4289. Chicago National Bank (Chicago, IL)

Bank Information

Episode Type: Suspension → Closure
Bank Type: national
Bank ID: 2601
Charter Number: 2601
Start Date: December 16, 1905
Location: Chicago, Illinois (41.850, -87.650)

Metadata

Model: gpt-5-mini
Short Digest: dad38899

Response Measures

None

Description

The articles describe the Chicago National Bank's collapse under President John R. Walsh (misapplication/speculation of bank funds), allied Chicago banks paying depositors, and subsequent appointment/upholding of a receiver. The original failure/closure date is referenced as 1905 (Comptroller announced bank would have to close). Later 1910-1911 articles discuss receivership and litigation. No contemporaneous isolated run is described in these clippings; the bank failed/suspended and remained in liquidation with a receiver.

Events (5)

1. December 15, 1881 Chartered

Source: historical_nic

2. December 16, 1905 Suspension

Cause: Bank Specific Adverse Info
Cause Details: Bank failed because President John R. Walsh misapplied bank funds and invested heavily in his private enterprises (dummy notes, bonds, speculative loans), causing insolvency.
Newspaper Excerpt: the fifth anniversary of the day the Comptroller of the Currency came to Chicago and announced that the bank would have to close
Source: newspapers

3. December 16, 1910 Receivership

Newspaper Excerpt: Judge Tuthill ruled to-day ... granted an injunction ... providing for the appointment of a receiver with instructions to sue Billings ... The decision to-day came on the fifth anniversary of the day the Comptroller of the Currency came to Chicago and announced that the bank would have to close. The organization of the bank is kept in existence by the stockholders in an effort to realize on what remains of the assets of the institution. The new receiver will be named next Monday.
Source: newspapers

4. April 18, 1911 Other

Newspaper Excerpt: Illinois appellate court today upheld the appointment of a receiver for the Chicago National bank and the Home Savings bank, the John R. Walsh institutions which went down with his financial crash in 1905. Stockholders had sued C. K. G. Billings ... for $3,000,000
Source: newspapers

5. August 15, 1913 Voluntary Liquidation

Source: historical_nic

Newspaper Articles (14)

1. December 17, 1910 The Sun New York, NY

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WILL SUE C. K. 6. BILLINGS. Court to Name Receiver for Defunet Waish Bank to Bring Action. CHICAGO. Dec 16 Judge Tuthill ruled to-day that C K. G. Billingsis liable for losses suffered by stockholders to the amount of $3,000,000 by reason of his negligence with other directors of the now defunct Chicago National Bank. The Court also granted an injunction against the present board of directors of the bank restraining them from accepting a compromise offered by Mr. Billings and providing for the appointment of a receiver with instructions to sue Billings for that amount and to attach his Chicago property. Billings has paid nothing of the bank's losses, but the other directors have paid amounts aggregating more than $1,000,000. The decision to-day came on the fifth anniversary of the day the Comptroller of the Currency came to Chicago and announced that the bank would have to close The organization of the bank is kept in existence by the stockholders in an effort to realize on what remains of the assets of the institution. Mr. Billings offered the present board of directors $150,000 for a full release of all his liability. The new receiver will be named next Monday

2. December 23, 1910 The Wisconsin Tobacco Reporter Edgerton, WI

Article from The Wisconsin Tobacco Reporter, December 23, 1910

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BILLINGS HELD LIABLE Sensational Decision Handed Down in the Walsh Bank Case. Judge Tuttle handed down in court in Chicago a sensational ruling that in his judgment C.K. G. Billings, the chairman of the board of directors of the Peoples Gas Light and Coke company, is liable as to losses suffered by stockholders in the sum of $3,000,000 by reason of his negligence, with other directors of the now defunct Chicago National bank, which went to the wall under the presidency of John R. Walsh. The court also granted an injunction against the present board of directors of that bank restraining them from accepting a compromise offered by Mr. Billings and providing for the appointment of a receiver with instructions to sue the gas company head for the above amount and to attach his Chicago property.

