Subscribers enjoy higher page view limit, downloads, and exclusive features.
4 3 Y “odd in the Bank of SOSA 5 Sh spi hott The:Weather ‘Unaettied. THIRTY-NINTH YEAR TSR MAR oD THE BIS BISMARCK, NORTH DAKOTA, WEDNESDAY, FEBRUARY 16, 1921 CK TRIBUNE Last Edition PRICE FIVE CENTS OMPROMISE EFFORT FAILS BANKS FORMED QUT OF STATE BANK, CHARGED Hearing Before House Investi-! gation Committee Takes Up Leith Matter, ‘QUEER DEALS GONE INTO: Lofthus, Cathro, Brinton Are on Witness Stand—$11,000 Check Shown Evidence designed to show that the Peoples State Bank of Leith, now closed, obtained a large part of its) capital stock, through the Bank of) North Dakota through the medium of the Scandinavian-American bank at Fargo, that a draft for $22,000 qe the Bank of North Dakota had been used at the time of the last regular ex- amination of the Scandinavian-Amer- ican bank of Fargo when the bank » Which drew the draft had little money in the state bank, and further testi- mony by J. W. Brinton on a check amounting to approximately ‘$11,000 which he said he drew-on a bank ‘in, which he had practically noxfunds io; cover up a shortage in the Scandi-! navian-American bank, with the knowledge and approval of 0. K. Loi- thus and William Lemke, was brought out at the hearing of the house in- vestigation committee today. The witnesses for the session in the’ courthouse were O. E. Lofthus, state examiner; F. W.\Cathro, director-gen- eral of the Bank of North Dakota, and J.-W. Brinton, who had returned from St. Paul. . Attorney John Sullivan inquired in- to the People’s State Bank at Leith, in opening the hearing. He said that “we want to show that the Bank of North Dakota ot only furnished a substantial portion of the deposits and - bills payable, but we also have a sus- picion that the Bank of North Da- kota furnished a large part of the cap- ital stog: in this bank.” The prin- pal incorporator, he said, was_J. I. Cahill, formet state senator, now); member of the Board of Administra- tion and candidate for the nomination for secretary of state with Nonparti- san league endorsement. E The transaction at the time of the last examiaation of the Scandinayian- American bank was to the effect that the cashier of a bank at Prosper con- trolled by the. Scandinavian-American bank was forced to make a draft for $22,000'on the Bank of ‘North Dakota, when the bank had little money in the benk, and place it in the Scandinavian- American bank at Fargo in exchange for $22,000 of notes until the examina- tion was completed, Dec. 29, 1920 Check is Produced. ‘Brinton produced the much discuss- ed “$11,u00 caeck” which he brought back from St. Paul, The exact amount was fof $10,419.10, signed by J. W. Brinton, general manager, on a Mintie- apolis bank in which he had little money. The check was placed in the Scandinavian-American bank at the time of the Langer supreme court case. It was made’ payavle to O. bk. Lofthus. Brinton said he had talked with Lemke about the obligation, that he thought the suggestion that he give the check was made by Lofthus ia the presence of Lofthus and Mr. Thatchér, and they. were to hold the check until he could make it good. (During F. W. Cathro’s examination, he admitted that $1,500 had been paid to Jack Hastings, former financial manager of the Nonpartisan league, after Hastings had agreed to sell bonds on commission. ‘Cathro had been charged with embezzlement. in connecuon with tnis and deaied that it was anything but legitimate. Tracing Stock Deal, ° The records produced by Sullivan showed that v. I, Cahill had borrowed about $416 from the People’s State bank. Records also showed collateral put in thé Bank of North Dakota by the Scandinavian-American . bank | in- cluded three certificates of deposit is-| sued by the People’s State bank of Leith to J. I. Cahill, one Emsch and Adolph Zeller, totalling $14,539.81, which, Mr. Sullivan pointed out, would indicate the People’s State bank is- sued these certificates to these three men, who sent them to the Scandiaa- nian-American bank, which turned them into the Bank of oNrth Dakota as collateral. “Does it seem reasonable,” asked Mr. Sullivan, “that a man would bor- row $416 at 10 per cent interest from a bank from which he had a certificate of deposit for $4,846.61%” referring to theCahill loan and certificate. ‘It isn't likely,” replied the exam-: Records also indicated that $5 a share was