William Lemke and the Bank of North Dakota

8/11/2019 William Lemke and the Bank of North Dakota

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The New Federalist January 26, 1998 Pages 5-7

Amerian Almana

The Amerian !ystem Prini"le

William Lemke and the Bank of North Dakota

By Richard Freeman

#hester Frit$ %i&rary, '( )* N( +a)ta

The original Bank of North Dakota. Inset: William Lemke as a young man.

n 1919, .illiam %eme reated the /an )* N)rth +a)ta, in the traditi)n)* the Amerian !ystem ")liies )* A&raham %in)ln0s e)n)mi m)&ili$a-ti)n )* 1861-65, )* Aleander amilt)n0s First Nati)nal /an, and )*/en3amin Franlin0s *)unding )* the 4e"u&li(

The )riginal legislati)n reating the /an )* N)rth +a)ta gae it wide-ranging ")wer as a state-)wned, "u&li redit, anti-usury deel)"ment &an(ts &)ld harter em")wered it t) )nentrate de")sits *r)m state agenies,and t) issue &)nds *)r the *inaning )* large-sale in*rastruture, h)me

&uilding, and agriulture( F)r a &rie* time, the /an )uld als) dis)unt "riate &an l)ans, in )rder t) in3et new liuidity int) N)rth +a)ta0s "riate &aning system(



The /an had &een )rgani$ed &y the N)n"artisan %eague NP%, a m)e-ment )* *armers and "r)duers esta&lished in 1915, )* whih %eme &eamethe leader( t engaged in an all-)ut war with the *inanier )ligarhy, "i)tedar)und the Angl)-+uth m)narhy, whih had illegally installed the '(!(Federal 4esere !ystem in 191 t) )ntr)l Ameria0s redit and m)netary

")liy, and thene t) im")se a ")liy )* usury(

This %)nd)n-entered )ligarhy *)rged a tri"le-headed 3uni)r )ligarhy inAmeria-)nsisting )* the grain artel, the rail artel, and the &aning artel

:whih )"erated *r)m a &ridgehead in ;innea")lis, ;innes)ta( ts "ur")se was t) undermine the Amerian re"u&li( At the turn )* the entury,the artels inreasingly l))ted the *armers )* Ameria( They ran the entral

")rti)n )* the 'nited !tates as their "ers)nal slae "lantati)n< the *armers &eame indentured hattel, hained &y high inde&tedness, and reeiing

*r)m the grain )m"anies )nly )ne-hal* t) tw)-thirds )* the alue )* theirr)"( The *arm e)n)my &egan t) deay(

The /an )"ened its d))rs )n July 28, 1919( =er the net three years, thetri"le-headed )ligarhy did eerything in its ")wer, legal and illegal, t)

&anru"t and destr)y the /an and its deel)"ment "ers"etie( This &eame )ne )* the de*ining &attles )* the early "art )* the 2>th #entury(?ah "hase )* &attle was trum"eted ar)ss the )untry &y news"a"ers suhas The New York Times, whih thunder)usly attaed %eme and the NP%(Amerians t)) sides )n the /an uesti)n( Ar)ss the )untry, milli)ns )*

*armers, w)rers, and &usinessmen su"")rted the /an(

.hy was this *ight s) im")rtant@ N)rth +a)ta0s tiny ")"ulati)n was lessthan that )* any )* Ameria0s 5> largest ities at the time(

.illiam %eme 1878-195>, as a re"resentatie )* a generati)n &)rnsarely 15 years a*ter A&raham %in)ln0s Presideny, aggressiely &r)ught%in)ln0s Amerian !ystem )* ?)n)mis int) the 2>th #entury( Alth)ughthere is a limit t) what a state deel)"ment &an an a)m"lish, sine*undamental e)n)mi s)luti)ns usually in)le nati)nal )r internati)nal

)n*igurati)ns, n)netheless, as a germ-"rini"le whih an s"read t) )therstates and &e)me the &asis *)r nati)nal "r)grams eatly what .illiam%eme had in mind, a state &an an hae a ")wer*ul im"at( Further,within that "ers"etie, a state &an an adane state deel)"ment, d)ingwhat is n)t the "r)ine )*, )r d)ne &y the *ederal g)ernment(



%eme &elieed:as did #)tt)n ;ather, /en3amin Franlin, enry #lay,enry #arey, %in)ln, and amilt)n &e*)re him:that in a re"u&li, thenati)n-state an interene t) &e a *)re *)r the a)m"lishment )* g))d,thr)ugh anti-usury, anti-slaery, dirigisti state-*)stered and -*inanede)n)mi deel)"ment( This )ne"t deries *r)m the thining )* the great

"hil)s)"her and sientist )tt*ried .ilhelm %ei&ni$, wh)se ideas hel"ed*)und Ameria( 'nder the general wel*are lause )* the #)nstituti)n, thestate *)sters the well-&eing )* its iti$ens, &y "r)iding #lassial eduati)nt) deel)" the )gnitie ")wer )* the mind( t issues and m)&ili$es hea"and a&undant redit t) manu*aturing, agriulture, )nstruti)n, mining,trans")rtati)n, and in*rastruture(

This )mmitment led Ameria int) &e)ming the greatest industrial-agriultural re"u&li in the w)rld, &y the turn )* the 2>th #entury(

?)n)mist %ynd)n %a4)uhe has reealed that the underlying BseretB t)why this meth)d :&ased in the Plat)ni traditi)n:w)rs, lies in thedeel)"ment )* the ")wer )* reas)n( n his reent "iee BThe .ells )*+))m,B %a4)uhe wr)te,

The anti-entr)"i generati)n )* net "hysial-e)n)mi "r)*ita&ility,lies within the a"aity )* the indiidual human mind t) generatealidated dis)eries )* new "rini"le, and t) transmit th)sedis)eries t) )ther minds &y meth)ds )* )gnitie re"liati)n( This

is e**eted thr)ugh the generati)n and disseminati)n *)r "ratie )*alid dis)eries )* "rini"le, dis)eries whih are )riginallygenerated, and re"liated within the s)ereign )gnitie "r)esses )*the indiidual mind(1

The transmissi)n )* these sienti*i dis)eries t) the e)n)my, thr)ugh themahine t))l "rini"le and in*rastruture, "r)dues an inrease in thea"ital-intensiity and ")wer-intensiity )* the "r)dutie m)de )* thee)n)my, whih, when 3)ined t) the im"r)ed )gnitie ")wers )* la&)r,inreases the rate )* anti-entr)"i e)n)mi atiity( ;an inreases mastery

)er nature(

'nder the New C)r &aning h)uses )* J(P( ;)rgan, et al(, the nati)n0srailr)ads were trans*)rmed *r)m an engine )* deel)"ment, int) an instru-

1 %ynd)n ( %a4)uhe, Jr( BThe .ells )* +))m,B EIR, D)l( 2E, N)( 51, +e( 19, 1997, ""( 12->(



ment *)r s"eulati)n, and *)r g)uging the *armer with sandal)usly high railrates *)r m)ing grain t) maret(

Ao!e: a train of the ".#. $ilitary Railroad% constructed y Lincoln&s "nion

forces. Left: Araham Lincoln. Belo' right: (.). $organ.

