The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1913-03-11

Papers in the action, including the
complaint Of the attorney general and
the order Of the district court to show
cause, have been served upon Man
Ing secured today upon the several
directors and officers, located in vari-
GUS sections of the state. Ah1davits
furnished by b. j. Keatins. Roy A.
Nelson and w. F. Costello, deputy
hank examiners, and George Dumas
OF PembtnaA county, a purchaser Of
stock In the company, are used as a
basis for the action.
Defendant oAieials.
The defendant directors of the
company are James Henderson Of
e. A. Taylor of st. Thomas. H. b.
Springer of Northwood. Joseph Power
Of Langdon. f. Sandiie and B. p.
Sandlie Of Grand Forks. Head offices
OF the company are located In the
, Widlund building in this city, and
have been in charge of the general
manager and the secretary and treas
urer. E. Sandlie and B. p. Sandlie.
since the organization Of the concern
in 1910.
In the afildavit and the report by
B. J. Heating. acting in his capacity
as deputy bank examiner. the most
startling allegations against the COM
Sold Stock Over Value.
Though. he says. the stock had n
par value of SO, he contends that by
gross Misrepresentation and false
hoods We're resorted to to bring about
sales, many paving SIS. $50 and $?5
for their shares.
The shares Of stock sold. and the
price obtained, is ~iven as follows:
113 shares at $40. s1,130
1.407 shares at $15.. 21,105
1881 shares at 500. $500
6.799 shares at $25.. 169,975
In addition there was received $3.50
In premiums on such stock, the total
revenue from stock being $226,100,
an excess Of $128,100 over actual par
value.
Thirty-five per cent Of the stock
has been sold for on subscription. at
twenty per cent down by cash or note.
the balance running in installments
for about eight years. The balance
of the stock, or sixty-five per cent.
has been settled for in full by notes,
according to the examiners findings
Sold Investment Contract.
The company has engaged in the
tract. which % ". y. Ses5%sen p. COSTELLO eGe- re-
ports is somewhat in the nature of an
endowment insurance policy. which
contracts the company is not author
lied to sell under its charter. These
investment contracts provide for an.
nual payments of a certain amount.
and at the period Of expiration, the
holder Of the contract is entitled to
$1,000. or such amount as: his con-
tract may have been written for.
Copies Of the contracts are submitted
as exhibits in the case.
On this form OF investment contract
IL is alleged that $12.Ss6.75 has been
paid to the company. and that q re-
serve Of only $19S.l5 is carried to
protect the investors
97o,49e.s0 in Commissions.
All told, the company is alleged to
have received $239,36l.65, of which
$113.s12:54 has been expended from
which there can be no possible re-
turns The expenditures include ex-
of $79.4ss.so alleged to have been
paid on the sale Of capital stock. COM
missions of $6.11s.7l on the sale Of
contracts. together with smaller
amounts on notes discounted, notes
charged off. and losses due to ad-
vances to agents.
systematic looting Of the company
ever since its establishment by the
manager. e. Sandlie. 1t is pointed out
by the bank examiners report tina:
in the very beginning, when an at.
torney was engaged to draw articles
Of Incorporation. that $40 was paid
to the attorney. $50 was credited to
the account Of B. p. sandlie, and S101
was charged to the company az the
attorneys fees.
f. Sandlie's Commissions.
It is also pointed out that f. sand.
lie receives n salary Of 3l26 q month,
has been paid travelling expenses of
$l.366.6s: that he has received a com:
mission Of from s to 100 per cent on
the first years annual payments on
Investment contracts. and forty per
cent on the. total subscriptions on
sales of the 'company's stocks.
The records Of tho company are
rather vague. according to Mr.. Keat-