The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1927-12-03
Mills VALUE
MUST STAND,
SHAFER SAYS
Attorney General Comment
on Report Of Appraisers
Recently Published

Regardless Of the system Of &C.
counting used at the state mill and
elevator, the state must bear the
financial burden which Il has> I'M
posed, Attorney General George F.
Shafer said IN . statement here to-
day.
The statement was prompted.
Skater explained, BY the recent re
port Of appraisers appointed by
Governor A. G. Sorlie which indi-
Gated that the mill could be replaced
now for substantially less than It
cost when built and that It's pres
ent 'going value b almost 81 O00,-
600 less than the original cost.
Governor Sorlie's comment that the
mill management u being charged
with an excessive amount Of interest
and depreciation drew the attorney
generals special attention.
Mr.. Shafer'S comment follows:
This report Is Of no Importance
whatever for any practical purpose
and it cannot be made the basis Of
relieving the mill management Of
any portion Of the fixed interest and
depreciation charges. It makes NO
difference what the present value Of
the present replacement cost may
be. It is the original cost that must
be made the basis Of our bookkeep.
ing, because the state borrowed the
entire construction cost Of the plant.
This cost was the SUM Of $4,000, 900,
which is IN outstanding liability Of
the state in the form Of long term
bonds that carry IN annual interest
ch6rge Of $4,000. This liability
must be charged to the mill project
until it is fully paid.
State Owns Enterprise
"The state owns and operates the
enterprise and o. long 40 it does the
mill management represents the
state in the operation Of !. the BUSH
ness. It would be Z meaningless oct
to relieve the mill management Of
any portion Of these fixed charges
when the state, the real proprietor,
cannot be 80 relieved.
"Our system Of bookkeeping Is in
accordance with the law. Chapter
1853, Session Laws Of 1919, which ID
the act Mat provides for the financ-
ing OF tn construction Of the plant
through the issuance Of state bonds,
specifically provides that the state
shall take 2 mortgage on all Of the
poperty Of the mill and elevator IS
ISOLATION - security for the pay
ment Of al bonds sold by the state
for the use Of the association and
shall pay out Of its earnings to the
state treasurer, such amount % the
industrial commission shall deter.
mine to be necessary for the pay.
ment Of such bonds and the interest
thereon
Legislature's Intent
ut IL perfectly plain that the leg
islature intended that this state en-
terprise should be disappearing,
and that it should reimburse the
state for the principal and interest
Of MI bonds that were issued for its
construction and operation. Similar
provisions are contained I'm each Of
the other laws establishing, or f.
nancing the establishment Of state
industries.
Furthermore, there il no fund
either In the mill and elevator asso-
citation or the state treasury against
which the reduction in the value OF
the plant could b charged. Il 10,
therefore, utterly impossible to re.
duce these fixed charges until they
are fully paid, either from earninga
Of the business or BY taxation.
"The state. has . fixed obligation
on account q the mill and elevator
association in the form Of outstand-
ing bonds with interest to maturity
thereof, in sum which exceeda
100000. This liability cannot b
escaped by any method Of apprais-
ing the property, or by any manner
Of manipulating the bookkeeping Of
the mill and elevator association"