1.
April 10, 1919
Williston Graphic
Williston, ND
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STATE BANK OPENS DOORS AT BISMARCK STATE BANK EXAMINER WATERS MADE MANAGER OF NEW BANK Bismarck, April 5.-The first formal step toward making rural credits at cost was taken here by the state industrial commission yesterday. The Bank of North Dakota has ordered established immediately and by the last of May will be in full running order. Bismarck was named the home of the bank during the period of its fouration and organization. State Bank Examiner J. R. Waters was chosen to head the institution and was instructed to immediately organize the banking force, enroll member banks, arrange that the public funds now in other institutions be credited to the bank of North Dakota and to select a special attorney who will immediately take charge of preparing for issue the $2,000,000 of state bonds authorized by the legislature for employing a special counsel for the bank was in accordance with the action taken at last week's meeting when it was found that the attorney general's office had been guilty of circulating rumors to the effect that the bond acts were insufficient. 27 Million Deposits Under the bank act as passed by the legislature the institution must be in full operation 90 days after the bill became a law. This means that
2.
October 7, 1919
Omaha Daily Bee
Omaha, NE
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Closed Bank's Officers Waive First Hearing Fargo, N. D., Oct. 6.-President H. J. Hagen and Cashier P. R. Sherman of the Scandinavian-American bank, closed on orders of the State Bank commission, waived preliminary examination and were bound over to the district court. Each furnished $5,000 bail. P. M. Halldorson, receiver of the bank, alleged that the officers exhibited to him a false statement as to the bank's condition when he made a regular examination September 9. Bismark, Oct. 6.-An examination of the Bank of North Dakota. the state-owned institution created by an act of the last legislature, was begun here by State Auditor C. R. Kositzky, upon formal instructions from Attorney General William Langer. Langer in his letter to Kositzky stated that correspondence found in the Scandinavian-American State Bank of Fargo, which was ordered closed last Thursday, indicated that securities totalling more than $300,000 had been transferred from the Fargo bank to the state institution.
3.
October 8, 1919
The Bridgeport Times and Evening Farmer
Bridgeport, CT
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EXAMINE ONE MORE BANK IN NORTH DAKOTA Closing of Bank in Fargo Leads to Inquiry Into Dealings of Associate in Bismarck. Fargo, N. D., Oct. 8.-An examination of the Bank of North Dakota by State Auditor Karl R. Kositzky, to determine "what moneys, if any, have been diverted to illegal purposes," was commenced this afternoon at Bismarck, the State capital, at the instance of the Attorney General William Langer. The examination grows out of the closing at Fargo of the ScandinavianAmerican Bank, which made loans amounting to $432,000 to the National Non-Partisan League and three subsidiary corporations, and which have been termed by, the State Banking Board to be excessive and without sound security. Other developments during the day in connection with the bank closing were the waiving of preliminary examinations by H. J. Hagen, President, and F. R. Sherman, cashier. They were held for trial before the Case County District Court in November. Each officer is accused of falsifying the bank records for the purpose of deceiving a Deputy Bank Examiner as to the actual condition of the Institution. They were placed under $5,000 bonds each. Defensive measures taken by Directors of the bank and officers of the Nonpartisan League who have mutual interests because of the possible political effect of the closing of the bank were outlined today. The bank will go to the Supreme Court on a writ of certiorari, and would require members of the Banking Board to certify to the Court the record on which they have acted in closing the bank and ordering a receiver. This will make it necessary for the Attorney-General and Secretary of State, who are majority members of the Banking Board, to justify their official actions in court, provided the Court grants the application, which will probably be filed today. Another court procedure yesterday was that of the AttorneyGeneral, who applied in the Cass County District Court for the appointment of a permanent receiver. This is the procedure required by law in the liquidation of an insolvent bank. When Auditor Kositzky, in compliance with the Attorney Generals demand, went into the Bank of North Dakota to make an examination he was resisted by J. R. Waters, manager of the bank, and former State Bank Examiner. Mr. Waters returned to the bank about an hour after the State Auditor and four accountants had taken possession, and there was a hot exchange of words. Kositzky is one of the three Nonpartisan League state officials who recently declared themselves opposed to the league leaders. "It is essential for the interests of the taxpayers of North Dakota that there be an immediate examination of the Bank of North Dakota," Attorney General Langer advised Auditor Kositzky in his letter of complaint. "Under the law it is your duty to make an examination. I have information that the Bank of North Dakota has become mixed up with the Scandinavian American Bank of Fargo now in the hands of a receiver. "As Attorney General I make formal demand that you, as State Auditor, intrusted with the safeguarding of the taxpayers' money, proceed immediately to ascertain to what illegal purposes, if any those now in control of the Bank of North Dakota have diverted the money intrusted to their care." The Bank of North Dakota is an institution founded by the Nonpartisan League State Administration. It is under the maagement of *Mr. Waters, former Bank Examiner, who was charged by the State Banking Board with having given the Scandinavian American Bank of Fargo advance information as to the time examiners would enter the bank, thus permitting the bank, it is said, to prepare its records to disguise its actual condition. It has control of approximately $16,000,000, as the public bank law requires that all funds he deposited in the State Bank. The bank redeposits with private banks much of its funds. According to Manager Waters, the State Bank had about $183,000 on deposit with the Fargo Bank when it was closed. The Nonpartisan League officials and their newspapers continue to assert that the State officers have closed the Fargo bank for political purposes only. Governor Frazier has issued a statement to the effect that he will do all in his power to stop the Banking Board officers from continuing their course, and the leading Nonpartisan League newspaper in Fargo asserts that "the noose is rapidly tightening around the Attorney General's official neck."
4.
