12286. Peoples State Bank (Grand Forks, ND)

Bank Information

Episode Type: Run → Suspension → Closure
Bank Type: state
Start Date: February 14, 1921
Location: Grand Forks, North Dakota (47.925, -97.033)

Metadata

Model: gpt-5-mini
Short Digest: b41a7824

Response Measures

Borrowed from banks or large institutions, Full suspension, Books examined

Other: Receiver appointed and lengthy receivership/asset-sale litigation followed; 20% dividend later paid to depositors.

Description

A run began in mid-February 1921 after sensational newspaper headlines; directors ordered the bank closed (suspension) Feb 17-18, 1921. The bank went into receivership under John Vallely and assets were advertised for sale in Nov 1922. There were efforts/announcements to reorganize/reopen in Aug 1921 and legal proceedings through late 1922, but the bank remained closed and in receivership—thus a run leading to suspension and permanent closure.

Events (4)

1. February 14, 1921 Run

Cause: Rumor Or Misinformation
Cause Details: Withdrawals began after newspapers published sensational headlines about a meeting between promoters and bankers; directors blamed The Herald for precipitating the run.
Measures: Directors refused statements; no special measures beyond ordering the bank closed are described.
Newspaper Excerpt: the run was caused by The Herald...run which began Monday
Source: newspapers

2. February 17, 1921 Suspension

Cause: Rumor Or Misinformation
Cause Details: Board ordered the bank closed after the run that began following newspaper reports; articles state directors 'ordered the bank closed' citing the run as reason.
Newspaper Excerpt: Following a meeting this morning of the directors, the Peoples State bank, closed its doors shortly after noon.
Source: newspapers

3. August 11, 1921 Other

Newspaper Excerpt: it was announced from Grand Forks that the farmer-owned People's bank in that place would soon resume business. Efforts are made to frighten farmers ... preventing a reorganization.[announcement of planned reopening interrupted by attacks].
Source: newspapers

4. November 1, 1922* Receivership

Newspaper Excerpt: Peoples State Bank, Grand Forks, North Dakota. John Vallely, receiver, Grand Forks. (assets for sale listing Nov 1922).
Source: newspapers

Newspaper Articles (21)

1. February 17, 1921 Grand Forks Herald Grand Forks, ND

Article from Grand Forks Herald, February 17, 1921

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"Well, won't you tell me why you closed?" he was asked. "A run." "When did it begin?" "As soon as your paper got out with its sensational headlines," he replied. Mr. Knutson was no more communicative. He said a run did it, and the run was caused by The Herald. "No bank can stand a run," he said. "I don't care whether it's a state bank or a national bank, it can't stand a run." "Won't you make some kind of a. statement? something that will give an intelligent, fair account of the matter?" he was asked. "I won't give The Herald any statement." he said. "It wouldn't be used correctly anyhow." "You write out a statement and sign it. and I'll guarantee that it will go in The Herald just as you write it, providing you write the facts," The Herald representative informed Mr. Knutson. but he absolute.y refused to say anything. The People's State bank was organized three years ago. Thomas Allen Box and John Hastings, who at that time were organizing banks under the direction of A. C. Townley, as they later testified in the Valley City bank investigation, got a commission of about $7,500 for organizing it. The bank was organized with the idea of filling an alleged need which other banks in Grand Forks did not cover. Members of the board of directors are: C. O. Swenson, Northwood; E. H. A. Fisher, Kellys; J. P. Hemmingsen. Niagara; Jonas Lenz, Reynolds; T. G. Thompson, Thompson; B. O. Sorbo and H. O. Brenna of Grand Forks.

2. February 17, 1921 The Bismarck Tribune Bismarck, Mandan, ND

Article from The Bismarck Tribune, February 17, 1921

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PEOPLES BANK IN FORKS CLOSES DOORS TODAY Directors Shut Up Institution and Call Lofthus to Take Charge RUN GIVEN AS REASON No Statement Made Regarding Deposits on Hand by Cashier Grand Forks, Feb. 17.-Following a meeting this morning of the directors, the Peoples State bank, closed its doors shortly after noon. Cite Report. The action was forced as result of a run which began Monday after newspapers appeared in the street, giving an account of the meeting between Townley and the bankers, say the directors. They refused to say how much money was withdrawn and how much North Dakota money State bank has on deposit. Order Bank Closed. The directors ordered the bank closed and immediately after the cashier ordered O. E. Lofthus, state bank examiner.

