The Bismarck Tribune Newspaper, February 11, 1921, Page 6

Partisan Fanaticism Dares Ul | Political Conspira ~ Campaign. to Destroy Confidence of. e x Came oy C of People in State-owned Institutions Reaches ‘Climax in House Auditing Committee’s Mock Investigation of Bank of North. Dakota-Whole Credit Structure éf State Endangered, Inclu- ding Existerice of Scores of Banks, By Conspiracy Seeking to Bring About €rash-and Thus’ Discredit the State Administration and the Idea of State.Ownership of ‘Marketing Facilities—Plot Is Sprung at Time Country Groans under Depression Brought About by Nation’s Banking System Coordinating with Grain Gamblers. The people of the State of North Dakota « weve unleashed to checkmate the idea that sale that would lead to the disposal of sev- rious crisis in their are faced by the most history. This crisis is brought on by a gi- ‘gautic political conspiracy. That conspir- acy is the capstone of years of éffort’on the part of certain huge and powerful interests to destroy’ the idea that the people may go. into business for themselves for their own better intergst, rather than permit’ indus- tries And marketing machinery to remain in the exploiting hands of private privilege. In this battle the representative of the people is the Indiistrfal Commission of the State of North Dikota. In the actions of this committee rests the fate of the-state owned industries for which the farmers of North Dakota has been battling for sev- enteen years. But more than that indeed, the Industrial Commission today is forced to battle a political conspiracy to destroy “the very foundations of the credit system of this state, ‘ When the history of this gigantic politico- economic conspiracy shall have been written it will reveal one of the blackest pages in American history. Beside it the deeds of.the Robber Barons wil] pale into insignificance. The impossibility of obtaining fair repre- sentation of facts—and facts aloné by-which the people may judge—in the press impels the Industrial Commission to attempt‘ to lay before the public the details by which this conspiracy has been fostered. ‘The peo- ple are entitled to know and form their,own independent judgment ‘as‘‘to the ‘conflict which is raging in North Dakota. a The Commission realizes that aside front _ factional bias which dictates, either un* iously or deliberately, the transmis- sion of news in the public press, there are other considerations which may be_ad- vanced in extenuation of the failure of the press 4o functidn efficiently in informing the public on the momentous events which have transpired in this state; namely, the mechan limitations and production costs of the publishing business which rule news- ace; and the very maze of uncer- y as to what are facts thrown about the efforts of any unpartisan observer to’ ob- tain them. The whole effort of the opposi- dion (o the Industrial Commission involved in this political conspiracy has. been not only to obscure the issue, but to attack the farmer-labor program by innuendo, unsus- tained charges and plain libel and scandal mongering. ' MEA Sane EN, In other words, this conspiracy has. work- ed unceasingly to one end. And that end is to destroy the confidence of the people in their own enterprizes. The motive for that-conspiracy is simple enough, t It is the fear of private privilege that the people will succeed in throwing off the shackles of: exploitation. j This struggle in North Dakota is more than polities. | Politics is merely its. mani- festation. It is to the forces directing the politics of the anti-state éwnership interests to which the people should turn their eyes! for the reyealing light on'the motfves actu- ating these. ceaseless attacks on public in- stitutions. ° : How the System Would : Throttle a State _ It is axiomatic that the oppressed people will bear their burden dnly up to a certain point. Then they will turn on their oppres- sors and institute reforms or fundamentals changes that will relieve them. Whereupon the battle between the exploiter and the ex- -ploited, the kings and the commons, hegins. North Dakota is the tést tube wherein the reactions of oppressed and_oppressor may he best observed in American history. The people vonceived the idea that state elevators—in other words the. utilization _ ‘of their common power—would. help solve the problem of marketing grain through which the exploiters robbed them of their birthright. a State elevators were fought and checked with the powerful backing of the System at every turn and corner. : Eventually the rising power, of publie opinion put the representatives of that vast hody of farmers and laboring men in power who demanded relief. Whereupon the vast, ilimitableresources of the commercial au- tocracy of not only the state, but the nation ~ The Indu ‘(The First in-a Series of Advertisements.) , private privilege wag not absolute, The state through the legislature and the Industrial Commission organized a state mill and elevator system. : Lh ‘The state organized the, Bank of: North Dakota; a bank whose prime: motive was fd service to the people at large, rather than mére profit making. The bank was designed, primarily, to servé two purposes} first, to liquidify the credit of the state so that, its flow could be adjusted efficiently and cheap- ly to those regions where it was most de- manded; in other words, to see that the stream of credit flowed where is would do the most good for the greatest number, The other purpose was to provide a better, sys- tem of rural credits; which it has done.’ By concentrating the power of. publie funds, usually lying dormant: in private in- stitutions serving rarely move than the pur- pose of petty private graft, the bank was enabled to increase the efficiency of the credits of the state’ immeasurably for the benefit of the people. ‘ Private banking’ interests, not. only those of North Dakota, but those of, the Twin Cities and the nation at large, saw an im- mense danger in the Bank of North Dakota. It could not be permitted to sueceed. It not only tore down the false tradition that. the private banker was absolute over the credits of the nation, It struck at his private pro- fits. Vor the first time in its history, ‘the State of North Dakota wasson its way to something like independence from the Twin City grain-banking combination which had held it down for so long; which, dictated, as it were, the fate of practically every inhabi- tant of a great commonwealth. The system works through polities. - Consequently a hungering pack of politi- cians was unleashed. They proceeded by devious means—through misrepresentation lies, libel—to strike at: the confidence of the® people. They concentrated: their efforts on The Bank of North Dakota. Upon the milling program they dared not dwell. ‘The people knew what they wanted in that regard, The system knew that if it could destroy the Bank of North Dakota, the state's indus- tries would return to complete dependency upon its whims; because it is ‘the. credit strueéture of the country "that is the main? stay of the System. , ; .,' Block Sale of State Bonds >... .by. Tactics. . sc To repeat, one motive was hack of the never ceasing campaign. That motive was to destroy confidence in The Bank of North Dakota, ' “ _ The various peaks of the political con- spiragy dictated by the System are easy‘to trace, - eer ea ines al nds The first outstanding peak is that famous incident whereby a politician endeavored to wreck a bank in Fargo—ohe of the large in? stitutions patronized by fatmers: and their organizations. It was not ‘that partitular bank which the” System ‘tared” so mugh about; but it was hoped by that closing’ to cast some disctedit on The Bank of North Dakota. ‘The record is clear on that point, however, so far as the people of North Da- kofa are concerned. as ‘ So far as the people of the nation living outside North Dakota’s’ borders are con- cerned, the story is different. Millions of newspaper readers gained.the impression that It was the Bank of North Dakota itself that had closed its doors. Such an impres- sion was merely a question of skillful pro- paganda exercising the art of innuendo, What mattered it if the Fargo bank itself ‘reopened its doors.: The object. had been achieved. Propaganda has skillfully Wnked up the name of The Bank of North Dakota in. such a way that the casual reader car-. ried in the back of his head some vague sug- gestion that he couldn't define. Yet, the entering wedge had been dviven.. Such: is the power of pen and ink and printing presses. : “Tt would hardly be said that the/ Fargo hank fiasco was a success for the political conspirators setting out to destroy, the con- fidence df the people of a whole state in their credit structure.” But, the Fargo. in- cident was only the beginning of the eam- paign. Next F. W. Cathro, Dirtetor General of the Bank_of North Dakota Negotiated a strial Commi “ \ enteen million dollars in state bank, rural cvedit and industrial progyam securities throngh two of.the ‘largest bond hduses in- America. . In passing it is noteworthy that, at the time these bond houses were extreme- ly anxious to underwrite,the bonds. There was no question as to their validity’ or the ‘soundness of the credit’ which they repre- sented, i ; The deal was up to the point of consum- mation, But, in the meantime, an influen- tial man of the state, servant of Big Busi- ness and philosopher of the exploiter bent of mind, went back east. There he confer- red with certaingnterests. Vollowing upon that incident, tH® bontl houses’ attorney ad- ised rejection of ‘the North Dakota securi- ties. The'reason he advanced for that, re- jection were most significant. In, substance, he said, there was too much evidence that Nogth Dakota would remain in a state of political controversy for years. The bonds were excellent securities, but he advised that where politics were active and ever ex- istent as they would be in No. Dakota that ' his clients, the-bond houses, should hold off, The inference is plain’enough.'Oneof North Dakota’s- most irifluential interest-serving politicians had called upon that attorney. Tt was not unnatural that the attorney should gain the impression politics would he bitter in this stage, for some time to come, Attacks on Bank Made on , Any Pretext Other peaks were Paes though, in the progress of the people toward fruition of their program. It was notewcrthy that at} the time the press was full of the Fargo bank incident, with its deliberate baseless insinuations directed against the Bank of North Dakota, the State Auditor, known throughout the state as an opponent of: the administration and the Industrial. Commission,, demanded’ entrance to make. an “audit” of the Bank of North Dakota. Officers of the bank and bers of the Industrial Commission refused the State Auditor permission to ‘follow the course he had set out; to* pursue. Great publicity was given to this