Lemke&s *o+Thinkers

+uring the *irst hal* )* the 2>th #entury, %eme had seeral Amerian

!ystem, anti-*ree trade )-thiners, wh) ated as he did, t) )rder Ameria0se)n)my a)rding t) these "rini"les !en( e)rge N)rris )* Ne&rasa,wh) *athered the Tennessee Dalley Auth)rity< !en J)hn Geny)n )* )wa,wh) intr)dued legislati)n *)r a nati)nal in*rastruture )mmissi)n in 1925<#arl +( Th)m"s)n, wh) headed the Pu&li =wnershi" %eague, whih)rgani$ed *)r the &uilding )* "u&li utilities and in*rastruture, inluding the#hiag) sewage system and numer)us dams and waterways< 4)&ert.agner, !r(, wh) *)ught *)r in*rastruture and la&)r ")wer< 4)&ert%aF)llette, !r(, and s) *)rth(

/y the early 192>s, they had *)rmulated eerything ")sitie that was t) &eame the 19>s New +eal( The ")m")us "resum"ti)n that %)rd J)hn;aynard Geynes had t) )me *r)m )lla"sing ?ngland, with his ne)-;althusian ide)l)gy, t) instrut the "))r &award Amerians )n h)w t)

&uild in*rastruture, is a&surd(



+uring the 192>s, %eme and the mem&ers )* the N)n"artisan %eague werela&elled ultra-#)mmunists, and a)lytes )* %enin< during the 19>s, when%eme ran *)r President )* the 'nited !tates )n the 'ni)n Party tiet, hewas alled a right-wing "aran)id and anti-!emite( /)th harateri$ati)nswere lies(

The starting ")int *)r the truth is that %eme )nsidered A&raham %in)ln t) &e Bthe greatest President Ameria eer had(B n a 199 &)), %emeu)ted an edit)rial *r)m the )ligarhy0s m)uth"iee, the Times )* %)nd)n,whih may hae &een slightly edited &y the time %eme g)t his hands )n it,

&ut n)netheless aurately re*lets /ritish thining( The Times edit)rialattaed %in)ln0s green&a urreny ")liy, whih %eme su"")rted

* that mishie)us *inanial ")liy whih had its )rigin in the N)rthAmerian re"u&li during the #iil .ar in that )untry sh)uld &e)meindurated d)wn t) a *iture, then that g)ernment will *urnish itsm)ney with)ut )st( t will "ay )** its de&ts and &e with)ut a de&t( twill hae all the m)ney neessary t) arry )n its )mmere( t will

&e)me "r)s"er)us &ey)nd "reedent in the hist)ry )* the iili$edg)ernments )* the w)rld( The &rains and wealth )* all )untries willg) t) N)rth Ameria( That go!ernment must e destroyed, )r itwill destr)y eery m)narhy )n this gl)&e( ?m"hasis in )riginal(

n 192, %eme was eleted &y the "e)"le )* N)rth +a)ta t) the '(!(

)use )* 4e"resentaties, sering in 19E1, and then in 19E-5>( =ne )*his *irst ats in #)ngress was t) intr)due (4( 8E, a /ill ?sta&lishing the/an )* the 'nited !tates, that w)uld a&)lish the Federal 4esere /)ard )*)ern)rs and esta&lish a /an )* the 'nited !tates( e wr)te that the

"ur")se )* the "r)")sed /an was t) generate a&undant redit t) *inaneB"u&li w)rs and internal im"r)ements wheneer and whereer there wasunem"l)yment( This w)uld "reent en*)red idleness and w)uld utili$e thela&)r that is n)w g)ing t) waste(B

This thining in*used %eme0s suess*ul and )urage)us e**)rt t) reate the

/an )* N)rth +a)ta(

North Dakota (oins the "nion

+uring the "eri)d *r)m 1875 until 19>>, when the re"u&lian a""r)ah t)e)n)mis was in e**et, N)rth +a)ta "r)gressed *r)m &eing a relatiely

&award wasteland int) a state with a gr)wing ")"ulati)n and e)n)my<



*r)m the turn )* the entury )nward, under the )ligarhial m)del, thee)n)my and )nditi)ns )* li*e regressed(

'" until the 187>s, the +a)ta Territ)ry, )m"rised )* what is n)w N)rthand !)uth +a)ta, )nsisted )* l)ng strethes )* "lains, d)tted with

m)untains and riers( There were *ew inha&itants )ther than hunters andtra""ers(

/ut in the "eri)d 1861-65, the "r)teti)nist dirigisti e)n)mi ")liies )*the %in)ln administrati)n, "r)dued gr)wth *)r the entire nati)n( %in)ln

"ut an end t) the s)urge )* slaery, and de*eated the #)n*ederate insurre-ti)n( n s) d)ing, he needed t) m)&ili$e the e)n)my *)r war, &ut his

")liies went *ar &ey)nd that( They inluded

H )ernment su&sidies, &)unties, grants )* land, and )ther measures t)

&uild the railr)ads( 'nder this ")liy, Amerian rail traage m)re thanuintu"led, *r)m 1,>>> miles in 186> t) 167,>>> miles in 189>( Thetrans)ntinental rail system was &uilt(

H The deel)"ment )* the mahine t))l "rini"le, under the guidane )*%in)ln0s great adiser, enry #arey(

H 'nder the in*luene )* the 19th-entury rail Bsiene drier,B whihdemanded ast am)unts )* steel *)r l))m)ties, tras, rail &ridges, et(,the steel industry was &uilt( This was assisted &y #arey )lla&)rat)rs

Th)mas !)tt and Andrew #arnegie(

H The granting )* large trats )* '(!( g)ernment-)wned lands andterrit)ries t) settlers, "r)ided that they w)uld deel)" the land( This was*)stered &y the )mestead At, and the Tree #laim and Pre-em"ti)n Ats(

H The hartering )* land grant )lleges, whih &eame the selet)n *)r many)* t)day0s state uniersity systems(

H The esta&lishment )* a regulated nati)nal &aning system, with thereati)n )* the ateg)ry )* nati)nally hartered &ans, and the re-esta&lish-ment )* a single nati)nal '(!( urreny, t) &e used t) *inane gr)wth(

%in)ln had t) und) the treaher)us w)r )* President Andrew Jas)n, wh)had destr)yed the !e)nd /an )* the 'nited !tates, thus unleashing a ha)s)* *ly-&y-night Bwildat &ans(B Furtherm)re, &y 186>, there were 7,>>>se"arate and aut)n)m)us urrenies in Ameria, m)stly issued &y "riate

&ans(



n 1862 and 186, %in)ln and the '(!( #)ngress "assed the nati)nal/aning Ats, whih reated IE5> milli)n in '(!( Bgreen&asB &eause )*the )l)r )* the in )n the &ill( This was a nati)nal s)ereign urreny(/ans )&tained these green&as *r)m the g)ernment &y "ledging theirh)ldings )* '(!( g)ernment &)nds against them( The &ans then lent andirulated the green&as t) *inane industrial and agriultural gr)wth(

The resulting e"l)sie gr)wth trans*)rmed the *arm states( 4ailr)ads riss-r)ssed the area, &ringing with them terminals, eleat)rs, adaned *armeui"ment, nati)nal marets, et( #ities s"rang u", and attrated &y thisdireted gr)wth, "e)"le m)ed int) the ;idwest and Plains !tates( 'nderthe im"etus )* this ")liy, in 188>, the '(!( g)ernment and territ)rial land)**ies assigned a&)ut 2 milli)n ares t) settlers in the +a)ta Territ)ry< &y188E, )er 11 milli)n ares had &een trans*erred t) settlers(

A)rding t) the 12th #ensus )* the 'nited !tates, in 188>, the area )* the+a)ta Territ)ry, had a ")"ulati)n )* )nly E,896( Ten years later, in 189>,it had gr)wn t) 182,719, a *ie*)ld inrease =ne-uarter )* the state0s

")"ulati)n were newly arried ?ur)"ean immigrants, m)stly *r)m ermanyand !andinaia(

N)rth +a)ta0s rih "lains were ideal *)r wheat *arming, "r)duing a eryhigh grade )* winter wheat, and als) s"ring wheat, "r)duing ery high-uality *l)ur( N)rth +a)ta &eame a leading wheat-"r)duing state a

")siti)n it still h)lds t)day(n 1889, )n the &asis )* this gr)wth, the '(!( #)ngress diided the +a)taTerrit)ry int) N)rth and !)uth +a)ta, and admitted &)th as new states int)the 'ni)n(

/ut the /ritish )ligarhy saw this "lenti*ul deel)"ment, and s)ught t) "utan end t) it( n 1875, the %)nd)n *inaniers )rhestrated the "assage )* the'(!( !"eie 4esum"ti)n At it went int) e**et in 1879, whih retired: i(e(, destr)yed:a ")rti)n )* the green&as, and "ut the '(!( )n a de*lati)n-aryK)ntrati)nary g)ld standard(

T) rule this area, %)nd)n set u" the ;innea")lis headuarters )* the artels(Fr)m here, the tri"le-headed )ligarhy ran the Plains !tates:*r)m )wa t)the +a)tas:as a slae "lantati)n, whih su&3eted the *armer t) re"eated,seere l))ting, threatening his ery eistene(



