The Nonpartisan Leader Newspaper, April 6, 1916, Page 9

L i A 7 The North Dakota Grain compan&, a.corporation with head offices at Du- . luth and owning' elevators at Dazey and Walum' in' this state, failed last month. - The outstanding facts in con- nection with ‘this business crash are as follows: ) - : About 40 farmers held storage tick- ets against'.the company for over 30,000 ‘bushels of various kinds of grain, worth $25,000. {A large number .of these stand a chance of losing a large part of the money they had tied up in this grain. The failure was due to poor busi- ness management; the- railroad -com--. niission finds the company has prac- tically been insolvent for two or three - yvears and yet continued to do business. The company, in violation of law, - shipped out and sold the grain be- longing to the farmers without pro- }t.;eéct‘ilng the farmers with a sufficient £ 4 has no way of enforcing the above law, beeause of lack of appropriation to employ elevator inspectors; farm- ers therefore have no assurance that this same thing will not happen else- where in the state. Chairman W. H. Stutsman of the railroad commission states he and his associates on the commission foresaw conditions such as this during the last legislature and in vain sought an ap- propriation to employ. elevator. in- pectors. . ; The railroad commission recom- mends a law making ‘it larceny for an: elevator to ship out stored grain belonging to farmers in excess of bonds put up by the company for the protection of its customers. e railroad commission proposes to start a: suit against the persons at . Duluth who received the grain ship- ped out of the two elevators, in an effort to regain possession of it for the farmers. OFFICERS OF COMPANY HAD OVERDRAWN ACCOUNTS Officers of the North Dakota Grain company at the time of the failure had overdrawn their salaries about $5000, but the railroad commission doubts if this can be collected back to help protect the farmer ticket- holders. The commission’s examina- tion of the: books of the - company showed P. E. Olson, the president, had overdrawn. his salary about' $3100. Treasurer E. H. Pugh of the qomYany had also overdrawn his salary. These-two men were crediting them- selves monthly with salaries of $100 each, but evidently not living on. this. allowance, because the books show their salary accounts overdrawn to pay private expenses according to the: railroad commission, and they have admitted paying personal ac- counts with ‘company checks. The law in regard to bonds elevat- ors must carry to protect storers of grain is contained in section 3111, compiled laws, This section requires a minimum bond of $5000 and states: “Such bond, specifying the location of each elevator, mill or warehouse operated by such individual firm or corporation, shall be in sufficient amount to protect the holders of out- standing tickets.” Supplementing this law the rail- road commission has in force ‘the fol- lowing rule: “No . person, firm or corporation “The railroad commission states it. tor Failure T THE NONPARTISAN LEADER They Bear the Risk of Gambling by th | ;Sto_ry of An Eleva owning or operating an clevator or warehouse in this state shall issue storage receipts in ~excess of the amount of grain in store in said ware- ‘house plus the amount of the bond filed by said warehouseman, without first filing with the board of railroad commissioners an additional bond to cover all such excess receipts.: Any violation of this rule shall be cause -for revoking the license of such ware- house.” -:. What were the facts at Daiéy and. Walum regarding the enforcement or observance of these laws and rules? -The"following facts are-furnished by - -the railroad commission: : A5 GRAIN SHIPPED FAR IN EXCESS OF BONDS To protect storers of grain at these two towns the North Dakota Grain company had a bond for $5000 each for the elevators, making $10,000. The company when it closed had $25,000 worth of storage tickets out among the farmers but only about $8000 worth of grain in the elevators. The protection the farmers had, thercfore, for the $25,000 worth of - storage tickets' they held was this amount of grain on hand plus the two bonds of $5000 each, making $18,000. The amount of loss to' the farmers therefore is™ $7000, unless the suits planned by the railroad commission are successful. : The company, “according to these facts, shipped out $7000 worth of the farmers’ grain for which the farmers were not protected, in' violation both of the law and the rule of the railroad commission. - - Most of the $7000 loss will fall on the ticket-holders at Dazey, because practically all of the grain the com- pany had on hand was in the Walum clevator and will have to go to protect ticket-holders there, who will not lose very much, if anything. Chairman Stutsman of the railroad . commission makes the following statement in regard to the failure: “The North Dakota Grain company North Dakotans in Florida Here is a picture of four North Dakota citizens taken at St. Peters- burg, a Florida winter resort. To the left is George S. Loftus of the Equity and to the right above is L. A. Trudell of Deering, North Dakota, one of the original boosters of the League. - At the left above is J. W. Boeing, a banker and farmer of Minot, and at the right below is Dr. J. Gressick, a physician of Grand Forks. The four North Dakotans met at St. Petersburg, where Mr. Trudell had been called by the death of his brother. The picture was given-the Leader by Mr. Trudell; who returned this month from Tlorida after ten weeks spent there. . Mr. Trudell joined the League when it had less than 400 members and he is one of its most earnest workers. NINE E AGAIN Speculators; ‘hat Carries a Lesson has practically been insolvent for two or three years, but of course the rail- road commission had no way of ascer- ‘taining this, and in fact the Northern .. Trust company, which went on its bond last July for $10,000, had no