Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1916-05-12

| duotilci itohi anu uDOuJ SIX unsigned
cashier s checks varying in amounts
from $26,S00 to $500. Mr.. Averll ex-
planned, the witness said, that these
checks were drawn in his favor he hav-
ing loaned the bank money.
The Phoenix publishes herewith q
statement by Attorney Clarke c. Fits,
chief counsel for Mr.. Averill, relative
to the ross-examination of United
States Bank Examiner James II. Kel
liner. Mr.. Fits says:
owe showed by his crossexamna-
ton in one-half hour Saturday that at
his examinations in July, 1914, he APP.
proved of the same things which he Sc
verely criticized in March, 1915, ano
on which the Indictment is partly
founded. He admitted that the six
checks which in direct examination he
said were drawn to the order of Mr..
Averill personally were in fact drawn
to the bank.
"He admitted that his testimony in
direct as to the count of cash and such
items was an error and that what he
criticized in March as to the method
of keeping the cash book he had dis
tinctiy approved the July before.
"Mr. Keliher admitted that any en-
tries which Mr.. Averill made as ex-
aminer charged, to affect the account
of the Shawmut bank, could not have
deceived him or the treasury depart
ment, as the law required the examiner
to verify the account by the books of
the Shawmut, and that all bank people
knew it,
When court adjourned on Saturday
it was left by order of Judge Hand
that Mr.. Kelleher must bring in to
court Monday afternoon his report of
the condition of the Vermont National
bank to the comptroller in July, 1914.
Keleher claimed that this report was
confidential and couldn t be used in the
case. Judge Hand thought otherwise,
however, and the report was on hand
when court came in Monday after
noon.
The defense in asking for this sought
to show by its contents a favorable re-
port on the bank s condition on the day
| examined and that many entries such
as had been made on the books on his
later visit had been made in 1914 and
indeed had been the custom for sew
eral years, proving in the mind of the
defense that if the bank was all right
on the earlier date and the methods of
bookkeeping used by Mr.. Averill were
all right then. they were all right later.
The report, which was read in part
| in the conduct of the trial, showed that
| Mr.. Kelleher reported the condition of
the bank to be all right in July, 1914.
Mr.. Fits questioned the witness as
to the conversation he had with Mr..
Averll on the day of the last eXamina-
ton and when the examiner said he
found the alleged false statement on the
books of the bank. Witness said he
asked Mr. Averill about certain trans
fers to Shawmut and about certain UNI
signed cashiers checks and also as to
certain cash items in the footings of
the day S accounts. In explanation
the witness stated that Averill told him
that the transfers had been made to
make the bank reserve appear greater
than it really was That the cashier S
checks belonged to him for money
which the bank owed him for commits
sions on business secured, etc. Four of
these checks were unsigned, one was
drawn to the order of Mr.. Averill and
one to the Vermont National, trustee.
Counsel for defense brought out in
the cross examination that there were
unsigned cashiers checks in the Yer
mont National as carly as 1905 which
were still outstanding when the last ex-
animation of the bank was made by Mr.
Kelleher. These unsigned cashier s
checks had been rcconciled from year
to year by all the bank examiners. Mr.,
Fits also brought out in the cross-eX-
animation that in all but one or two pc
RODS mentioned in the indictment the
bank S reserve was little more than
the legal requirement Us per cent of
the total deposits), even without the
checks which it is alleged Mr.. Averill
used in bolstering up his reserve by a
system of charging and crediting sepa-
rate banks.
Testifying as to Mr.. Averill's health
during the period Just before the case
started Judge Tyler said he appeared
depressed. Work piled up on his desk.
The judge testified he would not have
known of conditions at the bank had
it not been for the discovery by the
bank examiner of certain entries on
the books which appeared in the case.
Mr.. Kelleher IS examination brought to
the knowledge of the board among
other things the fact of debenture
bond of $4,000 belonging to the bank.
1t was purchased years before but
the present directors did not even
know of its existence. The bond had
never been reported among the bank s
assets.
C. W. Richardson, at one time cash
Ter of the Vermont national bank, tes-
tilted Tuesday in regard to the de-
benture bond of $4,000 Mr.. Richard
son said the bond was kept in what
was known as the north vault, not
with Mr.. Averill S private papers.
Judge Tyler also testified that the
bond was not found among Mr.. Aver
ills private papers. Judge Tyler also
testified that the first suggestion of
considering Kelleher for the presiden-
cy of the bank to succeed Mr.. Averill
came from Mr.. Kelleher, and not from
the judge or any of the other direc-
| tors.
George c. Averill was on the stand
several hours Wednesday in his own
defense. He made a general denial of
the charges. He said he owned
$50 shares of the bank stock at par
value of $50. When he came there in
1885 the bank paid 10 per cent divi-
dends, when he left it paid dividends
of 16 per cent.
He alone was responsible for the en-
| tri bn hnnEc 10 tna1n nd