The Washington times., 1915-04-13

stated that Louis u. Brandeis would
probably be engaged by the Department.
of Justice as special counsel to defend
tho injunction proceedings. MIR. Greg
ory declared that Mr.. Brandcis had not
heretofore been negaged by the Depart,
ment OF Justice to look into the ailegeo
Irregularities of the bank, although TINS
was the statement made by Comptroller
williams in his published statement this
morning.
Tho Attorney General declared that
although he knew Mr.. Brandeis had
been investigating these matters, he
was working entirely for the Treas
ury officials.
Duty of Department.
"The matter did not come officially
to the attention Of the Department OF
Justice" said Mr.. Gregory. "until theh
Injunction suit was brought, when, IT
became the duty of the department TO
defend the case. The Department of
consideration the prosecution of the
Riggs National for any Irregularities.
In saying that Mr.. Brandeis is not
acting for the Department of Justice
at this time, ! do not mean to say that
] disapprove the action OF Mr.. Will
liems in employing him. On the other
hand, | approve 1t, and would be glad
TO have Mr.. Brandeis as special coun-
sci in the case
outside of Washington the fight be-
tween the Riggs Bank and the Treasury
officials is generally expected. to judge
from the newspapers. to prove one of
the greatest engagements of financial
litigation in the history of the United
states. That It will go to the Supreme
Court of the United States is taken for
granted and that Congress will take it
up is regarded as extremely probable.
The eyes of the banking and financial
interests of the country have been
fastened on the controversy. which is
fraught with far-reaching possibilities.
The relationship of the Riggs Bank to
the National City Bank and through
that bank to the great financial interests
of the United States is we'll known.
Contention of Glover.
In the answer which Comptroller
Williams has made to the banks state
ments. he charged that, II the bank Of
f'cials had been allowed to go on their
way unhindcred, the results would have
been SERIOUS. He declares the evil
dence will show it was necessary for MS
office TO seek to terminate the repre-
henSible practices Of the officers ana
their misuse of the powers delegated to
them bv the directors.
u is the contention of President
clover and Vice Presidents Allies and
course Of Comptroller Williams has
hccn inspired by personal malice and
hatred, and not by desire to conserve
the public interests since there Is is
the banks solvcnry.
Againct this. comptroller Williams
says his whole purpose has been to
compel the bank officials to give up
the unlawful and dangerous practices
and methods which had been in vogue
FOR years ?ast
The Comptroller gives out extracts
from three letters addressed to the
Riggs Bank since last July from his
office.
Loan To Flathcr.
Ono Of tho things to which the Comp
trol'or takes especially sharp exception
Is the loan by the bank of S63, 500 to
Vice President Flathor. which the bank
is said To have represented {" be Sc
cured by high-class and marketa BILE
local and out-of-tONn stocks. The
Comptroller cites in ono Of his letters
TO tn" bank the fact that among these
stocks arc Rock Island preferred, whose
market value at the time was IL and
Rock Island common at !. AS we'll as
nrlmbor of other stocks having low
market Valuc. lie critic;ses the fact
that such securities as these arc found
in the collateral of conservative bank
officers"
The structures OF the Comptroller on
the collateral of the loan to Mr.. F'Iather
are severe. and so arc his structures on
the stock brokerage business which he
says is conducted within tho bank and
into which his letters go in detail.
Among the charges ,o brought by the
GERS of the bank on both direct and
dummy" loans. President Glover is
charged by the Comptroller with get
ting $65O0 loan from the bank
without knowledge Of the directors as
to the real borrower.
Loans TO Women.
1t declared that nearly 1000, coo had
been loaned to some forty or ffty vom-
en- on stocks and securities, "manv Of
them of highly speculative character.
A case is cited of man who had
bought 800 shares of Rock Island stock
through tho bank officials at cost Of
S26,9s7. In six months the stocks value
shrivelcd to 5000.
1T should here be noted.'' sa the
letter, that in the opinion of this office
no excuse ever has been given for the
action of your president in getting
$500 of money from the bank. with
out the knowledge of the directors as
to the real borrower. The
practice which seems to have been in
vogue in your bank for the officers or
Junior clerks to borrow its funds. some
times In their OWL names, sometIn.s IN
the name of dummies and sometimes
as dummies for others. on speculative
stocks or bonds. is unbuSi incsslkc, sets
very bad example to the banks other
employees, and Is. in fact, thoroughly
reprehensiblc and cannot be too strong
ly condemned"
The transactions of the bank officials
IN what Williams terms speculative and
wiz cat stocks on commission using the
bank as an agency for stock specula-
tons and brokerage business" are con-
demned sweepingly by the Comptroller.
Kaiser Directing Battles
In Hills, Says Petrograd
PETROGRAD. April 13.-The Bourse
Gazette and thnr nnuSnn nnrr tndn q,