The producers news. [volume] (Plentywood, Mont.) 1918-1937, 1930-09-12
Bought Majority of Stock.

ton merger was erected by ole
corporation in the Twin Cities buy
ing outright a majority Of and
probably all of the stock Except
The directors qualifying shares) in
the respective banks merged.
When a person buys stock in an
ordinary corporation the creditors
of the corporation can usually look
for payment only to the property
of the corporation which has been
bought by the money of the stock
subscriptions. When the stock
holder has paid his money for his
stock his liability usually ends
With banks it is otherwise. A
stakeholder in a bark, after the
property Of the bank is entirely
exhausted by its creditors must
pay, if needed, an equal amount to
the receiver that he paid for his
original stock. 1t is known as a
double liability. This is a state
and national regulation Tor the
protection of depositors in banks.
Local Directors Own Some.
1t is thought to be fact that
SO per cent of the stock of all the
merger banks of the First Bank
Stock Corporation is owned by
that corporation. Of course .he
local directors in a state or ma
tional bank must by law always
own some stock. These are called
the qualifying shares. Usually
this amount is 100000 in stock.
If there were thirteen directors
for instance, local in Montana of
a particular bank then the depos-
itors may be sure that the receiv-
er if there is failure, can look
to local people to put up $4,000
more in addition to their original
investment. The strength of a
bank and the ultimate insurance
of the depositor depends OF the
solvency and strength and honesty
of the stockholders in that bank.
If any of the merger banks Ii the
wheat belt of Minnesota, North
Dakota or Eastern Montana were
to close its doors by reason of the
low price of wheat, or heading up
short, or not heading up at all
for any additinal amount above
the qualifying shares, the deposit
ors could only look to the Mime
sofa concern and all except the
small liability for qualifying
shares would depend on the solv
arg of the owner, that is to say
TIE C.. poratioD in Minnesota. The
first problem of our State bank
examiner about a merged bank is
= I'D or hcw strong financially
y eSosa c'rporate srockhOld
er is.
: ing up short or general fail il
price of wheat below the cost o.
I production great disaster NIGH
arise.
Had Faith In Bankers
Until the years 1920 ana 1872
in Montana, the ordinary folks be
,, lieved that all bankers were thu
soul of honor, working entirely 70.
q the good of the community, tina
their books were more honorabl,
+ kept than the County Records, tina
l a witness who disputed thei
: words in court was willful per
; jurer and that in a general wa,
/ the mantle of the ancient Hebrev
4 prophets had descended by Apos
q tolic succession upon the moder
is bankers. The bankers had n
# "buffaloed."
Ie After the 226 banks failed
+ one year in Montana and tn
k courts looked through such O
l. their books as were not destroyed
It it was found that while some Q
lie the failures were honorable mis-
IL fortunes the banking professio
lie did not contain any higher pei
a, centage of honest men in it tina
l. the mercantile or the industrial @
the medical or the legal or tn
N clergy. In fact it was discovere
10 that large percentage of thes
k, banks had been run by cheap, ur
N derhand, perjured, swindlers.
rs Northeastern Montana there al
County Attorneys who would lik
to catch one Minnesota chat
banker in this state. The Cover
- or of Minnesota does not honor OF
~ request for his extradition.
in Power Lies Elsewhere
TX No matter how honorable an
ar high-minded and intelligent ar
to careful in business the local me
as in charge of any of the merge
TX banks may be the power lies
he the hands of Board of Director
of the First Bank Stock Corpor;
at ton in Minnesota to remove the:
err local officers, to withdraw fro.
st Montana banks funds for favore
e. customers in the Middle West iii
ks the big chain stores or pet whe;
yh banks in Minnesota and Dakot
w Mismanagement in the parel
concern over which these loo
N men in Montana have no contr
be may result in the gravest disaste
N through no fault of Montana m,
re Except the original imprudence
a. turning over their customer
of funds to the management of Eas
nd ern strangers).
20, Mrs. G. may have to look to h
rs. laurels in raising big lemons
k Montana. Were such a calami
IRE to befall this state, the affairs
IRE the First Bank Stock Corporate
nix would not even be administered
nd Montana receiver or under {
OIL orders of a Montana court. If
ie- Big Second Glass Merger were
'as fail, the absentee landlord Gro,
of in the capital at Helena would n
lg, even get lemonade in the sha
is of receivers and attorneys fee
ion Some Consolation!
let Whether the merger is buildi
not handsome quarters as false sh
the of prosperity or not, good Nc
tana workmen are getting so