The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1933-11-22
MINNESOTA BOARD
SUSPENDS SALE Of
Chain BANK STOCK
Issues Order to First Bank
Stock and Northwest Ban.
corporation Chiefs
WILL PROBE OLD DEALS
Emphasizes That Solvency Of
Institutions Is Not Cues
toned in Any Way
WILL PROBE OLD DEALS

commerce commission wednesday
ordered temporary suspension of sale
In Minnesota Of stock Of the North
west Incorporation and the First
Bank Stock corporation, Minneapolis
holding companies.
Officials Of the two corporations.
which have more than 800 member
banks in several states. were ordered
to appear before the commerce COM
on December to show cause
why the temporary ban should not be
made permanent.
Elmer A. Benson, state commission
er of banks and q member of the COM
merce commission, said the action
should not In any way discredit or in
any way be construed as to cause any
question as to the solvency of the
member banks of the two corpora
tionS."
The action. taken at meeting Of
the three-man commission late Tues
day, followed q probe into sale of the
stocks made at the request Of Cover
nor Floyd B. Olson. The state house
Of representatives at the last session
of the legislature adopted a resolution
suggesting the inquiry.
Manipulation Is Charged
The commission, in its order against
the Northwest Incorporation, says it
appears the Northwest Bancorpora-
ton has used large sums "wrongfully
and for the purpose Of misleading and
deceiving the purchasers or dealers"
in shares Of the common stock and "for
the purpose of manipulating the
market"
The commission charges the First
Bank Stock corporation Sold $4,000
shares of common stock to the First
Minneapolis company and the First
st. Paul company, subsidiaries, under
an agreement to repurchase, at the
same price, receiving in payment UNI
secured promissory notes.
The commission charged the stock
was repurchaSed when 1t had de-
preciated In value. This sale, the
commission said was fraudulent and
fictitious" and may have worked
fraud on other purchasers" Of the
stock.
The order against the Northwest
Bancorporation is effective at 3 p. m.
Wednesday and that against the First
Bank Stock Corporation as soon as
notice has been served on officers Of
the corporation, S. Paul Skahen. state
securities commissioner. and member
Of the commerce commission said.
The orders, Commissioner Skahen
asserted. prevent any and all brokers
or dealers from buying, selling. trad
ing or dealing in the shares OF COM
mon stock of the two corporations
in Minnesota until further orders from
the department Of commerce.
Traded on Two Exchanges
Stock Of the Northwest BancorpoA-
alton is traded in on the Chicago and
Minneapolis stock exchanges. First
Bank stock shares are listed on the
latter market.
The commission order charges the
Northwest incorporation has pub
i.shed false and misleading" finan-
cial statements and that the Corpor-
alton listed its stocks on the Mime
apolis stock exchange for the pur-
pose Of establishing and maintaining
q fictitious market quotation" to aid
in manipulating sales Of the stock.
Common stock, the commission fur
t. er alleges was sold pursuant ito a
fraudulent plan or scheme aimed to
"mislead and deceive prospective pur-
chasers as to the true value" and
"bona-fide market price" Of the
shares.
1T further appears" the commits
son order recites, that pools or syndi-
Gates were organized to manipulate
che market price Of the shares to mis-
lead purchasers as the public demand
for them.
The commission alleged also that
Northwest Incorporation continued
to pay dividends when there were no
warnings and that Bancnorthwest, 4
trading company. was incorporated to
trade In Northwest Bancorporation
stock to lead the public to believe
hat said shares were Of greater value
than they really were"
Bankers Welcome Hearing
=. W. Decker, chairman Of the
Northwest Incorporation board, said
I'VE heartily welcome such investiga-
tion in order that the whole matter
may Be cleared up In the public'a
mind"
G. 7. Jaffray. president Of the First
Bank Stock corporation In . state
ment said II know the officers and
directors Of the First Bank Stock cor
poration have never In any way
agreed to or allowed any transactions
which. IN their opinion. were not To-
the best interests Of the corporation
and its stockholders and ! am sure
that We viii welcome . fair and i'm
partial investigation Of what the cor
poration has done"
Shares OF the two corporation
were traded In heavily on the Mime.
apolis stock exchange today. At moor
Northwest Incorporation command,
ed . price Of 44.50 per share compar'
ed with yesterdays Gloss Of Is. FRS
Bank Stock was selling ct e6.76 com
narAd With 4 final mutation 0f ~ a