The Hope pioneer. [volume] (Hope, N.D.) 1882-1964, 1920-03-18
X THE STATE DRY.

Fargo Forum:
II there were any bankers in North
Dakota who took. but a perfunctory
part in the fight against the Nom
partisan leagues legislative program,
feeling secure in the belief that it
was Just q political fight" that did
MT vitality affect them, they are hav-
ing a rude awakening these days.
Two aspects Of the laws that effect
banks in tho state r proving a real
menace. to their prosperity and the
prosperity Of the communities they
serve, and coming on top Of the gen.
eral tightening Of money through.
out the nation, they are bringing the
bankers of the state face to face
with a situation that is giving them
cause for real concern.
The general tightening of funds
doesn't call for any particular com
ment here. Every business man is
familiar with the tendency.
The other two aspects Of the situa-
ton are: The fact that the new
laws that affect banking are proving
a great siphon' that is sucking the
outside capital out Of the state: and
the combination Of a tax that a.
mounts in Fargo to 3.5 percent on the
full value of bank sotck, while other
investments pay but the 3-mill tax on
moneys and credits.
The latter condition might be
touched upon first. The law which
assesses bank capital and surplus at
its full value and taxes it at the full
rate, instead of the usual 3-mill rate
taken by other investments, results
in multiplying the taxes of banking
institutions by about ~. For ex-
kample, n Fargo bank is called upon
to pay a tax of $17,157 in place of
$1,482. National banks have some
recourse, al under the federal laws
they may not be unfairly discriminat-
de against. They may be able to get
some relief from the courts. But
the state banks have no alternative
but to pay. ..
The seriousness of this situation
may be judged by any business man
who, will picture the problems he
would confront il he found his taxes
multiplied by IL, and his earnings
limited by law.
The "%siphoning" process Of the
Bank of North Dakota merely adds
another problem for the bankers to
solve.
In stead Of bringing new capital
into the state, as vas hoped, it is
actually proving the medium through
which most outside capital is being
withdrawn as rapidly as possible.
The loans which the Bank of
North Dakota is making are renewals
OF loans formerly carried by the local
banks and other agencies. As out
side money is withdrawn, borrowers
are seeking the Bank of North
Dakota. The only funds it has are
the funds taken from the local banks
Of the state. The state bank, there
fore, is Gripping each little local
bank, and making it less able to
serve its community. In addition
the state bank has piled another
burden Of expense on the borrowers,
for somebody must support the state
bank and pay the $4,000 salaries.
Those who support it, Of course, are
the borrowers of money and the tax
payers who get less interest on pub
lie deposits.
Thousands Of dollars are being
spent by Mr.. Cathro in literature be-
ing sent out to the voters of the state
at the banks expense to prove what
q benefit" it is to the state. But
the cold facts are beginning to be
realized, and they can't be hidden.
The bank is a piece of monumental
folly. 1t is costing the taxpayers and
the borrowers of the state hundreds
Of thousands of dollars a year; it ia
Gripping the local banks and making
them less able to take care of the
needs of the communities they serve:
and it combined with the other
tdtottc legislation enacted by the
Nonpartisan bureau, in providing a
huge siphon through which the out
side capital is being sucked from the