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Closes Its June closing the board directors of Nebraska State bank of Bloomfield today by Governor Bryan. The bank taken over by Examiner Haines. Gossard was president; Mueller. W. assistant cashier. Deposits to capital was $25,000, and surplus,
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Bloomfield Stores Still Cash A press dispatch from Bloomfield, Nebr., says: Altho the drouth, the grasshoppers and bank failure temorarily caused Bloomfield business men to suspend their strictly cash basis business, the merchants in this town of persons again have put their away For more than three Bloomyears field citizens for everything. Even tho the drouth came and brought hardship to butcher, baker, and all other merchants, the cash basis prevailed. Then came the grasshoppers to play havoc with growing crops. The merchants still took cash for their sales, however. The cash system continued until about month ago when the Nebraska State bank closed, tying more than in deposits. Credit was restored for few days, but now the merchants are back on their cash basis, and all are satisfied. The all cash system was the idea of Dr. B. Lonergan.
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BANK RECEIVER GET FEDERAL LOAN District Court Upholds Right to Pledge Assets in Test Case. C. Radke, attorney for Secretary Luikart the department trade and commerce, returned from Center Saturday with an der from District Judge Stewart of Norfolk authorizing Mr. Luikart as receiver to pledge sets failed Nebraska State Bank of Bloomfield for loan $50,000 from the Finance corporation of the federal government. Before order carried out the application Mr. Luikart must be appealed the supreme court of Nebraska for final decision, that being the condition under which the finance corporation make banks in states which have no specific ute receiver to pledge assets failed bank for loan. To give the district court all the possible on the application receiver, Meserve Creighton, appeared and to the order and the merits of the case (Continued on Page 8.)
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Appeals Lincoln, Sept. Direcand stockholders the Nebraska State bank of Bloomtoday appealed to the braska court from Knox decision authorizing the county receiver to borrow $50,000 the Reconstruction Finance to test the validity state banking department ask the loans certain court The loan sought to proval. slower assets hope the
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Appeal Bank Loan Test to High Court LINCOLN, Sept. tors and stockholders of the failed Nebraska State Bank of Bloomfield Friday appealed to the Nebraska supreme court from Knox county decision authorizing bank's borrow $50,000 from the Reconstruction Finance Corp. to test the validity such loans, as the state banking unwilling the loans until certain court approval. The loan sought to permit slower liquidation the bank's assets in the hope that more can be obtained by the delay.
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RECEIVI FRO LD BORROW OVERNMENT FUND F. C. Radke and Barlow Nye, attorneys for Secretary Luikart of the department of banking, in a brief filed Wednesday, urge on the supreme court the wisdom, legality and need of allowing the receivers of state banks to borrow from the Reconstruction Finance corporation, on the assets in their hands, for the purpose of paying depositors. The test is being made in the case of the receiver of the Nebraska State bank of Bloomfield, Objections had been filed because the statutory first lien given depositors on assets prevents such use of them. The attorneys say that the receiver cannot in good faith withhold dividends from the depositors until such time as the debtors of the bank can pay in full; he must pay something now. Present settlement of obligations means tremendous reduction in their face value and much misery to the debtors. Postponed settlement of these obligations undoubtedly would result in greatly increased returns. A loan from the Reconstruction Finance corporation, secured by a pledge of these obligations, would permit the payment of the larger dividend now to depositors, and give the debtors sorely needed time to meet their debts. The difficulties of a painful situation would be greatly ameliorated if such a loan were permitted by the court. He adds: "Therefore it seems to the receiver that as much regard for public welfare should be shown in the liquidation of insolvent state banks as in the liquidation of a railroad or telephone corporation. If the judicial receiver of these corporations possesses the power under order of the court to pledge assets in order to continue the service of a railroad or telephone, we believe that a bank receiver in paying dividends to depositors is performing exactly the same sort of service to the public. He is continuing that part of the business of the bank which is neces. sary to the public welfare, namely, the return of money entrusted to the bank. "We do not believe that the provisions of the Nebraska statute which grants a first lien on assets of a failed bank to depositors therein, means to grant actual physical possession of those assets to the depositors, for the possession of the assets is specifically placed in the court through the receiver. The lien means only a right to priority of payment from the proceede of those assets and the means of securing this priority to depositors is undoubtedly a matter for the determination of the court in the exercise of its equitable jurisdiction.
