Full text of Central Western Banker : January 1932, Volume 27, No. 1

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T h e Teller Tells the W orld 4

Few Tests o f Mismanagement 5

T h e N ew Business Era 6

Cartoons o f the M onth 15

JA N U A R Y

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Federal Reserve Bank of St. Louis

The Loyalty of

OLD
FRIENDS
Frequent surveys of the source
of new business brought to
this bank reveal that it comes
from or is sent by, our friends.
More than fifty per cent of our
new customers are introduced
by our old patrons.

The loyalty of our old friends
is deeply appreciated.

W e are

thankful for their confidence
in the stability of this bank.

:irst National
Bank of Omaha
THE

DAYS O F COLD D U S T

Central Western Banker, January, 1932

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Federal Reserve Bank of St. Louis

Chicago —

5-Billion-Dollar Wholesaler
N e t sales by all types o f wholesale
establishments in Chicago, for the
twelve months covered by the 1930
Government census, amounted to
more than five billion dollars. A n d
representative establishments, in
each o f the Government’s forty-nine
classifications o f this wholesale
business, have commercial accounts
at the Continental Illinois Bank

C ontinental Illinois
BANK AND TRUST
COM PANY
C H IC AG O

Central Western Banker, January, 1932

CENTRAL WE/TERN EANRER
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 , Editor

G erald A. S n id e r , Associate Publisher
H. E. O ’ C o n n o r , Field Representative
W m . H. M aas , 1221 First National Bank Bldg., Chicago, Vice-President
F r a n k P. S y m s , 19 West 44th Street, New York, Vice-President
F r a n k S. L e w i s , 840 Lumber Exchange, Minneapolis
Subscription, 25 cents per copy; $2.00 per year. Entered as second-class matter at the Omaha postoffice.

ol.

JA N U A R Y , 1932

N umber 1

The Te lle r Te lls the W o rld
By C. W . FISH BAUGH
1 9 3 2 ~ r a year in which to beat depression. And
just as an extra help instead of the usual
365 days, there are 366 days. Another advantage
is the 1932 election, when the people can again
make their wants known. Bankers have been the
goats of 1931. Will they remain the same in
1932 ? It’s up to the bankers. Let’s g o !
¿8
3
ONE BA N K E R tells a story about three
brothers. Two of the brothers were fairly well
off. The other one was next to zero. He owed
some money at the bank and the first brother
signed the note with him. When he came in to
renew the note he asked if it would be all right
if the other brother signed with him this time.
The banker said it was all right but wanted to
know the reason. “ Well,” he said, “ John signed
the note last time, and I don’t want to seem par
tial to him, so I ’ll give Charlie a chance to sign
this time.”
«¿8
¿8
F. W. W O O L W O R T H CO. has a store on
Fifth Avenue in one of the most select locations.
Folks thought it would be a failure, that people
would be ashamed to be seen entering it. The
hrst day 45,000 people made purchases. Every
day the store opens it makes a profit.
I guess it’s true that Fifth Avenue is just
Main Street, with a few more stores.
¿8 ¿8 ¿8
T H E R E ’S A B A N K E R who received a letter
from his son who was away at college, which
said in part: “ Dear dad, I know you’re awfully
busy, but if you’re too busy to write, just sign
your name to a blank check and mail it. . . .”
<¿8 ¿8 ¿8
TH E H O LD U PS in Iowa have averaged
about one a week since June 1. Which reminds
me, have you joined your own local “ holdup-ofthe-week club” ?
¿8 ¿8 ¿8
ONE OF T H E FU N N Y incidents told about
a recent bank run was of a farmer who came
racing into town as soon as he heard there was a

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Federal Reserve Bank of St. Louis

run on the bank. He came to the window breath
less and said: “ Say, I want to pay my note, by
gosh, 1 thought I wouldn’t get here in time.”
& ¿8 «¿8
TH E U N ITED STATES BU REAU of En
graving and Printing destroys annually about
$10,000,000,000 in old paper currency. Two
methods are used, both methods of course being
thorough. In one method the paper is reduced to
pulp, in the other it is destroyed in a furnace.
Wonder what the man who throws the money
in the furnace thinks about it?
¿8 ¿8 ¿8
H OTELS have printed on their customer
checks: “ Guest check.” Oscar says that’s right:
“ Guest whether it is good or not.”
¿8 ¿8 ¿8
IT IS E STIM A TE D that the savings de
posits in this country are twice the size of our
national debt.
Looks like banks are still useful, after all.
<¿8 <¿8 ¿8
JOHN P. M EDBU RY mentions that one
bank president hired a mind reader to work in
the bank and twelve cashiers quit their jobs.
The latest report says the bank president has
quit now.
¿8 ¿8 ¿8
CAV E -IN -R O C K on the Ohio River in
Hardin County, Illinois, was the home of the first
crude counterfeiters of pioneer days. It was here
that Philip Alston in 1870 issued his spurious
five dollar gold pieces. He sold his counterfeit
products to the river pirates and boatmen who in
turn passed it on to others. Later Alston became
a common river pirate, became acquainted with a
Spanish official who took a fancy to him and
gave him a diplomatic post in Mexico.
But don’t be misled, Alston was very lucky. If
there’s one crime the Federal government goes
after in a big way, it’s counterfeiting. And they
generally get their man.
(Continued on Page 17)

Central W estcrn Banker, January, 1932

Just a Few

TESTS O F M IS M A N A G E M E N T
N TH E old and well established
large city bank we usually find
several of the personnel who have
been with banking all their lives, di
rectors and officers who know bank
ing.
Men who know business and
know the application of business to
banking and vice versa. Such men
know that in order to maintain a
sound bank they must use sound bus
iness methods. And banks thus oper
ated will stand the test of good and
bad times with but very, very few ex
ceptions. Therefore, for the present
let us assume that the old reliable
bank in some large city has been "tried
and tested and found not wanting”
mostly because of management.
In the other side of the question
let us consider the country bank. Is
it possible that some of these country
bank difficulties can be accounted for
under the heading of mismanage
ment?

W e Go Visiting
Let’s go visit some of the banks and
perhaps we will find out somthing
about what is happening on the inside.
First, we go to this medium - sized
bank in an outlying district of one of
the larger cities. Its president has had
no particular training or actual expe
rience in banking, but he had a lot of
extra money and thought it would be
nice to be known as a bank president,
so he organized a bank. He had broth
ers, nephews, nieces and cousins who
also had some money to invest, so he
let them into the leading positions in
the bank. They did not get their jobs
on account of good banking ability,
but merely because they were "in the
family.” Can a person successfully re
pair a watch merely because he hap
pens to have enough money to buy a
watch factory? The answer is NO, in
big letters, and the same is true in
banking. The type of bank we have
just been visiting probably will not
stand, for the simple reason that the
personnel in charge does N OT
K N O W BANKING.
Politics
On our next visit we find a bank in
which the leading stockholder is a
big politician, probably one who by
virtue of his office handles large
amounts of money. That makes a nice
combination, for you see if I own a

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Federal Reserve Bank of St. Louis

By JAMES JAY JONES
bank I will use it as a depository for
nearly all the funds passing through
my office. No, of course, if I am the
president or leading stockholder of
the bank I will pick out a personnel
who will be favorable to me political
ly, and in my deep desire to build up
a good political organization, I will
naturally pick politicians rather than
bankers. I and all the “ help” in the
bank will naturally give a lot of time
to politics, but that doesn’t matter
now because I am in public office,
and I ’ll see that plenty of money is
kept on hand to make smooth sailing
for the bank and everything goes well.
“ Our depositing customers are the
ones we should look after. Their
safety should be our first thought.
W e are sorry to say, however, that
our depositing public is getting
wise to some of the things which
happen in our country banks and
they are beginning to demand a
change in affairs. If we, as unit
banks, are to survive, we certainly
will have to change our w ays!”

It’s just a matter of bookkeeping and
we are getting along fine, deposits in
creasing every month,— but— O h ! Oh !
here it is election time and some one
else is elected. He takes the public
funds over to his bank and of course,
it’s a hard blow to us,— and— the bank
we have just been visiting may be in
difficulty soon. Most politicians can’t
even run politics successfully,— much
less banks.
And so on and on we go, visiting
various banks and in so many of them
we find the managing officers do not
know banking; merely running a bank
as a side line.
Now we get down to the small
bank; the one in the rural community.
The directorate is usually made up of
people in the immediate community
and how can these persons have ac
tual knowledge or experience in bank
ing? This is not intended as any un
favorable reflection on our country
bank directors, but it is, we believe,
stating facts nevertheless, so we find
most of our country directors are in
this very responsible position simply

because they happened to have the
money to buy the required amount of
stock, and not because they know
banking.
The One-Man Bank
This sort of situation usually re
solves itself into the hiring of a cash
ier who has had actual banking expe
rience and so we have what is some
times called a "one-man bank.” If this
one man has full charge, and he is a
good banker, and actually operates the
bank according to the best of his
knowledge and belief, the bank will
prosper. But supposing he does have
full charge and he is inclined to be
selfish and proceeds to operate the
bank for his own personal interests?
That will usually result unfavorably
for the bank. In many a "one - man
bank” that one man finally gets to the
place where he is running an office for
investments, real estate and insurance;
— and the bank as a side line.
Suppose this one man would lend
to anyone, regardless of whether they
were good or bad risks, merely to pay
for insurance sold by him and on
which he personally would get a nice
commission. Is that good for the bank?
Or supposing he would solicit the
bank’s best depositors to buy bonds
and securities, and retain the commis
sions for his personal use. Will the
deposits increase from such practices?
Certainly n ot! But from our observa
tions we believe these plans have been
practiced to more or less extent in
certain small banks, and the poor in
nocent, misled, non-suspecting direc
tors thought that cashier was just the
very best man they could possibly get
for the place. They finally “ woke
up” to the true situation, but t-o-o
1-a-t-e.
On the other hand this “ one man”
may be well qualified and doing his
level best in every way to have a good
bank, but if the president of some di
rector (who doesn’t know one thing
about banking) tries to tell him how
everything should be done,— well—
there’s going to be trouble sooner or
later, that’s certain.
The Gentleman Farmer
Now let’s concentrate. Get down to
business and pick out a certain bank
to visit. The Century Limited Nation
al bank of Imagination City, Illinois.
(Continued on Page 20)