October 10, 1919
Republican Farmer
Bridgeport, CT
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XAMINE ONE MORE BANK IN NORTH DAKOTA Closing of Bank in Fargo Leads to Inquiry Into Dealings of Associate in Bismarck. Fargo, N. D., Oct. 8.-An examination of the Bank of North Dakota Karl R. "what moneys, if State determine Auditor Kositzky, any, have by to been diverted to illegal was this Bismarck, commenced afternoon purposes," at the State capital, at the instance of the Attorney General William Langer. The examination grows out of at of the which closing American Fargo Bank, Scandinavian- made loans the amounting to $432,000 to al subsidiary Non-Partisan League the and Nation- three corporations, and which termed by the to be excessive withhave ing Board been State and Bankout sound security. during the Other connection developments day in with the bank closing of by H. J. Hagen. aminations and were F. the waiving preliminary President, exR., Sherman, cashier. They were for trial Court in County held District before the Novem- Case ber. is accused of the for the Each bank officer records purpose falsifying of deceiving a Deputy Bank as to actual the condition Examiner of the Institution. They were placed under $5,000 bonds each. Defensive measures taken by Directors of the bank and officers of League who have because of mutual the Nonpartisan interests the poseffect of the closing were outlined of sible The the political bank bank today. will go to the Supreme on a writ of and members of Court would Board require certiorari, the Banking to certify to the Court on they have in and closing record the which bank ordering acted a the remake it for and ceiver. the of Attorney-General This will necessary Secretary State, who are majority memtify actions in bers provided their of the official Banking Board, to court, justhe Court grants the appli will be court cation, today. which Another probably procedure filed yeswas of the applied in General, terday District who that Attorney- the Cass County Court for the apa procedure This pointment is the of permanent required receiver. by law in the liquidation of an insolvent bank. When Auditor Kositzky, in compliance with the Attorney Generals demand, went into the Bank of North Dakota to make an examination he was resisted by J. R. Waters, manager of the bank, and former State Bank Examiner. Mr. Waters returned to the bank about an hour after the State Auditor and four accountants had taken possession, and there was a hot exchange of words. Kositzky is one of the three Nonpartisan League state officials who recently declared themselves opposed to the league leaders. for the the of North "It taxpayers is essential Dakota interests that of there be an immediate of of North torney Langer advised the General Bank Dakota," examination Audi- Attor Kositzky in his letter of complaint. "Under the law it is your duty to an I have the Bank of North make mation has that examination. infor- Dakota become mixed with American Bank Scandinavian in up of Far- the go now the hands of a receiver. "As Attorney General I make formal demand that you, as State Auditor, with the money, of the intrusted taxpayers' safeguarding proceed immediately to ascertain to what illepurposes, any, those in Bank of North control gal of the if Dakota now have diverted the money intrusted to their care.' The Bank of North Dakota is an institution founded by the Nonpartisan League State Administration. It is under the maagement of Mr. Waters. former Bank Examiner. who was charged by the State Banking Board with having given the Bank of as to advance dinavian information American the Fargo Scan- time examiners would enter the bank, thus permitting the bank, it is said, to prepare its records to disguise its actual condition. It has I approximately bank law $16,000.000, control as the of requires that all public
5.
December 26, 1919
The Bismarck Tribune
Bismarck, Mandan, ND
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CATHRO EXPLAINS Evidently Director General Cathro feels that this showing needs a word of explanation. He therefore points out that the farm loan department could not make loans until he had perfected of a transit departand a proper auditing that these two necessary farm loans ment tors appears the organization in making henceforth have system. been fac- It properly perfected, and loans will be speedily made. This assurance of Director General Cathro, however, is not convincing. This feeling is strengthened when he out that owing to the snow and appraisal points cold weather will while be post- it is poned until spring, and perfectly all right for the farmers must to applications, it however, be keep understood, on making that until they spring cannot expect the appraisal and even then it will take some time to grind the loan through the transit be, department, whatever that may and through the auditing department. FARMERS MUST WAIT Director General Cathro further strengthens doubts as to his ability intention to make these loans admonishes farmers and when he they of the want loans that impatient if are not to the great rush not of state owing inquiry become who answered; their of business letters must that and under this farm loan department the want of space in the bank, he has been unable to answer these letters. NOT RUSHING LOANS casual study bank A of the statement by Director he is not explains published why General rushing Cathro these loans. The only available money to loan $3 the deposits which amount to so something less than $12,000,000. The cash on hand amounts to $12,184,000. To make farm loans for which applications have already been made would only leave $1,000,000 of the public funds. At the rate the applications in, this would be entirely March 1st. are exhausted coming by make In other farm words, the Bank cannot loads until it can sell bonds. The farm, loan department of the out of farm mortgage bank til state is virtually commission bonds can un- be sold. It will be recalled that $1,000.000 of the 3,000,000 bonds, the sale of the state attempted to negoand tiate which with Chicago farm New loans York Bonding Companies were mortgage bonds. These failed of approval at the hands of the bonding attorneys in exactly the same manner and for the same reasons that the bank bonds failed. APPLICATIONS UP TO $26,000,000 It is probable that at the present first year will see application the bank for from to rate made the at twenty loans. twenty-fivc millions of farm It that the will run from fifis of the quite bank apparent ten deposits to It will also be noted individual that teen the millions. deposits certificates amounts to $27,075, and that the of deposit, other than of public funds, amount to only $11,307. It seems clear that the people of the state or of the United States are not rushing the Bank of North Dakota with their deposits. must furnish the capital for the when they are to the bonds cannot lished industries since be he estab- bank sold! In fact, if the cash assets of the were $50,000,000 instead of $12,000,000. there would not be any more than enough money to go around and take care of its needs. CAUSES DISSATISFACTION The failure of the farm loan department of the bank to furnish loans as advertised is leading to a wide-spread dissatisfaction. It is significant that when the actual loans made are only $127,512, that there had been withdrawn, after application has been made the aggregate sum of $485,560. Withdrawals are being made with increasing rapidity owing to the fact that months elapse after application has been made and no/satisfaction can be obtained as to when the money will be available.
