The Ward County independent. [volume] (Minot, Ward County, N.D.) 1902-1965, 1919-10-09
AUDITOR BARRED FROM
EXAMINING STATEBANK
Work Had Started But Director Gen
eral CathrO Would Not Permit Ac-
cOuntants to Enter Bank.

Work Had Started But Director Gen
eral CathrO Would Not Permit Ac-
cOuntants to Enter Bank.
Bismarck, N. D., Oct. IA legal
battle in the supreme court of North
Dakota is expected to follow the ac-
tion of officers of the Bank of North
Dakota today in refusing to permit
representatives of the state auditors
department to continue examination
of the institutions condition, COM
menced yesterday, and the removal of
the state auditors seals from the
banks vault. F. w. Cathro, director
general of the bank, met the account
ants when they undertook to enter the
institution at 8 a. m. to resume their
work and informed them that they
would not be permitted to enter the
bank.
The accountants informed State Au-
ditor Karl R. Kositzky of the devel-
opment At 8 a. m. the bank opened
for business with the regular force in
charge, and according to Manager j.
r. Waters and Director General Cath
rc, the seal placed on the safe by the
state auditor was removed at their
orders.
Court Action Announced. 4
Auditor Kositzky reported to Attor
ney General William LANCER that he
had been denied admittance to the
Bank Of North Dakota today, and that
official announced that he would i'm
mediately make application to the
Burleigh~ county district court for a
writ of mandamus, directing the bank
o1S So A, A,
tinue with the inquiry.
Waters and Cathro, in letter adj
dressed to Kositzky, asserted he was
without legal authority to examine the
bank Kositzky undertook the inves-
tigation yesterday at the order of At
torney General LANCER.
Deposit Misstatement Charged
Mr.. Kositzky announced today that
during his examination yesterday he
found that the Bank Of North Dakota
had deposit of 1882, 2,293.68 in the
Scandinavian-American bank when
that institution was closed. Mr.. Wat
ers, in statement last Friday, said
that the state banks deposits in the
Fargo institution was $183,316.82.
Zky that it is the duty Of the state aud
lCUI W Hiihc dIy llIHCSLlSdLlOil dIiu SS-
animation of the Bank of North Da-
kota in order to safeguard the inter
ests of the taxpayers Of the state. Ko-
day upon receipt of the letter Mr.
Waters arrived shortly after Kositzky
took personal charge and demanded
the institution. Words followed, but
Kositzky did not yied.
Attorney General Demands Inquiry.
LANCER in his letter said:
'It is essential for the protection of
the taxpayers of your state that there
be an immediate examination of the
Bank of North Dakota. Under the law
it is your duty to make an examina-
tion of the accounts have informa-
tion that the Bank of North Dakota
has become mixed up with the Scandi-
navian-American bank of Fargo, now
in the hands of a receiver.
CAS- attorney general, make 1or-
nal demand that you, as auditor, en-
trusted with the safeguarding of the
taxpayers money, which you have so
efficiently done in the past, proceed
Immediately to ascertain to what il
legal purposes, if any, those now in
control of the Bank of North Dakota
have diverted the money now entrusted
to their care by the school districts.
villages, cities, townships, counties and
towns and the people Of the state of
North Dakota"
The Bank of North Dakota was or
ganized as the result of an act passed
by the last legislature and its last re-
port showed resources in excess of
$316,OO0,0OO.
Governor Absent From Meeting.
When the state banking board met
today Governor L, ]. Frazier declined
to attend, notifying other members of
the board, Attorney General LANCER
and Secretary of State Thomas Hall,
that he. was too busy on another board.
LANCER and Hall then called on Dep
uty Bank Examiner Semmingsen, act
ing examiner in the absence Of O. e.
Lotus, the state bank examiner, to
attend as secretary of the board. He
could not be found. Subsequently the
board made demands on other officials
in the banking department to appear
before the banking board, but none of
the subpoenaed persons could be To-
Gated.
Bank Officers Waive Examination.
President H. j. Hagen of the Scan
dinavian-American bank is in Bis
marck today to attend a meeting, Of
the guaranty commission.
Hagen and P. r. Sherman, cashier
of the closed bank, were bound over
to the district court yesterday, waiv-
ing preliminary examination. Each
furnished $4,000 bail. Charges against
the officers, made by P. E. Halldor-
son, receiver of the bank, are that they
exhibited to him as security false
statements as to the banks actual
condition, when he made regular ex-
animation Of the bank, Sept. 8.
Halldorson charges the statement
given him by the bank officials show
ing the banks loans at 81, 144,91O.15
more. The transaction, it is charged
in the complaint, was merely an in
complete discount transaction, and not
an outright aisle Of loans as represent
ed to the examiners at the time by the
frs- kn%1r