Jamestown weekly alert. [volume] (Jamestown, Stutsman County, D.T. [N.D.]) 1882-1925, 1919-10-23
BANK CASE GOES
BEFORE SU|PRE REME
COURT THURSDAY

ing Upon Banks Alleged
Insolvency.
Bismarck, N. D., Oct. 22.- (Spe-
ycialD The supreme court tomorrow
will receive from the attorney gem
.eral additional affidavits bearing up
on the alleged insolvency Of the
Observation-Disclosures bank Of Far
go, as requested by the court follow
Ing Its original hearing on the mat
ter last week.
At this hearing, William Lemke,
representing the bank whose doors
were closed by the state banking
board several weeks ago, presented
several affidavits in which an ac-
countant whom the bank had hired,
the state banking examiner and other
interested parties made oath that the
bank was solvent; that everything
was lovely. and that President Hagen
and Cashier Sherman were one of the
finest little pairs OF bankers in North
Dakota. 5 y.
Assistant. Attorney General Sheets,
representing the state for Attorney
General LANCER, objected to the SUI
preme courts attempting to deter
mine the question Of banks solvency
from these aftidavits. He insisted
that the state should have an oppor-
tunity to put the men who made these
afhdavits on the stand and to ques-
Stion them and cross examine them as
a means Of determining how they ar
rived at their conclusion.
Attorney William Lemke Of the
National Nonpartisan League, ap-
pearing for Hagen and Sherman and
the bank, objected to the taking Of
oral testimony, insisted that his af1
fidavits were all that the court need
consitler. and that it should decide
the case right on the bat on the
strength OF these af1davits; dissolve
the temporary receivership and re-
open the bank. 5535 81
Admits Legal Reserve
Less Than othing
The state won a partial victory in
the supreme courts order directing
that the state introduce further af-
fidavits to support the banking
boards contention that the scandi-
navian-American bank was iinsolvent;
that its legal reserve was shown by
Attorney Lemke's own afidavits and
admissions to be several hundred
thousand dollars worse than nothing;
that the bank had mad excess loans
on questionable security aggregating
nearly three-quarters of g million
dollars. and half q million Of this
amount had gone to the various
Townley enterprises. &
Other Violations. II 4
Attorney Lemke. for the league. id
mitted that the Brinton snewspaper
trust loans wers excessive. He Of.
fersd no apology, however for the
fact that the Brinton combine had
succeeded n borrowing from the lsa-
que bank at Fargo almost twice q,
much 6 It was legally enttled TO un-
der any legitimate interpretation Of
the banking laws of this stats aud
that these grossly s1csssivs loans
vere poorly secured. if3 secured atS
III. Hs8 said sthsy should % thrown
out, ana Lssmks further admitted
that thsEs we're other loans which;
should Is ditchsd. lIs also confess-s
edsthat Presid lent Hagen and Cashier
Sherman. who had borrowed llberal-5
" of the hank funds, had violated q
Of the state banking
board hut he: assured the court that
Ill the board could do II this M
stance 22was TO exact . small nne. He
showed there must have been some;
good found dalton for the banking
board attask son the sxc essive loans
g the 10 stues s. sors sanizati tions bscause,
jhsI ~ q. the Cons sumsrs United
storss CO. haid rsdncsd during the
recslvership p, its Ind edness to the
bank ~ taking mn g. 900 0fS orr Ssss
inalS Sloans az 4 90 ssss Sss!
The sta tSs thru assist Attorney
80 ~ IL ~