6.
November 26, 1920
The Bismarck Tribune
Bismarck, Mandan, ND
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Prepared Drafts The Bank of North Dakota has prepared drafts for large sums of money to be withdrawn from banks in the state in anticipation of withdrawals after the initiated law becomes effective. The bankers committee, it is said, stood willing to continue their telegraphic communication with treasurers until all could be reached SO that there would be only a small amount of money, if any, withdrawn and consequent withdrawals from local banks made while present conditions obtain. The bankers said that they were received courteously at the Bank of North Dakota and the question of withdrawal of deposits was discussed for an hour and a half. Mr. Cathro said after the conference that he made no promises; that it was necessary for the Bank I of North Dakota to withdraw large sums of money in anticipation of withdrawals as permitted by the initiated law. One banker said today: "There isn't a bank in the state that can't get financial assistance outside the state to tide them over the period of transition under the initiated (Continued on Page Three)
7.
December 9, 1920
The Weekly Times-Record
Valley City, ND
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REFUSAL TO PAY ILLEGAL Bismarck, N. D., Dec. 7.-The resolution of the industrial commission authorizing the manager of the Bank of North Dakota, that the initiated law regarding public deposits is not retroactive and authorizing him to refuse to honor drafts of public treasurers in his discretion, was characterized as being without foundation in law by William Langer, attorney general and a member of the industrial commission yesterday. Mr. Langer declared that he had not been invited to attend the meeting of the industrial commission, of which he is a member, and that he never advised the commission that the law relating to deposit of public funds is not retroactive. "My opinion is just the contrary" he said. "My opinion as attorney-general is that this initiated law is retroactive and that it does affect deposits that have been made in the Bank of North Dakota. "There is no more sense or reason why a city or county or any other depositors that may wish to withdraw its deposits from the Bank of North Dakota should be prohibited, vexed, harassed or annoyed in so doing than if said depositor were withdrawing the money from some other bank. "The governor says: 'This initiated law passed because the people were misled and misinformed. They were told that the funds of the bank were invested outside the state.' "As a citizen of the state who campaigned among the farmers before they voted on the initiated law I know that they were neither misinformed or misled. On the contrary they knew only too well how the men whom they had entrusted as the majority of this industrial commission had appoined an ex-livery stable keeper who had never run a bank in his life as manager of the bank and when Mr. Waters, as be states, refused to commit crimes which could put him in the penitentiary, they appointed men in charge whom Townley's own newspapers had previously characterized as swindlers. "The honest attempt made by myself as the minority member of this board when I asked the state auditor to examine the bank was frustrated by the majority members of this industrial commission. The citizens of the state naturally did not care to have their public funds amounting to millions of dollars in the state Bank of North Dakota operated as it was."
8.
December 22, 1920
The Devils Lake World
Devils Lake, ND
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CRIPPLE THE N.P. PROGRAM Mill And Elevator Work Tied Up Along With Homes LABOR LAID OFF Withdrawals From State Are The Diretc Cause BISMARCK, N. D., Dec. 22.-The industrial commission has ordered that work on the buildings now under construction by the state home building assoication be suspended, the order first going into effect in Fargo. The reason assigned by the commission for taking this action was that the Bank of North Dakota is unable to finance the home building project now because of the heavy withdrawals of public funds by county, city, township and school treasurers. Secretary W. A. Anderson of the industrial commission said that work on the state homes will now be held up until the state is able to dispose of the bonds which have been issued to finance the building association. He also said that in all probability the same action will be taken in the case of the mill and elevator at Grand Forks. The order stops work on about 60 dwellings, 15 of which are in Fargo. "The Bank of North Dakota is unable to finance these projects now because of the law initiated by the enemies to the farmers' program taking the public funds away from the state bank," said Mr. Anderson. "Despite the assurance of the state bankers association and many of the treasurers, the officials opposed to the industrial program are withdrawing their deposits from the Bank of North Dakota. On the other hand the banks in which the public funds are redeposited claim they are in such a condition that they are unable to honor the drafts by the Bank of North Dakota on such redeposits. The result is that the daily balance in the. Bank of North Dakota are decreasing rapidly and it is unable to finance the state industrial projects any longer until the bonds are sold."
9.
January 15, 1921
Grand Forks Herald
Grand Forks, ND
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Bismarck, in. 15. Several representatives extined their votes on the resolution used by the house on Thursday, with requests Governor Lynn J. Frer and members. of the industrial cimission to explain their action in reiting the proposal of the North Dako bankers to aid in solving the state's hancial difficulties. During roll call several of the representaes rose to explain their votes, sonof these being as follows: Freema Grand Forks: "I live within a mile the state mill and elevator and have vital interest in it, but I feel thatie people's money has been depositen the Bank of North Dakota, and-ey can't get it out. If this was a Meral bank it would not be allowed run 48 hours under these conditiv. If it was a state bank it would allowed to continue only by the gre of the banking board. I vote de Herel, Sheridan: "Eastern capitalisteied to dictate to the state how it shed run its affairs. If any one is to slapped in the face let it be Wall reet not our state officers. I voter compared to South Dakota. Jeison, Cass: "Compare North and'uth Dakota. South Dakota has a pulation and resources less than Nor Dakota. Both states have issued "I estate bonds; both issues have beeheld constitutional. In South Dakot$30,000,000 of these bonds have betsold, in North Dakota none. The rean is that people don't want to put the money in such a raffle as the Bill of North Dakota seems to be." jdddock of Mountrail: "I'vote no beuse the resolution is untrue in counts. conclusions and, I believe, in ination." atterson of Renville: I vote no becse it is unconstitutional to ask us tsacrifice the constitutional rights othe great state of North Dakota.' speaker Twichell, Cass: "I vote aye cause this is merely a request to the vernor and industrial commission to ggest some way out of our present fficulties or explain why the bankoffer was summarily turned own.
