The Banker Caught in the City's Money Mess
As the corruption trial of Henry Fuhrman unfolds, his defense argues that his private financial dealings with the city treasurer were not criminal, but essential maneuvers to keep city payroll running.
The story, cleaned up
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The line of defense for Henry Fuhrman regarding the charge of aiding and abetting City Treasurer Krug in the unlawful use of public money for profit was outlined at the trial before Judge Humes. Fuhrman’s counsel argues that his relations with Krug did not differ from those of the banks in which city funds were deposited. He acted as a private banker who did more for the city at a critical moment than any other institution, providing security for his loans from the city treasury and paying interest on those funds, while every cent borrowed from Krug was repaid. During the trial, testimony revealed that banks often contributed to campaign funds in exchange for the promise of city deposits. While the state alleges Fuhrman illegally borrowed from the treasury, his counsel contends he was essentially stepping in to fund city operations—specifically salary rolls—when other financial institutions refused to help.
“Mr. Fuhrman strained all his resources and took those warrants and disposed of them... as an accommodation to the city and with the expectation that, when the bonds should be floated, the money would be restored to the salary fund.”
This trial highlights the blurred lines between public finance and private banking that defined early Seattle politics. The argument over 'bankers as lifelines' vs. 'public officials as embezzlers' is a precursor to the civic scandals that would lead to major municipal reform in the 20th century.
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