*artels and "sury

T) understand what %eme )n*r)nted, let us eamine this tri"le-headedartel

H The &aning artel and usury the #ity )* %)nd)n, )"erating thr)ugh .all!treet, and se)ndarily, s)me &ans in #hiag), )ntr)lled the ;innea")lis

&aning sene, harged usuri)us interest rates< N)rth +a)ta0s natie &anshad minusule a"ital &ases, and were easily )rdered ar)und(

The *armer had t) &)rr)w t) *inane "urhases )* *arm mahinery andin*rastruture, as well as s"ring "lanting( A 1915 study &y '(!( #)m"tr)ller)* the #urreny J)hn !( .illiams, )n the lending "atterns )* all nati)nallyhartered &ans, *)und that tw) )ut )* eery three N)rth +a)ta nati)nallyhartered &ans harged interest rates )* 1>L )r higher, at a time when 1>L

was de*ined as the usury limit( Nearly hal* these &ans harged interestrates )* 12L )r m)re( !tate-hartered &ans harged interest rates as high as>L

The &ans als) harged ery high *ees, )*ten eual t) seeral "erentage ")ints )* the l)an, t) )riginate the l)an(

H The rain #artel led &y the Pills&ury and Peey *amilies, wh) were s))nt) &e 3)ined &y the trans"lanted ?ur)"ean grain-trading *amilies )* Andre,Fri&)urg, +rey*us, and ;a;illan, this artel )wned all the im")rtant mills

t) whih *armers *r)m N)rth +a)ta, and the surr)unding states, had t) shi"their grain t) &e milled int) *l)ur( N)rth +a)ta had n) inde"endently)wned grain mill )r eleat)r( The artel als) )ntr)lled the grain ehangesin +uluth and ;innea")lis, and "aid ridiul)usly l)w "ries t) the *armers*)r their grain( The artel heated the *armer, under"aying him *)r his grain(=ne meth)d )* heating was undergrading !ee Ta&le 1(

The eleat)r )"erat)r, &y this deli&erate undergrading, sim"ly "aid the*armer >-E>L less than his wheat was w)rth( The eleat)r )"erat)r, )r thegrain artel-)wned ehange trader in ;innea")lis, ")eted the the*t-

"r)*its *r)m the di**erene(



TABL, -

"ndergrading y Duluth ,le!ator% -/0

/ushels /ushels

4eeied !hi""ed

N)( 1 N)rthern 99,711 196,288

N)( 2 1E1,E55 E67,76E

N)( 272,>E7 21,5E9

N)( E 2>1,267 N)ne

N) rade 116,>21 N)ne

4e3eted 59,7E2 N)ne

=n hand all grades 12,7

The grades )* N)rth +a)ta wheat are N)( 1 ard, N)( 1 N)rthern, N)( 2, N)( , N)( E, N) rade, and 4e3eted( n 1915, +r ?dwin %add, "r)*ess)r)* hemistry at the N)rth +a)ta !tate Agriultural #)llege, and *))d)mmissi)ner )* N)rth +a)ta, using an e"erimental mill, re")rted that

wheat graded N)( E was *)und t) mae 67(L *l)ur< N)( wheat t) mae69(E1L *l)ur< and N)( 1 wheat t) mae 7>(11L *l)ur< s) the di**erene inmaing *l)ur &etween the N)( 1 and the N)( E wheat was )nly L, &ut a N)(E graded wheat *ethed a muh l)wer "rie than N)( 1(

A 19>6 re")rt &y the N)rth +a)ta /aners0 Ass)iati)n, whih inestigatedgrain-mareting "raties, *)und, as the ta&le sh)ws, that at )ne +ulutheleat)r )"erat)r usually a &an )r railr)ad )m"any graded 7L )* thewheat that it &)ught *r)m the *armer, as N)( )r N)( E grade, )r l)wer< &uta*ter miing a little &it )* higher graded wheat int) the l)wer graded &ins, it

s)ld m)re than 75L )* the eat same wheat at N)( 2 )r N)( 1 grade(



Turn of the century steam+1o'ered tractors% a technological inno!ation made

1ossile y Lincoln&s American #ystem 1olicies.

t didn0t end there( The *armer had t) "ay a )mmissi)n eual t) 1L )* thealue )* the wheat, t) the eleat)r )"erat)r )r the ehange-trader *)r itsgrading and handling the grain(

H The 4ail #artel at its a"e were tw) ma3)r lines, the N)rthern Pai*i 44and the reat N)rthern 44, whih sered the u""er ;idwest and #entralPlains )* the 'nited !tates( These lines were )wned &y the New C)r

&aning h)uses )* J(P( ;)rgan, ?dward arriman0s /r)wn /r)thersarriman, and the Ja)& !hi** and .ar&urg *amily-)wned Guhn %)e&inestment *irm( =ne an instrument *)r nati)nal deel)"ment, the railr)adswere n)w an instrument )* s"eulati)n:the &ans re"eatedly l))ted the

railr)ads and dr)e them int) &anru"ty:and )* g)uging, harging the*armer sandal)usly high rail rates *)r m)ing grain t) maret(

F)r eam"le, a *armer "aid I91(8> t) shi" a 6>,>>>-")und ar )* wheat *r)m;in)t t) rand F)rs, N)rth +a)ta, and then m)re t) shi" t) ;innea")lis(The *armer sim"ly )uld n)t esa"e the shi""ing *ee:een i* he s)ld the



wheat t) a l)al grain eleat)r, the shi""ing harge was taed )n, as "art )*the )st )* Bgetting the wheat t) maret(B

N)rth +a)ta had n) inde"endent, indigen)usly )wned rail line(

n all, assessing the )m&ined e**et )* the multi"le l))ting, the tri"le-headed )ligarhy "ratied "rimitie aumulati)n l))ting s) seere thatthe *armer was *)red t) anni&ali$e his "lant and eui"ment, his s)il, andthe liing standard )* his *amily( This aused a &read)wn in "r)duti)n,

&el)w the &reaeen leel needed *)r )ntinued surial, threatening the*armer and agriulture itsel* with annihilati)n(

The emergeny alled *)r a leader wh) )uld shi*t the "aradigm rush the)ligarhy and its ")liy )* usury, and reie the amilt)n-%in)ln meth)d)* anti-usury, "r)-deel)"ment e)n)mis(

.illiam %eme was &)rn )n Aug( 1, 1878, in Al&any, ;innes)ta, andm)ed with his *amily t) rand F)rs in the +a)ta Territ)ry in 1881( is*ather, Frederi %eme, had &een &)rn in 18E in =ttend)r*, Prussia,m)ing with his "arents t) Ameria in 1851( n 1861, as the #iil .areru"ted, Frederi 3)ined the 'ni)n Army, sering with #)m"any ?, Third.is)nsin #aalry, whih, during the war, st)""ed the insurreti)nary#)n*ederate Army0s adane at !t( %)uis, ;iss)uri( Frederi %emestr)ngly su"")rted %in)ln and the 'ni)n( T) Frederi, %in)ln was theman wh) saed Ameria(

/i)gra"her ?dward /la)r&y, in his &i)gra"hy )* %eme, Prairie Rebel:

The Public Life of William Lemke, re")rted,

.hen in #)ngress Ms)metime a*ter 19, .illiam %eme realledthat his *ather distrusted the /ritish &eause he &elieed they had

"r)l)nged the M#iil .ar &y hel"ing the !)uth with the intenti)n )* 3)ining Frane in a su&seuent "artiti)n )* the 'nited !tates(

That iew )* /ritain:whih )rhestrated the #iil .ar, in )rder t) "artiti)n

and )u"y the 'nited !tates:was the uniersal, and aurate, iew )*alm)st all 'ni)n eterans )* the #iil .ar, and )* m)st Amerians duringthe 186>s( This )utl)), assimilated *r)m his *ather, remained ingrained in.illiam0s thining, sha"ing it in a "assi)nate way *)r the rest )* his li*e(

n 19>>, Frederi %eme was eleted t) the l)wer h)use )* the N)rth+a)ta !tate %egislatie Assem&ly, sering )nly a year &e*)re he died( e



su"")rted legislati)n de*ining usury and regulating interest rates:an issuewhih .illiam w)uld later ham"i)n(

