Full text of Central Western Banker : February 1932, Volume 27, No. 2

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T h e Teller Tells the W orld 3
T h e Gold Standard
in Present-day Economics 5
Trends and Traditions o f Life
Insurance Investment 6
Are Railroads Up W ith
the Tim es? 9

FEBRUARY

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T hrough
Rose - C o l o r e d
'y^T’ H E N Y O U V I E W

C lasses

the economic conditions in

Nebraska and compare them with general condi
tions throughout the country, it is almost like lookingthrough rose-colored glasses.

Nebraska looks rosy, be

cause there is always a demand for Nebraska’s products
. . . and that means each year the dollars come rolling
into the state in return for the f o o d

p r o d u c t s of

Nebraska.
Nebraska products have been bringing annually more
than a half billion dollars into the state in return for
the state’ s agricultural crops and live stock sales.

And,

o f course, many millions more come from manufactured

THE

FIRST

products, such as butter, meat, flour and other food
products.
Perhaps the total amount will not be as large this year
due to either smaller yields or lower prices, but the
farms will not shut down.

The annual income will

continue in return for Nebraska’s products, because
these products are food.

You are always wel
come at this bank re
gardless of whether or
not you are a depositor.

First National Bank of Omaha

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Central Western Banker, February, 1932

CENTRAL WE/TERN RANKER
410 ARTHUR BUILDING
OMAHA
C l if f o r d D
G erald

YVm . H.

Associate Publisher
R. W.
122} Fir?t National Bank Bldg., Chicago. Vice-President

n id e r .

aas,

e P u y ..

Publisher
Editor

H. E. O ’ C o n n o r , Field Representative
P. S y m s , 19 West 44th Street, New \ork, Vice-President
F r a n k S . L e w i s , 840 Lumber Exchange, Minneapolis
Subscription. 25 cents per copy; $2.00 per year. Entered as second-class matter at the Omaha postoffice.

V olu me 27

oorhead,

rank

FEBRU ARY, 1932

N umber 2

The Teller Tells the W o rld
By C. W . FISH BAU GH
ER E ’S SOMETFIING bankers with in
surance departments might be interested
m : “ In the last eighteen months more
people were killed in automobile accidents in the
United States than American soldiers were killed
in action or died from wounds in the World
W a r!”
In other words, if your clients want long lives,
have them sell their cars and join the army.

y t yt yt

TH E ELKS LODGE of Iowa City is doing
a fine piece of work in aiding students. All stu
dents who lost money in the closing of the John
son County Savings Bank and the Citizens Sav
ings and Trust Co. of Iowa City can borrow fifty
per cent of the amount they had on deposit from
a special Elks Fund.

forgery was a failure, as has been the fate of
almost every forgery of the five pound note.
The reason is the paper. The paper rather than
the design is what the cashiers scrutinize. The
paper is all made at one special plant. Each proc
ess in the making of the paper is kept separate
from the other. The plant is zealously guarded.
A rigid search is made as each man leaves the
factory.
y t y t yt

T H E R E ’S A LAUGH now and then, even in
these days of depression. I read the other day
where the Indians in the Dakotas were becoming
very uneasy. The Indians say the Great Father
took the land away from them, and now they’re
afraid he’s going to make them take it back.
At least it’s worth considering.
y t y t yt

yt y t yt

TH E C A PTU R E of the lone bandit who held
up the American State Bank at Burr, Nebr., still
stands out as one of the quickest arrests of a
bank bandit of last year. The bandit, a young
man from Omaha, only twenty years old, was
arrested three hours after he had escaped with a
loot of $300.00.
yt yt yt

TH E F ID E L IT Y N A T IO N A L B A N K AND
T R U ST CO. of Kansas City has placed the larg
est single contract ever written for an electrical
tear gas system. Its installation will protect every
department of the bank.
The plan seems to be, “ give the bandits some
thing to erv about!”
y t y t yt

TH E FIV E POU ND N O TE issued by the
Bank of England seems to be the very aim of
simplicity. It has no colors, only black. The
wording is simple, design plain. So simple, in
fact, that a boy seventeen years old taking some
India ink and fine steel pen drew a perfect dup
licate. So expert, in fact, that experts had to take
a magnifying glass to tell the difference. Yet the

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EIN STEIN H AS S A ID : “ Time is fallacy
and is the same as space.”
Some of our customers have the same idea.
Time means nothing to them and they sure get
located all over space.
yt yt yt

FROM A SPEECH made Feb. 17, 1929, by
Senator James A. Reed: “ More profit can be
made from distilling liquor in a wash boiler than
can be made in banking.”
I’m almost convinced he’s right. Has anyone
any good home brew recipes?
yt yt yt

BLACK BLO TTERS are used in diplomatic
offices and embassies throughout the world to
guard against the revelation of state secrets.
It’s just as important that banks guard against
forgeries by the use of these same black blotters.
In fact, I use black blotters entirely when writing
this column.
y t y t yt

A R K A N SA S,
states is taking a
to all states. The
“ code” of qood

one of our great southern
step that might well be adapted
state bankers have drawn up a
banking. It contains twelve

Central Western Banker, February, 1932

The Ten Largest Banks
(Three ciphers omitted)

— Gross Deposits—
December
December
31, 1930
31.1931

Chase National Bank, New York........... .81,459,115
National City Bank, New York............... 1,418,702
Guaranty Trust Co., New York_______ 1,070,022
Bk. of America, N.T.&S., San Francisco 799,220
Cont’l 111. Bank & Trust Co., Chicago.... 773,437
Central Hanover Bk. & Tr., New York.. 608,192
Bankers Trust Co., New York.......... ..... 558,086
First Wayne Nat’l Bank, Detroit...... ..... 483,911
Sec. First N. B., Los Angeles
479 013
First National Bank, Boston....,.......... ..... 476,989

articles, all of them thoroughly prac
tical and each meant for good sound
banking. As each bank adopts the code
its name is printed in the Roll of
Honor in the Arkansas Banker, the
official publication of the Arkansas
Bankers Association. The Honor Roll
is certainly growing, too.
& & ¿5
TH ERE IS A N EW PO LITIC A L
PA R TY with the old W. J. Bryan slo
gan of Silver 14-1 (Bryan’s was 161). It looks like it’s going to be the
same old fight all over again.
But, why not have the duel money
system? W e have dual banking, the
dual court system, a dual government
and a lot of people leading dual lives.
Blip, hurrah, for free silver.
CO U N TERFEITIN G in the old
days was somewhat simpler than it is
today. The coins of the government
were none too perfect, so a fair coun
terfeit had a chance to get by. One
way counterfeits were made was to
take a double plate of iron in which
two hollow disks had been cut. Clay
was placed in the disks and an impres
sion of a coin was made. With two
impressions, for each side of the coin,
the plates were placed together and
hot lead poured in through a funnel
like opening in the top. When the
piece cooled the knob left at the place
the metal ran in was hied away, and
the job was complete.
& & &
DO Y O U REM EM BER in the
Village Smithy this sentence: “ And
he looked the whole world in the face,
for he owed not any man.”
Automobile dealers now take the
place of the Smithy, but I don’t be
lieve they can say the same.

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$2,073,775
1,460,031
1,341,640
998,039
964,468
660,779
636,589
c 511,126
543,800
581,235

TH E STRON GEST competitor
the banks have right now is the gov
ernment. At present the government
has around 400 million dollars of de
posits that rightly belong to local
banks all over the country. This is
called the postal savings system. It is
of course true that the money is re
deposited in a certain few banks. But
the money is still out of use in that
community. For every dollar de
posited the bank must put up bonds
to guarantee its safety and then pay a
good rate of interest besides.
S «¿8 ¿8
TH E M IN N ESO TA Bankers As
sociation has stated that they will do
everything possible to put a stop to
false rumors about banks. Anyone
caught in a “ whispering campaign”
will be punished to the full extent of
the law.
All state associations should fall
into line and stamp out this malicious
form of gossip that is undermining
banking.
J8 ¿8 S
TH E SH AN G H AI Commercial
Savings Bank, Ltd., Shanghai, is hav
ing installed a vault alarm system.
Maybe “ East is East,” but it needs
Western protection.
¿8 ¿8 ¿8
A CERTAIN presidential candi
date made a speech recently and re
marked that he couldn’t be a banker—
he didn’t have enough ice in his veins.
Well, if he gets to be president he
better take up banking and get some
ice in his veins to face a few of those
foreign diplomats.
¿8 .* ¿5
A STOCK that was called in 1929,
“ a stock to buy for your grandchil
dren,” has dropped over $200 a share.
That’s tough on posterity.

Deposits
December
31,1926

Increase
5 Years

% of
Inc.

$852,456
864,354
639,362
424,054
a 795,085
b 432,813
459,529
c 338,045

$606,659
554,348
430,660
375,166
x 21,648
175,397
98,557
145,866

71
64
68
89

308,666

168,323

—

41
22
43

W H E N TH E Louisville Trust Co.
of Louisville reopened for business
the town factory whistles were blown
in celebration.
I’ve heard of them hooting, but
that’s the first time I ’ve heard of them
whistling. Maybe it’s a good old
southern custom, yes, sah.

Canadffin Gold-Output
According to figures issued by the
Canadian Bureau of Statistics, Can
ada now is close behind the United
States for second place among the
world’s gold-producing nations. Can
ada made a new high record for gold
output during 1930.
The revised Canadian figures indi
cate an output for the year of 2,012,068 fine ounces. Preliminary figures
for the United States show an annual
production of 2,232,593 fine ounces,
ranking second to South Africa for
the largest output in the world.
Activity in Canadian gold mining
and prospecting has been stimulated
by the reduction in commodity prices,
combined with the attitude in finan
cial circles toward increasing the
world’s gold supply.
Ontario’s output during 1930 in
creased by 113,745 fine ounces, total
ing 1,736,012, while 141,747 fine
ounces were mined in Quebec, an in
crease of 50,949 fine ounces over the
previous year. British Columbia also
increased its production.
World gold production during 1930
totaled 20,460,168 fine ounces, of
which 10,716,351 fine ounces were
obtained from the Transvaal, Cape
Colony and Natal. Total of the South
African districts also represented a
new high record.

Central Western Banker, February, 1932

The Gold Standard in Present-Day
Banking Economics
T

HE O N L Y purpose of any
economic system that might be
devised would be to further the
ability of man to meet his physical
needs and in such manner as to allow
opportunity for mental and spiritual
growth.
When man and the members of his
family were able to provide all of
their requirements without the ex
change of goods with others no ex
tended economic system was neces
sary. Again when the number of fam
ilies within a reasonable area was
small enough that trading intercourse
could be carried on by means of bar
ter, no system of economics was es
sential.
When barter was first undertaken,
however, the first economic element
arose, for it was inevitable that some
sort of mental measure would have to
take place in the minds of those en
gaged in barter before they could ar
rive at decisions as to what would
constitute a fair exchange.
Two Forces
These mental measures must have
had in them two forces: desire, and
the time labor element. As soon as
triangulation entered into the situa
tion barter became more complicated
and men soon found it necessary to
have some measure into which quan
tities of all things could be converted.
The laws of supply and demand must
have become operative at the incep
tion of barter. They have prevailed
ever since, are equally forceful today,
and must be so in the future.
To visualize just what the laws of
supply and demand mean as applied
to human endeavor let us suppose
that a central warehouse were estab
lished in a large community; that
prices were fixed as between all com
modities which were carried to and
taken from the central warehouse and
that all men in the community took to
this central warehouse all surpluses
which they themselves provided
through their labor and received all
of their needs that the warehouse con
tained. Each individual would select
for his part of the work such produc
tion as his ability, opportunity and
desire determined.
W e will suppose that the warehouse
man had instructions to receive every
thing presented and to give in ex
change to each individual those things

