Williams County State Bank (Williston, ND)

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WILLISTON BANK SUSPENDS Williston, N. D., June 12. Depleted reserve today was given as the cause for the voluntary closing this morning of the Williams County State Bank of this city. The business of the bank was temporarily suspended by the board of directors. President L. J. Rodman of the institution said this afternoon. to enable officers to bring more capital into the bank. Reorganization work already is under way, Mr. Rodman said, but it is difficult to say at this time whether reopening will be effected and if so not the amount of loss that will be sustained by depositors.

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RUMOR SAYS WILLISTON BANK IS CLOSED There is a rumor current around town today that the Williams County State Bank of Williston did not open its doors yesterday morning, but The Herald is not in possession of any of the facts concerning the matter, and does not know whether or not this is merely a temporary suspension.

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WOULD OPEN BANK AGAIN Party of Williston Men Seek Aid from State Officials A party of Williston men, here in the interest of the Williams County State Bank, which they hope may be reopened, received word while here that stockholders in Williston had pledged $75,000 in the refinancing plan for the bank. The party, including Sheriff Carl Erickson of Williams county; Robert Ruteledge, deputy; Earl Swinley, county treasurer, interviewed Attorney-General G. F. Shafer, State Examiner, Gilbert Semingson and C. R. Green, manager of the Bank of North Dak., with a view of seeking assistance in preventing appointment of a permanent receiver. They said that Judge Moellring of district court had named a receiver on Friday. Previously the bank had been in the hands of a deputy examiner. State officials are favorable toward reopening of the bank if a satisfactory plan can be worked out, it was said.

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DEPUTY'S TRIAL FOR, CONTEMPT TO BE SOON Minot, N. D., July 27.-A second continuance until, Sept. 4 09113 was ordered by Judge George H. Moellring in district court Tuesday in the hearing on an order to show cause why R. S. See, deputy state bank examiner, should not be cited for contempt of court for resistance to an order of the court issued June 28, appointing George B. Everson as temporary receiver of the Williams County State bank of Williston. During the meantime interrogatories dealing with the case will be submitted to Judge Moellring. It is the contention of counsel for See, that the court did not have jurisdiction to issue a restraining order preventing See from interfering with the receivership. The assets of the institution are being checked and other details are being considered and belief has been expressed in some quarters that the bank may again engage in business, Judge Moellring said yesterday.

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BANK CASE TO JUDGE COOLEY Will Decide Controversy Over Williston Bank Controversy over the receivership of the Williams County State Bank, which closed its doors recently has been shifted by the supreme court to the jurisdiction of Judge Charles M. Cooley by the supreme court. The action was taken upon petition of Attorney General George F. Shefer, in behalf of the state banking board. The supreme court order states that since the administration of a closed bank is involved and District Judge Cooley was appointed, under the new law of the legislature effective July 1, to administer affairs of closed banks the subject matter is transferred to him for appropriate action. The petition was made with a view of reinstating R. S. See, deputy bank examiner, in charge of the bank. District Judge Moellring had named a receiver. The supreme court action is viewed as relieving Judge Moellring of any further jurisdiction in the case.

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$400,000 In Unbankable Paper In Williams Bank, Receiver's Report Says

Williston, N. D., Aug. 10.—A report prepared by Receiver George B. Everson of the Williams County State bank on the liabilities and assets of the institution, for presentation to the district court, states that there is the sum of approximately $400,000 which the receiver considers unbankable paper. This paper, in the opinion of those making the appraisal of the assets is practically worthless.

No mention of irregularities in the operation of the bank is made in the examiner's report.

One proposal given to effect reopening of the bank is for all depositors to agree to leave 60 per cent of their deposits in the bank for three years. The balance of 40 per cent, it is proposed, would be underwritten by the guaranty fund commission and paid by them sooner or later.

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Unbankable Papers Amount to $400,000 Williston, N. D., Aug. 14.-A report prepared by Receiver George B. Everson of the Williams County State bank on the liabilities and assets of the institution, for presentation to the district court, states that there is the sum of approximately $400,000 which the receiver considers unbankable paper. This paper, in, the opinion of those making the appraisal of the assests is practically worthless. No mention of irregularities in the operation of the bank is made in the examiner's report. One proposal given to effect reopening of the bank is for all depositors to agree to leave 60 per cent of their deposits. in the bank for three years. The. balance of 40 per cent, it is proposed, would be underwritten by the guaranty fund commission and paid by them sooner or later.