paid in organization work on the Leith bank and that Jack Hast- ings was 2 stockholzer, but no infor- mation could be given by the witness, he said, as to who got the $5 a share. “We find $8,000 of paper of capital stock notes in the Leith bank itself, said Mr. Sullivan, “We find $14,000: ; ‘North Dakota in; It is a reasonable con-| is it not, that the Bank tact, | in other paper. clusion then, ; i of North Dakota furnished, in $14,000 used as capital stock the Leith bank?” Qualifies Statement. “yes,” replied Mr. iLofthus. Then he qualified the statement by saying he understood’ the paper in the Bank of North Dakota was two to one se- curity, and in that event it would be $7,009 furnished by the Bank of North akota. athe capital stock of the Leith bank (Continued on Page Seven) ‘TWO BANKS ON SLOPE CLOSED Two Slope country banks, the Peo- ples State of Leith and the Union Farmers State bank of New Salem. are closed today, according to wor received at the office of the state ex- ~ aminer. The Peoples State was known. as a “league bank,” J. 1. Cah, tormer senator and member of the board of administration, having been know2 as'one of its backers. CIGARETTES T0 STAY UNDER BAN WHERE WILSON By H. B. HUNT. Washington, Feb. 16—The reat turnover in administrations will take place March 5, not M ‘the new president is'inaugurated, 2s BY HOUSE VOTE Effort Made to License Sale of Them Is Defeated in the House SALARY BOOST CARRIES Measure Would Amend Consti ‘tution, and Must Go Before People for Vote The anti-cigarette law stays on the law statutes of North Dakota. ‘The house settled this question late yesterday afternoon, but not until there had been jiberal debate. came before the senate on two re- ports—a majority report of the judici- | ary committee for indelinite postpone ment, and a minority report for pass- age as amended. ‘The majcrity re- port prevailed. The minority of the committee had amended the bill to license the sale of cigarettes on payment of a fee of $50, prohibiting sales to minors and provid- ing other restrictions. Chairman Starke, of the committee, explained the minority attitude, “We believe that licensing would be more effective in keeping the cigarette away from the use of minors,” said Mr. Starke. ‘Now it is no greater of- fense to sell to minors than to adults. We have made the license high, so that probably not over one or two in a small community would handle cig- arettes, and they couid be easily watched. We have made penalties severe. Under present conditions cig- arettes are easily-obtainable and there is no control. Rep. Bauer opposed it. He said he ‘agreed there was “a lot of solace in a pipe or cigar,” but he couldn’t be- lieve there was in a cigarette. Cigar- ettes were sent to Europe during the war, Bauer said, and he declared “the tobacco men would have been poor bus- iness men if they hadn’t used the op- portunity to boost their business.” Wants It Iron-Clad. ‘ Representative Reichert declared he would be in favor of a law prohibit- ing the shipping of cigarettes into the state, answering a remark of Rep. Starke, to the effect that under pres- ent laws, cigarettes can be obtained by having them shipped in. Rep. Starke replied that it was doubtful it the federal government could prohibit the transportation of cigarettes in in- terstate commerce, as Congress can not restrict the shipment of anything not inherently harmful, and the cigar- ettes were not regarded harmful as was liquor. ‘Representative Boyd talked of cigar- ettes sent to France for soldiers, de- claring that “they often gave us cigar- ettes when they didn’t have any food” and that “they say cigarettes are bad so are bullets, and tea and coffee.” The vote for ‘indefinite postpone- ment, however, was overwhelming. Pay Boost Measure. The house passed house bill 188. providing for an amendment to the constitution, to be voted on by the people, fixing pay of legislators at $10 per day and 10 cents mileage. In passing a bill making an open season on muskrats until 1924 musk- rats included. There was some ob- jection. fish and game committee, were included in the closed season at the request of the fish and’ game com- mission, because muskrats made holes in the ice, permitting fish to live through the winter, and said some of (Cantinued on page 3) Rep. Bauer, chairman of the said they {| is generally supposed. President Wilson, Vice But the cabinet