Full text of Central Western Banker : December 1928, Volume 23, No. 12

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

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Federal Reserve Bank of St. Louis

Ilium

NEBRASKA STATE CAPITOL

J N CHRISTMAS of 1857
we began

to wish our

friends a Merry Christmas
and a Happy New Year.
Although banking service
has developed since 1857, the
spirit of Christmas is un­
changed.
It is our sincere desire again
to wish our correspondent
banks a Merry Christmas
and a Happy New Year.


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Federal Reserve Bank of St. Louis

First National
I Bank of Omaha
FIRST TRUST COMPANY

3

ast>

minute
M EW SJ
’T 'H E N A T IO N A L B A N K of BelA gium recently presented to the
Federal Reserve Bank of New York
a bronze bust of its late Governor
Benjamin Strong, as an expression of
gratitude for assistance rendered by
the New York bank during 1926 when
Belgium was stabilizing its currency
The bust was made by Paul De Soete,
Belgian sculptor.

Guaranty Trust Company of New
York City, died recently at the age of
77. It is said that Mr. Ryan maintained a balance in the Guaranty
Trust of $40,000,000, and his fortune
was estimated at $400,000,000.

A R T H U R J. M ORRIS, president
^ a n d founder of the Morris Plan
Company1 of New York, introduced
a resolution at the recent convention
of the National Association of Finance Companies that installment papers held by financing companies
should become eligible for rediscount
by the Federal Reserve System. The
resolution, which was adopted, is said
to provide the key to lower interest
rates for purchasers.

the merged bank, when the consolidation is approved, will be the Industrial Trust Company. The executive personnel has not as yet 1 been
decided upon.
______
V y H E N TH E E X CH AN G E privileges recently closed, more
than seventy-five percent of the stock
of the Bancitaly Corporation and the
Bank of Italy of San Francisco had
been exchanged for Trans-America
Corporation certificates. A longer time
for holders abroad has been granted,
so that the amount is expeceted to be
considerably increased.
______

H ; M. B Y LLE SB Y & Company,
Chicago, have recently made an
investment on the west coast of Mexico amounting to nearly two millions
of dollars. H. M. Byllesby has purchased public utility plants in the
cities of Hermosillo, Guaymas, and
Culican.
T W O HU N DRED and four banks
■
— -----S A SU B ST IT U T E for the prein five mid-west states reporting
sent method of taxing shares of
’
savings accounts and deposits to the
bank stock, A. J. Veigel, state bankANOTHER
CO N TEM PLETED Chicago Federal Reserve Bank show
ing commissioner for Minnesota, has
merger is that of the Industrial increases during October, amounting
suggested an excise tax on the net Trust, Title and Savings Company to an average of more than 1 percent
earnings of banks. Mr. Veigel be- with the Fern Stock Trust Company, over the preceding month and 4J/2
lieves such a plan could be put into both of Philadelphia. The name of percent over October of last year.
practice w i t h o u t
______
creating
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of the present laws,
Vol. 23, No. 12
DECEM BER, 1928
Gf the A. B. A. has
and would be much
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announced change in
more equitable than
/ pi
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dates of the annual
the tax law now in
1 o ± o o u. ^
convention of that aseffect.
Legal D e p a r t m e n t ............................................................ 4
sociation. Instead of
---------Does Banking Need T h i n k e r s ? ...................................... 5
the original dates of
TH E
L A R G E ST
by craig b. hazlewood
October 14 to 17, the
TRANSAC 1ION
Cartoons o f the M o n t h ......................................................... 7
convention w i l l be
in the history of ChiGetting Out from Under the Kansas Guaranty Law .
8
held in San Franciscago real estate was
How Safe is YoUr S a f e ? ......................................................... 9
co> September 30 to
completed when the
By A M d e v o u r s n e y
October 3. ConductUtilities Power and
Profits and Capital Values inF a r m i n g ..............................12
ing activities in San
Light Company
b y h e n r y v . McKib b in
Francisco made the
bought the land and
Bonds and I n v e s t m e n t s ....................................................... 15
change in dates nebuilding of the ConInsurance .............................................................
21
cessarv.
tinental N a t i o n a l
Nebraska News
’
9S
— ------ Bank & trust Com
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\ PONSOT TDApany. The price paid
News o f the Omaha Stock Y a r d s .................................27
Yjq n
recently
for the property is
South Dakota N e w s .................................................................30
announced in New
repoi ted to be aiound
Kansas News
32
York is that of the
$20 ,000,000.
Colorado N e w s ...............................................
. . .
33
Chase National Bank
—............
......
.
---with the Garfield NaT S P A5 i ^ ^
b
T he C e n t r a l W e s t e r n B a n k e r of O m a h a
tional Bank under the
RYAN,
one ot
Published monthly at 416 Arthur Bldg., Omaha, Nebraska
name of the ChaSC
the world's richest
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men, and the largest
City of New York.
Stockholder i 11 t h e
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(Continued on Page 17)


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Federal Reserve Bank of St. Louis

Central Western Banker, December, 1928

4

W hen the Notemaker Is Promised
Freedom from Liability
What happens when an officer of the hank tells the maker of a note
that he will not he held liable for its paymentf
consist of money on deposit from its
customers. The principal assets of a
bank consist in the securities received
through the investment of such de­
posits. Banks, by the acceptance of
pay this note, nor any interest on it,
and you can get the note any time that deposits from their customers, assume
a trust relation that cannot be fraudu­
you wish. If at any time you be­
lently and clandestinely bargained
come dissatisfied with having signed
the note, you just come in here and away by their officers. Every note that
is executed and delivered to a bank
ask us for it and we will give it to
for money loaned by it becomes a part
you.”
of its assets, and every depositor has
If a party is induced by fraudulent
acts to execute a note and afterwards a right to rely upon said note as be­
ing a legal, binding and valid obliga­
renews the note, with full knowledge
tion upon the maker thereof, and any
of the fraud, then such renewal would
secret or collusive agreement made
operate as a waiver of his right to
between such maker and the officers
urge the same as a defense against
of a bank, to the effect that such bank
said renewal note.
will not hold the maker thereof lia­
One who gives a note in renewal of
another note with knowledge at the ble, is invalid, null and void.
The banking business is fraught
time of a partial failure of the con­
with public concern. Banks do busi­
sideration for the original note, or of
false representations made by the ness through permission of the law,
subject always to its provis­
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ions for the protection of de­
Brought Action
positors, creditors and stock­
A bank brought action in
“ It is well established that a bank cash­
holders. Public faith, credit
court asking for judgment
ier or president has no authority to prom­
and honesty in business trans­
against the signer of a note
ise
a
person
executing
a
note
to
the
bank
actions are a bank’s main as­
payable to the bank. The
sets. Banks are subject to
that the maker will not be required to pay
signer of the note claimed that
public regulation to the end
the president of the bank,
the note, and such a promise, if made, is
that they make proper loans
with the purpose of cheating
not binding on the bank.”
and freely contract debts with
and defrauding him, caused
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depositors and others, to
the note to be signed and de­
achieve the ends of legitimate
livered to the bank, and that
the same was signed and delivered to
payee, waives such defense, and can­ business. The laws of a state re­
quire careful examination by the bank
the bank without any consideration
not set it up to defeat a recovery on
examiner periodically in order that
whatsoever. That the officers of the the renewal note.
bank, as an inducement to procure
The final proposition to be con­ those who deal with banks may not be
said note, from the maker, orally
sidered in this case is whether an o f ­ misled by appearances. To sanction
agreed and promised the maker that
ficer of a bank has the authority as any arrangement, whereby the real as­
sets and securities of a bank are to be
the note would never be used or con­
such to bind the bank by a secret
sidered as an obligation against him.
promise made to a person executing regarded as less than or different
from the apparent assets and securi­
It is elementary that one promise
a note in favor of the bank, that such
is legal consideration for another. If
maker will not be required to pay said ties would tend to defeat the entire
purpose of the regulatory statutes.
a promissory note is made by A to B note when the same becomes due. The
Parties may not participate in a trans­
in exchange for a promissory note
commercial and fiscal life of the state
made by B to A, each note between
is very largely dependent upon the action, the object of which is to give
integrity and sound business judg­ to the assets of a bank, a favorable
the original parties or in an action by
an indorsee is a valid consideration
ment of those having in charge its appearance for purposes of examina­
for the other. It is in the nature of an banking business. The principal ob­ tion, but less favorable for purposes
of liability or enforcement.
ject and purpose of a bank is to in­
exchange of property, each party get­
ting title to the property received in vite deposits of money from the pub­
A party, having signed a note with
lic and to use such money in the pur­
exchange.
full understanding of its purposes,
cannot be relieved of liability. Con­
A bank officer, to secure the exe­ chase of interest-bearing securities, or
to make loans to responsible persons
sidering a note as a part of a bank’s
cution of a note, may say:
at
a
legal
rate
of
interest.
assets,
an understanding or agree­
“ W e will guarantee that it will not
ment of nonliability is neither proper
Principal Liabilities
obligate you in any way whatsoever ;
The principal liabilities of a bank
you will not ever be called upon to
(Continued on Page 31)

TN TH E past, some parties who have
signed notes payable to a bank, have
been told by one or more officers of
the bank that they, as makers of the
note, would not be held liable on the
note. Generally, this oral agreement,
accepted by the maker of the note,
caused the note to be executed, and
delivered. What authority does the
officer of the bank have to make such
an agreement?
A situation may arise where a bank
desires to make an additional loan to
a customer, but cannot do so, because
it has already lent him as much as
the law permits, and for that reason,
induces another person to give his
note for the amount, promising that
he will not be held liable in the mat­
ter. In legal contemplation, the bor­
rower who receives the money, and
not the bank, which pays it out, is the
party for whose accommodation the
note is signed.

1

By T

C e n t r a l W estern
B a n k e r L egal D e p a r t m e n t

Central Western Banker, December, 1928

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Federal Reserve Bank of St. Louis

he

5

By C r a ig B. H a z l e w o o d ,
President, American Bankers
Association
Vice-President, Union Trust Co.,
Chicago

A M ERICA has astounded the world
by its readiness in casting aside
traditional viewpoints, disregarding
gage, and other securities based upon
traditional difficulties, and pioneering
fixed assets. Next, we have witnessed
new shortcut formulas in the realm of
a period of financing through deben­
business. Business and banking are
ture issues. And now we have come
undergoing epochal changes.
to the greatest volume of financing by
But every advantage has its danger;
stocks that has ever taken place. What
and in the present trend, too many who
does this mean to the bank executive?
are not deep or independent thinkers
It means the necessity of arriving at
may blindly accept each new idea and
sound rules governing these types of
make a quickwitted, but frequently
C r a ig B. H a z l e w ood
securities; new and sound standards;
unsound application of
and new yard sticks
it to a great variety of
that will determine the
situations. W e have all
value of the many
seen -what happens
kinds and classes of
when a school boy con­
stocks. There was a
fidently applies t h e
time when stock prices
w r o n g mathematical
had a definite relation­
formula. And this is
ship to book value.
what happened— and
What is that relation­
w i l l surely happen
ship today? Or if such
Sane thinking necessary to work out of difficulties due
hundreds of times— in
a relationship no lon­
to rapid changes in the hanking and business world.
banking among those
ger is generally recog­
who have learned by
nized, what, then, is the
rote and who apply the letter without
As a matter of fact, banking and proper yardstick ? Is it the relation oi
understanding the spirit.
business problems are crowding in earnings to stock prices? And how
Intelligent thinking, to my mind, is upon us so rapidly that while the man­ is the element of management -—the
the essential executive quality for the ual worker is thinking of a six hour question of a company’s potential
new business era we are now enter­ day and a five day week, the execu­ earnings— to be calculated in the final
ing. It was by disregarding prece­ tive knows not where to look for ade­ equation? Is the banker fully aware
dent and by relying on sound creative quate help or relief. With the enor­ of the new importance that has come
thinking, that the Federal Reserve mous increase in size and intricacy of to be attached to management in re­
banking system, the greatest organiza­ business affairs, the problems have be­ lation to finance? Is some laboratory
tion of its kind in the world’s history, come so complicated and the mass of to give us a formula for measuring
was created. It has been by sound information necessary to the solution management that will relieve each one
thinking that the spectacular success­ of a given problem so great that the of us at his own desk from the ne­
es in consolidation, chain store opera­ “ days are not long enough.” This is cessity of thinking through the indi­
tion, direct selling, scientific organiza­ merely another way of saying that the vidual problem and shouldering the
tion, mass production, and every other demand for managerial and executive responsibility? Unless this happens,
great business or banking initiative ability is rushing ahead— that the op­ the great bankers of the future must
have come to flower.
portunity for young men and women still be great thinkers, with great
who have the professional training hearts.
The Dark Side
Looking at the dark side of the pic­ and who have developed genuine
Another New Problem
ture, it has been through unsound thinking power is greater than ever
There is another new problem that
thinking and inexcusable ignorance before.
comes close to the banking profession
Let us consider some of the changes -—a problem with ramifications that
that the pathway of progress has been
strewn with mediocrites and failure in business and banking procedure, extend from the savings account of
and the new problems resulting from
both in business and in banking.
the rural school teacher, across the
W e may sometimes be tempted to these changes which demand intelli­ country, and down into the fundamen­
feel that all the great problems have gent thinking by the banker.
tals of the Federal Reserve System. I
been solved and that nothing remains
Take our methods of financing, for refer to the problem of stock market
but to apply the right formula. To
an example. In general, we have loans. What are the proper sources
any who have reached this conclusion, noticed somewhat of a transition from of funds for the stock market— and
the highest rewards in business and the time when financing was almost what are the proper methods of con­
banking must certainly remain closed. invariably accompanied by bond, mort- trol? Only a short time ago, “ Loans


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Federal Reserve Bank of St. Louis

Does Banking Need
THINKERS?

Central Western Banker, December, 1928

6
for Corporations and Others” was a
relatively important heading in the
statement of brokers’ loans; today, it
is a topic that engages the attention of
all thoughtful bankers. Various ex­
pedients have been devised and put
into force. The banking profession,
however, does not even approach
agreement in its answer to this and
many other problems of stock market
finance. Are the bankers of this coun­
try to do the constructive and con­
clusive thinking upon these problems
of the stock market, or will they let
them go unheeded and in the end, per­
haps, find that some new economic
agency has crowded the banking busi­
ness out of the position it should oc­
cupy in this field?
1 am sure that this is a problem
which has not escaped the attention
of the banking profession here at New
York. Perhaps, however, because of
the very nearness of the problem, you
gentlemen may unintentionally give
this matter too much thought to the
exclusion of other problems that press
equally for solution. In many cities
and states, we are wrestling with the
question of whether unit banks can
survive in the face of chain and branch
banking. In this field, as throughout
the galleries of business there echo
and reverberate the results of succes­
ses already scored in the held of con­
solidation and chain development.
From 1900 to the present year, the
number of branch banks has increased
from 60 to almost 3,000. How many
bankers are there among us who in the
true scientific spirit, can put aside per­
sonal feelings, set down the cold facts,
and reason out the trend in this mat­
ter? Are we merely in the doldrums
or do we stand where sea and river
meet? Is every unit bank in this
country doomed before the onrush of
chains, holding companies, and branch
banking systems— or is chain banking
merely a phase of our banking de­
velopment which will awaken the unit
bankers of the country to a new and
sounder culture of their own banking
system ?
The young men and women here
may say that I am choosing problems
in national economics or statesman­
ship rather than banking. Very well.
.Let us then assume that you have be­
come the responsible head of a unit
bank and have concentrated all your
thinking upon its internal problems of
management. You are not a general
in command of grand national maneu­
vers, but a captain holding an outpost
— the managing officer of a bank. To
some degree, you will, of course, find
iat hand rules and standards that will
help you. Many bankers have trav­
eled this path before you, observing,

The article on this and the pre­
ceding page, is from an address
by Craig B. Hazlewood, VicePresident of the Union Trust Co.,
Chicago; President, American
Bankers Association, before the
Forum Dinner, New I ork Chap­
ter, American Institute of Bank­
ing Section, American Bankers
Association, Hotel Pennsylvania,
New York City, December, 1928.
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recording, thinking, and setting up
standards for your guidance. But you
will not be long in command of a
bank or even one of its departments
before you will find that you are alone
with problems that only a thinking
mind can solve.
Investment of Funds

One of your problems will be the
investment of the funds of your in­
stitution. You will search for guid­
ance—and the time is coming, 1 be­
lieve, when bankers may find some­
thing in the nature of applicable rules
and ratios which they may follow in
the intelligent investment of the funds
intrusted to them. As a matter of
fact, however, we have recently sent
out thousands of questionnaires to
bankers in a number of states, asking
rather simple questions regarding the
allocation of a bank’s funds. Strange
as it may seem, there was a complete
lack of agreement regarding the per­
centage of the bank’s available money
to be placed in such broad classifica­
tions as cash, secondary reserves,
bonds, and local loans. Answers re­
garding cash reserves ran from 5
per cent to 72 per cent; secondary re­
serves, from none to 73 per cent; cus­
tomers’ loans from none to 90 per
cent; other bonds and stocks from
none to 48 per cent; local loans, from
none to 71 per cent. The percentage
of the bank’s capital and surplus in

’Central Western Banker, December, 1928

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Federal Reserve Bank of St. Louis

fixed assets varied from none to more
than 100 per cent. Nine per cent of
the banks questioned had no second­
ary reserves of 15 per cent or less; 31
per cent of the banks stated that they
had invested none of their funds in
bonds or stocks.
When asked what definite policy
they followed with respect to the in­
vestment of their funds, over 74 per
cent of the banks answering the ques­
tionnaire stated that they had estab­
lished no definite policy. Consider
these replies, and then consider
whether there is any need for think­
ing in the banking business. Is there
any wonder that there have been so
many bank failures in the past nine
years? While I lay no claim to the
predictive powers of a prophet, I ven­
ture to say that within the next five
years, we shall find thinking bank
management laying down basic prin­
ciples, averages, and percentages for
the guidance of bankers in the sound
and safe investment of the funds in­
trusted to their care.
Starting New Banks

Let us take another problem. You
are asked to help in the establishment
of a new bank. Some country banker
or some discerning director of a city
bank who is familiar with the meth­
ods of market analysis used by well
managed business corporations may
ask you whether a certain community
affords a real opportunity for another
banking institution— in other words,
whether the market is there. He may
ask a definite estimate of the size of
the market. He may inquire what capi
tal is warranted— how large or how
small a bank can operate profitably
there. Though there are many opin­
ions regarding these problems, there
is little definite information available
which will enable one to establish a
new bank in a city or in the country
on a basis of scientifically determined
facts and statistics of mere hopes and
guesses.
The time is coming when the offi­
cer of a bank will analyze operating
statements, income and expense items
on a far more scientific basis than we
have ever done in the past. W e will
expect him to know whether his gross
earnings are in line with what his bank
should earn, according to predeterm­
ined standards of income and ex­
pense. W e will expect him to accept
or challenge his net earnings as satis­
factory or otherwise. W e will hold
him responsible for knowing what his
income from various sources should
be. W e will look to him for exact
knowledge of his expense percentages
and definite control of the percentage
(Continued on Page 20)

7

CARTOONS OF THE MONTH

_
C opyright, 1928, By the New York Tribune, Inc.

