Full text of Central Western Banker : February 1933, Volume 28, No. 2

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Federal Reserve Bank of St. Louis

CENTRAL WESTERN

BANKER
Omaha

Our Economic Welfare In 1933
Page 4

How the Depositor Can
Guarantee His Own Deposit
Page 7

The Tax Burden—
An Obstacle T o Recovery
Page 9

W hy Not Federal Regulation
o f Waterways ?
Page 11

February

1933

o x v e x ie x c e
In the very heart of the down-town section of the city, at
the crossroads of business, the First National Bank of
Omaha is located so that it will be of the greatest con
venience to the greatest number of people.
Make the First National Bank your headquarters when
you are in Omaha. We shall be glad to receive your
correspondence and get your telephone calls . . . to be
your Omaha office.

First National Bank

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Federal Reserve Bank of St. Louis

of Omaha
M E M B E R FED ERAL RESERVE SYSTEM

Central Western Banker, February, 1933

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Federal Reserve Bank of St. Louis

CONTINENTAL ILLINOIS NATIONAL
B A N K AND TRUST CO M P A N Y
OF C H I C A G O

Statement o f Condition , Decem ber 31, 1932

RESOURCES
CASH AN D

DUE FR O M B A N K S

$ 2 5 4 ,0 8 0 ,2 1 3 .9 2

U N ITED ST A T E S G O V E R N M E N T S E C U R IT IE S
O TH ER B O N D S A N D

S E C U R IT IE S

L O A N S : D EM A N D
TIME
STO CK

.
.

2 2 5 ,1 8 2 ,2 4 9 .8 1

B A N K B U IL D IN G

3 4 4 ,9 9 9 ,1 5 9 .4 6

4 ,2 0 0 ,0 0 0 .0 0

A CCEPTA N CES

O T H ER B A N K S ’ LIA BILITY O N
IN TER EST A C C R U E D

9 0 ,2 0 2 ,3 4 1 .4 8

$ 1 1 9 ,8 1 6 ,9 0 9 .6 5

IN FED ER A L R ESER V E B A N K

C U S T O M E R S ’ LIABILITY O N

7 8 ,3 1 7 ,9 9 9 .2 0

7 ,5 0 6 ,0 8 7 .1 0

BILLS P U R C H A S ED

3 1 0 ,0 9 2 .4 6

BUT N O T C O L L E C T E D

2 ,7 4 0 ,7 6 8 .2 8

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

O TH ER R E S O U R C E S

1 4 ,7 0 0 ,0 0 0 .0 0

7 8 3 ,3 5 0 .1 2
$ 7 9 7 ,8 4 0 ,0 1 2 .0 2

LIA BILIT IES
C A P IT A L S T O C K

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

$ 7 5 ,0 0 0 ,0 0 0 .0 0

SU R P LU S .....................................................................................................
U N D IV ID E D

2 5 ,0 0 0 ,0 0 0 .0 0

P R O F I T S .........................................................................

R E S E R V E F O R D IV ID EN D

P A Y A B LE JA N U A R Y 2, 1 9 33

R E S E R V E F O R T A X ES A N D
D E P O S IT S : D EM A N D
TIME

1 ,1 2 5 ,0 0 0 .0 0

IN TER EST

.
.

3 ,7 4 1 ,8 0 9 .3 2

.
.

9 ,9 3 0 ,9 9 2 .9 9
.

$ 4 8 9 ,5 9 5 ,2 8 2 .9 1
1 8 3 ,5 2 8 ,3 2 0 .5 3

6 7 3 ,1 2 3 ,6 0 3 .4 4

A C C E P T A N C E S .......................................................................................

8,1 5 4 ,4 2 4 .9 7

O T H ER B A N K S ’ BILLS E N D O R S E D A N D
D IS C O U N T C O L L E C T E D

SO LD

3 1 0 ,0 9 2 .4 6

BUT N O T E A R N ED .

6 7 0 ,7 3 8 .7 2

O T H ER L I A B I L I T I E S .........................................................................

7 8 3 ,3 5 0 .1 2
$ 7 9 7 ,8 4 0 ,0 1 2 .0 2

T he ca pital stock o f the C on tin en ta l Illin ois C om p an y , h eld in trust
f o r the stock h old ers o f the C on tin en tal Illin ois N a tion a l B a n k an d T rust C om p an y o f C hicago ,
is n ot in clu d ed in the a b ov e fig u res

Central Western Banker, February, 1933

C E N TR A L W EXTERN CAN CER
410 A R TH U R BUILDING
OMAHA
C l iff o r d D e P u y , Publisher

R. W. M oorh ead , Associate Publisher
H. H. H aynes , Editor
H. E. O ’ C o n n o r , Field Representative
W m . H. M a a s , Vice-President, 1221 First National Bank Bldg., Chicago
F r a n k P. S y m s , Vice-President, 19 West 44th Street, New York
F r a n k S. L e w is , 218 Essex Bldg., Minneapolis
Subscription, 25 cents per copy; $2.00 per year. Entered as second-class matter at the Omaha postoffice.

V olum e

F E B R U A R Y , 1933

N umber

O U R E C O N O M IC W E L F A R E
IN 1933

Three sets of factors will probably shape the course of
our nation in 1933, and determine the degree
of change for better or for worse
H R E E sets of factors w ill prob
ably shape the course of the eco
nomic welfare of the nation in
1933, and determine its degree of change
for the better or for the worse. T h e first
of these consists of financial conditions,
and here we are clearly better off than
we were a year ago. T h e conditions of
financial panic that prevailed late in
1931, and which returned early in 1932,
are things of the past. Few banks are
suspending as 1933 begins. Hoarded
funds are coming back into circulation.
G old has stopped going abroad, and is
returning.

Business conditions constitute the sec
ond set of controlling factors, and in
these regards we are not so well off as
we were a year ago. O u r national budg
et is unbalanced. T h e railroad crisis still
threatens. Commodity prices are lower.
Unemployment is more serious. T h e fin
ancial difficulties of municipalities are
more acute. International trade has fal
len to lower levels. W a r debts are still
unsettled, and defaults have occurred.
Corporate earnings are lower, and wage
rates have declined. In general any com
prehensive set of statistical measurements
of business activity w ill show preponder
ant declines for the past year.
The National Morale

T h e third set of factors is made up of
elements that are less surely ponderable,
but which are perhaps more important
than the others. T h ey are those that
make up the courage, the fortitude, the
national morale of a people beset by the
difficulties of a great economic depres
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By C o l . L e o n a r d P. A y r e s
Vice President, The Cleveland Trust Company
Cleveland

sion. Probably these conditions are better
than they were a year ago. T h e steady
return of hoarded funds reflects increas
ing confidence. T h e elections largely
eliminated political dissatisfactions. Great
numbers of families and firms are solv
ing the problems of carrying on success
fully with lower incomes and at lower
price levels.
W e can improve conditions in 1933
if we grapple with realities, and crowd
them for solution. It w ill require vigil
ance and co-operation, for much that
must be done, both locally and nation
ally, depends on governmental action,
and everywhere inexperienced admin
istrations are coming jubilantly into o f
fice. F or individuals it is a time for the

“ O ur national expenditures must
shortly be brought within our
federal income“

old-fashioned virtues of thrift and selfreliance. For governments it is a time for
budget balancing by expenditure reduc
tion. For all it is a time for adjustment
to new conditions without repining for
the old.
Reconstruction Finance Corporation

T h e Reconstruction Finance Corpora
tion is about a year old, for it was or-

ganized last February. It was originally
authorized to acquire resources of two
billion dollars, and this was later on in
creased to 3.8 billions by the emergency
relief and construction act. Up to the
end of November it had acquired 1.2
billions in cash, all of which had been
furnished by the Federal Treasury. In
the same period of 10 months it had
made loans amounting to a billion and a
half dollars, and over 283 millions had
been repaid.
Banks have been the greatest borrow
ers, and also the best payers. Up to the
end of November they had received
nearly 808 million dollars, and they had
repaid 234 millions. Applications from
banks for loans have steadily decreased
in number. T hey were at their highest
point in April, and each month since
then the number of applications for
loans by banks has gone down, until re
cently they have been well under half
as many as they were in the early months
of the activity of the corporation. Farm
ers have borrowed about 85 million dol
lars, and repaid nearly 15 millions. T h e
railroads have borrowed about 262 mil
lions, and repaid about 12 millions.
Up to the end of the year the advances
for relief purposes had amounted to
about 104 millions, and these funds had
gone to 36 states, and to Hawaii and
Porto Rico. Disbursements for self-liq
uidating projects amounted in 1932 to
about 16 millions, but more than 100
millions in addition had been agreed
upon. T h e Reconstruction Finance C or
poration has played a most important
part in the depression emergency. Its ac
tivities availed to prevent financial chaos
last year. It continues to be an essential

Central Western Banker, February, 1933

instrumentality of the government
these troubled times.

Railroads

Railroad income was almost as great
in the closing quarter of 1932 as it was
in the last three months of 1931. This is
a decidedly reassuring development, for
it is the first time in the long depression
that the income accounts of the rail car
riers have shown any signs of becoming
stabilized at levels even nearly equalling
those of the preceding year. T h e earn
ings of the roads are still seriously defi
cient, for they are not sufficient to meet
operating expenses and fixed charges, but
at least they are no longer progressively
declining, as they have been until re
cently.
T h e plight of our railroads constitutes
one of the most urgent of our national
economic problems, and so far no ade
quate steps have been taken towards
solving it. T h e roads have introduced
stringent economies, and greatly increas-

" A s things are going now a railroad
crisis is in the making. Railroads
constitute almost our greatest in
dustry, and one that is essential to
our national welfare. W e need a
thoroughgoing revision of railroad
legislation in a new trans
portation act."
ed their efficiency of operation. Never
theless all their efforts have been un
availing to offset the reductions of in
come resulting from the shrinkage in the
volume of traffic during the depression.
In 1931 the net income of all the Class
I roads amounted to about 141 million
dollars, which was sufficient to meet fix
ed charges about one and one-fifth times.
In 1932 net incomes showed an actual
deficit of about 170 millions, which
means that only about three-fourths of
the fixed charges were earned.
As things are now going a railroad
crisis is in the making. T h e roads con
stitute almost our greatest industry, and
one that is directly essential to our na
tional welfare. T hey are one of our
greatest employers of labor, and in the
first rank as purchasers of materials from
other industries. T h eir bonds are held
in vast amounts as investments by banks,
insurance companies, trust funds, and in
stitutions. T h e roads are so important
as taxpayers that many communities are

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largely dependent on them for the sup
port of their public services. W e need a
thoroughgoing revision of railroad leg
islation in a new national transportation
act. M eanwhile, and to tide over the
present emergency, the roads need legis
lation to enable their owners and credit
ors to readjust their capital structures
without being blocked by small dissent
ing minority groups.

much steel as they did in 1929, and not
one-tenth as much as they did in 1923.
Perhaps the most important and seri
ous fact about these conditions in the
fundamental iron and steel industry is
that there is no promising prospect that
they will be much bettered in 1933. T he
railroads will not be good buyers this
year, for their incomes do not cover their
fixed charges and operating expenses.

Steel in 1932

T h e output of finished steel in this
country has stepped down in the past
four years from 1929 to 1932 at what
may be termed a four, three, two, one
rate. In 1929 it was almost 40 million
tons, and a new high record ; in the first
depression year of 1930 it dropped to
just under 30 million tons; in the second
depression year of 1931 it fell to less
than 20 m illion ; and this past year it
was less than 10 million tons. One must
go back through the records for 30 years
to the opening periods of the century to
find so low an output figure as that of
1932, and still further back to reach so
small a per capita production.
Perhaps the most impressive single
fact concerning the record of 1932 is
that during the past year more than 10
per cent of our steel output was consum
ed by the manufacturers of containers.
This really means that tin cans used
over 10 per cent of our steel output, for
the cans we refer to as tin are really
made of thin steel sheets. T his past year
the tin cans used more steel than did
the railroads, which were for many
decades the best customers of the indus
try, and sometimes called for nearly onethird of its entire output.
In 1932 the automobile industry was
the greatest consumer of steel, as it had
been once before in 1928. T h e building
industry was in second place, instead of
being first, as it was in 1931. T hen in
third place came the containers, followed

"The R e c o n s t r u c t i o n F i n a n c e
C o r p o r a t i o n has played a most
important part in the depression
emergency.
Its activities avai led
to prevent financial chaos last year.
It continues to be an essential in
strumentality of the government in
these troubled times."

