The Devils Lake world. (Devils Lake, N.D.) 1920-1982, 1921-03-02

I. Proper perspective Of, the financial
situation in North Dakota demands the
observer look behind politics and po-
litical raids on the credit structure Of
the state FOR partisan purposes. The
large condition Is one which is grave
enough, as every farmer, laboring man
and business man and investor knows,
but too few persons have had the op-
portunity, as a result Of the clouds
that have been thrown around the
question, to analyze what is the mat
ter with the financial situation in the
state.
The best manner to appraise the
financial situation is to consider what
happened to the private banking sys.
TEN in the year ending December 81,
1920.
NJ. w. Thatcher, president Of the
Equitable Audit company Of Mime.
apolis, t%estifying before the senate
committee investigating the Bank Of
North Dakota, produced an analysis Of
the private banking conditions which
was astonishing. Il explains the viz.
tual credit collapse. incidentally, 1t
proves the absurdity Of the charges Of
political opponents Of the present. state
administration that the Bank Of North
Dakota and the state industries are
responsible for the let-down from
which the state Is suffering.
Reports In the Office of the state
bank examiner on condition Of the
private state banks Of North Dakota
q ! whole for the year show:
Deposits during the year dropped
from approximately $13O,00O,O00 to
sos, 10000, or a decrease Of about
$27,OOO,OOO.
Bills payable Of banks increased 400
per cent, or about $14,25O,OO
Due from reserve banks decreased
$0,36O,OOO.
Book reserves decreased over so per
cent or about $1%1,,3OO;OOO.
These figures, Mr.. Thatcher pointed
out, represent q "defation" in re-
sources of banks in the year Of more
than $5O,OOO,00O. Therein lies the
direct evidence of where the responsi.
bility for the present credit s%tringency
should be placed, Mr.. Thatcher de-
clared. : ,S
Take three items in thefscheduleson
the general condition Of all state banks
which ], have presented" he s. i'd, "and
1t Is easily seen where the banks are
5000 900 short Of resources as com
pared to aSyear ago. 81
deposits in all state banks de-
creased $27,00O,OOO; bills payable In
creased sl4;25o,ooos and sums due
from reserve banks decreased $780,
600. The total Is more than $4,000
600. This much In resources, ordin-
arily In use for the people OF this
state, has gone. It Is without the
state borders. Someone else has II
when 1t is needed here. Drop: in crop
prices and livestock prices for the past
year was more than 500, 100000. In
other words, when the processes Of the
present nationwide defation we're set
IN motion, North Dakota, as a mere
producing state, was terrifically,z hard
hit.
Banks had extended their loans, on
the basis Of, the going average of de-
posits. The enormous decrease Ia de.
posits nnadesit difficult to manage with
the large amount o. loans they had
made. That explains Ia turn the ID.
crsases 10 bills payable and the dc.
crease A due from reserve banks. And
q 4 4 4 II ,goeas back ! the ~."dedaltionrt" 4
ppsand livestock&SpIric Products Of
the state were produced IT the old rata
q expense. necessitating the former
drain odnssthaSsbankssb sfalr.nnaers ana
those pQrssdsIueeSss solld " ths a.:
"a, aatsdr pstces Ssa 81 & ~