The Wisconsin tobacco reporter. (Edgerton, Wis.) 1877-1950, 1899-06-23
WHY THE STOUGHTON BANK FAILED
Bank Examiner Kidd Charges Cashier
Joice,, Whose Arrest Follows.


taken place in the Stoughton bank fail
ure during the week. On Saturday J.
III. Joice, cashier of the Dane County
Bank was arrested upon a warrant
sworn out by widow who charges him
with having taken deposit of 5000 and
given in exchange his individual note
instead of certificate of deposit. He
was released on bail to appear on the
22d The stockholders of the defunct
bank have all been served with a sum-
mons in suit demanding payment to
the receiver of their statuatory liability
upon their stock in the bank.
More light is thrown upon the cause
of the failure than anything yet made
public by a statement of Bank Examiner
Kidd sent out from Madison which
says:
Mr. Kidd says the responsibility for the fail
ure rests with the officers of the bank. and es
pecially it's cashier, j. FL. JOice. who, until
recently, had practically full charge of the in
stitutiOn and was allowed to make loans with
out consulting with the other officers or the
directors EXOrbitant sums were borrowed
from the bank by other parties, including the
cashier, without security. In addition to IOsns
made to Mr.. BrictsOn, the amount of the liza
bility on the part of the cashier maker or
endOrSer exceeding the amount due from any
other borrower. All the loans went into spec
ulative- ventures in which the cashier was
largely interested. Instructions were repeat
edly given to the officers Of the bank to call in
these loans or demand ample security to pro
tect them, but such instructions were not fol
lowed.
In December last an examination of the bank
was made by MI. Kidd after which written in
StructlOnS were given the officers and directors
to call q meeting at once and insist that all
large loans be called in, reduced in amount. or
properly secured In March the bank was
again visited and the examination disclosed
the fact that these loans not only still remain
ed unsecured and unpaid. but contrary to in
StructiOns given by the bank examiner, they
had been largely increased. Mr.. Kidd at that
time instructed the president to call meeting
of the board Of directors at once and by resO-
luton appoint q discount committee, which
committee should be required to pass upon all
loans above specified amount which was
done. A few days later he called the directors
to his Office at the capitol and after going over
the affairs of the bank in detail, drafted a reSO-
luton authorizing 0. NJ. Turner, president, to
take active charge Of the bank, with instruc
tiOns to the board to hold a meeting upon their
return to their banking office and adopt it, and
proceed at once to collect or secure all the
large loans. The records show that this reSO
tuition was adopted April l. after which time
President turner was in charge Of the bank
until ii closed.
Upon the same day, April 1, Mr.. Kidd gave
legal written notice to the officers and directors
calling upon them to place the bank in safe
condition, under penalty OF causing publlca-
ton Of it's condition to be made in local papers
as by law provided. At the expiration Of the
thirty days consultation was held with Mr..
Turner, and an extension of time was granted.
On April 7, letter was written Mr.. Turner
asking him to meet Examiner Kidd Mon
day for consultation before taking final action,
but in the meantime President Turner had re-
south
be expected from that quarter, and, rather than
attempt to borrow funds to continue business
he concluded to close the bank All of these
large loans were invested i'll a cattle ranch in
Mexico and an irrigation plant and land in
Texas, in both of which the cashier was and is
now largely interested. In Investigating the
banks affairs Mr.. Kidd found that Cashier
,Toice entered into an agreement with Mr..
BrctSOn to loan BrictSOn a certain sum of
money, the consideration being that JOice
should receive half of the profits of the vent
ure. The money used for this purpose was
presumably funds of the bank, as several notes
for large sums given to JOice and endorsed by
him to the bank now part of it's assets.
Examiner Kidd has caused Cashier JOice to
make an assignment Of this contract, together
with all his other interests in the south, to
the bank.
The responsibility for the failure of the
bank" said Examiner Kidd, rests with it's
officers, and chiefly with it's cashier, as that
official was implicitly trusted in the manage
ment OF it's affairs. He went to the extreme of
recklessness in using the funds of the bank
and allowing them to be used by others to
bolster up speculative ventures in which he
was largely interested; and it can hardly be
presumed that these methods would have been
pract1ced had he not become personally in
vOlved in these transactions. The other Off
GERS of the bank and the directors, should
have given more attention to its management
as they had ample warning of the reckless
methods which were being practiced, but they
seemed reluctant to interfere because the
cashier and his brother owned majority of
the stock of the bank, and assumed that their
wishes should control. It is hoped for the
good of all parties interested that these invest
ments may prove profitable. II, however, such
should be the result, itWl have been brought
about by business methods of crude and spec
ulative character and by transactions far re
moved from those which should characterize
a legitimate banking business. [ know litUle
personally, of Mr. BrictSOn. 1t is not for me
either to defend or censure him. but have lit
tie sympathy with the methods which would
shift a responsibility of this character from
where it rightly belongs. Mr.. BrictSOn has the
same right that any other citizen has to Dor
row from any individual or bank that will
favor him with the loan. If he has made
mistake in judgment, it is his loss. 1t was Op
tional with the bank, however, to make or re-
fuse to make the loan Bank Ot1clalS VINO
handle banks funds, which are Entrusted to
their keeping, have no right to part with them
for any purpose without using due diligence IN
protecting them from loss or possibility OF
loss. This may in all fairness be said. proper
regard for the interests of the creditors OF the
Dane County bank wOvld suggest the injustice
of casting uncalled for Odium upon Mr.. Brlct-
son or doing that which will in any way in
jure his credit for, from information received,
[ have reason for believing that of all those
who borrowed the funds of the bank for the
he is the most trustworthy and reliable, and
tie one who is most likely to pay dol ar for
dollar of his Indebtedness