The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1919-01-21
BANKERS HERE
TO CONSIDER
NEW BANK ACT
Heads of State Financial Insti-
tutiOns See Rocks Ahead
for Themselves
MANY ARE NATIONALIZING
Increasing Capital in Order to
Place Themselves Under
Federal Control

North Dakota bankers who regard
Townleys Bank of North Dakota
scheme as the gravest problem which
the state has ever had to face are
meeting in Bismarck today to discuss
the naturalization OF their institu-
tions as the only means Of protecting
their interests from the domination
OF the Bank of North Dakota
For a majority Of us it means ma
tlonaliZatiOn; for many Of the weaker
banks it will mean liquidation" said
a prominent Slope banker. There is
nothing in the Bank of North Dakota
bill which cOmpels banks to name this
institution as their reserve agent, but
the state banking board, which is con-
trolled by the same one mani refer
to Mr.. Townley-who through the gov
ernor of North Dakota will have abso-
lutte domination of the Bank Of North
Dakota and all of its associate en-
terprises, must approve the reserve
agent designated by the state banks,
and it will be very easy mater for
this board to withhold its approval Of
agents other than the Bank Of North
Dakota or to quietly let it be known
that banks which expect any c0nsid.
GRAFTON from the administration must
designate the Bank of North Dakota
as their reserve agent"
Banks NationaIizinq. II
A number of state banks have re-
Gently increased their capital to $685.
900, the minimum with which ma
tional bank can be accepted. BY be-
coming national banks, financial In.
stitutions can escape direct domina-
ton Of the Bank of North Dakota.
They cannotfi however, make them.
selves immune from the effect which
this institution, with it's One-man con-
troll may exert over the financial sit
uation of the entire state.
Central and western North Dakota
every year is forced to borrow out
side money to tide the farmers over
from seeding time in March until
crops and stock are sold in the fall"
said banker today. my bank last
year was forced to borrow Ap35,O00 to
take care of the farmers in our COM
munity. This was moro than twice,
the amount Of our capital and surplus.
We got some of this money by In
uucing our correspondents to take up
some of our loans. A great deal Of
it, however, was secured on person
al security of officers of the bank
to s cure this line Of credit. And we
did it not for the accommodation OF
our business men but to finance the
farmers. The farmers had to have
this money, and there wasn't money
enough in North Dakota to take care
of them. | don't believe that after
the new order is established these out
side interests are going to pour their
money into this tate to be deposited
in the Bank of North Dakota.
Under the league laws the Bank Of
North Dakota is answerable to no au-
thority on earth but the governor OF
North Dakota, and Townley, the man
back of him. The Bank of North
Dakota will be inspected, investigated
and o. KID by a state banking de-
partment whose head owes his Job to
the governor, who in turn as chair
man of the state industrial commits
sion, with full veto powers, is the act
ual one-man power back of the bank.
No provision is made for independent
supervision; no such supervision is
possible under the league plan. The
Bank of North Dakota becomes a
close corporation at all times directly
responsive to Governor Frazier and
President Townley.
when Governor Frazier vetoed
the terminal elevator bill two years
ago he was, | am convinced, taking
oluers from Mr.. Townley. am con-
fident that the governor is now TAX
ing orders from the president of the
national .Nonpartisan league, and that
as head of the state system OF banking
and industry he will continue to take
orders. Not questioning the honesty
or good intentions OF Mr.. Townley
in the least. l yet insist that too
much authority and too ac1uch power
are being concentrated in the hands
of one man, no matter how unselfish
and disinterested and sincere he may
be in his desire to serve the best IN
terests of all the people
Taxes to Pay Interest.
A bill providing for ne issuance OF
the s2O0O,OGO in bonds which are to
furnishe the capital of the Bank OF
North Dakota has already been ap-
pTOteU Ill lCdSuO SouCuS OAN ~ "sS
ready for. introduction this afternoon
Interest on these bonds, which is not
to exceed six per cent. is to be paid
from the earnings of the bank, pro-
vlu.ng these earnings suffice. Other
wise. the board of equalization shall
levy a tax to provide Tor such inter-
est payments as may fall due.
There is no provision in the act
creating the Bank of North Dakota
that these bonds be sold at par. IL
has been suggested that the state may
take up these bands from its univers'
ity and school lands funds. Barring
| this outlet, and presuming that the
| bonds are thrown on the open market.
| it is entirely possible that they may
| be offered at discount OF ten per
| cent, or ever more. Farmers notes
and post-dated checks negotiated by
| the league have been discounted to 2
much greater amount when hawked
about the money markets Of the
Twin Cities and other centefs to the
east. Jack Hastings, Townley's n
.~>.s>y .>csaHapv and the mnD Who 10