3. December 24, 1910 The Diamond Drill Crystal Falls, MI

Article from The Diamond Drill, December 24, 1910

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BILLINGS HELD LIABLE Sensational Decision Handed Down in the Walsh Bank Case. Judge Tuttle handed down in court in Chicago a sensational ruling that in his judgment C. K. G. Billings, the chairman of the board of directors of the Peoples Gas Light and Coke company, is liable as to losses suffered by stockholders in the sum of $3,000,000 by reason of his negligence, with other directors of the now defunct Chicago National bank which went to the wall under the presidency of John R. Walsh. The court also granted an injunction against the present board of directors of that bank restraining them from accepting a compromise offered by Mr. Billings and providing for the appointment of a receiver with instructions to sue the gas company head for the above amount and to attach his Chieago property.

4. April 19, 1911 Norwich Bulletin Norwich, CT

Article from Norwich Bulletin, April 19, 1911

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RECEIVER UPHELD FOR THE WALSH INSTITUTIONS. Director Billings Being Sued for $3,. 000,000 by the Stockholders. Chicago, April 18.-The Illinois appellate court today upheld the appointment of a receiver for the Chicago National bank and the Home Savings bank, the John R. Walsh institutions which went down with his financial crash in 1905. Stockholders had sued C. K. G. Billings of New York, one of the directors of the banks, for $3,000,000, the whole amount alleged to have been lost by them. Their plea. was based on a statute holding any one director liable for all losses sustained through his failure to prevent illegal practices in national banks. A receiver for the bank, it is expected, will sue out a writ of attachment on Billings' property here, including his stock in the People's Gas Light and Coke company, to pay the judgment. The court allowed a compromise if the stockholders and Billings could arrive at one.

5. April 19, 1911 The Sun New York, NY

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MAY HOLD BILLINGS LIABLE. Court Decision in Walsh Bank Case Held to Point That Way. CHICAGO. April 18. -Judge Jesse A. Baldwin, sitting in the branch Appellate Court, handed down an opinion to-day in which he upheld the appointment of a receiver for the Chicago National Bank and Home Savings Bank, of which John R. Walsh was formerly president. The decision to-day grew out of suits begun against C. K. G. Billings and the directors of the banks to prevent the latter from accepting a settlement from Billings in lieu of his alleged liability. Billings was formerly a director of the banks. The decision of the branch Appellate Court was pointed out by Attorney Jacob Newman, representing several stockholders. to mean that Billings is liable for losses suffered by stockholders in the sum of $3,000,000 by reason of his negligence as a director.

6. April 19, 1911 Omaha Daily Bee Omaha, NE

Article from Omaha Daily Bee, April 19, 1911

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Receiver for Two Walsh Institutions Illinois Appellate Court Hands Down Decision Upholding the Appointment. CHICAGO. April 18.-The Illinois appellate court today upheld the appointment of a receiver for the Chicago National bank and the Home Savings bank, the John R. Walsh institutions, which went down with his financial crash in 1905. Stockholders had sued C. K. G. Billings of New York, one of the directors of the banks, for $3,000,000, the whole amount alleged to have been lost by them. Their plea was based on a statute holding and one directly liable for all losses sustained through his failure to prevent illegal practices on national banks.

