Middlebury register. (Middlebury, Vt.) 1886-1937, 1916-08-18
"As to the first three charges
| must answer in the affirmative.

las to the fourth charge, l dlscov-
cred the Illegal acts; the misleading
advertisements; the use of banks to
evade taxation; that four Of the direc-
tors, including Senator Page had in
Cured liabilities to the bank very
largely in excess of the legal limit,
which is 10000, and acted in each
case promptly after complete informa-
tion, and caused all such practices to
be abandoned after a good deal Of
effort, and | will state fully and frankly
the facts with relation to all these
matters, as they have existed during
my term Of office. and as they exist at
the present time.
81 found that the Lamoille County
Savings Bank and Trust company had
been investing in real estate mortgages
outside Vermont for several years the
amount at that time being something
over one-quarter of million Of dollars
and was advertising under the slogan
"All in Vermont" l took up the matter
with Senator Page. the president Of the
bank, and II. NJ. Mcfarland, the vice.
president, and advised them that the
advertisement. in my judgment, was
misleading. in that it caused the peo-
pie of Vermont to believe that the bank
did not invest in out OF State mort
cages as many other banks were doing
but that it invested all of its funds in
Vermont. l nscerthined TINT two of
the directors of the bank Ind guarnn-
teed the amount of these out of Stnte
loans under an arrangement with SEN
ntor Page by which he paid them from
his own pocket a commission for their
guarantee, and he insisted that II was
perfectly proper thing to do that 1t
made the loans Vermont loans, and that
the bank had right under those cir
cumstances to advertise that all its in
vestments were made in Vermont either
upon real estate loans or with two good
Vermont names. ] Insisted that under
the law the directors had no right TO
guarantee such loans In such amounts,
md that the practice must he stopped,
both as to guaranteeing the loans by
the directors, and as to the form Of the
banks advertisements that the other
directors whose indie btedness was ex-
cessve must reduce 1t to the legal limit,
and was assured that l should have no
cause for criticism in those matters in
the future.
MIR. SENTER'S CRITICISM.
Some two years later noticed adver-
tisements Of similar character, answering
John Senter's criticisms, and called the
attention of Senator Page and Mr. Nc
FarIand to the agreemen made two years
before which | thought had not been hon
estly kept I also discovered that the
bank, at the request of Senator Page,
was about to invest further in out Of
State mortgages and he had asked tho
treasurer to accept the Endorsement upon
such mortgages of a local corporation in
which Senator Page and other officers OF
the bank were largely Interested. | OBJ
jected to this end wrote a letter TO Soma.
tor Page stating my objections He call
ed for conference upon the matter and
l met him and Mr.. Mcfarland and spent
cay with them going over the matter
fully. Senator Pace insisted that their
practices We're ri1ht and ought to he AL
lowed, and that the position which l took
was preventing the bank from getting
additional security. I took the po.Ition
TINT the only right and proper thing for
the bank to do was to observe the I,u
Nhich governed al sucL n'n'tcrs,rad tint
1t "as bad policy in any even lo,. lhe
hank &c make out OF STATE investments
which tfey were not fully satisfied wer,
absolutely SOUND and safe, and that when
he induced his directors to guarantee ont
OF state leans. paying them for the rr,r.
antee, he was offering an lnducement :,
accept loans in which TIE bank might mo,
otherwise invest and that | should insist
THE ALLEN n