Article Text
Trial Fraudulent Intent Denied In Own Conspiracy By Bell, Testifying Defense
PARK BANK HEAD TAKES STAND
Says He "Can't Imagine Any Man Crazy Enough To Ruin Himself"
CITES STOCK OWNED
Witness Tells Of Rejecting Offer By Graham To Merge With First National
(Continued from Page policy already posted collateral against the bank the The the sale into cashier's for and carried security the full from 1931, days before the bank closed, had been kept that form Reduced Obligations Mr. Bell testified that at least part of the profits from his syndicate with Mr. Richardson reduce his obligations the instead being pocketed the State contends. He also testified his belief in the legitimacy the syndicate arrangement, adding that existence at one time was known to member of the Supreme Bench and occasioned no criticism from the course his the testimony, defendant reviewed the history the syndicate agreement and traced decline the bank, attributing the latter outside forces, as the 1929 and England's abandonment of the gold standard. Blames Circumstances Saying that he believed the Park Bank solvent when closed, Mr. Bell drew picture the institution victim such as fact that, at the minute, when most needed, Governor Ritchie the city's leading bankers engaged entertaining the Democratic Committee man, James Farley, now PostPointing that the indictment charges Mr. Bell with engineering loans for himself with tent, Mr. Curran what he the charge. Bell replied: "Well, emphatically deny words the indictment. My first thought always was protect depositors. was for that reason bought the Nevada Copper took the Washburn note. Protect the depositors. That thought always before imagine any would crazy owned 5,019 ruin himself." Tried To Save Bank The 5,019 Park Bank stock, which still holds. The Nevada Copper shares and the Washnote referred represented transactions which the defense contends were undertaken to save the bank from When Mr. Curran asked what the Park Bank's policy had been during and respect loans insufficient collateral, Mr. responded: the borrower, had had loaned money. am speaking of the part. That's what framed loans on. might say people later in and paid off in though the was below the face And when Mr. Curran asked there had been any differentiation this respect between borrowers, Mr. Bell answered: not respecter of persons. treated all alike. My personal motto thought much one who had only one who had shake them same Mr. Curran frequently found sion admonish the his questions without elaborathe court few occasions did At slight would Mr. Charles Evans William H. Maynard. State's aiding Herbert State's prosecuting the cast, would grin broadly. Resumes Testimony Resuming his testimony after the character witnesses left the stand the Mr. Bell substantiated the story the Clearing House Association meeting two weeks before the bank closed. recounted from stand Monday Watson Sherthe witness defense. Mr. Sherwood had that the meeting from sistence Mr. Graham that the off its loan from the Bell recalled hearing George Page, then State Bank on that he could the Bank was insolvent. added: never did consider it insolvent, when closed. needed that's insolvency.' Long" Graham Boyce, president Company, James Bruce, Baltimore Company stay the meeting," Mr. Bell continued, dinner of the National Surety The ceeded how the night August was bank, visit Farley efforts arrange Willis Jones, deputy AttorneyGeneral, attended the acted the directors and attending the
Howard Bruce gave for Mr. Farley. think Mr. Bruce suggested that touch with Graham Boyce," Mr. Bell went on. "Mr. Boyce sent statement would put our counter currency the next me ning and other $250,000 Monday thought they could give us $1,000,000 Tuesday task. That Thursday night. If he had said $500,000 by Saturday morning Monday, could have done Curran then about the syndicate agreement, Mr. Bell replywas first drawn up in the year There three of George Walthers, deceased. Clinton Richardson and myself. Mr. Walthers passed away early in Agreement Questioned was the substance the share one-third the profits and also stand third the Q.-On what? the purchases of securities the notes of Mr. Walthers or Richardson. Q.-Did any of the notes? what happened? Speaks Of Settlement Mr. Walthers died account still open. There was Q.-And that arranged through member the Bench relative Mr. Walthers and the executors of the estate? There was $19,000 paid the Walthers estate. was used liquidate notes he'd signed and taken from the bank. Q.-And all these securities were purchased by notes discounted by the bank and known the member the Supreme Bench? Objects To Question Mr. O'Conor objected to the question, and the was that the Bench member former son-inMr. Walthers." The court went on to emphasize that the jurist question had been acting executor the Walthers estate and not counsel. Mr. Curran-He not subject even the slightest kind of criticism, Q.