10.
February 11, 1921
Great Falls Tribune
Great Falls, MT
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N. DAKOTA BANK CALLS LOANS PRIVATE FIRMS Industrial Commission Issues Order Stopping All the Payments. Collectors Sent Out to Gather in $6,750,000 Owing Institution. Bismarck, N. D., Feb. 10.-The state industrial commission late Thursday issued an order stopping payment on all checks drawn by the state treasurer issued in payment of hail warrants and funds issued to townships, counties and cities, and all township treasurers' checks with the exception of funds for school, penal and charitable institutions and those county treasurers' checks who are depositing all funds in the Bank of North Dakota. The bank of North Dakota has been ordered to send out men to collect from private banks all obligations due from these banks to the Bank of North Dakota. The state bank has outstanding $1,250,000 of past due loans from the private banks of North Dakota and $5,500,000 in redeposits in private banks in this state and which private banks, it is said, refuse to honor checks daawn by the Bank of North Dakota. O. E. Loftus, state bank examiner, announced that all banks with redeposits in the Bank of North Dakota had been ordered to pay the drafts of the bank immediately on their receipt or explain why they should not be forced to suspend. The order, some state officials said, may cause embarrassment to a large number of banks.
11.
February 11, 1921
Evening Star
Washington, DC
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By the Associated Press. BISMARCK. N. D., February 11.The state industrial commission has issued an order stopping payment on all checks drawn by the state treasurer for funds Issued to townships. counties and cities and all township treasurers' checks, with the exception of funds for schools, penal and charitable institutions. The Bank of North Dakota was ordered to send out men to collect from private banks all obligations due from these banks to the Bank of North Dakota. The state bank has outstanding $1,250,000 past-due loans from the private banks of North Dakota and $5,500,000 in redeposits in private banks in this state, and which private banks, it is said. refuse to honor checks drawn by the Bank of North Dakota. O. E. Loatus, state bank examiner, announced that all banks with redeposits in the Bank of North Dakota had been ordered to pay the drafts of the bank immediately on their receipt or explain why they should not be forced to suspend. The order, some state officials said, may cause embarrassment to a large number of state banks. Boy Scouts Invite Harding. JACKSONVILLE.-Jacksonville Boy Scouts will relay a message from this city to St. Augustine inviting President-elect Harding to visit here during his stay in. Florida. Mr. Harding will personally receive the last scout who delivers the invitation. Bonch Magneto Company Cutx Wages SPRINGFIELD. Mass.-The American Bosch Magneto Company announced a wage reduction of 12 1/2 per cent, affecting all factory employes on an hourly. weekly or piece work basis, effective February 14.
12.
February 17, 1921
The Princeton Union
Princeton, MN
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t IN SERIOUS PLIGHT On the Verge of Financial Collapse, State of North Dakota Knows Not Which Way to Turn. to Political Strife Endangers Plan Bring About Ratification of Rehabilitation. North Dakota's finances are in It is a particularly critical condition. possible that the entanglement time may straightened out but at this acbe there is no assurance of its 'being complished. The closing of the Far- big Scandinavian-America bank at a nonuartisan league institution, go, addition to the suspension of numer- the in other financial concerns makes situation ous more complicated. Mean- the while political strife endangers state's ratification of its rehabilitascheme. In Bismarck there who are two tion diametrically opposed groups tentative discussing the terms of Chicaplans are reached by twin city and and bankers to relieve the situation which go North Dakota on the footing hireput it held before Townley and his it in lings invaded the state and placed such woeful circumstances. The groups mentioned are the button legislators who flaunt the Townley and those who are known as indepen- disdents. They are both expressing satisfaction with the terms advanced situafor rehabilitation of the financial tion. The league group is displaying sore- of over having to give up many ness their pet socialistic schemes, including of of North Dakota, bulwark whole program. On the the Bank demanding the other hand the independents are short all sorts of things, none of them of unconditional surrender on the part of of the league forces. Resignation William C. Lemke, attorney general, in e and now one of the big powers $, league circles, is one of the things they are now insisting upon. e After the caucus of the indepen- of dents, Theodore Nelson, secretary o the Independent Voters' association, y as the I. V. A., made the flat it that the of insist upon f known statement absolutely independents elimination would e Lemke from the state governHe said that the K, would have to r William commission ment. industrial be re- no vamped so that the league would longer control. At present the com- Frar mission is made up of Governor and er zier, Attorney General Lemke, John N. Hagan, commissioner of agriculture and labor. cThis is what has happened in regard to the proposed bond sale: North Dakota bankers' h e made proposals in on mittee The January find comiwhich they would undertake to a market for state bonds. The terms were rejected by the nonpartisan by S. of league caucus, though advocated A. C. Townley a of The desperate situation of the Bank the of North Dakota finally brought heads to concede whatever found should league be necessary, but they Dakota bankers d appealed to twin Then the North they city obdurate bank ers help bring them together. conference, A. At to Sunday's their C. Townle John M. Hagen and nonpartisan ley, league associates declared the that they would undertake to bring terms nleague caucus to agree to the of ce the North Dakota bankers had asor fered if the leaguers could have bthat the bonds would be taken. calls for nthe Bank of North of surance This proposal Dakota, liquidation its red as a rural credits bank, the affairs of of winding organization up the legisla- Home Id association, and new Id the arbitrary powers commission and industrial Building tion ending the present of state the wide open methods of handling vn finances. On this basis the twin city and Chiof banks and trust companies repscago resented to the conferences have- considered the matter. ly iLight thrown on the methods of the Bank of North Dakota by the special committee of the North assembly has on investigating Dakota disclosed the whole many he strange transactions, and what is alive with interest as to 22 still be in store. end the story of low F. state may instance, There the is, bank for rs got its capital stock, as related exam- by W. Cathro, its manager, when to ined by Francis J. Murphy, of Minot, for the rt start with a paid in of ft attorney banks committee. capital bank Other cash, but not this bank. The is in control of the industrial commisnas v. sion, which by law was given almost state, unlimited power to bond the s. transfer funds and otherwise manipulate state finances. The law also rek, quired all counties, cities, villages, towns and school districts to deposit
13.
