The Bismarck Tribune Newspaper, June 23, 1919, Page 2

PAGE 2. Wealt BEFORE THE BANKING BOARD OF THE STATE OF NORTH DAKOTA, In the matter of the consolidation of the. American Exchange Bank of Valley City, N. D., and the Ameri- National Bank of Valley City, N. D. Testimony of William Olson, Presi- dent of the American Exchange Bank of Valley City, N. D.,, a State Bank. By Mr. Langer: Q. Mr. Olson, you are president of he American Exchange Bank of Val- Jey, City? A. Yes, sir. Q.. How long have you been presi- iden? From the time it was organiz- ed? A. -Yes, from the time it wat organized. . You have been the only presi- deni it has had? A. Yes, sir. Doesn’t Know The Price. Q: Now, I want to know how much you paid, your state bank, paid for the stock in the national bank. ‘A. Well, 1 could not tell just how much ij is, how much it was, Q. ‘Can you tell me approximately? |A.. No, I could not, to be right. Q. You know whether it was fifty thousand dollars‘ or a hundred thous- ‘and dollars, don’t you? A. Oh, it Imust have been over two. hundred thousand dollars. Q. Over two hundred thousand thousand dollars? A. I think so. «Q. You saw the transaction? You saw the checks and the notes? A. 'No, I didn’t see them all. Q. As I understand it, then, you paid different prices for the stock? A. Yes. « William Olson is a prosperous Barnes county farmer. He knew very little about banking at the time when he was made president of the American State bank of Valley City by ohn J. Hastings and Thomas Allan Box, Townley’s financial aides, The little that he really knew of the transaction in which, after taking a profit of $20,000 for selling to the farmers their own bank, extracted from the profitable venture another bit of a trifle more than $15,000, was related to the state banking board during its investigation into the transaction, The official abstract of Mr. request of the state banking board, follows: Olson’s testimony, published by Q. You paid the cashier and the president more than the others who had the control, or less? A. -No, we did not pay them more, no. Didn't Know But Used Bank Funds, Q. Did you pay them less? A. I did not have anything to do with the deal myself. ‘ Q. You are using money out of the bank you were president of to pay didn’t you? A, Yes, Q. Surely you would know how much you paid for. the stock, if you used the money out of the bank you are president of. A. I haven’t:it. ip my mind. Q. Did you sign the checks? A. I don’t know just how it was. Q. Did you sign any checks at all as president of your bank, buying any stock in the national bank? A I think not. Q. Who did sign them? A... Well sir, I could not say about that. Who Signed The. Checks? Q. ‘You mean to say that you are president of the bank and don't know who signed the checks when you bought out the national bank? _ A. . (No answer.) Q. You said you paid the Ameri- can National Bank two hundred thous- and dollars. A.. Why, I:couldn’t say now what it was. Q. Now, the old bank surplus, didn’t. they? A. wer.) By Mr. Thorberg: Q. They didn’t have any other real estate there, did they, Mr. Olson? A, No, I don't think so, The bank had some (No ans: or 8 ee ee THE PLAIN TRUTH ABOUT © MR, TOHNLEY'S PROGRAM} ‘Facts the Taxpayer Should Consider Before He Makes Up His Mind How He Is Going to Vote in the Referendym Election June 26 THE NEWSPAPER BILL Senate Bill 157 is the “newspaper” bill. It was in an effort to attach an emergency clause to this measure, giving it immediate effect and making it more difficult to refer the bill-to the people for their approval, that Townley and Brinton waved a club over the heads of members of the house of representatives for two: days, last winter, AND THEN FAILED. ; : There is the same amount of justice in‘Senate Bill 157 that there would be in a law giving a commission of three politicians at ‘the state house power to designate one official undertaker, or one official tailor, or one offi- cial grocer in each county, and to inform the public that it would be illegal for them to patronize any other. ‘ Senate Bill 157 directs a trio of politicians at the state house to select one official county newspaper in each county, and as many official state newspapers in addition as may be found necessary to care for extra league news- pre in counties where Brinton has two or more, in these papers and in no other must be published all offi- cial advertising, public or private, of an official news- paper. In Burleigh county, for instance, the Wing States- man or the Regan Headlight might be created the official newspaper. Taxpayers in the remainder of the county, to