-<...
By courtesy o f the New York Herald Tribune

THE N E W ENGINEER IS ALR E A D Y AT W ORK
— Darling in the New York Herald Tribune.

Wihi.'v,»,
Copyright, 1923, by the Chicago Tribune


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

THE BALLOON JUMPER
— Orr in the Chicago Tribune.

PHENOMENON!
— Harding in the Brooklyn Eagle.

Central Western Banker, December, 1928

8

Getting Out From Under the
Kansas Guaranty Law
A lustoi y o f the Kansas guaranty measure, its provisions, how it
operated, and how it was finally laid to rest after years o f hopeless effort to accomplish its purpose
( One o f a series o f articles on
the guaranty o f batik deposits
measures enacted by various
states.)
O

NE o f the modern day miracles of
the business world exhibits itself
in the manner in which most guaran­
ty bank deposits laws stay alive, al­
though technically dead, th e Kansas
guaranty law can well be classed in
this category.
Owing its birth to the banking
troubles of 1907, the Kansas guaranty
law was initiated in 1909. Under the
terms of its organization membership
in the guaranty system was optional
and about 700 of the 1200 state banks
became members of the system.
Each member bank paid annual as­
sessments of one-twentieth of oneper cent of its deposits until finally
they had built up a guaranty fund of
half a million dollars. Then, when the
payment o f losses gradually deflated
this fund, additional assessments at
the same rate, and not exceeding in
number five per year, were to be lev­
ied. In order to guarantee payment
of these assessments each member
bank had to pledge bonds with the
state treasurer equal to one-half of
one per cent of its deposits.
Issued Certificates

When a bank failed, in the guaran­
ty system, depositors were issued cer­
tificates for their claims. The bank’s
assets were then liquidated and the
funds secured through liquidation
were paid to depositors, with the de­
ficiency, if any, paid from the guaran­
ty fund. Claims against the guaran­
ty fund bore interest at 5 per cent. It
was up to the bank commissioner to
collect the assessments and supervise
the guaranty system as a whole. The
state had no responsibility in the sys­
tem, acting merely as the manager of
the system, despite the fact that, as in
many other states, the words, “ State
of Kansas,” appeared on most of the
guaranty literature.
In fact, the guaranty act stated
quite clearly that the state had no
responsibility therein: “ Any bank
guaranteed by the state of Kansas,
either directly or indirectly, shall dis­

qualify the bank from further partici­
pation in the bank depositors’ guaran­
ty fund and forfeit its bond deposited
with the state treasurer for the bene­
fit of such fund.”
In spite of this paragraph in the
statutes, depositors as a rule thought
the state was back of the fund. The
guaranteed banks constantly adver­
tised that “ the deposits of this bank
are guaranteed by the depositors’
guaranty fund of the State of Kan­
sas.”
As a result of this misunderstand­
ing, national banks, naturally, were
afraid of its consequences. The guar­
anty act provided that national banks,
too, might join the system, but the
United States supreme court decided
that national banks were without au­
thority to incur liability through such
a system. Then the national banks
organized a mutual insurance com­
pany, owned by Kansas national bank
stockholders, to insure their deposits.
Many of them took out such insur­
ance, but the experience of a very few
years taught them that the state guar­
anty feature did not injure them
much, from the standpoint of compe­
tition, and the deposit feature was dis­
continued so far as the national banks
were concerned.
During its first decade, the Kansas
state guaranty system worked out
nicely since general prosperity and
constantly increasing prices of farm
products and land values brought few
if any, bank failures. Hence, the
guaranty fund was more or less un­
touched.
O f course, such a condition brought
about scores of new banks, every Tom,
Dick and Harry taking out charters
until Kansas finally had one bank for
every 1,400 inhabitants. The state
then became badly over-banked.
Came the year 1920, when a few
failures wiped out the state guaranty
fund, proving, as it had been proven
in many other states, that the guaran­
ty idea is good in good weather, and
unsound in bad weather. Faced with
extra assessments, a bankrupt guaran­
ty fund, and the conviction that the
solvent state banks would become
eventually insolvent if made to pay

Central Western Banker, December, 1928

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Federal Reserve Bank of St. Louis

for the losses of other banks for years
to come, the final chapter in the fail­
ure of the Kansas guaranty law came
in April, 1926, by a momentous decis­
ion of the Kansas supreme court. The
case involved the proper interpreta­
tion of the provisions relating to the
withdrawal of state banks from the
guaranty system.
A Test Case

Seventeen withdrawing banks band­
ed together in friendly suit to deter­
mine these points, which previously
had been clouded in doubt, due to the
loose provisions of the guaranty act.
The state supreme court held that “ the
liability of member banks under the
guaranty act is limited to the bonds
pledged. There is nothing in the act
which creates a personal liability on
member banks.” This decision was
exactly what the seventeen banks
sought.
Speaking further of the state guar­
anty law, the supreme court said:
“ The whole scheme is hopelessly and
irretrievably bankrupt— and can never
be made to pay out, even the interest
on its obligations. All this means that
if this $6 ,000,000 (the estimated net
liability of the operating guaranteed
banks) is a fixed charge on present
member banks, no one of them which
desires to liquidate and retire from
business, can do so in less than 20
years certainly, nor in less than 140
years, almost as certainly, nor before
the end of eternity in all probability.”
Following this decision, which lim­
ited the liability of the few remaining
banks in the system to about a million
dollar’s worth of pledged bonds (an
average of about $1,600 per bank) the
Kansas state bank commissioner was
instructed to sell to the highest bidder,
the bonds and apply the proceeds to
payment of depositors’ claims in de­
funct banks. A total of $357,000
worth of bonds were sold for $315,000
which, along with other money avail­
able, made around $700,000 that was
paid out to depositors of closed banks,
nine bank’s depositors being paid in
full, the balance prorated between two
other banks, the remaining defunct
banks receiving nothing. Total claims
(Continued on Page 31)

9

By A. M.

D

e

V

oursney

Manager, Protective Depart­
ment, Wisconsin Bankers’
Association

A . M . D eV o ursney
P R E V E N T IV E pro* tection, the objective
of Bank Association
protective work, nec­
essarily includes all
phases of protective
thought and activity.
To no one preventive
can be accorded all the credit for the
recent experience of genuine relief
from the depredations of burglars and
robbers. Heavy vault doors, alarms,
re-locking devices, gas protection,
community protection, immediate and
thorough investigation, satisfactory
penalties imposed by modern laws, are
all contributing to our present im­
munity from attack.
It is not sufficient that a protective
department have a past record of ac­
complishment. The past is gone and
we must look to tomorrow. Do you
know that insurance statistics have
predicted that some day burglaries
would again predominate over rob­
beries? They believe that burglaries
and robberies run in cycles, but offer
no concise data on why or when. Sta­
tistics are based on past performances.
Efficient bank protection requires
more than statistics. It demands defi­
nite facts and constant analysis of
criminal trend.
The Wisconsin Bankers Associa­
tion protective manager reports on
October 22nd, that there were only
four robberies of member banks in
Wisconsin in the past two years with
every robber captured and sentenced
to fifteen years and upward in the
state’s prison, with a net robbery loss
for that period o f less than $400. He
reports only one successful burglary
in the same period with a loss of but
$208.00— a total net loss to Wisconsin
Bankers Association members o f but


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Federal Reserve Bank of St. Louis

from January, 1920, to
December 31st, 1925,
there were 72 burglar­
ious attacks on banks
in Wisconsin causing
money and security
loss of $209,548.93, and
to off-set this contin­
ued attack there were six convictions
of burglars for the burglary of these
banks with sentences aggregating 69
years meted out to these six men, the
highest sentence being 30 years and
the lowest being five years.
This experience of Wisconsin is no
different than the experience of other
states. They have all had numerous
attacks with few convictons because
the possibility of identification was de­
cidedly remote in cases of burglary.
W e are inclined to believe that the
task of eliminating the burglary haz­
ard will be even greater than the task
of reducing the robbery hazard. Let
us review the situation, past and pres­
ent :
One of the earliest methods of at­
tack on banks was by punching the
combination. This was reasonably
successful until met by better vault
doors, and re-locking devices.
About 1890, the use of black pow­
der was introduced and followed af­
ter a number of years by dynamite.
This was met by stronger safes— then
came nitro-glycerine and it now seems
a far cry to the time when the yegg
calmly sat upon the top of the safe
and exploded the nitro with a sledge
hammer.

Your

How

Bank burglary is coming back,
equipped with modern methods
that make burglary a greater po­
tential hazard than ever before.
$608.00 in two years by burglars and
robbers.
The report of the American Bank­
ers Association protective manager at
Philadelphia, recently, indicates that
for the year ending August 31st, 1928,
their member banks suffered 177 day­
light robberies and 28 night burglaries.
Comparison with a similar preceding
period shows that there have been an
increase in robberies of 55 per cent
within a year and a reduction of burg­
laries of about the same percentage.
Provide Real Hazard

From these reports it is quite natur­
al to presume that burglary is a de­
cadent profession, doomed to early
discard and abandonment by the thiev­
ing fraternity.
This conclusion is unwarranted and
erroneous. Bank burglary is coming
back and is returning equipped with
modern methods and tools that make
burglary a greater potential hazard
than ever before, while the hazard of
robbery is still engaging the undivided
attention of bankers associations.
Before we look to the future, let
us see what the past burglary records
show :
Searching our records, we find that

Illinois Bank First Victim

The story of the first burglary with
nitro-glycerine will bear re-telling in
part. It occurred in a bank at Salem,
111., and created such excitement and
interest that the president of the bank

Central Western Banker, December, 1928

10
called in the officers of the banks in
the neighboring towns to examine the
premises. This examination caused
considerable apprehension on the part
of the bankers, and the safe companies
were all decidedly interested to obtain
the facts so that they could plan a
safe that would foil this method of at-

ful will soon become the method of
other gangs.
This nitro-glycerine epoch ran along
for some considerable time. It was
met by the round screw door, the first
of which were of plate construction.
The thieves having some success with
these, forced the manufacturers to
step forward again and they produced
the solid round door safe and then ad­
ded maganese to the steel body of the
safe for further security.

torches have eliminated the hazard
of flare-back and our modern torch, or
the more recent lance, are decidedly
dangerous in their application to vault
doors or safes that contain no resist­
ance to this implement. This brings
us up to date as far as burglarious
tools are concerned.

iiiimimiiiiiiiiiimiiimiiiMiiiimiiiiiiiiitiiiiiiimiiiiimiiiiiiimiMiiiiiimiiimiiiiiiimiiiiiiiiiiiiiiiimiiimiiiim

The author o f this article comes from a
family identified zuith police work for sev­
eral generations. A recent publication writ­
ten by Herbert Asbury under the title o f
“ Gangs of New York” offers as a history
of the draft riots July 14, 1863, as follows:
Throughout the evening «another
crowd had been assembling in City Hall
Park and Printing House Square, and
when the tip town mob came streaming
down Park Row an attack was im­
mediately begun. Sergeant De Voursney attempted to defend ‘ The Tribune’
building single handed, and fought val­
iantly in the doorway until he was sur­
rounded by a ring o f dead and dis­
abled gangsters, but he zvas finally
overwhelmed and the mob rushed in­
to the building, over-running it and
setting it on fire in half a dozen places.
The editorial and mechanical forces,
led by Horace Greeley, escaped down
Showing what an oxy-acetylene cutter will
the back stairway, and Greeley was
Another oxy-acetylene cutter job per­
do in a few minutes when applied
chased into a Park Row restaurant,
formed by the usual equipment found
to ordinary type, of vault door.
where he hid under a table.”
in garages and welding shops.
Mr. A. M. DeVoursney’s father zoas
tack. Meanwhile thieves from all over
Startling New Methods
chief of medical staff, Blackwell’s Island
the United States flocked to the leader
Penitentiary, New York, and his uncle was
About
five or six months ago a
of this successful gang even offering
police and fire commissioner o f Neve ark,
series of successful burglaries started
N. J.
to work for him for mere subsistence
in Chicago. This gang has shown full
A t twenty-nine years of age the author
if he would only teach them how to
was managing one o f the eighteen o f ices
and
complete knowledge in combina­
produce the nitro-glycerine and how
o f an international detective agency, being
tion punching, the use of nitro-glycer­
to use it. The reason we mention this
the youngest man in this executive position
ine and the cutting torch, and now use
at that time.
all three methods in a single attack on
Before he was thirty-five he zvas manag­
a safe.
ing the criminal department of an interna­
tional detective agency at Chicago, and be­
fore coming to Wisconsin was Chief Spec­
ial Agent o f the Illinois Bankers Associa­
tion, where he still holds the record for
work resulting in the speedy convicuon of
bank robbers and burglars in a case where
Johnny Gardner and his gang were arrest­
ed, convicted, sentenced and on their way
to Joliet penitentiary within forty-eight
hours after they had burglaried the State
Bank o f Ohio, Bureau County, Illinois.
Mr. DeVoursney’s mechanical and elec­
trical knowledge, as well as his ability along
those lines, is conceded by manufacturers
selling vault equipment, alarms and devices,
zvho without an exception, maintain very
friendly relations with the Protective D e­
partment o f the Wisconsin Bankers’ A s­
sociation. (Editor’s Note.)
A common type o f maganese safe that with­
stood the oxy-acetylene attack
riiiiiiiiiMiMiiiiiiiiiiiiiiimiMtiitiiimiiiiimimiiiiiitiiiiiiiiiiiiiiiiiiiiiimiii,Mm,,,im„Mm
,inunnnnin,,,,,
but a few minutes.
ihih

Only forty-one seconds required to force
entrance to vault illustrated above.

story is to emphasize the fact that a
successful method of burglary or rob­
bery attracts considerable attention by
not only the police, but by the thieves,
and any method that proves success­

The next move was up to the bank
thieves. Science had evolved the weld­
ing torch and latter the cutting torch,
both of which, having found such ex­
tensive use in burglary. Many a good
burglary was spoiled by a flare-back
that exploded the hose which connect­
ed the tanks with the operating torch,
but armor-plated hose and better

Central Western Banker, December, 1928

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Federal Reserve Bank of St. Louis

One burglary netted $29,000— an­
other $26,000— another $16,000 and
they continue unabated. As far as we
know, no convictions have been ob­
tained in connection with these big
mercantile burglaries, in spite of a
$5,000 reward in one case offered by a
mercantile establishment that was one
of the victims.

11
Another case o f burglary, by ap­
parently this same gang, and using all
three methods of burglarizing, was
perpetrated on a watch-case manufac­
turer near Cincinnati, Ohio, which
netted a return to the burglars of
about $35,000 in gold bullion. This
case makes quite apparent that the
Chicago gang is stepping out into new
territory after their successful attacks
in Chicago.
With well planned jobs, adopting
three methods in one operation, with a
background of success on a large scale,
this gang, or other gangs adopting
these methods, are going to travel far
before successfully stopped.
There
have been few actual convictions for
bank burglary. Little evidence can be
brought into court ; very seldom can
witnesses positively identify men seen
in the semi-darkness, and the best re­
sults have been obtained from a law
penalizing the possession of burglar
tools. Wisconsin and a few other
states have such a law.
Should Be First Consideration

It is quite apparent that strength of
equipment is the first deterrent to be
considered. A big man very seldom
gets a punch on the nose. Another
matter to be considered in connection
with burglary are adequate burglar
alarms, such as the McClintock “ A ”
Grade of full six-sided protection hav­
ing a burglary discount of 65 per cent,
which reduction in itself is a very fav­
orable recommendation, and for the
smaller banks there are preventative
devices that will foil or prevent entry
to vaults through the door or that will
delay their action to some considerable
extent.
Our department has endeavored to
impress upon the members of this as­
sociation the necessity fo r the incorpo­
ration o f torch-resisting metal in vault
doors. There are still some banks
that place price above utility and buy
laminated vault doors that are laid up
with successive plates of open hearth
steel. The resistance to modern bur­
glarious attempts of such a door is
appallingly small.
The most modern development in
vault doors sponsored by such high
class companies as the Mosler Safe &
Lock Co., York Safe & Lock Co., etc.,
is the door with the integral shell cast­
ing with the heavy “ V ” type cast jam
laid up with heat resisting and drill re­
sisting metals, and engineered to re­
sist the known methods of attack. This
type of door is sponsored by the lead­
ing vault engineers of the country and
has the approval of this department.
W e are fully aware that the under­
writers give the same burglary dis­
count in their manual for the door


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Federal Reserve Bank of St. Louis

Noted Author Starts
'T ' HE above photograph shows
Harry Stephen Keeler, noted
author of Sing Sing Nights, The
Deuce of Spades and other mystery
novels, officially inaugurating the
1929 Christmas Club season at the
Capital State Saying Bank, Chicago.
The photograph shows Mr. Keeler
being congratulated by the bank’s
officers upon opening account number
one. He is seen shaking hands with
O. A. Christensen, president of the

bank and on his left is Harry E.
Ivoeber, the bank’s vice president.
The Capital State Savings Bank is
a scene of beehive activity with its
new Christmas Club season going at
full speed. Unique decorations ap­
pear in the lobby and accounts are
opened at an old fashioned Christmas
hut, built over the tellers’ cages. A t­
tractive Christmas gift candles are
being given away with every account
opened during the coming month.

