The Ward County independent. [volume] (Minot, Ward County, N.D.) 1902-1965, 1918-03-21
north DAKOTA CUT
OFF FROM FEDERAL
LAND BANK LOANS
: President Quamme, St. Paul, Pro-
neunces Against New State
Seed Bonding Law.

nsunces Against New State
Seed Bonding Law.
With new applications from North
Dakota farmers for loans Of $3,00O,-
~ pending today, the Federyl Farm
Loan bank Of St. Paul, which has out
standing loans of $6,5O0,000 in that
state, has notified all agencies it will
not DO another dollars worth Of busi-
mess in North Dakota while the seed
bonding law remains in operation.
=. G. Quamme, president Of the
bank, said today the directors are
quite aware Of the effect of SO drastic
An order just in advance of crop seed
ine time.
THE law requires that loan made
by the Federal Farm Land bank shall
be first lien," Mr.. Quamme said.
"Under the seed bonding law Of North
Dakota, seed bonds would take prior
ity over bank loans. We took the ac-
tion following legal advice from
Washington"
He has advices today that North
Dakota will make test case as soon
as possible, Mr.. Quamme said. The
state supreme court will be asked to
pass on the validity of the seed bond
ine law. If that law is declared in
valid the bank will again do business
in North Dakota. If the seed bonding
law stands, tn bank is out Of it per-
manently, Mr.. Quamme said,
"It is not a matter in which the
bank officials have any CHOICE" he
said. ut is simply a case Of law"
Mr.. Quamme said all loans that
were signed and put on record in
North Dakota prior to Jan. 20 will be
closed as a matter Of keeping good
faith.
Loans Already Signed to be Closed.
OF all the business done by the Fed
eral Farm Loan bank in the states Of
the district since it opened, more than
half has been done in North Dakota.
Wisconsin farmers have borrowed ST.
3O0, 900, Michigan farmers $1,70O, 900,
Minnesota farmers $4,000, but the
farmers Of North Dakota, who were
suick to organize the associations OF
borrowers that the law requires, have
. taken $6,5OO,OOO. With the 100000
which Mr.. Quamme said is now pend
inr and which will be held up until a
supreme court decision has been
riyen, North Dakota stood to have ap-
proximately $1O,O00,OOO Of money bor-
rowed.
The North Dakota seed problem has
been serious this year, as many farm
srs did not get wheat Of sufficiently
good quality last year to provide seed
for the 1913 season, and coarse grain
seed also is scarce.
The seed bonding law was passed at
the recent extra session of the North
Dakota legislature. The law provides
that when the county commissioners
Of any county shall decide it neces-
sary, the bonds of tie county may be
issued to buy seed and feed for farm
ers, that the value of the seed or feed
so provided for the farmers shall be
paid out of the crop so raised. and
that the sum shall oe a first lien
against the crops.
The seed bonding l,.w further pro.
vides that if the debt so incurred by
the farmers is not paid by Oct. l5 OF
the same year in which it is made, the
loan shall become first lien upon the
land affected and shall take preced
ence over all liens filed at any time
after the passage of the act.
While the bill was pending in the
North Dakota legislature, it was ar
gued by members of that body wht
stood for some modification of it that
it's terms would be in conflict with the
farm loan banks lien provisions.
Nonpartisan leagne members of thu
legislative committee that had the bill
in hand were said to have put aside
consideration of the conflict that woult
arise and the attorney general o!
North Dakota gave It as his opinion
that the seed bonding law would no
conflict with the federal law. Th,
Farm Loan bank directors immediate
" put the matter up to Washington.
Quamme's Statement.
The formal statement issued by Mr.
Quamme reads as follows:
"The Federal Land bank Of st. Pau
will do no more business in North Da
i kota 40 long as the seed bonding Law
remain in effect. Should the see
bending law be repealed or declare,
,unconstitutiona by the supreme cour
Of the state or any federal court W
could Of course Immediately resum
operations.
ssThe officials Of the Federal Lam
bank Of St. Paul are exceedingly sor
~ that this matter came up, becaus
the business from North Dakota ha
been most gratifying. We have trie
from the beginning to render the bes
service we could, realizing that tn
interest rates there were higher tina
in any other state in our district.
"This does not mean that we hav
shown any favoritism to North Dakc
ta, but it does show that the deman
for our service was greater in Mort
Dakota than in any other state iu
our district.
"The Federal Land Bank system
which uses it's mortgages for securit
Tor bond issues. must exercise tn
greatest precaution and operate strict
y according to law in order to Pre-
tsct the bond buyers in the fullea
sense This may not be 80 imperativ