The producers news. [volume] (Plentywood, Mont.) 1918-1937, 1931-07-24

plan has been developed by the banks in this
area which have recently gone broke.
The plan is this: The depositors in the broken
bank convert their checking accounts in the busted
bank into certificates of deposit without interest
in cases due in five years from date and in
other cases, the amount is divided into five equal
parts and certificates of deposit with no interest is
sued due in one, two, three, four and five years.
from date. Those holding certificates or savings
certificates of deposit due coming due, return
them for cancellation for which new certificates
are issued due in either five years from date with
out interest as above, five certificates without
interest issued face value for onefifh of orig
inal c. D., due in one, two, three, four or five
years respectively When all of the obligations of
the bank are thus gned up the bank is then "em-
holmcd' and allowed 10y the banking dcpartnen5
e open again for operation with no demands The
"embamcd' bank keeps its OLD cashier "wAc
knows all about the banks business" on the nav
roll The cashier receives new deposits if anyone
can be found so simple as to deposit more money
N such bank, and there are some such people;
cash checks. transfer money. if anyone can be
found who WI take and clear their checks. and
collect the loans due the bank, as they become due.
if he can.
The over Of the "embalmed" bank of course is
not asked to come in and surrender his note and
give another one for it. without interest. and
without security, due in five year, or due in five
annual payments. Those whom the bank owes
takes certificates Of deposits due n five years
without interest; those who owe the bank must
pay their notes as they come due with 1917 inter
ct. Sort Of a one-sided arrangement-nobodv but
bank could put over anything like an "embalm-
ing"
The bank officials go out to the depositors in a
bunch accompanied BY two or three larre ,,oof
depositors and tell them: "Now listen! Times arc
hard, you know that a receiver can't collect cent
from the borrower this fall You know what re-
celVers cost, what they do with assets of bank
# a receiver is appointed you wont get 10 cents
Oh dollar and probably you wont get that for
i've years. The community wont have q barl
and YOU know what a calmity that will be We
need bank Now if you will SIGN up Won NAV
get your deposit back The country is bound f.
come pack n five years. We can't paw Won inter-
est; II receiver is appointed you wont get anv
interest from the date the bank closed Now. ro,
Trend they all say, "sn't it better to sign up. let
Us open the bank and oct all your money than 70
appoint receiver and get maybe 10 per cent?"
Inc argument sounds logical The depositor does
not want to be wrecker and maybe he might
get his money in time, and besides he is enr.
rounded by the bankers and his neighbors. so he
taxes the pen they force into his hands and signs
up his consent for the "emblaming"
The bank opens up, and then what?
There IS one thing the bankers did not tell tho
GepoSltors end that is that the stockholders of The
detunct bank are liable to the depositors for the
iace value of Their stock IF a receiver is appoin+
ed ne must proceed against them at once ana coi-
lect this money which means ruin for tie s., ck
holders But, if they signed up and "errbglncdv
the bank, that liability is avoided which is no
small item for the stockholders, and Is the reason
VII 20 = 50 strong fo1 "en5alming'' IL, tie five
yearS tFst tlapso before he certificates are due
tie INK 'vckh0de1s have plenty q ,lnc n rr.p.
lee all their property to Their wives. or incor1,r
ate Their farms as Frank FreIrh did transfer tie
stock to somebody against whom judgment would
he worthless, 50 that when in "enlha1n,d" hank
closes again, the bank stockholders are ont from
under with the confding depositors holding the
sack as usual
The interest on the loans collected from the
borrowers viii prevent the bank cashier from ask
ing the Red Cross for a miserable dole this winter
along with the sacrificing depostors-it will save
h sensitive feelings
The banks at Scobey, at F1axviDe and at NTali.
cine Lake have been "emblamed" during the nos+
week-a quick job was done at Medicine Lake
Many people are suggesting that all Of these
mummes be collected into one central npsopr, !
f'r the purpose of cutting the overhead expenses