Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1920-06-25

the bank, was left in control Of the
borrower and in the custody of the
borrowers agents. without having
been checked by the bank officials,
whose only record Of the collateral
was that reported BY the agents Of
the borrower. e,
The bank was closed and a Tempo
rary receiver appointed by action Of
the state banking board, o the d.
rect and definite recommendation Of
the assistant attorney general and
two deputy state examiners, who
acted under orders of the state bank
ing board, and who reported the
bank in a state of insolvency as a re-
ley organizations. These examiners
also reported that the bank had abso-
lutely no cash legal reserve, but va
maintaining a "book reserve" through
book credit with a Duluth bank.
based on. a deposit of discounted pa
per for the definite, specific, and un-
derstood purpose Of enabling the
Scandinavian American bank to show
a book reserve only.
Governor Frazier says that the
bank was illegally closed. yet the
president and cashier were later ar
rested, charged with violation Of the
state banking act, and the president
was convicted by a farmer jury, In a
court presided over by a special dis
trict judge appointed by Governor
Frazier, instead of the judge then sit
ting regularly IN hat district.
1t is true the bank was re-opened
by order of the supreme court of the
state" The deputy bank examiner
who had been installed as temporary
receiver vas removed, and the bank
was ordered to resume business, with
out its having been re-
habilitated. The supreme court of
North Dakota comprises five mem
bers, four Of them elected by the
Nonpartisan league. Notwithstand-
ing the fact that the bank case was
already in the district court, and
would have come to the supreme
court under due procedure, the ma
jority of the supreme court, at the
request of the leaders of the Nom
partisan league, arbitrarily assumed
jurisdiction, gave a swift ''once-over"
hearing on afidavits filed by the
Nonpartisan league attorneys. and
refused to hear witnesses on behalf
Of the state banking board. which
was made the defendant.
Three of the five justices rendered
a decision that the bank was solvent.
principally on the afhdavits Of the
president and cashier. The question
of jurisdiction, proper and legal pro
cedure. and all other points raised by
the defense we're practically ignored
and no witnesses were given a hear:
ing. .
This was too much for one Of the
supreme court judges elected w the
Nonpartisan league, who filed a dis
senting opinion declaring the major
ity decision to be a fundamental and
~far-reaching error.
1t strikes at the very founda-
ton of judicial due process of
law. Compared to a denial
of judicial due process, all 9TH
er questions are as chair t o the
wheat. 1t seems t o me that this
proceeding is o extraordi-
nary; l have searched in vain
for any precedent for such ac-
7 ,tion. If considerations
Of this character are once made
controlling to the extent of pre-
Guiding trials, then government
by Injunction will become the &C
copied rule instead of the odious
exception.
1t is true 1.-The bank has been re-
opened and is still doing business"
but new stockholders have bought
in, new capital has been added, and
a complete change in the manage
ment effected. Possibly the best reply
to Governor Frazier's reference to
the bank is found in the statement
issued by the new directors. who
say:
Our aim is to rebuild the bank,
getting it back to it's former po-
sition as a safe and sane bank
ing institution. That
the bank ever got into poItics
was not the fault of the stock
holders now in charge, except
hat they did. not realize h
course that was being taken by
the officers then in charge.
We directors are very
much interested in bringing the
bank out of the mud.