The Glasgow courier. [volume] (Glasgow, Mont.) 1913-current, 1920-11-12
ARTHUR E. TOWNLEY,
DREAMER, PROMOTER
and BOSS POLITICIAN

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. 1t was
simply a 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 l didn't sail. l
kept my eyes open and watched de-
velopments, while Townley made his
arrangements with the director gen.
eral' of the bank.
Townley then went out over the
| state and organized several banks,
but while he vas 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 its
doors-and hung out a sign that it
was insolvent. This act of the bank
ing board, which I believe was illegal,
in 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. 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 Nonparti-
san 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
7 And Townley's attorney today boast:
} that it is the only bank in history tina
has been closed as insolvent and ther
opened up with an increase in depos,
its. When | left the Bank of NORTH
Dakota I had seen nearly a half mil.
lion dollars of public funds go to the
Townley bank in Fargo-si l believe
Mr.. Lemke told the truth when he said
its deposits increased when it was re.
opened.
Prior to this time l received from
the Fargo bank a bundle of about 6
quarter of a million dollars worth oil
notes to be rediscounted. The "direc.
tor general had accepted the paper
and was about to transmit the bund.
to the Fargo bank. The notes to b
r~ediscounted were largely Townle,
paper, post-dated check loans, ant
personal notes of William Lemke
l Townley's attorney, and notes O
Townley's organizers and employees
. | was fired to Indignation. l was no
in authority but l declared that if tina
paper came into the bank l woul,
walk out and make the deal public
This brought the financial dreamer
to their senses. Not that they ha,
cold feet, but they feared then, as the,
!. carried back to Fargo in a hand BAG
a carried by -- to Fargo in a han,
bag.
l wrote my resignation to the gov
/ ernor. In fact, l had resigned sew
eral times during the time | was ban
examiner and manager of the Ban
OF North Dakota, but each time Gov
ernor Frazier made a personal appea
to me-made it personal-and I al
d ways yielded as l did at this time, al
o though l told him in the letter hi
k director general was putting me u
against the pe~nitenitary. But tn
n Governor always said l would not b
responsible for what the .directo
e general" did. At another time, fol
S lowing another questionable transac
h alton, l wrote another resignatio,
charging crime in the institution an
S in this case the Governor tore the let
ter up and again in his big, easy-go
: ing way, made it a personal matte
d and got me to agree to remain unit
April, 1920, the end of my first yea,
r By this time the political boss ha
grown d~istrustful of me and his at
torney, Lemke, openly said l was
l damn fool. l could mention dozen
of transactions committed in the Ban
OF North Dakota that have sent me
r to the penitentiary in other states
| currency was taken out of the ban