The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1918-07-24
Other Mems Views
An Editorial That May or May Not Square
With The Views Of The Forum

The Minneapolis Journal:
The Fargo Courier News organ Of the Non
partisan league makes the charge that some OF
the North Dakota banks are refusing to take
care Of the needs Of North Dakota producers
and instead handle loans for st. Paul and Min
neapolis concerns on comn3ercial paper" 1t as
serts that lit is not a good thing, in
view of the need Of money here at home to have
money of North Dakota banks, which belongs tc
North Dakota people, loaned to the commercial
interests of the Twin Cities.
After further assertion in detail along this line
The Courier News winds up with this threat Of
legislative action:
If ST. Paul and Minneapolis commercial paper
is more attractive than loans to North Dakotans
at eight per cent and 10 per cent then it is high
time for public discussion of the reasons there
form preparation for remedial legislation next
winter, if some method is not soon forthcoming
by which this unnecessary wrong may be righted
The Courier News is either profoundly ignor-
ant Of banking conditions in the Northwest OF
is deliberately disappearing those conditions
Fortunately, however, its Fargo contemporary
The Forum, has promptly furnished the people
of North Dakota with the facts in REPUTATION OF
the Nonpartisan league organs charges. Under
the caption, "A Vicious Half Truth" The Forum
says:
TT probably would be hard to find ten
thousand dollars worth of Twin City paper
in all the banks of North Dakota right now
when money is needed here On the other
hand the North Dakota banks have Dor
rowed millions from Twin City and eastern
banks to finance the crop.
North Dakota is a one-crop state. In
September and October, the money piles up
in the banks. From $10OO00,000 to $780,
100000 accumuates in the state.
This money is not available for long
time loans of a year or more. The banks
must keep their resources liquid or go out
of business. Any bank that tied up it's re-
sources in the fall in long time mortgage
loans, would have to close its doors, when
the depositors began to check out their funds.
Any bank that carried all these deposits
without earning any interest on them would
also have to close its doors.
There is but one thing to do and that is
to find gilt-edged short time paper. There
is no big supply of such paper available in
North Dakota, and the bankers naturally turn
to the Twin Cities and other large centers.
They go into the open market and buy mil
lions Of such paper, falling due along in Feb
ruary, March, April, May and June
ut is cold-blooded transaction. The
bankers seek only paper that will be paid
when due, and since there is no personal fac
tor in the transaction, the banks are in posi-
ton to insist upon payment. BY the end Of
June this paper has all been taken up and
the crops. The banks go farther than that,
They pledge their own assets and borrow
more money.
ut is a mutual proposition. North Da-
kota bankers lend their funds when they are
flush in the fall. and get the money back
and more loans in addition when they need
money in the spring.
ITO confuse long time loans with short
time paper shows childish ignorance Of the
first principles of banking. It is confusing
an investment bank with a commercial bank.
No commercial bank afford to tie up
any great amount Of money in long time
g mortgages if it hopes to keep it's funds liquid.
1.-THE charge that North Dakota banks lend
money in the Twin Cities and refuse loans
in Dakota is a vicious half truth There is
probably not a bank in North Dakota that
is not at this moment cleaned out of Twin
City paper and owing money to the Twin
City or eastern banks for reserve funds to
finance the crop movement.
This is a clear statement OF the true facts
The city and country banks are interdependent
just as business in the cities and agriculture in
the country are interdependent. If Norh Dakota
banks kept all their money at home they would
go broke; IL they did not have the Twin CITY
banks to draw upon In crop moving time they
could not finance the crops.
There isn't any politics about it--tust plain
straightforward banking.