Central Western Banker, January, 1932

Adjusting O urselves to
TH E

N EW

B U S IN E S S E R A

Business can operate successfully at the new and lower
price levels when once it has adjusted its operations to
them. The immediate job of every business man is to
make these a d ju s tm e n ts without unnecessary delay.
HE DECLINE in commodity
prices that has taken place since
1920 has not been especially
rapid, but the way in which it has
come about has been exceedingly dis
rupting to business. W e have had
three great price inflations in the his
tory of this country, all caused by
great wars. After the World War it
has taken wholesale prices 11 years to
drop back to their pre-war levels. It
took somewhat longer than that for
them to make the same relative de
cline after the Civil War, and not so
long for them to do it after the War
of 1812.
The important characteristic of this
price decline is not its rapidity, but
the fact that it has come in two sud
den installments, the first in 1920 and
1921, and the second in this depres
sion, with a nine year plateau of sta
bilized prices and prosperity in be
tween. The two post-war deflations of
our earlier history were not of that
sort. On those occasions the price
movements after once getting well
under way followed irregular but al
most continuous declining trends until
the bottom levels of relative stabiliza
tion were finally reached.

Wholesale Prices
During the period of the World
War wholesale prices more than
doubled. They then dropped sharply
in 1920 and 1921, and became stabil
ized at about one and one-half times
their pre-war levels. Then they moved
sideways as on a plateau at about that
same level for nine years, and then
in this depression dropped the rest of
the way down to where they started
from when the war began in 1914.
The two drops were sharp and de
cisive, but during the nine-year pla
teau in between, the price levels
seemed so stable, and so definitely es
tablished, that the peoples of all coun
tries had confidence in them.
During those nine years all otherprices became adjusted in working
relationship to those of commodities
at wholesale. Wages and salaries,
rents and the cost of living, retail
prices and family budgets, taxes and

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Federal Reserve Bank of St. Louis

By COL. L. P. AYRES
Vice President, The Cleveland Trust Co.

land values, the costs of transporta
tion, and the charges for services fur
nished by public utilities, all became
adjusted to the prevailing, and appar
ently stabilized levels of wholesale
commodity prices.
iimiiiiiiiiiiiiiiiiimi!iiiiiiiiiiiiiiiiimMiiiiiiii;miiiiiiiiiiiimiiMiimiiiiiiMimiiiiiMiiiiiiiiiiiiiiiMiiiiiimiiiiiiimi

“ Two principles appear valid as
guides in the formation of poli
cies, whether personal or corpor
ate, in 1932. The first is that op
erating budgets should be bal
anced.
This means that income
should be coaxed up, and outgo
should be pared down, at what
ever cost of thought and effort,
until the two accounts overlap and
leave at least a little margin on
the credit side. It involves call
ing a halt to the piling up debts
and making progress in paring
them down.
This policy is the
valid objective for the national
government, the state, the muni
cipality, the c o r p o r a tio n , the
church, the club and the fam ily!”
Illlllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllillllllllllllllilllllllllll

Results of Price Declines
All these working relationships are
now thrown out of adjustment. When
commodity prices fall fast and far
they cause a long series of economic
disturbances of which there are three
groups that are specially important.
The first and most far-reaching result
is that business slows down and de
pression prevails. The earliest and
most drastic declines usually appear
in the prices of raw materials, and
the countries and corporations pro
ducing them find that they can neither
operate at a profit, nor exchange their
products for manufactured goods.
This causes trade to slow down, and
unemployment to increase, and the
business paralysis spreads from the
raw material regions like South
America and Australia, to the manu
facturing countries such as Germany
and the United States, and finally to
the trading nations of which Great

Britain, the Netherlands, and Sweden
are examples.
A second important result of a gen
eral price decline is that if it lasts
long, it forces reductions in wages
and salaries. If manufactured articles
can be sold for only two-thirds or
three-quarters as much as they
brought two years ago, it is clear that
either the wages of the workers must
be reduced or the output per worker
per day must be increased, or there
must be brought about some combina
tion of lower wages and increased
efficiency. The experience of the past
indicates that lower price levels do re
sult in both lowered wages and in
creased productivity per worker, with
the advances in efficiency absorbing
most of the price shrinkage, and the
decreases in wages taking up the re
maining and smaller part of them.
Burden Increased
The third result of a general de
cline in price levels is that the burden
of all debts is increased. Farmers
readily recognize the validity of this
economic law, for among them it
operates simply and visibly. It oper
ates just as surely in the cities, but it
works more obscurely. The farmer
who had a mortgage of $2,500 on his
farm when wheat sold locally for
$2.50 a bushel could pay off his debt
with 1,000 bushels of wheat. When
the price at the farm fell to 25 cents
he could have paid off the debt, not
with 1,000 bushels, but with 10,000
bushels. The law applies everywhere.
In proportion as the levels of prices
decline, the burdens of debts increase.
The law operates against debtors
whether they be individuals, families,
corporations, municipalities or na
tions.
If commodity prices should prompt
ly regain much of their recent losses
the problems of readjustment would
largely disappear. Probably it would
be unwise for us to expect that even
a good measure of business recovery
and increased industrial production
will be accompanied by important
general advances in the average levels
of commodity prices. Such a general

Central Western Banker, January, 1932

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Federal Reserve Bank of St. Louis

Y o u r N e w Y orli.

c orrespon dent
C e n tra l H a n o v e r
d en t

N ew

Y o rk

a la r g e , m d e p e n -

L a n k w it li w o r l d

w id e c o n n e c tio n s, in c lu d in g re p re s e n
t a tiv e

o ffic e s

111

London,

B e r l i n an d B u e n o s A i r e s .

P a r is ,

I t is tlie

N e w Y o r k c o rre s p o n d e n t o f k u n d re d s
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ta n k s

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tru s t c o m p a n ies.

C e n tr a l H
B A N K

A N D

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T R U S T

C O M P A N Y

NEVYORK
NO SECURITIES FOR SALE

Central Western Banker, January, 1932

advance would have to be an inter
national advance to prove durable,
and there is little in the history of
the past to lead us to hope that a gen
eral world-wide price decline follow
ing a war inflation is likely to be
promptly followed by a world-wide
peace-time price inflation.

cline, the costs of new construction
will fall, rentals will sink, and the
worth of existing leases, mortgages,
and real-estate bonds will be affected.
If these things happen local taxes will
have to be reduced so that real prop
erty can sustain them, and we shall
face the grave social problems of re
ducing the costs of our schools, and
our police and fire departments, and
of cutting down our expenditures for
roads.
The principle that price declines in
crease debt burdens promises to play
an important part in the business de
velopments of 1932. The nations of
the world have already learned that

Our N ew Dollar
If price levels of commodity prices
remain for a considerable period
about as low as they are now, we shall
have to accept much of the shrinkage
in land values as being relatively
permanent, instead of merely tem
porary. Moreover, if prices of build
ing materials stay low and wages de

OUR
WI LL

MAI LED

OFFERI NG

LI ST

REGULARLY

G M A C

UPON

REQUEST

N otes

are a standard m edium fo r short term in"
vestment. Based o n highly liq u id assets, they
provide a sou n d instrum ent fo r the tem po"
rary em ploym en t o f surplus funds. G M A C
obligations

are

c o u n tr y w id e

dem and

for the security p ortfolios o f individuals,
i n s t i t u t i o n s a n d t h o u s a n d s o f b a n k s.
available in convenient maturities and
denominations at current discount rates

G
A

eneral

cceptance
OF F I C E S

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Federal Reserve Bank of St. Louis

otors

o r p o r a t io n

P R I N C I P A L

Executive Office - B r o a d w a y at

CAPITAL AND SURPLUS

t h

CI TI ES

Str eet - New T or\ City

SEVENTY MILLION DOLLARS

governmental debts increase in weight
when prices fall. Municipalities are
rapidly finding it out. Next year the
same realization will be forcibly borne
in upon industrial corporations having
bond issues outstanding. Organiza
tions having much city real estate
under lease, such as chain stores, the
ater chains, and gasoline distributors,
will find that new competitors will
have the advantage of lower land
rentals and smaller building costs.
Railroads and utilities will be less
seriously affected, if they can get ade
quate volumes of business, than will
manufacturers and distributors. The
railroads and utilities sell services at
rates that were previously fixed by
commissions, and which fall slowly,
and they buy commodities and carry
through construction projects at new
and lower levels of prices. If they
could get back the old volume of busi
ness, the lower price levels might
actually aid them instead of hurting
them, just as they help people receiv
ing fixed incomes as, for example,
government employes.
Looking Forward
Two principles appear valid as
guides in the formation of policies,
whether personal or corporate, in
1932. The first is that operating
budgets should be balanced. This
means that income should be coaxed
up, and outgo should be pared down,
at whatever cost of thought and ef
fort, until the two accounts overlap
and leave at least a little margin on
the credit side. It involves calling a
halt to the piling up debts, and mak
ing progress in paring them down.
This policy is the valid objective for
the national government, the state,
the municipality, the corporation, the
church, the club, and the family.
It will not do to think that we can
wait until business recovery makes
possible the adoption of this policy.
The order of events is the other way
around. Prosperity will return when
millions of individual men and women
resolutely grapple with existing con
ditions, and use them as a foundation
from which to build for the future.
Business recovery cannot be conjured
into being by the enactment of some
all-inclusive legislation. The volume
of employment will increase in pro
portion as individual business units so
re-order their affairs as to enable
them to operate at a profit. Business
can operate successfully at the new
and lower price levels when once it
has adjusted its operations to them.
The second guiding principle is that
in a time of readjustment to lowered
price levels hopes for speculative
profits should be relegated to very
subordinate positions. This applies
(Continued on Page 12)

