The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1922-12-23
REVISION OF
BOZ Nd. LAW
TO BE URGED
Governor Nestos Expected to
Tell Legislature of Neces-
sary Changes
NEUTRALITY-SUSPICIOUS.
Abolition of Private Deposits
Feature of State Bank
To be Urged

Revision of and Strengthening of
the rural credits department Of the
Bank of North Dakota, is expected
to- be urged upon the legislature at
its forthcoming session, by Governor
r. A. Nestos. The proposals of the
Governor are expected to embrace
!. both the remedying of defects exist
ing in the law at the present time
and permitting the continuance Of
the rural credits business in the
future.
In line with the Governors policy,
as announced in campaign speeches,
of asking that the state industrial
enterprises be placed in the hands
of non-political boards of experts, it
is expected that such recommends.
ton; will be made with regard to
the Bank Of North Dakota. 1t is gem
orally held in administrative circles
that the distance of the Grand Forks
mill and elevator from the state
capitol makes it imperative that a
board be named to manage the mill,
but that the principle of none-polis
tical management Of the industries
also applies to the Bank Of North
Dakota.
There are several measures said
to be necessary in consideration Of
the rural credits department. During
the last six months, the amount Of
money used from the Bank Of North
Dakota to act as a revolving fund
for the handling Of the farm loan
business has varied from 100000 to
$1,100,O0O.OO, averaging about $780,
coo, and it is held by bank officials
that the same amount Of money will
be needed for the efficient handling
of the business for years to come.
The legislature probably will be ask.
ed to provide for such revolving
fund, becauseS of the uncertainty of
depending upon available tax funds
in the bank.
Changes Held Necessary
Under the rural credits law, the
department is permitted TO charge
IN amount to cover administrative
expenses, not exceeding one percent.
There is, however, no provision for
turning into the farm loan any ex-
cess there may be over the actual
administrative expenses. One diff
Guilty encountered by both the league
and present administrations in the
sale of state bonds was that pay
ment at maturity was fixed by law
at the state treasurer's office where
az most bond investors desire bonds
payable in New York. It is probable
the legislature will be asked to en-,
act law making the payment op-
tional, either at the state treasurers
office or at trust company in New
York. The law governing the making
of farm loans by the Board OF Uni
versity and School lands provides
that the board may pay taxes and
insurance upon land and buildings
on which loans are made when the
borrower is delinquent, but there is
no such provision in the Bank OF
North Dakota law. The laws permit
ting the issuance of bonds has been
construed to mean that farm loan
mortgages must mature within 80
years after the passage Of the law,
which would make the amortization
period at this time but 26 years. 1t
is desired to clearly provide for an
amortization period Of 30 years.
It also has been pointed out that
although the limit of bonds which
may be issued by the rural credits
department was raised from $1O,-
900 900 to $2O,OOO,OOO, if the depart
ment is to be permanent this latter
limit must be increased.
Abolish Deposit Feature
With regard to the Bank of North
Dakota proper, it is understood that
Governor Nestos is prepared to re-
commend that in the interest of eco
nomy and for the welfare Of the
state to abolish the private or indivi-
dual deposit features Of the Bank
and to devote the energy of the
management of the bank to a COM
plete development Of the\ rural Gre
dts department and the handling OF
the funds belonging to the state and
to the various Institutions. When
the present management of the Bank
of North Dakota took over the bank
the individual deposits amounted to
$4,000 and now are about $4,000.
The individual deposit feature, how
ever, is held in administration cir
,cles to be a commercial function of
the bank which ought to be dispens-
ed with.
It also is known here that Cover
nor Nestos plans to law before the
legislature the question Of action TO
make possible the payment without
delay of all soldier bonus claims, on
a basis somewhat similar to the hail
warrant sales. negotiated by the ad-
ministration.