The Bottineau courant. (Bottineau, Bottineau County, N.D.) 1895-1929, 1921-03-03

Proper perspective Of the financial
situation in North Dakota demands the
observer look behind politics and po-
litical raids on the credit structure Of
the state for partisan purposes. The
large condition is n which is grave
enough, as every farmer, laboring nan
and business man and investor knows,
but too few persons have had the op-
p%0rtunity, as a result Of the clouds
that have been thrown around the
question, to analyze what is the mat
ter with the financial situation In the
state.
The best manner to appraise the
financial situation is to consider what
happened to the private banking sys-
tenn in the year ending December 81,
1920.
M. w. Thatcher, president Of the
Equitable Audit company of Mime
apolis, testifying before the senate
committee Investigating the Bank Of
North Dakota, produced an analysis Of
Che private banking conditions which
was astonishing. It explains the vir-
tual credit collapse. Incidentally, it
proves the absurdity of the charges Of
political opponents Of the present state
administration that the Bank of North
Dakota and the state industries are
responsible for the let-down from
which the state is suffering.
Reports in the office Of the state
bank examiner on condition of the
private state banks of North Dakota
~ q whole for the year show:
Deposits during the year dropped
from approximately $13O,OOO,OOO to
sos, 600, 900. or a decrease Of about
$27,OOO,OO0
Bills payable of banks increased 400
per cent, or about e14,25O,OOO.
Due from reserve banks decreased
e9,36O,OOo
Book reserves decreased over so per
cent or about $11, 300, 600.
These figures, Mr.. Thatcher pointed
out, represent a ~"defiation" in re-
sources of banks in the year Of more
than $5O,0O0.QOO. Therein lies the
direct evidence of where the RESPONSE
bility for the present credit stringency
should be placed, Mr.. Thatcher de-
clared.
stake three items in the schedule on
the general condition Of all state banks
which 1 have presented" he said, land
It is easily seen where the banks are
&50,OO0,000 short of as COM
pared to a year age.
deposits In all state banks de-
creased $27,O0o,OoO; bills payable in
creased S14,e5O 600 and sums due
from reserve banks decreased $780,
GOO. The total Is more than $5O,OOO,-
OOO. This much in resources, ordin-
arily in use for the people of this
state, has gone. It Is without the
state borders. Someone else has It
when it is needed here. Drop in crop
prices and livestock prices for the past
year was o than 5000, 1000. In
other words, when the processes of the
present nationwide defation were set
In motion. North Dakota, as a mere
producing state, was t%errihcally hard
hit.
Banks had extended their loans, on
the basis Of the going average Of de-
posts. The enormous decrease in de-
posts made 1t difficult to manage with
the large amount Of loans they had
made. That explains I'm turn the in
crease in bills payable and the de-
crease In due from reserve banks. And
It all goes back to the ~"defation" In
crop and livestock prices. Products Of
the state were produced at the old rate
Of expense. necessitating the former
drain on the banks by farmers; and
those products were sold at the de.
fated" price. ~ "
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