Central Western Banker, January, 1932

O U R F O R E IG N IN V E S T M E N T S
T A TIM E when grave prob
lems of International finance are
" putting handicaps on world trade
and industry, and affecting the inter
ests of thousands of American inves
tors, it is well to consider the causes
of these difficulties, together with the
effect, and the remedial measures that
have been and are being taken. Before
the W orld War, the United States
was a debtor nation. W e owed more
money to foreign countries than they
owed us, because we had been great
ly in need of capital in order to de
velop our natural resources. England
and France at that time were the great
creditor nations. Today this country
has taken its place as the leading cred
itor nation of the world. Any nation
predominating in world trade inevit
ably become, and so long as her trade
lasts, remains a creditor nation, ft
therefore behooves us to examine the
credit of individual countries and the
general principles of international fin
ance, to more fully understand pres
ent conditions and better cope with
future conditions when the inevitable
continuance of foreign loans by Amer
ican capital takes place.
In the United States, the entire
foreign bond market has been in a
state bordering on hysteria because of
the lowering of the credit of some im
portant foreign countries. This has
brought about an extraordinary de
cline in the prices of many foreign
bonds payable in American dollars.
The investing public has failed to rec
ognize that the current prices of the
securities of many foreign nations to
day do not represent actual values.
They simply reflect the absence of any
market demand whatever for the
bonds. Just as in the commodity mar
kets, when prices fall steadily, as they
recently have done in the case of for
eign securities, the public simply does
not buy, but waits in the hope or fear
of still lower prices. The result has
been an almost total demoralization of
the United States market on many
foreign dollar bond issues.
This evening, therefore, I wish to
summarize for you the report of the
Foreign Securities Committee of the

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

By ALLAN M. POPE
President, Investment Bankers Association
of America
(Address on radio program,
Halsey, Stuart & Co., Dec. 9, and
Copyrighted by Halsey, Stuart &
Co.)

Investment Bankers Association of
America, as presented to the Board of
Governors of that Association for the
year 1931. The most important part
of this report deals with the reorgan
ization of and the new and additional
duties to be undertaken by the Insti
tute of International Finance.

llan

M. P ope

The Institute is now conducted by
the Investment Bankers Association
of America, in cooperation with New
York University and with the Com
mittee on Inter-American Relations,
which is a committee composed of
representatives of the leading Amer
ican manufacturers, power and light,
and transportation companies with
Latin - American interests, although
for the most part their individual in
terests are likewise generally interna
tional in scope. The Institute is an un
biased organization, run without prof

it, that has issued since 1926 technical
bulletins on foreign countries primar
ily for the use of bankers. Now its
governing council has been greatly ex
panded to include business men, com
mercial bankers, international lawyers
and others, as well as investment
bankers, all of whom are constantly in
touch with current developments in
foreign finance. Anyone can become
a member of the Institute, and the
bulletins are now designed to be read
by anyone and are not too technical.
The immediate undertaking of the
Institute is the dissemination to the
investing public of information re
garding countries in default and oth
ers where their credit is in question.
When this is accomplished, it is equal
ly important to inform the public on
countries of unquestioned merit. Its
recent bulletin on Chile gives the latest
information in concise, readable form.
Another bulletin on Peru is about to
be published. One on Bolivia and on
Brazil and other countries will follow.
Details regarding membership, which
entitles a person to all bulletins, and
information regarding the additional
scope of the Institute’s activities can
be obtained by application to the Di
rector, Institute of International Fin
ance, 90 Trinity Place, New York
City.
I shall now endeavor to present to
you a summary in non-technical lan
guage of the Foreign Securities Com
mittee report which explains the gen
eral principles involved in the causes
of present day international economic
conditions, their effect, and the rem
edies that have been applied.
The existing world condition is
that certain countries have had in
creasing difficulty in meeting the ob
ligations which they owe to foreign
countries or the nationals thereof, and
which are payable in the currency of
the nations to which they owe this
money. Certain common factors are
responsible for the difficulties in which
most of these affected countries have
become involved. From 1923 until
1929, the world consumption of raw
materials increased, with only a few
exceptions. This rising demand made

Central Western Banker, January, 1932

it profitable to expand production and
as increased production became still
more profitable, the trend toward fur
ther expansion continued. Manufac
turers of finished products demanded
raw materials to meet the consumer’s
demand for articles made from them.
However, in 1929 the demand for
manufactured goods gradually began
to decline, and it became evident that
all over the world there had developed
a rate of production which far ex
ceeded the natural consuming power
of the market. The manufacturer and
the consumer then began to curtail
their purchases even more heavily,
and buyers held off in the hope of still
more favorable price levels.
The net result was a rapid, drastic
reduction in raw material prices, and

a sudden decline of manufacture and
trade in general. O f course, there is
only one remedy for such a condition.
That remedy is in the eventual lim
iting of the production of raw mate
rials, which is automatically brought
about sooner or later by prices falling
below production costs. Then after a
little while, the gradual consumption
o f existing supplies of such raw mate
rials leads to a point where the fun
damental demand exceeds the remain
ing supply, and a rising scale of prices
begins at about that point.
The economic principles which I
have outlined apply to domestic quite
as much as they do to international
commerce, but there are certain other
factors which do not exist in the do
mestic economy of any nation. Bear

CORPORATE
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The issuance of the new series of Corpo
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the investment strength and stability of
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In creating the two new series, it has
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Holders of the old series may exchange
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The exchange of shares of the old series
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may determine for himself after careful
consideration whether or not he chooses
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O m aha

D e tr o it

N e w O r le a n s

in mind that any country which bor
rows from other countries, either di
rectly or through the citizens thereof,
must meet such obligations through
payment in the currency of the coun
try to which the money is owed. This
foreign currency can be obtained in
one or all of three ways: first, by sell
ing more goods to foreign countries
than are purchased from them, thus
creating a credit balance in foreign
currencies; second, by shipment of
gold; and third, by borrowing from a
foreign country or its citizens in their
own currency.
When a country’s imports exceed
its exports and the value of its intern
al currency has declined in terms of
foreign currencies, and when gold, as
a result, has been shipped abroad in
excessive amounts, the natural ten
dency is a lowering of that country’s
international credit position, and at
that point two general developments
are likely to take place.
In the first place, the citizens of a
country whose credit position has de
clined become afraid that their in
ternal currency will continue to fall
lower and lower in value. To safe
guard their own capital against such
a possibility, they try to exchange the
currency of their own country for
that of some foreign nation whose
currency is more stable.
This step
aggravates the very difficulty which
prompted it, and is commonly re
ferred to as the “ flight of capital.”
Then, second, when the credit of a
given country becomes unstable, for
eign bankers who hold credits there
naturally become alarmed, and begin
to withdraw those credits, and the
repayment of such loans requires ad
ditional foreign currency of the ship
ment of gold, which makes the situa
tion still more critical for the debtor
country.
Within recent months a number of
the leading commercial nations of the
world have faced all of these various
adverse factors in quick succession.
Naturally, they have taken or are
about to take corrective measures, and
fortunately there are several remedies
available. One of them is to stimulate
exports.
This creates foreign ex
change. Another is to curtail im
ports, either by prohibition or by in
creased tariffs. Still another is to con
fine the exportation of gold to the
payment of basic essentials, under
strict regulation. The last two meas
ures tend to conserve foreign ex
change or gold. A final, rather drastic,
step is to mobilize the foreign bal
ances, foreign currency and foreign
securities owned by private citizens
and corporations of the country ad
versely affected.

Central Western Banker, January, 1932
Most nations which engage to any
extent in international trade have
been on what is called the “ gold bas
is,” meaning that their citizens use a
national paper currency, which can
be freely exchanged for gold at a spe
cified rate, thus stabilizing the pur
chasing power o f the paper currency.
However, when the exportation of
gold from such a country takes place
in excessive amounts and corrective
measures fail to halt the difficulty, a
condition develops similar to a run on
a bank. The flight of capital takes
place, and the country may be forced
to go off the gold standard. Its paper
currency is then no longer convertible
into gold at a fixed rate, and its value
in terms of foreign currency and even
in internal purchasing power is re
duced. This is simply another word
for inflation of its currency. When a
financially strong country is only tem
porarily embarrassed, such inflation
can usually be checked before com
plete disaster occurs through utter de
valuation of the paper currency. An
instance of complete devaluation took
place in Germany in 1924 when the
mark, which had been worth about
twenty-four cents before the War,
sank so low that a dollar would buy
over four trillion marks. On the other
hand, an example of the way infla
tion has been checked and currency
stabilized occurred in France in 1926
when the franc, which before and
during the war had been worth about
nineteen cents, fell to approximately
two cents, rose to about four cents,
and was then stabilized at that point.
An international trade depression
brings about a situation in debtor
countries, illustrated by the following
symptoms and conditions. Unemploy
ment increases. If the country has had
a dole system, its public expenditures
become increasingly heavy. If the
country has an import tariff or cus
toms duty, the revenue from that
source falls off heavily as buying di
minishes, and so do its license taxes,
sales taxes and income taxes. The re
sult of all these conditions is that the
nation’s budget becomes unbalanced
and shows a deficit. This condition
may be corrected by reducing expen
ditures, increasing taxation, and bor
rowing internally and externally.
I have briefly described the various
handicaps that have recently been en
countered in certain instances by for
eign countries in meeting the obliga
tions on their external public debt in
the face of adverse trade conditions.
It is obvious, moreover, that a nation
with a treasury deficit and a depreci
ated currency automatically finds it
more expensive to pay its foreign ob
ligations out of its own depreciated

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currency. In the past, such nations
have usually taken care of their tem
porary deficits or currency deprecia
tion by borrowing abroad, but in the
past two years, the bond markets of
the principal creditor nations, which
have been the United States, England
and France, have not been receptive
to foreign loans, for a variety of rea
sons.
When a country’s available internal
currency is inadequate to buy foreign
exchange needed to pay its foreign
debt service, and when such a country
finds that it is either impossible to ex
port sufficient gold or to borrow
abroad, that country must inevitably

default upon payment of its foreign
obligations. The important point to
which I would call your attention,
however, is that a foreign country in
default nevertheless continues as a
going concern, whereas a domestic
corporation,
under such circum
stances goes into receivership and is
often liquidated or completely reor
ganized.
The recent world-wide trade dis
turbance has brought about actual de
faults on the part of only a few for
eign governments. In most such cases,
financial experts are now at work reg
ulating the application of various rem
edies, and in no case has there been

We are ready
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of stock” . T h is

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paredness

T o d a y it is reaffirming confi

sums

every

working

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the

nation-wide telephone habit.
T h e Am erican T elep h o n e and

dence in the future. It is spending
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policy of pre

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for plant additions and improve

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terruption,

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through

than

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May we send you a copy o f our
booklet “ Some Financial Facts’ ’ ?