3. February 17, 1921 Grand Forks Herald Grand Forks, ND

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WAS NOT MEMBER OF THE CLEARING HOUSE; RUN BEGAN MONDAY Did Not Owe a Cent to Other Banks in Grand Forks. OWES STATE BANK $50,000 ABOUT Disagreement on Directorate Othv Made Impossible For er Banks to Help. organized The People's State by Thomas bank, who, Allen then. Box three years ago Hastings, Nonpartine and John the employ J. doors of the at o'clock toard this afternoon were league. in closed by its order of the of directors. it apowed closed. When the $200,000 bank to depositorswear borrowed in and money. surplus $11,000. Approximately proximately Its capita $100,000 The was gross $75,000 assets are listed at Bank $390,000. of North in the Dakota People's had institu- State in 600 The on besides re-deposit which the institution local about $40,000 tion bank owed borrowed the state money. Draft Made. two days draft for $1,500 of North made closing Dakota toby the have Bank forced bank the refused say 10 believed.to ago to the to day. Officials statement of except Monday demake any which began bank that a run, closing. Savings it was much said. caused the made the to run, state how during the positors Officials refused withdrawn be less than money had it been is believed to not of the week. but bank was Clearing a $ 0,000 The People's State Grand Forks member banks Grand mber sociation. banks The in East throughhelp including House showed two a willingne gness the People's prop, Forks. the week to made definite out, would State out bank. and if carried A disagree osition. which the bank of open. directors, how out ever, the plan. ment have kept made on the it board impossible to carry the bank Wires Lofthus. of cashier state bank and miner to 60 the charge mand Ole wired c. Gordon O. E come Lofthus to tank. Grand Knutson. Forks man any to make The MO Get bank representation refused that of the "statements They to a simply run said which head- was Herald caused "gensation by cleans was by Herald. F. B. the Feetham. closing and lines" procipitated in for the The bank "because said of a shortof direcwas an of ready members cash. of are the known board as mem- held The of whom league. and decided 1008 all of the Nonpartisan this morn ng the folwas a beis meeting to close. here At placed o'clock, on the door diClosed rectors. o lowing the notice bank by order of the board of the of week. Differences on officers Board of the During the various embers bankers bank and conferred with bers of the erything Clearing was 10 done for senting buard association he mem and out. but it was to House help the the bank directoral there Apparently, the on impossible ii some said. differences some time. for have agree been of directors after the for annual were meeting reports board media in ately January was there reported who for pre- in of trouble. It Gle Knumber of use the of stance. that had been a elected board. beca When the report, no was viously heard opposition was not on the officials of such the statetisked said about that there prove their had 1 thank upoble and, that to Mr. of Knutson the bank of He dibeen nts. chosen said member manage of the board of not H. however with the it closing is interthis In State bank, bank indebt- is the People's to note that city which Dakota. is The ing in the of North Northwest Savonly to one the Bank bank the First owe yur National National the bank Northern the the State Bank bank of lash and a cent to other Grand from not Dakota. have The no redeposits under no obNorth Porks banks bank and are bank. did More- not s.ate the state bank Forks the the Grand gations to people's State other Grand Forks a cent to the East business con lanks or to being no The member associabanks. there whatever. House however. Little nections the Clearing every State effort, bank agree but did make People's reach any 1.011 to help possible the to. meni. Excitement. or No caused no trouble Shortly aft de The closing the bank. several and timent at closed. hall the doors appeare were red Mr. in the Knutson directors ex plained the closed mositors to get in that the that the De asked to them bank and of the member Fund emmission behing Lositora places banks tank Guaranty state guarantee which are Inside men which deposits in commission of director vers all of of the the board groups. each Those other in members found were in two talking to wore sitting were group in the other thinking made vilent. Herald to get the end one those but inparently. represe ntative a statement bank The attemption Iron the cashier veral and Gordon. he refuse officials. facts Mr to first, but no mor appealed will make name he said was tements reply. over my 10 Continued on Page

4. February 18, 1921 The Washington Times Washington, DC

Article from The Washington Times, February 18, 1921

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RUN ON NORTH DAKOTA BANK SHUTS ITS DOORS GRAND FORKS, N. D., Feb. 18.The People's State Bank, of Grand Forks, has closed its doors by order of the board of directors, following a run on the bank which began Monday. The bank owes approximately $200,000 to depositors and approximately $100,000 in borrowed money. Its capital was $75,000 and surplus $11,000.

5. February 18, 1921 Grand Forks Herald Grand Forks, ND

Article from Grand Forks Herald, February 18, 1921

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for the whole thing on the headlines in The Herald. That is a simple and easy way to get out of difficulty. When in doubt, damn The Herald. If there is no doubt, damn The Herald, anyway. The Herald has no desire to add to the perplexities of the managers of the People's bank. It feels, however, that too great emphasis has been placed on the influence of The Herald's headlines. It might be easier to establish a connection between the closing and the history of the bank itself. The bank was organized with a capital stock of $75,000. The stock was peddled about the country by professional promoters who are reported to have received $7,500 for their services. To pay. ten per cent on a bank's capital stock for promotion expense IS taking quite a large slice out of its assets right at the start. If the subsequent business of the institution has been conducted on that plane of liberality any mystery surrounding the closing would disappear, and it would not be necessary to charge the incident up to Herald headlines. It is to be regretted that any business institution in the city has found it necessary to suspend. The present case is particularly unfortunate in that, according to The Herald's information, a large number of the depositors in the People's State bank are persons of relatively small means, who will be inconvenienced by the withholding of their funds until regular settlement can be made.

