Full text of Central Western Banker : June 1931, Volume 26, No. 6

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T h e Im p o rtan ce
o f M e r c h a n t L o a n A nalysis . 4

;

, -<_*

H o w to B r i n g P ro s p e rity B a c k . . . 6

L ong T erm
R a ilro a d O u t l o o k F a v o ra b le . . 8

Rent or Rent Value
Insurance . . 11

JUNE

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' ■i'V’riTtA"

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Federal Reserve Bank of St. Louis

I T

Bank

Service
Since 1857, as Nebraska has
grown, so has the First Na
tional Bank of Omaha.
Starting with the early days in
Nebraska, when the chief bus
iness of banks was the ex
change of gold dust, the First
National Bank has continued
to provide a service broad
enough in scope and large
enough in resources to meet
the requirements of Nebraska’s
business and industry.
During these years we have
had many correspondent banks
as our customers for more than
a half century and some for
nearly three-quarters of a cen
tury. We invite your account.

The Bank o f Personal Attention

-irst National
Bank of O m aha

L D E S T

B A N K -

Central W estern Banker, June, 1931

C EN TR A L W E /T E R N EA N RER
410 ARTHUR BUILDING
OMAHA
C l if f o r d D e P u y , P ublisher
G erald A . S n id e r , A ssociate P u b lish er
R. W . M oo rhead , E dito r
L. D. V an D ora n , A ssociate E d ito r
J. A . S ara zen , Circulation M anager
W m . H . M aas, 1221 F irst N ational B ank Bldg., Chicago, V ice-P resident
F r a n k - P. S y m s , 19 W est 44th S treet, New Y ork, V ice-P resident
F r a n k S. L e w is , 840 L um ber Exchange, M inneapolis

S ubscription, 25 cents p er copy; $2.00 per year.

V o l . 26

E n tered as second-class m a tte r a t the O m aha postoffice.

JU N E , 1931

N umber 6

Intimate Glimpses of Successful Bankers
WAYLAND MAGEE
Farmer Member, Federal Reserve Board

at the University of Nebraska and at the Iowa
A Y LA N D M A G EE of Bennington, Neb.,
State college at Ames, attended the University
who had been a director of the Federal
of Chicago, and was admitted to the practice of
Reserve Bank of Kansas City, has been
law in Chicago in 1908.
appointed by President Hoover to be the farm er
Mr. Magee came to Nebraska in 1910 as ex
member of the federal reserve board.
ecutor for the estate of his grandfather, a N e
The appointment is im portant to the middle
braska pioneer, C o l o n e l
west, giving representation
James H. P ratt. Since then
on the reserve board to the
the 1,200-acre Summer Hill
the agricultural interests in
farm about, thirteen miles
the person of a man whose
west of Omaha, has been his
farm ing experience is ex
home.
tremely practical, and whose
business and banking expe
He has been a leader in
rience is broad.
agricultural affairs in N e
braska, and active in politics
Mr. Magee is also a law
as a republican. He has co
yer.
operated with the college of
H e has taken his place on
agriculture in experimental
the board and will actively
work in grains and in live
take part in its deliberations
stock raising, and is a direc
and decisions, although his
tor of the Nebraska Dairy
appointment will not become
Development society. He has
final until confirmed by the
been active in the Omaha
senate at its next session.
Chamber of Commerce as a
Mr. Magee is the first rep
member of its agricultural
resentative of the tenth fed
committee. H e has also been
eral reserve district, on the
president of the Douglas
federal reserve board. He
county farm bureau and the
takes the place made vacant
Nebraska Crop Growers as
by the death of Edw ard H.
sociation.
Cunningham of Cresco, la.
In September of 1927 Mr.
“I have no policies and no
W a y l a n d W . M agee
Magee was appointed a di
program for the relief of
rector of the Omaha branch of the Federal Re
agriculture,” Mr. Magee said in his first state
ment after his appointment. “But I shall be in a
serve bank of Kansas City, and later to the K an
position where I can speak effectively on any
sas City board. He has traveled extensively, leav
issue which involves the welfare of the w est.”
ing his college studies and law practice in 1908
Mr. Magee was born in Chicago in 1881. He
for a wandering trip around the world that
was educated in the Chicago public schools. He
consumed two years, and in which he made
then attended the N orthw estern and H arvard
his own way.
He is m arried and has four
law schools and took special courses in botany
children.
at Bonn, Germany. He took agricultural training

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Central W estern Banker, June, 1931

The Importance of
Merchant Loan Analysis
T IS not my purpose to define any
particular business or industry
operating in this territory yet a
cross section of the average town will
usually include merchants represent
ing the following lines that transact a
m ajor portion of the business— gen
eral stores, drugs, groceries, dry
goods, furniture, hardware, lumber,
automobiles and accessories, radios,
oil and gas, produce and grain.
This does not take into account the
m anufacturers, wholesalers or distrib
utors who are located principally in
the large centers and who come under
a somewhat different classification.
T heir business is dependent in the
main upon the problems of distribu
tion confronting the retailer in the
successful operation of his business;
however, the extension of credit to
the larger and more complex enter
prises is based upon the same funda
mentals that apply to small concerns.

'" p H E V A R IO U S classes of business
A require the application of different
ratios in making our analysis and it is
impossible to establish a hard and fast
rule that would apply to many lines.
Some are more staple than others
and much less subject to depreciation
and price fluctuations; then too, the
most im portant factors in making
credit commitments to any concern
are the integrity, the record of con
tinuous management and the earnings
of the concern.
W e should always bear in mind that
we need the m erchant more than they
need us. M any towns are doing busi
ness today without banking facilities
but no banks are operating in towns
where they are not properly supported
by other lines of business.
By the application of sound busi
ness methods we can assist a m erchant
in maintaining a proper financial
structure that will result in his becom
ing a larger and better customer of
the bank and thus contribute to the
growth and stability of our town or
city. It often takes courage to perform
this necessary function that we owe
to business but we certainly have a
very definite responsibility and obliga
tion that cannot be discharged merely
by refusing credit if it can be safely
extended with the assurance of re(From an address delivered before the
M id-W est Bank Management Conference
at Kansas City.)

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By E. N. VAN HORNE

There is an apparent trend or epi
demic of multiple lines of merchandis
President, Continental National Bank
ing perhaps best evidenced by drug
Lincoln, Nebraska
stores. Some clothing stores are
branching out into ladies ready-topayment at m aturity or within a re a w ear; the hardw are dealer is selling
sonably certain period of time.
household equipment of the latest
I have never known a banker with style and color on the installment
parasitical tendencies to be perm an p la n ; music dealers are retailing elec
ently successful. If he expects to live tric refrigerators and everybody is
with a community rather than on it handling radios at a dollar down.
he must perforce extend a sufficient W hile this is supposed to be an era
amount of credit to his customers to of specialization, I cannot see that it
justify his existence and to insure applies to commodity m erchandising
theirs. 1 do not mean to convey the —that appears more complex than
ever before.
The relation of turnover to inven
tory should also be given considera
tion since the actual sales of m erchan
dise prove its liquidity and m arket
value. If the customer has a slowmoving stock or one that possesses an
element of risk through style changes
or consumer demand, we cannot place
our estimate of it as high as the fig
ures shown in the statement. Sales
volume is therefore im portant and
inventory should at all times conform
to the amount of business transacted.
The general decline in prices d ur
ing the present year together with
poor business conditions makes it al
most impossible to move merchandise
in liquidation regardless of price. W e
are therefore confronted with the
necessity of checking closely all inven
tory assets and taking into account
the shrinkage or cost of replacement.
If the merchant has not taken his in
M r . E. N. V a n H orne
ventory at the m arket value, or at cost
if lower, then he has not cleaned
thought that we should conduct a house and his operations for the cur
bank “a la cafeteria” by collecting all rent year will reflect this situation.
the pocketbooks in town and spread Certainly he has not put himself in
ing them on the counter with a self- shape to take advantage of improved
service sign displayed above them. conditions when they appear on the
However, we can so distribute our business horizon.
funds that we always have our finger
Second in importance to the inven
on the purse string which insures sea tory item are accounts receivable. This
sonable liquidation and a proper de item is an increasing hazard to the
gree of liquidity in our note case.
average m erchant because of the fixed
or slow class of accounts and the te n
'^ p H E P R E S E N T evolution of busi- dency toward increase. It is quite ap
A ness necessitates a degree of cau parent that the average m erchant does
tion on our part that is often hard to not understand or properly manage
explain to the average merchant. It the extension of credit and collection
is not enough merely to get his finan of accounts.
cial statement showing proper ratios,
but to find out what his inventory con
sists of, how long he has carried it in /"C O M P E T IT IO N in many lines and
a desire for volume are encourag
stock, and what the actual physical
ing installment selling to such an exvalue is on today’s market.

Central W estern Banker, June, 1931
tent that we cannot easily estimate
the collectibility of such accounts or
the shrinkage in their value.
In a recent conversation with a
state bank examiner I was told that
merchants throughout his territory
were obliged to “carry” their custom
ers longer and in larger amounts than
heretofore, due to the low price for
farm produce affecting the custom ers’
ability or willingness to pay. This con
dition was forcing the merchants to
increase their lines at the bank when
ordinarily a seasonable liquidation
was in order and should be expected.
To offset this situation I find that
several towns have adopted already a
strictly cash basis and the m erchants

are highly pleased with it. Announce
ments are being received regularly of
this new form of business practice
which will eliminate loss through the
abuse of too liberal credit policies.
A fter checking the basis of inven
tory and determ ining the value of ac
counts receivable we should investi
gate the account in the trade and see
how wholesale accounts are being
paid the number owing. I feel that a
distinct weakness is shown in scat
tered accounts and that a concentra
tion of purchases with fewer creditors
is very helpful in carrying on during
such an unprofitable period as many
merchants are now experiencing.
Increasing importance should be

given to operating figures of all com
mercial accounts to see that the state
ment reveals in detail actual earnings
and progress from year to year. A
close analysis of earnings is essential
to see how they are used, and whether
a sufficient amount is retained in the
business to insure its growth and per
manency.
The continuity of many credit lines
is the result of distributing practically
all the earnings during periods of
prosperity; therefore, when con
fronted with a year of depression such
as the year just closed, the m erchant
finds his cushion of profits and sur
plus account insufficient to absorb cur(C o ntinued on page 17)

A. G. Becker Ad Wins Award
H E A D V E R T IS E M E N T of A.
G. Becker & Co., reproduced
here, was selected by the Jury
of the H arvard Advertising Awards
as the individual advertisem ent of
1930 effective for its use of typog
raphy. This is one of the five awards
for distinguished individual adver
tisements of the year, each of which
carries a $1,000 cash prize and certifi
cate of award. The H arvard A dver
tising Awards were made possible by
the generosity of the late Edw ard
Bok, who desired to give recognition
to meritorious advertising work. The
aw ards are made each year under the
supervision of the Graduate School of
Business of H arvard University upon
recommendation of a jury composed
of leaders in the advertising world.
Over 10,000 individual advertisements
were examined and considered by the
judges this year.
W hile the recognition accorded the
prize-winning advertisements specificallv covers one phase of advertising
technique, all phases have an influ
ence in the decision. In other words,
an advertisem ent must have all
around m erit in order to be eligible
for consideration for an award.
The A. G. Becker & Co. advertise
ment was one of a series which has
been appearing in national magazines
of general circulation. The theme of
this series is the importance of the
management factor in the success of
business enterprises and, therefore,
in the continuing worth of securities,
which are based on such enterprises.
The reason A. G. Becker & Co. de
velops this point is that it has been
particularly concerned with and in
terested in management ever since its
establishment in 1893. From its in
ception, it has been a large factor m
the commercial paper field and has,
therefore, made continuous loans in
large amounts to outstanding indus
trial concerns. In its early years, the

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complete financial reports of corpora
tions which are now available were
unheard of. As a result, the firm had

to base its decisions very largely on
its appraisal of the character and

• They march along— out of one market into another.

investor. Plants and inventories lose their value

Children growing up, marrying, making new homes.

quickly if markets disappear. Earnings diminish when

Men and women passing into old age, leaving behind

management fails to maintain that constant flow of

the varied needs of active life.

new customers which replaces those lost, in the nat

• The markets of business are never fixed. Today’s

ural order of things, each year.

market is today’s possession only. Tomorrow’s army of

• Since its inception, 37 years ago, A. G. Becker

buyers is but now massing forward— largely unaware

& Co. has been particularly concerned with the

of the products and services industry offers them.

management factor. Long before detailed financial

• In this endless procession there is the key to every

statements were available, this company was financ

manufacturer’s sales problem and a challenge to his

ing American industry in large measure on the basis

resourcefulness. His success in gaining and hold

of its appraisal of management. And today, our

ing these changing markets is measured by his

estimate of management is still the determining factor

knowledge of them, and by his ability to supply

in our recommendation of securities.

what people want at the time they want it.

