The Ward County independent. [volume] (Minot, Ward County, N.D.) 1902-1965, 1919-10-02

League Agent COulTOlS dpSI.
A further startling revelation in the
report is that thousands and thousands
of dollars of collateral, such as post
dated checks. notes, etc, given to the
Nonpartisan League and the Consum- |
ers' Store company, are not even con-
trolled by the bank, but are in charge
of woman in the employ of the
league and the Consumers Store COM
pany.
Of the collateral that is supposed
to be in the bank. supporting loans toI
the Consumers Store company, the re-
port BY the assistant attorney general
and the deputy bank examiners dis
closes that much of it has been taken
out of the bank and is in the hands
of the Consumers Store company,
which A. C. Townley, president of the
Nonpartisan league, is now in the field
personally promoting.
How Paper is Handled.
'The method by which all of this
collateral {post-dated checks, notes,
etc, given by farmers to the Nonpar-
tisan league and it's subsidiary corpor-
ations) is handled, requires comment"
reads the report. "The collateral held
by the bank for the Consumers Stores
company loan and for the National
Nonpartisan league is in the control
and custody of one Mr.. Emma Clay
ton, who is in the employ of the two
debtors mentioned herein. This collat-
oral, while kent in the vault of the
bank. is accessible to her at all tines
and under hoy direction, and hv her
it is taken from the bank and placed
under tha control of the debtors os
tensibly for the purpose of collection.
and not until recently have even the
raceints been given to the bank to
show that such specific collateral has
been so removed. Mrs Clayton is the
only person who has knowledge of the
amount of collateral on hand and it's
correctness. She has her offices in the
rear Of the building and her figures
are taken by the officials of the bank
as true and correct"
1921, 1855 of Notes Given Back.
The report discloses that of S554.--
364S8 of paper of the Consumers
Stores company, given as collateral,
1921 1855 are not now in the bank.
but in the hands of the Consumers
United Stores company for purposes
of collection.
Nothing But Receipts.
Cali that the bank has to show for
the amount of this collateral out for
collection is receipts for the same
signed bv officers and employees of the
Consumers United Stores company.
cit is estimated that the farmers
notes held as collateral are not worth
in excess of SO per cent of their par
value. This is liberal statement as
to this class of collateral hypothecatod
for the loans under discussion"
Difficulty Lies With the Loans.
"The general condition of the bank
shows that the difficulty lies almost
totally with the loans. This SURVEY
clearly displays the fact that the bank
has been for some time without any
competent credit man to deal with this
phase of the business. 1t further
shows that the condition of the bank
has been in the last few wears. in this
respect. continually growing worse,
/ saws Mr.. Sheets in his report. which
I is supported by two deputy bank ex-
! aminers P. F. Halldorson and lingo
men.
! Bank Cannot Handle Itself.
"The bank is heavily overloaded at
| the present time by reason OF the eX-
cess liabilities and extensions Of cred,
/ it's" continues the report. ut is not
in position today to properly handle
itself. The reserve is wav below tn
requirements of law, and if figured n
| strict accordance with the law at the
! time of this report. would be severa
hundred thousand dollars less than the
reserve. The bank today is unable tt
properly handle itself because of these
excessive lines of credit and injudlc
ious extension Of loans, and presents
vast unwieldy financial monstrosit!
unable to take care of it's obligations.
! Responsibility is Not Placed.
Il "Beyond any question of a doubt
/ and for the reasons contained IN tn
!, report, we are Of the opinion that tn
i Scandinavian American bank of Far
i 90 is insolvent," concludes the report
eve do not attempt at this time t.
place the entire responsibility for thu
condition. The condition, however, /
too apparent to warrant other conclus
ions. We do not believe that the pro
lection to which the deposltors OF tn
bank are entitled could Justify con
tinuation of business. We are thor
oughlv convinced that the only way !,
which the vast interests of the ban
and it's patrons may pc served IS "
closing it's doors from further bushes
with the public until these objection
able conditions herein mentioned hav
been rectified.
"Under the present management
and under the present conditions n
other means is available in our oplr
ion at the present time, and our, rec
concentrations are made in accordanc
Herewith"
LANCER Advises Allied Banks to Guar
Themselves.
I Bismarck, N. D., Oct. 2:-Attorne
General William LANCER this afternoo
addressed the following telegram to
group Of banks in the state which al
associated with the Scandinavian An
erican bank of Fargo:
"The banking board this mornin
closed the Scandinavian America
bank at Fargo on the ground of il
J solvency and for violation Of stat
laws. was instructed by the banl
ing board to notify all allied bank
of this action so that you may tax
all possible steps to protect yoursee