The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1920-02-10
STATE PROFITS
STAGE MONEY!
SAYS PACKARD
Former Tax Commissioner
Shows How Profits are Made
Easily ''On Paper"
CHALLENGE TO ANDERSON
North DakOtan Declares Mime
sofa Importation Can't Back
Up Statements

"F. W. Cathro, Director General OF
the Bank Of North Dakota, and W.
A. Anderson, Minnesota citizen who
draws two salaries from the state OF
North Dakota, have explained all
about the interest on the bonds Of
North Dakota, bank series, which is
claimed as profit Oh the part Of the
Bank of North Dakota, and yet, !
am not convinced" says f. Il. Packard.
assistant attorney general, i'll state
me1t given today to the press.
"Mr. Cathro explains ut great
length that these bonds. which were
issued by the state of North Dakota
and given to the bank, which yet holds
them have interest coupons attached
and that these coupons must be clip
ped Off and something must be done
with them, Eo he carries them as
profits in his profit and lose account
and as an asset on his balance sheet.
If Mr.. CathrO must do something
with them, l would suggest that he
carry them on the loss side Of his
profit and loss account as interest due.
as well as on the profit side, and that
he carry them on his balance sheet
as a capital liability as well as an
asset" <,& ..,
SIMPLY STAGE MONEY
"'rhey are neither an asset nor a
profit to the state of North Dakota
in any sense of the word. They are
exactly the same kind of profit as
the interest on Mr.. Cathro's note
would be, made payable to himself
upon which he credited himself every
six months with accrued interest-it
is simply u 'stage money transac,
ton. In order to make his accrued
Of interest any good. he would have.
to nay interest on the note which
would be deducted from profits on one
side ana credited OH the other of his
profit. and loss account If he chose
to carry it as d capital asset then
he would have to carry it as liabili-
ty as well.
.Mr. Anderson, the two-salaried
gentleman from Minnesota, says that
they have the coupons and that they
could take them to the capitol and
demand money, OH them from the state
treasurer and get it, and enter 1t as
cash asset as interest received. II
Mr.. Anderson was running q real
bank. subject to the banking laws of
this state, and made that sort Of
entry without carrying it on the IL
ability side Of his ledger, he wOulp
hc liable to term in the state penl-
tentiarv for making false entry.
Mr., Anderson says that it is. because
T don't understand bookkeeping and
that it is because l am a novice that
I made the ridiculous mistake OF sup
nosinc that when the state of North
Dakota rays out $46O19.64, ana re-
ceivcs back $45,O7S.45 that there is "a
lu,s1 of s641.19 instead Of a profit OF
s45O7s.45. must be a novice all
right, can. not get the vision.
.""Nlr Anderson further charges
that I arrived at my deficit on the
Drake mill by including in its run,
min. expenses items which they had
already taken into account as mill
expenditures. These items appear as
cypenditures undar the Mill and E.le-
yotor Associa ton report. Is the pubic
to understand that these expenditures
have been twice deducted. once in the
Drake mill account and once in the
mill and elevator account? II this
i. true, then the profit account OF the
Drake mill should be increased by the
sum of these items. ,.
Is DEPRECIATION ALLOWED?
"Moreover. there is absolutely moth
ing to indicate that any depreciation
has been allowed on the. Drake mill
no interest on the capital or taxes
allowed. Before the state can break
even on the Drake mill, it must make
= fair return upon the capital invested,
proper depreciation must be charged,
aud what the state would receive IN
taxes must be taken into account. Will
Mr.. Anderson furnish the public with
an itenized statement of the profit
and loss account of the Drake mill
including every item Of expense and
nrofit? He will not. He dare not. 1t
would show much heavier loss than
l indicated in my opinion If its
books were kept as the books OF a
private corporation are kept, and not
faxed to deceive the public .
TO WORK NEW RITUAL
The new ritual Of the Royal Arch
NfasonS will he eypmDlitiC:, for the