A LITTLE SOCIALISM

 

I can't think of a place in  America that is more deceptive than North Dakota: 70,000 square miles of not what you thought.  

It's most fertile land is the valley of the Red River of the North (above), except its not a valley. It's the bottom of a lake that's no longer there - usually.  The river meanders back and forth across a prostrate terrain on its way to not the Pacific or the Atlantic, but first Lake Winnipeg, in Canada,  then the Nelson River and then Hudson Bay and finally the Arctic Ocean. 

Flowing north, every fall it freezes first at its mouth causing “the valley” below to flood.

Every spring, when the rains come to Minnesota, the lake reappears again, but briefly, because in North Dakota the dominant long term weather pattern is drought. 

And in the second decade of the 20^th century, with a population of little over half a million, most of whom were farmers and bred to be conservative and fiercely independent and Republican,  this state created openly socialistic industrial and economic institutions. Perhaps this was because North Dakota's raison d'être from its inception in 1889, was the business plan of two vertically integrated out-of-state corporations. 

Both the Northern Pacific railroad, created to benefit its shareholders...

...and the Great Northern Railroad, built by the megalomania of its owner, James J. Hill (above, center, tan fedora)  sold land to European farmers, who bought their inexpensive new American farms sight unseen. 

The boat and train tickets, and the land itself were loss leaders for both corporations. Their profits came once the farmers were isolated on the Great Plain of North Dakota. They bought their food and supplies from corporate stores, financed their wheat plantings through corporate banks, stored their harvests in corporate silos until it was transported on corporate railroads to be sold to corporate owned mills in Minnesota.  

In “bonanza” years the profits ended up in the corporate banks. And in the inevitable non-bonanza years, the farms were repossessed by the banks, starting the cycle all over again.  It was a very profitable business plan, as long as the customers did not get wise that North Dakota was a colony of the Minneapolis-St. Paul, Minnesota capitalist- industrial complex.

Up to 1916 the great dividing force within North Dakota politics was race. In the 1870's the Red River Valley had been settled by snowy white Norwegians and Icelanders - mostly stern Lutherans. The west and center of the state was settled in the 1880's by creamy white Germans who had been living in Russia since the 16^th century. They called themselves the “volksdeutsch” and they were rigid Catholics all.  But in 1916, the North Dakota normal was turned on its head by a political arsonist named Arthur Charles Townley, who split the rigid, stern conservative North Dakota Republican Party into kindling.

When he was a farmer along the Montana border, Townley  (above) was known as the “Flax King”. But an August snowstorm in 1913 cost him his farm and left him $80,000 in debt. As a fall back career he went into politics – Republican of course - there being only one real party in North Dakota - and he pushed for aid for farmers. He was confronted by his fellow Republican Treadwell Twitchell who told him to stop messing in state politics and “go home and slop the hogs”. Instead Arthur cranked up his model T Ford and went on a tour of the state, speaking to hundreds of small groups about the need for North Dakota's 78,000 farmers to organize in self defense. 

 Three thousand paid $6 each to join his Non-Partisan League, because he spoke their language. “If you put a banker, a lawyer, and an industrialist in a barrel and roll it down a hill,” he said, “you’ll always have a son-of-a-bitch on top.” In 1916 the Non-Partisan League had 40,000 members and elected Lynn Joseph Frazier as governor. And in 1918 they swallowed the Republican party whole and won every executive office in state government, control of the house and near control of the state Senate.

Governor Frazier (above, center) now became the head of the new Industrial Commission, a three man board running state owned businesses. Commissioner of Agriculture John Hagan (above, left) was entrusted to construct and run the state's Mill and Elevator Association in Grand Forks. It would buy wheat and barley from farmers at fair prices and sell the final products at a profit for the state. Attorney General William Lemke (above, right) oversaw operations of the BND, the Bank of North Dakota. 

All state and local tax revenues would be deposited in that bank, and used to offer low interest loans to farmers. When the farmers profited the bank would profit. And you know, it seemed like a good idea at the time. The day it opened the bank had two hundred applications for a total of $8 million in loans.

Then the First World War ended on 11 November, 1918. In a flash every industrialized nation slashed their budgets and stopped buying American wheat.  Farm prices collapsed. The 650, 000 farmers of North Dakota were hurting, and in order to cover its loan requests, the BND was forced to offer $10 million in bonds for sale. 