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BANK CONDUCT AT WILLISTON IS DEFENDED

John F. Sullivan, Attorney, Says Voting Trust Agreement was for Good of Bank

EXPLAINS THE BASIS

Disastrous Crop Conditions Alone Cause Williams Co. Bank to Fail, He Says

The "voting trust" agreement which was made when the Williams County State Bank of Williston was refinanced in December, 1920, and which was the basis of attacks leading up to the filing of charges against four signatories by U. L. Burdick was explained today by John F. Sullivan of Mandan, attorney for two of those named defendants in the complaint instituted by Burdick. The charges against the four men involved—George F. Bates of the Citizens Trust Company of Buffalo, N. Y.; Ed. Schulenberg, First National Bank, St. Paul; Erick Thorberg, First National Bank, Minneapolis; and Gilbert Semingson, at present state bank examiner but who represented the Bank of North Dakota in the agreement—were dismissed in Williston yesterday.

"The actual facts in the matter show not only that there was nothing criminal in the voting trust agreement, but in truth and in fact the so-called trust arrangements from the standpoint of what appeared to be the conditions at that time was for the best interests of the bank and its depositors," said Mr. Sullivan.

Outside banks refinanced the Williams County Bank in 1920. They allowed credit of approximately a quarter of a million dollars and advanced $32,000 cash to take up bad paper, according to Mr. Sullivan. The outside banks who had done this desired to know that the bank would be under what they considered safe management. The voting trust agreement was made under which their representatives could vote the stock and protect themselves.

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WILLISTON BANK TRUST PACK HELD MADE WITH BEST RESULT IN VIEW

Nothing Criminal, Says Sullivan, Bad Times Blamed For Closing

Bismarck, N. D., April 18.—The "voting trust" agreement which was made when the Williams County State bank of Williston was refinanced in December, 1920, and which was the basis of attacks leading up to the filing of charges against four signatories by U. L. Burdick, was explained today by John F. Sullivan of Mandan, attorney for two of those named defendants in the complaint instituted by Burdick.

The charges against the four men involved—George F. Bates of the Citizens Trust company of Buffalo, N. Y.; Ed. Schulenberg, First National bank, St. Paul; Erick Thorberg, First National bank, Minneapolis; and Gilbert Semingson, at present state bank examiner, but who represented the Bank of North Dakota in the agreement—were dismissed in Williston yesterday.

"The actual facts in the matter show not only that there was nothing criminal in the voting trust agreement, but in truth and in fact the so-called trust arrangements, from the standpoint of what appeared to be the conditions at that time, was for the best interests of the bank and its depositors," said Mr. Sullivan.

Allowed $250,000 Credit

Outside banks refinanced the Williams County State bank in 1920. They allowed credit of approximately $250,000 and advanced $32,000 cash to take up bad paper, according to Mr. Sullivan. The outside banks who had done this desired to know that the bank would be under what they considered safe management. The voting trust agreement was made under which their representatives could vote the stock and protect themselves.

"The result of the trust agreement was that twin city banks advanced the credit," said Mr. Sullivan. "If conditions in the Williston territory had subsequently been anything other than absolutely disastrous, the Williston bank today would have been one of the big banks of the state."

The voting trust agreement did not require that the outside bankers be permitted to run the bank, Mr. Sullivan said, "but was simply for the purpose of assuring the banks who

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JUDGEMENT

IS GIVEN

Minot, N. R., May 10. Judgment totalling $152,101.22 with interest thereon at the rate of 6 percent from June 12, 1923, together with costs and disbursements in the actions, in favor of Williams county and against various defendants who attached their names to surety bonds given by the Williams County State bank of Williston, now closed, as a depository for county funds, is ordered in decisions handed down by Judge John C. Lowe in district court in Minot in four separate actions.

The judgments in the four actions are divided thusly: $24,000; $32,000; $46,101.22 and $50,000 and in the main are against the same defendants with few exceptions. By stipulation entered into previous to the trial of the cases at Williston several weeks ago, the name of L. R. Baird as receiver for the Williams County State bank was substituted for the Williams County State bank.

SILK HOSE

Some of the newest hosiery is of very sheer silk with inserts of lace or the instep, the lace motif outlined with gold or silver threads.

