Pullman herald. [volume] (Pullman, W.T. [Wash.]) 1888-1989, 1909-05-28
A BAD BANK FAILURE
Palouse State Bank at Palouse Fails
and J. X. Mccormack is Made
Receiver

/
louise Of which Hon. H. M. Boone,
ex-state senator and now deputy state
bank examiner had been president
and manager for several years, was
in the hands of a receiver. The bank
was declared to be hopelessly in
solvent and creditors had asked that
receiver be appointed. j. X. Nc
Cornack, president of the Security
State Bank was appointed receiN err
| by Judge Chanfield of the superior
court upon the request of some of
/ the creditors.
Investigation shows that the bank
is and has long been in bad condi-
| tion. 1t IS generally believed that
recklessnosG and lack of knowledge
of banking has been responsible for
the downfall of the bank, but many
profess TO believe there have been
many criminal acts which have
brought about this unhappy condi-
ton. The bank held deposits for
more tnan 100000 and much of
this was the money of poor or mid
die class people upon whom the loss
is a severe blow School teachers,
ministers, laborers and people of
moderate means with small banking
accounts formed the greater num-
Der of the depositors, but there were
some deposits reaching as high as
$1,000, and others from $1,000 to
10000.
Senator Boone recently sold his
stock in the bank to M. j. Hawkin-
son, a recent arrival from North
Dakota, who is said to have had but
little experience in banking, and
who took the bank from Mr.. Boone
and has been manager of it since
the sale was made, about three
months ago. Mr.. Boone was recent
ly appointed deputy state bank ex-
aminer. The law requires that a
bank examiner or his deputy must
not own any bank stock, 1t is claim
ed that Mr.. Boone had never re-
signed as president of the bank and
that he was still president when the
bank collapsed.
There are many things about the
bank that look bad. Few people
who have any knowledge of bank
ing believe that the bank could be
so badly wrecked in less than three
months, the time that elapsed after
Mr.. Boone gave up the actual man
agement. Mr.. Boone sold the bank
and the building in which it is To-
Gated, for 900, he owning the
building before the sale and also the
majority of the stock when the sale
was made. Mr. Boones son is said
to owe the bank $4,000, One fea-
ture which looks bad is the account
published in the Spokesman-Reviewl
Tuesday, showing that Boone re-
Gently traded $4,000 worth of bank
stock to l.. N. Lisle, of Prosser, for
Mr.. Lisle's fine orchard tract of 20
acres, adjoining the town of Prosser, |
and that Boone had the land decided |
to his (Boone's) daughter, Mrs. |
Cola l.. Patton. All that Lisle got |
out of his land, which was one of the |
finest orchard tracts in that section, |
is $4,000 worth of stock in a bank |
now in the hands of a receiver, and |
upon which Mr.. Isle will have to
pay $4,000 more, if the bank proves |
to be hOpelessly insolvent, as claim !
ed in the complaint. The law re-
quires that every stakeholder be
held liable for double the par value
of his stock. thus Mr. Llsle not only
loses his land but Is liable to have
to pay $4,000 for the privilege of
losing it.
The blow is hard one to Palouse
and the business men feel 1t keenly.
Some of them blame the creditors
who forced the bank into the hands
of a receiver. These people Justify
their action on the grounds that it
was necessary. Mr.. Mccormack, the
receiver of the bank, when asked
about this said: There were two
avenues of action open, One was
to take the matter before the state
bank examiner and let him pass up
on 1t. The other was to take 1t into
the superior court and ask to have
receiver appointed. Mr.. Boone,
former president of the bank, is de-
putty state bank examiner and some
of the creditors did not feel like
appealing TO him. 1t was decided to
take the matter before the superior
court. | was appointed receiver and
accepted II reluctantly. l did not
seek the appointment but tried to
avoid accepting it but the court ask
ed me to act and some of the credit
ors asked that | act and | accepted
Tho tpuct apd Mill 10 tbo hest oan