The producers news. [volume] (Plentywood, Mont.) 1918-1937, 1919-10-10
LANCER AND HALL DIRECT FINANCIAL
BLOW AT FARMER MOVEMENT

and Thomas Allan Box, Nonpartisan
League financiers, and of J. r. Wat
ers.
Loan of $4,000 to H. f. Knaack,
associate of H. D. Haggerty, who
died year ago without assets of any
kind.
Those in a position to point out
that the facts regarding these loans.
arc as follows:
Stores Note Is Only $4,000
There is no loan of $4,000 to the,
Consumers United Stores company.
That company's loan is for $4,000.
There ars notes of $500 and $4,000
of individual farmers, all Of which, as,
well as the company's note, are backed
BY farmers notes in, the proportion
OF one and half dollars in notes to one
dollar loaned. The majority of these
notes do not fall due until October 15,
and the notes to the bank not until
December l. The notes, however, are
already being collected, some $4,000
in cash being already in hand, in ad-
vance of the date due.
League Notes Well Secured
The loans to the National Nonpar-
tlsan League are not to the League,
bI. % il.>!. ,i....!s, connected with the
League, and not in larger amounts
than $1,000 or $4,000 to each :indl-
vidual. The loans are all secured for
the most part by farmers post-datei
checks, for SIG each, to the Nonpar-
tisan League, for membership, though
there are some farmers notes. Loans
have been made on such checks every
year, without the loss of single pen
ny to any OF the many banks which
have, handled them. The checks fall
due in the autumn, and the notes are
paid off. Year by year, 80 per cent
of the face value of these checks has
been collected. The amount owing
the bank on such loans is secured by
farmers collateral in the proportion
of two to one.
The largest loan in connection with
the League Exchange is $4,000. These
'Serlou8 tioAns Am nualt4 9u- tte.e e7lotes
OF farmers, and ire secured not only
Of farmers, and are secured not only
by the farmers credits, but: also by
bank stock in various farmers banks
as collateral. The various individual
as collateral. The various individual
notes are also indorsed by the League
Exchange.
Collateral Equals. Two to One
The loans to the Publishers Ma
tional Service Bureau are the notes
Of farmers, ranging usually between
$40 and 500 in amount, given by
the most prosperous farmers in the
various counties, as rule, for sub
scription to the farmers weeklies in
the various counties.
This collateral also is given in pro-
portion of two to one.
While technically LANCER contends
that these loans violate the rules OF
the banking board as in excessive
amounts, it is pointed out that so far
from being bad loans, they are the
best loans that any bank can make.
Only three loans are cited as "bad:"
One is the sisal trust note, which is
said TO DC amply secured.
Another is the Haggerty loan. This
is secured by a first trust mortgage
on 5000 acres Of hardwood timber
land in northern Michigan. Apprais-
ais of the land differ. Some place it
is worth at least three times the
amount Of the mortgage. The loan is
in the process of collection, and the
bank expects to realize the face value
of the obligation.
The H. E. knaack loan was made
to a man, now deceased, who was
vice president of the Hartley, Iowa,
Savings bank, with purchase agree
ment with the bank. The estate is in
probate, but a decision is expected
October 13. and in this case also the
bank expects to collect every cent.
Bank Declared to Be Solvent
But it is pointed out that even if
all OF these three loans were alto
gether bad, still the bank would not
be insolvent. The loss might reduce
dividends to stockholders, but it would
not in the least involve the banks
credit.
"Thcre was regular examination
Of the bank only ten days ago." said
Acting Bank Examiner Siomingso1
Thursday. "This examination showed
some paper that ought to be taken up
at once and the bank was requesteu
to attend to the matter. This was not
an unusual situation. All banks are
given reasonable time to take up
paper the department deems not en-
tirely sound, and such paper is fire.
ountly found.
$50 l thought Of course the Scan
dinavian- American was taking care of
this and was giving them a reason
able time to clean up. The action of
the board, over the head Of the ex-
aniner's Office, and in the examiners
absence was unexpected and came like
d bolt out of the sky this morning."
Eo.:srve Exceeds Requirement
Continued on Page Eight)