The Bemidji daily pioneer. [volume] (Bemidji, Minn.) 1904-1971, 1909-10-07
JOHN R. WALSH !.
LOSES APPEAL
Circuit Court Affirms YER
dict Of Guilty.
WILL CONTINUE TO FIGHT.

Pending Motion for Rehearing.
Collapse of the Walsh Banks Oc-
Cured Nearly Five Years Ago and
the Government Charged Their Pres
ldent With Misapplicaton of Funds.
Chicago, Oct. John R. Walsh,
convicted of misapplication of the
funds of the Chicago National bank,
must serve a sentence of five years
Imprisonment imposed upon him by
the trial jury unless the supreme court
upsets affirmation Of verdict of
guilty handed down by the United
States circuit court of appeals here.
Counsel for Mr.. Walsh in their ap-
peal laid the greatest stress on what
they alleged was a lack of criminal
intent on the part of the defendant.
In the very lengthy brief which they
fled much law was quoted to show
that the convicted banker used the
funds of the bank in what he consid-
cred legitimate manner.
The opinion of the court of appeals,
written by Judge Humphrey and
handed down by Judge Grosscup, is
brief and is confined almost wholly to
the question of criminal intention.
Allegations that Juror Palmer was
unduly Influenced are dismissed with
word and but little more is said in
eliminating allegations of inconsist-
ency and repugnancy.
Walsh Remains at Liberty.
Counsel for. Mr. Walsh have thirty
days in which to file application for a
rehearing by the court Of appeals.
Meanwhile he will be at liberty under
his present bonds of $4,000.
The rise and fall of the fortunes of
John R. Walsh, who is now seventy
two years of age, forms an interesting
chapter in the history of Americans
who have risen from obscurity to
power.
The three Walsh banks-the Chi
cago National, the Equitable Trust
company and the Home Savings bank
were closed by the comptroller of
the currency Dec. IS, 1905, nearly five
years ago. At that time Walsh not
only owned these institutions and the
Chicago Chronicle, but owned all or
nearly all of the stock of score of
railroad and industrial concerns.
According to the brief of the gov
eminent on the appeal all Of these
nj hoY nj
verge of it, when secured by Walsh
for little or nothing. The securities
were unnarketable and practically
worthless. Then, it is alleged, Walsh
formed corporations to buy these COM
panies from himself, taking in pay
ment stock Of the new corporations
and enough of their bonds to repay
himself at their face value for the
sums he actually paid for them. In
this wey, according to the prosecution,
he secured for nothing stocks and
bonds to the face value of 100000 900.
Planned Great Rail System.
Walsh dreamed a great dream Of
railway system to be pieced together
from his scattered purchases which
would reach from the Mississippi to
the Ohio, through Illinois, Indiana,
Wisconsin and Michigan to Duluth
and Superior, Wis. The quarries and
coal mines were to furnish much of
the traffic
To secure funds Walsh had recourse
to the funds in his banks In cover
Ing up these loans it is alleged that
he used memorandum notes, signed
with the names of clerks who were
not consulted in the matter. There
was nothing on the books to show
that Walsh had received the loans.
Even Fred Blount, the vice president,
Is said to have been ignorant on the
matter. For collateral Walsh depos-
tied the securities of his various en-
terprises.
For two years it is charged that
Walsh ignored the demands Of the
comptroller of the currency that he
place his banks upon firm founda-
ton and when the crash came it was
discovered that 66 per cent of the
securities held were those of Walsh
properties. Of the $25,OOO,OO0 depos-
its $16,000,000 were represented by
the paper and securities of the Walsh
ENTERPRISES.