Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1919-06-21

11dSklll6S adku.
"You see with this bank at
Valley City, I have negotiated on
that bank about nine months. i
went up there the first time Mt the
direction of Mr.. Townley 10 buy 1t
+, for the league, n at hat time
Grady wanted too much; and I
kept dickcring along all summer,
along until about the first Of De-
cembcr-hc came Town to the
controlling interest which was
ESQ shares-I don't remember the
a figures on it, but / paid
somewhere around $4,000 a share
bonus for his controlling interest.
Then / picked up the balance of
the stock ut a very much lesser
figure"
y Mr.. LangeN 1.-The totA was $751;
O00?" A. Roughly speaking.
: Q. You bought it for what was in
it? A. I bought the bank SO that it
could be turned over to the farmers
at actual book value. which will alb
solutely show on the statement, but
you see part of the assets are no
book assets. so we. have put in $500
In he bank to. bring it up to the
$1,000 900 capital, with the surplus or
undivided profits in addition.
Q. You paid s162, 900? A. Roughly
speaking, yes.
Later in the examination, Mr..
LANCER asked Hastings how much he
had made on the deal, and he replied:
I'D rather not tell. 1t is not a matter
that I think should be spread as long
as the assets are there. OF course, If
|athe assets are not there, we would
have to put it in"
Mr.. LANCER. then, asked: when
did you put in $15,000?"
A. (showing paper) today.
MIR. Waters, then bank examiner,
explained: "In the examination Hal
vorson found the surplus impaired
$751; 900. and so Jack and Mr.. Grady
and Olson told me this morning. l
they said they would call this cashier
up. You said we have to put this
money in there. but we will call him
up and have him wire you that it has
been DONE"
Mr.. LANCER: @. That was not put in
till Halvorson insisted it should be put
in? A.. Yes, I was told about it one
evening about Iii o'clock, and I had
to 'go to st. Paul hat evening and
leave MIR. Aamoth to make the entries
and transfer. and it is these approxi-
mately 100000 worth of outside as
sets we will realize $4,000 on. They
fcannot go in the bank as actual as
sets. We will have to take them up
ourselves and take our cash for it,
SAYS 1T WAS NONE
OF FARMERS BUSINESS
@. Did the farmers know that you
make a rakeoff from Grady on this
deal? A. 1t was nOnc Of their business
whatsoever.
@. You didn't figure any trust rela-
ton existed between you and the
farmers you were buying the stock
flor? A. None at all. MY deal was alb
%solutely with Grady. and the general
understanding of everybody was that
we were to take this bank over at a
clean JDluation.
@. There is some stock owned by
the United Stores company? A. Yes
sir.
@. How did they get mixed up in it?
A. They were one of the first pur-
chasers of the stock.
@. Is it $4,000 worth: A. No. they
have a hundred shares of stock.
TOWNLEY GAVE MORE
DIRECTIONS. HE SAID
@. Ten thousand dollars worth? A.
They have n hundred shares. The
principal thing Is we have control Of
the bank through seven or eight peo-
pie mostly connected with the league.
Our intention was to keep fifty per
tcent of the stock. I was talking with
Mr.. Townley in St. Paul and I told
him how far I had got, and he said.
you are keeping part OF 1t. and / said
YES. and he said to keep fifty per cent
of the stock. md I found there was
1913 shares sold out OF 1000. We will
take as much stock right to the fifty
iper cent or nor II necessary.
rs Q. Does the Consumers Stores COM
pany own any other stock in banks in
1.-The state? A. SO shares at Hatton and
ithey have purchased other stock.
iGRADY LOANED MONEY
Ito HASTINGS
LANCER then said: "Olson said that
Grady would not take the Consumers
Stores company notes until he en-
dorsed them personally"
A. Grady would not?
H. @. Yes.
A. I don't know anything about
that. Grady has never done any bust
ness with us last year. You see, up
until this year. Grady has always
loaned Is all the monev he had to
loan. I borrowed as high as $125,-
600 in the summer at one time, but
he refused to Dan us any money last
because Bill Lemke had sued him on
some company. land investment COM
pany, they had and Bill was attorney
for plaintiff and sued him and stood
a chance of getting. a judgment, and
l guess he would: n they put it up
to me that they had plenty of money
to loan and would oar if l could get
them a release; you see l could not do
that because it was a matter of pro-
f%essional ethics with Bill. but Bill did
release himself on the case and had
it dismissed for prejudice. consequent
ly they figured it was a put up job on
my part, but it was not.
@. Do you consider it good bank
ing to have one corporation owning
Stnrk in a 10f IF ctofo honEc9
A. Well. that is a question that I
would say yes n no to. according to
the corporation. what it represents
and what it is organized for, and
what benefits are derived from so do
ing.
c.. The capital stock of the Con-
sumers' Store is $4,000?
A. $4,000.
@. Have they stock in n other
bank, aside from Hatton and this
stock?
A.. Well, no, they have not: no
they have not; they ave purchased
stock at times. but it has been han
died.
O.. What we are interested in is,
we want to be sure about the total
liability, and we are naturally inter
ested to know, if anything went
wrong, whether there would be funds
to SAY
A. They would be absolutely good
They nave assets at the present time
of, about 81, 500, 900. of which $780,
900 is good and collectable. SO I should
think they ought to be good for a lit
tie bank stock. +
ONLY NEWSPAPER TALK,
HASTINGS SAYS
/ @. Now did the organization take
place there? Did anybody. with your
authority or without your authority
either way, any one down there at all