Evening star., 1931-05-15
Bank Examiner Testifies of
Finding Excess Loans to
Investing Depositor.
RESIGNATION FOLLOWED
NIGHT BOARD MEETING
Signature on Bank Records Iden.
tilted by Witnesses at Trial of
Former Bank President.

tanned by Mrs. Louise T. Chambers.
who acted on his advice, 1t was testi-
fed today at Haynes trial on charge
Of misappropriating funds of the bank.
William P. Folger, who is now chief
national bank examiner, detailed the
account of Haynes resignation at a
meeting of the directors which Folger
said he himself had called on Septem-
Der IL, 1928, following an examination
of the banks records two days pre-
viously.
The meeting. which started at II
| pm, lasted until o'clock in the morn
ing and broke up only after Mr.
Haynes had submitted his resignation.
Mrs. Chambers, in a suit against
Haynes, has charged he "dissipated" her
fortune, putting her loss at $2so,oOO.
Examiner Tells Story.
Folger followed to the stand Paul
c. Ramsdell, a national bank exam
! liner, who visited the bank in July Of
1928 At that time he said, he found
| two cash items" representing cashiers
! checks for $29,050 and for $4,000 sent
| to w. B. Hibbs g. Co., local brokers.
| for the account Of Louise T. Chambers.
He said they created excessive loans
| to Mrs. Chambers, and that in dis
| cussing the matter with Haynes that
the bank president said that 1t was
only temporary matter and would
| be adjusted"
Ramsdell said in answer to ques-
! tioning that a limit TO loan should
have been 10000, which would be 10
| per cent Of the banks capital and
| surplus. Ramsdell said that he dis
cussed the matter with Haynes because
1T was irregular"
| When Folger took the stand he de-
| clared in response to a query by United
States Attorney Leo A. Rover, who Is
| prosecuting the case, that he visited
the bank on September 10, 1928, in re-
! sponse to certain information" The
| nature OF this information was not
brought out Folger said that he asked
| the cashier to see the cash items" and
that they were brought from paying
teller. Among them, he said, he found
! a ticket for 9,050 on which there was
a pencil notation for Mrs. Louise T.
Chambers, credit Hibbs d Co" This
was signed Harry v. Haynes, and was
dated June IS, three months previously.
Also Found $4,000 Draft.
It had been brought out In previous
questioning Of both Folger and Rams
dell that such items should not remain
in the cages more than two or three
| days
Folger added that he found also a
draft for S33, 900 drawn by Mr.. Haynes
! on Hibbs & Co. This was not dated,
| but a notation on it indicated it had
been placed there September Z. He also
| found, he said, that Mr.. Haynes account
| On the individual ledger, marked "Syndi-
| cate Account Zone OF the accounts
which it has been brought out Haynes
| carried at the bank, had received a
credit of $4,000, this deposit covering
/ an overdraft
| Folger said that he did not say any
| thing TO Haynes about it on that day,
| but that two days later he himself
| called the meeting Of the directors at
which Haynes appeared. When these
matters were brought up, Haynes was
/ quoted as saying that Mrs. Chambers,
| who had Eeen a customer at the bank,
| had lost considerable money acting on
| his advice aid that the proceeds Of
those items had been used to recoup her
losses"
Folger declared that Haynes then said
he would resign, left the room and came
| back with his resignation as president
| and director of the Farmers and Me-
chanlcS Bank.
Identifies Handwriting.
H. WinShip Wheatley of counsel for
| the defense questioned Folger ss to If
he knows what handwriting" was on
the ticket for $29,050.
"Mr. Haynes" the witness said.
Rover questioned Fo,ger as to whether
| certain cash items" which he enumer-
ated would be irregular, and drew from
the witness the statement that such
| hypothetical cases as Rover propounded
would be irregular and unusual Rover
asked the witness, "Supposing the
| president of bank draws a check for
| $685. 900 against his account, creating
an overdraft, and puts cash item in
to cover it, would that be Irregular"
| The witness said that 1t would be.
Rover asked again II he repeated the
| action with the same amount involved
! would that also constitute an irregu-
| larity. and the witness agreed that 1t
would. Again Rover asked If he did
! the same thing with a $4,000 item,
| would the procedure be viewed askance
! by Government banking officials, and
| drew the same reply
After the bank examiners testimony
! had been completed James c. Elgin,
| audit-r of w. B. Hibbs & Co., who
began his testimony yesterday, was re-
| called to the stand to continue with
| his identification of records in stock
| transactions in which Haynes is reputed
to have figured
Seven other Hibbs employees followed
Elgin to the stand for Identification of
| these records. They were Paul p Rod
| Ter. cashier: w. c. Smith, customers
man; James j. Madden, teller: j. Carl
Perry. bookkeeper; Albert Haas, secur-
| ities clerk; Frank Kane, chief telegra-
| pher. and Leo A. Herer. telegrapher.
| After these witnesses had testified, jus
| tice Gordon took an adjournment until
Monday morning. 1t Is not thought that
the prosecution will complete presenta-
| ton OF its case before Thursday.
| Bennett Takes Stand.
| George willard Bennett, who went
to Lorton more than year ago to
begin serving a nine-year sentence for
enbezzlement of 100000 at the Far
mers & Mechanics, where he was first
paving and receiving teller, took the
stand yesterday afternoon TO identify
bank records.
The questioning of Bennett did not
extend beyond the records.
Like other witnesses who held posi-
tions in the bank under Haynes, Ben
nett was asked who supervised his
work.
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