Northwestern National Bank (Portland, OR)

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MILLIONS NORTHWESTERN BANK

PORTLAND. million dollars in cash was rushed here today to stop run on the Northwestern National bank which began late yesterday and continued mildly today. The money was sent from San Francisco, Seattle and Spokane, Wash. The Northwestern National bank today passed into the hands of the the First National Bank. Transfer of the bank and the decisions to liquidate it resulted from heavy inroads made by the run, A small crowd of depositors were hand when the bank opened today.

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NORTHWESTERN BANK TAKEN OVER BY TWO PORTLAND CONCERNS

PORTLAND, Qre., March 29. (UP The Northwestern National Bank, scene of a run late yesterday, passed into the hands of the United States National Bank and the First National Bank today. It was announced that all depositors would be paid in full with cashier's checks on one of the two banks and that affairs of the Northwestern would be liquidated. Fifteen million dollars in cash arrived from San Francisco, Seattle and Spokane today and will

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FIFTEEN MILLIONS RUSHED TO STOP RUN ON BANK

(By United Press) Portland. million dollars in cash was rushed here today to stop run on the Northwestern National bank which began late yes terday and continued mildly today The sent from San Francisco, Seattle and Spokane, The Northwestern National bank today passed into the hands of the S. National bank and the First National bank. of the bank and the decisions to liquidate It sulted from heavy inroads made by the run. A small crowd of depositors were on hand when the bank opened to-

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Run On Bank

March million dollars cash rushed here today stop the Northwestern National Bank which late yesterday and continued mildtoday. The money was sent from San FranSeattle and Spokane,

The Northwestern National Bank passed into the hands of the National Bank and the First National Bank. Transfer the bank and decisions to liquidate resulted from The inroads made the

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RUN ON PORTLAND BANK Portland, Ore., March 28.-(AP) -A run today on the Northwestern National bank of Portland. the Morning Oregonian will say. tomorrow, by "unfounded and malicious rumors circulated by telephone," started this morning and continued until the close of business tonight. In order to accommodate as many depositors as possible the bank did not close at the usual hour but remained open until 6 o'clock.

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BANK

DEPOSITORS WILL BE FAID IN

FULL, OFFICIAL

MENT SAYS; TIME DEPOSITORS

PAID.

Portland, Ore,, March The Northwestern National Bank, scene of run late yesterday, passed into the hands of the U. National Bank and the First National Bank today.

It was announced that all depositors would be paid in full and that affairs of the Northwestern will be liquidated.

Fifteen million dollars in cash arrived from San Francisco, Seattle and Spokane today and will be used if the continues. The bank opened at 10 o'clock and fair sized crowd of customers was waiting to receive assurance as to the safety of their funds or to withdraw them. Transfer of the bank and decision to liquidate it resulted from heavy inroads made by the run when hundreds of small depositors withdrew their accounts The bank remained open late last evening and all accounts were paid, the customary thirty to ninety day withdrawal notice being waived

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BANK UNABLE TO WITHSTAND WITHDRAWALS

PORTLAND, Ore., March Northwestern National bank, scene of a run late yesterday passed into the hands of the United States National bank and the First National bank It was announced that all depositors would be paid in full with cashier's checks on one of the two banks and that affairs of the Northwestern would be liquidated. Fifteen million dollars in cash rived from San Francisco, Seattle and Spokane today and will be used if the run continues. The bank opened at 10 o'clock and fairsized crowd of depositors was waiting to receive assurances as to the safety their funds or to withdraw them. Transfer of the bank and decision to liquidate it resulted from heavy, inroads made by the run during which hundreds of small depositors withdrew- their accounts.

