Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1920-12-28
OPEN LETTER 10 COVERING AMI
I|IsEGISLATURE OEsaNORTH DAKOTA
{by Arthur Lesueur)

ss iBy Arthur Lesuear) 4.
81. Section 51T2 Of the Revised
Codes OF l913.a limits the loans which
= hankI.mAy make to Is 3 cent OF the
csapitalrand surplus OF the bank actua,-
Y paid IN. The@Bank4 OF North Da-
loan perhaps ten times this limit, to
the mill and elevator corporation and
should have auth0rity t6sidaGssig AS
the bill now Stands the Limitations
provided by HectionS 5172s sin my judy
ntent r. bindink rdpon the state
bank. Subsection z Of Section 5150 of
the Revised Codes containsSt the princi-
pal authority Of. banks in the state OF
NorthaiDakota with reference to. the
transaction Of business. It does not
include the right to. install q savings
department OF a savings bank.
Nowhere in the chapter governing
banking does the institution have the
rfghtEto perform the trust function of
holding securities and issuing bonds
against those securities. So that un-
less the act is amended, viz, House
Bill No. IS, so IS to allow the. bank
to sell it's bonds, its businessst in the
matter Of real estate Sloan4 must in
stantly stop unless, a friendiysgovernor
Is there to issue bonds. In my judg-
ment this is q fatal defect and hbso-
lutely should be remedied. S.G
The state should not issue its bonds
based upon real estate securities as
provided in Section IL Of this act, be
ginning in tn middle Of line rs, but
the bank should have the power to
act as trust company in the matter
Of holding these mortgages-not the
bonds of the state, tas security for Its
bonds issued by itself, thus taking
away the power of a mere shift Of po-
liticalS suc cess to interrupt and destroy
the activities, of the bank.
II the bank can do this on IT'S own
Of one election to put 1t out Of bus
ness. AS the bill stands, two years
operation under a hostile governor will
absolutely end the banking system az
inaugurated by this bill.
I most respectfully refer you to a
bill drafted or this subject by myself
which you have in your possession for
the purpose Of appropriate sections
covering the different objections urg.
ed against this bill, even though you
should insist in putting across the vic
ious system of management which ID
proposed through the industrial com
rnissi0n..@House Bill No. IL, and the
bansttR rs Established by House Bill No
Is. I cannot be too earnest and EN-
phatic in urging consideration OF these
propositions upon you. And I hope
absolutely nothing personal in this
matter for me. &
Even these criticisms which I am
handing to you l do not expect to be
handed on to anyone but I do expect
you VIII earnestly consider this propo.
sition and through any channel you
choose, bring sthese objections before
those who are responsible for the en-
actment of the laws.
Constructive Suggestions.
1t may possibly be of. assistance to
you In considering this matter to make
aSrfew more constructive suggestions
which seem to me vitality Important:
i. Specific authority should be Civ
partment. (See Subdivision 8 of. Sec.
ton l of the proposed bill drawn b,
myself which you have.)
2. The bank should be authorized
to issue it's own bonds. (See Subdi-
vision 10 of Section / of the bill above
referred to-
5. The bank should be limited In
passing money to surplus account as
provided in Section 4 Of the bill.
a.: It should. make. reports at leas,
not less often than every two months
(See Section S. All references to sec.
,tions Arctic sections Of the bill. "a copy
Of which you have, which was drawn
by myself.) ~ "% =,
g., The investment Of savings de.
posits should be strictly safeguarded
!, (See Section ~
g.. Limitations should be imposed
on the, bank with reference to reserve
funds but they should be more liberal
than those imposed upon private state
banks which would be the limit OF
the bill attached hereto. (See Section
80. SIS
z. The, bank should De authorized
to exceed the limit Of loans to one
concern in dealing with the state in
situations. 1 think this a be safely
done. as suggested in Section II.
81 The savings department should
have privileges and limitations defin.
ed in the act. (See Sections 15, II
and 1S.)
g.. The savings department and the
bank should keep entirely separate &C.
counts. '(See Section 20.)
10. The bank. should be made a lie.
gal reserve bank and a legal depos.
tory for all funds in the state. Nc
compulsion should be applied, nowey.
er. toward the use of such as such
repositories. (See Section 22.)
IL. The bank should be governed
by a board of governors who should
never at any time be elective officials
1t Is important in all of the indus
tries operated by the state that a free
hand be given as far as possible to
those who administer them. and thai
the tenure Of office be made as Sc
cure. ,as possible to give them a sense
of security-asfeeling that they were
| engaged in their lifework. as 1t were
This never a be true Of elected Off.
ciais who are elected as often as once
cvar,t two Years. 1t is more import.
ant for the banklt hat this be true thar
Ill any other. industry because Of thf
tremendous amount of detail that q
bank must handle and the necessity
for familiarity with those details or
the part.of the governing officials.
Sincerely yours,
(Signed) Arthur LeSueur.
In closing this portion Of thetpamph.
let. let me say made the best figh,
within my power for these principle,
within the League. would not figh,
the League for I believe in its pro.
gram. ! did not carry the fight into
the open for L, knew that il I did st
before some experience had been had
in carrying out the League program
in the way:it was being done, that tie
diseredited that / could never hope FOL
a. fair consideration Of them after.
wards and would thus deprive tns
farmers OF the state from ever de.
irving any benefit from them.
was copvinced that two years ex.
perience with the. Legislation enacted
In 1919 would. convince the. farmer,
Of the soundness Of these views. and
thatsI could thenitbe .ofzsome possible
assistance i d bringing about the. rrcr.
g~anization. of the industries and Thu
hank upon = sound. and stable basis