7. May 25, 1911 Norwich Bulletin Norwich, CT

Article from Norwich Bulletin, May 25, 1911

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President Taft Denies Applications of 1 WO Bankers Now in Penitentiaries ALL EXECUTIVE CLEMENCY DENIED "Laws Must be Upheld," Says the President, "When They Affect the Rich Man More Than When They Affect the Poor" -Failure to Distinguish Between Legitimate Business and Improper Gain. Washington, May 24. - President action tonight was in accordance with the recommencations of Mr. WickerTaf: tonight denied the applications sham. for the pardon of Charles W. Morse of New York and John R. Walsh of ChiWalsh Misapplied Bank Funds. cago, the two most prominent bankers In denying Walsh's application the ever convicted and sent to federal pen president said in part: Itentiaries under the national bankJohn R. Walsh was convicted of ing laws. misapplication of the funds of the Denies All Executive Clemency. Chicago National bank while its president. Not only did the president refuse to pardon either Morse or Walsh, but he 'His pardon is asked: First, because his violations of laws were technical also declined at this time to exercise any other sort of executive elemency and did not involve moral turpitude in these cases or to shorten the senand secured,him no financial benefit; tences imposed upon the two men by second, eccuse all the depositors of the courts in which they were conhis banks were paid through the sacrivicted. fice of his private fortune: third, because he was, in doing what he did. The Laws Must Be Upheld. attempting to upbuild industrias of In denying the pardons the prestsubstantial benefit to the country: dent took a firm stand that the nafourth, because he is an old man, in tional banking laws, or any other laws, ill health, not likely to live long. and must be upheld when they affect the one who has borne a good reputation rich man, even more than when they and lived a life of simplicity and not of affect the poor. self indulgence. The Walsh Case. Walsh Controlled Three Banks. The record in the Walsh case. the "The facts are that Waish owned a president said in a long opinion. "shows large interest in three banks the Chimoral turpitude of that insidious and cago National bank the Equitable dangerous kind to punish which the Trust company and the Home Savings national banking laws were especially bank. the latter two Illinois state corenacted." porations He absolutely controlled The Case of Morse. them, although there was a substantial In considering the case of Morse, minority interest in all of them held the president said "that from a con by others. He used them to furnish gideration of the facts in each case I the money for the development of SEVhave no doubt that Morse should have eral railroads, limestone quarries, coal received a heavier sentence than mines and other enterprises. Walsh. Indeed, the methods taken by Used Bank Funds to Finance Private Morse tend to show that more keenly Enterprises. than Walsh did he realize the evil of what he was doing.' "Using his control of these banks. he took their funds and invested their Mad Rush for Wealth. in enterprises of the character menIn his opinion in the Walsh case the tioned, either by direct purchase of the president protested against the fatture bonds, which he caused to be issued, to discriminate between legitimate or by lending from the funds of the business and improper gain. "The three banks in the securities of these truth is. said he, "that in the mad enterprises and because of these inrush for wealth in the last few decades vestments the banks failed. The allied the lines between the profit from legitibanks of Chicago, in order to prevent mate business and impreper gain from a panic, took over the Walsh banks ndue use of trust control over other holdings and Walsh's properties and people's property and money has some. paid the depositors in full, but in the times been dimmed and the Interest of liquidation the allied banks will sussociety requires that whenever opportain a substantial loss tunity offers those charged with the Morse Made False Entries. enforcement of the law should emphasize the distinction between honest In the Morse case Mr. Taft said in business and dishonest breaches of part trust." 'Charles W. Morse was convicted of misapplication of the funds of the NaWalsh May Be Paroled in September. tional Bank of America and of making The president's denial of the appli false entries in the books of the banks cations of Morse and Walsh for parand the reports to the comptroller of don does not mean that they must stay the currency. On appeal to the circuit in prison until the end of their terms. court of appeals his conviction on the Walsh who is 73. began a sentence of false entry charge was affirmed. He five years in the Leavenworth peniten ha-1 beer confined in the Tombs for Mary in January, 1910. and under the ten months before he was taken to federal parole law is eligible for parole Atlanta. next September The president's acWrecked a Bank. tion tonight has no bearing whatever "Although his conviction technically upon future application for parole. was on false entries, there is no doubt Morse May Be Paroled in 1915. as TO what the evidence showed generMorse began his fifteen year term n ally, to wit: That Morse was engaged the Atlanta penitentiary in January, In large private transactions in which 1910 also. In denying his application the maintenance of the price of ceithe president granted him leave to retain stock in the market was of capinew it after Jan 1. 1913. Under the tel importance to him, and he procured parole law Morse will be eligible for control of this particular bank and release in 1915. other banks for the purpose of doing Mrs. Morse's Long Petition. the specific thing mentioned, which was essential to the success of his Both Morse and Walsh made strong speculations. The result of his operaefforts to have the president exercise tions was severe losses to the bank elemency. He was besieged by friends which forced it into liquidation. and attorneys of both men. Mrs. Morse got up a monster petition which was Losses Not All Made Good. signed by scores of members of con"One of the chief arguments made in Cress and other prominent persons and Morse's behalf is that since the comex-Senator Hale of Maine did much mission of his offenses he had out of in her behalf. The pleas of ill health his own estate made good the losses and reimbursement of all depositors in inflicted upon the bank. In the first the Morse and Walsh banks were made place, the evidence does not sustain the In both cases. claim that all the losees to the bank Wickersham Made Recommendations. have been made good by him. but even if his estate had met the obligations Both applications were scanned growing out of his fraudulent transacclosely at the department of justice tions it could not change the necessity by Attorney General Wickersham and for his lawful punishment for the his assistants and both were read with crime he committed." care by the president himself. His