Lemke ,nters )olitics

.illiam %eme attended the 'niersity )* N)rth +a)ta, and then )&taineda law degree at Cale 'niersity in 19>5( e &eame a lawyer, &ut his)nerns led him int) ")litis, and *)r him, that meant ad)ating A&raham%in)ln0s e)n)mis( As we shall d)ument &el)w, %eme *)ll)wed%in)ln0s "r)-deel)"ment ")liies ")liies in his *ight *)r the /an )*

N)rth +a)ta, and als) in his all *)r the reati)n )* a /an )* the 'nited!tates(

N)rth +a)ta had had s)me ")litial *arm m)ements in the "ast( n the188>s, s)me N)rth +a)ta *armers 3)ined the nati)nal P)"ulist Party, whih

trans*)rmed *arm "r)test int) a m)ement that "r)tested real e)n)miin3usties, &ut whih )**ered n) direti)n *)r a s)luti)n t) the in3usties(

+uring the *irst deade )* the 19>>s, a gr)u" )* N)rth +a)ta and;innes)ta *armers *)rmed the !)iety )* ?uity, whih, a)rding t) )nehist)ry, was Ban )rgani$ati)n *)stering "r)duers0 and )nsumers0))"eratiesB and was B*)ught t))th and nail &y the "riate )r")rati)nswhih denied it aess t) the regular hannels )* trade, irtually "reentedits )&taining redit, and issued )ntinu)us "r)"aganda against it(B

n 1911 )r 1912, %eme 3)ined the !)iety )* ?uity as its lawyer, &e)mingatie in all as"ets )* its w)r( A "rime )nern )* the !)iety )* ?uitywas t) get N)rth +a)ta t) )nstrut a state-)wned grain eleat)r( N)rth+a)ta had n) inde"endent grain eleat)r system, 3ust as it had n) netw)r)* grain mills( /ut suh a state-)wned eleat)r w)uld grade the *armer0sgrain *airly, and harge him a reas)na&le st)rage rate(

n 19>9, the N)rth +a)ta legislature had a"")inted a /)ard )* rain#)mmissi)ners t) study whether the legislature sh)uld )nstrut a graineleat)r( The /)ard re")rted *a)ra&ly(

)weer, the N)rth +a)ta state )nstituti)n reuired an amendment &e "assed, in the *)rm )* a &all)t re*erendum, &e*)re the legislature )uldauth)ri$e the &uilding )* an eleat)r( n a)rdane with that, tw) re*erendawere "laed )n the &all)t and "assed, )ne in 1912, the )ther in 191E, eahtime &y a three-*)urths ma3)rity )* the )ters( The *irst auth)ri$ed the statet) )nstrut a grain terminalKeleat)r in a state )ther than N)rth +a)ta< the



se)nd re*erendum auth)ri$ed )nstruting a terminal within the state( n191, the legislature een "assed a ta ley )* )ne-eighth )* a mill )n all

"r)"erty, t) raise the *unds needed t) )nstrut the terminal(2 )weer, the;innea")lis-&ased three-headed )ligarhy, alarmed &y the "r)")sal,su&seuently a3)led and )wed the N)rth +a)ta legislature int) re3etingthe "r)")sal(

t was lear that, in the *ight t) de*eat the triumirate )ligarhy, the !)iety)* ?uity and )ther eisting )rgani$ati)ns were t)) te"id, and w)uld n)tsueed( .hat was needed was an )rgani$ati)n with a strategi sense,)urage, and an a&ility t) d) mass )rgani$ing( n 1915, the N)n"artisan%eague was *)rmed( t w)uld &e una**iliated and )utside the tw) ma3)r

")litial "arties:hene the name Bn)n"artisanB: &ut w)uld run itsandidates inside th)se "arties, while )ntinuing t) d) mass )rgani$ing )*

the ")"ulati)n ar)und its )ne"ts and ")litial direti)n(%eme m)ed int) the N)n"artisan %eague NP% sh)rtly a*ter its *)unding(The NP%0s leadershi" was led &y a three-mem&er eeutie )mmittee%eme< Fred .))d, a t)"-*light *armer )rgani$er, and Arthur #( T)wnley,

"resident )* the NP%, *r)m 1915 t) 1921, and, with his &r)ther, the largest*la-gr)wer in N)rth +a)ta, with 8,>>> ares(

The N)n"artisan %eague0s mem&ershi" ame *r)m n)n-)nenti)nal gr)u"sthe !)iety )* ?uity, the Nati)nal Farmers 'ni)n, the !)ialist Party '!A,

elements )* the )ld P)"ulist and Pr)gressie Parties, the range, ari)us)ther *arm )rgani$ati)ns, and a num&er )* inde"endents( ?ah )* thesegr)u"s w)uld laim that it was res")nsi&le *)r the NP%0s direti)n, andwhile they did eert s)me in*luene )er the NP%, it was inreasingly%eme, and his Amerian !ystem e)n)mis, whih sha"ed NP% ")liies(

2 A mill is a unit )* m)netary alue eual t) a th)usandth )* a '(!( d)llar(

3 n 1912, a*ter seere )ld weather and sn)w damaged the *la r)", s"eulat)rs*inished it )**, *)ring the "rie )* *la d)wn t) I1 "er &ushel( .hen T)wnley went &anru"t, with I8>,>>> in de&t, he deided t) tae )n the s"eulat)rs( n 191E, he 3)ined*)res with the !)ialist Party, heading its B)rgani$ati)n de"artment,B whih all)wedn)n-!)ialists t) w)r with the Party with)ut 3)ining it( T)wnley le*t the )rgani$ati)na*ter a year(



First Bank of the "nited #tates% )hiladel1hia% )ennsyl!ania.

The ill introduced y Lemke in -22 The first ".#. Treasury #ecretary%

to estalished the third Bank of the Ale3ander 4amilton.

"nited #tates.



The N)L&s Fi!e+)oint )rogram

n signing u" su"")rters, the NP% )rgani$ed ar)und a sh)rthand *ie-")int "r)gram(

1( !tate )wnershi" )* terminal eleat)rs, *l)ur mills, "aing h)uses and)ld-st)rage "lants<

2( !tate ins"eti)n )* grain and grain d)age<

( ?em"ti)n )* *arm im"r)ements *r)m taati)n<

E( !tate hail insurane )n the areage ta &asis<

5( 4ural redit &ans )"erated at )st( T)day, m)st )* these issues seemremara&ly n)n-re)luti)nary, &ut at that time, they seemed uite radial(

4es"eting P)int 1, in a "red)minantly *arm state, terminal eleat)rs, *l)urmills, "aing h)uses and )ld-st)rage "lants )nstitute in*rastruture, ine**et( The )ligarhial triumirate ran these )"erati)ns m)n)")listially,

&l)ing the entrane int) this *ield )* any inde"endent &usinessmen wh),while maing a *air "r)*it, w)uld still &e interested in ee"ing the *arme)n)my alie, and *armers with it( Thus, while it an &e de&ated whether

"u&li )r "riate )wnershi" was &est, the )"eratie ")int was t) get the stateint) ati)n t) &rea the a&uses )* the )ligarhy(

4es"eting P)int , i* a *armer im"r)ed the land, he was eem"t *r)m

"aying taes< it was the s"eulat)rs, wh) &)ught th)usands )* ares )* land, &ut neer made im"r)ements )n it, wh) w)uld &ear the highest ta(

The /an )* N)rth +a)ta emerged *r)m P)int 5(

Already, &y the *all )* 1915, a*ter )nly hal* a year in eistene, the NP%0snews"a"er, the Leader, was g)ing )ut t) 18,>>> su&sri&ers(

n ;arh 1916, the NP% held a n)minating )nenti)n t) elet a slate )*andidates t) run in the *all statewide eleti)ns( ;any )* the t)" "e)"le

n)minated &y the NP% were %eme0s ass)iates *)r eam"le, the NP%0sandidate *)r )ern)r, %yn J( Fra$ier, had &een %eme0s r))mmate at the'niersity )* N)rth +a)ta, and was a l)se )lla&)rat)r< an)ther )lleague)* %eme, Neil #( ;ad)nald, was n)minated as the %eague0s andidate *)rsu"erintendent )* eduati)n( !eeral %eme ass)iates *r)m the !)iety )*?uity were als) n)minated(



