News and citizen. [volume] (Morrisville, Vt. ;) 1881-current, 1916-08-16

Bank and Trust Company, dated Febru-
airy Il, 1914, / said:
Il examined the above bank Feb
ruary 10, and find that your liability and
the liability of Mr.. Mcfarland to the
bank has not been decreased since my
last examination. You will remember
that In the talk we had something over a
year ago, I notified you that the liability
of the officers of the bank must be re-
duced to the legal limit, namely, ten
thousand dollars. as quickly as Ii could
be done, and I find no progress has been
made in that direction. :" In talk
Ing with MIR. Mcfarland 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.
advised MIR. Mcfarland. and now nd.
wise You that this cannot be allowed
1t Is only another method Of accom-
plishing the same thing and cOntinu-
Ing the same practices which 1 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 directors are re-
duced to the legal limit, just as soon a.
1t Is possible to do so without loss to
the bank.
MEETING IN NEW YORK.
"As result Of this letter Senator
Page asked me to meet him IN New York
for conference, I replied that could
phiacf of hat 30
matter was perfectly plain, and no ex-
plantations were needed. He insisted up
on conference. and paid ali my expenses
to New York and return. After a 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 1 refused to have
released until the loans were paid, or I
was satisfied they were absolutely good.
October Is. 1915, / wrote Senator Page
as follows:
"My attention has been called to the
statements I'm two recent advertise
ments of the LamoiIle County SavinRD
Bank and Trust company, In one II
which 1t Is stated that the bank does
not look for Investments which pay
more than six per cent, and In the
other 1t Is stated that the bank has no
assets which are not absolutely good
for the face value. I have not attempt
tempted to quote either of these adver-
tisements verbatim. but in the case of
the first one the impression is given
I, \,
pay 1t more than six per cent, and In
the latter one the Impression is given
that the banks Investments have been
SO carefully made that they have de-
velOped no weaknesses. Inasmuch as
you have 1Oans which pay you six and
one-half and seven per cent, the first
advertisement cannot state the sit
uation correctly. In the case of the
other advertisement, although l under
stand from you and Mr.. Mcfarland that
you have the guarantee Of Mr.. knight
and Mr.. Mcfarland on certain loans
which have developed a very substantial
weakness, and l suppose you reason that
because of those guarantees the bank
will make no loss, that you are war;
ranted in making the statement in the
advertisement. I think the only case
in which bank could make the state
ment properly. would be where the in
vestments had been made with such rare
Judgment and discretion that no weak
ness ever developed in any Of them, but
where, as in your case, It is evident that
the officers who had charge of making
the loans In the bank. namely yourself
and Mr.. Mcfarland, as I understand it,
made investments which later turned out
to be poor, even though one of the Off
GERS Of the bank guaranteed there shNald
be no loss, I think the bank is not war
ranted in conveying to the public the i'm
preston that its officers have been SO
careful and used such good judgment as
such an advertisement would indicate.
REASONS FOR DELAY.
Please consider this matter in the
light in which l have stated It, and I
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 indicated.
He asked for a conference and assured
me that the advertising for the bank had
been turned over to Mr.. Culver, the
treasurer, and he would have nothing
further to do with 1t. and said he did
not realize he was doing anything i'm
proper in such advertising.
las a result of the conference, letters
and rulings of the bank commissioner
during the past six years. the Lamoilie
County Savings Bank and Trust COM
pany has abandoned all the practices
which have been criticised. and the on
ly reason II took so long TO accomplish
Il Is the attitude of Senator Page, and
his persistent efforts to devise some
way in which the bank might purchase
out of state loans, and still advertise
I'm such n way ms to lead the people 40
think all the banks deposits were In
vested in Vermont or In Vermont Sc
curities.
81 have made this statement so that
the depositors in our State banks may
know the attitude which the bank COM
missioner takes towards Illegal and I'm
proper practices by the oanks over which
he has jurisdiction
FRANK c. WILLIAMS.
Bank Commissioner"
Newport. Vt. August 9. 1916"