whom these newspapers would possess no news value, would be compelled to pay two dollars a year or any sub- scription price which the publishers might arbitrarily fix, merely on the chance that some time during the year this “official paper” might carry a legal notice of interest to him. The newspaper bill will mean a subscription subsidy of $500,000 per annum for 58 county newspapers and an unknown number of state newspapers, selected not be- cause the people of the state or in their own counties want them, but because they stand well politically with the organization which chances to be in power at the state house. The newspaper bill creates the most vicious form of political machine, one which subsidizes and poisons news at its source and which will enable those in power, to publish simultaneously in 53 official county news- papers and an unknown number of official state news- papers anything in the way of alleged news or editérial comment which they may demand. SENATE BILL 157 DOES NOT PROVIDE FOR THE SELECTION OF THE OFFICIAL NEWSPAPER BY THE PEOPLE AT A POPULAR ELECTION. UNDER SENATE BILL 157 THE PEOPLE HAVE ABSOLUTELY NOTHING TO DO WITH THE SELEC- TION OF AN OFFICIAL NEWSPAPER FOR THEIR COUNTY. THIS POWER IS DELEGATED WITHOU' a TATION OR RESTRICTIONS OF ANY KIND To" A BOARD OF THREE POLITICIANS AT THE STATE HOUSE. SENATE BILL 158, WHICH PROVIDES FOR SELECTION BY POPULAR VOTE OF ONE OMTIGIAE NEWSPAPER IN EACH COUNTY TO BE’ THE ME- DIUM FOR ALL LEGAL PUBLICITY, HAS NOT BEEN JUNE 26. REFERENDED AND WILL NOT BE VOTED. UPON F SENATE BILL 157, WHICH WILL BE if UPON JUNE 26, IS NOT A GOOD MEASURE; 1 SES. § SENTIALLY BAD, AND YOUR VOTE ON’ SENATE | BILL 157, IF YOU BELIEVE IN A FREE. AND HON- EST PRESS; IF YOU STAND FOR A SQUARE DEAL: JF YOU BELIEVE IN DECENT POLITICS AND ‘IN OPEN AND FAIR DISCUSSION OF STAT: FAIRS. _ YOTE “NO” ON SENATE BILL 157, peaiseng By Mr. Banger? Q:‘ Is that the only real estate there was? A.. That is the only real estate there was. 4 Q. Is that a fact there was a deal about some residence down there at the. same time? A. Nothing to do with it, Q. Who bought that? Hastings and Mr. Box, Q. How much did, Hastings and Box pay for that? A. I think it was approximately, fifteen thousand dol- lars, , The Consumer's Stores, Q. 1 see the United Consumers Store Company is down here for a subscription. Know, anything about that? A, Yes, there was—they are down for a hundred shares, aren't they? Q. More than that. A. Mr. Hast- ings and Mr, Box and myself signed the notes for that stock, to be sold to shareholders. When we sell, we ap- ply this money on this. Q. You are interested in,.the Con- sumers Stores Company? A. No, I am not. E A. Mr. ‘|-You are as good as gold. A. No. “-]AL No. Q. Why should you sign any notes? A. Well, to make the deal square for the bank. Q. That is, the bank would not take the notes of the © Consumers United Stores Company, unless you signed them? A. don’t know whether that is the idea or not, but just to square the bank. Q. As an accomodation measure? A, Yes. i - Q. And they amounted to about nineteen thousand dollars? A. Yes, about seventy-five to one hundred shares. Q. Why wouldn’t the bank take the notes of the Development Company? A. Why, I don’t know. Didn’t Know Why. Q. 1 want to find out why the Con- sumers Store ;is. mixed ‘up in that deal, if you know. A. I don’t know why it is. Q. The subscription of the Con- sumers Stores is only $12,500. Is|’ that a fact? A. It is, . Down here you have got them for $19,100. A. A difference in the number, of shares, 43 it? -Q. Yes. A. We have four of, those subscription books. Q. Four of them? A. Yeu:: Q. Two more besides these two? A. Yes, sir. Q. Is Porter Kimball in it? A. 1 understand he was connected with it a while ago—I don’t know. : By Mr. Hall: Q.° Let me understand before we get away from the Consumers Store Company how many shares they hav in the institution now. £ A. (No answer.) By Mr. Langer: Q. According to this schedule they have got $19,100—191 shares. The Consumers’ Notes. . By Mr. Hall: Q. Have you signed notes with (Mr. Box'and Mr. Hastings to. secure the payment for ‘this $19,100, or on behalf. of the United Stores Company to. secure their subscription in any way? A. I don’t remember the amount: that. they. signed for. » By Mr, Langer: ' ; Q.But:.you signed all they asked you to ign’ A: Yes, -Q. As:1 understand, you are worth about a quarter of.a million dollars. Q. The Federal, Development Com- pany :financed this deal, did. they? A. Well, that was done through the Bank and the Federal Development Company: some way—I couldn’t say.) Q. You