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About Morning Oregonian. (Portland, Or.) 1861-1937 | View Entire Issue (March 30, 1910)
I T1TE aiOKXITfCr OKEGOXIA5, AVKT7nESIATt 3IAKCH 30, IHIO. BLAME FOR BANK CRASH IS SHIFTED Moore on Stand in Own Be half Says Methods of Morris Caused Trouble. LITTLE IS CONTRADICTED Indicted Banker Says He Was Ignor ant of Many Transactions Tele phone Stock vDeal Admitted Wrong Trial Xear End. CContlnued From F1rt Page.) for the bank. Mr. Moore testified that nothing: was In the bank to show that the building was being constructed for the bank. When asked to explain about the Golden Eagle and how it had secured another $100,000 from the bank, Mr. Moore said that the real truth about the- bank's having: taken over the stock of the Golden Eagle was not made known to him until Morris was away on a trip. Then, he said, it had come out accident ally through the assistant cashier. Mr. Truby, now dead, who said he had un derstood from Morris that the company was to be allowed to overdraw. !Note Covers Overdraft. "I don't remember when or how tiie account was first opened," said Mr. Moore, "but It was in the latter part of 1906, and came to the bank In the usual way. Shortly after the account came there they began to ask for ac commodations. They couldn't make a showing which was satisfactory At that time, but at the same time, as is some times liable to happen in banking, they did manage to run In a small over- draft. To cover this overdraft and to allow further credit which they wanted, we took their note for J6000, which was Indorsed by Mr. Wright, of tne Oregon Hotel. It being understood that Mr. Wright had some Interest In this company. They were accustomed to deposit from 800 to J3000 every day and it was one of those accounts that was hard to keep down. "So far as I knew they did not have any more than the $6000 until one day I had occasion to refer to the ledger In which their account was and saw, quite by accident, that they had over drawn $21,000. I asked Trnby and he paid Morris had allowed It. I tele graphed Morris and asked him if these sums had been advanced without se curity. He replied that they had, so I called In Lowlt and insisted that we be secured. I insisted that the account must be brought down at the rate of $1000 a week. This was done until the account was cleared up. After that I knew nothing about their debts to the bank until a few days before the bank closed. Then I learned that Mor ris had allowed them to have more money and to protect the bank had taken over the stock of the company. "It was on the Sunday when Eriede, Lytle and all of us were going over the bills receivable that I learned it. Truby came to me Just as we were go ing out of the bank and called my at tention to the pouch which he said liad been put in the rear vault by Morris. I tried to get him to explain fully about the matter, but he did not eeem to be able or to be disposed to. I was knocked off my pins when .1 learned that the Golden Eagle owed this money. . What I told L,ytle was that we had better not show Frlede those notes that night, that we could show them to him the next day. Ap prehension about the bank because of our want of cash had made Frlede very sick and I thought it were best that he hear no more bad news. I had absolutely no doubt as to the solvency of the bank at that time and have never had. I did not learn all about the Golden Eagle until a week or so after the bank. had closed, when Mor ris, who had been to New York, told me about It." Stock Covers Overdraft. When asked to explain how it was that he hadtold Mr. Devlin that the Golden, EaglS owed the bank only J6000, Mr. Moore said tha-t in reality that was all it did owe, the transfer of the stock to the bank after the first $6000 note having been made to take care of all the overdrafts. He said this point was so explained to Mr Devlin and to Mr. Simon and that for some time after the failure they had debated as to whether it would be best to handle the claim of the Golden Eagle as an asset of the bank or to assume the ownership of the stock in settlement of the claim. Tearing off of the names from the uomen Jagie stock, he said, had taken place after the transfer of the Golden Eagle stock to the bank. Gus Lowit had demanded return of the notes and Mr. Moore and Morris refused but agreed to tear off the names, as the Oregon Trust could not keep both very well under the agreement. In relation to the Pacific & Eastern Mr Moore testified that George Bstes, then in charge or the bond department of the bank, was enthusiastic about the road and finally got Morris and Lytic to in vestigate the proposal. He said that cer tificates of deposit for $S1.000 had been Issued on this deal from the bank and that he had relied entirely upon Morris' and Estes' judgment in this transaction. He explained issuance of the certificates of deposits by saying that the receiver of the road had assured him that it would not be necessary to cash the cer tificates of deposit as the bonds would be sold for the road before the need of the $81,000 would be pressing. Lytle's Statement Denied. "What are the facts about the state ment in Mr. Lytle's testimony that vou assured htm that the bank had nothing to do with the Board of Trade building'" asked Attorney Fulton. "I never assured him of anything of the kind." was the reply. "in fact j don't remember having conversation with Mr. Lytic" 'The Order of