• The nature of the comprehensive investment service

• The alertness of a company’s management in

built up on this basis is described in a booklet, copy

meeting this problem is of prime importance to the

of which will be sent you upon request. Ask for T108.

BONDS

• STOCKS

• COMMERCIAL

PAPER

• 5*1

PINE

STREET,

NE W

YORK

• l OO

SOUTH

LASALLE

STREET,

CHICACQ

B e c k e r & C o.

A bove, is reproduced the adv ertisem en t of A. G. B ecker & Co., which w on the H a rv a rd A dvertising
A w ard fo r 1930. T he aw ard c arrie d w ith it a $1,000 cash prize a nd certificates of aw ard.

Central W estern Banker, June, 1931

G
) l ow to <J3ring
prosperity ^ ack
F W E compare periods of pros
perity with periods of depression,
we find that in periods of pros
perity debts run high, that credit is
easily available and is used to the
fullest extent. On the other hand, in
periods of depression, debts are re
duced, because creditors want their
money and because debtors see no ad
vantage in borrowing. Prosperity is a
period of expansion of credit and de
pression is a period of liquidation.
Now the question we may ask is

I. J. McGINITY

President, Citizens State Bank, Lebanon,
South Dakota

th is : is inflation of credit a cause or
an effect of prosperity and is deflation
a cause or an effect of depression?
To find the answer we may study
some periods of prosperity and de
pression of the past.
The “wild cat” banks of Jackson’s
time inflated credit, made it easy to
borrow money, and caused a period of

CORPORATE
TR U ST SH A R ES

-!- -!- JL ARSIGHTED investors today are
making their dollars do double duty. At
present low security price levels, cur
rent return is increased. And as America
emerges from its present depressed con
dition, today’s principal will become
tomorrow’s profit. Corporate Trust
Shares offer a desirable means of ac
complishing this. They combine the
security of diversification with mar
ketability, convenience and freedom
from substitution.

SMITH, BURRIS & CO.
Central Syndicate Managers

120 S outh La S alle
D E T R O IT

S tr eet , C hicago

N E W ORLEANS

OM AHA

ASK YOUR INVESTMENT HOUSE OR BANK

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expansion. The demand of English
merchants for payment from A m eri
can buyers precipitated the crisis of
1837. The paper money of the Civil
W ar times inflated credit and caused
a period of over expansion following
the war. The panic of 1873 had sev
eral factors but it was started by the
contraction of credit abroad. The
panic of 1892 was caused by the con
traction of credit occasioned by the
hoarding of gold by banks and in
dividuals. The period of expansion
beginning in 1907 had its inception in
the discovery of gold in the Klondike
and its culmination in the late w ar
period aided by the rediscounting
privileges offered by the Federal Re
serve Bank. The deflation period be
ginning in 1920 was started by the
Federal Reserve Bank calling its
loans.
In all the foregoing events briefly
enumerated, other elements entered
in, but the controlling factor in each
instance was the contraction or the
expansion of credit or of the currency
which amounts to the same thing.
There are those who contend that
the present world depression has been
augmented by the demonetization of
silver in several foreign countries and
by the failure of gold production to
keep apace with the increase of pop
ulation.
Modern business is founded on
credit. Credit operates not only in the
form of long term credit such as
bonds and mortgages and shorter term
credit such as notes and open accounts
but in current business transactions,
it takes the place of gold currency in
the form of checks and drafts. A
bank is an institution built entirely on
credit. The depositor extends credit
to the bank and the bank extends
credit to the borrower. W hen credit
stops, business fails, and we have a
panic. The word credit comes from
the Latin word credo: I believe. It is a
belief, a confidence in people and con
ditions. It really is a state of mind.
W hen we are optimistic, business is
good. WTien we are pessimists, we
have hard times.
T ) E A L IZ IN G that the contraction
and expansion of the currency
and credit was the cause of our eco
nomic ups and downs, the Federal
Reserve System was established to
provide an elastic currency that would
expand and contract to meet the ordi-

Central W estern Banker, June, 1931
nary needs of business and to meet
those extraordinary demands that
come m case of a crisis. The Federal
Reserve System has done this, but,
instead of preventing the ups and
downs, it has accentuated them rath
er than modified them. It contributed
to our expansion in 1916 to ’20 and it
has done nothing to prevent the pres
ent drastic liquidation. It was too pos
itive when it should have been nega
tive and too negative now when it
should be positive. It has failed in its
function. It might even be said that
the Federal Reserve Bank has done
more harm than good by preventing a
postwar panic. A panic would have
lirought about a sudden, precipitous
readjustm ent. The industrial and
commercial east and agricultural west
would have gone down together and
by this time all would have recovered
and conditions now would be back to
normal. The Federal Reserve Bank,
however, is a commercial bank de
signed to handle commercial credits
and was able to assist the commercial
interests while agriculture took the
toboggan.
In this, as in every period of pros
perity or depression, credit is the con
trolling factor, and in this respect, the
Federal Reserve Bank holds the key
to the situation. Conditions will nat
urally adjust themselves in time but
the Federal Reserve Bank could put
an end to this depression immediately
by expanding credit where deflation
has been the greatest, viz., in the agri
cultural sections.
One of the consequences of defla
tion of credit is price reduction. W hen
credit is good, there are more buyers
and prices rise as buyers overbid each
other. W hen credit is withdrawn,
prices fall because there are fewer
buyers and sellers undersell each
other. Supplv and demand governs
prices—but credit governs supply and
demand. Prices rise and fall as credit
expands and contracts.
In the present depression, however,
the m anufacturer, the railroads and
the union laborer have refused to take
reduced prices and wages. They have
been able thus far through organiza
tion, to defeat the law of supply and
demand meanwhile the prices of ag
ricultural products have gone to the
bottom. F or a time, it looked as if the
m anufacturer, the railroads and the
union laborer were going to get away
with it, as if they had a little world of
their own. But it now appears that
this is not true.
Prices and wages can be held up
artificially for a time but there can be
no permanent prosperity until there
is an equality in trade. If the m anu
facturer in one day makes goods
which exchange for products that it
takes the farm er five davs to produce,

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the m anufacturer must remain idle
four days waiting for the farm er to
catch up. The m anufacturer, the rail
roads and the union laborer are fight
ing deflation but the deflation of ag
riculture has been the most drastic
in history.
C O U T H D A K O T A may be consid^ ered typical of the agricultural
states. On June 30, 1920, its state
banks had loans amounting to 158
millions. On June 30, 1930, their loans
had been reduced to 53 million and on
December 31, 1930, they had been re
duced another 10 million. N ot only
have banks curtailed credit but every
loan company, every business house
and every individual has done the

same. Foreclosures, bankruptcies and
bank failures have been numerous.
There has been deflation with a ven
geance.
The credit structure of the agri
cultural sections has been almost an
nihilated. There was a time when a
farm mortgage was considered the
best security in the world. Now no
one wants a farm mortgage. A loan
on live stock and equipment is taboo.
It is a “capital loan.” The farm er
needs capital loans as does the m an
ufacturer. The m anufacturer, how
ever, can mortgage his plant and sell
bonds on the open market. He can
even sell his plain note on the open
m arket at a low rate. There is no mar(C ontinued on page IS)

• T h e h ill t r a y s in t h e c o u n t e r a r e
l'o r e x p o s e d c u r r e n c y . S u r p l u s f u n d s
a r e d ro p p e d th r o u g h a s lo t in to th e
l o c k e r b e lo w . W h e n e v e r a t e l i e r l e a v e s
h is w in d o w , a s t e e l c o v e r p r o t e c t s
e a s li in t h e b ill t r a y s . W h e n t h e t e a r
g a s is r e l e a s e d , t h e l o w e r d o o r lo o k s
fo r a p r e d e te r m in e d p e rio d . T h e m e ta l
h o o d b e lo w t h e c o u n t e r c o n c e a l s
th e fo o t c o n tro l fo r th e t e a r - g a s .

When Banks
Become

BEDLAMS
D u r in g th e c o n fu s io n th a t f o llo w s a
h o ld -u p . . . e v e n a n u n s u c c e s s fu l o n e
. . . m o n e y e x p o se d a t t e lle r s ’ w in
d o w s c a n b e c o m e lo s t, str a y e d a n d
o fte n sto le n .
T h e T e lle r ’s S a fe ty L o c k e r, r e c e n t
ly d e v e lo p e d in th e D ie b o ld R e se a r c h
L a b o r a to r y , w o r k s in c o n ju n c tio n w ith
th e D ie b o id -L a k e E r ie T ea r G as S y s
te m as th e fin a l p r o v isio n fo r s a fe ty
in b a n k s. A s so o n a s th e te a r g a s is
r e le a s e d , it a u to m a tic a lly p la c e s a ll
e x p o se d c u r re n c y u n d e r im m e d ia te
p r o te c tio n .
S u fficien t m o n e y is k e p t a t h a n d fo r
th e tr a n sa c tio n o f d a ily b u s in e s s . A ll
su r p lu s fu n d s a r e d ro p p ed th r o u g h a
s lo t in to th e in te r io r o f th e L o ck er,
w h e r e th e y r e m a in u n til th e te lle r
b a la n c e s h is d a y ’s a c c o u n ts.
A fte r
b a n k in g h o u r s, th e la r g e in n e r tr a y

c o n ta in in g th e a c c u m u la te d c a sh is
r e m o v e d to th e t e lle r ’s lo c k e r in th e
b a n k v a u lt, fo r th e n ig h t. T h e h a n
d lin g o f m o n e y is thvis sy s te m a tiz e d
. . . i t is n e v e r a w a y fro m im m e d ia te
p r o te c tio n .
W h ile th e D ie b o ld -L a k e E r ie T ear
G as S y s te m a u to m a tic a lly o p e r a tes
th e D ie b o ld T e lle r ’s S a fe ty L ock er,
th e d a ily u s e o f th e L o c k e r in n o w a y
in te r fe r e s w ith th e T ear G as S y stem .
D ie b o ld V a u lts a n d V a u lt D o o rs
p r e v e n t b u r g la r y . D ie b o ld -L a k e E r ie
T e a r G as S y s te m s fo il an d d isc o u r a g e
h o ld -u p a tta c k s.
N o w th e D ie b o ld
T e lle r ’s S a fe ty L o ck er (p a te n ts p e n d
in g ) o ffer s p r o te c tio n fo r e x p o sed
c a sh in a n y e m e r g e n c y . D ie b o ld se r v
ice is a v a ila b le in a n y p a r t o f th e
U n ite d S ta te s w ith in tw e n ty - fo u r
h o u r s — in m e tr o p o lita n a r e a s im m e
d ia te ly . W r ite fo r in fo r m a tio n .

