The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1897-01-31
1t Is Not Court Decisions That
Wreck Associations.
BOLD DECLARATION
FROM UNITED STATES DISTRICT
ATTORNEY or TENNESSEE.
OFFICERS ARE TO BLAME
And Make False Statements When
They Attribute Their Trouble
to Adverse Court
Decisions.

Chattanooga, Tenn, Jan. 30.-Allega-
tions made by Building and Loan Asso-
ciat5on people at Knoxville have created
a sensation in legal and financial circles
in Tennessee. The Southern Building and
Loan Association of Knoxville with stock
holders in almost every State in the Union
was forced into the hands of a receiver
last week by the courts. After the fail
terview made the following sensational
statement;
The panic in the Building and Loan
Association in this city was caused by a
decision of the Supreme court whlch pro-
yided that where borrower fortelts his
property the Association must pay him
back such amount as he had paid in
Following this, hundreds of suits were
at once begun and then the people who
had money in them, began to Withdraw
it Applications for withdrawals came
50 fast THAT money could not be obtained
to pay off one third of them. Public
sentiment was bitterly opposed TO the
associations and the result is that they
went into receivers hands and will be
wound up. The Southern, which was
the second to fail, is the largest in the
world and had stockholders IN every
Northern, Eastern and Southern State,
and many in the West
If the above statement was true it
would completely wreck the Building
and Loan business in Tennessee aud
would affect thousands of shareholders
all over the country. 1t is not a fact,
however, as is shown by the following
opinion OF UNITED States District Attor-
ney ]. II. Bible:
The Supreme court has rendered no
decision that even remotely affects in
juriously the contracts of building and
loan associa tons, where such associa-
tions have conpaed with their charter
and bylaws, but on the contrary. the
Supreme court, without a single excep-
tion has upheld and sustained all such
building aud loan contracts.
The Supreme court has not rendered
any decision that is adverse to building
and loan associations. lit has decided
some cases against building and loan as
s0ciations, but in each instance it has
been because the building and loan as
sociati0n I'm making its contracts had not
complied with the law.
Here is the language OF the Supreme
court:
Our conclusion is that the contracts
under consideration were authorized by
the act of the legislature under which
the defendant association was organized
and are not usurious.
The contract that the court had under
consideration was just such a contract
as your association makes in every case
where a loan is made. There has been
no decision of the Supreme court of Ten
nessee since the Patterson case that diff
fered from the holding of Judge Cooper
in that case, as every lawyer in the State
knows, and as could be verified by every
member of the present Supreme court.
The contrary statements sent out by
officers who are alleged To have misman-
aged the affairs of their associar riOns,
is false from beginning to end.
1.-THE officers of building and loan as
sociatiOns in Tennessee deliberately make
false statement to their stockholders
whenever they say that the cause OF
their failure is due to adverse decisions
of the courts in TINS State.
"rne cause of the failure of the build
ing and loan association in this State cam
not be attributed 30 any decision of the
Supreme court.
(Sdgned) JAMES III. BIBLE"