The Ward County independent. [volume] (Minot, Ward County, N.D.) 1902-1965, 1920-10-21
A. c. T0WNLEY, DREAMER,
PROMOTER, ,B0SSPOE% %lClAN
Townley's Bank Promotions anu
Bank of North Dakota

resigned and stepped out. Here is
Townley's chain bank scheme: He
planned on organizing bank No. l by
taking 51% of the stock and getting
the money on the stock in the Fargo
bank, his parent bank taking the
money which the Bank of North Da-
kota would put there for his use; then
he would organize bank No. 2 and
take $40 of the stock and get the
money on it at bank No. /, where
state funds would also be deposited
for him; then he would organize bank
No. 8 and take $40 of the stock and
borrow money on it at bank No. 2,
where state funds would also be de-
posted. This, of course, as Townley
related, "would all be according to
law" as the law provided that state
funds of the Bank Of North Dakota
could be deposited in private state
banks-and as North Dakota has a
bank guarantee law no bonds are re-
quired by the private banks. l was
simply matter Of time and Townley
reasoned that he could put one, two,
three or four banks in every county
in the state and control the banking
business of North Dakota-With state
funds. And in time the banks would
pay for themselves and Townley
would own them. OF course, Townley
Informed me that he was willing to
take in associates in the deal and this
of course was to be the price for "sail-
ing" with him. But | didn'r sail. |
kept NY eyes open and watched de-
velopments, while Townley made his
arrangements with the "director gem
eral" of the bank.
Townley then went out over the
state and organized several banks,
but while he was right in the middle
of his financial dream, the state bank
ing board, while the bank examiner
was examining Townley's sisal plan
tation in Florida, took possession Of
Townley's Fargo bank and closed it's
doors-and hung cut sign that it
was insolvent. This act Of the bank,
ing board, which I believe was illegal,
lin method at least, destroyed the
dreamer's entire financial air castle
and it came tumbling to the ground.
The raid on the Fargo bank was
caused by the sore spot left in the
bosom of J. ]. Hastings who was
smarting under the discharge of his
former boss, but who did not dare to
come out in the open because of crimi-
nal prosecutions threatened by Town
ley for acts it was claimed he COM
mitted while financial secretary. But
Hastings got the information to the
banking board and they caught Town
ley napping-with his bank examiner
in Florida.
AS soon as the bank examiner got
back from Florida he went to the su-
preme court, elected by the Nonpar-
tisan League, and got the banking
board ousted from the Fargo bank.
Later it was reopened and more state
funds put into it to give it new life.
And Townley's attorney today boasts
that it is the only bank in history that
has been closed as insOlvent and then
opened up with an increase in depos-
it's. When l left the Bank of North
Dakota had seen nearly half mill
lion dollars of public funds go to the
Townley bank in Fargo-so believe
Mr.. Lemke told the truth when he said
it's deposits increased when it was re-
opened
Prior to this time received from
the Fargo bank bundle of about
quarter of million dollars worth of
notes to be rediscounted. The "direc-
tor general" had accepted the paper
and was about to transmit the funds
to the Fargo bank. The notes to be
rediscounted were largely Townley
paper, post-dated check loans, and
personal notes of William Lemke,
Townley's attorney, and notes of
Townley's organizers and employees.
l was fired to indignation. l was not
in authority but declared that if that
paper came into the bank l would
walk out and make the deal public.
This brought the financial dreamers
to their senses. Not that they had
cold feet, but they feared then, as they
carried back to Fargo in a hand bag,
carried by, to Fargo in a
hand bag.
/ wrote my resignat tion. to the gov
ernor. In fact, I had resigned sew
eral times during the time was bank
examiner and manager of the Bank
of North Dakota, but each time Gov
ernor Frazier made a personal appeal
|, to me-made it personal-and l al
ways yielded as l did this time, al
though l told him in the letter his
"director general was putting me up
against the penitentiary. But the
Governor always said l would not be
responsible for what the "director
general" did. At another time, fol-
lowing another questionable transac-
tion, wrote another resignation
charging crime in the institution. and
in this case the Governor tore the let
ter up and again in his big, easy-go-
ing way, made it personal matter
. and got me to agree to remain until
April, 1920, the end of my first year.
BY this time the political boss had
grown distrustful of me and his at
torney Lemke, openly said I was a
damn fool. l could mention dozens
of transactions committed in the Bank
of North Dakota that have sent men
to the penitentiary in other states /;
currency was taken out of the bank
(. ~, 1on&