The NP% h)se t) run its slate )* end)rsed andidates in the 4e"u&lianParty "rimary( t made this deisi)n *)r tw) reas)ns *irst, the 4e"u&lianshad &een *)unded as the "arty )* %in)ln alth)ugh they were n) l)nger s)in "ratie< se)nd, the 4e"u&lian Party su"")rt &ase was twie as largeas that )* the +em)rats in N)rth +a)ta

The eleti)n results stunned the nati)n the NP% andidates w)n eery ")stthey ran *)r inside the 4e"u&lian Party, *r)m %yn J( Fra$ier running *)r)ern)r, )n d)wn( ;)re)er, the NP% w)n )ntr)l )* the 4e"u&lianParty mahine, a"turing en)ugh 4e"u&lian "reint )mmitteemen seatst) elet .illiam %eme as hairman )* the 4e"u&lian Party )* N)rth+a)ta( The )ld 4e"u&lian B!talwarts,B as they were alled, )ntr)lled &ythe &ans and the grain artel, were in sh)(

This it)ry &rings t) mind the %a4)uhe m)ement0s stunning ;arh 1986it)ry in the llin)is +em)rati Party0s "rimary *)r %t( )ern)r and!eretary )* !tate( As with the %a4)uhe it)ry, the %eague0s it)ryreated an u"r)ar(

Lemke and World War I

As 4e"u&lian Party state hairman, in the *all 1916 eleti)n, %emem)&ili$ed t) de*eat .))dr)w .ils)n0s &id *)r reeleti)n as President )* the'nited !tates, &eause he new that .ils)n w)uld &ring the 'nited !tatesint) the First .)rld .ar )n the side )* its l)ng-time enemy, /ritain( %eme

&i)gra"her /la)r&y, wr)te regarding %eme0s iews during .)rld .ar ,BN)t )nly at this time &ut thr)ugh the "eri)d )* .)rld .ar , he &elieedthat the str)ngh)ld )* th)se wh) start and run all wars was in the /ritishsles and Frane %eme t) A(F( #aldwell, !e"tem&er 21, 199(B

ndeed, /ritain &egan )rhestrating the First .)rld .ar, during the lastdeade )* the 19th #entury as a means )* &l)ing the deel)"ment )* analliane )* the 'nited !tates, 4ussia, ermany, and #hina *)r the "ur")se )*

&uilding rail-entered deel)"ment )rrid)rs ar)ss the ?urasian landmass(

N)netheless, in the N)em&er general eleti)ns, des"ite %eme0s e**)rts,.ils)n arried N)rth +a)ta:&y a small margin:and the nati)n &y awider margin(

m")rtant )ut-)*-state *igures, suh as 4e"u&lian !enat)r e)rge N)rris )* Ne&rasa, t)ured the state )n &ehal* )* %eague andidates( n the *alleleti)ns, a ")litial re)luti)n )urred the %eague andidates, n)w the



4e"u&lian Party standard-&earers, w)n N)rth +a)ta0s t)" state )**ies(%yn J( Fra$ier was eleted )ern)r, and .illiam %anger w)n the ")siti)n)* Att)rney eneral(E The %eague w)n a ma3)rity )* the seats in the !tateAssem&ly, and a si$ea&le min)rity in the !enate(

N)L Legislation

n the 1917 legislatie sessi)n, the NP% "assed legislati)n, seeral "iees )*whih %eme hel"ed sha"e, whih inluded, a)rding t) )ne hist)rian

A state grain grading system< "r)")sed )nstituti)nal amendmentsregarding w)men su**rage in s)me eleti)ns< eem"ti)n )* *armim"r)ements *r)m taati)n< a state &an de")sit guarantee law< anine-h)ur day *)r w)men< a T)rrens land title registrati)n law<regulati)n )* railr)ads< and tre&ling )* *unds *)r rural eduati)n(

!)me )* these sh)w the in*luene )* %eme and the NP%( F)r eam"le, thetre&ling )* *unds *)r rural eduati)n re"resented a seri)us )mmitment t) theminds )* the state0s iti$ens( The state &an de")sit guarantee law, in theeent )* &an *ailure, antii"ated, and, in "art, set the gr)unds *)r, the '(!(#)ngress0 ad)"ti)n )* the Federal +e")sit nsurane #)r")rati)n F+#system in 19(

The %eague did een &etter in the 1918 eleti)ns, reeleting its slate )*)**iers *)r t)" statewide ")sts, and a"turing a tw)-thirds ma3)rity in &)th

the state Assem&ly and !enate( The N)n"artisan %eague *elt that n)w wasthe time t) "ush *)r the /an )* N)rth +a)ta(

n the 1919 legislatie sessi)n, the NP%-4e"u&lians *irst intr)dued a &illt) reate a state industrial )mmissi)n, a three-man &)dy made u" )* thethree highest eletie ")sts the )ern)r, #)mmissi)ner )* Agriulture and%a&)r, and Att)rney eneral( t w)uld )ersee the /an )* N)rth +a)ta,and a"")int managing )**iers t) run the &an )n a day-&y-day &asis(

The ndustrial #)mmissi)n "lanned )ut the state0s industrial "r)gram, and

the /an was, e**etiely, the *inaning and im"lementati)n arm )* the "r)gram(

4 The )"")rtunist %anger w)uld s))n turn against the N)n"artisan %eague and the /an)* N)rth +a)ta( is re"utati)n as B.ild /illB %anger the g))d *arm leader, seems t) &elargely a myth, &uilt &y %)nd)n-direted hist)rians wh) are )"")sed t) %eme and, &y &uilding u" %anger, wish t) &ury the re"utati)n )* %eme(



ist)rian 4)anne ?mers)n Juner re")rted in her &)), The Bank of North

akota: !n E"#eriment in $tate %wnershi#, that

The #)mmissi)n0s ")wer was wide-ranging( t was em")wered t)manage, )"erate, )ntr)l, and g)ern all utilities, industries,

enter"rises and &usiness "r)3ets, n)w )r herea*ter esta&lished,)wned, undertaen, administered )r )"erated &y the state( Penal,harita&le )r eduati)nal instituti)ns were ee"ti)ns(

The /an )* N)rth +a)ta &ill ame net( t had a wide-ranging mandate: in *at, it "aralleled the mandate )* the ndustrial #)mmissi)n(

n the language )* the )riginal at reating the /an

1( The /an )* N)rth +a)ta, *)r "ur")ses )* en)uraging and

"r)m)ting agriulture, )mmere, and industry, shall engage in the &usiness )* &aning, and shall esta&lish a system )* &aning )wned,)ntr)lled, and )"erated &y the !tate( t shall &e alled the /an )*

N)rth +a)ta( ( ( (

( The &usiness )* the /an may inlude anything that any &an maylaw*ully d), ee"t as restrited &y the At(

E( All state, )unty, t)wnshi", munii"al, and sh))l distrit *unds,and *unds )* all "enal, eduati)nal, and industrial instituti)ns, and all

)ther "u&li *unds shall &e de")sited in the /an )* N)rth +a)tawithin three m)nths *r)m the "assage )* this At(

5( All de")sits in the /an are guaranteed &y the !tate( ( ( (

6( The /an may l)an *unds t) )ther de"artments, instituti)ns,utilities, industries, enter"rises )* &usiness "r)3ets )* the !tate, whihshall &e returned with interest t) the /an( t an als) mae l)ans t)the !tate, )r t) )unties, ities, )r ")litial su&diisi)ns )* the !tate, )r t) state )r nati)nal &ans( t ann)t mae l)ans )r gie redit t) anyindiidual, ass)iati)n, )r "riate )r")rati)n, ee"t *irst m)rtgages)n real estate in the !tate )* N)rth +a)ta Mi(e(, *arm m)rtgage l)ans(

