FIVE YEARS IN PENITENTIARY
IS SENTENCE OF AW. GEORGE
Jury Convicts Elkin Banker
of Misappropriating Funds
DEFENDANT
WILL APPE AL!
laak Ftikd m May 1*21 With
Shortage of Over $57,000—
r Held Rciponiihl**
For Not Continc Clean With
tho Whole Affair—Mr.
Goorgo's Tntinoay Did Not
Satisfy.
Five years work In the state peni
tentiary now looms up before A. W.
George of Elkin, former cashier and
president of the Farmers A Merchant
Bank, of that town. He has no doubt
by this time had spare moments left
to himself is which to reflect over
the lone time that he wit] perhaps be
kept from his home, his wife, his
three small children, his friends and
his 80-year old mother who makes
her home with him, all because a
jury of Surry citizens has said that
he took the money entrusted to his
care by his fellow men and so con
ducted the bank as to cause a short
age at mn than W.4M In Ms funds.
Just three years ago this month au
ditors of the Corporation Commission
eioaed the bank when they discovered
it to be insolvent, and aftor working
on the books three weeks found a
shortage of $67,000.00 in its funds.
The hooks were in such a miserable
condition that many items and entries
were never satisfactorily straighten
ed out The prosecution has contend
ed that this shortage came about as
the result of issuing certificates of
deposit, taking the money for private
purposes, and making no record of
the transaction on the books of the
hank.
When the auditor made his exam
ination he found many certificates
that had been issued and paid for at
a greater sum than the stubs and en
tries showed. This was in addition to
the certificates issued where no rec
ord of any kind had been made.
Failed to Make Proper Record
of Certificate*
In the trial of the ease the indict
ment charged Mr. George with mak
ing a false entry in his hooka for the !
purpose of deceiving the auditors, and
defrauding the depositors and stock
holders. The indictment charged him
with issuing certificate No. 1781 for
92,040, entering it on the stuh book |
for 120, carrying it through the cash ;
book as 120, and then paying it is1
12.040. There were also other in
stances where certificates of the hank .
were issued and carried through the
books in substantially the same man-j
aer.
The defense had testimony to try
to prove to the jury that the Issuance
of certificate No. ITtl waa merely a
clerical error. They had the owner
of the certificate, a fanner frnei Tad
kin county in court who testified to
this effect, hot the state offered as
corroborative evidence the large nun- •
her of atfcsr entries and esrtificaUs
falsely lasaed which M contended was I
all done for the pm poos of defrauding
the bank.
la the former trial held just tw*
years ago aad which resulted la a
■111 lal the state placed before the
Jury all iiHwii of the defendant's al
leged mishandlinfr„ef the bank. There
was sack • large amount of this that
II could hardly he awfathwsd only
by the mm trained la Intricate bock
keeping and high finance. At the
trial last week Solicitor Oravss
changed his pUn hi eondocting the
rase and relied sa the Matter of the!
m*other tnatmMS of making mo ne
ar* at ill
Mr. Gmmrgm Toatif ioa m Hia
At tha former trial tha defense
offered no teatimoay, not avan Mr.
Geiirga roinc on the witness stand.
this trial he teatifiad in hi* own ba
half. It la reported that this art waa
againat the will of his attorneya;
that thev plead with him all during
the conduct of the raaa that he muat
not r<> on the stand; that they reaaon
ed with hiir that owing to hia per
voua condition and having been ill
for several week* he would not be
nbte to keep Ma head and |i«i aatia
Cactory anawera to qoeationa pro
pounded htm bjr the prosecution. Ho*
ever, what pieaauie there waa brought
to hear to diaaoade him from hia par
poae waa of no avail. And In hia
testimony all admit that he did him
self more harm than good. He could
not expla'n satisfactorily many of
the transact ions and entriea. and
many of hia repliea were he didnt
remember or didnt know, Aa to the
pertifiratea issued and not correct
ly recorded he atated that it waa juat
an overaight or er.-or on hia part that
it waa done. All during hia stay on
•he witneaa atand he waa cool and un
disturbed and did not appear to real
ise that hia freedom waa at atak^ He
se«ined to have perfect confidence in
himself and appeared to believe that
the jury would take hia version of the
unfortunate affair in preference to
'he maaa of evidence produced by the
prosecution and vindicate him of all
the chargea on hia own statement
Bank LonC in Poor Condition
Say Auditor*
From all evidence praaented and
that obtainable It would appear that
the failure of the bank waa a caae
of a man trying to hold a Job beyond
his ability and capacity. Tor two or
*hree yaara before the hank waa fin
ally cloaed the Coporation Commit
sion waa often in correspondence with
it in regard to ita condition. The
bank waa cloaed on May 26th, tttl.
