Evening star., 1935-10-24
STOCKS "SAVED"
IN BANK MERGER
Cooper Jury Told Donaldson
Move by Lawrence
A. Slaughter.

The merger of the defunct Com
mercial National Bank and Con-
tinental Trust Co., in 1890, really was a
stock saving move by R. Golden DON
aldson, once president of the former
bank. it was testified today by Law
renee A. Slaughter, former vice presi-
dent of Commercial, at the trial in
District Supreme Court of Col. Wade
H. Cooper on charges of misapplying
funds of the Commercial Bank.
1t was as a result of this affiliation
of the two institutions, according to
Irving Goldstein, leading the proSecu-
ton for the Government, that Cooper,
assuming presidency of Commercial
on resignation of Donaldson, effected
manipulation" for his own profit
in violation of national banking laws.
Slaughter. under cross-examination
by Chief Defense Attorney William E.
Leahy, said the Commercial board had
not initiated the consolidation. It
was, he declared, engineered by DON
aldson in an intensive effort Ito find
market for his stock in the Com
nercial which he was having difficulty
with"
Support for Stock.
1.-THE whole object was to find way
to support the large block of stock
which Mr. Donaldson held ano which,
under pressure, he was unable to take
care Of" the witness said.
"Mr. Donaldson first went to Riggs
and then the Federal American Banks
before he succeeded in negotiating the
Continental deal"
Slaughter declared a merger Of
Commercial with Continental was the
only way out for Mr.. Donaldson at
thak time"
The former vice president said the
Commercial directors welcomed the
affiliation because they felt it strength
ened the position of the Commercial
Bank. whose position had been affect
ed by unfavorable publicity regarding
one of the banks officers.
Questioned by Leahy about three
dividends of $4,000 each paid by Con-
tinental after the merger and which
the Government contends were illegal
and fraudulent, Slaughter reiterated
testimony of yesterday that he remon-
strated with Col Cooper and other Off
GERS of the bank about Continental
paying dividends when ''it had no
money with which to do it.
Advances Charged.
The Government charges Cooper
with advancing money from the Com
mercial Bank to the Continental Trust
Co. for the purpose of paying these
dividends.
In response to question from
Leahy, Slaughter said bank examiners
had checked the Commercials books
every six months and he did not re-
call that they ever criticized the divi-
dend payments by Continental or the
loans made by Commercial to Conti-
mental.
AS time went on, the witness said
the officers of the Commercial Bank
grew very much concerned" over the
value of the assets which Continental
had turned over to Commercial as
security for $4,000, 900 worth of deposit
liabilities assumed by Commercial
under the affiliation agreement. Con-
tinental had represented the book
value Of these assets to be in excess
of S4,000,00O.
After Leahy had brought out from
the witness that Col. Cooper had taken
substantial salary cuts some time after
becoming president of Commercial
Goldstein by redirect examination
sought to show that Cooper's salary
jumped from $500 year to $4,000
when he assumed presidency of Com
mercial after the merger.
Leahy in replying yesterday to
(See COOPER, Page s.