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https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis CENTRAL WESTERN BANKER Omaha H ow T o T a k e Care o f Office Machines Page 4 W h at Trust Service Offers to T h e Public Page 5 T h e Voluntary Allotment Plan o f Farm Relief Page 9 Public Utilities fo r Trust Investment Page 11 March 1933 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BUILT ON A C O N S E R V A T IV E B A N K IN G P O L IC Y The First National Bank of Omaha, which was nationalized in 1863, seventy years ago, has steadfastly held to its policy of conservative banking. Our con stant adherence to such a policy has gained and held the con fidence of the people of this ter ritory in our institution. The faith and trust displayed by our patrons are shown in the fact that many have been our cus tomers for twenty, thirty, and forty years— some for more than fifty years. When you are in Omaha, please make our bank your Omaha headquarters. RST National BANK OF OMAHA Central Western Banker, M a rc h , 1933 3 CEN TR AL W E /T E R N EANRER 410 A R TH U R BUILDING OMAHA C l if f o r d D R. W . M W m . H. M V olum e oorhead, aas, Associate Publisher H. H. H Publisher eP u y , ayn es, Editor H . E. O ’ C o n n o r , Field Representative Vice-President, 1221 First National Bank Bldg., Chicago F r a n k P. S y m s , Vice-President, 19 W e st 44th Street, New York F r a n k S. L e w i s , 218 Essex B ldg., Minneapolis Subscription, 25 cents per copy; $2.00 per year. Entered as second-class matter at the Omaha postoffice. 28 M A R C H , 1933 N um ber The Teller Tells the World B y C. W . F I S H B A U G H y iT S O M E time you may hear the expression about the O ld Lady of Threadneedle Street. W e ll, just act calm and light a cigaret. T h e O ld Lady is just a humorous appellation given to the Bank of England. It was formerly located on Three Needle Street; with a slight change it easily became Threadneedle Street. N ow the favorite ex pression seems to be: “ T h e O ld Punk down on M ain Street.” A A A ^ p H E Y tell me a young newsboy put the bee on a few bankers at a convention. T h e newsboy came down the street loudly shouting: “ W uxtra, all about the big swindle, 278 people swindled, W u x tra .” News is news and bankers want the latest, so one of a group of bankers hailed the newsboy. T h e banker after searching all his pockets for a nickel without success, finally borrowed one and bought a paper. He hastily scanned the sheet. T here was nothing about a swindle that he could see. H e blurted: “ Say, there’s nothing about a swindle in this.” T h e news boy winked and went merrily down the street shout ing: “ W uxtra, all about the big swindle, 279 people swindled, W u x tra .” A A A j T Y O U want to relax a little and attend a good movie with a little banking mixed in the plot you’ll certainly like the follow in g: “ Prosperity,” “ American Madness,” and “ Silver D olla r.” One thing is common in all the pictures— they each show part of a bank run. “ Silver D olla r’s” bank run is way back when President M cK inley stood by the gold standard and silver’s value sank and sank. A A A R E C E N T L Y there has been much publicity about different ones naming the ten most beautiful words. N ow here is my selection; you can correct me if I ’m w ron g : “ M oney, gold, silver, greenbacks, dough, currency, legal tender, cash, and coin of the realm.” https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis J p U M O R S , false statements and gossip has caused much trouble in the banking world. J. G . H o l land makes an excellent statement about this e v il: “ Gossip is always a personal confession either of malice or inbecility, and the young should not only shun it, but by the most thorough culture relieve themselves from all temptation to indulge in it. It is a low, frivolous, and too often a dirty business. There are country neighborhoods in which it rages like a pest. Churches are split in pieces by it. Neigh bors are made enemies by it for life. In many per sons it degenerates into a chronic disease, which is practically incurable. Let the young cure it while they may.” A A A ^ B O U T two years ago some large city banks opened a new kind of account for customers; a checking-saving account. A certain balance was kept in each account. W hen the checking account went down too low, an amount was transferred from the savings account. Evidently it has not worked out very well, as I see that several of the banks plan to discontinue the dual account. A A A rjT 'H E N E X T time someone uses the term “ T h e Almighty D olla r” just fool them. Speak right up and say: “ D o you know who first used that ex pression? N o ? W e ll, then I ’ll tell you. W ashington Irving first used that term in ‘A Creole V illage,’ published in 1837.” Yep, a few cracks like that used at the right time and you’ll be the life of the party. A A A W H E N Britain paid its war debt payment in December it was a simple task. T h e Bank of England officials unlocked the safe in which the key to the gold stock vault was kept. T h e porters of the bank opened the vault and removed $95,550,000 in bar gold from one section of the vault to another and labeled it: “ Property of the ETnited States.” T h e vault was then locked and the key returned to the safe. T hat was that. 3 Central Western Banker, M a rc h , 1933 4 The average bank has considerable money invested in M e c h a n ic a l E q u ip m e n t. Carelessness and neglect can run into high-priced repairs. It will pay you to know How To Take Care of O F F IC E M A C H IN E S A V E R Y high percentage of difficul ties with office machines can be traced to one factor — neglect. M ost of us have learned, in this ma chine age, to give a little first aid to the mechanical appliances used in our homes. W e put a few drops of oil on our vacuum cleaners. W e give the grease cups on our washing machines a turn now and then. W e give our automobile a cleaning when it needs it; we put it under cover at night. M ost of us do these things and have found that it pays to do so. N ot only does it prolong the lives of these mechanical servants, but as a result they give us better service. T h e same kind of care given to office machines, gives the same results. Adding machines, typewriters, book keeping machines, check writers, coin counters and all the other mechanical aids at our service during our daily busi ness activity will give us better service and last longer if given a little care. T his does not mean an attempt at making repairmen out of machine oper ators, but simply the acquiring of a few habits that require little time but mean so much in the life and usefulness of a machine. Neglecting the ordinary dusting and covering of machines when they are not in use, causes much serious trouble. O n an adding machine for example, the ac cumulated dust gradually works its way into the mechanism, mixes with the oil inside and becomes a gummy substance that prevents the free movement of the parts. As a result the machine does not add correctly. T h e work must be done over again. O ften the time lost in check ing delays many others who must use the same figures. A call for a mechanic is sometimes necessary. Dust mixed with oil becomes an abrasive. If no immediate difficulty is experienced, ultimately this abrasive mixture slowly grinds the life out of the bearings. O n a typewriter, dust accumulating on the segment causes the typebars to https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By W alter R egenhardt Chief Inspector Cleveland Trust Company stick at the point of contact with the platen. This condition is not only an an noyance, but again usually requires the services of a mechanic to eliminate. Dust and particles of paper not brush ed out of the die on a check writer ob literates the word written and leaves only a smudge on the check. Dust jammed in the coin slide of a teller’s change machine, causes the slide to stick back and coins are bounced on the count er or roll on the floor. Dust in the coin tray may cause a teller to short-change a customer unknowingly— should he fail to check the change. F IV E R U L E S for getting the most service out of Mechanical Equipment: 1. Cover machines when not in use. 2. Keep machines dusted 3. Keep type clean. 4. Keep rolls or platens clean. 5. Learn w h e re and w hen to oil machines. Dust and excessive ink on a number ing machine gums up the whole works — poor English but a positive fact. A ll dust contains a very high percentage of fine grit, similar in effect to fine emery cloth. These conditions are easily avoided by proper care, frequent dusting and a reg ular use of the cover for its intended purpose. T h e time and effort required to take proper care of any machine is insignificant. T h e expense that can often be saved is, in total, very considerable. Office machines require oiling, just as do any other machines. A drop of oil in the right place on a machine often trans forms a sluggish, squeaky mechanism into a smooth-operating machine. T he only important point to learn is where to oil and where not to oil a machine. A ny repairman w ill gladly instruct an operator in oiling his or her machine. In discriminate oiling defeats its own pur pose and w ill cause trouble instead of improving operation. For instance, oil on rubber w ill cause it to rot and swell, making replacement necessary. T h e danger of over-oiling is so great that some mechanics hesitate to encourage oiling by operators. M any machine operators have found that cleaning the platens or rubber rolls on their machines eliminates the slipping of paper. A liquid for this purpose is carried in the stock room. LTsually the slipping of paper is caused by the glazed surface of the platen. By removing this glaze with frequent cleaning, the orig inal surface is restored. A n analysis of reports made out by repairmen, shows how much can be done by operators to eliminate trouble through proper care of their machines. A w ellkept machine has fewer repair calls. I f a workman is known by his tools, what shall we say of an operator who neglects his machine? T h e total investment in all kinds of machines used in our bank exceeds a mil lion dollars. Maintenance costs are con siderable. It is within the power of each operator to raise or lower these costs. Proper care lowers costs. Neglect raises costs. A neglected machine soon becomes an abused machine. A n abused machine is well on the way toward the junkyard. Operators are urged to become more familiar with the machines they operate. W ith a thorough understanding of all the features on a machine, and with proper care, a saving in time and ex pense is realized. D Central Western Banker, M a rc h , 1933 W H A T TRUST S E R V IC E O F F E R S TO T H E P U B L IC F r a n c is H . S isso n President, Am erican Bankers Association Th is address by Francis H. Sisson was given before the M id-W inter Trust Conference held recently in New York under the auspices of the American Bankers Association. M r. Sisson is vice-president of The Guaranty Company, of New York T' IS my purpose to discuss briefly some of the principles and problems involved in presenting to the public what a trust institution has to offer in the field of personal trust service. In other words, my approach to the subject assigned to me w ill be that of business development rather than that of trust administration. show the assets of the estates to be di vided as fo llo w s: 6 2 .4 0 % in stocks and bonds 1 3.43% in real estate 9.62 % in mortgages, cash, etc. 3.31 % in insurance 1 1.24% in other assets T h e modern trust institution is a logi cal product of our times, developed in response to the need of our people for a type of corporate organization to per form adequately the services of an exe cutor and trustee, in an age of complex organization in every field of business and finance. T his variety of assets may not seem, at first glance, to be of very complex nature, but consider the item of stocks and bonds alone for a moment, as met with in actual estate administration. A large Eastern trust company, as executor of estates recently in process of settle ment, held securities issued by more than 1,300 different companies, diversified in many lines of business, including the fo llo w in g : 384 M anufacturing Companies 95 Railroads 164 Public Utilities 51 Merchandising Companies 69 O il Companies 111 M ining Companies 106 Real Estate Companies 221 Governments and Municipalities 39 Banks 16 Insurance Companies 17 