Home Savings Bank (Chicago, IL)

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the the Clock for G

He the door. the line doors began by Vice Bank state fore was it to and pay for called of a stitutions con for been of He the Chicago and 1837 to in Chicago. J. McNalvery of the most bus York. of the Homent: John direction Best, William the of Equithe ically this He has of days, he nor would at his residence for bank informafor Mr. Walsh Any from of lobby people not but the any con the Bank Home the of mositors Monroe of the of detail large Dof the those the that monthat bank theirlared declared excite as as paid pass quickly Rapidly. was there Bank a run, Blthough out with being drawn great who men called rapidity. of that the amount dewould and they Many checks be for accepted departed as actual serency their in were their balances other rawing banks, out the asked was for handed at 11 issue be would without every was Ridgely declaring declated, exof the Home the Situation. of and of and Bank any other Chicago is any nor there other statebank Similar L. utchinchange Corn D. R on dethe and No Banficial city treatough althout he as difficultion the mornread

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NATIONAL PANIC NARROWLY AVERTED Three Chicago Banks Go to the Wall. Clearing House Comes to Rescue and Prevents a PanicStocks Tumble and Great Excitement Follows. Chicago, Dec. 18--Three big Chicago banks went to the wall this morning. but a national panic is averted. The banks are The Chicago National. Home Savings bank. Equitable Trust Co. They are all forced into liquidation by the heavy losses of their owner, John R. Walsh, who's entire fortune is swept away. He has been a heavy plunger in private enterprises. The Chicago clearing house came to the rescue of the three banks and all depositors are to be paid in full, and a national panic is thereby averted. Wall street operations are in a panic. A terrific decline in stocks 00curred on the exchange. Colorado Fuel and Iron fell 2 points.

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8 CHICAGO BANKS FAIL

DEPOSITORS WILL BE PAID (Continued from Page One.) the conference about 7 o'clock Sunday evening. The comptroller feels that great credit is due not only to the clearing house committee, but to all the other clearing house banks, for the prompt. vigorous action and the broadminded spirit shown in meeting this emergency. MR. WALSH VERY BUSY. J. R. Walsh, president of the failed institution. was very busy at his residence this morning and declined to be disturbed when called up over the telephone. His daughter, however, quoted Mr. Walsh as saying that all information concerning the failures, for the present at least, would be given out by the Clearing House assoclation. CAPITAL AND RESOURCES. The Chicago National bank was organized in November, 1881, with an authorized capital of $300,000, increased to $500,000 in 1887, and to $1,000,000, in 1901. Its resources, according to one of the latest reports made to the comptroller of the currency, are $21,000,000 of which nearly $11,000,000 are loans and discounts with $4,000,000 cash on hand. The liabilities include nearly $14,000,000 in idividual deposits $4,700,000 due to other banks. The Home Savings bank, was organized originally in 1867, with a capitalization of $100,000. A recent statement of the resources shows an aggregate of $4,232,271, of which $3,782,000 is reported as being held in municipal, railroad and other bonds. The savings deposits aggregates $3,982,653. The Equitable Trust company was chartered by the state of Illinois Aug. 27. 1889, to act as executor, administrator, trustee, guardian, assignee or receiver. and to receive and to execute trusts of every character. The capital stock is $500,000. Its resources are $4,612,351. The liabilities include $2,707,568. of deposits in trust: $454,324 certificates of deposit: $491,574 through various trusts. YESTERDAY'S MEETING. The meeting was called to order in the office of President Forgan of the First National bank at 3 o'clock yesterday afternoon and was in continuous session until 5 o'clock this morning, A careful canvass of the situation revealed that the Chicago National bank had deposits to the amount of $16,000,000, the Home Savings bank had savings deposits to the extent of $4,000,000, divided among about 8000 depositors. The Habilities of the two banks and of the Equitable Trust company were roughly estimated at $26,000,000. The assets of the three Institutions made up about $20,000.000 of this amount and the directors and officers of the Chicago National bank came to the front with securities amounting to about $3,000.000 more. This left a deficit of about $3.000,000, and the Chicago banks represented at the meeting declared at once that they would meet the situation and care for the deficit. If it is proved necessary toadvance any more than $5,000,000 to meet all demands. the banks pledged themselves to make up the same. The great difficulty confronting the bankers In the meeting was to arrange a legal settlement of the case in the very short time at their disposal before the hour of commencing business for this morning. It was finally arranged that