Construction w ill not take large ton
nages, because existing buildings can be
bought more cheaply than new ones can
he erected. Automobiles w ill not require
large amounts, for most people are still
managing to get along with their old
cars. T h e prospects for exports are not
bright, for our foreign trade continues
to shrink.
National Debt

O u r national debt is now about half
as great as our current annual national
income, and considered on that basis it is
heavier than ever before in our history.
O n the other hand it is equal to less
than seven per cent of our national
wealth, which is a lower percentage than
prevailed in the depression follow ing the
W o rld W a r, and one only about twothirds as much as it was at the end of
the Civil W a r. T h e debts of nations, like
those of individuals, should be consider
ed in relation to both their total wealth

" W e can i m p r o v e c o n d i t i o n s in 1933 if we grapple with realities,
and crowd them for solution. For individuals it is a time for the oldfashioned virtues of thrift and self-reliance. For governments it is a
time for budget balancing by expenditure reduction. For all it is time
for adjustment to new conditions without repining for the old "
by the railroads, and by the pipes and
tanks of the oil country. Exports were
less than one-sixth as great as they were
in 1928 and 1929. T h e sharpest reduc
tions were those of the railroads, which
bought in 1932 less than one-eighth as

and to their current incomes, for both
have important bearings on their capaci
ty to repay.
Figures purporting to reflect the
wealth or the income of a nation are at
best only appropriations based on esti-

Central Western Banker, February, 1933

6
mates, and are subject to considerable al

was heavy indeed. It amounted to nearly

lowances for possible margins o f error.

10 per cent of our wealth and to 35 per

T h e data used assumed that national

cent of our annual national income. T he

wealth in 1929 was 385 billions, and

follow ing decline was rapid, but it was

that it had fallen by 1932 to 301 bil
lions. T h e national income for 1929 was
taken as 85 billions, and that for 1932
as 40 billions. Estimates computed inde
pendently and by different methods
would produce other figures, but their
relationships to our national debt since
1850 would probably turn out to be

checked when wealth and income de

closely similar.
A t the close of the Civil W a r the debt

creased and debt grew in the long de
pression of the 70’s. A similar temporary
increase in the weight of the debt took
place in the long depression of the 90’s
and that was accentuated by the costs of
the war with Spain. T h e lowest point
was reached in 1916 when the weight
of the debt was about the same as it was
just before the Civil W a r.

T h e burden of debt increased sharply
during the W o rld W a r, but the subse
quent decline was rapid and steady until
1929. Since then the increase has been as
rapid as though another great war was
being waged. O u r national debt has in
creased because of our continuing federal
budget deficits, and our wealth and in
come have shrunk, which makes the
burden still heavier. T h e Civil W a r rec
ord offers evidence that it has not grown
beyond our capacity to cope with it.
Nevertheless our national expenditures
must shortly be brought within our fed
eral income.

The Back-to-the-Land Movement
T

h e
b a c k -t o -t h e - l a n d
movement is now and perhaps al
ways w ill be the backwash of un
employment. Farmers’ sons and daugh
ters have flocked to the cities by hun
dreds of thousands in recent years, par
ticularly during the war and in the boom
years up to 1929. Undoubtedly they en
joyed a higher standard of living— hous
ing, amusement, educational and recrea
tional facilities— than would have been
possible on the farm, Lhidoubtedly they
considered their new work more agree
able than farm work, and they were for
the most part happier in their new sur
roundings. T hen came the depression
and unemployment.

T hen it was that these city sons and
daughters of farmers and their families

deavoring to discourage it. There are
some compensations, however, from cer
tain rather non-farm viewpoints, such as
providing a market for farms, many of
which are in the hands of banks, insur
ance companies, and other loan agencies,
and tenants for farms which were unoc
cupied, and most any tenant is better
than no tenant.
It is estimated by the U . S. Depart
ment of Agriculture that farm popula
tion at present is approximately 32,000,000, or very close to the peak of 32,077,000 which was reached on January
1, 1910. T hree years ago the total farm
population was estimated to be 30,169,000, indicating an increase of nearly 2,000,000 during the past three years. This
means that several hundred thousand

families have moved from city to country
within the past three years.
W h at other industry could even
dream of absorbing millions of unem
ployed upon any basis whatever? None.
Agriculture is the residual occupation of
man and his final refuge from starva
tion. If only a sufficient public recogni
tion of this fact could be achieved, the
present disturbing conditions of unrest
and even riot in many farming sections
would be dealt with in a constructive
manner that is now lacking.
W hen business and industrial condi
tions improve to the point of reducing
unemployment, the back - to - the - land
movement w ill slacken and possibly when
industrial prosperity returns there will
be a trend of population cityward again.

and some others, no doubt, began to
think about the farm, the chance to make
a living that it affords, the opportunity

Danger Ahead!!!

to grow foodstuffs. T h e trek back to the
farm began and all over the country
abandoned farms and tenant houses and
laborers’ cottages began to be reoccupied.
It is in the main a good movement, good
for those who go back, good for the
cities and for the nation in these times,
but probably not so good for the farm
communities that must absorb this sur
plus city population, provide school fa
cilities and relief for those in distress.
Furthermore, it means more competition
for farmers who are already hard put
to keep going.
City officials, welfare agencies, and
chambers of commerce are encouraging
and aiding the movement, while rural
officials and farm organizations are en
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s t h e February issue of the Central Western Banker goes to
L press, the Nebraska legislature has had placed before it two
bills proposing State-owned-and-operated banks. One bill proposes
to dump $2,500,000 of State money into such a plan, and another
bill suggests only $1,200,000. Both bills provide that the governor
and the tax commissioner should appoint a State board of one rep
resentative from each congressional district, and branches would
be established in each county. The county treasurer, attorney and
clerk would appoint the cashier of this county branch, whose salary
is to be $2,400 per year.

No Nebraska banker needs to be told of the serious situation
in which he would find himself, should such legislation as the above
ever be passed. Don’t view these bills as too absurd for your con
sideration. These are just the kind that slip by and become laws.
Start now, and do all you can to defeat such dangerous measures.

Central Western Banker, February, 1933

How The D E P O S IT O R Can
Guarantee His
wn Deposit
P

R E S I D E N T H O O V E R , in his
message to Congress December 6,
1932, discussing the banking system
of the nation, is quoted as having said in
part :
“ As a system, our banking has failed
to meet this great emergency. W id e
spread banking reforms are a national
necessity. T h ey should have immediate
consideration as steps greatly needed to
further recovery. M ethods of reform
have been exhaustively examined. There
is no reason now why a solution should
not be fou?id at the present session of
Congress.”
A Widely Discussed Problem

As no solution was offered, I infer the
field is open for suggestions and that it
would not now be out of order for any
banker to bring forth any plan or
thought that might be helpful in fulfill
ing the request of the President.
W ithin the past year much has been
said and written on guaranty of deposits.
It has been debated in banking conven
tions, the press, financial journals and in
the halls of Congress. Some eighteen bills
bearing on this subject were introduced
in the last Congress, and it appears that
we are now no nearer a solution; yet
bankers everywhere realize that the
banking system of the nation is on trial
and recognize the necessity of some new
move or plan that will bring stability to
the business and restore public confi
dence. M any theories, panaceas and curealls of every possible character have been
suggested. M any o f the claims and de
mands of the people, although made in
good faith, constitute raids on the pub
lic treasury, for all of which, in the final
analysis, the people pay.
I t is now time fo r sound and clear
thinking, for it appears quite likely that
more proposals for changes in our bank
ing system w ill be made. It is no longer
a secret that public confidence in the
banking system, as well as in everything
else, has been shaken. A guaranty of de
posits in individual banks by the government, state or by banks themselves is
funda?nentally unsound and unworkable,
both in theory and in practice, and has

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By A L L E N P. FRIERSON

Vice President
East Tennessee National Bank, Knoxville

been so demonstrated by the failure of
the noble experiments of form er state
guaranties.
Cannot a plan be evolved that w ill
give protection and yet at the same time
bring about no radical changes in the
American system of banking, nor inter
ference with the freedom, initiative and
individual management now permitted
under the present system?
It has long been my thought that those
who receive protection and benefits are
the ones to pay for them. W hether it is
feasible to so change the present system
of banking as to bring it all under one
system or control I am not prepared to
suggest. It does occur to me that it is
possible and practicable to bring about
the creation of a Federal guaranty sys
tem to include all solvent banks of de
posit, whether state or national, that
would provide protection to the deposi
tors and would be no burden on the Fed
eral or state treasuries, nor on the banks
themselves. I believe this could be ac
complished through the avenue of insur
ance.

commission that would strengthen banks
rather than weaken them? W e have re
cently seen a Federal law enacted requir
ing all banks of deposit, whether state
or national, to collect two cents on each
check to provide governmental revenue.
N ow , why not establish a guaranty sys
tem by requiring all banks to collect a
small annual per centum from depositors
and borrowers alike, thereby creating the
necessary revenue. T h e solvency of any
bank depends on the soundness of its
borrowers. It is too well known for dis
cussion that many loans are sound at the
time they are made, but by a variety of
circumstances become bad assets, which,
of course, weaken the depositors’ securi
ty. F or this risk the borrower should be
required to pay a Federal bank guaranty
tax; and on the other hand, if the de
positor is guaranteed, he should likewise
be required to pay for the protection.
It is a simple fact that without deposi
tors there would be no banks, and with
out banks there would be no Federal
Reserve System. As stock of the Federal
Reserve banks is owned entirely by the
member banks, it seems sound reasoning
to say that the earnings of the Federal
Reserve System are made possible and
created by the depositors in the individ

Let bankers now remove from their minds any prejudice
they may have had regarding a guarantee of deposits,
and sit down and do some clear thinking about a sane,
sound and workable plan for the protection of depositors
Deposit Insurance

W e now safeguard our lives and prop
erty by paying for such protection, and
I am convinced that a Federal guaranty
system can be built up on this theory
which will not only provide the needed
protection to depositors but will stabilize
the business as a whole and restore that
public confidence so necessary to the fu
ture security of the nation.
Could we not enact Federal legisla
tion creating a Federal guaranty system
to be governed by a Federal banking

ual banks, and that certainly since it is
their money that creates the earnings of
the Federal Reserve System, a certain
part of their profits should be set aside
as security to depositors. Indeed, it might
be proper for all of the net earnings of
the Federal Reserve System, after sur
plus and other statutory provisions are
met, to be turned into the depositors’
protective fund, and for member banks
to forego dividends on their stock as
their contribution or tax to the fund,
since their own dividends to their respec-

Central Western Banker, February, 1933

tive shareholders are made possible by
the use of the depositors’ money. They,
along with the depositors and borrowers,
should have a hand in building the guar
anty fund.
Three Beneficiaries; Three Insurers

Those who are not and cannot become
members of the Federal Reserve System,
and who wish the protection of the guar
anty system, should likewise be required
to contribute to the guaranty fund a sum
equal to that which member banks would
be contributing by reason of waiving
their right of dividend on their Federal
Reserve stock. There are three benefi
ciaries or parties at interest in banking,
namely, the depositor, the borrower and
the stockholder. T h e responsibilities and
benefits to all are well known, and all
three should be required to provide the
guaranty fund. A ny direct tax or assess
ment against individual banks w ill not
work for the reason that some banks
would not have the earnings to pay any
tax or assessment levy, and, therefore,
such a plan would create a discrimina
tion between the strong and profitable
banks and the weak and unprofitable.
Eliminating Discriminations

A ny guaranty law that will protect
the depositors of one bank to the detri
ment of another is unworkable and

for the protection of their money as they
are now paying for insurance or other
protection. A Federal hanking commis
sion could be created to direct the guar
anty system and likewise act as a liq
uidating body, and should be clothed
with certain powers of examination and
control necessary to sound bank manage
ment. T h e President is unquestionably
correct in his statement that wide-spread
banking reforms are a national necessity,
and, when enacted, will undoubtedly
remedy many of the weaknesses and in
justices of our present system.
Improper competition between banks
has no doubt been one of the contribut
ing causes that has brought about so
many failures. It is manifestly unfair to
prefer or secure one depositor over an
other, arid it is my belief that all deposi
tors should stand alike as to any protec
tion or risk, whether it be the govern
ment or subdivision, business or individ
uals. I, therefore, believe that no deposi
tor should be secured by surety bond or
otherwise.
Establ ishi ng Uni formity

T h e interest rate on time deposits
should be uniform so that it could not be
used as a vehicle of competition. There
should be no interest on demand depos
its. M oney invested at interest in any

and that no dividends should be paid by
any bank until its surplus equals onefourth of its capital; that the maximum
dividend, where surplus equals onefourth and less than one-half, should be
fixed at six per cent; when the surplus
equals one-half of capital that the divi
dend rate should be fixed at eight per
cen t; and that when surplus equals capi
tal, dividend rate should be discretionary
so long as its surplus remains at not less
than its paid-in capital stock. This pro
vision is also embodied in the Steagall
Bill.
Arriving at Assessment

A n estimate of the percentage of loss
sustained by depositors in the past and
what may be reasonable to expect from
banks now in liquidation could no doubt
be ascertained. From this an idea of the
amount necessary to create a guaranty
fund that would offer at least a satisfactory guaranty to depositors, could be es
timated.
T here are approximately 20,000 banks
in the United States having deposits of
$35,000,000,000 to $40,000,000,000, and
probably with loans of at least threefourths as much. So, if a tax of one-half
of one per cent were exacted, it would
create an annual fund of $350,000,000
which could be annually increased by the
earnings of the Federal Reserve System.