Am)unt )* the l)ans )uld n)t eeed )ne-hal* the alue )* the realestate seurity( %)ans )uld als) &e seured &y wareh)use reei"tsMi(e(, wareh)use reei"ts issued against the *armer0s grain when held ata state-)wned grain eleat)r:4?F( ( ( (



8( The At &e delared an emergeny(

Taen as a t)tality, these "r)isi)ns made the /an )* N)rth +a)ta a ")tentially ery ")wer*ul instrument, as it )uld *inane any in*rastrutural,industrial, )r agriultural "r)3et deemed in the interest )* adaning the

gr)wth )* N)rth +a)ta its l)ans t) indiidual "riate &usinesses had t) &eentered int) )n a 3)int "artii"ati)n l)an &asis with a "riate &an(

The /an had )ne additi)nal *eature, re")rted )n &y Alan !( T)stle&ee in his192E &)), The Bank of North akota: !n E"#eriment in !&rarian Bank'

in&:

The /an0s relati)n t) the eisting redit struture was t) &e similar t)that )* a *ederal resere &an t) the mem&er &ans in its distrit ( ( ( itwas t) &e the enter )* a "art learing and )lleting system< it was t)

*urnish its redit t) the "u&li "rimarily thr)ugh the medium )* thel)al &ans whih w)uld redis)unt with the #entral /an(

Thus, in its )riginal *)rm, the /an )* N)rth +a)ta was t) &e theintermediary *)r "r)iding liuidity t) the "riate &aning system )* N)rth+a)ta, thr)ugh dis)unting the *inanial "a"er that the indiidual "riate

&ans "resented, and &y that means, maing *unds aaila&le t) them *)rlending )ut( * a small N)rth +a)ta &an wanted t) mae a l)an t) a*armer, &ut laed the *unds, it )uld dis)unt a )mmerial "iee )* "a"erwith the /an, and get the *unds( This intriguing *eature was neer "ut int)

e**et(

A state-)wned "u&li redit &an, suh as the /an )* N)rth +a)ta, was n)tnew t) Ameria( /en3amin Franlin had adaned the idea during the early18th #entury( +uring the 19th #entury, 1> states esta&lished wh)lly )r

"artly state-)wned &ans( =* these 1> state &ans, tw):Dirginia0s andGentuy0s:suried int) the 2>th #entury(

The de&ate )n the /an, and the )m"ani)n industrial )mmissi)n, was*erent( NP%K4e"u&lian 4e"resentatie irdell Patters)n stated )n the

*l))r )* the legislature that

.e hae &r)en the gr)und and gr)wn )ur wheat and then we hae let &ig &usiness d) the rest( /ig &usiness has weighed it, graded it,arranged *)r its trans")rtati)n and s)ld it, and then "aid us s) little *)rit that we hae t) g) &a and &)rr)w *r)m them t) struggle )n *)r







n his 199 &)), C)u and Your (one), %eme wr)te that the green&asBhae &een taled a&)ut with )ntem"t &y eery internati)nal &aner, &yeery )u")n li""er and &y eery m)ney hanger(B

%eme asserted

* eer a m)nument sh)uld &e ereted t) an inanimate )&3et, then itsh)uld &e ereted in mem)ry )* the series )* the 'nited !tates n)tes

:the Bgreen&as(B !uh a m)nument w)uld gie us new )urageand h)"e, and w)uld assist materially in &ringing a&)ut a m)netarysystem that w)uld sere all the "e)"le and n)t 3ust a *ew internati)nalmani"ulat)rs(

At the time that %eme was writing, there were IE7 milli)n )* theBgreen&asK'nited !tates n)tesB still in irulati)n, )nstituting a&)ut 1>L)* the "hysial urreny su""ly( %eme $er)ed in )n the *at that, while%in)ln did issue Treasury de&t, he issued IEE> milli)n in urreny had heals) issued that as de&t, the ati)n w)uld hae added a huge interest )st(

!aid %eme

* in 1862 President %in)ln and #)ngress had s)ld &)nds in "lae )*issuing Bgreen&as,B then at *ie "erent )m")und interest, these

&)nds w)uld t)day am)unt t) )er I12 &illi)n Min interest and "rini"al( n additi)n t) saing the nati)n &illi)ns, ( ( ( theseirulating as m)ney ( ( ( hae many times m)re than "aid in serie*)r that war:in ehanging )mm)dities and hel"ing reate wealth(

%eme saw the /an )* N)rth +a)ta as a ste""ing st)ne t) )nstruting a Nati)nal /an( n 19, %eme intr)dued )use 4es)luti)n 8E, BA /ill?sta&lishing the /an )* the 'nited !tates,B whih was the )**iial namegien t) the First Nati)nal /an 1791-1811 and !e)nd Nati)nal /an1816-186( ?en th)ugh %eme stated a disagreement with Aleander

amilt)n, and threw in s)me language reminisent )* Th)mas Je**ers)n )rAndrew Jas)n, he was lear en)ugh )n in)r")rating the im")rtant*eatures )* amilt)n0s First Nati)nal /an( As )"")sed t) a #entral /an,whih is the "riate t))l )* *inanier &andits, a Nati)nal /an )"erates *)rthe s)ereign "ur")se )* the nati)n, em")wered, in the 'nited !tates, &y theeneral .el*are #lause )* the #)nstituti)n(



%eme enumerated the ")wers )* suh a &an in his &ill( n a)rd withArtile , !eti)n 8, Part 5 )* the #)nstituti)n

The /an )* the 'nited !tates will &e the instrument thr)ugh whihthe #)ngress )* the 'nited !tates will )in and issue the m)ney and

regulate the alue there)*( ( ( (

MFurther, /e it enated &y the !enate and )use )* 4e"resentaties )* the 'nited !tates )* Ameria in #)ngress assem&led, That *)r the

"ur")se )* en)uraging and "r)m)ting agriulture, )mmere, andindustry, and *)r the "ur")se )* *inaning the g)ernment )* the'nited !tates and the ari)us de"artments there)*, and "r)iding the

"e)"le )* the 'nited !tates and the ari)us !tates and ")litialsu&diisi)ns there)*, with a s)und and elasti nati)nal urreny andmedium )* ehange, the )ernment )* the 'nited !tates shallengage in the &usiness )* &aning, and *)r that "ur")se there is here&yesta&lished a system )* &aning )wned, )ntr)lled, and )"erated &ythe 'nited !tates, in its s)ereign and g)ernmental a"aity, underthe name )* the /an )* the 'nited !tates(

%eme )ntinued that

The )ernment will issue *ie &illi)n d)llars )* urreny t) &en)wn as B'nited !tates ;)ney,B ( ( ( !uh n)tes will &e *ull legaltender *)r all "u&li and "riate de&ts( ( ( ( They will &e seured &y

the g)ld and siler n)w in the 'nited !tates Treasury )r &uried &y it insu&terranean aults(

n 19E, the *igure )* I5 &illi)n was a ery )nsidera&le am)unt tsissuane w)uld hae nearly d)u&led the '(!( urreny in irulati)n( Theey was that the /an w)uld etend the m)ney t) large-sale in*rastruture

"r)3ets( !ine many )* these "r)3ets were initiated &y, )r under thesu"erisi)n )*, the indiidual states, the m)ney w)uld &e etended t) th)sestates )r their B")litial su&diisi)ns,B i(e(, )unty and l)al g)ernments(

%eme "r)")sed

The &an will trans*er *unds t) the Treasury )* the 'nited !tates *)r "u&li w)rs and *)r "u&li e"enditures as direted *r)m time t) time &y Ats )* #)ngress(

And *urther,



MThe '(!( urreny n)tes w)uld &e l)aned *)r "u&li w)rs andinternal im"r)ements wheneer and whereer there was unem"l)y-ment( This w)uld "reent en*)red idleness and w)uld utili$e thela&)r that is n)w g)ing t) waste:la&)r l)st *)reer(

