Evening star., 1939-04-04
Rhodes BIames
Currency Controller
For His Troubles
Former Fidelity Head
Takes Stand in
Perjury Trial

of the Fidelity Building & Loan AS
sociation, which was closed in July,
1886. took the stand in District
Court today to defend himself
against charge Of perjury, and at
once began recital of the difficult
ties with the controller of the cur
rency which previously have been
blamed for his plight.
Mr.. Rhodes is accused of swearing
falsely to report to the controller
covering the condition of Fidelity
as of June 30, 1885. Responsibility
for the figures in the report al
ready has been assumed by Mrs.
Ruth S. Horner, who was assistant
secretary and assistant treasurer of
the institution. She sought to JUS
tify irregularities in accounting that
were reflected in the report by con-
tending that the controller would
not allow certain proper assets to be
shown. These included physical
properties in six branch Offices and
some other items.
Mr.. Rhodes said that the control
Ter (at that time j. W. Pole) ordered
Fidelity to close within four or. five
days after it had opened in 1929.
He at that time was counsel for the
association and the president was
Harvey Cox, an attorney. Mr.. Cox,
witness today, and Mr.. Rhodes
both agreed that the controller had
said that there were enough build-
ing and loan associations in the D:s-
trict and that he didn't want any
more opened.
Ignored Controller.
Mr.. Rhodes said also that the
controller threatened to indict all
the hackers of Fidelity and that Ed
ward F.. Colladay, who was their
special counsel, had told the Treas
ury official that the Justice Depart
ment had said the controller had no
power to interfere with the organ
ization.
They ignored the controller S
order to close, the witness con-
tinued, but later, at the order of
that official, discontinued selling
membership certificates and accept
ing insured deposits.
This, Mr.. Rhodes continued, ma
terially affected the financial status
of the institution.
The controller, he said, then
sought to force the closing of the
branches that Fidelity had opened
as business expanded, and after the
institution had closed during the
bank holiday in 1888 said he would
not let it reopen unless the branches
were suspended. Mr.. Rhodes said
he signed an agreement to close the
branches, but the directors refused
to go through with this.
He pointed out if they had been
closed depositors would have wanted
their money back and that they also
would have lost their investments in
property in nearby Maryland and
Virginia.
Ledger Sheets Brought Up.
Mr.. Rhodes, under questioning by
William E. Leahy, chief of defense
counsel, then told of coming into
possession Of the % ledger sheets
that have figured largely in the case
up to this time These sheets COW
cred the accounts of depositors that
were withheld from the regular book-
keeping channels of the institution
IN order to keep the books in bal
ance. The Government has sought
to prove that the fact they were in
Mr.. Rhodes possession in June. 1896,
showed that he knew the accounts
were not reflected in the report to
the Treasury year earlier.
He said, however, that the sheets
were sent over to him early in June,
1896, because Mr.. Stovall was
threatening to 60 through Mrs.
HornerS desk"
At that time, Mr.. Rhodes had left
the presidency and was at his law
Offices in the National Press Build
ing According to previous testi-
mony, Mr.. Stovall was an auditor
who was going over the affairs of
Fidelity, and these sheets were in
Mrs. Horner's possession at the
Fidelity offices. He did not say who
sent the ledger sheets over to him.
Mrs. Horner. who had assumed re-
sponsibility for the report in an all
day appearance on the stand yes
teroay, was recalled today and said
that the directors and the Finance
Committee of Fidelity also had
signed the report.
The Government charges that the
report to the controller on the con-
dition of Fidelity as of June 80, 1885,
was false in that the liabilities were
understated by $4,000, represented
by the accounts of % depositors that
had been withheld from the regular
bookkeeping channels.