8. May 25, 1911 New-York Tribune New York, NY

Article from New-York Tribune, May 25, 1911

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MORSE AND WALSH STAY Continued from first page. denied, with leave to renew the same after January 1, 1913. In reaching these conclusions I follow the recommendation of the Attorney General. In denying the Walsh application the President said, in part: John R. Walsh was convicted of misapplication of the funds of the Chicago National Bank while its president. His pardon is asked, first, because his violations of laws were technical and did not involve moral turpitude and secured him no financial benefit; second. because all the depositors of his banks were paid through the sacrifice of his private fortune; third, because he was, in doing what he did, attempting to upbuild industries of substantial benefit to the country; fourth, because he is an old man. in ill health, not likely to live long, and one who has borne a good reputation and lived a life of simplicity and not of self-indulgence. The facts are that Walsh owned a large interest in three banks-the Chicago National Bank, the Equitable Trust Company and the Home Savings Bank-the latter two Illinois state corporations. He absolutely controlled them. although there was a substantial minority interest in all of them held by others. He used them to furnish the money for the development of several railroads, limestone quarries, coal mines and other enterprises. Using his control of these banks, he took their funds and invested them in enterprises of the character mentioned, either by direct purchase of the bonds, which he had caused to be issued, or by lending from the funds of the bank money on "dummy" notes secured by such bonds as collateral. He risked nearly the whole funds of the three banks in the security of these enterprises, and because of these investments the banks failed. The allied banks of Chicago, in order to prevent a panic, took over the Walsh banks' holdings and Walsh's properties and paid the depositors in full, but in the liquidation the allied banks will

9. May 25, 1911 Daily Kennebec Journal Augusta, ME

Article from Daily Kennebec Journal, May 25, 1911

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NO PARDONS. (Continued from Page One.) the recommendations of Mr. Wickersham. President Taft in the Walsh case, said in part: "John R. Walsh was convicted of misapplication of the funds of the Chicago National Bank. while its president. "The facts are that Walsh owned a large interest in three banks-The Chicago National Bark, the Equitable Trust.Co., and The Home Savings Bank, the latter two Illinois state corporations. He used them to furnish tahe money for the development of several railroads, limestone quarries, coal mines and other enterprises. "Using his control of these banks, he took their funds and invested them in enterprises of the character mentioned. either by direct purchase of the Lounds, which he had caused to be issued, or by lending from the funds of the bank money on 'Dummy' notes, secured from such bonds as collecteral. Because of these investmen the banks falled. The alhed ban of Chicago in order to prevent a panie took over the Walsh bankss' holdings and Walsh's properties and paid the depositors in full; but an the liquidation the Allied Banks will sustain a substantial loss. "The application for pardon must be denied. In the first place, the record shows moral turpitude of that inidious and dangerous kind, to punish which the National Banking laws were especially enacted. A bank officer who uses such funds to promote enterprises n in which he has a private interest and without the knowledge and consent of the shareholders for whom he is a trustee, involves the whole capital of n the bank in unauthorized speculation 1from which he is to derive profit if sucis cessful, is guilty of a, fraudulent breach of trust, is guilty of moral ture a pitude and must be punished. No reference to usual business methods, no e suggestion of great business entery prises, no excuse of building up use-