Investment Trusts I Highly Specialized It is only when we clearly understand the industrial growth of the country from simple beginings to the present complex system that we see the trust company as a highly specialized form of corporate organization adapted to meet present day needs. Estates of today have the same character as our variegated in dustrial pattern. Figures issued by the United States Treasury Department, covering Federal estate tax returns filed during 1931, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 100.00 % A single estate administered by the same company contained among its as sets securities issued by 98 domestic cor porations, 23 municipalities, and 14 for eign governments and corporations. Securities Vary T h e complexity of security holdings does not end with diversity by industry, for the types of security issues themselves vary greatly. T h e estates being admin istered by the previously-mentioned trust company at a recent date contained at least 68 different types of stocks and bonds. T h e preferred stocks, for ex ample, included the follow ing types : first preferred, junior preferred, preferred as to dividends and as to assets and divi dends, participating, voting, non-voting, cumulative, non - cumulative, callable, non-callable, graduated dividend, con vertible, carrying warrants. Real estate, too, presents complexities undreamed of by the estate owner of 1800. T o refer again to the estates ad ministered by the trust company just re ferred to, the real property that it was called upon to handle as executor includ ed apartment buildings, factory and loft buildings, office buildings, city and coun try residences, cooperative apartments, 6 Central Western Banker, M a rc h , 1933 farms, and vacant parcels, distributed throughout 25 States and Canada. Increase Reports to the American Bankers A s sociation indicate that in 1927 trust in stitutions were appointed as trustees and executors in 29,814 wills. D uring 1928 the number of appointments rose to 44,375, and during 1929 the number of ap pointments was 60,036. These figures represent the number of appointments under wills made during the years men tioned. For the year 1930, the method of reporting to the American Bankers Association was changed so that the number of actual appointments under wills offered for probate was reported— for 1930 such appointments totaled 48,812 as compared with 36,193 appoint ments in 1929, an increase of 35 per cent in one year. T his rate of increase is ap proximately the same as that of 1929 over 1928 in the number of appoint ments under wills made. Living trusts to the aggregate value of $1,013,769,436 were received by re porting trust institutions for 1930 as compared with $603,926,218 in 1929, an increase of 67 per cent for 1930 over 1929. L ife insurance trusts created with trust institutions have also shown a re markable growth. T h e amount of insur ance under trust agreement reported for the entire period 1923-1926 was $264,550,072. T h e amount of such insurance had increased, it is estimated, to more than $4,000,000,000 by the end of 1930. Shrinkage T here may be those who will say that during the difficult times of the last two years estates in the hands of trust insti tutions have declined in value. But where is the individual or corporation with any W I T H the possibility of the greater part of the six M iddle W estern states being without representation on the Executive Council of the American Institute of Banking, friends of M ilton F. Barlow, of Omaha, are strong in their support of his candidacy for the o f fice of Executive Councilman. T h e elec tion will take place at the Annual Con vention of the American Institute of Banking in Chicago, June 12 to 16. T h e present incumbent, M aynard W . E. Park of Kansas City, goes off the E x ecutive Council at the coming election, and unless every effort is made to place M r. Barlow on the Council, the states of Nebraska, Iowa, Missouri, Oklahoma, Colorado and Kansas w ill be without representation in the governing body of their organization. W e contend, however, that the trust institution is the most effective agency yet devised for the conservation of es tates. T h e record of our trust institu tions during the depression has been a proud one. T h e institution of trust serv ice has held to its course of conservation. It may be significant that, according to figures recently made public by the Bureau of Internal Revenue, income from fiduciaries in 1931 declined only 14 per cent from that in the preceding year; whereas income from interest and dividends decreased 24 per cent during that period. It is also interesting, if not as significant— because wages are includ ed— to note that income from all sources declined 23 per cent in the same period. Security Affiliates M il t o n F. B a r l o w M ilton F. Barlow is assistant cashier of the United States National Bank of Omaha. Elis educational background comprises a degree from Yale LTniversity, a degree from the L aw School of the University of Omaha, and admission to the Nebraska Bar. ident and president— and during his ac tive administration enrollment was in creased, and educational efforts placed and maintained on a higher level. It is men like M r. Barlow, with executive ability and the willingness to work, who are the backbone of A .I.B . chapters to day. M r. B arlow ’s record of American In stitute of Banking service and accom plishments is one of which any member could be proud. H e has been active in the Omaha Chapter for the past seven years— holds a graduate certificate— has capably filled the office of both vice-pres- O n the basis of his qualifications, of his excellent American Institute of Bank ing record, and of the great, rich terri tory which he will represent, the active support of every A .I.B . member is urged to elect M ilton F. Barlow, o f Omaha, to the Executive Council. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis substantial holding of securities or real estate that has not experienced some shrinkage of values. T here may be those who insist that trust institutions should have had some miraculous power by which they could have foreseen clearly the unhappy chain of economic develop ments during recent years. B ut we can didly admit that we do not have, and do not claim to have, any super-human insight into the future that has been de nied every other agency created and con trolled by the hand of man. In this connection it may be appro priate to say a word as to the misunder standing, more or less general, that trust funds have been placed in securi ties sold by trustees themselves or by trustees’ investment affiliates, or in se curities in which such affiliates may have a financial interest. Probably a majority of the larger banks and trust companies doing a trust business have security departments or se curity affiliates, yet whatever may be the objections to security affiliates by advo cates of laws designed to control such affiliates, it has never been seriously urg ed that trust funds have been affected by these relationships. It is a general prin ciple of law, and a matter of specific statutory prohibition in some states, that a trustee shall not deal with itself, and this applies to the individual as well as the corporation. State laws prescribing the type of securities that may be bought for trust investment, in the absence of directions from the testator or trustor, provided a limitation as to what securi ties may be selected for trust investment. But even where the creator of a trust gives the trustee full discretion in the selection of investments, the trustee will Ceìitral Western B anker, M a rc h , 1933 not purchase them from itself or an af filiate because of the ethics involved and the legal prohibition. N ot only that, but trustees w ill not buy in the open market securities in which their affiliates may have an underwriting interest. Remarkable Record T h e sound management of such a vol ume and variety of assets as I have men tioned or referred to is a great respons ibility, and the record of trust companies in discharging it has been a remarkable one. It has been reported that up to M ay, 1931, there has been no record of loss of a single dollar to the beneficiaries of estates and trusts through the miscon duct or malfeasance of any trust institu tion in any state, nor, with one small exception has there been any loss to the beneficiaries of trust funds due to the failure of a trust institution as trustee. Hand in hand with conservation of estates is the service to the individuals concerned with these estates that is rendered by the trust institution. These services may be performed for the crea tor of the trust, the beneficiaries under the trust or both. But from the time a trust becomes active until its ultimate purpose is accomplished a trust institu tion is rendering interested and sympa thetic personal service. T his then is what we have to offer— conservation and personal service. Each of these foundations of our business branches out into the myriad and com plex structure of the trust business. But both are the fundamentals of every func tion we undertake in the personal trust field. T h ey are the principles— the first principles— to guide us in how we offer our services to the public. Three Avenues There are three great avenues by which we may offer our service to those who can make use of them, namely, by advertising, by personal representatives and through our relations with the pub lic. So far as advertising and personal rep resentation are concerned, I will content myself with the observation that the principles that underlie their most effec tive use are those that are predicated upon an appreciation of the foundations of trust business, conservation and serv ice. By this I mean that a sound adver tising policy and a sound program of personal appeal must be built up from the fundamentals and must conform to the lines they prescribe. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 7 There remains that other avenue by which trust service is offered— public re lations. I have differentiated advertising and personal representation from public relations for the reason that the first two represent planned and supervised activi ties of trust institutions, whereas the third is a relationship that is born the moment a corporate fiduciary comes into existence. By its advertising and through its personal representatives, whether they be purely solicitors or administra tive officers and employees, the trust in stitution offers its service in a way it considers the most advisable and effec tive. Under the general head of public re lations come the important group con tacts such as those between trust institu tions and attorneys and underwriters. These are relationships of great impor tance. But these groups are also parts of the public at large and it is of the rela tionship between trust institutions and the general public that I want to speak. Measuring Goodwill It is by their public relations that the goodwill of trust institutions is measur ed. It is the general public, the average citizen, the man-in-the-street, if you will, that creates public opinion. H e may not be the man to whom we address our ad vertisements but he will form an opinion of us just the same. O u r problem is to see that his opinion shall be an informed opinion, that he have some understand ing of what we do and why we do it. Ten Commandments F o r Y o u r Bank C u s t o m e r s I. Never cash a check for a stranger. II. See that your bank account is checked up by a thoroughly reliable person in your employ, or a certified public accountant. It may not always be practical to do it yourself. III. Never sign a check in blank or make it out payable to currency, cash or bearer. IV. Never leave a check book, voucher checks, or even cancelled checks 'where anyone can get hold of them for improper use. V. Never accept a check because it looks business-like. Crooks are now counterfeiting checks of well known concerns. VI. Never assume that a bank certification stamp makes a check safe. These certifications are being counterfeited by crooks. VII. Never do what a strariger suggests, in order to identify him. H e prob ably has an accomplice planted somewhere to give you the information he wants you to have. VIII. Never give out a check to a stranger. T his is not meant in the ordinary business transaction. Crooks make deals whereby they can get one of your checks and then proceed to alter it to meet their needs within