The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1925-01-16
DEMANDS MADE
ON n. D. BANK
ARE LESSENED
Beth Farm Loan Applications
and Bank Applications
Are on the Wane
DIFFICULTIES OF BANK
Uncertainty of Management
Prevents Continuing Pol
icy, Says Manager

The Bank of North Dakota. whose
deposits were sought avidly three or
four years ago by private banks and
whose farm loans were sought by
farmers in all parts of North Da-
kota facing a steadily diminishing
business as farm and banking con-
ditions in the state improve.
For the first time since the bank
has opened, private bank in the
state has informed the Bank of
North Dakota that it wants to pay
the bank but two percent instead
of four percent on funds deposited
with it.. This is held by banking Of
ficials to be tantamount to the pri-
vate bank asking the Bank Of North
Dakota to withdraw it's money!.
Scores of other private banks in the
state, with plenty Of funds of their
own, do not care whether the Bank
of North Dakota leaves redeposits
with them or not, and the applica-
tions of private banks for loans has
diminished.
The applications for farm loans
have decreased, too. The Bank now
has about $7,5OO,O0O. of farm loan
applications on hand. In the opin-
ion of bank officials, they will be
able to make loans on all valid ap-
plications now on file, in the next
several months and then will be able
to make loans as rapidly as there
is request for them.
Information that several private
loan companies, making loans for
shorter periods. than the Bank Of
North Dakota, will begin doing busi-
ness in the state again next spring
and the availability of the Federal
Farm Loan Bank loans both tend to
decrease the demands on the farm
loan department of the Bank of
North Dakota.
Changed Rapidly
Conditions within the Bank of
North Dakota have changed rapidly
in the last several months, the good
crop of 1924 having a marked effect
on this state institution. It in
creased deposits of public treasur-
ers, put money into the bank from
liquidation of loans, and left the
bank with the problem of investing
its huge amount of funds profitably.
One of the striking features of the
report of Temple, Brissman and
Company, auditors, made this week,
was that the Bank of North Oak ota
could not find means of investing
money profitably.
The conclusion in the report is
confirmed to some extent by c. R.
Green, manager of the bank. The
bank now has about ten million dol
lars of money it could loan, but most
Of it is tax money and will be with
drawn by June. Therefore, the bank
cannot invest it except on short-time
paper or government securities that
can be turned quickly. In searching
for means of investing the funds
of the bank profitably, the manage
ment invested 100000 in wheat
storage tickets, due in March. The
amount of such paper offered, how
ever, has been limited. Mr.. Green
is opposed to policy of going on
the market and buying commercial
paper, such as city private banks in
vest in, holding that this is impro-
per business to be engaged in with
tax money that constitutes virtual
trust fund.- The bank has been
forced to keep large sums of money
in reserve centers, bearing interest,
but not a sufficient rate to enable
it to make money.
The audit report of Temple, Briss-
man and Company, regarding the
future of the bank, is perhaps ex-
tremely pessimistic, in the view of
Mr.. Green, but the manager of the
bank has pointed out to members
Of the legislature who have sought
information some of the difficulties
facing the institution.
For more than three years over
$2,O00,OO0 of money has been tied up
in closed banks, which the audit re-
port held should be written off as
loss and the money replaced by
deficit tax. Figuring interest at s
percent, the Bank of North Dakota
is failing to make 100000 a year
interest it should make on this
amount of money, which greatly re-
duces the chances of the bank show
ing unusual profits, it is pointed
out.
Uncertainty Faced
Perhaps the worst situation faced
by the bank management is uncer-
tainty. As long as the Bank Of
North Dakota is politically control
led, and subject to acts of the leg
islature, it is realized that laws may
be enacted or new boards given
power who would change the policy
of the bank. The management Of
the Bank of North Dakota cannot,
as a private bank can, outline q
policy of investment, Of funds and
general management and continue it
for year after year. This alone
greatly handicaps it in making mon
| ey.
The fact that large portion Of
the tax money in the bank remains
there but short time is another
disturbing factor. The Bank OF
North Dakota cannot, 60 out and bor-