February 22, 1921
Grand Forks Herald
Grand Forks, ND
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SEEKING PRIVATE DEPOSITS. The management of the Bank of North Dakota has decided to enter the field of private banking, and announcement has been made that offices will be opened in each county where individual deposits may be made, to be forwarded thence to the central bank at Bismarck. There is no law which controls the individual in disposing of his money. If he wishes to deposit his funds in the Bank of North Dakota, that is his 1 usiness. But it may be well for persons who have money to deposit to recall a few facts before entrusting their funds to the custody of the politicians who are in charge of the state institution. Under the requirements of the law nearly all of the taxing bodies of the state deposited their money in the Bank of North Dakota. Most of them are now engaged in a strenuous effort to get it out. Not only has the Bank of North Dakota refused to honor demands for funds when made for the purpose of withdrawal under the terms of the new law, but it has refused to honor checks for current expenses of local communities. Local bodies having large sums to their credit in the Bank of North Dakota cannot get enough money to pay salaries and coal bills. This situation has arisen very largely because the Bank of North Dakota, being a political institution, has used large portions of the funds entrusted to its care, not in facilitating the necessary activities of the state, but in the promotion of political enterprises through the discount of political paper collected by certain banks which were harmonfous members of the combination. Suits at law have been instituted in many localities to recover funds deposited with the Bank of North Dakota. But the officials in charge of that institution declare that these suits are without merit, as the bank in not subject to the banking laws of the state. In other words, money on deposit in the Bank of North Daketa will be paid only at the pleasure of the officers of the bank, and the owners of that money may twiddle thumbs in the meantime. mention just a few of the inwhich shed light on the finmethods of the people who are inviting individual deposits in the of North Dakota: Several hundred persons were into make fresh advances to the inavian - American bank of when that institution was first The bank is closed again,
14.
February 24, 1921
Sioux County Pioneer
Fort Yates, ND
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North Dakota Laws in the Making EASTERN BANKERS WITH. DRAW PROFFERED HELP Taking the position that they did not wish to be accused of dictating to the people of North Dakota how their state government should be run, the Minneapolis and Chicago bankers who took part in the conferences in Minneapolis looking toward a rehabilitation of the entire North Dakota financial situation, withdrew their proposals and left the situation as it is. It is contended by the Independents that a serious break is threatened in Nonpartisan ranks, A. C Townley, national president, being in favor of a compromise, it is said, while Messrs. Frazier, Lemke, and Hagan prepose to "sit tight" and either ride through to victory on their program or go down to defeat with it. Nonpartisans as strongly maintain that no such break exists and that it is the purpose of the organization to continue their fight along the lines already well defined. Liquidation of the Bank of North Dakota under the direction of a liquidation committee, headed by John Steen, state treasurer, and agreement to limit the industrial program to projects already undertaken, with the dissolution of the North Dakota Home Builders' association. was proposed at the Minneapolis conference between representatives of the state administration, bankers of North Dakota and representatives of one big Minneapolis financial institution present. Under the terms of the proposed compromise, which would in no manner affect the investigation of state industries being conducted at Bismarck, the following general policy would be put into effect: The state administration would enact laws that would permit the liquidation of the Bank of North Dakota down to a farm loan institution only. Pass laws that would make the sale of state bonds possible. Bring about legislative safeguarding of public moneys. on deposit in private banks, and make the state bank ineligible to receive public moneys. Dissolve the North Dakota Home Building association when work already started is completed. Restrict the industrial program to the erection and operation of the flour mill and elevator at Grand Forks. The bankers would undertake the sale of two million bonds with which to capitalize the Bank of North Dakota as a rural credit bank, and to provide a million dollar fund for financing the operation of the state mill and elevator when it is completed. Seek a market for $2,500,000 of mill and elevator bonds with which to complete the construction of the industry, and to repay the million dollars borrowed in Chicago to finance the construction work so far done. Back the sale of three million dollars of farm loan bonds with which to take up farm mortgages placed by the state bank, making that money available for return to the political subdivisions of the state, and to seek a market for such additional bonds as may be necessary to finance future farm loan operations of the state bank. A recent Minneapolis dispatch, following the dissolution of the conference, read: Negotiations for the sale of North Dakota state bonds by Minneapolis and Chicago investment firms are off. at least for the present. The sale of $6,000,000 in bonds had been contemplated as a means of putting the North Dakota bank on a sound financial basis.
15.
February 24, 1921
Cavalier County Farmers Press
Langdon, ND
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HOUSE COMMITTEE AND SENATE CONTINUE HEARINGS Practically every effort at real, constructive legislation, seems to have been swept aside by the industrial probe, which still is in full swing. The house committee has grilled Cathro, Lofthus, Brinton, and many other more or less important witnesses, while the senate, sitting as a committee of the whole, is going over the same ground seeking to bring out points passed up in the house hearing. The defense of the industrial commission and the Nonpartisan officials of the bank and other institutions is mainly that the program was well under way and would have worked out; that the financial situation in the state was such that the introduction of the initiated law last fall allowing public funds to be withdrawn from the state bank precipitated a crisis. Mr. Cathro points out that when the civil organizations of the state came to the Bank of North Dakota for money it was necessary for the state institution, in turn, to call upon local banks for its redeposits, and this embarrassed local banks, with the result that many were forced to close. The charge of favoritism in the placing of redeposits is vigorously denied, while the questioned methods of capitalization and floating loans are strongly defended as necessary to the functioning of the state program and the maintenance of financial stability in the state. The Independents charge that extreme partiality was shown in the placing of redeposits, that criminal carelessness, if not worse, was shown in the placing of thousands of dollars of loans to various enterprises throughout the state which heads of the Nonpartisan league were backing, and that, on the whole, the state's funds were spent aimlessly while legitimate and pressing needs were allowed to go unheeded and the treasury was allowed to become so depleted that now the state is hard put to to meet current expenses. It is even hinted by the Independents that a public collection, similar to one or two which have been taken in years past to keep the state university running, may be necessary to keep the state government functioning. Perjury Charge Against Brinton Charging perjury on 11 specific counts, Manager F. W. Cathro of the Bank of North Dakota, has caused the arrest of J. W. Brinton, formerly personal representative of President A. C. Townley of the National Nonpartisan league. Mr. Brinton has repeatedly made sensational charges concerning the league, the Bank of North Dakota, the financing of Nonpartisan enterprises, and so on, his most recent testimony in this connection being before the house and the senate investigating bodies in Bismarck. Brinton was released on his own recognizance for a justice court hearing some time this week.
