The sun., 1919-10-06
North Dakota's Socialist Programme
Blows Up.

&sAVWS OPs
North Dakota's State Socialism,
which Is controlled and operated by
the so-called NonlPartisan League,
which itself Is controlled and oper-
ated by A. G. TowNLEY, has begun to
blow up. The first big explosion is in
the Scandinavian American Bank of
Fargo. TowNLEY says the closing of
the institution by the State Banking
Board was a political coup. Maybe
it was, in the sense that those who
have been resisting his wildcat politi-
cal league and his wildcat State ex-
pertinent took advantage of the shock
ing condition of the Fargo bank to ex.
pose the wide and weird workings of
Tow NLEy's league and TowNLEY's
whole scheme.
But, politics or no politics, the fact
remains that the bank was crammed,
jammed with notes of TowNLEY's
league, of subsidiary institutions
within the league and of individuals
associated with TowNLEY's league or
TowNLEY's subsidiary corporations.
The fact remains that these loans
were made contrary to the law in that
they were vastly in excess Of loans
that could be made legally to the cor
porltions and individuals getting the
money. The fact remains that these
loans, even If they had been within
the law, were made contrary to sound
banking practice. The fact remains
that they were made contrary to ordi-
nary COMMON sense.
Where there was supposed to be col
lateral under the notes, 1t wasn't col
lateral. Hundreds of thousands of
dollars of such collateral was In the
form of post dated checks. A post
dated check isn't money or the equiva-
lent of money. A post dated check
isn't even a promise to pay on a given
date. A post dated check isn't any
thing In the world and can't be any
thing in the world except a call on a
bank to pay out on a certain date some
Of depositor's funds If on that fu-
ture date he happens to have any
funds in the bank.
The bank which is now in the hands
of the receiver was loaded with this
kind of collateral, but even nt that,
III many instances large numbers of
these post dated checks had been re-
moved from the bank and were in the
hands of outside persons trying to
collect on them. II, in other words,
the post dated checks had been actual
collateral instead OF being nothing at
all, there was nothing to show for the
post dated checks except receipts from
those who had taken away the checks
for whatever purpose.
And SO it is, politics or no politics,
that the bank examiners have found
the Fargo bank insolvent, with more
than 81 100000 of liabilities and the
greater part of its assets lent out i'm
properly and unwlsely to the Non
Partisan League and its socialistic
children, the Consumers Stores Com
pany, the League Exchange, the Pub
fishers National Service Bureau, &c.
How could the Fargo bank, under
those circumstances, be anything but
lnsolvent? How could any other bank
that had been used in the same way
be anything but insolvent?
But. after all the big lesson Is not
the wreck merely of the Fargo bank.
Other banks in other States have lent
out funds improperly to enterprises
and individuals that shouldn't have
had such loans. Other banks have
carried false or worthless collateral.
Other banks have been ruined by Grim.
inal or reckless mismanagement The
big lesson Of the Fargo bank blowup
is the economic lunacy of the whole
Townley scheme.
TowNLEY's league could go into al
most any kind of business. The State
could go into almost any kind OF busi'
pess. All that was necessary, ac
| cording to the soclalistic hallucina'
ton, was money or credlt--not brains
not training, not experience, not adapt
ability-just the opportunity, with
plenty of money, to plunge into any
sort of undertaking. Wherefore pass
state law guaranteeing all deposit;
made in the State banks. That would
make everybody sure of the banks
Then get everybody to become deposi
tors In the banks. Then use their cap
! ital TO back all the socialistic enter
prises set afoot by the league and by
| the State. How could the State
scheme fail when the depos!tor was
sure of his money. though 1t went to
wrong persons and into wrong enter
prises, when the enterprises were
sure to get all the money they wanted
But 1t has failed.
How many other banks in Nortl
Dakota will go the way Of the Fargt
bank nobody could say. But every
one Of them that has been in the same
wild business as the Fargo bank will
90 the same way. This Is sure. All
the soclalistic Industries, all the so
clalistic businesses, all the socialistit
enterprises that have been kept float
ing temporarily by such banks will