The Holbrook news., 1921-03-04

"The board of directors shall,
 at their first meeting following
 the annual stockholders meet
 ing, elect a president, vice pres
 ident, cashier, and secretary, all
 of which shall be stockholders"
 The investigators say Tt is ques- tionable if the status of. I. c. Cole or R. R. Turbeville gave them the right to be called stockholders, all though these men acted as secre- tary and cashier for the bank with out bond.'
 It was a we'll established cuS-
 tom of the HOIbrOOk State to re-
 discount notes at the First Nat-
 iOnal of Albuquerque and at eth
 CT banks without stating the lia-
 bility for such rediscOunts on the
 books of the company.
 There were a great many trans actions between the Holbrook State and0 the First National of Albu- querque and the Holbrook State and other banks that represent the, re- discount of notes given the Hol- brook State for which the Holbrook State showed no liability at any time during its history.
 The investigators were unable to find record of but few loans made by the Holbrook unit that were ever sold outright to other banks, as in nearly all instances notes were re-discounted with other banks bear ing the endorsement of the Holbrook State and the HolbrOOk State always took back their notes upon their due dateS-eVen in cases where the words "withOut redburse" were used in the endorsement.
 The letters submitted with the report discloses the attitude of the First National of Albuquerque in December 1917, toward the line of preferred credit they were at that time carrying for the Holbrook State.
 In brief, the plan of the First National was that the Holbrook unit should show re-discounts of about '35,OOO; bills payable for S2O,OOO, secured by a like amount of paper, together with twentyp CT cent added IS security; and the First National would carry approximately $80,oOO )f re-discounts without the necessity If showing that amount as re-dis- counts on the books of the HOlbrOOk unit.
 In his letter of December 4, L. M. Reynolds strenuously objected to the showing of re-discounts or bills pay able, and preferred that the line of credit the home office was carrying for the Holbrook unit should not show in the Holbrook bank That there was no further objection on the part of the home office to the prac- tice of carrying these re-discounts, they did not appear in the records of the Holbrook bank, is proven beyond doubt by the letter published last week to a protesting debtor of the bank. The policy once with the control of L. M. Reynolds it WIS adhered to by the First National during the check cred career of the Holbrook State.
 A letter from G. L. Rogers, vice president of the First National further substantiates the polity ex< isting between the two banks, in that the First National refused a certif- icate of deposit for S14,OOO, saying that they preferred to have notes in place of the ones they therf held, part of which were past due
 Page 55 of the letter file shows the temporary nature of some of .hese re-discounts, and the reason for the temporary nature of most ,f the re-discounts that were tenn oorary was the expectation of Louie and his assistants of the coming of he bank examiner. This letter was addressed to J. M. Reynolds and is ] frantic appeal to save the Hol- brook unit from showing up things 'hey wished covered up.
 The investigation shows that a note for S4,OOO signed by L. NJ. Ray lolds was taken temporarily by the First National and was purely an in- iation of the balance carried by the First National, asSthe re-discount did not appear in the records of the Hol- brook unit.