The Ordway new era., 1920-10-29
Dreamer, Promoter,
ARTICLE ".

dream OF big StGte-oWned Dank,
with S2,000,000 capital. and his
dream of a chain of private banks
controlled by him to finance his va
rious other promotion schemes such
as newspapers, stores, finance COM
panies. land promotions and other
undertakings that appealed to him.
This dream came to him after he had
organized finance company known
as the League Exchange, newspap-
er company known as the Northwes-
tern Service Bureau and later the
Publishers National Service Bureau,
store company known as the Con-
sumers United Stores Company, and
after he had bought or organized sew
eral private banks. All these insti-
tutions were organized principally
with farmers notes and the financial
burden. the demand for cash, the
need of cash to keep his various or
ganizations running was ever press
ing and a heavy strain upon the boss
politician and promoter.
1t is true that tho original League
program" called for n rural credit
bank opernted at cost" but at the
time of starting his farmers league,
when the writer sat In many confer
cnces with the political boss, he only
thought of n state-owned bank a.
means OF making loans to farmers on
real estate. AS VIC stumped the state
with other speakers we only explain
ed the need of cheaper money for
farm loans. But after the entire ms
chincry of the North Dakota govern
ment was in his hands, after he had
organized the companies just men
| toned, Townley, the dreamer and
promoter. enlarged upon the bank
idea. He then planned bank to do
T. general banking business, accept
deposits and make loans to other
banks upon notes and other securi-
ties
Gets Hold OF Money.
Although his real object did not
become known to his close associates
until the bank of North Dakota was
a going concern, 1t became known
soon thereafter In 1917, through
his financial secretary. Mr.. Hastings,
he purchased the Scandinavian Amer
lean bank at Fargo, $50, 900 insti-
tuition, and organized several other
smaller banks in other counties, and
laid his plens for a chain of banks
as soon as the big state bank was
created TO finance them. This new
state bank was created by the legis-
laturo in January and February,
1919 and was opened for business the
following July with Il capital bond
issue of 100000 and with all the
public funds of the state-about
$40, 900 - placed on deposit
therein. 1t was controlled by Town
ley and his attorney, Lemke, thru
their personally aelectcd officials.
]. II. Waters, Towaley's true and
trusted friend, was appointed man
ager. This was after Mr.. Waters
was placed in charge of Townley's
sisal enterprise, and here again we
will let Mr.. Waters toll the story.
was appointed manager CT the
Bank of North Dakota with the un-
derstanding that l was to be its real
manager and director. but shortly
after l had taken charge another
man was appointed over me as ''di-
rector general" This change was
occaJioned for reaSCns which the
reader can grasp aftor l relate GER
tain things which took place in the
Couldn't Use Waters.
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 disagree
ing with him, he put IL more trusted
man in cha. ge of the bank. over me,
to make cure that .nCre would be no
hitch in his plans. He, no doubt,
thought that | would stand hitched
because of my connection with him
in his sisal company and would take
d chance with him for a considera-
tion. Evehtg have proven that the
political bees made mistake. He
should never have had me in the
Bank of North Dakota. 1t was
mistake on his par.
As soon as the bank was organic
cd and as coon as the millions came
into our possession, Townley'8 Fargo
Dank commenced to make demands
for deposits. 1t received with my
deposit equal to its CAPT
tai, but l had made up my mind to
keep n close watch over its activities.
About this time NJ. Townley came
to me with his chain bank scheme for
my APPROVAL, and | will relate it to
you as Mr.. Townlcy explained it TO I
me, then his close and intimate /
friend. | assume this. at least, for
ho had turned over to me in trust
hia interest in 22.400 acres of land
to over 100000 accord .
ing to the papers turned over with .
the trust.
High Financing.
l apposed Mr.. Towrley's scheme.
told him frankly II would not stand
up and that 1t would put him up
against the penitentiary. In other
/ balked. H. was then that /
no longer had con.rcl of the banks
affairs; 1t was turned over to the "di-
rector general" and was only man
ager in name from hat time until
resigned and stepped out. Here is
Townley's chain bark scheme: He
planned on organizing bank No. by
taking 81 per cent CT the stock and