suspicion of its true condition, being assured by the banks of ‘Duluth that it was all right. -However, when the company was unable .to meet its drafts the banks closed down on it, and of course it had to go out of business. : “This is the first time in the experi- ence of the present members of the commission that stored grain has been shipped-out in excess of the bord furnished the state and where ticket- holders have suffered a loss on that account, but it is a matter that the commissioners have heen worrying about for several years, and we have d(lie%ded this very thing and anticipat- ed it. “There is no way mn which the rail- road commission can keep track of the 2000 elevators in the state and ascer- tain whether they are shipping out stored grain in excess of the amount of their bonds, BETTER INSPECTION OF ELEVATORS IS NEEDED “Last winter I urged upon the ap-- propriation committee of the legis- lature an appropriation for the em- ployment, of elevator inspectors whose mission should be to check up and keep track of the elevators in the state, so as_to determine which of them were violating this order of the commission by shipping out and sell- ing stored grain, but both my warn- ings and prayers for help were ignored. “It Seems to me that this is an ap- propriate time to agitate action. on the part of the legislature furnishing the commission with means to check up the elevators and keep track of their stored grain, and also to make it a criminal offense for an elevator to ship out stored grain in excess of its ability to redgem storage tickets, “We are going to make every effort to recover for the ticket-holders the stored grain of theirs shipped out by the company. Whether under the law the eclevators in Duluth which purchased this grain would be liable to account for it to the ticket-holders I1s a matter for the courts to decide, We have ascertained who purchased the grain sent out by the company and there is prospect of recovering a ]all"g}? pa:"t gf it. Negotiations are now progressin looking to the interested pargties ad% vancing money enough to take care of the deficit to the ticket-holders and we really have hopes of ultimately realizing practically the entire amount of the tickets. “The commission has a rule pro- hll;ltmg. the issuance of warehouse re- ceipts in excess of the amount of grain In store plus the amount of the bond, but the only penalty which this commission has power to enforce is a revoking of the elevator’s license, and this of course would not be a penalty against a corporation already insolvent. : . “Of course it is hard to make the danger apparent until something of this kind happens, but I think it ought to be easy now to convince the legis- lature that something should be done along these lines.” Senator Murphy and the Insurance Bills : He Helped to Kill State Control; How He’s President of Federation J. MURPHY of Grafton, recently P elected to the presidency of the ®new Insurance Federation of North Dakota, an organization frank- ly organized to fight compulsory state hail insurance, is the same Murphy, it now develops, who, as state senator, helped kill fire insurance regulation in North Dakota at the last session of the legislature. " The Leader has already shown how the insurance men who have organiz- ed” this new' association honored Lieutenant -Governor J. H. Fraine, now candidate for governor, by mak- ing him delegate of the North Da- kota insurance men to White ‘Sulphur Springs, where the national insurance convention will be held. Fraine, it was : shown, cast the deciding vote against insurance regulation in the senate, killing this legislation at the - last session. i Murphy’s work as senator ‘againsi fittempts to regulate insurance rates : was as striking as Fraine’s. He was chairman of the senate committee on insurance and in a position to get in some good work for the insurance men. On February 16, 1915 (Page - 427, Senate Journal, 1915), he report- ed ‘on behalf of himself and the mem- bers of the committee against pas- sage .of the bills introduced by the state insurance commissioner. to lace rates under the commissioner’s Juris- diction.; He recommended indefinite postponement of the bills and moved the recommendation be adopted, and the senate adopted it i - Later, however, friends of the bills succeeded in getting them reférred to the committee on judiciary, which re-: ‘ported them out favorably for pas- ' sage. Senator Murphy, however, had the pleasure of voting for the indefin- ite postponment of the bills again on February 24 (Page 717, Senate Jour- nal, 1915), when they were finally put te sleep after a tie vote and Lieuten- ant Governor Fraine had'used against ‘the bills his vote in breaking the tie. The Lé&hder’s articles on insurancé, showing the excessive rates on hail and fire policies and the smallness of the losses in proportion to premiums paid in North Dakota, have attract- ed considerable attention. The bul- letin of ‘the Insurance Federation of North Dakota dated March 22 is de- voted almost entirely to comment on what the Leader has had to say about ~insurance, A call is made to insur- ance men to stand together to pre- vent the state taking over hail insur- ance entirely from the private corpor- ations. Insurance men are urged to Jjoin the new organization “to protect” the " insurance business in -North Dakota. On the necessity of insurance men org4nizing the insurance bulletin quotes the following' story: “Upon being shown the inmates in the violent ward of an insane asylum, Elbert Hubbard once said to the only attendant: ‘My good man, are you not afraid of these violent persons?’ ‘Oh, no,’ replied the attendant, ‘I can handle any of them very nicely,’ ‘But,” continued Mr. Hubbard, ‘sup- ie i) EEE pose that they should all join together to attack you: What would .you_do then?’ The keeper -shook - -hig head - and replied: ‘If they knew -to get together and organize or mutual advantage they' would