Selections from Citibank documents

Accomplishment Files 1979 - 1987 Citibank

Acco:Citibank Commerce J. Pol

MEMORANDUM TO: File

FROM: Doug Loen

DATE: July 10, 1984

SUBJECT: Chronology of Usury Law and Citibank Invitation Legislation

Dec. 79-Jan. 1980 Bill Drafting requests made to the Legislative Research Council.

January 8, 1980 Legislature Convenes.

January 8, 1980 HB 1046 was introduced. An Act to exempt regulated lenders from limitations on the rate of interest which regulated lenders may charge and to further exempt regulated lenders from certain usury statues and to declare an emergency, by Clents; Brady; Burg;Eichman; Ham, Donald; Frankenfeld; Ham, Carl; Peterson, Donald. HJ 25.

January 18, 1980 HB 1046--Commerce Committee recommendation, do pass. HJ 303.

January 22, 1980 HB 1046--Passed House 59-8. HJ 336.

January 23, 1980 HB 1046--Referred to Senate. SJ 312.

February 4, 1980 HB 1046--Do Pass Amended Recommendation from Commerce 'Committee. SJ 566. February 6, 1980 HB 1046--Passed Senate. SJ 680.

February 8, 1980 HB 1046--House concurred with Senate amendments. HJ 902.

February 12, 1980 HB 1046--Delivered to Governor. HJ 1025.

February 13, 1980 Governor contacted by Citibank.

February 14, 1980 Governor meets with Charlie Long of Citibank.

February 15, 1980 29th Legislative Day. 30th and Final was changed from March 1 to March 12, due to Milwaukee railroad problems.

File — Citibank Chronology Page 2 July 10, 1984

February 19, 1980 Governor signs HB 1046 into law. HJ 1250.

February 28, 1980 Citibank representatives meet with Pierre business people.

February 29, 1980 Governor meets with Sioux Falls bankers.

February 29, 1980 Governor meets with Sioux Falls bankers.

March 3, 1980 Governor, Sioux Falls bankers, South Dakota Banking Association meet with Citibank.

March 12, 1980 Final Legislative (30th) Day.

March 12, 1980 Rules suspended, HB 1370 introduced, and passed by both Houses. House 64-2, HJ 1254; Senate 33-1, SJ 1074.

An Act to permit the acquisition of the shares of a new bank by a bank holding company under certain conditions and to declare an emergency. Introduced by: Barnett; Burg; Ham; Donald; Herseth; Mickelson; Miller; Walter; Harding; Krull; McClure; Shanard; Testerman.

HB 1370 signed into law.

March 13, 1980 Legislature Adjourns.

SOUTH DAKOTA'S BLESSING/CURSE

At the end of Bill Janklow's first year as South Dakota's Governor, he was worried.

The politicians, the people and even some of his worst detractors in the media had given him good marks for both his efforts and accomplishments in 1979.

He was himself proud of the work that had been done. With a hiring freeze and closer scrutiny of government operations, the rate of state government growth and spending had been reduced. The poor management, poor profitability situation at the state-owned cement plant had been solved. State intervention in fuel shortage and drought-related problems had lessened the harm done to South Dakotans. Positive movement had begun in water development. State government, like an overweight athlete in training camp with a tough new coach, was becoming leaner and more responsive.

The most urgent problem of 1979 was still unsolved—saving necessary rail lines from a death, to be caused by the bankruptcy of the Milwaukee Road. It consumed most of Bill Janklow's time and energy. It was the toughest problem he faced in 1979. But, the foe was visible. The pieces to a gigantic solution puzzle were available or within the possibility of creation. It did indeed cause worry, but Janklow remained optimistic. It might take another year or two, but he felt confident that he could whip the problem. Enough of the pieces were within his ability to influence. He ended his State of the State speech on January 8, 1980 with these words of encouragement, "The name of this great country ends with the words I-CAN, not I-RAN."

However, the many months of research and analysis into the railroad mess had shown Janklow the full impact of something else—the blessing and the curse of South Dakota being the most agriculturally dependent state in America. It was a truth that Janklow had known, but the statistical evidence was startling. Knowing that a 16,000 pound elephant can be dangerous is one thing. Seeing one for the first time from a distance of two feet much more dramatically influences one's understanding of that elephant's place and power in one's universe.

Twenty-one percent of the state's total income can be attributed directly to agriculture. The national average for all fifty states is three percent. The percentages for other farm states are only in the ten to fifteen percent range.

In 1973, South Dakota had average rainfall, adequate pastures and good cattle prices. The per capita income ranking among the fifty states was twenty-first. But, since then, South Dakota has been plagued with several droughts—major ones in 1976, 1977, and a partial drought in 1979. In the middle I970's, drought caused the sell-off of more than 26% of the total livestock in the state. Because more than two-thirds of South Dakota's agricultural income is derived from livestock, the effects have been devastating and continuing. Once a foundation herd is sold, it takes three to five years for a rancher to build his herd size numbers back up to normal. But, the recurring droughts of the late 1970's prevented a normal rebuilding of the agricultural economy. (Additional droughts in 1980 and 1981 further retarded recovery). In 1976, per

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capita income dropped to 49th in the nation. Since then, it had been 38th in both 1977 and 1978.

Total federal emergency and disaster loans and grants to South Dakota farmers due to drought in the middle and late 1970's amounted to $713 million. But, drought caused losses in just livestock sales alone were estimated to be $ 2.3 billion.

When Mother Nature cooperates with just the right amount of rain and sunshine, the harvests are huge and the pastures plentiful. When Uncle Sam cooperates with a national farm policy that gives farmers a fair price for their efforts, South Dakota's agricultural economy prospers. So does the rest of South Dakota. But, that happened less and less frequently in the 1970's—Mother and Uncle were very unpredictable. Because South Dakota needs both for prosperity, when either one is absent, the state suffers.

That's what really worried Bill Janklow at the end of his first year as South Dakota's Governor. Farm prices and weather patterns were well beyond his realm of influence. He couldn't significantly impact the agricultural economy through state government actions. He could nudge it in one direction or another, like a captain using his rudder to guide his boat through an iceberg infested sea. Water development and saving the railroads were such actions, bringing the possibility of prosperity through primarily disaster avoidance. Janklow could steer the ship of state, but the ship's fate was being determined by factors beyond the captain's control.

The long-term, big picture problem was the composition of the South Dakota economy. Janklow decided that he would make the diversification and improvement of the South Dakota economy his guiding objective for his years as Governor.

Approaching the task as a salesman with a new product and a national territory to cover, Janklow looked at South Dakota as an outsider. He analyzed the product and the territory.

He knew that the free enterprise system that had built America into a prosperous giant was chafing under the yoke of repressive federal regulation. Over 7,000 pages of new rules and regulations were being printed by the federal government every month during 1979. He had seen the unchecked growth of more than 150 new federal regulatory agencies that had been created since 1960. As he studied the the state's economy, he felt that perhaps his generation had been the first generation of Americans who had not been able to fully produce and create according to the free economy principles advocated by the founding fathers.

He also knew that his product—South Dakota—had an excellent business climate and a hardworking population that still believed in the work ethic. But, again, the actual statistics and evidence were startling. However, this time all the information was very positive.

The South Dakota business climate was an undiscovered gold mine of profit potential. The state had no corporate income tax, no business inventory tax, no personal income tax, no personal property tax and one of the lowest workmen's compensation taxes in America. State and local governments were partners with business, not regulatory masters issuing red tape.

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