-And was the existence the syndicate known him (the jurist) the making the settlement. Yes. far nothing said to indicate the judge that the other directors did not of the was said. Arrangement Continued Mr. Curran brought out that Mr. Walthers' death, Mr. the syndicate arrangement with Mr. Richardson agreement drawn up between Mr. Richardson and myself, each sharing half interest, instead third," Mr. Bell said. Richardson put up the additional that Mr. Richardson some of my own colQ.-And you continued on that basis? A.-We went along like that to asked Mr. Richyear ardson put up collateral. England had just gone off the standard. He bought additional Park Bank stock time. Market values were breaking quickly. Stocks were selling some at lower prices than dividends. 1925 Agreement Cited The court asked if the 1925 agreethe one read into last week and was told that the one in evidence was written 1930. The 1930 agreement, agreement, Mr. Curran brought involved the taking over of the California Cafeteria account. didn't the lunchroom business," Mr. Bell went that to make profit. Two Philadelphia men bought the place, and loaned them the money. sorry say they did act very honorably. They went think, six months. helped bring the California Cafeteria down that Police traffic regulations at
Witness Cut Short Mr. Curran the witnes short directed his the collateral Mr. Bell had said turned securities? Look this list. list this copy of the list. Here of Park Mortgage and Ground Rent, Park Bank years later those were worth These shares Blenheim Realty were carried at copy statement shows their net worth the time The 260 shares California Cafeteria carried that's what for it. This erick Bergner that stock value to it. Cafeteria Brought Up the California these two from Philadedphia were indebted and when they walked out you took over and your note? Curran shifted his line the write-ups the bank's offset depreciation in its done with the full and consent of all the rectors? of them. There's no question that. recollection back the alleged paper profit Securities Sold March securiThere but that protect want account and value of certain securities among the his were sold Mr. Bell) Mr. the Frederick Bergner Company was "the oldest company (of kind) the United States, that recent years and Trust, National had suffered from competition in celluloid field the duPont terests. Mr. Bergner the date, but predict dent the Bank until 1919. will see higher prices. when leaving estate over Mr. Bell said, adding that he had named one of the motive actuated you? The Park Mortgage and Ground reduce the surplus faith in the securities was buying (the securities think still have. were they? A.-Safe Deposit City Bank New York. Fidelity Trust, Fidelity Trust. don't set you Mr. Curran then $60,000 notes which Mr. Bell up for purchase Park Bank stock. Would Protect Credit Rent shares formed protect the credit of the of collateral, Mr. The Bell said, incorporated the end the spring People $250,having hard money to $500,000. The invest stocks. were initial stock flotation, he said, away stock on account price he paid. the double liability. The shares had par value. Q.-But just you Dividends Per Cent. worth what was From February, 1925, the paying for company eight per Mr. Bell went on to emphasize the cent. Mr. added. effect bank's stability of Q.-What did the do? cline the market quotations on its A.-It's was first mortshares. He referred drops that took had few second after prices been pegged mortgages-and buying and selling Baltimore Stock Exchange. ground rents. mean that after prices connection did have pegged stocks sold under Bank? the Park them? president and the directors the same. stock listed? A.-On the Baltimore Stock Exchange. the last sale? A.-Well, or 68. That years ago. Delaware corporation, isn't
"Bootleg" Sales Made no doubt about it. going the time, brokers makbootleg sales. Bootlegging supposed to been pegged support the credit the done. Continuing, Mr. Bell said he called reading frequently Delaware corporation. papers the York papers time" that the "Comp- Held 5,019 Shares troller of the Currency said not sell Mr Curran brought out borrowers Mr. Bell 5,019 shares Park Q.-What did your board know Bank stock when the bank went into $60,000 notes? receivership. A.-They were acquainted with Q.-And would you say approved and thought wise. the average price you paid for those Note Deals Questioned shares? Mr. Curran asked. about A.-I imagine it was up along $25 group of Mr. Bell's notes, aggregating share. approximately defense The average price the stock contends that Mr. Bell borrowed the bought 1931 the proceeds money from the Park Bank to take the note previously from the institution book "about the witness said. value block which Mr. Curran next referred letter depreciated sharply. the defense's commissioner that this was to save Mr. criticizing certain the bank from loss the bank's affairs and telling Mr. Mr. Bell said ten other Bell that they would have to be similarly take over blocks rected. depreciated securities the Letter Mentioned bank's portfolio. The late Q.-Something was said about John Baer, he was not asked the bank commissioner's letter participate knew your desk instead of the bank's what troubles the brokers were Have you say about having. that?