6. February 21, 1921 Grand Forks Herald Grand Forks, ND

Article from Grand Forks Herald, February 21, 1921

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EXAMINATION OF LOCAL BANK BEGINS TODAY Deputy Examiner Here Today to Take Charge of People's State Bank. Complete List of Stockholders Given-F. B. Wood Holds Eighteen Shares. O. E. Bergstrom, deputy bank examiner, arrived in Grand Forks this morning to take charge of the People's State bank, which closed its doors last Thursday. Mr. Bergstrom began his examination this afternoon. He said he would be unable to make any kind of a statement until the examination is completed. This will take at least a week, he said. He was unable to say what steps would be taken toward settling the affairs of the bank. The question of asking for a receiver will be up to O. E. Lofthus, state examiner. and he will act only upon the report of Mr. Bergstrom. Under the state law, stockholders of the bank are liable to a 100 per cent assessment on the stock. Stockholders List. A list of stockholders, on file at the office of County Auditor Hans Anderson, shows how the 750 shares of stock are divided. The late K. K. Lageson of Reynolds, N. D., appears on. the list as the heaviest stockholder. According to the July. 1920, report, made about six months after Mr. Lageson's death, he had 40 shares of stock, valued at $4,000. The People's State Bank has a claim of over $4,000 against the Lageson estate, but whether or not this is for the 40 shares of stock is not known. The claim appears in the form of two notes, copies of which are on file in the county judge's office. If the stock is not paid for, heirs of Mr. Lageson are liable not only for the amount of the stock but for an additional $4,000, or a 100 per cent as-

7. February 24, 1921 The Miller Press Miller, SD

Article from The Miller Press, February 24, 1921

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AND FORKS BANK CLOSES Caused Trouble, Officials State; About $300,000 Owed. rand Forks, N. D.-The Peoples e bank, organized three years ago Thomas Allen Box and John J. tings, closed its doors by order of board of directors. hen the bank closed it owed apmately $200,000 to depositors and oximately $100,000 in borrowed y. Its capital was $75,000 and as $11,000. Bank of North Dakota had on re-deposit in the People's bank, and the Grand Forks inon owed the state institution $40,000 in borrowed money. ials of the bank refused to any statement, except to say run, which began Monday, the closing.

8. February 24, 1921 Cavalier County Farmers Press Langdon, ND

Article from Cavalier County Farmers Press, February 24, 1921

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GRAND FORKS BANK CLOSES Run Caused Trouble, Officials State: About $300,000 Owed. Grand Forks, N. D.--The Peoples State bank. organized three years ago by Thomas Allen Box and John J. Hastings, closed its doors by order of the board of directors. When the bank closed it owed approximately $200,000 to depositors and approximately $100,000 in borrowed money. Its capital was $75,000 and surplus $11.000. The Bank of North Dakota had $7,600 on re-deposit in the People's State bank. and the Grand Forks institution owed 'the state institution about $40,000 in borrowed money. Officials of the bank refused to make any statement, except to say that a run. which began Monday, caused the closing.

