East Oregonian : E.O. (Pendleton, OR) 1888-current, 1908-11-03
TRUE LIGHT ON
BANK FAILURE
SCRIBER'S FORMER ASSOC-
ATE EXPLAINS MATTERS
]. B. Stoddard Traces Down Real
Beginning of the Trouble of the
Farmers 4 Traders National Bank
of La Grandc-Not Dollar In
Original Sumpter Bank-Soriber
Carried Enormous Mental Load for
Ten Years

have been circulated and published
ure Of the Farmers & Traders Nation
al bank of this city, and as the peo-
pie have generally been cropping in
the dark seeking information, rep
resentative of The Observer, knowing
that J. B. Stoddard was once associat-
ed with J. W. Scriber in the banking
business, sought an interview with
the former, to see if he could throw
any light on the subject. To ques-
tions asked of Mr.. Stoddard, he stat
ed in effect as follows:
"Yes, l was associated with ]. w.
Scriber in the banking business at
Sumpter Some things might be told
that would be of interest to the pub
lie at this time, in view of the recent
/ failure The system of "frenzied fl
ing the past 10 years is really the
root of this evil. The individual is
often the creature of circumstances.
The causes underlying this failure
date back for 10 years or more, to a
time when Mr.. Scrber commenced
to speculate and manipulate affairs
outside of legitimate banking busi-
ness. Initiation of credits, hypothe-
eating securities, multiplying resour-
ces, and trying to make each dollar
of capital do the work of 20 was the
beginning of this trouble.
"Mr. Scriber, having a very limited
capital. conceived the idea of buying
control of the stock of the Farmers Il
Traders bank. and then through the
initiation of credits sought to estab-
lish a chain of banks from Elgin to
| Canyon City in. Grant county, while
at the same time he was investing
heavily in real estate and backing
many industrial, mining and promo
ton enterprises. The banks at Sump-
ter and Canyon City were started
without a dollar of actual capital be-
ing invested in them by the promot-
ers, depending entirely on the depos-
itors' money with which to do busi-
ness. Much of these deposits were
loaned out to mining operators with
out security, among which were num-
bered the officers of the banks. Large
sums of money were deposited with
the Farmers & Traders bank by the
bank of Sumpter. subject TO draft, and
the La Grande bank often had notes
with the Sumpter bank signed by
business concerns OF this city and
county and running sometimes as
high as $4,000. The loans made by
the bank of Sumpter to Mr.. Scriber
and associates and to the La Grande
bank did run as high at one time as
100000. Money at Sumpter was easy
and plenty during boom times, but
when the slump came the immense in
flation of credits had to be liquidated
and instead of the Sumpter bank fur
nishing large sums of money to Mr..
Scriber and the Farmers & Traders
bank, the whole scheme was reversed
and all the worthless mining and 9th
er property and securities belonging
to the bank up there had to be sent
to La Grande and assumed by Scri-
ber and the bank here. The bank
was reorganized at Sumpter and the
new directorate rejected all the ques-
tionable paper, besides a lot of paper
was sent to the La Grande bank be-
fore the change was made. The pa
per considered bad, the notes trans
ferred, the money owed by Scriber
and his associates, and the deposits
withdrawn from La Grande when the
slump came, aggregated nearly $780,
900 perhaps $1,000 or 100000 Of this
has been realized on since. Scriber
was at fault in the first place for en-
gaging in these speculations but when
il came 10 a show down, he was the
victim Of others, bad management,
and all the burden fell on him, then
in turn on the Farmers e. Traders
bank, and now on the depOsitors who
are the innocent sufferers.
There probably isn't another man.
living who would carry the load Scri-
Der has carried during the last five
or 10 years."-La Grande Observer.