The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1909-10-05
Story of the Man Whose Fren-
zied Finance Reached
Dizzy Heights
DEVELOPED GREAT PLAN OF
BUYING BANKRUPT PROPERTY
Refinanced These In Corporations
From Which He Secured His Orig.
inal Outlay in Cash and Took Large
Interests I'm Stocks and Bonds.

u
II. Walsh, who was convicted nearly
two years ago of misapplication of the
funds OF the Chicago National bank,
and sentenced to five years in the
federal prison at Fort Leavenworth,
Rams, were early arrivals at the
United States circuit court of appeals
today. prepared to hear the result Of
the defendants appeal
The rise and fall Of the fortunes Of
John r. Walsh, who is now 72 years
old. forms an interesting chapter in
the history of Americans who have
risen from obscurity to power. Tho
three Walsh banks-the Chicago Ma
tional, the Equitable Trust company
and the Home Savings bank--wera
closed by the controller of the cur
rency December is, 1905, nearly five
years ago, at that time Walsh not on
ly owned these institutions and the
Chicago Chronicle. but owned all, or
nearly all, of the stock of sixteen
other companies, including railroads,
quarries, coal and storage companies.
According to the brief OF the govern
ment on the appeal, all of these COM
panies were bankrupt, or on the
verge of it. when secured by Walsh
for little or nothing. The securities
were unmarketable and practically
worthless. Then. it is alleged, Walsh
formed corporations to buy these
companies from himself. taking in
payment the 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 face value of $780,
100000.
Walsh dreamed a great dream of a
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 the funds
Walsh had recourse to the funds in
his bank. In covering up these loans
it is alleged that he used memoran-
dunn notes signed with the names of
the clerks who were not consulted
In the matter. There was nothing on
the books to show that Walsh had re-
ceived the loans.
For two years it is charged that
Walsh ignored the demands of the
comptroller Of currency that he place
his bank upon a firm foundation and
when the crash came it was discov-
cred that siXty-siX per cent of the
securities held were those of the
Walsh properties. OF the s25 900 900
deposits, $16,000,000 were represented
by paper and securities of the Walsh
enterprises.
Walsh's appeal contended that the
trial court erred in the case of the
United States VS.. Hbbard in the ap-
pellate court. In that case, answer
ing the brief, the government insisted
that the cases were in no wise alike,
and declared that the instructions CIV
en- by Judge Anderson in the Walsh
case were taken with scarcely a
change of word from an instruction
approved by the United States su-
preme court in the case of Agnew vs..
the United States. In connection with
the attack upon the verdict of the
jury because Of the attitude of Juror
Palmer the government brief showed
that all of the jurors. except one, who
is in Florida. and Palmre, after the
trial signed the affidavits showing
that Palmer reached his verdict freely
and without undue influence. The
government further contended that
Palmer acknowledged that the verdict
was his answer. At that time there
was no exception taken by the counsel
of Mr.. Walsh to the verdict. It was
also pointed out that Immediately after
the jury was discharged that Palmer
said to one of the counsel for the
government: II know Walsh is gull
ty, but l hate to send an old gray.
haired man to the pen."