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GUARANTYFUND NOW MILLION AUDITORS SAY Amount Available on October 31 of $806,898.24 Supplemented by Payments 32 BANKS NATIONALIZE This Many Take Out National Charters Since Guaranty Law Is Effective "In our opinion the Depositors Guaranty fund has been properly accounted for on its records, and that all disbursements are consistent and in order and properly authorized and authenticated." This is the statement made by the Temple, Brissman Co., certified publie accountants at the conclusion of their audit report of the depositors guaranty fund made as of October 31, 1924. The report shows that on Oct. 31, last. the amount available for the purposes for which the fund was created was $806,898.24. This is exclusive of $204,661 due from closed banks in the state on deposits and assessments. No figures are given however as to the total liability of the fund to depositors in closed banks, this being beyond the province of the examination. Total Expenses The total expenses of the commission since its inception in 1917 to the date of the audit was $78,801.19. Of this $37,848.79 has been paid from legislative appropriation and the remaining $40,952 from the assessment fund. On October 31, 1924 the commission had on deposit in closed banks $112,966.29. A supplementary report shows that since the date of the audit $18,901.55 has been withdrawn. These deposits are divided among 16 closed institutions, the largest amount in any one bank being $21,398.39 in the defunct Williams County State Bank at Williston. There was also $21,515.26 on deposit in banks which were on the special deposit list on October 31, but of this $15,773.88 has been withdrawn since that date. Closed banks which still hold deposits of the guaranty fund are the Clyde State Bank, Bank of Cogswell, Farmers Bank of Dunn County, Dunn Center; Farmers State Bank of East Fairview, Sawyer State Bank, Williston State Bank, Farmers Bank of Garrison, State Bank of Grenora, Farmers Bank, Hampden; Security State Bank of Hanks, State Bank of Maxbass, Farmers State Bank of Nome, Farmers State Bank of Rawson, Farmers Bank of Ray, Farmers and Merchants State Bank of Sherwood, Tolley State Bank, Farmers State Bank of Watford City, Williams County State Bank of Williston. There was also due from these closed banks $89,303 on assessments to the guaranty fund, but $34,625 of this has been remitted by the state receiver since the date of the audit. In addition to these obligations there is the sum of $2,341.99 listed as notes receivable. These notes represent loans made to the receiver of the Farmers' and Merchants Bank of Robinson for receivership expenses. Intervene In Affairs It is shown in the audit report that the commission has intervened in the affairs of a number of closed banks in order to protect its interests. Some of these were as follows: The Sawyer State Bank had pledged collateral to secure certain loans. (Continued on page 4)

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COURT TO PASS ON RIGHT TO PLEDGE ASSETS E. T. Conmy, appearing for L. R. Baird, receiver of closed banks, has asked the supreme court to determine whether a state bank in North Dakota has the right to pledge its assets to secure a general deposit. Mr. Conmy has intervened in the case of the City of Williston against N. B. Ludowese as city treasurer of IV. he }: V. of Dahita and Williams County State Bank. Mr. Conmy stated that the general receiver is confronted by more than a score of cases where banks had pledged assets to secure general accounts. In some, after a bond was given, collateral was used to secure the deposits. The court is informed in the brief that there is no statutory power for banks to pledge assets to borrow money and any power, if it exists. would be implied by the nature of the business.

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CLAIMS TOTAL $680,962 IN BANK SUITS of Closed Administrators Williams County Bank Named Defendants Civil actions, one filed in the name c : L. R. Baird, receiver of closed banks, have been instituted against former trustees of the Williams County State Bank at Williston, N. D., to recover $680,962.93 with interest from Dec. 13, 1920. This amount is alleged to be the entire sum of deposits, both public and individual, in the bank during the regime of the defendant creditors who took over the management of the bank in 1920. A separate action, instituted by Williams county, asks for $122,393.56 with interest from Dec. 13, 1920, the amount of county funds on deposit in the bank. The contention of the plaintiffs is that during the three years the bank was operated under the management of J. P. Desmond, one of the agents of the eastern creditor institutions, it was "no bank at all," but strictly a private institution which was used to "further the interests and benefit the creditors to the expense of the depositors." First service in the case was had on C. T. Jaffray of Minneapolis, president of the Soo railway and chairman of the board of directors of the First National bank of Minneapolis. Papers were served on Mr. Jaffray at Grand Forks Thursday night, just before he addressed a meeting of the Commercial club in that city. Many Defendants The defendants in the actions are: First National bank of St. Paul, First National bank of Minneapolis, Northfield National bank of Northfield, Minn., the Ulland. Mealey. Cer. ley company of Minneapolis, the Citizens Commercial Trust company of Buffalo, N. Y., the Union National bank of Minot, N. D., Eric A. Thorberg, Ed. Schulenberg, George F. Bates, O. A. Drews, J. P. Desmond and A. W. Bollum. The individuals named are alleged to have been agents of the creditor corporations in taking over the Williams County State bank and in operating it. The suits were instituted by Ernest A. Francis, state's attorney of Williams county, and William Lemke

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Judge Will Take Case Against Banks Under Advisement Minot, N. D., Oct. 21.-(P)-Judge John C. Lowe of Minot yesterday expected to take under advisement actions brought by L. R. Baird. as receiver of the Williams County State Bank of Williston, and by Williams county against various banking institutions and individuals in Minnesota and North Dakota seeking recovery of assets and resources amounting to approximately $1,500,000. Judge Lowe said that he would decide the case by November 7, two days prior to the opening of a district court term at Williston. The defendants, which include banks in Minneapolis, St. Paul and Northfield, Minn.; Buffalo, N. Y., and Minot, all contend that the service of summons and complaints upon them was not legal. Arguments will be concluded late today.