"\\ a guarantee insurance plan could be formulated that would leave the government, state and the banks
out of the picture entirely, insofar as their assumption of loss is concerned, it would I believe, provide
the protection to depositors and answer the guarantee problem. The depositing public would as willingly
pay a tax for the protection of their money as they are now paying for insurance or other protection/
w holly unsound, but if the depositors
and borrowers themselves in every bank
were contributing by a Federal bank in
surance tax, there would be no discrim
ination between the large and strong
banks and the small and weak banks, for
they would be on the same basis, and
the small banks would, through their
depositors and borrowers, be providing
their proper share of the guaranty fund.
If a guaranty insurance plan could be
formulated that would leave the govern
ment, state and the banks out of the pic
ture entirely, insofar as their assumption
of loss is concerned, excepting the sug
gestion regarding dividends on Federal
Reserve stock and a like tax or assess
ment on non-members, it would, I be
lieve, provide the protection to deposi
tors and answer the guaranty problem.
T h e depositing public would, in my
judgment, as willingly pay such a tax

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Federal Reserve Bank of St. Louis

form, whether bank deposit or other
wise, should be for a given period, and
I think that a uniform practice by stat
ute, permitting banks to pay a maximum
interest rate on time deposits only, would
be a just and wise move. A provision in
the Steagall Bill, now pending in C on
gress, fixes a maximum rate of interest
on any deposit at four per cent.
M any suspended banks would no
doubt be in business today had they been
satisfied with the payment of reasonable
dividends. I believe the dividends to
stockholders in banks should be regulat
ed by law for the purpose of strengthen
ing their capital structure for the benefit
of depositors and the stabilization of the
value of bank stock. T h e rise and fall of
the market value of bank stock has been
one of the cause of bank rumors and gos
sip. I believe the dividends to stockhold
ers in banks should be regulated by law,

T o this could be added a tax against
non-members equal to any dividend pay
able to member banks. T he rate of onehalf of one per cent is, of course, used
here merely as an example. Perhaps onefourth or one-eighth of one per cent
would be sufficient.
No Resistance

Let us assume, for example, that the
average deposit in banks is $1,000; if
the depositor were required to pay onehalf of one per cent insurance premium,
it would cost him for this protection $5
per annum, or 41 cents per month. W h at
depositor in any bank today would not
be willing to pay such a tax?
Let bankers now remove from their
minds any prejudice they may have had
regarding a guaranty of deposits, and sit
down to some clear thinking about a
sane, sound and workable plan for the
protection of depositors.

Central Western Banker, February, 1933

THE T A X BURDEN—
A n Obstacle To Recovery
T H I N K it is correct to say that
among railway men today will be
found a very earnest desire to help
the railroads to find solutions to their
problems. W e have been through a great
depression, but we are now on the road
to recovery. W e are going forward on
it all the time, and each step we take
brings us that much nearer the goal we
all want to reach. T h e greatest obstacle
of all, along the road to recovery, is ex
cessive taxation. I am sure I will be par
doned if I illustrate this point by turning
to my own business, which is that of
railroading.

T h e railroads of this country pay ap
proximately one million dollars a day in
taxes. It took the net revenue of more
than 75,000 miles of railroad for the
whole of 1931 to pay the 1931 taxes of
the railroads of the country. In the first
six months of 1932, the railroads worked
104 days for the tax collectors and only
79 days for their owners. T here are lit
erally hundreds of counties, school dis
tricts and other taxing units throughout
the United States where the railroads
pay more than one-half of all the taxes
that are collected by those units.
A Heavy Hand

It is not because of the effect of taxes
upon the railroads alone, however, that
I invite attention to this obstacle on the
road to recovery. Taxation lays its heavy
hand upon every one of us. It reaches
into every worker’s pay envelope. It
takes something out of every landlord’s
rent check. It adds to the cost of our
raw materials and our finished products
and to the cost of transporting them. It
makes our letters cost more, our gasoline
cost more, our food and fuel and cloth
ing cost more. It intrudes, directly or in
directly, into every business transaction.
It makes every one of us work one day
out of every five, not for ourselves or for
our famdies or for the business in which
we are engaged, but for our various gov
ernments.
Taxation is not a new problem, al
though it has grown and is still growing
in size and importance. W e have devot
ed much time and effort to it in the past.
In the past, however, our primary em~

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Federal Reserve Bank of St. Louis

By L. A. DO W N S
President
Illinois Central System

phasis has been upon eliminating inequal
ities of taxation. O u r attitude seemed to
be that, so long as the burden of taxa
tion was distributed equitably among us,
we did not care very much how heavy
the burden. There are still many glaring
inequalities of taxation that need to be
straightened out, but we also require an
understanding of our mutual interest in
the reduction of all taxes.
One thing we need very much to real
ize, of course, is that the burden of gov
ernment is something which we have put
upon ourselves. N o longer are taxes ex
acted from us by some authority higher
than ourselves. For approximately a cen
tury and a half, we have been governing
ourselves and taxing ourselves, and the
load of governmental expense and taxa
tion that has grown so burdensome is of
our own making. Taxes are high because
we have let them come to be high, and
they are going to be reduced in direct

In discussing the tax burden, Mr.
Downs states that the railroads of
this country pay taxes of approxi
mately a million dollars a day, and
declares there is no reason why
government costs should not be
reduced just as they are being cut
in every privatejenterprise.

of government. A ll these and many other
things are more or less properly regarded
as essential, and payment for them can
not be avoided, even if it does add— in
some cases greatly— to our burden of
taxes.
I do not mean to say that we should
condone waste and extravagance in these
necessary expenditures. W e all have had
to economize greatly in our respective
fields of endeavor, and I think we are
entirely within our rights in demanding
that the spenders of our tax money ex
ercise comparable economy in expendi
tures for even the necessities of govern
ment. Again I turn to my own business
for illustration. O u r economizing has
not been a case of what we have wanted
to d o ; it has been a case of what we
have had to do. W e have had to reduce
purchases, consolidate and eliminate de
partments and divisions, take off trains,
close stations and do a thousand and one
other unpleasant things to reduce our
outgo and to bring it within reasonable
distance of our income. Necessity is a
hard taskmaster, and we all have felt its
lash in the last three years. If we have
overlooked anything, it is in failing to
demand as sternly as we ought that the
spenders of our tax money go as far as
we have had to go in economizing, even
in necessary expenditures.
T he path to tax reduction, of course,
is through reduction of governmental expenditures. As a step toward tax reduc
tion, I suggest that governmental expen
ditures be grouped into these three
classes.
Three Classes

ratio to the effort which we are willing
to put into having them reduced.
Many Expenses Legitimate

W e also must realize that many of
the governmental expenses which cause
taxation are for legitimate and necessary
projects. W e cannot very well get along
without an army and a navy for national
defense. W e need an adequate police
force and a fully equipped and fully
manned fire department for local pro
tection of our homes, lives and proper
ty. Public education has come to be ac
cepted as a natural and proper function

hirst, I would list the expenditures
that are absolutely essential. In this class
fall the expenses of the primary func
tions of government— the cost of operat
ing the executive, legislative and judicial
branches; the protection of life and prop
erty, national defense and activities of
similar nature which are of direct or in
direct benefit to every member of our
population.
Second, 1 would list the expenditures
that are non-essential but at least rela
tively harmless. In this class fall those
governmental activities which have de-

Central Western Banker, February, 1933

10
veloped in more or less recent years at
the demand of organized minorities with
the tacit consent or agreement of the
public generally.
T hird, I would list those activities of
government and those expenditures of
tax money which, under the guise of
helping one portion of our population,
serve principally to hurt others and to
increase the burden upon all the taxpay
ers.

As I have said before, I believe we
should demand the exercise of utmost
economy even in the most necessary of
governmental functions. T ru e economy
does not mean, necessarily, going with
out, but it does mean the avoidance of
waste, the elimination of every kind of
extravagance and the receipt of a dollar
of honest value for every dollar spent.
These principles should be our guide in
all expenditures of tax money.

Guaranty Trust Company
of New York
140 Broadway
LONDON

PARIS

CO ND EN SED

BRUSSELS

LIVERPOOL

H AARE

ANTWERP

ST A T E M E N T , D ECEM BER 31, 1932

RESOURCES
Cash on Hand, in Federal Reserve Bank,
and due from Ranks and Bankers
U. S. Government Bonds and Certificates
Public S e c u r it ie s .....................................
Stock of the Federal Reserve Bank
Other S e c u r i t i e s .....................................
Loans and Bills Purchased . . .
Real Estate Bonds and Mortgages .
Items in Transit with Foreign Blanche
Credit Granted on Acceptances . .
Bank B u i l d i n g s .....................................
Accrued Interest and Accounts Receivable

197,891,874.27
527,071,010.31
79,865,101.22
7,800,000.00
24,953,391.87
456,157,496.34
2,391,701.10
7,972,124.51
85,968,777.36
14,322,480.02
6,393,017.22

$1,410,786,974.22

L IAB IL IT IES
C a p i t a l ....................................................... * 90,000,000.00
Surplus F u n d ...........................................
170,000,000 00
Undivided P r o f i t s .....................................
11,233,494.33
$
Accrued Interest, Miscellaneous Accounts
Payable, Reserve for Taxes, etc.....................................
:

Acceptances
...................................................................
Liability as Endorser on Acceptances and
„
.
t>•1
1
. . .
Foreign B i l l s ...................................................................
Agreements to Repurchase Securities Sold . . . .
D e p o s i t s .................................................*1,018,987,670.00
Outstanding C h e c k s .........................
19,810,547.54

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Federal Reserve Bank of St. Louis

271,233,494.33
_
6,512,828.82
85,968,777.36
139,16o.OO
8,154,4.) . 7
1,088,778 ,917.o4