Washington account was opened up before I had anything to do with the bank," continued Mr. Moore "I worked every day I could to get the account secured or to get it reduced In some way but was unable to do so " He denied being in the bank as said by Mr. Watts, the friend of Minnie Mitchell, who declared that Moore wit nessed the banking transaction on which the indictment against Moore is based. Mr. Moore said he was in the parlors of the First National Bank at the time ne gotiating with the members of the com mittee of the Clearing House for the loan of $250,000. He further stated that Teller Declus had no right or authority to re ceive the deposit as his duty was to take care of only those persons who were in the bank line at 3 o'clock when the doors were supposed to be closed. He described the meeting with the Clearing House committee and said that they told bun that they did not want to make- a. loan because they thought Morris was unfit to be in the position he occupied. Mr. Moore said the bank had invested largely in telephone bonds because they found, after some inquiry, that other banks in Portland and out side were investing in them freely and it was done with the knowledge and consent of all of the1 board of directors. Reorganization in View. At the time'of the failure of the bank he had thought of reorganizing it and Nationalizing it, and wfW this purpose in view had some money for stock for a new bank which was to be called the National Bank of Commerce. There was $7200 of this money in the bank when it closed, he said, and he paid back $4800 in cash to prospective stockhold ers by raising the money himself out of his private funds. He and his brother, he testified, had an investment company which deposited $15,000 in the bank. Both, he said, had small person al accounts also. He declared that the surplus had been created; at the same time his notes were taken out of the bank by the entry of the telephone stock, which they valued at 50 cents on the dollar. He said he valued the property free and clear of all incumbrances, which he had turned over to the receiver after the bank had closed, at more than $180,000. On cross-examination, Mr. Moore said he owned only $15,000 of the bank stock. When he bought out Ralston's share, amounting to $.25,000, for which he paid a bonus of $10,000, he said he bought it for the bank and It was understood by him that the, stock was to be held in a trust account for the bank until sold. He had put in his note for $25,000, he testified, and when any of the stock was sold it was to be credited upon his note. He couldn't re member any stockholders' meeting at which he was elected a director, and said that he had never seen any of the bylaws, and had guided himself In his duties as president on the belief that.lt would be all right if he used his own judgment. He did not know that the bylaws provided that the sav ings accounts of the bank should be invested pnly in municipal and Nation al bonds and real estate mortgages at 40 per cent of their value, although the printed advertising of the bank said so. He said he knew Morris was not worth the amount of money for which notes had been placed in the bank with his name attached. At 6 o'clock the attorneys for the de fense notified the court that their de fense was virtually through when the cross-examination of Mr. Moore ceased, and that they were ready for argument. Mr. Fitzgerald said he desired to ques tion Mr. Moore further along other lines and would perhaps finish about noon, when the argument might proceed. CHINA TO HAVE NAVY FORTS AND DOCKS AUK BEING PLACED ALONG COAST. Students WII Be Sent to England and Germany, to Learn Meth ods of Construction. VICTORIA, B. C, March 37. (Spe cial.) According to latest Oriental newspapers, the Chinese naval com missioners have presented their first report on their tour of Investigation to the naval yards of the world. The first recommendation was that the government should send Chinese students abroad to study methods of construction. This will be done, the students going to England and to Ger many. As a further result of the in vestigations, the Chinese government has decided to build a Chinese navy, and to create a board of Admiralty to have charge thereof. As in Canada, a beginning will be made building cruisers and torpedo boats, but this will be followed up with battleships of the first order. As a further step in the same direction, the naval department is preparing maps preliminary to constructing naval bases, forts, barracks, docks and light houses. Great secrecy Is being ob served as to this latter move. Regard ing naval education, schools will be es tablished In the coast and riverine pro vinces, and two middle schools will be established one by the provinces of Chlhli, Mukden and Shantung, in con junction, and the other by the pro vinces of Kiangsu, Chekiang, Fukien and Kuang. An academy and special schools wift be organized and the naval department will be at the Capital. With respect to expenditure: $500, 000 is required this year for naval sta tions, to be followed by $1,000,000 next year; $2,000,000 of the $15,000.00 esti mated will have to be provided this year for construction work. Circular orders have been sent out to the pro vinces urging the authorities to make further contributions toward the naval funds, but In view of the present finan cial straits of the country. It is hardly to be expected that the provincial ex chequers