incident, The industrial Commission ‘had. decided that publicity adverse to the Bank of North Dakota’ was the impelling motive back of the effort. Ridiculous statements. as: to the condition of the state. bank were published broad- cast, nevertheless, hingéd merely upon the word of:a political opponent who had made no audit. Pa Continuing thrcughout this Period was a crossfire of- criticism. from certain banktrs in the state, as well as the. anti-state ownership ‘politicians of pol-- tical subdivisions. One of. the methods by. which the bank concentrated and made available the credit of the state for the benefit of the producers was the + law which compelléd all publie funds of political sub- divisions be depcsited in the Bank of North, Dakota. The ‘cry was raised that political subdivisions under. the &ld system were obtaining higher rates of inter- est than the 2 per cent allowed thent by the state bank. In some, cases this was true, insofar as local private bankers at times allowed a nominal 3 per cent on local: political subdjvision funds. But the real motive for this. outcry was apparent. The Bank cf North Dakota demanded ‘that the local bankers pay 4 per cent for, these same funds. Tht general assertion. is not;,too broad. that. in scores of cases throughout. the state they never: had paid anything up-to the time the Bank of North Dakota came into existence: ; ote ln other: words, the. Bank ‘of:North Dakota took \.the fonds of counties and redeposited them in the banks ‘o. those counties and made the banks pay a fait rate cf interest. Thereih ies the ‘real explana- tion fcr.ihe propaganda that was directed against tty stsie Gank cn that seore, “The people were’ get- : fair xeturn on their own: mohey—which was ing that had not been done before even. in those ni. ances where bankers. actually were paying interst av 3 nev -cent.. ne $ Members cf the Indus‘r‘al Commission are officers of the ‘state. ests of the state at. arge in.mind:at all times. Their responsibility has tecn heavy, - -Yet in the struggle against the politica¥ conspiracy: directed at the state industries at no time has responsibility been so heavy, and. the .ccnsequenees gf wrong action or misguided :policy, so‘fraught with potential calamity as. in\the last six months. ..;0) sf >: SON Because; the political conspirators, have struck at a.time when. the credit structures of the whole state was wavering, tottering it ht: be said, under the blows administered against thé m; it: price of. crops by grain gamblers and the coordinated. checking of credit by the nation’s banking system. _ Driving.the People on to Calamity ‘The history; of! the recent, period: ,of ‘what Wall Street pipers Atte calls vaenh fon” is tragic. ally Aamiliar to the North Dakota farmer and labor, . ing man. | 1 3 a Fhe relation of the Federal Reserve-system banks to this so-called “deflation” is ‘apparent. | It -Was'a ruthless “process, whatever thay be .the argument for the economic paMey involved. The North Dakota farmer is aware that in effect the great banks ordered the smaller banks to ‘sell him cut. "The wheat strike that followéd will. go ~ down in hjstory. : \ . As the consequences of that ordeal, however, hun- dieds of the smaller\ banks, throughout the state were faced with extreme difficulties. . , >The farmer was right; he had been robbed. He was’ entitled by every law to hold his wheat for a betterment in; prices; to give the market gambler abetted by the great banks a taste of their own medicine. The sitGation made rough going for the smaller bank, however, in fact more than a score of them closed their doors. - - ‘hey have acted with the best inter. © , * And ‘had it not been’ for the bank of North Dakota this state would have trembled under the .crash of some. 150-to 300 banks. It would: have been a blow at the credit of ‘the state from which it would have been years in recovering. In that feet ‘lies the prés- ent -taetics. involved .in. the: political conspiracy against the state institutions. Politicians acting on the orders of the system want to: bring Widespread repudiation and ruin on this state. They know the cost to themselves. They are willing to pay it. If they don’t and the state’ industries succeed their losses in illegitimate profits of .exploitation will be even heavier. > ~ » § Financial Crash Sought to « -Blame People If the crash ean be brought about and made so dee vastating that no man, Woman or child in the state can escape its consequence, the present administra- tion elected in opposition to the system: will be charged with the rsponsibility. 6 — Th politics of this conspiracy thus is as simple as it'is: monstrous, . The pecple, the politicians argue, will not stop to make a’calm, dispassionate judgment as to who . should bear the responsibility for such a smash. The whole erash could- be laid upon and would be, laid upon the people’s institutions. would teach the peo- ple to let well enough alone. and stay out of business- Thus at a time when the stdte bank is beginning to function a load is thrown upon it that would ter to its very foundations any bank of like size in the world. p ' The Bank of North Dakota is standing up through it all, From out of this storm of propaganda direc- ted.at it in-these perilous times, it emerges day by day sound as a rock. And in the meantime the con- spiracy rages arourd it;.more violent, more bitter in. proportion to the growing desperation of those who would destroy it if they