Cavalier County farmers press. (Langdon, N.D.) 1920-1921, 1921-03-03

Proper perspective of the financial
situation in North Dakota demands the
observer look behind politics and po-
itcal 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-
~Nortunity, as a result of the clouds
hat have been thrown around the
question, to analyze what is the mat
Ter with the financial situation in the
state.
The best name to appraise the
financial situation is to consider what
happened to the. private banking SyS-
tenn in the year ending December 81,
1920.
M. 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. 1t explains the vir-
tual credit collapse. incidentally, it
proves the a%bsurdity 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
us a whole for the year show:
Deposits during the year dropped
from approximately S%13O,OOO,OOO to
$1O3, 100000, or a decrease of about
$27, 600.
Bills payable of banks increased 400
per cent, or about $14, $50, 900.
Due from reserve banks decreased
$9,360,Oo0.
Book reserves decreased wei so per
cent or about $11 ,30O,O
These figures, Mr.. Thatcher pointed
out, represent a 'defation'' in re-
sources of banks in the year of more
than $50,000.00O. Therein lies the
direct evidence of where the RESPONSE
bility for the present credit stringency
should be placed, Mr.. Thatcher de-
clared.
"Take three items in the schedule on
the general condition of all state banks
which I have presented" he s. id, "and
it is easily seen where the banks are
$50,000,000 short of as COM
pared to a ear ago.
deposits in all state banks de-
creased $27, 0 10000; bills payable in
creased S14.25O.OOO and sums due
from reserve banks decreased $780,
600. The total is more than s5O,O0O,-
OOO. This much in resources, ordin-
arlly in use for the people Of this
state, has gone. 1t is without the
state borders. Someone else has it
when it is needed here. Drop in crop
prices and livestock prices for the past
year was more than 100000 600. In
other words, when the processes of the
present nationwide def1ation were set
in motion, North Dakota. as a mere
producing state, was terrifcally hard
hit.
Banks had extended their loans, on
The basis of the going average of de-
la,sits. The enormous decrease in de-
l,osifs made it difficult to manage with
lie large amount of loans they had
AIDE. That explains in turn the in
ease in bills payable and the de-
rease in due from reserve banks. And
y all goes back to the "~defation" in
crop and livestock prices. Products OF
tsse state were produced at the old rate
"f expense, necessitating the former
Z -ain on the banks by farmers; and
iAl0se products were sold at the de.
lated" price.
s'.et1 ..UrfEH