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CITY'S CLAIMS AGAINST BANK UPHELD IN N.D.

Williston Is Victor in Controversy Over Property Given to Secure Deposit

Special to The Tribune. Williston, N. D., Feb. 10.-By a decision of the North Dakota supreme court, the city of Williston has established its rights to certain property pledged by the Williams County State bank to secure a deposit of $17,580.23 made about two months before the bank closed, the decision being a confirmation of the decision by Judge Moellring when the case was tried in district court here two years ago, and will make possible for the city to realize in full on its claim, which, with accumulated interest, amounts to about $21,000. The sum in litigation was deposited in the Williams County State bank on April 14. 1923, by city treasurer, who took deeds to certain real estate owned by the bank to secure himself. as the city already had on deposit much as could be legally placed in the bank under the bonds which it was able to furnish. Later. when the bank sought to borrow $50.000 from the Bank North Dakota to enable it to business, the bank mortgaged this property as security for such When the bank closed on July 12, 1923. the city claimed the property security for its deposited funds. and this claim was contested by the Bank of North Dakota. The city's contentions were upheld Judge Moellring's decision from which Bank of North Dakota appealed. The case was argued before the supreme court last April, and at the request of the court the case was re-argued as between the city and the Bank North Dakota. eliminating arguments of intervenors which had entered into the first hearing. and this re-argument was held September 11, 1925. The property involved in the litigation is the building in which is located the Williston Savings and Loan assoand the premises occupied by the Hagen company, both which also pledged to the Bank of North Dakota. The city's security also consists of other items in which the Bank of North Dakota has no interest. and the total value of this security is believed to be well in excess of the city's claim. The opinion of the court was written by District Judge Pugh, sat in the case as a substitute for Chief Justice and was concurred in by all the other members of the except Justice Johnson, who filed a dissenting opinion.

AT LAND BANK MEETING Special to The Tribune. S. McCormack left Tuesday for Spokane to attend meeting of the federal land bank. Mr. McCormack was recently appointed vice president of the land bank and also retains his place on the board of directors.

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Guaranty Fund Body Takes No Action on Proposal of Banks No action was taken by the state guaranty fund commission on a proposal by numerous banks, creditors of the closed Williams County State Bank of Williston, whereby the banks would turn over to the state receiver of closed banks assets now held by them in return for the promise of the guaranty fund commission not to prosecute any action against them in connection with the bank's affairs. Although no formal expression was made by the guaranty fund commission it was indicated that they did not consider the offer substantial enough to warrant its acceptance. The guaranty fund commission has contended that the banks in question, located in Minot. Duluth, Buffalo, N. Y., and the Twin Cities were trustees for the Williams County State Bank at the time it closed and had been for some time prior to its closing. As such trustees, it is claimed, they were responsible for the safety of deposits made while they acted in that capacity. A statement of the case by state officials shows that the banks loaned money to the Williston institution in an effort to tide it over and otherwise aided it in its unsuccessful fight for existence. The proposal of the banks was to turn over to the receiver part of the assets turned over to them by the Williams County state bank as secu-

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Baird Files Suit in Williston Case Minneapolis, Aug. 26-(AP)-L. R. Baird, receiver for the Williams County State Bank of Williston. N. D., field suit in Henepin county district court today against menry A. Thoeny of Glencoe and C. O. Lundquist of Minneapolis as administrators of the estate of Harry L. Simons of Williston, in which recovery of approximately $150,000 in bank collateral is sought. The complaint alleges that Simons and other creditors of the bank obtained from the stockholders and directors of the bank a trust agreement "with the intent to gain control of the bank." The trust agreement, it is alleged,

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Baird Starts Suit Against Williston for an the City by Williston of erty taken over from liams County State bank that institution closed, been Instituted by Baird, state Baird here today. The City of also asked notes, estimated $4,500, the bank secure deposit city funds. The suit predicated upon the supreme court the bank case in which that banks may not pledge their secure deposits public funds.