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Bank Sold After 'Run'

First National and National Purchase

Million Dollars Sent Other

Depositors

March Northwestern National passed into the hands of the United States National bank and First National bank today. announced that all positors would be paid in full cashier's checks on of the two banks and that affairs the Northwestern liquidated. Fifteen million dollars in from San Francisco. and Spokane today and used the The bank opened o'clock and crowd of depositors waiting receive assurthe safety of their funds or to withdraw them. Transfer of the bank decision to liquidate resulted from heavy inroads made by the run during which hundreds of small depositors withdrew their accounts. The bank remained open late Monday evening and all accounts were paid, the customto 90-day withdrawal tice savings accounts being waived. Ainsworth. president of the United States National bank. and Mills, president of First National bank, issued joint statement today in which they intimated that the run caused by 'malicious rumors which in our opinion. Agreement of the banks take over the and to guarantee of payment counts followed an all-night session of the Portland Clearing House association. William Crawley. national bank examiner attended the conference and proved The March 23 call for national banks showed the condition of the Northwestern to be lows: resources posits, surplus and profits, The Northwestern of one the largest national banks Portland. founded in and the Pittock estate, ownof the Morning recently acquired control

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Depositors Make Run On Portland Bank

Mar the Northwestern Na. here this afternoon hundreds depositors caused tired work overtime in paying thought financial circles that the bank could the run without difbut bankers puzzled caused the run.

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NORTHWESTERN CLOSES ITS CAREER IN BANKING

CIRCULATION RUMORS CAUSE OF MONDAY RUN

Board Assigns Assets to Two Other Portland Banks, They to Assume Deposit Obligations

Ore., March Northwestern National bank of this city closed its banktoday when assigned Its assets the United States National and First National banks of Portland consideration their deposit obligations of the Northwestern. Depositors are receiving 100 the dollar on their deposits, and subjected to dein getting their money Those are the savings department of the bank are not being to give the stipulated 30 to 90 days notice in order withdraw their accounts This was the policy decided of directors for the Monday when the run the began. After weathering the withdrawof more than during the first day the run. the directors bank into agreement the Portland Clearing House the United States National and First National banks are both in turn backed by the federal serve. for the payment of all posits demand The of rumors, characterized by heads the First National United States National and the run the Northwestern. declared. president of the United States National said tonight: covering of Monday night and Tuesday have every that the securities held by the NorthwestNational will out In full and most regretful that this unholy attack their busimade liquidation of the Northwestern advisable."

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THE PORTLAND BANK CRISIS

Another big Portland bank is to go out of existence as a result of the announced liquidation of the Northwestern National whose assets will be taken over by the First National and United States National without loss to depositors. The crisis appears to have been brought on by the circulation of rumors that the Northwestern was insolvent. This resulted in a run. The bank was able to meet the demands of the depositors, but the situation created was such that the officers decided to liquidate and retire from the field. The affair is to be regarded with regret, though the prevention of loss to depositors is a matter for congratulation. Two main facts stand out in the incident. First: That even a great bank is absolutely dependent upon the confidence of the public. No matter how great its material assets may be, public confidence and good will are indispensable. Remove this and no bank can last a week. In a somewhat lesser degree this principle applies to business generally. There can be no success without the support and approval of the public.

Second: The banking situation in Portland is fundamentally sound as shown by the immediate raising of more than $15,000,000 by two other banks to pay off the Northwestern's depositors. Nobody will suffer loss or even inconvenience. It is a convincing proof of the confidence of the financial leaders of Portland in their city. They have used their money to stabilize the situation when they might have permitted a competitor to go to the wall with immense losses to thousands of people.

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CARY SEES BIG BANK RUN

Leo J. Cary, of Coquille, who returned this morning from brief business trip to Portland, said that one of the most remarkable sights he ever witnessed was the run on the Northwestern National Bank in that city which continued unabated all day Notwithstanding the fact that the First National Bank and the United States National Bank. with combined resources of nearly $100,000,000. announced that they would take, over the Northwestern and guarantee that every penny would be paid depositors, the run continued all day yesterday until the bank closed at o'clock. A crowd of one thousand or more kept surging around the bank all day. Officers of the bank were stationed at each door and Mayor Baker made speech to the depositors Fifteen million dollars in cash were received to provide pay. ments to-depositors: This money was rushed in from Seattle, Spokane and San Francisco. The larger part of the crowd was well dressed. substantial looking people, and there seemed to be more women than men in the mass struggling to get into the bank. Vold Sees Run H. T. Vold, with the Pacific Coast Adjustment Bureau of Portland arrived this morning to the damage of the old Pioneer hotel which burned in Empire.

