The Washington herald., 1915-05-20

| CONTINUED FROM PAGE ONE.
choosing traction stock as a principa
collateral, but kept repeating that loan
had been made upon Traction stock 6:
II there was something undesirable j
such collateral. Only once did he init
mate that the stock had not proved t
be adequate security for the loan, an
then he was fatty contradicted by tn
banks attorneys, who challenged him t
submit proof of what he had asserted
He had charged that one loan of 5000
carried by the bank and secured by trac
ton stock had been charged off," H
was corrected by the attorneys for tn
bank. who asserted that the loan in uIes
ton had been secured by q group IF mis-
cellaneous stocks including traction.
/ The most startling performance of Mr.
| Cntermyer, and one which the banks
attorneys most strongly resented. wa
the putting into evidence of a transcrip
from the books of the Lewis johnson 4
Co.. local brokers, whose affairs are nov
In the bankruptcy court of the stool
| transactions of one Of the officers of tn,
Riggs Bank day by day, covering a con
siderable period. 1t was not urged tina
! these purchases and sales of stocks mad,
| by the bank officer in his individual ca
4 pacity and with his own funds had any
relation to the Riggs Banks affairs OF
the matter before the court. The bank ;!
! officer is a member Of the local stocl
| exchange. and the account with the
bankrupt firm apparently bore no rela
! ton to the issue before the court, bu,
Mr.. Untermyer made it a theme fol
| commenting upon the improperly OF
bank officers buying and selling stock
He admitted that the officer had bought
and sold, for investment or otherwise
through other local brokers. and it was
one of the unexplained things of this
case that the Treasury officers should
have sought to couple the name of the
bank officer with a bankrupt firm.
Former Senator Bailey protested against
receiving the document. Copies had not
been served on the other side Mr..
Bailey declared that he had not seen the
document before.
"Yellow, Document 1. Admitted.
He observed that it was written on
yellow paper, very appropriately
THE transactions II recites are vel
low." retorted Mr.. Untermyer.- The court
decided that a wide latitude had been
given for the introduction of papers. and
the yellow document" got by
The comments of the trial Judge from
the bench, which were not very salts
factory to the bank people Tuesday.
were very much to their comfort yester-
day. Shortly before the conclusion of
Mr.. Untermyer's argument. when he was
defending the Withholding of the 5000
from the Riggs Banks interest due upon
bonds deposited in the Treasury by the
Comptroller as penalties. the court raised
question as to whether the penalties
prescribed in the statute applied to
special reports Mr.. Untermyer APP
peared surprised and argued at length
with the Judge that they did apply
The bank attorneys were smiling.
and the judge seemed unconvinced.
The real bone of contention in the case
is the $1,000 which the Comptroller of
the Currency has sought to withhold.
Judge Mccoy stated Tuesday that he
that as presenting d separate
issue from the other things in the bill
and would consider 1t Independently.
II he holds that the COMPTROLLER had
no warrant for Withholding this money
as penalty because the penalties pre-
scribed by the act do not relate to
failure to make special reports. the in
junction against covering it into the
reasury would be made permanent I'M
less the court should adopt I'll. con-
tention of Attorney Brandeis that the
relief in the case cannos be given IL;
Equity Court and remand the bank to
suit against the government In any
event. the banks officers were feeling
yesterday over the pros
pect of establishing that the comptrol-
Ter had exceeded his authority in with
holding the interest due upon their
bonds.
Mr.. Bailey will close the argument
for the bank today. He is expected to
make detailed answer to Mr.. Inter
myers statement of the alleged facts"
In the case. The banks attorneys
were charging yesterday that the facts
have been distorted by Untermyer and
that Mr.. Bailey will demonstrate this
Today in his usual vigorous style.
Bailey Smiles Wisely.
Throughout his argument Mr.. Inter
myer complimented Secretary McAdoo
and Comptroller Williams on their fis-
cal policy and their administrative fair
ness" He painted both officers as pa
tent and fair. seeking only to inculcate
the highest ethics Of banking, to break
up the practice of insecure loans and to
place deposits of public funds only in
banks where the commerce Of the coun
try" would be promoted and benefited.
Repeatedly he referred to the wise and
Iar-seeing fiscal policy Of the Secretary |
of the Treasury. which would soon flood
the country with unparalleled prosper
ty. and ascribed all the malice to the |
bank people. While these encomiums |
we're being uttered. Mr.. Bailey. an old
school Democrat. sat by smiling in q
'keptical way.
Mr.. Untermycr was unusually severe |
IN the bank management, reiterating the
charges made by Comptroller Williams
- to excessive loans and dispropor-
ionate amounts Of so-called stock collat-
raj loans to commercial loans. He went
'ack into the history Of the institution
or many years. declaring that Comp
roller Williams had q right to demand
eports on business Of the bank running
'ack for years In order to establish to
~ satisfaction what the present con-
ttion" Of the hank Il.
He scored the bank Officers and
heir attorneys for bringing in the
ecretary Of the Treasury except~in . II
primal way. He declared that It was
gratuitous a6ront to that ofacer.
rho really had nothing to do with the
acts complained of.
Admitting that the bank had ''pros~i
cred" the attorney for the govern
tent argued that national banks were
OF organised primarily to make
loney for their stockholders.
Says Danks Are Utsslties.
The. prosperity Of . bank IL . hne
hing for It's shareholders. said Mr..
Intsrnyer. but national banks are I