10. May 26, 1911 The Ocala Evening Star Ocala, FL

Article from The Ocala Evening Star, May 26, 1911

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REASONS AGAINST RELEASE President Taft has proven that wealth and style bear no weight with him in passing judgment on guilt. His refusal to commute the sentences of the two big thieves, Morse and Walsh, must rejoice every good citizen and brighten the hope that the time may come when 'rich and poor" will yet "stand equal in the light of freedom's day." Both Morse and Walsh made strong efforts to have the president exercise elemency. He was besieged by friends and attorneys of both men. Mrs. Morse got up a monster petition. which was signed by scores of members of Congress and other prominent persons, and former Senator Hale of Maine did much in her behalf. The pleas of ill health and reimbursement of all depositors in the Morse and Walsh banks were made in both cases. Both applications were scanned closely at the department of justice by Attorney General Wickershi and his as. sistants and both were read with care by the president himself His action was in accord with the recommendations of Mr. Wickersham In denying the Walsh application the president said in part Used Other People's Money "John R. Walsh was convicted of misapplication of the funds of the Chicago National Bank while its president "His pardon is asked First. because his violations of laws were technical and did not involve moral turpitude and secured him no financial benefit second, because all the depositors of his banks were paid through the sacrifice of his private fortune: third. because he was. in doing what he did, at tempting to upbiuld industries of substantial benefit to the country: fourth because he is an old man, in ill health, not likely to live long, and one who has borne a good reputation and lived life of simplicity and not of indulgence. "The facts are that Walsh owned a large interest in three banks the Chicago National Bank. the Equitable Trust Company and the Home Savings Bank, the latter two Illinois state corporations. He absolutely controlled them, although there was a substantial minority interest in all of them held by others. He used them to furnish money for the development of several railroads, limestone quarries, coal mines and other enterprises. Using his control of these banks, he tapk their funds and invested them in enterprises of the character mentioned. either by direct purchase of the bonds, which he had caused to be Issued. or by lending from the funds of the bank money on 'dummy' notes secured by such bonds as collateral. He risked nearly the whole funds of the three banks in the security of these enterprises, and, because of these investments. the banks failed. The allied banks of Chicago, in order to prevent a panic, took over the Walsh bank holdings and the Walsh properties and paid the depositors in full; but in the liquidation the allied banks will sustain a substantial loss "The application for pardon must be denied. A bank officer who uses such funds to promote enterprises in which he has a private interest. and without the knowledge and consent of \the shareholders for whom he is a trustee involves the whole capital of the bank in.unauthorized speculation. from which he is to derive profit if successful, guilty of moral turpitude and must be punished. "Walsh had acquired great power His the control of three large banks responsibilities were commensurate His guilt is in proportion to the trus and confidence extended to him. O course, he did not intend to steal th money of his depositors or stockhold ers, but he is.none the less guilty or account of this fact. He abused thei trust and confidence and imperiled the money of those who trusted him in enterprises of most speculative ~char \ acter and he thus lost their money. the speculation had been successful. he hoped. they would not have lost, may be, and he would have allowe them the usual interest or dividend The real and great profit would have been his. "Many influential and prominent per sons have petitioned for his pardon They do not fully appreciate, it seem to me. the high importance to societ trus that such criminal breaches of as this be severely punished. Walsh is 73 years old. His healt is not good. but I do not think from the evidence that his condition alarming or requires his release befor the time when his case may be brough before the parole authorities. Morse a Greater Criminal than Wals In the Morse case, Mr. Taft said part: 'Charles W. Morse was convicted misapplication of funds of the National Bank of North America and of makin false entries in the books of the ban and in reports to the controller of th currency." "Although his conviction technical was on false entries there is no dou as to what the evidence showed gen erally, to-wit: that Morse was engage in large private transactions in whic the maintenance of price of a certa stock in the market was of capital portance to him, and he procured con trol of this particular bank and other banks for the purpose of doing the spe cific thing mentioned. which was esse tially the success of his speculation The result of his operations was seve losses to the bank. which forced it in liquidation. Morse exhibited the same fraudule and criminal disregard of the trust t posed upon him in the exercise of control over the bank as Walsh di Indeed. the methods taken by Mor tend to show that more keenly tha Walsh did he realize the evil of wh he was doing and resort to more su tle methods to accomplish and conce them. "One of the chief arguments ma in Morse's behalf is that since the con of his offense he own made his mission estate, good In has, the the out loss inflicted upon the bank fir place. the evidence does not sustain t