People Calmer

Mr. Vold stated that the run on the Northwestern Bank at Portland had apparently subsided yesterday afternoon when he was at the bank. Following Mayor Baker's speech to the people calmer attitude was dreds of people jostled their way into the bank to draw out their money immediately. thinking that a lack of funds would follow. However, the people of Portland are now aware that the bank is not suffering under any such conditions and that their money is safe. Mr. Vold. who was in the bank yesterday, reported that it had apparently resumed state of normaley but many were yet drawing out money from the safety deposits.

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HEAD OFF A RUN ON BIG BANK

Fifteen Million Dollars Rushed to Portland, Ore.

Portland, Ore., March 30.-Fifteen million dollars in cash was rushed here Tuesday to stop a run on the Northwestern National bank. which began late Monday and continued mildly today. The money was sent from San Francisco, Seattle and Spokane, Wash. The Northwestern National bank passed into the hands of the United States National bank. and the first National bank. Transfer of the bank and the decisions to liquidate It resulted from heavy Inroads made by the run. A small crowd of depositors were on hand when the bank opened Tuesday.

Wm. Penn-5 cents-A Good Cigar.

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RUSH FIFTEEN MILLION; HALT RUN ON BANK

PORTLAND, Ore. March teen million dollars in cash was rushed here Tuesday stop run on the Northwestern National bank which began late Monday and tinued mildly Tuesday The money sent from San Francisco, and Spokane, Wash. small crowd depositors hand when the bank opened Tuesday.

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FORMER FALLS MAN MANAGER PORTLAND BANK

Mark Skinner Was Manager of the Institution Which Was Taken Over in Portland by Two Other Great Coast Banks.

The taking over of the Northwestern National bank of Portland the United States National and the First National of Portland, told in The Associated Press dispatches in The Leader, is of local Great Falls, Mark Skinner, formerly of this place, was president and manager the The bank was one which some deposit. but ternal troubles are understood started rumors, and after the of Tuesday, the bank staying open until o'clock, decided that the other two banks should purchase the and take its assets over in division between the two The Northwestern building landmark Fortland, being 16 stories in height. understood that the internal dissension in the bank decided the directors to sell out to the other banks rather than go ahead under the circumstances. and is also understood here that the stockholders came out without loss. Mark Skinner raised in Great being connected for number years with the First National bank. working up boy. was connected with the Stanton bank in its organization, leaving to organize the Commercial National bank. leaving here 1916 to take presidency of the First National of St. Paul, and leaving that institution five years ago take the vice presidency and later the management of the Portland bank. in which he had some $50,000 in stock. and member of the board of directors. It understood that Mr. Skinner will retain Interest in the Portland and become connected with one of the other Institutions.

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BANK RUNS bank trouble has been put behind. The excitement and hysteria of yesterday is quietude today. It is reason for congratulation.

It is not often so in case of run on bank. Generally it means receivership bankruptcy. That long ties up funds. often periods. Depositors wait long and get their money driblets that do them little or good. The costs and the very nature of bankruptcy causes more or less dissipation of assets. dead horse in business loses all its friends and the public's respect. Heavy, often enormous, fees are collected for administration. More than once the fees in bankruptcies in Portland have mounted to the proportions of scandal. enough With funds tied in court proceedings, every busi- geous ness suffers. cloud Collections are difficult. spirit return hangs trade. county, of uneasiness hangs the this Though was bank. its passing leaves no destructive aftermath. The run, the drawn faces the and the excitement history that will soon be forgotten. Business is as usual year should and every prospect is bright. happy outcome, gratifying contrast with what might have been. It ought to be the public of the soundness and staof dates. bility financial Portland. It would seem to create in the public mind and conviction that the financial of the town are ably. and safely conducted. It ought to create prefer ogy to forefend future bank runs. The fact that every depositor has received or can any day receive cent of his that there was not the slightest every money reason for the the frantic depositors surged around the bank counters, run. As the and officers of the institution were bending every energy defeats to guarantee the smallest depositor against even penny of loss. The spirit the stockholders made clear in the pledge of their personal fortunes guarantee that the banks liquidating the fairs suffer loss. What sacrifices these earnest stockholders of the Northwestern made tured press and the limit to which they went in protecting depositors, they alone know. This, together with good offices of other Portland banks, which might stood aloof, very agreeable phases of what threatened at tion one time to be very disagreeable affair. And out of all, there this: We all know now that there was talk occasion for run. And we always know that run generally does the thing the depositors do want the bank to close its doors. The depositor who listens rumors and phones other depositors, the very thing most likely to cause themselves today loss by closing the institution. her. She is in jail, and there is to court battle over the family money. married folks only knew rows lead one direc-

