The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1921-02-17
House Committee Discusses Le-
gal Phases of Industrial
Program Laws
WANT EXAMINER AGAIN
Attorneys Say They Understood
State Official Went to
Minneapolis

shall to take necessary steps to
bring o. E. Lofthus, state bank
examiner, before the committee.
The action was taken just be-
fore the noon adjournment,
when Attorney Francis Murphy
announced that Mr.. Lofthus had
been summoned to appear, and
had gone to Minneapolis instead,
he understood.
Lofthus, he said, was wanted
to explain some transactions Of
banks involved with the Scandi-
navian-Ameriran bank.
There were two witnesses on
the stand during the morning,
F.'W. Cathro and J. w. Brinton.
During the testimony Of Mr.. Cathro
the conclusion was reached that un-
der the laws there is no limit To- the
money the Industrial Commission
could order the Bank Of North Da-
kota to put into state industries
that it could order all the public
funds into the industries.
~Sound Discretion"
The only limit, according to Mr.
Cathro, was "the sound discretion of
officers in handling state affairs.
Il wish to inquire" said Attorney
Sullivan, whether or not there is any
provision of law that limits the
amount of money the Industrial COM
mission may order you, as head 81
the state bank, to credit state indus
tries"
my recollection is that there is
not" replied the witness.
1.-THE only reasonable conclusion is
that, as far as the limitations Of laws
are concerned, is that it would be pos
sible for the Industrial Commission
to invest all the deposits in, the in
dustries If they saw fit" said Sulli-
van. =.
Mr.. Cathro suggested that his i'm
preston was that other laws con-
trolled this, and that something
improbable Mr.. Sullivan was talking
about, ..E
Mr.. Sullivan said that he wished to
remind the witness Of statement Of
Judge Robinson, Of the supreme
court in a decision, to the effect that
the test of a law is what the worst
set of grafters might do under it, not
what reasonable men might do.
Mn IN
other statutes than the Bank Of North
Dakota referred to. One provision
was to the effect that if the earnings
on the state industries should not be
sufficient to meet the interest on
bond issues, it was made the duty Of
the board Of equalization to make a
state tax levy to mako up the de-
ficit. <>t, 49,.
The final conclusion of Mr.. Cathro
was that it would be malfeasance in
office for officials to make improper
appropriations, and that the only limit
to the Investment of the banks mon
ey in state industries was "the sound
discretion of officials.
Mr.. Sullivanthen inquired as to the
value of investments in state indus
tries as bank reserve.
1T wouldn't be very good reserve,
would it?' he asked. '
1T wouldn't be reserve"
1T would be some what In the ma
ture Of an investment?
yes" Las &siast. ..l
Mr.. Cathro suggested 1t would not
be "very non-lMdid" investment.
Law ON Private Banks.
He said, on questioning, that there
was law providing that the private
banks should keep a certain reserve,
and there is no such provision with
regard to the Bank of North Dakota.
Mr.. Sullivan read from Mr.. Cathro's
statements on the banks duty as
printed In booklet to the effect that
the prime duty of the bank was to
keep the public monies mobile" for
the good of the entire state, make
sound Investments. etc. !,
"And you followed that policy,
asked Sullivan.
As far as the investments Of the
Bank of North Dakota are concerned"
In response to further question
Mr.. Cathro said that the investments
in industries, etc, were not very
mobile" '
Cathro On Stand. .
F. w. Cathro, of the Bank of North
Dakota, was the first witness called,
Attorney Sullivan asked him about the
$500 draft Jack Hastings drew OH the
bank through a bank at Oberon. This
was the drafts referred to by J. W.
Brinton.
This is the one you said yesterday
was drawn on the Bank of North Da-
kota but when you looked it up you
found it was not quite so," queried
Mr.. Sullivan.
That's correct" replied the witness.
The draft was read. 1t was dated
Chicago, Feb. 13, 1920 on the Oberon
bank to account of J. J. Hastings to
g. M. Townsend in care of the Bank
Of North Dakota.
# Mr.. Sullivan referred to the entries
made in the bank in connection with
this transaction, the entry being made
to permanent books from slips. A
slip was shown with the entry debit
to bond sale'' and the name of J. r.
Waters, manager, attached.
Mr.. Sullivan: Il believe you said
!.Gsntinued on page 81