changes will not occur until March 5. The | new cabinet nominations will go lo a special session of the new senate on the afternoon of March 4 and will be confirmed. The secretaries’ commissions will be’ made out that night and be on the desk, of the new president for his signature when he shows up for work, March 5, The actual swear! ‘in of the new cabinet will take place in each department © between . o'clock and noon March :5. “What do yousexpect ‘to be doing March 5 and immediately there er, and where are you going to be? This question, put to each of the) administration heads. excepting the | president. elicited the following an- swers: Secret of Stite Colby: 1 hope to The bill: i catch an afternoon train to New York and begin to attend to private business.” COLBY Secretary of Treas- ury Houston: “I’m absolutely without plans either for the immediate or inde- finite future. Tr cently bought a new house here and probably will be eu- Joying myself at bes home.” HOUS1LON Secretary of War Baker: “T have reservations on the 7 p.m. train for Cleveland. I'll prob- ably put in Sunday unpacking boxes and hanging pictures in a new home and Monday will’ start in practicing law.” BAKER Atty. Gen. Palmer: “Vl turn this office over to my succe! sor March 5 and, for a few days will stay in Washington getting ready for a two or three-week vacation somewhere in the south, Then I'll return to Wash- PALMER ington and am seriously considering remaining here in the general prac- tice of la Postmaster Gen- eral Burleson: “As soon aS my succes: sor is qualified 1 shall leave for Tex- as to take care of my private interests and get out of poli- tics.” BURLESON WANT WILSON TO ACCOUNT FOR FOREIGN FUNDS Washington, Feb. adopted a_ resoluticn calling upon President Wilson for an itemized ac- count of his trip to Paris. There is atiout a mile of wire in the} interior of a piano. COUNTY TREASURER MEIDINGER WANTS N. D. BOND CANCELLED J. A. Meidinger, of McIntosh county has written Har- old Hopton, manager of the state bonding department that he wishes ‘his bond cancelled and that he wili secure a bond from a private com- pany. Mr. Hopton recently issued orders that the bonds given by the state to the county treasurers under the new state bonding act would not apply to counties where the treasurers were not’ depositing money in state bank on the grounds that the initiative law while it repealed the compulsory fea- tures of the law requiring deposits in the state bank did not give the county officials power to designate any other depositaries. Wants Bond Cancelled. . The letter follows: Dear Sir: Your favor of the Sth inst. re- ceived. warning me as T. understand it; that unless I deposited the Mc- J intosn county tax money in your bank 1 county treasurer } at Bismarck. and of which Mr. Cathro is the manager, the state bond under which I now am would be annulled. In answer wish to say: bond and return the premium to the county to which I think it is entitled. I will secure a private or some com- pany’s bond for our county board to consider when it again meets. , Personally I dislike to do this as it gives the banks and “Big Biz” an- other chance to holler about our North Dakota bank and even the old Scandindvian bank which I am trying | to defend all I can. Object to Tactics. The people here do not think that our North Dakota bank is treating the people of our county right. They gay that a perfectly good and solvent institution like this bank that takes all our tax money and has not given a single farmer of our county a loan is not treating the farmers fair to say the least. (Continued on page 3) 4 FAMILY WILL BE MARCH 6 ch 4, when | President | Marshall and Secretary to the Presi-| ; dent Thmulty will yield their’, jobs | Mareh 4. 10) 16.--The house! Cancel the! AND OFFICIAL Secretary. of In- terior Payne: “Goo taste requires that [ iatay here until my successor. qualifies, and IL. expect to spend the greater part, of Mar. 5 here in the office waitin; to turn it over to him. Then I'l go back to private lite.” | | | | i i | | PAYN Se ary of ‘Navy «Daniel “TH leave for Raleigh, N..C., the evening of March 5 and arrive there Sunday fnorning. I'll) go imme and wash) up. then to the Methodist church aon and ask forgiveness DANIELS ‘for my sind greet old friends. Monday morning (ll go down to the News and -Oh- server office, take off my coat, roll up my sleeves and become an editor again.” Secretary of Agri- eulture ! “Inauguration Day is Friday. On Sat- jurday Pl turn this j office over to my successor. Vl com- pre vacation in- to Sunday and on Monday leave for Des Moines. 