The true Democrat. [volume] (Bayou Sara [La.]) 1892-1928, 1914-04-04

solvent, 10 raise money Oh even Soou COL
lateral, and, with those insdebt and finan-
cially weak, the borrowing of money to
pay debt was utterly impracticable.
Under these conditions, the liquidators
of the bank deemed it best to follow the
second and less drastic course although
they realized that the liquidation would
| be prolonged thereby. If the liquidators
| had followed their own personal interest
lit would have been much easier to have
closed out the business of the bank with
out delay, rendered their account, collect
ed their fees and turned their attention
| to other matters.
| The adoption of this course by the IL
quidators has, thus far, added nothing ap-
preciable to the expense of the liquidation
of the bank.
| In answer to the suggestion that the
money on hand might now be distributed
for the relief of those who are creditors
of the bank, ] wish to say that in the
opinion of every person connected with
the liquidation of the bank, as well as
| many of the largest depOstorS cogniZant
| of the true situation, it would be exceed
lingly imprudent and detrimental to those
interested in a successful liquidation of
the bank, to distribute the money on hand
| at this time In the judgment of those
charged with the liquidation of this bank,
lit is a matter of absolute necessity that
the liquidators should be in possession of
funds to protect the bank against all
creditors holding collateral. Under the
law, as soon as these loans become due,
lit is within the power of each creditor
to sell all collateral for the security of
their loans on making simple demand for
payment and giving very short notice
of sale. With one exception, the credi-
tors of the bank holding collateral have
been extremely lenient and fair. in this
matter: but, it is by no means impossible
| that one of these creditors may at any
time make a peremptory demand upon
| the bank for the payment of the money
due AS long as the liquidators are in
pay such debt and take up the outstand
ling collateral Should these funds be dis
tributed the liquidators in the presence of
such a demand would be powerless and
| it might well happen that collateral of
very much greater value than the amount
of the debt would be sacrificed merely be-
cause the liquidators were without money
| to protect it,
In addition to this, the bank is the
holder of quite large amount of mort
gage paper secured by second and third
mortgages upon real estate. In the event
| of foreclosure by the holder of the first
mortgage, the bank should be in posi-
ton to protect, on proper occasion, the
second or even third mortgages held by
lit 1t is conceivable that property of
value much greater than the amount of
the first mortgage might, under existing
conditions, be sold under foreclosure for
merely the amount of the first mortgage
should the liquidatorS of the bank not be
| in position to compete in the bidding at
sheriffs sale AS long as this money is
in the hands of the liquidators, they, in
the exercise of a sound judgment, are in
position to bid up to what may be
deemed fair value of any property Of
fered for sale or at least bid up to the
point of protecting the bank.
| These considerations, as a matter of
prudence, has led to the policy of holding
this money so that the liquidators might
be in position to protect the interest of
the depositors and other creditors of the
bank, on proper occasion In this policy,
the State Examiner of State Banks con-
ours, as does also a number of leading
business men of the Parish of West Fee
liciana and several of the largest depos-
| itors in the bank. Were this money dis
trbuted, the pro rata going to each cred
| itor would amount to quite an insignifi-
cant sum; when this is borne in MING
feel that every one entitled to this small
pro rata will cheerfully agree to let the
small amount going to him remain on de-
post so as to insure the protection and
promote the successful liquidation of the
bank in the manner indicated by the
policy which has been adopted.
In conclusion | wish to say that Messrs.
NJ. & F.. Wolf have, some months ago, col
llected an amount sufficient to pay their
tioan and have returned some of the
pledged collateral to the bank. l am in
formed that in the course of a month or
so the National Bank of Commerce will
be in a position to do the same thing.
| And, it is not unreasonable to suppose
that the other banks holding collateral
will realize on the same as soon as pos
sible and return the balance, if any, with
out unnecessary delay. All of these banks
have their collateral in the hands of local
attorneys who have been cooperating
with the attorney of the liquidator in
every possible way to collect this indebt-
| edness.
Under the conditions above outlined,
had the liquidators pursued the drastic
policy of seizure and sale of the property
of all the debtors of the bank, the liqui-
dators at this time, in all human proba-
blity would have found themselves in
the possession of quite a lot of real es-
tate and with very little more, if any,
actual money Many of the debtors of
the bank would have been driven into
bankruptcy and ruined without substan-
tial benefit to the creditors and deposit
| tors of the bank. Realizing the truth of
this. the liqudators of the bank feel ais
sured that they have adopted the best
and sanest course which could have been
pursued thus far. trust that the many
readers of your valuable journal will
concur in this view.
Very truly yours,
| n ID C,yprSTSr