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

"~S~A~AANANo
cred closed and placed in the
anking law are also charged
'esolution.
on obtained from Bismarck,
and Sec. of State Thos. Hall,
6 board, voted for the resolu-
sed. Governor Frazier, the
oted against closing the bank.
that much of it has been taken out of
1.-The bank and is in the hands of the
! Consumers, Store company, which A.
i G. Townley, president Of the Nonpar-
tisan league, is now in the field per-
sonally promoting. :
i How Paper is Handed
/ '"The method by which all Of this
1 collateral (post-dated checks, notes.
1 etc, given by farmers to the Non
4 partisan league and it's subsidiary cor
porations) is handled, requires COM
Iment," reads the report. "The collat-
eral held by the bank for the Consum-
ISers' Stores company loan and for the
National Nonpartisan league is in the
l.control and the custody of one Mrs.
Emma Clayton, who is in the employ
jsof the two debtors mentioned herein.
tThis collateral, while kept in the valut
I sof The bank, is accessible to her at all
times and under her direction, and by
! her it lis taken from the bank and
placed under the control Of the debtors
ostensibly for the purpose Of collec-
ton, and not9until recently have even
1.-THE receipts been given to the bank
] to show that such specific collateral
lhad been so removed. Mrs. Clayton is
lthe only person who has knowledge of
| the amount of collateral on hand and
Kits correctness She his her Offices in
4 the rear Of The building and her fig
4 ures are taken sby the officials of the
bank as true and correct"
1921, ,435.55 OF Notes Given Back
| ? The report discloses that of 1884,
S64.S8 Of paper Of the Consumers
Stores company, given as collateral, +,
S291,435.55 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 by officers and employees of the
Consumers United Stores company.
@''It 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 hypothe-
Gated for the loans under discussion.
Difficulty Lies With the Loans
"The general condition Of the bank
shows that the difficulty hes almost
totally with the loans. This survey
clearly displays that fact that the
bank has been for some time without
any competent credit man to deal with
this phase of the business. It further
shows that the condition of the bank
has been in the last few years, in this
respect. continually growing worse"
says Mr.. Sheets in his report, which is
supported by two deputy bank exam
iners, P. E. Halldorson and 1ngomen.
Bank Cannot Handle Itself
''The bank is heavily overloaded at
the present time by reason Of the ex
cess liabilities and extensions of ere
dts" continues the report. 1T is not
in position today to properly handle
itself. The reserve is way below the
requirements of law, and if figured in
strict accordance with the laWo at the
time of this report, would be several
hundred thousand dollars less than the
reserve. The bank today is unable to
properly handle itself because of these
excessive lines of credit and injudic-
ious extension of loans, and presents
a vast unwieldly financial monstrosity
unable to take care of it's obligations
Responsibility is not Placed
t'Beyonl any question Of a doubt:
from the condition above described
and for the reasons contained IN the
report, we are Of the opinion that the
Scandinavian American bank of Fargo
is insolvent," concludes the report.
"We do not attempt at this time to
place. the entire responsibility for this
condition The condition, however, is
to warrant other conclusions. !
We do not believe that the protection
to which the depositors Of the bank are
entitled could justify continuation
of business. We are thoroughly con-
vinced that the only way in which the
vast interests Of the bank and it's pa
irons may be served is by closing its
doors from further business with the
public until these Objectionable condi-
tions herein mentioned have been rec
titled
.'Under the present management |
and under the present conditions no
other means is available in our opin-
ion at the present time, and our rec
concentrations are made in accordance
Herewith.