The Bismarck Tribune

ESTIMATE LOW ON BOND ISSUE TO PAY LOSERS

Baird Says Bond Issue Will Be 50 Instead of 25 Millions

Should the proposed $25,000,000 bond issue for the payment of depositors to closed North Dakota banks be put into the constitution by the voters November 6, it will cost each person in the state $80, or an average of $400 per family, Kiwanians were told at a luncheon meeting here today.

The speaker was L. R. Baird, Bismarck, receiver of closed banks. A number of judges from all parts of the state, in Bismarck to attend the fall session of the state judicial council was present at the meeting.

Baird, asked by members of the Kiwanis club to explain the workings of the law because of his familiarity, did not take sides on the issue. He explained both sides of the issue.

The bond issue, if put into the constitution by the voters, would not be for $25,000,000 as is popularly supposed, but more than $50,000,000, Baird said.

He pointed out that it was proposed to borrow $25,000,000 at five per cent interest for a period of 10, 20 and 30 years, and that the interest on the amount would total more than the principal.

Under the wording of the law offered for passage, the work of the state guaranty fund commission in the last 10 years would be completely gone over by the liquidation board, he said, explaining that the accounts that had been rejected by the guaranty fund commission would be reheard by the district court in Burleigh county. Baird did not estimate the cost of rehearing the cases, but said that it would take a few extra judges, at least.

Baird explained the workings of the state guaranty fund and the purpose that it was intended for, saying that after it was designed by the legislature 10 years ago to pay losses to depositors in closed state banks, accounts were paid promptly for two or three years.

When a large number of banks failed the fund was exhausted, and directors of the commission found themselves unable to pay the accounts. Revised several times, the bill regulating the commission was finally revised entirely in 1925, the new plan being to pay all depositors a certain percentage of their losses at that time, and other payments were to follow later. At that time a payment of 10 per cent was made, and other payments of an equal amount were to follow as far as the fund would permit. All accounts of $10 and under were paid in full.

The new proposal, however, would have bonds to the amount of $25,000,000 issued, to cover the entire losses.

Three new members of the club were introduced at the meeting. They are Dr. F. R. Krause, Carl Sipple and Roy Bakken, all of Bismarck.

Guests at the meeting were Judge McKenna, Napoleon; Judge Lembke, Hettinger; James Morris, Carrington; Frank Bavendick, Bismarck; Judge J. A. Coffey, Jamestown; Judge A. M. Christianson, Bismarck; Judge Birdzell, Bismarck; William Owens, Williston; J. J. Johnston, Fessenden; E. J. Taylor, Judge G. Grimson, Langdon; W. A. MeIntyre, Grand Forks; Judge Kneeshaw, Pembina; Judge Cole, Fargo.