Omaha daily bee., 1915-05-16
NJ ADOO'S ANSWER
IS SENSATIONAL
Riggs Bank is Accused Of speculat-
ing and Making Loans to For
mer Treasury Officials.
WHY HE WITHDREW FUNDS


answer to the injunction suit brought BY
the Riggs National bank charging them
with conspiracy to wreck the irstitu-
ticn Their answer is a sweeping denial
- all the banks charges
Both officials presented iong affidavits
that they did not combine nor eonspire
10 injure the bank that their actions,
which were set forth as ground for the
hanks charges. were taken in the ex-
oreise OF proper discretion and because
g tie management. the propriety and
sometimes the iawfuiness Of which they
questioned
Makes Counter charge.
Secretary McAdoo in his affidavit made
this counter charge
Il charge and aver the fact to be that
10y inclusion In the suit is due TO Interior
and improper motives and resorted to
solely for the purpose OF thereby uttering
and publishing grossly false and libeious
statements under the privileges and pro-
lection Of judicial forms and free from
the legal accountability that would 9TH
oIwise be involved"
Mr.. williams Ia MS sworn statement
says examinations OF the Riggs bank by
his office disclosed violations OF the ma
ticnal bank act. that II was not so much
commercial bank as one which lent
much money on stock collateral which
was used In speculative ventures; that
some OF its officers and directors made
false statements under oath; that dummy
loans were sometimes made the proceeds
OF which went to officers; that some
officers we're engaged in real estate
transactions. and that other things were
done beyond its powers.
John Burke. treasurer OF the United
States. the third defendant, submitted
an affidavit relating to the retention by
ltim Of s5,ooo interest on government bonds
q the Riggs bank deposited with the
treasury 10 secure its note circulation.
dr. Burke said he acted in accordance
With law.
Leans Money to Cfficiats.
number Of tables and other statlsti-
cal data we're submitted with, the
answers. One gives list OF loans by
the bank to former secretaries Of the
treasury, assistant secretaries, former
comptroller OF the currency and national
bank examiners. The names OF Leslie
NJ. Shaw. william Y. Rldgely. L. A.
Coolidge and others appear in the list
Secretary McAdoo said in his answer
that he has nothing to do with the pen
alties assessed by Comptroller Williams.
which the bank seeks TO enjoin. and that
ne knows of only two reasons witch
might cause the bank 20 be hostile 90
him. One was that ne refused ono OF
tie agents a desk In the comptrolier's
office and the other Was that he charged
interest on government deposits. lie with
drew government funds. he says. ho-
4. ia d.. a.
bank doing more commercial business.
Comptroller Williams. In great detail.
deniea that no had conspired 20 injure
the bank and charges that II has violated
the law and been guilty of improper
practices" in stock brokerage transsc-
tions. excees loans. stock investment ard
other transactions.
Dsd Not Threaten Hank.
Mnssra. McAdoo and wiliiams and NJ.
C. Elliott give their version Of a confer
enoe IN McAdoo's office. NJ the conclu-
sion OF which. the hank alleged IN ita
complaint, McAdoo said 20 President
Glover OF the Riggs bank: Mr.. Glover,
you know what this means 20 tho riggs
National bank" The bank averred that
20 bo a threat and in promise would be
fulfilled later bv withdrawal OF govern
Inens deposits
McAdoo AYERS he made no such remark
hut warned Glover that the then delicate
financial situation here might be made
worse and that ali the national banks n
the city would suffer In consequence.
The affidavits which are the answer
are designed I'm part TO show the rela.
tions between the Rigs National and the
National City bank OF New York. Mr.
McAdoo swears that Vice President
annual salary Of $4,000 from the Nationa
City bank. that four others identified
with the RIGGS bank received salariel
from the National City. all totaliing $751;
year.
Further. Mr. McAdoo swears that Mr.
Allies five days before he resigned a
assistant secretary OF the treasury ant
took the oath as a director OF the RiEgi
National deposited $4,000 OF govern
ment funds in that institution. making
total there OF 100000 which drew no in
terest a. was then the custom.
Mr.. McAdOo says that as he went 20
hospital for an operation early las
March. the imposition OF fines by Conn
troller Williams, on that officers refisa
TO approve the Riggs as a depository 10
other national banks. were not brough
to his attention.
RelOtndeF from Bank.
The bank issued a statement takln
issue with many OF the allegations In IN
answers. II says that while Mr.. William
swears that he intends TO exact no NOR
penalties than the one for sS.0o0. he oril
inally attempted 20 impose penalties "a
gregating si5o.OCo The National CIT
hank. under the law. Il says. docs not an
eouid not own a share OF stock in IN
Riggs and that the two are not connecto
n any way. With reference 70 loans
officers Of the treasury and the conn
troilers office the banks statement ga,
that II loaned also 10 officials In all 9th.
g0yernment departments and 10 mar
members OF congress. feeling that a.
commodation 10 a person with credit ar
collateral ought not 10 be denied becaui
he was public official il declares I'M
the $4,000 deposit by Mr. Allies was n,
taken from the treasury. but was traa
ferred from the National City bank
the direction OF Secretary shaw n
bank declares that IN the nineteen yea
Of its existence Mr.. Williams had -four
only three loans which he could chara
teriEe az dummy loans" although ca,
was wholly free from deception
fraud fttT