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

SI&,Hnes. n under her direction
Ind by her it is taken from the
hank and placed under the con-
troll Of the debtors o%stensibIy for
the purpose Of collection, and not
until recently have wen the re-
ceipts previously mentioned been
given to the bank to show that
such certain specific collateral
had been SO removed. Mrs. Clay
ton is the only person who has
knowledge Of the amount of COL
Iaterdal on hand and it's correct
ness. She has her offices in the
rear Of the building and her fig
ures are taken by the officials
Of the bank as true and correct.
The collateral to the Consumers
store loan and TO the Nonpartisan
League loan Wqs not checked at the
time the bank went under the wire
for the State Guaranty board, nor
at three subsequent examinations
made thereafter by the state exam
iner's office. nor has it been checked
Ibis time. The task is entirely out
Of proportion to the amount of time
and assistance permitted in gather
ing the material for this report. It
is our opinion that this collateral
should be examined and verified and
We so recommend.
NATIONAL NoNPARTlsAN
SLEAGUE.
The National Nonpartisan League
line Of credit consists Of % individ-
ual notes ranging in denomination
lam $40 to $4,000 and aggregating
.a,S14S, S24.26. A consideration Of
@sT$f1aes of the makers Of these
acc hmodation notes will illustrate
that the same condition attends the
extension Of this line as has former
ly been explained in the line of cred
it extended to the Consumers Unit
Stores. TIE individual notes repre-
sent a single line and are so con
sidcred by the bank.
The security held by the bank as
collateral for it's loan made to the
National Nonpartisan League for
s14S.S24.26 consists principally of
pos,dated checks in the sum Of SEA-"
SG+.01. AS to the value of this class
OF collateral reference is here made
to the discussion and the opinion of the
same above, and which is now made
a part hereof. There are also 81
shares of the Peoples State Bank of
Hat,on bank stock with al estimated
market value of $115 each. amount
ing in total to s6.555 held by the bank
as security for this tinc of credit.
Discussion as, ~ the value Of this
collateral will be made hereafter. In
addition to this Consumers United
Stores company bonds in the SUM
Of 81, 900 is held as collateral. 1t is
our opinion from an examination
Of thGse bonds that they represent
nothing more than the individual la
bi!ity Of the Consumers United
stores company. a corporation. These
bonds represent the collateral al
ready discussed in the form OF
farmers notes as security for the
United Consumers line of credit and
| constitute a pyramiding of THAT COL
lateral. In fact they amount to
nothing more than the signature of
the Consumers Store to the indeb:-
edness which the::S secure.
L. r. Sherman is made the tru3-
tee by these bonds and they are by
Consumers United Stores company
admittedly issued for the sole and
'HhE oppose VI heel'''iS sOSS'i'@i lit
small n6ateral in the form of
fnr~G owned by the COM
phnv. while the bonds which repre-
sent that collateral arc scattered
for tho purpose Of obtaining crcdis.
To these bonds c~ertifcation Is made
BY p. r. Sherman that he holds for
each one. TO which tbs fertilization
is attached, one and one-half times
in farmers notes to guarantee rs
payment. The bond issued was or
%iginally made in two series. A. and
r., each consisting of $250.000 only
one Of which was issued. Some part
OF this issue has already been taken
up and cancelled.
In conclusion it is our opinion
that this line Of credit is almost
wholly unsecured. The only por-
ton having value. in u opin-
ion. beina tho Hatton Bank stock
on which at best the bank holds
only a second lien. and which
represents a class Of security Of
a very inferior quality.
THE LEAGUE ExcK9hGE. INC.
This loan consists of s66.1S2.21 and
comprises nine notes ranging from
s~:.l49.3, 10 $4,000 aggregating that
total. Tho security which the bank
holds for this advancement COM
pris"s farmers notes OF the kind pre-
viously described with a par value