Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1919-11-18

IL A1EA 16SGGb
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pany to take care df the publication
md tho following interrogatories and
answers took place. .
O.. AS a matter Of fact In the
fall of 1915 you had q pretty
good idea?
A We were successful In this 5.
measure that we had half BUSH
Ell basket Of post-dated checks,
noneAof which had been paid and
which nobody said would be paid.
~, O. So thatswhen those gentle
men started In in the fall OF 1915
they knew they had this half
bushel back Of them?
"A. They weren't good enough
81 any responsible publishing
house would look upon them as
security.
On May 1, 1918, Townley was undo,
oath, again, and this time instead O
that thousands Of checks wer'
no good and that he had a half bush
ell basket Of them which nobody, no
even the mel who signed them, sait
would be paid.
Many Checks Worthless.
During the course Of an cxanaina'
ton before the committee on military
affairs of the United States senate
Reed, one Of the commit
tee, asked him the following qucs,
tons and received the following an
sWerS:
Senator Reed: What is the to-
tai income from all states in the
way of membership dues?
Townley: The memberships
are somewhere around 100000,
and each member pays 50.
Senator Reed: That brings it
up to approximately $1,600,000 a
year?
paid. I would suggest in this
connection that the membership
pay these dues by the use of
post-dated checks and m
times they are not always cashed.
we are not always able to cash
Senator Reed: Do you mean
that there is a d~efalcation?
Townley: Quite a large
amount.
Senator Reed: Can. you give
US an idea of what the income is.
We do not want to know how
many defaults, OF how many bad
checks there are, but tell us what
the income is.
Townley: You want to ascer-
tain the ~disloyalty of the mem
bership?
Senator Reed: Not in order to
ascertain the disloyalty Of the
membership but to ascertain how
many thousands of dollars these
officers who are charged with
disloyalty have to handle.
Townley: Probably rs to 80
per cent is not paid.
Organizers have repeatedly. told Us
hat approximately two-fifths Of the
paid their membership dues
n cash. Their instructions from
rownley are to get the cash If pos
'ible. Approximately so per cent is
paid in post-dated checks, etc. II
statement under oath is
rue that from twenty-five to thirty
Der cent of the total memberships are
lot paid. then you have the ratio OF
twenty-five or thirty to sixty, which
means that approximately one-half OF
per cent Of the post-dated
are not paid, and that is exact
y my contention.
State Bank Involved
My friends, when Townley, through
he Observation-Disclosures bank of
fargo attempts to make loans, re-dis-
cunt paper, or do anything else
which would obligate the State Bank
Il North Dakota to the extent of
hundreds of thousands Of dollars, CIV
ng the Bank Of North Dakota collat-
raj in the nature Of post-dated
checks. then ! would recreant in my
i11tvASf 1MAiA mt n~Nfneatr -.
On the 2sth day Sof August, 1919,
ne Observation-Disclosures bank Of
fargo sent $333,460.S3 of this kind
# security to the Bank Of North Da-
lota in exchange for money raised
~ the taxpayers of this state, the
money mind you, that your school
.ity. town and village treasurers had
deposited there-the' school money OF
state of North Dakota and ali
'ther public funds.
Can All Do 1t?
My fellow citizens, under the de,
cision OF the supreme court whict
holds p~ost-dated checks as ~"excellen,
security" you need no longer EN-.
harrass banks by offering to give then
any mortgages on real estate prop
erty. Under the law, a bank cam
take any of them except to secur,
a debt. etc. But whenever you wan
you can easily borrow a few
thousand dollars from the banker ant
give him pose-datcd checks dated
three. four or five years ahead. I
you can't get all the money you wan
from one bank that way, there ar,
some six or seven hundred stat,
banks and you can borrow up to I'll,
limit IN each one OF them.
You can do just exactly VIVA
Towntey was going to do when h,
started out TO organize two hundre,
banks some four months ago. Town
ley figured big business sc damagin;
to the common ordinary folks II
North Dakota that he and Box, Has,
ings, Lesueur, Brinton. Leslie Simp
SON OF this county, Heck of Wilton
Bowen, Walter Thomas Mills of Ney
Zealand. Currie of Colorado, Day o
Spokane. Pike of st. Paul, Gillen o
Jersey City and Van Lear Of Mime
apolIs. would have to protect you.
Protection Costly.
OF course, protection costs money
BY paying Townley and the rest o
the protectors one hundred dollars
they would sell you threshing ma
chimes, .ineoleum, cheese, desks an,
silk at ten per cent above cost
but they didn't tell you when 70,
paid the hundred dollars that the
were going to buy the stuff throug,
the Cooper Brokerage company, an
that the cost" would be whateve
the subsidiary concern Of their
charsed;the Consumers United Store
company for it.
On condition that you paid all tn
way from $11o to $40 per share 70
bank stock. Townley and those pre-
tectors were going to- protect 70
against your banker friends--but the
didn't tell you that after they "a