Omaha daily bee., 1909-05-09
BRIEF ELAYS BANKER WALSH
Government Attorney Condemns
Methods Of Chicago Financier.
LATTER Is SEEKING FREEDOM
Document Asserts Convicted Banker
Paid lis Dividends while Bank
was InsOIvent and Gave IL
Useless Notes.

CHICAGO. May S-Arguments OF the
government in opposition to the attempt
OF John r. Walsh. under sentence OF five
years Imprisonment for alleged misappli-
cation of the funds Of his bank. the de-
funct Chicago National, to obtain freedom
on appeal to the United States circuit court
Of appeals are contained i'm the brief filed
today by Assistant Attorney Fletcher Dob
bins i'm reply to the brief filed by counsel
for the defendant a month ago. The Walsh
banks. the Chicago National, the Equlta-
BILE Trust company and the Home Savings,
closed their doors December 10, 1905. Walsh
was indicted two years later on 1872 counts.
A year later the case came to trial in
the United States district court and a ver-
dict finding the defendant guilty on fifty
four counts was returned. Judge Ander-
son sentenced Walsh to five years at Fort
L~eavenworth. The appeal followed. Oral
arguments will be heard by Judges Cross
cup, Baker and Seaman, the last week In
the month.
1t is said that the Walsh failure caused
losses to himself, stockholders and others
aggregating SIG. 10000
Counsel for Walsh contended in their
brief that the loans made by Walsh and
his purchases Of bonds of his own railroad
With the banks money were legitimate
transactions, made for the benefit Of the
bank and without loss to the bank"
what Evidence shows.
That counsel should seriously make
such statement of fact to this court re-
cites the government brief, "can he ex.
planned only by the necessities of the
case. We contend that the following facts
were established by the overwhelming
weight of the evidences: That on December
IS, 1905, the Chicago National bank was
insolvent, and while paying dividends at
the rate of is per cent annually, although
IL was not earning them; that the notes
made the subject of criminal charges were
of a kind absolutely unknown to honest
banking; that they were secured by bonds
that were unmarketable and OF little or
no intrinsic value; that they were never
paid; that they belonged to q class Of
transactions that was a chief factor in the
destruction Of the bank and in causing a
loss to the stockholders of the entire value
Of their stock; that these loans were made
in utter disregard OF the interests of the
bank for the sole benefit and advantage of
Mr.. Walsh and his personal enterprises:
that the proceeds of these notes we're used
as alleged in the Indictment; that the bond
purchases which are the subject of Grim
inal charges were not made In the usual
course of business; that these bonds were
unmarketable and worthless as bank as
sets; that they contributed directly to the
destruction of the bank and to the loss of
the stockholders"
1t is further alleged In the brief that
these pretended loans and bond purchases
were Of such a fraudulent nature that they
created no obligation on the part of the
bank to pay over the proceeds to the par
ties to whom they were actually paid. "
The brief contends that Mr.. Walsh's in
t%ention was not, as president of the bank,
in good faith to make good loans and in
%vestments for the bank. but rather to get
the funds Of the bank to promote his per-
sonal enterprises and to conceal the real
nature OF his act.