16.
February 26, 1921
The Evening Herald
Albuquerque, NM
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BY N E A. SERVICE BISMARCK N D Feb. 24 Something is going to creek soon. in North Dakota Either the nonpartisan league. with its dream of a New Day in gover nment, Or the organized opposition of conservative political and business forces, supported by the concerted financial interests of the country The league can be killed and may be soon- but unless its leaders make a completo surrender the killing will be costly, perhaps wreeking the whole public and private financial structure of the state State is Broke Right now the state, officially is flat broke for ready money Public officials cannot get their pay checks cashed The state bank only public institution of its kind in the United States, has suspended payment. temporarly It's the crisis of a five-year political and economic battle of umparalleted bitterness, Here is the background: Two years ago the league in com plete control of state offices and legislature created the Bank of North Dakota 11 opened for business 18 months ago. 11 was to finance the program for state-owned flour mills. grain elevators, loans to home builders and farmers Bonds for $17,000,000 were authorized The bank was made depository of state, county and city funds-on which private banks had therefore paid little interest Private Banks Hit These combined measures threatened the most profitable parts of the private banking business Quite naturally the financial interests state and national united to scotch them. The big bond issues were contest ed through all the courts and their legality finally upheld by the supreme court of the United States But Ladies Aid society in church partors Friday, 7:30 D. 111. Opening session of Christian Endeavor convention in the South Methodist church Come to the above services
17.
March 14, 1921
Grand Forks Herald
Grand Forks, ND
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(Herald Special Service.) Bismarck, N. D., March 14.-It is generally predicted here that an effort will be made to throw the Bank of North Dakota into a receivership following the decision of the supreme court made public Saturday which holds that the funds of the bank are subject to garnishment. John Steen, state treasurer, is being mentioned as a possible receiver for the institution. Officials of the Bank of North Dakota held a long conference Saturday following announcement that the supreme court had decided that the Bank of North Dakota is subject to garnishment, the same as a private institution. Denial, however, was made that the garnishment case was considered. F. W. Cathro, director general of the bank, refused to express an opinion as to the effect of the decision upon the future of the bank, saying: "I have not had an opportunity to digest the decision and until I can consider it carefully I am not in a position to make a statement." A similar attitude was taken by other officials of the state, and O. E. Lofthus, state bank examiner. Governor Frazier had left the city early Saturday on personal business and Attorney General Wm. Lemke had not returned from the Minneapolis Nonpartisan League meeting. The third member of the industrial commission under which the Bank of North Dakota operates, John. N. Hagan, was ill at his home. State Treasurer John Steen. Independent, who has been mentioned as a possible receiver for the Bank of North
18.
July 14, 1921
The Bismarck Tribune
Bismarck, Mandan, ND
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INSTITUTIONS TOGET BY, SAY BOARD MEMBERS Hold Present Cash Difficulty of Bank of North Dakota Not Serious A OF TALK RECEIVER One Group Wants Application; Another Oppose-Bank Says it Can't Collect of the $11,000 pay-roll check the State The for matter Agricultural college, on which payment was Bank of North by the Dakota, R. H. refused Muir has ,according to members of Tte and been administration. J.1. settled Cahill, board of the members board claim do not expect any to result from difficulties they the inability to serious meet of the Bank of North Dakota the checks. situation is, however, causing uneasiness among and surers considerable The of counties school trea- treaof county districts, which have to get their Several surers been unable money. have apportion- made Bismarck in an to ment trips to affairs. effort straighten out will be some difficulties with state institutions the or three some There next of the two months. during Board this is due to and interest on that members the income say the school fact lands and loans for the last year was less than was anticipated, and leaves some of the institutins with deficits. How this will be met has not been determined. Talk of Receiver of the Bank or may not The status may be of affect- North the There are some the ed Dakota by bank. present difficulties busi- want of and politicians who started to get a ness an action men receiver that for the bank on the ground it is another group say There is insolvent. that would be Leaguers as an Nonpartisan that this construed would be- at. by the bank and issue. believe that state tack come fess to on a political They officials radi- prowill be forced to take some cal action themselves to relieve the situation. no action has taken the renewed bond camexcept Thus far selling been drive with a the paign, North Dakota by particular members Governor of the in Commission of Frazier, Commissioner Industrial Attorney-General Agriculture Lemke Hagan. and bond sales mount to a conthe bank siderable Unless the figure will months be short of cash for two or three at least ,or until fal tax payments are received. opposing the Bank of North to the pay Dakota Those point refusal to of state apportionment checks, derived on school bonds $368,000 and being income money from and interest lands. that when which is of It is the probable board, composed the majority Mr. of Governor Frazier, Mr. Lemke, Nielson and Mr. an effort Hall, are in Miss the city will Poindexter, be made the to a and The situation. have meeting constitution discuss requires inschool funds be kept violate the interest that that the only taxpayers being make used, and must up The board and lands has assets any school deficits. of university of $6,655,- bonds of $11,750,206.47; farm loans, 669.00; total, $18,405,875.47. The total income is about $1,500,000 a year. BANK'S POSITION. other hand On the it Is able stated that If it were to from banks owe by collect the bank which ended. It It difficulties would be A. that the was all tor stated of audits, by Johannsen, Bank direc- of North Dakota has due in demand and demand banks the amount deposits going loans of $2,980,- from the banks therefore, according 000 The which situation, cannot pay. to the view of the Bank of North Dakota officials, is not an isolated case confined to the state bank.