9. July 28, 1921 Cavalier County Farmers Press Langdon, ND

Article from Cavalier County Farmers Press, July 28, 1921

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here. Grand Niles Fire destroyed the Cullen Forks vator Grand Forks- Growers' The association July 23. Wool convention at the County held its annual were elected ProVelva- Directors of the Velva Coal annual meeting here. Kirkland of Van has ducts company Hook-Rev accepted R. J. a call to Searcy, Ark., Church of the Nazarene. has resigned as Elevator has the Parshall- business local manager E. Hannon company. of the Farmers just a completed Cooperative Stanley-The big Stanley booster band tour of this the Fort section. Elbowoods-Inrecervation Indians of will hold Berthold a fair here Indian September Gilbert 26 W. to 28. Davis, North Da- 85 a is dead. face years Fargo- old and Col. last resident 25 years, of schools kota for the Bowman inability financial Bowman- stringency The state. due to father a to get funds from Popelka, the 45, followed years Mandan- example John set by his with a shotgun. six damthe killing himself 10,000 hail year. Bismarck-Abo filed this year at age claims have the figure last This about exceeds 1,000. 56, this time by Smith, negro, He Bismarck- Carl Bismarck in 1950. then has a barred date in from the for city vagrancy until have was following his arrest Funeral services Grand Forks- N. Wells, pioneer vicnorthwest been hotel held for H. man. He was a of pneumonia. working in a sandpit tim Mandan-Be Boys here discovered the training school coal which a stove at vein of lignite freely. a test proved burns The Normal school July closThe Dickinson- session largest 20. on record. ed its enrollment first summer of 382 was the North State Dakota sesscommended Raptist Minot-The convention, President at its closing Harding for conference. ion, the disarmament Hydle, who for sevcalling Bowbells L. L. as superintendent af- of eral Bowbells years acted schools, National has become bank. filiated the with the First The Grand Forks Sal- day vation Grand Army Forks- corps pay staged indebtedness a tag in- its curred to raise in funds organizing to and equipping band. Forks An attempt bank here to reopen is exGrand Peoples State the announcement the pected of as $50 the assessments result of levied against Soo stockholders. Uchner, has former been given his plea depot agent suspended at sentence on misapa 3-year of guilty to charges of propriating Jamestown- $400. Raising Tamestown of a $1,000,000 colthe endowment fund for Pres. Kroeze before Preslege North was urged Dakota by synod of the Dakota byterian Grand church. Forks- association The North is reported Juma ber at loss to Home have Builders disposed of of 25 a per supply cent of to the Divide state. Miss Anna Black, Miss Lois Crosby Red Cross nurse, of court, and were they incounty Hatch, deputy clerk in which were riding tured when struck the auto a stretch of sand and overturned. eassessment of Brace propBismarck- towns of Carrington. Borerty in the McHenry, Melville. Barlow City, Jaunita, Dundas and been dulac, Brantford. ordered because of comhas plaints Minot-Because of inequalities. Minot's a "paying police proposi- court has failed to prove committee has Lynch been tion" a special Magistrate John ordinto named impose to ask heavier fines on city of ance violators. Forks- "The elimination slogan Grand by 1924, is department the of adopted ilteracy by the state in its campaign Niel- for public betterment. instruction Miss Minnie announced J. school superintendent, of the son, state special convocation here at a school. auditor, university summer C. Poindester. auditor state of Bismarck- has directed the against the Slope county to treasurer. proceed J. S. Doug- the recover former county about $60,000, funds which amount las. to of Slope two county Amidon banks, without he deposited bonds, in it is charged. The two banks have Upwards closed. of 1,000 people of Mandan- in the tour of inspection Holstein took part the North Dakota Salem, lis tened Breeding farms of to circuit the made stories money at New of despite the Inspected farmers unfavwho have conditions. and creamy orable herds. crop Milk, rich. full thirst their milk. was supplied farm. as a quencher cow's at farm after Security State bank Bismarck-T Brantford, Eddy county, of has Private closed. of Bismarck- The body boy who McGarvey, a Bismarek War, sacrificed Ralph his life in the World

10. August 11, 1921 The Bottineau Courant Bottineau, ND

Article from The Bottineau Courant, August 11, 1921

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MORE BANK BUSTING Recently it was announced from Grand Forks that the farmer-owned People's bank in that place would soon resume business .It had been forced temporarily to suspend business because of the big banker conspiracy against state banks, as exposed recently by John Skelton Williams, former comptroller of the currency. But no sooner was it announced that plans for reopening the bank were under way than the I. V. A. thru their press agent in Fargo headquarters, opened an attack on the bank, for the express purpose of preventing a reorganization. Efforts are made to frighten farmers by intimating to them that every farmer-owned bank is mismanaged. These efforts are rather curious, read in connection with the developments in the Beisecker chain of banks, and in the news of

