The Hope pioneer. [volume] (Hope, N.D.) 1882-1964, 1919-10-16

correspondent, as lawful in all re.
spects, still the bank would be anc
has been at all times subsequent tc
April LIST, last past, as j. r. Waters
stated in his letter Of criticism to H
j. Hagen on May 9Th, 1919, from
which the following paragraph is
taken:
I'm the matter of your legal
reserve. the examiner shows that
you barely up to require
ments and in figuring the re-
serve, the amount due to banks
is treated as a demand deposit.
the reserve on hand at all times,
after deducting the amount due
to banks, must be ten per cent
of the time deposits and twenty
per cent of the demand. In figur-
ing on this basis which would be
strictly according to law, you
can readily see that your Sc
serve would be many thousands
of dollars less than no reserve.
1t is by opinion that your bank
with it's present line of deposits
should carry in reserve at all
times at least $500, 900"
The pest Illustration Of this meth
| cd is found in some of the recent
correspondence together with the
figures of the bank of recent date
which r herewith submitted as
follows: On August 18th, 1919, the
Bank of Commerce and Savings over
the signature of w. H. Locker, presi-
dent, opened the first paragraph of
his letter as follows:
Presume you will be advised
in advance as to when the next
call will occur. Would you let
me know in a confidential way
Just when this will take place."
On the Sth day of September fol-
lowing. II. ]. Hagen wrote Mr..
Lockner a letter, the important part
of which is as follows:
we are enclosing notes and
Gert'llcates of deposit aggregat-
ing WIN accrued interest $751;
19o.94. We would be pleased 10
nave temporary credit for this
amount, n if in a short time
carry the warrants and certin'
cafes Tor US, please advise. We
anticipate q call within the next
three or four days"
The information which he haa an
pears to hafe been good because on
me 9tn day of September. the dav
LITER, Deputy State Examiner P. %.
entered the bank for the
urpos OF making an examination,
Nr. lido found that on the day
previous to the commencement of his
examination, sS1, 1864 had boon
charged to the account of the On
uth bank and he further found that
TINS charge consisted Of notes which
.ne OBSERVATION-DISCLOSURES bank
mad discounted to it's Duluth cor
respondent. Mr.. Halldorson immedi
ateiy asked r. R. Sherman, the
cashier for an itemized list and
what the status Of this transaction
was and he was given a list and
told both Mr.. Hagen and Mr.. Sher-
man that the paper was DISCOUNTED
without any strings to it and that
there was no contingent or other liza
blllty and hat there was no under
standing between the Duluth banl,
and the Scandinavian-American
whereby this discouted paper could
We ciassed as rediscounted paper
which in fact it actually was with
out question. The day Mr.. Halldor-
son entered the bank on the 9th a
further amount Of s14,1Go in notes
was again charged to the Duluth
nank In the same manner as indi-
Gated above, making a grand total of
discounted paper sent to the CORE
spondent bank at Duluth in two DAY We
Of $95,716.94. The nature OF this
transaction as it was made to an
pear on the books of the Scandina-
Vian-American bank was to bolster
up its reserve which Mr.. Halldor-
sons report. made on that day, will,
show even this additional amount
improperly added, was far below the
legal amount.
That this was the condition here
tofore stated in this report, and the
terms upon which this discounted
paper heretofore referred to was
taken, is shown by the following
paragraph taken from n letter OF
September 11th. 1919. over the sig
nature Of the Bank of Commerce and
Savings. signed by w. H. Lockner
president acknowledging receipt OF
the
The condition on our taking
this paper is that you have an
excess loan. which can he re-
lleVed IN a few days and that this
paper is to be charged to YOUR
account on or before the 18th of
this month and that all notes and
c. d. are to be charged back to
your account. For the time that
we carry same, we will charge
you at the rate of 6 per cent. 1t
is also understood and agreed
That the funds placed to your
credit for your paper is to re-
main in the bank and not be
withdrawn or any part Of it. On
account Of our low reserve this
is the only condition under which
we can take the paper on and we
arc 6oipr II ,pl, ~. ~. 80.