D I E B O L D
SAFE AND LOCK COMPANY . . CANTON, OHIO
OVER

SEVENTY

YEARS

BANK

SERVICE

Central W estern Banker, June, 1931

LongTerm Railroad Outlook Favorable
Despite the rather gloomy aspect which
clouds the view of many people on the ulti
mate recovery of the bond market, there are
many favorable factors which are contributing
to the certain resumption of activity, as is
evidenced by the data presented in the fol
lowing article. It is reprinted from the April
20th issue of B o n d B r ie f s , a house organ of
the Northern Trust Company of Chicago.

E P O R T S of declining railroad
earnings, dividend reductions,
and constant discussion of the
threat of competition from newer
forms of transportation have tended
to create a feeling of uncertainty re
garding the outlook for the railroads,
th is feeling has naturally been re
flected in the prices of railroad bonds,
and has given rise to doubt, in the
minds of some investors, as to the
suitability of such securities for con
servative investment.
A large part of the decline in rail
road earnings this year and last has
been caused by the diminished volume
of trade as a whole. Much of this loss
will undoubtedly be recovered when
improved business conditions restore
the volume of traffic to normal. Un
questionably, a considerable amount
of business has been lost to competing
forms of transportation, but we be
lieve that the present difficulties of
the railroads have been greatly exag
gerated so far as the long term out
look is concerned.
Since 1920 the railroads have lost
to competing carriers more than onethird of their passenger business.
A fter enjoying a practical monopoly
of passenger business for many years,
they are now confronted by the neces
sity of adjusting themselves to meet
this new competition. The passenger
service of the railroads is being con
stantly improved, with satisfactory
results m many cases. The Chicago
suburban service of the Illinois Cen
tral, formerly a source of loss, has,
since electrification and consequent
speeding up of service, become dis
tinctly profitable. It is being recog
nized that considerable waste could
be eliminated by pooling the passen
ger service of several roads running
competing trains between such cities
as Chicago and St. Louis.

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Federal Reserve Bank of St. Louis

Fundamentally, the basis of com
petition between railroads and bus
lines is that of fares. Most people who
have to travel any considerable dis
tance prefer the greater com fort and
speed of a train. This is especially
true of journeys of several hundred
miles or more, which are the most
profitable to handle. The railroads are
now experimenting with various fare
reductions designed to meet the rates
charged by busses. In certain cases
fares are graduated according to
whether the passenger is to occupy a
standard Pullman, tourist sleeper, or
day coach, the rate for the latter ap
proxim ating that charged by bus lines.
J T MAY be doubted whether private
automobiles will make serious fu r
ther inroads into the passenger busi
ness of railroads. The novelty stage
of the automobile has passed, and
many people who use their cars for
local transportation and for short
trips prefer the relaxation and free
dom from responsibility offered by
trains for longer journeys.
The railroads are showing a grow
ing disposition to supplement their
passenger service by the use of motor
busses and airplanes. Service on
branch lines is being replaced in part
or completelv by motor busses, owned
by the railroads either directly or
through their interest in bus lines,
many of which are already owned or
controlled by the railroads. Similarly,
on transcontinental business, the rail
roads are cooperating with the air
lines in supplying combination railair service, and in some cases have a
direct interest in the air transport
companies.
In 1929, freight revenues of the
Class I railroads amounted to 76.8%
of their total operating revenues, com
pared with 13.9% accounted for by
passenger revenues. In 1928, the rail
roads handled 77% of all freight
traffic in the United States, while the
Great Lakes handled 14% ; pipe lines,
5% ; inland waterways, 2% ; motor
trucks, electric railways, and air
planes, 2% . Corresponding figures for
1929 and 1930 are not available, but
when published will no doubt show a

somewhat larger percentage handled
by m otor trucks. Gross ton miles of
freight handled by the railroads in
creased only 8.8% from 1920 to 1929,
compared with an increase of 62.2%
from 1910 to 1920.
In facing the new competition for
the freight business which is their life
blood, the railroads are favored by
three fa cto rs: the growing recogni
tion of the necessity of subjecting the
competing agencies to regulation sim
ilar to that under which the railroads
o perate; the efficiency and economy
of rail service, which can be further
im nroved; and the indirect benefits
which accrue to the railroads from
the operations of their competitors.
"J^ O T O N LY are the railroads de
manding regulation of their com
petitors, but there seems to be an in
creasing disposition on the part of
the government and the public tr>
grant the need for such supervision
as will place the railroads on an equal
competitive footing with the other
agencies. Legislative relief should,
and probably will in time, include ex
tension to railroads of the right to
operate inland waterway barges and
coastal steam ships; removal of the
government from ownership and op
eration of barge lines, placing the lat
ter on their own feet as a private en
terprise, properly taxed to pay their
fair share of the cost of developing
and maintaining w aterw ays; regula
tion of the rates and services of truck
and bus lin es; the imposition of suffi
ciently heavy taxes upon the operators
of trucks and busses to defray their
just proportion of the cost of con
structing and m aintaining highw ays;
and the extension to the railroads of
the right to make special rates, such
as trainload rates for petroleum, to
meet competition.
Sixty per cent of the $11,500,000,000 of railroad bonds outstanding
with the public are owned by individ
ual investors whose average holding
is small, and the other 40% are held
by insurance companies and banks
who have thus invested a substantial
part of the savings of the American
people. Approxim ately one million

Central W estern Banker, June, 1931
stockholders own $7,212,000,000 of
railroad stocks in small average units.
It is clear, therefore, that the stake of
the public in the $25,000,000,000 ra il
road industry is too great for the
American people to allow that vast
investment to be jeopardized for lack
of proper governmental restraint upon
newer transportation mediums.
But the railroads are by no means
entirely dependent upon governmental
protection for their survival and pros
perity. They have im portant natural
advantages which they are constantly
striving to improve and utilize to the
fullest extent. The principal advan
tage is their low cost of operation in
handling long haul, carload freight,
which is the largest and most profit
able part of their business. It has been
estimated that the operating expenses
of a company operating five-ton
trucks are from 18 to 25 cents per
truck mile, compared with an equiv
alent cost of freight service of five
leading railroads of less than 3.3
cents. W hile many truck operators do
not charge hiuh enough rates to cover
all their costs, including adm inistra
tive and selling expenses, insurance,
etc., there is very frequently, contrary
to general opinion, a m arked rate sav
ing to the shipper using the rails
rather than trucks. F or example: a
recent study of the University of Il
linois A gricultural Experim ent S ta
tion showed that the live stock ship
pers of Illinois would have saved over
$400,000 in 1927 if the 1,115,606 head
of live stock shipped by trucks to the
three leading markets, Chicago, East
St. Louis, and Peoria, had been
shipped by rail.
'C 'O R S H O R T hauls, especially of
1 less-than-carload lots, trucks prob
ably have the advantage in costs, and
railroads can very well afford to sur
render this business to them. In fact,
some of the roads are operating their
own trucks for this purpose and dis
continuing or curtailing local freight
service by rail. The railroads are also
using trucks or cooperating with truck
operators in improving store-door
deliverv and pick-up service to ship
pers. The trucks gather the freight
from m anufacturers and iobbers and
take it, either to the regular freight
house or to a special freight concen
tration yard, where it is loaded into
cars. At the other end of the rail haul
the process is reversed and the goods
are delivered to the consignee by
trucks. Some roads use containers m
which small shipments can be com
bined in sinide packages for greater
convenience in handling. Others use
special box cars whose bodies can be
detached and placed on trucks, th ere
by perm itting shipment of carload
lots by rail and truck with only one

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

S IX P E R C E N T

Collateral Trust Gold Notes
IS S U E D

IIY

ATLAS SECURITIES COMPANY
of Illinois
A “ Lew is E. B o w e r ” C o rp o ra tio n
A u to m o b ile B a n k e r s Since 1912

Maturing from 6 months to 5 years
Interest Payable Semi-Annually at the
CHICAGO TRUST CO., Trustee
A non-speculative investment, secured
by Automobile Installment Paper not
affected by market fluctuations
C o r re sp o n d en ce so lic ite d fr o m

Banks, Insurance Companies, and Distributors
W. L. TAYLOR, Executive Vice-President
5 9 W e s t W a c k e r D r iv e , C h ica g o
W e h a n d le o n ly o u r ow n s e c u r i tie s

£ /~ ln n o u n c in g

D iv ersified Trustee S h ares
Series D
a m e th o d of in v e s tm e n t, s u ite d to b o th th e
difficult conditions of to d a y a n d the p ro b a b le
conditions of tom orrow; a step fo rw ard in the
field of the fixed cu m ulative investm ent trust a n d
p o sse ssin g se v e ra l n ew a n d distinctive featu res
For Further Information Write to

American Trustee Share Corporation
59 Wall Street, New York
C hicago

P h ila d e lp h ia

Los A n g eles

Central W estern Banker, June, 1931

loading and unloading operation.
The Southern Pacific Company,
which is a holding company control
ling the Southern Pacific and Central
Pacific Railroads and many other en
terprises, has im portant interests in
coastal steamship lines and pipe lines.
W hen legislative authority is given,
many of the railroad companies them
selves will undoubtedly acquire and
operate their own barge lines, lake
and coastal steamers, and pipe lines,
thereby shariim directly in the profits
,df what are now competing forms of
transport.
The present operating efficiency of
the railroads, which is generally con
ceded to be at the highest point in
their history, will be gradually in
creased as the consolidations now con
templated by the roads and authorized

in general term s bv Congress are com
pleted. W hile the plan proposed by
the Interstate Commerce Commission
will undoubtedly be considerably
modified in practice, the final result
should be improved service to the
public and increased profit to the rail
roads.
The railroads are also in a position
to profit, indirectly, from the progress
made by their competitors. F or ex
ample, it is generally conceded that
the automobile industry has been, and
still is, one of the greatest factors in
the railroads’ prosperity. The vast
quantities of steel, glass, rubber, lum
ber, textiles, coal, and other materials
employed in the m anufacture of auto
mobiles, as well as the finished prod
ucts, furnish the railroads with a very
substantial part of their total traffic.

Good //7//
G ood W i l l has been defined as the de
sire created in the mind of a custom er that
causes him to return to the firm that has given
satisfactory value and service.
T h e B ankers L ife I nsurance C ompany
of N ebraska through its almost half century

of operation has created a tremendous force of
good will that has placed us in a favorable posi
tion in the minds of the insurance buying public.
Good will is of vital importance to the sales
force of any organization. If you are interested
in a connection with a life insurance company
either p art or full time it will pay you to inves
tigate our proposition. W rite us.