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NEW LIGHT ON THE PORTLAND BANK CRISIS

Because there is much public interest in it, the publication of a few additional facts on the closing of the Northwestern National bank of Portland last week, together with a brief comment upon them appear to be worth while. Outstanding facts about the affair appear to be: First-That bad loans had been made by the bank during the past few years and that losses which had to be written off had prevented the payment of dividends to stockholders and restricted the bank's growth and prosperity. Second-The bank was never insolvent and with a change in management had placed itself in the best financial condition in its history shortly before the closing. Third-That the "run" on the bank Monday, March 28 was the result of a series of rumors which apparently were started by some person or persons with malicious intent. That these rumors were entirely without foundation. Fourth-That the bank paid out nearly $2,000,000 in cash the afternoon of March 28. That evening its principal stockholders agreed to sign personal guarantees for large sums of money in addition to the double liability to which they were legally held. Fifth-That finally they agreed to sacrifice their large investments in the bank and to turn the assets over to two other Portland banks without compensation to themselves, but with an unconditional guarantee that every dollar due the depositors would be paid at once. The facts indicate that the run was entirely unnecessary, that it was the result of a malicious and criminal plot and that the principal stockholders of the bank courageously sacrificed their large investments and their personal pride in the interest of their depositors. We may justly conclude that the closing of the Northwestern is a drama in which human nature at its greatest heights and lowest depths stands revealed. Too much cannot be said for the courage and sense of honor shown by the one group, and no words of contempt carry enough sting to describe the instigator or instigators of the plot.

One of our earliest business recollections was a sign in a little eastern bank which read, "Honor thy father and thy mother, but not strangers' checks." The advice was good then and it is good now. Baker is visited periodically by bad check artists who pick up a bunch of easy money and then leave for parts unknown. This could be stopped if our people would be a little more careful in cashing the checks of those they do not know. The bogus check toll is greater than most people suppose.

We entered the World war 10 years ago today, and outside of China and Chicago the world is at peace. While all we fought for was not realized, the great menace to civilization was removed. The world was made safe enough for democracy, but the greater task of making democracy safe for itself is still an unfulfilled hope.

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THEATRES

Playhouses In New York, Once Part Of John Jacob Astor Estate

Newspapers Of Oregon City Are Hit By Failure Of Northwestern National

ASSESSED AT ALLEGE MISMANAGEMENT $2,200,000

New York, April theatres heart Times tion having close sold by Robert Dowling Walter Reade who concontrols chain theatres this and other cities. The properties involved the Astor, located Street Broadway. The Astor Theatre and building. the largest has frontage of the north side and depth of 100.5 feet. Bijou, which adjoins, has frontage Street depth while the Morasco occupies plot 100 by 100

Assessed $2,200,000 The plots frontage feet Broadway and 308 feet Street and assessed the City New York taxation purposes the at $2,200,000 corner occupied by the Astor Theatre of the valuable the Times section, there eight on FortyStreet, between and Eighth sites the three theatres just Mr. Reade formerly the John Jacob Astor and public auction by Joseph Day and Clarence Davies in the Astor in that sale the first bid made when Astor Twelve bids finally sold to Mr. Dowling for that time $960,000. Others Then Sold for $350,000 The Bijou Moresco Theatres and offered as one parcel and started finally for which was less the values the property by the city upon the home tonight.

San April 10. land, Ore., has within the past ten days been shaken by the suspension and collapse the Northwestern tional Bank. While the Northwestern has been reckoned among the older stable banks, it has held popular running tween and More ago the resignation was nounced, and the fact leaked out that the Olmstead regime had weakened the institution. that re-establish the stockholders been assessed 100 per cent their holdings. That started run on the bank, which was stopped only when the First National and United States National guaranteed payment depositors. did prevent the fall of the The trouble appears to have grown out loose manner large Knowledge of unbusinesslike of large accumulation of assets have escaped the stockholders. Only few weeks the reorganiz.:tion offers $125 were made outstanding $100 par, with market quotations at with few shares offered.