$1,410,786,974.22

As to the second classification, I think
the time has come to revise our thinking
as to what constitutes the proper func
tions of government. In the past, we
seem to have been guided largely by the
principle that we should have the gov
ernment do for us everything that it can
do approximately as well as private en
terprise can do. I propose that we should
have the government do nothing for us
which private enterprise possibly can do.
As to the third classification— those
expenditures which, in the guise of help
ing a portion of our population, hurt
other portions and lay a heavy hand
upon all taxpayers— it would be imposs
ible for me to express myself as strongly
as I feel. Every citizen who is engaged
in a lawful and honorable enterprise has
a right to expect and demand that he be
given an opportunity to conduct it with
a minimum of governmental interference.
If I speak with some emphasis upon
this phase of the subject, it is because, as
a railroad man, I come up against this
very thing. T he railroads have suffered
as no other industry has suffered from
the misdirected efforts of government in
the field of regulation and interference
with the operation of natural laws. I
take no narrow view of other forms of
transportation. I think there is a place in
a rounded national system of transpor
tation for water carriers, road carriers
and air carriers, as well as rail carriers.
However, I do feel very strongly that,
in order to find their respective places,
it is necessary that all forms of transpor
tation be required to stand on their own
feet, that they be regulated alike, and
that subsidies in every form be with
drawn from their support.
Against favoritism in government, the
railroads have resolutely set themselves
and pledged their earnest efforts, and I
am proud to say that they have the sup
port of the great majority of business
men. It is not a selfish fight that the rail
roads are making, notwithstanding the
fact that they are fighting for their very
existence. It is a fight that concerns every
business man as a user of railroad trans
portation. It is a fight for fundamental
principles of government that are sound
to the core.
T h e road to recovery may be a long
one, and it may be a hard one, but it w ill
be smoothed and our progress along it
will be hastened to the extent that we
remove the obstacles of excessive taxa
tion and useless governmental expendi
tures,— From Executives Service Bulle
tin,

Central Western Banker, February, 1933

W HY NOT
Federal Regulation of Water Ways?
T

H E D E V E L O P M E N T by C on
gress of a policy of sound national
transportation enabling the rail
roads to compete equitably with the
waterways and, eventually, to handle
water-borne traffic was urged as a major
step towards solving the country’s traffic
problem by M ilton W . Harrison, presi
dent of the Security Owners Association,
in a recent address before the N ew Y ork
Railroad Club,
Pending the working out of this plan,
M r. Harrison emphasized the impor
tance of placing the waterways system
under strict regulation by the Federal
government similar to the control now
exercised by the Interstate Commerce
Commission over the rail carriers. This
he said was the second step necessary to
remove discrimination caused by such
unfair practices among water carriers as
rebating and rate cutting, evils respons
ible nearly fifty years ago for the wave
of protest which brought about drastic
railroad regulation.
New Policy

T h e new transportation policy urged
by the speaker included :
L Cessation of waterway development.
2. Inauguaration of a system of tolls, or
ton-mile taxation, on waterways.
3. Regulation of all water carriers un
der the supervision of the Interstate
Commerce Commission.
4. Repeal of provisions prohibiting rail
roads from engaging in water trans
portation, and
5. Discontinuance of operations of the
Inland W aterways Corporation.
These recommendations were supple
mented by a proposal to discontinue un
profitable transportation services by
water at rates claimed by the investors’
spokesman to be low er than actual cost

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Owners of railroad bonds favor railroads engaging in
shipping service as step towards sound
national transportation

the expense of which places added bur
den upon the taxpayers.
Am plifying his recommendations for a
national transportation policy, M r. H ar
rison continued :
“ I do not mean that expenditures
should cease upon the Great Lakes and
other natural waterways, which are an
economic asset to the nation. I do not
mean that expenditures on harbor im
provements should cease. Harbors are
essential to foreign commerce and the
distribution of our surplus products. I
do not mean that expenditures for flood
control should be curtailed. I mean, how
ever, that we should cease the wasteful
and expensive experiment of enriching
shippers at public expense by creating
and maintaining artificial waterways,
and encouraging traffic to move over
them by imposing insurmountable re
strictions upon the railroads. T h e elim
ination of such items from public expen
ditures seems particularly imperative at
this time when national credit is stagger
ing under the burden of an unbalanced
budget. T h e Shipstead - Mansfield bill,
proposing a bond issue of a half billion
dollars, or any other attempt of a sim
ilar nature to increase the bonded debt
o f the nation for waterway purposes,
must be defeated.
“ It is economically unsound that the
railroads should be required to build,
maintain and pay taxes upon rights-ofway while similar facilities are donated,
tax-free and toll-free, to inland water
carriers. W e have the waterways, we
cannot destroy them nor can we ever
expect that they w ill be self-supporting.

W e can, however, institute a series of
reasonable charges for the use of public
property which will help to offset the ex
penditures now charged to the taxpayer.
Every attempt to force the water car
riers to pay a share of the cost of the fa
cilities which they use is met with the
retort that it has always been a policy of
Congress to subsidize a new and grow
ing agency of transportation.
False Comparison

“ T h e reference is, of course, to the
land grants and monetary subsidies giv
en by Federal, State and local govern
ments towards early railway construc
tion. N o comparison could be more er
roneous or misleading. T h e government
was and still is economically benefited
from its assistance to the railroads. Prior
to the extension of the rail lines into the
W est, government lands were quoted at
a dollar and a quarter an acre, with no
buyers. T h e advent of the railroad cre
ated a demand for the lands and raised
the price far beyond what could other
wise have been realized. In addition, in
return for their subsidies, the railroads
agreed in perpetuity to transport govern
ment troops and mail at reduced rates, a
service they are performing with a sav
ing of millions of dollars a year to the
government.
“ Regulation was imposed upon the
rail carriers at a time when they possess
ed a monopoly of the transportation fa
cilities of the country. It was imposed to
correct a condition and not for the pur
pose merely of singling out the railroads
from other forms of transportation. Is it

Central Western Banker, February, 1933

12
therefore not logical that regulation
should be extended over other transpor
tation agencies as they arise, including
the waterways? Lack of regulation
means unstable rate conditions with de
structive rate wars. It means discrimina
tion between shippers and rebating. A ll
of these elements are present in water
transportation. Exhaustion of their re
sources through prolonged rate wars has
caused the intercostal carriers to view
with acquiescence, if not outright favor,
the prospect of government regulation
of their rates. T h ey should be regulated,

SA LM O N P. C H A SE -

and the regulation extended to inland
water carriers.
“ Assuming that inland waterways are
necessary from the standpoint of na
tional defense, why should the railroads
be prohibited from employing this facili
ty where they find coordination econom
ic? W aterw ay proponents will reply that
in former years railways bought up
water lines for the purpose of junking
them and should not again be permitted
to engage in water transportation. A
railroad today cannot abandon a mile of
its trackage without the specific authori

Sec reta ry o f th e ‘T r e a s u r y u n d e r L I N C O L N

THE

C hase N

atio n al

B ank

o f the City o f üfejw York

W in t h r o p W . A ldrich
Chairman Governing Board and President

C h a r l e s S. M c C a i n

Jo h n M cH u g h

Chairman
Board of Directors

Chairman
Executive Committee

T h e Cnase N ation al Bank invites the
a c c o u n ts of ban ks, ban k ers, firm s,

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Federal Reserve Bank of St. Louis

corporation s and individuals.

ty of the Commission, after a hearing
and finding by that body that the public
interest no longer requires its operation.
Such authority could readily be extended
to railroad-owned water lines.
Competition

“ T h e ideal form of competition is not
a competition between different agencies
of transportation, but a competition be
tween strong national transportation
systems embracing all agencies. T h e rail
roads should not only be permitted to go
into water and other fields of transpor
tation, supplementing the services to
their own, but should be forced to do so.
O ut of transportation coordination will
come keener competition and more effi
cient service for the shipper, as well as
strong and stable transportation credit
and financial structures. T h e provision
of the Panama Canal A ct prohibiting
railroads from owning water lines should
be repealed.
“ It is an economic anomaly that this
government, founded upon the principle
of private enterprise and initiative,
should operate the Inland Waterways
Corporation in competition with its cit
izens. T h e Corporation was formed with
the assurance that its operations were de
signed merely to test the practicability of
water transportation, and would ulti
mately be sold to private interests. Eight
years of operation by the Corporation
should be a sufficient test. If it has not
established itself on a basis which will
warrant the investment o f private capi
tal it should be abandoned.”
M r. Harrison said that our viewpoint
upon the waterway problem must be that
of “ enlightened national self-interest,
without regard to the selfish interests of
any particular group. W e must under
stand that lower rates on artificial
waterways are being secured only at the
expense of higher transportation costs,
and at the risk of lowering the standard
of national transportation by crippling
the railroads. W ater transportation per
forms a useful function and has a very
definite place in our economic system
when utilized in its proper sphere. I do
say, however, do away with subsidies.
D o away with favoritism. Let each
agency pay its own way, stand upon its
own feet, and let the victory rest with
that which produces the most efficient
service at lowest cost.”
Regulation Needed

Urging equable regulation of water
ways and railroads, he continued: “ If it
is sound public policy that the railroads
be regulated why is it not also sound

Central Western Banker, February, 1933

public policy that water carriers be sim
ilarly regulated ? Prior to the extension
of regulation to the rail lines, transpor
tation was in a chaotic state. Rate wars
depleted the revenues of the carriers. Se
cret rebates were granted to large ship
pers and it was difficult for a shipper to
determine exactly what his position was
in relation to his competitor. Strictly en
forced regulation corrected these abuses
so far as the rail lines were concerned.
T h e rise of water transportation has cre
ated a similar condition without that in
dustry. Uniform regulation of water car
riers is essential to the stabilization of
that industry as well as the transporta
tion industry as a whole. Intercostal car
riers have accepted this fact as is reflect
ed by current proposed legislation which,
with the support of such carriers, is de
signed to bring rates under the authority
of the shipping board and end the ex
haustive rate wars which have so deplet
ed the revenues of the carriers.
“ Inland waterways, on the other hand,
have utilized to the full their advantage
as unregulated agencies. T hey have
fought any proposal of regulation and at
the same time have fought every effort

the traffic, nor is there equal opportunity
for the railroads to compete with the
water routes for this traffic. “ T h e unreg
ulated barges carrying sugar from N ew
Orleans have not been adhering to the
usual basis of rates of 80 per cent of the
all-rail rate. From N ew Y ork the unreg
ulated canal and lake carriers have been
handling sugar at rates ranging between
22 cents and 2 7 l/ 2 cents per hundred
pounds, against rail rates of 55 cents a
hundred pounds.
“ T h e railroads have not yet been re
placed as the axis around which our na

OUR
WILL

MAILED

tional commerce revolves. T hey are as
essential to the well-being of the nation
as they were at the turn of the century
and must remain indispensable at least
for many years to come. It is folly for
our government to undertake from pub
lic funds to subsidize a route for compe
titors which must, if successful, impair
the ability of the railroads to perform
their task with proper efficiency, yet if
the large proportion of the freight car
ried on the waterway represents diver
sion from the railroads, what other re
sult can there be?

OFFERING

LIST

REGULARLY

G M A C

UPON

REQUEST

N otes

are a standard medium for short term in
"\l is economically unsound that
the railroads should be required
to build, maintain and pay taxes
upon rights-of-way while similar
facilities are donated, tax-free and
toll free, to inland water carriers/7

of the rail carriers to break through the
wall of regulation with which they are
surrounded, and preserve their traffic
through the medium of lowered rates.
Under no necessity to accept all traffic
offered to them, they have concentrated
upon those commodities which are most
adapted to their special requirements.
T hey oppose every effort of the rail car
riers to retain to themselves some portion
of this choice traffic and seek to surround
themselves with an impregnable monop
oly, leaving the rail carriers to subsist
as best they may on the traffic which
the water carriers do not choose to han
dle.”
Kates Differ

I he inroads of water competition
upon railroads in the Mississippi Valley
were illustrated by the sugar traffic, of
which the rail carriers handle less than
one-tenth of the tonnage. M r. Harrison
contended that this is not a fair share of

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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 s titu tio n s and th ou sa n d s o f banks.
available in convenient maturities and
denominations at current discount rates

G eneral M
A

cceptance
O F F I C E S

otors

C o r p o r a t io n

P R I N C I P A L

CITIES

Executive Office - B r o a d w a y a t 5 7 t h S t r e e t - N ew T or\ City

C A PIT A L A ND SURPLUS

SEVENTY M ILLION DOLLARS

Central Western Banker, February, 1933

J N S U R A N C E ^
Application to the b a n k in g Fraternityc

PRESENT C O N D IT IO N S —
A H andicap or A Help To The
Life Underwriter?
I

W hen these facts are brought to the
attention of the under-insured man, is it
surprising that he wants to increase his
life insurance?

N M A N Y respects the life insurance
salesman is in a much more fortun
ate position than other members of
the selling fraternity'. T rue, he suffers
from the same handicap that they do—
the reluctance of the public to spend.
But equally true, he enjoys many ad
vantages which they do n o t; advantages
which have been created by the same fac
tors that produced his handicap; ad
vantages, which if properly exploited
will go far to offset this handicap. These
advantages are the new reasons for buy1
ing life insurance and tbe added strength
which have been given to the old argu
ments for life insurance by events of the
past few years.

