The Nonpartisan League: When Farmers Seized the State

The story starts with a conversation in a field. In the spring of nineteen fifteen, Arthur Townley, a flax farmer who had gone spectacularly bankrupt after a bad harvest and a bad loan, began driving from farm to farm across North Dakota in a Model T Ford. He had a pitch.

The railroads controlled the freight rates. The Minneapolis grain exchanges set the prices. The grain elevators docked farmers for moisture and grade without independent oversight.

The banks in the east held the mortgages. Every link in the chain between the field and the bread loaf was owned by someone in a city who had never turned a furrow. Townley's solution was radical and practical: take over the Republican Party from the inside, elect a governor, and use the state government itself as a counterweight to corporate power.

He called his organization the Nonpartisan League. Within two years the League had sixty thousand dues-paying members and was the dominant force in North Dakota politics. In nineteen sixteen they elected Lynn Frazier governor and swept the legislature.

What followed was unlike anything in American political history. In nineteen nineteen, North Dakota established the Bank of North Dakota, the only state-owned bank in the United States. It was capitalized with state funds and charged with providing affordable credit to farmers who were being gouged by private eastern banks.

In that same session the legislature created the North Dakota Mill and Elevator in Grand Forks, a state-owned flour mill and grain elevator, also unique in the nation. Both institutions still operate. The Bank of North Dakota held more than ten billion dollars in assets as of recent reporting.

During the two thousand eight financial crisis, when private banks across the country were failing, North Dakota's state bank posted record profits. Townley's angry drive across the prairie had built something that lasted.