Aa far back aa April. 1111, the exam
iners were criticiaing Ha manage
ment and conduct. On April 9. 1919,
Tohn G. Nichola, chief bank examiner
for the atate took the matter in hia
own hands and viaited the hank and
checked over Ha hooka. On hia re
turn to Raleigh he addreaaed a long
letter to W. 8. Reich, then preaident
of the hank, alao aending a copy to
Mr. George, cashier, telling of tha
condition he found. The report of
the findinra of Mr. Nichola In part
waa aa follows: ,
Condition* Bod Two Yosts
Before Closing
"April 1#. 1919.
Mr W. 8. Reich. Pres.
Farmer* A Merchants Bank.
Elk in, N. C.
Deur Mr. Reich:
Following up our examination if
your hank on April 9, 1919, I wish to
rail your attention to the itemi of
rriticiim, and aak that you call a
meeting of your Board of Directors
and have them discuss these items,
advisin* me of the action taken. You
•rill please make this letter and all
replies thereto a ptirt of the minutes
of the Meeting.
ACCOUNTS
Cashless checks short, 1167.06
Loans and discounts short, . 6.SS4.14
Certificates of deposit, over 8.697 18
Individual ledger over, 826.(1
Cash over, 1.011.61
This la • very serioua situation and
should he remedied. The audit
agreed to will adjust these differences
hut the question in my mind Is the {
reuse of this condition and the rente
ly
OVERDRAFTS
I4.7S4.96. These iteass must ha
collected at ones and all offenders no
tified that this practice has heen dis
continued. This amount represents
M overdrafts, a very large percentage
vt your depositors.
CASH ITEMS
I1.6M.M. These alas must be col
lected and the practice diecontinued.
•11 Items should he cleared daily and
not held over from day to day under
»ny circumstancea.
OTHER REAL ESTATE OWNED
The larnperty^ owned hy your ineti
ly >hmi Id ba mid 4armg the
LOANS AMD DISCOUNTS
Past due paper $*&J. UtO to mm
ih« and must ba reduced by ekh
eollertkm er imiaiil with aaph a
rarity at oMa. Your hank sbeald at
m> tima Kara paat doe pa par in tin
of *10.000.
The Una of credit ratmdad to J. R.
Atkinaon and hia allied iatereets la 1
considered very excessive, totaling
$13,459.62. This Una must ba reduc
ed not to exceed $5,000 at any ona
Losses:—Ttw following loan*
ba collected or charged off:
Ona Price Store Co. IllttJI
J. W Ham. 56.00
Sorry County Drug Co. 270.90
Doubtful and alow paper—Tba fol
lowing loana muat be collected.
3. M. Gentry, 100.00
W V. George. 150 (10
Geo. Cough. 35.00
f. H. Harria. 187 00
4. H. Mathia. „ 560.00
1. R Strang* 1.000.00
Floyd Mayia 355.00
R M. O*home. ... 150.00
T. T. Pruift. 271 AH
F.lkin Ire A I.icht Co.. 2.000.00
Mt. Park School. 1.500.00
I. V. Simmon*. 501.75
Thia neper baa kwn kLanding in your
Hank for a considerable length of
Mm* and ha* the appearance of a fix
ed line of credit, which muat be dia
r on raged and eliminated.
IRREGULARITIES
Your hilla receivable fila waa found
in a very deplorable condition. The
following ware the defect* noticeable:
The general appearance waa un
tidy. that ia the note* weia very
much worn and diaeolored from hand
ling. collateral waa acattered through
the file with the note* covering aame
elsewhere. Collateral in many
inxtancea. waa miaaing. in atf
eral rase* not transferred to the bank.
