The Washburn leader. [volume] (Washburn, McLean County, N.D.) 1890-1986, 1921-02-18
Theft Would
Be Les; )! !! Costly

N. ...:. Dc LISSl VUSlly
At q time when private bankers II
North Dakota wouldn't lend penny
to automobile dealers, no matter how
good their rating, and when purchasers
OF automobiles also were denied credit
at the banks, because every dollar
H was needed for handling the crops
the Bank Of = !. North Z, 4 Dakota z found
Il ss$27, 800 to advance to the dealer who
was 4 selling cars to the league and
I leagne employees f3 S.3.3
Apparently the Bank of North Dako-
!: to In effect bought the cars and turned
them over to the new owners without
10 dollar paid on them. The notes
4 were given to the dealer for the exact
purchase price Of the car. 4. He dis
counted them with his bank in Michi.
| gan City, and this bank promptly re.
: discounted them to the Bank Of North
Dakota. The fact that the legal limit
which the Michigan City bank could
loan in this was $4,000, appears to
have been but q minor incident to
which no attention was paid. .'Ts'
4 But the result was that the Bank of
North Dakota had, and still has for
that matter, notes to, the amount of
I $27 800 secured by mortgages on cars
which are worth exactly that amount
new and when the note were given.
All the notes are overdue. na
Es This deal violated three distinct
laws Of good banking.
.'tS To thu Rrcf vIoao txrror ~r,11 ~
other bankers we're quite properly re-
fusing to lend money for the purchase
Of, cars. i&54,3 5. st, 5 +
In: the second place it violated the
law fixing the limit which the Mich
igan City bank could loan to one GUS
toner, at $4,000.
In the third place the security was
absurdly inadequate. Most conserva-
tive bankers refuse to loan more than
80 percent. of the value Of q car, and
then only to select customers. Even
the private corporations handling auto
mobile paper insist on q payment OF
at least one-third and then charge
high interest rates to Offset the extra
risk they run. But the Bank Of North
Dakota appears to have loaned to the
full listed value of the cars. The no
tatiOn that all the notes are past due"
is significant. &
Y Perhaps that kind of banking isn't
criminal, but one is almost inclined to
wish that actual theft had been corn.
mitted in the Bank of North Dakota
instead of such wholesale mismanage-
ment Of the public money as is being
revealed every day. and of which this
Is but d one example. "A crook. might
steal $4,000 or 100000, but that is q
mere drop in the; bucket to what 4
banker who follows Mr.. CathrO's meth
sbds may cost the state by acts that
are within the law, but which make
any sane banker or. sensible business
man tear his hair in evaporation. "
Fargo Forum. ii $Fs ;5 / IL &. r L
Lees Statement Under Oath
5s e. G. Lee, auditor of Bishop, Briss-
man & Co, identified under oath nu-
merous transactions that apnear on
the records of the Bank OF North Dar
notes by Nonpartisan leaguers used
as collateral to loans in the state bank.
Names listed included Howard Wood,
lieutenant governor; S. s. Hemming--
son, an incorporation 0f one OF, the
leagues corporations; r. L.; Fraser,
state. senator; H. H. Nelson George
Moeilering, Frazier, appointed on state
bar examining board, and r. II. Walk,
er, former house member and de-.
feated candidate Tor state treasurer In
the last. erection. ssF& s ssSS 3ii ~ vt g rs
McLean's senetor Benefited sFt,s,
8t5fs 1t is not surprising that Senator Fra.
ser, who is one of the leading friends
OF the farmers, would not have q
nice little loan from the state. n It
seems to have always, been the high
ser ups who got the loans and not the
people who need It. 'ES y$I; ss2