19.
July 20, 1921
The Bismarck Tribune
Bismarck, Mandan, ND
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ASK RECEIVER IF NOT PAID Lakeside School District Files Suit Against Bank of North Dakota The Lakeside school district No. 11, of Kidder county, has filed suit against the Bank of North Dakota for $2,276.30, on which payment was refused June 30, 1921, according to the complaint filed in district court. The commissioners asked that a judgment be granted, be declared a lien on specific funds "and that in case said defendants are unable to produce and tender into court the specific funds or to replace them then that this court appoint a receiver to take charge of said defendant (Bank of North Dakota) and that said defendant be declared insolvent and that plaintiff have such other and further relief as may seem necessary and just."
20.
July 21, 1921
Jamestown Weekly Alert
Jamestown, ND
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FUNDS COLLECTED BY GUARANTY COM. IN BANK OF N.D s Total Over Three Hundred n Thousand Dollars Accordd ing t o Lofthus-Bankers Apt View Situation With prehension. N. D., July 15. (special) by the Bismarck. money collected CommisGuaranty of paying Depositors All of the Fund de- off the purpose was sion for of closed banks Dakota depositors in the Bank of This Noth became posited weeks ago. meeting of several today following a plans for the known commission to consider of the Tolley State last paying Bank, off depositors the first of the banks to clos fall. totals about $308,000, The fund to O. E. Lofthus, state of the according and secretary-treasurer the moncommission, aminer who deposited ey Many in the bankers state bank. viewed when the situa- they the posited learned tion with in that the apprehension the Bank money of because had North been of Dako- debecame known, North Dakota ta, it the Bank of its oblifact that unable to meet all that the has been Mr. Lofthus insists be able to gations. North Dakota will depositors Bank of checks to within which pay off may the be mailed out the next two weeks, guaranty fund law provides in the The money shall be left to that until it is banks the assessed the withdraw- ready out. However. during be paid made on many banks money als were middle of May and the It has the in the one bank. done to deposited that this was Dakota been reported the Bank of North provide much needed cash. Mr. Lofthus it was with it was done because would be declares that the money it was expected out immediately but that audit paid necessary to make a new of a refound the Tolley bank because interpretation of court decision and Commission. cent by Guaranty Fund that all the law also provides from The collected or received Guarmoneys time by the Depositors the time to Fund Commission under deposanty of this act shall be trust provision one or more banks or their ited companies in operating under law." Bank of North Dakota is law. not The under the guaranty true but included Lofthus said this was comMr. that the guaranty fund some added mission has the power to make rules for itself. fact that the Bank of North Dakota The is obliged to pay out approx- fund $300,000 of guaranty of means that the money are increased far imately bank obligations beyond now the obligations which it is meet. the the bank is unable to Bank of known Within the last two days the paying North Dakota has begun not paid checks again, but has state the $368,000 state apportionment fund. The guaranty fund commission coin- at meeting here, met with Bankers a its of the North Dakota mittee Association The commission spokes- which said that the committee, Hollisman composed of George H. of Biswas of Fargo; H. P. Goddard Velva, ter, and A. E. Sevareid, of commismarck, invited to meet with the of was and discuss the liquidation closed sion banks and the appointment of a supervisor of receivers. Schoreggo Named Supervisor stated that the banker's It was unanimously suggested second committee of B. J. Schoregge, County the name president of the Williams vice Bank of Williston, to be banks. superState of receivers of the closed state visor Schoregge formerly was a of examiner Mr. and now is a member The the Guaranty Fund Commission. and Mr. appointment was made imSchoregge enters upon his duties of mediately. It is stated that none banks the receivors of the various will be removed as a result. H. Hollister was delegated George audit the claims of the Tolley State to Bank and pesent his recome mendations to the commission. It was announced that a recent of decision of the supreme court Nebraska to the effect that when a bank pays a higher rate of interest is than the legal rate the deposit guaranteed under a guaranty law, not will be applied in North Dakota, banks and that depositors in closed interwho received a higher rate of est than six per cent will not have fund the protection of the guaranty law, and will not be paid the amount of their deposits by the commission. fund The members of the guaranty commission are Governor. Frazier, chairman, O. E. Lofthus, secretarytreasurer, S. G. Severtson, Bismarck: R. B. J. Schoregge, Williston, and M. Porter, Minot. ORDER REASSESSMENT ou
21.
