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Next day J. P. Morgan & Co. announced that its $474,000 unsecured loan to Whitney dated from 1932. This made it evident that in that year Dick Whitney must have had what amounted to a private failure. Then to the stand came various of Dick Whitney's partners to say that they were all in ignorance of the situation, that Dick Whitney had literally been dictator of company affairs.* By this time the Attorney General's office had the total of Whitney "transferences" up to $798,376.
Here was a case worth a prosecutor's diving into, and in dove New York County's ambitious District Attorney Thomas E. Dewey in unprecedented style. Although the State's Attorney General had the case well in hand. Prosecutor Dewey secretly called before his Grand Jury Dick Whitney's sister-in-law while he himself queried Mrs. Whitney. Then Prosecutor Dewey suddenly snatched Dick Whitney from under Lawyer Ambrose V. McCall's astounded nose with an indictment charging that Richard Whitney had appropriated another $105,000 in securities from the trust fund left by his father-in-law to Mrs. Whitney and her sister (Harvard University and St. Paul's School are residuary legatees). Richard Whitney was co-trustee of this fund. According to Mr. Dewey, in 1932, 1937 and 1938 Dick Whitney hypothecated its securities for loans of $100,000, $100,000 and $400,000. The first two loans were repaid, but not the third, which was obtained through Public National Bank in January.
The Attorney General's office snapped, "We won't fight over the body." Dick Whitney surrendered, was booked at the Elizabeth St. police-station while a group of Bowery derelicts were momentarily herded from the desk. After the prisoner had been searched, Desk Lieutenant Simon P. Breen remarked as though one of the neighborhood boys had gone wrong: "Mr. Whitney, I'm sorry to see you in this trouble and wish you luck."
"Thank you," said Richard Whitney.
"The Whitneys have always had a good name," continued Lieutenant Breen.
"Thank you again," said Mr. Whitney. Later he was released on $10,000 bail.
But next day, while Dick Whitney was consulting his lawyer — Charles Henry Tuttle, 1930 G. O. P. candidate for Governor of New York—the Attorney General's office did make a grab for his body. Commodore William A. Stewart of the Yacht Club wanted the club's securities back. Missing now was a total of $109,384 in securities the club had trusted to Treasurer Whitney. Assistant Attorney General McCall found them at Public National Bank as part collateral for the Whitney loan, and, as the Daily News's news section put it, "Richard Whitney ... for the second time in 24 hours [was] fingerprinted and mugged like a Hell's Kitchen package thief and held in $25,000 bail."
This time the fallen financier was taken to the Criminal Courts Building. While photographers ran ahead of the poker-faced broker, snapping his long, elegantly dressed frame and the little Porcellian pig glistening at his watch chain, several hundred idlers trailed in his wake. "Who is it?" cried a woman. "It's Whitney!" screamed a group of giggling schoolchildren.