The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-03-25
NEW LIGHT IS
CAST ON BANK
'COvERUP DEAL
Delay of Nine Months in
Prosecution of Hartman
Case Revealed.
EXPLANATION Is GIVEN
Fear That Run Would Be
Made on Institution
Brought Delay.
EXPLANATION IS GIVEN

BIZ Scripps-Howayd Newspaper 4HaHce
WASHINGTON, March 25.-The
demand for congressional investiga-
ton of the treasury, the comptroller
OF the currency, and the department
of justice grew today, with disclos-
ure that Hoover administration Off
Gals delayed for nine months the
prosecution Of Joseph w. Hartman,
president Of the closed Hartman
National Bank and Trust Company
of New York, for alleged Justification
of accounts.
The alleged Irregularities first
were discovered on July 9, but a
detailed report was not submitted to
the comptroller of the currency by
l.. K. Roberts, chief national bank
examiner, until Dec %.
Only an informal letter for filing
was sent to the comptroller by Rob-
erts on July 25, and it contained no
basis for court action. j. w. Pole
was comptroller at this time, but he
resigned on Sept 20.
Confer With Investigator
The senate banking and currency
committee, through its chairman,
Senator Duncan u. Fletcher Dem,
Fla now is in long distance tele-
phone connection with Ferdinand
Pecora, counsel for the committee
stock market investigation, in New
York. on the Hartman matter. Pc
cora may come to Washington
Tuesday for the committees sched-
uled meeting. in which event the
Hartman case probably will be
taken up.
The committee is charged with
investigating stock transactions,
such as those participated in by
bank afflliates, and will look into
the Hartman affair on this basis,
if any evidence is found that the
Hartman bank funds went into
security buying.
When Examiner Roberts report
reached Acting Controller F. G..
Await on Dec. %, he Immediately
forwarded copies to the department
TO justice here and to George z.
Medalie, United States attorney, at
New York. Under instructions from
the department here, Medalie held
up prosecution, and no action was
taken against Hartman until
after the Roosevelt administration
came in.
Reason Given for Delay
The reason for the delay in both
instances, according to Mr.. Await
and department of justice officials,
was the precarious banking situa-
ton, and the fear that an indict-
ment would lead to run on the
Hartman bank, and possibly others.
Roberts said in his July IS letter
he was holding up his report in
the hope that funds could be recov-
cred and disquieting situation
strengthened. The bank remained
open until the national holiday, but
now is closed.
When asked if bank examiners
had this authority. Await answered
that it was justified by the situa-
ton He still is in constant COM
munication with New York Clearing
House officials, who asked delay in
prosecution after he had forwarded
a report to the department of JUS
tice.
When the moment for initial
prosecution arrived on the day
Awaits reports reached the prosecu-
ting authorities, he was visited by
Henry f. Cooper, new president of
the bank. the attorney for the New
York clearing house, and another
bank official.
Asked No Publicity
They urged no publicity while
they sought to reorganize, also
pointing out the delicate situation,
and Await recommended this course
to the department of justice. if it
were consistent with justice. "
Treasury officials asked that no &C
ton be started without notifying
them first.
In a conference with officials of
the department of Justice, the same
spokesman asked for temporary
delay" They said they simply want
ed time to "fortify" the Hartman
bank against any run that might
follow publicity attending the IN
dictment.
Though they produced no records,
they said the bank was safe and
liquid, but not in condition to
stand the sort of run that might