St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-12-18
BANKRUPTCY EXPLAINED.
NORTH DAKOTA THE VICTIM OF CIR
cUHSTANcES.
THE STATE REALLY SOUND.

appropriations Made Regardless
OF the Interests of the Taxpay-
ers-Defciency in the General
Fund of 100000, and Fur
Their Shortage Expected-Too
Much Politics in the Matter.
c. c. Gouran, of Grand Forks, invest
or in municipal bonds and other North
Dakota securities, was at the Merchants
Saturday, and. met by a reporter, the
following facts were elected in relation
to the alleged bankruptcy of North Da-
kota. The debt limit of the state is
$500, 900 as fixed by the constitution, in
addition to the debt assumed by the
state on its admission to the Union OH
account of public Institutions erected
while the state was yet q part of Da-
kota territory. To meet the expenses of
the constitutional convention. the SEES
slons of the legislature Immediately fol-
lowing statehood, and for general reve-
u purposes, the sum of $3.50, 900 reve-
nue bonds were issued and later $4,000
capital improvement bonds. To this
has been added $4,000 normal school
bonds and S10.0 900 soldiers home certifi-
Gates under laws so framed as to give a
lien upon the lands granted to the state
for these purposes, it being intended
to avoid the constitutional inhibition so
far as this excess is concerned, or at
least to make the lien good even if the
bonds should prove to be issued in vio-
lation of the constitution. The full debt
m of the state having been exceeded,
and $50, 200 more, in the form indicated,
the state authorities now refuse to issue
warrants or any evidence of debt for the
expense lists of the agricultural college
at Fargo, amounting to S41,392.56 for
the months of September, October, No
vember and December, and for the
penitentiary at Bismarck, the deaf and
dumb school at Devils Lake, the nor
NAL schools at Mayville and Valley City,
the soldiers home at Lisbon, the hos
pital for the insane at jamestown. and
other vouchers for state expenses aggre-
eating S34, 1925, in addition to the agri-
cultural college matter mentioned. on
the ground that it would be a further
increase of debt inhibited by the con-
%Stitution.
On a suit to compel them to issue war;
rants to the agricultural college the
state officers show the state of the treas
ury, and that there is now a deficiency
in the general fund aggregating $780,
600, and that this deficiency will be fur
ther increased before the meeting of
the next legislature. They recite the
unrIn,.C nnrnNrIntinn onnnn fhnna
those in the nature of standing appro-
priations to meet the salary list fixed by
the constitution. amounting to S5S, 500,
and other items which In their judg-
ment should be preferred claims against
the state and ask the court to instruct
them on the points raised. They fur
Their suggest that the court should take
into consideration the point raised that
all debts incurred beyond the constitu-
tional inhibition were void and ask in
struction as to that.
Another North Dakotan who was
present said that the present phase of
the financial middle in North Dakota is
due to the following facts:
During the last days of the legislative
session the senate refused to confirm
the governors appolnteeS for boards of
trustees of the Fargo agricultural col
lege and the Bismarck ~penitentiary.
After the adjournment of the legislature
the governor commissioned those officers
whom the senate refused to confirm;
but the courts decided that there was no
vacancy. He then removed the old
board at Fargo under charges preferred
by the public examiner; but the courts
decided that he had no right to remove
that class of officers ON the report of
the public examiner. A later decis-
ion was made to the effect that
he had no right to remove
one of the military staff without court
martial. and the governor has deter
mined to give them a dose of close con-
struction of laws since they have needed
it and has commenced Oh the agricul-
tural college.
There is also another matter bearing
IN the case: Under the old admins
tration the treasurer governed the de-
posts of state funds and having them
under control could provide at any time
for any deficiency which might occur.
The funds were placed so that there
was some advantage to the bank having
them. But the Republican legislature
determined to take from the Populistlc
state administration every advantage
and so passed a law providing for the
in banks which should fur
nish certain prescribed securities
at a rate of interest not exceeding three
per cent. The treasurer refused to obey
the law, took it to the supreme court,
and the law was knocked out on account
of defective title. In the meantime, he
had deposited the funds where he
chose, but in such small sums that no
assistance can be had in return for
them in time of need.
The money is deposited in round
sums as follows: First National Bank
of Grafton, $4,000; Grand Forks Ma
tional, S14, 1000; Union National of Grand
Forks, $4,000; Merchants National of
Grand Forks, 81, 600; Red River Valley
of Fargo, $40, 900; Merchants State OF
Fargo, s12, 600; Bismarck Bank, SIG, 600;
State Bank of Buxton, $1,000; State
Bank of Cummings, $1,000; First Ma
tional Bank of Dickinson. $4,000; First
National of Pembina, $4,000; State
Bank of Lisbon, 81. OO0; jim River Ma
tlonal. of jamestown. $1,000.
And there is still another element.
The legislature omnibussed the appro-
priation bills. and then carried them
through as the result of a combination
of local interests, knowing that they
were largely in excess of the resources
of the state, intending to throw on the
governor of the state the responsibility
of veto, while they could justify them
selves to their constituents as having
done their duty. In some instances the
| observation-disclosures mara innraacad hn