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always be supply and demand, but
there would be underlying conditions
Chairman, Commerce and Marine
that would take into account the time
Committee, A.B.A.
labor element contained within each
article, the time labor element con
which he wished that were in the tained in the production of raw mate
warehouse on the basis of the prices rials and, further, a recognition of the
fixed.
value of skill and ingenuity. In a
Under such a system it is incon world where skill and ingenuity had
ceivable that there would not be a pil no place the mentality of men would
ing up of certain goods which were undoubtedly depreciate, for there
not wanted in the quantities delivered would be no mental stimulant to fur
and such a scarcity of others that ther production of the conveniences
were desired in greater numbers that of life, to develop science, or to create
living would become very difficult.
art. Now it is not conceivable that any
control group in such a single ware
house could measure the needs and
desires of men except in a very lim
ERIODIC movements that re
flect a. rise and fall in the ac
ited community. It has therefore been
tivities of men must continue
necessary for individual markets to
while man is constituted as he
be developed covering many kinds of
now is and always has been. There
goods, the production of which must
is reason to believe, however, that
industry will be able to devise a
be in enormous quantities. Such mar
means whereby the current mov
kets would not be possible if there
ing relationship between demand
were not some commonly accepted
and supply, in specific commodi
measure that would enable the flow
ties, and in general, will be better
ing into and out of the markets of
understood!”
goods of the same character on a
basis of measurement as against all
other goods.
When the unbalanced conditions
If we assume a common measure,
reached a certain point, necessity
which we will call gold of a certain
might force individuals to try to pro weight and fineness, and all commod
vide themselves with things that were ities were expressed in gold values as
not in the warehouse.
to quantities that relatively represent,
say, the middle point of demand and
Money Essential
supply, such prices could not be ex
If those in control of the central
pected to maintain this perfect point
warehouse were allowed to vary
for any appreciable period of time.
quantities of what were at first con
Instead there would be a dispersion of
sidered equivalents between various
prices due to the action of a great se
goods to meet the laws of supply and
ries of causes affecting the relation
demand, conditions of life would
ships between supply and demand in
thereupon be improved. But it is in
each commodity. The principal such
conceivable that any system to intelli
causes are relative crop production,
gently accomplish the moving rela
discoveries of new bodies of metals,
tionships between quantities of a
changing customs and habits of the
large number of commodities could
people, introduction of labor-saving
be worked out that did not carry
devices and inventions, and dis
within it some common measure in
coveries.
which quantities of each character of
It is because individual goods are
goods could be translated in words
subject to these forces that the rela
expressing mathematical values. Such
tionship between various kinds of
common measure has been designated
goods to each other, as expressed in
in our language as “ money” and has
the common measure of gold, fluctu
usually been some commodity, or a
ate. If, therefore, the price index in
term such as “ dollar,” meaning a
relation to gold were as fixed as is the
specified amount of some commodity,
metal bar which is held in vacuum in
or “ fiat,” which, when tried, has al
the Bureau of Standards in Washing
ways led to disaster.
ton to define the length of one yard,
T o accomplish the conversion in
there would still be constant fluctuaour warehouse the ruling force would
(Continued on Page 14)

By F R E D I. K E N T

Central Western Banker, February, 1932

6
D IS T R IB U T IO N

L IF E

IN S U R A N C E

IN V E S T M E N T S — B Y

C L A S S E S — 1906-1931

(52 U nited States L e g a l R eserve Com panies)
D ecem ber 31, 1906

D ecem ber 31, 1931

Trends and Traditions of
Life Insurance Investment
O D A Y the minds of Americans
of all classes are focused upon
investments and their analysis
to an extent never before experienced.
While nothing dramatic or sensational
can be said on the subject of life in
surance investments, their character
indicates the composite judgment of
the managers of 350 different com
panies with over twenty billion dollars
of assets. Conclusions reached are,
therefore, entitled to respect. Detailed
analysis of the investing activities of
life insurance companies has been
possible by the cooperation of 52 lead
ing companies holding 91.6% of the
assets of the United States legal re
serve companies. For the twenty-fiveyear period under observation these
companies have furnished their statis
tics in detail. It has been a most
eventful period, including the greatest
war in history, and the rising and
falling tides of industry and idleness
— of wealth and poverty. One can al
most read the economic and political
history of an era in noting the invest
ment trends of this period, and their
underlying causes— so let us recur to
the situation existing in the year 1906,
when The Association of Life Insur
ance Presidents was formed. The im
portant insurance event of the year
was the investigation and report of
the Armstrong Committee of the New

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By W I L L I A M A. L A W
President, Penn Mutual Life Insurance Co.

York Legislature, and the enactment
into law of its major recommenda
tions, thereby creating a comprehen
sive code for stabilizing and safe
guarding life insurance operations. Its
beneficial effects ever since cannot be
overestimated.
Roosevelt President
Theodore Roosevelt was then the
versatile and colorful President of the
United States— a leader of rare per
sonality. During the year his plans
for the construction of the Panama
Canal were approved by the Senate.
Joseph G. Cannon was Speaker of the
House of Representatives— an invalu
able factor for conservatism and
economy. The expenditures of the
Federal Government in the year 1906
amounted to $6.64 per capita — in
1930, $32.96 per capita. This increase,
however, is partly due to the larger
interest paid upon the public debt,
which was 29 cents per capita in 1906
and increased to $5.44 per capita in
1930, or a net increase of $5.15 per
capita. Eliminating this, the increase
is from $6.35 to $27.52 per capita.
The San Francisco earthquake and
fire had occurred and had aroused the
sympathy and help of the entire na

tion. It was a disaster of first magni
tude, which the fire insurance com
panies met with courage and ener
getic action. It caused a volume of se
curity liquidation, in order to supply
the funds for reconstruction, which
was to have a notable effect on the
financial events of the succeeding
year 1907. The largest bank in the
United States had $25,000,000 capital,
$20,000,000 surplus, and $160,000,000
deposits. Charles Evans Hughes, Escp,
had attained such public favor
through his activities in the life insur
ance investigation that he was elected
Governor of the State of New York.
Neither Federal income taxes nor
Federal inheritance taxes had been
authorized by Congress.
The total assets of the United
States legal reserve life insurance
companies amounted to $2,942,000,000, compared with $20,200,000,000
at present. This indicates the extent
to which the American people have
sought financial independence for
themselves and for their dependents,
constituting a national self-reliance
reserve — a reserve against the one
great hazard of life which no man
can avoid. It is characteristic of the
self-reliant spirit of more than half
our people that they have accumulated
a fund of such magnitude, the pur
pose of which is to relieve the State

Central Western Banker, February, 1932
or charitable organizations from the
necessity of supporting these policyholders or their dependents. The
larger this fund grows the greater the
national benefit. While large in the
aggregate, it represents the equities
of more than 68,000,000 policy
holders — or an average of $297 per
policyholder. These steady increases
are not a product of spasmodic pros
perity, but are the result of continu
ing growth on an ascending scale for
many years. From 1881 to 1906,
United States life insurance assets in
creased from $461,000,000 to $2,924,000,000 or 534.2%, while for the suc
ceeding twenty-five years from 1906
to 1931, the increase to $20,200,000,000 was 590.8%.
M ore Than Doubled
During this period the ratio of life
insurance assets to national wealth
has more than doubled, increasing
from 2.3% to 5.6%.
Since 1906, probably the most sig
nificant economic changes have oc
curred in the department of transpor
tation, due to the invention, develop
ment, and utilization of the automo
bile, and in the extension of electric
light and power facilities. The growth
of motor operation has not only
affected seriously the earnings of
steam railroads and interurban elec
tric railroads, but has rendered most
difficult the profitable operation of
electric street railways in localities
other than the centers of dense popu
lation. It has caused the construction
of more highways and better high
ways at a cost and to an extent entail
ing many large issues of State bonds
in various sections of the country, and
has induced the creation of many
County, Township, and Municipal
obligations. It has revolutionized the
personal habits of a nation.
The automobile and tractor together
have exerted an enormous influence
in changing farming operations, in
creasing production, eliminating man
power, decreasing the use of animal
manures, and impairing the earning
capacity of local railroad lines.
Electric street railways were quite
profitable and their first-mortgage
bonds constituted a conservative and
highly popular type of investment in
1906, and deservedly so, because their
earnings were both ample and prog
ressive in growth. But time wrought
vast changes. For example: In 1903,
a group of wealthy and experienced
street railway operators bought a
property in a thrifty and active in
dustrial area in the East, paying about
$800,000 for the equity, subject to a
bonded debt of $1,000,000. Net earn
ings exceeded twice bond interest. In
developing and improving the prop

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erty they spent $1,000,000 more, rais
ing the money through junior liens.
It has always had capable and honest
management. In 1931, it was imprac
ticable to obtain a bid for the firstmortgage bonds of the Company as it
was barely earning its operating ex
penses. The people are there. They
are still gainfully employed. They are
traveling more than ever, but in auto
mobiles and not on electric street rail
ways. It is doubtful if $50,000 can be
realized from assets.

In 1906, the shares and bonds of
steam railroads were stock exchange
favorites, constituting almost the en
tire list and the bulk of daily tran
sactions, and railroad bonds repre
sented by far the major item of se
curity investment of life insurance
companies.
At that time $1,001,728,000, or
34.8% of total assets, were invested
in railroad securities. The period of
rapid railroad expansion had ended
and thereafter a decline occurred in

Guaranty Trust Company
of New York
140 B ro ad w ay
LONDON

PARIS

BRUSSELS

LIVERPOOL

H AVRE

ANTWERP

CONDENSED STATEMENT, DECEMBER 31, 1931

RESOURCES
Cash on Hand, in Federal Reserve Bank,
and due from Banks and B a n k e r s ...............................$
U. S. Government Bonds and Certificates . . . .
Public S e c u r itie s ......................
34,596,044.44
Stock of the Federal Reserve B a n k ...............................
Other S e c u r it ie s .........................................................................
Loans and Bills P u r c h a s e d ................................................
Real Estate Bonds andMortgages. . . . . . .
Items in Transit with ForeignB r a n c h e s ............................
Credits Granted on A c c e p t a n c e s ......................................
Bank B u i l d i n g s ...................................
14,554,843.20
Accrued Interest andAccountsReceivable
. . . .

257,806,418.75
274,340,207.44
7,800,000.00
22,686,032.18
778,505,668.63
1,445,273.43
8,358,702.88
86,715,704.72
7,222,066.10
$1,404,040,051.95

LIABILITIES
C a p ita l......................................................$
Surplus F u n d .....................................
Undivided P r o f i t s ...............................

90,000,000.00
170,000,000.00
24,959,038.40
$

Accrued Interest, Miscellaneous Accounts
Payable, Reserve for Taxes, etc....................................
A cceptances......................................................................................
Liability as Endorser on Acceptances and
Foreign B i l l s .......................................................................
D e p o s i t s ................................................. $1,025,049,550.56
Outstanding C h e c k s ...............................
44,972,365.20

284,059,038.49
8,112,102.82
86,715,704.72
44,231,200.07

1,070,021,915.85
$1,494,040,051.95

Central Western Banker, February, 1932
the total of railroad securities in rela
tion to other types of available invest
ments. At the close of this year $2,986,000,000, almost three times the
sum in 1906, will be invested in rail
road bonds and stocks. Nevertheless,
after this huge increase in the amount
of such investments, railroad securi
ties will represent only 16.2% of the
total assets of life insurance com
panies, i. e., the life insurance assets
have grown in volume during the pe
riod so much more rapidly and con
stantly than have railroad securities
that the life insurance holdings, al

though much larger in dollars and
much larger in ratio of total railroad
securities outstanding, represent a
ratio of insurance assets only one-half
as large.
In 1906, the investments of these
fifty-two companies, amounting to
$1,001,728,000, were 12.2% of the
funded debt of the railroads, which
was then approximately $8,200,000,000. By 1930, the investments of $2,947,027,000 were 23.1% of the total
funded debt of the United States
railroads, then amounting to $12,771,351,000.

ORPORATE
TRUST SHARES
A C C U M U L A T I V E

S E R I E S

The P R O D U C T of
PIONEER EXPERIENCE
An important factor in the wide
spread success of Corporate Trust
Shares, Accumulative Series. . . . the
established position and long experi
ence of its Sponsors, who are pioneers
in this held.
* Also available in distributive type k n o w n
Series AA.

