The weekly times-record. (Valley City, N.D.) 1912-1922, 1921-02-24

TESTIMONY OF D1REcT9Rs OF VALLEY \, CITY CITY
BANK OF NORTH DAKOTA IN IT'S ALLEGED
FINANCING OF THE RECENT POLITICAL CAM
AGREEMENT WITH A. G. TOWNLEY WHERE
BY THE SECURITY NATIONAL BANK WOULD
BE FULLY PROTECTED BY MONEY PLACED
ON DEPOSIT BY THE STATE BANK.
Bismarck N d., Feb 2l-Attorney Sinkler Of the SEN
atee investigating committee devoted Saturday afternoon
to testimony relating to the alleged financing OF the non
partisan league through the borrowing of money from
banks and promising them in return that sufficient money
would be kept deposit from the State Bank to
the loans made ~. 4
committee in the morning S. P. Ellis and Lee Cowel, d.
rectors Of the Security National Bank of Valley City who
testified in the morning were cited by the senate commit
tee for the afternoon and W. Cathro director general
Of the State Bank with the bank records was also sum-
moned Mr.. Ellis held throughout vigorous cross
animation to his testimony in the morning which in
substance that he had complained of the loans of
apiece made to six farmers who were not customers of the
bank and had been given to understand that would make
no difference with the oanng power Of the bank as an
agreement had been made whereby the Bank of North D
kota would keep enough deposit cover the $5OOO
Attorney Snker and H. A. Paddock secretary of the in
dustrial commission brought out that money had &C.
ualy changed hands, That the bank had merely given it's
note certificates of deposit for the notes of the farmers
and that therefor it not necessary to have any
to cover the loan Mr. Ellis maintained that it took
Senator Ployhar asked him if it not gossip
that the Security National Bank had turned down the
drafts Of the Bank of North Dakota because of an
ment made between President Grady and a. c. Townley
president Of the league whereby he could do this protect
himself on the loan
Mr.. Cowel, in answer to question of Mr. Sinklerl
whether he had before the house committee
to testify to hearsay replied that he had
"Your testimony was all hearsay them" he was ask
ed. absolutely hearsay he replied Then he related|
how he had discovered the notes at directors meeting
and complained to President Grady who ntimated that
did not want to discuss the notes at the meeting After
the meeting he said he talked with Mr. Grady privately
and told that the loan good because he had
made an agreement with Mr. Towney whereby money
from the State Bank would be kept deposto the
Ioan The bank he was told, making per cent be-
cause the notes bore 10 cent and the bank only paid
the State Bank per cent deposit Mr. Cowe admitted
that he had received the wrong impression regarding the
changed hands, He held however, under severe grlling
by both Attorney Sinkler and Paddock to his original
statement regarding the alleged agreement Records of
the State Bank produced to show that the money
been placed on deposit four months before the loans
made and by j. R. Waters in response to requests
the bank for deposit Drafts drawn by the State Bank un
der the Security National bank numbering three and all
of which had not been honored were introduced One
for 600 July days before the loans were nego-
tated One for $4,000 July % and another for 600
on September TO- When asked by newspaper men whv
these drafts not paid Mr. Cathro replied that he did
not handle the transaction but that he understood that
the Valley City bank claimed agreement as cited by
Cowel and Mr.. Ellis.
49,