As a result )* etending a&undant redit t) in*rastruture and nati)n- &uilding, %eme was ertain that the /an0s dirigism w)uld *)ster e"l)siee)n)mi gr)wth

ie t) this &an the )ntr)l )* the m)ney and the redit )* this nati)n( ( ( let it su""ly us with am"le units )* ehange with whih t)measure the energy )* )ur "e)"le:and then we will neer again *inda )nditi)n where milli)ns are hungry:where eerything is t) &ed)ne and n)thing is &eing d)ne(

e added,

The 'nited !tates, &eause )* its great natural wealth and unlimitedres)ures )* raw material and silled w)rmen, has, thr)ugh its eer-inreasing mehanial inenti)ns and hemial dis)eries, &e)mesel*-su**iient and a&le t) deel)" e)n)mi *reed)m *)r all( t anand will a&)lish ")erty &y an eer-inreasing and higher standard )*liing, n)t )* the *ew, &ut )* the many(

%eme said,

MThe /an )uld lend at a uni*)rm serie harge Minterest rate n)tt) eeed )ne "erent "er annum( t )uld mae l)ans t) !tates and

")litial su&diisi)ns wheneer and whereer there was unem"l)y-ment(

The 1L interest rate t) &e harged *)r /an l)ans *)r in*rastruture wasim")rtant t) %eme, and he reiterated it thr)ugh)ut his li*e( As an anti-usurymeasure, he th)ught that the Nati)nal /an sh)uld harge n) m)re than theadministratie )st )* the l)an, and this he re)ned t) &e 1L(

%eme s)**ed at the &aners wh) demanded that the Federal 4esere giethem the n)tes whih it generated &y &uying '(!( Treasury seurities, i(e(,m)neti$ing the *ederal de&t( %eme wr)te, sarastially

* the )ernment sh)uld tae s)me )* this m)ney away *r)m theinternati)nal &aners and use it )n &ehal* )* all the "e)"le as it wasintended t) &e used, &y the #)nstituti)n )* the 'nited !tates, then the



.all !treet interests w)uld yell B*iat m)ney(B M/ut it is sound

money when the )ernment gies it t) the &ans *)r n)thing(M?m"hasis in )riginal(

%eme )nluded that

eery&)dy n)ws that this nati)n has &e)me great &eause )* the "r)gressie and aggressie genius )* its "e)"le:&eause )* the "r)duti)n and reati)n, and n)t the destruti)n, )* wealth(

e alled *)r the a&)liti)n )* the "riate-&an-)wned, usury-"ratiingFederal 4esere !ystem, t) &e re"laed &y his "r)")sed /an )* the 'nited!tates(

%eme did n)t hae all )* these iews *ully w)red )ut in the *irst deades

)* this entury( /ut the )re )* his iew was already in "lae, and thishigher "rini"le in*)rmed his *ight *)r the /an )* N)rth +a)ta(

The %)nd)n-direted rail, grain, and &aning artel &eame alarmed whenthe N)n"artisan %eague was *)rmed in 1915, and its alarm grew &y lea"sand &)unds, as the NP% w)n the 1916 statewide eleti)ns, and then the 1918eleti)ns, a"turing a tw)-thirds ma3)rity in the &)th h)uses )* the N)rth+a)ta legislature( This alarm grew t) "ani "r)")rti)ns when in Fe&ruary1919, the NP%-s")ns)red /an )* N)rth +a)ta "assed the state legislature,with a sheduled )"ening date )* July 28, 1919(

n additi)n, %eague )rgani$ing had s"read t) set u" a**iliated )rgani$ati)nsin ;innes)ta, )wa, !)uth +a)ta, Gansas, Ne&rasa, .is)nsin, ;)ntana,dah), .ashingt)n, Teas, and #)l)rad), during the "eri)d 1917-19( The

NP%0s nati)nal headuarters was n)w ;innea")lis, h)me )* the grain artel(

The artel )ligarhy had &een )rgani$ing against %eme and the NP% sine1915, using eery means, *air and m)stly *)ul, t) d) s)( /ut in 1917, thetri"le-headed )ligarhy la&elled the NP% a sediti)us )rgani$ati)n< )n-duted a am"aign )* "hysial h))liganism, inluding &eatings and

destruti)n )* "r)"erty< and had harges )* sediti)n &r)ught against the NP% in the )urts(

F)r the net *)ur and )ne-hal* years, the )ligarhy0s attas &eame a)unter")int t) what the NP% w)uld a)m"lish, and inluded, am)ng )therats )* "er*idy an attem"t t) hae the /an delared un)nstituti)nal andshut d)wn a ase that went all the way t) the '(!( !u"reme #)urt< a 4ed



!are with-hunt against %eme and the %eague< and *inanial war*arewhih &r)ught the &an t) &anru"ty(

The res)ures that the )ligarhy )mmitted t) this am"aign were etra-)rdinary *)r the time, and *)r this "art )* the w)rld( Their )"")nent, %eme

and the NP%, a small, *arm-&ased )rgani$ati)n, with *ew material res)ures,under atta *r)m a %)nd)n-&ased )mmand enter, the m)st *)rmida&le*)re )n ?arth( .hat the )ligarhy *)und m)st terri*ying in the NP%-ledm)ement *)r a state-)wned deel)"ment &an, was n)t sim"ly the /an0sim"ressie ")wers, &ut the ery "rini"le )* the Amerian !ystem )*?)n)mis whih it em&)died, and e"t alie( The "aram)unt danger t) theartel the s"read )* this "rini"le and "ratie t) the rest )* Ameria( tmight een &e ad)"ted &y the nati)nal g)ernment

*harges of #edition

The )"ening sal) ame with the )ligarhy0s harges )* sediti)n against the%eague, *)ussing )n the NP%0s anti-/ritish stane, with the intent )*sending its leaders t) 3ail and there&y &reaing the )rgani$ati)n( Pri)r t)Ameria0s entering .)rld .ar :that is, while this )untry was still neutral

:the N)n"artisan %eague am"aigned against Ameria0s &e)ming /ritain0sally in the war( ;illi)ns )* Amerians wh) were n)t mem&ers )* the %eagueshared this iew( )weer, *)ll)wing Ameria0s entry int) the war, the NP%su"")rted the war e**)rt( n ;ay 1917, the NP% "ut )ut a statement whih

read.hateer ideas we as indiiduals may hae had, as t) the wisd)m )*)ur nati)n engaging in this war, we reali$e that a risis n)w )n*r)ntsus in whih it &e)mes neessary that we all stand unreseredly

"ledged t) sa*eguard, de*end, and "resere )ur )untry(

n maing this delarati)n )* )ur ")siti)n we delare uneui)allythat we stand *)r )ur )untry, right )r wr)ng, as against *)reigng)ernments with wh)m we are atually engaged in war( !till weh)ld that when we &eliee )ur )untry wr)ng, we sh)uld endea)r t)set her right(

At the l)se )* this war ( ( ( "riate m)n)")lies must &e su""lanted &y "u&li administrati)n )* redit, *inane, and natural res)ures( Therule )* ( ( ( s"eulat)rs must &e )erthr)wn i* we are t) "r)due a realdem)ray(



#h))sing t) ign)re the reality )* the NP% ")siti)n, the tri"le-headed)ligarhy ")rtrayed the NP% as a sediti)us )rgani$ati)n giing aid t)ermany during the "eri)d )* .)rld .ar ( 'sing this "retet, the )ligarhyim")sed a reign )* terr)r( The &)), Political Prairie *ire: The Non#arti'

san Lea&ue, ++-'.. &y 4)&ert ;)rlan, re")rted what trans"ired in;innes)ta in the *all )* 1917 and winter )* 1917-18, alth)ugh the samething was ha""ening in )ther states

The &reaing u" )* %eague meetings either &y l)al )**iials )r &ym)&s was alm)st standard "ratie, and i)lene &eame ( ( ( m)re)mm)n( %eague )rgani$ers and s"eaers in s)me )unties were

&eaten, tarred, and *eathered, and threatened with lynhing, whih inseeral instanes alm)st )urred( ( ( ( =ne *armer with a ermanname was Bde")rtedB *r)m 4) #)unty:taen ar)ss a state line

l)thed in h)t tar and t)ld neer t) return(;erhants with %eague sym"athies *)und their st)re *r)nts "aintedyell)w and their wind)ws smashed( ( ( ( The edit)r )* the Park