Your Investment House or Bank
Will Furnish

Full Information

SMITH, BURRIS & CO.
Central Syndicate M an a g ers

120 South LaSalle Street, Chicago
Detroit

N e w Orleans

Omaha

HOLDERS OF OLD SERIES CORPORATE TRUST
SHARES
m ay, if they desire, exchange for either of the new series — on a
preferential basis.

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G e t details from any authorized distributor.

An Important Factor
The service of transportation is
vital to our national life and the par
ticipation of life insurance companies
in railroad financing has been an im
portant contribution to American
progress.
It is essential that the affairs of the
railroads be so administered by the
cooperation of management and rate
making bodies as to provide ample
earnings to meet the service of all
financial obligations. The rate-making
powers of the Interstate Commerce
Commission are exercisable not only
for the protection of shippers and
passengers, but also for the main
tenance of railroad credit and the
preservation of values for the holders
of railroad securities. This is a duty
as plain as the responsibility for effi
cient management resting upon rail
road officials. It should be the com
bined objective of management and
rate-maker to enable railroad com
panies to accumulate in prosperous
years substantial liquid reserves from
which to meet the requirements of
lean years. The continuation of a
healthy transportation system ade
quately financed and entitled to the
highest credit rating has a bearing of
inestimable importance upon the main
tenance of other property values and
the prosperity of business generally.
It is unthinkable that any step will be
taken, or any action fail to be taken,
which will result in the permanent
impairment of present railroad obliga
tions, or the ability of the railroads
to effect such further financing as
may be required to maintain our high
standards of railroad service.
Life insurance companies are not
immune from the possibility of some
loss in specific cases of railroad in
vestments, but the records of past ex
perience and the extreme care with
which such securities have been
selected by life insurance companies
justify complete confidence in the in
tegrity of railroad obligations held
by them, and in ultimate payment at
maturity regardless of present market
quotations and outlook.
Today, street railway securities
constitute only a minor portion of life
insurance investments, while the hold
ings of various public utility issues
have increased greatly in volume.
Holdings of public utility bonds and
stocks in 1906 represented only $134,056,000, or 4.7% of assets. Since
1921, the ratio has steadily increased
owing to the rapid growth of the elec
tric light and power industry, and its
ever-broadening scope of service. The
stability of its earnings has been ex
tremely satisfactory during recent
years of depression. The investment
(Continued on Page 10)

Central Western Banker, February, 1932

A re Railroa ds K ee ping U p W ith
C
the Times?

LASS I railways in 1930 pur
chased more than $1,000,000,000
of goods essential to their oper
ation. What this means “ in terms of
busy factories and farms, active mines
and lumber yards: in other words,
tens of thousands of jobs for workers
in practically every field,” was de
scribed in a radio address recently by
Dr. Julius Klein, Assistant Secretary
of Commerce.
“ The great importance of the rail
ways in and to American business be
comes apparent when we consider a
few of the outstanding figures con
cerning them,” stated Dr. Klein. “ W e
are dealing here with an industry
which in 1930 paid out considerably
more than $2,500,000,000 in salaries
and wages to more than 1,500,000
workers. Compare these figures with
those of other great industries: they
are, for example, much more than
three times the figures for our auto
mobile factories or those for the vast
iron and steel mills.
Operations in 1930

“ In 1930, American railways car
ried more than 2,000,000,000 tons of
freight for an average haul of more
than 180 miles. Business welfare and
business development are tied up with
every phase of the activity of the rail
ways.
“ If we include indirect as well as
direct purchases, the railways use
more than one-fifth of all the timber
that is cut in this country. They take
nearly one-quarter of all the bitumin
ous coal produced, and not far from
one-fifth of all the fuel oil. About 17
per cent of the total iron and steel
output of the United States finds util
ization on the railways. I hardly need
to enumerate the specific articles of
routine type that the lines buy— the
rails and ties, the wheels, axles, and
tires, the bolts, spikes, frogs, and
switches, the nuts and rivets, the big
boilers, the turntables, and so on.
Those are the perfectly obvious
things.
“ And most of us realize, too, that
the railways have to use great quanti
ties of cement, of grease, of ballast,

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HE RAILROADS have been
T
and still are, in the very front
rank of American industries and
activities as regards the introduc
tion of new methods, improved
devices, ingenious short-cuts, and
in general superior management
in the handling of their distinct
ive engineering problems. In many
ways, their achievements along
this line have been positively
startling!”

of electrical materials of every con
ceivable sort. But until we are con
fronted with the cold figures, few of
us appreciate the fact that the rail
ways spend more than $20,000,000
annually for such an item as ‘station
ery and printing.’ They spend $7,500,000 for rubber and leather goods.
And in the smaller items connected
chiefly with the passenger service,
they provide a market for just about
every line of merchandise.
“ The figures as to the value of an
nual purchases by the railroads do
not include the value of materials and
supplies that are purchased indirectly
for the railroads by contractors who
carry on construction work, who
build equipment, or do other work for
the railroads on a contract lump-sum
agreement basis. If we were to add
these other values, the total would be
even more astonishing.”
Dr. Klein pointed out that the
steam carriers still transport 75 per
cent of the freight traffic of the
United States, as measured in tonmileage, “ whereas it is estimated that
trucks carry only about three per
cent.” This does not mean that motor
transport is of minor consequence,
Dr. Klein explained. He added, how
ever, that the possibilities and limita
tions of this type of transport agency
were being more and more clearly
defined.
Discussing the “ resounding triumphs”
of railway efficiency, Dr. Klein
added : “ The railways have been, and
still are, in the very front rank of

American industries and activities as
regards the introduction of new
methods, improved devices, ingenious
short-cuts, and in general superior
management in the handling of their
distinctive engineering problems. In
many ways, their achievements along
this line have been positively start
ling.”
By way of illustrating some of the
achievements of the railroads, Dr.
Klein explained that the carriers
handled the traffic of 1929 — repre
senting an increase of 37,000,000,000
ton-miles over 1920 — with 7,500
fewer locomotives, 65,000 fewer
freight cars, and a saving of 18,000,000 freight-train miles.
Increased Efficiency
“ In 1920,” he said, “ each railway
freight car traveled, on the average,
25.1 miles each day— but a decade
later this figure had been increased to
32.3 miles per day, an increase of 29
per cent (reduction in traffic cut this
average in 1930, but the heightened
efficiency remained available, none the
less). In 1920, the average freight
train consisted of 37 cars— but ten
years later that figure had risen to 49
cars, an increase of 32 per cent.
“ The roads managed to bring about
an increase of 34 per cent in average
freight-train speed over the same pe
riod. They reduced by 30 per cent the
number of pounds of coal required to
move 1,000 tons of freight and cars
for the distance of one mile. By a
carefully planned campaign, they
brought about the drastic reduction
of 71 per cent in the payments re
quired to be made for loss and dam
age to freight; the service has thus
become substantially more reliable,
and shipments more secure.”
Speed Helps Economies
Referring to the remarkable in
crease in the speed of the average
freight train during the last decade,
Dr. Klein continued:
“ Not only has this been helpful in
enabling the railwavs to economize; it
has had a notable influence on the
business of merchandising. One of
the outstanding trends in retail busi-

10
ness in recent years has been the one
that is generally described as ‘handto-mouth buying’ ■
— the purchase of
rather small quantities of up-to-date
goods just as they are needed, instead
of keeping a big, diversified stock on
hand in the store.
“ Merchants are able to do this now
adays much more effectively than
they could in the past, because, with
the greater speed of freight trains,
they can get the ordered merchandise
more quickly from the suppliers. A
competent economist who has studied
this matter carefully said the other
day that the actual savings to Ameri
can business from this source amount
to many millions of dollars annually.
This is just a single example of the
way in which the achievements by the
railways in the field of efficiency have
provided dollars-and-cents benefits
not merely for themselves but for the
entire structure of American busi
ness.
“ Our American railways today,
with few exceptions, are rendering
enormous service to American busi
ness and are thoroughly alert, prog
ressive, and ‘in tune with the times.’
Their future as an indispensable
agency of transportation seems to me
to be secure.”

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Central Western Banker, February, 1932

TRENDS OF LIFE INSURANCE
INVESTMENT
(Continued from Page 8)

by life insurance companies in such
securities at the close of this year will
have increased to $1,856,000,000, or
10% of assets. During the last three
years preferred and guaranteed pub
lic utility stocks gained in favor, the
investment increasing from $1,678,000 in 1906 to $117,644,000 at the end
of 1930.
Mortgage holdings have tremend
ously increased both in volume and
ratio. The ratio of city mortgages has
become much larger while that of
farm mortgages has also increased.
Total investment in mortgage loans in
1906 was $820,522,000. At the close
of this year it will be $7,095,000,000,
nearly nine times the 1906 figure, the
percentage increasing from 28.5% to
38.4%. During the post-War period,
while the country was busily catch
ing up with delayed construction, the
largest percentage of increase oc
curred. It is only natural that invest
ments in mortgage loans should fol
low the expansion of real estate
values and the erection of new build
ings. It is equally logical that there
should be a decline in this ratio from
43.1% in 1927, which was the high-

water mark of real estate expansion
and construction, to 38.4% now when
building and real estate development
have slowed up.
Mortgages upon town and city
property increased from $551,864,000,
or 19.2% of assets in 1906, to $5,249,000,000 at the close of this year,
or 28.4% of assets. As to farm mort
gages, the total in 1906 amounted to
$268,658,000, or 9.3% of assets,
while at the close of this year farm
mortgage investments will have in
creased to $1,864,000,000, or 10% of
assets, nearly seven times the 1906
investment. Comparing farm mort
gage holdings with the value of farm
property, the ratio of holdings has
more than trebled during the twentyfive years. In 1910, the United States
Department of Agriculture estimated
the value of farm property, both land
and improvements, at $34,801,000,000; at that time the life insurance
investments in farm mortgages were
$443,456,000, or 1.27% of the value
of farm property. In 1925, farm prop
erty was valued at $49,468,000,000,
at which time the life insurance com
panies held farm mortgages amount
ing to $1,893,000,000, or 3.83% of
the value of all farm property. In
other words, the percentage of life

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Central Western Banker, February, 1932
insurance investments as related to
the value of farm property has more
than trebled in the fifteen-year period
from 1910 to 1925. Figures as to pres
ent farm values are not available, but
in our opinion the ratio of farm mort
gages held by life insurance com
panies represents today a larger per
centage of farm values than ever be
fore.
A Significant Fact
It is most significant that in 1906
the life insurance companies had
holdings of bonds and stocks amount
ing to 50% of assets compared with
total mortgage holdings of 28.5%,
while in 1931 they will have holdings
of bonds and stocks amounting to
38.1% compared with total mortgage
holdings of 38.4%. The mortgage
holdings have thus increased from
slightly more than one-half the ratio
of bond and stock holdings to a ratio
somewhat in excess of bond and stock
holdings.
In 1906, life insurance companies
held Government bonds amounting to
$2,900,000, or one-tenth of 1 % of
total assets. By 1921, as a result of
war financing, this sum had grown to
$801,268,000, or 10.7% of assets.
With the reduction of the War debt
bpth volume and percentage in Gov
ernment bonds declined, until this
year, when, for the first time since
1922, amount of these securities and
ratio to total assets have shown an
increase.
As to State, County, and Munici
pals. The volume has increased from
$103,789,000, or 3.6% of assets, to
$728,000,000 at the end of 1931, or
3.9% of assets. The low yield of
these securities is offset in a measure
by their desirability due to safe char
acter and tax benefits accruing to the
owner.
Investments in real estate increased
from $156,442,000 to $519,000,000,
but the ratio decreased from 5.4% to
2.8 % of assets. Since 1926, when real
estate investments had shrunk to
1.8% of assets, there has been a con
tinuing increase in ratio resulting
from prevailing conditions involvingforeclosures and purchases of real es
tate. O f course, the policy of all com
panies is to hold only real estate es
sential to operations, but mortgage in
vestments entail occasional purchases,
and it is a gratifying fact that at the
end of the year 1931 the percentage
of assets invested in real estate will
be only one-half what it was in 1906.
Let us subdivide assets into two
classes: first, the investments for the
conduct of business (into which class
would fall Home Office buildings and
equipment, cash on hand and in
banks), and second, the investments

