The Alaska citizen., 1911-01-16
INNER HISTORY OF
 WA. BANK FAILURE

(Continued from 1st pageD ~-->~>~~>~~o~~~~~~~~~~~ by the Dexter Horton bank. Fur hermOre, he says, if h. had had any idea that the credit was to be cut off the moment the $10l. 900 was started on the trail he never would have shipped that money from this point It was when it was made clear that the credit was to be stop ped that he interyen. d and took steps to have the court seize and return that shipment
 MT. Hawkins says he is under the impression that Mr. Parsons voice is less influ ntial in the councils of the Dexter Horton people than it was with the Washington Trust company and that the loan he advised to the latter institution might not have ap- peared advisable to the Dexter Hor
 on management. He suggests, alsO
 hat MT. Parsons action in selling out the Washing ton-Alaska bank and the interests of the people who had supported him for the previous four years is open to fully as much crit icism as his. Mr. Hawkins, reluctance to reduce the cash on hand at this point, and that it is quite likely
 hat the pressing need of exchange would not have occurred. and with it
 he necessity of Outsi'e credit. if
 he gentlemen who are now eVadinS the responsibility had not appropri- lted such large amounts to their own mt rpriseS.
 In regard to the payment of the di- videud that is to be distribut ed commencing this morning. Mir. Flaw kins suggests that there is no need for a hurry on the part of depositors IS the bank will be open for the remainder of the week, and contin- ucusly during banking hours, and il will be impossible 10 handle more
 han two hundred accounts a day. Therefore those who have no i'm mediate need of the money should De considerate of the necessities of others.
 Arrangements are being made SC hat customers on the ere ks will 1e able to draw their dividends at McLean's. on Fairbanks creek; Han sons, at Fox; and at Willis X Welch It Chatanika.
 tEDm lHp straps u IlllOl Iliitlel III regard to the inner history of the bank, or banks, to be gleaned from various sources the causes leading up to the smash can be traced as far back as two years ago, when the Fairbanks Banking Company was reOrganized
 At that time the newly elected board Cf directors was induced by Barnette to take over, at a valu- atiOn of S341 ,O00, the Gold Bar stock. To get the directors to do this Barnette represented that this stock had a value of four or five hundred thousand dollars. although he is supposed to have acquired 1t for one hundred thousand dollars less than the valuation he placed on it when he turned it over to the new concern. He also agreed to leave on deposit with the reorganiz- ed bank the sum of $200,000 of his personal funds to do business on, at the same time assuring the dir ectors that there would be no diff ficulty in disposing of the stock at the valuation it was turned into tn bank at. These representations were necessary to overcome any objections that the directors would naturally have to saddling them selves with such cumbersome and unelastic asset when it was appar- ent that so large an amount of money could have been used to much greater profit in handling To- cal business.
 That stock also became an asse' of what is now claimed to be the Fairbanks Banking company, doing business under the name of the Washington-Alaska bank of Nevada, at the same valuation of $3i1,O0O. The records in the bank disclose the fact that the Gold Bar Lumber has besn operating for of years and has not paid one cent in dividends and has a debt of about $90,000. The value of the timber limits has naturally declined on account of the stripping thsrefrom of large quantity of timber. It is also to be remem- bered that the stock was bought when timber lands were being eag- erly sought and commanding a price which has never since been equal led.
 The directors of the present Wash ington-Alaska bank declare, it is said, that the s200,0O0 was left with the bank by Barnette as guaran- zee of the value of the Gold Bar