Indorsements in many caaea were
made by rubber stamp alone which
ia not a sufficient transfer. they,
should be indorsed in writing, flip
interest payments and credit on prin
cipal payment* were in many case*
obscure making It almost impossible
to ascertain the true value of the
notea.
BAD DEBTS
Prom the information I can gather
from uninterested parties 1 estimate .
the following losses:
W M. Story Lumber Co, $1,022.42
Losses on notes overdue. ... 469.51 .
All other loans and diacounts.
shortage in account. 5.334.14 i
Overdrafta, 407.25
Cash itema. 280.32
Total $7,519.64
Thia amount muat he either clear
ed or charged off during tha present
year and as your surplus and undivid
ed profits account only shows $4.
715.87 your next dividend must bo i
withheld until adviaed by thia de
partment to the contrary.
UI.NCML
The appearancr of your bank on
lb* day of the examination waa very ,
unsatisfactory be in* in a very untidy ,
condition for a bank. The counter*
were loaded with papers, as wall as
the tablea and deaka. This condi
tion must be re«sdied at one* and a
-••neral house cleaning ia In order, j
This haa to do with the success and
growth of your bank in the future.
11 there ia no better advertisement
for a bank than a neat, clean and up- j
to-dste institution.
Yours truly, j
John G. Nichols.
Bank Examiner."
"Copy to A. W George, Cashier." |
Mr. Reich Rasi|u»d As
President; George Elected
In addition to the above report Mr.
Nichols' letter further contained sev
eral paragraphs in which he offered'
recommendations as to a new system
of bookkeeping and a revisal of the
method then used to file the bank's
papers and notes. Some time after
the receipt of the above letter Mr.
Reich resigned as president of the
bank and Mr. George was elected
aa president and cashier. It is re
ported that the action of Mr. Belch
waa the result of a disagreement over
the conduct of the bank's affairs aad
that he resigned rather thaa he a par-;
ty to any action that he did not think
right, expedient or hast for the Inter
est of the depositors.
Jury Reached Verdict Withcmt
Iks verdict of the Jury was
< d with vary little discussion
them The Judge finished his
st one o'clock Friday. Court
journed and then all went to d
including the Jury. The Jery
back to Its room about two to
deliberations. On reaching Its
and before discussing the cess all
agreed to take a secret ballot to sse
hew they stood on the first go. When
all the tickets wsss gathered
srmr.lt*.
— ■ • n uttMi
Then for aboot aa hear the Jmmi 4b>
cut bat, we have htfln told by MM
doubt in tWr bM of Ms plh. They
matter and therefore tarrM in the
jury room until three o'clock Aa they
atternajra for the defendant remarked
with a groan. "They came ia tea ear
ly to do ae any M" h«*ia»
mark it would aeam that tka baat
thay had hoped for their (Hart waa
a hmc Jury.
Ai thay alowly fllad hi it eoeld ha
■aan that thara waa an unueuel apar
Ua about tha ayaa of wat of thaw.
On eioaar examination it waa found
to ho a tear that had awaited into tha
ayaa fmm tha bottom of thair hearts;
thay knew tha coaaequencee of thair
verdict; thay knaw It would aand a
man from Ml thraa •null children,
'wn hi* wife and from his aged mo
ther; it waa enoogh to auke them
think serioualy, and braathe quick
and short.
Jury Much Effected By
Sympathy
After Sheriff Hsynea had caution
ed tha audience to keep quiet Deputy
Hark Bledsoe asked tha body of men
if they had agreed, C. H Childress
<>f White Plains, who was sitting on
one end of tha front row, arose and
in a husky voice replied. "Wa have."
Then tha question waa aaked. "Gen
tlemen. what ha your verdict?" And
in a quivering voice, hardly audible
past the bar. he replied "Guilty."
slumped back into his seat and began
wiping the sweat *rom his forehead,
not that of heat, but of agony out
of pity for the condemned.
