The elections of 1920 again saw the league victorious. In the Republican primaries Dr. E. F. Ladd, president of the State agricultural college, defeated Senator Gronna for the nomination as United States Senator. William Langer, who had been elected attorney general in 1916 with the endorsement of the league, opposed Governor Frazier in the primary and was defeated by a small margin. Frazier and Ladd were elected in November.
Two important initiated measures were passed, one providing for a board of auditors to audit the accounts of the State treasurer, the Bank of North Dakota, and all State industries, the other amending a previous measure so that although State funds and State institution funds must be deposited in the Bank of North Dakota, county, township, municipal, and school district funds need not be deposited there.
In 1920 deflation of the league's boom set in. The United States Supreme Court declared the grain grading law unconstitutional. The Independent Voters Association, anti-Nonpartisan, argued that the cost of government had greatly increased under the Nonpartisans. In the 1921 session of the legislature committees were appointed to investigate. The minority of the Senate committee reported that the industrial commission had practiced a policy of favoritism in affairs of the Bank of North Dakota in distributing public funds to private banks, so that the bank could not at that time meet its obligations; that the commission had failed to exercise proper control of the North Dakota Home Builders' Association, so that its affairs were hopelessly muddled; that it had approved contracts between the Drake mill and private merchants, especially the Consumers United Stores Company, a subsidiary corporation of the Nonpartisan League, resulting in losses to the State; that it had approved a policy of the Bank of North Dakota by which $2,000,000 of a total $5,200,000 in live claims against solvent banks were against 37 institutions mostly classed as "league banks" or "friendly" politically; that it had allowed officers of the bank to deposit public funds in private banks with the result that $1,400,000 of these funds were tied up in insolvent banks.
The recall was exercised for the first time in the United States against the governor of a State. In a special election of 1921, Frazier was defeated by R. A. Nestos, Republican, a member of the Independent Voters Association, or I. V. A.'s, as they were popularly called. The other two members of the industrial commission, Attorney General William Lemke and Commissioner of Agriculture and Labor John Hagan, were also recalled. But measures initiated to curtail the industrial program failed; Governor Nestos had to administer a program to which his party was opposed. Nestos was reelected in 1922. In the same election former Governor Frazier, running for United States Senator, defeated J. F. T. O'Connor, Democrat, who later became comptroller of currency under President Franklin D. Roosevelt.
Governor Nestos was defeated by the Nonpartisan candidate, Arthur G. Sorlie, in the primary of 1924 while I. V. A. Republicans won several of the State offices. Senator Ladd died in office and a Nonpartisan newspaperman, Gerald P. Nye, was appointed to fill the vacancy. He holds that office at the present time (1938). When Governor Sorlie died, Walter Maddock, Lieutenant Governor, filled out the term.
In 1928 George Shafer, an I. V. A., who had been attorney general under Nestos, was elected Governor, and in 1930 he was reelected.
The debt limit having been increased at various times, North Dakota's bonded debt in 1930 was estimated to be $36,357,200; $1,000,000 represented in capital stock of the Bank of North Dakota; $4,000,000 in mill and elevator construction and milling bonds; the remainder in various real estate bond series.
By 1930 North Dakota's population was 680,845, more than double the figure at the opening of the century. Large foreign immigrations accounted for the approximately 88 percent rise in the 1910 census over that of 1900, and by 1920 the figure had risen to 646,872. Statistics of the U. S. Bureau of Census show North Dakota to have been the only spring wheat State having an increase of population during the period from 1930-35. The growth has been almost entirely rural; from 1920 to 1930 no new urban centers (above 2,500) have appeared in the State.
The State capitol building was destroyed by fire December 28, 1930, and plans were immediately laid for building a new statehouse. A $2,000,000 building, unique in that it is North Dakota's only skyscraper, today stands on Bismarck's Capitol Hill.