The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1921-11-10
BOND CONTRACT
SUIT WILL GO
TO ITS MERITS
Injunction if Issued Will be
With Understanding of Early
Trial, Nuessle Says
>KEHoE ATTACKS PLANS
Says Industrial Commissions
Method is Mere Subterfuge
-Lemke Answers Him
,KEH0E ATTACKS PLANS

""'I' "uo uAAuCI SOAolUcTdClOu tOua1
the suit begun by taxpayers, including
former Senator A. j. Gronna, to pre-
vent the delivery of any more state
bonds under the contract of-the Bank
of North Dakota with the spitzer
Rorick & Co. Of Toledo, Ohio. Judge
Nuessle indicated he would render a
prompt decision and demanded tina,
attorneys agree upon a Judge who
should hear the case on it's merits
before the present Industrial Commits
sion goes out OF Office.
An affidavit of prejudice against
Judge Nuessle had been filed by At
torneyGeneral I4emke, which was held
improper by the supreme court, and
at the conclusion of the argument,
which waas delayed until late in the
afternoon because of the filing of the
affidavit, Judge Nuessle> asked attor.
neys to agree upon Judge who should
try the case on its merits providing
that he issued temporary restraining
order.
Declaring that the Industrial Com
missions method of selling and op.
tioning bonds through the Bank of
North Dakota "is a mere subterfuge
for the purpose of evading the ex-
press provisions of the law" J. J. Ke-
hoe, of Cando, attorney for taxpayers,
asked Judge Nuessle to restrain the
commission and the bank from furth-
er delivery of bonds under the Spitz-
er, Rorick & Co. contract
Mr.. Kehoe declared that the pur-
ported contract was not binding upon
the Bank Of North Dakota because il
was made in the name of the bank by
it's manager while the law provides
that all contracts made by the Bank
of North Dakota must be, made in the
name. of the State Of North Dakota. z.
This contract, if it be- contract"
he said, provides for the actual sale
OF only $1,00O,00O of bonds and op-
tions the remainder. There is stipu-
lation which allows the Splitter, Ror-
ick & Co. to break the contract. But
this option given by the Bank of North
Dakota absolutely ties the hands Of
the state until Sept. 10, 1922, and i
the bond company does not wish to
take the bonds it does not have to do
So" said Mr.. Kehoe.
He declared that the bonds had not
been issued when the contract was
made and asked "how can the bank
show that it has bought the bonds
when they have not been issued"
"The Industrial Commission man
ages and controls, the Bank OF North
Dakota he said. 'THow can these Of
ficials, who as the Industrial Com
mission are prohibited from selling
the bonds at less than par, do through
the bank that which they cannot law
fully do as principals"
Lentke's Answer
Attorney. General Lemke, answering
the contention, read the statutes pro-
vidinE the Bank of North Dakota may
do what any other bank may law
fully do. He said the Bank OF North
Dakota took the discount, that the In.
dustrial Commission received par for
the bonds and that the Industrial Com.
mission was within the law in selling
the bonds to the Bank of North Da.
kota just as much as it would in sell.
ing them to a bank in st. Paul, and
that bank then selling them at a dis
count. fs m
The Bank Of North Dakota, he said,
would lose no money. The bonds pro-
vide for 5 3-4 per cent interest. The
real estate loans the bank proposes
to make are at 6 3-4 per cent. The
bank instead ,of losing money actually
would profit, he said.
He denied that the hands of the In.
dustrial Commission were tied until
Sept. 10, 1922, because there was
provision that the Spitzer, Rorlck q
Co. must take bonds within ~ days
after they were ready for delivery,
JUDGE Nue..,e'. Remark.
Judge Nuessle, in remarks at the
conclusion OF the hearing, said the IN.
dustrial Commission was endowed
with broad powers, that the acts had
been approved by the people, that the
Bank of North Dakota really is the In.
dustrial Commission acting in cor
porate way.
He said there was no question but
that the law provided the state bands,
except the bank series, must be sqld
at par. He said that he did not know
all of the exigencies which may nave
made it desirable for the, Industrial
Commission to obtain funds as quickly
as possible and remarked that know:
ing what do of the money market
doubt if little better can be done"
, He said the question appeared to be
mixed question of law and fact, ana
that he did not believe it could be de..
ternine,d whether or not the act OF
the Industrial Commission in selling
the bonds through the bank was mere
subterfuge until he knew all the con-
ditions Surrounding the sale and the
necessity of getting money. He said
that there was necessity OF bringing
funds into the state of North Dakota
as quickly as possible and that the
matter should. be settled before the
present Industrial Commission goes
out of Office. so that the member may
have the opportunity to be vindicated
oBagdad. former capital OF the MOS
lem empire, was founded in 7Sl A. u.