Evening star., 1939-03-28
Trial Of Rhodes
|nFide|ity Case
Is Under Way
Defendant Declares
Controllers Fight
Forced Accountinq

Forced Accounting
Accused Of covering up deficit
Of approximately $4,000 in report
to the Treasury on the financial
condition of the old Fidelity Build
ing g. Loan Association, Fred B.
Rhodes, the former president, set up
as a defense in District Court today
that fight on the institution by the
controller of the currency necessi-
tated the accounting for which he
stands indicted for perjury
The controller, it was declared BY
William E. Leahy, chief of defense
counsel, in his opening statement,
refused to allow the association to
show as an asset about $4,000 rep
resented in property in its city-wide
branches, and that this meant the
difference between reporting a sur
plus and deficit.
At the same time, however, de-
fense counsel sought to relieve Mr..
Rhodes Of responsibility for the ac-
curacy of the saying, That was the
business of the bookkeeper."
Explaining Mr.. Rhodes as law
yer, counsel said "he doesn't know
much more about bookkeeping than
a mouse does about Christmas"
Rhodes Third Trial.
Today was the third time that Mr..
Rhodes, now SO, has faced trial on
charges growing out of the closing
in July, 1886, of the association
which dealt extensively in proper
ties in nearby Maryland and Vir-
ginia. The other two trials were on
indictments charging forgery and
in both the juries after lengthy de-
liberation failed to reach verdict.
In outlining the case to the jury
of three women and nine men,
which was chosen late yesterday be-
fore Justice Jesse c. Adkins, Assist
ant United States Attorney John j.
Wilson. the prosecutor, explained
that the perjury indictment on two
counts is based on the report to the
controller of the condition of the
association as of June 80, 1885. This
report, the prosecutor said showed
liabilities of-in round figures
ST 1862 900. and that this was about
77,000 short of the true figure The
report, he continued. also showed
undivided profits and surplus of
$4,000 as against a deficit of $4,000
which would have been proper under
the circumstances.
This shortage of s77,0O0. Mr.. Will
son continued. was represented in
the accounts of % depositors which
were not included in the report. The
| ledger sheets carrying these ac-
| counts, he said, were found on Mr..
Rhodes desk in his law Office in the
National Press Building four months
after he had severed connection
with the institution.
Attacks Controller.
In his opening statement, Mr..
Leahy at once launched into an at
tack on the controller of the cur
rency, but he did not develop the
reason for the reputed animus of
that Office toward the institution.
Mr.. Leahy said the trouble with the
controllers Office started the day
the Fidelity opened and that that
official had threatened to "indict the
whole crowd the hackers
| of Fidelity.
The business expanded. defense
said, and eventually branches were
opened and the controller sought
to close these.
He insisted there wasn't a red
cent ever taken by SOUL from
Fidelity and that Mr.. Rhodes had
dumped 100000 of his own money"
into the concern.
He said it will be shown that a
separate record was kept of every
transaction and that the directors
knew all about the method of ac-
counting. He added that I. Chor-
pening, national bank examiner, had
known of the situation and had
told the Fidelity nevertheless to de-
clare the June dividend.
Documents Identified.
The early witnesses called by the
defense identified various documents
which are later to figure in the case
Among these witnesses was Cooper
Rhodes. son of the defendant, who
had notarized the report to the
controller.
The names of the Jurors follow:
George R. Lindsay. 80, clerk. 506l
Conduit road NV; Edward W.
Howard, 81, meat cutter, 1910 Thirty
fifth street NV: Mrs. Grace H. Bar
ber, 81, 1407 Kennedy street NV,
housewife; F.. Latimer Barkley, 80,
1926 Warren street NV, real estate
man; Ernest j. Benin. 48. 36Ol Abe
marie street NV, in the Procure
ment Division Of the Treasury De-
partment: Mrs. Sarah s. Gagnusson,
Sc, 1928 Northampton street, NV;
Maurice J. Collins, SO, 1907 Floral
street NV, real estate man: Edward
j. Maloy, jr., 33, 113l Allison street
NV, clerk; John P. Donovan, 63,
% Fifth street NE. clerk; Harry G..
Pitt, "a, 239 Concord avenue NV,
insurance man and noted golfer;
Arthur j. Golden. 46, 1901 Thirteenth
street, NV, clerk, and Mrs. M. Vir.
ginia Hack, 43, 1410 M street NV,