By W IL L IA M B. B A IL E Y
Economist
Travelers Insurance Company

ployment would appear to be a handicap
rather than a sales argument. It is true
that unemployment has reduced the
number of those who are able to buy life
insurance; but it has also made those
who are employed more anxious for this
protection.
H o w has it done this?
Suppose a man drops out o f the pic
ture today with little or no life insur
ance, what does he leave? Any security
holdings which he had are likely to have
shrunk to a third or a fifth of what they

W h at are some of these new reasons?
T h e increased federal estate tax is one
of them.
As you know, the recent increase in
federal estate taxes has greatly increased’
the tax liability of many wealthy men,
and has increased the number of men
whose estates would be liable to heavy
taxation. T hus the man who has previ
ously bought life insurance to cover his
inheritance taxes now needs more. And
many a man who previously considered
his estate to be exempt from such taxes
is now included in the group which needs
life insurance for this purpose.
Increased income taxes is another rea
son. This applies particularly to the pur
chase of Single Premium policies. A u
thorities on income taxes hold that it is
possible for the wealthy man to reduce
his taxable income by investing a part of
his capital in a single premium policy.
A Strong Argument

Strange as it may seem, unemployment
is proving to be a strong argument for
life insurance. A t first thought, unem
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Federal Reserve Bank of St. Louis

"The need for Life Insurance has
grown until it is safe to say that
never before in the history of our
country has that need been greater
than it is today."
were worth in 1928. If he was a home
owner, it is quite probable that the mort
gage overshadows his equity and little, if
any, cash would remain if the home were
sold. As for the possibility of his wife
getting a job, that is out of the question.
Neither are there likely to be any rela
tives in a position to add a w idow and a
couple of children to their obligations at
this time. In former years, charity could
be considered as the very last resort, but
today charities are so overburdened in
their attempts to care for the needs of
the thousands who are thrown on them
through no fault of their own, that they
would not warmly welcome the depend
ents of a man who might easily have
made proper provisions for their care.

Replaces Shrinkage

Thousands of men who considered
themselves above the need for life insur
ance in 1928 or 1929, are now discover
ing that it offers the quickest and most
certain way of replacing the shrinkage in
income from their security holdings, on
which they had previously depended to
take care of their families in case of their
death and themselves after retirement.
T h e high-salaried man or the successful
professional man no longer high-hats the
life insurance salesman. T hey have dis
covered that few men ever become so
big that they no longer need the help
which life insurance can give them.
T h e continued decline in security
prices during the past three years have
been a distinct handicap to most sales
men. It has made it harder to sell auto
mobiles, homes and most other things. I
w on’t say it has made it easier to sell
life insurance, but it has not handicapped
the life insurance salesman anywhere
nearly as much as it has the salesman in
other lines of business. It has created a
demand for new forms of life insurance.
It has made prospects out of people who
were not interested in life insurance four
years ago.
H o w many Single Premium Life and
Annuity policies were you in the habit of
selling during the boom years? T oday,
Single Premium and Annuity premiums
constitute close to 50 per cent of the first
year premium income of some of our
largest life companies.
D uring the past year many people
who are living on invested capital have
found their income insufficient to meet
their needs, and have resorted to the dan
gerous expedient of “ dipping into the
box’ ’— that is the selling of securities to
piece out their income.

Central Western Banker, February, 1933

T his is a very risky thing to do, be
cause it isn’t the non-dividend paying is
sues which are sold under such circum
stances. T h ey w ouldn’t bring enough to
justify selling. It is the cream of the box,
the high-grade dividend payers that are
still selling at prices high enough to real
ize an appreciable sum. Every time a few
of these shares are sold, the investment
income is reduced by the amount of the
dividends they would pay. T his reduc
tion in income forces another and larger
resort to the box which in turn again
reduces the income. A fter a while, every
thing worth selling has been sold, and
the investment income has dried up en
tirely. If any elderly investor is forced
by circumstances to dip into his capital
to augment his income, there is only one
safe procedure to follow . T hat is to buy
an Annuity. T his increases his income by
utilizing a part of his principal; but it
assures him an income which cannot be
outlived.
Annuities

Some insurance men have regarded
the recent rising popularity of Annuities
as merely a depression phenomenon— as
a flight of scared dollars into one of the
safest investments known.. Unquestion
ably some people have invested in Annui
ties because they were afraid of other
investments. But there are other factors
which lend weight to the belief that the
present growing popularity of Annuities
is not a mere wave created by current
business conditions, but the start of a
definite tide which is likely to continue
to run in this direction for years to come.
D uring the last fifteen years or more,
it has usually been possible to secure an
interest return of at least five per cent
with a high degree of safety. T his meant
that the man who wanted to assure him
self a retirement income of $2,000 a
year could do so by accumulating a fund
of $40,000. If, however, interest rates
should drop to the levels prevailing in
England and H olland before the W a r,
it would take about $60,000 to produce
a similar income. O n the other hand, a
man in his sixties can assure himself a
life income of $2,000 by investing about
$20,000 in an Annuity. Sixty thousand
is a large sum for a man to save during
his working years; twenty thousand is
much more within his means. For this
reason, if the present trend toward dis
tinctly lower interest rates continues,
many men and women will be forced to
employ an Annuity to provide a com fort
able retirement income, because it will
be impossible for them to accumulate

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enough during their lifetimes to provide
a comfortable income on a straight, safe,
interest return. It was this factor which
forced the English and Dutch investors
to turn to Annuities during the years
prior to the W a r. T here is no reason to
believe that a similar pressure would not
exert the same results under similar con
ditions over here.
Need Is Great

As the value of securities and real es
tate has shrunk and as the opportunities
for finding employment have narrowed,
the need for life insurance has grown un
til it is safe to say that never before in
the history of our country has that need
been greater than it is today. A feeling
of uncertainty pervades the atmosphere.
M any of the old landmarks have been
washed away by the series of terrific
storms through which we have been
traveling. H owever, there is one tower
ing landmark which has not budged an
inch amidst the stress and turmoil. It has
stood as firm and solid as the continent
itself. It is life insurance and it has been
a tremendous source of com fort to mil
lions of men by assuring them that here
is something solid against which either
they or their families can lean at a time
when other values seem ephemeral.

Hold
Annual Meetings
Annual meetings of several of the
nearly tw o dozen insurance companies

which have their home offices in Lincoln
were held recently. Heads of the com
panies commenting on the business for
the year find that they have weathered
the storm of economic conditions in
much better condition than many other
corporations, and all of them are opti
mistic of the future. V ery few changes
were made in the official staffs.
Bankers Life Insurance company dur
ing the past year sold $9,715,559 worth
of insurance, bringing the total amount
in force up to $935,917,913. Policy loans
were $10,444,348, an increase of $1,214,380.
Assets increased $426,121, making a
total of $41,706,408, while lapses were
$19,837,371, an increase of $6,152,227.
M ortality was 40.41, an increase of
1.65. There were no changes in officers.
Regarding the outlook for the coming
year, H . S. W ilson, president, said: “ It
is difficult to predict what the future
will bring. I decided long ago that I was
no longer qualified as a prophet.” Re
garding that the middle west depends
upon farm prices, he said the future
hinged largely upon the fate of the farm
er.
Service L ife company has $15,022,145 insurance in force, and wrote $1,603,000 during the year just closed. A s
sets of the company are $2,570,365. T h e
outlook for 1933 is considered rather
good. M ore policies lapsed in 1932 than
in the average year and many more loans
were made on policies. T h e mortality
rate was slightly higher.

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Central Western Banker, February, 1933
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Nebraska Annual Meetings
A T T H E A N N U A L meeting of the
officers and directors of the First N a
tional Bank of Albion no change was
made in the personnel of the organiza
tion.
James Fox was re-elected president;
F. M . W eitzel, vice president; F. J.
Fox, cashier; and C. E. Krause and J.
P. Fox, assistant cashiers. T he directors
are H . H . Funru, Norman W . Peters,
G uy M . Peters, Herman Gunther and
A . G . Mansfield.
T H E A N N U A L meeting of the
stockholders of the City National Bank
of Crete was held at the banking rooms.
A ll of the old officers and directors were
re-elected, namely: John Rothmuller,
president; Ralph D . Brown, vice presi
dent; F. A . Novak, cashier; E. C. Plouzek, assistant cashier; Clark Weckbach,
assistant cashier; G . E. Feavitt, F. J.
Marcelino, Herbert G . Smith and Ella
C. Weckbach, directors.
THE
A N N U A L meeting of the
stockholders and directors of the Farm
ers State Bank of Douglas was held at
the bank recently. T hey were well sat
isfied with the report of the year’s busi
ness. A ll of the officers were re-elected
to the same positions. T hey are S. A.
W alker, president; J. C. Farrell, vice
president; M . W . Dunlap, cashier; and
Charles Jenkins and J. E. M cG inley to
act with the other three officers on the
board of directors.
THE
S T O C K H O L D E R S of the
First National Bank of Grand Island
met in annual session, approximately sev
enty-five per cent of the stock was rep

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resented. A fter a resume of the bank’s
progress during the year, and a decision
on the part of the shareholders to con
tinue in their recommendation and ap
proval to the directors and management
of the bank’s policy of constructive con
servatism, the follow ing directors were
re-elected: Messrs. Emil W olbach, E. J.
W olbach, J. L. Cleary, V . E. Evans,
Oscar Refiners, I. R. Alter and F. J.
Cleary.

T H E A N N U A L meeting of stock
holders of the Hastings National Bank
elected to the board H oward Pratt,
Stephen Swigle, C. E. Byers, O . A . Riley, Bert M ott and R. R. Vance. T he
board then convened and made the fo l
lowing elections: M r. Pratt, president,
O . A . Riley and R. R. Vance, vice-pres
idents. T hey also elected Ivan C. Riley,
cashier, and Charles Deets and H . E.
Nelson, assistants.
A t the meeting of the stockholders of
the Nebraska National Bank, Hastings,
one new man was placed on the board.
Ralph Bryant was elected to fill the
vacancy left by the death of C. E. Staley,
who also acted as cashier. T h e board
elected L. J. Siekmann, president, and
J. H . Lohmann, vice-president and cash
ier. Other members of the board are D r.
A . A . Smith, W . J. Rinder, W . H .
Brach, and J. T . Oder. T hey elected E.
Alberts and M rs. Carrie A . Stone as
sistant cashiers.

THE
S T O C K H O L D E R S of the
First National Bank of Leigh held their
annual meeting and transacted business
relative to the close of the year. T he
present board of directors was re-elected,

they being Thomas M ortimer, Julius
Zastera, Gustave Hahn, Christ W iegert
and J. H . M oeller. T he officers selected
w ere: Thomas Mortimer, president; J.
H . M oeller, vice-president and cashier;
Julius Zastera, assistant cashier; George
C. Kumpf, assistant cashier and Harry
W . Hahn, assistant cashier.

ANNUAL
M E E T I N G of stock
holders and directors of the Bank of
Lorton was held recently. Directors of
the bank are C. H. Damme, Fred M a r
ket, Herman Wellensiek, M ike Heng
and W illiam Poehler. Officers are S. H .
Damme, president; Fred Markel, vice
president; C. Steffens, cashier.

AT T H E A N N U A L meeting of the
First National Bank of M inden, all of
the officers of the institution were re
elected. Calvin S. Rogers is president;
Dr. H . Hapeman, vice-president; E. C.
Tidvall, cashier, and D . R. Nichol, as
sistant cashier. These with M r. Emil
Anderson, state representative, and M r.
J. L. M cPheely, local attorney, consti
tute the board of directors.

A N D R E W C. H O V E was elected
cashier of the M inden Exchange N a
tional Bank at the annual meeting of the
stockholders, succeeding M rs. Thomas
M cQ uillan, who is retiring from active
participation in the bank’s business.
A ll of the other officers were re-elect
ed. F. R. Kingsley is president; H . A .
Gaarde, vice president, and F. R. Kings
ley, H . A . Gaarde, Thomas Cavanaugh,
H . S. Kingsley and A . C. Hove, direc
tors.

