THE FAMOUS BANK CASE 



in suddenly closing this bank, practically with- 

 out warning, and in installing a temporary 

 receiver without the knowledge of the state 

 examiner, and in suddenly causing telegrams 

 to be sent to so-termed associated banks of 

 said bank throughout the state and deter- 

 mining that certain forms of collateral held 

 in this bank, as well as in many other banks 

 of the state, improper collateral and of doubt- 

 ful value has occasioned unprecedented public 

 concern, not only in this bank, but in banks 

 throughout the state, concerning their solv- 

 ency and concerning the operation of bank- 

 ing laws of this state and even the credit 

 of the state." 



As to the sending of the regular examiner 

 out of the state, and the appointment of his 

 subordinate as receiver, the court said: 



"It therefore follows that the action of the 

 majority of the state banking board was illegal 

 and unauthorized. Even though it were con- 

 ceded that the board did possess the power to 

 close the bank and appoint a receiver, never- 

 theless the action as taken by the majority of 

 the board was unreasonable, arbitrary, un- 

 just, and cannot be upheld." 



Concerning the postdated checks and the 

 general condition of the bank, the decision 

 said: 



"There is no more reason for declaring farm- 

 ers' paper to be of a certain percentage of value 



315 