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for income purposes. The ratio of the
first class— investments essential to
the conduct of business — to total
ledger assets decreased from 6.9% in
1906 to 2% in 1930, a remarkable
evidence of increased operating effi
ciency.
The management of all companies
view with concern the growth in per
centage of assets invested in policy
loans and premium notes. While such
assets could logically be rated quad
ruple A, these liens against the
amount of insurance reduce the sum
payable at maturity to beneficiaries.
Notwithstanding all efforts to dis
courage policy loans, it is only nat

O U R
W I L L

M A I L E D

ural that policyholders should pledge
their policies to obtain funds in time
of need. This should, of course, be
the last resort of the borrower. In
1906, $254,815,000, or 8.9% of as
sets, were invested in such loans; the
ration increasing to 14% in 1916,
falling to 12% in 1926, and increas
ing from 1929 to the present. It is a
comforting thought that such loans
have relieved distressed policyholders,
but the responsibility remains with us
to strive constantly toward the reduc
tion of this ratio.
Since the passage in 1928 of the
Wales Act, liberalizing the laws of
New York State regarding investment

O F F E R I N G

L IST

R E G U L A R L Y

U P O N

R E Q U E S T

G M A C N otes
are a standard medium for short term in
vestment. Based on highly liquid assets, they
provide a sound instrument for the tempo
rary employment of surplus funds. G M A C
obligations

are in country-wide

demand

for the security portfolios of individuals,
in stitu tio n s and th ou san d s of banks.
available in convenient maturities and
denominations at current discount rates

G eneral M
A

C o r p o r a t io n

cceptance
OFFICES

otors

P R I N C I P A L

CITIES

Executive Office - B roadw ay at 57th St r e e t

C A P IT A L

AND

SURPLUS

SEVENTY

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M IL L IO N

DOLLARS

Central Western Banker, February, 1932

in preferred and guaranteed stocks,
there has been considerable activity in
the accumulation of such investments,
the total increasing from $17,437,000,
or six-tenths of 1% of assets in 1906
to $351,385,000, or 2% of assets in
1930. The attitude of the companies
toward such investments has been
conservative, as long with increased
yield and tax benefits considerable
market fluctuations have occurred in
even the most sound issues of pre
ferred and guaranteed stocks.
It is encouraging to note that, not
withstanding the influences o f the
current depression, life insurance
companies of the United States will
this year add $1,320,389,000 to their
assets, bringing the total to the rec-

ord figure of $20,200,000,000. This
1931 increase exceeds the average an
nual increase for the eight-year pe
riod from 1923 to 1930, inclusive,
which was $1,278,412,000, and is only
$248,854,000 less than for the record
year 1928. Thus, these companies have
been enabled to continue to serve the
financial needs of the country by add
ing to their ownership of the nation’s
fundamental securities. These new in
vestments have assisted in maintain
ing work and purchasing power by
financing building operations, in mak
ing possible public works by the ab
sorption of state, county, and munici
pal bonds, and in aiding public utility
and railroad financing. But for the
unusual demands of policyholders for

The February
Horoscope . . .
The Amethyst is the February birthstone. The
birth flower is the Violet, and the virtue of the
month is Sincerity.
People born in February have a great deal of
natural ability in certain directions. Literary
talent is particularly marked; medicine and the law
also claim a good many February men.
February persons usually have a magnetic, attrac
tive personality which makes them ideally fitted
for salesmanship.
Frequently, however, F eb ru ary p ersons lack
complete frankness with themselves and others.
Above all else it is important that you learn to be
sincere and you should try to cultivate evenness
of mind and temper.
Famous persons born in February are
Washington, Lincoln, Dickens, Ruskin,
Jules Verne, Lamb, Galileo, Lowell,
Cicero and Longfellow.
The stars omen well for 1932. Oppor
tunities will abound for all. Some will
succeed in the New Year and some
will just get by. It is for you to choose.

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R O Y A L UNION LIFE
INSURANCE COMPANY
DES MOINES, IOWA
A . C. T U C K E R , Chairman of the Board
J. J. S H A M B A U G H , Pres.
B. M . K I R K E , V. P. and Field M gr.
\V. D . H A L L E R , SePy

loans against their policies, the in
vestments in these other fields would
have been much greater. However, as
previously indicated, these policy
loans have undoubtedly been of tre
mendous benefit to policyholders and
have performed the same general ser
vice as investments in other fields.
The* 52 companies, whose detailed
figures have been assembled in the
survey, will increase their holdings
during the year in each of the major
investment classifications. Only the
investments in the relatively small
items of foreign government bonds
(other than Canadian) and collateral
loans will show a decrease. The
amount loaned to policyholders by
these 52 companies during the year
will absorb 32% of the year’s increase
in assets. The new loans to policy
holders, amounting to $427,291,000,
will be the largest increase in any
type of investment. The total invest
ment in mortgage loans (farm and
city) at the end of the year will be
$7,095,000,000, an increase of $80,965.000. There will be added to the
holdings fo railroad securities $38,973.000, making the total investment
$2,986,000,000, ranking second to
mortgage loans in the percentage of
assets invested therein. The portfolio
of United States government bonds
will be increased by $91,569,000 and
of state, county and municipal bonds
by $140,795,000, making the aggre
gate investment in these two types of
security $395,000,000 and $728,000,000, respectively. To the holdings of
public utility securities, $180,813,000
will be added and to miscellaneous
bonds and stocks, $64,094,000. The
total public utility securities held will
be $1,856,000,000, and of miscellane
ous bonds and stocks $611,000,000.
Life insurance real estate holdings
will increase by $107,918,000, the
largest addition during the twentyfive-year period, bringing the total
real estate investment up to $519,000,000. Undoubtedly, a large portion of
this increase arose from the necessity
of foreclosure purchases under real
estate mortgages. The investment in
all common stocks increased during
the first nine months of the year by
the relatively inconsiderable figure of
$6,441,000. '

Already Done
Six-year-old Billie found a pocketbook and made haste to return it to
its owner.
“ Y ou’re an honest lad,” the latter
told him magnanimously. “ Here, I ’ll
give vou a dime.”
“ Aw, you don’t hafta,” replied
Billie, turning away. “ I kept a quar
ter out.” — American Legion Weekly.

Central Western Banker, February, 1932

II N S U R A N C F
ts Application to t]w

Fraternitu

Selling Self Reliance
h e o r e t i c a l l y , s e lf-r e li
ance is an admirable ideal. Prac
tically, in the growing complexi
ties of human civilization some degree
of cooperation seems essential to in
dividual progress, prosperity and hap
piness. Human society is too closely
knit in an interdependent organization
to permit a completely self-reliant
man to exist in its midst. The political
scientist and the political economist
are constantly trying to determine
what the individual can best accom
plish through that cooperation which
is government and what can best be
left to voluntary association. It is, I
suspect, this distinction between en
forced cooperation and voluntary co
operation which the makers of this
program had in mind in phrasing our
theme and the title of this paper.

B y T h o m a s I. P a r k i n s o n
President, Equitable Life of New York

no small measure to the American
system of offering life insurance pro
tection not alone to those who seek it,
but also to the hesitant, reluctant
or sometime antagonistic individual,
sought out, informed and persuaded
by the most efficient and public-serv
ing sales force in the world. It is not
the result of inborn thrift or self-ani
mated conservatism that more than
sixty-eight million citizens of the
United States have associated them
selves to maintain a great reservoir of
self-reliance represented by one hun-

Missionaries o f Thrift
Certainly, we who labor in the field
of life insurance have not been guilty
of encouraging the individual to risk
too great a degree of self-reliance. In
the recent past some of those with
whom we have been more or less in
competition have played that role
with varying degrees of credit to
themselves and of satisfaction to their
victims. The representatives of life
insurance institutions have been the
great missionaries of a type of thrift
based not upon the idea of self-sufficiency but rather upon a plan of co
operative accumulation, investment
and administration of common funds
for individual protection. The volume
of our new business, even under cur
rent conditions, indicates the public
confidence in the soundness of this
plan and the success which has at
tended its operation. W e may well re
joice in this evidence of the fact that
to many who might otherwise have
despaired of hereafter accomplishing
any useful purpose by thrift, life in
surance has been a sentinel which
from place to place has given assur
ance that all is well with the coopera
tive thrift plan which we offer to the
public.
Sound as the plan is, however, it
cannot be denied that the widespread
acceptance and use of life insurance
by the general public is due and in

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Federal Reserve Bank of St. Louis

T homas T. P arkinson

dred and ten billion dollars of life in
surance in force in this country. This
great source of national strength,
economic stability and family protec
tion springs directly from the activi
ties of our underwriters in the field.
The vitally important place of life in
surance in our social and economic
structure, recognized and acclaimed
by the press, statesmen, economists
and the common people of our nation
is a tribute to the energy, intelligence
and loyalty of that great body of men
and women who, during the past
eighty-three years, have been carrying
a message of thrift and cooperative
protection to the American people.

A Dignified Career
Membership in this great American
force of life underwriters has con
stantly increased in dignity as a
career and in opportunities for use
fulness. Even now, their problem, in
volving as it does so much of the ma
chinery of professional service, is not
an easy one. But in those pioneer days
when the foundations which we now
enjoy were being laid the difficulties
of the agents must have tried the
patience and the endurance of the
best of them. Their activities were
hampered by the fact that they had
both to educate their prospects to the
need of life insurance and to inspire
faith in the dependability of their
company’s guarantees. John Bassett
Mooie, speaking of those early days,
has said that “ there was a tendency
to put life insurance in the same cate
gory with the sale of lightning rods,
\\ith which an old lady was reported
to have refused to have her house
equipped because she said the light
ning came near enough in the adjacent
woods and she did not want to bring
it any closer.”
The experience of two pioneer
agents in the southwest illustrates the
difficulties which those early salesmen
encountered and demonstrates their
institutional loyalty. The story is told
that these two were attempting the
sale of a policy to one of the big cow
men. They knew him well, even inti
mately, but when they attempted to
interest him in life insurance he said:
“ Boys, what you say is all right. I
think insurance is a good thing; but I
do not know anything about your
company or its ability to pay when
the money becomes due.” The agents
were resourceful and realizing the
force of the personal factor in that
society, responded: “ Well, Bill, you
know us and you know we would not
i ecommend anything to you unless we
had confidence in it. Now, would it be
all right with you if we personally
guaranteed the payment of your pol
icy?” This satisfied the prospect and
when the $100,000 contract was de
livered it bore the personal guarantee
of those two agents endorsed on the
back of the policy. There that guar-

Central Western Banker, February, 1932

14
antee remained until the policy was
paid at maturity.
The Prospect’s Requirements
The modern life insurance agent
encounters no such public attitude;

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he enjoys the advantage of the gen
eral public’s familiarity with insur
ance coverage and confidence in the
institutions which provide it. The
change, however, has brought him
new and different problems. The bet
ter informed buying public calls for
abler sales effort. The complexity of
modern life has presented new needs
for life insurance and has increased
the importance of the agent’s knowl
edge of varying types of contracts
and his capacity to diagnose the busi
ness and domestic situation of his
prospect in order to meet the pros
pect’s expectations in the fitting of in
surance protection to his peculiar
needs. Moreover, the human inertia
or perversity that leads men to neglect
or resist that which is good for them
still requires of the life agent the ex
ercise of the greatest patience and
tact in the advocancy of the protec
tion which he offers. Therefore, althought the modern life underwriter
has need of new equipment and deals
with more technical problems, he
must, nevertheless, still be the man of
great human sentiment, the mission
ary interested in and enthusiastic
about service to others and ready,
even though not required, to guaran
tee that performance by his company
which he inspires his prospect to ex
pect.
Looking back over the last twentyfive years one notes no more import
ant development in the life insurance
world than the gradual evolution of
something in the nature of a profes
sional status for the life insurance
agent. It is to the credit of the men
and women who constitute our agency
forces, that the greatest contribution
to this evolution and their preparation
for their new tasks has been made by
themselves and their own organiza
tions. They have struggled to raise
their own ideals of service, not only
individually but through their under
writers’ associations, national and
local. The companies, some more than

others, have made use of training
schools and other methods to educate
newcomers and improve old-timers in
the use of the tools of life insurance,
but such training would never have
developed the ideals of professional
service which now dominate the per
manent agency forces of our com
panies, if it had not been accompanied
by the urge and effort of the agents
themselves.

