The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1921-04-18
EXTENSION OF
STATE SCHEMES
BEING OPPOSED
Proposed Constitutional Amend.
ment Does Not Meet Views
of Many Independents
COULD QUIT INDUSTRIES
Present Law Makes Bonds State
Obligation and Gives Com
mission Power to Quit


election, which has increased rather
than diminished since the Devils Lake
convention, although the probable date
is not until November 8, has brought
ont varied ideas from voters VINO nave
done Il great deal OF meditatlng upon
problems before the state. Discussion
has been confined chiefly to the home
and to small groups
The proposal for a constitutional
amendment proposing new BOND IS
sue of $7,75O,O00, replacing the pres
ent authorization, has perhaps brought
ont more varied opinion than any
other.
There ia considerable opposition ex-
pressed among voters who are grow
ing weary Of the ever-increaslng pro-
posals to make new issues or bonas
for the state of North Dakota Tor vafi-
ous industries which they feel have
already proved to he unsound in con.
cention and which they believe Will
only plunge the state into the mlre oi
debt, They do not believe that there
should be any effort to float additional
bonds: but instead to utilize the pres
ents laws to provide for the liquida-
tion of all the state industries, espe-
cially the Bank Of North Dakota, ana
get the state down to sound busl
Ness basis.
Chief Argument.
The chief argument advanced for the
proposed constitutional amendment TO
be submitted at a recall election pro-
posing q new issue of bonds is that the
nresent bonds are unsaleable because
thew are not the obligation OF the en-
tire state. This view does not meet
the views of many Independent law
yers OF high standing, who believe that
the people of the state Of North d.
kota are bound to pay the millions OF
dollars they feel will be lost in The
continuance OF Improbable industries
with political management.
Under the present constitution anc
laws subsequently enacted, many In
dependents point out, the lndustrla'
Commission has the power to close
down the industries, liquidate the
Bank of North Dakota or turn it into
a real rural credits institution.
If the Bank Of North Dakota were
made q rural loan bank there Is plen.
ty of law available for, carrying out
the policy, they hold. The. present
constitution, amendment to section
1872, article IL, makes the sky the limit
on bonds issued on real estate secur-
ity. The constitution provides that all
state ateindebtedness in excess OF $2,OOO,-
600 shall be secured by first mortgages
on real estate. This makes the sky
the limit with the only restriction,
chapter 154, session laws OF 1919, lin
iting the amount of real estate bonds
which may be issued to $1O,OOO,0Oo.
Chapter ISL, session laws OF l919'
creating the Industrial Commission
gives the commission supreme author
itv over the Bank of North Dakota.
What Amendment Would DO.
The proposed constitutional amend
ment advocated at Devils Lake, which
provides a $7,750,OO0 bond issue foi
various industries, also would make
the sky the limit on real estate loans
It is held by those who oppose the
proposed amendment that this is sim
ply duplication of authority regard
ing real estate loans already on The
statute books and with respect to the
bond issues.
The chief argument advanced foI
the proposed constitutional amend'
ment to be submitted at recall cleo
ton is that the present bonds are
unstable because they are not an Obll'
CATION of the entire state. This view
does not meet with the. views OF many
Independent lawyers Of high standing
who have examined the matter, and
they do not feel that the proposed ac-
ton is warranted. The present bond
issues offered. they say, are the debt
Of the state of North Dakota, and if
the industries fail, the people will
have to pay dearly for the experiment.
Section 1872 in article II of the con-
stitution provides:
1.-The state may issue or guarantee
the payment of bonds. provided that
all bonds in excess of two million dol
lars shall be secured by first mort
cages upon real estate in amounts not
to exceed one,half Of its value; or up
on real and personal property of state-
owned utilities, enterprises or indus
tries, in amounts not exceeding its
value, and, provided further, that the
state shall not issue or guarantee
bonds upon property of state-owned
utilities, enterprises or industries in
excess of ten million dollars
May Sell Below Par.
The laws enacted to provide the is
suance of bonds under the above sec
ton name first the s2,00O,00O Bonds
of the State of North Dakota, Bank
Series" They are per cent bonds,
payable in 10 to 80 years at the dis
cretion of the governor, and may be
sold for less than par. The law says
that upon such delivery of bonds so
purchased and paid for, the faith and
credit of the state of North Dakota is
pledged for the payment thereof, both
principal and interest to the lawful
holder and owner thereof, upon pres
entation and payment according TO
law"
To provide for payment of bonds the
law states that profits from the in
dustry shall go to this end and also
that the state board of equalization