Assets Equal Liabilities Despite the collapse, assured the the are fully equal to Only the will direct losers the aggregate sum of about $2,000,000. stories afloat that the management was in persons to whom alleged illegitimate advances had been made. Criminal charges will be presented. but their definite There been active bidding for the Northwestern Building, the prevalue is about $2,500,000. offer that said rumor identifies this offer the Bank Italy the both of Francisco. Indirectly the newspapers of Portland involved current sip. The Pittock majority owner The Oregonian, was the larg. est owner broken bank, and understood that the Pittock trustees actually put up more than to make up the bank's losses. The proprietor The Evening Telegram reported to have heavy loser, and has that in the that will pass either rival, The Evening Journal or to the Hearst organization.

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Former Official At Bank Gets 18 Months Sentence

PORTLAND, Nov. Ford H. Schiller, 24, former sistant collection teller at the Northwestern National bank, now defunct, was sentenced to serve 18 months at McNeil island today by Federal Judge McNary, when he pleaded guilty to charges having embezzled $5,000 from the bank and made false entries upon his books to cover hte defalcation. According to Forrest E. Littlefield, assistant federal attorney, Schiller began taking money be- The longing to the bank in the summer of 1926 and continued to do Many bedroom has been beautified at until the time the bank suspended when the amount reached expenditure, with LUSTRELAC ENAMEL. The old bed$5,000. His books were balanced room furniture, painted in an attractive color combinby him at that time by the entry ation, and decorated with transfer motifs, becomes of debit slip for $5,000 on suite of furniture according to the latest fashion! New York bank.

He was receiving salary month. Send for Color Harmony Chart

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PRESIDENT BANK

Jan. Emory Olmstead, former president of the Northwestern National bank which was liquidated last March after run, filed an answer in federal court today to suit brought against him other former directors the by Charles Burckhardt, stockholdBurckhardt sought to $60.C00 and interest for he charged the to bank's affairs by the directors that any act of his while director the closing of the bank He asserted the bank he signed president and director ruary 28, 1927, and by Price, trustee the H. Pittock estate Referring to the run on the bank last March. which said was due false and malicious rumors, said was paid depositors the first day of In tier months since the Northwestern tional bank paid to depositors all and none to He believed that there would be $2,500 available for stockholders. Discussing loan Wheeler Olmstead said amply secured He added Wheeler would be pay his obligations and those all companies. He added that than would remain intact the Wheeler problem is cleared crossed wires

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BELL'S WIDOW LOSES FIGHT SHOW BAD CHECKS to Get Insurance Major IN WHEELER CASE CHICAGO, Jan. 25. (AP)-The 66. year-old the

27 Introduced by Government in Building Evidence for Kiting Charge.

BANK OFFICIAL TALKS

Vice President Says Emery 01mstead Approved died the Transactions.

PORTLAND, checks, $719,762. were introduced by govern. ment today support their contention that Emery Olmstead, former president the defunct Na tional bank, and Wheeler mer president the McCormick "kiting" which they now on The checks were among those listed the indictments the two men representing loss to the The checks were Identified by Mark the bank, and chief witness the day for the government. Eight the checks had been returned the Title and Trust Brookville, five by the Trust company of Titusville, Pa.

Held Bank Assets. Each of the checks had been turned the mark. "not sufficient They are held part of the assets the bank which in the process of liquidation. The checks the government pointed the National bank by the McCormick Lumber company signed by Wheeler president of the were dated between February February 10, 1927. They bore the initials, identified by Skinner the of drafts the Wheeler Lumber company San De. cember 1926, totaling also admitted They had been returned to the NorthwestNational Although he was vice president of the bank and of its board of the Skinner today that he was not aware the transactions carried on by the McCormick Lumber and was not aware the large amount company owed the bank until Feb. ruary He admitted that Frank O. Bates cashier, other had to him that checks" had that he had been advised that matter had been taken care of after to the attention Olmstead.

