Evening star., 1922-06-11
SOUTH DAKOTAS
BANKING ISSUE
hon-Partisan League Forces
Line Up Determined Fight
in November


Already the opposing hosts I'm Soutb
Dakota are preparing to fight to g.
nnlsh at the polls in November. The
proposed law for the establishment
OF the Bank of South Dakota" is
being backed by the South Dakota
branch Of the National Farmers' Nom
partisan League, which had the mat
ter called to vote by Initiating a
law designed to authorize such a
bank. this action being taken under
provisions of the initiative and refer
endum amendment to the state con-
stitut1on.
The initiative petition having Sc
cured the legal number Of signatures
me last legislature was compelled to
submit the proposed law to the
voters.
Backers Of the proposed measure
claim IT will take the farmers of
south Dakota from the grip of the
money kings" and place the finan-
cial affairs of the cities. counties and
the state in the hands of the people
mus giving the people control of the
money accumulated in the state.
Some OF the non-partisan league sup
South Dakota would be panacea
for all the evils within the state in a
financial way.
The proposed law providing for
establishment of the Bank of South
Dakota is created somewhat on the
lines of the North Dakota statute
which provided for the Bank of North
Dakota. The workings Of the Bank
OF North Dakota were much in the
public eye few months ago. when
more than two score of the banks
In North Dakota failed.
FfnA taI
Non-partisan league members criti-
ployed by the present financial insti-
tutions of South Dakota to preserve
South Dakota from bankruptcy dur
ing the period Of postwar recon-
struction. and notwithstanding the
disastrous experiment made in the
state of North Dakota with a similar
institution, the support of men who
are willing to undergo any part Of
experiment as means of expressing
their animosity toward existing dnan-
c1al institutions Is being sought.
The proposed law provides for the
esta ablishment Of the industrial com
mission Of South Dakota. which shall
consist Of the governor, the attorney
general and the state auditor. 70
this commission shall be assigned the
duty. responsibility and power to
operate. manage and control the
Bank of South Dakota.
capital of the Bank of South Dakota
shall be s2,000.000. which amount
shall be secured by the sale of bonds
of the state Of South Dakota in that
amount. These bonds shall be pay
able in not less than ten nor more
than thirty years from the date Of
the adoption of the law. They shall
bear interest not to exceed per cent
payable semi-annua1ly, and shall be
exempt from all state, county and
nm lipiY fo nf oil ig
Those opposing the proposed law
assert that should the state of South
Dakota sell its bonds in the open
market and with the funds so secured
South Dakota. which institution
would then solicit deposits. and with
the deposits so secured repurchase
from the original purchasers the
bank bonds of South Dakota. there
would be an institution without
capital, but with immediate liabili-
ties. the failure to meet which would
mean to South Dakota just what the
failure of the Bank of North Dakota
to meet its obligations meant to
North Dakota-ruined credit.
Backing OF State.
1t is admitted by opponents of the
measure that the credit of the state
would be behind the bank to the ex-
tent of the state bonds held by the
banks. but, they contend, it would be
a credit that would not become avail
able through collection OF bonds for
the period of not less than ten or
more than thirty years.
1t is argued by these opponents
that the difficulty experienced by the
Bank of North Dakota in disposing OF
the bonds issued for it's bank should
be witness enough to the voters OF
south Dakota of what difficulty they
would encounter should they in times
of financial stress such as South Da-
kota and other states have expert
enced during the past two years
the bonds held by the Bank Of South
Dakota in order to realize on the
capital. SO called. of the Bank Of
south Dakota. 1t is asserted that
the history of every financial insti-
tuition in the United States which has
nermitted and practiced accepting
notes and bonds for capital stock has
been one of failure.
The proposed law makes provision
for taxing the people to provide Tor
ON the bonds which shall be sold for
CapitaI. The state tax commission Is
made responsible for levyfng a gem
eraI tax, in the same manner IN
which other taxes are levied. for the
nurpose of paying the interest on
thase bonds. This. opponents of the
measure declare, is confession OF
the trainers of the proposed law that
they fear in advance that the BANK
of south Dakota might be failure.
1t is provided by the proposed law w
that upon petition OF 80 per per, cent lit,in G1
.hrse months after the fling of such
a a"r petition, the Bank of South Dakota
III establish branch bank in that
city. It may also establish such
branch bank in any CITY wltnout pe'i-
ton of the electors.
,.,nucrplAI cnijRT WINS