their estimate of your bank account. IX. Always write your checks carefully with ink, typewriter or checkwriter. Begin each line as far to the left hand side as possible, the amount as near the dollar sign and leave no open spaces between words, and never allow a check to go out with any erasures appearing. X . Finally, after you have taken every precaution possible that you can think of, regularly employ a certified public accountant to insure against internal irregu larities and provide forgery insurance for conditions over which you have no control. W atch your step and lengthen your life. W atch your check and prolong your wealth. Forgery insurance is the only protection that can be had for conditions over which you have no control, no matter how careful and cautious you may be. Central Western Banker, M a rc h , 1933 8 F or instance, does he know that the terms of the trust instrument absolutely govern the acts of the trustee? T hat cer tain securities or real property must be held in the trust regardless of market values because the creator of the trust ordered it so ? T hat investments may be limited to a certain class of securities, the legals, regardless of yield because the trustor did not grant discretionary pow ers to his trustee? Does he know that trust institutions have lessened appreciably the rigors of the depression ? T hat every beneficiary receiving a living income from a trust is one less recruit for the army of the un employed ? T hat every going concern in trust and kept going by a trust institu tion is a direct contribution to the em ployment situation ? Does he realize that the trust institu- tions of the country stand ready to speed its economic recovery? T hat trust funds must be invested, cannot be used for speculation, and that reviving business and industry can look to trust institu tions for a bulwark of financial support ? H e must learn that any type of organ ization that competently performs a need ed service, w ill attract to itself increas ing amounts of business. T his has been true of the trust institution. It is our hope and expectation that this trend will continue and that the field of usefulness of the trust institution will be an everwidening one. T here need not be the slightest concern, however, that the plac ing of a large amount of money and property in the hands of trust institu tions as trustees w ill lead to any sort of control over a considerable portion of the country’s wealth, or over its invest- ments. T his is not possible from a prac ticable standpoint, and it is certainly the last thing the trust institutions them selves desire. T he concern over the matter may arise from a misconception of figures as to trust assets. A trust institution, as trustee under a bond issue, has no con trol whatever over the money involved, yet the total amount of the issue might erroneously be represented as a trust as set. T h e trust institution w ill at no time have any control over such funds, for even in a reorganization, the trust com pany will simply be acting for and under direction of bondholders. Other funds, sometimes improperly called trust funds, are held simply in custody or as agent, subject solely to the directions of the owner. Furthermore, when it is consid(Continued on Page 12) Restore Confidence With A Bal anced Budget B A L A N C I N G the Federal budget would “ not only reestablish our own confidence in ourselves, but it would reestablish the w orld ’s confidence in our financial situation,” Lawrence H . Sloane, vice president Standard Statis tics Company, told his audience at the recent mid-winter trust conference meet ing held in N ew Y ork. “ I can well understand the strains and perplexities which the current economic situation lays upon those in your capaci ty— charged with a sacred trust, respons ible for the conservative and intelligent employment of other people’s money,” M r. Sloane said in part. “ W ith business as yet showing scant signs of actual re covery, with the farm mortgage situa tion having been catapulted into a stage of acute crisis by the open break-down in the debt structure, with the urban real estate debt structure more vulner able as a result of the agricultural deba cle, with the corridors of the nation echoing with an increasingly violent de mand for currency debasement, with the implications all of these developments have so far as the value of fixed income bearing securities are concerned, your problem becomes well nigh titanic in its proportions. “ T h e answer, whatever it may be, must come from tbe banks of the P oto mac. T h e United States government is https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis now, and for months past has been, vir tually the only important source of our new supply of high grade bonds. If we can balance the Federal budget, there with throttling this source of new bonds, the market for high grade municipal and corporate issues could readily move much higher. Balancing the Federal budget would not only reestablish our own confidence in ourselves, but it would R e c o v e r y is within our grasp. Let us not fum ble it through sheer lack of understanding reestablish the w orld ’s confidence in our financial situation. “ T h e greatest stock-market boom in history, far surpassing the Coolidge boom, might immediately follow the passage of the Voluntary Allotment Plan into law. “ W hether or not the plan would work, whether or not difficulties previ ously undisclosed, which lurk in every such large project, could be overcome, all that could be seen by the speculative- ly minded, which includes nearly every body, would be that agricultural income would be increased 4.2 billion dollars, and they would hasten to take advantage of the prospect of speculative profits. “ If we can achieve this most impor tant of all economic fact of budget bal ancing, if we can expose the farce in the thus far hypocritical gesture toward re ducing governmental and municipal ex penditures, if we can scale down and definitely settle the foreign debt, thereby leveling off numerous barriers to inter national trade, if we can revise our an tiquated bankruptcy procedure, and if we can, by wise remedial measures, stab ilize our extremely difficult agricultural debt situation before it completely blows up in our faces, then currency debase ment— or ‘ inflation’ as it is politely call ed— w ill be neither necessary or desir able. If we take these necessary funda mental steps without undue further de lay, the beginning of business recovery will be at hand. “ T h e strange thing is that what needs to be done is so clear and so relatively simple. T h e crowning tragedy of this whole depression would be to have re covery within our grasp, as it is at the moment, and then to fumble it through sheer lack of understanding, through sheer inertia in crystalizing the public w ill.” 9 Central Western Banker, M a rc h , 1933 Another Thought O n The Voluntary Allotment Plan O f Farm Relief I T Y dwellers would be asked to assume a $35 per capita annual increase in their cost of living as part of the voluntary allotment plan of farm relief urged by D r. Edward S. M ead, professor of finance at the U n i versity of Pennsylvania, and Bernhard Ostrolenk, former director of the N a tional Farm School. C T h e plan, revealed in detail by its ad vocates in a book on the subject which is published by the University of Penn sylvania Press, calls for an increase of more than four billion dollars in the farmers’ purchasing power through res toration of the prices of farm products to the levels of 1929. Revival of Trade W ith this tremendous increase in the farmers’ purchasing power there would follow naturally, in the opinion of the advocates of the plan, a general revival of trade whose benefits would be extend ed to the city dweller and would com pensate him in some measure for his an nual $35 contribution to farm relief. Assuming that the solution of the ag ricultural problem lies in controlled pro duction under conditions that w ill not violate personal and property rights, the advocates of the voluntary allotment plan would induce rather than force farmers to restrict their output. Therefore they propose that excise taxes be levied on farm products and that farmers subscribing to the volun tary allotment plan be given part of the proceeds of these excise taxes in addition to whatever sum they receive for the ac tual sale of their products. Farmers fail ing to cooperate would not receive a share of the tax proceeds. Select Commodities As the first step in the voluntary allot ment plan the commodities to be affect ed by the plan would be selected. These are (1 ) agricultural staples which, on their way to the consumer, pass through some form of manufacturing transfor https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis mation, such as wheat, rye, cotton, wool, livestock, or tobacco; or (2 ) commodi ties on which a tax can be levied in transportation or merchandising, such as fruit, potatoes and rice. Follow ing selection of the products to be affected a computation would be made of the extent to which the present prices of these products would have to be in creased in order to insure the desired blanket increase of 4.2 billions in the total farm income. Federal Board A federal board is to be created to deal with each commodity. These boards, acting through state and local officials in the farm counties and through the coun ty agents, and having before them all the available information concerning the present and prospective market factors operating upon the different commodi ties, would determine first what price would be sufficient to give a reasonable return to the farmer. Next the boards would estimate the visible supply of tbe commodities, taking into account any surplus on hand; the consumption requirements of the United Acreage Determined By this time, it is assumed, the amount of acreage devoted to producing each commodity would have been determined by the agents of the boards through county organizations, and each county would have been assigned its pro rata share of the new production desired. T h e final step would then be taken through the county agent who would in form each farmer in his county of the acreage which would be assigned to him if he subscribed to the plan, the estimat ed season’s price his products would com mand, and the extra compensation from allotment certificates which he would receive from the government as his share of the excise tax proceeds. T h e probability that further adjust ment upward in the tariff of farm prod ucts might be necessary in order to make the plan complete is recognized by D r. M ead and M r. Ostrolenk, but they ex press the belief that “ if Congress is suf ficiently under the domination of agri cultural interests to enact the voluntary allotment plan, it will not boggle over further increases in the duties on farm products.” T H E A D V O C A T E S of the plan explained here feel that prices of ail commodities would advance sharply under the lift of speculative buying. The stock market would "leap upward", bonds would rapidly advance, especially those issues of companies who sell their product to farmers. "The greatest stock market boom in history might follow the passage of the Plan into law" States would be determined and, on the basis of experience, an estimate would be made of the amount of each product which the market would absorb at a given price. T here would then be extended to American farmers an invitation to coop erate with the boards by producing only that amount which the domestic market could absorb at a given price, plus the amount received from the excise tax. City Dweller Pays T hey also recognize the possibility that the entire increase in farm prices may be shifted to the consumer. Apply ing this increase to the entire population they estimate that city dwellers would be asked to assume an increase of $35 per capita annually in their cost of liv ing in order to rehabilitate agriculture. Solace is offered to the city dweller, however, in the authors’ conception of 10 the sequence of events to follow the passage of the voluntary allotment plan with its anticipated addition of 4.2 bil lions of dollars to the purchasing power of farmers. “ As soon as the bill was signed by the President, without waiting for its ac ceptance by its initial beneficiaries, as soon, in fact, as a Congressional m ajori ty and the Presidential signature were assured, the commodity markets would show immediate improvement,” they write. Prices