The Ogden standard. [volume] (Ogden City, Utah) 1902-1910, 1909-10-05

Walsh guilty Of misapplication of the
funds of the Chicago National bank.
was affirmed by the United States cir
cult court of appeals here today
The rise and fall of the fortunes Of
John X. Walsh. who is now ~ wears
of age, forms an interesting chapter
in the history of Americans who have
risen from obscurity to power.
The three Walsh banks-thc Chi
cago National. the Equitable Trust
company and the Home Savings bank
were closed by the comptroller Of
the currency on December Is, 1905.
nearly four years ago, AT that time
Walsh not only owned these instltu-
tions and the Chicago Chronicle. but
owned all OF nearly all. of the stock
OF the following companies:
The Acme Gas company. the Bed
ford Belt Railway company. the Bed
ford Quarrlcs company. the Chicago
Western Railways, the Chicago
Nharhng & Storage company. the In
diana Southern Coal company, the Tli-
ncis Southern Railway company. the
Lake Michigan Car Feny Transporta-
tion company, the Mount Olive & Stan
ton Coal company. the Ohio Quarrlcs
company OF Ohio, the Ohio QuarTies
company of Illinois. the Southern In
diana Coal company. the Southern In
diana Railway company, the Southern
Missouri Railway company, and the
Wisconsin G Michigan Railway COM
pany.
According TO the brief of the gov
crnment on the appeal, all of these
companies were bankrupt. or on tho
verge OF It. when bought by Walsh
Tor little or nothing, Their securities
were unmarketable and practically
worthless.
Then, It is alleged. Walsh formed
corporations TO buy these companies
from himself. taking In payment stock
of lie new corporations and enough OF
their bonds 10 repay himself at their
face value for the sums he actually
paid for them. In this way, according
30 the prosecution, he obtained for
nothing stocks and bonds TO the face
value of 100000 600
Walsh dreamed a great dream of
railway system 10 be pIeced together
from his scattered purchases which
would reach from the Mississippi TO
the Ohio, through Illinois. Indiana,
Wisconsin and Michigan TO Duluth,
MINI, and Superior, Wis. The quar-
rics and coal mines were TO furnish
much OF the traffic.
To obtain funds. Walsh had recourse
10 the funds In his banks In covering
up these loans, II Is alleged that he
used memorandum notes signed with
the names OF clerks who were not con-
suited In the matter. There was moth
ing on the books 10 show that Walsh
had received the loans Even Fred
Bount, the vlce-presidcnt, is said to
have been ignorant on the subject
For collateral, Walsh deposited the Sc
curIties of his various enterprises
For two years. It was charged
Walsh ignored the demands OF the
comptroller of the currency that he
place his banks on a firm foundation.
and when the crash came. II was dis
covered that &C per cent Of the securi-
ties held were those Of Walsh proper
ties OF the S25.0000O0 deposits, S16-
100000 were represented by the paper
and securities Of the Walsh enter
prlses.
Air. Walsh must serve the sentence
Of five years Imprisonment imposed
upon him by the trial jury. save in the
event that the supreme court upsets
the affirmation of the verdict Of guilty
handed down today. Counsel for Mr..
Walsh in their appeal, laid stress on
Intention on the part OF the defend
ant. In the lengthy brief which they
fled much law was quoted 10 show
that the convicted banker used the
funds of the bank In what he consid'
cred a legitimate manner.
The opinion of the court of appeals.
written by Judge Humphrey and hand
cd down by Judge Grosscup, is brief
and confined almost wholly TO the
question of criminal intent.
The allegation that Juror Palmer
was unduly Influenced is dismissed
with word and but little more Is
wasted in eliminating the allegation OF
Inconsistency in the verdict.
AS TO the substance of the matter
charged in the various counts says
the opinion. the verdict viii not be
disturbed. II the gravamen OF the
charge In each count on which thefo
has been verdict OF guilty is the same
there is consistency in the verdict
In the instructions given the jury
hr Judge Anderson In the trial court
The higher tribunal finds no error. As
10 the lack OF criminal intent, the
opinion reads;
hder section 500 there could be
mlsappllcatiou of bank funds by an
officer which would be innocent and
not criminal, and there could be mis-
application which. under the statutes,
would be criminal What would show
the difference between mlsapplications
which were criminal and those which
were not. what would show Innocence
or suilt. good faith or bad faith, the
court sought by instruction 20 care
fully define, and We think did fairly
we'll"
Counsel for Walsh have thirty days
In which to hlc application for a re-
hearing by the court Of appeOls. Mean
while he will be at liberty undor his
present bonds OF $4,000