TELEPHONE

SEC U RITIE S

CO.

195 Broadway, New York City

Inc.

Central Western Banker, January, 1932

any responsible expression o f an in
tention in any country except possibly
Russia to repudiate the foreign obli
gations which have defaulted since
the beginning of the W ar period.
While it naturally takes time to
overcome the unfavorable effects o f a
world-wide trade depression, the rem
edial steps already put under way in
countries which are in default should
surmount these difficulties more rap
idly than would otherwise be the case.
The reason for this is further evident
from the fact that the development
and maintenance of its own share of
world trade absolutely require a na
tion to keep its international credit
position sound. The necessity for re
establishing its credit by meeting ob-

ligations that have been past due is
now, to a greater extent than ever be
fore, of urgent importance to any na
tion whose foreign obligations are
now in default.
ADJUSTING O U R SE LV E S TO
THE N E W BU SINESS E R A
(Continued from Page 8)

alike to hopes for speculative gains in
land, In commodities, and in stocks. It
is not equally true of bonds. Even in
periods of rising commodity prices
stock speculation is the most laborious
form of acquisitive enterprise. When
general readjustment to lowered com
modity price levels is under way suc
cessful speculation is rendered doubly
difficult. This country is over-equipped

The January
Horoscope
People born in the first 19 days of January come
under the influence of the zodiacal sign Capricorn.
They are generally h ig h -m in d e d , exceedingly
proud, and strong of will. Men born in this period
are possessed with keen business instinct and make
ideal leaders.
Sir Isaac Newton, Gladstone, Richelieu, Alexander
Hamilton and John Hancock are famous men born
under the influence of Capricorn.
Aquarius rules over the period from January 20 to
31. Men born in this period are of an affectionate
disposition which frequently makes of them phil
anthropists and statesmen. Faithfulness to duty
and determination are other predominant qualities.
Famous men born under the influence of Aquarius
are M ozart, M cK inley, Janies G.
Blaine, Lord Byron and Francis Bacon.
The Garnet is your lucky stone. Your
birth flower is the Carnation.
The virtue of January is constancy.
1931 has gone its way. But the stars
in their age - old cycle are bringing
back improved conditions throughout
the globe. Prepare yourself for bet
ter times.

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with speculative facilities, and its peo
ple are overimbued with the specula
tive spirit, both ill-adapted to present
conditions.
Prospects for 1932
Custom sanctions attempts at this
time of the year to forecast probable
business developments of the new
year. This time it seems possible to
make such forecasts only within
closely restricted limits. This depres
sion and this business cycle are so ex
ceptional in character in so many
diverse respects as to make it quite
unsafe to assume that serious fore
casts can be made concerning such
concrete matters as the output of
automobiles, the production of steel,
the volume of new construction, and
the probable trend of security prices.
There still remain too many unsettled
situations abroad that are highly im
portant, darkly obscure, and thor
oughly unpredictable.
It does seem probable that a year
from now industrial production, rail
road loadings, and factory employ
ment will be recorded in greater vol
umes than they are at present. Gold
exports will probably be smaller,
money in circulation less, and bank
failures fewer in 1932 than this year.
Commercial failures will probably be
more numerous. Dividend payments
are likely to be less, and the cost of
living and the average earnings of in
dustrial and railroad employes lower.
Among series likely to advance may
be included brokers loans, and the
production of electric power.
Here’s one reason for selling travel
ers checks. If the customer draws out
$500 in cash it’s gone, but if he buys
$500 in travelers checks the commis
sion on the sale is equivalent to keep
ing the money an extra thirty days.
The average life of the Bank of
England notes is only 63 days, while
some of the large notes remain in cir
culation only 10 days. The reason for
this is that all notes when returned
to the Bank are kept and destroyed.
(The notes are held five years before
destroying.) The daily accumulation
of notes averages twenty pounds, in
weight. The habit of the banks to
keep records of the number of these
Bank of England notes has often
made it very unpleasant for crooks.
Favor World Court

ROYAL

UNION

LIFE

INSURANCE COMPANY
DES MOINES, IOWA
A. C. TUCKER, Chairman of the Board
J. J. SHAMBAUGH, Pres.
B. M. KIRKE, V. P. and Field M gr.
W. D. HALLER, SePy

Life and fire insurance executives
numbering approximately 150 indi
viduals, recently came out in favor of
the entrance of the United States into
the W orld Court. Edward D. Duffield, president of the Prudential,
made this announcement. Mr. Duffield is a member of the National
World Court committee.

Central Western Banker, January, 1932

INSURANCE

Us Application to The Banking Fraternitu

L ife Insurance — and Recent
IN V E S T M E N T
H A T would you do if you had
struggled throughout your life
with never more than enough
money for bare necessities, and then
suddenly came into possession of five
hundred thousand dollars?
Such an experience, like a page
from a fairy story, has actually fallen
to the lot of an Illinois inventor whose
new machine has given him unex
pected wealth. The man has just com
pleted a thorough study of money,
and his reactions are significant be
cause here is the unusual situation of
an educated and intelligent person ab
solutely free to sample the entire in
vestment field and put his funds
wherever he chooses. He is using the
whole fortune to finance ordinary life
insurance and a single payment tenyear endowment policy. lie points out
that with a wife and two daughters
he cannot afford to lose his capital be
cause he may never have another
“ windfall.” And life insurance won
his confidence over all other invest
ments, for he finds in it
Security of principal,
Stability of income,
Reasonable yield,
Perfect marketability and
Freedom from care.
In this period o f reduced capital,
new wealth like this inventor’s is met
less often than is the opposite. Invest
ment news lately has been mostly of
losses rather than of gains, because
the losers have been not only more
numerous but also more vociferous.
One of the commonest remarks
around the stock ticker today is, “ In
surance is all that most men have
left.”
Many Victims
Among the tragic victims of the
stock market are many whose suffer
ing has given them a new appraisal of
financial values. One friend of mine
was worth three hundred thousand
dollars in 1928. Just as a small hedg
ing in case the glorious “ Coolidge
prosperity” might not be perpetual, he
bought a life income policy. With the

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LESSO N S

By DWIGHT INGRAM
General Agent, Chicago, Equitable
Life o f Iowa

market crash he was forced to let it
lapse. But now a year later he has
found that the cash value will prepay
three years’ premium on thirty thou
sand dollars of ordinary life insur
ance and he has sworn to keep away
from speculation until his family pro
tection is guaranteed.
In 1928 we sometimes had to defend
our wares against rich men who
seemed to be smarter than the life in
surance companies. My partner tried

D w ig h t I ngram

Editor’s Note:
The article on
this page by Mr. Ingram, won
third prize this year in the 1931
Kirk Memorial Cup Essay Contest.

to sell our one-year endowment policy
to a wealthy client. But our claims of
safety, stability and a good interest
return of four and eight-tenths per
cent under our current scale were
swept aside, for the client was put
ting his funds into the call money
market at 12 per cent. That “ wise”
capitalist has seen his assets dwindle
from six million dollars to two million
dollars. If he had put the entire six
million into one-year endowment as

we wanted him to in 1928, he would
be worth over six million six hundred
thousand dollars today.
After being tested through eighteen
months of business depression, every
form of investment except life insur
ance has to make its apologies to the
public. The rank and file of bonds are
hardly worth seventy cents on the
dollar. Even Liberty bonds have
“ stung” their purchasers, for one
Equitable agent tells of having bought
Liberties at 103 and sold at 87. The
face value of first class bonds is cer
tain only if they are held until ma
turity; the current market price has
no such guarantee as the cash value
and benefits under a life insurance
contract.
Real Estate
Real estate, well thought of as
being profitable over a long term of
years, has been over sold in most com
munities. The market is “ frozen” and
the only value that can truly be placed
on land is a forced sale price. Public
confidence has also been shaken as re
gards real estate mortgages, though
the blame should fall on certain
abuses rather than on the fundamen
tal theory of mortgages. If you buy a
conservative mortgage on well situ
ated property and investigate the facts
personally, you almost always have a
safe investment. But so many exces
sive loans were floated during the
“ boom” years, many of which have
defaulted on interest or principal, that
the whok mortgage field has suffered
in reputation. The fact that mortgages
cannot be sold freely or used as col
lateral for loans in hard times has
made them less attractive to private
individuals.
Common stocks, having gone up
and down with the dizzy speed of a
roller coaster — and bank savings ac
counts, when so many banks have
failed recently— form a striking selfexplanatory contrast to the guaran
teed cash values and solid legal re
serves that stand behind life insur
ance contracts.