of wheat, corn, pork, beef, and cotton would sharply advance under the lift of speculative buying. Stock quota tions in the various industries affected Central Western Banker, M a rc h , 1933 would immediately leap upward. “ Agricultural machinery stocks, rail way securities, fertilizer and chemicalcompany stocks, lumber, oil, cement, coal producers, mail-order houses, in fact, the securities of every company which sells largely to farmers would show rapid ad vances. Securities Advance “ Next would come an active revival in these industries whose managers would speculate, just as the textile industry speculated in the summer of 1932, upon the prospective revival of demand. W orkm en would be recalled and fac tories would be set to work producing the goods the farmer is expected to buy with his increased revenue. “ T h e bonds of those companies which have issued bonds would also rapidly ad vance, and new issues which are now held back awaiting a market would be released. It is, of course, impossible for any such general shift in security values not to spread throughout the entire busi ness structure. “ W ith reviving industry, increased wage payments, large profits, the tax revenues — local, state, and Federal— ■ would largely increase. Deficits would disappear. M unicipal bonds could again be sold. T h e ruthless cutting of salaries and the wholesale abolition of positions of public employees would stop.” Distributors Group and Allied General Merge H Y S IC A L consolidation of two of the largest factors in the securities distribution field was consummated recently at a meeting of the board of di rectors of Distributors Group, Inc., when the m ajor executives of Allied General Corporation were elected to ex ecutive positions in Distributors Group, Inc. A t the meeting, Chase Donaldson, president of Allied General Corpora tion, was elected president of Distribu tors Group, In c.; John Sherman Myers, who succeeded Hugh W . Long as pres ident of Distributors Group, Inc., a short time ago, was made chairman of the board. Kenneth S. Gaston, executive vice president of Allied General, became executive vice president, and W . Franklyn Best, treasurer of Allied General, became Comptroller. T . F. Chalker re mains as secretary and treasurer of D is tributors Group. A t the same time the follow ing were elected to the board of directors: Chase Donaldson, Kenneth S. Gaston and Edward B. T w om b ly of Putney, T w om bley & Hall. Stockholders of Allied General C or poration at a special meeting approved the sale o f the corporation’s wholesale security distributing and trading busi ness to Distributors Group, Inc. Allied General Corporation, however, will con tinue to manage its portfolio as a gen eral management investment trust. T h e consolidation of the executive personnel and dealer affiliates of Dis tributors Group, Inc., and Allied G en eral Corporation brings under one man agement a security distributing and trad- P https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis M E R G E R represents one of the largest dealer service organizations and outlets for securities in the United States ing organization with 2,500 affiliated in vestment houses throughout the United States, Canada and Continental Europe, with representation in nearly every town in the country with 20,000 or more pop ulation. T h e organization will have more than 50 direct wire connections to prom inent Stock Exchange firms, trading houses and investment trust groups in important financial centers throughout the country. Allied-Distributors, Inc., a subsidiary organized some months ago by Distribu tors Group and Allied General to con solidate the trading departments of the two organizations, now becomes a w hol ly-owned subsidiary of the former com pany and will carry on the general mar ket security distributing operations hith erto sponsored by Allied General C or poration. Distributors Group, Inc., with Allied-Distributors, Inc., represents one of the largest dealer service organiza tions and outlets for securities in the United States. Insurance Taxes T w o important points have recently been decided by the United States Board of T a x Appeals of interest to insurance companies. T h ey both came up in the case of Lafayette L ife Insurance C om pany. T he follow ing is a digest of the decision prepared by Seidman & Seidman, certified public accountants: 1. A life insurance company cannot claim a deduction for interest expense where it issues a deferred dividend pol icy, and at the end of the tontine period voluntarily pays to the assured, in addi tion to the deferred dividends, amounts equal to 3 j4 per cent interest on the div idends compounded over the period. T he reasoning upon which this conclusion was reached is that as there is no agree ment or statutory requirement to pay interest, and the deferred dividends are not loans made by the policyholders to the insurance company, or a debt of the insurance company, the payments are not in fact interest. 2. W here a life insurance company is conducted through two departments — one of investments and the other of un der-writing— it may deduct in its in come tax return depreciation upon furni ture and fixtures used in both depart ments, even though it is taxable on the income of only one department. T h e Government contended that since the taxable income of the company is con fined to receipts of interest, dividends and rents, depreciation should be allow ed only with respect to property used in the production of such income, but this contention was overruled. He heard the toot, but tried to scoot And beat the engine to it. T h e poor galoot now twangs a lute. Take heed and don’t you do it. 11 Central Western Banker, M a rc h , 1933 PUBLIC U TILITIES F O R TRUST IN V E S T M E N T O nly a few Securities can show a Better Record U T L I N I N G the record of the bonds of operating electric and gas utilities during the past few years, Bernard W . Ford of Blyth & Company, San Francisco, in an address on investments for trust funds at a con ference of trust men from all parts of the United States meeting in N ew York, declared that the credit of this class of corporation in many of the principal cities of the country is valued more high ly than the general tax obligations there. T h e conference was held under the auspices of the T rust Division, A m eri can Bankers Association. “ For several years we have been expe riencing an economic cycle which has severely tested investments of all classes,” M r. Ford said. “ Corporate and individ ual earning power has fallen to unprece dented low levels. T h e foundations which support the debt structure have so shrunken as to render much of the structure insecure. H ave well-selected public utility bonds proved themselves solid against the financial storm? I di rect your attention to the record. O Only One Per Cent “ So far as I can learn, the total m ort gaged debt of operating public utilities rendering principally gas and electric service now in default is less than $75,000,000. T h at is about 1 per cent of ap proximately $6,000,000,000 of such se curities now outstanding. Is there any other class of investments, including mu nicipal bonds, with a better record, save only state and United States G overn ment obligations? These figures include the worst with the best so that I may not be accused of bias in presenting the https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis record of the kind of utility bonds which you would select for trust fund invest ment. “ It is customary in studying classes of securities to set up high grade and second grade groups, etc. Bonds in the high grade group generally show inter est earned better than three times, where as in the second grade group earnings of about two times is required as a qualifi cation. T h e investments which you would select would fall in one or the other of these groups, or in between. Hence we are speaking of the best quality and the poorest quality of the securities which you would select. " C O M P A R IN G 1926 values with the values of today, the average price of high utilities is approx imately 5% higher than 1926 average prices" Utility Earnings “ Adopting one o f the common group ings of high grade utility bonds, we find that in 1926, which was approximately a normal year, interest was earned on an average 3.4 times. N ow , after nearly three years of grinding depression, indus trial stagnation, and decreased purchas ing power on the part of the public at large, we find the earnings of these com panies have declined to 3.3. times inter est requirements. “ Selecting entirely the poorest grade of utility bonds which would he eligible for your purposes, in 1926 interest was earned on an average 2.2. times, the margin of coverage being only one-third that of the high grade group. In 1932 earnings for this class had declined to a point of 1.8 times interest requirements, in one of the periods of lowest corporate earnings in the modern history of fi nance. Market Value “ It sometimes becomes necessary to sell investments, and generally the need to realize is greater as adversity grows. M arket values, therefore, must be taken into account. Comparing 1926 values with the values of today, the average price of high grade utility bond is ap proximately 5 per cent higher than 1926 average prices. Practically speaking, high grade public utility bonds purchased at any time during the past fifteen years would today be worth as much, or more, than the purchase price. Also, let it be observed that the credit of the utility companies operating in many of the prin cipal cities of the United States today, is valued more highly than is the general tax obligations of those municipalities. “ T h e record of second grades is nat urally not so good. T h e fact, however, that average prices today are 15 per cent to 20 per cent under 1926 quotations certainly calls for no apology, as even in this class the decline in dollar value has been considerably less than the offsetting increase in purchasing power of the dol lar. “ T here is the record. I invite you to scan the entire field of investments for comparison. I submit to you that your experience as trust officers must prove the stability of operating public utility 12 Central Western Banker, M a rc h , 1933 bonds for trust fund investments, and on the basis of sound investment princi ples I ask for your continued confidence and support.” tion are seen to be remote. T h e trust in stitutions outnumber greatly the life in surance companies, and the question of investment concentration is not seriously mentioned in connection with those or ganizations. W hat Trust Funds Not Permanent Service Offers (Continued from Page 8) ered that there are more than four thou sand institutions actively engaged in trust service, the chances of concentra- Another misconception is that funds held as executor on any given date are permanent funds. Such is not the case, as most of such monies are distributed outright as soon as the estates can be settled. T h e smaller portion that goes S A L M O N P . C H A S E * S e c reta ry o f th e T r e a s u r y u n d e r L IN C O L N THE C hase N a t io n a l B ank o f the City o f üfeyw Yo?~k into trusts is retained on the average for only a comparatively few years — ten years being one estimate by competent authorities. T rust institutions themselves do not encourage— in fact they discourage— the making of any kind of trust, particularly the long-term trust, unless a very defi- " T H E T R U S T institution is the most effective agency yet devised for the conservation of estates-its record during the depression has b e e n a p r o u d one- - t r ust service has held to its course of conservation" nite need for it is apparent. It has often enough been demonstrated that inelastic provisions and the desire to tie up prop erty for too long a period have proved unwise. O n the other hand, there is ample evidence as to the great benefits and protective advantages of trusts wise ly planned and efficiently administered. Those who desire to protect such mem bers of their families as need protection — wives, daughters, children, the aged— will continue to create trusts and con tinue to place them in the hands of in stitutions qualified to administer them properly, and the question of concentra tion of investments w ill take care of it self. A Misconception W i n t h r o p W . A l d r ic h Chairman Governing Board and President C h a r l e s S. M c C a i n Jo h n M cH u g h Chairman Board of Directors Chairman Executive Committee The Chase National Bank invites the accounts oi banks, bankers, iirms, corporations and individuals. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis T his leads into the matter of the hu man qualities of the service of the trust institutions. In this day of the universal ity of corporate organization we do not hear so much of the charge that the cor poration is “ soulless.” Y et one of the reasons why some individuals hesitate to appoint a trust company or bank is that they feel the handling of their estates w ill be of a routine nature and their re lationships with their beneficiaries cold and impersonal. This is a misconception. It is odd that some who criticize the banks and trust companies charge them with being merely human and hence cap able of error; while on the other hand, they will not give the institutions credit for human qualities in dealing with cli ents. T h e fact is that the trust institu tion is nothing more nor less than an aggregation of individuals, and these in dividuals, to my personal knowledge, give of themselves unsparingly and sym- Central Western Banker, M a rc h , 1933 pathetically in caring for the interests of clients. I could mention many cases that, for reasons of preserving confidential re lations never find their way into pub licity, in which really extraordinary per sonal efforts have been put into the serv ice of estates— some of these estates be ing so small that the fees to the trust ininstitutions have been absolutely neglig ible in comparison with the work done and the service rendered. Economy It is essential that we inform the pub lic how in another very important re spect trust institutions render a valuable service to estates— that of economy of administration. Because of the experi 13 Exports Commonplace articles produced in this country, most of them well known in the average American home and asso ciated more or less with the everyday pursuits of American citizens, continued to form an important part of the export trade of the United States during 1932 despite the destructive effects of the world-wide depression and innumerable barriers set up in various foreign mar kets, according to F. M . Feiker, director of the Bureau of Foreign and Domestic Commerce of the Commerce Depart ment. Paper bags, shoe polishes, tooth brushes, razor blades, electric fans, sew ing machines, hosiery, hats and caps, false teeth, and a wide range of similar products were shipped abroad last year in appreciable quantities to the advan tage of the contributing trades and in dustries. Paper bag exports were valued at $488,158; shoe polishes and cleaners, $257,915; tooth brushes, $340,293; raz or blades, $1,254,617; electric fans, ence of personnel, completeness of equip ment, and organization for the work, trust institutions proceed in the admin istration of estates and trusts without waste motion, and with adequate knowl edge of the many and varied steps that must be taken in estate administration, including: probate and immediate pro tective measures, collection of assets, de termination of claims, adjustments, tax proceedings, management of investments and realty during administration, tempo rary management or liquidation of busi ness interests, distribution and account. W e should strive to impress upon the public that the trust institution service is not interrupted by absence, illness, or " W E M U S T see to it that the public sufficiently understands the trust business to a p p r e c i a t e it. W e must maintain unalterably our faith in our high purposes and in our ability to fulfill them" But business can crash through those bar other reasons that in the case of an in dividual might cause lapse of attention. T o make the public conscious of all these facts is a vital part of a sound pub lic relations policy on the part of trust institutions. W e must stand upon our solid foun dations of conservation and service. W e must see to it that the public suf ficiently understands the trust business to appreciate it. W e must maintain unalterably our faith in our high purposes and in our ability to fulfill them. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis riers with Long Distance telephone service. It works! Says the Norge Corporation, reporting a typical instance, ” One country-wide drive, which was conducted largely by Long Distance, resulted in the sale o f five trainloads o f refrigerators, valued at $1 ,5 0 0 ,0 0 0 .” Long Distance rates are low — for example, only 90c from New Y ork to Baltimore, 60c from Detroit to Cleveland,$ 1.25 from Chicago to St. Louis. For helpful information about telephone selling plans, just call your telephone Business Office. Charges listed a bove are f o r station to station, d aytim e calls. E ven in g and night rates are con sid erably low er. W h ere the charge is 5 0 c or m ore a fe d er a l tax applies as fo l l o w s : 5 0 c to 9 9 c , tax l O c ; $ 1 . 0 0 to $ 1 . 9 9 , tax 1 5 c ; $ 2 . 0 0 or m ore, tax 2 0 c . Central Western Banker, M a rc h , 1933 14 $222,839; sewing machines for house hold use, $1,621,487; hosiery, $1,527,0 1 0 ; hats and caps, $765,548; false teeth, $1,080,631. Overissue and old newspapers valued at $1,472,722 were sold abroad during the year. Exports of American pencil slats amounted to $565,296; files and rasps, $990,294; barbed wire, $791,283; horse shoe nails, $157,722; hand and machine needles, $429,373; freight and passenger elevators, $356,638. Cash registers, $1,450,028; hand and power lawn mowers, $141,817; corn plasters, $295,200; household insecti cides and exterminators, $827,103. A ir Traffic Records Broken W h ile aviation doesn’t make the claim of being depression-proof, one air trans port company in the United States last year scored an outstanding record by carrying 107 per cent more passengers than were transported during the previ ous year. A total of 89,000 passengers flew over the N ew York-Chicago-Pacific coast and other mail, passenger and ex press airways of United A ir Lines, while 43,000 passengers traveled via United planes in 1931. A n increase in mileage flown was also recorded during the past year by the air transport system, whose planes flew nearly 2,000,000 miles more than the 1931 total of 11,115,000 miles. A feature of United A ir Lines’ activi ties during the year was establishing the record of 50,000,000 miles of day and night flying, more than any other air line the world has flown. O f this total, 23,000,000 miles were recorded at night over United’s illuminated airways. N ot only did the company make sub stantial expenditures during 1932 for airport hangar-depots, radio telephone and other communications, addition of flying equipment and increased payroll, but it also placed an order for sixty newtype Boeing 10-passenger high-speed transport planes powered with two su percharged W asp engines. Reduction of air express rates during 1932 has brought sharply increased vol ume of plane express packages to United A ir Lines planes, and the year marked air express as a definitely established phase of scheduled air transportation in this country. Diverting Highway Funds “ Economic recovery of the United States will be seriously retarded unless immediate halt is called to the indefens ible practice of motor fund diversion,” warns J. Borton W eeks, president of the American M otorists’ Association, in urg ing the country’s motor vehicle owners to unite in opposition to diversion of such funds to other than highway pur poses. “ Unless united and determined action G M A C SHORT TERM JIOTES available in limited amounts upon request G A c c e p t a n c e Executive Office " B roadway https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis M e n e r a l OFFICES IN C o t o r s o r p o r a t io n at 57th Street " Jkew Yor\, N- Y. P R I N C I P A L CITIES is taken,” said M r. W eeks, “ the country w ill be strewn with the wreckage of highway programs, countless workers will take their place in dejected bread lines and important industries w ill be forced to curtail output or close down altogether. “ In nearly all parts of the country ‘diversion hysteria’ appears to have law makers in its grasp. Highway funds, con tributed by motor vehicle owners through registration fees and gas taxes, are pounced upon like manna from heaven and distributed with a lavish hand to the unemployed, although in the process hundreds of thousands of gainfully em ployed workers are thrown out of work, causing an ever-widening circle of those looking to the state for food and shel ter.” — Start Economic Planning A starting point for the economic planning called for in the newly publish ed report of the President’s Research Committee on Social Trends is found in the Lederal Hom e Loan Bank System. T his is the opinion of I. Lriedlander, Houston, Texas, vice president of the United States Building and Loan League. In the new credit system, says the building and loan official, lies the op portunity to start economic planning at the foundation of the social system, the family, particularly the family in the home. A fundamental contribution of the Home Loan Bank System to a reformed and planned economy for the home-own ing and future home-owning group is the distinct blow which the institution deals to the idea of financing long-time purchases with short time credit, one of the confusions of present-day practice, he says. T h e fact that the System is a permanent institution w ill give it in fluence which could not be exterted by an emergency structure, it was em phasized. “ L or the first time the home-owning family and the entire phase of our busi ness life which lies in the production and utilization of homes find themselves the center of attention of a national body with powers to dig into the facts and make them effective for the entire na tion,” M r. Lriedlander points out. “ Through the Home Loan Banks we* can start economic planning by the fam ily and for the family, at least as far as its fundamental need of shelter is con cerned.” Central Western Banker, M a rc h , 1933 15 N SU Application to the B anking Selling Business Insurance to the Young Business Man A N A G E N T was trying to sell a 22year-old who knew all the an swers on the idea of reinstating a $1,000 endowment policy he had lapsed. “ Listen, M r. Green,” the W ise One told him, “ I ’m just not interested. And that’s that.” T h e agent went back a few days later. “ M r. Lambert,” he said, “ I ’ve been thinking a good deal about you. T h e fact is, I ’ve checked up with one or two busi ness men I know who happen to know you. I thought you might like to hear what they had to say, and what I ’ve de cided after talking to them.” Not Interested “ If it’s about life insurance, G reen,” the ex-policyholder replied, “ I ’m not in terested. I told you the other day that I don’t need any life insurance, and that goes now .” “ Say, give me a little credit, w on ’t you? I ’ve been in this business long enough to know when I strike a man who means what he says!” Green as sured him. “ T o tell you the truth, I ’m half inclined to believe you’ re right about not needing that endowment policy.” “ I know I ’m right,” Lambert ad mitted, modestly. “ And I don’t need any other kind of a policy, either. M y folks are well fixed, and I ’m not thinking of getting married. So you’d better save your time.” “ A ll right, I w ill,” Green told him with a laugh. “ But I meant what I said a minute ago. I call on a lot of men your age, and I don’t need to tell you that most of them aren’t very hard to figure. T h e y ’re working because they have to—not because they see something ahead of them. Something you told me made me think that you might be worth cultivat ing as a future prospect— for a real pol icy. I don’t think anybody’ll ever ‘sell’ you any life insuarnce, but I ’m all wrong about your business future if you don’t https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Business Insurance can be sold to Ambitious Young M en. Th is article explains how it was done. ‘buy’ a whale of a lot of it, some of these days. Cards on the Table “ N ow I ’m going to put my cards right out on the table, M r. Lambert. Y ou know I ’m in this business to sell life insurance— and I ’m laying my plans for big stuff, not thousand dollar endowments. T h e only way I can build up good sized accounts is to pick the fellow w ho’s going places in the business world — and pick him while he’s making his start, not after he’s landed and made all his connections. “ A ll right, now here’s the way I ’ve figured