could. ‘ . The crux of the conspiracy lies in the so-called in- vestigation of the Bank of North Dakota by a com- mittee appointed by the majority-of the lower house of the state legislature. The tactics of the majority members of this com- mittee have been so obviously inspired by prejudice and a desire to make political propaganda rather than ascertain a-true audit of ‘the bank that the minority members have withdrawn from participa- tion. i \ : Two. attorneys,’ known throughout. the state for their opposition to the present administration and: the policy and purpose of the Industrial Commission, not only were hired by the house committee to con- duct the inquiry, but were empowered and ‘did draw up the rules under which the committee is acting. These rules, and ¢he conduct of the so-called -in- quiry has led to the frequent and general charge’ that it is merely a kangaroo court. t. Witnesses for-the Bank of North Dakota have been . flatly denied the. right to-counsd. Proceedings. in. the house committee’s hearings have been as involved in their methods as they have been open in their design to discredit the Bank of North Dakota if possible. _ ; The committee had in its presence an audit of the Bank of North Dakota made by ‘Bjshop, Briss- man, and.company, a firm engaged for that purpose by the state auditing committee,-composed of a ma- jority of members opposed to the Present adminis- tration, \ ? Expert Accountants Have g No Place. : . Bishop, Brissman and company made an audit and commended the officer's of the bank for the efficient way in which the affairs of the institution were con- ducted. Balances were found to -be correct and all funds properly accounted for. In effect, if the ob- ject of the Bishop, Brissman and company audit was-tc make. political capital, the effort fell flat. — : The committee has this audit before it; yet it has made no attempt ‘to-analyze the audit itself. In addition the committee has the audit of the In- dustrial Commission in its possession. This audit agreed with ‘that of Bishop, Brissman Co., yet so far as analysis is conce1 the committee has not” moved. The committee in fact has not accountant representation, although if is difficult to conceive how an examination of so complicated a structure as a bank. can be_made without expert assistance of that sort. - pai In the proceedings of the committee, however, lies the revelation as to the purpose of this inquiry. From the beginning of the inquiry the questioning of the committee’s attorneys has been obviously di. rected at making -F..W.:Cathro, director general of the bank, refuse to answér certain questions, he tactics: involved are shrewd. Knowing Mr. Gathro. is a banker’ and placed’ in confidential rela- tions with hundreds of bankers and banking institu- tions throughout the state, it was not at all problem- atical. that he would refuse to reveal affairs that wilekt shake the confidence of depositors in those anks. : : The time, as perhaps, the inspiration for the in- quiry was apt, Public confidence in wheat belt banks could easily be shaken. It would be a daring thirfe indeed for Mr. Cathro: to reveal the condition of certain institutions. - Noteworthy, toc, is it, that many of these banks that would ‘have been. thrown into the spotlight of disastrous publicity had the committee had its way :with Mn Cathro ‘were insti- tutions officered and directed by bankers opposed to. the present administration and the idea of state ownership in industry: ,, Mr Cathto, pointed out repeatedly on: the stand ; the! members and official representatives of the mmitteé were At liberty under his orders from the Industrial. Commission to call at the bank and make any investigation that they might see. fit. Why Cathro Balked Mock +). + Inquisition Accounts would be opened for inspection and every courtesy and assistance shown the inquisitors, He did object, however, to dragging these records out into the public to be distorted and lied about in the press. In short, it was a violation of common sense, to say nothing of the trust devolving upon him , through the relations of The’ Bank of North Dakota with the gther banks of the state. ‘ There could bé no feretelling the consequences to scores of institutions were this to happen. yi Therein lies the explanation of Mr. Cathro’s atti- tudé on the stand and the cause of his citation to ep appear before the house of representatives on a charge of contempt of the house. The members of the investigating committee, with the comparable audits cf both Bishop, Brissman and Company and the audit of the Industrial Commission itself at their hands; with the opportunity offeréd for a direct examination of the records of the bank in the-institu- tion itself, were bent, through their attorney, in béelaboring the banking system of the state to the point of crash. The rules under which the @mmittee proceeds were~drawn up by its attorneys. One of the note- worthy of this set of rules is the now famous No, 12 It reads: ' f @ “Witnesses shall be examined by counsel employed by this committee, provided, however, that if a mem- . ber of the committee wishes to question a witness, permission shall first be given by the chairman of said committee, and provided, furthér, that if it shall appear to the chairman ‘that such question or qués- tions are not propounded in good faith, he shall re- fuse to permit same to be asked unless directed to do: so a majority of the committee.” \ Another rule which would have. the effect of hold- ing up operation of the state institutions is particu- larly significant in relation to' the committee attor- ney’s insistence that records from The Bank of Nerth Dakota be brought into the hearing.’ It was the possibility involved. in this rule that prompted the Industrial Commission to issue an-order per- mitting officrs of the bank or of the Industrial Commission to take documents andSpapers into the investigating room, but not to permit them to go out of their possession. The rule reads: “All documents, papers and exhibits offered and received in this investigation shall immediately be filed with and kept in’ the custody of the secretary _cf this committee until the same shall be annexed to the report of this committee and filed with the house of representatives.” ‘ More than irony is implied in this rule: “The proceeding being in the nature of an inves- tigation and the controversies incident to the aver- age trial being absent, the counsel for the committee aré directed to proceed to ‘the examination of wit- nesses by the question and answer method, and without reference to the formal rules of evidence, elicit. from witnesses,” as ‘expeditiously as the cir. cumstances will permit; the ultimate and essential facts to be by each witness disclosed. Investigators Invited to Scan : Records , industrial Commission as the ultimate execu- intent over the state institutions frankly warned officers and cther employees that the investi- gation was. designed. to.throttle ions in -their ‘operation. SUA resolution Tiirocted to all employees of the arious state enterprises says: vente is the‘oninion of ‘the governay, the attorney general and the commissioner of agriculture and labor, constituting the Industrial Commission of North Dakota and representing the executive de-- partment of the state of North Dakota that the ac- ions-adopted by said (investigating) committee were taken,and adopted for thé purpose of preventing a full and honest investigation of the North Dakota state industries and are in the nature of a third de- gree or star chamber proceeding unheard of in the annals of the courts or. legislative invegtigations of the United States, or in the orderly. Srocesses of civilized governments. “A corepllanes with the demands (of the com- mittee) to produce the bocks and records of the state industries *-*, * * *~* * * would stop the operation of said industries and destroy them. “It ig the opinion of the ‘governor, the attorney general and the commissioner of agriculture and labor, as members of the executive department of the state and as members of the Industrial Commis- * sion, that such proceedings are taken, not with a view to securing evidence or inspection of such books, records, and documents, but for the purpose of stopping the operaticn of said industries and of destroying them; and that such action was taken for no fair and honest purpose and is in violation of the constitution and laws of the state of North Dakota and is an attempt to usurp’ the perrogatives of the executive department of the state.” _ Seeking to lend full and reasonable“assistance to any investigation, however, the Industrial Commis- sion, after ordering employees to refrain from tak- ing books.or papers out of the institution, delivered the following order in the resolution: “You are * * * * * ordered to permit any person duly ‘authorized by a resolution: duly passed in. either House of the Seventeenth legislative assem- bly, or perscns duly delegated, by said rsolutions,’ carrying: proper credentials, showing such author- ization, to examine and inspect any of the above mentioned items or property which“are in your pos- session, under your control or in your use at any time during business hours on business days, pro- vided, however, such inspection shall only be per-~ mitted when your managing officer of the particu- Jar industry in which you are employed is resent in person during-such inspection, or has authorized or delegated some other person to act in his behalf in that respect. #You are further hereby ordered not to permit any person so inspecting any of such items or pro- perty to change, alter or remove any ¢f the same. “You are ordered and directed to do everything in your power, censistent with this order to assist and cooperate with such persons in securing for = them such information as’ they diay be seeking by such. &xamination and insnection, so that it will be passible for such committge or committees to ob- tain all the real facts &{fcerning the said industries if they so desire.” AA a e Commission is seeking by every avenue to prevent the. throttling of the state’s industries and the state’s credit Wy this political conspiracy. The success or failure of the Commission ‘in this strug. gle rests with the people. Will public opinion rise up and condemn for all time tactics of. politicians, who for the price of fleeting partisan success, would strike at the foundations upon which North Dakota is builded as one of the sister states of the union; would bring poverty and suffering to the hearthside of thousands of homes; would destroy that confi- dence upon which the state-must live in relation to the other states of the union? The Industrial Commission believes that public opinion will answer the ccnspirators in only one way, once the fac's have been placed before ‘the eople. The peoplé shall know the truth, iravest Consequences the. state institu- - aa 4 diy