mean’ the. Scandinavian- American Bank? A. Yes, J believe that was.it. t + Q. You charged the farmer, .when he bought the: stock, $125.00 per share. A. Yes. 2 Q. $15.00 went @ surplus? A. Yes, Q. And the $10.09 to . promotion and development? A. Yes. Q. That went to the Federal De- velopment Company? A. Yes. Q. Did you have any agents sell- ing that stock, besides Kimball and Box? A. Well, I don’t know how you would term it—Mr. Aamoth and Mr. Graham and Mr. Torkelson and myself—I think that is all. Q. ‘Anybody else hired to sell any stock? A. Yes, there was another young man that worked in the coun- try for a couple of days.. Q. .I mean, you didn’t hire any pro- fessional stock salesmen to go out? Q. Did you. have a meeting with the farmers on a certain day? A. ‘They were all notified to ap- pear on election day. ‘Q. About a hundred came there? A. Yes, I believe:so. Q. And those farmers all under. stood at that time that ten per cent of the money they paid, ten dollars went to the Federal Development Gompanyt A. Why, I think they *Q. Was it explained. to them in your presence? <A. At that meet- ing? 2 Q. Yes. A. Well, I was in a party there—we had the meeting in the bank lobby, in the building—I don’t know whether that particular point was explained to the crowd.or not. - __ The Promotion. Fee. :Q. . Now,.the shares .of stock you sold, did the farmers, you sold it to think the Federal: Development .Com- pany kept ten per cent for promo- tion? A. Yes, Q. No. opposition to it on the part of anybody. A. No. Q. Now, what arguments did you use when you sold the stock? A. Why, that we was putting in a farm- ers. bank, a good thing for the com- munity. . : ‘ To..Get The Cheap Money. 3 :Q.. Do you know whether yourself or Mr. Box, or Mr. Hastings-or Mr. Grady or Mr. Aamoth or anybody. told the farmers down there they were Putting in that bank because of the State bank here? A. No. » @:, Did. any. of them. tell that the state bank would send money down there at two per cent and your bank loan it out for eight per cent? A. There was some talk on the streets about we were going to put in a bank and borrow money at six per cent. ¥ Q. Loan money at six per cent? A. ‘es, Q. Where were.you going to get the money from? From the State? 4. I don’t know where we were g0- ing to get it from. Branch of State Bank. Q. Wasn't the understanding down there that what you were establish- BISMARCK DAILY TRIBUNS® the “othér way? “A. . There might have been some one, possibly. Q.. In your presence ‘did anybody tell those farmers that the state was going to put their money down there and get two per cent on it and loan it out at six or eight? A. Not to my knowledge. Was a League Bank. ‘ By Governor Frazier: Q. It was a so-called League Bank when it was organized, wasn’t it? A. Yes, there was gome thought so. By Mr. Hall: Q. I want to know whether I am getting this thing clear in my mind or not, I want to know. if my con- ception of the: organization is right. We find that, at Valley City,. there was a banking house capitalized .at $50,000 surplus. They were establish- ed and doing business, weren’t they? Here came along. a committee of pro- moters giving oyt—well, I don’t. mean to say that they themselves gave out the impression—but somebody. gave out the impression for them, anyhow, that they were about to establish a league bank institution, and” they were going to capitalize that league instiution at $200,000, and the result of:it was that. they started out and sold their capital ‘stock, $200,000 worth, at a premium of $25.00 and that the income ‘totaled $250,000. $200,000 were placed: into the jack- pot:-of the. bank, and $30,000 was placed in there as a surplus fund, and that :§20,000 was turned over, or will accrue when these notes are paid. to thg Federal Development Company. 4. Yes, I understand, it that way. Just Where They Were. Q. So that. the people of Valley City. fing themselves . just exactly where they were at’ the beginning, with. but the one’ banking house, with a little more-capital it is true, but} they have paid $20,000 for getting the same banking house back. A. Well, they have paid a.good deal more than that, haven't they? Q: Whey. have paid $20,000 for the ee there. It has cost them $20,000 and what - additional’ benefits shave . they derived from it? The ~ people in Barnes County who are doing busi- ness at that bank are paying $20,000 for the re-establishment of the bank that was already in business, A. A new bank, a state bank. Q.