Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1919-05-20
Court Dismisses Plea
to Dismiss Injunction;
Williams Gives His Side

Motions to dismiss the case Of the
First National Bank of Canton VS..
John Shelton Williams, Comptroller
of the Currency. on the grounds of
process and Jurisdiction, were over
ruled by Judge Charles Il. Wilmer
in Federal Court this morning. The
defense Immediately filed another
motion for dismissal, arguing that
the law gives the Comptroller the
power to call for special reports
and that. therefore, the court has
no power to distinguish between
special reports which are right and
wrong.
The motion was overruled. Mil
ton c. Elliott. of the defense, opened
the case by replying to the bill of
complaint. John B. Stanchfield, at
torney for the plaintiff. was present.
ing his answer as court adjourned
at noon, to meet again at 1.30.
In his affidavit answering the
Williams explains that the First
National Bank of Canton, Pa. has
been under continuous criticism
from the Comptroller's office for
more than fifteen years past and has
been on the special list since July,
1917. Among the many matters
which have been criticised in con-
nection with the mismanagement of
this bank have been the making OF
excessive loans, forbidden by law,
purchases of stocks contrary to law,
unlawful investments in real estate,
the overextension of credit and
loans to the officers of the bank and
to enterprises in which these Off
GERS are or were pecuniarily inter
ested--such loans having locked up
continuously through a long period
of years the greater part of the en-
tire capital and surplus of the
bank"
In discussing the charges made
by the bank that the call for spe-
cial reports was the result of per-
sonal spite and that he did this to
retaliate upon Congressman McFad-
den for advocating the abolishment
of the Comptrollers office, Williams
says he informed him that "the at
titude of this office in it's dealings
with his bank had no reference,
directly or indirectly, to any action
he had taken or might take relative
to the adjustment of the office of
the Comptroller of the Currency. L
assured him that l had not been
aware of his activity in that direc-
ton, never having seen or heard of
the speech which he claims in his
bill to have delivered on this sub
ject before some convention in the
year 1914. 1 told Mr.. McFadden
very plainly that he might. pursue
any course he saw fit in that con-
nection and that, whether he ap-
proved or disapproved of the Comp
troller's office, efforts to protect
and safeguard the depositors and
shareholders of his bank would be
unremitting."
In reviewing the points brought up
in the case in this afternoons session.
which opened at 1880 o'clock, Attor-
ney Stanchfleld narrated the rise of
Congressman McFadden from the po-
sition of janitor, in 1890, to his pres
ent office as president of the bank.
This position was given him in 1915.
He has also been president of the
State Bankers Association.
Stanchfeld continued his address,
telling how the bank examiners came
into Canton and went over the af-
fairs of the bank. He said they went
to a local hotel where the financial
statements of the bank were posted
as advertisements. These statements
were ordered torn down. When the
botelman learned the people giving
the orders were national bank exam
iners. he followed their demands. It
is saiG he took the statements, rolled
them into a bundle and put them
away. but that they were later stolen
from his possession.
Naturally. Mr.. Stanchield continued.
frequent visits by a company of bank
examiners aroused suspicion in the
minds of the depositors, regardless of
the fact that the bank enjoyed good
character. The examiners, when they
wanted to telephone, went across the
street to the Farmers National Bank:
where they talked within hearing OF
attaches. divulging information to the
rival institution. The suspicious of
the depositors resulted in run on
the hank.