Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1921-11-08
NEW ACTION WAS
FILED MONDAY In
BURLEIGH COUNTY

Bismarck n. p, Nov. s.--The sui,
filed in Burleigh county district court
yesterday seeking to enjoin further
sale of state bonds. attacks the val
idity OF the contract between the
Bank Of North Dakota and Spitzer.
Rorick & Co.. a Toledo concern, for
disposal of the securities, according
10 the complaint in the action.
While refusing to issue a temporary
restraining order. Judge w. L.
Nuessle directed the industrial COM
mission, against whose members the
suit is filed. to sho;w cause Novem-
Der 8, why the contract with the To-
ledo concern should not be set aside.
The industrial commission recently
contracted with Splitter, Rorick & Co.
for the sale Of. about IS, 0o9, 600 worth
of state bonds at a per cent dis
count s1.2oo.0oo of which already
have been Sold g
Points in Complaint
In the action, initiated by a grour
Of northern North Dakota taxpayers
the following points are made:
First. that the Bank OF North
Dakota is not legally possessed
of state bonds it has undertaken
to deliver to Splitter, Rorick &
Co.
CllxfL LsN HhOUSCIldl
commission is without authority
to sell the bonds at less than par.
Third. that the bond contract
is illegal, because attempts are
being made to sell tho bonds at
less than par. whereas the state
law provides that the industrial
commission shall sell the bonds
for cash at not less than par.
That any transfer of the bonds
1>1 sr>@,~ l~y
to the Bank OF North Dakota is
mere subtcrfuge Intended as AN
evasion of the law, and not bind
ing upon the state.
Plaintiffs in the action are Alex
Currie of Cando. Norman Morrison
of Rock Lake, Joseph NJ Kelly of
Devils Lake Charles Peyerson. A. J.
Gronna of Lakota, D. X. Brightbill OF
| Cando John Thelin and c. II. Olson
After setting forth the preliminary
facts regarding the Bank Of North
! Dakota. and the authority over it OF
! the state industrial commission. the
complaint cites the law regarding the
! issuance and sale Of state bonds. Tho
various sections Of This law empower
the issuance of bonds in the following
amounts:
Mill and Elevator Series, not ex-
! ceeding s5.0Oo.00o.
J Real Estate Series. not exceeding
! s1o.00o.o0O.
Home Building Series. not exceed
! ing 100000.
In each case the complaint sets
! forth. the law provides that:
| 'SThe said industrial commits
sion is empowered. authorized and
+ directed to act as the agent nf
the state for the negotiation. sale
and delivery of such bonds, and
shall sell them for cash at not
less than par value"
| The alleged contract entered into by
| letter between F. w. Cathro mana
ger of the Bank of North Dakota and
Splitter, Rorick & Co. is then quoted
] in full and the affidavit then con-
tinues with the following allegations
on the part Of the petitioners:
THAT the defendant Cathro as
manager of said bank. and the de-
! PENDANTS. Lynn j. Frazier. Williams
Lemke and John n. Hagan. as MEM
\ bers Of said Industrial Commission.
! claim to have already sold and de-
livered to said Splitter. Rorick & Com
pang bonds of said state. real estate
! series, to the amount of $1,000, 10000
and they threaten and intend to. and
unless restrained and enjoined there
from by. this court, will sell and de-
liver to said Splitter. Rorick & Com
pany, exclusively. al! the other bonds
Of said state mentioned in said CORE
spondence. at the price and on the
terms in said letter and riders men
toned in SO far as said Splitter. Rorick
! & Company may be willing to pur-
\ chase the same.
! Transaction Unlawrul.
4 That the whole transaction at
4 tempted to be effected by said CORE
j spondence Is unlawful and in violation
OF express limitation imposed by law
on the powers and authority OF said
industrial Commission and said bank
and OF said Cathro AZ manager Of said
bank and Of all other agencies Of the
4 State OF North Dakota for the sale Of
its bonds, Of all OF which illegally.
violation Of express provisions Of Law
and excess OF authority. each Of said
defendants and the said A. B. Foster
and the said Spitser. Rorick = Co
had full and actual knowledge and
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