The Brattleboro daily reformer. (Brattleboro, Vt.) 1913-1955, 1916-08-11

tors, including Senator Page, had in.
CURED liabilities to the bank very large
ly in excess of the legal limit, which is
$4,000, and | acted in each case
promptly after complete information
and caused all such practices to be
abandoned after a good deal of effort
and l will state fully and frankly the
facts with relation to all these matters
as they have existed during my tern
of office, and as they exist at the pres
ent time.
81 found that the Lamoille County
Savings Bank and Trust company had
been investing in real estate mort
cages outside Vermont for several
years, the amount at that time being
something over one-quarter of mil
lion of dollars and was advertising nm.
der the slogan "All in Nermont.;' !
took up the matter with Senator Page
the president of the bank, and Fl. NJ
Mcfarland, the vice-president, and adj
yised them that the advertisement. in
my Judgment was misleading, in that il
caused the people of Vermont to believe
that the bank did not invest in out OF
state mortgages as many other banks
were doing but that it invested all oil
its funds i'll Vermont. | ascertaiaed
that two Of the directors of the banI
had guaranteed the amount of these
out OF state loans under an arranoe
ment with Senator Page by which h.
paid them from his own pocket n com
mission for their guarantee. ana he i'm
sisted that it was a perfectly proper
timing to do; that if made the loan.
Vermont loans, and that the bank hat
right under those circumstances I.
advertise that All its investments wer,
made III Vermont either upon real cs
tate loans or with two good Vernon
names. insisted that under the Law
the directors had no right to guarantee
such loans in such amounts. and tina
the practise must be stopped, both n
to guaranteeing the loans bv the direc
tors, and as to the form of the bank
advertisements: that the other direc
tors whose Indebtedness was excessix,
must reduce it to the legal limit. an,
was assured that | should have II,
cause for criticism in those matters il
the future.
Noticed Advertisements.
Some years later | noticed adver
usements OF a similar character, answer
ing John Sentcr 5 criticisms. and calIe,
the attention OF Senator Page and Mr.
Mcfarland to the agreement made tw.
years before, which | thought had no
oech honestly kept | also discovered
that the bank, at the request OF Sena
tor Rage, was about to invest furthe
III out OF the state mortgages and Ii,
hdd asked the treasurer To accent Thu
Endorsement upoa such mortgages of :
local corporation in which Senator Pap,
and other officers OF the bank wfrr
largely interested. / objected to thi
and wrote letter to Senator Pao,
stating my objections. He called for .
conference upon the matter and | me
hm and Mr.. Mcfarland and spent :
DAY with them going over the matte
fulIy. senator Page Insisted that thei
praetlses were right and ought to be al
lo"rd, and that the position which
tooh was preventing the bank from yet
uhg additional security. took I'll,
position that the only right and prone
thing for the bank to do was to Oh
serve the law which governed in sucl
matters, and that it was bad policy il
any event for the bank to make ont ~
state Investments which they were no
1ulIy satisfied were absolutely sount
and safe, ana that when he induced hi
directors TO guarantee out of star
loans, paying them for the guarantee
he was Offering an inducemeut to ac
cept loans in which the bank miobt no
otherwise invest. and that | should in
Slst that the bank 5 investments h,
made according to law. If the law wa
wrong he should take that matter nj
with the legislature, but that | believe,
1t was very wise provision in the Law
which prohibited directors of a banI
borrowing from the bank. or becomiu,
indebted to the bank in such amounts
and under such circumstances as IRE
vailed in that bank. Later. very ser
iouS weakness developed in one line a.
out OF state loans guaranteed bv tw,
directors, and Mr.. Mcfarland frankI
stated that the loans would not hay,
been made il Senator Pare ha1 M
l&ld the directors a commission to quar-
antce them. Mr.. Mcfarland secure,
the bank against possible loss o1
these loans. After several hours dis
cusslon Senator Page finally said tina
ne would comply with my request AN,
that | should have no further cause 70
criticism, although he believed | wa
wrong IN my position. From the frs
criticism which l made of the policie.
OF the bank up to the present time. Mr.
Mct arland has always agreed that
was right in my position; that the pol
icy Of the bank had been wrong. am
that he was very glad / was insistia,
III change and would cooperate witt
me IN every way possible to improve
conditions and eliminate bad practises
which he has faithfully done to tn
present time.
Makes Several Discoveries.
- In the summer of 1913 discoverc,
mat several state banks had apparent
" purchased in March. stock of othe
banks and national banks held b. of
hcerS of those banks, and that shortl
after April l, part of such stock wa
ree-transferred to its former owners a
Il