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Judge Telleen Upholds President's Bank Moratorium in Whiteside Case
Former Official of Sterling First National Ordered to Pay $35,102.
DEFENDANT 74 AND ILL
Asserts His Institution Was Solvent Before Roosevelt Proclamation.
Morrison, April 5. — In awarding the receiver of the closed First National bank of Sterling a judgment yesterday against L. C. Thorne, its former president and largest stockholder, Judge Leonard E. Telleen also upheld the constitutionality of the national banking moratorium, declared by President Franklin D. Roosevelt on March 4, 1933. The case, in which Thorne had refused to meet his stockholder's liability because he believed the banking moratorium to be unconstitutional, has attracted the attention of the press over the entire United States. Court officials here have had communications from lawyers in distant points, inquiring about details in the case. So far as it is known, this is the first time that the constitutionality of the president's banking moratorium has ever been subjected to court test.
The judgment entered against Thorne yesterday afternoon was one of the largest claims allowed in the Whiteside circuit court in recent years. The judgment allowed was for the full amount of the receiver's claim against the past bank president, which was $35,102.98. It is said that Thorne, who is 74 years old and at present so ill that he may live but a short while, does not have enough property in his possession to meet the large amount of the claim demanded by the closed bank.
The bank receiver filed the original bill in the case late last year. In January the defendant filed an answer. In the answer he stated that the bank was solvent prior to the bank moratorium and that it was still solvent after the holiday, but that government regulations would not permit it to reopen. Therefore the value of the bank stock was destroyed, the answer stated.
The answer further asserted that the banking moratorium, called by the president on March 4, 1933, was unconstitutional. Part 9 of the answer is as follows: "Defendant avers that said bank was not insolvent at the time of the moratorium of the president of the United States of America, effective March 4, 1933. Defendant further avers that the proclamation of the president of the United States declaring said bank moratorium, by which said bank and other banks were closed March 4, 1933, was illegal and without authority in law and amounted to a taking of the defendant's property without due process of law and in violation of the Constitution of the United States." The answer also stated that the bank would have remained in business had it not been closed by the moratorium.
The defendant admitted his relationship with the bank as a stockholder, but indicated that the number of shares upon which he was being assessed was greater than the actual number of shares held by himself. There were other admissions in the answer also.
The bank receiver did not file a lengthy reply to the defendant's answer, holding that the entire case of the bank has been set forth in the original bill and that it did not need either explanation or amending. The reply was filed shortly after the answer of the defendant.
The Sterling bank in question has already paid to depositors 80 percent of their claims. The receiver reports that, following the sale of the bank building ten days ago, another dividend of 10 percent can be declared. If and when L. C. Thorne pays his judgment to the bank, another dividend of perhaps 5 percent can be declared.
Small Interest Is Seen for Sterling School Elections
Sterling, April 5.—With township elections over, and the city election two weeks away, school elections will take place between the two, on Saturday, April 13. Little opposition is reported, with exception of Sterling union schools, where four are seeking office as members of the board of education. E. A. Turnroth, president, will be a candidate for reelection, as will Harry Hubbard and Frank Stager, board members. J. H. Lahman and Lloyd Thummel have also filed for members of the boards.
On the board of Sterling Wallace school, Howard Geyer, president, Lloyd Brown and J. D. Gulliford have filed for reelection. Terms of only two members of the board of Sterling township high school expire this year. John Steger and Arthur Wheeler will be candidates for reelection.
In Rock Falls, terms of Elmer Campton and Ray Gilman, members of the board of education of the grade schools, and of L. L. Winn, president, expire, and the resignation of Fred Ulrich creates another vacancy. Mr. Campton will not be a candidate but both Mr. Gilman and Mr. Winn are seeking reelection. Herman Oltman has filed as member of the board, and Ellsworth Wolf will be a candidate to fill the unexpired term of Mr. Ulrich.
On the board of Rock Falls township high school, the terms of Mrs. E. G. Hurdle and Mrs. John R. Thompson expire and they will not be candidates again. The Rev. H. E. Shiffer, president of the board, has consented to again seek that office, and Clarence Tousley and William Sowles will be candidates for board members.