The producers news. [volume] (Plentywood, Mont.) 1918-1937, 1919-10-31

nevertheless, the action as taken by
the majority Of the state banking
board was illgal and unauthorized.
Even though it should be conceded
that the board did possess the power
to close the bank and appoint a re-
ceiver, nevertheless, the action as
taken by the majority of the board
was unreasonable, arbitrary, unjust
and cannot be upheld"
ACTION IS CONDEMNED
After commenting on the fact that
LANCER and Hall had sent state ex-
aminer Lofthus out of the state, the
opinoion said:
"The action of the respondents ir-
respective of the question of intent,
accompanied with widespread pub
licity and specific notice to other
banks Of this state and their action
could not do otherwise than occasion
alarm and doubts in the minds of the
public and Of depositors in the sound
ness Of the banking institutions af-
fected, as we'll as in all banking in
stitutions in the state. The acts of
the respondent as disclosed in this
record jcopardized the solvency of
the relator bank as we'll as other
banks.
'"There is no other manner in which
this procedure can be characterized
other than arbitrary and contrary to
both the spirit and the letter of the
law. It both merits and receives the
condemnation of this court"
The court went into the records to
show that the bank had failed to
comply with any of the specific re-
quirements of insolvency. and added:
ACTION HELD ILLEGAL
Illegal action of LANCER and Hall is
shown by the court in those two Of
ficial's attitude toward the reserve
of the Fargo bank. The court pointed
out that the law demands that 80
days notice shall be given to a bank
if it's reserve is found insufficient and
that failure to raise the reserve after
due notice is punishable by a fine
only, and not by closing Of the bank.
No notice or order had been given the
bank the court declared.
Another rebuke for LANCER and
Hall was contained in the courts
opinion relating to their statements
that the list of loans in the bank
aggregated $74O,000 which they as
sumed to be secured by insufficient
and improper collateral consisting
largely of farmers notes and post
dated checks. "The contention is
made that a post dated check is not
collateral, and that farmers notes
should not be estimated at over SO
per cent Of their value. To support a
conclusion in this regard they have
simply hearsay statement that
large amount of such farmers paper
did not pay out, or paid up poorly.
This hearsay statement contained in
the record is denied by the persons
whom they state, were the authors
thereof
FARMERS PAPER GOOD
"There is much evidence in the re-
cord as well as in the report Of the
state examiner that this farmers
paper is good collateral; that there
is a good margin of safety on the Sc
curity offered, and that uniformly it
has paid out well in from rs per cent
to IS per cent. There is neither
reason nor justification for declaring
farmrs' paper to be worth only so
per cent of its value. There is no
more reason for declaring farmers
paper to be of certain percentage
of value than there is for declaring
lawyers, doctors or merchants paper
to be Of certain percentage value"
The court found post dated checks
acceptable and good security, upset.
TIM, LanGers' contention.