Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1921-03-04

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channel that would make -them sub
Ject to the absolute and un~restSained
control Of an elective body to- be
known as the industrial commission.
The powers OF this body in the matter
of the use and control OF such funds
is to all practical purposes without
limit,
Reading the bank act in. connection
with other league program" acts of
the legislature passed at the same ses
sion, the committee says 1t 10 very
evident that the bank~"was intended
to be h source from which was to
be made available the liquid cash capt.
tai for investment in such state in
dustries as the state legislature pro-
ytded for, and which it might subse-
,quently see tit to authorize, without
limit as to amount" ~
The provisions OF the law which give
to the bank the power to do anything
that any bank can lawfully do, except
If herein restricted" are analysed by
the committee in connection with
comments upon the broad powers Of
the governing body
The Bank of North Dakota not
only became the depositary for all
public funds, but also the state of
LA A/oAVto uCSbolS0 AS RVtVV6S w
enter into the general banking bust
ness" says the. committee. This
power, together with its right to be-
deposit public funds, its right to be-
come the general public clearing
house for the other banking institu-
tons of the state, its wide discretion
in the matter Of redeposits. its unlim-
tied power in the matter OF the
amount Of loans it might make to in
aix&Hs,nf 1&~~lA ~~I ~th4. ~->~~fA~
and the terms and conditions of such
loans, laid a foundation, from the
standpoint Of Socialistic theory. for
perfect immunity from organ-
lied attack"
Provisions fer the loaning Of money
on real estate are treated in the eight
Of having been adopted for n pur-
pose OF attracting to the Bank OF
North Dakota the same favorable
the federal farm loan bank"
The General Policy. -
Discussing the general banking pol
icy outlined in the law, the commits
sion says:
AN of the people of the state. thec-
retically at least, do business with the
banks Of the state. BY becoming de-
~positaries OF funds from the Bank OF
A>oNoNo nllu W pSAi6 Pei
to borrow money from the Bank of
North Dakota the banks and the peo-
pie of the state would become subser-
vient to and dominated by the power
in control of the bank. Adding to the
influence h u cngendered h active
influence OF the farmer, which it was
presumed would come to the support
Of The bank by virtue Of the special
authority to make direct farm loans.
NnYe nlAfnc Tho vip$,~o 1r a f~i~hA1
Socialist dream of financial power, IA
hampered by legislative control. and
the requirements of practical business
and political experience and judgment
and the safeguards which years of
practical business experience had
heretofore thrown about the uses of
the public and private funds of this
state"
No Reserve Required.
Failure Of the Bank Of North Da-
kota to maintain a reserve. n failure
of the bank Law to require such. Is
shown by testimony given By the
witness Thatcher. a league account
ant before the examiners" which
"discloses that II the 1915 reserve law
had been made applicable to the Bank
OF North Dakota on December 3. 1890,
its cash would have been ~$1.123.4sS-
wv iSi =" A0<L ~ "0S A.
$46.7s7.63. This is to say. the Bank
Of North Dakota upon the foregoing
date was 5 l.07e.7oo.se short OF having
a cash reserve" while the reserve with
approved agents should have been
$1~.635.2o2.51. instead OF $~52s.So5.sS.
as shown by the audi report. making
a total shortage of $2.241,sos.ss."
This leaves out of account the
amount due other banks which must
IN 'IaS,,r.n1 IL, ba;r- p,4n{F~C% $AeS "a
deposits in Country banks cannot be
considered in computing reserve. and
particularly is this true with respect
to deposits in closed banks"
Disastrous Effects.
The situation clearly demonstrates
the disastrous effect of the failue OF
the law to require a reserve. which
has Contributed in no small measure
to the present deplorable condition
of the. Bank of North Dakota" The
hank should have been controlled.
says the report, by q. statute assur-
ing not only h mobility and liquidity
o. its assets. but also providing a
fund sufficient to take, care OF neces-
ssry Withdrawal of public money"
Cash on Hand-Checks Disf1onored.
while the state treasurer had
$4,000. 900 o n deposit in the Bank Of
North Dakota during February, pay
ment was refused on checks by the
Bank of North Dakota, and in lieu OF
payment, in the exercise OF sound
discretion" these checks were regis
tered As presented. the report says.
1t cites the case Of Van q. schwam, a
check of $500 having. been given to
him for his soldiers bonus. payment
of which was refused and marked
Presented for payment February "a,
1891 Not paid for lack of funds.
Will draw interest at six per cent per
annum until called for payment
Thus" the report reads. the ver-
satile officials in charge Of the Bank
Of North Dakota have coined a new
species OF obligation, hereinafter to
be known as a registered check In
the bonus case the state treasurer
paid it out of currency in his office:
An Act Of insolvency.
A number Of these checks have
been sent from outside the. state and,
the report says, has allowed the i'm
preston to go forth that the state
treasury is depleted, Notwithstanding
1.-THE large balance aforementioned"
At the anne time. the report says,
the shamefulness Of this situationf rs
emphasized by the fact that the rec
ord shows that at the same time that
the state ~treasurer's checks were dis
hinored by the Bank of North Da-
kot1 the bank, at the instance Of the
industrial commission, was paying out
hundreds Of dollars to the employees
Of a certain committee, presumably
engaged in investigating said band AND
such commission. Such failure to pay
current checks constitutes an act OF
insolvency" -.
' pnnk 'r1nnNAAl~a Ta~<~ rs