Judge for Bankers

Ferdinand Pecora spent many days and many nights early in 1934 blasting away at the complex catacombs of Detroit finance. What Mr. Pecora as inquisitor for the Senate Banking & Currency Committee elicited from the official minds and records of Detroit bankers was noted carefully by the Department of Justice. During that summer a Federal Grand Jury, acting upon the evidence, laid upon 34 Michigan bankers responsibility for the thunderous Detroit banking crash of 1933 returned indictments against them for making false reports to the U. S. Controller of the Currency, the Federal Reserve or for misappropriation of funds. The engines of justice appeared well-oiled. When it came to putting the bankers on trial, however, the engines knocked. It was not until last week, after nearly two years of fiddling, that the Government succeeded in getting its judicial machinery into satisfactory operating condition.

To do this the Government had had to create a new Federal judgeship in Michigan, get the newly-appointed judge to cede jurisdiction in the case, and finally bring in a judge from another state to preside over the bankers' trials. Responsible for these notable maneuvers were three intransigent Republican judges, each of whom U. S. Attorney General Cummings deemed too sympathetic to the bankers to try their cases, and each of whom refused to accept temporary transfer to some other district. The prosecution's efforts to dislodge these judges were the subject of high indignation last year in the Detroit and Michigan Bar Associations.

At first only two of the District Judges were thought to have been too closely connected with banking to try the cases. The third, Judge Ernest Aloysius O'Brien, was granted jurisdiction over the first case in the autumn of 1934. As the time approached for trial, however, the Government's prosecuting attorney lost confidence in Judge O'Brien's impartiality, filed an affidavit of prejudice against him, asked him to withdraw. The judge refused and presided at the acquittal of the bankers. Subsequently a U. S. Circuit Court of Appeals sustained the Government's contention of prejudice, ordered Judge O'Brien to step aside.

At this the judge's Mends howled loud & long. Declaring that the independence of the judiciary was threatened, the Bar Associations voted confidence in Judge O'Brien. The Detroit Free Press, whose Publisher Edward Douglas Stair was one of those indicted, discovered that it was "the first time in the memory of seasoned practitioners that one arm of the Justice Department has formally questioned the fairness of another." Judge O'Brien appealed to the U. S. Supreme Court.

The Supreme Court's refusal last autumn to hear his appeal left the case stalemated until a few weeks ago. Then a fourth Federal judgeship was created in Detroit and filled by a Roosevelt appointee who announced in advance that he would not try the bankers. Last week Chief Justice Hughes assigned Federal Judge Patrick T. Stone of the Western District of Wisconsin to Detroit to perform that judicial chore. The stage set, the Government prosecutor announced he would proceed to trial May 1.

First case is against Donald N. Sweeny, onetime president of First National Bank of Detroit, and two vice presidents. Charges, varying with the bankers, include misapplication of funds and making or countenancing, "window dressing" entries in reports to the Controller of the Currency as early as 1931, concealing the actual indebtedness of their bank.

To Detroit for a summer of long arguments and resurrected rancor, Judge Patrick Thomas Stone brings a reputation for wit, geniality, and broad interpretation of the law. Now 47, big, baldish, he insists on being called "Pat," has long been a popular toastmaster in his home State. First Federal judge appointed by President Roosevelt, he was strongly supported by both Wisconsin labor organizations and local bar associations.

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