October 13, 1921
The Weekly Times-Record
Valley City, ND
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WHY PUBLISH THE LIST The reason given for the Bank of North Dakota's refusal to pay just claims against it. is invariably that it "can't collect what is due it from private banks." All right, suppose we accept that reason, for the time being, and ignore the millions tied up in delinqu real estate loans, in state industries, and in the houses of state officials. The last statement of the Bank of North Dakota shows that only 214 banks are still doing business with the Bank of North Dakota, and they have exactly $2,243,280 in redeposits, and $1,919,397 in loans. That includes more than 50 insolvent banks with a total of about $1,400,000 in loans and redeposits. Suppose the Bank of North Dakota publishes the list of banks still doing business with it. Why not let the voters know exactly what banks still have redeposits and loans, how much each has, how much is due, and what banks have refused to pay. That information was given last winter during the legislative investigation, and no serious results were noticed by the banks of the state. There was no run on the banks. Why not bring the information up to date? Such a report would disclose exactly how much money the Bank of North Dakota ha sin insolvent banks and how many of these insolvent banks are socalled "league banks." It would show how many socalled "league banks" still have money which they cannot or will not repay to the Bank of North Dakota. It would be a pretty fair guess that every independent banker who could do so, has long since ceased to do business with the Bank of North Dakota. He quit either of his own choice or because the Bank of North Dakota called on him for what he owed it. Certainly it is not reasonable to suppose that the Bank of North Dakota would register checks, while it permitted an "unfriendly banker" to retain any of its funds. "The gang that is running things at Bismarck doesn't do business that way. It doesn't sacrifice votes to protect an "unfriendly banker. Nor is it reasonable to suppose that the bank examiner would trifle very long with an "unfriendly banker" who couldn't or wouldn't pay what he owed. There would be a sign on his door in short order. The next time you read the excuse that the "private banks won't pay
22.
October 22, 1921
Every Evening, Wilmington Daily Commercial
Wilmington, DE
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A COLLAPSED MILLENNIUM. Taxpayers of North Dakota have procured an injunction against the receipt of deposits by the State-controlled Bank of North Dakota. Th: motive for their action seems to be to save for themselves the proceeds of the $6,100,000 loan which the defendant State officials sought to retall here, with the result of finding that Wall Street was unsympathetic with political finance. Now the taxpayers allege that the bank is insolvent, and they are unwilling that the proceeds of the bonds should be wasted in support of the costly enterprises which the State sought to establish with the borrowed funds. If published reports may be relied upon, the taxpayers are better friends of themselves than the officials chosen to represent them and now on their defense against a recall petition. The State Bank is described as unable to meet its checks. The State is behind in payment of its salaries. The NonPartisan League's chain stores company is in receivership. Its homebuilding association cannot complete the houses it began. Work has stopped on the State-owned mill and elevator, which were the hub of the movement for the welfare of the farmers who believed in prophecies of the millennium through the ballot box. The Non-Partisan League is naturally said to be much chastened.-New York Times.
23.
November 5, 1921
The Bismarck Tribune
Bismarck, Mandan, ND
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SUPREME COURT SETS JAMESTOWN CASE FOR NOV. 8 Hearing Will Be Held in Supreme Court on Judge Coffey's Injunctional Order IN CASE ISSUES NEW Hearing in the "Jamestown case" upon the supreme court's order to District Judge Coffey and the plaintiffs in the action to show cause why the high courts order dissolving the Coffey order should not be made permament will be held on Tuesday, November 8, at 10 o'clock in the supreme court chambers here. The court which had postponed the hearing from Nov. 1 on its own motion today also on its own motion set the case for hearing next Tuesday. In connection with hearing on the case, in which District Judge Coffey issued an order declaring the Bank of North Dakota insolvent and prohibiting it from receiving deposits, the court will consider the motion filed in behalf of Secretary of State Hall and State Superintendent Minnie J. Nielson, defendants, who joined with plaintiffs in motion to quash supreme court's order. Unusual importance is now attached to the case since the defeat of the initiated law proposing the abolition and attorneys of payers the Bank of North Dakota who instituted and taxthe Jamestown suit have made known their intention to pursue it to the conclusion and end to have the bank held insolvent, which they hope would be followed by appaintment of the receiver to win up its affairs. The Spitzer, Rorick company band purchase contract also will enter into the case. There has been demand among some Independents that the contract be cancelled while the administration desires to deliver the bonds immediately to release the money for use in the state. In this connection Treasurer John Steen announced that he had received a letter from an eastern bond house, dated Nov. 1, asking if there were any North Dakota bonds for sale, and stating that the bond market had eased up and that bonds where formerly were not issued because of low rate of interest could be sold now.
24.
June 6, 1924
The Bismarck Tribune
Bismarck, Mandan, ND
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mbling of the public funds, in summer and fall of 1919, F. W. Director General of the Bank menced his career as manager The results of this manare now well known, and it herefore, unnecessary to go into detailed statement of the poliwhich were carried out under management and of the conresulting therefrom. It is well known that out of the pubfunds on deposit in that Bank, putting nearly half a mildollars into the Home Building ociation, the bank redeposited loaned nearly four million dolof the public funds among banks over the State, innearly a half million to the Scandinavian-American Bank argo. Not only did the manageof the Bank give financial reto the so-called 'friendly banks' in utter disregard of all prinof safety and good business, Imost uniformly placed large of money, without security, on in banks which were noted their financial instability, and atened insolvency, and many of have, in the course of time, passed into the hands of a reBy these unbusinesslike poland methods, the Bank of North although in control of milof public funds, came to figrief in the fall of 1920. After people had adopted an initiated permitting local subdivisions to draw their funds therefrom and eposit them elsewhere, the Bank North Dakota was unable to meet bligations in the ordinary course usiness, and was forced to, and register checks in large sums, was compelled to, and did, cease unction as a bank, except in a limited manner. Among its activities the Bank of North had started out to make farm and did make farm loans in amount of $2,700,000, but owing he shortage of funds and the inof the administration then in to sell rural credit bonds, Bank practically ceased making loans nearly a year before the election, and, at the time the administration took charge of bank, the Farm Loan Department virtually disorganized. Insurance Law 'he League administration also blished what is known as the Hail Insurance Department, by of which, the State, through empulsory insurance and levy of indemnity tax, undertook to incrops against loss on account Although vested with the to levy an indemnity tax with to pay hail losses, and also to warrants in settlement of hail allowed, the old administraneglected to provide any method nancing, redeeming, or providing the payment of such hail warprior to the collection of the mnity tax levied each year, with result that the holders of hail were compelled to wait for months after the issuance of hail warrants before receiving money or to sacrifice their hail