Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1908-01-18
WAS PRESIDENT or CONCERN.
Penalty for Crime is Imprison-
ment for Period of Not Less
Than Two Years.
Law Docs Not Permit the Sub.,nuj, on
OF Fine for the Prison
Term.

chicago, Jan. 1S-John r. Walsh
president OF the defunct Chicago Ma
tionnl bank, was today found guilty of
Incorporating the funds of that in
stitution. The jury which had been
considering the case since Thursday
afternoon, reached an agreement short
ly after o'clock this morning, but the
verdict was not announced until after
court reconvened at 10 O'Clock The
penalty under the law for the crime OF
which Walsh was convicted Is impris-
onment for period of not less than
five years, 1t does not permit the sub
sutution of fine for the prison term.
Walsh WAS found guilty on 81 counts
The original Indictment contained 1872
counts. Demurrers were sustained as
to 81 counts, which left 1850 upon which
the jurors We're required to pass.
The verdict WAS read by the clerk OF
the court at l0:17, Immediately after
the reading of the finding. attorneys for
Walsh asked that the jury be polled,
This was done,
CLOSING OF BANE1.
The charge against Walsh grew out
of the closing In 1905 of the Chicago
National bank, OF which Walsh was
president, and its allied institutions,
the Home Savings bank and the Equit-
able Trust company. Walsh was ae-
cused of having loaned funds of these
institutions, aggregating $16,000,O0o, ON
fictitious and insufficiently secured
struggling enterprises which he him-
self had founded and practically
owned. Many of the notes, it devel-
oped at the trial. were signed. without
authority, by the names of various en-
ployes of Walsh.
The directors of the bank testified
they were not consulted by Walsh as
to the making of the loans: that they
knew nothing of them. Twenty-six OF
the notes We're described as "memoran-
dunn notes, and they formed one OF
! the chief features OF the trial They
represented more than 81, 100000. Meth
DDS of conceaiment employed In car
rying the transactions on the books OF
the bank and alleged misrepresenta-
tons made in reports to The national
bank examiners kept the hitter In
ignorance of the true condition of the
banks finances and the nature of their
securities for several years prior TO
the closing of the institution.
DEFENsE's THEORY.
The defense took the ground that all
of the Walsh enterprises were built up
in order to save and protect original
loans by Walsh in good faith. the
claim was also made that Walsh did
not hold the controlling interest In the
corporations which protlted by the
loans, but that the Chicago National
bank held IL, Walsh being only a
trustee and a CONSERVATION of the BANKS
interests. Walsh was on the witness
stand for two days. He admitted near
" all of the transactions charged
against him. but chung to the defense
that all he did was for the good of the
bank he headed and that all of the
loans proved good and that no one
lost anything In consequence of them.
In substantiation of the latter CLAIM,
the defense offered evidence to show
that since the closing of the banks
Walsh had bought back the collateral
taken from him by the clearing house
banks, amounting to $1,O00,000, giving
in payment note for the same
amount. payable in FIVE years, The
collateral released, Walsh was able
to go ahead with the building of his
railroads. Another fact brought out
was that the Associated Banks of Chi
cago took a pro rata share of the ST.
100000 loan negotiated by Walsh for
the redemption of his securities and
that these banks today hold the stocks
and bonds which Walsh was prosecuted
for making loans upon. This circum-
stance was made the basis OF Walsh's
claim brought out at the trial that the
value OF the securities had been estab-
lished.
The trial covered a period OF nine
weeks and was twice interrupted by ILL
ness OF jurors
WALSH UNMOVED.
Walsh received the verdict with lit
tie show of emotion. but one of the
jurors, Ebert Palmer OF Harvard, Ill,
burst into tears as he took his seat In
tho jury box and was so overcome dur
ing the proceedings that he was scarce
ly able TO answer the clerk when ask
ed If the finding represented his view
as to the guilt OF the defendant.
AS the clerk read off the names the
jurors in turn answered his question
In the affirmative. When It came Palm
er's turn to respond, he arose with his
head bowed, swayed as II about TO
fall and muttered something behind
his hand. Not untll the question had
been repeated n third time did the
juror control his feelings sufficiently
10 reply.
Formal motion for new trial was
made by Atty. John S. Miller and
Judge Anderson set the hearing OF the
arguments for Feb. 4. Walsh was al
lowed to remain Rt liberty on the same
bond 100000, which had been given af-
ter his indictment by the federal grand