The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1923-03-27
CLAIMS STATE
MONEY WENT TO
DEFUNCT BANK
Former Cashier of CasseltOn
lBank Says His Bank We're
Merely Agent
BAND RECORDS LOST
Court Informed That Records
of Bank of North Dakota
Are Incomplete


whereby money from the Bank OF
North DHkota would finance an in
crease in capital stock in the now
dcfunct Scandinavian-A American Bank
in Fargo late in the year 1920 was
given i'm district court mere today
by II. ID. Ellis, former cashier Of the
Peoples State Bank Of Casselton,
which is resisting an attempt by the
present management OF the Bank ot
North Dakota to collect approXl-
matcly $4,000 from the bank.
Ellis declared that P. L. Arrhus,
former Nonpartisah League business
manager; +. b. Wood, member of
the league national executive COM
mittce and Louis McAnaney. credits
department. manager of the Bank Of
North Dakota under the league ad-
ministration, with him made tho
deal.
Under the terms Of the deal cap
ital stock notes given by farmers
for increasing the capital stock of
the Scandinavian American Bank
were delivered to the Peoples State
Bank of Cassclton, the bank receiv-
ed over $4,000 from the Bank OF
North Dakota and the Scandinavian
American Bank was permitted to
draw on it, he said.
He told the jury the account was
to be carried for time as rede-
posits from the Bank of North Da-
kota, and that the Bank of North
Dakota was to protect the Peoples
State of Caselton against with
drawal of one-third Of the amount.
The Peoples State never delivered
the notes to the Bank of North Da-
kota Instead the Bank of North
Dakota credited that bank with
redcpos:t and then permitted the
bank to place the same amount to
is credit as reserve in the Bank Of
North Dakota, subject to withdrawal
by the Casselton bank.
That many letters which passed be-
tween the Bank of North Dakota and
the Peoples State Bank of CasseltOn
had disappeared from the files in the
Bank OF North Dakota and that a
search made by present officers Of
the bank and others failed to locate
them was disclosed in district court
here in the first part Of the suit of
the Bank of North Dakota against the
Cassclton bank for SIS, 8,576.82. 1t also
was brought out that part Of the
records relating to the reserve ac'
count of the Casselton bank had dis.
appeared.
Il afn do 20 hn W q
Casselton bank is that the transac-
tion with respect to over $4,000 was
a "shady" deal through which the
Bank of North Dakota was to furnish
funds to bolster up the Scandinavian
American bank of Fargo when it had
been closed by the banking board and
rcopcned on court order back in 1920
and 1921.
The start of the case also was
marked by an alteration between
Theodore Koffel of Bismarck, attor-
ney for the Bank of North Dakota.
and J. f. Callahan of Casselton, of
counsel for the bank, in which the
word "liar" was passed when both
presented different versions Of an
agreement whereby certain record
testimony would be admitted without
the necessity of producing witnesses.
1t was finally smoothcd out.
Hunt Fails.
In testimony on questioning by
A. G. Divct, attorney for the Cassei-
ton bank, A. Johannsen, audits de-
partment director of the bank, said
that C. r. Green, present manager of
the bank, himself and others had gone
through the bank files to find certain
correspondence which was said to
have passed between the two banks,
and that no correspondence between
May II. 1920, and Feb. 5, 1920, was
found. The files. it was stated, were
in charge Of a girl employe. Mr..
Johannsen said that a page with ref
erence to the reserve account Of the
Prosper bank was lost or had been
misfiled. He said that he had seen
the file during the legislative investi-
cation of 1921. This period was dur
ing the time the Nonpartisan league
administration was in power and
+. w. Cathro was manager of the
bank. Mr.. Johannsan was on the
stand to identify certain papers and
records, the transactions involved not
being in his department.
Mr.. Divet served a demand upon
counsel for the bank to produce the
correspondence.
The Bank of North Dakota in the
suit alleged that $77,592.82 was the
balance of various sums placed in the
Casselton bank at various times, be-
tween August, 1919, and March 10,
1921, which aggregated a total of
$1O6,591.42. The amount had been re-
duced to ST., ,592.s2 and interest was
to be added.
Banks Answer.
The Casselton bank, in, denying lia-
bility, said that part of the amounts
claimed were items of $4,000 on Dec.
2, 1920, and $22,225 on Jan. 20, 1921,
and that the arrangement was that
the Peoples State bank would take
notes given for stock in the Scandi-
navian-American bank, the Bank Of
North Dakota would advance money
to the Peoples State, and that it
would not be withdrawn before the
lQontinued en Raee TArssl