THE GOLD STANDARD IN
PRESENT-DAY ECONOMICS
(Continued from Page 5)

tions in prices of commodities and
prices of goods constituting active
dispersion.
If, therefore, we would have a true
commodity price index it would not
only have to be weighted for quantity
but considered for dispersion as well.
Importance of Price Index
Admitting this, we must recognize
that the commodity price index, as
determined by the United States De
partment of Labor (which uses 550
articles) and by various other reliable
agencies in the world, does enable us
to realize the movement of all com
modity prices in their relation to the
measure of gold to some valuable ex
tent.
W orld trade is primarily an ex
change of goods. Goods which are ex
changed when expressed in gold
values, after the necessary allowances
for supply and demand, contain
within them the following five prim
ary costs:
1. L abor;
2. Materials;
3. Overhead, including invention
and interest covering the time
element;
4. Transportation;
5. Distribution.
All of these costs are subject to
their own fluctuations without regard
to any of the others, although there is
always a tendency for adjustments to
follow important movements in the

AUSTRALIA

BANK OF NEW SOUTH WALES
E S T A B L IS H E D

1817

( W i t h w h i c h is a m a l g a m a t e d T H E W E S T E R N

A U S T R A L IA N

BANK)

.................................................................. 7 ,5 0 0 ,0 0 0 £ s
P A I D - U P C A P I T A L .......................................................................................
,,, , ,,
6 ,1 5 0 ,0 0 0 £ s
r e s e r v e
f u n d ..............................................................................................
RESERVE

L IA B IL IT Y

P R O P R I E T O R S .............................................

7 ,5 0 0 ,0 0 0 £*
2 1 ,1 5 0 ,0 0 0 £ s

Aggregate Assets 30th September, 1930, 89,228,378 £s
A G E N T S —-F I R S T N A T IO N A L R A N K , O M A H A , N E B R A S K A

ÏÏF \D OFFICE GEORGE ST.. SYDNEY

GENERAL

M ANAGER, ALFRED

CHARLES

11LAU U i l l t ,
v u s t r . l i m S t a t e s , F e d e r a l T e r r it o r y , N e w Z e a la n d , F i j i , P a p u a , M a n d a te d
5 0 5 B r a n c h e s a n d A g e n c e s in a ll A u s t r a l i a n S t a t e s , x e a e _,
^ Tj„ m l „ „ . ____________ ____________________________ —
=

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Federal Reserve Bank of St. Louis

D A V ID S O N

LON DON OFFICE, 29 THREADNEEDLE ST., E. C. 2
T c r r .t o r y

Central Western Banker, February, 1932
general commodity price level. The
reason for this can be clearly seen in
a simple statement. Suppose a manu
facturer produces a million articles,
which he sells at $1 apiece, and that
his profit of his turnover is 10 per
cent; his profit will be $100,000, and
if he pays 10 per cent in taxes the
government will receive $10,000. Then
suppose the price falls to 50 cents an
article; total receipts will be $500,000;
the profit at 10 per cent will be $50,000, and government will receive, at
10 per cent, $5,000. But, during such
a drop in the price of this commodity,
if it is in line with the general priceindex movement, it means a depres
sion is existent. Regardless of the vir
ulence of the depression it must carry
an important recession in business.
A recession in business means re
duced quantity production. Under
present conditions many concerns are
running close to 30 per cent capacity.
If we apply this figure to the fore
going business we find that instead of
producing one million items at $1
there would be produced 300,000,
which would be sold at 50 cents each,
meaning a gross profit of $150,000, a
net profit on a 10 per cent basis of
$15,000, and taxation to government
at 10 per cent, or $1,500. Such a con
dition means less monetary units per
share of stock, a reduction or elimina
tion of dividends and greatly reduced
receipts by stockholders and govern
ment.
Adjustments o f Commodity Prices
A further difficulty must be faced
in that reduced production means in
creased proportional cost of overhead
and a further reduction in earnings.
This has resulted in the creation of
losses by innumerable organizations
throughout the world during the year
1931. The pressure for readjustment,
therefore, becomes enormous and nat•urally follows the lines of least resist
ance. Thus, while the units of labor
are reduced the wages of those who
remain are maintained to the last.
This means increasing unemployment
and lengthens the duration of the de
pression.
If it were possible to have falling
commodity prices attended simultan
eously by similar percentage move
ments adjusted to proportionate costs,
the value of incomes from profits,
even though reduced in the number
of units received, would be the same
in commodities. Then the reduced
units in the taxes received by govern
ment would meet governmental costs,
provided they were reduced in the
same manner.
But the dispersion of prices which
takes place in the commodity price
index would require different percent
ages of movement in each industry in

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Federal Reserve Bank of St. Louis

order to maintain the status quo.
In order, therefore, for men to live
in growing densities of population
with requirements for vast units of
production, the world has been de
pendent to a large extent upon the
ingenuity that has been vouchsafed to
man for self-preservation, as exer
cised by those who have moved into
positions of semi-authority and au
thority in business operation.
The tendency of democracy, how
ever, is to select in large proportion
the mediocre for government and un
fortunate political forces are always
at work which enormously complicate
the natural complexities of business
and industrial progress. The people
are led to believe that government can
be more wise than men, that they can
live beyond capacity, and the burdens
of the public are increased.
Periodic movements that reflect a
rise and fall in the activities of men
must continue while man is consti
tuted as he now is and always has
been. There is reason to believe, how
ever, that industry will be able to de
vise a means whereby the current
moving relationship between demand
and supply, in specific commodities
and in general, will be better under
stood. Then we can expect a flatten
ing of the curves of business enter
prise which will reduce the depth and
duration of depressions except as un
fortunate political conditions may
prevent.
The method under which this will
be accomplished will undoubtedly be
through some form of economic coun
cil which, to function effectively, must
be free from government, although
advisory to it.

New York Bank Stockholders
Stockholders of 16 leading banks
and trust companies in the City of
New York now number 322,286
against 21,869 in 1920, an increase of
1,374 per cent, according to a survey
by Hoit, Rose & Troster. No other
group of stocks in the United States,
with the exception of the public utility
group has experienced such an in
crease in stock ownership.
The market value of the outstand
ing shares of the 16 banks, the firm
points out, at present is approximate
ly $2,114,720,000 compared with
$638,978,500 in 1920, and with an
average valuation of $9,063,045,000
in 1929.
The yield of the 16 stocks on the
average makes an interesting show
ing. The present yield is approximate
ly 6.25 per cent, virtually the highest
for any period in the last 11 years. In
1921 the yield was 6.10 per cent, and
in 1929 went as low as 2.11 per cent.

Lamentation
"This country is going to the
dogs!” roared the statesman. “ The
Constitution means nothing to the
people ! Our great nation will be con
sumed by the red fire of Bolshevism !”
“ So you got licked for Congress,
eh?” remarked the common citizen.-American Legion Weekly.
W e are shown that no suffering,
no self-examination, however honest,
however stern, no searching-out of
the heart by its own bitterness, is
enough to convince man of his noth
ingness before God ; but that the sight
of God’s creation will do it.— Ruskin.

A ttra c tiv e P a r t-T im e C o n tra c ts 1
a n d M a n a g e rs 9 C o n tra c ts
available in

NEBRASKA,

IOWA,

MISSOURI

and COLORADO

to Firms and Individuals Financially Responsible
with Top “ General Agents’ ” First Year Commissions
and Liberal Non-Forfeiture Renewals
|

For information write

P. ERLENDSON, Supt. of Agencies
1445 N Street, Lincoln, Nebr.

THE S E R V IC E LIFE
!

IN SU R A N C E COM PANY

Central Western Banker, February, 1932

16
..............

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W M . B . H U G H E S , S e creta ry ,
N e b r a s k a B a n k e r s A s s o c ia t io n

E . IV. V A N H O H N E , P r e s id e n t
N e b r a s k a B a n k e r s A s s o e ia tio n

...................................................................................................................... .
O P T IM ISM for the future, based John W . Towle of Omaha, the latter
upon a satisfactory year just ended, being president of the Omaha Steel
was expressed by bankers of Lincoln Works.
at the time of the annual meetings in
Mr. Miles is 81 years old. He an
January. In all of the banks officers nounced that his advancing years
and directors were re-elected, there made it impossible for him to con
being no change in the executive per tinue looking after the bank’s inter
sonnel of the Lincoln banks. Most of ests. He has heavy real estate hold
them reported quarterly dividends as ings in Richardson County, of which
usual, and dividends for the year Falls City is the county seat.
closed paid as in former years.
The new officers of the bank are:
E.
N. Van Horne, who is president E. H. Towle, president; John W .
of the Nebraska Bankers Association, Towle, vice president; J. S. Lord,
was re-elected president of the Con cashier; F. W . Bucholz and A. D.
tinental National Bank of Lincoln. Cameron, assistant cashiers. The
“ The year 1931,” he said, “ was very Towle family has been one of the
satisfactory from the standpoint of major stockholders of the bank since
the bank’s activities and we look for its founding 50 years ago.
a gradual improvement in general
business conditions in 1932.”
M. Weil, re-elected president of the
FORD E. H O V E Y , president of
National Bank of Commerce, said, the Stock Yards National Bank of
“ The past year has been entirely sat Omaha and a director of the North
isfactory. The bank paid its regular west Bancorporation, was one of
dividend the same as it has for the three men suggested for governor of
past fifteen years. There has been no the Tenth federal reserve district to
change in the employes of the bank
nor any salary reductions and we are
looking toward 1932 with a great
deal more confidence than we did
toward 1931.”
W . E. Barkley, president of the
Union Bank, reported “ Deposits in
the bank have increased 20 per cent
since the middle of December. A dis
tinct turn in deposits was noted then
and we are very optimistic regarding
conditions during the coming year.”
O. J. Hitchcock, president of the
Havelock National Bank, said, “ Indi
cations are good for 1932. The Have
lock shops are working on good
schedules and we look for a much
better year in 1932. W e feel that we
did well in 1931 considering that the
shops were working but a short time.
General conditions, as a whole, are
much brighter.”
TH E E N T IR E IN T E R E ST of J.
H. Miles, now of California, in the
First National Bank of Falls City,
Nebraska, were sold, in mid-January,
to E. H. Towle of Falls City and

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Federal Reserve Bank of St. Louis

F ord E. H ovey

succeed W. J. Bailey, who retired in
January. Mr. Hovey, however, de
clined to permit his name to be pre
sented, according to W. D. Hosford
of Omaha, one of the directors of the
bank.
TH E N E W W A H O O State Bank
of Wahoo, Nebraska, opened for bus
iness last month after holding open
house for friends on New Year’s day.
J. G. Hohl, banker at Pargue for a
number of years, is the president of
the bank. E. G. Risk, Wahoo manu
facturer, is vice president. The charter
for the new bank is the only one
granted by the state of Nebraska dur
ing 1931. The bank occupies the for
mer Saunders County National Bank
building.
TH E FIR ST N A T IO N A L Bank
of York, Nebraska, declared its one
hundredth consecutive semi-annual
dividend at the annual meeting in
January. The First Trust Company,
affiliated with the bank, declared its
thirty-sixth consecutive semi-annual
dividend. C. A. McCloud, who is re
publican national committeeman for
Nebraska, is the president of the
bank.
TH E B A N K OF M ILLER, in
Buffalo County, Nebraska, was re
organized and reopened January 14,
depositors agreeing to accept repay
ments on their old accounts at the
rate of 1 per cent a month, according
to an announcement by Governor
Bryan.
K E ITH N EVILLE, former Gov
ernor of Nebraska, was named presi
dent of the First National Bank of
North Platte recently to succeed
Frank L. Mooney, who died. The
election was made permanent in Jan
uary, when E. F. Seeberger was made
vice president and W . H. Munger,
cashier. Mr. Neville had been vice
president.