Pipe used in the construction of pipe
lines is another im portant source of
railroad revenue. In many cases, also,
the railroads lease part of their right
of way to pipe line companies, who
thereby obligate themselves to con
tribute to the railroads’ earnings for
a long period of years.
W

f f lL E the extension of natural
T gas pipe lines and electric tra n s
mission lines tends to reduce the in
dustrial demand for coal, one of the
principal factors in railroad traffic,
the cheaper fuel and power made
available bv these agencies encourages
the development of industries, which
in turn will become customers of the
railroads. Furtherm ore, coal must be
transported by rail to supply the needs
of central electric generating stations.
The electrification of the railroads
themselves will Gradually relieve them
of the non-revenue producing and ex
pensive hauling of coal to supply their
own locomotives.
W e believe it is reasonable to ex
pect, from the facts and tendencies
we have cited, that the railroads, by
virtue of their inherent strength and
the indispensable position which they
occupy in our economic life, will be
able to solve the problems confront
ing them and continue to grow and
prosper. From an investment stand
point, it is necessary to exercise dis
crimination in selecting railroad
bonds, as in any other field. Among
the railroads of the country, the great
trunk line systems are in the best pos
ition, because of their greater divers
ity of traffic and territory, the long
haul character of most of their busi
ness, and their larger financial re
sources and earning power. In con
sidering the obligations of a given
railroad, those in an underlying posi
tion are, of course, to be preferred,
from the standpoint of safety, to ju n
ior and unsecured issues. At the same
time, the general credit of a railroad
is of the utmost importance in d eter
mining the desirability of any of its
obligations.

Plan Increase in Service Charges

Bankers Life Insurance
Company of Nebraska
Founded in 1887

LINCOLN

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

NEBRASKA

Proposals to increase service charges
on all checking accounts with mem
ber banks of the Salt Lake Clearing
House Association, are being consid
ered by members of the association,
F. M. Michelson, president, an
nounced recently.
The proposed changes, it is under
stood, will increase the monthly ser
vice fee on all personal accounts
under $200 with an additional charge
for more than four checks cashed
during a month.
Attorneys for the clearing house
association are now working on the
proposals, Mr. Michelson said. They
probably will go into effect June 1.

Central W estern Banker, June, 1931

INSURANCE

^ \ I ts Ajj

p lic a tio n to th e B a n k in g T ra tern iti/

Rent or Rent Value Insurance
U R IN G this period of retrench By HY SCARBOROUGH, J r.
ment, so-called, that the entire
country is passing through, in
surance of all types is interesting amount of the policy for any one
every one of us because of numerous month of untenantability. On a nonlosses that have occurred with greater fireproof building, the limitation clause
frequency during this period than is restricted to one-ninth or oneseemingly during the era of pros twelfth whereas with a fireproof
perity.
building the limitation clause may be
A form of insurance that can be written for one-sixth and up, of the
developed by most bank insurance annual rental income.
agencies is the rent, or rent value in
The probable length of time that it
surance— that is, protection against will take to restore the building to a
loss of rents or rent values, as a re rentable condition is the determining
sult of a building or buildings beingfactor for the amount of limitation to
rendered untenable by fire, windstorm,
be
applied. The rate is reduced to cor
explosion, riot or civil commotion.
respond
with the limitation clause and
The term “ren t” is the amount of
money paid by tenants for the use of is lower for a policy with the onea building, and the “rental value” is twelfth clause than it is for the policy
the term used when the owner oc with a one-sixth clause.
The two principal forms under
cupies the building, and it repays him
the amount which he would have to which rent or rent value insurance is
pay for the use of a building of sim written are Form s No. 1 and No. 2.
ilar dimensions and equal in all other Form No. 1 should be used for build
ings occupied by either tenants or
respects.
Policies protecting the hazards of owners or both. Form No. 2 should
rent loss or rent value are w ritten in be used for dwellings whether oc
favor of the property owner and in cupied by owners or tenants, or both.
the event his building is rendered un Roth of these forms are used whether
tenable, pays the owner the rental the building is vacant or not. The
value of his building during this pe main difference between them is that
riod of untenantability caused by the the dwelling form includes coverage
various hazards for which his prop on rental losses due to inherent ex
erty is insured against such losses plosion (with the exception of steam
caused by fire, windstorm, explosion, boilers and fly wheels) and Form No.
riot or civil commotion. Tf the owner 1 does not.
occupies the building himself, he
would lie reimbursed for the rental JZ>ENT or rental value insurance
written without a limit of loss
value lost, even though he did not
per month is usually not encouraged
rent tem porary quarters.
simply because it is only necessary to
IN S U R A N C E of this nature is usu carry insurance equivalent to a prop
ally w ritten with a one-twelfth lim erty ow ner’s rental income for the pe
itation clause, which is similar to the riod required to restore his building.
co-insurance clause in that it en If, for instance, a property owner can
courages full insurance to the annual restore his building within three
rental income or value. If the rental months, and you solicit his rent or
rental value insurance under a form
income from a building is $1,200, and
without a limit of loss per month, he
the one-twelfth limitation clause is will only carrv enough insurance to
used in the form, the insured must protect himself against loss of rents
carry $1,200 of insurance in order to for three months. Therefore, all rent
receive $100 for each month that his or rental value insurance written
building is rendered untenantable. If without a limit of loss per month will
the one-ninth limitation clause is used, result in a total loss possibilitv to the
the owner should carry insurance company, and at the same time the
equivalent to nine months rental in premium secured will be less and the
come to be fully protected, because he same as regards the commission paid.
can only collect one-ninth of the U nder the rules governing this sub

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Federal Reserve Bank of St. Louis

ject it will be noted that a substan
tial reduction in premium rate is given
where the insurance is written with a
limit of loss per month as against in
surance written without a limit of loss
per month.
The reference to “actual loss sus
tained,” as noted in the rent forms, is
placed therein for the express p u r
pose of preventing an insured from
makinp- a profit out of a fire (w ind
storm, explosion or riot and civil
commotionF It simply means this—-If
an insured’s rental income is $12,000
a year and $3,000 of that is paid out
to maintenance such as elevator ser
vice and janitor service, if then the
expense of elevator service does not
continue after the fire (windstorm,
explosion or riot or civil commotion),
the insured cannot recover more than
$9,000 for 12 months of untenant
ability W ithout the form being lim
ited to “actual loss sustained,” the
company might be called upon to pay
$12,000, thus making the fire (or other
casualty) profitable to him rather
than reimbursing him for his actual
loss sustained. O f course if the prop
erty is not rented, there is no loss
under the contract.
In determining the amount of in
surance to be carried in the case of a
large apartm ent building, for instance,
where certain apartm ents remain un
rented for short periods of time,
caused by the continual changing of
tenants, obtain from the landlord or
building m anager’s records the total
yearly income for all the buildings,
just as though it were rented in its
entirety. Tdeduct from this amount
the total of his yearly loss of income
as a result of the short periods of
vacancv caused by continual changing
of tenants, and you have the amount
of insurance to be carried with the
one-twelfth limitation clause. If the
one-ninth clause is used or solicited,
carry nine-twelfths of that amount.
If the owner can restore his building
in a short time he should use a form
that does not contain the limitation
clause, provided the premium will be
less than would be secured under a
form with a limitation clause. This
form of insurance should be consid
ered by the property owner and its
presentation by the banker will re
sult in helping your customer elim-

Central W estern Banker, June, 1931

mate one more hazard from the many
avenues of possible loss.

the adverse siege of depression in
greater degree than any other part of
the country. The Bankers Reserve has
business in force of over $133,000,000.
Its president, R. L. Robison, expects
1931 to be one of the best years in
the company’s history.

Has Good Record
T he Bankers Reserve Life In su r
ance Company of Omaha, one of the
Middle W est’s best known life insur
ance institutions, is continuing its
splendid production record. This
strongly intrenched life insurance com
pany is feeling the impulse of better
times, particularly in the Iowa-Nebraska territory which has withstood

Loan Company Formed
Announcing organization of N orth
west Livestock Loan Company, to be
affiliated with N orthwest Bancorporation, President E. W. Decker of the
latter company said he believes it will
prove to be one of the most import -

O maha L ife Insurance Company
CAN PLACE MEN IN
MISSOURI
UNDER ENERGETIC COMPETENT
STATE AGENT
or
Will give General A gent’s Contract
in certain parts of Iowa or Kansas

W. E. McCANDLESS,
Vice-President and
Manager o f Agents
OM AHA

;

Li f e

OFF THE PRESS

Insurance—

T h e enlarged annual edition

theBanker’s Friend |
B a n k s a re th e m e d iu m t h r o u g h w h ich m o d e r n b usiness of all k in d s is
\ c a rr ie d on. They, in tu r n , a re d e p e n d e n t on g e n e ra l bu sin ess activ ities for
S t h e i r ow n p ro s p e rity .
Life in s u ra n c e does m u ch to stabilize b u sin e ss o p e ra tio n s.
I t safej g u a r d s m e r c a n ti le an d i n d u s tr i a l e n te r p r i s e s a g a i n s t loss occasioned by th e
■ d e a th of t h e i r m a n a g i n g h ead s. I t step s in a n d m eets th e financial needs of
\ a fa m ily w hose b r e a d w in n e r h a s been ta k e n . It pro vides s te a d y incom es for
| people w ho h a v e t a k e n f o r e th o u g h t for th e i r la t e r years.
T he b eneficiaries of life in s u r a n c e a r e c u s to m e rs of th e b a n k s in th e i r
j h o m e c o m m u n ities , a n d th e m o n ey paid th e m soon finds its w ay in to depo sit
j acco un ts, in v e s tm e n ts, a n d th e ch a n n e ls of e v e ry d a y business.
F o r his ow n se lf-in te r e s t a n d th e g e n e ra l good of th o s e w ho rely upon
him , every b a n k e r sh o u ld p ro te c t his own in s ti tu t io n a n d fam ily w ith ade| q u a te life i n s u r a n c e a n d e n c o u ra g e his p a t r o n s to do likewise.
THE

SERVICE LIFE
9 B. R. HAYS,
P r e s id e n t

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

IN S U R A N C E CO., L IN CO L N, N E B R .
H o m e Office Bldg., 1 5 th an d N S tr e e ts
JO H N L. O E S C H G E R ,
S ec’y-Treas.

ant moves for years in the livestock
industry of the Northw est and Middlewest, The new company has au
thorized capital of $1,000,000.
Alex. Highland, vice president,
N orthwest Bancorporation, M inne
apolis, will be president of the N orth
west Livestock Loan Company. John
E. W agner, treasurer, Cudahy Pack
ing Company; H. G. Black, assistant
treasurer, A rm our and Company; A.
G. Sam, president, Live Stock N a
tional Bank, Sioux City, Iow a; F. A.
Birch, president, Stock Y ards N ation
al Bank, South St. Paul ; J. C. Thom
son, vice president, N orthwest Bancorporation, Minneapolis ; Ford E.
Hovey, president, Stock Y ards N a
tional Bank, O m aha; L. K. Moore,
assistant to the president, Stock Y ards
National Bank, O m aha; and A. T.
Hibbard, vice president. Union Bank
and T rust Company, Helena, M on
tana, will be directors.
Northwest Bancorporation has 135
affiliated institutions in eight states.
It finances the live stock industry
principally through its affiliated banks
at Omaha, Sioux Citv, South St. Paul,
and other points, and through the Cat
tle Feeders Loan Company, Omaha*
and the M ontana Loan Company,
Helena.
President Highland said, “The
Northwest Livestock Loan Company
will not only finance the livestock
business but will be prepared at such
times as conditions w arrant to enter
into plans for increased production of
livestock, improvement of grades, and
encouragement of farm ers who may
desire to put more animals on their
farm s.’’

of the

American Bank Reporter

( Blue Edition)

I
j
i
\
|

and Attorney List
1931 Is s u e

PRICE $12.00 A COPY
Corrected up to date of issuance

CO N T EN T S:

A complete list of Banks, Bankers, Savings
Banks, Principal Loan, Investment, Safe
Deposit and T ru st Companies in the
U nited States and C anada, w ith names of
Officers,
Capital,
Surplus,
U ndivided
Profits, Loans, Deposits, Principal Corre
spondents, A ttorney List, B anking Laws
and other general B anking Inform ation.