will be able to provide the further contributions asked for. EGYPT'S NOTED SPHINX, NEAR lira Sr 7 II f X - II A -.i 1 CAIRO, Egypt, March 29. (Special,) One of the most interesting features of Colonel and Mrs. Roosevelt's visit to this city was the party's trip out Tf the city for a sight of the noted Sphinx, which stands In all its glory and aged romance of centuries the chief show place of this country, a few miles to the west. It was after paying the Sphinx a visit that Colonel Roosevelt, astride a fiery steed, waged the other men of his party and won a two-mile race into th e city. Mr. Roosevelt's refusal to talk pol itics here with the American newspaper correspondents reminded them of the Sphinx he had vlsLted silent, y t looming high on the horizon now closely "watched by the American people. TO FIGURE IN DIVORCE T. J. Munly, Fred Merrill, S. A. D. Puter and C. P. Webb Connected With Case. SENSATIONS 'COME FAST Frank Drake, Furniture Man, Says Portlanders Guilty of Misconduct With His Wife, and Cites In stances in His Complaint. SAM FRANCISCO, March 29. (Spe cial.) There s to be a 'divorce suit In the family of Frank Drake, the furni ture broker, of New York and San Francisco, who interrupted his wife at dinner with George Graham, a traveling salesman, who said he was a mining promoter, at the Techau Tavern. Drake announced yesterday that he would be gin divorce proceedings when his legal residence shall have been established in California. Desertion will probably be alleged in the divorce complaint, for Mrs. Drake and her husband, as a result of the sen sational chase In taxicabs along Mar ket street, and the signing of articles of separation. ' Although the specifio charge will be desertion, the names of a number of prominent men will be mentioned in the complaint as being to some extent responsible for the separation. Among the number, according to Drake, will be T. . Munly, S. A. D. Puter, Fred Mer rill and C. P. Webb, of Portrand. "I propose tS show by evidence that Munly went down to Los Angeles and met my wife on frequent occasions." said Drake yesterday, "and I also propose to show that he met her in Portland, also. Munly Is en old fossil who Is antiquated and aged end how he ever succeeded in winning the affections of my wife or any other woman is a mystery to me." Drake says his wife went from Port land to Chicago with S. A. D. Puter and remained In that city at the Great Northern Hotel for a week or more. She was supposed to meet her husband in Chicago, he says. "She was to have come to Chicago and meet me," said Drake, "but I have discoveed that she went to Chicago with Puter. I never met Puter, but I have read of him a great deal." Indiana Man Involved. Another man who will be mentioned In the complaint Is Gilbert R. Jones, of Evansville Ind. Drake says Jones vis ited his wife at her apartments at Van Ness avenue and Ellis streets on many occasions. They drank together ex cessively, he says. ' "I furnished a pretty little flat out on Van Ness avenue," said Drake, "and hoped to have an Ideal home. My wife wanted the place, so I fixed It up for her. But I have since learned that she entertained Jones at my home while I was away, and I have also learned that they drank together very heavily." Fred Merrill, a former member of the City Council of Portland and at one time a candidate for Mayor of the city by the Willamette, will also be men tioned in the complaint, according to Drake. Merrill has wealthy relatives In San Francisco and other parts of California. Fred Merrill Connected. "I have learned that Merrill used to take my wife out in an automobile when I was away from the city," said "Drake. "I have also learned that he took her to many roadbouses and that he had the wine habit whenever my wife arrived in Portland. I shall mention him in the complaint." Another Portland man who may be in volved in he San Francisco divorce suit, according to Drake, is C. P. WTebb, a sa loon man. Drake declared yesterday that he has Instructed his attorney to prepare the divorce papers and bring suit when he saw fit. "My attorney has advised me that it is not necessary for me to live contin uously In California for a year in, order to bring a divorce suit," said Drake. "As a traveling man, 1 may institute suit anywhere, at any time, and the courts look upon us .and our residences just as they look upon mariners. I begin suit whenever my attorney sees fit- I have positive proof of my wife's misconduct and shall bring suit." Woman Goes to Sister. Mrs. Drake has left her apartments and her husband at the Palace, and is residing with her sister, Mrs. A. W. CAIRO, VISITED LAST WEEK BY MRS. ROOSEVELT. POHTLAPJD MEN , ' " ' i ft? CENTRAL BANK One dollar will open a savings account with this company. An account once opened will encour age your endeavor -to save and increase the account from time to time. It will do more. It will cause you to be methodical in your transactions. Centrally located and fully equipped in every department, we are pre pared to handle all busi ness that comes within the scope of our service. MERCHANTS SAVINCS & TRUST COMPANY Corner Sixth and Washington Streets. Morgan, at 818 Grove street. Drake still resides at the Palace. George Graham, w..w escorted Mrs. Drake to a dinner which was inter rupted by the unexpected arrival of her husband, has .left the Palace and the city. "I don't know what has become of him, said Drake. "He was such a contemptible piece of humanity that I never took the trouble to Inquire where he went." MIJXLY HAS GONE TO COAST Health Bad, It Is Said Resides at The Ockley, on. Morrison Street. T. J. Munly, named as a corespondent in the Drake divorce case, resides at the Ockley. 