Central Western Banker, February, 1933

O F F IC E R S in the Otoe County N a
tional Bank, Nebraska City, remain the
same as last year, W . H . Pitzer, presi
dent; Henry Meyer, vice president;
John D . Stocker, cashier, and Harvey
Teten, assistant cashier.
A directors’ meeting was held to elect
officers. A t the stockholders meeting all
directors were re-elected.
S L I G H T C H A N G E S in official po
sitions were made at the annual election
of directors held by all Omaha and
South Omaha banks with the result that
some new faces appear in the directorate
of some of the institutions.
F. J. M cCauley, cashier of the Pack
ers’ National Bank of South Omaha,
was elected a director of the institution.
H e succeeds Chauncy Abbott, Jr. Other
directors and all officers were re-elected.
"I he Stock Yards National Bank ad
journed after its meeting to reconvene
after the return of Ford E. Hovey, pres
ident, now in W ashington. T here were
no changes. N o official changes were re
ported by the Live Stock National.
Stockholders of the United States N a
tional Bank, at the annual meeting,
elected John W . Hughes a director to
succeed the late Edward M . Martin,
and named M ilton F. Barlow assistant
cashier. Barlow is the son of the late M .
T . Barlow, for many years president and
chairman of the board of the bank. There
were no other changes.
M r. Hughes is vice president and a
director of the Guarantee M utual Life
company, of which M r. M artin, whom
he succeeds on the Eh S. National Bank
board, was vice president and counsel.
Son of the late W . H . S. Hughes, he
was associated with an Omaha bank be
fore entering the insurance business.
F. C. Horacek, president of the Union
State Bank, reported no changes.
W illard B. M illard, Jr., was elected
a director of the Omaha National Bank
at the annual meeting of that institution.
H e entered the service of the bank in
1924 and became a vice president in
1928 after having served as assistant
cashier. H e is a grandson of the late Sen
ator Joseph H . M illard, president of
the bank for almost 40 years. A ll offi
cers and other directors were re-elected.
J. F. M cD erm ott, who a year ago
was made a vice president of the First
National Bank, was elected a director.
His election increases the board to eight
members. H e was assistant cashier of
the bank before he became vice presi
dent. A ll officers and other directors
were re-elected.

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17
ATI 4 H E A N N U A L meeting of the
stockholders and directors of the First
National Bank of O ’ Neill, the follow ing
were elected as directors: J. F. Gallag
her, J. P. M ann, H . J. Birmingham,
Edward M . Gallagher and Ed T .
Campbell. T1 he follow ing were elected
officers for the ensuing year: president,
J. F. Gallagher; vice presidents, H . J.
Birmingham and Edward M . G allag
her; cashier, Ed T . Cam pbell; assistant
cashier, Helen Biglin.
ATI 4 H E A N N U A L meeting of the
First National Bank of O rd, the same
officers and directors were re-elected.
Frank Koupal continues as chairman of
the board, Joseph P.* Barta as president,
U P. O ’Neal and James M isko as vice
presidents, James Petska, Jr., as cashier
and Horace Travis as assistant cashier.
T H E S T O C K H O L D E R S of the
hirst National Bank of Tekamah met
recently in their first meeting since the
consolidation of that institution and the
Farmers State Bank a few months ago.
T h e stockholders expressed confidence in
the present officials of the institution by
ie-electing them to govern the destiny of
the institution for the follow ing year.
T he present board of directors was
also re-elected. T hey are : Clyde Grothe,
Orville Chatt and bred Morehouse. T he
officers are headed by Robert I. Stout,
president; E. C. Houston, and D . W .
Greenleaf,
vice
presidents;
H.
J.
W ragge, cashier.

T H E F IR S 4" N A 4 H O N A L Bank
of W isner held its annual business meet
ing and elected the follow ing officers:
M . E. Schrieber, president; Henry
Schurman, vice president; N . D . Saville,
cashier; M . E. Schrieber, Henry Schurmann, N . J. H ill, Herman Clatinhoff,
John Sieman and Gus Albers, board of
directors.
A 4 T H E A N N L fA L meeting of the
stockholders of the First National Bank
of W ahoo, the follow ing officers were
re-elected: E. E. Placek, president; L .
J. Kudrna, vice president; Ernest Han
son, cashier; James L. Kudrna, assistant
cashier. T h e directors include: E. E.
Placek, E. E. G ood, Paul F. Good, H .
Reader, E. S. Schiefelbein, R. F. M cCreery, Ernest Hanson, L. J. Kudrna
and Ed Lehmkuhl.
J. G . H ohl was re-elected president
of the W ah oo State Bank at the annual
meeting. E. G . Risk, vice president;
Howxird M ielenz, cashier; O . G . Hohl,
assistant cashier. Directors include J. G .
Hohl, E. G . Risk, H ow ard M ielenz, M .
A . Phelps, W . T . Pickett, A. Havel
and D r. J. F. Lauvetz.

Heads Lincoln Chamber
Stanley M aly has been elected presi
dent of the Lincoln chamber of com
merce for the coming year.
M r. M aly, vice president of the First
National Bank, moved to Lincoln from
Cedar Rapids, Neb., in 1920 and was
president of the City National Bank

Condensed Statement, December 31, 1932
RESOURCES

Loans and Discounts _______ $2,537,964.79
Bonds and Securities______ ....
75,764.52
U. S. Bonds to Secure Cir
culation -------200,000.00
U. S. Government Securities.
760,552.13
Stock in Federal Reserve Bank
16,500.00
Banking House .........
52,000.00
Furniture and Fixtures______
None
Other Real Estate ___
1.00
Due from U. S. Treasury___
10,000.00
Cash and Sight Exchange___ 1,284,712.89

LIA B IL IT IE S
Capital --------------------------$ 450,000.00
Surplus -----------------100,000.00
Undivided Profits, N et______
64,441.70
Unearned Discount ......
25,624.91
Reserved for Taxes, Interest,
etc. ______
25,639.01
Dividend payable Jan. 3. 1933
6,750.00
Circulation ------- ...
200,000.00
Deposits ____
4,065,039.71

$4,937,495.33

/ his Bank Has N O Affiliated Companies
M em b er of Federal Reserve Syste?n and Omaha Clearing H o use Ass n

L IV E STOCK N A T IO N A L B A N K
OMAHA

Central Western Banker, February, 1933

18
prior to its consolidation with the First
National. He has been a vice president
of the chamber for the past two years
and served as senior adviser to the junior
division during the past two years. He
is a Spanish American W a r veteran, a
member of the Lions club, the Lincoln
Country club, Scottish Rite, a Shriner,
is married and has three children. H e
succeeds A . C. Lau as president.

Spalding Banker Dead
John H . Sullivan, president of the
Spalding City Bank, died at his home in
Spalding early in December, 1932. Aged
eighty-two years, M r. Sullivan passed
away from a heart attack.
M r. Sullivan was the founder of the
Spalding City Bank in 1902, and was

sicians said heart disease was the cause
of death. T h e doors to the garage were
open.
T h e body was discovered when M rs.
Frerichs telephoned to the bank to in
quire about his coming home for lunch.
H e had not been well for some time. His
w idow and two daughters, Charlotte
and Theodora, survive.

County Meeting
T h e Buffalo County Bankers Associa
tion met at Kearney recently for the an
nual dinner and business meeting. L. J.
Hallas, of Shelton, was elected president
for the new year, and Robert W oodru ff,
o f Gibbon, secretary.
N o prepared program was given. F ol
lowing the banquet, the association mem
bers discussed generally proposed bank
ing laws, now under consideration by
the legislature.

Making Loans
T h e Omaha office of the Regional A g
ricultural Credit corporation is paying
out between $300,000 and $350,000
each day in loans, M anager C. C. Kuning said recently. M any of the loans are
of the small “ barnyard” type. T h e office
has not yet started to make seed or crop
production advances.
T h e 120 employes of the corporation
are on double shift because of the heavy
volume of work. One shift works until
5 :30 p . m ., and another comes on at 6
p . M . and works until 11 p . m .

Vice President
G uy C. Kiddoo, formerly vice presi
dent of the Omaha National Bank, was
advanced to a vice presidency in the
First National Bank of Chicago at the
stockholders’ meeting.
M r. Kiddoo went to Chicago with
W alter W . Head in the Foreman-State
National Bank, which was absorbed by
the First National. A t the time of ab
sorption, only one vice president of the
Foreman was taken into the First N a
tional as a vice president.

Two Banking Bills
Banking legislation designed to permit
insolvent banks to do a limited banking
business under state supervision and to
relieve pressure upon debtors has been
introduced in both branches of the N e
braska legislature.
T h e bills, presented as proposals of
the banking committees of the two cham
bers were worked out by the committees
after consulting officers of the state bank
ing department.
T h e plan proposes to authorize agree
ments between a bank and its depositors,
subject to the approval of the state trade
and commerce department, by which the
bank can receive deposits and pay checks
and do a limited banking business.
Eighty-five per cent of the unsecured
deposits and unsecured creditors of a
bank would have to sign the agreement
with the bank and it would be binding
on all.

Brinkman Retires
Charles F. Brinkman, 68, assistant
vice-president of the United States N a
tional Bank, Omaha, was retired on a
pension the first of the year after 25
years of service. H e began with the bank
in 1907 as assistant manager of the cred
it department after a number of years
with R. D . Dun & Co., at Sioux City
and Omaha.
M r. Brinkman plans to devote more
time to his hobby— gardening.

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Joh n H . Sull iva n

Cut Rates
its active president up to the time of his
death. H e was a pioneer of Nebraska,
coming to Greeley County in 1878.
D r. M . M . Sullivan, son of the late
John H . Sullivan, has been elected pres
ident o f the Spalding City bank to suc
ceed his father. Miss Hannah Sullivan,
daughter of the late president, was nam
ed vice president.

Lower Interest Rates
Interest rates paid on savings deposits
in all Lincoln banks have been reduced
from 3 per cent to 2 y 2 per cent, officials
of the Lincoln Clearing House associa
tion announced. T h e new rate went into
effect January 1. General conditions
which have resulted in lowering the in
terest rate everywhere on savings depos
its account for the change, it was stated.

Banker Dies
R. F. Frerichs, president of the First
State Bank of Sterling, was found dead
in the garage at his home recently. Phy

T w o of the six national banks in
Omaha have reduced the interest rate
paid on savings accounts to 2 per cent,
and the other four have reduced the rate
to 2 j5 per cent. T h e former rate was 3
per cent. T h e change took effect Janu
ary 1.
One of the reasons assigned is the
lower rate of return to the banks on in
vestments, particularly government se
curities. N o change in rate was reported
by the state institutions.

W ins Prize
Gilbert L. M cA llister, a bookkeeper
at the U . S. National Bank, Omaha,
took first honors in the Burroughs add
ing machine contest for speed and ac
curacy held in the Burroughs’ offices
under auspices of the Omaha chapter,
American Institute of Banking.
Twenty-one
contestants
from
11
banks in Omaha and Council Bluffs
competed. Edward J. Kosowski, of the
Stock Yards National Bank, was second,

Central Western Banker, February, 1933

and Miss Alice Robinson of the Omaha
National Bank, was third. Prizes were
$15, $10, and $5, respectively.

(iiiiiiiiiiiiiimiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiimiiiiimiiiiiiiiiiiiiiiiiiiiiiitiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiitiiiiiiiimim

iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiimiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiimmiiiiiiiiiiiiiiiiii

Heads “ Y ” Drive
T h e Omaha Y .M .C .A . current main
tenance campaign w ill be held from Feb
ruary 20 to M arch 1, with Alvin E.
Johnson, vice-president of the Live Stock
National Bank, as general chairman.
M r. Johnson, as president of the
Y .M .C .A . board of directors, has played
a prominent part in “ Y ” activities dur
ing the past year, and has served in sev
eral recent “ Y ” financial campaigns. H e
was chairman of the South Omaha divi
sion in the past Community Chest cam
paign, this division exceeding its quota
by a large margin. M r. Johnson also
served for two years as chairman of the
Omaha Baptist community canvass.