Defendant Maintained Stoic
Attitude On Hearing Verdict
The defendant maintained hia stoic
attitude on hearing tha verdict,
hia countenance never flinching, hia
head held up. and hia eyes dry rod
looking straight forward. The tody*
thanked the jurymen for their aerviee
and ordered the Solicitor to take up
the nest case. Court went on for
soma time and everyone began to
think Hia Honor would paaa sentence
on Mr. George aome other day. Just
before adjournment he aaked if the
defendant George was in coin*, ar.d
on being informed that he, was his
attorney J. H. Folger. realising (hat
Hia Honor was about to pa«s nentence
arose and entered a strung and im
aasaioned plea of mercy for hia elier.t.
He pointed to the good character Mr
George nroved even te this date hy
the people of Elkin and Yadkin coun
ty. He brought to the eourt'a at
tention that Mr. George did not
squander this money, if such araa
done, far hia own benefit, that he
had never profited one penny from the
bank "a failure or from any applica
tion of its funds before ita failure.
He told the court how Mr. George had
turned over all hia property to tha
(Continued to Page 5)
biuuve uertlicl and Qu Buoy
Worry Ship Masters
Norfolk. Vs.. April ?S—A derelict
schooner and a drifting (u buoy
which have heen running amuck off
ths Atlantic coast several months, are
causing ship masters as much worry
•<« the proverbial Flying Dutchman
Hid years ago.
The derelict schooner Governor Par
"bandoned by her crew October 8.
has boon aijrhted in various position*
by paasing ships, bat invariably coast
guard cotters sent out to destroy her
hay* been unahlo to find the elusive'
derelict. She has drifted approxi-j
matelv 1,100 miles line* she was
abandoned and has appeared In so
many places that ship masters ars
beginning to Its* in constant fear of
seeing her loom ap off their bows at
any moment.
Frying Pan shoals gas buoy broke
loose from its moorings Novwnbsr 14,
IMS. and has bean drifting evsr sines
For a long tims the baoy light con
tinued to bora and ssvsral ahlpa re
n«rted glimpsing the wmith-Hke ob
lect bobbing up and down far out at I
sea. 71m buoy was sighted a few
Aaya ago about MO miles due east of
Capo Breton. N. S. This la between
i KM and 1JM miles from the point
where she started upon to aha less
Wows Ads Da The Work
We are In rsceipt of the following
**tlc*—"Please take ay ad. Uncas
far Hals.' ont of the paper. The horse
la sold" This ad appeared one time
MAROONED CIRCUS SEEKS
WAY OUT OF CALIFORNIA.
■aid to
r Willi I
show for joat on* day!" Wall, by
folly, you can ten the rwww of a
ml dm if you'll only find • place
for this circus to Ind.
Just aaiact an open field in New
Mexico or Ariaona and ret a permit
to hold the *how and the groan pro
cndi for tha great Al G. Barnes cir
rus are all yours.
for tha Al G. Barnes circus to
>trended in California with gobs of
money to get out with. Furthermore
it will stay stranded in California far
life so far aa the cattle and rhc-ep
men of New Mexico and Ariaona are
concerned unless there ia a s'.iklen
•nd to the foot and mouth disease.
Lonf Siege for fltodnM.
The stockmen of the Southwest
hare fust gone through three terrible
years of drought that has bankrupted
•hem almost to the laat man. The
oroapects this year are the moet fav
orable in ten years. There has been
snow and rain, and the ranges are
netting in good condition. And Just
when it seems that they can save a
few dollars oat of the wreck the
dreaded foot and month disease break
'<ut in California and threatens to
Ariaona immediately put an em
bargo wall about its California her
der that has surely never been equal
led outside of war times. Seven h «n
dred tourist automobiles were held up
at Needles, and in some- eases kept
there for three weeks. At Ytima and
other points, it la eatimat-*! that hun
dreds of others are in Hke predica
No animal coming fr,.m California
's allowed to set foo* in Arizona or
New Mexico. No California fruits or
vegetables may be taken off trams in
these States. The dogs and net cana
ries of tourists are being killed be
fore parties are alio we i to cross the
border, and the people themselves
muat submit to the mos' rigorous dis
infecting.