that is poorly constructed of the cheap­
est material, as long as it be of steel,
as they do for the most carefully con­
structed door built to the highest type
of specifications, including the best of
materials and workmanship; but the
question presents itself, are you pur­
chasing insurance discount or are you
buying a door to protect the contents
o f your vault? Simply because the in­
surance companies persist in retain­
ing an obsolete classification there is
no excuse for a bank to take the
chance of a serious loss, and further­
more, what bank has complete insur­
ance coverage?
There are many banks that cannot
afford large doors and these banks are
in the greater majority. What are we
doing for them?
About three years ago the writer
had occasion to examine gas protec­
tive devices. Inquiries kept coming
in relative to a bottle to be attached

to a door or placed in a safe that was
selling at such low price that it at­
tracted the bankers’ attention and
many orders were placed subject to
inquiry by this department.
W e have access to several chemical
analyzation laboratories, so we had
this so-called gas analyzed. It turned
out to be a very cheap combination of
ammonia and mustard oil and upon
so advising our members they can­
celled their tentative orders.
Not Always Effective

Realizing that there was a genuine
demand for gas protective devices,
possibly induced through the public­
ity relative to the use of gas during
war time, this department endeavored
to segregate the sheep from the goats
as this demand was being met by
both good and bad devices. There
were two products about two or three
years ago that impressed us favorably.
(Continued on Page 34)

Central Western Banker, December, 1928

12

and Capital Values
In Farming
By H e n r y V. M c K i b b i n ,
John Nickerson & Co., Inc.
TN TH E agricultural situation today is found evidence
A of the termination of the post-war deflation— the last
of the major divisions of American industry to so ad­
just itself. The evidence of the culmination lies in the
stabilization of land values, which establishes the com­
pletion of readjustment of inflated war time capital
values to sound values as based on returns from land.
The fifth annual survey of the farm land markets
reported early this year by the National association of
Real Estate Boards contains the following findings:
1. A larger volume of farm acreage was sold in
1927 than in 1926 at the same or higher prices.
2. An upward tendency is recorded in farm prices
in 47 per cent of the communities reporting. Prices are
reported either stationary or upward in 85 per cent of
the communities.
3. Purchases of farms are now predominantly by
persons electing the farm as a business enterprise and as
a home. Moreover, in ten per cent of the communities
reporting, purchasers are buying farms to hold for an
increase in price, and in 3 per cent they are buying farm
land as an investment.
4. Optimistic sentiment as to farming and farm land
values prevails among the farmers themselves in 70
per cent of the communities reporting.
The United States Department of Agriculture in a
statement issued March 31, 1928, reporting farm bank­
ruptcies (which have been the depressing influence on
farm values) as having declined in 1927 to .99 per 1,000
farms from an average of 122 per 1,000 farms during
1924 to 1926, said the following:
“ Apparently the decline in the 1927 rate indicated an
approaching end of the abnormal wave of bankruptcies
made inevitable by the losses of the post-war agricultural
crisis. This does not imply that no improvement in agri­
cultural conditions had been made prior to 1927. Slow
recovery began, in fact, as early as 1922. But changes
in agricultural conditions are not reflected immediately
in the rate of farm bankruptcies. It usually takes sever­
al years for prosperity to reduce, or depression to in­
crease the farm bankruptcy rate.
“ In other words, the numerous farm bankruptcies of
the last three or four years are a delayed reflection of
1921-22. In like manner, the decline in the bankruptcy
rate in 1927 may be considered evidence both that the
job of clearing away the wreckage of the depression
period is nearing completion, and also that the last few
years have been on the whole a period of agricultural
recovery.”
The earning power of United States farms has been
on the upward trend since 1922. Land values, however,
continued to decline into 1927. In the agricultural in­
dustry where operations are in small hands conducted
mostly within business records and by trial and error
methods and where investment is comparitively non­
liquid, it has taken years of unrelenting economic pres­
sure to accomplish a revision of value which in the more
volatile manufacturing and trading businesses was at­
tained in one relatively brief but drastic move.
In a study of the farm real estate situation prepared
by the Bureau of Agricultural Economics of the United
Central Western Banker, December, 1928

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Federal Reserve Bank of St. Louis

States Department of Agriculture and published Oc­
tober, 1927, the net income available for total capital in­
vested in agriculture before allowance for management
reward (the equivalent of “ Administration” in other in­
dustries) was given as follows:
(In millions of dollars)
Net Income

Crop Year
19191920192119221923192419251926-

20.................................................................. 5,030
21.................................................................. 375
22.................................................................. 785
23.................................................................. 2,014
24................................................................ 2 097
25.................................................................. 2,656
26.................................................................. 3,082
27.................................................................. 2,440

The same study reported total capital invested in
agricultural production as follows :
(In millions of dollars)
Net Income

Crop Year
19191920192119221923192419251926-

20............................
21............................
22......................
23......................
24.............................
25......................
26.............................
27.............................

................................... 79,459
................................... 73,139
................................... 63,811
................................... 62,549
................................... 60,472
................................... 59,745
................................... 59,712
....... ...........................58,255

The consistent reduction of investment reflects the
steadily declining value of land.
From the same source is obtainable a statement of
value of the farm operators’ net investment in agricul­
tural production, that is, total agricultural investment
less property rented and debts ow ed:
(In millions of dollars)
Capital Invested

Crop Year
19191920192119221923192419251926-

20.........................
................................ 47,065
21.............. .................. ..................
................................41,172
22................................ ................................ 34,711
23.........................
................................ 34,321
24.........................
................................ 33,046
25............................. ................................32,574
26................................ ................................ 32,727
27............................... ......... ...................... 31,812

The operators’ net income applicable to these latter
figures is as follow s:
(In millions of dollars)
Net Income

Crop Year
19191920192119221923192419251925-27..

20..
21..
22..
23..
24..
25..
26..

.................... 2,675
.......(— )
1,720
...... (— )
797
.................... 419
.................... 520
.................... 1,039
....................1,413
................... 874

The Bureau of Agricultural Economics’ index of
estimated per acre value of farm land of the United
States as of March 1st of each year is as follows (in
percent of 1912-14 values) :
March 1

Index

1920.
1921.
1922.
1923.
1924.
1925.
1926.
1927.

169
157
139
135
130
127
124
119

A cursory survey of the series of figures just given
would indicate an anomoly in improving returns from
(Continued on Page 34)

Locate Stolen Currency

That the men responsible for dyna­
miting the vault of the bank at Harris­
burg, Nebraska, on the night of
August 20 last, and who got away
with $2,000 in currency and a large
number of checks, decided to take no
chances
on
being
apprehended
through attempts to raise money on
the checks they stole, became certain
recently when special agents of the
Union Pacific railroad secured pos­
session of several bundles of vouchers
which have since been identified as
those missing from the Harrisburg
bank, the total of the checks being
reported at $16,500.
The checks were found along the
right-of-way of the new Union Pa­
cific railroad extension near Egbert,
Wyo., where the Egbert-Creighton
extension crosses the Lincoln high­
way and connects with the main line.
The finding of one bunch of checks
in a thicket near the railroad result­
ed in a search of the locality where
the robbers are thought to have stopp­
ed for a division of loot before board­
ing a main line train, and all of the
missing checks were found.

he has been traveling representative
of the Heinz company. He is the son
of Mr. and Mrs. G. W . Smith of
York, Nebraska.
Mr. Gage is the son of Mr. and
Mrs. Perry Gage, owners of the Pal­
mer Journal. He too has a wide ac­
quaintance over the county. Mr. Gage
attended Nebraska Central College
for two or more terms.
Increases Caiîital Stock

An increase of 25 per cent in the
stock of the Omaha National Bank,
Omaha, Neb., is to be made January
1 , under plans of the bank to take
over the trust business of the Omaha
Trust company. The plans, announced
by Walter W. Head, president of the
bank, in a letter to stockholders De-

Investigate Armored Car

Omaha may soon have an armored
automobile to take care of payrolls
and also of currency between banks
and various business establishments.
J. R. Allen of the Brinks Express
company, o f Chicago, recently inter­
viewed many Omaha banks and busi­
ness houses in connection with the
armored car. His company carries
payrolls, currency and securities for
147 banks in Chicago, besides having
contracts in many large cities of the
country.
Resigns

George Wright, former assistant
cashier of the First National bank of
Belden, Nebraska, and later cashier
of the Laurel National bank, and the
Creighton National bank, has resign­
ed his position and accepted a posi­
tion with a creamery company.
Purchase Bank Interest

Ray Smith and Bruce Gage have
entered Merrick county banking cir­
cles, having purchased the interest of
F. O. Binderup in the Loup Valley
State bank of Palmer, Nebraska.
Mr. Smith will be remembered by
his many friends in Central City. For
five years he was with the Central City
National bank. For the last two years


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Federal Reserve Bank of St. Louis

W

alter

W.

H

ead

cember 7, only needed their approval,
which was expected, at a special
meeting.
The new plan increases the capi­
tal stock of the bank to $1,250,000.
The customary dividend of 3 per cent
per quarter will be continued, Mr.
Head indicates. The letter announc­
ing the details of the plan, follow s:
“ At the time of the organization of
The Omaha Trust Company nation­
al banks did not handle trust business.
They are now authorized by law to
exercise complete trust powers. By
reason of the bank’s larger invested
capital account and its prestige and
standing developed through its 62

years of business life, your directors
believe it is advisable that after Jan­
uary 1st, 1929, The Omaha National
Bank handle all new trust business,
and as rapidly as possible, assume
trusts now held and cared for by The
Omaha Trust Company. They be­
lieve further that the sale of invest­
ment securities can be carried on
more satisfactorily by an organiza­
tion entirely separate from the one,
or ones, that engage in trust under­
takings.
In anticipation of this reorganiza­
tion, The Omaha National Bank has
been incorporated and will have a
paid up capital stock on January 1st,
1929, of $250,000.00, an amount
deemed sufficient at this time to satis­
factorily and profitably handle the
bond business, the mortgage business,
and the insurance business heretofore
transacted by The Omaha Trust Com­
pany.
The capital account of The Oma­
ha Trust Company, according to the
plan recommended to the stockhold­
ers by the directors will be reduced
from $500,000.00 to $200,000.00. This
company will continue to administer
trust business which it is now caring
for until such time as the trusts are
terminated or it is deemed advisable
to transfer the business to The Oma­
ha National Bank.
The Omaha Safe Deposit Com­
pany now capitalized at $200,000.00
will be continued in business for the
purpose of continuing to operate the
safety deposit _vaults. The capital
account of this corporation will be
substantially reduced.
As a result of these changes in the
capitalization of the affiliated compan­
ies, $250,000.00 will be paid into The
Omaha National Bank, as additional
capital. Subject to the stockholders’
approval, it is proposed to issue ad­
ditional stock of this amount for dis­
tribution as a stock dividend to pre­
sent stockholders in proportion to the
shares which they now own, each
stockholder being entitled to onefourih share for each full share now
held.”
Friendship is a word the very sight
of which makes the heart warm.—
Birr ell.
When men are lonely they stoop to
any companionship; the dog becomes
a comrade, the horse a friend; and it
is no shame to shower them with ca­
resses and speeches of love.— Wallace.

Central Western Banker, December, 1928

14

The State bank of Elkhorn, Nebras­
ka, was forty years old recently.
The institution was originally or­

ganized as a private bank and began
business November 5, 1888, by J. M.
Bruner and B. B. Baldwin.
On June 15, 1909, it became a
state bank and continued under the
management of Messers. Bruner and
Baldwin until April 15th, 1915, when
it was purchased by the late Otto H.
Schurman of Fremont, the late J. N.
Wyatt, E. A. Schurman and J. A.
Gibbons.
Mr. Wyatt was president of the
bank until his death about 18 months
ago, with E. A. Schurman as cashier.
On the death of Mr. Wyatt, Mr.
Schurman became president. Otto H.
Schurman sold his interest a few
years before his death in March, 1927.

g AN KERS, and the people of Ne­
braska generally, now recognize
that one of the most important prob­
lems facing the state legislature when
it meets in January, if not, indeed,
the most important problem of all, is
that connected with the bank guar­
anty law.
The repeal of the law does not, at
this time, seem likely. Both candi­
dates for governor expressed them­
selves as in favor of strengthening it.
At the same time it is recognized that
with a deficit of 10 millions in the
fund, and with new failures occurring
from time to time, that to redeem the
guaranty pledge soon, under the con­
ditions of the present law, will be
extremely difficult, if not impossible.
The proposal for a general state
tax to take up the deficit has been
put forward, but has gained little
support. At no time in the past was
the credit of the state pledged to re­
pay the deposits in state banks man­
aged under the guaranty system.
An early test of the constitution­
ality of the law is seen in a circular
letter recently sent to the state bank­
ers, asking them to join in an injunc­
tion suit to prevent collection of the
special assessment upon the state
banks organized under the guaranty
law.
The circular letter was signed by
the heads of three of the largest state
banks in Nebraska: A. L. Schantz,
president of the State Bank of Oma­
ha ; Dan V. Stephens, president of
the Fremont State Bank; and W ill­
iam Seelenfreund, president of the
Continental State Bank of Lincoln.
They resist the special assessment
of one-fourth of one per cent, based
on deposits, recently announced by
Clarence G. Bliss, secretary of the
state department of trade and com­
merce, which would bring to the

guaranty fund a little over one-half
million dollars.
No resistance is contemplated, ac­
cording to Mr. Schantz, to the regu­
lar bank guaranty assessment of onetenth of one per cent of deposits, due
on January 1.
The guaranty fund commission has
been told by a Chicago auditing com­
pany, that a complete audit of the
fund would cost $52,875.
The report of the auditing firm set
forth that there are 79 banks which
the commission is still operating as a
going concern, while 117 other banks
have been placed under receivership
during its administration. The com­
mission also has charge of 48 other
bank receiverships which it took over
from the former receiver when the
guaranty fund commission was or­
ganized in 1923, and which have not
yet been closed.
The Chicago firm estimated the
cost of auditing each going bank at an
average of 3 hundred dollars and
each receivership at $175.
Other indications of the restive at­
titude of the state toward the bank
guaranty law have come from Bridge­
port and Verdel. Depositors of two
failed banks at Bridgeport decided to
ask the legislature to make a
thorough investigation of the meth­
ods of the guaranty fund.
The
Bridgeport State bank was closed
three years ago, and then was oper­
ated by the commission until its
assets were sold.
Depositors say
they have received only 10 per cent
of their deposits.
The Nebraska
State Bank at Bridgeport, which
closed last April, has paid 15 per cent,
they say.
At Verdel, where the Farmers
State Bank was taken over by the
commission in July, 1925, and oper­
ated for two and a half years before
finally closing. Depositors say they
have received nothing.

Meet in Holbrook

Directors Meet

The Furnas County Bankers asso­
ciation held a meeting at Holbrook,
Nebraska, recently. All the banks in
the country were represented except
the Farmers’ State bank at Hendley,
there being fifteen of the bankers in
attendance. The time was spent in
discussing shop matters and possible
legislation affecting banks, which may
be proposed at the coming session of
the legislature.
The next meeting will be held at
Arapahoe at a time to be determined
by C. A. Phillips, president of the as­
sociation.

The Federal Land bank of Omaha,
will loan approximately $18,000,000
this year, according to John Carmody,
secretary. The bank made $16,750,000 in loans during the first ten
months of 1928, and now has more
than $163,000,000 in loans.
Directors of the bank met recently
They were to discuss the placing of
money in the reserve, and the annual
dividend.
Forty Years Old

Rancher Leaves Fortune

F. M. Heinrich lived most of his
mature years on his cattle ranch in
Hardin, Mont. He rode herd as a
youth, and as his years multiplied he
became a cattle raiser and eventually
a man of means, probably a million­
aire.
Often in the last seven years he
visited Omaha and there sprang up
between him and those he met in a
business and social way at the Stockyards National bank a close friend­
ship. Then, on October 27, the ranch­
er was taken by death.
The friendships he made in Omaha
were the great friendships of his life.
He bequeathed $140,000 to his five
Omaha friends.
Ford Hovey, the bank’s president,
was his financial adviser and host to
the rancher. He was left $50,000.
And Mrs. Ford Hovey, who pre­
sided at the table where Mr. Hein­
rich was honor guest so many times,
likewise received $50,000.
Henry Hovey, son of the president,
is assistant cashier at the bank, ihe
young man was quite a favorite with
the rancher. He was left $25,000.
James B. Owen, vice-president of
the bank, was given a legacy of $ 10 ,000, and the cashier, W . H. Dressier,
who kept books for the rancher for
the last two years, was remembered
with $5,000.

Farm Purchase Power

The purchase power of farm pro­
ducts compared to other commodities
is 90 percent of the 1904-14 prewar
parity, according to C. J. Claassen,
chairman of the publicity committee of
the Nebraska Bankers’ association.
Mr. Claassen said this ratio is pos­
sible in spite of an| approximate 5
percent production over 1927.
“ The sustaining influence to this
favorable position is due mostly to
the livestock industry,” Mr. Claassen
said.