Omaha Deposits
T h e 10 Omaha banks, at the close of
business December 31, showed total de
posits of $75,773,537 and total loans of
$33,051,836, according to figures of a
national bank call.
Deposits were $77,527,789 and loans
$36,905,850 at the time of the previous
statement, September 30. T here were
$85,144,675 in deposits and $42,185,104
in loans on December 31, 1931.
A t a recent meeting of the Fourth
Regional Clearing House Association
held at Steinauer, Nebraska, the follow
ing officers were elected for the coming
year: L . C. Farwell, president, D u Bois;
A . R. Kovanda, vice president, Elk
Creek; W illiam H . Hynek, secretarytreasurer, Humboldt.
Executive committee: L . P. W orth ,
Falls C ity ; F. M . Steinauer, Steinauer;
O tto H . Struve, Sterling, and E. C.
Yont, Brock.

N O C H A N G E S were made in the
directors or officers of any of the Bould
er banks at the elections. F ollow ing is
the list:
National State Bank: C. G . Bucking
ham, president; Frank T yler, vice presi
dent; L . W . Cumberford, vice presi
dent; Henry M . Sayre, cashier; C. E.
Burr, assistant cashier; A . W . Border,
assistant cashier.
Directors : C. G . Buckingham, chair
man of the board; Frank T yler, L. W .
Cumberford, C. E. Buckingham, D . E.
M cA llister, Henry M . Sayre.
First National Bank: H . P. Gamble,
chairman; Charles H . Cheney, presi
dent; Lewis C. Allison, cashier; J. H .
Gibson, assistant cashier; Donald M c ln nes, assistant cashier.
D irectors: H . P. Gamble, Charles H .
Cheney, F. H . Eastman, Frank Hiskey,
C. J. M axw ell, Lewis C. Allison.
Boulder National Bank: F. W . Kohl
er, president; D . I. Hutchinson, vice
president; Charles G . W alton, cashier
and trust officer; H . M . W illiam s, as
sistant cashier; John F. Burke, assist
ant cashier.
Directors: F. W . Kohler, Louis H er
man, C. G . W alton, Dudley I. H utch
inson, H . M . W illiam s, C. E. Kohler.
Mercantile Bank and T rust C o .: Ira

M . D eLong, president ; R. W . Joslyn,
vice president and cashier; W . E. Gragg,
assistant cashier.
Directors : C. Flint Smith, A . E. C ol
lins, R. W . Joslyn, Ira M . D eLong, M .
C. Goss, J. W . Valentine, Charlotte H .
Downer.
T H E A N N U A L M E E T I N G of
the stockholders of the First National
Bank of Cedaredge was held in the
banking rooms on Tuesday, January 10.
Directors for the ensuing year were
elected as fo llo w s: L. C. Bolton, E. E.
Bull, B. F. Shelledy, E. J. Ginter, H .
W . Bull, B. F. Hirt, and P. K . Yonge.
Officers elected for the coming year
w e re : L. C. Bolton, president; E. J.
Ginter, vice president; P. K. Yonge,
cashier.
IN T H E R E G U L A R annual meet
ing of the officials and directors of the
American State Bank, Granada, the
same officials and board were re-elected
for the ensuing fiscal year.
T h e officials are E. F. Page, presi
dent; M arion H . Durham, vice-presi
dent; H . E. M cKeever, cashier. T h e di
rectors are A . S. Lee, Joe Mesick, M .
H . Durham, E. F. Page and H . E.
M cKeever.
T H E A N N U A L meeting of the
stockholders and directors of the Bank
of Burlington was held at the offices of
the bank. T h e same officers and directors
were elected for another year and are as

ACTION!
T

Heads Civic Project
Reorganization of the Omaha Sym
phony orchestra, for a season of three
more concerts this year, and under man
agement separate from the board which
has controlled the orchestra in the past,
has been announced.

IKE to get things done quickly
L . . efficiently? Our experienced
staff plus complete banking facili
ties enables us to give you such
service as your correspondent in
Lincoln.

Rudolph Ganz, who scored a triumph
when the orchestra played at the O rpheum December 16 at a benefit concert,
has been signed up as conductor.
T h e new organization w ill be called
the Civic Orchestra Society of Omaha,
and W . Dale Clark has been elected
president.

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Federal Reserve Bank of St. Louis

Continental National Bank
LINCOLN, N E B R A S K A

20
follow s: George D . Tubbs, president;
E. L. W einandt, vice president; H . W .
Gleason, cashier. D irectors: George D .
Tubbs, E. L, W einandt, H . W . G lea
son, George W . Foster, John S. Boggs.
S T O C K H O L D E R S of the Colorado
Savings & T rust Company and those of
the La Junta State Bank held their an
nual elections of directors.
A t the T rust company all the old
directors were re-elected as follow s: W .
A . Hart, Charles E. Sabin, V . N. Lagerquist, Frances M . Rourke, E. G .
W oodbridge and J. H . M acdonald.
Officers were also re-elected as fo l
lows :
President, W . S. M o rris o n ; vicepresidents, W . A . Hart and E. G .
W ood brid ge; cashier, J. H . M acdon
ald.
A t the La Junta State Bank, all the
old directors were also re-elected as fo l
low s: John Richert, J. N. Lamb, W .
M . Rickman, W alter A . Schertz and
R. N. Mason, Sr. T h e officers w ill re
main as follow s: President, John Rich
ert; vice president, J. N. L am b; assist
ant cashier, Hattie Dodds.
D I R E C T O R S of the Fort Collins
National Bank were re-elected at the
meeting of the stockholders, including E.
R. Baker, R. Breniman, J. S. Elder, J.
J. Harding, J. M . Hoffman, I. C. Rid
dle and G . A . W ebb.
S T O C K H O L D E R S of the First N a
tional Bank of Florence met at the bank
recently for the annual meeting.
A ll directors were re-elected by the
stockholders. T h e directors of the bank
are W . L . M orris, R. W . M orris, R ob
ert S. Gast, M ahlon Everhart, George
W ilson, O w en Price, J. V . McCandless
and E. F. Jack.
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T H E E L L IS State Bank stockhold
ers met in the bank recently. A ll direc
tors were re-elected. T hey are J. W .
and R. A . Nicholson, F. I. M errill, H .
E. Henchey, A . W . Meserve and L. S.
Johnson. Officers are J. W . Nicholson,
president; R. A . Nicholson, first vicepresident ; F. I. M errill, second vicepresident ; L . S. Johnson, cashier; and E.
J. Zerfas, assistant cashier.

Central Western Banker, February, 1933

burg were re-elected and J. F. Klaner
was added as a director at the annual
meeting of the stockholders of the insti
tution. T h e personnel of the board is the
follow in g: E. V . Lanyon, president; C.
F. Spencer, vice president; C. O . Davis,
vice president; Edgar C. W ebber, cash
ier; T . F. Cole, Lavon Lanyon, John
Blair and M r. Klaner.
T H E A N N U A L stockholders meet
ing of the National Bank of Commerce,
W ellington, was held recently and all
officers for the ensuing year were re
elected as follows :
E. B. Roser, president; H. F. Harbaugh, vice president; George E. Harbaugh, cashier; M rs. Roxie M . Ratekin,
assistant cashier. Directors : E. B. Roser,
H . F. Harbaugh, George E. Harbaugh,
Oscar L. D eT u rk , Dan M . Ratekin and
W . H. Cortelyou.
THE
S T O C K H O L D E R S of the
First National Bank of Hoisington held
their annual meeting recently. T h e fo l
lowing were elected to the board for the
year 1933: C. P. Munns, chairman; R.
C. Russell, M . W . Bennett, W . M .
T indall, A . H . Reif and W . L. Beetz.
T h e follow ing officers were elected:
C. P. Munns, president; R. C. Russell,
vice president; M . W . Bennett, cashier,
and M . V . Johnson, assistant cashier.
T H E A N N U A L meeting of the
Cedar Point State Bank took place re
cently. Earl James was elected cashier;
W . P. Dwelle, assistant cashier; J. W .
Cope, president; and W . R. Sayre, vicepresident.
Directors are J. B. Griffith, G . H .
G rim w ood, Earl James, W . P. Dwelle,
J. W . Cope, and W . R. Sayre.
T H E P E O P L E S State Bank at Elmdale held their annual meeting and elec
tion of officers recently.
Directors elected were Edward T hu rs
ton, L. B. Breese, Dick Fox, George T .
Dawson, George T . Drummond, Fred
Smethers, P. C. Jeffrey, and F. W . Jef
frey.
Officers are Edward Thurston, presi
dent and cashier; L. B. Breese, vicepresident; P. C. Jeffrey, secretary, and
M iss Florence W ilson, bookkeeper.
T H E A N N U A L meeting of the
Strong City State Bank was held recent
ly.

S E V E N M E M B E R S of the board of
directors for the National Bank of Pitts

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Federal Reserve Bank of St. Louis

Officers elected were Dudley D oolit
tle, president; 1. E. Stout, vice-presi

dent; W . W . Austin, secretary; John
Lewis, cashier, and Hugh Campbell, as
sistant cashier.
T h e seven directors are E. B. W h it
ney, Hugh Campbell, Dudley Doolittle,
Henry W iebrecht, W . W . Austin, John
Lewis, and J. E. Stout.
T H E F I R S T N A T I O N A L Bank
of Columbus held its annual stockhold
ers meeting and elected the follow ing di
rectors: F. C. Hainer, M rs. H . A . LaRue, M rs. Leona W . LaRue, Robert
H . LaRue, F. W . Boss.
T h e only change was the election of
F. W . Boss to fill the vacancy caused by
the death of A . H . Skidmore.
C H E S T E R V . M O R R IS , who has
been assistant cashier of the Citizens N a
tional Bank, Emporia, since 1930, was
made assistant vice president at the re
cent meeting of the directors. Other o f
ficers elected were M . A . Limbocker,
president; J. S. Langley, vice president;
E. H . Rees, vice president; E. V . W ood ,
cashier; E. K. Lord, assistant cashier;
R. H . Jaquith, assistant cashier.
T H E A N N U A L meeting of the di
rectors of the Goodland State Bank was
held recently, and two of the active
members of the bank’s staff were ad
vanced. W . L . Bunten, who has been
cashier, was elected a vice-president, and
L. L. M cH on e, who has been assistant
cashier, was promoted to cashier.
A L L O F F IC E R S and members of
the board of directors of the Galena N a
tional Bank were re-elected at the an
nual meeting of bank stockholders.
Officers re-elected are J. K. W ingert
of Joplin, president; Albert Schmidt,
vice president; R. A . Coles, cashier; and
T . O . M oeller, assistant cashier.
A L L D I R E C T O R S of the Hutchin
son State Bank were re-elected. T hey
are as fo llo w s :
E. E. Bloom, W ill H . Shears, A .
Dade, C. M . W illiam s, H . G . W elsh,
A . C. Hedrick, Garrett Sallee, Frank
Jackson, R. E. D illon and E. Carey, Jr.
A T T H E A N N U A L election of the
Farmers National Bank of Abilene the
follow ing officers were re-elected to
serve during the ensuing year: C. W .
T aylor, president; W . C. Grigg, vicepresident; M . C. Gugler, cashier; and
D . W . Gugler, assistant cashier.
T h e follow ing directors were re-elect-

Central Western Banker, February, 1933

ed : A . L. Duckwall, C. W . T aylor, W .
C. Grigg, E. M . Shockey, G . W . M inick, H . W . Rohrer and M . C. Gugler.
O F F IC E R S A N D directors of the
Lawrence National Bank for 1933 were
chosen at the annual meeting held at the
bank building.
T h e officers and directors who served
during 1932 were all re-elected. T hey
are as fo llo w s:
Irving H ill, president; I. J. Meade,
vice-president; J. D . Bowersock, vicepresident; George W . Kuhne, cashier;
W . A . Schaal, assistant cashier; W . E.
Decker, assistant cashier; A . D . Kolterman, assistant cashier; F. W . H osford,
trust officer.
Directors: E. W . Barteldes, A . W .
Berger, G . G . Clevenger, W . S. M e t
calf, G . R. Schultz, F. H . Smithmeyer,
W . H . Varnum, and A . D . W eaver.

