The herald-advance. (Milbank, S.D.) 1890-1922, 1919-10-10

The SCdndIndvlan.American Bank 0
Fargo SuSpendS by Order OF
State Banking Board.
The Scandinavian American bank
Of Fargo was closed by the state
authorities of North Dakota acting
under orders of Attorney General
LANCER.
The capital stock and surplus of
the bank, it was stated, is 100000
and the law limits the banks loans
to any individual or corporation to
l5 per cent OF that amount, which,
in this case, is $4,000. Total loans
above the limit were reported by
the examiners as $743, 1874, ,82, while
the total liabilities are said to be in
excess of 81, 100000.
The first item in the list of "ex-
cess loans." in the report. is $780,
600 to the Consumers United Stores
company. Regarding this the re-
port says:
The Consumers United Stores
company has line of credit ex-
tended through system Of indi.
vidual loans to 25 individuals ag-
gregating in all $4,000. The in.
dividual paper is given for accomo-
dation purposes only and is secured
by notes representing farmers
liabilities in the sum of $1OO and
$50 together with postdatedl checks
of $32 and less. amounting in all to
1854, ,364,88. 1t should be noted
that 1921 ,435. SIS Of the above notes
and postdated checks are not now in
the bank but in the hands Of the
Consumers United Stores company.
In our opinion these postdated
checks are not in law or in fact COL
lateral at all
Second on the list of excess
loans is an item of $148,824, ,26.
representing !oans to the National
Nonpartisan league.
1.-The National Nonpartisan
league credit say the report,
consists of % individual notes
ranging in denomination from $84O
to $4,000 and aggregatin9 in all
$148,824.26. A consideration Of
the names of the makers of these
accommodation notes will illustrate
that the same condition attends the
extention of this line as has former
ly been explained in the line of
credit extended to the Consumers
United Stores.
The security held by the bank
as collateral for its loan made to
the National Nonpartisan League
for S148,824.26, consists princi-
pally of postdated checks in the sum
of 1914, ,864.Ol. There is also fifty
seven shares of. the Peoples State
bank Of Hatton with an estimated
market value Of $ll5 each, amount
ing to Sc, ,555. In addition to this,
Consumers United Store bonds in
the sum of $4,000 are held as col
lateral.
"This loan consists Of $66, 1921,
and comprises nine notes ranging
from So, ,l49.34 to SO, 900. The Sc
curity which the bank holds for
this advancement comprises far
mers' notes of the1 kind previously
described with par value of $780,
1888"
The report lists 243 shares of
stock in league banks at Courtenay.
Hillsboro. the Scandinavian-Ameri-
can Of Fargo. the Peoples State
bank of Casselton and the First
National bank of Sheyenne.
The report states that the league
holds only a second lien on the
stock of the Hatton bank. which IS
included in the security offered for
a Nonpartisan league loan Of about
$150.0OO. Regarding. the league
security, the report says: ''Taken
at first face value, the collateral
does not become sufficient to cover
the face of the loan. It is our
judgment that this much is no,
only excessive in the extreme but
that the collateral is wholly made
quate.
This loan amounts to SAT. $50. .O6
and is covered by accommodation
paper running from $1,000 to $1O,-
400 in notes signed by the Publish
ers National Service bureau, ]. B.
Brinton. president. and F. B. Wood,
vice president. The bank has for
security of this loan STA 900 in far
mers notes of the character already
described. That this loan is exces.
sive in the extreme is apparent on
its face. In addition to this it is
our opinion that the collateral be-
hind it is entirely inadequate.
''This loan consists Of six notes
- rrinn frnrn "a SQQ ~ 41n 00O