you, M r. Lambert. I think you’ re sensible enough so that I can be A Y O U N G M A N may not be interested in Life Insurance, as he understands it. But when he finds what an i mpor t a nt par t it can play in his future, he sees it is something he c a n n o t p o s s i b l y postpone buying. absolutely frank with you, and I ’m g o ing to ask you to be just as frank with me, if I ’ve got you figured wrong. T h e way I see it, you’re working here for experience. I don’t get any picture of you spending the rest of your life mak ing money for the other fellow . Five or six years from now, maybe sooner than that, you’ll be in business for yourself. “ W hen that happens, you’re going to need regular, commercial bank cred it; and you’ll get it. But put yourself in the shoes of the banker you’ll go to. Suppose you’ve gone into the specialty manufac turing business. Y ou know your stuff, you’ve got a good bunch of salesmen handling your output, and you’ re mak ing some money. O f course, it’s all go ing back into the business. “ Another concern in your field goes haywire. L et’s say they’ve got a pretty good patented pants-creaser as a leader — an item your organization could han dle like hot dogs at a world series game. T his concern loaded up with too much inventory, didn’t know how to manufac ture economically in the first place, and are weak on sales. Y o u ’ve got a chance to buy ’em out, patents, inventory, the whole works, for 30 cents on the dollar. Y ou need $10,000 to swing the deal, and, the way it looks to you, you can put on a drive and get your whole invest ment out again in less than six months— with plenty left for a swell profit during the last half of the year. “ Y ou go to the bank and tell your story. T h e banker says, ‘ I believe you’ve got something, M r. Lambert. W e ’ll be glad to loan you the money. O f course w e’ll want you to start reducing the note at the end of 60 days, and w e’ll expect you to clean it all up in six months.’ Covering the Loan “ H e gets a note for you to sign, and you’ re sitting on top of the world. ‘ By the way, M r. Lambert’ (this comes just before he passes the note across the desk) ‘naturally you will want to assign enough life insurance to the bank to cov er this loan ?’ “ ‘W h y certainly,’ you tell him, ‘ I w ill if you have to have it— but it is Central Western Banker, M a rc h , 1933 16 just a short-time loan, and every nickel of it’s going into a mighty valuable in ventory. I didn’t suppose you would want life insurance on a deal of this kind.’ “ ‘M r. Lambert,’ he cuts in, ‘it’s on deals of this kind that we particularly do want life insurance. W e ’ re making this loan on two kinds of collateral: your business is one, and you are the oth er. Frankly, your business isn’t security for more than a fifth of the loan we are talking about. W e don’t know anything about manufacturing and selling patent ed specialties— and, without you on the job, w e’d have to go into that business to get our money out, or else the busi ness would have to be sold for whatever it would bring. But we know you, we believe in you, and we are satisfied that you can continue to build your business and operate it at a profit. As long as you’ re on the job, and continue the way you’re going, we want to help you and do business with you. T h a t’s what w e’ re here for. B u t we’ve got to have some as surance that you’re going to continue on the job. T h ere’s only one thing we are afraid of, and that’s premature death.’ “ ‘A ll right,’ you tell him, ‘ I see your point. I ’ll give Harry Green an order for $10,000 today.’ “ T h a t’s where I come in, M r. Lam bert— -only I figure those orders are go ing to average a lot more than $10,000. I ’ll be very much surprised if you’ re not on my books for over a hundred thou sand before either of us is 10 years old er! N ow frankly, do you think I ’ve got you figured out about right?” “ I ’ve got to give you credit, M r. G reen,” Lambert conceded. “ I can see you’ve got me figured just about the way I ’d have done it myself.” “ Thanks, M r. Lambert, I didn’t think I was wrong about you,” Green con tinued. “ N ow there’s just one more point that I want to go over with you today— and I ’m pretty sure that you’ll agree with me when I say it’s important. Foresight “ L et’s go back to that bank situation a minute. One of the biggest bankers in the middle west told our vice-president that he rated foresight as the most valu able quality any business man could possess. Suppose, when your banker tells you that he is going to need life insur ance as collateral, you are in a position to say: ‘Yes, I looked ahead to that sev eral years ago. I took on as much busi ness insurance as I figured I could pay https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis for. I knew I ’ d want bank credit one of these days, and I wanted to be sure I ’d have the insurance when it was needed. Also, I got it at a much lower rate than I ’d have to pay now— and I ’ve got it to a point where the policy w ill be carried in force for several years, without any more premiums, if things shape up so I have to use all of my money in the busi ness.’ “ If you were in a position to tell him that, don’t you think that banker would have to sit up and take notice?” “ W e ll, I don’t know. . . .” Lambert hesitated a bit at committing himself. “ D o n ’t misunderstand me,” Green in terrupted, “ I ’m not suggesting that you take on a lot of life insurance right now. It isn’t necessary. A ll you need is enough to show that you were looking ahead and had confidence in yourself. If I were you, I w ouldn’t load myself down with twenty-five or fifty thousand. But I w ould get about ten thousand of the kind of life insurance that big business buys, and I ’d hang onto it like a leech!” “ W h a t would that cost m e?” Lam bert wanted to know. T en thousand ordinary life was is sued ; five of it was placed and paid for. — Continental Assurance Company. Farm Mortgage Situation Frederick H . Ecker, president of the Metropolitan L ife Insurance Company, made the follow ing statement recently: “ I have read in the press various state ments as to action on the part of life in surance companies concerning the farm mortgage situation. O n the part of the M etropolitan, it has been our consistent policy for the past two years to work out with our borrowers methods satisfac tory to them and fair to the policyhold ers represented by the Company, to the end that earnest farmers, desirous of keeping their homes and working out their problems, shall have the fullest consideration and cooperation from us. T his policy on our part is well-known in the farming communities and has met with many favorable comments from the farmers themselves. There are cases where we are obliged to foreclose but they are practically limited to cases where the farmer is unwilling to carry on or to try to do his part toward w ork ing out his problem or, in certain in stances, where we are practically forced to foreclose by reason of the action of second mortgagees, holders of chattel mortgages, or crop mortgages who un dertake to enforce their subsequent liens. In such cases the owner of the first mort gage has no alternative but to foreclose to protect his rights. W e are not chang ing our policy or undertaking to do any thing new or different. “ W e believe the best interests of farm borrowers w ill be served by close coop eration with len din g institutions rather than by seeking legislation to unduly re strict by compulsion of law free action on the part of the borrower and lender. In fact we have received letters from borrowers expressing this thought as their views.” Meets in Omaha Policyholders in the Guarantee M u tual L ife company of Omaha, meeting recently, re-elected R. E. Langdon, sec retary, to the directorate. J. C. Buffington, president, who start ed the company more than 32 years ago, in his annual report said the company had increased its assets by more than 300 thousand dollars, and said that more than half the company’s funds were in desirable city, county and state bonds. T h e present dividend schedule is being continued without reduction, he said. Group Insurance “ M ost wage earners are inadequately insured and the group insurance plan enables them to become insured easily, safely and very economically,” Henry B. Ramsey, manager for Nebraska and South Dakota, with headquarters in Omaha, for the Prudential Insurance company of America, said recently. “ W ith the employer’s co-operation and in no other way, may the employes enjoy the advantages of the group ar rangement. “ T his plan prevents distress and re moves the need for ‘passing the hat.’ T h e firms who give their employes the priv ilege of a group policy are more than re paid for their expense by reduction in turnover and increased loyalty to the or ganization. “ An estimate of the benefits under this plan during 1932 shows 51 thousand families in the Lhiited States received 89 million dollars in claims. “ Group insurance also enables indi viduals who are physically impaired to obtain life insurance. 17 Central Western Banker, M a rc h , 1933 W M . R . H U G H E S , S e creta ry , N e b r a s k a R a n k e r s A s s o c ia tio n l ì . H . 15A l i USER, P r e s i d e n t N e b r a s k a R a n k e r s A s s o c ia t io n fiuiiiiiiiiMiiiiiiii....mini....mm............................. mm.......mmmmmmmmmiimmmnmmmmmnm.......................... ........iNiiiiiiiiiiiiiiiiiiiiimiimiiiiiiiiiiiiiiiiiiiiiiiiiii...............................................................................nimm....il......... ................................................. limimi; The New Bank A c t j ^ E B R A S K A ’ S new bank act became law recently when signed by G o v ernor Bryan. Permitting limited operation of weak banks under the supervision of the state trade and commerce department, it was written early in the session by legislative leaders, department officials and the at torney general to tide the banks and their debtors over periods of stress when necessary. T h e senate and house passed it with little opposition. Secretary E. H . Liukart of the de partment started at once to make it ef fective and predicted incidentally that higher prices would bring better times within six months. Before the law can affect any specific bank, at least 85 per cent of its deposi tors must agree to abide by it. Luikart said however that his department would insist on early 100 per cent co-operation from the depositors. T h e old deposits and old debts are set aside for gradual liquidation and ad justment, while the bank continues to accept deposits and cash checks for the convenience of the community but using a new set of books. T h e plan is that eventually the slow paper of the banks will be worked out and the institutions placed on a normal basis again. M r. Luikart said his prediction of higher prices within six months was based on the belief some sort of inflation would occur within that time. H e fa vors it as a means of helping the farm ers pay their debts. H e did not estimate the number of banks interested in the new law and said he might not make their names public on https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis taking them under the supervision of the department. Should Be Killed T h e D w orak bill to bar Omaha bank ers from selling insurance had smooth sailing in the Nebraska senate until Sen ator Stewart (dem .) of Clay Center proposed its provisions be extended to all cities of 1,200 or more population. H is proposal was killed, however, and the bill was referred back to the com mittee on insurance. Dies in York Frank L. Borden, 65, vice president of the City National bank of Y ork for 11 years, died recently follow ing a long illness. M r. Borden came to Y ork 30 years ago as manager of the Blackburn department store. H e later purchased the Blackburn interests and operated the store until a few years ago, when he be came actively engaged in the banking business. H e is survived by his mother, M rs. Elizabeth Borden, also of York. Forty-Seven Years R. O . “ B ob” M arnell, cashier of the Merchants National bank of Nebraska City and a director of the Omaha branch, Federal Reserve bank of Kansas City, recently completed 47 years as a banker. M r. M arnell, who is well known among Omaha bankers and busi ness men, started with the Nebraska City bank as a messenger boy. Ship A hoy! Carl W eil, Lincoln banker, one of the countless admirals in former Lieu tenant G overnor M etcalfe’s “ great navy o f Nebraska,” found