21
Directors of the First National Bank
are: O . B. T aylor, Jr., M . B. Ham il
ton, A. J. Schilling, H ow ard Gordon,
T . T . Reyburn, chairman; Paul B.
Johnson, V . A . Cain and W . A. Lam
bert.
Officers re-elected w ere: O . B. T a y
lor, jr., president; M . B. Hamilton, vicepresident; A . J. Schilling, vice-presi
dent ; Howard Gordon, cashier.
Directors re-elected at the Leaven
worth National Bank were: Byron S.
Harvey, Om ar Abernathy, Samuel H .
W ilson, H . R. W illson, Eugene D .
Lysle, W . T . H ewitt, Harvey B. G oodjohn, S. C. Parker, and F. E. Carroll.
T h e name of I. B. Parmelee was added
to the list of directors as a newly elected
director.
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A L L O F F IC E R S and directors of
both the First National and Union N a
tional Banks, Manhattan, were re-elect
ed. Directors were chosen in the annual
meetings, after which the boards met
to elect officers. T h ey a re:
Union National Bank— Directors, S.
A . Bardwell, C. D . M iddleton, D r. J.
D . Colt, Sr., L. R. Eakin, H . W . A llman, J. W . Cordts, C. E. Floersch, and
H . W . Brew er; president, M r. Floersch;
vice-president, M r. M id d leton ; cashieiy
M r. C ordts; assistant cashiers, R. C.
Barr, W . B. Glenn, T . J. Ragland and
M . L. Hill.
First National Bank— Directors, Fred
I. Boone, E. A . W harton, H arry P.
Wareham, j . C. Ewing, W . H . Chap
pell, B. L . Fdrich, P. G . Dalton, and
W . D . W o m e r; president, M r. W o m e r;
vice-president, A ir. D a lton ; cashier, M r.
E w in g ; assistant cashiers, M . S. Spencer,
J. T . Ryan, W . E. Good, R. D . W om er
and Lawrence Dufva.
B O T H J U N C T I O N C I T Y banks
re-elected officers and directors who have
held office for the past year at the an
nual stockholders’ meetings. Thom as B.
Kennedy continues as president of the
First National Bank. A. D . Jellison was
re-elected chairman of the board and
H . W . Jacobs president of the Central
National Bank.

O F F IC E R S O F the First National
Bank of Laramie were re-elected in the
annual meeting of the institution.
John A . Guthrie was re-elected presi
dent and A . C. Jones and George J.
Forbes, vice-presidents. Other directors
are John W . H ay of Rock Springs, H .
C. Prahl and Jesse Converse of Laramie.
H . R. Butler was again named cash
ier and T . H . Therkildsen, A . W . Jones
and S. S. W allace assistant cashiers.
A L L O F F IC E R S and directors of
two Sheridan banks were re-elected at
annual meetings.
Officers and directors of the First N a
tional Bank were re-elected. T hey are R.
H . W alsh, president; Edward S. M oore,
vice president; W illiam C. Henderson,
vice president; D . C. M eyer, cashier;
H . O . M inick, assistant cashier; E d
ward S. M oore, H . C. Stevens, M a l
colm M oncreiffe, R. H . W alsh, J. W .
W ilson, Jr., and W illiam C. Henderson,
directors.
T he Bank of Commerce re-elected

the follow in g: E. B. Allan, president;
Peter Kooi, vice president; W . E. Fair,
vice president; G uy Sturgeon, cashier;
John F. Brooder, assistant cashier; E.
E. Lonabaugh, Peter Kooi, E. B. Allan,
W . S. M etz, Levi S. Howes, A lf Diefenderfer and W . E. Fair, directors.
D I R E C T O R S and officers of Rock
Springs banks, elected at annual meet
ings, were announced recently.
M . S. Eccles was re-elected president
of the First Security Bank of Rock
Springs. Others re-elected were E. G .
Bennett and Glenn D . W ilson, vice
presidents; D . V . Archbold, cashier; and
H . T . Buor, assistant cashier.
T h e directorate includes Eccles, Ben
nett, W ilson, Archbold, C. I. Canfield,
John M rak and J. H . Brooks.
A ll officers of the Rock Springs N a
tional were re-elected.
John W . Hays was named president,
W . H . Gottsche and Robert D . M u r
phy, vice presidents; Claude Elias, cash
ier; and Frank Plemel and Albert W a lt
ers, assistant cashiers.
T H E L A N D E R State Bank held its
annual meeting in the banking rooms.
Following the report of operations by
Secretary M . A . M elson, the matter of
election o f directors was taken up, with
the re-election of the men constituting
the board last year, namely, W . J. H ag
ans, D r. W . F. Smith, George F. Earley,
Thom as Dunne and M . A . Melson. W .
J. Hagans was re-named president of the
board. T h e official group in charge of
the bank as named by the directors in
cluded W . J. Hagans, president; M . A.
M elson, vice-president and secretary;
1 homas Dunne, vice-president; Fred W .
Cornwright, cashier; Charles B. Tuller,
assistant cashier.
T h e annual meeting of the Stockgrowers’ State Bank took place in the di
rectors’ room when shareholders named
the entire board of directors as effective

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

TYPEW RITERS, ADDING MACHINES, CHECK WRITERS
LATEST MODELS AT BIG DISCOUNT
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D I R E C T O R S A N D O F F IC E R S
for the year were elected at the First
National Bank, Leavenworth, at a meet
ing of the stockholders follow ed by a
meeting of the directors.

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Federal Reserve Bank of St. Louis

ALLEN-WALES
1912 Farnam St.

THE FINEST “ H EA V Y DUTY”
ADDING MACHINE MADE

Omaha, Nebraska

Central Western Banker, February, 193 >

the previous year. These include W alter
Oswald, chairman of the board; E. J.
Farlow, E. A . Earle, Charles E. Thom as
and W . E. Hardin. A t a meeting of the
directors W alter Oswald was re-elected
president; E. J. Farlow, vice-president;
H arry H . Hime, cashier; John Souter,
assistant cashier; Ray M organ, assistant
cashier.
T h e annual meeting of the First N a
tional Bank was held in the directors'
room of the bank when all directors
were re-elected for the ensuing year, in
cluding S. Conant Parks, chairman of
the board; S. C. Parks, Jr., George F.
W estbrook, E. W . Frankenfeld and C.
E. Baldwin.

T H E A N N U A L meeting of the
W yom ing Bankers Association w ill be
held in Casper on Friday and Saturday,
September 1-2, 1933, it was announced
in Cheyenne at a meeting of the execu
tive committee of the association.
T h e committee members met at Plains
H otel and discussed other matters in re
gard to the association.
George A . Bible, president of the state
bankers, presided at the meeting. M r.
Bible is cashier of the First National
Bank in Rawlins.
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F. Raynolds, G . L . Rogers and J. E.
Cox, vice-presidents; H . L . Snyder,
cashier, and W . J. W hite, assistant cash
ier. T h e directors are J. M . Reynolds,
H . F. Raynolds, Rogers, Lloyd Sturges
and Cox.
T h e officers of the Albuquerque N a
tional T rust and Savings Bank are: Col.
George E. Breece, chairman of the
board; G . A . Kaseman, president; Fred
Luthy and Fred A . W hite, vice-presi
dent; O . M . Love, cashier; G . Giomi,
M . F. Otero and R. M . Elder, assistant
cashiers. T h e directors are Breece, Kase
man, Love, Luthy, A . L. M artin, W . C.
Reid and Fred A . W hite.
T h e officers of the First Savings Bank
and T rust Company are: J. M . Ray
nolds, president; G . L. Rogers, vicepresident ; J. E. Cox, secretary and treas
urer, and Fred K. How ell and Ira V .
Boldt, assistant secretary-treasurers. T he
directors are: Cox, Sturges, H . F. and
J. M . Raynolds and Rogers.
T H E L A S V E G A S Savings Bank has
started its forty-third year with the
same board of directors and personnel of
the forty-second year.
Directors of the bank, re-elected are:
W . G . Hayden, George A. Flemming,
A . H . Gerdeman, W . F. Kaser, L. H .
Kronig and N . Fontaine. T h e directors
renamed the present officers for the ensu
ing year: W . G . Hayden, president;
George A . Fleming, vice-president; A .
H . Gerdeman, cashier; R. R. Devine
and J. Andrew Myers, assistant cashiers.

iiitnmiimiiiiiiiiiiiiiiiiiiiiiiiiimimiiiiiiimiiiiiHiiiiiiiiiiiiiniiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiimiiiiiiiiiiiiiiiiimiiiii

A L B U Q U E R Q U E banks held their
annual stockholders’ and directors’ meet
ings, and in all cases elected the same
directors and officers for the new year.
T h e officers of the First National
Bank are: J. M . Raynolds, president; H .

A M E E T I N G of the stockholders of
the First State Bank, Taos, was held
when the former officers were re-elected
who w ere: President, D r. T . P. M a r
tin; vice president, C. R. D w ire ; cash
ier, James B. R ea d ; assistant cashier,
M anuelita Gonzales.

A T T H E S T O C K H O L D E R S meet
ing of the First National Bank of Las
Cruces, the follow ing were elected as di
rectors :
W . P. B. M cSain, A . I Kelson, E. J.
Stern, C. F. Knight, Fred S. Hess,
Frank M . Hayner, Ben T . Hall, J. F.
Earnhart and J. J. Aragon, Jr.
T he directors elected the follow ing
officers: President, A . I. K elso; active
vice president, W . P. B. M cS ain ; vice
president, F. M . H ayner; vice president,
C. F. K night; cashier, J. J. Aragon, J r.;
assistant cashier, Lester Lackey; attor
neys, H olt & Holt.
T H E A N N U A L stockholders meet
ing of the First National Bank of A rtesia was held recently. A ll former offi
cers and directors were re-elected for an
other year with the addition of one mem
ber to the board of directors. J. F. H in
kle, of Roswell, former land commission
er, succeeds E. A . Cahoon, also of Ros
well, who resigned some three months
ago because of ill health. Officers re
elected include: J. E. Robertson, presi
dent; C. E. M ann, active vice-president;
J. H . Jackson, vice-president; L . B.
Feather, cashier; W . M . Linell, assist
ant cashier; Fred Cole, assistant cashier.
J. J. H E R I N G A , chairman of the
board, and T . H . Rixey, president, were
again elected to the executive positions
of the Farmers’ and Stockmens’ Bank,
Clayton. D . W . Priestly was also re
elected vice-president of the institution.
Other re-elections include F. H . Chilcote, cashier, and Hess Beckner, assist
ant cashier.
T h e board of directors are: J. J. Heringa, chairman of board; T . H . Rixey,
D . W . Priestly, H . F. Rixey, J. H .
Rankin, Allan W y k o ff and Ed Heringa,
members.

AU STRALIA

BANK OF N E W S O U T H W A L E S
E S T A B L IS H E D

1817

(W it h w h ic h a re a m a lg a m a te d T H E W E S T E R N A U S T R A L I A N
a n d T H E A U S T R A L I A N B A N K O F C O M M E R C E L t d .)
P A I D -U P
C A P IT A L
.....................................................................................................£ s
R E S E R V E F U N D ..................................................................................................................
R E S E R V E L I A B I L I T Y O F P R O P R I E T O R S ...............................................

BANK
8 ,7 8 0 ,0 0 0
6,1 7 .0 ,0 0 0
8 ,7 8 0 ,0 0 0

£ s 2 3 ,7 1 0 ,0 0 0

Aggregate Assets 30th September, 1931, £s 90,111,427
A G E N T S — F IR S T

N A T IO N A L

BANK, OM AHA, N EBRASKA

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

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

GENERAL

M ANAGER, ALFRED

CHARLES

D A V ID S O N

LONDON OFFICE, 29 T H R E A D N E E D L E ST., E. C. 2

6 0 4 B r a n c h e s a n d A g e n c i e s in A l l A u s t r a l i a n S t a t e s , F e d e r a l T e r r i t 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 t e d T e r r i t o r y o i N e w G u i n e a a n d L o n d o n

★

T he

STATES served by

the Northwest Bancorporation
have a combined area about
equal to that of Germany,
England, France and Spain.

No r t h w e s t Ba n co r po ra tio n

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

MINNEAPOLIS, MINNESOTA
BancNorthwest Company— Investment Securities

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

Full text of Central Western Banker : February 1933, Volume 28, No. 2

FRASER