Central Western Banker, January, 1932

The emergency strength of life in
surance has stood out constantly.
How many homes have been saved
from foreclosure and how many fam
ilies fed, all because the head of the
household owned life insurance? And
how satisfying it was to us last year
when we were able to assist in getting
a policy loan for an unemployed clerk
to feed his wife and baby until he
found a new job and repaid the loan!
Through a year and a half of eco
nomic stress life insurance has
emerged as the best all-ai ound invest
ment; perfect as collateral for policy
loans, immediately marketable for its
guaranteed cash value, yielding a
good return in dividends and in
creases in reserve, while at the same
time continuing its fundamental pub
lic service of insuring future income
for wives, children, partnerships and
corporations.
Life Insurance Day

Life Insurance Day will be ob
served on Thursday, Januaiy 21,
1932, throughout the United States
and Canada in connection with Na
tional Thrift Week, which begins
with Benjamin Franklin’s birthday,
January 17th. A series of special days
during the week will be given over to
the consideration of various phases of
financial independence such as the
family budget, the making of a will,
home ownership, savings and invest
ments.
Life Insurance Day this year will
have the sponsorship and active sup
port of the Life Agency Officers As
sociation, the Canadian Life Insur
ance Officers Association and the Na
tional Association of Life Under
writers, thus giving “ the day” the
benediction of the home office execu
tives as well as the blessing of the
men and women agents in the field.
The National Life Insurance Day
committee is headed by Albert G.
Borden, second vice president of the
Equitable Life Assurance Society of

the United States, and is composed of
thirty of the familiar figures in life
insurance in the United States and
Canada.
The Life Insurance Day committee
has adopted for its slogan, “ Give
More Thought to the Life Insurance
You Now Own,” and has taken as a
central theme for its activities the
premise that “ life insurance is the
country’s most effective leverage for
prying loose ‘fear-frozen’ assets and
thereby releasing surplus funds for
timely spending.”
Molinaire’s Department W ins

In the special Reliance Life Caritas
Cup Race, a production contest staged
by the Reliance Life, the Iowa-Nebraska department, under Manager
W. B. Molinaire, won first place. The
contest is staged on the order of an
airplane race, on a country-wide hop.
The Caritas Cup Race is an annual
event with the Reliance Life and al
ways attracts a great deal of interest.
Big Bond

E. W . Snyder, Omaha agent for
the Hartford Accident & Indemnity
Co., has written a $3,315,000 bond
for the Cargill Grain Co., which
operates a large elevator at Omaha
and other storehouses in Nebraska.
The bond guarantees the payment to
persons storing their grain that they
will be paid for it. The Nebraska law
requires that these bonds be filed with
the State Railway Commission, which
supervises the operation of the grain
storage warehouse law. The bond is
the largest ever filed with it.
Files Papers

Reynolds Brothers Company of
Fremont, Nebraska, has filed articles
of incorporation giving it authority
to operate an insurance agency and a
real estate loan business. It has taken
over the business of Reynolds Broth
ers. The capital is $100,000, with
$75,000 paid in.

“ A t Age Sixty”

“ Independent at S ixty:” The chief
reason why so few men are independ
ent after a lifetime of work is that
they have neglected to follow any in
vestment program at all. Most men of
moderate income could be independ
ent at sixty if they adopted a sound
investment program fairly early in
life and then stuck to it. The years
between thirty-five and fifty are the
most productive of the average man’s
life, what bankers call the period of
financial opportunity. This time,
therefore, is clearly one of making
provision for age sixty and beyond.
The trouble is that most men at
thirty-five either procrastinate or com
promise. They provide some measure
of emergency protection for their
families with life insurance, which is
excellent, but investment of surplus
earnings is left almost entirely to
chance.
The two chief sources of invest
ment for income, from the standpoint
of the small investor, are insurance
and sound bonds. Insurance, which
has various forms, has the advantage
of protection in the event of death.
Bonds offer the greater return. Both
should be a part of the estate at sixty
if possible.— Saturday Evening Post.
W hy not displace old people’s
homes with “senior clubs” ! Now that
old age pensions are coming in, each
one will eventually be provided with
money to pay at least the cost of liv
ing and thus will have a sense of in
dependence. It should be a real club
with opportunities for all kinds of ac
tivities, and its purpose should be to
provide, not simply for a living, but
for a life. The trouble is that people
“ stop living” at a certain age, largely
because they are expected to. Pro
visions should be made for the last
years of life, so that it will not be the
wasted period that it is.
Seniors are a nuisance because so
ciety does not provide for them in
any way as it does for every other pe
riod, even middle age.— Harper’s.

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

1817

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

A U S T R A L IA N

BANK)

.......................................................................................
P A I D - U P C A P I T A L .....................................................................................................
............................................................
R E S E R V E F U N D ...........................................................................................................

7 ,5 0 0 ,0 0 0 £ s

RESERVE

7 ,5 0 0 ,0 0 0 £ s

L IA B IL IT Y

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

6 ,1 5 0 ,0 0 0 £ s

2 1 ,1 5 0 ,0 0 0 £ s

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

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

"A —

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Federal Reserve Bank of St. Louis

.....a ........................................

GENERAL M ANAGER, ALFRED

CHARLES

D A V ID S O N

LON DON OFFICE. 29 T H R E A D N E E D L E ST„ E. C. 2

T" T l w

Central Western Banker, January, 1932

Cartoons of the Month

Uncle Has a Tough Problem
— Shoemaker in the Chicago “ Da ily N e w s.”

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Federal Reserve Bank of St. Louis

Central Western Banker, January, 1932

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

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

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Talks on W ar Debts

Gwyer Yates, president of the
United States National Bank of
Omaha, believes that cancellation of
the foreign war debts as a practical
measure for the restoration of trade
would repay the United States.
Talking recently in Omaha, Mr.
Yates said:
“ The fall in commodity prices is
affecting debtor and creditor nations
alike. Every debtor nation finds that
its burden of debt, measured by com
modities, has increased by not less
than 25 per cent over the past eight
een months, and creditor nations have
had their external trade seriously re
stricted by the decline in the purchas
ing power of the foreign customers.
W e have a loss, so why not take it
and cancel the obligations?”
Mr. Yates also urged the paving
of highways by long-term bond is
sues, “ in order to employ our surplus
of cheap labor and avoid the dole.”
Heads Mortgage Bankers

Louis S. Clarke, head of the Kloke
Investment Company of Omaha, has
been elected president of the Nebras
ka Mortgage Bankers Association.
The vice-president is H. B. Reynolds
of Lincoln. Mr. Clarke succeeds J. B.
Wadsworth of Council Bluffs.
Another Dividend

Another dividend of 15 per cent to
the depositors of the failed South
Omaha State Bank, for a total of
$106,286, was scheduled for early in
January by the Nebraska department
of trade and commerce. Claims of
$708,453 against the bank have been
allowed.

president of the Hastings bank 15
years resigning to take the •Illinois
position.
Some Valuable Advice

“ How to Get Along with Your
Banker” was the subject of a talk
made by Victor B. Smith, vice-presi
dent of the Omaha National Bank, at
a dinner meeting of the Beatrice, Ne
braska, chamber of commerce re
cently.
“ More than they have known for
some time,” said Mr. Smith, “ the
bankers now know the importance of
the ability of the customer to pay his
loan when due. They also know the
significance of frozen assets — loans
which may be good in time but which
are not liquid.”
Mr. Smith discussed general busi
ness, citing instances where failing
business had been nursed back to
prosperity as the business man
learned more about his own affairs,
discovering what percentage of his
accounts are receivable and overdue,
and how far in arrears. He urged the
payment of enough salary to cover
the worth of his own services.
Eighty-Seventh Birthday

James L. Slocum, who has been
president of the Richardson County
Bank at Falls City, Nebraska, for
more than half a century, celebrated
his eighty-seventh birthday last month
by attending to his work at the bank,
as usual.
Mr. Slocum went to Richardson
County with his parents, Mr. and
Mrs. Samuel E. Slocum, 66 years
ago. He was born at Linesville,
Pennsylvania. He is an extensive land
owner and a member of the Christian
church and the Masonic lodge.
Nebraska Banker Dead

A Former Nebraska Banker

Allen R. Thompson, former presi
dent of the Nebraska National Bank
of Hastings, Nebraska, has become
second vice-president of the Illinois
State Bank, Quincy, Illinois. He was

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Federal Reserve Bank of St. Louis

Wilson S. Weston, 58, former vicepresident of the Peters Trust Com
pany of Omaha and of the Omaha
National Bank, died suddenly in his
office one afternoon in early Decem
ber. Before coming to Omaha Mr.

Weston was president of the First
National Bank of Hartington, Ne
braska, where he had lived for 30
years. He also had served a term as
president of the Nebraska Bankers
Association.
Addresses Pawnee City Meeting

Seeing a decided change for the bet
ter in general condition in Nebraska,
E. N. Van Horne, president of the
Continental National bank of Lincoln
and president of the Nebraska Bank
ers’ association, recently told members
of the fourth regional clearing house
that the bottom seems to have been
reached and that the nation as a whole
has started to climb back.
Mr. Van Horne, spoke at a meeting
of the clearing house association held
at the Park hotel in Humboldt. The
association includes all the banks of
Pawnee, Richardson, Nemaha and
Johnson counties.
In his 18 or 20 years of banking
had never seen anything like the con
ditions through which the country has
just passed. He predicted, however,
that better times are in store for the
near future as the result of better
grain prices and restoration of confi
dence. The recovery might be slow,
he said, but all indications are that the
bottom has been reached.
At the election of officers, which
followed the speeches, Frank Dafoe
of Tecumseh was elected president of
the regional association. T. R. Rich
ardson of the Bank of Lewiston was
elected a member of the executive
for Pawnee county.
Becomes President

Paul Buol has been elected by di
rectors of the Security National bank
of Randolph, Nebraska, as its presi
dent, and has accepted the responsi
bility. Mr. Buol has been connected
with the Security almost since its or
ganization some thirty-five or more
years ago. He has previously served
as president, vice president, and cash
ier, and brings to the office long years
of banking experience.