11. May 27, 1911 The Irish Standard Minneapolis, Saint Paul, MN

Article from The Irish Standard, May 27, 1911

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for parole. Morse began his 15-year term in the Atlanta penitentiary in January, 1910, also. In denying his application the president granted leave to renew it after Jan. 1, 1913. Under the parole law Morse would be eligible for release in 1915. The pleas of ill health and reim- bursement of all depositors in the Morse and Walsh banks were made in both cases. In denying the Walsh application the president said in part: "The facts are that Walsh owned a large interest in three banks-the Chi- cago National bang, the Equitable Trust company and the Homes Savinge bank, the latter two Illinois state cor- porations. He absolutely controlled them, although there was a substan- tial minority interest in all of them held by others. He used them to fur- nish the money for the development of several railroads, limestone quar- ries, coal mines and other enterprises Using his control of these banks, he took their funds and invested them in enterprises of the character mentioned either by direct purchase of the bonds which he had caused to be issued or by lending from the funds of the bank money on 'dummy' notes secured by such bonds as collateral. He risked nearly the whole funds of the three banks in the security of these enter- prises and because of these invest- ments the banks failed. The allied banks of Chicago, in order to prevent a panic, took over the Walsh bank holdings and Walsh's properties and paid the depositors in full, but in the liquidation the allied banks will sus- tain a substantial loss. ### Can't be Glossed Over. "The application for pardon must be denied. No reference to usual busi- ness methods, no suggestions of great business enterprises, no excuse of building useful industries and no sub- sequent attempt to make good the losses which his acts have brought up- on innocent persons who trusted him can gloss over the fact that such a man is taking other people's money for his own use." In the Morse case, Mr. Taft said in part: "Charles W. Morse was convicted of misapplication of funds of the Nation- al Bank of North America and of mak- ing false entries in the books of the bank and in its reports to the comp- troller of the currency. On appeal to the circuit court of appeals, his conviction on the false entry charge was affirmed. "Although his conviction technical- ly was on false entries, there is no doubt as to what the evidence showed generally, to-wit., that Morse was en- gaged in large private transactions in which the maintenance of the price of certain stock in the market was of capital importance to him and he pro- cured control of this particular bank and other banks for the purpose of doing the specific thing mentioned which was essential to the success of his speculations. The result of his operations was severe losses to the bank, which forced it into liquidation "Morse exhibited the same fraudu- lent and criminal disregard of the trust imposed upon him in the exer- cise of the control over the bank as Walsh did."

12. October 10, 1911 The Marion Daily Mirror Marion, OH

Article from The Marion Daily Mirror, October 10, 1911

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WILL PAROLE Continued from Page One. turpitude and secured him no financial benefit: that all the depositors of his banks were naid through the sacrifice of This private fortune; tha! he was attempting is bulld up indus of benefit to the country that he is an old not likely to liv long and one who has borné a good reputation and lived a life of sim plicity and not of elf-indulgence. Will Lead Quiet Life. Walsh was convieted of misapplica tion of the funds of the Chicago National bank, of which he was president. He was sentenced to imprisonment for five years and began serving his sentence January 19, 1910. He owned large interest in three banks: the Chicago National: the Equitable Trust company and the Home Savings bank, and used them to furnish money for the development of several railroads, limestone quarries, coal mines, and other enterprises. The banks failed because of the use of their money in the Walsh enterprises and the other banks of Chicago, in order to avoid a panic, took over their holdings and Walsh's properties and paid the depositors in full, It is understood that Walsh's relatives have arranged to take care of him and to take him to some quiet place in Illinois where he will spend the rest of his days, reporting from time to time through the United States district attorney in the district where he intends to reside.

