Show COURT TURNS DOWN OGDEN BANK OFFER Hadlock Ruled Against on Petition to Have Settlement Settlement Settlement Set Set- Accepted Special eSpecial to The Telegram OGDEN March 25 C. 25 C. C Preston AlIen Allen Al Al- len Ien certified public accountant o of Salt Lake returned tg the the Ogden State bank Friday to resume his Investigation investigation investigation in in- as to the liability of directors directors di dl- rectors of the closed institution Mr Allens Allen's work was interrupted several eral months ago when the directors directors tors came forward with an offer in settlement Commissioner Hadlock petitioned the court to approve this settlement The petition was denied here Thursday R. R Sherman Jones examiner In charge of liquidation sa said d that tha when Mr Allen completes his investigation he will press for settlement to the full Lull amount of the liability shown by bythe bythe bythe the audit OGDEN March 25 Walter 25 Walter H. H Hadlock state bank commissioner was ruled against by Judge George S. S Barker in Second district court here late Thursday when the court refused to act favorably on his petition petition peti pet tion to accept an offer by officers and directors of the closed Ogden State bank to settle in full lull their civil liabilIty liability lia lia- ha- ha for in connection with the banks bank's failure Judge Barker observed in entering entering enter enter- ing his order that it was his opinion the petition fell of its own weight Although there is no inference that the bank commissioner and examiner examiner examiner ex ex- ex- ex in charge have not acted in good faith I do not believe the they are sufficiently informed to recommend the release of the liability Judge Barker said The court said that in view of the evidence there was no justification for lor or granting the petition Taking ou out the he stockholders' stockholders liability included in a the item he said there would be little left to the tion lon The Thc directors' directors liability would be settled on this basis Judge Barer Barker Earker Bar Ear ker er said for a minimum and amount of mone money At the hearing records from the i I con confidential files flics of ot the the- state banking bank- bank ing ng department were read into the the record These included letters of at the ic state bank commissioner and examiners ex- ex miners calling attention to excess loans and the need for additional funds as long a ago o as two and one- one hall months before the bank was forced to close Another letter was written by Seth bank commissioner in 1928 to o the bank management in which he ic complained of unsatisfactory conditions conditions conditions con con- in the bank in many respects OBJECTION OVERRULED This evidence was given over the objections of the bank commissioner commission commission- er that it was not pertinent to the hearing The court ruled it adrais- adrais I sible ible as as tending to establish liability lity Other evidence showed that the banking department was not net satisfied satis sails lied fed with the conduct of the institution ution over a period of several years R R. S. S Jones a bank examiner prior prioro to o the closing of the bank had written writ- writ ten en to the commissioner in his re report report report re- re port that the bank had been a one one- man institution long enough The loan policy of the bank was nothing short of deplorable said saida a letter written in October 1930 In a letter written to the bank 11 It was vas stated such violations have created cre- cre ted a personal liability upon upon each director in case of loss Records show low that such a practice has continued contin contin- continued ed many months Although your attention attention at- at has been repeatedly called to the he violations satisfactory improvement improvement improve improve- ment has not been made HELD ELD TOO LENIENT In his letters the commissioner had commented on a too lenient loan policy polley and declared the sympathy of the ic bank was being concentrated on the le borrower over the depositor Mr Hadlock in an examination of the he bank had found excess loans of i His report included the statement that hat officers and directors of the I bank ank had absolutely no regard for forthe forthe the 10 law Some of the officers and directors he reported were fully aware ware of the situation but seemed to o be let things go as they are re S 0 The faults found by Mr Hadlock went vent back before 1926 when he was wasa a visiting bank examiner He reported reported re- re ported that other officers of the bank had lad told him of cf changes which were the crying need of the bank but nothing was done to obtain better cooperation cooperation co- co operation between A. A P. P Bigelow president resident and the officers and directors di- di rectors which was the chief thing Vice President Van Meter told him was vas lacking Mr Hadlock testified that he did didot not ot know what the banks bank's losses to tol depositors and nd other creditors would be e and would not nol know for a long time ime In September 1930 Examiner Jones had ad reported the banks bank's loans in a deplorable condition Mr Jones reported In May 1929 that lat unless drastic action is taken by y this department state banking department department de- de a a avery very serious situation will vill result |