Emmons County record. [volume] (Williamsport, D.T. [i.e. N.D.]) 1884-current, 1921-08-04

|
the conclusion that it was advisable
to submit constitutional amendment
specifying the purpose for which the
bonds issued could be used and limit
| ing those purposes and the amounts
issued and placing the use and dis
hu,se!ncnt of the funds in the hands
CT these in whom the people could
have confidence, and that it was nee
c .ry to initiate the laws later ap-
proved by the Devils Lake conven-
ton to carry out the program and
make the bonds desirable invest
ment; one which would be attractive
to purchasers, which the issues al
ready provided for were not, even
though they might be held valid.
In consultation with experts we
learned many reasons why such bonds
were unattractive even if their val
idity was conceded and illustrative of
some of them were reasons given by
Mr.. Hubert, president of the Mer-
chants Loan & Trust Company, who
had advanced to the Bank of North
Dakota million dollars on some of
these bonds as collateral for a short
time loan.
That letter reads as follows:
Hon. B. F. Spalding,
Fargo, North Dakota.
My Dear Judge Spalding:
Referring to the matter of the
State of North Dakota Bonds, in my
opinion the credit Of the State of
North Dakota is high and an ordi-
nary issue of bonds of that state,
with all the usual legal foralities
complied with, would be a good and
salable bond.
An objection to the present issue
of bonds is that they are specifically
issued for the promotion of certain
industries, such as bank, flour mills,
and elevator-and the idea has appar-
emily been conveyed to the people
Fof North Dakota that these bonds will
be paid, both principal and interest,
out of the earnings of these indus
tries and that the burden will not
fall upor the taxpayers.
In my opinion such bonds will be
very difficult to market. It would be
much better to retire these bonds
with an entirely new issue made in
the ordinary way.
Very truly yours,
(Signed) E. D. HUBERT,
EDS-ES President.
The tremendous loss sustained in
the Drake mill and elevator expert
ment, more than twice as much as
the capital invested in one year, as
well as the loss on the state operated
creamery experiment, both of which
are set out in the recent report that
was made by the auditing company
that undermined the state industries
last fall, no doubt account in part
for the hesitancy. of the investing
public to buy bonds that are to be
retired out of the proceeds of the
state owned industries.
We discovered another objection
that was also urged by every. bond
expert we saw to all of the series of
bonds, including the real estate
bonds; namely, those sections in the
Bank of North Dakota act which re-
quire state money, including sinking
funds to be deposited with the Bank
of North Dakota, and which permit
the officials of the bank and the in
dustrial commission to divert these
funds, and to use them for almost ev-
cry purpose at any time regardless of
whether such sinking fund was for
payment of interest or principal.
They insisted that this was not sound
finance and that disaster was sure
to result. They had ascertained that
the present industrial commission
and the officials of the bank had al
rady diverted millions of state funds
belonging to school districts, town
ships, hail insurance funds, soldier
bonus funds and others and that they
seemed to have the disposition to
continue this practice.
As members of the campaign or
ganization, we felt it was our duty
to learn as far as possible why our
state administration had not sold
any quantity Of the North Dakota
bonds. We felt that by ascertaining
what the objections were, we would
be better able to determine what
steps it would be wise to take at the
Devils Lake convention, if recall
should be decided upon to bring relief
to the people at the earliest possible
moment.
We knew that even under normal
conditions North Dakota is a borrow
ing state and that now many millions
! a 4 : -