by him, which reports were required to be verified and attested in accord ance with law, and to exhibit in detail and under appropriate heads, the resources and liabilities of each such national banking association at the close of business on past days specified by the said Comptroller in making his several requests for the same, and particularly the total amounts of money loaned by each such national banking association respectively upon promissory notes, and the total amounts of bonds, securities, etc., including corporate stocks, owned by such national banking association; that inasmuch as each such national banking association established and doing business in the Borough of Manhattan, in the City of New York, has done such a great volume of business that it has been required to employ numerous clerks and bookkeepers to keep the books of accounts of the same and make up the aforesaid reports for verification, attestation and transmittal to the said Comptroller, the work of keeping such books and making such reports has been to a certain extent necessarily mechanical, and entries once made in such books have in due course of business appeared in or been the basis of other entries which appeared in and have necessarily affected the said reports so made by the said agents to the said Comptroller, as well as those made by the said national banking associa tion to the said Comptroller, and those made as hereinafter set forth by the Comptroller to Congress, without such clerks or bookkeepers necessarily having any knowledge of the truth or falsity of such entries or of the true circumstances underlying the making of the same, or pertaining to the transactions upon which they were respectively based; that in so examining the affairs of any such national banking association in the said borough, the said agents so appointed by the said Comptroller for that purpose have been compelled, by reason of the great volume of business transacted by such national banking associations, to accept the said books and the entries so made in the same as true, when the same appeared to be consistent and regular, and especially when entries showing loans were accompanied by entries, records or share-certificates showing the possession by the said national banking association of apparent col lateral security for such loans,-it having been impracticable for such agents to inquire into the circumstances underlying the making of each such entry or pertaining to the transactions upon which they were based; and that the said Comptroller by law has been required to make an annual report to the Congress of the United States, at the commencement of its session, exhibiting, amongst other things, a summary of the state and condition of every such national banking association from which such reports have been received by him during the year preceding the making of each such report; which said reports to Congress have necessarily been compiled from and based upon the reports so made to the said Comptroller by the said agents and by the said national banking associations, and have been and are of great importance and indispensable as aids to the performance by the Government of the United States, through the said national banking associations, of its official functions pertaining to the borrowing of money on the credit of the United States, to the obtaining of money, through taxes, duties, imposts, and excises, for its use, and to the providing of agencies for its fiscal operations and a stable and uniform currency for the use of its people. And so the Grand Jurors aforesaid, upon their oath aforesaid, do say, that the said agents appointed to examine the affairs of the said national banking associations in the said borough have, in manner and form aforesaid, heen charged with the execution of a governmental duty in ascertaining the true state and condition of the affairs of such national banking associations, and reporting the same to the said Comptroller; and the said Comptroller has been charged with the execution of a governmental duty in receiving and considering such reports from the said agents and associations and approving or disapproving of the management of the affairs of such national banking associations, as shown by such reports, and acting as required by law in either case, and also in reporting to the Congress a summary of the state and condition of such national banking associations as they appear from such reports; and the United States has had important fiscal and other governmental functions to perform in the premises. And the Grand Jurors aforesaid, upon their oath aforesaid, do further present, that Charles W. Morse, and Alfred H. Curtis, each late of the said Borough of Manhattan, in the said City of New York, and in the said Southern District of New York, at all times from the twenty-eighth day of March, in the year nineteen hundred and five, to the twenty-first day of October, in the year nineteen hundred and seven, at and within the said borough, city and district, were directors and were officers, to wit, vice-president and president respectively, of The National Bank of North America in New York, which then and there was a national banking association theretofore organized and established, and then and there existing and in operation and doing business, under and by virtue of the laws of the United States concerning national banks; that the said Charles