Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1921-02-04
Refers Investigating Com
mittee ToRecord. OF The
Bank Of North Dakota;
Given Hour To Produce
Records And Fails; Will
Be Called Tomorrow.
(By s.au Correspondent }

(By S.au Correspondent
Bismarck n. d., Feb. AZ. ".
cathro, manager of the Bank Of North
Dakota, today told the house audit
committee that the Bank of North
Dakota had shown no favoritism in
the redeposit Of public moneys in the
banks of the state. and had followed
the policy OF redepositine in each
pank as nearly as possible the amount
of funds taken from it by the state
bank
he was Immediately asked by
Francis Murphy. attorney for the
committee to tell the committee how
large the redeposits in the Scandi-
! navian- American Bank of Fargo were,
as compared with the redeposits in ali
other Fargo banks.
On suggestion Of Mr.. .Lemke. he de-
clared that the records were the best
evidence on this point. and was there
| upon asked to produce these records
q recess of an hour being taken for
| this purpose. At the end of the re-
cess Mr.. Cathro did not produce the
| records. but urged that the commit
| tee should not press the question, on
the ground that it might tend to de-
| stroy confidence in the banks of the
state.
| On being pressed for reply. he de-
clared his desire to consult with Mr.
Lemke. representing the state indus
trial commission and accordingly Mr..
| Murphy moved that he be given until
$3.50 O'Clock Saturday morning to take
the matter up with the commission
members.
Audit Gives Figures.
| As matter of fact. the audit repos.t
made By Bishop. Brissman & Co.
shows that on December 3. 1920, the
day for which information was asked
by Mr.. Murphy. the deposits in the
Szandfnavian-Am American Bank of Far
go amounted to 1928. .s94.s1, and the
total liabilities Of the Scandinavian-
American bank 10 the Bank Of North
Dakota were $444.127.4s. On the
same datf. the same report shows
that the total liabilities OF all other
banks in Fargo to the Bank of North
Dakota totaled $11O,51s.ss.
May Serve Another Subpoena.
1t was expected that another sub
poena would be served on Mr. Cathro
this afternoon calling on him to pro-
duce the records of these facts at
$3.50 o'clock Saturday morning.
Earlier in the hearing Mr.. Cathro
had given further testimony regard
ing the capitalizing of the Bank of
North Dakota for $4,000 900, and also
in regard to the hypothecation of the
states bonds in Chicago. Much of
the ground gone over was similar to
that covered Thursday but more de-
tails We're given regarding the trans
actions.
At the end Of this portion of thr
testimony MIR. Cathro had explained
that he had issued two cashiers
checks to the industrial commission
in payment for the bonds These
bank by the industrial commission
were marked Paid and their
amounts credited to the capital stock
i OF the institution. while when made
they had been debited to the bond
account.
No Additional Cash.
The whole transaction was tech
nlcai sin nature. and the questions
asked and answered this morning
were simply to demonstrate more
clearly that the transaction was a
its s2.0o0.00o capitalization the bank
did not acquire single dollar of ad--
ditional cash, although the footings
and volume Of business were boosted
accordingly.
| In connection with the bond
hEpOthecaton. correspondence read
showed that the Chicago firm with
which the loan was negotiated was in
considera BILE doubt as to its validity
unless the bonds had been actually
purchased by the Bank of North Da
kota from the state industrial COM
mission
The testimony regarding redeposits
was introduced as follows:
What Does it Mean:
Now taking this item of redeposi,s
of s7.040.S99.19. What does that
mean?" asked Mr.. Murphy.
That is money carried in local
banks throughout the state" replied
Mr.. Cathro.
Now the largest part of the depo<-
its of the Bank of North Dakota is
public money. according to just wha,
system is this redeposited ?" Mr.. Muir
ply asked.
THE Bank of North Dakota adop,
cd the policy of redepositiug in the
same banks the money that was plac-
cd there by the county treasurers and
I it has been there ever since" Mr
Cathro answered.
Our policy has been in the main
to retain deposits in local banks about
similar to their previous condition. "
he repeated in answer to another
question along the same lines.
He explained. however. that in
some cases deposits had been moved
from one part Of the state to another
as need seemed to arise. especially
from the eastern part of the state IL
, the western.
. Opens Fire.
Mr., Murphy then opened fire in
: earnest.
isn't it a fact" he asked tina,
money has in some cases been with
: drawn from several banks in com
< munity and placed in one.
There has been no attempt at ia
vortism." Mr.. Cathro answered.
How about conditions in Fargo
Mr.. Murphy wanted to know.
I'VE left things as We found them
; there" Mr.. Cathro replied:
do YOU know how much the rede.
posits in the Scandinavian American
bank of Fargo was on December y
1902" Mr.. Murphy asked.
Mr.. Cathro was silent.
Can. you tell us?" Mr.. Murphy re-
peated.
II don't want to be party to open.
Continued on page %