The Minneapolis-St. Paul bankers, who had lost their best customers to the BND, turned up their noses. They were determined the bank should fail. Faced with impending disaster, the Industrial Commission decided on a bookkeeping slight of hand. They ordered various state agencies and city governments, which were already required to have their money deposited in the bank, to loan the BND $10 million. 

The cash was never actually withdrawn, so nobody was actually out the money. But cash was available to make loans to the strapped farmers. And the bank of North Dakota had been saved.

It was a bridge too far for the old school Republicans. On April Fools day, 1919, three major players in state politics, Attorney General “Wild Bill” Langer, state Auditor Carl Kositizksy and Secretary of State Thomas Hall all resigned their membership in the NPL in protest. Publicly they blamed Townley's influence. Langer even called the father of the Non-Partisan League a liar. Resistance to the League solidified around The Independent Voters Association - except the IVA was anything but independent. 

Most of its money came from the Minnesota capitalist-industrial complex,  and the railroads.  So much money poured in that in November of 1919 the first issue of a 40 page monthly magazine appeared, “The Red Flame”, pounding home the message that the NPL were communists and socialists, intent on subverting capitalism in North Dakota. 

Newspapers took sides, and it became clear that the further west within the state, the stronger the NPL became, and feeding off the anti-German sentiment left over from the war, the further east you went the stronger the IVA became.

The IVA tried suing to invalidate the legislation which had created the Industrial Commission, claiming it violated the 14^th amendment to the U.S. constitution. A North Dakota judge tossed the suit, and the State Supreme Court upheld that decision, saying it was an issue of taxation and thus a matter for the the elected officials, not judges. The IVA then appealed to the U.S. Supreme Court which heard the case in April of 1920.  And in June the high court admitted that things in North Dakota were getting pretty odd, but again, they refused to stick their noses into a taxation issue.

The primary campaign in 1920 was nasty, and vicious. There were charges that the IVA was bribing politicians, and the IVA managed to put a measure on the ballot to weaken the bank by allowing city or county governments to withdraw their money. Month after month, “The Red Flame” spewed out accusations against Frazier and the Non-Partisan League, charging incompetence and fraud in running the Bank of North Dakota. 

In the October Republican primaries Frazier beat “Wild Bill” Langer for Governor, but the NPL lost control of the North Dakota House to the IVA, and the bank lost capital when the ballot measure allowing local governments to withdraw deposits, passed. Come November, the wounded Frazier still defeated the Democratic candidate for Governor, but by a mere 5,000 votes.

Governor Frazier (above, front left) responded in December, during a special session of the legislature, when he introduced the “anti-liars” bill, making it a felony for a state employee to publish false statements about the bank.   

IVA politician Theodore “Two Bit” Nelson went hyperbolic to the North Star Dakotan newspaper, “This is the end of democracy. Nothing is sacred,” he announced What it was, was civil war within the Republican Party. 

Politics in North Dakota ground to a halt. Fist fights erupted periodically in the legislature between NPL and IVA Republicans. But the IVA had managed to turn one of the NPL's political reforms against it, collecting 73,000 signatures and forcing an October recall election on the three freshly re-elected members of the Industrial Commission; Frazier, Lemke and Hagen. At the same time a half dozen ballot measures were offered, any one of which would neuter or destroy the bank.

The vote was held on Friday, 28 October, and all three NPL members of the Industrial Commission were ousted. Frazier became the first Governor every recalled, by a margin of just 1%, barely 4,000 votes. 

But the Bank of North Dakota survived, as every ballot measure meant to destroy it was defeated. Wrote the Dakotan newspaper, “It seems that the people want the bank and the mill but think that the IVA can do a better job of running them.”  In 1921, the IVA tried again to dismantle “Socialism” in North Dakota, and again every ballot measure intended to overturn the bank and the state run flour mills, went down to defeat. They never tried again. Both institutions are still very much alive and healthy today in North Dakota, if reduced in size and goals. But they remain a recognition that when corporations seek to exploit and dominate the people, the people have no choice but to incorporate themselves.

The year after being recalled as governor, the people of North Dakota elected Lynn Frazier to the United States Senate, where he served for 17 years. 

Arthur Charles Townley (above) the man who splinted the Republican party, served a 90 day prison sentence in 1922 for discouraging enlistments in World War One. He resigned from the NPL, but he never stopped fighting for things he believed in. Without him, his Non-Partisan League remained a thorn in the side of the Republican Party until 1956. Since then they have annoyed the Democratic Party of the North Dakota, which remains a minority party in a state still filled with farmers and still dominated economically from Minnesota.

- 30 -