The weekly times-record. (Valley City, N.D.) 1912-1922, 1921-07-28
THE TRUTH ABOUT
THE BOND BLOCKADE

uC DUNN OAVV1AI1UA
b We have been accused Of going to-
eastern cities for the purpose OF 6lock-
ing the sale Of North Dakota bonds
and of being responsible tor the fall-
.ure Of the state administrator 70
complete the mill and elevator pro-
iect. the homes, and from making
farm loans. It is proper, therefore,
that the public have the facts SO ms
statements made by members OF the
Industrial Commission and otners
made be corrected.
We did not go to Chicago OF else
where in March, or at any time TO
nrevent the sale of bonds. The facts
are that meeting was held in Grand
Forks about the middle of March, at
tended by the members Of the Joint
Camnaipn Committee and other rep
resentative opponents Of the pres.
emit administration from different
parts Of the state. This meeting was
held for the purpose OF discussing
the possibility of carrying out con
structive program in the event OF q
successful recall election. The cues
ton had frequently been asked, What
assurance is there that if the present
members Of the Industrial Commission
are recalled North Dakota bonds can
be sold and the present mess cleane9
up?" This meeting decided to send
Mr.. Spalding to Chicago with 1nstruc.
lions to procure from the hrm OF
Wood & Oakley, bond attorneys, an n
opinion as to the validity OF any OF
the proposed bond issues and II that
firm found the bonds or any part OF
them could not be legally issued, to
get an opinion as to what new laws
were necessary to, if possible, make
such issues valid. Mr.. Spalding de-
clined to 20 alone on such mission, 1t
was then arranged that the other
signers hereof should nae6 Mr.:
Spalding in Chicago. The scope OF
INQUIRY was also enlarged so as to
cover more than legal inquiries. Up.
on our arrival in Chicago we called
on the law firm as instructed. This
firm had been advised Of the visit and
a date fixed for an interview. We
found member of the firm working
on an opinion on the bond issue. We
at first supposed it to be in response
to the notice Of our visit. 1t, now
ever. later developed that he had been
EMPLOYED by the Bank OF North Da-
kota to prepare an opinion. "
He found himself unable to reach
la conclusion on the subject while we
were in Chicago as evidence OF many
necessary facts had not been fur'
nished by the North Dakota off1clals
At the same time we found one
George Webb represented as public
itv agent Of the Bank of North Dako-
| ia. camping on the trail OF the law.
yers apparently for the purpose Of
getting an opinion Immediately.
Wood & Oakley, having been en-
ployed by the Bank Of North Dakota
could not give US their professlona
opinion on the subject. But as re-
suit of interviews with reputable
bond attorneys and bond statesmen n
Chicago and. other cities, we reached
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
bursement Of the funds in the hands
of those in whom the people coule
have confidence, and that it was nee
essary to initiate the laws later ap
proved by the Devils Lake conven
ton to carry out the program ant
make the bonds a desirable invest
ment; one which would be attractive
to purchasers, whcih the issues al
ready provided for were not, evel
though they might be held valid.
In consultation with experts w
learned many reasons why such bond
were unattractive even If their val
iidity was conceded and illustrative o
some of them were reasons given D.
Mr.. Hubert, president OF the Mer
chants Loan & Trust Company, wh.
4 had advanced to the Bank OF Nortl
! Dakota million dollars on some o
these bonds as collateral for a shor
| time loan. ~
! That letter reads as follows:
Hon. B. F.. Spalding,
! Fargo, North Dakota.
NV Dear Judge Spalding:
i Referring to the matter OF tn
| State of North Dakota Bonds, in M
opinion the credit of the State .
| North Dakota is high and an ordinar
| issue of bonds of that state, with al
! the usual legal formalities complies
with, would be a good and salabl
bond. y
| An objection to the present issu
of bonds is that they are specificaM!
Issued for the promotion Of certai
industries, such as bank, flour mill
and elevators land the idea has ap
parently been conveyed to the peopl
! Of North Dakota that these bonds vii
! be paid, both principal and interest
out Of the earnings Of these indus
tries and that the burden will not fal
upon the tax payers.
In my opinion, such bonds will b
4 very difficult to market. It would b
much better to. retire these bond
with an entirely new issue made in tn
ordinary way.
! Very truly yours,
IEDS-ES Presiden