Central Western Banker, January, 1932
Hold Annual Meeting

Burt county bankers met recently
at Oakland, Nebraska, to choose o f
ficers for the coming year. W . C.
Heintzelman ,bf the First National
bank, Lyons, was elected president;
W. H. Harding, of the First National
bank, Oakland, viice president, and
Lawrence Young of the Farmers bank
of Lyons, secretary-treasurer.
Beatrice Banker Killed

Hugo W . Ahlquist, SO, Beatrice,
Nebraska, banker, died last month of
injuries received when his automobile
crashed into a concrete bridge railing
fourteen miles south of Lincoln on the
Cornhusker highway.
Mr. Ahlquist, who was vice presi
dent and cashier of the Nebraska
State bank of Beatrice, was returning
alone to Beatrice from a business trip
to Lincoln.
Makes Eastern Trip

W. Dale Clark, president of the
Omaha National bank, returned last
month from a short trip to New York
City.
Consolidation

After operating as competing insti
tutions for many years, the Farmers
State bank and the First National
bank of Bradshaw, York county, Ne
braska, have been consolidated.
Is Elected President

Due to the death of E. E. Good,
president of the Citizens State bank
at Peru, Nebraska, on November 18,
a rearrangement has taken place in
the officers of the bank. M. E. Good,
a brother, has become president, and
Mrs. Ida Church Good, wife of E. E.
Good, is now the vice president of
the bank. The other bank officials re
main the same, Carroll Lewis as cash
ier and Ann Farley, assistant cashier.
M. E. Good has been a resident of
Peru for the past 48 years and when
the bank was organized in 1891 he
was cashier for the first four and a
half years. When he left the bank in
1895 his brother Ellis became cashier
then when the father, Jacob Good,
died in 1913, Ellis E. Good took his
father’s place as president.

17
stockholders.
Hans Storjohann be
came president, Henry Woidneck, vice
president, and J. M. Pucelik, cashier.
Visits Dan V . Stephens

Fred Shepherd of New York City,
executive manager of the American
Bankers association, was in Fremont,
Nebraska, recently, for a few hours’
visit with Dan V. Stephens.
Mr. Shepherd, who has been ac
quainted with Stephens a number of
years, was in Iowa on business and
decided to make a call in Fremont
while in the west. He is interested in
animals so Mr. Stephens took him to
the “ Cottonwoods,” where deer and
buffaloes are kept.

THE T E L L E R TELLS
THE W O R LD
(Continued from Page 4)

TH E B O W E R Y SAVIN GS Bank
of New York City heads the list of
the hundred largest mutual savings
banks with $457,822,318. The total
amount of the hundred largest ones is
$6,716,357,949. Which at any time is
a lot of money.
& &
A SW ISS SCIEN TIST once had
the idea of indestructible money. Bills
that never wear out. It was a process
of spraying molten tin on paper in a
way to make it wear, tear and fire
proof.
W e don’t care about the bills wear
ing longer, but we do want them to
last longer. Sounds like a paradox.

A GROUP OF BAN KERS were
returning from a bankers’ meeting,
one banker jocosely remarked: “ I
think it would be a good idea to have
a ticket to give each borrower. Every
time he paid a note on time, punch
the ticket. That would be called his
ticket of good conduct.”
One of the others remarked :
“ That’s a good idea, but I don’t be
lieve we would have to buy any
punches.”
& & ¿z
TH E FIN AN CE COM PAN IES
of this country are trying to have
their paper made rediscountable by
the Federal Reserve. The Federal Re
serve was organized to help banks,
not competitors. Right now the Fed
eral Reserve has more to do than it
can take care of. In fact the Credit
pool had to be organized to take care
of good paper that could not be re
discounted at the Fed. Yet finance
companies are advocating that their
paper be rediscounted too !
¿5 ¿8 &
^ TH E W IN N E S H IE K COU N TY
State Bank, Decorah, is the oldest
bank in the state of Iowa. It was
founded in 1855. The oldest banks in
Nebraska are the First National Bank,
Omaha (1857), and the United States
National Bank, Omaha (1856). In
Missouri the oldest is the Boatmen
National Bank in St. Louis (1847).
The Exchange National Bank of
Atchison is older than the state of
Kansas. It was founded in 1859 while
Kansas was not a state until 1861.
The oldest National bank in the two

SPEED
in handling your transactions
W

ere

you to ask one of our correspondent

banks the most important point about service,
they would most probably state the speed with
which we handled their transactions.
As your correspondent bank in Lincoln, we
pledge this sam e speed and efficiency. We

Reopens at Spencer

The Spencer State bank, Spencer,
Nebraska, which closed its doors last
month, has opened for business un
der new management. The depositors
took over the institution and put $18,750 of new money into it. One hun
dred and fifteen depositors became

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Federal Reserve Bank of St. Louis

would welcome an opportunity to serve you.

Continental National Bank
L IN C O L N , N E B R A S K A
Affiliated with N O R T H W E S T BANC O R P O R A TIO N

Central Western Banker, January, 1932

18
Dakotas is the First National Bank “ Never-Never” land and is buried
under the dirt, as are the homes of
& Trust Co. at Yankton (1872). Now
who’s going to be the first to say: the miners and stores. It is so hot
there that on the surface it would be
“ What of it?”
unbearable. The mining of opals is
»8 »j! »5
A B A N K E R tells me the funniest the industry. Once a week the colony
incident of the year was when a school is in receipt of news from the outside
teacher came in and asked their pres world.
This must be the bank the wag
ident to play Santa Claus at a school
means
when he speaks of the “ Sand
program. He says he never heard so
many excuses in such a short length Bank.”
¿8 ^8 ¿8
of time. That’s the price of getting
T W O N EW Y O R K E R S have
fat and portly.
The president said he had played more than a million dollars in cash in
Santa Claus to most of the grown-up their safety deposit boxes, and have
people around the town, but he’d be had for four years.
The employe who is earning twenty
dog-goned if he was going to be Santa
dollars a week and spending it to live
Claus to the kids.
on, is of more actual value to the
¿8 <¿8 ¿8
A BOND SA LE SM A N came in country than those two.
¿8 & ¿8
the other day. Said he could always
tell the president of a bank, because
TH E IO W A BRAN CH OFFICE
the president was the only one in the plan seems to be working. Since the
bank allowed to chew tobacco.
law was passed 70 branches have
¿8 ¿8 ¿8
opened, and only four of these have
A BRANCH of the Common surrendered their charters and two of
wealth Savings Bank, Australia, is these were on account of banks open
built underground. It is located in the ing in that territory. The average an-

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The NEW YEA R

I
Talks at University

Let us hope that your problems will
diminish, and your profits increase in 1932.

I f we can help you solve your problems so
that your profits will increase we shall be most
happy to do so.

THE FIRST NATIONAL BANK
1

AND

THE FIRST TRUST COMPANY
I

LINCOLN, NEBRASKA
I

nual upkeep of a branch is $1,500,
meaning the parent bank must have
$50,000 worth of deposits earning 4
per cent to pay the upkeep of the
branch.
¿8 ¿8 «¿8
A new simile: Some checks are
getting so much float they need water
wings.
«¿8 ¿8 ¿8
Recently I wrote in this column
about the chattel mortgage that was
recorded reading: “ Mules and in
crease.” R. P. Galt of the Farmers
State Bank, Silver City, Iowa, sends
the following clipping from a Council
Bluffs paper:
“ For Sale: 36 head of breeding
mules. Phone 289.” Evidently that is
the same herd on which the chattel
mortgage was drawn.
<¿8 & ¿8
There’s the joke told on the small
country banker who went to the city.
He asked to use the telephone. The
city correspondent all hospitality
showed him a phone. The visitor
looked the instrument over thorough
ly then stood back and studied it, and
finally picked it up and shook it. The
city banker came over and inquired:
“ What seems to be the matter, doesn’t
it work?” “ I don’t know yet,” an
swered the small towner. “ Where the
heck do you grind the thing?”

‘‘Since 1871”

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Congress should change the federal
reserve act to make borrowing easier
for member banks, R. R. Ridge, vice
president of the Omaha National
bank, stated at the annual dinner of
the Creighton university college of
commerce last month.
Mr. Ridge explained the organiza
tion of the National Credit Corp.,
President Hoover’s plan to provide re
lief for banks.
“ Although the organization can do
much to aid banks,” Mr. Ridge stated,
“ it cannot solve the problem of im
proper management.”
Mr. Ridge declared that the hoard
ing of money from circulation is one
of the most depressing factors of the
present financial situation.
Bank Reopens at Hildreth

Central Typewriter Exchange, Inc.
(E S T .

1903)

TYPEW R ITER S, ADDING MACHINES, CHECK W RITERS
LATEST MODELS AT BIG DISCOUNT
ASK

ALLEN-WALES
1912 Farnam St.

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Federal Reserve Bank of St. Louis

SEE

THE FINEST “ H E A V Y DUTY”
ADDING MACHINE MADE

Omaha, Nebraska

The Franklin County bank of Hil
dreth, Nebraska, which was closed
October 19, last, has been reopened.
The institution was restored to sol
vency by the stockholders and a group
of depositors. Depositors agreed to
limit their withdrawals upon the stip
ulation they will eventually be paid in
full.
Ed Van Steenberg is president and
H. S. Kirkbridge, cashier, of the re
organized institution.

Central Western Banker, January, 1932

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News of the Omaha Stock Yards
.....

