Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1922-04-10
Serious Condition Is
Shown, Says Complete
Audit Report; Bank OF
n. D. Is Hardest Hit
Babe Adams, Fraser and

Continued From Page ~,
bank, Casselton. advises a. balance Of
$31,059.23, and they submitted the
following explanations:
1--WE hold $42,225.oo of notes
given for new stock in the Scan
dinavian bank OF Fargo and
which were taken on by us upon
tho assurance Of the Bank OF
North Dakota that they would be
covered with a rcdeposit and
that the rcdeposit account would
not bic drawn against until the
notes were taken of Our hands.
See correspondence in flies there.
We have charged the notes ard
interest. to the redeposit ac-
COUNT"
The audit report adds that "a
search was made of the correspond
nee files of the Bank of North Dako-
ia but no correspondence was found
relating to the said redeposit."
Webb Account.
Regarding the George T. Webb ac-
count the report says The commits
sion Of $4,000 paid to Geo. T. Webb
November 23, 1921, was returned to
the Bank of North Dakota in pay
ment of an apparent overdraft in the
special account, and the bank in turn
issued a cashiers check to Geo. r..
Webb in the amount of $146.59 to ball
ance the amount"
A letter was found. in which F. W.
Cathro. then manager of the bank.
promised to pay Webb a commission
Of $4,000 bonus If bond sales of over
100000 resulted from his efforts.
The audit report adds: 1.-The min
utes Of thei-1nance committee under
date of June; 10, 1921, contain an en-
try authorizing the payment of the
commission to Geo. r. Webb of So
900, but Mrs Nellie MARI, clerk of the.
nance committee. informed us that
these minutes were written November
Is. 1921. n dated back to June IS,
1921. on instructions of Mr.. f. w.
Cathro, director general and manager
Of the bank
Total expenditures made by Webb
In h bond sale campaign were $780,
307.96. Vouchers for all expenditures
could mo- be found in detail, the re-
port says.
Prospective Lossc~
Discussing conditions which show
losses deemed certain to result to the
Bank of North Dakota, the audit re-
port says:
.'The Bank OF North Dakota, asset
item of interest credited to earnings
but not collected, of $263,219.58, in
cludes interest accrued but not collect
ed on farm mortgages of 1853, O57 10.
We understand that as the mortgages
are delivered to the state treasurer
the interest coupons are collected by
him and used in the payment of in
terest of the. real estate. bonds and
il the Bank OF North Dakota fails to
recover this interest, which ;is carried
as an asset, the book deficit of the
bank will be correspondingly increas-
ed. VIA.
ALSO the assets Of the bank repre-
scented in transactions with the closed
banks; loans and ~discounts;e redepos-
o~verdrafts; farm loan special deposits;
special collections and receivers
proofs OF claims: in all amounting to
$1,682,765.57. are all reflected at face
value. and the very material losses
which will be sustained in the final
liquidation of these assets will equally
increase the hook deficit" :,
Illustrative Of the ~shrinkage to be
sustained In these assets the auditors
call attention to the account Of the
Observation-Disclosures bank, Fargo.
low defunct. Loans and discounts of
the Bank of North Dakota amount to
T38,794.51: redeposits, s232. O98. 20.
overdraft. ~$15,615.29, totalling 1885,
$4,000 /
Loans to Bank.
Further the report says: Assets of
the Bank of North. Dakota Of loans
and discounts, open banks. corpora
tions and individuals Of ST. 81 $3.50
n due. from country banks of ST.
058.712.49,' and all Of the assets, are
stated at full value. A large amount
Of the loans are represeptedin renew
al, paper. 1t is apparent that q. consid.
cradle amount of the assets will be
slow of liquidation and realization,
and considerable ultimate losses sus
book deficit" .s"S'
Situaiaon Summed On.
In summing up the situation the
audit report continues: You will OBJ
serve the serious condition reflected
by h fact that the demand liabilities
are $1,~7S4,42l.44 In excess Of the D
rent or demand assets. After saddins
loans and discounts OF open banks,
corporations and Individuals, and "a.
sducting therefrom the time dsposii
liabilities, the liabilities exceed ~
assets by 1885, e56.10. Adding there
to the frozen assets-transactions syith
closed banks Of. $1,6S2. 1867. ana
fixed assets, represented In the con.
~atructton D. theS Grand Forks mill. the
Drake mill and furniture and fxtures
and automobiles OF thefvarfous enter
prises. the statement reflects net a.
sets at face value Of. 37S4.544.35 "a
icover capital disabilities Of 31,448 ,637..
81: = sulting ~ . book defcit Of isss,-
LOOT MAILS or SSos. +;
~. Council Bluffs, Iowa. AprilE q