11. August 11, 1921 Emmons County Record Linton, Williamsport, ND

Article from Emmons County Record, August 11, 1921

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State Summary PassingGlimpses fLate Events in North Dakota Mandan-Upwards of 1,000 people took part in the tour of inspection of farms of the North Dakota Holstein Breeding circuit at New Salem, listened to the stories of the farmers who have made money despite unfavorable crop condiitons, and inspected their herds. Milk, rich, full creamy cow's milk, was supplied as a thirst quencher at farm after farm. Bismarck-D. C. Poindexter, state ayditor, has directed the auditor of Slope county to proceed against the former county treasurer, J. S. Douglas, to recover about $60,000, the amount of Slope county funds which he deposited in two Amidon banks, without bonds, it is charged. The two banks have closed. Grand Forks-"The elimination of ilteracy by 1924." is the slogan adopted by the state department of public instruction in its campaign for school betterment, Miss Minnie J. Nielson, state superintendent, announced here at a special convocation of the university summer school. Minot-Because Minot's police court has failed to prove a "paying proposition" a special committee has been named to ask Magistrate John Lynch to impose heavier fines on city ordinance violators. Bismarck-Reassessment of property in the towns of Carrington, Brace City, Jaunita, McHenry, Melville, Bordulac, Brantford, Dundas and Barlow has been ordered because of complaints of inequalities. Crosby-Miss Anna Black, Divide county Red Cross nurse, and Miss Lo!s Hatch, deputy clerk of court, were injured when the auto in which they were riding struck a stretch of sand and overturned. Grand Forks-An attempt to reopen the Peoples State bank here is expected as the result of the announcement of $50 assessments levied against stockholders. Grand Forks-The North Dakota Home Builders association is reported to have disposed of a supply of lumber at a loss of 25 per cent to the state. Jamestown-Raising of a $1,000,000 endowment fund for Jamestown college was urged by Pres. Kroeze before the North Dakota synod of the Presbyterian church. Minot-Albert Uchner, former Soo depot agent at Makoti, has been given a 3-year suspended sentence on his plea of guilty to charges of misappropriating $400. Grand Forks-The Grand Forks Salvation Army corps staged a tag day to raise funds to pay indebtedness incurred in organizing and equipping its band. Bowbells-L. L. Hydle, who for several years acted as superintendent of the Bowbells schools, has become affiliated with the First National bank.

12. September 2, 1921 Grand Forks Herald Grand Forks, ND

Article from Grand Forks Herald, September 2, 1921

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# ACCOMMODATION NOTES. In the suits brought for the collection of notes given to the since suspended Peoples' State Bank of Grand Forks the proceeds of which were intended to be used in the operation of the since suspended Grand Forks American, it develops that certain of these notes had been given for no money consideration received by the makers, but were intended simply as a loan of the credit of the individuals to the institution or institutions which it was desired to assist. Notes of this kind are called accommodation notes. Many of them have been given during the activity of the Nonpartisan league in North Dakota. They have been given upon assurance that the makers would never be called upon to pay, as means of payment would be found before the maturity of the notes. The makers of such notes would not be inconvenienced in any way whatever. It would be interesting to know in just how many hundreds of cases such assurances have been given, later to be found worthless. Hundreds of thousands of dollars, possibly millions of dollars, have been paid by North Dakota farmers on notes of exactly this character. Sometimes collection was resisted. Sometimes there was no opposition, it being understood that resistance would be futile, and the interested persons have frequently not desired the publicity which would come from suits at law; but whatever the method and whatever the surrounding circumstances, when the effort has been made, either the money represented by these notes has been collected or judgment has been secured to hang like a millstone around the necks of the makers of these notes. The particular notes to which reference has just been made were given by residents of the western part of Grand Forks county to aid in financing one or more of the enterprises inaugurated in support of the Nonpartisan league management and in the customary way, subsidiary to it. It has frequently been stated that the Peoples' Bank was not a part of the Nonpartisan league, that the Grand Forks American was owned by Grand Forks farmers and not by the league. The fact is that both enterprises were the product of league activities, were promoted by league organizers, and were intended to be conducted in the interest of the league. The credit of men of substance has been obtained for enterprises ostensibly of a business character in order that a political movement might be fostered. In each case disaster resulted. It is fortunate that Grand Forks county has experienced but a few things of this kind, but even a few is too many. The farmers of the county who have become familiar with the facts will doubtless be somewhat cautious hereafter about signing accommodation notes for the promotion of political movements.

13. November 3, 1922 Grand Forks Herald Grand Forks, ND

Article from Grand Forks Herald, November 3, 1922

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LEGAL NOTICE BANK ASSETS FOR SALE Sealed bids for the purchase of all the assets of the closed banks listed below will be received up to November 15, 1922: Farmers State Bank, Greene, North Dakota. W. E. Burgett, receiver, Flaxton. Citizens' State Bank, Edgeley. North Dakota. O. L. Engen, receiver, Fargo. State Bank of Milton. Milton, North Dakota. John Vallely, receiver, Grand Forks. First State Bank, Crystal Springs, North Dakota. H. B. Hanson, receiver, Crystal Springs. Bank of New Rockford. New Rockford, North Dakota. C. H. Reimers, receiver, Carrington. Peoples' State Bank, Leith. North Dakota. C. F. Kellogg. receiver. Bismarck. Peoples State Bank, Grand Forks, North Dakota. John Vallely, receiver, Grand Forks. Crocus State Bank, Crocus, North Dakota. Fred F. Walz, receiver. Egeland. Security State Bank, Courtenay, North Dakota. C. H. Reimers, receiver, Carrington. Prosper State Bank, Prosper. North Dakota. O. L. Engen. receiver, Fargo. Timmer State Bank, Timmer. North Dakota. C. F. Kellogg. receiver, Bismarck. Williston State Bank, Williston. North Dakota. G. R. Van Sickle, receiver, Minot. Citizens' State Bank, Pingree, North Dakota. C. H. Reimers, receiver, Carrington. Citizens' State Bank, Hazen. North Dakota. C. F. Kellogg, receiver, Bismarck. Security State Bank, Brantford, North Dakota. C. H. Reimers, receiver, Carrington. Bank of Leal. Leal, North Dakota. C. I. Buslee, special deputy examiner, Leal. Peoples' State Bank, Hatton, North Dakota. O. L. Engen, receiver, Fargo. Citizens' State Bank, Bathgate, North Dakota. John Vallely, receiver, Grand Forks. Sawyer State Bank, Sawyer, North Dakota. G. R. Van Sickle, receiver, Minot. Itemized lists of the assets are on file in the office of the state examiner at Bismarck, and with the receivers of the above banks. Bids should contain terms of payment and may include time certificates of deposit in going banks in the same community, all bids to be accompanied by certified check of one per cent of the amount of the bid. All bids should be addressed to Gilbert Semingson, state examiner, Bismarck, North Dakota, and the State Banking Board reserves the right to reject any and all bids. (Herald Oct. 26-27; Nov. 2-3.)

