Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1921-04-05
Industries Not Backed
BY Entire State Credit
seottnued from page L.,

however, the exception of tho sinking
Iund OF real estate seriee-chapter |
1874, Laws 1919, section y. This, OF
course, would include tho proceeds of
the sale of bonds. These proceeds
are, In the case Of the bank bonds,
.desisnated as the capital Of the Bank
OF North Dakota tsection 4, chapter
l4a), and, in the case of the mill and
elevator series the proceeds are re-
CURED to be placed by the Industrial
commission in the funds of The ASSOC
citation (section z, chapter 1889.
Again referring to section Is Of the
bank act, it provides that the bank
may transfer funds to other depart
n1ents, institutions, utilities, industries,
enterprises or business projects Of the i.
state, which shall be returned with IN
terest to the hank. Now referring to
section IFS of the constitution, which
reads:
"'No tax shall be levied except
IN pursuance of law, and every
law imposing a tax shall state dis
tinctly the object of the same. to
which only it shall be applied
it is pertinent to inquire what relation
the bank or the state sustains with
reference to the various deposits of
, public funds required to be deposited
therein.
Could Not Transfer Funds.
IF the bank is but the state holding
these funds as a mere custodian, as
a treasurer. would hold them, they
would not! lose their character as pub
lie funds; and if the bank, in all Its
business relations, is but the state.
whenever it would follow the express
direction contained in the law to
transfer. invest or loan it's funds, it
would do so in the direct pursuit OF
a governmental object. Manifestly, II
this governmental object should differ
from that for which the funds were
originally raised by taxation, the man
date of section us of the constitution
requiring tax moneys to be applied to
the purpose for which they were
raised, would clearly he violated. Can
lit be seriously commended that moneys
raised by taxation FOR the support of
the public schools in a remote section
OF the state are authorized to be used
for the purpose Of building a home for
a bank cashier in the capital city. Of
the state? This is TIC logical result
of the petitioners argument. The
steps are these: The bank is the state
because the constitution authorizes the
state to engage in the banking bua-
ness. h things That are done by the
bank are therefore done by the state
in pursuit of whatever governmental
object the bank is authorized to at
tain. To attain these objects, public
moneys are required to be deposited in
the bank, there to be used through
loan or transfer to- finance any of the
authorized operations.
Flaw in Icmke's Contention.
1.-The flaw In the argument, as we
see it, is this: 1t not only ignores the
effect of express constitutional limita-
lions upon the powers of the state gov
eminent itself, but it ignores as vel
the legal effect Of what the legisla.
ture actually did whe it authorized
tho use of the credit ofNthe state fol
the purpose of supplying capital funds
to be used to form a separate organ
ixation through which it might seek tc
In attaining these ends, II the state
should act directly, it would be ham
pered by reason of express %constitu'
tional limitations. But it cAn hazard
whatever money. lawfully obtained. i
may be authorized to use In conduct,
ing the particular business. To make
the business a success it may be neces.
sary to vest in its agencies powers tina
could not be conferred in public Of
ficers whose acts as such would bind
the state unqualificdly.
0 Public Credit Not Hazarded.
These agencies hazard only the APP
propriated capital, not the publ,
credit. Doubtless it was partly on &C
count of these Limitations that it wa;
thought best 10 appropriate q certain
capital for use in. the banking bust
ness; inc to create a bank organiza
ton which, using this capital fun
as it's basic security, could SO handl
the funds deposited with it as to real
ize tho governmental objects sollgh
without t%renching upon the constitu
tional limitations applicable to tn
state itself. 1t can not be REASONABLE
contcnded that the constitutional au
1hority to engage in certain bust
nesses nullifies by implication exl<cs
limitations on the powers Of tho stat
government, especially where thes
limitations arc embodied in amend
mcnts adopted concurrcntly with thos
giving the AUTH GRITTY.
SAME AS PRIVATE BANK.
W. have no doubt that under
the bank the bank sustains
the relation of debtor with re-
spcct to all Of tho deposits, both
public and private. that are
plaoed in it. 1t is simply the au-
thorizcd depositary OF the pub.
y lie funds, and holds them in the
same capacity that private depos-
ttary banks customarily held
Dakota was created. There is a
vast difference between this re-
lationship and an official Gu
todianship, In which. the Official
is using the funds in furtheralV:e
of the particular purpose for
which they were raised by taxa.
ton.