Central Western Banker, December, 1928

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Federal Reserve Bank of St. Louis

15

Public Utilities and Customer
Ownership
W hy the principles and practices
D ORN fourteen years ago, as the
result of war financing, customer
of customer ownership have
ownership is becoming a full grown
proven profitable in this line of
child, and the motto of “ the public be
business.
pleased” has proven its logic, accord­
ing to a recent report of the National
whereas this year’s report gives a total
Electric Light Association, covering
of 246. The number of new stock­
1927 and 1928. The report, in part,
holders added during the past year is
says:
249,491, making a total of customer“ Customer-ownership of stocks and ownership stockholders of 1,681,768.
other securities of electric light and
The total number of shares sold up to
power companies has continued, dur­ the end of 1927 was 16,719,236 shares,
ing the year passed, to expand in very
including 3,581,206 during the past
marked degree,” says the report.
year.
“ This method of financing, which
“ Your committee feels that any
yields a considerable proportion of
doubts which may have existed at the
capital requirements, was inaugurated
beginning of these efforts as to the
about the year 1914, and while at first practicability or desirability of selling
employed by a few companies, was
stocks and other securities directly to
quickly taken up by others and was
customers, have long since been dissi­
shortly established as a tried and suc­
pated by the experiences and records
cessful policy which can be adopted
of our member companies as reported.
confidently by our member companies.
Arguments for the plan would be su“ The past year has seen the lowest
perflous. The methods and safe­
rates of return for many years for
guards, as encompassed in the ten
sound public utility securities of all
cardinal rules of customer-ownership,
classes, and has been favorable to re­
drafted by your committee several
funding and permanent financing of
years ago, have become widely recogproperties for long term periods. It
nied and continue to provide a safe
would be expected on this account
standard of procedure for member
that the amount of new financing done
companies to follow.
through junior securities, including
“ Scrutiny of the statistics reveals
customer-ownership stocks, would be
that the shares sold in recent years are
relatively less than during years when
not as widely distributed as in earlier
the market for bonds and lower inter­ years. It is believed that, with more
est bearing securities has been so fa­ emphasis on sales under the deferred
vorable. It is, therefore, most encour­
payment plans, the distribution can be
aging to note that the number of com­
further broadened, with greater re­
panies selling issues of customer-own­
sultant benefit to the companies and
ership stocks is larger than ever be­ their stockholding customers.
fore, and that the total shares sold
Look First
during the year represent a large in­
“ In compliance with the recom­
crease over an preceding year, ac­
cording to the records of your com­ mendation made by the public policy
committee to all member companies
mittee.
to support the Better Business Bureau
“ The number of shares reported
in their fight on the stock swindler,
sold during the year aggregate 3,581,and to disemínate the bureau’s slo­
206, which compares with 2,686,187
gan, ‘ Before you Invest— Investigate,’
in 1926 and 2,926,271 in 1925, which
and in harmony with requests fre­
was the high record up to that time.
The number of companies reporting quently voiced by members in various
parts of the country, the customerhaving engaged in this phase of activ­
ownership committee has worked out,
ity up to the end of last year was 228,


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Federal Reserve Bank of St. Louis

and herewith endorses, a plan where­
by the protective facilities of the Na­
tional Better Business Bureaus and its
42 local affiliated bureaus, with their
thousand points of contact for the col­
lection and dissemination of informa­
tion, are made completely available to
all companies having sold, now en­
gaged in selling, or that expect at some
future date to sell, stock to their cus­
tomers.
“ The customer-ownership commit­
tee has examined thoroughly into the
Better Business Bureau movement
and has come to the conclusion that
its machinery is most practicable for
utilization by public utilities in observ­
ing No. 7 of our ten cardnal rules:
“ Loss of capital by shareholders in
hazardous and fraudulent offerings
from various sources must be guarded
against by the rendering of authentic
information and advice to sharehold­
ers.
“ The customer-ownership commit­
tee cannot emphasize too strongly the
timeliness of this arrangement with
the National Better Business Bureau.
While it is possible that a few com­
panies, due either to their own situa­
tion or the fact that much good work
has already been done by the various
local bureaus, may not feel a special
need for the Better Business Bureau
service, the committee believes that no
electric light and power company can
afford to withhold its support from
the National Better Business Bureau
whose general work has now become
of such definite value to the customerownership program.
Fighting Swindlers

“ Since 1914 nearly 1,700,000 cus­
tomers have become shareholders in
electric light and power companies.
Not only have they directly invested
more than $1,600,000,000, but also
they are in daily contact with our com­
panies as buyers of our service.
“ A large amount of time and ef­
fort has been devoted to creating this
body of customer-owners. It is worth

Central Western Banker, December, 1928

16
furthering such effort to retain and
protect them. Customer-owners, be­
ing essentially investors of small
means, having been educated by us to
put their savings to work, offer a fer­
tile field for cultivation by swindlers
or fraudulent promoters.
“ The customer who becomes a util­
ity stockholder is attracted by the se­
curity of his investment. Big profits
never enter into a customer-ownership
sale talk. But the spacious argument
of the plausible swindler that his pro­
motion means big profits is sure to
find a sympathetic hearing unless the
facts about the swindle ,are made
known. If these facts are not dis­
seminated it is certain, in the commit­
tee’s opinion, that an increasing num­
ber of our present customer-owners
will sell their utility securities in or­
der to buy questionable stock. Fur­
thermore, this infiltration by the
swindler will make it more difficult
for utility companies to put on new
customer-ownership campaigns.”

The ten cardinal rules of customerownership referred to are as follow s:
1. The sale of the securities must
be directed from the company to cus­
tomer or through an agency expressly
created for the purpose and control­
led by the company.
2. The safety of the securities o f­
fered must be amply protected by
property and earnings.
3. A minimum rate of dividends
must be provided for insofar as hon­
est judgment based on experience can
forsee.
4. A reliable resale market must be
maintained in some manner so that
shareholders who wish to dispose of
their holdings can do so promptly at
nominal expense.
5. A partial payment purchase
plan must be operative in order to
give every customer who can save a
small amount monthly full opportunity
to become a shareholder, and to en­
courage thrift.
i6 . The proprietary interest and

responsibility of shareholders must be
emphasized and the shareholders sup­
plied regularly with information re­
garding their company and its affairs.
7. Loss of capital by shareholders
in hazardous and fraudulent offerings
from various sources must be guarded
against by the rendering of authentic
information and advice to sharehold­
ers.
8 . The number of shareholders
must be increased steadily and efforts
should be made to avoid large indi­
vidual accumulations of stock.
9. Employees must be carefully in­
structed in order that all representa­
tions made to customers or others are
in line with the facts.
10. Managements must realize that
customer-ownership multiplies their
obligations to the public and intensi­
fies the trust reposed in them. It does
not replace the constant striving for
higher efficiency, good service, rea­
sonable rates, courtesy and progres­
sive public relations policies.

W hy Consolidations Take Place
HE question o f economic benefits
arising from mergers has prompt­
ed the Sherman Corporation to ask
several hundred bankers in 22
states about their views. The replies
showed wide variations of opinion.
As an indication of the degree to
which consolidations have been go­
ing on, it was brought out that an an­
alysis of the first 1,000 companies in
Poor’s Manual o f Industries, 200, or

one out of every five, was the result
of consolidation.
The reasons advanced in favor
of consolidation were summarized as
follows :
Growth of mass production and
mass distribution.
Surplus of physical plant— of brick
and mortar, of machines, of equip­
ment.
Necessity of meeting the competi­
tion of big business with adequate
financial sinews.

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SOUND, Diversified List

of Bonds, and Sincere, Experi­
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Central Western Banker, December, 1928

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Federal Reserve Bank of St. Louis

Changes in methods of distribution,
notably the growth of chain distribu­
tion.
The development of advertising.
High cost of selling and distribution,
contributing to which high cost are
the many duplications of effort and
expense where many competitors are
attempting to reach the same market.
The complex character of business
itself, making it difficult for one or
two managing executives of a small
company to direct effectively produc­
tion, sales, merchandising, styling,
financing, advertising, etc.
Changes in the character of the
consuming public, such as the desire
for new styles and new things.
The growth of installment or spac­
ed payment selling, with its require­
ments for financial resources on the
part of the seller.
It was pointed out that competition
with its resulting price-cutting ten­
dency, and the Federal laws against
“ price-fixing” or even price agree­
ment is likely to start executives to
thinking of getting together in a
merger with the object of finding the
strength and economy other consoli­
dations have shown.
The first step in the survey of the
opinions of bankers and industrialists
who have had experience with mer­
gers and consolidations, or who have
been close enough to such experience
to give practical opinions and judg­
ments was among commercial and in­
vestment bankers. Because in many

17

cases, the inquirers were requested
not to use names, all the opinions are
offered anonymously.
“ There are too many people in
business for themselves, too many lit­
tle people,” said the president of a
Chicago commercial bank. “ They
never should have been in business
for themselves because they were not
that kind of people. They should
have been a part of an organization
and not the organization itself.
“ It takes many qualities to make
for permanent success in business
and very few people have them all.
A man may be a genius in advertising
and a failure in service, a wonder
producer and a poor seller. He may
have unusual qualities as an organizer
and be a poor financier. His judgment
may be all right in five places^ and
weak in one and, since a chain is no
stronger than its weakest link, he fails
to carry the load. But combine these
various qualities into one organiza­
tion and you have a strong, cohesive
business unit.”
Some of the conclusions reached
bv the inquirers, after this first step
of the survey are:
Merger in field of industry, offer­
ing limited expansion opportunity is
economically desirable, if the merger
is formed soundly and thoughtfully
provided with strong, capable man­
agement :
Scientific, preliminary analysis of
all the factors in proposed merger is
essential;
The personal, human equation is the
key factor in a merger and must be
dealt with in a way that will assure
thorough cooperation and unified con­
trol of the merged companies:
If a merger’s primary objective is
the sale of watered stock to innocents,
it is economically and socially sub­
versive ;
The potential advantages to be
gained from sound merger are today
more in distribution than production
and perhaps the factor of greatest
possible advantage is reduction of
selling costs through elimination of
duplications in salesmen covering the
same territory.
Other advantages proved in degree
by cases of successful merger are:
Reduction of costs and overheads;
reduction of prices to the consumer;
broadened markets; the combination
of diversified qualities of managerial
abilities in a strong, cohesive organi­
zation ;
increased diversity
and
strength of financial control; subtrac­
tion o f duplications, whether of pro­
duction equipment, buildings, over­
heads, selling costs, etc.; increased
net profits.


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Federal Reserve Bank of St. Louis

LA ST M IN UTE N E W S
(Continued from Page 3)

The business of the Former Garfield
bank will continue in the present
quarters, and it will be known as the
Garfield branch of the Chase Nation­
al. The personnel will remain the
same.

r^H IC A G O GAINS another huge
^ financial institution through the re­
cently announced consolidation of the
First National Bank and the Union
Trust Company. Prior to the consoli­
dation the First National is planning
to increase its capital stock from
$15,000,000 to $20,000,000. F. O.
Wetmore of the First National, and
F. H. Rawson of the Union Trust

will become co-chairman of the con­
solidated bank. H. A. Wheeler will
be vice-chairman, and M. A. Traylor
president of the consolidation. The
Union Trust Company will give up its
present banking quarters.
T N CO N TR A ST to the record­
-breaking pace in the stock market,
the November bond market was quiet,
using the amount of new investment
financing as an index. However, the
total was the largest of any month
since June, and shows a trend toward
greater activity. New bond and note
offerings in November totalled $526,184,000, which compares with offer­
ings of $691,753,500 in November,
1927 and $426,516,000 in October,
1928.

Commercial Paper and Acceptances
Short and Long Term Bonds
Investment Trusts

W e can supply you r needs in any m aturity of thirty
days or longer at rates from 4/€% to 7%.
Please send for our lists

CLARKE, LEWIS & CO.
318 SOUTH N IN E T E E N T H STR EET
OMAHA

Central Western Banker, December, 1928

18

November Bond Market Quiet
T N C O N T R A ST with the recordbreaking pace in the stock market,
November’s bond market was quit, if
the amount of new investment financ­
ing is used as an index. The total,
though, was the largest of any month
since June and shows the trend to­
ward greater activity.
New bond and note offerings in
November totalled $526,184,000, ac­
cording
to
the
compilation
of
Lawrence Stern and Company, Chi­
cago investment bankers. This com­
pares with offerings of $691,753,500
in November 1927 and $426,516,000
in October 1928.

Tax exempt issues for the first
time in a long period led last month’s
offerings. Large New York City and
Federal Land Bank issues helped
swell this total. This group and rail­
roads were the only classifications to
show an increase over both October
1928 and November of last years.
Industrials and public utilities showed
an increase over October, but were
sharply lower than in November of
last year. Foreign offerings were
small last month and were less than
one-half the total in that group in
November a year ago.
The total of all offerings for the

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BONDS

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SHORT

TERM

NOTES

Central Western Banker, December, 1928

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Federal Reserve Bank of St. Louis

'

ACCEPTANCES

eleven months of 1928 amounted to
$6,034,044,000, compared with $7,641,161,000 for the corresponding
period of 1927. This is a decline of
about 21 per cent.
161 Issues

Last month’s offerings, excluding
tax exempts, included 161 seperate
issues. This compares with 143 such
issues offered in October 1928 and
189 in November 1927. There were
76 major issues of a million dollars
or more brought out in the market
last month, compared with 67 in O c­
tober, 50 in September, 20 in August,
and 85 in November a year ago.
The weighted (by. volume) indices
of average yields at offering prices
showed an upturn last month and
tend to indicate a slight hardening of
money conditions in the bond mar­
ket. The corporate average for the
month registered 5.62 per cent com­
pared with 5.52 per cent in October
and 5.29 per cent in November last
year. This increase was due almost
entirely to the large rise in the in­
dustrial index to 6.12 per cent from
5.79 per cent in October and only
5.34 per cent in November 1927.
Real estate average stayed unchanged
at 5.90 per cent. Public utilities, rail­
road and foreign indices all showed
marked upturns when compared with
a year ago.
O f the 76 corporate and foreign
issues in the million dollar class
offered last month, New York invest­
ment bankers underwrote 31 totalling
SI70.165.000, compared with 28 total­
ling $202,723,000 offered in October.
Chicago dealers headed svndicates of
23 issues totalling $85,500,000. com­
pared with 12 issues totalling $32,750.000 in October. Boston again took
third place for the fourth month in
succession, followed by San Fran­
cisco and Baltimore.
The Lawrence Stern and Company
monthly bond review concluded as
follow s:
“ There were no features of partic­
ular interest in November’s bond
market. The volume of bonds traded
o n the stock exchange fell considerablv below the October total, and
public attention toward the bond
market was limited largely to con­
vertible issues, which registered some
spectacular rises, in sympathy with
advancing prices on the stock market.
“ During the first part of the month,
there was a continuation of the in­
stitutional buying of high grade
issues which was noted in October,
but during the latter half of the

19

month this buying tapered off and a
slight reaction in the price of a num­
ber of the high grade, low coupon
rate issues was registered.
Very
little interest was exhibited in the
foreign list.
“ The most favorable factor noted
during the month was the very good
reception which was accorded to the
fair volume of new issues which were
offered. Underwriting houses have,
for the most part, priced such issues
on an attractive basis, and the new
offerings were very readily absorbed.
“ Although it is probable that a
particularly active bond market can­
not be expected so long as the pre­
sent enormous volume of trading on
the stock exchanges continues, the
public continues to be favorably in­
clined to well priced new issues, and
the general situation is entirely
sound, with a prospect for gradual
improvement after the beginning of
the new year.”
A N E ST A T E IS A P PR AISED

Soundness of judgment is reflected
alike in the manner in which the late
Payne Whitney accumulated the lar­
gest fortune ever appraised for trans­
fer tax purposes in this state and in
the manner in which he provided for
its disposal.
In these days of conflicting invest­
ment theories, and more particularly
of 7,000,000 shares days on the New
York Stock Exchange, a special in­
terest attaches to the list of security
holdings on which the Whitney estate
was build. The latter is striking in
two respects.
First, for its comparatively small
proportion of bonds as compared with
stock; second, for the unusual dearth
o f poor or worthless securities of
either category.
The respective merits of stocks and
bonds as media for investment may
be and have been argued interminably.
The war-time and
post-war-time
periods of inflation did much to dis­
turb the complacency of the adherents
of the “ pure investment” theory; the
extraordinary prosperity of the Unit­
ed States, in which common stocks
have participated to such an amazing
extent in increased earnings and
values, has done even more to bring
about a change of investment view­
point. Evidences of this trend are to
be found on every hand.
The Investment Bankers’ Associa­
tion of America, the “ bond man’s”
own national organization, frankly ad­
mitted at Atlantic City a month ago
that good common stocks rightfully
deserved a place in the social register
o f finance. Investment experts at this
very moment are engaged in rewriting


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Federal Reserve Bank of St. Louis

the savings bank laws ot the state
along lines which will put less of a
premium on liens on physical assets
and more of a premium on earning
power. All of which means not that
bonds are in danger of going out of
style, but that income-producing abili­
ty is being scrutinized more closely
in the study of investments than it
ever was in pre-war days.
The second characteristic of the list
of securities included in the Whitney
estate, the scarcity of poor or worth­
less holdings, is peculiarly worth not­
ing at this time. At the moment,
thousands, and perhaps hundreds of
thousands, of persons throughout the
length and breadth of this country,

pE W

are “ in” the stock market. Some of
these are speculators and some are
investors. The speculators are deal­
ing on margin, playing tips “ straight
from the feed box,” trading in and
out of stocks, never lingering long
with a stock that isn’t moving. The
investors are buying good stocks, pay­
ing real money for them, and “ sitting
with them.” It is not, of course, liter­
ally true that no margin trader has
made money in this market; it is
literally true that for every one who
has done so there are a hundred who
have made much more by the simple
process of investing in seasoned stocks
and holding them.
If in the published list of holdings

single banks or institutions can

afford to em ploy a real financial e x ­
pert, yet these experts are at your dispos­
al through the financial services to which
our house subscribes.

W e place at your disposal the opinions o f
the best in form ed financial experts.

Consult them through us.

A sk fo r special reports on any corporation
or partnership.

SMITH, LANDERYOU & CO.
640 First National Bank Building
OMAHA, NEBRASKA
Telephone JA ckson 5065

Central Western Banker, December, 1928

20
in this richest of all estates there is
one outstanding lesson for the aver­
age speculator in securities, it is this:
No one is rich enough, no one poor
enough, to afford inferior stocks!—
Editorial in the New York Herald
Tribune, November 26, 1928.

icy of accepting the money rate as dic­
tated by the condition of the country.
“ It seems undoubtedly wiser to
have the treasury adapt itself to the
going rates for money,” he declared,
“ rather than to encourage operations
by which money rates are kept low in
order to permit treasury financing at
cheaper interest rates.”

Favors Going Interest Rates

In his report on government and
farm loan bonds, Arthur H. Gilbert,
of Spencer, Trask & Co., Chicago,
stated, at the recent convention of the
Investment Bankers Association, that
recent offerings of treasury certifi­
cates bearing interest at
per cent
are examples of the department’s pol-

DOES B A N K IN G N E E D
T H IN K E R S?
(Continued from Page 6)

he pays for payroll, for interest, for
rent, and for every other important
item. Here, for the present, at least,
there is a landing field where any
fledgling banker may exercise his

jfiEMM

SHORT

TERM

INVESTMENTS

FOR

BANKS

UR sh o rn term
obligations havew been pur­
chased by more thans 6,000
banks in the United States.