I
i

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42 0 E a s t 1 4 9 th S tr e e t
New Y o rk City

Central W estern Banker, June, 1931

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Nebraska
News
¡
I

.T. G. L O W E ,
P re sid e n t, N e b ra s k a H a n k e rs A s so cia tio n

W M , IS. H U G H E S , S e c r e t a r y ,
N e b ra sk a H a n k e rs A s so cia tio n

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..... ........................................................................................................ ............................................... 7,

Elected Cashier

Congratulations !

Gresham Banks Merge

At a recent meeting of the Board of
Directors, Fred H. Wackel was
elected cashier of the First National
Bank of W est Point, Nebraska. The
election of Mr. Wackel fills the va
cancy caused by the death of Wm.
Gentrup.
Mr. Wackel has had several years’
banking experience at the former Ne
braska State Bank in W est Point.

On May 11, Mr. and Mrs. Fred H.
Davis of Omaha celebrated their
fifty-fifth wedding anniversary. Mr.
Davis is president of the First N a
tional Bank of Omaha, and dean of
Omaha bankers.
The anniversary was marked bv
no departure from his business rou-

Two banks, the First National Bank
of Gresham, Nebraska, and the
Gresham State Bank have merged and
will operate under the name of the
Gresham State. David Young is pres
id en t; A rthur W alford, cashier, and
Robert Heinke chairman of the board
of directors.

Heads Omaha Chapter
^ Milton Barlow of the United States
National of Omaha, was re-elected
president of the Omaha chapter of
the American Institute of Banking at
a meeting of the board of governors.
O ther officers elected by the insti
tutes are: Vice-president, Jess Bill
ings, Occidental Building and Loan
association; secretary, Ernest Tan
ner, First National Bank; treasurer,
Wallace Johnston, Stock Yards N a
tional Bank.
Mr. Barlow has been transferred
from the savings department of his
bank to teller in the commercial de
partment.

Heads Association
W. F. Wenke, Pender, was named
president of the Northeast Nebraska
Bankers association at the annual
convention held in Norfolk, succeed
ing Rollie W. Ley of Wayne, who
served as head of the organization the
past year. S. D. Thornton, jr., Neligh,
is new vice president; Fred Muller,
Norfolk, secretary; and George H.
Haase, Emerson, treasurer.

Heads Creighton Bank
At the annual meeting of the board
of directors of the Creighton N ation
al Bank, George W right was elected
president to succeed J. F. Green, who
died recently. Mr. W right has been
actively identified with the institution
as vice-president. M. F. H arrington
of O ’Neill was chosen vice-president
in Mr. W right’s place. Mrs. Rene
Rodgers was made assistant cashier.

Buys Creston Bank
The Citizens State Bank of Cres
ton, Nebraska, which has been under
the control of C. C. Sheldon and R.
M. Campbell of Columbus, has been
sold to Fred Rabler of Leigh, who has
taken possession last month. Mr. Rab
ler and his son, Fred Jr., will conduct
the bank hereafter though Ralph B ar
rett, who has been in the bank for
several years, will remain with it.
O. W. Hahn, who has been with
the bank since its consolidation with
the Farm ers State Bank about seven
years ago, and Charles Hook will
remain with the bank for about thirty
days.

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Federal Reserve Bank of St. Louis

Pays 70% Dividend

F red H. D avis

tine, which keeps him at his desk
daily from 10:30 a. m . until 5 p . m .
Mr. Davis sa id :
“My advice to a young man would
be to get hold of a good job, work
hard and keep it. Make few changes.
Remember the old adage about the
rolling stone. H ard work and close
application to business are the only
means toward success that I know
about. The rearing of children is the
onlv way toward happiness in a fam
ily.”
Mr. and Mrs. Davis were married
in Trinity cathedral, Omaha, May
11, 1876. Mr. Davis will he 78 years
old, June 10.

The State Bank of Madison, Ne
braska, which was closed last Decem
ber and put in the hands of a receiver,
has paid depositors a dividend of 70
per cent of the money due them. This
was the first dividend to be paid.
Prospects appear to be good that
the bank will ultimately pay deposi
tors 100 cents on the dollar.

Assistant Cashier
At the regular monthly meeting of
the board of directors of the Farm ers
and M erchants Bank of Omaha, Mr.
Isaac G. W atson was elected assistant
cashier.
Mr. W atson has been in the employ
of the bank for the past 10 years.

Returns from Trip
Gwyer Yates, president of the
United States National Bank of
Omaha, after a three-weeks business
trip through the south and east, end-

Central W estern Banker, June, 1931
mg in May, returned to Omaha to
say :
“Little change is to be noted in the
business situation. One hopeful sign,
however, is that factories are receiv
ing a few more orders.”
Mr. Yates attended a meeting of
the executive council of the A m eri
can Bankers association at Augusta,
Ga., as a member of its bankruptcy
com m ission; a conference of reserve
city bankers of Richmond, Va., and
then went to New York.

president of the board, the banking
plan had also, in some cases, proved
embarrassing to the pupils from
homes where even the minimum de
posits had been hard to get.
Before the plan was abandoned, a
rule had been made that 25 cents
would be the minimum deposit ac
cepted, and pupils had been given en
velopes in which to keep smaller
coins until 25 cents were raised. Sev
eral hundred accounts at the First
National Bank, however, contained
only from 1 to 5 cents.

Orders Savings Plan Dropped

Loan Company Official

The Omaha board of education m
May ordered the school savings plan
dropped. The more than 40 thousand
children depositors, after several
years of the th rift savings, had ac
cumulated more than 360 thousand
dollars in the F irst National Bank.
In ending the system, the school
board gave as a reason the burden of
work the plan placed upon teachers,
which seemed too much in view of
the larger classes that each teacher
will have next year.
According to W alter L. Pierpont,

Ford Plovey, president of the Stock
Yards National Bank of Omaha, and
L. K. Moore, assistant to the presi
dent of the Stock Y ards National,
were elected vice-presidents of the
N orthwest Live Stock Loan Com
pany, organized at Minneapolis with
an authorized capital of one million
dollars. Edw ard W . Decker, president
of the N orthwest Bancorporation,
said the new company would finance
live stock operations. The president is
Alex Highland, a vice-president of
the N orthwest Bancorporation.

r n

years

0 U

EXPERIENCE

Serving Since 1871

THE FIRST NATIONAL BANK
OF

LINCOLN, NEBRASKA
Affiliated institution T h e F ir st T r u s t C o m p a n y

" ...........

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

’ ° " ’ 'T

C e n tral T y p e w rite r E x c h a n g e , Inc.

(E S T . 1903)

i
|

T Y P E W R IT E R S , A D D IN G M A C H IN E S, C H E C K W R IT E R S
L A T E S T M O D E L S A T B IG D ISC O U N T
A S K TO S E E

A I

1 7 1VT

W7
W

1912 Farnam St.

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

A I 17 C
/Y L .E O

f in e s t
“h e a v y d u t y ”
A D D IN G M A C H IN E M A D E

the

T H E S IX T H A N N U A L land val
uation and management course spon
sored by the Mortgage Bankers asso
ciation of Nebraska and the d ep art
ment of agronomv and conservation
and soil survey division of the N e
braska university college of agricul
ture, was held during May. The
course included a field trip from N or
folk, to study different soil types of
nearbv farm s ; and a banquet when
Dr. George E. Condra and Dean W .
W. Burr of the state universitv talked.
Talks during the field trips were by
H enry Hall of E. II. Lougee, Inc.,
and Charles Mead of the Omaha N a
tional Company, and others.
C H A R LES T. K O U N T Z E , chair
man of the board and vice-president,
and Denman Kountze, vice-president
of the F irst National Bank of Omaha,
attended a meeting recently in New
York of the Kountze Brothers bank
ing house.
T H E FARM ERS AND M ERCH
A N T S B A N K opened its doors for
business in W est Point, Neb., April
25. It was formed bv taking over 50
per cent of the deposits of the for
mer Nebraska State Bank, and began
business with assets of $193,401.72.
G. J. Collins is presid en t; Gerhard
Stalp, vice-president; W. T. Knieval,
cashier; Dorothea Reppert, assistant
cashier. Directors are - G. J. Collins,
Gerhard Stalp, Earl Reppert, Joseph
A. Terman, W. T. Knieval.

Placed at the disposal of N ebraska
Banks and Bankers is responsible
f o r t h e ir c o n tin u e d p a tr o n a g e .

i .........................

N E W M EM B ER S of the board of
governors of the Om aha chapter of
the American Institute of Banking,
elected for two year terms, are W al
lace Johnson, Stock Yards National
B ank; Ernest Tanner, F irst National
B ank; Richard Gash, Live Stock N a
tional ; Milton Barlow, United States
National ; and Ray Nelson, the federal
reserve bank.

Omaha, Nebraska 1

M IL T O N B A R LO W , of a bank
ing family long known in Om aha in
connection with the United States
National Bank, is the new president
of the Omaha chapter of the Am eri
can Institute of Banking.
The vice-president is Jess Billings,
Occidental Buildin & Loan associa
tio n ; secretary, Ernest Tanner, F irst
National B ank; treasurer. Wallace
lohnson, Stock Awards National Bank.
Mr. Barlow has been transferred
from the savings departm ent to teller
in the commercial departm ent of the
United States National Bank.
W . D A LE CLARK, president of
the Omaha National Bank, according
to usual custom of the Omaha Cham
ber of Commerce, was to be advanced
to the presidency June 9. Mr. Clark

Central W estern Banker, June, 1931
has served during the past year as
chairman of the executive committee
of the chamber. M r. Clark succeeds
H. H. Hoel as president of the cham
ber.
—
M RS. P. J. LA N G D O N , 60, presi
dent of the Bank of Gretna, Neb., is
dead. She had succeeded to the presi
dency after the death of her husband.
She had lived in Gretna nearly all her
life, and had been active in civic a f
fairs. Three sons and five daughters
survive.
--------T H E R E C E N T S E S S IO N of the
Nebraska legislature was marked by
the passage of few laws relating to
banks or banking procedure. House
bills that were passed and became
laws w e re :
Id. R. No. 39, by Davis of Weeping
W a te r: Provides for payment by state
and county treasurers of a service
charge of not more than one per cent
to banks in which are deposited pub
lic funds.
H.
R. No. 130, by Blackman of
Til d e n : Requires state banks as well
as national banks to give bond for
safe-keeping of public funds deposited
by city or village treasurers.
H. R. No. 141, by Nuenberger of
W akefield: Provides for deposit of
money of school district or town
treasurer in banks designated by the
governing board. T reasurer not liable
on bond for deposits thus made.
Senate bills that became laws w e re :
S. F. 108, by Wellensiek of Grand
Is la n d : Provides for restoration of
capital stock of state banks by assess
ing stockholders; provides for sale of
stock of individuals if assessment is
not complied with.
S. F. 137, by W ellensiek: Provides
that capital, invested in state banks
shall be determined on amount in
vested rather than on assessed valua
tion of such banks.
S. F. 143, by Bowring of M errim a n : Provides for giving by banks of
surety bonds or approved securities
for safety for public deposits.
TH E NEXT STATE
of the Nebraska Bankers
will be held at Lincoln,
and 23, the dates asked
Lincoln bankers.

convention
Association
October 22
for by the

G R O U P T H R E E of the Nebraska
Bankers Association, at its meeting
at Norfolk, elected the following offi
cers :
President, W . F. Wenke, cashier,
Pender State B ank; vice-president, S.
D. Thornton, Tr., president, Security
State Bank of N eligh; secretary, Fred
W . Muller, cashier, Security State
Bank, N orfolk; treasurer, George H.
Chase, cashier, Farm ers State Bank,
Emerson.
Senator Bulow of South Dakota
was a speaker at the group’s banquet.