W. Morse and the said Alfred H. Curtis, so being such officers of the said national banking association, and well knowing all the premises aforesaid, and intending to take advantage of the same, unlawfully did, on the eleventh day of January, in the year nineteen hundred and six, at and within the borough, city and district aforesaid, conspire, combine, confederate and agree together, and with divers other persons to the said Grand Jurors unknown, to commit an offense against the United States, that is to say, the offense of knowingly making a false entry in a certain book of the said national banking association with intent to injure and defraud the said national banking association and to deceive the agents who should be appointed by the Comptroller of the Currency of the said United States to examine the affairs of the same. And the Grand Jurors aforesaid, upon their oath aforesaid, do further present, that the unlawful conspiracy, combination, confederation and agreement in this count of this indictment mentioned was so entered into by the said Charles W. Morse and the said Alfred H. Curtis and the other conspirators aforesaid under the circumstances and conditions in this count next set forth, and the said false entry was so to be made by them, with the intent and knowledge last aforesaid, in a book of the said national banking association, for purposes, under circumstances, and in the manner and by the means, now here described, that is to say: By reason of the said Charles W. Morse and the said Alfred H. Curtis being, as such directors and as such vice-president and president respectively, actively engaged in the management of the business and affairs of the said national banking association and possessed of a power of control, direction and management over the moneys, funds and credits of the same, and over the other officers, clerks and employees of the same, they were to make use of the moneys, funds and credits of the said national banking association in the purchase of and dealing in, on behalf of the said national banking association, of a large number, to wit, two thousand, of the shares of the capital stock of the American Ice Securities Company (a corporation theretofore organized and then existing under and by virtue of the laws of the State of New Jersey), and in investing such moneys, funds and credits in those shares on speculation, notwithstanding as they the said Charles W. Morse and the said Alfred H. Curtis and said other conspirators then and there well knew, the said national banking association then and there was not by law allowed to purchase, or invest its moneys, funds or credits in such corporate stocks for the purpose of speculation therein or to deal in such stocks, and such purpose and investment would not be approved by the said Comptroller, and would be an unlawful and improper use of such moneys, funds and credits, and one calculated to injure the business and credit of the said national banking association and impair its capital; and thereupon were to provided. False Entry. Report, March 28, 1907. Knickerbocker Loan Transaction. COUNT 12C. And the Grand Jurors aforesaid, on their oath aforesaid, do further present, that the said Charles W. Morse and the said Alfred H. Curtis, before and on the twenty-second day of March, in the year nineteen hun dred and seven, and thenceforth until and on the twenty-eighth day of March, in the same year, at and within the said Borough of Manhattan, City of New York and Southern District of New York, were directors and were officers, to wit, the said Charles W. Morse was vice-president and the said Alfred H. Curtis as president, of The National Bank of North America in New York, which then and there was a national banking association theretofore organized and established and then and there existing and in operation and doing business under and by virtue of the laws of the United States concerning national banks, and that the said national banking association on the said twenty-eighth day of March, in the year nineteen hundred and seven, did there make and transmit to the then Comptroller of the Currency of the United States a certain report of the condition of the said national banking association at the close of business on the twenty-second day of March, in the year nineteen hundred and seven, according to a certain form theretofore prescribed by the said Comptroller of the Currency of the United States for the time being, the same being a report which it was then and there, to wit, on the said twenty-eighth day of March, in the year nineteen hundred and seven, by law the duty of the said national banking association to make and transmit to the said Comptroller of the Currency, to wit, one of the five reports before that time, and then required by law to be made each year by every such national banking association, and which said report was then and there verified by the oath of the cashier of the said national banking association and attested by the signatures of three of the then directors thereof. And the Grand Jurors aforesaid, upon their oath aforesaid, do fur ther present, that the said Charles W. Morse and the said Alfred H. Curtis, so being directors and so being also vice-president and president, respectively, of the said national banking association on the twentyeighth day of March, in the year nineteen hundred and seven within the Borough, City and District