14. November 20, 1922 The Bismarck Tribune Bismarck, Mandan, ND

Article from The Bismarck Tribune, November 20, 1922

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ALL BIDS BUT TWO ON BANKS ARE REJECTED Commission and Committee Considering Bids For Purchase in Decision GOVERNOR IN DEFENSE Rejection of all of the bids made on the purchase of assets of 19 closed banks in the banks except bids on two bankers.2which are under consideration, has been been to for reccommendation to the banking board has the Guaranty Fund Commission and bankers' committee. Among the bids rejected were those for the purchase of assets of the closed Peoples State bank of Grand Forks. Decision on the two bid; still under consideration is expected soon. Because of misunderstandings of the work of the men in charge of the essets of the closed banks, Governor R. A. Nestos has made a statement of the conditions, and the present status of proceeding towards elling the assets of some of che institutions. According to the governors statement, three banks, or the assets of three banks have been sold. The advertisement for the sale of the assets of the nineteen at present being considered was ordered by the State Guarantee Fund Commission, two of whose members are appointees of Governor Frasier. The decision of the bankers of the state that it would be better to sell the assets of the banks than to attempt to work cut through receiverships was arrived at openly at the last meeting of the State Bankers association, declares the governor, this meeting having been held at Minot. Assets of two of the three banks whose paper was sold in August, according to the governor were sold to 2 party from Alexandria, Minn., while the assets of the third bank were sold to Craig Craig, a former state manager of the Nonpartisan League.

15. November 28, 1922 The Bismarck Tribune Bismarck, Mandan, ND

Article from The Bismarck Tribune, November 28, 1922

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Fargo, N. D.-District Judge Cole, temporarily enjoined state bank board from selling assets of People's State bank of Grand Forks and directing to show cause December 1, why John Vallely should not be removęd as receiver of the bank.

16. December 1, 1922 Grand Forks Herald Grand Forks, ND

Article from Grand Forks Herald, December 1, 1922

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NO ARGUMENTS IN BANK CASE I Bangs, Representing Valof lely, Files Affidavit Prejudice Against Judge Cole. Attorney Philip R. Bangs, representing John Vallely, receiver of the People's State bank of Grand Forks, this morning filed an affidavit of prejudice against Judge A. T. Cole, and consequently no arguments were made on the petition of Allan Mc. Manus, Ole Knutson and others to enjoin the banking board from disposing of the bank's assets and to remove Vallely as receiver. Word to this effect was received here this afternoon from Fargo. Early this week, Judge Cole signed a temporary restraining order, citing the banking board and Vallely to show cause today why the injunction should not be made permanent. The filing of the affidavit of prejudice precluded further action today. The case now will go over until the supreme court appoints a judge to hear the arguments.

