Gilpin observer., 1908-01-23
BANKER WALSH FOUND GUILTY.
Maximum Penalty Five Hundred and
Forty Years imprisonment.

Forty years imprisonment.
Chicago John R. Walsh, former
president Of the Chicago National
bank. which closed its doors in De-
cember. 1905, was found guilty Satur-
day on fifty-four counts of the indict-
ments against him charging misappli-
cation Of the banks funds.
The verdict was returned by a jury
In the Federal District Court here.
Walsh was permitted to remain at
liberty under the bond furnished by
him after the Indictment had been re-
turned against him one year ago, pend
ing the hearing of arguments January
2Sth on a motion by his counsel for a
new trial.
The penalty fixed by the statutes for
the offense Of which the aged financier
was convicted is Imprisonment for
not less than five years or more
than ten, for each count upon which
his guilt was established.
When the jury was polled at the re-
quest Of Attorney John S. Miller, OF
counsel for the defense, Elbert Palmer,
a juryman from Harvard, ILL.,, was
overcome by emotion and wept as he
signified his acquiescence in the find
ing.
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 Equi-
table Trust Company. Walsh was ac-
cused of having loaned funds Of these
institutions, aggregating $16,000,000 on
fio{o
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 were described as "memor-
andum" notes and they formed one
of the chief features of the trial. They
represented more than $2,000,000.
Methods Of concealment employed in
carrying the transactions on the books
Of the bank and alleged misrepresen-
tations made in reports to the national
bank examiners kept the latter 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.
The defense took the ground that
all OF the Walsh enterprises were
built up in order to save and protect
original loans made by Walsh in good
faith.
The claim was also made that Walsh
did not hold the controlling interest
in the corporations which profited by
the loans, but that the Chicago Ma
tional bank held it, Walsh being only
trustee and a conservator Of the
banks interests. Walsh was on the
witness stand for two days. He ad-
mitted nearly all Of the transactions
charged against him, but clung to the
defense that all he did was for the
good Of the banks 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 $7,000,000, giving
In payment a note for the same
amount, payable in five years. The
collateral released, Walsh was able to
go ahead with the building Of his rail-
roads.