Middlebury register. (Middlebury, Vt.) 1886-1937, 1916-08-18

that the banks investments be made ac-
cording to law. II the law was wrong he
should take that matter up with the Leg
islature, but that believed II was n very
wise provision in the law which prohibited
directors of II bank from borrowing from
the bank or becoming ncebted to the
bank In such amounts and under such
circumstances as prevailed in that bank.
Later very serious weakness developed
In one line Of out OF State loans guaraL.-
teed by two directors, and MIR. McFar-
land frankly stated TINT the Ionns
would not have been made II Senator
Pnge had not paid the directors
commission 10 guarantee them.
Mr.. Mcfarland secured the bank
against 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 believed | was wrong in my position.
From the first criticism which | made
Of the policies OF the bank up to tho
present time, Mr.. Mcfarland has al
ways agreed that I was right In my po-
sition; that the policy Of the bank had
peeH WIOHb, ana tnat ne was very Rlau
l was insisting in a change and would
cooperate with me In every way posi-
Bile to improve conditions and eliminate
all bad practices, which he has faith
fully done to the present time.
BANK STOCK TRANSFERRED.
I'm the summer of 1913 discovered that
several State banks had apparently pur-
Chn ~, Mo- .
national banks held by officers Of those
banks, and that shortly after April 1,
part Of such stock was re-transferred TO
its former owners at the same price at
which 1t had been purchased. inquired
into the matter and discovered TINT
Senator Page had transferred n large
amount of stock owned by him In va
riOus banks to various other hanks
shortly before the first OF April and
had received I'M agreement from the
Banks to which such stock WINS trans
ferred that II would be returned to
him on demand at the price OF transfer,
and the same transaction Ind taken
place between various banks and the
vnrtOus officers md stockholders in
other banks. l WINS convinced, ms the
result of my investigation, that these
transactions were solely for the pur-
pose of evading the payment of local
taxes on such bank stock. and | no
tihed 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 or release
the bank from its agreement to resell.
and sent circular to all the State banks
calling their attention to the situation and
making similar recommendation
found one bank which kept such stock,
and was advised that the agreement had
been returned to Senator Page and the
bank owned the stock. about $4,000.
At my Inst examination OF that Dnnk
discovered TINT the bank had paid Sem
ator Page the difference between the
dividends received on the stock and
1--we per cent. interest on the amount
ut which the stock was purchased, md
an examination disclosed TINT the nd
justment which ] Supposed had been
made was not really made and TINT
Senator Page still owned the bank
stoc< although Il had been held nv the
bnnl. turing all thht tine had paid no
local taxes, only Iayia6 the State tax.
l Immediately notified the officers of that
bank that that conC.ton must not con-
tiIue; that the bank must either
absolutely Purchase that stock free
from any owne'cS.p, ccrtrol or
interest in it 10y Senator PAGE.
or return it to him. and that the only
way in which such a transaction could
lawfully al ear was by the bank loaiing
the money to Senator Page and taking
tie stock rs collateral The stoct was re-
turned to Senator Page. Sometime last
RI FTGHEQ GIN