*. Re-organization, get that thing clear, benefits? Governor Frazier: Before there was afew people in the bank, now a big stock company. Mr. Olson: A. It his iner the bank four times wha: it w: as to enable the peopis to do four times the amount of Lusines3 for the accommodation of the peayle. By Mr, Langer: Q.° Do you know whether or not Hostings and Box or the Federal Je- velopment company sold the bank they bought to these farmers at ex- actly the same price they bought ji at? A. I could not say as to that EIGHT STEPS IN U.S. ACTION TO RATIFY PEACE TREATY I wanted to What are the ed (Continued from age One.) end seven democrats, probably will enter into the discussion. MAY BE TWO MONTHS DELA I. How long it will take for the com- mittee to consider the treaty is prob- Jematical, but senators now in Wash- ington do not expect the committee will report for at least a month and a half or two months after the treaty is sub- mitted ‘to it, When the committees report, or re- ports, reach the, floor of the senate there will be another discussion; by senators who are not members of the} foreign’ relations committee, and if there are.two reports each of the con- flicting sections of the committee will have to defend> its. own, ‘This’ will mean more argument, more speeches 30] Partisan feeling | MONDAY, JUNE 23, 1919. et building wag included in the deal. Q.° You think some un od it} privilege of having that bank remain| senate, as in-the committee, any. sen- PRESIDENT OLSON: TELLS WHAT: - HE KNOWS OF VALLEY CITY BANK REORGANIZATION: BY : HASTINGS Barnes County Farmer Signed Checks and Notes as Re- quested by Townley Lieutenants—Institution Was to Get Cheap Money From State to Be Loaned to Farmers at Profit ef Four Percent—Stock Sold to Leaguers at $25 Profit.., ator may offer amendments,. and un- Coubtedly: several. of. them «will. try to bave their pet schemes incorporated in the treaty. The constitution provides that two- flirds of the senators: present \ must vete for the treaty, to ratify it. It is not necessary, therefore, that a two- U:irds vote of the entire membership be cast in its favor, nor is it necessary that every member of the senate be present, If all the 96 members were present, 64 the treaty. When the treaty is ratified the senate {will advise the president of its action, just it does in the case of any bill or resolution, President Wilson will then issue a proclamation declaring the war at an end. i If, however, the senate should refuse to ratify the treaty without amend- ments, then the amendments would have to be submitted to all the nations, large and small, which signed the doc- ument, If they consented to the amendments, the process, of ratififica- tion could go on, The senate .is not empowered to change a single one of..the 80,000 words of the covenant without the con- sent of the other:powers. It can, how- ever, make its ratification conditional upon the adoption: of amendments, That is, it can say: * ratify the treaty provided, that article 519 be stricken out, or that. a new article be added ‘to read ‘as fol- lows.” In this case - the. ratification would be binding after the other pow- ers had accepted the conditions named, If the senate refuses to ratify: the treaty is considered likely that a new peace conference will- be called, for none of the allied powers would be willing to be a party .to a treaty to which the United’ States: was: not a We holdsthe moneylbag, and considered. Inasmuch as this, is th war in which the United Stat has: had_ so. great a number of allies, it is not at all unlikely that the supreme court may votes would . ratify and. more delay. On the floor of the he asked to outline just what the pow- ets of the senate will be. i STEPS IN RATIFYING TREATY. Here are the successive steps that will be necessary in ending the war in the United States Senate: 1. President submits official draft ot treaty and addresses senate, asking iis ratification. eae 2. On motion of chairman of com, mittee, treaty is referred to comm! tee on for 3. Committee holds conference, on treaty, calling in experts and members of peace delegation. - 4, Committee submits to senate either one unanimous report or major- ity and minority reports, a 5, Discussion of committee report. or reports on floor of senate, 6. Vote on ratification ; ‘two-thirds vote of senators present required to ratify. 7. Senate submits its action to pres- ident. 8, President, proclaims treaty: yati- fled and war ended. 36 BODIES RECOVERED.’ St. Paul, June 23.—The first official message received today from Adjutant General W. S. Rhinow at Fergus Falls said that 36 bodies had been recovered, and that other bodies were in the debris. 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