Click image to open full size in new tab
Article Text
Witnesses Testimony In Trial of
Crowds Attend Sessions in Courtroom of Judge O'Connor
Assistant State's Attorney Edwin Raber said Sunday that pected conclude the presentation the in the Bain trial by Wednesday Thursday of this week. The trial far has taknearly month. Attorney Francis Busch, representing the four John Bain, former head of the chain banks, his sons, Robert John H., and Merle Fisher, said he might take several presenting the fense, the trial before Judge John without jury, charges of conspiracy defraud depositors. Attorney Busch the defense would be that no criminal intent actuated the bankers in their transactions. Bain and his will take the witness and tell their stories of the collapse the twelve banks, in which depositors had
Says Property Overvalued clates, his subsidiary companies, and Following gist of testimony officers and directors of banks. given since last week's issue of LibReal estate totaling Bell: shown, which Bain Harry Cutmore, chief deputy group had obtained sessor, testified that property Edwin Nelson, 9401 South Ashwhich John Bain issued $375,000 land avenue, twenty bonds was worth only $327,years' experience, testified he had 475. He testimony about values sold $30,000,000 worth of real estate pieces property on and his sales prices property which there bond the vicinity of Bain holdings, the The Hall building at 79th showing that Bain's estistreet and Evans which far too high. Nelson said former United States Senator Charles had appraised Bains' property Deneen and Dr. Walter Buhlig the state's request after the twelve owners Bain, Bain banks failed year ago, and given most because that the appraisal out findfigured prominently in other testiovervaluation mony the trial. Carl Hornung, director of Bain's Bain appraised the property West Englewood Trust Savings for purpose selling bank, testified that two months bebonds Cutmore, who was fore the banks failed he was induced rector of appraisals for Cook county sign $25,000 note "conveni1929, said the law provides 'for before bond issue can there was told to bring in $20, must two appraisals by disinter000 good collateral, ested persons then the issue and did," he added. limited per cent of the banks closed, learned that my praised value. and mortgages posted with the In 1928, the Bain banks beIllinois bank collatselling Normandy Hall bonds, Bain loans." value the building was insisted that you 375 and the land worth duce your mortgages collatCutmore stated. When the banks instead of taking closed, June 1931, the total the inquired Prosecutor Rahad shrunk accordguess they thought my his estimate curities would be better,' Hornung the forty-one properties listed Cutmore the Prosecutor Raber called Miss Anna total value. Prosecutor Raber Eunson, secretary Bain's figures, for the purpose Bain, the witness of far in excess identified letters written Bain by of the $8,000,000 valuation. brokerage firm and Chase Lester Stark, auditor emNational bank of New York. ployed state's attorney, testibrokers asked for margin. The fied his of the bank asked repayment of loan of trust that three years old. the Bain banks which bonds Attorney Busch, for the defense, issued. the transacsought the letters excluded tions showed rapidly from evidence the ground they ues for land. Stark traced one taken from Bain's personal files property and were used violation of $73,000 and the constitutional rights. Judge eventual listing the property overruled the objection. valued $120,000. Stark's records showed that in the Charles H. Meacham, formerly sistant to John Bain, months before the Bain banks were closed listed stocks taken from the closing the twelve Bain banks June Other the trusts, and stock in John Bain, banks had closed June he Inc., their place. In one and the Bain banks needed stance, Stark testified, Bain took out shares stock building cash any runs the next street Ashland avenue, day. developed which Bain's records showed to early June the worth much shares Stony Island, and Bryn Mawr banks. Bain, Inc., but Bain only put Meacham said he appealed back shares stock in his own bank cash and the Bain company and used the equivalent banks' credit but that 5,700 shares pay debt to another meant the banks were to close, his subsidiaries, the Lewes com- the loop bank wouldn't lend the pany. $400,000
Former Secretary Testifies telephoned the witMiss Anna Eunson, former said. the downtary John Bain, testified that town bank. he called she drew check for back he crying. He told and against close all the banks. had the switchof John Bain, trustee. board operator each of the he for this twelve cashiers. dictated stateasked Raber ment they paste the front she hadn't signed by decided stocks Prosecutor Raber obtained from he turn over any stocks the series of explanations replace Raber why the Bain refused and was further The banks had collatHarold Sims, chief posted for loan not to exceed the house was said He explained for by that there was no more collateral questioning Raber produced letter dated Sept. Sims identified The witness gave account the letter as one sent John Bain, in the the banks, which were set forth the results the Bain companies, John examination by Mr. Sims some Bain, Inc., the company, and months the assets they absorbed Bain which affiliate John Bain, Inc., was concern membership in clearing house. consolidate management the The the letter that the various properties assets of Bain Chicago clearing desired loans banks organization. assets totaling listed Each day would at the get Bain bank holdings, be eliminated fice John Bain, Inc., report maturity, their worth not being the cash on hand, the assets and the satisfactory the clearing clearings various banks, Of this the West Meacham said. From the downtown Trust Savings bank, parent bank office would decide how much the Bain chain, held additional cash each Bain bank Mr. Sims related that would and he subsequently would borrow the meeting of the clearing house aggregate amount and then allocate mittee held, John Bain, share each former Senator Charles Deneen that Bain made Roy Massena attacked Sims final effort the findings. The committee decided day the banks Meacham Sims' findings, testified. the Chatham bank reported second Sims' fig. only $5,000 on hand on the closupheld. of the clearing house was say bank had only $5,000 June, of that meeting was sound like bank which identified which Bain I'd like an told he take Defense Attorney Busch said from his banks thought question would his clearing house bring desired information clearing committee, Meacham then said that this testified, held meeting Jan. 1931, and that meeting Bain notified that, effective Feb. 15, his banks would membership the clearing house. Irwin Gilruth, receiver for the twelve banks, that Bain by the county collect taxes. During May, 1931, the month before the bank chain closed the twelve banks $884,233 from taxpayers and not this money over the county. The cash was not hand when the state auditor closed the banks. Mr. Gilruth testified that the day before the banks were closed Bain $100,000 in bonds the south park board safeeguard deposit the board of that amount. Another deposit the south park board $25,000 the Chicago Lawn State bank, this regarded preferred claim, Gilruth The eleven the Bain banks had paid obligations $1,000,000 to Continental Illinois Bank and Trust since they closed and the collateral has been returned. None of the collateral consisted of notes John Bain his companies, the stated. statement of the condition of the banks by Lester Stark, employed by the state's attorney, showed and doubtful of $6,243,951 the twelve Bain banks, which 686,975 loans discounts made by Bain, his family and asso-
