New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1908-10-17
MORSE BANK LENT
BIG SUMS TO CLERKS
ONE GOT MORE THIN $780,
900 IN TRANSACTIONS.
Profit of sI3P,4O9 II an american
Ice Securities Co. Stock Deals
ShOzcn at the Trial.

ov..r+ Of hundreds of thousands OF dollars was
the most startling development yesterday in the
Morse-Curtis trial before Judge Hough in the
United States District Court. According 70 tes-
timony put in evidence by United states Al
torpey stimson. most Of these loans we're made
to Dawson Brown and Leslie E Whiting. who
were clerks in the employ of Primrose & Braun.
No 43 Exchange Place. the Morse brokers The
proceeds as shown by the banks books. were
used in specuiations in American Ice Securi-
ties Company stock
Brown. who is elderly man, and Nnltlns'
who is little more than a boy. were put on the
witness stand and asked by what strange COIN
cidence they owed the bank at various times
from $4,000 to 100000 when working in subor-
dinate places for salaries of SO and 81 week
respectively Their answers produced smiles
throughout the courtroom.
Each testified that he had signed the notes
simply because he was told to- had never re-
cefved any part Of the borrowed funds, was
totally ignorant of where or for what purpose
the money went. never owned the collateral
which was put up to secure the notes and never
made so much as a single extra penny out or
the transactions. Each presumed the notes
would be paid. and when the notes were PAID
and were returned to the makers. each promptly
tore up the cancelled paper and proceeded 10
forget all about the affair
PROSECUTIONS STAR WITNESS
To show the complicated history OF these
Brown and Whiting loans the prosecution called
it's star witness, Edward P. Moxey, special in
vestigator Of the Department OF Justice Mr.
Moxev. who worked up the case against John
r Walsh the Chicago banker. has been delving
into the books of the National Bank Of North
America for the last eight months, assisted by
three other government sleuths- He had every
TRANSACTION at his tongues end. He was on the
stand nearly all day
On cross examination, however. ex-Judge
William NJ K. OIcott obtained from the Wit
ness the admission that the result Of the banks
numerous alleged speculations in American Ice
stock had been net profit to the bank Of S132,-
400 - Mr. OIcott also brought out the fact
from the same witness that in two cases where
the bank had lost money in certain stock trans
actions the losses had been plainly entered in
the books and no attempt had been made at
concea lment-
Before tracing the alleged dummy" loans and
Ice stock transactions Mr. Stiulson attempted -
put in evidence a chart showing the fUctua-
tfons of American Ice stock during 1896 and
1907 The defence objected strenuOusly, and
Mr. OIcott exclaimed dramatically: 4 object to
the introduction of that chart unless I am al
lowed to introduce picture graphically show
ing the distress which these indictments have
caused in the home of my client" The Ice stock
chart went in, notwithstanding.
LOANS TO JOHN F CARROLL
In tracing the loans made to Brown and Whit
ing all of which were secured by American Ice
and United Copper stock. reference was made 20
loans 10 John F Carroll, OF Tammany Hall
fame; Calvin Austin. president Of the Consoi-
dated Steamship Lines Company; Philip j Britt
of counsel for AIr Morse: John K Elliott. presi-
dent Of the Consolidated Arizona Smelling Com
panv. and Wesley NJ Oler. president OF the Amer
fcan Ice Securities Company According to the
banks books the collateral to secure the Brown
and Whiting loans was usually worth only q
trife more than the face value of the loan
The first Of the loans to Brown was made late
in 1905 and until October IA, 1907 there was
scarcely a time it was shown, when there was
not a Brown or a Whiting loan on the banks
hooks. These loans were usually paid up with
reasonable prornptness-au were cali lOans-out
whenever one of them was paid another loan
went into the bank on the same day. Brown or
Whiting in this way getting the funds with
which TO paw of the existing loan No loans to
Brown were made after the end Of 1905
The loans to Whiting reached a grand total in
Aprf1 1907. of $31O.JOO. on June "A. according
10 the banks books a check was received rom
tba Mercantile National Bank for 100000 OF
this sum 100000 was used to reduce the Whit
ing loan while 100000 went to pay on an
other loan. the maker OF which was not men,
toned. There was then created new Whiting
loan of $11O,5OO. secured by 1000 shares OF Ice
stock and y 500 shares of United Copper. This
loan was reduced by dividends received on the
Ice stock to 100000. and so stood on the books
until October II, when Mr.. Morse paid IT on
with his own check for 100000 drawn on tho
National Bank of North America
on the same day that Morse paid of this last
Whiting loan. however, according TO the banks
books. credit of 100000 was made to Morses
personal account This credit came from the
sale to the bank by Morse of 2O00 shares Os Ice
stock at 30. netting him 100000. and from ths
proceeds of a demand loan of $4,000 made by
the bank to Morse. This right at the begin
ming of the panic.
PECULIAR DEAL IN ICE STOCK
The price of ice stock on October IA. when
Morse sold the two thousand shares to the bank
at so was slightly over 81. so the bank got
couple Of thousand dollars the better Of the deal
on October Is. however. according 20 MoXeys
testimony, the two thousand shares of ice stock
were charged off the books Of the bank and
debit OF $4,000 entered in the profit and
loss book The price Of the stock in the market
was then in the vicinity of -. SO IL had value
around $4,000 on December :. however. the
ice stock was re stored 20 the banks books as an
asset of $3sO4I So which was its value at tbs
market price at that time
The disappearance and return Of these two
thousand shares of ice stock was not explained
| either in the direct testimony Of Moxey in
his cross examination. and IL remainedfone OF
| the puzzles OF the day. Judge Hough. apparent
Iy. was particularly interested in this point, but
neither side saw Mt to throw any further light