Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1922-01-06

say you were placing $4,000 for to
be used for the stock increase or any
way you wish to put it. as / expect
the directors. when they meet tomor
row afternoonswillsw wantSte know 1t is
placed and all / can tell them is j
wrote you and we have ant under-
standing but that does not guarantee.
the proposition to them. 1t p16bably
would be all right anyway, but am
sure that would be the better way.
ours very truly.
F. C. Heaton.
Assistant Cashier.
Heaton's Story on Stand.
The story Of the transaction as told
on the witness stand by Heaton was
substantially as follows:
1T was decided to increase the
capital stock of the Scandinavian
American bank to $500 shares. They
wanted to do this to get more funds
as they were badly overloaned.
''l'he only way TO cover up these
excess loans was to increase the stock,
and the only way to sell thelstock was
to take notes for it.
"Of course they couldn't get any
cash. @
after they got these notes they had
to get money on them. Hagen and
Lemke told me to go out to Bismarck
and see McAneny about it. So it was
decided to take these notes to the
banks at Casselton.. Prosper, Walcott
and so forth and the Bank of North
Dakota would deposit equal amounts
in these banks.
Wa!cott Bank Bucked.
THE Walcott bank bucked on this
and wouldn't take the notes. SO one
morning about o'clock. Peter Aar-
hus sent tor me and we took about
| $22.5O0 of the notes to the Prosper
State bank at Prosper. and wanted
them to take these notes. ~
johnson. the cashier of the Pros
per bank. wouldn't take them. He
| told Aarhus he couldn't do it.
| "Aarhus said the bank of North
Dakota would certainly send the
| money. He said he had a telegram in
| his. pocket from McAneny promising
| to send it, But still johnson wouldn't
| take the notes,
I'VE came back to town and told
Hagan about it. and Hagan and !
went to Prosper again. Hagan told
johnson he ought to have sense
enough to take the notes. He ought
to know that the Prosper bank
couldn't keep running without the
Scandinavian American bank. Hagan
said
"Finally Johnson said, Til give you
a customers draft if you won't turn
it loose without notifying me. Hagan
took this draft and sent it to the
Bank OF North Dakota that same
night"
Other Deals.
| Questioned as to other deals in
| which he had been associated with
Hagan. Heaton told of a transaction
revolving around some real estate at
Buffalo. N. ID. In regard to this at
/ fair the witness said in substances:
AT one time Sherman and Hastings
came to me saying Sherman had title
to soTre property in Buffalo. He
wanted to raise some money on it but
|it wouldn't look well if the deal was
made In his name. He wanted me to
!; take it in my name and have note
! and mortgage made out.
IT asked Hagan about it and he
| said 1t would be perfectly OK. and
! would never have to bay the note.
1 So they gave me a. deed to the prop
erty and gave Hagan mortgage. on
lit.
1 "This property was supposed to
4 consist of lot with a brick building
on it. but found out later it had
nothing on it but wooden shack.
! This mortgage appeared on the
\ books of the bank when it was closed
by Attorney General LANCER. Then
after Lemke and Lofthus took charge
sla----