Morris tribune., 1920-06-11
POLITICIANS CONTROL
y N. D. STATE BANK
Speaker of M. S. G. A. Compares It
With Institutions of This
State

Albert Nystrom, four-minute
speaker of the Minnesota Sound Gov
eminent Association, made some tell
ing points against the Non-Partisan
League state banking scheme at the
Strand last Friday evening. The talk
was illustrated by the film, "The
Peoples Money" in which the ad-
verse local effect of the state bank
ing scheme was clearly shown.
Mr. Nystrom said:
"The Minnesota Sound Government
Association believes that there is
great financial danger in state owner
ship of banks when controlled by
radical political machine as is the
case in North Dakota under the
TownIey Non-Partisan League ad-
ministration.
"The Bank of North Dakota is gov
erned by three men; the Governor,
the Attorney General and the Com
missioner of Agriculture & Labor, who
are elected at a general election for
a period of two years. The Bank of
North Dakota is therefore doomed to
a political career, and all men of
sound business judgement will admit
that under political control no bank
can function for the best interests of
all it's depOsitOrs.
estate or private banks of Mime
sofa are governed by a complete code
of banking laws, which safeguard
their deposits. Their directors must
@ of CtnOk
their stock holders are liable for the
full amount of their holdings. But is
the Bank of North Dakota safeguard
ed by such a law? It is not, but
they have rules which are made by
the three state officials who have no
financial interest in the bank.
Estate or private banks of Mime
sofa are required to keep a cash re-
serve on hand equal to 10 per cent
of their time certificates, and 20 per
cent of their demand deposits, while
National banks must keep reserve
of Is per cent of their notes, but the
Bank of North Dakota is not re-
quired to keep a reserve.
estate or private banks of Min
nesota are prohibited from lOaning
more than Is per cent of their cap
ital and surplus to one individual or
concern and overdrafts are forbid
den. The Bank of North Dakota can
loan it's entire funds to one indivi-
dual or concern and overdrafts are
not forbidden.
minnesota state banking laws pos
itively forbid private banks from in
vesting their funds directly or indi-
rectly in trade or commerce, but the
Bank of North Dakota by simple
process of bookkeeping can transfer
funds to any industry, enterprise or
business project of the state, with
out security to be returned with in
terest. If the enterprise fails and
the money is lost it can only be re-
covered by taxation. The citizens of
North Dakota are therefore required
to make good any error of judge
ment or management which the bank
officials may make by being taxed to
make good the loss.
"Above all things the Bank of
North Dakota was to be a land
bank, and assist the farmers in max
ing loans on their improved farms.
This is how it worked out. Up to
January 18th, 1920, nearly nine mill
lion dollars in farm loans had been
applied for, but less than one million
dollars in farm loans had been grant
ed. One million two hundred thou
sand dollars in loans had been with
drawn by farmers who had grown
tired of waiting, and had obtained
their loans elsewhere. In making