The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1926-11-22
without Due Consideration

A. associated Press dispatch credits Senator IVY
with the recommendation that the Bank OF MOTT"
Dakota handle the affairs Of closed banks. II oena
ter Nyc has been quoted literally ne douptless
without accurate information and certainly WITHOUT
due consideration
f the receivership Of closed banks is to be trans
fcrrcd to the Bank of North Dakota, the law under
which tho hank was created must be revamped
There is serious legal question whether, under the
presrnt law, the Bank of North Dakota has au-
thority to purchase assets.
This matter was gone over at the 1925 session OF
the legislature thoroughly discussed and considere
at chat time and rejected because those VINO nal
made deep study Of the questions involved decided
that the plan was not feasible
The Bank of North Dakota is now loaded with
pprcximately S2,OO0OOO worth of claims against
closed banks, large portion of which Will be
total loss 1t would hardly advisable to force
this bank into the liquidation Of closed banks under
this condition and especially so where political pres
sure is moro likely to be applied in the case OF the
Bank of North Dakota than is possible under the
present scheme Of handling rcceivcrships through
the courts.
Even though the Nye plan possessed some merit,
it would necesstate the establishment of depart
ment of closed banks within the state bank. This
would add to the expense Of operation There is no
doubt but that the expense of handling the affairs
of closed banks under the Bank of North Dakota
would be Is great if not greater than now Obtai! $.
Affair." of closed banks must necessarily he handled
through the courts and il the Bank Of North DAKOTA
were to act, as Senator Nye suggests, its qui'ang
department must in the very nature of things
Grated Under the supervision Of the courts.
Under the present system used for the liquidation
of the affairs Of closed banks the average cost per
banf is approximately $t25 month. In many cases
k,< 80 - In
at from many months Of experience.
II is doubtless whether another advantage Senator
Nye points out would inure under the Bank of North
Dakota any than is now the case under the
present system of recevershp Senator Nye believes
the Bank of North Dakota could realize more quick
ly the assets CT closed banks than is possible
This is very doubtful. Those who have had expe-
rience with closed banks know that it is not always
possible to determine the value Of assets Of closed
bank the institution ceases to function.
Immediate liquidation of the assets is not pos
siblc except in some cases. The present system
of rcccivershp has in some Is 20 instances real
lied at once the closed banks assets where local
institution willing to take the good paper
OF the defunct bank. But even in these cases
receiver necessary to liquidate assets Of ques-
tonabc nature which il sold must be disposed OF at
an unreasonable discount to the creditors
Now that the state has initiated the present plan
of harding the affairs Of closed banks it is reason
able to suppose that it would be wiser to proceed
along present lines than to load new functions upon
the Bank of North Dakota not logically belonging to
that institution in harmony with the purposes OF
its establishment by the people of this state through
popular referendum.