G e n e r a l M o to r s
A c c e p t a n c e C o r p o r a t io n

Gold

Executive Office * BROADW AY at 57th ST. *• N ew York City
Capital, Surplus &
Profits

.

Undivided

$52,156,000

«
Central Western Banker, December, 1928

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

wings in the direction of research and
constructive thinking.
Too long we have been content to
operate banks in pioneer fashion—
that is, setting up a bank wherever the
impulse may have dictated and carry­
ing it through for better or for worse.
The time is long overdue for a more
definite and more scientific grasp of
the whole problem. There are scores
of questions that only the exceptional­
ly experienced and intelligent banker
can negotiate. What percentage, for
example, should a country bank carry
in its secondary reserves? A city
bank? Scientifically, what type of se­
curities as to quality and marketabil­
ity should be purchased for the sec­
ondary reserve account? What type
for longer investment? What princi­
ples, rules, or standards should gov­
ern security buying? What reserve
should be set up for losses?
What policy should govern local
loans? How should these be diversi­
fied? What effect should the factor of
domination in a community by one
fundamental industry have upon the
policies governing local loans and re­
serves? What limits, if any, should
be set on the amount of the bank’s
funds placed in this line of business?
What is a safe percentage on local
loans— on outside loans?
The bank’s funds generally include
demand deposits, public funds, savings
deposits, certificates of deposit, invest­
ed capital. What would be a reason­
able net profit on each of these classes
of funds? Is it possible to fix stan­
dard income and expense ratios for
banks according to size, location, or
other classifications? What is the
proper ratio of net profits to earning
assets ?
What might we accomplish if we
could establish a program of more in­
telligent and cooperative thinking in
the banking profession than we have
ever had in the past? If each of us
would devote just half an hour each
day to hard, independent, critical
thinking about the banking business,
we could, I believe, revolutionize it in
ten years, and the American banking
system would reach the highest pin­
nacle of achievement and greatness to
which it has ever attained.

There is gold in the creeks of the
Yukon,
And tons in the dirt of the Rand.
There’s an untold slew of the dust in
Peru
As many a Spanish bully knew.
But the hour-glass holds more in its
sand!
— Herbert Kaufman.

21

Farm Insurance and Farm Property
'T H E writing of farm insurance, although still beset with difficulties,
heavy losses and uncertainty, is show­
ing the results of improved business
conditions, in the opinion of F. H.
ETawley, president of the Ohio Farm­
ers Insurance company, writing in a
recent issue of the Underwriters Re­
view, Des Moines insurance publica­
tion.
Linking up the question of farm in­
surance and farm prosperity, Mr.
Flawley, whose company writes a
large volume of farm risks, says in
part:
“ Agriculture itself has been unprof­
itable in most localities. The question
of farm relief, which has been occupy­
ing so many columns on the front
pages of our newspapers, is of the
keenest interest to fire insurance com­
panies, as well as to farmers and poli­
ticians, for there is a very definite re­
lation between prosperity on the farm
and prosperity in the home offices.
“ This is not the proper place for a
discussion of the causes of farm de­
pression. It is, however, a well known
fact, that thousands of farmers have
left the land and moved to cities
where they work in factories and
stores. The farms are vacant, their
buildings are falling into disrepair,
and, although many of them are offer­
ed as insurance risks, they are bad
business for the companies.
“ Although farms today combine
high values with high hazards, the
home offices have few, if any, sources
of information regarding specific risks.
There are no inspection bureaus, maps


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Federal Reserve Bank of St. Louis

or commercial reports to aid them.
And yet, if there is any type of risk
which needs the services of the best
rating bureau in existence it is the
large, expensive farm barn with its
many and increasing hazards intro­
duced by modern machinery.
“ The modern farmer has an auto­
mobile, a motor truck, an electric
lighting plan, and various gasoline or
electric motors for driving miscellane­
ous machinery. Besides these are his
tractor and suoplies of oil, kerosene
and gasoline, all of which are usually
in combustible buildings or near sup­
plies of extremely inflammable ma­
terial. The internal hazards of the
average large farm barn of today are
appaling.
“ There is as much reason for indi­
vidual specific rates on farm proper­
ties as there is for special rates on
general manufacturing plants or ware­
houses. However, because of their
number and location, it does not seem
practicable to produce them.
Effect of Good Roads

“ Another important change in con­
ditions on farms has been brought
about bv the automobile, and this
change, because of its effect upon so­
cial and economic conditions of the
farmers, has seriously modified the
farm insurance situation. Good roads
and fast cars make it possible for the
farmer to go to nearby cities and
towns easily, with the result that he
spends more and works less. The
beneficial results of this development
are partly nullified by the bad.

“ On the other hand, the farmer who
is not served by hard surfaced roads
is handicapped and apt to be dissatis­
fied. He cannot so easily market his
produce and therefore, they have no
control over production and market­
ing of their crops. Until they do this
the writing of farm insurance is going
to continue to be a very difficult and
uncertain business.
“ There are several factors which
combine to make the situation more
encouraging. One of these is that
agents are realizing that the replace­
ment value of farm buildings should
be no guide to the amount of insur­
ance to place on buildings. No build­
ing should carry more insurance than
the related value of that building to
the farm as a whole. This amount
often seems very small when com­
pared to the replacement value of the
building in question.
“ Another important factor in the
successful writing of farm insurance
is that of making the insured a heavy
coinsurer with the company carrying
the risk. The local farm mutuals,
many of which are successful so long
as they operate only locally, make it
a point to carry only a fraction of the
value of the property covered, with
the result that the owner is a heavy
coinsurer and cannot afford to have a
fire.
Installment Insurance

“ A third factor is installment in­
surance which has been the means of
improving the record of farm insur­
ance in many localities. It has sev­
eral advantages over three or five year

Central Western Banker, December, 1928

22
term insurance. In the first place,
companies need carry only a small
fraction of the reserve necessary for
longer term policies. In the second
place, farmers can often afford to pay
their premiums more promptly, with
resulting benefit to the agent. W e ex­
pect to see more and more farm risks
covered on the installment plan.
“ The development of rural motor­
ized fire departments also is having a
favorable effect on farm and sixth
class town insurance. Cities and towns
find it impracticable, even dangerous,
to permit their fire fighting apparatus
to answer alarms in the country. Com­

munity fire engines can, however, be
obtained for that very purpose. Prop­
erly equipped with chemical pressure
tanks, they are of great importance in
fighting farm fires when manned by
part of the regular, trained personnel.
“ This plan is meeting with great
success in many points in the Middle
West, notable at Medina, Ohio, where
the idea seems to have originated.
“ Such rural fire departments should
have the unqualified support of all
companies, whether they are writing
farm insurance or not, for all compa­
nies are vitally interested in sixth class
town property. This is a practical

and definite means by which the fire
insurance companies of this countrycan help to cut down our shameful fire
waste.
“ Farm property protected by light­
ning rods has been found to have a
much better loss experience than unrodded property. The great difficulty,
of course, is to make sure that the
rods, even when well installed, will be
maintained in good condition. Here
again, the conscientious agent can be
of inestimable value to the farm writ­
ing company by keeping a close watch
on lightning rods on all buildings he
insures.”

Makes Estate Survey
/\

M O ST useful document for
promoting estate creation, estate
conservation and the actual sale of
Life Insurance, is the new LIFE IN ­
SU RAN CE E ST A T E SU R V E Y re­
cently issued by the Trust Depart­
ment of The National City Bank of
New York. It gets down to the im­
portant question of family income
and how to provide it, in such a clear
and convincing way that the prospect
is very likely to give it the serious
consideration it deserves.
This Survey is printed in the con­
venient form of the usual legal docu­
ment, similar to the “ General Estate
Survey— To Assist In Will Making”
which was issued a few months ago
by this same bank and given wide dis­
tribution. It is, in effect, a work
sheet, which the insured fills in, draw­
ing his own conclusions from the
facts set down. Therein lies one of
its chief values.
Its Purpose

On its first page the purpose of the
Survey is stated as follows :
“ 1. To clarify the relation of your
Life Insurance to your entire
estate and to the important
question of family income.
“ 2. To help you arrive at the
amount of taxes, administra­
tion and other expenses, which
your estate may have to pay,
and outline the most econom­
ical provisions for their pay­
ment.
3. To assist you in drafting a plan
for the disposition of your in­
surance estate which will com­
ply with your wishes and as­
sure their faithful fulfillment.”
This is follewed on page 2 by a
chart showing the average estate
shrinkage at death, due to taxes, ad­
ministration expenses and debts. This

chart should prove to be a good sell­
ing aid.
Next comes a brief explanation of
the form and a few short arguments
for its use. For example:
Life Insurance bears such an
important relation to your entire
estate, to inheritance and estate
taxes, and on the even more im­
portant question of adequate in­
come for your family, that its
careful analysis in conjunction with
your estate as a whole is advisable.
“ To have an accurate inventory
of your estate but a matter of
good business judgment and ordi­
nary foresight. It enables you to
know exactly where you stand fin­
ancially. It helps you consolidate
your estate and make systematic
plans for estate creation which will
accomplish your ultimate aims.”
There follows a complete digest of
insurance policies. This the Bank’s
Trust Department offers to fill in if
the insured will allow it to examine
Lis policies. Lists of securities and
real/ estate are then provided for.
When the insured has filled these in
he is ready for the next step— the
analysis of his estate. His gross as­
sets are set down under seven items,
and totaled. His current liabilities
come next— four items, and then his
estimated eventual liabilities. These
are the expenses which will arise at
the time of his decrease and include
all items of taxation and administra­
tion, in addition to the usual “ ex­
penses of last illness” and the like.
The Bank offers to calculate certain
items, which it is a better position
to do, as a rule, than is the insured.
Liabilities are then deducted from
the total gross estate, leaving the
value of the net estate. At this point

“ it is regular income that keeps the
family going” the amount they can
safely count on can be found only
after deducting from the net estate
those items which cannot reasonably
be expected to produce income, such
as one’s residence, unimproved real
estate, personal property, etc. These
are all assets, and help swell the size
of the estate, but for income they
have no value unless converted into
cash and invested. In casting up
rough inventories of their estates
many men— good business men too—
overlook this significant point.
This last deduction leaves the “ Net
Income— Producing Estate” and the
Survey suggests that in figuring the
available income therefrom, a rate of
not higher than 5 per cent used. This
seems to be a sound recommendation.
The next step is “ Estimated An­
nual Expenses of Family— Excluding
Self” and “ Total Annual Income for
Family.” “ Disposition of Your In­
surance Estate” is the last general
heading. The terms of the usual in­
surance trust plan are outlined and
the three forms of trust unfunded,
funded and cumulative, are briefly
explained.

an important step is indicated. Since

ance is that form of insurance that

Central Western Banker, December, 1928

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Federal Reserve Bank of St. Louis

Definite Plan Insurance Urged

“ A farmer can be no more helpless
predicament than to wake in the dead
of night to find his home on fire. Lack­
ing effective means of fighting a fire
on the farm, that has made real head­
way, he can only stand helplessly by
and watch his home reduced to smoke
and ashes,” said R. E. Langdon, secre­
tary-treasurer of the Guarantee Fund
Life of Omaha, in an address at a re­
cent meeting of Nebraska agents.
“ But even more important than the
protection of property by fire insur­

23
keeps the wolf from the farm door
after the head of the family passes on.
Life insurance, alone of all forms of
insurance, has the advantage of being
in every case an investment rather
than an out-and-out expense. To col­
lect on fire or tornado insurance, the
house or barn must burn or be blown
away. Every barn doesn’t come to an
abrupt end through the agency of fire
or wind, although many d o ; but every
life must end, and with every life in­
surance policy there must be a pay­
ment.
“ In buying life insurance a definite
plan should be followed. It is well to
provide for the payment of a part of
the insurance money in a lump sum
on the death of the policy holder. This
lump sum payment should be suffi­
cient to cover the expenses that invari­
ably follows illness and death, to pay
off pressing and all-important obliga­
tions, such as a mortgage on the farm,
and to provide the family with suffi­
cient funds to meet their changed con­
dition of life. Beyond this point, ordi­
narily it is inadvisable to provide the
family with insurance money in a
lump sum. Where men or women
inexperienced in business affairs are
left with insurance money beyond
their immediate needs, there is too

great an opportunity for unwise pur­
chases or investments. To meet the
condition, insurance companies now
write policies that provide for the pay­
ment of insurance money at the rate
of so much a month. In other words,
such policies provide for a monthly in­
come which is much safer in the hands
of the average person than a sum of
money beyond immediate needs.”

speedy betterment of conditions with
respect to fire fighting equipment and
the restoration of a full complement
of men in the department. Commis­
sioner Westergaard, an insurance
man himself, says that the city is
certain to be dropped from Class 3,
where it now is, unless something is
done.

May Reduce Commissions

The United Life of Salina, Kan.,
conducted a unique anniversary cam­
paign in October and November, and
it is continued through December.
Richard J. Surface, vice-president
and general manager, and James J.
Donelan, vice-president, have had ex­
perience in agency building. There­
fore, they divided the agency force
as nearly as possible in order to carry
on a contest between the east and
the west divisions. The normal mon­
thly production of the United Life
is between $200,000 and $225,000 a
month. During October the agents
produced $547,000. The two vicepresidents believe that with the smal­
ler companies competitive divisions of
this kind are stimulating. In the Oct­
ober contest the east side produced
$301,750 and the west side $245,250.

Anniversary Campaign

Charles F. Hobbs, newly elected
Kansas commissioner, has suggested
to the hail companies that as one
means of preventing a material in­
crease in hail rates for next year they
might reduce commissions to agents
in the high rate territory. He points
out that hail insurance is more or
less compulsory in all the territory
paying above 6 per cent premium and
that it is not a question of salesman­
ship so much as it is clerical work in
writing the policies.
May Increase Omaha Rates

A sharp increase in Omaha fire
rates, possibly 30 per cent, is indicat­
ed unless the city council in 90 days
can give the representatives of the
National Board assurances of a

=3€=

=35=

=5€=

=5<=

=5€=

YO U R OPPORTUNITY
Banking and Lite Insurance go hand in hand.
Both institutions teach the principles and advant­
ages of thrift.
The banker is hi a better position to educate
the public on the thrift idea than any other citizen
in the community.
We are, therefore, anxious to obtain a num­
ber of progressive banker agents in Nebraska and
adjoining states and are offering an unusual parttime contract with liberal commissions and sales
training by experienced insurance men.

G uarantee

F und

L if e

B u il d in g

Write Agency Department for Details.

18th and Douglas Sts., Omaha

We Write
ORDINARY LIFE
20 YEAR ACCUMULATION
20 YEAR ENDOWMENT
ENDOWMENT AT 65
ENDOWMENT AT 70
YEARLY RENEWABLE TERM
TERM INSURANCE FOR 5, 10, 15,
20, 25 AND 30 YEARS
DOUBLE INDEMNITY
DISABILITY BENEFITS
WAIVER OF PREMIUM
JUVENILE INSURANCE

=35=

=35=


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

=35=

=35=

Guarantee Fund
L IF E
H
AA ssociation
.
~ OMAHAAssets Exceeding $13,000,000.00

^5=
Central Western Banker, December, 1928

24
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P H IL , H A U L , P r e s i d e n t
N e b r a sk a B a n k e r s A s s o c ia tio n

accounts. The largest amounts to be
paid will be at the Omaha National
bank, where $165,000 is on deposit,
and at the United States National
bank, which has approximately $ 100,000 in such accounts.
The Christmas savings account is
considered a big factor in the holiday
trade season.
Not Enough Signers

The plan advocated by the Nebras­
ka Bankers’ association of offering
$5,000 reward for each "dead” bank
robber garnered in the state hasn’t
been approved by a sufficient number
of members of the association and
maybe never will be, William Hughes,
secretary of the association said re­
W M . Ik H U G H E S , S e c r e t a r y
cently.
N e b r a sk a B a n k e r s A s s o c ia tio n
To make the plan effective 700
Second Bank
bankers must agree to pay $7.50 for
A second bank will be opened at each dead robber. After several
Laurel, Nebraska, soon if the plans months agitation 681 bankers have
of Ernest McDowell and several large signed up, 54 voted against the pro­
property owners in and around Lau­ posal and 139 were noncommittal.
rel, organize the state bank now oper­
Hughes is making every possible ef­
ated by the state commission, ma­ fort to secure the needed nineteen
terialize. Their plan is to collect the signatures but said prospects are not
stockholders liability, which, with a very bright, although he believes the
resale at the necessary figure, to se­ proposal eventually will carry.
cure the assets of the closed bank.
Seriously Injured
As the bank never passed into the
hand of a receiver, the capital stock
Charles E. W ood, cashier and act­
will really be assigned to new people, ing president of the Bank of Talthus clearing the bank of loss, and madge, Nebraska, was seriously in­
enabling it to start with the old de­ jured recently when the automobile
posits which are now unliquidated, he was driving left highway and en­
back on the books as they were before tered a ditch. His shoulder was
the commission took the bank over.
crushed.
i
Mrs. King, another occupant of
Meet in Sidney
the car, was hurt, but less seriously.
Twenty-five bankers, representing She has been a house-keeper for the
all of the financial institutions in Kim­ W ood family for a number of years.
Mr. W ood attributed the accident
ball, Cheyenne, Banner and Deuel
counties, and known as group 7, met to the steering wheel of his sedan
in Sidney, Nebraska, in a special ses­ which he says became suddenly in­
The machine, headed
sion on call of the president of the operative.
group recently. The bankers from south, before the accident, was head­
several towns in the four counties as­ ed north after entering the ditch. A l­
sembled at the Union Pacific hotel though damaged considerably, it was
where a banquet was served, follow­ not totally wrecked.
ing which a business session took
W ith Creighton National
place in the directors’ room of the
American bank.
W . L. Merrick, of Minneapolis,
The meeting was one of the most Minn., who came to Creighton, Ne­
important held by the. group for some braska, recently to fill the position of
time as subjects of unusual interest cashier at the Creighton National
were on the program for discussion.
bank, on account of the resignation
of George Wright, was not able to
Christmas Savings
continue with the work, and has re­
Omaha banks will pay approximate­ turned to his home.
The position is now being filled by
ly $500,000, about December 15', to
depositors having Christmas savings E. C. Dunkelberg, of Alton, Iowa,
Central Western Banker, December, 1928

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

and he has already taken up his duties
at this banking institution.
Hold Bank Dinner

A dinner for officers and employes
of the Nebraska State bank was held
recently at the Hotel Cornhusker in
Lincoln. F. E. Beaumont, vice-presi­
dent presided at the meeting which
followed the dinner. A message which
was read from Charles T. Knapp,
president. Short talks were made by
W . S. Battey, cashier; C. W . Battey,
assistant cashier; Edith Woodward,
assistant cashier; and F. S. Aldrich
and Irvin Slattery.
To Get Refund

Ten Lincoln banks and trust com­
panies are to receive a refund of $52,332.75 in taxes, including interest
from date of payment, illegally assess­
ed upon their respective corporate
stocks for certain years, according to
action taken by the board of educa­
tion. The action settling a question
of long standing was taken upon re­
commendation of the board’s attor­
ney, R. O. Williams and was con­
curred in by C. Petrua Peterson, city
attorney, and George W . Ayres, as­
sistant attorney-general. M. O. Pal­
mer, chairman of the special auditing
committee, and Dr. E. W . Rowe, pre­
sident of the board, signed the war­
rants authorizing repayment.
The companies involved with the
yearly and total amounts of refund
follow : Conservation Investment com­
pany, 1926, $214.53; 1917, $233.46;
total, $447.99; Central National bank,
1925, $2,422.82; 1926, $2,722.31;
1927, $2,253.77, total, $7,398.90; City
National bank, 1927, $3,621.60; Con­
tinental National bank, 1927, $2,088.56; First National bank, 1925, $5,837.89; 1926, $5,851.98; 1927, $6 ,275.10, total, $17,964.97; First Trust
company, 1926, $891.91 ; 1927, $2,395.37, total, $3,287.28; Lincoln State
National bank, 1925, $1,823.64; 1926,
$2,008.61; 1927, $2,288.46, total, $6 ,120.71; Lincoln Trust company, 1925,
$3,476.22; 1926, $2,077.12; 1927,
$623.56, total, $2,176.90; Nebraska
State bank, $1,368.20; Normal State
total, $274.48. The difference of
$3,583.16 between this total and the
total repayment of $52,332.75 is the
amount that will be refunded as soon
as three of the banks and trust com­
panies eligible for refund present the
proper affidavits, as recommended by
the attorney.