Central Western Banker, February, 1932

Johnson Heads Clearing House
Alvin E. Johnson, vice-president of
the Live Stock National Bank of
South Omaha, was last month elected
president of the Omaha Clearing
House association at its annual meet
ing. Mr. Johnson succeeds W . Dale
Clark, and has been vice-president. T.
L. Davis, vice-president of the First

State Bank of Omaha, representing
40 per cent of deposits.
In January checks for 106 thousand
dollars were mailed to depositors of
the South Omaha State Bank. It was
their first payment. Total deposits
there amounted to about 940 thou
sand dollars.

balance. Joseph Houmont is president
of the bank and P. G. Richardson,
cashier.
BANKS OF N E B R A SK A which
subscribed to debentures of the Na
tional Credit Corporation were asked
to take $108,970 worth at the first
call, for 10 per cent of subscriptions,
in January.

D. P. H OGAN, president of th(
Federal Land Bank of Omaha, wa;
called to Washington to testify ac
hearing before Congress committees
on future policies of land banks.

D EPO SITO RS of failed state
banks in Nebraska were paid divi
dends of $3,528,620 in 1931, accord
ing to the state department of trade
and commerce.
The largest payment in December
was $817,857 to the depositors of the

J. H. STEIN M EY ER, 78, who had
been president of the Nebraska State
Bank at Beatrice, died recently.

.T .m 7 0 T J X V 7TXT.rT?fXrTXTTTÏÏ.IATJJJ.TJ.T.T.1.r.|.T.|.T.T.T.lT.l.i:i JTX^Xi:o:T.O.TI^.T.T.T.T.T.T.rT.'rTnX».1.r.,t.T.T.I.T:i'.riXr.T.T.T.>.T.l.T.IXltTi<AÏJ.t.».T.T.>.T.I.f

THE
CH A SE N A T IO N A L BANK
o f the City o f New York
Capital $148,000,000
Deposits (December

Surplus $124,000,000

31, 1931) . $1,459,000,000

A lvin E. Johnson

The Chase National Bank invites the accounts of

National Bank, was elected vice-pres
ident of the clearing house. William
B. Hughes was again chosen secre
tary-treasurer.
On the clearing house committee
were appointed T. L. Davis, Alvin
E. Johnson, W . Dale Clark, president
of the Omaha National; Gwyer H.
Yates, president United States Na
tional; J. B. Owen, vice-president
Stock Yards National of South
Omaha; J. F. Coad, president Pack
ers National of South Omaha.

banks, bankers, corporations, firms and individuals.

O R V IL L E C H A TT, former coun
ty judge of Burt County, was elected
a director of the First National Bank
of Tekamah. He takes the place on
the board made vacant by the resigna
tion of Herbert Rhoades, district
judge at Omaha.
TH E L IV E STO CK National
Bank of Omaha distributed 36 thou
sand dollars in dividends during 1931,
a payment of 8 per cent on the stock,
according to Alvin E. Johnson, vice
president.
TH E SE C U R ITY ST A T E Bank
of Broken Bow, Nebraska, which
closed in November has reopened.
Depositors, permitted to withdraw 30
per cent of deposits at once, con
tracted to defer withdrawals for the

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Federal Reserve Bank of St. Louis

General Banking

Trust Department

Foreign Department

lllllll!!lllllllllllltlll|ll|t||||||»tllll|||||U||tllllllllllllll|||||irillllllllTltlllllllllllllllllllllltllt1llltllllltlllllllllllllllllllll!lll!ll|lll|||!l||||||||||||||||||||||||tlll!tlllll>llllllltlllllllllllllllimimilllllllllllllllltlltMltlHIHIinfUlt1ll!f

!
Combining a complete service
fo r
every
department o f
correspondent banking, we are
especially able to care for your
Lincoln account.

THE FIRST

NATIONAL

BANK

AND

i
i
!
!

THE FIRST TRUST COMPANY

LINCOLN, NEBRASKA

“ Since 1871”

5
I

'.riiiiiiiiiitiimiiiMHmuiiiniiiiiiiiitiiiiitiiiiiiiiHiiiiiuiuMiniimitiimriiiiiiiii.'iiiiiiiiiiiiiiiiituiiiiiuitiiiiiiiiiiiiiiuiiiiiiiiiiiiiiiitiiiiiiiiiiimtiiiimminiMiiiitiiiimiiiimiiiimiitiiiitiiiiuiiiiimiiiiiiiiiitiiiiiiiiiiiiiic

Central Western Banker, February, 1932

JOHN M. K IN G ERY, 65, presi
dent of the First National Bank of
Tilden, Nebraska, died early last
month.
DEPO SITS of the nine Omaha
banks amounted to $85,175,658 at the
close of business December 31, it was
announced following the call of the
comptroller of the currency. Loans
and discounts at the same time
amounted to $42,222,350.
The figures from the separate
banks follow:
Bank

e p o s it s

oans

Omaha National ......
$28,215,880
First National .......
20,764,808
United States National ... 20,543,637
Stock Yards National__ 6,676,342
Live Stock National____
4,711,649
Packers National _______ 2,103,303
Union State ____________ 1,174,071
South Omaha Savings
815,031
Bank o f Florence_______
170,937

$14,148,198
6,803,078
7,300,867
8,294,596
2,866,225
1,286,646
525,263
883,349
114,128

Total________ ___ ______ $85,175,658

$42,222,350

Unusually heavy fall borrowings to
take care of feed loans were reflected
in the figures from the Stock Yards
National Bank.
E. E. PLA C E K was elected presi
dent of the First National Bank of
Wahoo, in January, succeeding Ed
Lemkuhl. Mr. Placek is president of
the Nebraska Culvert Company. Ed
Lemkuhl was made vice president,
Ernest Hanson, cashier; and E. E.
Good, L. J. Kudrna, Mr. Placek, Paul
F. G o o d /D r. R. F. McCreary, Mr.
Hanson, Herbert Reader and E. S.
Schiefelbein, directors.
j. f r a n c i s M cD e r m o t t was
advanced from assistant cashier to
vice president of the First National
Bank of Omaha at the annual meet
ing in January.

CrQJ^

Mr. McDermott has been with the
bank since 1920, and had been assist
ant cashier since 1922. He is a grad
uate of both the arts college and law
college of Creighton University at
Omaha, and is the president of
Omaha post No. 1 of the American
Legion — one of the largest legion
posts in the world.
The directors also made Charles
D. Saunders assistant to the president
of the bank. Mr. Saunders came to
the bank January 1, 1929, from Den
ison, Iowa, where for four years he
had been vice president and cashier
of the First National Bank of Deni
son. He is treasurer of the Merchants
Investment Company, which is owned
by T. L. Davis and Fred W. Thomas,
vice presidents of the First National
Bank. Mr. Saunders is also interested
in four outstate Nebraska banks.
Former Senator Gilbert M. Hitch
cock, publisher of the Omaha WorldHerald, resigned from the board of
directors of the First National. His
place was not filled, the directorate
being reduced from eight to seven.
E D W A R D A. CU D AH Y of Chi
cago resigned as director of the Stock
Yards National Bank of Omaha, in
January. Ford Hovey, president of
the bank, said Mr. Cudahy withdrew
because it was difficult for him to at
tend directors’ meetings. The position
was not filled, the board being re
duced from fifteen to fourteen.
V IC T O R B. CALD W ELL, assist
ant vice president, has been advanced
to vice president of the United States
National Bank of Omaha.

KNOW

L IN C O L N

KNOW

N EBRASKA

Jp'R E Q U E N TLY in our service to correspon
dent banks we are called upon for assistance
beyond the usual banking routine. It is then
that those we serve appreciate most our knowl
edge of this territory.
As your correspondent bank in Lincoln, this
intimate knowledge of Lincoln and of Nebraska
will be valuable to you. W e would welcome an
opportunity to serve You.

Continental National Bank
LINCOLN, NEBRASKA
Affiliated with N o r t h w e s t

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Federal Reserve Bank of St. Louis

V ictor B. C aldwell

Advancement of Shirley S. Ford
from vice president to executive vice
president;
Advancement of Ralph R. Rainey
from cashier to assistant vice presi
dent ;
Advancement of Harry E. Rogers
from assistant cashier to cashier;
Advancement of N. L. Sholen from
head of the new accounts department
to assistant cashier.
Gwyer Yates, president of the
bank, spoke of the promotions as
being based on records of service. Mr.
Rogers has been connected with the
bank since 1911. Mr. Sholen entered
the employ of the bank as a messenger
25 year ago.

Plan New Bank

AND W E

USTI Vt i

Other changes made by the direc
tors at the January meeting included:

Ban co r po r ation

Alliance, Nebraska, business men
have applied to the comptroller of cur
rency at Washington for permission
to establish a new national bank, with
$100,000 capital and $10,000 surplus.
The institution would replace the
First National bank which closed last
October 31, and would be called “ the
First National bank in Alliance.” C.
A. Newberry, pioneer merchant, head
ed the organization group.

Announce Merger
Officers of the Farmers’ State bank
of Bradshaw, Nebraska, have an
nounced its merger with the First Na
tional bank. The new institution will
conduct its business under the latter
name.
For the past decade, it was ex
plained, stock in both banks has been
held by the same persons, who be
lieved the merger would provide bet
ter banking, facilities.

Central Western Banker, February, 1932

..................................................................................................................................... ..............................................................................................................................................................................................................iiimiimminmimii»|

News of the Omaha Stock Yards
^1111111111111111111111111UHI III UH iIII II I II I II I llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllMlllllillllllllllllllllllllJllllllllllllllllllilllllllllllllllllll,llllllllllllllllllllllllllllllllllllilllinillllllllllllllllllllllllllllllllllllinilllllllllllllllllllAlllllllllllllllllllllllllllllinillllllllllll»lll^

New Officers Elected
At the meeting of the Central Ne
braska Breeders’ association, the fol
lowing officers were elected : Walter
E. Cole, Broken Bow, president; Ben
A. Best, Oconto, vice president, and
M. L. Gould, secretary-treasurer. The
two-day tour that was to have been
held was abandoned on account of the
snow. It is planned to hold a sale of
pure bred stock early in February.

Heads Beet Growers
J. A. Stockwell, cashier of the First
National Bank at Bayard, Nebraska,
and treasurer of the National Beet
Growers association, has been elected
to fill the vacancy on the Cooperative
Beet Growers association board of di
rectors caused by the recent death of
Frank R. Becker. Mr. Stockwell has
for a considerable period been active
in the affairs of the organization.

Skimmilk Possible Dairy Feed
In areas where the use of surplus
skimmilk is a problem, it can be fed

to dairy cattle economically, according
to Earl N. Shultz, extension special
ist in dairy husbandry at Iowa State
college. Mr. Shultz’s recommendation
is based on experiments conducted by
himself at the University of Minne
sota during the winter of 1928-29.
Skimmilk can be used as a supple
ment in the dairy ration, replacing
linseed oil-meal at the rate of 8
pounds of skimmilk to 1 pound of
linseed oil-meal. Mr. Shultz found
that the best way to feed skimmilk
was to weigh it and the grain for each
individual cow, and pour the liquid
over the grain before feeding. The
grain mixture absorbs the skimmilk
without mixing and when fed on top
of the silage there was no loss of
skimmilk.
With oil meal worth $2 per hun
dred, skimmilk has a value of 21
cents per hundred pounds. With soy
bean oil-meal worth $2.50 per hun
dred, skimmilk is worth 23 cents per
hundred pounds for feeding. The
value of milk can be determined by

the market price of the high protein
concentrates in the various localities.

