The Morning Tulsa daily world. [volume] (Tulsa, Okla.) 1919-1927, 1922-02-12

. tne purchase by tne BAnk OF Com
merce, but practically all the notes
above mentioned have been In the
/ bank for some time.
The cash reserves Of the bank
were insufficient for many months
/ before the sale to the Bank of Com
| merce and the minutes show that
/ the active officers OF the bank re-
ported same at n formal meeting of
the board Of directors held November
| %. and November rs, 1920 and re-
| fused to longer keep the bank omen,
but a resolution was passed author
izing and directing them 10 con-
tinue operations until otherwise or
dered.
"In addition 10 the S396,OO0 in
notes turned back TO the Guaranty
state bank. the Bank OF Commerce
now holds notes taken oyer from
/ them on which the losses are esti-
mated 10 be more than S400. 900, and.
In addition to these notes mentioned.
which were in the bank, there were
| bond I'D securities which will prob
| ably result In the loss OF S75 900, u
/ my information in regard TO their
value IL correct.
"The amount OF $4,000 OF these
/ bonds are collateral on note at
the time the bank commissioner cN-
| amined the bank in September. 1920.
and, therefore. were not included In
the totals OF the hanks bonds and se-
! curities The other bonds nt that
/ time were probably regarded with
/ higher favor than at the present
time, but the notes mentioned above
| aggregnting S79b,000 were practical
/ ly all In the bank at that time and.
in addition, there are other notes
/ concerning which / have no suffi-
| Client information TO estimate the
/ loss, but, from several resources, the
| indications are that the paper is
worth much less than face value.
Made Untrue Report.
Taken as u whole. IL l. quite
evident that ut the time the bnuk
commissioner examined the Guar
nnty state hank, September 27.
1920. the bank was insoivcnt and
he must have known the fact or
the officers and directors of the
him.
! when the condition OF the assets
OF the bank and its reserves are con-
sldored and the action Of the diroc-
| tors on November 25. 1920. are noted,
tho presumption IL great or not con.
clusive) that they knew the bank
was insolvent at that time
The Bank Of Commerce now has
| notes which did not come from the
I eAiiN9 tAhlb lunkt ON Wnlcn the
| loss VIII be approximately 100000.
The greater part Of these notes
| were assets Of the Bank of Com
| merce at the time the Bank of Com
| merce purchased the assets of the
| Guaranty State bank, and a care
ful examination should have re-
Vealed at that time losses OF ap-
proximately 100000.
| 1T Is apparent that at that time
the Bank OF Commerce was in bad
! condition.
''The Guaranty State bank had for
months been running with deficient
reserves and owing on bills payable
an amount largely in excess OF that
| permitted by law and for sometime
the actual cash value OF it's assets
| was not sufficient to pay its liabili-
| ties.
by their own record and acts. It
Is shown that these things were
known TO the directors of the Guar
anty state bank for sometime before
they transferred their assets TO the
! Bank of Commerce.
| The directors OF tho Bank of
Commerce claim they purchased the
assets of the Guaranty State bank
! on the representations made by the
bank commissioner that there could
not be loss to exceed Sl5O,OOO in
all OF the assets and they had $685.
600 in excess paper, out OF which
10 take other notes and substitute
any purchased which should be un-
desirable. The negotiations had pre-
ceded the sale for some time, but the
| Information / have received and the
records found show that the eale
and transfer of assets and examin-
alton OF same took place after the
bank closed January 8, 1921, and
! was completed before the Bank OF
! Commerce opened January 4, 1921.
A Brnzcn Unloading.
"Whcn IL IL known that the
bank commissioner had taken the
Guaranty state bank out of the
| hands OF his examiners and for
some time past had conducted the
examinations himself, and when IL
II apparent that the directors of
the bank knew the bank was in
solvent and the bank commissions
or should have known the bank
was iIrSolyent, and when he used
his influence TO undOad IL upon
another bank. which at that time
had Its capital impaired, and It's
! full capital less than the bank
! taken over, nnd when Won con-
slider the other transactions of
| the bank commissioner with John
| Rchold, director of the bank,
and one whose borrowings from
the bank, combined with other
| borrowings from the bank for
his benefit, aggregated In excess
OF S25O,000 (not including some
OF the corporations I'm which he
was large owner), you can draw
your own conclusions whether IL
was carclcssnoss and ignorance
or whether lumber of the di-
rectors OF the Guaranty State hank
corruptIy conniycd with the bank
commissioner 10 have the Guaran-
| ~ state bank taken over by the
Bank OF Commerce, that they
might g cape the financial respOn-
! sihilIty and infamy attached 10
their own misdccds. The docu-