Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1921-07-15
GUARANTY FUND
DEPOSITED in
BANK OF N. D.
Doubt Arises Whether Pay
ment Can Be Obtained
When Needed.
Especial to the Herald. )

LQ0 money CO1eCLeQ Oy the Do-
positors' Guaranty Fund Commtssion
for the purpose Of paying off de-
positors of closed banks has been de-
posted in the Bank of North Dakota
several weeks ago. This became
known today following meeting Of
the commission to consider plans for
paying off depositors of the Tplley
State bank, the first of the banks to
close last fall.
The fund totals about $3os, 500, ac-
coriing to o. E. Lofthus, state exam
iner and secretary treasurer Of the
commission, who deposited the
money in the state bank.
Many bankers viewed the situation
with apprehension when they learned
that the money had been deposited ii
the Bank of North Dakota, it became
known. because of the fact that the,
Bank Of North Dakota. has been un-
able to meet all it's obligations. Mr..
Lofthus insists that the Bank of
North Dakota will be able to pay off
the checks to deposit6rs which may
be mailed out within the next two
weeks. "a
What the Law Says.
The guaranty fund law provides
that the money shall be left in the
banks assessed until it is ready to b.
paid out. However. the Withdrawals
were made from many banks as far
back as the middle of May and the
money deposited in the one bank. It
mad been understood by bankers that
this was done to provide the Bank of
North Dakota with much needed
cash. Mr.. Lofthus declares that it
was done because it was expected
that the money woud be paid out i'm
mediately but that it was found nee
essary to make new audit Of the Toll
ley bank because of recent court
decision and Interpretation by TIN,
Guaranty Fund Commission.
The law also provides that IAN
moneys collected or received from
time TO time by the Depositors Guar
anty Fund Commission under the
provisions Of this act shall besade-
Pod sdsst more ba pks orr Fustt
~ 81 NJ q III 81 ss "
! The Bank Of North Isakota. is not
=, included under the guaranty law.
Mr.. Lofthus said this was true but
added that the guaranty fund COM
mission has the power to make some
rules for itself.
Can Bank Pay7 @
The fact that the Bank Of North
Dakota is obligated to pay out an
proximately 100000 OF guaranty
fund money means that the obliga-
tions Of the bank are increased Ear
beyond the obligations which it lis
now known the bank Is unable to
meet. Within the last two days the
Bank Of North Dakota has begun
paying state checks again, but has
not paid the $36S,o00 state appor-
tionment fund.
The guaranty fund commission. at
Its nheeting here, met with a commit
tee of the North Dakota BankerH as
socition. The commission spokesman
said that the committee, which waa
composed Of George H. Hollister of
Fargo; H. p. Goddard OF Bismarck.
and A. e. Sevareid of velva, was In
vited to meet with the commission
and discuss the liquidation Of closed
banks and the appointment Of a su-
perviaor Of receivers
I 1t was stated that the bankers
committee unanimously suggested the
name OF B. J. Schoregee, second Vice
president Of the Williams County
State bank OF WilMston. to be super
wiser Of receivers Of the closed
banks. Mr.. schoregge formerly wa.
state examiner and now is mem
Der OF the Guaranty Fund Commis-
sion. The appointing ent was made and
Mr.. schoregge enters upon his dutie.
immediately. It is stated that none OF
the receivers OF the various banks
will be removed as a result.
George II. Hollister was deleeated
to audit the claims Of tho Tolley State
bank and present HIS recommendaL-
tions to the commission.
Only Ie1al Rate AfloweH