Copper Shares Split Up I'm glad you asked "Mr. Bellamy Bellamy, about that left there because other director) said wasn't able wanted keep that letter in front assume that liability and requested in thought had put the be excused," Mr. Bell Well, might forget. block sixty shares wanted where I'd keep see assigned were split up among opened ten other directors. twelve times Referring the Washburn the left there when Mr. Bell the closed? was manBickford said by you to any officers clerks in the bank went sour, you took it relieving service charges the event your balance was not up to protect the bank. cent. your loans? remember telling Mr. Taking up, next, group of (George Belt vice-president) Mrs. Mabel C. Conroy, my secretary, which described not sufficient Mr. Curran brought wanted pay the charge that else. tration through renewals lot asking Mr. Belt and August he said, "Your balance running Mr. Bell paid off $400 on the along all knew just
Collateral Evaluated After ascertaining from the witness junior officers the bank usually evaluated collateral loans, Bell advised them Mr. Curran shifted the witness cashier's check for $6,462, Mr. Curran
"Explain to court the bank's son for handling the $6,400 cashier's check item this assumed the stock with note was watching the wasn't back, that going down. the Nevada Copper the Schulte Realty (taken over with note) put the proceeds cashier's check. The reason was that there thought the proceeds little later might reinvested conditions changed. There some discussion the spring 1932 about buying Anaconda. fact the was put the bank's will you explain the loan the insurance policy? Two Policies had policies, one for $26,000 and one for $15,000. asked put the insurance. on my initiative. It was treated cash value. Just my life for the protection of the in case my death. though the money (the proceeds of the $2,099 policy wen: into your account, really went back into the bank. A.-Yes, premiums the and $900 to Mr. Richardson for interest. checks drawn for benefit the bank out proceeds? Mr. Bell consulted some records replied: application made March got the check April counted on getting little sooner.' Read List Of Checks He proceeded read list of checks his account which he were drawn against the proceeds policy to preceding and following receipt the $168 and $132 to the Prudential surance Company, which wrote policy; $184 the Equitable Company, which the $15,000 policy, and $909.88 to Mr. Richardson. about your note of July, The State had introduced testimony show Bell had borrowed $2,296.83 1932, for the premium insurance policy and that although application rejected, the note had been paid when bank closed.
Mr. Bell's reply the question was: "That note was 13, was January 1933 was off. the result the directors about the bank's protection. asked policy the policy to be assigned the Park Bank?
Application Rejected was examined but the application rejected and the mium returned. The was paid the bank closed. heard Mr. Stewart (Edmund State Auditor) week testify profits on syndicate loans which divided Mr. And you that afterward we check were five of profits $100 each he said did not but which you did. What about The Court-Aren't there had account. than you never sought Curran-We only picked ferential five from Mr. Stewart's first didn't your Honors wish. Refers To Note profit Referring previous testimony each September 1929. the $13,564 secured the same day there another each. What was done with deposited to my account the and gave Mr. Richardson September check for $375 for call-loan here's October profit of $180.25 showing deposited in my account ten shares of Park purchased here's one showing total another on March 1930, split you and Mr. Richardson. That's total for you 257. What done with that? day $625 the gave loan on April $510 for per which collateral. Later, call-loan interest to Mr. $458.32 for Richardson. then handed Mr. Mr. Curran the Park Bank's tabulation liabilities certain resources dates between 1920 August 11. 1932. He asked Mr. Bell "touch the high lights." Mr. Bell once called attention the fact that September point bank deposits and that when closed had only $3,746,000. that shrinkage, he pointed the loans had cut from to $3,920,000. its invest$490,000. its mortgages, and its estate, $33,000 among items. run of December, increased your bills payable preciably then got them all paid summer them. wouldn't say the reason for solidating the various small loans the syndicate account? examiners said would make things for them. second reason was that make things easier if we had to part of the loans with the Reconstruction Finance Corporation or New York After questioning Mr. Bell as whether acted fraudulent intent and bringing out when the minority directors investigate the bank's loans, Mr Bell ordered free access for them all Mr. Curran questioned the witness the bank's policy loans that lacked collateral depreciation in the market value of He brought that Mr. Bell formerly was chairman of the the State Bankers Associand that he had resigned the because he was longer banker. what was the you policy the the banks in Baltimore in 1931 carrying of the other banks told including richin every they were carrying them. Court Interrupts doesn't answer the The Mr. Curran (restating the question) before the-let's call the catastrophe 1929-there pracamong the banks generally the of the loan. collateral That's true, isn't they had certain safety? they liked there change in this any policy after the crash? the custom then those signified he had comMr. Curran pleted his Hilary for Mr. said Gans, counsel ask. When Mr. he questions O'Conor informed the court he Mr. Bell pected cross-examine the court decided adjournlength, until today. of $7,000,000. They had deposits over went down $3,700,000 August the date of the close. beginning of the trouble startDecember, 1930. Newspapers announced closing banks. This in December, after the crash. trust closed New York and another big in December, 1930. had out our Christsavings many people ing new were the bank the rumor went out that money being drawn out. Mr. Albert GraFirst National Bank, called me up the telephone asked with him met he said: 'Web' (he calis me have about decided to open branch bank Liberty Lexington streets and another North avenue and Charles street but before fight wanted talk your could vice-president and there would no falling about salary.' thought the situation decided not "Did have loans with the any First National then? Mr. Curran asked.
Tried To Make Loan "Very the witreplied, and continued his recita"Later when went down to see Mr. Graham about pretty large said: think this would pretty time merge.' "Next day resorted the same practice and told 'Albert, let talk about later. What quick action. loan made then paid by spring. of the bank then fairly good. Of course, knew people were And then summer of 1931 went off the gold standard and there was deposits not seepage only with all. Tells Of Baer Suicide hopes the time the Stock Exchange would be closed beof the dumping. Then Mr. Baer (John Baer, director the bank) committed suicide. newspapers vice-president of our From the time of his death the bank closed we lost about $600,000 in deposits.