1 have greatly enjoyed my experience here, but PN be mighty glad to get’ back to my Iowa friends und the publish- ing business.” MEREDITH Secretary of Com- merce — Alexander: “On the 5th I'l be arranging to take} my family back to Gallatin, Mo. where: I will reopen the o!d law office that has been closed for years, dust off the books and wait for ALEXANDER , clients.” Secretary of La- bor, Wilson: | “I'm not certain “ju what I'll be doing. but I'll probably go to my farm in Bloss- burg, Pa., as soon ag relieved of ofti- ‘cial duties.” | “WILSON As for President Wilson, Secretary | Tumulty said: “Mr. Wilson will go directly from the inauguration cer ; monies to his new home at 2340 S. | street, Washington, to take up his life as a private citiz Vice President Marshall thought a moment. “March 5? he said. “Hm-m-m—Welh I think I'll sleep late, pack my trunks and, get out of here. First a spell on the Chautau- qua circuit to get some money, then a trip to Europe with Mrs. Marshall.” As for Tumulty himself, “Ll be. practicing law here in Washington-- and be happy.” (Copyright, 1921, by Newspaper En- terprise Association. Photographs Copyrighted by Harris & Ewing and National Picture Service.) eee BAND CONCERT BILL FAVORED © BY TOWN GRIERS Club Votes to Ask Representa- tives in Legislature to Sup- port Measure The Town Criers of Bismarck are behind senate bill No. 133, to permit cities to spend money, cn approval of the people, for suport of municipal band concerts. Believing that it is @ measure which will permit people of cities and towns to further community spirit by the maintenance of a band ‘to give con- certs for the entertainment of all the: people, the club, at a meeting last night, voted to urge Burleigh county representative to support the measure. The bill passed the senate yesterday. The bill makes the question of city support optio it is pointd out, and the support would not be given unless there were demand for it, The club also, looking forward, dis- cussed a proposal to hold a big Fourth tof July celebration in Bismarck in which several organizations of the city would join. It was the sentiment that the proposition ought to be gen- erally” disc pd, and that a celebr ition, if any, is held, should_e vanything ever held in the way of en- tertainment for visitors in Bismarck. WANT S.D. BANK. | Sioux Falls, S. D., Feb. 16.— istab-| lishment of a state bank similar to| that af North Dakota, is proposed ia petitions being circulatea by the mem- bers of the Nonpartisan league of this | state. By ancient right. the archbishop of Canterbury is the only man in Eng- Yand who can confer a degree of med- \icine on a layman, and! 4 market. credit was considered ness Conditions in This Country MUST USE CAUTION Credit of World Depends Upon Safe and Sane Banking in America — Washington, Feb. 16.—Governor Harding informed congress today in BETTER TIMES SEEN BY RESERVE — BANK GOVERNOR Harding Optimistic Over Busi-; the annual report of the federal re-) serve, that the utmost care must be taken to’ conserve our credit and pre- serve the basis of our prosperi to avoid the extreme conditions prevail- ing in other countries. On the United States depends im large measure the so.vency, and the financial solidity of many other coun- tr This gr sponsibility which rests upon the unking system and calls iso of sound judgment and the sti economic and banking principles. Has Had Crisis, try is generally recognized as having had the er ind in looking to the future the spirit of greater confidence prevails. A ¢ 4 | . . . . . utly increases the re-|honds (o the investing public mainly for their reasons : As the year closed there: CONFERENCE WITH BANKERS . IN TWIN CITIES IS ENDED FOR TINE ATLEAST, REPORT | Doubt as to Whether Independents and Nonpartisans in Legis- lature Could Get Together One Reason for the Action—Bank- ers Unwilling to Float Bonds Under Present Conditions in State They Say—State’s for Bismarck. Representatives Leave Minneapolis (By Associated Press) Minneapolis, Feb. 16—Negotiations for the sale of North Dakota State bonds by Minneapolis and Chieago investment bankers are off, at least for the present, it was learned