those bag holders again

those bag holders again

fiction
edward w pritchard

There was a lot criticism and raised eyebrows when the District court of appeals down in Cincinnati Ohio agreed to hear the case. There had been almost nothing significant constitutionally happen between Barberton, Ohio and down to Columbus the State Capital in twenty years. This mattered to the Nationally elected leaders of both parties down in Columbus, and in a show of unity and force both political parties had been pressuring the court to hear a few cases. In appropriations in Washington, DC, how many cases were reviewed in the District Court of appeals mattered financially and this part of Ohio were getting short shifted in federal dollars and pressure was coming from the public on the elected officials and they wanted help from the court.

Over the objection of a few Court members, the district court decided to hear the case nicknamed the bag holders revolt as a constitutional States rights issue for the Ohio courts had approved something an Ohio bank had done and federal regulators objected.

A small Bank south of Barberton, Ohio and North of Columbus had a long history of sound lending and a steady dividend payments. They got new President, a likable fellow, and he had the brainstorm to make a lot more loans to earn more fees and income and eventually gravity sank the portfolio and he was fired. The next new President, the replacement, didn't smile much and no one much liked him, or liked to hear what he had to say; but he said they had to raise capital immediately, before the next bank audit. He proposed a secondary stock offering which would badly dilute everyone one's stock holdings except his. Among other things he was an expert on Bank ratios because he had been a bank examiner for a long time. Reluctantly, very reluctantly the mostly new board of directors agreed.

The stock broker and lawyer came back with the bad news. Because of the situation on wall street, and the excessive scrutiny on honest small banks because of losses in New York, it would cost twenty five per cent of the new composite stock offering value to place the deal. Outrageous screamed the current stock holders and all the old directors. One of the new financial analysts, hired recently at the bank, had a brain storm and suggested a solution.

Instead of selling stock and being subject to all the SEC regulations why not sell something else as a proxy? They decided to sell purple cloth bags to help the environment and be to be used to carry one's groceries for two dollars each. Since the stock was selling for 45 cents a share now it seemed like a good idea. It was suggested to sell one million bags, all purple with the name of the Bank on them. Each current stock holder was asked to buy twenty thousand bags.

The banking regulators balked. This was a scam, a pretense, a John Law deal [early flim flam man]. The regulators said it was an attempt to avoid the regulation, which it of course was. The stock buyers countered their complaints by caring the bags around and using it for various things.

The court down in in Cincinnati is reviewing the case now. They bowed to political pressure and are now hearing the case of the bag holders revolt. The bag holders are united. They feel they have a right to carry the bags if they wish.

end