aforesaid, unlawfully, knowingly and fraudulently did wilfully make a certain false entry in said report, aforesaid, that is to say, a false entry to the effect that at the close of business on the said twenty-second day of March in the year nineteen hundred and seven the amount of "Liabilities other than those above stated" was "None," whereas in truth, as they, the said Charles W. Morse and the said Alfred H. Curtis, at the time of so making the said false entry, well knew, by reason of the fact that the said national banking association was at the close of business on the said twenty-second day of March, in the year nineteen hundred and seven, liable for the payment of a certain loan, in the amount of Two hundred thousand dollars ($200,000), made to the said national banking association, on the fifteenth day of February, in the year nineteen hundred and seven, by the Knickerbocker Trust Company (a corporation then and there organized and existing under and by virtue of the laws of the State of New York), the amount of "Liabilities other than those above stated" was Two hundred thousand dollars ($200,000); they, the said Charles W. Morse and the said Alfred H. Curtis, then and there, to wit, at the time and place of so making said false entry in the said report as aforesaid, thereby intending to injure and defraud the said national bank ing association and one Charles A. Briggs, one Emma Brokaw, one Frances C. Brown, one Charles C. Burke, one Louise T. Miner and one Cornelia M. Mead, and divers other persons (too numerous to be here named), then shareholders thereof, and to deceive the other officers of the said national banking association, and to deceive any agent appointed by the Comptroller of the Currency to examine the affairs of the said national banking association, against the peace and dignity of the United States and contrary to the form of the statute of the same in such case made and provided. And that the said national banking association on the said twenty-third day of May, in the year nineteen hundred and seven, did there make and transmit to the then Comptroller of the Currency of the United States a certain re port of the condition of the said national banking association at the close of business on the twentieth day of May, in the year nineteen hundred and seven, according to a certain form theretofore prescribed by the Comptroller of the Currency of the United States for the time being, the same being a report which it was there and then, to wit, on the said twenty-third of May, in the year nineteen hundred and seven, by law the duty of the said national banking association to make and transmit to the said Comptroller of the Currency, to wit, one of the five reports before that time and then required by law to be made each year by every such national banking association, and which said report was then and there verified by the oath of the cashier of the said national banking association and attested by the sig. natures of three of the then directors thereof. And the Grand Jurors aforesaid, upon their oath aforesaid, do further present, that the said Charles W. Morse and the said Alfred H. Curtis so being directors and so being also such vice-president and president, respectively, of the said national banking association on the said twenty-third day of May, in the year nineteen hundred and seven, within the Borough, City and District aforesaid, unlawfully, knowingly and fraudulently did wilfully make a certain false entry in said report aforesaid, that is to say, a false entry to the effect that at the close of business on the said twentieth day of May, in the year nineteen hundred and seven, the amount of "Bonds, Securities, etc., including premium on same (see schedule) was Eight hundred and thirty-nine thousand, eight hundred and ninety dollars and fifty cents ($839,898.50), whereas in truth, as they, the said Charles W. Morse and the said Alfred H. Curtis at the time of so making the said false entry well knew, by reason of the fact that the said national banking association was at the close of business on the said twentieth day of May, in the year nineteen hundred and seven, the owner of eight thousand shares of the capital stock of the New York & Cuba Mail Steamship Company (a corporation theretofore organized and then existing under and by virtue of the laws of the State of Maine), and that the value of said shares, amounting to Two hundred thousand dollars was not included in said entry, nor were the said shares of stock set forth in the schedule referred to in said entry, the amount of "Bonds, Securities, etc., including premium on same (see schedule)" was a different and much greater sum of money, to wit, One Million, thirty-nine thousand, eight hundred and ninety-eight dollars and fifty cents ($1,039,898.50); they, the said Charles W. Morse and the said Alfred H. Curtis, then and there, to wit, at the time and place of so making said false entry in the said report as aforesaid, thereby intending to injure and defraud the said national banking association and one Charles A. Briggs, one Emma Brokaw, one Frances C. Brown, one Charles C. Burke, one Louise T. Miner, and one Cornelia M. Mead, and divers other persons (too numerous to be here named) then shareholders thereof, and to depeace and dignity of the United States and contrary to the form of the statute of the same in such case made and provided. Misapplication, $102,920. |