In Calfomia it ia officiullv esti
mated that 57.000 bead of cattle have
bees destroyed in awffort to halt '.he
plague. There are quarantines in
many countisa of California. In Mer
ced county the diaeaae broke out a
second time after authorities thought
it curbed and 11,000 sheep were bur
ied in one day in a frantic effort to
stop the plague.
Nevada and Oregon and Old Mex
ico alio have placed stringent em
bargoe* on California product* of all
kinds. The great State of tunihirve
and maea ii ahnoat completely ohut
off from ita immediate neighbor*.
The fear of authorities of New Mex
ico and Arisona la almoat pitiable
but when you know what New Mex
ico cattle and alieep men have cone
through in the past few year*, it ia
easily understood.
Two starred hostlers riding with a
car of blooded horses bagged for wa
ter and food at the Albuquerque sta
tion the other day. and were refused
permission to put foot on the ground.
They ware supplied through the door
of the car and warned not to get off
under penalty of death.
Be Jeweled travelers on Sante fa
train* art not permitted to exercise
their Pomeranians an the state plat
form as usual. The poor petted ani
mals are confined strictly to the hag
srage ear. very fortunate to he alive,
if they knew ft, and their "Mammas"
can view them only In distant long
ing.
What such an organisation aa the
Al G. Barnes circus win de la a prob
lem. Let alone being compelled to
Vive up arrangements far appenr
»«ree that have been made month*
■head, ft le certain that ft cant play
in California all .ummer with profit.
PRESIDENT MAY VETO
IMMIGRATION ACT
Dm* Not Think Exclusion «#
Japan Good Busmosa Policy
Wsshington. April 27.—1>e »Wo
widely prevail* today—perhaps k io
the predominating on* that a prwi
dentist veto ia in prospect far batik 1
the soldier bonus Mil. and the inuni
grantion bill, the laat named nun»
contained the "loaded" Japan*— pro
viaion. Both art pending in confer
ence and both have received the ap>
proval of Congress is aa loprenifi
wajr.
It ha* created a difficult situation
for the President to handle, and. aa' *
many aaa It, ha must choose httwai
politics and business. The President
does not believe it would be good bust
's* or m harmony with the comity
of nations to offend Japan, and be la
equally convinced that it would aet
be good bosinees to drain the treas
ury for the bonu*.
President Coolidg* is being sdmon
:»hed daily to deal with the subjeet
nt Japaneae immigration on a biolog
ical basia. to bear constantly in mind
that people who cannot be aaaimilated
ind incorporated into American cit
zenship ahould not be permitted ta
settle in thia country, or to colonise
>t all. The Preaident is substantially
n agreement with his western friends
hut he thinks the end desired can ha
»ccompli»hed In a different way. and
lie has returned to the idea, that a
new and even more effective gentle
man's agreement could be achieved
in treaty form.
During the last two days the Presi
dent has talked to a number of sena
tors about this, but they have told
itim that it is now too lata to raeen
lider and it is this development that
has led to the belief that the Preei
Jent will send the bill back to Ceo
rreaa with 'certain recommendations,
i stop which would be equivalent to
i veto. Should the President pursue
is course he will have to da as to
the face of his beat friends from the
west, who say It win be very difficult
tinder such circumstances tor the Ma
publicans to carry the Pacific coast
•totes.
A lew otners wno qrmptiniu mil
tht point of view of Secretary Hurhso
who twlieves the delicacy of the Jap
anese question should be folly ncof
nized, are of U»e opinion that the ad
ministration will have the approval
of a majority of the people if the
President electa to handle the ques
tion like a statesman rather than aa
i politician.
The President believes the Ameri
can policy in the near future should
-ontemplate the cultivation of peace
md (rood -will with Japan, employ all
he moral suasion that is possible la
iressinR for acceptance abroad of the
r>swes report dealing with German
»narations. and then «o in for econ
■mv and tax reduction, along the
ines of the treasury department a*
tome. The President believes that
he aim of the Democrats hi
irith taxation and the bonus _
>ly been to throw all the sap poa
ilble to the h%
o the soldiers,
he taxpayers. A
rram of the
ipinion of
rorth