Cavalier County farmers press. (Langdon, N.D.) 1920-1921, 1920-07-08
new STATE Bank
FUNCTIONS WELL
Manager Cathro Discusses
Eastern Balances, Redeposits
in N. D.. Banks.

The remarkable success Of the Bank
OF North Dakota is q constant source
OF embarrassment to the opponents of
the industrial Program of the Nom
partisan administration of North; Da-
kota.s To counterfeit the influence of
the achievements of the state bank
the newspapers which represent the
Vested Interests persistently lie about
fheHafairs of. the bank and endeavor
to prejudice the voters Of North Da-
kotaf against It. The Bismarck Tri-
bunef recently published a vicious arti-
clef summing up all the lies which
came to the mind Of the writer. The
paper refused to publish Manager
Cathro's reply unless he would pay
for 1t at advertising rates.
Part Of Mr.. Cathro's. reply follows:
"What are the facts as to bank bal
ances in the Twin Cities? They are
these: On June 16, 1919, prior to the
organization of the Bank of North
Dakota, the banks in North Dakota,
as apart of. their reserves, had on de-
posits In banks in Minnesota $11,526,
64S.65, in banks in other states ST.
502,159.26, in other correspondent
banks in North Dakota $7,743,541.O2 g,
being q grand total Of reserves of
state banks held in other banks in the
amount of $20,772 ,343.93. The Bank
of North Dakota has on deposit at the
present time Gas of date of May "a,
1920, in Twin City banks 1891 ,923.13,
$4O5,020.26, $244,429.12 and SOL, 751. 90,
respectively in each of four different
banks; in Duluth $197, 852.70; in Chi
cago $345,S39.61; and in New York
notwithstanding a grand total of
reserves held by the Bank of North
Dakota outside the state of North
Dakota in the amount Of 81, 1865 SOC. As.
Eastern Accounts Necessary.
Every banker, every economist anC
every student of financial affairs we'll
knows that we must carry eastern ac-
counts sufficient to furnish the neces-
sary exchange for the transaction of
business, not only for the purpose of
paying checks held outside the state,
but also to provide our customers with
drafts or exchange to meet their re-
quirements. The daily float for the
current year has averaged about ST.
100000 a day, and it has sometimes
run over 100000 a day. During the
week ending May @, there, passed
through the bank 36,O06 items, aggre,
eating $9,S36,8S7.37, which volume OF
business certainly requires large east.
ern exchanges to handle. During the
past six weeks $7,441,511.5S have been
paid out in the payment of warrants
These exchanges must be paid for il
drafts that are payable at par at the
Federal Reserve bank; consequently
sufficient funds must be maintained
abroad to meet the payment of oul
float.
In the event that the Bank of North
Dakota should establish correspondent
relations with the Federal Reserve
bank of Minneapolis, then it would be
required to keep on deposit in the
Federal Reserve bank Of Minneapolis
without interest, seven per cent of its
demand deposits and time deposits
maturing within thirty days, ane
three per cent of it's time deposits
maturing after thirty days, which
would be an amount at the presen
time of $1,761, 528.91 In addition tt
that, it would have to carry an amount
equal to it's items out for collection
which would amount to $1,069, O73.63
which would make a total reserve tt
be carried at the Federal Reserve
bank, based on its present footings, O.
$780, Coz. "a, all Of which would have
to be carried there without interest
We would also have to, carry,a suffi
: cient reserve to protect the. with
drawaIs that are constantly bein,
made by the various ~treasurers, and :
possible reduction in the accounts
that the banks are carrying with us
all of which would be SO carried b,
us in the Federal Reserve bank as re
serves, without interest
We are not now carrying any fund
with the Federal Reserve bank; in.
stead of that we are carrying $1,76G,.
S05.45 In other banks on which we are
/. receiving interest at two, two and one.
fourth and three per cent annually, SO
that, to repeat, 1t is absolutely neces.
~ 90 SAA ~ jain HO1ENANOlL DuhoId
carry a sufficient fund abroad to pay
its exchanges. 1t is carrying a very
much less amount of money abroad
than vas formerly done under the old
system. 1t is carrying very much less
money abroad than the necessities OF
the situation might properly warrant
If it did not carry money il cores
: pendent national or state banks, il
would be required to carry funds with
the Federal Reserve. bank without in.
terest. 1t is receiving considerable
revenue on it's balances in national
and state correspondent banks, and II
is at the same time establishing credit
relations with the eastern banks that
cannot but be of value to the Bank OF
North Dakota and to its customers In
North Dakota. 1t is meeting the neces.
stiles of the situation in a straight
forward business-ike manner. The
opposition themselves, If they had the
power, would not and could moi