The Bennington evening banner. (Bennington, Vt.) 19??-1961, 1916-08-17

rection. In talking with Mir. McFar-
land about your plans for investment,
he advised me that you had decided
to buy western mortgages, but that
they were to be guaranteed by the
lumber company and that you and
Mr.. Mcfarland were to guarantee the
lumber COMPANY. i advised MIR. Nc
Farland, and now advise you. that
this cannot be allowed. 1t is only an.
other method of accomplishing the
same THING and continuing the same
practices which | have objected to
for the past four years and which are
contrary to law, and shall expect you
to reduce the liability of yourself and
see that the liabilities of the other di-
rectors are reduced to the legal limit,
just as soon as it is possible to do so
without loss to the bank
MEETING IN NEW YORK
AS a result of this letter Senator
Page asked me to meet him in New
York for a conference. | replied that
| could sc no object of conference,
that the matter was perfectly plain,
and no explanations were needed. He
insisted upon conference, and paid
all my expenses to New York and re-
turn. After long discussion, in
which | refused to change my rulings.
he again gracefully yielded and said,
You shall have no further cause for
criticism He reduced his liability to
the bank very soon to the legal limit,
and the other directors also except
where they had guaranteed out of
State loans, which refused to have
released until the loans were paid, or
] was satisfied they were absolutely
good.
October 25, 1915, wrote Senator
Page as follows:
"'My attention has been called to
the statements in two recent adver-
tisements of the Lamoile County Saw
ings Bank and Trust Company, in one
of which it is stated that the bank
does not look for investments which
pay more than per cent, and in the
other 1t is stated that the bank has no
assets which are not absolutely good
for the face value. have not at
tempted to quote either of these ad.
vcrtisements verbatim, but in the case
Of the first one the impression is given
that the bank has no investments
which pay il more than per cent, and
in the latter one the impression is
qiven that the banks investments
have been so carefully made that they
have developed no weaknesses. inas-
much as you have loans which pay
you 6Ia and per. cent, the first adj
ve-tics1-cnt cannot state the situation
correctly.
In the case OF the other advertise
ment, although ! understand from You
and Mr.. Mcfarland that you have the
guarantee of Mr.. Knight and MIR. Nc
Farland on certain loans which have
developed a very substantial weak
ness, and | suppose you reason that
because of those guarantees the bank
will make no loss, that YOU are war
ranted in making the statement in tho
advertisement | think the only case
in which a bank could make the state
ment properly. would be where the in
vestments had been made with such
rare judgment and discretion that no
weakness ever developed in any OF
them, but where, as in your case, IL IL
evident that the officers who had
charge of making the loans in the
bank, namely yourself and Mr.. Nc
Farland. as ! understand - made in
vestments which later turned out 10
be poor, even though one of the Off
GERS of the bank guaranteed there
should be no loss, | think the bank is
not warranted in conveying to the
public the impression that its officers
have been so careful and used such
good Judgment as such an advertise
ment would indicate.
REASONS FOR DELAY
"'Please consider this matter in tho
light in which | have stated IL. and
think you will realize that you are not
justified in asking the people of the
State of Vermont to- select your bank
above all others for the reasons indi
Gated
ale asked for conference and az
sured me that the advertising for the
Dlnk nuu DScH luIuCu OVER W hI. oui
YER the treasurer, and he would have
nothing further to do with it, and sal
he did not realize he was doing any
thing improper in such advertising.
"As result OF the conference, let
tprs and rulings of the bank commits
ssoner during the past six years, tn
Iamoille County Savings Bank an
Trust company has abandoned all tn
practices which have been criticized
and the only reason II took so long t
accomplish II is the attitude Of Sen;
ter age, and his persistent efforts I
devise some way in which the ban
might purchase out Of State loans, an
still advertise In such way as
lead the people to think all the bank
deposits wereinvested in Vermont c
in Vermont securities.
81 have made THIS statement so tn;
th,, dcpositors In our State banks ma
lnew the attitude which the ban
conn missioner takes towards illeg
and Improper practices Ly the banl
over " hich he has jurisdiction.
FRANK c. WILLIAMS.
Bank Commissioner,
Newport. Vt, August s, 1916