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

HOW TO BRING PROSPERITY
BACK
(C o n tin u ed from page 7)

ket for farm ers’ notes anywhere at
any rate.
Country banks are even boasting
in their statements of how little farm
paper they are carrying and how
much they are loaning other lines of
business on commercial paper and
bonds, a sad commentary on the
depths to which agricultural credit
has fallen. The only lines of business
that do any considerable volume of
business with the farm er, such as the

m otor car industry and the im ple
ment business have set up their own
credit machinery. A griculture is rap
idly approaching a cash basis.
The prime cause for this state of
affairs is the fact that the Federal Re
serve Bank has locked the door
against agricultural credit. It has prac
tically destroyed agricultural credit.
This has made it necessary for banks
to reduce agricultural loans. Even the
depositors of country banks have
withdraw n deposits to buy bonds. The
city is therefore flooded with money
at the expense of the country.
A griculture is the largest business

Complete Facilities
Continental National Bank has complete fa1 cilities to render correspondent banks a modern,
efficient banking service. These facilities, plus of
ficers with many years of banking experience,
have earned a reputation for the Continental as
'T 'H E

A Bank for Bankers

Use our facilities and service for your Nebraska
transactions.
C h a s . T . K n a p p , Chairm an
E d w in N. V a n H o r n e , P resident
T. B . S t r a in , V ice-P resident
E dward A. B ec k e r , Cashier

W . S. B a t t ey , A sst. Vice-Pres.
R . C. J o h n s o n , A sst. Vice-Pres.
C. W . B a ttey , A sst. Cashier

Continental National Bank
LINCOLN, NEBRASKA
Affiliated in N O R T H W E S T B A N C O R P O R A T IO N G R O U P

United States National Bank
O M A H A

“An Unbroken Record of Seventy Years
is a Guarantee of Safe and
Satisfactory Service”
OFFICERS :
W . B. T . B elt , C h a irm a n o f th e B o a rd

Chairman Executive Committee
C. F. B r i n k m a n , Assistant Vice Pres.
V . B . C a l d w e l l , Assistant Vice Pres,
H . M . B u s h n e l l , Vice President and R . R . R a i n e y , Cashier
Trust Officer
H . E. R o g e r s , Assistant Cashier
A. L . V i c k e r y , Assistant Cashier
J . C. M c C l u r e , Vice President
H . W . Y a t e s , Assistant Trust Officer
T . F. M u r p h y , Vice President
J. F. R i n g l a n d , Assistant Cashier
P . B . H e n d r i c k s , Vice President
R . P . M o rsm a n ,

G. H . Y a t e s , President
S. S. F ord , Vice President

Central W estern Banker, June, 1931

in the nation today. There is a third
more invested in agriculture than in
m anufacturing and over twice as
much as in railroads. Yet agriculture
is paralyzed for lack of credit and this
paralysis is creeping over the entire
nation. Not only is more capital in
vested in agriculture than in industry
or in commerce but one third of the
population is engaged in agriculture
and at least half our population is di
rectly dependent on it. W hen you ask
the farm er to pay up, he stops buy
ing. W hen half the nation stops buy
ing, what happens to the other half?
They stop selling and therefore stop
buying also. Buying is an endless
circle and the circle has been broken.

dollar is commensurate with the pur
chasing power of those engaged in
other industries. This can be accom
plished in either of two ways. By re
ducing wages, freight rates and prices
of m anufactured articles, or by rais
ing the price of farm products. The
first method would inflict a hardship
upon debtors who contracted their
debts in the period of high prices and
it will be a slow wearing down process
strenuously resisted by those affected.
The second method could be brought
about in two w a y s: (1) By opening
up a better market, by in some way
increasinp- the demand or reducing
the supply of farm products or (2)
by restoring agricultural credit. The
first of these is now being tried, viz.,
reducing the supply but nothing has
been or can be accomplished as there

O U Y IN G will not start until the
purchasing power of the farm er’s

OUR
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MAILED

OFFERING
REGULARLY

LIST
U PON

REQUEST

G M A C obligations
enjoy th e p ro tec tiv e b ac k g ro u n d of highly
liquid assets, w ith credit factors widely diver
sified in region and enterprise. Long regarded as
a national standard for short term investment,
they have been purchased by individuals, in stitu
tions and thousands of banks the country over.
available in convenient maturities and
denominations at current discount rates

G
A

eneral

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OFFIC ES

M otors
C o r po r a t io n

P R I N C I P A L

CITIES

Executive Office - B roadway a t 57 t h S t r e e t - Blew T or\ City

c a p i t a l

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Federal Reserve Bank of St. Louis

s u r p l u s

OVER

a n d

u n d i v i d e d

$80,000,0 00

p r o f i t s

is no way of controlling the farm er’s
acreage. The only method that re
mains is simply to reverse the process
that has brought about the present
state of affairs—by expanding instead
of contracting agricultural credit.
An increase of agricultural credit
will start things the other way just
as surely as effect follows cause and it
would be a very simple thinp- to ac
complish. All that would be necessary
to do would be for the Federal R e
serve Banks to solicit rediscounts
from country banks as they did in
1916. A mild inflation at this time
would be the leaven that would
lighten the whole loaf. It may be
urged that more debts will not aid
the farm er, but it m ust be remem
bered that agricultural indebtedness
is less than a fourth of what it was
ten years ago, and debt in itseli is
not necessarily undesirable. The place
to start an enlargement of credit is
where deflation has been greatest.
There values are lowest and conse
quently buying can be started easily
and loans will be safe.
The first effect it would have would
have would be to stop further liquida
tion. This will remove part of the vis
ible supply. The next thing it would
do would be to start buying. W ith
funds easily available some farm er
will buy up some of this cheap feed,
others some of these cheap cattle and
sheep or other commodities. This will
remove some of the visible supply.
The bargains now offered in agricul
tural communities were never better
than they are today.
How an increase of credit would
work out can be illustrated as follows :
Suppose a bank loans a farm er $1,000
to buy some cattle. The man who re
ceives the $1,000 for his cattle may
buy a car or some farm machinery
or some other things that he needs
and the men from whom he buys will
be able to buy still other things. T hat
$1,000 will pass through many hands
and as it goes it will open a stream
of buving. W hen 60,000,000 people
start buying, the factories will open
up and when the factories open up
and the workers are getting three
square meals a day, prices of farm
products will advance.
W e have been much concerned over
the foreign m arket for our surplus
of grain while here at home there are
120,000,000 people to feed. Give them
all a job and they will help take care
of the surplus. W e have been waiting
for our foreign m arkets to improve
but the foreigners are waiting for oui
m arkets to improve. The world is
waiting for its greatest commercial
nation to lead the way.

Central W estern Banker, June, 1931

News of the Omaha Stock Yards
ftiiiim iiiiiiiiiH M iiiiim iiiiiiim iiiiiiiiiim iiiiiiiiiiiiiiiiiim iiiiiiiim im iiiiiiiiiiiiiiiiiiiiitiiiiiiiiiiiiiiiiiiim iiiim im iiiiiiiiiiiiiiim iim iiiiiiiiiiiiiiiu iriiiiiiim m ^

Good Producers
Nebraska dairy farm ers receive
from 6 to 79 cents an hour for milk
ing their cows, according to a study
of thousands of yearly records recent
ly completed by Jay Pierson, studentin the college of Agriculture.
Pierson bases his analysis upon butterfat production per cow and used
20,407 yearly records in his study.
The average time spent in caring for
each was calculated to be 170 hours
annually.
From the figures compiled in the
report, the average cow entered in the
dairy herd improvement associations
over Nebraska produces 305 pounds
of butterfat each year and returns $93
above feed costs. The average N e
braska cow, in contrast, produces but
180 pounds of butterfat. The cow
tested in the dairy herd improvement
work returns a labor wage of 46 cents
an hour for milking, while the aver
age Nebraska cow returns but 16
cents an hour.

Butterfat Production Increases
B utterfat production in Nebraska
dairy herd improvement associations
during the month of April advanced
eight-tenths of a pound per cow over
that of M arch, according to the
monthly dairy letter as issued from
the agricultural college by E. C.
Schneidenhelm, extension dairyman.
The average production for each
cow on test for the month was 29.4
pounds as compared with 28.4 pounds
for M arch.
In addition, the letter
shows the average production for A p
ril of this year was more than for that
of the corresponding month last year.
Despite the fact that butterfat
prices over the state have steadily de
clined during April, due to several
factors, Scheidenhelm says there is a
constant demand for dairy cattle cap
able of profitable production. The
dairy departm ent at the college of ag
riculture receives many inquiries each
week asking where cows and heifers
can be purchased.
W ith an average production of 3.59
pounds butter for each cow tested
during the month, the Ham ilton-H allM errick association led the state in
production during the month. Clyde
Baldwin is the official tester. The
W ashington county organization was
second and Republican Valley, third.

Show have decided on the week of
October 31 - November 6 as the dates
for the 1931 event.
It is necessary to select dates
that do not conflict with other im port
ant shows and that permit exhibitors
to take their stock to other points and
the above dates seem to meet this re
quirement.
The show is now so well estab
lished that it is largely a m atter of
detail, although the management is
planning several new and attractive
features.

THE IMPORTANCE OF
MARKET LOAN ANALYSIS
(C o ntinued from page 5)

rent losses without impairing his cap
ital.
Many statements for 1930 are show
ing losses in yarying amounts. W e are
not so m uch concerned, however,
about the business that has a good
earning record and a proper retention
of profits in spite of last year’s opera
tions. Some lines that need careful at
tention are those showing a large in
ventory but top heavy with debt. Like
riches and poverty they seem to be
present at the same time, or one im
mediately following the other.
Just what policy should we pursue
when some of the foregoing weak
nesses are displayed? I think we
should analyze each case very care

fully and thoughtfully, just as does a
doctor called in for consultation. This
is not a time that we should become
panicky and try to enforce to rapidly
the liquidation of loans where liquida
tion is desired, for that would bring
disastrous results.
Intelligent analysis and handling of
such cases is not an easy task but a
very im portant one and deserves real
consideration on our part as bankers.
To bring orderly liquidation, it is first
im portant that we should have a
thorough understanding with our cus
tomer, shorten the m aturity of his ob
ligation to 30-day intervals if neces
sary and set up a definite program of
payments at each m aturity. Such a
program is not always accepted in the
proper spirit and we may have the
pleasure of seeing the line retired and
placed with a friendly competitor.
This point brings up the advisability
of taking on a new account with a
loan which usually proves em barrass
ing if not disastrous to the accepting
bank.

A NOTHER

question that seems
pertinent at this time is the one
of extending credit to branch or chain
stores that may be located in your
city. I have in mind a merchant who
is located in a sizable county seat
town. He has branched out during the
past few years until he now has five
stores located within a radius of 50

O F F IC E R S
F O R D E. H O V EY , P re s id e n t
L . K . M O O R E , A s s t, t o P r e s .
J A S . B. O W E N , V i c e - P r e s .
H . C. M I L L E R , A s s t. C a s h i e r
F . J. E N E R S O N , V ic e - P re s .
C. L . O W E N , A s s t . C a s h i e r
W . H . D R E S S L E R , C a s h ie r
H E N R Y A . H O V E Y , A s s t. C a s h .
T. G. B O G G S , A u d i t o r

Y VIRTUE OF our location we are able to
secure immediate information regarding
shipments of live stock to this market.
We urge that you take advantage of this branch
of our service by telephone or telegraph.

