Jamestown weekly alert. [volume] (Jamestown, Stutsman County, D.T. [N.D.]) 1882-1925, 1913-10-23
TO TEST STATE
BONDING AC'
BONDING COMPANIES WILL Al
PEAL TO SUPREME COURT.
70 Determine Validity of Law Gre
ating State Bonding
Department.

10 De13fm0e Va1lCy Oh Law Cree
ating State Bonding
Department.
Fargo, Oct. ia test case to de-
termine the constitutionality of the
state bonding act was started today.
1t seeks writ of prohibition and
injunction against Insurance Com
missioner Taylor and State Treasur-
er Olson. Max Stern of Fargo, as
citizen and taxpayer and ais oas a.
director and stockholder in a bond
ing company, has brought the ac-
ton. Lawrence & Murphy, Pierce,
Tenneson & Cupler of Fargo, and
Bangs, Netcher & Hamilton of Grand
Forks are the attorneys of record,
with Aubrey Lawrence of the first
firm as the attorney in charge of the
case.
State Senator Ellingson of Steele
county introduced S. B. 1856, which
is now known as chapter 1914 of the
Session Laws of 1913. It provides
for a state bonding department to be
conducted by Insurance Commission
er Taylor, with the premiums to be
paid to State Treasurer Olson.
, The act makes it obligatory for
!, every county official Except justices
of the peace and constables) all city,
township and school treasurers, to
take out surety in the state bonding
department. 1t has an exception
where the bond exceeds $4,000, the
latter figures being the maximum to
which any official can be bonded.
sa.q The measure provides that the
bonding department be established
by Jan. i, 1914, and Insurance Com
missioner Taylor already has the
forms and books prepared ready for
= the active operation of the depart
ment the first Of the year.
Petitioner Stern contends that the
law creates monopoly for the state
:. bonding, department, taking away
the legitimate business Of bonding
I companies chartered by this and 9th
or states, and effectually kills of all
competition.
1t is also contended that the act
arranges for the deficit of one year
20 be paid by the premium of subse-
quent years. There might be no
losses in the county in which a tax
payer resides, but he would be COM
PEELED to pay for deficits in another
in which heavy losses might occur.
These deficits might be of long stand
ing and a new conner. to the state
might be taxed to pay for defalca-
tions occurring three or four years
before he became a resident.
The action cites fourteen viola
tions of the state and three of the
federal constitution. Among the
most important are that the state Is
prohibited by the constitution from
entering into business in competition
with it's own citizens, that the act
creates a new monopoly for itself
against it's own citizens; that state
is prohibited by the constitution from
engaging in internal improvements;
that the expenditure of monies rails
ed in one taxation district for the
benefit of another taxation district
Is unconstitutional; that the act del
egates to the insurance commission
er authority in matters foreign to
his Office and not provided for in the
constitution or the legislative act
creating his office; that the salary
of the insurance commissioner is
paid by general taxation in which all
citizens participate but part Of the
time for which he is thus paid by
monies raised by general taxation is
used for commercial business for the
benent Of the few, and in competi-
ton with taxpayers who are assist
ing in the payment Of his regular
salary; that the act 10 class lesisla-
ton in that 1t 10 optional with some
omcials whether they shall give
surety in the state bonding depart
mont, while it 10 made mandatory on
others to do 20; that the salary OF
the public examiner 10 increased be-
yond the prescribed limit, permit
ting him to receive extra compensa-
ton; that the act raising money nee
essary to conduct this commercial
business, violates those provisions Of
the state constitution requiring uni
form taxation; that the act violates
that part of the state constitution
requiring that monies raised by tax
alton must be expended In the taxa
tion district In which 1t was asses
sed and levied; that the act dele
!. gates Judicial powers to the insur-
5alIlnuce ance com missioner 70 arbitrarily re-