The New York herald., 1921-02-14
LIQUIDATION EXPECTED
Legislative Investigation
Reveals ShockingsFinan-
cial Irregularities.
LEAGUE Is BADLY SPLIT
Townley Loses Control and
Lemke Usurps Power in Bit
ter Political Fight.

Special Despatch to THE New York liENALp.
BISMARCK. n. D., Feb. 15.-North
Dakota is face to face with a financial
and political crisis. The time has
come when it must pay the price for
ITS experience with Townleyism. and
as each day goes by the staggering
proportions of that price become more
and more apparent. That is the opin-
ion of the unbiased and many biased
Observers.
In the political and financial warfare
now being waged here two features Of
import loom up for the immediate fu-
ture. On the one hand, there is the
open threat of those in control of the
State government to permit the
wrecking of from $50 to 200 banks.
On the other, there is the possibility
OF Statewide recall election in this
State of bitter political struggles. De-
mands for the recall of the Governor,
Attorney General, Commission Of Agri-
culture and two Justices of the Su-
preme Court, have been voiced already.
lUc bdHh OI ANOiln DdhOlif Tic NSS
stone of the public ownership structure
erected by the Non-Partisan League con-
trolled Government, Is admittedly insol-
vent 1t cannot meet its obligations.
Clash About Liquidation.
Liquidation of the State Bank is de-
manded by financiers the first step
In the rehabilitation of North Dakota's
finances. Strange as it may seem. Ar
thur C. Townley, big boss of the Nom
Partisan League, is in favor of such
liquidation. But there has arisen an
other boss of the Non-Partisan League,
William C. Lernke, Attorney-General of
the State. Lemke, who is known as the
bishop" refuses to sanction liquidation.
Lemkeism is taking the place of Town
leyism. But there is no real difference
so far as the people of North Dakota
are concerned. This division in the
ranks OF the leaders OF the Non-Partisan
League has received more than its share
OF attention. III the final analysis, con-
ditions OF far greater seriousness than
differences Of opinion among the lead
ers are responsible for the present crisis.
Arthur Townley found himself week
ago able to control only ten votes in the
secret caucus attended by seventy Nom
Partisan Senators and Representatives
and was voted down in body where
he once held full sway. William G.
Leinke seized the reins Of control But
Il should be remembered that both Fown-
ley and LemlSe must continue in control
together or must fall together.
The bankers of North Dakota. through
o committee, made a proposal to the
league leaders some time ago which in
cluded the abandonment of the Bank OF
North Dakota. There has been legis-
lative Investigation going on into the af-
fairs of the bank and the public is begin
ming to find out the true state OF the
finances OF North Dakota. The condi-
tions are shocking even to ardent Nom
Partisan League followers.
state Checks Arc UishonO ed.
The real state OF affairs was revealed
last week when the Bank OF North Da-
kota refused to honor any State checks
except those drawn by the penal and
charitable institutions. II is refusing to
honor checks Of the subdivisions of the
State government. such as counties and
school districts, which have funds de-
posted in the State bank.
Moreover, the officials OF the bank
gave 1t out coldly that all banks having
redeposits must return those deposits
at once. 1t was stated that If this order
meant the closing OF $50 to 200 banks
Already counties having funds on de-
posit with the Bank of North Dakota
are taking means to protect their
money. Yesterday Golden Valley and
Sargent counties started garnshment
proceedings. tying up funds redeposited
In certain banks. Tomorrow Grant
and Morton counties will take the same
means to protect their funds.
The legislative Investigation, con-
Quoted by a House committee. controlled
League, has revealed startling situa-
ton. So many Irregularities have been
disclosed that II is impossible to
enumerate them. They all pointed to a
chaotic condition in the finances Of
North Dakota.
One thing is certain: The opposition
to the Non-Partisan League will never
consent to the continuance of the Bank
OF North Dakota. A land bank may
take its place. That is what Townley
Is said to have been ready to consent
20. Right now the leaders of the league
Townley and Lemke included. are re-
ported as seeking other compromise
measures
The league leaders and hangers OF
wear detected look. They admit things
have reached a serious pass. They
blame big business" and the crop fall
ure and general conditions. They refuse
to admit mismanagement and cxtraya-
gancc.
Conferences OF Importance are so Do
held within tho next few days Upon
them will determine what is going TO
happen in North Dakota soon.