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W inter Pig Rations

The returns which pork producers
may expect from next spring’s pig
crop may depend to a much larger de
gree on the feed received by the brood
sows throughout the winter than is
generally believed. “ The feed sows
get before the pigs are farrowed is
almost as important as that which
they receive afterwards,” says A. G.
Hogan, of the Missouri experiment
station.
The results of recent experiments
show that if brood sows are to be
good milkers and wean high quality
pigs, they should have the run of
good pasture during the winter and
spring before farrowing. If the
weather is bad for long periods of
time, clover or alfalfa hay should be
placed before them in racks where it
will be available all the time. After
farrowing the pigs and sows should
have sanitary quarters, and if a clean
pasture is available so much the bet
ter. No elaborate feeding or minerals
is required, and no elaborate feed
mixture will produce heavier or
healthier pigs at weaning time. The
ration of the sows should contain a
liberal amount of protein, such as lin
seed meal or tankage.
Trend in Farm Mortgages

A steady decline in farm mortgage
loans by 40 selected life insurance
companies the last four years is re
ported by the Bureau of Agricultural
Economics, United States Department
of Agriculture, in a new statistical
service on the agricultural credit sit
uation inaugurated last month.
Farm mortgage loans by these life
insurance companies, outstanding at
the end of August, aggregated $1,533,000,000 which represents a prog
ressive decline from the $1,618,000,000 in mortgages outstanding at the
end of the year 1927.
Farm mortgage loans by Federal
land banks at the end of October ag
gregated $1,171,000,000, a progressive
decline from the $1,197,000,000 in
loans at the end of the year 1929.
Loans by joint-stock land banks have
decreased since 1927, the loans out
standing at the end of October this
year being $540,000,000 compared
with $667,000,000 at the end of the
year 1927. Loans by member banks in
the Federal reserve system aggregated
$389,000,000 at the end of June this
year as against $489,000,000 at the
end of June, 1926.

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Federal Reserve Bank of St. Louis

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Production and marketing loans by
Federal intermediate credit banks to
farmers’ co - operative associations
totaled $45,058,000 at the end of Oc
tober this year, compared with $62,984,000 in October a year ago. The
peak in these loans was reached in
November, 1930, amounting to $68,406,000, and representing a sharp in
crease from the beginning of that
year, when loans aggregated $26,297,000. Federal intermediate credit bank
loans to financing agencies totaled
$78,470,000 in October this year, com
pared with $63,119,000 in October a
year ago.
Canadian Crop Smaller

The wheat crop of Canada in 1931
was provisionally estimated at 298,000,000 bushels, a decrease of 99,872.000 bushels compared with the
crop of 1930. O f the 1931 yield, the
three prairie provinces — Manitoba,
Saskatchewan and Alberta — con
tributed 279,000,000 bushels. The
year’s production of oats is placed at
331.243.000 bushels, nearly 100,000,000 bushels less than in 1930; barley
at 67,920,000 bushels is 67,000,000
bushels below the 1930 output; rye at
5.888.000 bushels is 16,130,000 bushels
less than the previous year.
Up to November 12, 1931, approx
imately 155 million bushels of wheat
had been delivered or shipped in the
three prairie provinces since August

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1. Both Manitoba and Saskatchewan
have marketed their wheat briskly
and a good percentage of the esti
mated production of each province is
now visible.
Colorado W ins Honors

To Colorado went the honor of
showing the grand champion steer at
the Great Western Live Stock show
in Los Angeles when a Hereford sen
ior calf exhibited by Banning-Lewis
ranches, Colorado Springs, took the
coveted honor, which always assures
not only liberal prize money, but a
substantial price at the fat cattle auc
tion sale. Raymond Lewis wore a
broad smile when his great season of
showing his Herefords was culmi
nated by the winning of grand cham
pion steer honors here. It was the
strongest individual steer show ever
witnessed on the Pacific coast, with
every class filled with outstanding in
dividuals.
Grand Champion Steer

The grand champion steer of the
International exposition in Chicago
last month sold at auction to Arbogast
& Bastian, Allentown, Pa., for $1.27
a pound.
The grand champion carlot sold to
McCann & Company, Pittsburgh, Pa.,
at $20.25 per' hundred.
“ Briarcliff Thickset,” the champion,
weighed 1,070 pounds and brought

OFFICERS
FORD E. HOVEY, President

L. K. MOORE, Asst, to Pres.

JAS. B. OWEN, Vice-Pres.

H. C. MILLER, Asst. Cash.

F. J. ENERSON, Vice-Pres.

C. L. OWEN, Asst. Cashier

W. H. DRESSLER, Cashier

H. A. HOVEY, Asst. Cashier

T. G. BOGGS, Auditor

Your account placed with the Stock 1 ards I\ ational Bank would beserved
by an institution whose long experience insures maximum efficiency.

Stock Yards National Bank of South Omaha

Central Western Banker, January, 1932

20
$1,358.90 to his owner, Oakleigh
Thorne, retired Wall Street financier
now raising blooded cattle near Pine
Plains, N. J.
The 1931 champion, an Aberdeen
Angus, did not approach in sale price
the $8.25 a pound paid for “ Lucky
Strike,” the Aberdeen Angus grand
champion three years ago.
Resistance Waning

Proceeding on the basis that “ see
ing is believing,” officials in charge of
bovine tuberculosis eradication in
Iowa are inviting persons who are not
in sympathy with the test to see re
actor cattle slaughtered and witness
the post-mortem examinations, ac
cording to the United States Depart
ment of Agriculture. The results have
been so convincing that in some cases
cattle owners, who were formerly ob
jectors to the test, have signed state
ments expressing their confidence in
the tuberculin test and the official
method of eradicating tuberculosis.
This procedure has been used in parts
of Iowa where military protection
was provided for the veterinarians in
making their tests in the face of seri
ous opposition.
In one instance a delegation of
farmers, high school students, nurses,
and business men witnessed the
slaughtering of several reactors at an
establishment where federal meat in
spection is conducted. A generalized
case of tuberculosis in a cow that had
been milked up to the time of
slaughter dispelled doubts concerning

the reliability of the tuberculin test.
Plundreds of nodules of the disease
were visible.
Another lot of reactors consisted of
registered animals, apparently in good
health, but post-mortem examination
here again revealed extensive lesions
of tuberculosis. The farmer and his
wife who owned them were present
during the slaughter of their animals
and expressed surprise at the obvious
symptoms of disease. The wife, a
graduate nurse, stayed at the plant
even after these animals were
slaughtered and proved to be an ard
ent spokesman in favor of the work.
She cited their animals and pointed
out their tuberculous lesions.
Sets New High Mark

The depression has ended in the
creamery butter field, one of the first
of the major industries to announce
an upturn in business. Production
and consumer demand for 1931 are
the largest in history, J. M. Harding
of Omaha, president of the American
Association of Creamery Butter Man
ufacturers, reports. He declared 1932
will be marked by further increase.
The association members will be
advised to extend advertising efforts
for increasing consumer demand,
which he asserted, can be filled with
present plant capacity.
“ With the major farm crops not
profitable in the past two years, the
farmer is going to milk more cows,”
he said. “ Keeping step with this
larger production must be ever greater
consumer demand, the other principal
factor in any live, up-to-date industry.

“ This year’s record breaking sales
will reach a total of more than 1,600,000,000 pounds, as a result of the adertising work that has been done.
Consumer demand will be at least 3
per cent above any previous year.
Creamery butter in storage is less
now than in any previous year.”
New Freight Rates

Interior Nebraska points gained a
new advantage in freight rates last
month when the new class rates be
came effective, according to G. J. Ol
son, traffic adviser of the Hastings
Chamber of Commerce.
“ The new schedule,” Olson said,
“ will eliminate what is known as ‘diferential territory’ which has worked
to the disadvantage of interior cities
of the state and has been a great dis
advantage to Hastings in the develop
ment of wholesale business.”
The advantage which certain east
ern Nebraska cities had in the matter
of rates has now been equalized, Olson
said.
Hastings and other interior
towns have now been put on a mile
age basis. Combination rates are elim
inated.
Omaha, Lincoln, Fremont and Be
atrice were named by Olson as the
cities having advantage under the old
rates. The territory around Lincoln,
Fremont and Beatrice, he explained,
was that known as differential.

A F E W TESTS OF
M IS M A N A G E M E N T
(Continued from Page S)

W ITH WISHES
FOR

YOUR HAPPINESS AND PROSPERITY
THROUGHOUT THE NEW YEAR

L IV E S T O C K N A T IO N A L B A N K

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Federal Reserve Bank of St. Louis

UNION STOCK YARDS

OMAHA

It is a small town in a strictly agri
cultural community. One of the di
rectors has charge of operation of
three or four farms other than his
own, and in order to make a good
showing on these farms he is espe
cially interested in “ taking care” of
the tenants. In order to do this we
find it has been “ arranged” to make
certain loans so that some certain ob
jectives might be accomplished. The
loans we now find are not, and never
were, well secured — but of course,
that matter is now up to the bank to
work out the best way it can. Another
person on the directorate has a son, a
daughter or two, and other relatives
who need financial assistance. In fact,
they need more than they can put up
security for, but in some mysterious
way the loans were “ approved” and
now the bank has them to work out
in any way it can. Another director is
in business, and a certain fellow owed
him a big account, and as there was
no way of him paying it we find “ ar
rangements” were made and the bank

Central Western Banker, January, 1932
loaned that fellow money to pay that
account. The banking department now
insists the loan should be charged off
as worthless. Still another director is
to be considered. He owns several
hundred acres of land and he is a big
farmer and trader, but for some rea
son or other he gets farther and far
ther in debt each year and can’t meet
his obligations. He is considered
“ good,” however, and we just don’t
like to ask him to make out a com
plete, sworn, financial statement be
cause he might not want to do it, so
we just let him drift along and take
the interest once in whenever he wants
to pay it. Then once in a while let him
borrow some more, etc., until we wake
up one fine day and find some one else
closing a mortgage on his land (we
thought all his land was clear, in fact
he told us so), and hear talk of him
taking the bankrupt law. W e don’t
know what to do in this case ’cause
that farmer has an excess loan in the
bank we have just visited.
The Insurance Salesman
Then we find out a certain official
in a certain bank is interested in in
surance and there is one certain cus
tomer who has a lot of personal prop
erty, and so he is a good insurance
customer. He keeps all his personal
property insured so of course, if he
wants a loan we just nearly have to
let him have it in order to keep “ on
the good side” of him. By granting
him a loan occasionally we’ll keep him
sweet and he will come to this “ cer
tain bank official” when in need of
insurance.
Now there happens to be another
certain bank official who “ got in bad”
financially with Mr. X. In fact that
official has been on a note with Mr. X
as security for a long time and now
we find again “ arrangements” have
been made to let Mr. X have a loan
at the bank. O f course, the loan is
very doubtful and no doubt will result
in a loss some time, but the loan was
made so Mr. X would feel better tow
ard that certain bank official, and
maybe he will pay that other note off
so the security will not have to pay it.
W e don’t know as yet just what the
result will be in that matter, but we
do know the bank will take a loss for
the amount loaned Mr. X.
Now the foregoing, dear reader,
may seem foolish, but in all serious
ness it is given as an illustration of
some of the “ transactions” we find in
some of the smaller banks and we
have written all this merely to say
that many of this class of banks have
been operated not as a safe, sound,
conservation bank should be operated,
but apparently just as an accommo
dation to the public.

