The Monte Vista journal. (Monte Vista, Rio Grande County, Colo.) 1888-1921, 1920-10-30

IA soon ~ tho bank was organ.
iscd and az soon a. tho millions
came into our possession. Town.
lcy's Fargo bank commenced To
make demands for deposits. II re-
c"ivrd with my sanction u d-po.it
equal TO Its capital. but I had mad.
np my mind To keep clos. watch
over Its activities About this tim.
Mr.. To~nl-y cam. to me with his
chain bank scheme for my approx
nj. and I viii relate II to you ~ Mr.
Townicy explained II to me, then
his clos, and intimate friend. I
assume this, ut least. for he had
turned over to me In trust his In
tcrcst In :s.t00 acres Of land u
mounting to over 100000 accord
Ing to the papers turned over with
the trust
I opposed Mr.. Townlcy's scheme
I told him frankly II would not
stand up and that Il would put him
up against the penitcntiary. In
other words. I baked. II was then
that ! no longer had control Of the
banks affairs: II was turned over
to the director general and I was
only manager In name from that
time until I resigned and stepped
out. Here Is Townley's chain bank
scheme: He planned on organizin.
bank No. by taking 81 pcr cent
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 Dakota
would put there for his use; then
no would organize bank No. and
take 81 per cont OF the stock and
get the money on II at bank No. l.
where state funds would also be
deposited for him: then he would
organize bank No. and take 81
per cent OF the stock and borrow
money on II ut bank No. 2. where
state funds would also be deposited.
This, Of course. as Townley re-
lated, would all be according to
law" as the law provided that stat.
funds OF the Bank OF North Dako-
tn could be deposited In private
state banks-and as North Dakota
has a bank guarantee law no bonds
are required by the private banks.
II was simply a matter Of time, and
Towniey 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 in
formed me that he was willing to
take In associates In the deal ana
this of course was to be the price
for Sailing" with him. But
didn't sail. l kept my eyes open
and watched developments, while
Townley made his arrangements
with the director general" OF the
bank.
Townley then went out over the
state and organized several banks.
but while he was right in the mid
die OF his financial dream, the
state banking board, while the
bank examiner was examining
Townley's sisal plantation In Flori-
da. took possession OF Towniey's
Fargo bank and closed its doors
and hung out sign that 1t was in
solvent This act OF the banking
hoard which l believe was illegal,
in method at least, destroyed the
dreamer's entire financial air castle
and II came tumbling to the
ground. The raid on the Fargo
hank was caused by tho sore spot
left in the bosom Of J. j. Hastings
WIN was smarting under the dis
charge of his former boss but who
did not dare to come out In the
omen because of criminal prosecu-
t,ons threatened by Townley for
acts II was claimed he committed
while financial secretary. But Hast
,nss got tho information to the
banking board and they caught
Townley napping-with his bank
examiner in Florida.
Al soon as the bank examiner got
so,t from Florida he went to the