The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1897-01-31
COURT NOT TO BLAME
Building and Loan Associations i'm Tonnes
see Called to Order.

Chattanooga, Tenn, Jan. 30.-Allega.
tons made by building associations al
Knoxville have created sensation il
legal and financial circles in Tennessee
The Southern Building and Loan aso-
citation OF Knoxville, with stockholders
in almost every state in the Union, was
| forced into the hands of a receiver last
week, by the courts. After the failure
an official of the association in an in
terview made the following sensa tional
| statement:
The panic in the building and loan
| associations in this city was caused by a
| decision Of the supreme court which pro-
| vided that whenever borrower forfeits
! his property the association must pay
nm back such amount as he paid in.
| Following this, hundreds of suits were
at once begun, and then the people who
had money in began to withdraw it. Ap-
plications for Withdrawals came so fast
that money could not be obtained 10 pay
| on one-third of Them Public sentiment
| was bitterly opposed TO the associa tons
and the result was that they went into
| receivers hands and will be wound up
The Southern, which was the second one
to fail, is the largest in the world. end
had stockholders in every northern, east
ern ana southern state and many IN the
west"
would completely wreck the building and
loan business in Tennessee and would af-
feet thousands Of shareholders all over
the country. 1t is not a fact. however,
as shown by the following opinion of
United States Attorney J. II. Bible:
The supreme court has rendered no
decision that even remotely affects iniur-
iously the contracts Of building and loan
associations where such associations
have compiled with their charters and
bylaws. but on the contrary, the ST.
preme court. without a single exception.
has upheld and sustained all such build
ing and loan contracts
The supreme court has not rendered
any decision that is adverse TO building
and loan associa tons. II has decided
IN some cases against building and loan
association, but in each case in has been
because the building and loan association
IN making its contracts has not compiled
with the aw
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 associa ton 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 loan is made. There has been no
decision OF the supreme court Of Ten
nessee since the Patterson case that dif-
fersd from the holding OF Judge Cooper
in that case, as every lawyer in the state
knows. and az could be verified by every
member OF the present supreme court.
The contrary statement sent out by
officers who are alleged to have misman-
aged the affairs OF their associations IS
also false from the beginning TO the end.
The officers ot the building and loan
associations in Tennessee deliberately |
make false statement to their stock |
holders whenever they say that the cause I
OF their failure x due 70 adverse decis- |
ions Of the courts in this state.
The cause OF failure agains, the build !
ing and loan associations in this state /
cannot be attributed 20 any decision OF |
the supreme cour:
(Signed( JAMES H. BIBLE"