The Brattleboro daily reformer. (Brattleboro, Vt.) 1913-1955, 1916-08-15

otherwise invest and that I should insist
that the banks investments be made ac-
cording TO law. If the law was wrong he
should take the matter up with the Leg
islatuIe but that l believed it was very
wise provision in the law which prohibited
directors of 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. q very serious weakness developed
in one line of out of state loans guaran-
toed by two directors. and Mr.. McFar-
land frankly stated that the loans would
not have been made if Senator Page had
not paid the directors a commission to
guarantee them. Mr.. Mcfarland secured
the bank against a possible loss these
loans. After several hours discussion
Senator Page finally said that he would
comply with my request and that l should
have no further cause for criticism al
though he believed [ 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
was insisting in change and would
BILE to improve conditions and eliminate
all bad practices. which he has faithfully
done to the present time.
BANK STOCK TRANSFERRED.
In 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
Sbn IL lFt
part of such stock was e-transferred to
its former owners at the same price at
which it had been purchased. Inquired
into the matter and discovered that SEN
ator Page had transferred a large amount
of stock owned by him in various banks
TO various other banks shortly before the
first of April and had received an agree
naent from the banks to which such stock
was transferred that it would be returned
to him on demand at the price of trans
fer, and the same transaction had taken
place between various banks and the va
rious officers and stockholders in other
banks. ! was convinced. as the result of
my investigation, that these transactions
were solely for the purpose of evadng
the payment of local 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 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 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 $26. 600
At my last examination of that bank l
discovered that the bank Rad paid SEN
ator Page the difference between the
dividends received on the stock and five
per cent interest on the amount at
which the stock was purchased, and an
examination disclosed that the adjust
ment which | supposed had been made
was not really made and that Senator
Page still owned the bank stock al
though it had been held by the bank dur
ing all that time; had paid no local taxes,
only paying the State tax. l Immediately
notified the officers of that bank that the
bank must either absolutely purchase that
stock free from any ownership control or
interest in it by Senator Page, or return
it to him, and that the only way in
which such a transaction could lawfully
appear was by the bank Ioaning the
money to Senator Page and taking the
stock as collateral. The stock was re-
turned to Senator Page. Sometime las
ST