17. December 21, 1922 Grand Forks Herald Grand Forks, ND

Article from Grand Forks Herald, December 21, 1922

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ARGUMENTS IN PEOPLES' BANK CASE FINISHED Will Be Held In Abeyance by Judge Kneeshaw for Next 40 Days. No Evidence of Bank Board Conspiracy Declares Presiding Jurist. the conclusion of arguments in State At the People's bank afternoon' injunction here this W. J. Kneeshaw would hold the Judge that he case announced matter in in abeyance for the next 40 days the hope that during that time stockholders, receiver. and others interested could make some arrangements for the re-opening of the bank. In making this announcement Judge Kneeshaw declared his conviction that the banking board was sincerely desirous that the bank should be re-opened and the best interests of the stookholders and creditors served No foundation had been shown, he declared for any charge of a conspiracy or the part of the state banking board against the interests of the bank or its stock holders as was charged in the pleadings presented by William Lemke. Tracv R. Bangs made his concluding argument for Mr. Vallely and the banking board in the course of the afternoon. Arguments on behalf of the petitioners asking for an injunction against the sale of the assets of.the defunct People's State bank of Grand Forks, and the removal of John Vallely as receiver of the bank were made before Judge W. J. Kneeshaw this morning by Attorneys William Lemke of Fargo and F. B. Feetham, Grand Forks Tracy R. Bangs of Grand Forks is presenting the arguments for the banking board and Mr. Vallely this afternoon. Letters Not Pertinent. : Speaking from the bench this morning Judge Kneeshaw declared his opinion that the letters which passed between Attorney General Johnson and George E. Duis of Grand Forks were not pertinent to the present case, and did not tend to prove conspiracy on the part of the state banking board. This statement was made in connection with a motion by Mr. Bangs that the letters be ruled out as evidence. "So far as the letters are concerned, I've read them over and can't find anything in them pertinent to this case or tending to prove conspiracy," said the judge. 'However they are in now, and so I suppose they might as well stay in." Arguments Made. Mr. Lemke in his argument maintained that the letters showed that the rights of the stockholders and creditors of the defunct bank had not been given proper consideration by the state banking board and that the treatment of the bank had been dictated by political considerations. He declared that the evidence which had been introduced showed Mr. Vallely, the receiver to have been guilty of malfeasance of the bank's funds and urged his removal. Mr. Feetham in his argument laid emphasis on the allegation that Mr. Vallely did not have the confidence of the stockholders and creditors of the defunct bank, and urged that the court should appoint a receiver who would be able under the law to carry on all business in connection. with the closed bank. This it is claimed a receiver appointed by the state banking board cannot do. Power of the state banking board to sell the assets of closed banks was also denied. This has been practically conceded by the opposition. Mr. Bangs began his final argument early this afternoon. Wednesday's Hearing C. B. McMillan, banker of Hannah and member of the state guaranty fund commission was put on the wit-

18. December 22, 1922 Grand Forks Herald Grand Forks, ND

Article from Grand Forks Herald, December 22, 1922

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NO EVIDENCE AGAINST BOARD Judge Makes This Announcement In People's Bank Case; Ruling Help Up. That steps be taken during the next 40 days looking towards the re-organization and re-opening of the Peoples State bank of Grand Forks was urged by Judge W. J. Kneeshaw at the conclusion of arguments on the application for an injunction against the sale of the bank assets and the removal of John Vallely as receiver Thursday afternoon. Judge Kneeshaw said that he would hold his ruling on the case in abeyance during the period he mentioned in the hope that stockholders and creditors might-get together during that period and arrange for the reopening. Banking Board O. K. In announcing this policy, however Judge Kneeshaw declared that no foundation had been shown for the charge made in the pleadings of the petitioners that there was a "conspiracy" on the part of the state banking board against the interests of the stockholders and creditors. "I am convinced that the banking board is sincerely desirous that the bank should be re-organized and reopened," said Judge Kneeshaw Two Are Rapped The actions of J. I. O'Donnell who made a bid of $100,000 on the assets of the bank, and of Ole Knutson, a former officer of the bank. who appeared before the state guaranty fund commission in connection with this bid were rapped by the judge, who declared that in his opinion they had not acted in good faith in the interest of the stockholders and creditors. In connection with the continuation of Mr. Vallely in the receivership, Judge Kneeshaw said that while at times he had exceeded his powers under the law. it appeared that in some of these instances he had acted with the approval of the banking board. It appeared, he said. that Mr. Vallely had done very good work in making collections on the assets of the bank. Wait 40 Days If it should however, develop during the next 40 days that Mr. Vallely is a stumbling block in the road to the re-organization of the bank he may be removed, Judge Kneeshaw indicated. He called attention to the fact that the evidence against Mr. Vallely had been placed before Judge C. M. Cooley of Grand Forks in a former action, and that Judge Cooley had found no grounds to warrant his removal. Bangs' Arguments. Tracy R. Bangs wound up the arguments for the defense early in the afternoon session. He pointed out the absurdity of contending that, the letters which passed between Attorney General Sveinbjorn Johnson and George E. Duis indicated any "conspiracy" on the part of the state banking board as William Lemke had claimed. Taking up Mr. Vallely's record as receiver of the bank, he called attention to the fact that he had reduced the liabilities of the institution by over $50,000. He admitted,that Mr. Vallely might have committed errors in judgment and technical violations of the law, but denied that these were sufficient to warrant his Pemoval as receiver. Lemke Corrected. William Lemke, who took a few minutes in rebuttal, was "called" on on one of his statements by O. B. Mc-