Agreed to Take Notes. Skinner testified the meeting the the bank October ratified by the board 1924, October 15, wherein overdraft Wheeler amounting to $350,000 acted and to secure this But the four deposited, one from the McCormick Lumber and other from the Wheeler Timber company for relation to the overt indictment, said that prior the the last March, sulting ultimately in the closing the the alleged check the cooperation Olmstead, not general information the bank's He he refused employees. to approve on this account December, 1926. Much the testimony today was ment hopes build case. Admits Unusual Practice. W. Becker, collection teller the National, final witness the day His department, he said, took care returned checks of the McCormick Lumber company. An unusual tice was admitted that Olmstead was notified they had been returned the the series, called Wheeler his keeper, but was told that the matter would be taken Olmstead These dishonored checks which were the possession of his checks by Wheeler's When him they bore the initials signify that they had been presented the president of the bank and by him approved. After notifying Wheeler the first few the were his said, then the matter up directly he said, that "I'll see that they are care of."

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Just Ramblin' Around

(Editor's Note: This series of communications will appear in the Evening Herald and Morning only per cent of the 7500 subscribers or the Herald and News take both papers).

On the Cascade Limited Sunday, Feb. 19th. YOU see the broad counA try bordering the railroad when you travel south you are impressed with that eloquent saying. "An Empire Awakening. For such it is. Those who were responsible for draining Lower Klamath lake have the thanks of everyone but some sportsmen who still insists that the lake is needed to ensure bird supply. Yet most of those same portsmen will not turn their hand over to help decrease the hunting limit on birds. The thing that is exterminating the bird life of Klamath county is the hoggish hunter who gets the limit. and the hunter who shoots the birds and never even picks them up because it is an effort to carry them back to camp. That is the class of sportsmen who rear up on their hind legs and howl about draining Lower Klamath lake. It is a stock pasture now second to none in the country. and in time it will be the home of thousands of people, for the rich land when once tamed, makes an everlasting productive area.

Weed highway is almost an assured undertaking. al though It is taking longer to get it started than many of us had expected. In Klamath county before the state line is reached there is quite a bit of construetion yet to accomplish. When I first looked at it there seemed to be little to do to make a good highway, but I can now see the need of a better and wider grade, possible change in location of some of the road and a general lining up of things to make it hitch onto California's end when the state decides to act. What that highway will do for Klamath Falls will be marvelous. It means as much as the erection of another Weyerhaeuser mill. Down at Weed and at Tennant, R. A. Long has been spending his money for years and those camps are firmly established. The men will all come to Klamath as soon as the road is open. They will come to have a good time. see the shows. and buy a lot of their supplies Siskiyou country is a gem in the California constellation, for Siskiyou is bound to do her part

In the building of that highway. She is the most unselfish country in the golden state and I'll bet Governor Young a new hat on it. According to the selfish rules of mankind Biskiyou would say she "does not choose' to build a road that will aid another community. But not so: she says she will help and she is helping in mighty materlal way to get the road in action.

RINDING Emery Olmstead and Jack Wheeler guilty in the Northwestern National bank case at Portland is causing a lot of talk among people who travel. One is rather surprised to see the interest that seems to have been taken in the case by those outside the state. All of which proves once again that a bank is peculiar kind of business and those who are given to talk and gossip should watch their step in talking about a bank. That Is why we have state and federal laws to bridle people's tongues regarding financial institutions, for the slip of the tongue relative to the solvency of a bank is a really serlous matter. Wheeler and Olmstead are not accused of that particular offense, but there are those in Portland who assert others talked too much and that talk caused the Northwestern National to close up shop and the stockholders to pocket loss that would build several sewer plants in Klamath Falls. Not so long ago woman appeared in an Idaho community selling silk underwear. She canvassed the community and in the coy feminine manner dropped remark here and there that a certain bank was not safe. She was a stranger in strange land but her poison did the work and a run on the bank followed. proving disastrous to the institution. So, people can cuss a newspaper and a newspaperman with imunity. they sling mud at their grocer or their meat man. can even abuse the laundry owner. all in the conversational gossipy way. but they must not light upon banks with such abuse.