The Grangeville globe. [volume] (Grangeville, Idaho) 1907-1922, 1919-10-23
National Non-partisan Leaders
Said to Have Borrowed
Excessively.
CURIOUS INSTITUTION
Established BY Townley, Auto
crat of North Dakota;
Keeps No Reserve.

Boise, Idaho, Oct. 20.-While the
failure Of the Scandinavian American
bank at Fargo, North Dakota which
had loaned excessively. to the National
Non-partisan League and its sub
sidiary concerns has become a matter
of national comment. No state is
more interested than Idaho where the
Non-partisan league, during the last
campaign created something of fur
ry and where its leaders are still oper-
ating along various lines. The trou-
Bile with the Fargo bank was that it
made loans to these nonpartisan con
Germs on unsound security, and an eff
fort is being made now through legal
channels to ascertain "what monies, If
any, have been diverted to illegal pur
poses."
The examination was ordered at the
instance of the Attorney General, one
of the Governors Of the bank, the other
two being the Governor Of the State
and the State Commissioner of Agri-
culture and labor.
Curious Deal.
The Bank of North Dakota is per
faps the most famous and curious of
the institutions established by Mr..
Townley, the autocrat of North Da-
kota and of the Non-partisan league,
Tn intention or pretense it is an imi-
tation of the numerous rural credit
banks of Europe, banks where farmers
artisans, trademen can get cheap
money. In effect it is something en-
tirely different, and it is conducted ac-
cording to rules unknown in any code
of banking laws since modern banking
began. 1t keeps no reserve; at least
1t is not bound to- The State banks
have to have O reserve amounting tC
10 per cent Of theii time certificates
and 20 per cent of their demand de
posits.
Easy Money.
The Bank Of North Dakota as Mr.
Frank r. Packard, an Assistant At
torney General of North Dakota, tolC
the Montana Press Association tn,
other day, "can loan out all of it
money and keep nothing to pay it
depositors." 1t can loan all of it
funds to one individual and over
drafts are not forbidden" Only tn
Legislature can declare the bank in
solvent.
Sure of Deposits.
All public funds have to be deposited
In it. Thus it is sure Of deposits
amounting recently to some $16,000,00
yet" says Mr.. Packard while sue
deposits are being made the bank ma
be insolvent and refuse to honor tn
warrants of the political subdivision
making the deposits. 1t may continu
to transact business, including the re
ceipt of deposits after insolvency. n
penalty is attached to the mishandlin
Of the funds
Public Kept i'm Dark.
This extraordinary bank doesn
have to publish statements of its COZ
dition No penalty can be inflicted NJ
on its officers for making false report
1t doesn't have to make good ba
debts or impaired capital
Upon depositing the public FUND
in this bank all public treasnrers an
their bohdsment are released. from Ii;
bility. If the money is squandered {
embezzled, the amount can be mao
good only by taxation" Moreover.
is allowed by the act creating it
transfer funds to other department
institutions, industries. enterprises,
business projects of the state, whiC
shall be returned with interest to II
bank" That is, it may tranfer II
school endowment to the credit of al
State-owned enterprise from a gil
factory to a humming-bird aviary.
Without Security.
The public moifeys may be appropI
afed without security to any Stat
owned enterprise
If the money is lost, the taxpaye