19. January 18, 1923 The Bismarck Tribune Bismarck, Mandan, ND

Article from The Bismarck Tribune, January 18, 1923

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# DEFENDANTS ARE VICTORS # IN NOTE SUIT Grand Forks, N. D., Jan. 17.- Claim that the note for $7,500 sold to a Chicago bank which they had to pay, was simply an "accommodation note," and that signatures of three others were not obtained on the note as promised, is the basis on which H. O. Haroldson, C. T. Ulberg, and H. G. Link sought to recover from John LaVallely, receiver for the defunct People's State bank of Grand Forks, amounts which the plaintiffs assert they paid on a note for $7,500 given the People's bank. Mr. Vallely, receiver, has been substituted for the People's bank, at first named as defendant. The plaintiffs assert that on Oct. 15, 1920 they were requested by the People's bank to sign the note for $7,500 as an accommodation, owing to the fact that an overdraft had been permitted to the Grand Forks American, Non-partisan daily newspaper, also defunct. They claim that they were assured by the People's bank officials that at least three other responsible persons would be obtained to sign with them, but that such signers were not obtained,

20. January 23, 1923 The Bismarck Tribune Bismarck, Mandan, ND

Article from The Bismarck Tribune, January 23, 1923

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# RECEIVERSHIPS OF CLOSED BANKS VERY COSTLY, # REPORT MADE BY GUARANTY COMMISSION SHOWS Enormous expense of conducting receiverships of closed banks in the state is shown in the tabulated statement which the Depositors' Guaranty Fund Commission has submitted to the legislature in connection with its general report on the condition of affairs in the banks and in the fund. The commission in its summary called attention to the manner in which expenses mount in closed banks. The total expense of the receiverships from the time of first closing on November 11, 1920 to Jan. 1, 1923, is given as $413,713.74. During this same period there was accomplished a liquidation of loans and discounts of the closed banks of $1,251,465.00. There was listed as expense in collections on borrowed money $94,964.03. The expense of the receiverships from November 18, 1920 until Jan. 1, 1922, or a year and about a month and a half, is placed at $243,877.40. The expense of conducting the affairs of the closed banks in the year ending Jan. 1, 1923, is placed at $169,836.34. There is shown a reduction in borrowed money of the closed banks of $1,220,262.17, which was accomplished through the collection of loans and discounts in a little larger amount. On January 1, 1923, the closed banks had $8,568,766.00 of loans and discounts, and the amount of borrowed money was $1,327,040.03. Of the notes held by the banks $1,094,363.00 collectable was pledged collateral to secure borrowed money, $1,260,770.00 was uncollectable pledged collateral; and $1,186,096.00 was rated as uncollectable, unpledged loans and discounts and warrants. Assets of closed banks include banking house furniture and fixtures valued at $247,452,00, other real estate valued at $567,927.00. The guaranty fund, which amounts to $598,146.43, has $24,402.81 in closed banks of the state; $85,567.06 in open banks on special deposit; and $488,176.56 in general deposits in all other state banks. The distribution of the deposits is not recorded. The Depositors Guaranty Fund Commission has sold the assets of three banks-the State Bank of Bantry; the Farmers and Merchants Bank of Robinson; the Dunseith State Bank. A 20 percent dividend paid the depositors of the Peoples State Bank of Grand Forks is the only dividend recorded paid. Assets have not been rated in the following banks: Security State Bank of New England; Farmers State Bank of Havelock; Mohall State Bank of Mohall; Farmers State Bank of Rhames; First Security Bank of Carpio; Scandinavian-American Bank of Fargo; Peoples State Bank of Leith; Crocus State Bank; Farmers State Bank of Walum; First State Bank of Amidon; Slope County State Bank of Amidon; Regent State Bank of Regent; Bank of Mowbray. The names of the closed banks, and the situation with respect to depositors held to be guaranteed, etc. is given in the table below:

21. January 30, 1923 The Bismarck Tribune Bismarck, Mandan, ND

Article from The Bismarck Tribune, January 30, 1923

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WILL DISCUSS BANK STATUS Judge Kneeshaw to Hear Progress on Reopening Grand Forks, Jan. 30.-District Judge W. J. Kneeshaw of Grafton, before whom the recent injunction hearing of the People's State bank was heard, will be in Grand Forks during the coming week in connection with legal phases of the proposed reopening of the bank, according to information given out by members of the bank finance committee recently. It is expected that some definite plan will be put forward to open the defunct bank at that time, in accordance with the decision rendered by Judge Kneeshaw at the Decem ber hearing, in which he held the matter in abeyance for 40 days in the hope that the stockholders of the bank, John Vallely, receiver, and other interested persons might evolve a plan for reopening the institution. The finance committee, which was appointed soon after the December hearing, has been working on a plan for reopening the bank and it is understood that the plan only needs the confirmation of Judge Kneeshaw as to its legal status, to be put in operation. No definite announcement as to the nature of the proposed plan has been made pub/ lic.