25
Nebraska Trust Companies

The banking resources of the 24
Nebraska trust companies increased
$2,578,987 in 12 months, bringing the
total to $19,314,173, according to
statistics given in the silver anniver­
sary edition of “ Trust Companies of
the United States," distributed by the
United States Mortgage and Trust
company of New York. Total capital
of Nebraska trust companies is given
as $3,385,700; with surplus and un­
divided profits of $1,576,435; and
deposits of $3,043,479.

EXPERIENCE

FIDELITY

PERMANENCE
IN CONTINUOUS EXISTENCE
SINCE 1891

PACKERS
NATIONAL B AN K

Sell Fixtures

Affiliation

The fixtures of the Farmers’ State
bank at York, Nebraska, have been
sold. Chairs, desks and counter furn­
iture were purchased by the First Na­
tional bank at Osceola, for $1,000,
and 100 safety boxes went to A. R.
Miller, Columbus, for $250.

PACKERS NATIONAL
COMPANY
INVESTMENT BONDS

National Bank Resources

National bank resources are approx­
imately $29,000,000,000, Comptroller
of Currency John W . Pole announced
recently.
This marks a gain of $1,711,000,000
in a year.
Other important statistics contain­
ed in the report follow s:
Loans and discounts, $15,117,000,000, an increase of $750,000,000 in a
year.
Deposits, $23,000,000,000, an in­
crease of $707,000,000.
Time and savings deposits, $8,310,-

SOUTH

National B a n k
'.Trust Company

000, 000.
Demand deposits, $11,186,000,000.
The report embraced 7,676 banks
in continental United States, Alaska,
and Hawaii.

O M A H A
“ An Unbroken Record of Seventy Years
is a Guarantee of Safe and
Satisfactory Service”

Merge in North Loup

An important business transaction
was consumated recently when the
final agreements were made whereby
the North Loup State bank became
the owner of the assets of the Far­
mers State bank, North Loup, Ne­
braska.
The North Loup bank will take over
the business at once and will occupy
the Farmers State bank building.
In making the merger, the officials
of the two banks feel that they are
following the policy of the State De­
partment in urging a reduction of
overhead expenses in the smaller
banks o f the smaller communities.
One set of officers and one building
suffice for the needs of all and in this
way banks are enabled to operate
with some show of profit, which have
not been able to do in the past 6 or 8
years.


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Federal Reserve Bank of St. Louis

OMAHA

OFFICERS:
M.

T. B a r lo w , President o f the Board
R. P. M o r s m a n , President

G.
J.
T.
C.

H. Y ates , Vice-President
C. M c C lure , Vice-President
F. M u r p h y , Vice-President
F. B r i n k m a n , Ass’ t V -President
P. B. H endricks , Ass’ t Vice-President

R.
H.
E.
A.

R. R a in e y , Cashier
E. R ogers, Assistant Cashier
E. L andstrom , Assistant Cashier
L. V ickery , Assistant Cashier
V . B. C aldw ell , Assistant Cashier

N A T IO N A L B A N K O F C O M M E R C E
L IN C O L N ,

M.

W E IL ,

C A R L W E IL , V ice-P resid ent
B Y R O N DUNN, Cashier
C a p ita l

$:iOO,0 0 0 .0 0

S u r p lu s

NEBRASKA

President
E R N E ST C. FOLSOM, V ice-P resident
B. G. C L A R K , A ss’t Cashier

$ 1 0 0 ,0 0 0

U n d iv id e d

P r o f it s

$ 1 0 0 ,0 0 0

Central Western Banker, December, 1928

26

OFFICERS
FORD E. HOVEY, President
JAS. B. OWEN, Vice-Pres.
F. J. ENERSON, Vice-Pres.
W. H. DRESSLER, Cashier
L. K. MOORE, Asst, to Pres.
H. C. MILLER, Asst. Cash.
C. L. OWEN, Asst. Cash.
HENRY A. FIOVEY, Asst. Cash.
T. G. BOGGS, Auditor

OUR B ANKING ROOM
M A IN

FLOOR RIGHT

4 4 O TOCK

Y ards

N ational

Service

has a significance w hich is best
realized by the m any correspondents w ho
have availed themselves o f it.
W e w ould appreciate an opportunity to
dem onstrate it to you.

Stock Yards National Bank
of
South Omaha

The Only Bank in the Union Stock Yards

Central Western Danker, December, 1928

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Federal Reserve Bank of St. Louis

TH E H A R T IN G T O N N A T IO N ­
A L BANK, Cedar county’s oldest
banking institution, went into receiv­
ership November 14. W . H. Allen
of Kansas City has been appointed
receiver. C. M. Jones, sr., president,
said slow paper on farm loans had
forced the closing of the bank, and
he was doubtful whether the bank,
whose assets were formerly 500
thousand dollars, could salvage much.
JOHN W . BENDER, who helped
organize the First National Bank of
Humphrey, Neb., and who was vice
president of the bank from its begin­
ning, died, recently. He served two
terms in the state legislature.
C. J. CLAASEN of the Peters Na­
tional Bank and Trust company, and
of the publicity committee of the Ne­
braska Bankers association, has re­
ceived from Ernest S. Coats, a
farmer of Valley county, Nebraska,
a letter urging Nebraska to advertise
its resources, in order to prevent
farms being abandoned, and to stimu­
late business. He spoke of meeting
Nebraska, Iowa and Dakota farmers
on a trip to California, all of whom
were planning to return to their
farms in the spring.
“ There must be some prosperity on
the farms if a farmer and his wife
can spend from five thousand to two
thousand dollars on a trip and have
possibly the same amount invested in
an auto, besides owning a modern
residence and up-to-date farm build­
ings at home,” he writes. “ For one,
I am proud of my occupation as a
farmer, and do not relish being held
up as subject to the need of govern­
ment aid.”
A. E. AN DERSON , state and
federal crop and live stock satistician,
upon receiving his regular reports
from Nebraska bankers, announced
at Lincoln that while) shipments of
stocker and feeder cattle into the
state in July, August and September
were nearly double what they were
in 1927 during those months, the late
movement is expected to be below
that of a year ago, and winter feed­
ing operations will be reduced.
During the three months named,
132,419 cattle were brought into the
state, against 69,000 the previous
year.
Sixty-five Nebraska bankers
reported sufficient corn for all feed­
ing operations and 90 bankers said
there was enough hay and forage.
Bankers report only 83 per cent as
many locally produced cattle were
held for grain feeding as compared to
a year ago.

27

the

Attend Chicago Show

South Dakota was represented at
the International Live Stock exposi­
tion, Chicago, by 50 of its boys and
girls, by some of its best live stock
and its best crops products, and by
two college student judging teams.
Feeds Ensilage

S. F. Whitcomb, veteran stockman
of Osage, la., who for many years
has been coming to the Omaha mar­
ket every fall to buy feeders, was on
the market recently and took out
three loads of good quality Hereford
yearlings. These young cattle will
be wintered on bay, silage and a lit­
tle corn and fed out next summer on
pasture.
Ensilage plays a big part in Mr.
Whitcomb’s feeding operations. “ It is
the cheapest feed there is for win­
tering cattle,” he says, “ and you can
feed any sort of dry roughage with
it. even straw. T have two 16x45
silos and should build another one.
This year I cut up nearly all my corn
and am stacking it so that T can refill
mv silos later if necessary.
“ Not as much feeding is being
done as in most former years. W e
had a good corn crop, and the pre­
sent price of corn there is not over
55 cents a bushel. There isn’t much
moving, but that is the price the ele­
vators are paying for what comes
in. and thev are begging feeders to
take it ofif their hands. Most of the
men who are feeding seem to have
all the corn they need.

Omaha

tock Yards

tional champion dairy judging team,
gave an illustrated talk on European
dairying. Mr. Young talked on “ The
Use of Concrete on the Farm.”
No Cattle Shortage

“ There isn’t a cattle shortage in
our section of the country from the
looks of things at the present time,”
remarked Jacob Raskob, well known
feeder of Sturgis, S. D., and a cou­
sin of John J. Raskob, chairman of
the National Democratic committee,
who was on the Omaha market last
month.
“ I would venture to say there are
even more cattle being held through
this winter than last. W e had a splen­
did hay crop this year and with corn
making a fairly good yield for our
country most everyone is holding a
moderate number of cattle. Besides
these there are a good many hogs
all through my neighborhood, both
fat hogs and pigs. A couple of weeks
ago there were 16 loads of hogs
shinned out of Sturgis in one day.
“ W e aren’t in a corn raising countrv. but it seems that farmers are
nutting in a little more each year.
Most of it this year made around 25
bushels to the acre on an average and
the quality of it is verv good. The
cattle I marketed this time were run
in the cornfields a couple of months
and were doing nicelv, but I feel that
I would have been far better ofif if
I had shipped them to market the
first of October with the rest of my
stock.”

Dairy Meeting at Benson

Mr. M. L. Flack of the State col­
lege and H. J. Young of the Nation­
al Portland Cement association ad­
dressed a meeting of dairymen and
others at the town hall in Benson in
Omaha, Thursday evening, Decem­
ber 6 .
Mr. Flack, who made the trip to
England last summer with the na­


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Acted as Judges

Dr. F. D. Keim and Prof. H. J.
Gramlich. both members of the Ne­
braska University facultv. acted as
iudges at the world’s greatest show­
ing of livestock, hav and grain, the
International Live Stock Exposition
and the International Hay and Grain
Show at Chicago.

Dr. Kiem was asked to serve on the
corn committee for the International
Hay and Grain Show. This commit­
tee judged the corn entered in the
show.
Corn entered from Nebraska was in
division three which included the corn
from the western corn belt states.
Prof. Gramlich was asked to judge
both fat and breeding classes of Red
Polled cattle.
The work of Prof. Gramlich and Dr
Keim, as well as that of the other
judges began Saturday, December 1,
the opening day of the show, and con­
sumed the major part of the follow­
ing week.
Dairy Work

Fourteen of the twenty-seven herds
in the Douglas county Nebraska dairy
herd improvement association now
average 300 pounds of butterfat per
year for each cow, according to the
last monthly dairy herd association
letter.
The
Douglas association,
now
through its fifth year has shown a
steady improvement in production of
the cows. The 300-pound butterfat
herds numbered only three the first
year, five the second year, and rose
to ejght during the third year. The
number remained the same for the
fourth year but increased to 14 during
the fifth year.
This remarkable increase is due,
probably, not only to the selection of
better animals, but also to the fact
that the number of members using
balanced feeding rations has constant­
ly been on the increase. During the
first year only ten of the farmers used
balanced rations. Seven additional
ones adopted the use of rations dur­
ing the second year, and within an­
other year 19 farmers were giving
their cows properly balanced feeds.
This number rose to 20 in the fourth
year, and 22 in the fifth ; in other
words, four out of five of the present
27 members feed balanced rations.

Central Western Banker, December, 1928

28
Besides this report, the dairy herd
improvement association letter con­
tains other news stories about the var­
ious dairy herd improvement associa­
tions over the state. It is published
monthly by M. L. Flack, state exten­
sion agent, dairy husbandry, and J. T.
Pierson, assistant to state extension
agent. Other features in this number
are: “ Cow Testers Short Course Suc­
cessful” “ Calf Scours,” “ Registering
Purebred Calves,” “ Identification for
jersey Cattle,”
and “ Association
News.”
Oklahoma Wins

The Spoor trophy, a bronze bull,
has become the permanent property
of the Oklahoma A. & M. college
stock judging team.
The five members of the team
made a score of 4,567 out of a pos­
sible 5,000 in the contest at the In­
ternational Live Stock Exposition in
Chicago. Twenty-three United States
and Canadian colleges participated.
By winning first place for the third
time the trophy now becomes the pro­
perty of the school. Four other
schools had won two legs on the
prize— Iowa State, Texas A. & M.,
Purdue and Nebraska.
Ginevere Francke of Lincoln coun­
ty, Nebraska, took first place in the
room decoration competition.
Sends Boy to Chicago

Arthur Holst of Waterloo, Nebras­
ka, was awarded the trip to the Na­
tional Club congress and
Interna­
tional Live Stock show offered by
Walter W . Head, president of the
Omaha National bank, for the best
record in pig club work in Douglas
county this year.
Arthur’s record of results and
story submitted with his final report
was especially well prepared. He has
been a member of the Platte Valley

The First
National Bank
OF

So wand Litter Club for two years
and has not missed a single meeting
of his club.
Arthur raised a litter of eight Spot­
ted Polands that weighed 2,160
pounds at the end of the 210 days
when the project closed.
Madison Comity Winners

A draft has been received for $8 ,583.05 from the Ak-Sar-Ben show in
settlement for the sale and premiums
on calves from Madison county that
were shown and sold at Omaha. This
covers sale price, premium winnings
and specials. In addition, $55 in
specials was received direct from the
Hereford Breeders’ association. Arland Schmitt of Madison received the
largest check for one steer which was
$484.80 for his 1,250-pound Reserve
Grand Champion steer “ Tunney.”
This" was a Hereford calf, bred by E.
O. Reeves of Battle Creek. Arland
bought this calf about a year ago for
$55. Jerome Jacobson of Newman
Grove had the second highest check
which was $329.67 for his reserve
champion Angus who sold for 33
cents. Neola Nedson of Newman
Grove was third with $254.52 for her
Hereford steer that sold for 21 cents.
Lorraine Schmitt of Madison was
fourth with $234.56 for one steer and
$234 for another steer. Clyde Fender
of Meadow Grove, and Roy Snider,
of Tilden, each had calves that were
dropped in January, 1928, both sold
for $16.75 cwt. Clyde’s calf sold for
$108.87, Roy’s calf brought $92.62.
Live Stock By Truck
For the first time this year, re­
ceipts of cattle by truck failed in N o­
vember to exceed those of the cor­
responding month of 1927. This was
in line with the large decrease noted
in total cattle supplies for the month.
However, the truck movement
showed a substantial increase, losses
in cattle and calves being more than
balanced by gains in the truck ar­
rivals of hogs and the number of
sheep and lambs trucked and driven
in. The increases are all the more

remarkable from the fact that unsur­
faced country roads were in bad
shape the first half of the month, and
indicate to what a large extent the
ever widening network of all-weather
roads that spreads out of Omaha is
making farmers and stockmen inde­
pendent of weather conditions.
For the year to date truck receipts
of cattle are almost 50 per cent
heavier than for the first 11 months
in 1927, and the gain in truck re­
ceipts of hogs over a year ago
amounts to almost 60 per cent.
The official receipts by truck for
the past month as compared with N o­
vember a year ago are shown in the
following table:
Nov.,
Nov.,

Cattle Calves Hogs
Sheep
1928 .............. .................... 10,614 3,397
1927 ____
13,102 3,492 42,659 40,413

Inc. ____________
Pec. ____ ___ _____

.

-2,448

95

24,197 10,770
...................... .

W ants Corn Held

Edward Severs, manager of an ele­
vator at Barneston, Nebraska, who,
some weeks ago, started a movement
among the corn growers to hold the
crop for better prices, reports that he
is finding backing from farmers
everywhere. He presented his plan
at a meeting held in Beatrice, recent­
ly, and at one in Lancaster county in
Lincoln. H. G. Keeney, head of the
Farmers’ Union of Omaha, and K. J.
C. Knight, head of the equity as­
sociation at Kansas City, addressed
the Beatrice meeting in the evening,
and urged support of the movement.
Mr. Severs says that market con­
ditions lend themselves to the plan
of holding corn and forcing higher
prices. He says he wants the feeders
to protect themselves, and that if
they know in advance what corn will
cost them they can figure whether
there is profit in the feeding opera­
tions.
His proposal is to put the price of
corn at $1.10 at Chicago or 92 cents
at loml shipping points, which is the
price that about a fourth of last
year’s crop brought. Mr. Severs says
that these county meetings are mere­
ly the start of a movement that will

LINCOLN, N E B R A S K A
Established 1871

TYPEWRITERS

OFFICERS
S. H. BU R N H AM , Ch. of Board.
H. S. F R E E M A N , President.
P. R. E A S T E R D A Y , V ice-P res.
W . B. RYONS, Vice-P resident.
S T A N L E Y M A L Y , V ice-P res.
.TOE L. BU R N H AM . V ice-P res.
LEO J. SCH M ITTE L, Jr. Vice-Pres.
B. O. CA M P BE LL. .Tr. V ice-P res.
E. H. M U L L O W N E Y . Cashier
H O W A R D F R E E M A N , A s s ’t Cashier.
F R E D D. STONE, Mgr. Service Dept.