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LO e enterprise exception the bank Walsh, to and the declared private that in. a por- AsMr. of them must be called comptroller tion surances declares, that were this given. would the kept. be done, but a the promises were not to close Finally the incentive of the Chicago crutiny of the affairs Home Savings National and given the by a banker in New take banks who was had been requested to a loan York, syndicate to furnish for furthpart $6,000,000 in a to Mr. the Walsh Southern Indiana Railroad. did er of expenditures on The bonds not sell of the as company, as however, was expected and were State and aprapidly examiners Up National bank failure of the loan. been exprised of time the the banks had enabled amined to this transfer separately, securities which back the State and forth. them to It and was the decided National that examiner investishould examiner make a simultaneous that the instiThis showed amount, estigation. tutions all had the lent way a large from securities $10,000,000 of the mated on the almost ento $16,000,000 that were owned is said that railroads tirely the paper by Mr. for Walsh. these that loans they It was were Walsh's signed substantiated by clerks. by and the bonds of Indiana, Mr. the railroads, the Southern the latter an and exChicago of Southern, the Southern Indiana, tension Wisconsin and Michigan. the the examiners had concluded for time, When report Mr. Walsh raise asked the money their that he could He was saying straighten out everything. as he hoped to successful in this Ridgeley not to be. as When of Comptroller the situation, he came was informed at once to Chicago. meetRidgeley Takes a Hand. Comptroller Ridgeley of called the a Chicago of the informed ing Clearing House members The and meeting was them of held the of the in the situation. office of Bank the President and continued afternoon from first three National o'clock o'clock this Sunday morning. the comp- It troller until was then five announced the banks by had suspended be paid and that that all depositors other would banks of effect the in full by the to the same the city. was issued A statement by the members of Clearing Ridgeley's House. statement says: Mr. of the clearing certain house that banks "The makes action it absolutely the three instituall the creditors receive of their money relieve imme- any tions diately, will and should on the thus part of troubles the pub- in apprehension to financial situation in 11c in regard The critical have been Chicago. three concerns large loans which these has been due to the mining and placed the railroad, coal controlled made enterprises to owned This and again emother by John R. Walsh. of the managing in phasizes the banks danger being interested large officers amounts outside of institutions on money. time The requiring been comptroller's criticis- Naoffice has condition for some of the Chicago on its offiing the and calling reduce the tional and Bank directors to and the investcers of these loans of Mr. Walsh's amount ments in the In bonds spite of repeated done this should in promises that have been corporations. continued to be prevent these bank. items and in order it was necesthe encroachments to take radisary further for the comptroller The comptroller's endeavoring office cal action. time been the Chihas make for some an examination multaneously of incago to National examination Bank of bank the examiner, State stitutions with an not by the able State to bring this result about of until a examinations few revealed it was serious these but was condition days ago. that The action." such neces- a sary to take immediate

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James B

Forgan, president of the First National bank, as head of the clearing house committee of the Chicago Associated banks, gave forth the statement. The assets of these institutions, it was asserted, were involved in coal and railway properties of John R. Walsh, the president of the Chicago National bank. John R. Walsh, head of the institutions which have been declared insolvent, was not at the meeting. The following were the members of the committee at the meeting. James B. Forgan, chairman; John J. Mitchell, James H. Eckles, Orson B. Smith, Ernest A. Hamill. The statement was issued at the offices of the First National bank. It is as follows: "The Chicago National bank, the Home Savings bank, and Equitable Trust Company, which have been controlled and managed by John R. Walsh and his associates have concluded to wind up their affairs and quit business in this city. After a thorough and careful examination of their affairs by the Chicago clearing house banks, it is stated that all of the depositors of these institutions will be paid in full upon demand, the Chicago Clearing House banks having pledged themselves to this result, thus putting all the resources of the Chicago banks behinb the depositers of these three institutions. The difficulty with the institutions has been that investments have been made in assets connected with the railway and coal enterprises of John R. Walsh. "These assets were not immediately available to meet deposits and have been taken over on terms which will enable the three institutions to pay their dem positors in full. Mr. Ridgly, comptroller of the currency, and Charles Eubank, of the auditor's department at Springfield, were seem and expressed themselves as greatly pleased with the action of the Chicago banks, and stated that it rekected great credit upon the associated banks of Chicago which have again indicated their ability to meet and emergency in a manner entirely satisfactory to the public." The meeting of the Chicago clearing house association began at noon Sunday. Notices were sent to the members of the board by Mr. Forgan after it 00 had been learned of the condition of the banks and the trust company. t Clerks were notified and fifty or more with ten stenographers hurried to the First-National Bank. Behind closed doors the Clearing House Association be gan its work of finding a way that might enable them to ride the financial sea in safety. That a panic would be likely to follow was the first thought of the committee. Resolutions were adopted and heads of other banks. pledged themselves to give assistance. The amount involved in the failure would not be stated by 8 the committee members. it All informatin concerning the meetW ing of the committee was kept secret W until three o'clock this morning and half