13. October 11, 1911 The Detroit Times Detroit, MI

Article from The Detroit Times, October 11, 1911

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PRISON DOORS WILL OPEN SOON FOR JOHN R. WALSH Atty.-Gen. Wickersham Approves Board's Recommendation For Parole. WASHINGTON, Oct. 10. - Although official announcement was withheld, it became known today that Attorney-General Wickersham has approved the recommendation of the board of parole that John R. Walsh, the Chicago bank wrecker, be paroled from the Leavenworth penitentiary. In refusing to make public announcement of his decision the attorney-general is merely following the unbroken precedent of the department to maintain secrecy about such matters. This rule was originally established for the protection of prisoners whose efforts to reform would be hampered by publication of their crimes and imprisonment. Walsh made his formal application when the board of parole of the department of justice made its annual visit to Leavenworth last week. The hoard acted favorably on the application and its recommendation was presented to Attorney-General Wickersham yesterday by Superintendent Ladow. The actual date of Walsh's release, life all other details, is withheld by the department of justice and the date on which the aged banker will obtain his liberty will only be known when he is released at Leavenworth. Walsh's parole, with the usual restrictions, requiring him to make regular report to the prison officials. follows an unsuccessful attempt to obtain a pardon from President Taft. On May 24 last, the president refused, saying: "It would defeat the object of the law and present a demoralizing difference between the punishment meted out of the ordinary criminal whose ojrcumstances have naturally led him into crime and one whose position in society should have made for him the strongest restraint against violation of the law." Walsh's plea to the parole board was the same as to the presidentthat his violations of the laws were technical and did not involve moral turpitude and secured him no financial benefit; that all the depositors were paid through the sacrifice of his private fortune, that he was attempting to build up industries of benefit to the country: that he is an old man; net likely to live long. and one who has borne a good reputation and lived a life of simplicity and not of selfindulgence. Walsh was convicted of misapplication of the funds of the Chicago National bank of which he was president. He was sentenced to imprisonment for five years, and began serving his sentence January 19, 1910. He owned a large Interest in three banks -the Chicago National. the Equitable Trust Co. and the Home Savings bank, and used them to furnish money for the development of several railroads, limestone quarries, coal mines and other enterprises. The banks failed because of the use of their money in the Walsh enterprises and the other banks of Chicago, in order to avoid a panic, took over their holdings and Walsh's properties and paid. the depositors in full.

14. March 17, 1912 The Washington Times Washington, DC

Article from The Washington Times, March 17, 1912

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# FINANCIAL Reciprocity is but another way of expressing the golden rule. It may not always work that way—it might have operated with different result in the Canadian matter, but in the abstract reciprocity means a square deal. It should be in vogue between banks and their customers; it ought to be the rule in the relations between banks whether friendly in interests or otherwise—but it isn't. There are many people who spend sleepless hours trying to figure out a way of beating their banks; scheming for the kiting of thousands of dollars of checks "In the air;" planning means of unloading a bunch of slow-paying, long-time notes; giving their indorsement to notes that they know will not come out clean in the wash, and thereafter showing indifference to responsibility. It is men of this class that force the bank official to be constantly on his guard, awakens his suspicions where there is little cause therefor, and makes him the more pleased to welcome legitimate business men of known and unsullied reputation. "The banking game in Washington is fierce," said a bank official. Of course it is, and so is the game of life. It is always something, one thing after another, and it is this that makes it interesting and worthy of the man to conquer and dominate. The banking game in Washington seems in one respect to resemble the street car—there's always room for one more. In a crowded field the man who attends to his own business will always find that he has enough to do and his progress will be the better for a reciprocal feeling of good will for his neighbor. In the banking business, as in no other, the whole body quivers when a shock is given through the suspension or failure of one institution. In the manufacturing industry one concern may go down through over-expansion, but the fraternity, the line is unshaken. There is nothing as useful in its way and place as money. There is nothing so timid as capital, as deposits, and let there be one jarring note in the business and the probabilities are that everyone will feel it. When the John R. Walsh institutions in Chicago went by the board it was not a matter of kindness, nor brotherly love nor a disposition to favor the owners of millions of dollars on deposit in the Chicago National and the two State banks over which Mr. Walsh presided. It was not man's kindness to man. It was a purely selfish motive, if one may call self-preservation selfish. The bankers of the "Windy City" understood that unless they stood in the gap for the depositors' money, unless they stood prepared to stand a run that would have shaken some of the very strongest institutions out of their boots. In these piping times of peace, when every bank has more money than it actually needs, when loans are restricted, when the activities of business are restricted, to say these things will not hurt. In piping times of peace Chicago banks have suspended, and the members of the Clearing House Asosciation have stayed up nights—no, not to worry, but to gather in the loaves and fishes, at wire and letter-times when self-preservation was not imperiled, when the wreck was worthy of an effort. Reciprocity in banking means the square deal, but it also means that if one banker can not say a good word for another that it would be wise to keep a knitting and forget to say anything. In one thing the banks and bankers of Washington are a reciprocal unit. Consent has been obtained from every bank in the District of Columbia to private examinations by an examiner to be chosen or at least approved by the Washington Clearing House Association. Commendation and nothing but praise