CAPITAL & SURPLUS
$1,050,000.00
ASSETS OVER $14,000,000.00

Central Western Banker, December, 1928

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

AND

A D D I N G M A C H IN E S
EVERY M AKE— LARGE OR PORTABLE

CO R O N A FOUR
Standard Four Bank Keyboard
-W id e Carriage

7 Col.

“ CO RO N A”

10 Col.

$60

A d d in g
M a c h in e s

$100

F. J. WEISS

GEO. F. PINNE

C entral T y p e w rite r E x c h a n g e , Inc.
1912 FARNAM ST.

{Established 1903)

OMAHA, NEBR.

66,856

51,183

29
extend over the entire corn belt, a
state meeting to be the next step fol­
lowing comity organization. Govern­
ment credit will be secured in order
that the movement can be made suc­
cessful.
Short Courses

Several men have entered the dairy
manufacturing short course at the Ne­
braska college of agriculture, the first
of the winter short courses outlined
for 1928-29. They will spend six
weeks in the creamery at the college
learning by actual experience.
As in previous years, the auto-trac­
tor short course will be given three
times. The first session starts Dec31, the second Jan. 28, and the third
Feb. 25. Each course is complete in
itself and four weeks long. Only
twenty-five men are allowed to enroll
each time. Half that number have al­
ready signed up for the first session.
Two other dairy short courses are
offered, one for creamerymen, Janu­
ary 14th to 26th, and the other for ice
cream makers, January 28 to Feb­
ruary 2d. Technical training will be
given in the laboratories and the
creamery of the dairy department.
The annual poultry short course is
scheduled for January 22nd to 25th
and will cover the practical problems
of the farm and commercial poultry


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Federal Reserve Bank of St. Louis

producer.
Selection, management,
feeding, equipment, and marketing of
chickens and turkeys will be discussed
and visits will be made to the prac­
tical poultry plant of the college.
Registration is required in each of
the courses. Fees are nominal. Those
who attend must be over 16 years of
age.
Moves to Lincoln

The First State bank of Bethany,
Nebraska, moved recently to quar­
ters on the first floor of the Sharp
building at Thirteenth and N streets
in Lincoln.
For some time preparations for the
housing of this bank have rapidly
progressed and complete equipment is
in place ready to care for the needs
of the bank’s customers.
Henry Heiliger, president, has been
in the banking business for nearly a
quarter of a century. For fifteen
years he was president of the Bank
of Plymouth and for eight years pre­
sident of the First State bank of
Bethany. He also served two terms
in the Nebraska legislature.
Resigns

W . O. Larson, assitant cashier of
the Rising City, Nebraska, bank for
several years, has severed his connec­
tion with the bank and is succeeded

by Wayne Drawbaugh, employed in
the bank for two years.
Organize Security Company

With an authorized capital stock
of $100,000, the Miller Allied Secur­
ities company has been incorporated
by a group of prominent Columbus,
Nebraska, men to do a general busi­
ness in real estate, insurance, ab­
stracting, loans, investment banking,
guardian, administration, securities
and other associated lines.
The new corporation is headed by
A. R. Miller, as president, and is, in
effect, the outgrowth of the loan and
securities business which he establish­
ed individually after selling out his
interests in the First National bank
three years ago and in which his son,
Leonard S. Miller, has been associat­
ed with him since last June.
Use Sound Investments

Eastern investment bankers are ad­
vising their customers to put a larger
proportion of their funds into sound
investments, according to A. C. Pot­
ter, senior partner of Burns, Potter &
Co., on his return to Omaha from
New York City, Mr. Potter attended
a meeting of the Omaha & Council
Bluffs Street Railway company bond­
holders protective committee while in
New York City.

ulo

<©ur Jkst
Jfor 1
Proöperouö i Setti gear
LIVE STOCK NATIONAL BANK
Union Stock Yards

OMAHA

BOND INVESTMENTS
Write for Our Attractive List of Carefully Selected Bonds

Central Western Banker, December, 1928

30
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South Dakota News
lllllllllllllllllllllllinillllllllllllllllHIIIIIIItllllllllllllllllllllllllllllllllllllllllllllllllllMIIIIIIIIIIIIMIIIMIMIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIMIIIIIMIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIinilllllllllllllMIIIIIIIIIIM

T W E N T Y -T H R E E
BAN KERS
from Lincoln County and the towns
of Alcester and Beresford in Union
County organized the Sioux Valley
Bankers Association in a recent meet­
ing in Canton. A pheasant dinner was
provided by the Canton bankers. The
following officers were elected: Presi­
dent, G. J. Moen, president First Na­
tional Bank. Canton, and Secretary, E.
N. Dean, cashier of the Farmers State
Bank of Canton. A second meeting
was held later to adopt a definite pro­
gram to be followed.
TH E BRO W N C O U N TY Bankers
Association met recently for a phea­
sant dinner. The chief subject for
discussion was the possibility of calf
club work for Brown County girls and
boys. Addresess were given by W . S.
Given of Britton, chairman of the
Agricultural Committee of the S. D.
Bankers Association, and by County
Agent Nichols of Marshall County,
both of whom related the successful
experience in calf club work promot­
ed by the Marshall County Bankers
Association, in co-operation with the
County Agent. The Association voted
to request the Executive Council of
the S. D. Bankers Association, to in­
vestigate the feasibility of offering re­
wards for bank bandits as one method
of preventing future increase in crime
against banks.

TH E SOU TH D A K O T A Bankers
Association bas mailed to its member
banks a series of six better farming
advertisements. Three days after
these had been mailed out, returns had
been received from country banks in
about a dozen counties accepting the
series and indicating that they will use
them. Most of the banks request that
another series be sent early next year.
GEORGE JEFFRIES, who was
sentenced from Stanley County in
1925 for the robbery of the Fort
Pierre National Bank, was unsuccess­
ful in an application for a pardon
from the South Dakota State peniten­
tiary.
R. E. DRISCOLL, president of the
S. D. Bankers Association called a
joint meeting of the Executive Coun­
cil and the Legislative Committee to
be held in the Marvin Hughitt Hotel
at Huron on December 1 and 2. Bank
taxation was to be the chief subject
for discussion.
TH E DECEM BER N UM BER of
the S. D. Bankers Bulletin asks mem­
ber banks whether they favor the As­
sociation offering rewards for appre­
hension and conviction of bank ban­
dits. The publication calls attention
to the fact that while up to the pre­
sent time S. D. has had an enviable

A Complete Banking Service
The Midland Bank offers exceptional facilities for the transaction
of banking business of every description. Together with its
affiliations it operates over 240c branches in Great Britain
and Northern Ireland, and has agents and correspondents in
all parts of the world. The Bank has offices in the Atlantic
Liners Aquitania, Berengana and Mauretania, and a foreign
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MIDLAND BANK

record for its comparatively small
number of crimes against banks, fu­
ture conditions might make it neces­
sary for the Association to adopt more
drastic protective measures. The or­
ganization does not at this time offer
rewards for information leading to
the apprehension of bandits. In ask­
ing the S. D. bankers for their opin­
ion on the subject, the Bulletin urges
them to bear in mind two things :
"Your bank may be next,—-and the
bandit who sticks a gun in your face
is a potential murderer.” Bankers are
also requested to express their opin­
ion on the following question: “ If the
Association should adopt the system
of rewards, would you favor a dual
plan— one reward for information
leading to arrest and conviction of
bank bandits another reward twice as
great for bandits taken dead or alive?”
W H E T H E R or not further litiga­
tion seeking to recover tax monev paid
on capital stock assessments by South
Dakota banks will be pressed follow­
ing the adverse decision of the United
States supreme court in the appeal of
the Security National Rank of Watertown is a question which must await
receipt of the high court’s decision.
Attorney Perry E. Loucks of Watertown, Chief counsel for the banks,
said. The supreme court apparently
holds,” Mr. Loucks said, “ that the
banks did not proceed in the right way
by filing petitions with the county
boards for refunds. If that proves
true it is possible further legal action
may be necessary,” he explained.
The caste started two and half years
ago in the third circuit court which
held that the bank could recover taxes
paid on capital stock. An appeal was
made to the state supreme court which
reversed the lower court, the case went
to the United States supreme court on
an appeal from the state supreme
court.
LENO A. BERG, son of A. L. Berg,
president of the Baltic State Bank of
Baltic, S. Dak., died recently as the
result of injuries received when in the
employee of the Northern State Power
Company, of which he was superin­
tendent for the Marion branch. He is
survived by a widow and five children.
TH E CITIZENS ST A T E Bank at
Garden City was destroyed by fire on
November 24 with a loss estimated at
$20,000 covered by insurance. The
fire started in a garage adjoining the
bank.

LIMITED

HEAD OFFICE: 5 THREADNEEDLE STREET, LONDON. E.C.j

Central Western Banker, December, 1928

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Federal Reserve Bank of St. Louis

A R T H U R R. JOHNSON, cashier
Brookings County Bank at Brookings,
S. Dak., has been appointed secretary

31
of Group 4 of the South Dakota
Bankers Association, by President C.
14. Lockhart of Watertown.
The
former secretary-elect, E. R. Johnson
resigned his banking position at
Brookings to resume work with the
Federal Reserve Bank.
CANDEM R A Y B U R N , vice presi­
dent of the National Bank of Huron
has been elected recently by the South
Dakota State Fair Board as treasurer.
C. L. Chase, cashier of the Farmers &
Merchants State Bank of Willow Lake
was named vice president and T. L.
Frick, president of the Farmers &
Merchants State Bank of Yankton
was re-elected president of the Board.
T H E F IR ST ST A T E B A N K of
Volga has taken over the business of
the Farmers Security State Bank of
Ahnberg, a sound institution but with­
out sufficient business to warrant its
continuance.
IR A A. M OORE, vice president of
the Minnehaha National Bank of
Sioux Falls, and chairman of the
Public Relations Committee of the S.
D. Bankers Association, gave a radio
talk on banking as a business over
station W N A X at Yankton recently.
M O N T H ERRICK , formerly em­
ployed by a Crosby, Minn., bank, has
accepted the position as bookkeeper
with the Farmers State Bank of
Faith.
LEGAL DEPARTM ENT
(Continued from Page 4)

nor tenable. It amounts to a fraud
upon the depositors, stockholders, and
the public, to agree that the obligation
which the party assumed was, in fact,
not an obligation. It amounts to a
fraud upon the depositors, creditors
and stockholders of a bank and a
fraud upon the public, because it gave
assurance that the assets of the bank

were sound. Having given the note
with the avowed object of having it
appear as an asset for purposes of ex­
amination, the maker is estopped
from asserting a secret understand­
ing that he was not to be held liable.
The law will not countenance con­
tracts that are against the public good,
and therefore forbidden by public
policy.
• It is well established that a bank
cashier or president has no authority
to promise a person executing a note
to the bank that the maker will not be
required to pay the note, and such a
promise, if made, is not binding upon
the bank.
GETTING OUT FROM U N D E R
THE K A N S A S G U A R A N T Y L A W
(Continued from Page 8)

against the fund still unpaid, are esti­
mated at anywhere from six to eight
million dollars. Thus the Kansas ex­
periment goes into history.
One of the most prophetic utter­
ances made on the Kansas law, which
has been borne out by history, was
made in 1909 by the president of the
Kansas Bankers Association that year,
President W . M. Peck, of Concordia,
making this comment:
“ In Kansas we have had our grass­
hoppers, our long, unbroken droughts,
our bewhiskered Peffer, our Mary El­
len, our Carrie Nation, and now have
the latest and greatest of them all, our
bank guaranty law.
“ With its politics, perhaps, we
should not concern ourselves, for we
all know that schemes are often con­
cocted by men who know better, simp­
ly to get votes for the purpose of
maintaining office and power. The
name itself is delusive and false.
There never was a bolder case of false
pretenses perpetrated upon the peo­
ple of the state than giving the name
of guarantee to that act. There is not
guarantee or strength enough in the

law to entitle it to be called by that
name. We bankers might just as well
ask our customers to attach a two cent
stamp as collateral to a loan of $50 as
to tolerate this law. That the people
think they want it, I hold to be no ex­
cuse for their legislators who well
know that its final end will be worse
for them.
“ This law raises no funds to speak
of to guarantee any bank only in good
times when there are no failures, but
does create a perpetual assessment of
a small amount that would not pay
the interest after a crisis and the fund
never would recover from its deple­
tion. While there is a provision in
the law which allows a bank to get
from under by advertising for six
months its intention to do so, provid­
ing all losses are paid at that time, a
repetition of the experiences of 1893
would involve the banks so deeply thatthey never could get away from the
annual assessments.
“ If the law is not checked in its
early childhood, great will be the ca­
lamity in its downfall which will sure­
ly come and to the stockholders who
are doubly liable for the debts of their
bank it will be a never ending curse.”
Talks to Secretaries

Omaha’s greatness lies in its agri­
cultural setting and its trade territory,
said Walter W. Head, president of
the Omaha National Bank, in a re­
cent address before the Nebraska
Association of Commercial Organiza­
tion Secretaries.
Mr. Head said that Omaha was as
much dependent on the smaller cities
in its trade territory as the smaller
cities are on Omaha.
You Tell ’Em

“ What’s an operetta?”
“ Don’t be dumb— it’s a girl who
works for the telephone company.”

BANK OF N EW SO U T H W ALES
AUSTRALIA
P A I D -U P
R ESERVE

_$ 3 7 ,5 0 0 ,0 0 0

C A P I T A L _________________
F U N D ---------------------------------

R e s e r v e L ia b ility

o f P r o p r ie to r s .

E S T A B L IS H E D

1817

.

2 8 ,2 5 0 ,0 0 0

_

3 7 ,5 0 0 ,0 0 0

.$ 1 0 3 ,0 6 9 ,6 0 0

Aggregate Assets 30th September, 1927

$438,905,640

—*

A G E N T S __ F I R S T N A T I O N A L B A N K , O M A H A , N E B R A S K A
G E N E R A L M A N A G E R , O SC A R L IN E S

H E A D OFFICE, GEORGE ST., S Y D N E Y

LONDON OFFICE, 29 T H R E A D N E E D L E ST., E. C.

5 1 8 B r a n c h e s a n d A g e n c i e s in a l l A u s t r a l i a n S t a t e s , N e w Z e a l a n d , F i j i , P a p u a , M a n d a t e d T e r r i t o r y o f N e w
L o n d o n . T h e B a n k C o lle c ts f o r a n d U n d e r ta k e s th e A g e n c y o f O th e r B a n k s , a n d t r a n s a c t s e v e r y
d e s c r ip tio n o f A u s t r a lia n B a n k in g B u s in e s s .


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Federal Reserve Bank of St. Louis

G u in e a

and

Central Western Banker, December, 1928

32
MiiHiiitiiiiiimiiiimiiiiiiiiiiiiiiiiiiHiiiiimiimmiiiiiimiiiiiiiiiiiiimimmmmiHHiimiHiiiimtmmiiiiiiitniiiimititiiHiiiiHiimini'

.................1...1...

Not a Candidate

Roy L. Bone, Kansas State Bank
Commissioner has announced that he
is not a candidate for reappointment
to the position at the end of his fouryear term ending March 31, and that
he will not accept an appointment.
His decision came as a surprise to
many bankers of the state, who had
given no thought of a successor for
the position.
Retires

The active vice-president of the
Downs, Kansas, National Bank, Dr.
Monte Gants, has retired from active
service. It is' reported that Dr. Gants
will purchase the business of Dr.
Niernberger, but will also retain his
financial interests in the bank.
New Cashier

Gene Michie has resigned as cashier
of the First State Bank of Cherokee,
Kansas, and is planning to move to
California. His position will be filled
by W . H. Wallace.
Dies at Holton

A death at Holton, Kansas, recently
was that of Frank M. Wilson, cashier
of the Bank of Soldier. The state
bankers were convening in Holton,
and Mr. Wilson was in that city at­
tending the convention.
Meet in Neodesha

Members of the Wilson County
Association met recently in Neodesha,

Kansas. Officers elected for the com­
ing year are as follow s: T. J. Cooper,
of the Wilson County Bank at Fredonia, president; G. C. Pitney of the
Neodesha National Bank, vice-presi­
dent; and F. W . Rettig of the Citi­
zens State Bank of Fredonia, secre­
tary-treasurer.
Consolidation

The consolidation was announced
cently of two banks in Clearwater,
Kansas, the State Bank and the
Home State. S. C. Bishop and R. M.
McKee remain as president and
cashier, respectively.
Merge in Douglass

The State Bank of Douglass, Kan­
sas, and the Exchange Bank of the
same city have recently merged. A.
G. Steinberf, formerly cashier of the
Exchange State will continue as
cashier of the combined institutions.
Portion Accounts

The member banks of the Law­
rence, Kansas, Clearing House A s­
sociation have formulated a plan
whereby the three large accounts of
the city will be apportioned among the
three banks of the town.
Dies at Atchison

Frank Millick, president of the
State Bank of Lillis, Kansas, and a
director of the Citizens Bank of Centralia, died recently at Atchison.