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Chicago, Dec. 19.-Practically norma) conditions were restored in local banking circles today. Runs on the Chicago National and Home Savings banks continued, but there was no excitement. It is believed by tomorrow night the greater portion of the deposits in both banks will be withdrawn.

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CLOSING OF THE CHICAGO BANKS EXTENT OF THE BUSINESS DONE BY THE INSTITUTIONS WHICH ARE NOW UNDER THE BAN. The cable yesterday brought news of the closing by the United States Comptroller of Currency of the Chicago National Bank, the Home Savings Bank and the Equitable Trust Company. There will be no loss to depositors as other banks came to the rescue. The reason assigned for the closing was the making of unwise loans to private companies. Some idea of the amount of business done by the concerns mentioned may be gathered from the following figures, furnished by the Bank of Hawaii: Chicago National-Deposits, $22,858.845; capital, $1,000,000; surplus, $1,423,345. Home Savings Bank-Deposits, $4,065,000; capital, $100,000; surplus, $155,700 Equitable Trust Co.-Deposits, $4,715,043; capital, $500,000; surplus, $459,586.85.

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CHICAGO BANKS CALM AGAIN.

Conditons Practically Normal, Although Runs Continue.

Chicago, Dec. 20. - Practically normal conditions were restored in banking circles here yesterday, and there was not the slightest surface indication of the disturbance caused Monday by the suspension of the Walsh banks. The runs on the Chicago National and the Home Savings banks continued, but there was no excitement whatever around the national banks, and very little in the offices of the Home Savings Bank.

A crowd of depositors gathered before the savings bank about an hour before the time for opening the doors and became disorderly. The lone policeman on duty sent in a call for aid and in a short time reserves formed the depositors in a long line. About five hundred men were in the ranks when the bank opened and the work of paying them went off rapidly.

It is believed that by tonight the greater part of the deposits in both the Chicago National and in the Home Savings banks will be withdrawn.

Bedford, Ind., Dec. 19. - When the Bedford National Bank, of which John R. Walsh of Chicago is president and principal stockholder, opened for business yesterday, the room soon became filled with small depositors, who were paid as fast as possible. There was little excitement, but the withdrawals of funds by small depositors continued. Other banks offered assistance, but it was declined as unnecessary.

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HARDLY A RIPPLE

Of the Great Financial Disturbance at Chicago. Chicago, Dec. 19.-Practically normal conditions were restored in the local banking circles today. There was not the slightest surface indication of the disturbance caused yesterday by the suspension of the Walsh banks. The runs on the Chicago National and the Home Savings continue, but there is no excitement around the banks.

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Heavy Bank Failures

Monday, the failure was announced of three of the largest financial institutions in Chicago, the Chicago National bank, the Home Savings bank and the Equitable Trust company. The total liabilities are $26,000,000, with assets estimated at $16,000,000. The failures were due to the unprofitable nature of heavy railroad investments made by the principal owner of the banks, John R. Walsh. A panic was averted by the prompt action of the allied banks of Chicago, which came to the rescue and pledged that every dollar due depositors should be paid. Mr. Walsh expects that the assets will realize much more than the estimate, and that the banks will prove to have been solvent.

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Chicago Banks Recovering

Chicago, Dec. 19.-Practically normal conditions were restored in local banking circles Tuesday and there was not the slightest surface Indication of the disturbance caused Monday by the suspension of the Walsh banks. The runs on the Chicago National and Home Savings banks continued but there was no excitement whatever around the National bank and but very little In the offices of the Home Savings bank.

