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

that the banks Investments be made ac-
cording to law. If the law was wrong he
should take that matter up with the Leg
islature, but that l believed 1t was very
wise provision in the law which prohibiteS
directors Of a bank from borrowing FROM
the bank. or becoming indebted 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 guaran-
teed by two directors, and MIR. McFar-
land frankly stated that the loans
would not have been made If Senator
Page had not paid the directors
commission to 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 1 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 I was right in my po-
sition; that the policy of the bank had
been wrong, and that he was very glad
I was insisting in a change and would
cooperate with me in every way possi-
BILE to improve conditions and eliminate
all bad practices, which he has faith
fully done to the present time.
BANK STOCK TRANSFERRED.
'Tn the summer of 1913 discovered that
several State banks had apparently pur-
chased in March, stock of other banks and
national banks held by officers Of those
banks, and that shortly after April l. a
part of such stock was re-transferred to
its former owners at the same price at
which it had been purchased. 1 inquired
into the matter and discovered that
Senator Page had transferred n large
amount of stock owned by him In
riOus banks to various other banks
shortly before the first of April and
had received an agreement from the
banks to which such stock was trans
ferred that IL would be returned to
him on demand at the price OF transfer,
and the same transaction had taken
place between various banks and the
various officers and stockholders In
other banks. I was convinced, the
result of my investigation, that these
transactions were solely for the pur-
pose of evading the payment of local
taxes such bank stock. and I no
tified all such banks that i did not
think 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 it's agreement to resell,
and sent circular to all the State banks
calling their attention to the situation and
making a 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 last examination of that bank 1
discover~I lat the bank had paid Sem
ator Page the difference between the
dividends received the stock and
five per cent. interest on the amount
ut which the stock was purchased, and
IN examination disclosed that the ad-
tustment which I supposed had been
made was not really made and that
Senator Page still owned the bank
stock although IL had been held by the
bank during all that time, had paid no
local taxes, only paying the State tax
/ Immediately notified the officers of that
bank that that condition must not con-
tinue; that the bank must either
absolutely purchase that stock free
from any ownership, control or
interest in it by Senator PAGE.
OF return il to him, and that the only
way in which such a transaction could
lawfully appear was by the bank loaring
the money to Senator Page and taking
the stock as collateral. The stock was re-
turned to Senator Page. Sometime last