390i,4 Morrison street. He left the city yesterday, it was said, for the Coast, where he went in search of health. At his rooming place it was said he was a man of quiet ways, who was away from homiiiuch of the time. He first came to PoTTland 18 years ago and has never married. For ten years he was in Alaska, and has been a traveling salesman. Mr. Munly is 63 years old and is in the real estate business. Last July he went to Los Angeles seek ing health, returning in early Fall. Mr. Munly has been a sufferer, it was said, from stomach trouble and from a catar rhal trouble. S. A. D. Puter, named also as', a co respondent In the Drake case, is "in the timber," and is not expected to return before April 2. Fred Merrin could not 'be located last night, although at his home it was said he was in the city. JOHN S. RALEIGH IS DEAD Member of Oregon Pioneer Family Dies in San Francisco. John 9. Raleigh, an Oregon pioneer and a former Portland Councilman, died last Saturday in St. Francis Hospital in San Francisco. -kJCTWIi Mr. Raleigh was a member of one of the pioneer Oregon families and is sur vived by a widow in San Francisco and three children. His son, Henry, Is one of the most prominent magazine illustrators In New York. He Is survived by four sisters: Mrs. J. M. Gearln and Mrs. C. A. Trimble, of Portland, and Mrs. Kelly and Mrs. McCormick. of San Francisco. He also leaves one brother in Yaquina, tjregon. 80,000 ACRES IN DISPUTE Northern Pacific Claims Spokane and Flathead Lands. SPOKANE. March 29. Half the set tlers on the Spokane and Flathead In dian reservations will be involved in a legal battle for possession of their claims. A contest clouding half of the sections ra the Spokane and Flathead EX - PRESIDENT ROOSEVELT AND j f BEN reservations has been filed with the Department of the Interior by the Northern Pacific. Every odd section on these reserva tions, comprising nearly half of the en tire acreage, is- claimed by the railway company as its property under the Gov ernment land grant made to the North ern Pacific in 1864. Nearly 80,000 acres on the Spokane reservation are affected. Formal notice of the contest was issued to the settlers and the United States Land Office at Spokane today by local counsel for the Northern Pacific- Astoria Men Enter Box Business. ASTORIA. Or., March 29. (Special.) Charles H. Callendar and W. P. O'Brien, of this city, have acquired in terests in the Astoria Box Company and will be associated with W. F. Mc Gregor, former sole owner of the plant. In the active management of the com- Real Estate Auction Sale FRED PHILLIPS, Auctioneer WATEH-FROXTAGE AND TOWN SITE LOTS IX GRAHAM CITY (K1TK GATE HARBOR) WILL BE SOLD AT PI;BLIC AUCTION IX THE DOMINION HALL, VANCOUVER, B. C, ON. Thursday and Friday, April 14 and 15 AT 2 I M. AND TiSO I. M. SHARP. ONE WORD ABOUT GRAHAM CITY GRAHAM CITY is a well-established town, and will in the near fu ture be a great center of population. GRAHAM CITY Is situated on the only deep-water, harbor (Sklde gate). There Is no other deep-water harbor within ninety miles. GRAHAM CITY will be a great residential spot and Summer resort, also an important commercial center. THE COAL FIELDS, the largest agricultural district, together with great and enormous mineral deposits, and the rich timber resources, etc., are all on Graham Island, on which Graham City is located. Two or more railroads will make their terminus at Graham City. Maps, full information and illustrated booklets can be obtained from The Standard Industrial Co., Limited, 338 Hastings St.. West, Vancouver, B. C. Watch This Space for the Most Extraordinary Offer Ever Made 4 OUR NEW DEPARTMENT for READY-TO-WEAR GARMENTS will be devoted specially to garments for LITTLE WOMEN MISSES and GIRLS Our buyer has just returned from New York, where he has made selections .at first (hands and has secured the very NEWEST in tailored SUITS, COATS, RAINCOATS and WAISTS in sizes usually difficult to find at other stores Our entire third floor is devoted to this department. SELLING pany's sawmill. The plant's capacity is to be increased in the near future. PIONEER OF SOUND DEAD Jolin Peterson Helped Make Geologi cal Survey in 1854. TACOMA, March 29. John Peterson, aged 76, a pioneer of Western Wash ington, died today in this city. He first came to Puget Sound in 1854 from San Francisco and was wl'h a Government party engaged in mak ing a geological survey of Puget Sound. Afterward he was engaged in steam boating on the River Platte in South America for several years. Returning to Washington Territory in 1871. he went to Fort Steilacoom and located on a homestead, where he The Fred Phillips Realty Company, 324 Hastings St. West, Vancouver, B. C. Leading Clothier had since lived. He is survived by fiv sons and Ave daughters. -f Moore Hotel Being Remodeled. SEASIDE, Or.. March 29. (Special.) Complete remodeling of the Moore Hotel Is under way. Alterations to cost more than 5000 are being made. The whole third floor is being torn out, the walls raised and a flat roof put on. Mr. Moore has had plans drawn for a large salt swimming plunge which will be added as an annex to the hotel this year. 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