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In Anderson County

Norman Heads Bankers

The Kansas state banking depart
ment has announced the merging of
the Lone Elm State bank with the
Bank of Kincaid, both in Anderson
county.
The Lone Elm bank’s October 10
statement listed $50,000 deposits, $20,000 capital and $3,400 surplus.

Officers elected at the group one of
Kansas Bankers’ association, at the
annual meeting in Seneca, are:
Charles Norman, of Troy, president;
E. Dowdy, of Troy, secretary; Frank
Geary, of Seneca, member of the com
mittee of state nominations.
Next
year’s annual meeting is to be held at
Troy.

Banks Merge

The National Bank of Chetopa,
Kansas, and Chetopa State bank were
merged last month.

State Bank Mergers

The Kansas state banking depart
ment recently announced two bank
mergers.
The Security State bank, Harper,
was merged with the First National
bank, Harper, and the Navarre State
bank with the Dickinson County bank,
Enterprise.
Latest statements on file with the
department showed the Security State
had $233,000 deposits and $40,000
capital and surplus, and the Navarre
State $57,000 deposits and $20,000
capital and surplus.

In New Quarters

The removal of the National Bank
of Pittsburg, Kansas, to its newly re
modeled building at the northeast cor
ner of Fourth and Broadway was com
pleted last month.
County Bankers Elect

C. O. Davis, vice president of the
National Bank of Pittsburg, Kansas,
was elected president of the Crawford
County Bankers association at a re
cent meeting in Pittsburg.
O. F. Meyer, cashier of the State
Bank of Brazilton was elected vice
president; Clyde B. Crumb of the
First National Bank of Pittsburg, was
reelected secretary-treasurer.
W . B. Millington of the First Na
tional Bank of Girard is the retiring
president and C. O. Davis the retiring
vice president.

Declared Insane

John M. Smith, Perry, Iowa, man
ufacturer, charged with attempting to
defraud insurance companies of $60,000 carried on his life, has been ad
judged insane. He will be sent to a
state institution, but will be prose
cuted later if he recovers his reason.

THE
CH A SE N A T IO N A L BANK
o f th e C ity o f N e w T o r k
Capital $148,000,000

Surplus $148,000,000

Deposits (September 29, 1931)

1,670,000,000

The Chase National Bank invites the accounts o f
banks, bankers, corporations, firms and individuals.
General Banking

Trust Department

Foreign Department

Central Western Banker, January, 1932

Colorado News
Steamboat Springs Banker Dead

Richard Jones, president of the
First National bank of Steamboat
Springs, Colorado, died of heart trou
ble last month. He was 72 years of age
and had been in poor health for some
time. He came to Routt county twen
ty-two years ago and was unmarried.
In Europe

Walter W . Stewart, son of A. A.
Stewart of Colorado Springs, has gone
to Europe to represent the United
States at a meeting of delegates from
seven countries to discuss Germany’s
ability to pay reparations.
The special advisory committee will
convene at the Bank of International
Settlements at Basle, and will be com
posed of representatives from banks
of the United States, Germany,
France, England, Japan, Italy and
Belgium.
Mr. Stewart was economic adviser
for the Bank of England for more
than two years and cooperated with
Owen D. Young in forming the Bank
o f International Settlements.
Eaton Consolidation

Two Eaton banks, the First Nation
al and the Eaton National at Eaton,
Colorado, have been consolidated.
All business of both banks will be
transacted in the First National bank,
the name of the consolidated institu
tion.
Officers of the consolidated bank
follow : B. L. Lorenzen, president;
T. H. Wilson, vice president; Fred
H. Moore, vice president; R. L. Rit
chey, cashier; R. L. Zike, assistant
cashier; and the following directors:
B. L. Lorenzen, T. H. Wilson, J. D.
Wilson, Fred H. Moore, Ralph Clark,
K. W . Bellrose, and Rex C. Eaton.
Floyd Tyson, teller, and Ruth W ad
dell, bookkeeper, will be with the new
First National.
The resources of the new institution
will approximate $700,000. The depos
its will total approximately $600,000.
Denver Banker Honored

H. E. Parks, trust officer of the
Denver National bank of Denver, has
been appointed a member of the trust
development section of the Financial
Advertisers association, representing
the Western division.
C. H. McMahon, president of the
.association, made the appointment.

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Federal Reserve Bank of St. Louis

The Financial Advertisers associa
tion is an organization of banks and
financial institutions throughout the
United States and Canada. Its object
is to bring about better advertising.
Through its central office in Chicago,
files and portfolios of newspaper and
other forms of advertising are made
available to members.
The executive committee of the
trust development section, to which
Parks was appointed, is composed of
four divisions — Eastern, Western,
Central and Southern.

Cities and Towns
About Alike
O N T R A R Y to popular opinion,
business and financial condi
tions in the smaller cities and
towns throughout the United States
are on the average no worse than in
large metropolitan centers, it was de
clared in an analysis of municipal fin
ances issued recently by M oody’s In
vestors Service.
These findings are based primarily
on replies to more than one thousand
questionnaires sent to counties, cities
and towns in the south, southwest and
midwestern sections of the country.
Among the states included in the
compilation were Alabama, North
Carolina, South Carolina, Mississippi,

Delaware, Arkansas, Texas, Mich
igan and South Dakota.
The principal causes of complica
tions in municipal finances are listed
as poor crops or low prices for farm
products, real estate booms, over
expansion of industrial activity, and
civic vanity.
‘'These influences have affected
small cities as well as large,” the
analysis comments. “ Yet many of the
less spectacular communities have
been highly fortunate in the present
depression. Instead of emulating
their more progressive neighbors, they
have left things much as they were
and now find tax collections and bond
retirements no great problem. This is
particularly important when it is con
sidered that the drop in construction
costs has already reduced by a large
fraction the value of improvements
completed in the last few years.”
Returns from certain sections of
the country generally believed to be
suffering especially from the depres
sion were surprisingly good. Delinquincies of more than 10 per cent on
1930 taxes were exceptional and ar
rears on the current year seldom ex
ceeded 20 per cent, the survey dis
closes.
“ Most replies show tax anticipa
tion warrants and floating debt of rea
sonable proportions, and special as
sessment bonds seem well in hand,”
the report finds. “ This creates the dis
tinct impression that abuse of these
three forms of finance has been most
pronounced in large cities and sur
rounding suburbs.
“ Answers to the question on the
business outlook indicate that watch
ers on inland hilltops have not seen
signs of returning prosperity any
sooner than the rest of us.”

Merger in Crook County

Heads Newcastle Bank

The merger of banking interests of
two communities in Crook county,
Wyoming, took place recently when
the Hulett State bank was consoli
dated with the Sundance State bank.
All business of the former will be car
ried on at the local banking institu
tion.
Robert B. MacKenzie, cashier of
the Hulett bank, in announcing the
consolidation, said the move had been
made with the approval of the state
bank examiner and was in line with
the state banking department’s policy
of fewer and stronger banks.

Charles W . Dow, prominent New
castle business man and state senator
from Weston county, Wyoming, was
recently elected president of the First
State Bank of Newcastle. He suc
ceeds H. G. Weare, who recently re
signed because of ill health.
A recent announcement of the reor
ganization affecting a change in o f
ficers and directors of the bank named
Hugh Updike of Osage vice president
and R. Hurtt, cashier. Three new
members of the board of directors in
clude Charles W . Dow, Hugh Updike
and Judge Harry P. Ilsley. Other
members are M. C. Roberts and R.
Hurtt.

This M E N A G E R I E
PAYS Northwest Farmers

7 TIMES M O ^
C°M £ THAN

"N FERTILE Northwest plain
and valley, King Wheat has been
slowly, steadily, surely dethroned in
the last ten years. "The cow, the sow
and the little red hen" have zoomed
into first place as largest income
source for Northwest farmers.
In 1921, 17,431,000 Northwest
acres in the states of Minnesota,
Montana and the Dakotas went to
wheat; 142 million wheat dollars
went into Northwest pockets.
This year, the same Northwest
farmers, cow-sow-hen-wise, planted
1,829,000 less acres to wheat, went
in for cow-sow-hen raising to such an
extent that the little red hen alone
will produce more than the total
income o f wheat.

hen." A decade now, unceasingly,
through farm organizations, lectures,
newspapers— N orth w est farm ers
have been bombarded with this
threefold production policy. In these
concrete, farmer-understood terms,
the corporation creed of diversifica
tion has been broadcast, with more
emphasis on the finished products of
agriculture (chickens, butter) less on
raw materials (wheat, small grains).

Result: the Northwest farmer now
cashes an annual check of $150 mil
lion for dairy products, $67 million
for poultry, $172 million for hogs,
under $50 million for wheat.
As a leading banking institution
of the Northwest, we solicit your
inquiry about the particular market
cow-sow-hen-wise Northwest offers
for your product, and our facilities
for handling your financial transac
tions through the 127 banks and
trust companies affiliated with us.

Territory Served by the Northwest Iiancorporation

To one idea goes the credit for
this amazing volte fa ce—the idea of
"the cow, the sow, and the little red

N o r t h w e s t Ba n c o r p o

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Federal Reserve Bank of St. Louis

MINNEAPOLIS,

MINNESOTA

rati on

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Full text of Central Western Banker : January 1932, Volume 27, No. 1

FRASER