In explanation of the stock transactions with Lewis Johnson & Company the bank in its published statement said that in order to facilitate the making of investments by its depositors and customers it was the practice of the bank to execute orders when received through one of its officers acting in his individual capacity as a member of the Washington Stock Exchange or otherwise. Such orders, it was stated, were always on a cash basis and not upon margin.
While the transaction was conducted upon the order and for the account of a particular depositor, customer or other individual, in the course of business the execution of such orders was reported by the brokers directly to the bank, but no order or transaction was ever made by the bank for its own behalf or profit, but invariably in behalf of others.
The fact that the bank cleared orders of the nature indicated for depositors and customers, it was stated, was open and well known to the investing community, and to every Comptroller of the Currency, and to every bank examiner who examined the bank.
Since the passage of the Federal Reserve Act, however, it was stated, this practice had been discontinued, for the reason presumably that it might be held to be in violation of Section 22 of the Federal Reserve Act.
The bank's counsel denounced in a public statement as malicious persecution the action of the Government in procuring this indictment while the civil suit of the bank against two government officials was pending, and stated that such action looked dangerously like an attempt to invoke the operation of the criminal court to punish the officers of the bank for their temerity in appealing to the courts for protection against persecution. Counsel stated that the action of the Secretary of the Treasury and the Comptroller of the Currency in inducing the Department of Justice to obtain the indictments proved that they were actuated by malice against which the bank sought protection in the court.
The criminal case was called for trial May 8, 1915. The Government was represented by the United States District Attorney, assisted by special counsel from the Department of Justice. The defendants were represented by eminent attorneys of the district bar, assisted by ex-Governor John B. Stanchfield of New York. Great interest was manifested in the case and many distinguished members of the district bar, bankers and Congressmen were present in court as the trial progressed. Two ex-Presidents of the United States, William Howard Taft and Theodore Roosevelt, were character witnesses for the defendants and testified to their unimpeachable integrity and high social and business standing in the community.
Intense feeling was displayed between counsel throughout the trial and arguments and one of the attorneys for the bank officials took the witness stand and testified that he personally drew the affidavit on which the indictments were based, denying that the Riggs National Bank had dealt in stocks. He explained in detail the circumstances under which the document was drawn, signed and sworn to. He stated that he carefully explained to the signers of the affidavit what he meant by the language used, that the Riggs National Bank, as a bank, had never purchased, sold, or dealt short in stocks, and that if there were any accounts carried on the books of Lewis Johnson & Company purporting to show such purchases, sales or dealings by the bank, such accounts were false. He stated that he explained to the defendants before they signed the affidavit that the affidavit did not relate to the brokerage transactions in which the officers of the bank in their individual capacity bought and sold stocks for customers. He declared that he alone was responsible for the wording of the affidavit and that the language used meant precisely what he intended it should mean.
The explanation of this witness was so clear and convincing that the defense could have safely rested their case on his testimony alone as totally destroying all evidence of any intent on their part to wilfully make a false statement in the affidavit.
The trial lasted twenty days. The case was given to the jury on the morning of May 27, 1916, and a verdict of "not guilty" was returned within nine minutes from the time they left the jury box. Only one ballot was taken which was unanimously in favor of acquittal.