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CHICAGO IS CALM AGAIN Yesterday's Bank Failure Has Apparently Left Little Trace of the Excitement. Chicago, Dec. 21.-Practically normal conditions were restored in local banking circles today. Runs on the Chicago National and Home Savings banks continued, but there was no ex-' citement. AIt is believed that by tomorrow I tht the greater part of the both banks will be withdeposits from:

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Run on Bedford Bank.

Bedford, Ind., Dec. 19.—The news of the suspension of the Chicago Na- tional bank, the Home Savings bank and the Equitable Trust company, properties in which John R. Walsh is interested, created considerable excitement here and was followed by a light run on the Bedford National bank, of which Mr. Walsh is president and owns 60 per cent of the stock. The run was confined principally to small depositors. About 1,000 men are employed in the various enter- prises operated in this vicinity by Mr. Walsh.

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The Chicago National Bank, the Home Savings Bank and the Equitable Trust Company, of Chicago, three institutions in which John R. Walsh is interested suspended business. Politics and injudicious loans was the cause of the crash

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HREE BANKS QUIT

ICAGO INSTITUTIONS OF JOHN R. WALSH GO OUT. icago National, Equitable Trust Company and Home Savings Bank Close Business-Two Banks Alone Carry $22,500,000 of Deposits. Liquidation of the Chicago National nk, the Home Savings Bank, and , Equitable Trust Company, all of icago, was announced at 3:30 lock Monday morning by representves of the Chicago Clearing House sociation, after a session lasting thteen hours. James B. Forgan, esident of the First National Bank, head of the clearing house commit: of the Chicago Associated banks, ve forth the statement. The assets these institutions. it was asserted, re involved in coal* and railway perties of John R. Walsh, Presiit of the Chicago National Bank. el statement was issued in the office the First National Bank. It is as lows: "The citizens of Chicago will unibtedly be surprised to learn that : Chicago National Bank, the Home vings Bank, and the Equitable Company, which have been conlled, managed, and officered by in R. Walsh and his associates e concluded to wind up their afrs and quit business in the city of icago, but they will be gratified to rn that after a thorough and careexamination of their affairs by the icago Clearing House banks that of the depositors of these instituas will be pand in full upon dend, the Chicago clearing house ks having pledged themselves to s result, thus putting all the rerees of the Chicago banks behind depositors of these three instituis. The difficulty with the instituhs has been that their investments e been made in assets connected h the railway and coal enterprises John R. Walsh. These assets were immediately available to meet deits in full." The meeting of the Chicago Clearing use Association began at noon Sun. Notices were sent members of the rd by Mr. Forgan after the condition the banks and the trust company had n learned. Clerks were notified and y or more with their stenographers ried to the First National bank. Bed closed doors the Clearing House sociation began its work of finding a y that might enable them to ride the incial sea in safety. That a panic would be likely to fol- was the first thought of the comtee. Resolutions were adopted and ds of other banks pledged themselves give assistance. The amount involvin the failure would not be discussed the committee members. in addition to the formal statement the failure, the following announcent was made, signed by the clearing ise committee of the Chicago assocbanks: pa To the Public: Depositors of the Chio National bank, the Home Savings k. and the Equitable Trust Company

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which he was president

The penalty is not less than five nor more than ten years' imprisonment. No substitute fine is allowed. The fight for the conviction of Walsh began with the suspension of the Chicago National bank, the Home Savings bank and the Equitable Trust comporr three

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which he was president

The penalty is not less than five nor more than ten years' imprisonment. No substitute fine is allowed. The fight for the conviction of Walsh began with the suspension of the Chicago Nation al bank, the Home Savings bank and the Equitable Trust comnenr three

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which he was president

The penalty is not less than five nor more than ten years' imprisonment. No substitute fine is allowed. The fight for the convietion of Walsh began with the suspension of the Chicago National bank. the Home Savings bank and the Equitable Trust company three