A Corn Fed Country
[Walter Locke in Dayton News |
Omaha looms through its unaccus
tomed mist, a city of rugged outline
and hardy strength. Its streets swarm
with a cornfed crowd. The farmers
are poor in pocket but rich in pounds.
They can’t sell their stuff for any
thing worth while. There is nothing
to do but eat it. A sight not common
since the ’93s has reappeared. Once
more the home killed hog dangles in
the cooling farmyard breeze. The
trainman swears that this has been
his regular landscape view. For a
while the farmer was prosperous
enough to ship two porkers to Omaha
and get one back, all sliced to eat.
Not now. Again he kills his own and
packing stock, hitherto at par, has
slumped 10 points down.
These oversize denizens of Omaha
streets came mostly from these well
fed farms. Their youth was spent out

LIVE STOCK NATIONAL BANK - OMAHA
Condensed Statement, December 31, 1931
BONDS AND SECURITIES
RESOURCES
D ESCRIP T IO N

Loans and Discounts - $2,866,224.76
Bonds and Securities .. 215,999.49
(See Itemized List)
U. S. Government Se
curities _______
— 1,160,611.32
Stock in Federal Re
serve Bank ______
16,500.00
Banking
House
and
Fixtures __________
56,000.00
Other Real Estate ..
1-00
Cash and Sight Ex
change . ___
-1,075,776.24
$5,391,112.81

LIABILITIES
Capital
- ___ ... $ 450.000.00
Surplus ______________
100,000.00
Undivided Profits, N e t.
58,302.18
Unearned Discount ....
37,730.44
Reserve for Taxes, In
terest, etc. ________
24,431.32
Reserved for Dividends
payable Jan. 2, 1932 .
9,000.00
Deposits ________
4,711,648.87

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

$5,391,112.81

Carried on St’ n’ d
Maturity Par Value Books at Rating

P U B L IC U T IL IT IE S
Low ell Gas L ight C o............
1932
New B ed ford Gas & E dison
Light Co........................... 1932
Staten Islan d E dison Corp. 1932
Rochester Gas & E. C orp .. 1932
P eoples Gas Lt. & Coke Co.
......................................1932, 3, 4, 5
Southern B ell T. & T. 1st
M tg....................................... 1941
International
T. & T. D e b .. 1955
Illin ois B ell Tel. Co. 1st &
R e f.......................................
1956
P acific G as
& Elec. 1st &
R e f.......................................
1957
Texas E lectric Serv. Co. 1st
1960
Jersey Central P ow er & Lgt.
1st ............................................. 1961
Central 111. P u b lic Service
1st .......................................
1967
Shawinigen W . & P. 1st &
C oll......................................
1970
Pennsylvania El. 1st ..............
1971
Penn.
Central
L ig h t
&
P ow er 1st
........................
1977
M inn. P ow er & L ight 1st
& R e f................................
1978
Com m onw ealth
E dison
1st
C oll......................................
1981
T otal

....................................

R A IL R O A D S
A la. & Grt.
Soutli’ n 1st
Cons.....................................
1943
Can. P ac. Ry. Co.. Cons . Perp.
K ansas City South’ n Ry.
Co. 1st .................................... 1950
P ittsburgh & W . Va. Ry.
Co. 1st .................................
I960
Pore M arquette Ry. Co. 1st
1980
Tex. & P ac. Ry. Co. G en’ l
& R e f................................
1980
New Y ork Cent. R R . Co.
Cons..................................... 1998
T otal

....................................

5,000.00

5,000.00 A

5,000.00
10 , 000.00
10 , 000.00

5,000.00 A l
10,000.00 A
9,987.50 A

990.00 A l l
4,100.00 A

1,000.00
10 , 000.00

1,000.00 A l l

10. 000.00

6.300.00 A l
8.035.00 A

11 , 000.00

9,092.50 A l

6 . 000 .

4.100.00
A
00

7.000. 00

5.000. 00
10 , 000.00

2.840.00
Al
00

4.000.

3.850.00
A
00

5.000.
1. 000 .

3.450.00 A l
7.700.00 A l

111 , 000.00

Carried on St’ n’ d
Par Value Books at Rating

D E S C R I P T IO N
1939
1963

Gov.
T otal

....................................

14,000.00

IN D U S T R IA L S
Gen. Am er. Trans. Sys. Eq.
T r..................................................
1935
Gen. Am er. Trans. Sys. Eq.
T r..................................................
1938
1940
Crucible St. Co. D eb ............
California P ackin g Co. D eb. 1940
U nion O il o f Calif. D e b .. . 1945
F irestone Cotton ivl’ ls 1st
G uar............................................. ,1948
N a tion al
Steel
Corp.
1st
1956
Coll
........................................
In la n d Steel Co. 1 st.............. 1981
T otal

....................................

M U N IC IP A L S
City o f Omaha, Neb. Sewer
City o f Omaha, Neb. Park
City o f Omaha, Neb. Sewer
City o f Chicago, 111..............
Co. c f H arris, Tex. Rd. &

1936
1948
1949
1943
1949

790.00 A l l
92,207.05
M ISC E L L A N E O U S
Sarpy County W a r .. . .
Clearing House Dep.

5,000.00
17,000.00

3,750.00 A l
10,355.00 A l

9.000.
5.000.

00
4.050.00
A
2.200.00
A
00

7.000. 00

4.410.00 A

10 , 000.00
63,000.00

7.300.00 A l l
38,127.50

T otal

9.000.
5.000.

........................

4.500.00
00
A
2.725.00
Al
00
7,225.00

5,000.00

4,400.00 A l

5.000.
9.000.
1.000. 00
5,000.00

4.400.00
00
6.300.00
00
650.00
3.750.00

6,000.00

3,360.00 A

2,000.00
10,000.00

1.460.00 A
7.400.00 A l

43,000.00

31,720.00

5.000. 00
10,000.00
5.000. 00
20,000.00

5,000.00
10,000.00
4,834.52
15,100.00

5,000.00

4,300.00

45,000.00

39,234.52

6,485.42
1,000.00

7,485.42

R E C A P IT U L A T IO N
D escription
P u blic U tilities .........
Railroads ........................
Foreign ............................
Industrials
....................
M unicipals ......................
M iscellaneous ................

P ar V alue
111,000.00
63.000.
14.000.
43.000.
45.000.
7,485.42

Carried on
B ooks at
92,207.05
38,127.50
00
7,225.00
00
31,720.00
00
39,234.52
00
7,485.42

T o t a l...........................

283,485.42

215,999.49

This Bank Has NO Affiliated Companies
Member Federal Reserve System and Omaha Clearing House Association

Al
Al
A
A

Central Western Banker, February, 1932

on the earth where, in their growing
up, the sky was the limit. Nebraska
is poor but powerful. Omaha is its
overplus. The runts, if any, the bliz
zards have blown away. Smile at this
Goliath race, it smiles back. Speak to
it, it speaks back. They have the ex
pansiveness of conscious strength.
Exclusiveness is the self-protection of
the self-conscious weak.
These giants swarm the stores. It
takes about a thousand pounds of
them, the merchant wryly smiles, to
buy a dollar’s worth. It takes as many
laborers at the stockyards to pack a
pig as if hogs were worth 12 cents in
stead of only 4. The towns, therefore,
seem sometimes prosperous when the
farms are not. But what can a
farmer buy with his 4-cent hog?
“ Christmas cards,’’ says the sadly
cheerful merchant, “ instead of over
coat.’’

Champion Dairy Cow
W. A. Post of Franklin county had
the high butterfat producing cow in
dairy herd improvement associations
in the state during the past year, ac
cording to announcements. The Hamilton-Hall-Merrick association was
the high association in Nebraska
while W . F. Bechtolt of the Platte
Valley organization was adjudged the
most efficient tester.
The high cow, Beauty Mercedes
Pldge Lyongs 8884, is seven years old
and made a record production 26,761
pounds of milk containing 917.5
pounds butterfat.
In addition to having the high cow
in the state, Post also owned the high

butterfat producing herd. His reg
istered Holsteins averaged 604.4
pounds butterfat. The records were
based upon 11.58 cow years. The
average milk production per cow was
18,674 pounds. The cows each re
turned $214.41 above feed costs. For
every dollar spent for feed, the cows
returned $4.21. It costs the Naponee
dairymen 12 cents to produce a pound
of butterfat and 35 cents to produce
100 pounds of milk during the year
as an average. The milk was worth
on an average of $1.58 per hundred
weight.

Champion Corn Growers Named
Champion corn growers of Nebras
ka were announced at the meetings of
the Nebraska Crop Growers’ Associa
tion, held in connection with the an
nual sessions of Nebraska Organized
Agriculture.
Winners named were Fee Faris,
Union, eastern division; Hal A. DeMay, Danbury, central division ;
George Eiker, Brule, irrigation dis
trict, and Tyre Nelson, Curtis, west
ern division.
Donald Sutherland, of Lancaster
county, won the 4-H Club honors of
the eastern division of the state, and
Lawrence Larson, of Polk county,
took first honor in the 4-H Club cen
tral division of the state.
The contest, known as the Ten
Acre Corn Yield Contest, was
sponsored by the Crop Growers’ A s
sociation.
Certain fixed costs were recognized
in deciding the winners. Man labor
was computed at 25 cents per hour,

a l u a b l e

t o

y o u

f~pHE officers of the S t o c k Y ards N a
t i o n a l B a n k of S o u t h O m a h a have
had long experience and close contact with
the livestock industry.
As your correspondent bank in South
Omaha, their experience will be valuable
to you.

Stock Yards National Bank of South Omaha
Affiliated with N o r t h w e s t

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

Ban co rpo ration

horse and machinery charges at 13
cents per hour, use of land at twofifths or one-third of the crop, tractor
power at from $1 to $1.50 per hour
depending upon the size of the outfit,
and corn at 35 cents per bushel.

Re-elects J. R, Hughes
At the regular annual meeting of
the Omaha Live Stock Traders’ E x
change, John R. Hughes was re
elected president for the ensuing year
and George Macdonald re-elected as
vice president.
In presenting his annual report,
Mr. Hughes pointed out the favorable
as well as the discouraging features
of the situation as it developed dur
ing the past year, and said traders
were now in a position to go ahead
and keep in step with the improved
conditions in business that he hoped
the new year would bring.
Directors elected for the three-year
term w ere: Byron Smiley, George
Francis and William Guilfoyle. The
board of directors now stands: Sam
Wertheimer, Dave Rosenstock, James
A. Sullivan, Joseph C. Christie,
Thomas F. Gill, John J. King, W il
liam Guilfoyle, George Francis and
Byron Smiley.
Charles F. Huntzinger was re
elected secretary-treasurer of the or
ganization.

Corn Stalks Good Bedding
By mixing cornstalks which have
been run through a hay cutter with
straw, John Stewart, manager of the
Iowa State college dairy farm, has
discovered a method of providing live
stock with economical bedding and at
the same time making more complete
utilization of farm waste.
As soon as the corn had been
husked this fall, the stalks were cut
and bound in bundles with a corn
binder. They were then run through
the ensilage cutter.
The stalks then were mixed half
and half with straw. Mr. Stewart
found the cornstalks, which were in
half-inch lengths after being put
through the hay cutter, to be unusu
ally good absorbers of moisture. He
states that this bedding is more satis
factory than straw alone for the ani
mals do not kick it away from them
during the night.
The total cost of getting the corn
stalks in the barn was only $3 a ton,
while straw alone costs $7 a ton. An
other advantage of this type of bed
ding is that the manure can be spread
on any land and will not be picked up
in the first crop of hay as is often the
case when longer length fodder or all
straw bedding is used.