today. \ The sale of $6,000,000 in bonds had been contemplated as a means of putting North Dakota back on a sound financial basis. Representatives of the North Dakota state government have left Minneapolis convinced that they will be unable to float bonds at present. »Bank officials came to the conclusion that under ditions they did not want (o undertake the sale,of present, con- orth Dakota Doubt Validity Doubt expressed as to the y ct construction of sound ‘facet that the bonds already saction was off for the present, at les lidity of the bond issue and the ned but unsold \haye been offered in Chicago and New York by irresponsible individuals have been “In the reconstruction, this coun- diseredited among investors. Minneapolis bankers who sat in at the conference would mnake no definite statement today. They admitted that the tran- ast, and while it may be re- were many indications that business! opened that there is no immediate prospect. “We feel that the public would not take willingly,” said one banker, “to North Dakota bonds under present governmental generally was beginning to adjust it- self to new conditions and was pre- paring to succeed on a sounder and saner basis. “Because of the accumulation foreign commoditics however for which there is no market, countries which have been sending us their nothing marketable for which to pay for their imports. We are brought face to face with the problem of how tween them on any we can best extend long-time credit to European countries in order enable them to reconstruct their in- to make shipments to Europe which otherwise would be made to the Unit- ed States and flood our domestic Opposes U. S. Credit. Government financing of European by -Governor Harding to be a war-time expediency. Over 82 percent of the earnings of the federal reserve bank came from rediscounting for member banks. i unt amounted in 1920 to 3,623,000,000, in comparison with '$2,668,254,000 in 1919. of position of dictating to : DOCTORS FEAR conditions in that he governed.” state and we are unwilling to be placed in a to the people of the state how they should : Another reason given by some of the bankers was the con- surplus products find that they have (lief of opinion between the Nonpartisans and Independents in the North Dakota legislature, indicating that an agreement. be- ind of a program is almost impossible. While it had been roosed to find a market for $6,000,000 of bonds if the North Dakota legislature made certain changes in dustries and how we can extend cred- laws, the bankers now believe that even on these terms they could it to other countries to enable them not agree to float the issue. WOULD CHANGE Bf EMBERSHIP OFINDUSTRIAL COMMISSION Two bills were to be introduced in the legislature this afternoon, vi ally setting forth a program by the Independents on the conduct of state business affairs. One of the bills ‘provided for a change in the Industrial Commission .—providing it woyld be gomposed of the state treasurer, whd is John Steen; the secretary of state, who is fS NEAR DEATH Enrico Caruso Stricken With Heart Attack In New York City New York, Feb. 16.—Oxygen today was being administered to Enrico Ca- ruso, world famous tenor, who is wag- ing a fight against death. Last night he was stricken with a heart attack, which caused his phy- sicians to fear that he would die be- fore dawn, An unofficial bulletin issued his physician at 11 o'clock, said: “Caruso has rallied from a very. s vere attack. His condition iss: ous.” by See es WILL HOLD RATE HEARING Minneapolis, Feb. 16.--A hearing on freight rates on grain and flour for the Upper Missouri territory will be held here Feb. 23 by the Interstate Commerce Commission. Thomas Hall, and the Commissioner of Agriculture, who is John N. Ha- gan. ' The first two named officials, Inde- pendents, would replace . Governor Frazier and Attorney-General Lemke, under the bill. - : The second bill was to require the deposits of public funds in state and national banks. In brief it would provide for the removal of all public funds from the Bank of North Da- kota The ‘depository law would provide that all state and national banks are depositories and that all public mo: ey should be deposited in depositorics. This would take all funds from the Bank of North Dakota. The Industrial Commission i w would provide that one official shou'd hold office until the