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names. When it comes to the matter of the law's dealing with them there begins to be a sharp divergence. Charles W. Morse already has tasted of the bitterness of imprisonment. John R. Walsh has not spent an hour in jail, although the crime of which he was convicted and is now under sentence of five years' imprisonment in the Federal penitentiary in Leavenworth, Kans., was committed four years ago, Morse, through the devotion of his wife, regained his liberty, only to be thrust back behind the bars. It was a long and hard task to procure the bond in the first place, It served only as a temporary expedient. Walsh goes to his office in Chicago every day when his seventy-two years will allow him to go, and that is most 01 the time. In spite of his three-score years and twelve. he still has a lot of the energy and fight that made him in former days one of the most conspicuous capitalists and financiers in the West. He has been privileged to be with his devoted family, whose loyalty, in a quieter way, is as beautiful as that of Mrs. Morse toward the Wall street banker He is as welcome as in the old days to the clubs. Those in whose debt he is to the extent of millions are about the last men in Chicago to say for publication anything against the man who weeked the Chicago National Bank and its allied institutions. Similarity of Crimes. Morse and Walsh both were charged with transgressing the banking laws. They used the money of others in a way that the statutes did not sanction, if the charges against them be true. There may have been differences of detail in the alleged wrongful things they did. but the principle involved was the same Compared with Walsh, the Wall street man is still in the prime of life. He might spend a term in prison and come out strong and ready to begin life over again. Recent reports that he added $7,000,000 to his fortune the short time he was out on bond, whether true or not, indicate that the blows that have fallen on him have not put him out of the running as a winner of wealth. For him there is hope after whatever penalty he may pay For Walsh a prison cell probably would mean, sooner or later, a death chamber Mr Walsh is used to hard work, to reckoning with vast detail. Prison life will be no laughing matter for such a man. He has for years been a lord of business over men, brooking no interference with his will He can't be that in Leavenworth. His age renders it unlikely that he will be able to do any physical work His friends feel that once he is restrained behind iron bars the warrant of his death will have been virtually signed. That is the reason they are making with him SO vigorous a fight to ward off the day of reckoning. In the case of this man the mills of the courts are grinding slowly In one month more it will be four years since the three banks, of which Walsh was the executive head, quit doing business and the associated banks of Chicago began to pay the depositors what Walsh owed them The man whose financiering wrecked the banks is still under a big obligation to the Institutions which came to the rescue of the hundreds of depositors. His debt to them is something like $7,000,000 It is the supreme effort of Mr. Walsh just now to raise money to satisfy these creditors, 80 that he will not have to sacrifice many millions of dollars of securities and property History of Walsh's Crime, It was on the morning of December 18. 1905, that the Chicago National Bank, the Home Savings Bank, and the Equitable Trust Company ceased to do business and closed their doors. That was on a Monday morning. Far into the night of Sunday-In fact, till almost the coming of dawn-representatives of the other banks in the Chicago clearing-house had been in conference trying to devise a way to save the banks from wreck and the city from a financial panic. Walsh and his advisers were in that conference. The man who had presided as the financial genius over the trio of banking institutions protested long and loudly that if he were given one more opportunity he would ward off collapse. Over the business of the banks went experts. They scrutinized this account and that. They observed with alarm the long list of menacing obligations, gasped with surprise when informed of the manner in which the funds of the bank-the money of the depositors-were being used to promote private enterprises. They reckoned up the securities for liabilities, figured closely on the conversion possibilities of collateral at hand. They were disposed to be eminently fair, but when they were through canvassing the situation its general aspect was SO forbidding that closing the doors of the institutions was decided on. How Panic Whs Averted. That was the beginning of the end The next morning, which was Monday, there were notices on the Walsh banks which told their tale briefly. The newspapers, which had been purposely let into the secret to help save Chicago from a panic, contained long stories of the fall of the Walsh banks. Every story was quick to say that the associated banks had agreed in conference to guarantee the payment of all deposits, dollar for dollar. All the depositors had to do was to find out what his balance was and write out a check for the amount to another bank chosen for the doing of his future business. He would be given credit for the amount Those who preferred might take their books to the failed banks after they reopened and get their money there. In saving the depositors from losing a cent in the Walsh banks the institutions coming to the rescue were saving themselves the burden of a "scare," which might have far-reaching consequences and precipitate other crashes. On the 5th of October, 1909. nearly four years after that memorable Monday morning, the Circuit Court of Appeals affirmed the sentence of five years running against Mr. Walsh, who had been duly convicted in the lower Federal court for violating the banking laws. Owes Banks $7,000,000. At the time the sentence was affirmed, as already stated. Mr. Walsh owed the banks which stood between his institutions and a local financial panic over $7,000,000. secured by the stock and bond issues of certain corporations in which Walsh was interested. The interest havdefaulted

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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.

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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.

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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.

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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

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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-

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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.