violation of this provision a misdemeanor, punishable by fine and imprisonment; it exempts from liability for loss any official depositing public funds in said bank, and the sureties on his bond; it authorizes the bank to receive deposits from any source, and authorizes funds to be deposited to the credit of the bank in any other bank provided by the commission; it guarantees all deposits in the bank and exempts them from taxation.

The bank, as a matter of fact, was given a blanket permission to do almost anything in the clause which authorizes it to transfer funds to other departments, institutions, utilities, enterprises, and all industries of the state; to make loans to political subdivisions thereof, or to state or national banks, and to make mortgage loans on real estate in amounts not to exceed one half its value, or on warehouse receipts not to exceed 90 per cent of the commodities evidenced thereby; but prohibits it from loaning on real estate more than 30 per cent of its capital, nor, in addition thereto, more than 20 per cent of its deposits.

The bank is under the supervision of the Industrial Commission created by the same legislature as the bank. The Industrial Commission is composed of the governor, the attorney general, and the commissioner of agriculture and labor; two of

these constitute a quorum, but the governor's approval of all orders, rulings, by-laws, or contracts is required before they become effective. Among other things the Industrial Commission is given power to fix rates of interest allowed and received, and to fix charges for services rendered by the bank; to purchase, lease, or condemn all requisite property, and to construct and repair buildings, but is prohibited from investing more than 10 per cent of the capital of the bank in buildings or fixtures for office purposes; to employ a manager and subordinate officers, and such contractors, architects, and other agents as in its judgment the interests of the state may require, and to define their duties, designate their titles, and fix their books and compensations; to discharge such employees whenever in its judgment the public interests require it; to prescribe the form of application for mortgage loans and provide for appraisal of real estate; to extend all payments under any real estate mortgage for one year in case of crop failure; to assign such mortgage to the state treasurer as security for bond issues.

The act also authorizes civil actions against the state on account of causes of action arising out of transactions connected with the operation of the bank, and requires the state examiner to inspect the bank at least twice a year, and report the re

sults thereof to the commission and to the ensuing legislative assembly.

The two features to be especially noted are the wide scope of business the bank is authorized to conduct and the political character of the Industrial Commission which directs the bank. A referendum vote of the state on June 26, 1919 endorsed the act creating the bank.

3. THE INDUSTRIAL COMMISSION

The source of authority or the controlling machinery in the experiment in state ownership, or what is termed "the new day," in North Dakota, is found in the Industrial Commission, created by the North Dakota Legislative Assembly of 1919 and ratified by a referendum vote of the state in June 1919. The commission is composed of the governor, the attorney general, and the commissioner of agriculture and labor of the state of North Dakota. Two members constitute a quorum for the transaction of business, but the governor's approval of all orders, rules, regulations, by-laws, and written contracts, adopted or authorized by the commission, is necessary, and such acts are not in force unless approved and signed by him. The governor is thus the hinge on which the work of the commission turns.

The Industrial Commission thus created is em

powered and directed to manage, operate, control, and govern all utilities, industries, enterprises, and business projects, now or hereafter established, owned, undertaken, or operated by the state of North Dakota, except those carried on in penal, charitable, or educational institutions. To that end the act creating the commission gives it power, in the exercise of its sound judgment and directs it to determine the location of such utilities, industries, enterprises, and business projects, and to acquire necessary properties by purchase, lease, or exercise of the right of eminent domain. The power of buying, selling, altering, changing, and promotion is thus placed in the hands of the commis.sion, which is given a blanket power to engage in any kind of business.

The funds for the creation of these enterprises are to come from the sale of state bonds in such amounts and in such manner as may be provided by law. Another act has provided for the issuance of bonds of the state of North Dakota to be known as "bonds of North Dakota mill and elevator series." To this must be added the appropriation out of the general fund of the state of $200,000, or so much thereof as may be necessary to carry out the act creating the Industrial Commission. Provision is made for accumulating a fund to repay this appropriation from the general funds

of the state by directing the commission to fix rates and charges with that end in view. To this must be added the power of the Bank of North Dakota to transfer funds to other departments, institutions, utilities, enterprises, and all industries of the state. The Bank itself is under the supervision of the commission.

The Industrial Commission has, also, power to appoint managers and subordinates for all business enterprises entered into and to remove and discharge any and all persons thus appointed.

The legality of the various acts necessary for the carrying out of the program of the League and the validity of the bonds to be issued having been upheld by a favorable decision of the United States supreme court, the next step was to raise the necessary funds with which to establish various industrial enterprises. The Legislature had authorized an issue of bonds up to the limit of $17,000,000, and so in 1920 an issue of $6,000,000 in bonds, bearing interest at from 5 to 54 per cent, was offered for sale, but found no market. Members of the League said that the financial interests were opposed to the state industrial program and so refused to take the bonds. The bankers, however. said that investors were unfavor