third Monday in January after the first general ele«- tion. the second to hold until the third Monday in Jan. after the second general election and the third unt!) the third Monday in January after the third general election. If there should be an election in the near future, and these bills are turned down, it is held likely that mney. would be submitted to the peo- ple. The Independent Voters association committee held a meeting last night, but no action was taken on the ques- tion of a recall, it was. said. - BANK OF NORTH DAKOTA FATE STUMBLING BLOCK IN LEAGU The question of the limitations of the Bank of North Dakota proved to be the stumbling block in the con- sideration of a proposed compromise agreement, by the Nonpartisan leagu- ers in Bismarck. The committee which went to Min- neapolis to confer with bankers was instructed that they should insist that the Bank, of North Dakota continue as the fiscal agent of the state in- dustries. The bankers were of the conviction RRR eee “MUST DO SOMETHING” IS EDICT HANDED TO OFFICIALS BY WOMEN A new, potent factor—the women voter—has entered the councils of the Nonpartisan league. There are 200 in the city, in a con- vention of the Women’s Nonpartisan clubs of the state. And many of them are making their presence felt. One of the delegates to the conven- tioy engaged in heated conference with Governor Frazier, F. W. Cathro and A. Johannsen in a hotel corridor last night. She “laid down the law.” The law was that “something must be done.” People “outstate” are becoming aroused over the failure of the Bank of North Dakota to pay state checks. especially school bills. The warning was given by this woman voter that such a condition cannot continue. School Teachers Unpaid. Many school teachers in the state are unpaid. It is id that $50,000 worth of school teachers salary ¢hecks were returned to various parts of the state by the local clearing house, having been sent here for col- lection from the Bank of North Da: kota. These checks were received in a few days, and went out in a bunch. Farmers in many communities have loaned money to pay school teachers salaries and keep the schools open. that they should be limited to the functions of a land bank, and the in- dustries financed in another manner. Must Be Agent. There are Nonpartisans who say i they will consent to the proposition Proposed, except that the Bank of North Dakota must continue as. the fiscal agent of the industries. The method in which, these industries should be financed, if the power of the Bank of North Dakota to advance money were taken away entirely, has not been determined. There would have to be a bond issue or tax levy to provide working capital, as well as to complete the Grand Forks mill. Bankers Fayor Plan, Claim, The Home Builders association has furnished some difference of opinion, but the proponents of the compromise plan.in the league ranks declare it is not the big question. If the houses now under construction are finished the work, can await the juagment of the public, they say. An appropria- tiow of $50,000 for the Home Builders i ained in the budget bill. Some Nonpartisans on the committees are said to be entirely willing tnai it be cut out. The Nonpartisans who claim that the compromise will go through de- clare the Minneapolis bankers want in to protect the money they have The situation is serious in some of North Dakota, far greater than the the including the city of Bismarck. Women Appreciate It. The woman voter app! ates this.| given She sees that_ if school teachers in| they have in the state are s ties, as well as in the country; amount the Bank of North Dakota has in the state. On the other hand. they say that if these bankers are not trance that the Riens North Dakota, many of whom come!ed they will withdraw entirely wn:l from outside the state, go awé the spring with registered chec say they were unpaid for a con: able period of time, there may empty school rooms next year. Some of these women counted on -strongly to bri be on the uestion of state finances. e been/assets of the Bank of North 1: pres- sure to bear in favor of a conpromise | nancing the 1921 crop they will | in} will not attempt to help finance the or] 1921 crop. der-| looked upon by proponents ct stats is This aid to the compromise plan as of far portance than releasing the * For unless the farmers get aid (Continued on Page Six)