The Nonpartisan Leader Newspaper, December 22, 1919, Page 3

In the interest of a square deal for the farmers VOL. 9, NO. 25 BY E. B. FUSSELL S THIS is written the Bank of North Dakota, established by the last North Dakota legisla- ture with a capital of $2,000,000 in state bonds, has been in fall operation. for four months. It opened its doors for the receipt of money July 28. The last monthly report, made at the close of business November 15, 1919, covers the operation of the bank for three and one-half months. It shows these facts: -The total resources of the bank are now $17 512 - 961.46, making it by far the largeut financial institution in the state of North Dakota and _ one of the largest in the North- west, ' ‘It shows a net profit of $58,- 497.74 for-the three and one-half months’ period, indicating the efficiency of its business man- agement. The writer of this article was present at the regular session . of the North Dakota legislature in January and February, 1919, . when the law estabhshmg the bank, the first of its kind in the United States, was passed. What was in the minds of the farmer legislators then was to carry out the plank in the League pro- gram providing for “rural cred- its at cost” and at the same time to provide a financial institution strong enough, if necessary, to finance other state industries, such as the terminal elevator and flour mill system, which the ‘people had been demandmg for years. But it is apparent already .that the Bank of North Dakota is proving a much greater bene- fit than the men ‘who drafted and passed the law ever dream- ed. And so, in Bismarck the other day, the writer asked F. W. Cathro,. director general of the bank, this question: “What service is the Bank of " North Dakota rendering ?” FIVE BIG SERVICES PERFORMED BY BANK _ Mr. Cathro put his answer un- der five heads. The service that is being rendered, he said, is five-fold. It consists of: 5 1. Farm loans. 2. Clearing house business. 3. Rediscounts. 4. Financing state .+ pending tax collections. 6. Financing state industries. Under the first heading, there had been received by the Bank of North Dakota up to November 15 a total of 1,676 applications for farm loans amounting to $6,588,940. There have ; been approved thus. far 232 application_s amounting to $927,200 and 10 appraisers are working on the remaining. applications as fast as the weather and the condltlon of the roads allow. - Aceordmg to the statlstlcs of the United departments Tlonpartigan Teader Official Magazine of the National Nonpartisan League ' ST. PAUL, MINNESOTA, DECEMBER 22, 1919 A magazine that dares to print the truth ¥ WHOLE NUMRBER 222 States department of agriculture the average rate of interest on farm mortgages in North Dakota has been 8.7 per cent. The Bank of North Dakota makes its loans at the rate of 6 per cent for inter- est, while an additional 1 per cent, paid each year, goes to pay off the principal under the amortization’ plan.. Most of the borrowers from the Bank of North Dakota designate their local bank as their agent in obtaining the loan and making payments on it thereafter. A charge of one-fourth of 1 per cent is made for this service. Even adding this agent’s commission to the interest rate (though it . " is not a compulsory charge) the average loan made- by the Bank of North Dakota is approximately 2% A portion of the counting rooms of the Bank of North Dakota, which handles clear- ings of more than a million dollars daily, General F. W. Cathro, seated at his desk. tion of the Federal Reserve bank the Bank of North Da- kota does the largest clearing business of any bank in the Its biggest work is to reduce farm mort- - gage interest rates, Northwest. Bank of North Dakota a Proved Success Total Resources Now More Than $17,500,000, Bank of the People Performs Serwces Allke for Farmers, Bankers and the State per cent below the average farm mortgage rate of - the private loan agent. The 1,675 farmers who had made application for state loans up to November 15, if they get the . $6,500,000 for which they apply, under this 2% per cent saving will save in interest charges $162,500 every year that their loans run, an average of more than $100 apiece each year. But the farmers who actually get state loans will not be the only borrowers who will benefit from the - real edtate loans made by the Bank of North Da- kota. The competition of the bank undoubtedly will result in lowering the interest rate on all loans made in the state, There are no accurate statistics on the amount of farm mort- gage loans in North Dakota, but estimates run from $100,000,000 to $309,000,000. If $200,000,000 should be taken as a fair figure petition of the Bank of North Dakota results in lowering the average mortgage rate 1 per cent, or from 8.7 per cent to 7.7 per cent, the annual saving to the farmers of the state, in re- duced interest charges, will be $2,000,000 a year. BANKERS ADMIT NEED OF CLEARING HOUSE Under the second heading, the clearing house business done by the Bank of North Dakota, it is interesting to note that on two state have met and discussed;the advisability of establishing a _ state clearing house. Nothing was done, but the need for such an institution has been proved by the volume of clearings through -the Bank of North Dakota, principally of intrastate items, have averaged more than $1,- 250,000 per day! Bank of North Dakota has taken away illegitimate profits which private banks were making is performing a function of im- mense advantage to the private banks of the state. Some of the banks are saving as much as $1,000 per month through hav- ing their intrastate clearing business ‘done through the Bank of North Dakota. By cutting down the expenses of the banks it is mo longer necessary for them to make undue charges for business in order to show a profit. . Under the third heading of “rediscounts” the Bank of North Dakota has been able to render service to both the banks and the individual borrowers. One of the greatest benefits of the fed- eral reserve system has been the and Director With the excep- to provide enough money for able to send their paper through (Continued on page 14) - AP AN AR T T their own localities, have been * and it is estimated that the com- - occasions private bankers of the - the fact that in the last month ~ While along some lines the . from farmers, in handling this clearmg business the state bank - fact that member banks, unable: A — e gy Ty e ey