Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1918-08-13
TUESDAY AFTERNOON. AUGUST Is, 1918.
HOUSE BILL Ats APPLICATION

In a former article on this page was given = SIM
mary OF the legal status of House Bill "A, and a state
n1ent of the reasons why, even if the provisions of tn,
Dill had been wise and beneficial, the method chosen fo
incorporating these changes in the fundamental law o
the state was in flat defiance of the states supreme law
In this article some attention will be paid to the mos
conspicuous features Of the bill itself, the things which
were sought to be accomplished by methods so impuccn1
and arrogant.
There are many features Of the bill which il is I'm.
possible to discuss in an article as brief as this must be
hence this discussion will be confined to the text and the
meaning OF the two sections which were framed for the
purpose OF carrying into effect the main purposes Of those
who created the Nonpartisan league and have been re-.
sponsible for its management.
Section "a reads: -..
The right of the state or any political subdi-
vision thereof to engage in any occupation or bust
ness for public purposes shall not be denied or
abridged.
In the past the state has been considered primarily
a governing and regulating rather than a Commercial, or
industrial body, and this applies generally to all the po-
1itical subdivisions of the state. The state and. it's sub-
divisions have from time to time undertaken various
business activities but only under special authority
granted by the people when the need in each spec,hc
case had been fully demonstrated. This section, had it
become operative, would at one stroke have made it pos
sible for the state or any county, city. village, township
or school district to embark without notice upon any
line of business whatever at the mere whim of a chance
temporary. majority, which majority might be overturned
In a few weeks or months. 1t is easy to see that with a
provision so broad and inclusive the state would imme-
diately have become the harvest field for an army Of
agents and promoters engaged in the establishment of
wildcat enterprises of all kinds. And in every case the
taxpayers would have been required to pay the price.
Section 173 reads:
The state or any political division thereof MAY
issue or guarantee the payment of bonds in excess
OF the debt limit specified i'm this article (s5Oo, ooo),
provided such bonds are secured by first mortgages
upon real-estate or upon property Of public utilities.
enterprises or industries.
Another section increases the legal debt limit of the
state from $1,000 to 100000, and this was advertised
as an example of rare conservatism and moderation. But
Section 173 renders this limit nugatory, and in set terms
removes ALL limit from the amount in which either the
state or its subdivisions may become indebted.
It will be observed that bonds may be either issued
or guaranteed without limit. Such bonds must be Sc
cured by first mortgages on real estate, without any con-
ditions as to the ratio between the indebtedness and the
value Of the property, or upon property of public utii-
ties, enterprises or industries" A million dollar mort
gage on a hundred dollar town lot would comply per-
fectly with the first of these provisions, and, a similar
mortgage on a pocketful Of stock in a bankrupt corpor-
alton would comply with the second.
Reading these two sections together we find that it
was proposed that the state or any division thereof might
launch out without limit into farming, manufacturing,
banking, wholesaling, retailing, or anything else; might
issue bonds without limit in furtherance of such enter
prises; and might, also without limit, guarantee the bonds
of any industry or enterprise which might be declared
to be Of a public nature. Any corporation good, bad or
Indifferent, could speedily doctor its articles of tncor-
poration so as to come within this provision, and then
its bonds might be guaranteed for millions or billions on
the security of any sort Of property. tangible or in
tangible, which 1t chose to offer:
The operation Of these provisions would quickly have
plunged the state into bankruptcy. The state would have
been flooded with fake enterprises of alt kinds. Bonds
would have been issued without end or limit. And the
property Of every citizen Of the state, his farm, his storey