The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1920-02-11
DAKOTA BANK
DECEIYlES, | c E VI
1H.F|'.. E. PACKARD
Assistant Attorney General Re-
peats Charges in Supreme
Court }
Kosl1zkY BATTLE ARGUED
Counsel for CathrO Institution
Holds It's Private Estab-
lishment
KOSIIZKY BATTLE ARGUED

"A charge that the management ol
the Bank of North Dakota had falsi-
fed reports with view to decciving
the people as to the extent Of the
banks earnings was read into the su-
prcme court records Tuesday by AS
sistant Attorney General +. f. Pack
ard, who has publicly, through the
press. challenged conventions made by
Director General Cathro and others
to the effect that the bank showed
a net profit Of approximately $4,000
during the first few. months of its
operations: ..t .i.l.tIttI t..i3'A
Packard was representing State
Auditor Kositzky IN the lattcr's posi-
ton for writ of mandamus com
pclling the Bank OF North Dakota to
hermit him to, examine it's accounts,
which was before the supreme court
OH an appeal from the Burlclgh coun-
ty district court.
Justice Bronson asked the counse!
for the state if he did not colrsl Lei
it rcprehensible for the state audltO:
to undertake an examination of the
bank merely for the purpose OF giving
it's affairs adverse newspaper publicity.
"SuCh an action undoubtedly should
he condemned" replied the assistant
attorney general, "but would like to
ask this court if it is not even more
rcprehensible for officials Of the bank
to falsify reports with view to de-
ceiyins the public as to the proflts
which the bank Is making
This line Of questioning was pursued
no further. ~. go.
STORY OF CASE
The state auditor made an attempt
tn examine the books of the Bank OF
North Dakota, under Instructions
from the state banking board, last
fall when the affairs Of the Scandina-
yian-Amerlcan bank Of Fargo, was un-
der investigation There had been
fo,1nd in the. files Of the scandinavian
American bank a carbon copy OF a
letter from Cashier +. Il. Sherman
to the Bank Of North Dakota IN which
lie stated that he was shipping the
latter institution a large amount OF
collaterial upon which. he wished a
loan. The state banking board sus-
pected that this collateral consisted
Of post,lated checks and similar paper
which it had held Objectionable as
security for alleged excess loans made
liz the Fargo institution. The state
auditor commenced the examination OF
the Bank of North Dakota as directed.
Int he had made little progress when
director General CathrO ordered him
to halt. The state auditor then ap
piled to Judge Nuessle in district
court for an order directing the bank
tn opcn it's books. Judge Nucssle
denied the order. ruling that the Bank
OF North Dakota was a private III
stitution. maintaining confidential re-
lations with its clients: and not a
public state department, subject to
audit tby the state as arc all state
deum rtments which have the handling
of public funds.
The state auditor appealed from
this decision to the supreme court.
where w. A. Anderson, secretary OF
the state industrial commission, and
Leslie A. Simpson of Dickinson, coun-
sci for the bank. raised the same con-
tcntion as to the private and>conhden-
tial nature of its lanking operations.
The state on the other hand inslstcV
that while some of the banks func-
tions were private in nature. 1t was
essentially department Of the state
government. Assistant Attorney Pack
ard argued that the legislature in cs-
tablishing the Bank of North Dakota
had created no new functions but had
merely transferred to it certain public
functions which had previously bee!l
performed by divers state depart
ments, and that in taking over the
exercise of these functions the bank
became a part Of the state govern
ment. Mr.. Packard quoted from the
opinion of Justice Grace rendered in
the ''four taxpayers. - suit against the
industrial commission. attacking tho
leagues economic program. in which
the iurist declared that when the
Bank Of North Dakota functions. II
functions as part of the sovereign
power Of the state"
The court has taken the question
under advisemcnt