The Ward County independent. [volume] (Minot, Ward County, N.D.) 1902-1965, 1920-10-21
BY J. w. BRINTON,
Townley's Former Private Secretary
and Personal Representative, and
I. X. WATERS,
Former Bank Examiner and Manager
Of the Bank of North Dakota.

Ot Lne Ddnk OI NOTCh DdkOtd.
Copyrighted. All Rights Reserved.
In the first article, the writer told
you Of Townley, the dreamer, and his
dream of big state-owned bank, with
S2,0O0,0OO capital, and his dream of a
chain Of private banks controlled by
him to finance his various other pro-
motion schemes such as newspapers,
stores, finance companies, land promo.
tions and other undertakings that ap-
peal to him. This dream came to
him after he had organized a finance
company known as the League Ex-
change, newspaper company known
as the Northwestern Service Bureau
and later the Publishers National
Service Bureau, store company
known as the Consumers United
Stores Company, and after he
had bought or organized several pri-
vate banks. All these institutions
were organized principally with farm
ers' notes and the financial burden,
the demand for cash, the need of cash
to keep his various organizations
running was ever pressing and a
heavy strain upon the boss politician
and promoter.
1t is true that the original League
program" called for "rural credit
bank operated at COST" but at the
time Of starting his farmers league,
when the writer sat in many confer
ences with the political boss, he only
thought of state-owned bank as a
means Of making loans to farmers on
real estate. As we stumped the state
with other speakers we only explained
loans. But after the entire machinery
of the North Dakota government was
in his hands, after he had organized
the companies just mentioned, Town
ley, the dreamer and promoter, en-
larged upon his bank idea. He then
planned bank to do a general bank
ing business, accept deposits and
make loans to other banks upon notes
and other securities.
Although his real object did not be-
come known to his close associates
until the Bank of North Dakota was
going concern, it became known
soon thereafter. In 1917, through his
financial secretary, Mr.. Hastings, he
purchased the Scandinavian American
Bank at Fargo, a $4,000 institution,
and organized several other smaller
banks in other counties, and laid his
plans for chain of banks as soon as
the big state bank was created to
finance them. This new state bank
was created by the legislature in
January and February, 1919, and was
opened for business the following July
with capital bond issue of $4,000, 900
and with all the public funds of the
state-about 100000, ,OO0-placed on
deposit therein. It was controlled by
Townley and his attorney, Lemke,
through their personally selected Of
ficials. J. r. Waters, Townley's true
and trusted friend, was appointed
manager. This was after Mr. Waters
was placed in charge Of Townley's
sisal enterprise, and here again we
will let Mr.. Waters tell the story:
l was appointed manager OF the
Bank of North Dakota with the under
standing that l was to be its real
manager and director, but shortly
after had taken charge another man
was appointed over me as "director
general. This chanke was occasioned
for reasons which the reader can
grasp after I relate certain things
which took place in the institution
Townley expected me to "sail" with
him, and when he found that l was
opposed to his ideas of banking to
the point of disagreeing with him, he
put more trusted man in charge OF
the bank, over me, to make sure that
there would be no hitch in his plans.
He, nc doubt, thought that | would
stand hitched because of my connec-
tion with him in his sisal company
and would take chance with him for
consideration Events have proven
that the political boss made a mis-
take. He should never have had me
in the Bank Of North Dakota. 1t was
a mistake on his part.
AS soon as the bank was organized
and as soon as the millions came into
our possession, Townley's Fargo bank
commenced to make demands for de-
posits. 1t received with my sanction
deposit equal to its capital, but
had made up my mind to keep a close
watch over it's activities. About this
time Mr.. Townley came to me with
his chain bank scheme for my ap.
proval, and l will relate it to you as
Mr.. Townley explained it to me, ther
his close and intimate friends. l as:
sumo this, at least, for he had turned
over to me in trust his interest in 22,.
400 acres Of land amounting to over
100000 according to the papers
turned over with the trust.
I opposed Mr.. Townley's scheme.
told him frankly it would not stand
UP and that it would put him uE
against the penitentiary. In other
words, l balked. 1t was then that
no longer had control of the banks
affairs; it was turned over to the "di.
rector general" and I was only man.