The Certificate of Extension was signed at nine o'clock on the morning of June 24, 1916, by Deputy Comptroller Thomas P. Kane as Acting Comptroller.
Some inquiries and comments were made as to why Mr. Williams did not sign this certificate as Comptroller, and it was stated in explanation that it was signed by the Deputy Comptroller as Acting Comptroller as a matter of expediency.
It appears that a meeting of the board of directors of the bank had been called for ten o'clock on the morning of that date and a representative of the bank had requested the Comptroller to issue his certificate as early in the day as possible in order that it might be presented to the directors at the board meeting, and Mr. Williams authorized the Deputy Comptroller to sign the certicate if he should be delayed in reaching the office on the morning of the twenty-fourth.
As Mr. Williams was late in arriving at the office on that date the Deputy Comptroller signed the certificate as Acting Comptroller and it was delivered to Mr. Darlington, a director of the bank, before ten o'clock, who called in person for it.
The last chapter of this unprecedented controversy was written on Saturday, July 1, 1916, when the attorney for the bank, in behalf of himself and his former associates in the case, ordered a discontinuance of the equity suit brought by the bank against the Comptroller of the Currency, the Secretary of the Treasury and the Treasurer of the United States. This step followed the agreement reached by the parties to the suit when the Comptroller declared his purpose to extend the charter of the bank.
While the signed acceptance by the directors of the bank of the decision of Mr. Justice McCoy as to the scope of the Comptroller's powers in calling for special reports, and the Comptroller's determination to extend the bank's charter in view of this recognition, afforded a very happy solution and settlement of this bitter controversy, it is to be regretted that the important question involved in the case could not have been passed upon by the court of last resort, and a decision reached as to the extent of the Comptroller's authority to pry into the past affairs of a bank and the individual transactions of its officers in connection with an application for extension of charter.
Indictment of Bank's Officers for Perjury
In the affidavit made by Mr. Williams and filed in the action brought by the officers of the Riggs National Bank against the Comptroller, it was alleged, among other things, that from the date of its organization as a national bank until the practice was stopped by his investigations, the Riggs National Bank conducted an extensive stock brokerage business through Lewis Johnson & Company, buying and selling stocks on commission in violation of law.
Lewis Johnson & Company was an unincorporated banking and brokerage concern doing business in Washington, through which the Riggs National Bank was supposed to have conducted its alleged unlawful stock operations. This company had failed a short time previously and went into bankruptcy.
These allegations were denied by the bank's officers in a joint affidavit made by the president, vice-president and cashier, dated May 19, 1915, and filed in the case.
In this affidavit it was declared that the Riggs National Bank never at any time bought or sold any stocks whatever from or through Lewis Johnson & Company.
Following the filing of this affidavit, the court at the instance of the United States Attorney made an order on the trustees in bankruptcy of the estate of Lewis Johnson & Company, requiring them to surrender to the custody of the United States Attorney the accounts standing in the name of the Riggs National Bank appearing on the books of the brokerage firm. National bank examiners were then put to work upon these accounts, which numbered about six thousand, and after a lengthy and exhaustive investigation, involving the tracing of every item through the books, reported their findings to the United States District Attorney, who submitted the facts presented to the grand jury. On October 1, 1915, four indictments were returned, one against
Charles G. Glover, president of the bank; William J. Flather, vice-president, and Henry H. Flather, cashier, jointly, and one against three of these officials individually, charging them with perjury in having sworn falsely that the bank never at any time oought or sold any stock through the firm of Lewis Johnson & Company, when the books of this defunct concern showed numerous accounts of stock purchases and sales carried in the name of the Riggs National Bank.
In anticipation of some such action on the part of the Government the board of directors of the bank appointed a special committee of three directors, with authority to employ expert accountants and special counsel, to make an investigation of all matters involved in the affidavit made by Messrs. Glover and Flathers, the truth of which was questioned by the indictment. This committee employed the American Audit Company of New York to make a thorough and complete examination of the records of the bank and of all transactions of the bank or any of its officers with Lewis Johnson & Compnay.
This audit company pursued its investigations daily for a period of about four months. Item by item in the affidavit filed by the Government was traced through the books and identified, and all but a relatively small number were identified as being for the account of particular individuals, and it was claimed by the bank, in a published statement, that no one of the transactions was made for or in any way on account of the Riggs National Bank, and that each and every so-called short sale was traced and identified as being that of an individual and in no single instance as that of the bank.
The bank in a statement issued for the information of its stockholders, depositors and customers said that the indictments grew out of a controversy regarding a purely technical construction of the phraseology of an affidavit filed in the course of the argument in the pending suit of the Riggs National Bank against officers of the Government, by which neither the court nor anyone else was deceived, and without any charge involving loss or injury to the property or business of the bank.