The New York herald., 1921-02-17
DEFEAT FOR TOWNLEY
Begs i'm Vain for Bankers to
Repeat Offer Which He
Once Refused.
BONDS DEAD IN CHICAGO
Former Aid in Discredited
Regime Reported Peddling
Them in New York.

Special Despotch TO THE New YORK HERALD.
MINNEAPOLIS, Feb. 16.-That the
Nom Partisan League will be able to
solve the financial problem its po-
litical banking methods have created
in North Dakota by anything short of
resignation of members of the State
Industrial Commission, and by the
closing Of more than one hundred
country banks it has "befriended."
was regarded to-day as practically i'm
possible.
Conferences between members Of the
Industrial Commission and syndi-
cate Of Minneapolis, Chicago and East
ern bankers and bond investors prac-
tically were broken off to-day, Mime
apols bankers said.
Negotiations for the sale OF North
Dakota State bonds by Twin City. Chi
cago and Eastern bankers. and A. G.
To whey and other representatives OF
tho North Dakota Government. have left
| the financiers convinced that for the
present, at least, there is no chance to
float he bonds.
Bank and trust company officials
came to the conclusion that under pres
ent conditions they did not want to un-
dertake the sale of the North Dakota
bonds to the investing public for the
following reasons:
Doubts expressed as to the validity
Of the bond issues.
The fact that the bonds already issued
| l,at. y aI-fxn cd nj
Chica go and New York by irresponsible
individuals. and have been discredited
among investors.
Back of these reasons lies another.
The banking interests feel that the pub
lie would not take willingly to North
| Dakota bonds under the present gov
ernmental conditions in that State, but
the bankers are unwilling to be placed
in the position of trying to dictate to
the people Of North Dakota how they
! shall be governed.
An additional reason is the intense
bitterness displayed by the two factions
at Bismarck. indicating that an agree
ment between them on any kind OF a
programme is almost impossible.
+ Townley Admits Failure.
| Minneapolis bankers who have sat In
| the conferences would make no definite
statement tonight. They admitted that
the transaction is off for the present at
least It may be reopened. but there Is
no immediate prospect OF that.
A. -. Towrley now faces more trouble
IN his own camp where he opposed his
former lieutenant, William Lemke. in
caucus ten days ago and met defeat.
He prevailed late on Lemke and other
leaders Of his North Dakota organiza-
ton to let him try to find market for
State bonds on the terms that once had
been offered by the North Dakota oank-
ers' COMMITTEES. These terms. involving
liquidation of the Bank OF North Da-
kota and partial abandonment Of the
leagues industrial programme" Town
ley told the bankers here he would un-
dertake to Put through IL they would
take the bonds. Even on these offered
terms the bankers have decided they
cannot undertake to upderwrite the Sc
curi.ies of North Dakota. So Townley
returns to confess failure and still do
what ne can to save something out OF
- wreck.
7. Jn getting in touch with Chicago and
Eastern financial men this week, local
bankers were surprised to learn that
former North Dakota banker, now dis
credited in that State, had been offer
ing the North Dakota bonds In Chicago.
Another formerly connected with the
League Bank at Fargo has been cry
ing them in New York Buyers we're
unwilling to touch them on. any kind
OF terms.
Refused Loans at Per Cent.
1t is a significant commentary on
North Dakotas situation that recent
efforts TO borrow money for the State
at per cent interest have failed. while
South Dakota sold s5,000,000 OF rural
credit bonds bearing per cent. interest
In Chicago last month at a premium to
yield 6.7 per cent.
Though unable TO help the State
Treasury and the state Bank out at this
time. Minneapolis bankers are standing
by North Dakota banks. All the North
Dakota banks are more or less erbar-
rasscd by the financial deadlock with
the Bank OF North Dakota. but with the
exception OF some smaller banks in tho
western section OF the State. Il Is be-
lieved they will come through. Predic-
tions are made that the virtual insolv-
ency of the Bank Of North Dakota and
the closing OF tho Scandinavian Ameri-
can Bank of Fargo will bring on suspen-
sion OF perhaps 100 banks. In addition to
the thirty-five which have closed up TO
date.
The North Dakota Representatives II
is understood. were willing to accept al
most any terms the bankers might offer
and try to put them through. but the
bankers were not disposed to impose
terms and conditions on the state Of
North Dakota.
A complete turnover OF the State gov
ernment and abandonment OF the So
cialistic programme would. Il is be-
iieved. restore confidence In North Da-
kota among investors, and proba bly,
nothing else would. But that is some
thing North Dakote lid have to work
out for herself. without any outside die
tation.