Evening star. [volume] (Washington, D.C.) 1854-1972, 1915-10-01

fairs of tho bank Since the new fed
eral reserve law came. into effect the
this nature. and the practice referred
to then ceased and Is no longer in
operation. These facts are stated to
make 1t clear that there never has been
officers Of the Riggs National Bank
aided it's depositors and customers in
| the making of their Investments in the
manner referred to. and also to make
it manifest that In the affidavit 1t could
! by no possibility have been intended to
deny that orders of this nature were
made through Lewis johnson Co, but
! to deny that they we're made for the
| account Of the bank
+ Try to Correct Impression.
During the preliminary hearing last
May, in the trial of the bank against
/ the Treasury officials, counsel for the
government sought to create the i'm
preston that the bank itself had been
trader in stocks by specializing in
its own name and for it's own profit
with the moneys Of the bank. and that
the bank had sold stocks short. To
correct that false impression it was
deemed advisable by the banks coun-
sci in the course Of the argument to
submit an AFFIDAVIT specifically denying
that this was the case. and the AFFIDAVIT
in question was prepared by counsel to
deny the erroneous Inference that the
bank had cleared such orders for its
own account. OF that 1t ever made
short sales.
when it appeared that this afii-
davit was being mfsintefpreted, coun-
sci for the bank Immediately arose and
explained to the court the mea ming and
intent Of the affidavit, namely. that
lit was drawn solely to meet the charge.
whether directly or implicitly made,
that the bank had speculated with its
funds, for its. own account. or had
made short sales of stock. and pointed
out that only by forced construction
Of the wording Of the affidavit was it
leading. rendering 1t impossible that
the aff1davit could have been misunder-
stood or any one deceived.
AS soon as the question Of the mean
board Of directors took measures to
ascertain the facts for its own benefit,
and within few days thereafter. at a
meeting of the board, appointed a spe-
H. Rozier Dulany. Charles l. Corby and
Joseph Paul, with directions to inves-
tiEate all matters involved in the aff-
davit, with authority to employ expert
accountants and special counsel This
committee promptly employed the
American Audit Company of New York,
accountants having no connection with
the bank or it's officers. to make a
complete examination of the records of
the bank and Of Lewis johnson & CO.
The audit company and committee
pursued their investigation daily dur
ing the past four months. One by one
the items referred to In the. affidavit Of
w. Norris hammond. hled by govern
fed. and all but a relatively small num-
Der have been actually identified as
being for the account of particular in
dfviduals, and 1t has been established
that no one of the transactions was
made for or in any way on account of
the Riggs National Bank. Also, each
and every eo-called short sale was
traced and identified as being that of
an tRdivtdusi' and not In a single in
stance as that of the hank.
1T is deemed proper for the stock
holders, depositors and customers Of
the bank, as we'll as for the public, to
make this statement, and to add that
we are fully prepared to meet this new
form of attack.
History Of the Case.
The Riggs Bank case. attracting
widespread national interest. started
with a suit fled by the bank against
John Shelton Williams. controller of
the currency; William G. McAdoo. Sec
Burke. treasurer Of the United States
The cnarge was made that Controller
Williams and Secretary McAdoo had
the bank and its officers. and that Con-
troller Williams had unlawfully en-
deavored to impose large money penal
ties on the bank.
Controller Williams had imposed
flne Of IS, 900 on the bank, alleging vio-
lations Of banking regulations. The
bank won the first skirmfsh by succeed
ing In getting temporary Injunction
preventing the government from col
iecting the $1,000. The final decision in
ed down by Justice Mccoy early this
fall, Judgment having been reserved
at the conclusion of the hearing last
spring.
During the hearing of the case last
May, 1t will be recalled, Samuel J. TN
termeyer, for the government officials,
produced statement from w. Morris
hammond, for years In the employ Of
bank had dealt in stocks for it's own
account.
Affidavit by Mr.. hammond.
MIR. Lammonds statement was in the
form Of an affidavit filed by MIR. Inter
myer. This affidavit was ~ follows:
Il am and have been from the begin
ming familiar with the stock and bond
transactions between the firm and the
Rigs National Bank which appear upon
the accounts In the books Of Lewis john
son 4 Co.
This account was opened january,
1906. 1t was closed October Z. 1919
There are about lSi pages containing
these accounts Of purchases and sales for
the Riggs National Bank in it's name,
each page showing on the debit and creuir
side approximately twenty TRANSACTIONS,
more or less, on each sioe OF the account,
making over six thousand transactions
on the form OF the ye4iow sheet, wnlcn
will ne found relefrea to in tue attluavit
OF bennett heretofore med"
Mr.. Lammond's altioavit was intend
ed to meet an aMdavit signed by
Charles &. Glover. president: w. j.
k'lather, one of the wee preslaents. AMI
h. n. Father. cashier OF the bank,
nled by Attorney Frank }. Hogan dur
ing the hearing May II, when was as
follows:
The bank never at any time since its
organization bought or SOD any stock
Whatever. from or through the Iirm Of
Lewis Johnson Il Co., ana that if any
entries on the books of the bankrupt
firm of Lewis johnson q Co. pu. ported
to show tnat the Riggs Bank naa ever,
at any time since ITS ORGANIZATION.