Stock Yards National Bank of South Omaha
Affiliated with the Northwest Bancorporation

Dates for Ak-Sar-Ben Show
Directors of the Omaha A k-SarBen Live Stock Exposition and Horse

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Federal Reserve Bank of St. Louis

The Only Bank in the Union Stock Yards

Central W estern Banker, June, 1931

miles. He not only has a continuous
line of credit in his own bank but is
borrowing at each of the towns where
he maintains a branch store.
As I view his situation he is in an
over-extended condition, having used
a considerable amount of his current
assets for investment of a fixed char
acter in establishing other stores. He
is relying upon his bank to carry him
continuously on a capital loan. Unless
a merchant has adequate capital to
finance properly outside operations,
we definitely should discourage any
extension or expansion program that

might involve payments against fu
ture earnings or change his financial
position to the point requiring bank
credit. Such stores all should be fin
anced at the source.
The benefits of affiliation in N o rth
west Bancorporation become more ap
parent when one thinks along these
lines. We have the advantage of ad
vice and consultation, experience and
inform ation concerning conditions in
various industries. It is possible for us
to know if there are borrowing dupli
cations at other banks and to learn
the general condition of credit affect

ing any particular business. W e are
able to proceed more intelligently.
There is a great strengthening of
confidence resulting from our contact
with other banks that are operating
successfully. W e receive the advan
tage of inform ation that enables us to
decide policies in the interests of our
customers, our community, and o ur
selves, and that takes us farther away
from a condition to which I alluded
in a preceding paragraph, when I said
this is not the time that we should be
come panicky and try to enforce too
rapidly the liquidation of loans.

■■

LIVE STOCK NATIONAL BANK
OMAHA
invites you to visit them
when in Omaha

■■

“THE BANK OF PROMPT SERVICE”

■i

OFFICERS
W . P. A D K IN S , President
A LV IN E. JO H N SO N , V. President
H O W A R D O. W ILSO N , Cashier
R. H. K R O EG ER , Asst. Cashier
L. V. PU L L IA M , Asst. Cashier
W . S. H O G U E , Asst. Cashier

s lH lH la tla lH lH lH lH lH lH la ln la ilB lB l

AUSTRALIA

BANK O F NEW SO U T H W ALES
E S T A B L IS H E D

1817

(W ith w h ic h is a m a lg a m a te d T H E W E S T E R N
P A I D - U P C A P I T A L _________________________________
R E S E R V E F U N D ____________________________________
R E S E R V E L IA B IL IT Y O F P R O P R IE T O R S

A U S T R A L IA N

BANK)

__________________________ $ 3 7 ,5 0 0 ,0 0 0
__________________________ 3 0 ,7 5 0 ,0 0 0
__________________________ 3 7 ,5 0 0 ,0 0 0
$ 1 0 5 ,7 5 0 ,0 0 0

Aggregate A ssets 30th September, 1930, $446,141,890
A G E N T S — F I R S T N A T IO N A L B A N K , O M A H A , N E B R A S K A

HEAD OFFICE, GEORGE ST., SYDNEY

G EN E R A L M AN A G ER, A L F R E D

5 0 5 B r a n c h e s a n d A g e n c i e s in a l l A u s t r a l i a n S t a t e s , F e d e r a l T e r r i t o r y , N e w
N ew G u in e a , a n d L o n d o n .

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Federal Reserve Bank of St. Louis

C H A R L E S D A V ID S O N

LONDON OFFICE, 29 THREADNEEDLE ST., E. C. 2
Z e a la n d ,

F iji,

Papua,

M a n d a te d

T e rrito ry

Central W estern Banker, June, 1931

19
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Heads New Mexico Bankers
Association to Meet in Huron
Plans are practically complete for
the fortieth annual convention of the
South Dakota Bankers association in
H uron June 24, 25 and 26. The three
day meeting will attract nearly 350
bankers, George A. Starring, secretary
has estimated.
The H uron Country club will en
tertain delegates at a golf tournam ent
the first day, with competition ex
pected among 75 banker-golfers. The
executive council will meet in the eve
ning. The convention proper will get
under way the m orning of the second
day, Thursday.
Five South Dakota cities and three
outside states will contribute speakers,
who will include:
B. F. Patton, president H uron
chamber of commerce; J. W . Bryant,
Mitchell, vice president state bankers
association; A. B. Cahalan, Miller, as
sociation president; Don W. DeVey,
W estport, treasurer; I. A. Churchill,
H uron, counsel for the association;
L. G. Troth, Pierre, state secretary
of agriculture; Harold E. Wood, Chi
cago, vice president Forem an-State
corporation ; Governor W arren Green ;
Jam es E. Clark, New York, editor
American Bankers Association Jour
nal; Theodore Christianson, M inne
apolis ; form er governor of M inne
sota ; E. A. Ruden, Pierre, state super
intendent of b an k s; Bruce Barnes,
Pierre, state sheriff ; H erbert V. Prochnow, Chicago, representative of
F irst National B ank; and William E.
Perrenoud, Sioux Falls, representa
tive American Institute of Banking.
Special entertainm ent features are
being planned for the wives of the
bankers, with the social climax being
a dancing party at the H uron Country
club Thursday evening.
The program is so arranged that
the convention will be concluded at
noon the final day instead of late
afternoon, to permit delegates to drive
home after the last session if they de
sire.

Banks are Consolidated
The Hillsview State Bank of Hillsview, South Dakota, has been con
solidated with the Farm ers State

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Federal Reserve Bank of St. Louis

Bank of Hostner, the state banking
departm ent has announced. All as
sets and liabilities of the Hillsview
bank have been taken over by the
Hosm er institution.

Group Four
W atertow n was selected for the
1932 meeting place of group four of
the South Dakota B ankers’ Associa
tion at the annual meeting in Milbank.
George K. Burt, W atertow n, was
elected president ; J. A. Anderson,
Pierpont, vice president, and Bert
Morgan, W atertow n, secretary-treas
urer.

Aberdeen Consolidation
The Aberdeen National Bank and
T rust Company, Aberdeen, South
Dakota, and the F irst State Savings
Bank were merged last month under
the name of the former, giving Aber
deen a national bank with resources
of more than $4,000,000.
Terms were agreed upon by the
boards of directors of the two insti
tutions at a recent meeting. It was
announced that the personnel of both
banks will be retained.

Issues Reward Poster
The South Dakota Bankers Asso
ciation has issued a two-color rew ard
poster offering “$1,000 Reward for
Bank Robbers, Dead or Alive.” The
posters have been issued to each mem
ber bank of the association with the
request that they be displayed in a
conspicuous place in the bank lobby.
It is believed that this will have a
tendency to discourage would-be
bandits. F or it is a fact that robbers
are prone to avoid those places which
offer a large rew ard for their dead
bodies.

Group Holds Meeting
H arm on Kopperud of Lake P res
ton was named president of Group
Five of the South Dakota Bankers
association at the annual meeting held
at H uron, to succeed Russel Bard of
Miller. Théo. H. Meyer of De Smet
was named chairman for Kingsbury
county.
Mr. Kopperud is vice president of
the Community State bank of Lake
Preston.

Dan FI. Otis of Madison, W iscon
sin, director of the Agricultural Com
mittee of the American Bankers As
sociation, was the principal speaker
at the final session of the New Mexico
Bankers Association convention at
Carlsbad. Otis praised the farm ers of
the nation and discussed their finan
cial problems with the New Mexico
bankers.
O ther speakers were C. A. Pierce,
mine superintendent of the United
States Potash Company at Carlsbad,
and Antone Snyder, assistant super
intendent of Carlsbad Caverns N a
tional park.
P. P. McSain, president of the First
National Bank of Las Cruces, N. M.,
was elected president of the New
Mexico Bankers Association. O ther
officers elected were A rth u r F. Jones,
Portales, vice-president and A. E.
H utsinger, cashier of the Citizens
State Bank at Vaughn, treasurer,
Mrs. M argaret Barnes of Albuquer
que, was re-elected executive secre
tary of the association.

Heads Bankers’ Association
W. P. B. McSain, president of the
F irst National Bank at Las Cruces,
was elected president of the New
Mexico Bankers’ Association, suc
ceeding G. K. Richardson, president
of the Carlsbad National Bank.
A rthur F. Jones, of the F irst N a
tional at Portales, was elected vicepresident.
Mrs. M argaret Barnes of Albu
querque was re-elected executive sec
retary, and A. E. H untsinger, of the
Citizens’ State Bank at Vaughn, was
re-elected treasurer.

In National Contest
W. C. Brinker Jr. of the In tern a
tional Co. of Denver, Colorado, will
participate in the national public
speaking contest of the American In
stitute of Banking, to be held June 9
at Pittsburgh during the organiza
tion’s annual convention.
B rinker qualified for the national
contest by winning the preliminary
contest of the institute’s ninth district
at Salt Lake City last month. The
ninth district includes the states of
Colorado, U tah, Arizona, Wyoming,
Idaho and Nevada.
The subject of the speeches this
year is “The Banker as a Stabilizer
of Business.” Prizes are offered for
the national competition by the A. P.
Giannini Foundation.

Central W estern Banker, June, 1931

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Colorado News
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Cut Interest Rates

Members of the Clearing House
Association are : F irst National, Gree
ley Union National, and W eld County
Savings.

Three Greeley, Colorado, banks
that constitute the Greeley Clearing
House Association will reduce inter
est on deposits from 4 per cent to 3
per cent, effective June 30, the inter
est paying date, T. C. Phillips, presi
dent of the Clearing House, an
nounced last month. The interest rate
on certificates of deposit will be
changed as they mature.
Greeley banks have taken this step
to adjust their charges to the gradu
ally lowering interest rates on the
only securities available for them to
invest safely their own reserves, Mr.
Phillips explained. Interest rates paid
on deposits by banks over the state
and nation have been lowered for the
same reason, and the action brings
members of the Greeley Clearing
House Association more in line with
banks elsewhere, he added.
Greeley banks, he said, are now
keeping a much higher percentage of
their funds in liquid assets, and con
sequently at a much lower rate of in
terest, thus making the institutions
absolutely safe against any eventual
ity__________

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Federal Reserve Bank of St. Louis

Colorado Banker Dies
Depositors Get Checks
Three hundred and eighteen divi
dend checks, amounting to $20,627.58,
were mailed last month to depositors
of the defunct People’s State Bank of
W ray, Colorado, by the State Bank
Commissioner Grant McFerson. This
was a 20 per cent divident and makes
a total of 89 per cent paid creditors
since the bank was closed September
9, 1930.

Elects Officers
Colorado Springs chapter of the
American Institute of Banking held
its annual election of officers at the
American Legion hut recently. J. Otis
Bymaster of the F irst National Bank
was made president. The other offi
cers a r e :
Paul L. McDaniels, State Savings
Bank, vice president; Mrs. Hal H a r
ris, Colorado Title and T rust Com
pany, corresponding secretary; Je r

T he
C h a s e N a t io n a l B a n k
o f the City o f N e w Y o?~k
P

ine

Street

ome Kovarik, F irst National Bank,
financial secretary; G. D. Rose, E x
change National Bank, treasurer.
The newly elected president is the
official representative of this chapter
to attend the national convention of
American Institute of Banking to be
held in Pittsburgh, Pennsylvania,
June 8-12.

corner

assau

Loring C. Lennox, 50 years old,
prominent banker and son of W illiam
C. Lennox, Colorado Springs m illion
aire, died recently at his home, probablv from a heart attack.
Physicians said Mr. Lennox’s heart
probably was affected by a rheumatic
attack.
Mr. Lennox was educated at Colo
rado Springs high school, Colorado
college and H arvard university.
Active in athletic circles during his
student days, he was captain of both
high school and Colorado college foot
ball teams.
H e is survived by his widow, Mrs.
Lucy S. Lennox; his father, and three
sons, Loring C. Lennox Jr., William
O rin Lennox and Robert Berwick
Lennox, all of Colorado Springs.