Central Western Banker, February, 1932

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Hildebrandt and Rudolph Koehler. A
resolution was adopted reducing the
number of directors from 11 to 9 and
the above named stockholders were
unanimously named as directors.

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F. A. Derby Is Director
Fred A. Derby, president of the
Derby Milling Company, has been
elected a director of the Guaranty
State Bank of Topeka, Kansas, to
to succeed the late Oliver H. White.
All other directors and officers were
re-elected at the annual meeting.
The annual report showed that the
earnings justified the payment of the
usual 16 per cent annual dividend
after suitable reserves had been made
for contingencies of various kinds,
N. A. Turner, president, said. Total
deposits show a $10,000 increase over
a year ago.
A resolution of respect was passed
to the memory of Mr. White. Board
members are Turner, S. V. Firestone,
T. F. Kreipe, Robert Stone, Earl
Ives, A. J. Schober, H. H. Turner
and C. W . Pratt. Officers are Turner,
president; Firestone, vice president;
H. H. Turner, cashier, and Pratt, as
sistant cashier.
P. W. Goebel Resigns
P. W . Goebel, veteran banker, is
retiring from active executive man
agement in the Commercial National
Bank and the Kansas Trust Company
o f Kansas City, Kansas. He resigned
as president of the latter institution
and announced he will retire as chair
man of the board of the Commercial
Bank. He will devote his time pri
marily to his banking interests in
Kansas City, Missouri. C. L. Brokaw,
president of the Commercial National
Bank and Goebel’s friend and asso
ciate through many years of banking,
was elected president of the Kansas
Trust Company.

One New Director
Officers and directors for the Tur
ner State Bank of Kansas City, Kan
sas, were elected at the annual stock
holders’ meeting.
C. S. Wilson is president; John
Swartz, vice president, and William
Madden, cashier. All were re-elected.
The board of directors is composed
of those three officers, W . J. Breidenthal and Frank Holcomb. Madden is
the only new director. He replaces R.
H. Perkins, who has moved from the
community.
The regular dividend was paid.

Changes at Ottawa
The Lane State Bank of Ottawa,
Kansas, held its annual stockholders

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Federal Reserve Bank of St. Louis

and directors meeting, directors being
re-elected as follow s: F. J. Miller, N.
E. Coffey, C. H. Estabrook, E. A.
Hanes, H. T. Jordan, J. K. Emerson
and W. W. Lehew. F. J. Miller suc
ceeds N. E. Coffey as president of the
board. Mr. Coffey becomes vice pres
ident in place of E. A. Hanes. H. T.
Jordan was re-elected cashier.

Reduces Bank Directorate
The annual meeting of the stock
holders of the Community State
Bank of Hanover, Kansas, was held
last month and the following directors
for the ensuing year elected: Jacob
Eipper, L. R. Kramer, J. T. Murphy,
H. H. Neumann, Wes J. Sekal, A. C.
Pecenka, Joseph Vlach, John F.
White and A. C. Wurtz, this being
the same board that has directed the
affairs of the bank for the past sev
eral years with the exception of Fred

New Bank Officer
A vice presidency in the Concordia
First National Bank of Concordia,
Kansas, has been accepted by George
W. Nimocks, for many years prom
inent banker in this section, president
of the Bank of Scandia, but will still
retain his relations with the Scandia
bank, continuing as president of the
latter institution.

4 Banks Merge
Four banks in Kansas were last
month merged into two institutions,
according to the state bank depart
ment. The Edgerton State Bank
merged with the Farmers State at
Gardner. Frank Sponable will be pres
ident of the Farmers State of Edger
ton and H. C. Bigelow, cashier. The
State Bank of Castleton, merged with
the State Bank of Pretty Prairie.

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I New Mexico News |
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Group Three Meeting

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Las Vegas Election

At the annual meeting of the stock
Members of the regional clearing
house No. 3 of the New Mexico holders of the Las Vegas Savings
Bankers’ Association held a recent Bank, the following directors were
meeting at the Crawford hotel in re-elected for the ensuing year: W il
liam G. Haydon, A. H. Gerdeman,
Carlsbad.
Chief among subjects discussed George A. Fleming, L. H. Kronig, J.
was the new National Credit Corpora H. Stearns, N. Fontaine, W . E.
tion, which is being sponsored by Kaser.
President Hoover to partly relieve the
The bank reports a very satisfac
banking situation. Miss Margaret tory year as its published statement
Brown of Albuquerque, secretary of indicates.
the New Mexico Bankers’ Association
After the meeting of the stock
also addressed the meeting.
holders, the directors-elect held a
In the election of officers, J. E. meeting and officers of the institution
Robertson, president of the First Na were re-elected. The personnel fol
tional Bank of Artesia was chosen lows: William G. Haydon, president;
chairman of the district succeeding George A. Fleming, vice president ;
W. A. Losey of Hagerman; Claud A. H. Gerdeman, cashier; R. R. DeHobbs, cashier of the First National vine, assistant cashier.
Bank of Roswell, was elected viceAll of the present employes, Phil
chairman and Floyd Childress, audi lip Guerin, Faustin Guerin, T. E.
tor of the First National Bank of Molleston, Alma Wilson, Virgie Brite
Roswell, was made secretary-treas and Olivia Deutschman, were re
tained.
urer.
G.
K. Richardson of Carlsbad, who
has been with the Carlsbad National
History shows that the majority of
Bank since its organization, has sev men who have done anything great
ered his connection with the Carlsbad have passed their youth in seclusion.
institution as president and will re — Heine.
move to Brownwood, Texas, where
he has a position with a newly organ
Flowers may beckon toward us, but
they speak toward heaven and God.—
ized bank at the Texas city.

Central Western Banker, February, 1932

Re-elected Bank Director

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Colorado State Banks
The total resources of 119 state
banks and 13 trust companies of Col
orado were $59,587,311.46 on Decem
ber 5, 1931, according to a report by
Grant McFerson, state bank commis
sioner.
This is a reduction in resources of
only $3,471,439 since the last report
in June.
The average reserve for all the
banks is 20.20 per cent, and the
average of Liberty bonds held 4.08
per cent, and average cash 4.69 per
cent.

enway, chairman of the board; James
P. Shearer, first vice president; Her
bert G. Sinton, second vice president;
C. C. Fingel, cashier, Dr. E. J. Brady,
C. B. Seldomridge, D. N. Heizer, di
rectors. No director has been elected
to succeed the late C. A. Hibbard,
who was chairman of the board, but
this will be done at the annual meet
ing this month. Mr. Hemenway suc
ceeded Mr. Hubbard as chairman of
the board.
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A Kansas Merger
The Kansas state banking depart
ment has announced the merger of
the Peoples State Bank of Geuda
Springs with the Union State Bank
at Arkansas City. The Geuda Springs
bank was capitalized for $10,000 and
showed deposits of $49,807 and loans
of $49.200.

.... ...... .................................................................... ...........................................niiiuii.mmiiimmiimmmmimMg

Wyoming News

A Consolidation
Consolidation of the City National
Bank and the Colorado Springs Na
tional Bank was announced last month
by directors of both institutions, who
approved the action.
There will be no change in the
name of the Colorado Springs Na
tional Bank and no change in direc
tors.
The City National Bank has de
posits totaling $340,000 and the Colo
rado Springs National Bank has de
posits of about $1,700,000, thus giv
ing the consolidated bank more than
$2,000,000 in deposits.
The City National Bank was es
tablished by the late Col. E. T. En
sign in 1902 and has served that sec
tion of the city since that time. Its
officers and directors are Martin
Drake, president; W . N. Armstrong,
vice president and cashier; Gordon
Parker, W. R. Armstrong and W . L.
Fisher, directors. Mr. Drake and Mr.
Armstrong will be affiliated with the
Colorado Springs National Bank.
The Colorado Springs National
Bank officers and directors are Willis
R. Armstrong, president; O. E. Hem-

Harry W . Farr, prominent Greeley
farm operator and feeder, has been
re-elected a director of the Denver
branch of the Federal Reserve Bank
of Kansas City for a three year term
ending December 31, 1934. Mr. Farr
has served seven years as a director
of the Denver branch of the bank.

........................................................................................ "imimimimiiimimu.....mu.......

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Casper Deposits
Casper, Wyoming, banks began the
new year with aggregate resources of
$8,450,797 and deposits amounting to
$6,982,898, according to a composite
summary of condensed statements,
Cash on hand and sight exchange
amounted to more than $1,334,000
while money in United States and in
vestment bonds struck another large
total.
Capital, surplus and undivided
profits of the four institutions on De
cember 31 aggregated $920,000, an
imposing total to start the new year.
The reporting banks are the Casper
National, the Wyoming National, the
Wyoming Trust company and the
First Trust and Savings Bank.

Merger at Powell
Consolidation of the Park County
Bank and the First National Bank,
both of Powell, Wyoming, became ef
fective last month.
The merging of the two institutions
was done voluntarily in the interest
of better business management. The

name of the First National Bank of
Powell will be retained.
C. J. Williams was president of the
Park County Bank and G. W . W il
liams was cashier. S. A. Nelson is
president of the First National while
Harry Barrows is cashier.

Re-elects All Officers
Stockholders of the Casper Na
tional Bank, Casper, Wyoming, at
their annual meeting re-elected all o f
ficers and announced J. W. Ouderkirk
of Kansas City, Missouri, who is now
in Casper, as executive vice president
of the institution.
Mr. Ouderkirk resigned a position
with the Federal Reserve Bank of
Kansas City to join the Casper Na
tional staff. Mr. Ouderkirk’s family
will move to Casper.
Officers re-elected were Pat Sulli
van, chairman of the board ; P. C.
Nicolaysen, president and director;
G. R. Hagens, vice president and di
rector; Robert Grieve and O. L.
Walker, directors; C. H. McFarland,
cashier; A. J. Clare, assistant cashier,
and R. E. Barton, assistant cashier
and auditor.

Reduce Interest Rates

C entral T y p ew riter E x c h a n g e , Inc.
(EST. 1903)

TYPEW RITERS, ADDING MACHINES, CHECK W RITERS
LATEST MODELS AT BIG DISCOUNT
ASK TO SEE

X f f T* XT

W T

A T 17 C

A L L llJ N -W A L tj
1912 Farnam St.

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Federal Reserve Bank of St. Louis

THE

FINEST

“ H EA V Y

DUTY”

a d d in g m a c h in e m a d e

Omaha, Nebraska

Savings deposits in Casper, W yo
ming, banks will draw compound in
terest at the rate of three and onehalf per cent, as compared with four
per cent up to this time, it was an
nounced last month by the Casper
Clearing House association. The new
rate is the prevailing one in other
principal cities of the Rocky moun
tain region and the east, where it was
placed in effect on the first of the
present year.

2350 m iles from salt water
thrives 2nd Largest U. S. Pori
N the Northwest, the cities
of Duluth and Superior lie
cheek by jowl. The Atlantic
rolls 2,350 miles to the East.
The Pacific is alm ost equi
distant to the West.

To the manufacturer who seeks markets
and sales outlets that can profitably be de
veloped, the commerce of Duluth-Superior
offers ample evidence of employment and
buying power that make the Northwest a
market which invites further scrutiny.

Yet only the Port of New York handled
more millions of tons of shipping in 1930.
And bustling New York bulked only 4%
larger in the nation’s shipping total than
Duluth-Superior.

To the banker . . . it is evidence of the
continuous banking needs of the complex,
active Northwest, and the solidity of the
Northwest Bancorporation w hich serves
them through 127 locally situated affiliates.

To the manufacturer who seeks produc
tion cheaply, the 31,000,000 tons of iron ore,
the ten million tons of coal shipped through
Duluth-Superior point out again the raw
material at hand in the Northwest.

The Northwest Bancorporation invites
fact seeking inquiries from business men
who want either production, sales or bank
ing information . . . A ddress Northwest
Bancorporation, Minneapolis, Minnesota.

Northw est Bancorporation

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

MINNEAPOLIS, MINNESOTA

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

Full text of Central Western Banker : February 1932, Volume 27, No. 2

FRASER