The Ordway new era., 1920-10-29

IUe monty WHICH lu' VI ANoith
Dakota would put there for his use;
then he would organize bank No.
and take 81 per cent of the stock and
get the money on II at bank No. !,
where state funds would also be de-
posted for him; than he would or
ganize bank No. 3 ard take 81 per
cent of the stock aid borrow money
on II at bank No. 2, where state funds
would also be deposited. This, OF
course, as Townley related, would
all be according to law" as the law
provided that state funds of tho Bank
of North Dakota could be deposited
! in private state banks-and as North
Dakota has bank guarantee law no
| bonds are required by the private
banks. 1t was simply a matter Of
time, and Townley easoned that he
could put one, two, three or four
banks in every county in the state
and control the banking business of
North Dakota-wi't state funds.
Would Then Own Banks.
And in time the banks would pay for
( themselves and TowLley would own
them. OF course, Tcwnley informed
me that he was willing to take in
associates in the 3eal and this OF
course was to be tho price for sail
/ ing" with him. But / didn't sail.
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,
/ nut 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
| Iirownley's Fargo bank and closed its
! doors-and hung out sign that It
was insolvent. This act of the bank
/ ing board. which believe was Illegal,
in method at lea9t, destroyed the
1 drcamer's entire financial air castle
and IL came tumbling to the ground.
! The raid on the Fargo bank was
caused by sor" spot left in the
bosom of j. j. Hactings who was
smarting under the discharge of his
former boss, but who did not dare to
come out In the open because of Grim
inal prosecutions threatened by
Townley for acts ii was claimed he
committed while financial secretary
/ But Hastings got tho information to
/ the banking board and they caught
Townley napping-with his bank eS-
amincr in Florida.
As soon ia the bark examiner got
/ back from Florida ne went to the su-
| prone court, elected by the Nonparti-
! san League, and got the banking
I board oustsd from the Fargo bank.
Later 1t we3 reopened and more state
funds put into 1t to give II now life.
And Townlcy's attorney today boasts
| that it is The only bank in history
that has been closed 10 insoIvcnt and
then opened up with an Increase in
deposits. When ! left the Bank of
North Dakota / had seen nearly a
half million dollars of public funds
go to the Townley bank in Fargo-so
4 l believe Mr.. Lemke told the truth
when he said its deposits Increased
when 1t we reopened.
TowuIey Collateral.
Prior to this time received from
the Fargo bank bundle of about a
quarter of 4. million dollars worth of
notes to be rediscourted. The "direc-
tor general had accepted the paper
and was about to transmit tho funds
to the Fargo bank. The notes to be
rediscounted were largely Townley
paper, post dated check loans, and
personal notes of William Lcmke,
Townley'E attorney and notes of
Townlev'G organizers and employees.
| wa8 fired to indignation. I YVES not
in authority but 1 declared that If
that raper came into the bank |
would walk out and make the deal
public This brought the financial
drcam0"e TO their sensos. Not that
they had cold feet. but they feared
then. as they do now, publicity And
the rotes were carried back to Fargo
In hand bag.
wrote my resignation to the gov
ernor. In fact. had resigned sew
eral times during the time was bank
examiner and manager of the Bank
of North Dakota, but each time Gov
cTnor Frazier mada 4 personal appeal
20 me-made IL pcrsOnal-and / al
ways yielded as | did this time. al
though | told him IN the letter his
director general wcs putting me up
against tho penitentiary But the
Governor always said | would not be
responsible for. what the director
general" did. At Cnother time, fol
lowing another questionable transac-
lion, | 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 IL 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. oponly said ! was
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 when / refused TO sign a check
and turned over to the League men.
was delighted whom my year WAS
up. I resigned and on the same day
left for Miami, Florida. l knew the