Re&ion Echo, wh) had re")rted *a)ra&ly )n a %eague meeting, amet) his )**ie in the m)rning t) *ind the d))r )"en, his lin)ty"esmashed, his "ress damaged &ey)nd re"air, and his )rres")ndene*iles st)len( ;any a gathering )* *armers was greeted with mud,r)tten eggs, st)nes, &uets )* yell)w "aint, )r the &last )* a *ire h)se,whih in )ne ase was said t) hae t)rn a si-m)nth-)ld &a&y *r)m its

m)ther0s arms( n m)re than )ne ase )me uards were utili$ed in &reaing u" these meetings( %)al law en*)rement )**iials in anum&er )* instanes )"enly threatened the use )* *)re against %eague)rgani$ing )r s"eaing, yet did n)thing t) restrain the lawless ati)ns)* sel*-styled Bl)yalists(B

The "ress "layed its "art( n !e"tem&er 1917, the %eague )rgani$ed aPr)duers0 and #)nsumers0 #)n*erene in !t( Paul, ;innes)ta, attended &y8,>>> %eague su"")rters inside, and alm)st an eual num&er )utside( Themeeting had little t) d) with the war issue( 4)&ert %aF)llette, !r( s")e(

A*ter the eent, in res")nse t) a heler, %aF)llette wh) was als) anti-/ritish n)netheless said, sine the '(!( was already at war, that B.e Mthe'(!( had a grieane against ermany(B The Ass)iated Press u)ting himsaying, B.e had n) grieane against ermany(B ?ight m)nths later, in ;ay1918, the Ass)iated Press admitted that it had Bmade an un*)rtunate err)r,B

&y the inlusi)n )* the w)rd Bn)B in %aF)llette0s statement( At the time )*AP0s *alse re")rting, the (innea#olis /ournal alled %aF)llette the B*ugle-



man )* sediti)n,B and Angl)"hile Teddy 4))seelt la&elled %aF)llette theBun within )ur gates(B

The ;innes)ta Pu&li !a*ety #)mmissi)n &eame the )ligarhy0s instrument*)r hauling natie N)rth +a)tans and %eague mem&ers *r)m )ther states

int) ;innes)ta )urts( %eague mem&ers were harged with &l)ingenlistment in the military, and maing sediti)us s"eehes( n the ma3)rsh)w-trial, N)n"artisan %eague "resident A(#( T)wnley was hauled &e*)re a;innes)ta 3udge( The *ied 3udge denied T)wnley the a&ility t) "resentital eidene in his de*ense( n mid-July 1918, he was )nited )*sediti)n and sentened t) 9> days in 3ail( A *ew years later, the 'nited !tates!u"reme #)urt re*used a writ )* certiorari0 T)wnley went t) 3ail(

The %eague *)ught )urage)usly against this atta, whih t)ld the aerage%eague mem&er that his )rgani$ati)n had drawn the ire )* ery ")wer*ul*)res(

The Inde1endent 5oters Association

/y 1918, the )ligarhy had deided that it needed an )n-the-sene ")litial*r)nt gr)u" in N)rth +a)ta( t *)rmed the nde"endent D)ters Ass)iati)n,)r DA( ;)ney was laished )n this )rgani$ati)n(

The &)) The Bank of North akota: !n E"#eriment in $tate %wnershi#,

re")rted

The ma3)rity )* Mthe DA0s *inanial &aing ame *r)m large)r")rati)ns, mainly the &aning, railr)ad, and grain trusts )*;innea")lis(

The DA "u&lished reams )* literature against the %eague( n A"ril 1919,three m)nths &e*)re the /an )* N)rth +a)ta een )"ened *)r &usiness, theDA launhed a lawsuit against the /an )* N)rth +a)ta, harging it withmisusing ta"ayer m)ney, and i)lating the #)nstituti)n )* the 'nited!tates(

The tri"le-headed )ligarhy shamelessly su""lied its )wn lawyers t) handleand argue the ase( The three lead lawyers *)r the DA law suit against the/an were

H N(#( C)ung:att)rney *)r seeral grain-milling )m"anies and *)r the N)rthern Pai*i 4ailr)ad(



H Tray /angs:att)rney *)r .estern 'ni)n, the 4ed 4ier #)m"any, andseeral tele"h)ne )m"anies(

H #(J( ;ur"hy:att)rney *)r the reat N)rthern 4ailr)ad(

The reat N)rthern and the N)rthern Pai*i were the tw) lead *)res in therail artel< .estern 'ni)n was )ntr)lled &y J(P( ;)rgan /an and theGuhn %)e& inestment &an )* the .ar&urg *amily and Ja)& !hi**< andthe utility and tele"h)ne )m"anies were )wned t) a signi*iant etent &y.all !treet and /)st)n &ans(

The DA ase was n)wn as $cott 10 *ra2ier0 !)tt was the name )* )ne )*the allegedly aggrieed N)rth +a)ta ta"ayers< Fra$ier was the name )*the )ern)r )* N)rth +a)ta( The ase was m)re ")"ularly n)wn as BTheF)rty-Tw) Ta"ayers0 !uit,B &eause it was *iled in the name )* E2

ta"ayers, )ne *r)m eah )* E2 N)rth +a)ta )unties the state had 5)unties all t)ld(

=n June 1E, 1919, Federal +istrit Judge #harles ?( Amid)n, wh) heard thease, deliered his deisi)n that the )urt did n)t hae 3urisditi)n( The

"lainti**s had *ailed t) sh)w that the am)unt in )ntr)ersy eeeded thereuired I,>>>, and did n)t dem)nstrate that the taing ")wer )* the statewas &eing used *)r a "riate "ur")se( Thus, the DA *ailed t) win its suit(

The NP%-led N)rth +a)ta g)ernment initiated a B*riendly suitB:reen (

Fra$ier: whih was &r)ught &e*)re the N)rth +a)ta !tate !u"reme #)urt, &y *ie /urleigh #)unty *armers( The )urt ruled in *a)r )* the NP%0sB*riendly suit(B

The (D(A(0s lawyers a""ealed &)th the BF)rty-Tw) Ta"ayers0 !uitB andreen ( Fra$ier rulings t) the '(!( !u"reme #)urt( t w)uld &e m)re than ayear &e*)re the !u"reme #)urt w)uld hear the arguments( +uring that inter-al, the ")ssi&ility that the DA might win its ase and the /an &e ruledun)nstituti)nal, hung lie a sw)rd )* +am)les )er the /an(

Federal Reser!e De1ression

n mid-1919, the Federal 4esere /)ard )rhestrated a nati)nal de"ressi)n,whih deastated N)rth +a)ta( The NP% and the /an )* N)rth +a)tahad &een set u" t) )erturn the Federal 4esere0s interest rate and reditditat)rshi"( +uring .)rld .ar , the '(!( e)n)my had &een geared u" *)rwar m)&ili$ati)n t) an im")rtant etent alth)ugh n)where near the leel )*



.)rld .ar ( n mid-1919, the Fed 3aed u" interest rates, and reated aredit runh( Ar)ss the )untry, industry and agriulture &uled( Thereat +e"ressi)n )* the 19>s had its )rigin in "art in this redit runh, aswell as in the terms )* the Dersailles Peae Treaty and the disastr)use)n)mi ")liies )* #alin #))lidge( The agriultural set)r did n)tre)er *r)m this 1919 runh *)r nearly 2> years( Alth)ugh )asi)nalslight u"tis )urred, the '(!( agriultural set)r was in a de"ressi)n *r)m1919-2> right thr)ugh the mid-t) late 19>s( The *arm de"ressi)n &r)ughthard times t) the N)rth +a)ta *armers, &anru"ting many )* them andreating a risis in the state(

This risis re"resented the )nditi)ns whih were the /an )* N)rth+a)ta0s raison d3etre its missi)n t) lend when the Federal 4esere reatedthe )nditi)ns in whih n)rmal hannels )* lending )uld n)t )r w)uld n)t(

)weer, the /an was n)w ulnera&le, thr)ugh its Ahilles heel it didn0thae m)ney t) lend( This the )ligarhy s)ught t) e"l)it(

To be continued

Documents

William Lemke and the Bank of North Dakota