The Glasgow courier. [volume] (Glasgow, Mont.) 1913-current, 1919-10-10

state banking board by resolution, or.
dered an immediate examination, un-
der the direction of the attorney gen.
eral, of a string Of eight banks, COM
monty known as "Nonpartisan League
banks" Part of the capital stock of
these banks was found in the Scam
Observation-Disclosures bank as collater-
al to loans made by the bank to the
league exchange, a million dollar cor
poration organized by A. c. Townley
and a recognized subsidiary corpora
ton of the National Nonpartisan
league.
Finding that Townley was unload
ing thousands of dollars worth of
post-dated checks of North Dakota
and Montana farmers on the banks of
North Dakota hundreds Of which were
never paid, after the duplicity of the
organization was discovered, the state
banking board declared all post-dated
checks without collateral value.
This order makes it necessary for
the National Nonpartisan league and
its subsidiary corporations to immed-
lately take all such collateral out of
the string of banks directly or indi-
rectly controlled by Townley and high
N. P. L. associates.
The attorney general t~elegraphed
all allied league banks tonight of the
action of the state banking board,
which includes Governor Frazier in it's
membership, and that he will be COM
PEELED to proceed against any bank
which carries such paper as Townley
and his associates unloaded on the ill.,
fated Observation-Disclosures.
Report in Detail.
The report of the bank examiners
to the attorney general discloses the
method of operating the heavier loans
that have been made by the bank to
the Consumers United Stores company
and the Nonpartisan league, the
league exchange and the Publishers
National Service Bureau. The banks
%loaning capacity, under the state law,
is limited to Is per cent of its cap
ital stock and surplus, which is $780,
900, so that the most that could be
legally loaned to any corporation or
individual is $4,000.
"The Consumers United Stores CON-
pany has a line of credit extended
through a system Of individual loans
to % individuals aggregating in all
$%170,000," says the official report.
"The individual paper is given on &C
c~ommodation purposes only and is Sc
cured by notes representing farmers
liabilities in sums of 500 to $500 to-
gether with post-dated checks of $32
and less, amounting in all to $780,
1854. 88.
"The security held by the bank as
collateral for it's loans made to the
National Nonpartisan league for
$148,824.26 consists principally of
post-dated checks in the sum of $274,-
864.01, in addition to this Consumers
United Stores company bonds in the
sum of $4,000 are being held as col
lateral. 1t is our opinion from an
examination of these bonds that they
represent notes more than the individ-
ual liability Of the Consumers United
Stores company, a corporation. The
bonds represent also the collateral
already discussed in the name of
farmers notes and constitute a col
lateral. In fact they amount to no
thing more than the signature of the
Consumers United Stores company to
the Indebtedness which they secure.
About the same condition is cited
with respect to the loan on publishers
national service bureau.
AS the report discloses $4,000 have
been advanced by the bank to finance
the various operations of the Non
partisan league. The closing of the