The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1934-07-10
C. ON TIN U E u
lfom pare one
Bank Receivership
Held On Way Out

/ wHtaA 0O1HetuulB some Gay ana then
the receiver can collect.
In the latter case, bonding COM
pantes have usually paid In full, then
collected from the receiver. In any
event, the unsecured depositor has
been on the outside looking In, for
the law Is the law and preferred
claims have hid to be paid first.
nevertheless, 271 banks have paid
dividends to general depositors and
others yet Will do 50. Payments
range from one-half Of one per cent
IN the case Of five banks, to 100 per
cent IN the case OF 10 others. The
average will Be somewhere between
20 ana Is per cent for banks nay
ing dividends. Some banks were in
such bad condition when closed that
they Will pay nothing at all.
| Oldest Were the Worst
When Baird took over the receiver
ship In October Of 1923, there were
l46 banks in process Of LIQUIDATION
ana some Of them had been in the
hands Of receivers since 1915. Pay
ments In these cases usually were
small because the costs OF receiver
snip under the old system had eaten
up the bank assets. The cost per
bank under the old ARRANGEMENT was
about $3.50 month. Under the con.
solidated receivership they have
averaged $46.70 . month.
from 1923 through 1888, however.
the attrition Of the banking system
continued, with the result that 3S4
other banks were turned over to the
receiver to Be closed out. OF this
number 1T remain as active trusts.
Affairs Of the others have been
closed out, or nearly 80.
Not all Of them, however, have
gone into the limbo Of forgotten
banks, for 81 Of the number were re-
opened, sometimes under arrange
ments with other banks and BY
arrangement with depositors. In
such cases the latter usually have
obtained complete payment of
amounts due. In some instances de-
po6ltors have voluntarily scaled
down their claims that the banks
might reopen.
The result Of the bank closines was
to make the receiver ct one time not
only the largest landholder In the
state outside Of the Bank Of North
Dakota and the state land DEPART
ment, but also the largest owner in
whole or In part, Of such thinss g
cattle, farm machinery and other
items on which chattel mortgages us
ually are taken by banks.
In some cases, however, the value
OF these chattels to depositors In
closed banks was materially reduced
by the necessity Of giving waivers in
order that the owners might obtain
government feed and seed loans. The
waivers were given in an effort to
preserve the value Of the property and,
ct the same time, help the mort
gagor. The receivers experience in
this connection was the same 6 that
Of other creditors. Very often the
creditors equity In the chattels was
wiped out.
Bans Hard-Boiled Policy
Baird thinks 1t improbable that q
hard-boiled policy Of bank liquidation
would have returned any better re.
turns for bank depositors because the
market for the items which might
have been foreclosed and sold practi-
cally had disappeared because Of
economic conditions which have be-
set the state In recent years. Another |
factor, Of course, was that such Q
policy In dealing with farm debtors |
would have brought on social chaos.
Where possible, assets Of banks have
been sold to other banks, but In most
cases this was impossible. since there |
were no takers. The result was that |
the receiver had to collect on each |
piece Of paper as best he could, Set
ting up system Of district agents for
that purpose. The collection diff |
cllties were further aggravated by
the fact that the best paper In bank
frequently had been pledged to big
city banks In return for cash, g much
q five dollars in loans being advanc-
ed for one Of money In an effort to
keep the bank open. In some cases
these loans were repaid by the receiv-
or, the security taken back and COL
lected for the benefit Of the deposit
tors, for In each case 1t was the best
cases this naner was taken hack atl
! discoa,nt central hanks nreferrinr
- 20 : loss FATHER than asu,me IA
cost Of collection. The fact that the
receiver had IN organization In the
field made 1t possible to make prof.
It for the depositors on such deals.
Re co.,ld collect 81 far less exnense
than n,t.of- stata hanks
Rena4ition Imnrohahle
When the nresent receiver,s office
~ ciosed q seenos imnrolnahle that
thar AVER min 10 another 81 tn Find
"a ~ state Two factors bear at
4,.,. -..~s,..,,