Omaha daily bee., 1909-03-08
Our Letter Box
Contributions On Timely Subjects,
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Version of Bank Case.


AURORA, Neb., March 6-To the Editor
of The Omaha Bee: In view Of the inaccu-
rate and misleading statement in what pur-
ported to be a report of the recent trial OF
the interest case of Hamilton county VS..
Aurora National bank, and published in
last Saturdays Issue of The Nebraska State
Journal and The Lincoln Daily Star, we
believe the people of the state should know
the real facts that are common knowledge
with the taxpayers of our county.
Thu county treasurer for a period Of time
received more county funds than the four
or five depository banks could tax under
the law. The Aurora banks declined to
qualify as repositories for the reason that
they had more funds on hands than they
could use for available loans or In their
business, and being in that condition they
declined to pay the interest required of
bonded depository banks.
The county treasurer in this dilemma and
with county funds accumulating in his
vault, which was not burglar-proof, and
being unable to find depository banks in
adjoining counties, bought with the excess
funds certificates of the Aurora National
bank and other banks, and placed them in
his vault. They were bought in the treas
urer's own name. but Immediately endorsed
v " lihoSl a % NOhANJ aSu VI
Hamilton county. The county treasurer
did not tell the banks that the funds were
county funds, but the bankers, though on
the stand they testified to facts only and
not to their conclusions, do not deny but
what they had such knowledge as the
transactions afforded them, through checks
payable to the county treasurer being used
in the purchase Of the demand certificates.
As a matter OF fact, and as stipulated in
the trial, everyone who cared to know,
knew that the county funds In excess of
| what the depository banks would take was
used to buy demand certificates only until
depository banks could be found, when the
demand certificates were Immediately
cashed, and the funds placed in depository
banks at two () per cent. No one makes
the claim that interest was ever paid or
ever promised to any one for the use of
this money.
These facts were known to the board OF
county commissioner with whom the
county treasurer frequently discussed the
situation, and the board approved and con-
scented Ia, the handling of the excess county
funds by purchase of demand certificates
until sufficient depository banks could be
found to take the funds. Sometimes these
funds would have to be held in form Of
demand certificates for two or three days
only, and then again it might be for some
weeks.
Some time ago question was raised In a
political campaign as to whether or not the
banks were liable for interest on such
county funds, though admittedly they were
| placed there only for safekeeping and the
banks, by reason of their own large sur
plus, did not profit therefrom. County At
tornav I II Groavannr declined to bring
any action on the ground that it was a
matter of public necessity to thus safe
keep the county funds, and held that as the
banks had not p~rofited, no liability for in
terest could attach. He pointed out that
the county treasurer had never kept a dol
lar in a nondepository bank when he could
get a depository bank TO take It.
Outside attorneys finally brought the
suit. The president and cashier Of the bank
told the facts In a straightforward man
ner, as did the county treasurer, and 1t
| soon became so clear what the actual facts
were that the attorneys bringing the suit
admitted openly that the county treasurer
had acted in good faith, and that the bank
had likewise acted in good faith, but main
tanned that under the depository law, no
matter II this were q case OF necessity on
the part OF the county treasurer. that the
banks were liable for . per cent interest
no matter why nor how the county funds
came into the bank.
The undersigned. from their official pc
sition, have knowledge that commissioners
as we'll as treasurers, knew OF and acqui-
esced 10 such disposition OF surplus funds.
We believe that those whose honesty was
impuEned IN the articles alluded to are
all honorable and creditable citizens. and
We ses with regret the scattering broadcast