The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1915-05-16
FEDERAL OFFICIALS
DENY SPECIFICALLY
RIGGS BANK CHARGE

ton to compromise the case The gov
ernment's brief will be filed Monday.
when oral argument will be heard on
pending motions to dismiss the bank
suit on plea of lack of jurisdiction and
for other reasons.
Both affidavits reeite alleged facts as
certained by the eomptroller's investiga-
ton of the bank which are said to show
violations of the national bank act and
improper practices. Both bring into the
case the name of the National City bank
of New York in an effort to show that
hostility which is declared to have been
exhibited by the Riggs bank toward the
treasury officials might have resulted
which the New York bank figured after
McAdoo took office
Secretary MeAdoo declares he knows of
only two Incidents which may have caused
personal hostility toward him by the
bank. One was his order denying desk
room in the comptroller's office to a
woman, who his affidavit says, made GER
tain reports on the condition of national
banks to the Riggs National and the Ma
tional City bank of New York. The other
reason his affidavit sets forth. may have
which carry government money per cent
interest on such deposits. At that time,
he says. the National City had 100000 of
such funds. the Riggs 100000 and the
National City, refusing to pay such in
terest, surrendered its account
Mr. McAdoo declares that he was con-
fined to his bed after an operation UNI
til after the beginning of the suit and
that he knew nothing OF the imposition Of
penalties against the bank or refusal
to approve it as a depository for the re-
serves of national banks until after the
action had been taken. On one occasion,
however, the secretary said, when Mr..
Williams suggested the employment "
counsel to advise him of his rights in
trying to learn the condition of the bank,
Williams informed him of his power I'M
der the law to impose penalties for per-
sistent refusal to comply with demands.
He advised Mr.. Williams, Mr..
McAdoo said to use his discre-
ton in enforcing the right of the
government to obtain Information to
W hich it was entitled OF the banks COM
plant that certain government deposits
were withdrawn that the bank was not
permitted to receive deposits from other
national banks and the numerous special
reports were called, for under penalty of
fines, Mr.. McAdoo asserted that he with
drew government funds from the bank
because he believed they should go to
bank doing a larger commercial busl-
reports were called for under penalty of
Sold Securities
Summing up his investigation of the
bank Comptroller Williams asserted that
he had learned the bank was lending it's
money on real estate and also was lend
ing on commission the money OF others
on such security and that 1t had con-
had bought and sold securities both for
itself and on commission for others.
This stock brokerage business. Mr.. Will
liame said, had been carried on at first
in the name of the hank and afterwards
IN the name Of a firm composed OF
stockholders of the bank. but later the
business was carried on In the name
of the bank and finally In the name Of
officers of the bank. but except during
the existence Of the firm all profits ex-
cept some specified went to the bank IT.
self. The plan of doing business in the
name of the officers, Mr.. Williams said,
was a mere device to evade the law. In
using it's funds to lend on real estate.
Mr. Williams said. the bank required
subordinate employees to give Personal
notes to the bank, the officers furnishing
collateral
Was Violating Law
In many ways, Mr.. Williams asserted
in his affidavit, the bank and its officers
violated the law. One charge was that
the bank carried excessive loans, some
times concealed by dummy notes. Mr..
williams pointed out that under the fed
eral reserve act the law required a ma
tional bank to maintain reserve equal
to rs per cent of its deposits, one half
of which must be in lawful money In its
vaults. This the Riggs bank failed to do,
said Mr.. Williams
Another charge by Mr.. williams is tina
the banks books have not shown its true
condition and that many OF its reports
have been false. 1t also Ii charged that
the bank in numerous ways has con-
Quoted its business irregularly and not
with view to best serving the banking
needs of the community. Nj. Williams
explained withdrawal from the bank of
American Red Cross funds by saying that
officers Of that organization acted on
his suggestion and found another bank
which paid interest and secured deposits
with collateral.
The affidavits are accompanied by
tables showing loans to former officials
of the treasury department tending to
show proportionately large governmental
deposits with the National City and Riggs
bank in former years and setting forth
alleged stock market transactions by GER
tain officials of the Riggs hank