The Bennington evening banner. (Bennington, Vt.) 19??-1961, 1916-08-10


right and ought to be allowed, and
that the position which took was pre-
venting the bank from getting addi-
tional security. took the position
that the only right and proper thing
for the bank to do was to observe the
law which governed in such matters,
and that it was bad policy in any event
for the bank to make out of state in
vestments which they were not fully
satisfied were absolutely sound and
safe, and that when he induced his di-
rectors to guarantee out of state
loans, paying them for the guarantee,
he was offering an inducement to ac-
cept loans in which the bank might
not otherwise invest, and thas
should insist that the banks invest.
ments be made according to law, If
the law was, wrong he should take that
matter up with the Legislature, but
that | believed it was very wise pro-
vision in the law which prohibited di-
rectors of bank from borrowing
from the bank, or becoming indebted
to the bank in such amounts, and I'M
der such circumstances as prevailed
in that bank Later, a very serious
weakness developed in one line of out
of state loans guaranteed by two di-
rectors, and Mr. Mcfarland frankly
stated that the loans would not have
been made il Senator Page had not
| paid the directors a commission to
guarantee them. Mr.. Mcfarland Sc
cured the bank against a possible loss
on these loans. After several hours
discussion Senator Page finally said
that he would comply with my request
| and that should have no further
cause for criticism, although he be-
lieyed | was wrong in my position
| From the first criticism which made
of the policies OF the bank up to the
/ present time, Mr.. Mcfarland has al
ways agreed that | was right in my
position; that the policy of the bank
had been wrong, and that he was very
| glad | was insisting in change and
would cooperate with me in every
way possible to improve conditions
| and eliminate all bad practices, which
he has faithfully done to the present
| time
| Makes Several Discoveries.
in the summer of 1913 / discovered
that several state banks had appar-
emily purchased in March. stock of
other banks and national banks held
by officers of those banks, and that
shortly after April l. part OF such
stock was re-transferred to its forme.
owners at the same price at which il
had been purchased. / inquired into
the matter and discovered that Sen.
ator Page had transferred large
amount of stock owned by him in va
rioGs banks to various other banks
shortly before the first Of April aud
had received an agreement from the
banks TO which such stock was traI S,
| ferred that it would be returned 20
him on demand at the price of trans
fer, and the same transaction had tax.
en- place between various banks and
the various officers and stockholders
in other banks. | was convinced, as
the result of my investigation. that
these transactions were solely for the
purpose Of eyading the payment of To-
cal taxes on such bank stock, and
notified all such banks that did not
think a bank chartered by the state
should allow itself to be used for the
purpose OF evasion of taxes, and rec
commended that at once they require
the seller to repurchase the stock OF
release the bank from its agreement
to resell, and sent a circular to all
the state banks calling their attention
to the situation and making a similar
accommodation. | found one bank
which kept such stock. and was advis
ed that the agreement had been re
turned to Senator Page and bank that
owned the stock. about $4,000. Al
my last examination of that bank
discovered that the bank had pait
Senator Page the difference between
the dividends received on the stool
and per cent interest on the amoun
at which the stock was purchased. ant
an examination disclosed that the al
justment which supposed had bee,
made was not really made, and tha
Senator Page still owned the 5anl
stock although it had been held BY IN,
bank during all that time: had pait
no local taxes, only paying the stat,
tax. | Immediately notified the OIL
GERS of that bank that that conditlo,
must not continue; that the banI
must either absolutely purchase tha
stock free from any ownership. cor
troll of interest in 1t by Senator Page
or return 1t to him, and that the onl
way in which such transaction coul
lawfully appear was by the bank loan
ing the money TO Senator PAGE an
taking the stock as collateral. TIL
stock was returned to Senator. pagt
Sometime last fall my attention Na
called to an advertisement by the l.;
noble County Sacings Bank an
= Trust company which | thought wa
- very misleading, and incorrectly sta
ed the condition of the bank. caTie
+ the attention OF the bank and Senato
rage to the matter and advised hin
that there were two statements in In
advertisement which he must kno
. were not proper One, that the han
>, ciu not consider loans bearing MOI
- tnan per cent as safe conservatiy
loans, and consequently did not 40 n
! ter such loans and the other, that III
:, bank dad no assets which were II,
= absolutely good for their face. Lat,
y | was assured by Senator Page in
[, conference had with him tnat u
' il nnNnIi iainn Ind hnnn IarnnL a..