The Glasgow courier. [volume] (Glasgow, Mont.) 1913-current, 1920-11-12


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-
pealed to him. This dream came to
him after he had organizer a finance
company known as the League EX-
change, a newspaper company known
as the Northwestern Service Bureau
and later the Publishers National
Service Bureau, a 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.
It is true that the original League
program" called for a 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 a 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
the need of cheaper money for farm
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 a 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
a going concern, it became known
oon 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 countieh, and laid his
plans for a chain of banks as soon as
the big state bank was created TO
finance them. hTe new state bank
was created by the legislature in
January and February, 1919, and was
opened for business the following July
with a capital bond issue of $4,000, OOO
and with all the public funds of the
state = about 100000 - placed on
deposit therein. 1t 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:
was appointed manager of the
Bank of North Dakota with the under
standing that I was to be it's real
manager and director, but shortly
after l had taken charge another man
was appointed over me as director
general" This change 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 I was
opposed to his ideas of banking tc
the point of disagreeing with him, he
put a more trusted mar in charge OF
the bank, over me, to make sure that
there would be no hitch in his plans
He, no doubt thought that I wor,lc
stand hitched because of my connec.
ton with him in his sisal compan,
and would take a chance with him fol-
consideration. Events have proven
mat the political boss made a mis-
take. He should never have had m,
in the Bank of North Dakota. 1t wa,
a mistake on his part.
AS soon as the bank was organize;
and as soon as the millions came int,
our possession, Townley's Fargo banl
commenced to make demands for de
posts. 1t received with my sanction
a deposit equal to its capital, but
had made up my mind to keep a clos.
watch over it's activities. About thi,
time Mr.. Townley came to me witt
his chain bank scheme for my an,
proval, and l will relate it to YOU a,
-.r. Townley explained it to me, Their
his close and intimate friend. | as.
sumo this, at least, for he had turned
ever to me in trust his interest in o..
400 acres of land amounting to owe,
100000 according to the paper:
turned over with the trust.
1 opposed Mr.. Townley's scheme.
Seld him frankly it would not stanc
up and that it would put him ur
against the penitentiary. In othe,
words, I baked. 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 mn.
ger in name from that time until
RESIGNED and Sannod ont uon :.