Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1909-10-08
CHICAGO FINANCIER LOSES FIGHT
AFTER CONVICTED OF MISAP-
PLYING TRUST FUNDS.
SENTENCED TO FIVE YEARS.
Defendant Appealed on Ground That En-
rors Were Committed and Attitude
of One Juror.
STORY OF HIS RISE AND FALL.

CHICAGO, ILL.,, Oct. 5.-John r.
Walsh, convicted of misappllcatlon OF
the funds of the Chicago National bank,
must serve a sentence of five years i'm
prisonment imposed upon him by the
trial jury, unless the supreme court up
sets affirmation of a verdict OF guilty
handed down today by the United States
circuit court of appeals here.
Counsel for Mr.. Walsh in their appeal
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 filed, much
law was quoted to show that the convict
ed banker used the funds Of the bank
in what he considered a legitimate man
ner. .
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 intent. Allegations that
Juror Palmer was unduly influenced are
dismissed with a word, and but little
more is said in eliminating allegations OF
Inconsistency and repugnancy
No Inconsistency in Verdict.
80 long as there is no Inconsistency
in the verdict as to the substance. OF
the matter charged in the various
counts" says the opinion, the verdict
will not be disturbed. If the gravamen
of the charge in each count, on which
there has been a verdict of guilty, is the
same, there is no inconsistency in the
verdict
AS to Juror Palmer the opinion reads:
1.-THE record does not show that any
improper influence worked upon the jury.
The return made to the court was i'll
fact a verdict of twelve jurors. The at
tempt by one of them afterwards to i'm
l., l,x,4 how n
alton. This doctrine is We'll established,
and is based upon reason as well as
upon authority"
LII :ne instructions given the jury by
Judge Anderson in the trial court, the
higher tribunal finds no error.
AS to the lack of criminal intent, the
opinion reads:
"UnGer section 5000. there could be
misapplication of bank funds by an Off
Ger which would be innocent and not
criminal. and there could be misapplica-
ton which under the statutes would be
criminal. What would show the differ
ence between Interpretations which
were criminal and those which were not,
what would show innocence or guilt, good
faith or bad faith, the court sought by
instruction carefully to define, and we
think did fairly define"
Counsel for Mr. Walsh have thirty
days in which to file application for re-
hearing by the court of appeals. Mean
while he will be at liberty under his
present bonds of $4,000.
History of the Case
The rise and fall of the fortunes of
John r. Walsh, who is now ~ years old,
forms an interesting chapter in the his
tory of Americans who have risen from
obscurity to power.
The three Walsh banks-the Chicago
National. the Equitable Trust company,
and the Home Savings bank-were
closed by the comptroller of the currency
on December IS, 1905, nearly five years
ago. At that time Walsh not only
owned these institutions and the Chica-
go Chronicle, but owned all, or nearly
all of the stock of the following compa
MES: The Acme Gas company, the Bed
ford Belt Railway company, the Bed
ford Quarries company, the Chicago
Southern Railway company, the Chicago
WEARING and Storage company, the In
diana Southern Commercial company,
the Illinois Southern Railway company,
the Lake Michigan Car Ferry Transport
tation company, the Mount Olive and
Stanton Coal company, the Ohio Quar-
ries company (of Illino1sl, the Southern
Indiana Coal company, the Southern In
diana Railway company, the Southern
Missouri Railway company, and the
Wisconsin & Michigan Railway COM
pany.
According to the brief of the govern
ment on the appeal, all of these com
panies We're bankrupt, or on the verge
of it, when secured by Walsh for little or
nothing. Their securities We're unmarked
able and practically worthless. Then,
it is alleged Walsh formed corporations
to buy these companies from himself,
taking in payment stock of the new cor
porations and enough of their bonds to
repay himself at their face value for the
sums he actually paid for them. In this
way. according to the prosecution. he
secured for nothing stocks and bonds to
the face value of $3O,OO0OOO.
Had Big Railway Dream.
Walsh dreamed a great dream of a
railway system to be placed together
from his scattered purchases which
would reach from the Mississippi to the
Ohio. through illinois, Indiana, Wiscon-
sin and Michigan to Duluth and Supe,
rior. 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 covering
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 re-
ceived the loans. Even Fred Blount,
the vice president, is said to have been
ignorant on the subject. For collateral
Walsh deposited the securities of his va
rious enterprises
For two years it is charged that Walsh
ignored the demands of the comptroller
of the currency that he place his banks
l.