The weekly times-record. (Valley City, N.D.) 1912-1922, 1919-10-09
Depositors are Protected

/ ~ ry
Depositors are protected against
the possibility of loss through the
state guaranty Of deposits act. II. j
Hagan, president of the bank, is
chairman Of the guaranty fund COM
mission, being appointed by Governor
Frazier.
P. E. Halldorson, deputy bank ex-
aminer, was appointed Stemporary2r 2re-
ceiver, and is now in charge Of the
bank. sS
The banks association with the
Nonpartisan League, for which it has
acted in a financial capacity for about
two years, is largely responsible for
Thursdays action, according to the
official report of the banks condition.
A. L. Sheets, assistant attorney gen
eral, and two deputy bank examiners,
who have been in the bank since last
Saturday afternoon, placed before the
banking board the information on
which Thursdays action was based.
The step was brought about through
the activity of Atty. Gen. William
Langer, who last week obtained from
the banking board blanket aut thority
to examine any and all state banks
or associations in Fargo. NJ rs
In his report to the banking board,
Mr. Sheets terms the hank. & s a vast
[unWieldly financial monstrocity un-
able to take care Of it's obligations"
Excessive Loans Listed -
Conditions that have contributed to
the alleged insolvency Of the bank, as
recited in the report of the assistant
attorney general and the bank exam
iners, include, among others:
Loans of $4,000 to the Consumers
United Stores company.
Loans Of $148 8,824.26 to the National
'Nonpartisan League.
I Loans Of $66;182.28 to the League
Exchange. ,
ers' National Service Bureau.
T Loan of $12, 900 to the United States
Sisal Trust, on the notes of j. r. Wat
ers, former bank examiner, and man
ager of the Bank of North Dakota.
loans of $47,088 to H. D. Haggerty,
former associate of John Hastings and
Thomas Allan Box, Nonpartisan
League financiers, and Of j. r. Waters
Loan Of $23 900 to H. E. Knack, as
sociate of H. D. Haggerty, who died a
year ago without assets of any kind
1874, ,104.82 In Excess Loans
Excess loans-that is, loans made
to companies, and to individuals, in
excess of the legal limit of loans that
may be made by the bank on the basis
of it's $4,000 capital and $4,000 sur
plus-are placed in the examination
report at $734, ,194.82.
The excess loans include, in addi-
ton to those listed. i Us
above; individual loans to officers and
directors Of the Scandinavian Amer
ican bank.
'The above represents the excess
loans carried by the Bank and con-
stitute more than 60 per cent Of the
total loans. Their general character
is extremely unsatisfactory. The se-
curity in almost every case is entirely
inadequate and in most instances con-
stitutes second liens on the property
held as collateral. Thelack Of judg-
ment and unwarranted optimism is
responsible for the, extension of Gre
dit displayed by the list Of 20 excess
loans which appears in each instance
to be increasing rather than decreas-
ing. In every case neither the fnan-
cial standing Of the makers nor the
collateral held by the bank for the
loans justifies the credit extended"
Collateral Declared Valueless
Several hundred thousands of dol !
lars worth of post-dated checks and
past-due notes, given as collateral by
the Consumers Stores company, the
National Nonpartisan League and the !.
Publishers National Service Bureau, :
are held in the report to be Of no
value as collateral
Leagues Agent Controls Paper |
A further startling revelation in the
report is that thousands and thous-
ands of dollars of collateral, such as
post-dated checks, notes, cts, given to
the Nonpartisan League and the Con- !,
Store company, are not, even
controlled by the bank, but are in
charge Of woman in the employ of
the league and the Consumers Store
OF the collateral that is supposed to
be in the bank, supporting loans to the
Consumers Store company, the report
by the assistant attorney general and
The deputy bank examiners discloses