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BANK RECEIVER MAY BORROW FEDERAL FUNDS Reconstruction Finance Corporation Money Available, Court Says. In an opinion by Justice Eberly, Friday, the state supreme court, in test from Knox county, held that the district court having authorize the receiver of failed state bank borrow money from the Reconstruction Finance and to pledge the assets of the trust to secure the loan, when it is made appear that such action is for the best interests the trust estate. Such borrowing and pledging, adds, are not the rights of claims of unsecured depositors given first lien upon the assets the state The court may be true that an has within the the legislation when banking laws enacted. Nevertheless, as an is properly the subject equity The shows that one of the functions of the Finance to furnish prompt partial relief cases of this character, and nowhere is there anything in the law giving depositors first liens that in any manner limit the power of court equity to dispose the property involved affect stated. In short, neither the law nor any deprive the equity court of the power of exercising the choice of directing appropriate methods for the to in managing disposing of the The is inescapable that when that done which proposed to the avails of all the bank property remain trust fund, the court imperative duty is imposed on the equity court administering the affairs of insolvent banks minimize possible losses to the public The bank involved was the Nebraska State of Bloomfield. cause of drouth and and the unsalability farm lands, put pressure upon debtors the would and to them, and for this the desired to secure loan from the government corporation. Thus enabling him to defer collections time to debtors until new crop comes.
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BORROWING DECISION IN CASE INVOLVING BLOOMFIELD INSTITUTION HANDED DOWN SOUGHT AID OF Hastings Action Tribunal De. cides Stockholder Cannot Escape Liability by Transfering Properto His Wife Lincoln, Feb. The braska supreme court today held right the failed state bank borrow money from the Reconstruction The court held such borrowing, accompanied by pledging of assets failed bank to secure the loan, was proper when apparently for the best interests of the positors concerned. The question raised in appeal from decision the Knox district court author izing Luikart receiver the failed Nebraska State bank Bloomfield to borrow money means of easing the liquidation process the bank The state banking department had the test danger obtaining loan later having state supreme court rule Reverses Previous Decision The court previous cision and held Arnold Vandenburg for loss sight result blast ing stumps for Center township Butler county. Vandenburg was member the township board but the new decision the court held his stump blasting work was not part of duties and that done employe. Judges Eberly and Paine dissented from the opinion. The court also held that bank stockholders' transfer of property his before failure bank did not property from liability. Wahiquist Defendant Val Peterson, receiver for the Bank of Commerce at Hast ings had sued to enforce liabil judgment against Charles Wahlquist property had formerly but transferred his wife in 1923. judgment rendered in 1930. The trial held against the but Judge Rose the supreme opinion said fail hold this property liable would be defeat the purpose the its efforts protect bank enjoys the fruits his the bank prosper permitted escape liability by trans ferring all his property to his consideration.' the opinion said, "before dividends the bank falls, the purpose of the constitution and the protection depositors may be thwarted with
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BANK RECEIVER MAY BORROW Reconstruction Finance Corporation Money Available, Court Says. In an opinion by Justice Eberly, entered Friday, the state supreme court, from Knox county, held the district court bank borrow money from the struction the assets the trust pledge made that for the appear interests the trust borrowing adds, are not rights claims depositors first lien upon assets the state court it may be true arisen within the legislation when banking were enacted. Nevertheless, properly equity jurisdiction. that one of of the Finance furnish prompt relief cases character, and where there anything the depositors first liens the court equity dispose affect property stated. In short, neither the law denor any the the the choice directexercising methods for the ing in managing disposing of the inescapable that when done do the avails of all property remain the imperative duty imposed on equity administering the affairs banks minimize losses to the public and possible creditors. The involved was the Nebraska State Bloomfield. drouth the unsalability farm put pressure upon debtors the would be oppressive and for this the desired to secure the him to defer and time debtors new crop comes.
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WINS RIGHT TO FEDERAL LOAN Closed Bank Receiver in Nebraska Wins Test Case Lincoln, Neb.-Special: The state supreme court, in a case involving the Nebraska State bank of Bloomfield, held that the district court may authorize the receiver of a failed bank to borrow money from the Reconstruction Finance corporation and to pledge the assets of the trust to secure the loan, when it appears that such action is for the best interests of the trust estate. The opinion, written by Justice Eberly, adds that such borrowing and pledging are not in violation of rights of claims of unsecured depositors given a first lien on the assets by state law. The receiver of the Bloomfield
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COURT UPHOLDS BORROWING BY BANK Lincoln, Feb. Nebraska preme court today upheld the right of the receiver of failed bank borrow money from the Reconstruction Finance corporation. The court held such borrowing, accompanied by pledging of assess failed bank to secure the loan, was proper when apparently for the best interests of the depositors concerned. The question was raised in an peal from decision of the Knox county district court authorizing H. Luikart as receiver for the failed Nebraska State bank of Bloomfield borrow money means of easing the liquidation process of the bank. The state banking department had the test case brought to avoid danger obtaining loan and later having the state supreme court rule it improper. News. Bruner came down from Verdigre Friday morning to look business matters, and was also visitor at the Thrapp home.