Cashier Resigns
A fter twelve years’ association with
the Larim er County Bank and T rust
Company and with its successor, the
Loveland State Bank of Loveland,
Colorado, Chauncey O. W inton has
tendered his resignation as cashier of
the latter institution to take effect
June 1. Mr. W inton will retire from
active participation in the banking
business.
The vacancy has not yet been filled,
it being reported that his duties will
be divided among other employes of
the bank.

»«

Capital
. . . $ 148,000,000
Surplus and Profits
211,000,000
Deposits . . . 1,883,000,000
T h e C hase N a tio n a l B an k invites
th e a c c o u n ts of b a n k s , b a n k e r s ,
co rp o ratio n s, firm s and in d iv id u als.
»«
General Banking • Trust Department
Foreign Department

Group Names Officers
P. K. Yonge of Cedaredge, Colo
rado, was elected president of the
Delta County Bankers’ Association at
a meeting of the organization in
Paonia. R. C. R aber of Delta was
elected vice president of the organiza
tion. O ther officers were elected as
follows : H arry Addams of Hotchkiss,
secretary; Charles P ark er of Delta,
treasurer.
There were about 40 bankers from
various parts of Delta county present
at the meeting. The session was de
voted mainly to m atters of business,
although there was a short program
during which W eldon Hammond, a
pioneer resident of Paonia, told some
interesting facts about the history of
western Colorado in the 70’s.

Central W estern Banker, June, 1931

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Wyoming News
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Buy Controlling Interest
J. Boatsman and his son J. S.
Boatsman have acquired the control
ling interest of the Union State Bank
of Upton, Wyoming, as a result of
their purchase of the stock of four
leading stockholders. The official line
up was reorganized by the election of
the following officers: J. S. Boatsman,
p resid en t; Albert Cellers, vice presi
dent; J. Boatsman, cashier; chairman
of the board, M. L. Snow. A. D. Cal
kins, cashier, will retain his present
position until the end of the year.

ries touched upon specific problems of
management. The one presented here
has to do with the nature of the m ar
ket served by all business concerns.
The composition of every m arket is
constantly changing and it is neces
sary for a business to appreciate that
fact and to conduct its operations ac
cordingly. The essence of the message
is contained in the illustration and
headline, “M arkets on the M arch.”

It is of particular interest that this
is the first investment house advertise
ment which has ever received a H a r
vard Advertising Award, and it is
indicative of the growing interest in
and the rise in importance of such ad
vertising.
In the first annual contest and ex
hibit of Chicago newspaper advertis
ing sponsored by the Advertising
Council of the Chicago Association of
Commerce, awards which were made
recently gave A. G. Becker & Co.,
first in two out of the six classifica
tions into which the exhibit was di
vided. The advertising won the award
for the best local campaign, and for
the best illustration.

Institute Members Complete Work
The Casper, Wyoming, branch of
the American Institute of Banking
completed its first year’s work with a
final w ritten examination of the sub
ject m atter covered. The final exam
ination papers are submitted to the
American Institute of Banking in
New York City for review and certi
ficates of proficiency in the funda
mentals of banking will be issued to
the members successfully passing the
course requirements.
The members completing the full
course and taking final examination
are as follow s:
H. J. Clare, P. W . Comer, Carl
Hewlett, C. H. M cFarland, Richard
Niles, M argaret O ’Brien, W. O. R at
cliff, C. O. Stout, H. J. W alters and
F reda H. W einberg, of the Casper
N ational; Paul Bartling, L. F. Davis,
George Rafferty, A. C. Riker, Carl F.
Shumaker, Rachael Snyder, Mabel
Val Dez and M yrtle Schreffler of the
W yoming National B ank; W . M.
Barbee, Leo A. Dunn, M. K. Ellison,
Jessamine H. Freeman, E. S. Holmberg, Kathleen Snyder, Monica Sny
der of the W yoming T rust Company;
Juliette Flint of the Commercial In
vestment Company and L. M. Kyner
of the Equitable Life Assurance so
ciety.
The officers of the Casper class are
H. J. Clare of the Casper National
Bank, president; W . M. Barbee of the
W yoming T rust Company, vice presi
dent ; Miss Kathleen Snyder of the
W yoming T rust Company, secretary,
and R. C. Cather, instructor.

A. G. BECKER AD WINS AWARD
(C o n tin u ed from page S)

ability of the management of the con
cerns whose paper it purchased and
offered to its clientele. This point of
view has persisted and forms the basis
for the investment service offered.
Individual advertisements in the se

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Federal Reserve Bank of St. Louis

The Morrison is the
tallest hotel in the
world. — 4-6 stories
high — with 1,950

W h e n completed,
the Morrison will be
the world’s largest
hotel, with 3,450
rooms.

Chicago’s

M O R R IS O N H O T E L
’T allest H otel in the W orld
46 Stories High

1,950 Rooms -- $2.50 Up
500 Rooms Being Added

Every guest room is outside, with bath,
running ice w ater, bed-head lamp and
Servidor. Each floor has its own house
keeper and the hotel’s garage has extensive
facilities for car storage. Rates are ex
tremely m oderate — $2.50 up — because
valuable subleases at this location pay all
the ground rent and the saving is passed
on to the guests.

Closest in the City to Stores, Offices,
Theatres and Railroad Stations

Central W estern Banker, June, 1931
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Bankers W an ts
T h is B a n k e r s W a n ts D e p a r t
m e n t is fo r th e fr e e u s e o f C e n tr a l
W e ste r n B a n k e r su b sc r ib e r s. T o
a ll o th e r s a c h a r g e o f fiv e c e n ts
p er w o r d p e r in s e r tio n w ill b e
m ade.
W e r e s e r v e th e r ig h t to
e d it a ll co p y or to r e je c t s u c h a d
v e r tis e m e n ts th a t w e d e e m u n s u it
a b le . A d d r ess a ll c o m m u n ic a tio n s
to th e B a n k e r s W a n ts D e p a r tm en t,
C e n tr a l W e ste r n B a n k e r , O m aha,
N e b r a sk a .

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Assistant Cashier Resigns
Mrs. M artin Zwanziger has re
signed her position as assistant cashier
of the Alma National Bank of Alma,
Kansas. She has been doing banking
work for the past eighteen years,
thirteen of which have been with the
Alma National.

Position wanted. M a r rie d m an , 4 0 y ears

old, w ith 15 y e a r s ’ p ra c tic a l ex perien ce
in c o u n tr y b a n k s, seek s e m p lo y m e n t
w ith b a n k in N e b ra s k a . Can f u r n is h th e
best of refe re n c e s. A d d ress Box 1002,
C e n tra l W e s t e r n B a n k e r.

Joins Lawrence Bank Force
George Docking has accepted a po
sition as cashier of the F irst National
Bank of Lawrence, Kansas. F. C.
Whipple, who formerly held the com
bined position of vice president and
cashier, has relinquished the duties of
the latter position and will continue
as vice president.
Mr. Docking was cashier of the
Kansas Reserve State Bank of T o
peka before its consolidation with the
National Bank of Topeka.
The officers of the F irst National
Bank of Lawrence under the new a r
rangement will be : W illiam Docking,
chairman of the board ; V. K. Hoover,
president ; W . F. M arch, vice presi
dent and trust officer ; F. C. Whipple,
vice president ; George Docking, cash
ier ; Carl Antrim , assistant cashier,
and E. B. M artin, assistant cashier.

Kansas Banks Merge
The state banking department has
announced the merging of the B ur
lingame State bank with the F irst N a
tional bank, Burlingame, Kansas, ef
fective last month,
The State bank’s latest statement
showed $81,000 deposits.

Reorganized Bank Opens
The reorganized Blaine State bank,
which merged with the State bank of
Lillis, Kansas, commenced business last
month with M. O ’Connor as president;
E d Malone, vice p resident; W . J.
H arrington, first vice president and
m anager; J. P. Redmond, cashier, and
W ilma, Crevan, assistant cashier.

IN LINCOLN....
HOTEL LINCOLN
HOTEL CAPITAL

IN NORFOLK....
HOTEL NORFOLK
M aximum Comfort at
a Minimum Rate

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Federal Reserve Bank of St. Louis

MacLennan to Board
F rank P. MacLennan, publisher of
the Topeka State Journal, has been
elected to the board of directors of
the National Bank of Topeka, Carl
W . McKeen, president, announced re
cently. Mr. MacLennan, who helped
organize the Kansas Reserve state
bank, was president of that institution
until it was purchased by the National
Bank of Topeka.

Disposes of Interests
R. A. Newman, president of the
F irst National Bank at Sterling, K an
sas, has resigned, and sold his inter
est in the bank to A. L. B urgert and
E. W. Farrell, who have been asso
ciated with the bank for the past five
years. Mr. B urgert becomes presi
dent, and Mr. Farrell, cashier, under
the reorganization.
Mr. Newman has been president of
the Sterling bank for the past eleven
years, and has been with the bank for
nearly a quarter of a century.

Heads Wichita Association
Horace J. Dunn was elected presi
dent of the National Savings & Loan
association of W ichita, Kansas, to
succeed W . C. Coleman at a meeting
of the board of directors. C. M. jackman was chosen vice president re
placing Mr. Dunn.
O ther active officers and directors
of the association are R. E. Hangen,
Wellington, vice president ; L. E.
Roush, vice presidetn and secretary ;
O. K. W ertz, assistant secretary and
treasurer ; Charles Rummel, assistant
treasurer; S. G. Hatfield, cashier;
Robert C. Foulston, general counsel ;
J. W . Garrott, F rank S. Rose, L. W .
M ayberry, A. H. Webb, P. L. Brock
way, W . A. Dye, Dr. E. S. Edgerton
and Claude E. Neil.

Group 1 Meets at Beatrice
One hundred seventy-five members
of Group One of the Nebraska Bank
ers Association, meet in annual m eet
ing at Beatrice on May 19th.
The noon luncheon, which was given
through the courtesy of the Beatrice
banks and financial institutions, was
addressed by C. Petrus Peterson, of
Lincoln, counsel of the Nebraska
Bankers Association. Over two hun
dred attend the luncheon.
The entire program was filled with
most interesting and instructive ad
dresses on all phases of banking oper
ation, including loans, investments,
profit producing policies and bank
management.
Officers elected for the ensuing year
were : Otto Kotouc of Humboldt,
president ; Earl Wilkins, Geneva, vice
president and W . W . Heim of Daw
son, secretary.

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Federal Reserve Bank of St. Louis

securities A nalysis
For

Correspondent
B anks

C en tra l H a n o v e r
a n a ly z e
m ake

se c u r ity

im p a r tia l

m e n d a tio n s.

is e q u i p p e d to

l i s t s o f l, a n k s a n d
in v e stm e n t

C en tra l

recom

H anover

lia s

n o se c u r itie s fo r sa le.

Tke

ckarge

is m o d e r a t e .

C orre

s p o n d e n c e is i n v i t e d .

C entral H anover
B A N K

A N D

T R U S T

C O M P A N Y

NEW YORK
R e p r e s e n t a ti v e s in L o n d o n , P a r i s , B e r l i n a n d B u e n o s A ire s

NO SECURITIES FOR SALE

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Federal Reserve Bank of St. Louis

Full text of Central Western Banker : June 1931, Volume 26, No. 6

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