Jamestown weekly alert. [volume] (Jamestown, Stutsman County, D.T. [N.D.]) 1882-1925, 1921-09-01
DEFERS PAYMENT
TO DEP0SlTORS OF
T0LLEY STATE BANK
Was to Have Been First Pay
ment Made Under Guar
anty Fund Law For Recent
Bank Failures - Commits
sion Opposes Opening Of
New Banks by Officers Of
Defunct Institutions.

ial 1.-The state guaranty fund COM
mission, meeting here, decided to de-
fer payment of depositors of the Toll
ley State Bank, closed last fall An
audit of the bank has been made
preparatory to paying the depositors.
The payment Of depositors of the
Tolley bank was. to have been the
first payment by the board under
guaranty fund law of depositors in
the numerous banks which have
closed in the last nine months. The
board declined to make public it's
reason for deferring the payment at
this time. The guaranty fund, a.
mounting to about $30S,0O0. has
been the subject of discussion in the
state because it was assembled from
the various local banks which had
set aside assessments made upon
them into the Bank of North Dakota
in May.
Checks Officers Of Closed Banks
The board also announced its in
tention to endeavor to prevent the
esta blishment Of new banks by Of
ficers of banks which had closed
their doors. 1t is declared by the
board that there are instances where
officers of banks have soughts to e.
wade their obligations by closing
their banks and throwing RESPONSE
bility on the guaranty fund commits
sion.
1t is admitted by board members
that under present laws there may
be difficulty in doing this Under
the law a bank may be incorporated
as may any other business institu-
tion within the state, which does not
come under the Blue Sky law, by
filing papers with the Secretary of
State. The Secretary of State issues
a charter to the bank which is taken
to the State Examiner who is requir-
ed to examine the organization pa
pers and resources of the proposed
new bank.
Under the plan evolved by the
board the State Examiner. o. f. Lof-
thus, will refuse ITO surrender the
charter or examine the books of the
proposed new bank if the officers of
the proposed new institution have
been officers or stockholders in a
closed bank to the extent that it ap-
pears that they are seeking to evade
responsibility devolving upon the
closed bank. The proposed incorpor-
ators of new bank may mandamus
the State Examiner to issue the char
ter.
The resolution adopted by the
board follows:
Whereas, it appears to this COM
fhot tn sr,U{D 80
ficers and stockholders of closed
banks do not possess proper sense
of their responsibilities toward the
depositors of such bank and toward
those who contribute to the Guaran-
ty Fund but are working to estab-
lish new banks and become directly
or indirectly interested in such new
banks.
Therefore, be it resolved that it
be the sense of this commission that
former officers and stockholders of
defunct banks be not permitted to
either directly or indirectly become
associated with other banks until the
payment of all depositors ;of the
connected without recourse to the
closed bank with which they were
Guaranty Fund and that we condemn
in no uncertain terms the tendency
of any former manager of defunct
banks to organize with the expecta-
tion of benefiting by the payment of
depositors of their closed banks from
the Depositors' Guaranty Fund and
"Be it further resolved that a
copy Of this resolution be forwarded
to the State Banking Board"
This situation does not obtain as
to the Tolley State Bank, according
to State Examiner Lofthus. He de-
clined to name the cities or towns
in which the situation does exist.