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f 9 f& H lit IwMBm t Thinking Paperjhr Thinking People 11 MORE LIGHT ON THE MERCHANTS BANK FAILURE. itiL "Q LOWLY the inside facts of the events that led to the failure of the I , O Merchants Bank are coming to light and as the investigation pro i ceeds more will no doubt be learned that will go to show that, those' f I ', Tjwho were expected to protect the depositors were busy taking meas-t;! Iwt ures to protect themselves. fl1 ? In February, 1914, an agreement was entered into between John J Pingree, S. W. Morrison, O. K. Lewis, Solon Spiro, M. S. Browning, ' L. R. Eccles, H. C. Edwards, Chas. E. Kaiser, C. P. Overfielci, R. P. Morris, John Watson and F. A. Sweet whereby these individuals agreed to protect the Salt Lake Clearing House Association from any loss on any drafts, checks, etc. of the Merchants Bank. On July 8, 1918, the same parties through their attorney senved notice on the Salt Lake Clearing House Association terminated the agreement. The following is the agreement and the letter giving no l" ' tice of termination : ft THE SALT LAKE CLEARING HOUSE ASSOCIATION, If SALT LAKE CITY, UTAH. A meeting of the Salt Lake Clearing House Association Was duly ijv called and held in the directors' room of Walker Brothers Bankers, w on February 4, 1914, at 4 p. m. , There were present: (1) Deseret National Bank, Mr. Cutler; (2) !$ Walker Brothers Bank, Mr. Howard; (3) McCornick & Company F Bankers, Mr. Whitney; (4) Continental National Bank, Mr. Boyer; (5) Utah State National Bank, Mr. Badger; (6) National Bank of the Republic, Mr. Earls ; (7) Utah Savings & Trust Co., Mr. Cook. On motion Mr. Boyer was elected president pro tempore. The min ) utes of the previous meeting held on January 29 were read and ap- proved. iThe following report was made by Mr. Boyer of the committee appointed on January 29 to call on the directors of the Merchants Bank : ' To the Salt Lake Clearing House Association and to the mem bers thereof, to-wit : Deseret National Bank, Walker Brothers Bank 'i ers, McCornick & Company, Bankers, Continental National Bank, Utalf State National Bank, National Bank of the Republic, and Utah fe Savings & Trust Company : t We, the undersigned, directors and stockholders of the Mer s chants Bank, a Utah corporation, hereby pledge to it our financial and ' moral support, as follows: WHEREAS, said Merchants Bank is a member of said associa- ' . tion and as such has been making settlement through said association $ of the balances resulting from daily exchanges with the other mem V' bers of said association and desires to continue to do so, and WHEREAS, we are advised, and the fact is that the other mem- fc? bers will refuse said bank the privilege of said association, (the right V to do so having accrued under the provisions of Section 4, Article ,X ,i of, the Constitution of said association) without and unless they, and k each of them, are secured as hereinafter set forth ; , ' NOW THEREFORE, in consideration of the premises and in fur- tker consideration of said members continuing to honor drafts, checks nd other items, (as is usual) drawn.on said Merchants Bank, we, the it undersigned, do hereby jointly and severally undertake and agree ' h with each and every member of said association that said Merchants . Bank will promptly make satisfaction settlement with each and every of said members of said association for all daily balanqes that may , become due and owing by said Merchants Bank to each of said mem- ' M bers of said association respectively with said Merchants Bank, and M we, the undersigned, do hereby further both jointly and severally un- dertake and agree that we will-hold each of said members of said as- H sociation respectively, harmless from all loss or damage that may arise !! thVbugh the failure of said Merchants Bank to immediately pay to ! .each of said members of said association any balance or balances that 'H mavbecome due by said Merch aits Bank to them or either of them by '! reason of said daily exchanges through said association. H This guaranty and undertaking, however, shall not apply to any H balances that may become due to any member of said association by H said Merchants Bank by reason of any checks, drafts or other orders H for the payment of money drawn upon said Merchants Bank, by the JM state of Utah or the treasurer of the state, or by reason of any war- H rants issued by said state of Utah, or its treasurer, or other officers, H and presented by any member of said association to said Merchants H Bank for redemption, purchase, or for any other purpose; and it is further understood that the liability of the undersigned under the M foregoing instrument shall continue only until such time as any one M of said undersigned may give notice in writing to the secretary or in H his absence from Salt Lake City, Utah, to any member of the execu- jfl tive committee of said association terminating his further liability M under the provisions of said foregoing instrument, and that upon the M giving of any such notice by any one of the undersigned, this instru- M ment shall be terminated at the expiration of the same banking day M upon which said notice is served as above provided, and thereafter M all liability except as to items therefore cashed by said banks shall M cease and terminate and be of no further force and effect. M The delivery of this guaranty to the secretary of said association H shall be deemed to be a delivery of the same to each of said banks and H thereupon its provisions shall accrue to the use and benefit of. each H of said banks and each of said banks may sue thereunder in its own H name. H IN WITNESS WHEREOF we have hereunto subscribed our M names this third day of February, A. D. 1914. H Signed: H. C. Edwards, Chas. E. Kaiser, C. P. Overfield, R. P. jH Morris, John Watson, F. A. Sweet, John Pingree, S. W. Morrison H O. K. Lewis, Solon Spiro, M. S. Browning, L. R. Eccles. H To the Salt Lake Clearing House Association, Salt Lake City, and to H said agreement and relieve the undersigned of all future and further jH W. W. Armstrong, its President, and E. A. Culbertson, its H Secretary : H You and each of you, as well as the members of said association, H will please take notice that a certain agreement made and entered jH into on the 3rd day of February, 1914, by John Pingree, S. W. Morri- M son, O. K. Lewis, Solon Spiro, M. S. Browning, L. R. Eccles, H. C. H Edwards, Chas. E. Kaiser, C. P. Overfield, R. P. Morris, John Watson, M and F, A. Sweet, under and by the terms of which they jointly and M severally agreed to protect the Salt Lake Clearing House Association jH for clearances of the Merchants Bank of Salt Lake City, until further M notice in accordance with said agreement, which is hereby referred H to and made a part hereof, for the purposes of this notice, 'is hereby M abrogated by the undersigned, and he hereby, under the terms of said H agreement, terminates any rther liability under the provisions of H said agreement, but without waiving notice heretofore served as of H date July 6, 1918. It being intended hereby to fully and in all respects terminate H t) SALT LAKE CITY, UTAH, NOVEMBER 9, 1918 Jl J