The New York herald., 1920-12-28
% BANKS CLOSED
BY NON-PARTISANS
Continued from First Page.

COhtniited from FTSt rage
accepted no private deposits, but con-
tented itself with acting as a clearing
house for public moneys. There were
other league banks to take care of pri-
vate accounts of league members And
1t may be said here that the use of the
past tense In referring 70 the Bank of
North Dakota Is an unwarTanted usage,
as the bank IS still open, going strong
and has a brighter outlook than ever
now that the Independent Voters Asso
citation has destroyed the Chinese wall
that hedged 1t prior to November 2.
Bank Soon Holds S45,oOO.0OO.
So much for that. The Bank of North
Dakota opened up for business July 2S
1919, and in a brief time had taken in
about s45,000,000 OF public funds. The
institution was created by Legislature
overwhelmingly Non-Pa ~tisan League,
and in the face of all sorts of dire pre-
d ctions and threats from outsiders. This
money was put TO work to produce other
moneys on which the industrial pro-
gramme was to have been installed and
prosecuted. The Industrial programme
included State owned and operated ele-
vators, -four mills and packing plants.
State hail insurance. fair grain grades
based on milling and baking values.
rural credits at cost and the exemption
of farm improvements from taxation and
so ON and on.
AS we have said, this sounds like pure
gold. But, as 1t is an utterly unselfish
programme. it required the direction of
utterly unselfish interests.
The laws creating this industrial plan
provided for supporting bond issue OF
$17,000,000. Litigation held up the bond
sale drive. and the Bank Of North Da-
kota took up the Townley burden. The
bank found the demands of the farmers
so severe that there was not sufficient
money to advance to the industrial pro-
gramme. The bond issue failed and so
did the programme. But the bank went
ahead essaying the role Of credit stabil-
izer for the entire State-apportioning
loans in sizes befitting the demands Of
localities.
The Independent Voters Association
the I. v. A. to be brief-representing the
opposition to the Non-Partisan League
and recognizing the Bank of North Da-
kota as the leagues solar plexus. went
into training with view to knocking
the league loose from the State and re-
establishing the old order of things.
So, taking advantage of peculiarly tit
ting State law, it initiated five laws by
referendum to be voted on at the succeed
ing general election, which in this case
happened to be November 2.
All these Initiated laws had to do with
the future of the Bank of North Dakota.
One provided for board of auditors,
another for regulation of real estate
loans, the third for official financial
news, the fourth had to deal with school
funds and the fifth was the knockout
punch.
DeadfalIs Laid for Bank.
This desired legislation proposed to
separate the bank and the State, county,
township and municipal treasures. 1t
sought to make It unnecessary for the
State Treasurer to deposit public funds
in the league bank. In other words, the
Bank OF North Dakota was to become
nothing more than the state treasury, as
the law would have 1t that only such
moneys as were strictly State funds
should go automatically TO the devoted
bank. County. township. school, city
and other public funes might be distrib-
uted evenly among all banks.
With much vigor and in great num-
bers the people went to the polls on
November and approved this law,
thereby separating the Bank of North
financial programme from about nine
tcnths of their breath The bank ceased
to be monopoly and great was the re-
joicing, for il was noble victory.
The process OF starving the dog was
on. Unfortunately general decline In
the market was on too. Tho dog was
not feeling any too fit to begin with, and
whereas II was proposed merely TO cause
him to lose weight, the foolish beast
began to evince signs OF becoming ut
terly defunct---of lying down dead and
staying dead. The cheering stopped sud-
denly.
Just as soon as that Gripping law
became operative. which was immedi-
ately upon its adoption. all guardians
of school. county. township and city
funds who were politically opposed to
the Non-Partisan League fastened to
Bismarck TO withdraw their accounts
Promptly they figured on redepositins
them in banks that hitherto had yearned
in vain for just such funds. Folks were
so busy shifting their money from pocket
to pocket that they failed to take note
of what was happening.
The management OF the Bank of
North Dakota seeing the run coming,
touched the psychological match to the
high explosive on which the financial
status of North Dakota was resting
The management got out the books and
found that 500 banks throughout the
State were sub-depositories OF public
moneys distributed by the Bank OF
North Dakota. Upon each Of these banks
simultaneously the big bank called for
the full amount of the redeposited
money.
Calls for Money That Had Gone.
The management knew It's North
Dakota. 1t found out precisely what it
already knew-that the money was not
in the vaults of the 500 banks. but had
been lent out TO farmers and business
men who at the moment were pos
sessed of Just about as much ready cash
as an elephant Is of feathers. AS this
article already has cited. prices were go
ing down. Grain was rotting In the fields
and moulding in bins because the farm
efs could not get the prices they de-
manded. The farmers insisted that It
had cost them more to raise than the
miuers were willing to pay for II.
Again, the business men couldn't come
across at once because they found them
seleves overstocked with goods they
could not sell for as much as they paid
for them. Everybody was whipsawed.
The management OF the Bank OF North
Dakota had, literally speaking, kicked
~ hole In the dyke and the inundation
was on.
One after another. banks closed their
doors. Two national banks turned tur-
-. hA UfarA al r.f h.