W h y take chances on Daylight Holdups
and losing’ your securities, besides having you and your customers locked
in an air tight vault when this all can be prevented by installing
one of the new Yale Day and Night Time Locks
This new type of lock will give you a service that your regular timelock can not and your reserve cash and other securities can be always
had in a few moments should an emergency arise. The large brass disc
in your window will warn any holdups that you are fully protected by a
Day and Night Timelock.
Day and Night Timelocks installed on Vault Doors protects against
burglary attack. Should the combination lock be pried off by yeggs,
the Day and Night Timelock will keep them out. No unsightly or
cumbersome devices, no door covered with wire or string, nothing to cause
trouble or lockouts, and you can not be locked in your vault by holdups.
Also installed upon Safes, Reserve Chests and Lockers.
Manufactured only by Yale & Towne Mfg. Company of Stamford,
Conn., and sold only through us in this territory.
Telephone or Write Us for Particulars

F. E. DAVENPORT SAFE COMPANY
Official Safe, Vault and Timelock Experts for
Nebraska and Iowa Bankers Associations

2061 Farnam Street
Telephones:

Central Western Banker, December, 1928

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Omaha, Nebraska

Office Jackson 1821; Residence, Kenwood 3123
or Kenwood 6382

Meet in Altamont

The Labette County Bankers As­
sociation held their regular quarterly
meeting recently at Altamont, Kan­
sas. The attendance was excellent,
and the officers and directors of the
Labette County State Bank were the
hosts for the occasion.
Elected President

G. C. Pitney, who has been cashier
of the Neodesha, Kansas, National
Bank for the past sixteen years, was
recently chosen president of that in­
stitution. Mr. Pitney succeeds the
late A. M. Sharp.
Twenty-five Years Young

A celebration commemorating the
twenty-fifth anniversary of its found­
ing was held recently by the Home
State Bank of McPherson, Kansas.
The bank was founded in 1903, and
its president, Mr. Harms, has been
with the institution since that time.
Adopt Charge

The bankers of Miami County,
Kansas, met recently at Louisborg.
The principle business transacted
was the adoption of a service charge
to go into effect January 1, 1929.
Godfrey Schirmer Dies

Godfrey Schirmer, president of the
American National bank of Denver,
German consul in the Denver district
and director in several large business
organizations, died recently after' an
illness lasting twelve days and at first
diagnosed as influenza.
He was in his sixty-fifth year and
was active in business and appeared
in his usual good health. His death
came as agreat shock to the business
community and to the numerous in­
timate friends he made during more
than forty years of business life in
Denver.
New Interior

The interior equipment of the new
First National bank of Cannon City,
Colorado, is fast being installed.
The attractive marble panels and
cageless teller’s counters have been
installed and are now being fitted up.
This equipment is an innovation in
the west and is of as much interest
to bankers as it is to the general
public.
Needless to say that when fully
complete this banking institution will
be one of the most modern.
Blessed is the man who has the art
of making friends, for it is one of
God‘’s gifts.— Hughes.
My companion, my guide, and mine
own familiar friend.— Psalter.

MiiHimiiiiHiiiitiiiiimiiiimni

Colorado News
mm»...in.... .............. ....limn...................................................................

Mail Xm as Checks

Persons who saved in Christmas
savings accounts maintained by three
Boulder, Colorado, banks were re­
warded when the banks mailed the
annual checks.
The Mercantile Bank and Trust
company mailed $18,000 in checks,
the Citizens National bank $8,000, and
the Boulder National bank $5,000.
The three banks now are starting
1929 Christmas savings accounts and
invite all to join.
Vice-President
W . C. Kurtz, of the firm of Biggs

and Kurtz, and a director of the
Grand Valley, Colorado, National
bank, was elected vice-president of
that institution at a recent meeting
of the board of directors. In this
capacity Mr. Kurtz will succeed the
late Beman C. Fox, who had served
the bank as vice-president for a num­
ber of years past.
William Weiser is president of the
bank, Mr. Kurtz, vice-president, and
William J. Moyer, chairman of the
board.

Stramp of Genoa and Mrs. A. F.
Drulinger of Hickman, Calif.
Million Resources

The resources of the four banks op­
erating in Holyoke and Paoli, Colo­
rado, showed a total of over a million
dollars, according to the published
statements of the four banking insti­
tutions recently. Deposits are on the
increase and far exceed the loans.
From the published statesments, the
total of deposits reaching close to the
million mark, or $959,384.79. To this
might be added the value of the var­
ious banking houses and fixtures. A
total of $59,590 which would make a
grand total of $1,018,974.79.
Deposits Gain

Pursuant to call of the State Bank
Commissioner, The Colorado Bank &
Trust Company of Delta has publish­
ed a statement showing total resources
of in excess of one million dollars,
which is a gain of one hundred fifty
thousand dollars over a year ago at
this time.
Change Ownership

Meet in Canon City

Fifty members of the Fremont
County Bankers’ association met re­
cently at the Strathmore hotel in
Cannon City, Colorado. Hon. Alva
Adams, of Pueblo was the principal
speaker of the evening. Other addreses
by prominent men were given.
The employees of the member
banks and their wives from both Can­
non City and Florence were guests
of the association. A banquet preced­
ed the program.

Announcement has been made of
the change of ownership in the con­
trol of The Farmers State Bank of
Peyton, Colorado.
The entire interest of Mrs. Emma
B. Herzberger, and of a few minority
stockholders has been purchased by
F. F. Hartman, J. O. Phillips and A.
L. Pieper.

FACILITIES

TO

M EET A L L

Mr. Hartman, who assumes the
duties of president of the bank, has
long been known in the Peyton and
Eastonville communities, as a stockman and rancher.
Mr. Phillips, who becomes vicepresident has lived in the Peyton com­
munity, as a farmer and rancher, for
22 years.
The active management of the
bank will remain in the hands of A.
L. Pieper, cashier.
Christmas Savings

It will be a merry Christmas in
Denver, Colorado, if one is to judge
from the figures announced by the
various banks. More than $903,000
was distributed by nine banks in the
city.
And while Denver is receiving near­
ly a million dollars to spend during
the holidays, members of Christmas
clubs throughout the nation will get
more than 550 million dollars.
The amount each Denver bank will
distribute follow s:
United States National......... $250,000
Colorado National....,.............. 200,000
American National................. 110,000
First National.........................
5,000
Denver National..................... 90,000
International Trust....,.......... 82,000
West Side National............... 40,000
Central Savings....................... 70,000
South Broadway National..... 16,000
The Christmas Savings club is an
American institution, established by
the American people, and has a mem­
bership in excess of 8 million. More
than 8,000 banks in the United States
have clubs.
It has been estimated that the
Christmas club idea has in itself
created 10 million permanent savers.

BAN KIN G REQ U IREM EN TS

President Dies
J. N. Steichen, 58 years old, presi­

dent of the First National bank of
Genoa, Colorado, died recently fol­
lowing an operation for appendicitis.
Pneumonia is said to have been the
cause of death.
Mr. Steichen is survived by his
wife and two daughters, Mrs. Charles

F IR S T N A T IO N A L
BANK»* CHICAGO
Affiliated

FIRST TRUST AND
SAVINGS BANK
0,u r
, ,
Burglar Alarm S ystems
Co ver the CpuriTRYjàW

Resources Exceed
$450,000,000.00

Frank O. Wetmore, Chairman
Melvin A. Traylor, President

O B-Mc CLINTOCK COMPANY
M I N N E A P O L I S ,


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Federal Reserve Bank of St. Louis

-

-

AA I A l A I .

Central Western Banker, December, 1928

34

Capital Values In Farm in
(Continued from Page 12)

farm operations and declining capital value of land. The
answer lies in the application of the income figures to
the investment values for the corresponding periods. In­
dicated returns on capital value are thereby arrived at
as follow s:
Crop Year
19191920192119221923192419251926-

Return on
Total Investment

Return on
Operators’ Investment

20.............................6 .3 % ...............................5.7%
21................................ 5 % ...................... (— )4 .2 %
22..............................1 .2 % ...................... (— >2.3%
23.............................3 .2 % ...............
12%
24............................ 3 .5 % ...............................1.6%
25.............................4 .4 % .............................. 3.2%
26.............................5 .2 % .............................. 4.3 %
27.............................4 .2 % .............................. 2.7%

The trend has been persistently upward since 1921-22,
excepting 1926-27. However, it is not until the high
point of the recovery of farm earning power is reached
(1925-26) that an adequate rate of return on capital
value is found to support a stabilization level. Even
here is found a return from farm operations lower than
the prevailing rate for mortgage money which means
that farms can be bought and mortgaged for part of the
price only on the unattractive basis of carrying the in­
terest charges by a contribution from earnings of the
equity investment.
What is the situation today? Similarly comprehen­
sive statistics for the period since the 1926 harvest are
not at hand. The Department of Agriculture, however,
has published the results of its 1927 annual survey of

about 15,000 farms which returns in the past have shown
a close relationship in trend to the reports on the whole
industry. This report indicates for the 1927 harvest a
return to the 1925 peak. For the 1928 harvest studies of
volume and price level indicate an increase of about
$500,000,000 m crop values over 1927. Furthermore it
is felt that because of the wider use of modern machinery
and the^ continuing liquidation of his indebtedness, the
farmers’ 1928 income has been bettered more than the
increase in crop values would suggest. Without attempt­
ing to evaluate this latter consideration, an appropria­
tion of 1928-29 crop year total farm income may be set
down as $500,000,000 in excess of 1925-26 returns. The
figures then are:
(In millions of dollars)
Net Income for
Net Income for
Total Capital
Operators’ Capital
Investment Value
Investment Value
3,500
1,900

Crop Year
1928-29

Since there has been apparently no substantial change
in capital values, the 1926-27 figures may be used. The
1928 harvest returns on capital values are then:
Return on
total Investment

Returnon
Operators’ Investment

,. ,
6%
6%
which means a return on capital values, at the levels
used, that establishes a profitable, equity investment in
the farming industry. The revival of interest in farm
lands is accordingly explained. Farm lands in the United
States are selling today, in terms of the pre-war dollar,
at 80 per cent of their 1912-14 values.

How Safe Is T ou r Safe?
(Continued from Page 11)

One was a solid gas and the other was
a liquid gas of the chlorpirine type
that was quite effective but liable to
leakage and breakage and at the same
time was inclined to be toxic to a
greater degree than we felt was safe;
therefore, we advised our members as
to the results of this inquiry and stat­
ed that if they decided to use gas pro­
tection we would recommend the solid
rather than the liquid gas, all other
things being equal.
Eater we had an opportunity to test
some of this solid gas that had been
in our possession for about seven
months. Endeavoring to set it off in
the usual way we found that it would
not function. W e then lit it with a
match and it burned but apparently
no tear gas was generated. This evi­
dence of deterioration led us to in­
quire further and we find that this gas
is being sold to police departments,
sheriffs’ offices, etc., and that the com¡pany’s laboratories advise that the
cartridges have an “ effective life o f
only one year.”

This statement caused us to think.
Many of our banks installed this pro­
tective device two years ago or more
and we were wondering what amount
of protection they had if this gas de­
teriorates so rapidly. Inquiry among
men who are in a position to know, de­
velops the fact that jolting or shaking
is one cause of deterioration, and they
state that the opening and shutting of
vault doors will in time separate the
black powder contents of this gas so
that it is not in a position to liberate
the active element in the gas.
Realizing the possibilities of gas
protection and looking for something
more substantial in the way of service
to our banks we then conferred with
the Anakin Company of Chicago, and
they are offering a five-year guarantee
on their gas and locks together, backed
by a $500 bond for faithful perform­
ance o f the function for which these
protective devices are sold, and after
the demonstration of the effectiveness
of the combination of these two de­
vices in the recent burglary of the post
office at Ripon, Wisconsin, we believe

TH E CE N TR A L W E STE R N B A N K E R OF O M A H A , P u b lish ed

by

that favorable action can be taken by
this department on their devices
without danger of incurring unfavor­
able criticism at a later date. This
company is using a very modern pro­
duct in their gas bomb.
When Locked in Vault

Recent robbery attacks have also
created a demand for some means of
safety for those who may be impris­
oned in a vault by robbers. This de­
mand has been met by the ventilator
and vault escape. The vault ventilator
has been the choice of some banks,
while others prefer to spend a little
more to insure their immediate release
from the vault. W e are quoting Mr.
H. P. Michael of the Underwriters
Laboratories, Chicago, who states:
“ The banker should consider human
life, he should not expect his employ­
es to resist the bandit’s command if
resistance jeopardizes the lives of em­
ployes and customers. Do not allow
them to be locked in a vault. There
are door attachments to prevent just
such happenings.”
D eP u y

P u b l is h in g

C o m pan y

416 Arthur Bldg., Omaha, Nebraska
C l iff o r d D e P u y ,

Publisher

G erald

A.

S n id e r ,

Associate Publisher

R.

W.

M oorh ead ,

E d ito r

Wm. H. Maas, 1221 First National Bank Building, Chicago, Vice-President

Central Western Banker, December, 1928

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

H . H . H a yn e s,

Associate Editor

HOTELS OF
H O SPITALITY
OM AHA

Œije
Cfjaáe gattonai Panfe
of the City of New York

Hotel Fontenelle

Capital............................................ -........ $60,00.0,000.00
L IN C O L N

Surplus and Profits................................ 78,807,343.06

Hotel Lincoln
S IO U X

Deposits (October 3, 1 9 2 8 )............... 892,388,858.54

C IT Y

OFFICERS
Albert H. Wiggin
Chairman of the Board

Hotel Martin
CEDAR

R A P ID S

John McHugh
Chairman of the Executive Committee

Hotel Montrose
S IO U X

FALLS

Samuel H. Miller
Carl J. Schmidlapp
Reeve Schley
Sherrill Smith
Henry Ollesheimer
Alfred C. Andrews
Robert I. Barr

Hotel Carpenter
C O U N C IL

BLUFFS

Hotel Chieftain
And in
Los Angeles,
Hotel
Alexandria
$2 Up.

Hotel Tallcorn
O p era ted

TEN

fo r

oth e rs

Your

C o m fo r t

Vice-Presidents
George E. Warren
George D. Graves
Frank O. Roe
Harry H. Pond
Samuel S. Campbell
William E. Lake
Charles A. Sackett

Hugh N. Kirkland
James H. Gannon
William E. Purdy
George H. Saylor
M. Hadden Howell
Joseph C. Rovensky

Vice-President and Cashier
William P. Holly

M ARSH ALLTOW N

am i

Robert L. Clarkson
President

by

EPPLEY HOTELS COMPANY

Second Vice-Presidents
Frederick W. Gehle Franklin H. Gates
T. Arthur Pytermai
Edwin A. Lee
Arthur M. Aiken
Ambrose E. Impey
Alfred W. Hudson S. Frederick Telleer Robert J. Kiesling
James L. Miller
Otis Everett
Lynde Seiden
Joseph Pulvermacher Wm. H. Moorhead Thomas B. Nichols
Leon H. Johnston
Harold L. Van Kleeck George S. Schaeffer
Comptroller
Thomas Ritchie

THE BANK STOCK MARKET
B K B — Strong' banker, capable of m akin g large investment,
can secure presidency of w ell established bank splendidly
located in M id-w estern city. Bank old, ‘clean” and in high
standing.
H G B — Investm ent of around $50,000.00 secures control, car­
ry in g presidency of splendid bank in “tw o bank” county seat
tow n of 2,500 population. Deposits $750,000.00. K an sas City
territory.
E M A — $9,000.00 investm ent purchases fifty shares of bank
h aving $20,000.00 capital; $16,000.00 surplus and profits; over
$180,000.00 deposits. Stock carries cashiership at salary of
$200.00 per month. Location— Southern M issouri town of
over 2,000 population.
T P B — Bank in modern county seat town of 4,000 population
-— cashiership at good salary m ay be had through purchase
of 100 shares of stock, reasonably priced.
M M B — M axim um investm ent of $20,000.00 w ill place sa tisfa c­
tory banker of broad experience in leading executive posi­
tion in bank w ith good volume and bright future. One of
the best of the sm aller cities of K ansas.
M C D — Two positions at g'ood salaries can be secured in
m oney m akin g Oklahoma bank in city around 3,000 popula­
tion. Stock priced at approxim ately inventory value. R e­
quires investm ent of about $25,000.00.
F L C — Investm ent of approxim ately $25,000.00 acquires hold­
ings of largest stockholder in money m aking Colorado bank
in good county seat town in agriculture and live stock te r­
ritory. Bank has deposits of $600,000.00. Stock offered car­
ries presidency at annual salary of $2,700.00.
H G A — L eading bank in M issouri county seat town desires to
secure cashier who has necessary ability to w arrant his
succeeding to presidency in a few years. Deposits over a
h alf-m illion dollars. Required investm ent around $20,000.00.

S M B — Control of National bank in good central K an sas
county seat town, carrying m anaging position, offered at
approxim ately book value.
M R A — Control of only bank in good western M issouri town
offered at about invoice value. Bank has deposits seven and
one-half tim es its combined capital and surplus; m akes a t­
tractive earnings and pays salary of $200.00 per month.
Cashier m akes large earnings from “side lines.” Requires
$22,500.00. L arge Undivided Profits account should be dis­
tributed.
H R B — $20,000.00 acquires 67 of the 100 shares of splendid
western K ansas bank, together with modern residence of
cashier.
This bank has been an especially good money
m aker for more than 20 years.
H S A — 25 shares of stock in only bank in w estern M issouri
town offered at about invoice value. Deposits about $125,000.00. Good earning power. Salary, $1,800.00.
G J B — A bout $6,000.00 acquires block of stock carrying cash­
iership of only bank in eastern K an sas town, 15 m iles from
county seat. Bank earned 17% last year. Salary and side
line commissions total around $3,000.00 per annum.
H B D — Investm ent of $9,500.00 secures stock carrying cash­
iership of profit m aking bank in central Oklahoma, at salary
of $3,000.00.
H B B — $13,000.00 buys 61 of the 100 shares of good central
K ansas bank in “ one bank” town, together w ith cashier’s
residence, valued at $2,500.00.
Stock priced about invoice
value.
Earned 21% last year.
Salary $1,800.00.
Annual
commissions to cashier about $1,000.00.
C B A — $7,700.00 secures stock carrying cashiership of only
bank in w estern M issouri town. Bank earned 12% last year.
Salary and com m issions about $1,800.00 per annum.
IvOIi— $11,000.00 secures control of only bank is east central
K an sas town. Salary $1,800.00. Commissions about $600.00.
Reasonable return on investment.

For Further Data on Above, as Well as for Informati on on Many Other Offerings not Here Shown, Address

BANKERS BROKERAGE COMPANY
(Successor to the C. C. Jones Investment Company)

919 Baltimore Avenue


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Kansas City, Missouri


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

The
Omaha
National
Bank

S E V E NTE £ NTH

FO R T Y

OMAHA, NEBRASKA

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