The Ward County independent., 1921-02-17
Negotiations f. Sale Of
C6,OOO,O0O ". l.. Bonds Off

davit on the ground that his answer
might tend to incriminate himself,
though he subsequently changed the
statement without giving answer to
the question, are high lights of the
Lofthus testimony.
He further admitted that the bank
of which he himself was cashier, when
he was appointed bank examiner, had
been used as channel for financing
Nonpartisan league corporations with
public moneys obtained from the
Bank of North Dakota, and that the
deception was practiced on the SUI
preme court in obtaining the notorious
order reopening the Fargo bank,
proceeding in which William Lemke,
the present attorney general, partici-
pated as attorney for the examiner,
and in which he also acted for the
Fargo bank.
Here are some Of the principal fea-
lures brought to light through the ex-
animation of Mr.. Lofthus:
Lofthus, himself, caused $4,000 of
public moneys from the Bank of
North Dakota to be deposited in a
bank at Beach that closed 81 days
after the deposit was made. He orig
inally said $4,000 was placed in the
bank 10 days before it closed, and yes
terday corrected his testimony to SHOW
that he caused this deposit to be made
with the expectation that it would per-
nit the bank to continue operation.
When Lofthus signed statement
in the Scandinavian American bank
case, swearing before the supreme
court that loan of $4,000 in that
bank to the Consumers United Stores
company was not an individual loan,
but that it was a group of loans to
responsible individuals, he testified
that such representation of his part
and the auditor, NJ. w. Thatcher, was
in fact false, that the loan was real
ly single loan to one corporation and
should be treated as such.
Lofthus testified that J. w. Brinton,
in settlement of an item Of 900
owing by the sisal trust, turned over
his check for that sum: That it was
subsequently honored, but he refused
to answer because his answer might
tend to incriminate him when he was.
asked if it was not fact that this
payment had been misrepresented to
the supreme court in the Scandinavian
American Dank case. -
Less Than No Reserve
The bank examiner testified that
when the Scandinavian American bank
was reopened in 1919, it's legal reserve
was third of a million dollars less,
than no reserve at all.
L0fthus testified that his power of
examination over the Bank of North
Dakota was very limited; in fact, that
it extended only to the question of
proving the accounts, and that he had
no authority to recommend or order
changes or improvements, and could
only bring to the attention of the in
dustrial commission any condition
which he felt might require attention,
and that the commission only had au
thority to remedy conditions complain
ed Of.
State Funds to Own Bank
Use of his own bank, the First State
Bank Of Kloten, for the purpose Of
financing Nonpartisan league corpora
tions, was testified to by the bank
examiner in connection with the iden-
tification of several notes found in the
Bank of North Dakota as collateral
to loans obtained by the Kloten bank
from the state bank. He said that he
knew this paper was league paper
used in financing the league or its
subsidiaries at the time it was accept
ed by the bank and subsequently turn
ed over to the state bank.
In Lofthus' so-called "accommoda-
ton" notes that were found included
paper signed by r. w. Fraser, clerk
Of the district court Of Divide county,
a strong Nonpartisan; George H..
Moellering of Ray, Williams county,
league candidate for district Judge in
the Minot district, elected last No
vember; S. S. Semingson, Of Divide
Continued on back page)