The herald-advance. (Milbank, S.D.) 1890-1922, 1921-03-11
CHAOS OF n. DAKOTA
TOLD BY ], +. WATERS
FORMER SECRETARY OF TOwNLET DIS
CLOSES inner SECRETS OF NON.
PARTISAN GANG.

PARTISAN GANG.
Some of the disclosures made by
the legislative investigation of North
Dakota affairs are simply astound-
ing. The facts are given by men
who were in. close touch and were
appointees of the nonpartisan ma
that, 1--WE will keep the bank (the
chine in the state. Here is some Of
the testimony Of J. F. Waters, form
err manager of the Bank of North
Dakota: i.
Waters declared that William>
Lempke, attorney general told him
Observation-Disclosures bank at Far
gc) open if it takes all the public
funds of the state Of North Dakota"
Il told Lempke that they would
have tc look for a new manager and
wrote my resignation in March,
1920" Waters testified.
In his testimony Waters said that
A. c. Townley had hired him as
manager of the Bank of North Da-
kota and that he had not made ar
rangements with the industrial COM
mission. At the time Of his appoint
ment as manager of the bank he was
state bank examiner.
He testified that Townley had out
lined plan whereby he planned to
organize an endles chain Of banks to
serve the purpose Of the league and
its enterprises.
"Townley was to borrow from the
Bank of North Dakota to organize
the first bank" Waters testified.
"Fifty-one per cent. was to be held
by the league and 49 per cent. of the
stock sold to farmers of the vicinity
and the second bank would be organ
lied and the stock would be hypothe-
Gated with an organized league bank
to secure loan for the 81 per cent.
league interest. Lempke also talked
this proposition over. with me and ap-.
proved the idea. which I opposed"
Waters testified that he had made
an examination of the Scandinavian
American bank Of Fargo in January
1920. and had fouad the notes and
paper held by the bank very unsat-
isfactory. He said h. wentssto Gov
ernor Frasier and with l.. HI. Mean
aney, director Of. credits of the bank,
informed the governor that the bank
was in serious condition. He made
the examination as a result of a re-
quest for loan.
Waters told of the trip Of J. J.
Hastings to New York to try to. sell
bonds to Germans about the time
war was declared and declared he
said that they could not be disposed
of through regular channels. The
court reports transcript regarding
the German money transaction reads:
"Mr. Waters-Hastinps Says: II
am going down there and place these
bonds with that bunch of radicals
that Governor Frazier has been down
there talking to and l have a very
good friend there, Mr. Podgen-
stecker, from whom we got $4,000
Of German money. The money was
sent to bank in St. Paul.
He testified that the now famous
"shoot it to other banks" letter to
the Scandinavian-A American bank Of
Fargo warning the, bank to get ques-
tionable notes out of the bank be-
cause the state bank examiner was
coming, was written by r. NJ. Halli-
day, clerk Of the Blue Sky board.
Waters further testified that he had
met F. R, Pollard, purchasing agent
for the Home Builders association in
Minneapolis hotel and that Pollard
showed him 4 roll of bills and re-.
marked that he had collected $1,000
rakeoff that day and was getting q
rakeoff of $40 thousand on q lot
of lumber purchased. Pollard was
later removed from his position with
the Home Builders association.