The producers news. [volume] (Plentywood, Mont.) 1918-1937, 1919-10-10

and THOMAS Allan BOX, NOnparLlsan
League financiers, and of j. K. Wat
ers.
Loan of $4,000 to H. E. Knaack,
associate of H. D. Haggerty, who
died year ago without assets of any
kind.
Those in a position to point out
that the facts regarding these loans
are as follows:
Stores Note Is Only $1O,000
There is no loan of $4,000 to the
Consumers United Stores company
That company's loan is for $4,000.
There ars notes of $500 and $1,000
of individual farmers, all of which, as,
we'll as the company's note, are backed
by farmers notes in the proportion
of one and half dollars in notes to one
dollar loaned. The ma ajority of these
notes do not fall due until October Is,
and the notes to the bank not until
December 1. The notes, however, are
already being collected, some $23, 600
in cash being already in hand, in ad-
vance of the date due.
League Notes Well Secured
The loans to the National Nonpar-
tisan League are not to the League,
bu. % inl.4viduals, connected with the
League, and not in larger amounts
than $1,000 OF $4,000 to each indi-
vidual. The loans are all secured for
the most part by farmers post-dateI
checks, for $16 each, to the Nonpar-
tisan League, for membership, though
there are some farmers notes. Loans
L 10 NJ,
year, without the loss of single pen
ny to any of the many banks which
have handled them. The checks fall
due in the autumn, and the notes are
paid off. Year by year, 80 per cent
of the face value of these checks has
been collected. The amount owing
the bank on such loans is secured by
farmers collateral in the proportion
Of two to one.
The largest loan in connection with
the League Exchange is $4,000. These
various loans are made on the notes
of farmers, and are secured not only
of farmers, and are secured not only
by the farmers credits, but also by
bank stock in various farmers banks
as collateral. The various individual
as collateral. The various Individual
notes are also indorsed by the League
Exchange.
Collateral Equals Two to One
The loans to the publishers Ma
tional Service Bureau are the notes
of farmers, ranging usually between
$40 and $100 in amount, given by
the most prosperous farmers in the
various counties, as rule, for SUB
scription to the farmers weeklies in
the various counties.
This collateral also is given in pro-
portion of two to one.
While technically LANCER contends
that these loans violate the rules OF
the banking board as in excessive
amounts, it is pointed out that so far
from being bad loans, they are the
best loans that any bank can make.
Only three loans are cited as "bad. y
One is the sisal trust note, which is
said to be amply secured.
Another is the Haggerty loan. This
is secured by a first trust mortgage
on 5000 acres of hardwood timber
land in northern Michigan. Apprais-
ais of the land differ. Some place il
; is worth at least three times the
amount of the mortgage. The loan i:
, in the process of collection, and the
, bank expects to realize the face value
of the obligation.
The H. E. Knaack loan was made
, to man, now deceased, who was
| vice president of the Hartley, Iowa
; Savings bank, with a purchase agree
ment with the bank. The estate is il
probate, but decision is expected
October 13, and in this case also th'
e bank expects to collect every cent.
\ Bank Declared to Be Solvent
< But it is pointed out that even i
t all of these three loans were alto
), gether bad, still the bank would no
: be insolvent. The loss might reduc
2 dividends to stockholders, but it woul
f not in the least involve the bank
= credit.
k "There was a regular examination
of the bank only ten days ago." sal
|. Acting Bank Examiner Siomingso
s Thursday. "This examination shove
n some paper that ought to be ia ken u
at once and the bank was requeste
to attend to the matter. This was no
l. an unusual situation. All banks ar
given a reasonable time to take u
l. paper the department deems not en-
tirely sound, and such paper is fire
e auntly found.
$50 / thought of course the Scar
l. dinavian-American was taking care c
this and was giving them a reason
d able time to clean up. The action c
# the board, over the head of the e1
r. aminers office, and in the examiner
h absence was unexpected and came hk
bolt out of the sky this morning.
F. Reserve Exceeds Requirement
E.irrhfA