Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1919-01-22
T0WNLEY BANK OF NORTH
DAKOTA MAY CAUSE MANY
WEAK BANKS II LIQUIDATE

MS lULlQUDAIE
Gently increased their capital to $685.
900, the minimum with which a n a
tional bank can be accepted. BY be-
coming national banks, financial in
situations can escape direct DONNA
ton of the Bank of North Dakota.
They cannot, however, make them
selves immune from the effect which
this institution, with its one-man con-
troll, may exert over the financial
situation of the entire state,
Central and western North Dakota
every year is forced to borrow out
! ID money to tide the farmers over
from seeding time in March until
crops and stock are sold in the fall"
said a banker today. my bank last
year was forced to borrow $4,000 to
take care of the farmers in our com
munity. This was more than twice
n amount of u capital and re-
source. We got some Of this money
ny inducing u correspondents to
take up some of our loans. A great
personal security of officers of the
bank who gave their joint notes in
order to secure this line Of credit.
And we did it not for the accommo-
dation of our business men but to fl
nance the farmers. The farmers had
to have this money, and there wasn't
money enough in North Dakota to
take care of them. I don't believe
that after the new order is establish
ed these outside interests are going
to pour their money, into this state to
be deposited in the Bank Of North
Dakota.
Under the, league laws the Bank
of North Dakota is answerable to no
of North Dakota, and Townley, the
man back of him. The Bank Of
North Dakota will be inspected, in
vestigated and O. KID, by a state
banking department whose head owes
his job to the governor, who in turn,
as chairman of the state industrial
commission, with full veto powers, is
the actual one-man power back of the
bank. No provision is made for in
dependent supervision; no such SUI
pervision is possible under the league
plan. The Bank of North Dakota be-
m 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
ne was, I am convinced, taking or
ders from Mr.. Townley. 1 am con-
fdent hat the governor is now taking
orders from the president Of the Ma
t.onal 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, I yet insist that too much
authority and too much power are
being concentrated in the hands of
one man, no matter how unselfish and
distnterested and sincere he may be
In his desire to serve the best inter-
ests of all the people,"
Taxes. to Pay Interest.
:. A bill providing for the issuance Of
the 100000 in bonds which are to
furnish the capital Of the Bank Of
North Dakota has already been APP
proved in league caucus and it was
ready for introduction this afternoon.
Interest on these bonds, which is NOT
to exceed six per cent, are to be paid
from the earnings Of the bank. pro-
viding these earnings suffice. Other
wise the board of equalization shall
levy a tax to provide for such inter-
est payments as may fall due.
There is no provision in the act
creating the Bank Of North Dakota
hat these bonds be sold at par. It
has been suggested that the state may
take up these bonds from it's unfver-
sity and school lands funds. Barring
this outlet, and presuming hat the
bonds are thrown IN the open mar
ket, it is entirely possible. that they
may be offered at a discount of ten
nor 10nf ~ IVA
notes and p~ost-dated checks negotiat-
ed by the league, have been discount
ed to a much greater amount when
hawked about the money markets of
the Twin Cities and other centers to
the east. Jack Hastings, Townley's
financial secretary and the man who
is expected to head the Bank of
North Dakota, is reported to have Of
fered at a liberal discount to. at least
one Minneapolis banker last summer
perfectly good time certificates of de-
post which Hastings is supposed to
have received from North Dakota
banks in exchange for paper which
farmers had given in payment for
league dues. chain store certificates
or life memberships in the organiza-
ton.
Question of Deposits.
The state bankers are also at sea
with regard to the provision in the
Bank of North Dakota bill which re-
quires that within ninety days follow
ing the passage of the act all public
moneys be deposited in the Bank Of
North Dakota. Last December the
counties. following a long esta blished
practice, advertised for repositories
for! county funds, both time deposits
and checking accounts. The state
banks presented their bids, and the
accepted institutions were awarded
these deposits for a period Of two
years. The bankers are anxious to
know whether the state can abrogate
such contracts between the various
counties and the banks, when such
contracts were made legally and in
good faith.
The chief objections to the
Bank Of North Dakota plan, as
indicated by the state bankers.
are the One.man control feature;
the fact that the scheme concen-
trates In the hands OF the COVER
nor supreme power to make or
break any state hank as hc may
see fit, and the fact that an en-
tefpFtsc OF such magnitude is to
he entirely under political super.
vision. q,
ut would be as though president Of
any state bank now established had