his commission use ful recently in a visit to Galveston, T e x as. M r. W e il was at Galveston when he met Ed Van Horne, who had his small son with him. Strolling on the water front, they asked to go on board a coast guard cutter tied up there. T hey were told no visitors were permitted. M r. W e il took out the card contain ing his admiral’s commission and sent it aboard to the captain. T h e captain es corted W e il and his companions aboard and showed them the ship. As they were leaving he picked up the card, studied it again, and asked: “ W hat sort of a commission is this, anyway? Is this really connected with the navy, in the reserve or something?” Elect in Neligh Five directors were re-elected at the annual meeting of the stockholders of the National Bank of Neligh. T hey are L. E. Jackson, Fred Penn, C. H . Ray, D r. XJ. S. Harrison and J. W . Spirk. T h e directors elected C. H . Ray cash ier. M r. Ray has been acting in that ca pacity since R. B. Genoways resigned some time ago, and w ill continue to de vote his full time to the bank. L . E. Jackson was elected president of the bank and w ill act as chairman of the board of directors. Fred Penn was chosen vice president, O . E. Krohn, as sistant cashier, and George W . Krumm, assistant cashier. Haskell Dies W illiam Greenleaf Haskell, 61, for 23 years president o f the Harlan County bank of Alma, died in Omaha recently after a two months illness. A nephew of the late District Judge W illiam Gaslin, Haskell was president of the Harlan County Banking association. H e was a 18 Central Western Banker, M a rc h , 1933 leader in community affairs at Alma as well as a prominent Mason and member of the Lincoln Shrine temple. Surviving him, besides his w idow are three sons, one daughter and three sisters. Annual Meeting T h e annual meeting of stockholders of the Dalton State bank resulted in election of the same board of directors with the exception ot Fred Borges, who passed away recently. His post was filled by election of A ndrew Hansen. Other directors are A . W . Friede, Henry Vick, J. A . W a lford and R. F. Buchanan. M r. Borges was one of the heavy stock holders in the bank, but the policies of the institution w ill not be changed by his death as the Borges family w ill con tinue behind the stock. Re-elected A t the annual meeting of the First National Bank of W ym ore, all officers were re-elected, as follow s: President, J. A . Reuling; vice president, W illiam A. Stahl; cashier, J. S. Jones; and assistant cashier, L. Boyd Rist. A Record T h e re-election of the officers of the Farmers Bank of M erna for the 25th consecutive year establishes a unique rec ord. In 1909, when the Farmers Bank was organized, the follow ing were elect ed as the officers: B. F. Cox, president; E. B. Daley, vice-president; F. L. Beals, cashier— and these same men have serv ed since then. Elected President J. P. M ann has been elected to the presidency of the First National Bank of O ’Neill to fill the vacancy caused by the death of J. F. Gallagher. M rs. E. F. Gallagher has been elected to fill the vacancy existing on the board of direc tors. M r. M ann has been a director and stockholder of the bank for forty years. H e has recently returned from Chicago to O ’Neill to make his permanent home. T h e dinner was sponsored banking and financial group. by the Fire Damage T h e explosion of an oil burner in the basement of a building in Alm a was blamed for the $9,000 damage done by fire to the Bank of Alma, the Oscar A n derson general merchandise store and the T . L. Porter law office. T h e building is a two-story brick structure and damage to it was estimated at $1,500. T h e losses are partially covered by insurance. “‘Strongest Ever” Banker Dies Omaha and Lincoln banks have not availed themselves of the opportunity to obtain federal funds from the Recon struction Finance corporation because they have “ the strongest reserves they have ever had in their banking history.” W . H . Faling, 85, prominent banker and merchant, died in Cambridge recent ly. M r. Faling settled there in 1880, coming from Illinois. H e established a general merchandise store and later en tered the banking field, finally establish ing an investment banking business of his own. T his was the statement of Fred W . Thomas, vice-president of the First N a tional bank and member of the R .F .C . board for that district, in a talk before the Chamber of Commerce wom en’s di vision. In his discussion of the R .F .C ., M r. Thom as also mentioned the work of its subsidiary, the Regional A gricul tural Credit corporation, which now em ploys 150 persons in its Omaha office. Other Omaha bankers who were guests included Alvin E. Johnson of the Live Stock National and counsellor for the chamber wom en’s division ; Ellsworth M oser of the United States National, Otis T . Alvison o f the Omaha Nation al, and J. B. Ow en of the Stock Yards National. Bank Clearings Thirty-ninth in population, Omaha ranked twentieth among all cities of the country in bank clearings for 1932, ac cording to the Chamber of Commerce industrial bureau. Omaha’s total clear ings for 1932 were $1,102,437,000. D uring the past decade, Omaha and Seattle, a much larger city, have been “ neck and neck” for nineteenth place. Other cities (all larger than Omaha) which Omaha surpasses consistently in clearings are Houston, T e x .; Providence, R. I .; Newark, N. J. Rochester, N . Y . ; W ashington, D . C . ; M ilwaukee, W i s .; Louisville, K y .; Indianapolis, In d .; St. Paul, M in n .; Denver, Colo., and Port land, Ore. Usual Dividend The Facilities ♦ ♦ ♦ ♦ ♦ https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis o ffe red by th is B a n k to its co rre spondents and other depositors h a v e been developed th ro u g h years o f exp erience in se r v in g ou r b a n k in g cu sto m ers. • Continental Nati onal Bank L IN C O L N , N E B R A S K A Affiliated with N orth w est B a n c o r p o r a t io n A t the annual meeting of the stock holders of the Geneva State bank the follow ing directors were elected: Earl H . W ilkins, Charles H . Sloan, Carl E. Schneider, George E. Aldrich and Frank O . Edgecomb. T h e board of directors elected Charles H . Sloan chairman of the board; Earl H . W ilkins, president; Grady Corbitt, vice president; Carl E. Schneider, cash ier, and M elvin L. Ralston, assistant cashier. T h e usual dividend was declar ed. Asks Report A new move to obtain information on management and expenditures of the Nebraska banking department was be gun in the house by republicans in the 19 Central Western B anker, M a rc h , 1933 form of a resolution by Representative W . J. W illiam s (rep.) of Cedar Bluff. T h e resolution seeks to have the house require E. H . Luikart, head of the state banking department, to submit a report within eight days showing collections from failed banks, funds distributed, employes and their salaries, amounts col lected to defray the expenses of central receivership, the number of persons do ing field work as assistant receivers, the maintenance expense of receivership and a separate detailed report on the han dling of the State Bank of Omaha. Representative W . H . O ’Gara (dem .) of Laurel suggested the matter should be referred to the banking committee. Confidence Needed Lack of confidence in country banks has been responsible for much of the de flation in agricultural prices, in the opin ion of J. L. M cD erm ott, vice-president of the Lirst National bank, Omaha. He spoke on the first of a series of public forum programs sponsored by the Cham ber of Commerce publicity bureau. “ W hen country banks were forced to call their farmer loans to satisfy deposi tors who were withdrawing their funds, the farmers had to sell live stock and other products at a time when the mar ket was glutted, forcing prices down w ard,” the speaker asserted. Pending revival of confidence, the Lederal Agricultural Credit corporation is stabilizing conditions, in a measure, because it can lend money on the farm ers’ personal property for a period long er than a year. M cCarthy, president; W illiam Schumm, vice president; J. L. Gregory, cashier; Irwin Cramp, assistant cashier. O n the board of directors are J. L. Benedeck, Lrank Zaitz, Jr., J. R. W eir, J. D . A l len, A . J. Sloss, M cCarthy, Schumm and Gregory. To Reduce Rates Interest on savings accounts exceed ing $500 will be reduced April 1 by D enver’s five largest banks. Smaller sav ings accounts w ill not be affected. Under a new schedule announced by the Lirst National bank, the Colorado National bank, the Denver National bank, the United States National bank and the International T rust Co., interest paid after April 1 w ill be 3 per cent a year on the first $500 in every account and 2 per cent on all excess over $500 in any account. T h e present rate of 3 per cent will be paid on all savings accounts until April 1. Noon Closing Starting last month, the Lirst N a tional Bank of M eeker closes during the noon hour. T h e change comes as recom mendation from the Colorado Bankers Association. T here have been many bank hold-ups in the state during the past few years and most of them occur while the bank force is divided during the noon hour. To Visit Denver Lrank M . Gordon of Chicago, presi dent of the Investment Bankers Asso ciation of America, w ill visit Denver M arch 2, during a trip covering numer ous W estern cities, the Denver group of the association has been advised. G ordon w ill be accompanied by A lden H . Little, executive vice president of the association. Robbed Again Lor the second time within three months, bank robbers raided the town of Erie, locked two girl clerks of the Erie State Bank in a deposit vault, threatened the cashier with death, and escaped with $2,300 in loot. News of the holdup which, like that of November 8, occurred shortly before noon spread rapidly throughout the dis trict and peace officers from all sections surrounding the bank soon were on tbe trail of a small sedan carrying the four gunmen who participated on the rob bery. Near Ault, however, the peace offi cers lost the speeding machine. T w o of the thugs, brandishing pistols, entered the bank and ordered Edna and Elsie Pierson, sisters, into the safety de posit vault. One gunman remained out side in the car and the fourth covered the cashier, W illiam W hiles, with a pis tol. T hey forced him to hand over $2,300 miiiiiiiiiiiiiiiiiiiiiriiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii„iiii,iii„„„„|,„„„llim,,ll|imillllllllllMIII, ...................... Re-elected A ll officers of the Rifle National bank were re-elected at the annual stockhold ers’ meeting, namely: C. R. M cCarthy, president; C. M . D onell, vice president; and T . H . H ill, cashier, with the addi tion of A . A . Swan, who was named as sistant cashier. T h e follow ing board of directors also holds over for another year: C. R. M cCarthy, C. M . Donell, R. L. M agor, Sr., T . H . H ill and R. C. Reigan. New Officers A full list of the newly elected officers and directors of the Lirst National bank of Glenwood Springs includes C. R. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Try Our SERVICE For Handling All O M A H A ITEMS LIVE STOCK NATIONAL BANK OMAHA Central Western Banker, M a rc h , 1933 20 tiiiiiimiimimimimmir.iimiiiiiuimmimiiiiiiiimimmimmimimmiiimmiiiiiiitiimimiiiimiiimmimi in silver and currency, and stuffed it into a brown leather bag. T hey overlooked a large amount of money in the cashier’s cage, bank officials said. County Meeting Recently at Ft. Collins the County Bankers’ Clearing House association held their regular meeting. T h e banks of Estes Park, Berthoud, Loveland and Fort Collins were represented, and luncheon enjoyed. “ Shop talk” was im dulged in by most members and the old officers were re-elected. It was discover ed when someone asked who the old officials are, nobody seemed to know, but they were re-elected notwithstanding. Somebody has the record. Savings Accounts M ore than 1,400 Christmas savings accounts have been opened in the South ern Colorado bank, Pueblo, and the Pu eblo Savings & T rust Co., officers an nounced. T h e number passes the expec tations of bank officials and if carried until December 1 will return to deposi tors a total of more than $75,000. A t the Pueblo Savings & T rust Co. 1,109 individual accounts have been started and 350 individual accounts have been opened at the Southern Colorado bank. T h e accounts average $54. Banker Dies Fred Kohler, 63, widely known Boul der banker and stockman, died at his home recently. Death was caused by complications that follow ed an appendix operation. M r. Kohler had lived in Boulder all his life and in addition to operating a large cattle ranch, was president of the Boul der National bank. T h e deceased is survived by his w id ow, one son, two daughters and one brother. iiiiiiimiiiiiiiiiiiiiiiiiiiiiiiiiiiiiMiiiiiiiiiiiiiiiiiiiJiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiimiiiiiiiiHiiiiiiiiiiiiiiiiiiiiiiii Heads Abilene National A . P. Rogers was re-elected president of the Abilene National Bank at the an nual stockholders’ meeting. Other offi cers, all re-elected, are : Vice president, G . W . Rees; vice president, J. B. Case; cashier, Cecil T a y lo r ; assistant cashier, R. G . Rogers. T h e directors re-elected were : A . P. Rogers, G . W . Rees, J. B. Case, R. G . Rogers, H . L . Humphrey and C. M . Harger. T h e Plainville State Bank entertain ed the Rooks County bankers and their ladies with a 7 o ’clock dinner recently. T h e ladies attended the show while the men folks held a business session in the bank parlors. W . F. Hughes of the Stockton National was elected president of the Rooks county group and M r. Sny der, secretary. Next meeting w ill be held at Codell. Twenty-one were present. Re-elects Officers A t the recent annual meeting of the stockholders of the Citizens State Bank, Cheney, all of the officers and directors were re-elected. T hey are as follow s: T . L. Northcutt, president; E. E. W righ t, chairman of the board; Pauline Blakey and M rs. Rowena Nelson, active vice presidents; Elmer Y oder, cashier. These with Roy Dew ey and M rs. Nora M cIntosh com pose the board of directors. Buys Control J. Earl Tanner, cashier of nut Valley State Bank, has the controlling interest in the National Bank, at Tow anda, the W a l purchased T ow anda according (E S T . 1903) ! * TYPEW R ITER S, ADDING MACHINES, CHECK W RITERS LATEST MODELS AT BIG DISCOUNT ALLEN-WALES 1912 Farnam St. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Arkansas City A ll officials of the Hom e National bank, Arkansas City, were re-elected at the annual meeting of the stockholders and directors of the bank. Officers are A . H . Denton, chairman of the board; Foss Farrar, president; A . H . M oore, vice-president; W . F. Shea, cashier; F or rest Livingston, John K. Peck and Ralph Burgett, assistant cashiers. County Meeting C entral T y p ew riter E x c h a n g e , Inc. ASK to an announcement. M r. Tanner, how ever, will continue to make his home in El Dorado and fill his position with the W aln u t Valley State Bank. M r. Tanner w ill be president of the T ow anda bank. TO SE E THE FINEST “ H E A V Y DUTY” ADDING MACHINE MADE Omaha, Nebraska I New Quarters Hutchinson may have a new bank building within the next few months. It w on ’t be exactly a new building but if the American National decides to move into its own home, the room now occu pied by the W elch shoe store w ill be so altered it will be, in effect, a new build ing. Pays to Be Cautious By refusing the unusual request of night watchman John Barnes to “ come out and talk business” at 1 o ’clock in the morning, A . A . Holdeman of LaHarpe probably averted robbery of the L a Harpe bank of which he is cashier. T h e banker decided it was hardly the time and place for any business discus sion with the watchman, so declined the invitation, speaking through a locked door. Later he learned that Barnes made his proposal at the insistence of six men armed with a submachine gun, rifles, re volvers and shotguns who had kidnaped him. Meet in Girard T h e C raw ford County Bankers Asso ciation had a 7 o ’clock dinner and meet ing in Girard recently. Those present were : W . E. Gregg, Edward M unday, Roy Hankins and E. Harley from M cC un e ; J. T . Fowler and G . M artin from A rcadia; Philip Vavadini from Frontenac; Edgar W e b er, C. O . Davis, Rex Crowley, R. L. Pate, James Fulton, and M r. Hunt from Pittsburg; Henry Viets, W . B. M illington, J. T . Leonard, W . Colean, R. L. Sullivan, H . E. Sauer, J. M . V in cent, W . E. Schifferdecker, Charles T in der and Ed C. Strickler from G ir ard. 21 Central Western Banker, M a rc h , 1933 M r. Fow ler is president of the asso ciation and M r. Crow ley is secretarytreasurer. Elect in Holton T h e directors of the Kansas State Bank, Holton, have re-elected the same staff of officers who have served the past year. T h ey are W . T . Beck, president; M . A . Bender, vice president; J. H . Riley, cashier; H arry Bradley, first as sistant cashier; Leon G . Abele, second assistant cashier; and Esther Hancuff and Anna M iller, tellers. Succeeds Father A t a special meeting of the board of directors of the Southwest National Bank, W ichita, M . C. “ C liff” N aftzger was elected president of the institution to succeed his father, L. S. Naftzger, who died recently. D r. J. L . Evans was elected vice president to succeed M . C. Naftzger. N o other changes were made. Annual Meeting A t the annual meeting of the Russell County Building and Loan Association held in Russell, the retiring director, J. W . Blair, was re-elected. T h e board then elected officers for 1933 as follow s: J. W . Blair, president; H . A . Dawson, vice president; Ruth Fliesbach, secre tary-treasurer; Oscar Ostrum, attorney; J. H . Bruney, appraiser; and S. S. M il ler, director. Jacob H . Siebert, vice-president; D r. G . J. Goodsheller and M rs. Catherine Messner, directors. M arion National Bank— J. F. W h a l ey, president; C. C. Brooker, vice-presi dent; Earl Kreuter, cashier, W alter Sie bert, assistant cashier; C. F. Pantle, Lola Kreuter and George Stenzel, direc tors. Heads County Bankers W arren J. Musch, cashier of the H artford State bank, was elected presi dent of the Lyon County Bankers asso ciation at the annual meeting in Empor ia. Francis H . Arnold, vice president of the Commercial National Bank and T rust company, of Emporia, was chosen as vice president and Chester V . M orris, assistant vice president of the Citizens National bank, of Emporia, was elected secretary-treasurer. Named President Roblin H . Davis, old-time pioneer of Rawlins and Carbon County, W yom ing, has been named president of the Denver National Bank. M r. Davis was born in Rawlins and attended school there until he was 15 years old. His father was one of the main stockholders of the old J. B. H ugus Sz Company store, which is now the Ferguson Mercantile Company. Since moving to Denver many years ago Roblin Davis has continued to be identified with local enterprises for he has been a stockholder in the Kindt Sheep Company, which company is now managed by one of the stockholders, I. Bolten. Dies in Belleville A . R. Moss, 59, Belleville banker since 1915, died suddenly from a heart attack. H e was former deputy district governor of Lions clubs, and served in many public capacities for civic improve ment and welfare. H e was widely known because of his activities in projects of public interest. ....................................... iiiiiiiiiiiiiiiiiiiiiitiimiiiiiiiiiiiiiiiiiiiiiiiiiiuiiiiiiiiiiiiiiiiiii|ii!iiiiiiiiiiiiiiiiiiiiiiiiiiiiiimiiiiiimiiiiiiij|iiiiiiiiu New President Signs Bank Measure In recognition of long and faithful service, having been with the institution twenty years in various responsible posi tions, M . H . H ill was elected at a re cent meeting of the board of directors to the position of president of the First N a tional Bank of Smith Center. For some time M r. H ill has been active vice-presi dent in full charge of the bank, and the action of the directors merely places him officially in the position the duties of which he had previously performed. G overnor Leslie A . M iller of W y o m ing has placed his signature on Senate File 41, by Senator Thom as A . Thain, (R ep .) of Buffalo, which w ill permit state banks to borrow from the Recon struction Finance Corporation on bills payable. Marion Meetings T h e three banks of M arion held their annual meetings and the follow ing offi cers and directors were chosen: Farmers and Drovers National Bank — T . W . Spachek, president; J. W . Gardner, vice-president; E. F. Nelson, cashier; J. J. Klenda, R. B. Harris, Bertha Hanus and B. V . Higgins, direc tors. State Bank of Commerce — Josiah G ood, president; J. E. G ood, cashier; https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Buys Stock Kent Snyder, who for almost twenty years has been cashier and a director of the Stock Growers Bank of W heatland, w ill this month sever his connections with the banking house and be succeeded by J. E. Foreman, at present an assistant state bank examiner, residing in Chey enne, and who at one time was a resi dent of Guernsey, where he was affili ated with a bank. Negotiations for the purchase and transfer of the interests in the bank be longing to M r. Snyder to M r. Foreman has been completed and arrangements made for the new cashier to assume charge on M arch 1st. f '/f j with Bath from .^ $2.50 ^ IOO Rooms Priced From $3 DOWN! 150 Rooms Priced From $3.50 DOWN! Luxurious Accommo dations Popular Dining Rooms O P E R A T E D BY E P P LEY H O T E L S COM PANY IN L IN C O L N . . . HOTEL LINCOLN HOTEL C A P IT A L A L S O IN O M A H A . . . H O TEL LOG AN Omaha’ s Largest and Finest Downtown Apartment H otel at Reasonable Rates Central Western Banker, M a rc h , 1933 22 Elect Directors T h e three Evanston banks, at their annual meetings held recently, elected the old directors and officers. One ex ception was the election of Harold Kelly as a director of the Stockgrowers, taking the place of A . Crawford, deceased. M r. Kelly is also assistant cashier of the bank and a young man who has a very prom ising future in banking and business circles. Banking Bill In a brief afternoon session the W y oming senate passed by 20 affirmative votes, none opposed, a bill permitting state banks to borrow on bills receivable and permitting the rediscount of certain classes of negotiable instruments with the federal reserve bank. T h e senate indefinitely postponed two bills, one referring to the affidavits of an absentee voter, the other relating to elec tions. Both of the latter measures were house bills. llllllllllllllllllllllllMIIIIHIIIIIIIIIIIIIIIHIIIIIMIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIMIIIIIIIIIIIIIIIIIIIIIIIIIIIIIHIIIIIIIIIIHIIIIl Open for Business T h e new Otero County State Bank has opened for business in the quarters formerly occupied by the State Bank of Alam ogordo. T h e new bank, formerly the State Bank of Tularosa, with amend ed charter and all legal matters com piled with requisite to change of name and location, was moved into the build ing prepared for its reception. R. D . Champion, president, states that he feels pleased and encouraged by the cordial reception received from the peo ple of Alamogordo, and that depositors began coming in with the opening and have been continuing to do so ever since. Becomes Cashier R. H . Carter, Raton, who has held the post of deputy state bank examiner the last two years, has been elected a member of the Bank of Commerce at Clovis, and at the same time was made cashier o f the same institution. Immediately after his election to the bank position, M r. Carter announced his resignation as deputy bank examiner. T h e new bank head has had many years of business experience in N ew M exico, as well as other connections with public affairs. Some years ago he was democratic state chairman and later he held the office of state comptroller. Deposits Increase F or the first time since June 30, 1930, N ew M ex ico’s state banks, in their re ports which were called last December 31, showed an increase in deposits, State Bank Examiner John Bingham an nounced. T h e deposits o f record in the state banks on the last day of December, Bingham said, were $263,078 more than on the date of the last previous call, Sep tember 30, 1932. “ It is a most encouraging thing,” Bingham commented, “ and is a concrete indication that the confidence in banks is growing and that the people now have more money to place in deposit than dur ing the previous two and one-half years, the period between the present and the economic debacle which began with the stock market crash in 1929. Pay No Taxes It was brought out at the hearing on bank legislation that some banks were paying no taxes at all, Democratic Floor Leader Coe H ow ard announced in the house recently. H e suggested remedial legislation, which, he understood, would be acceptable to these banks. Charged W ith Bribery Charges that money is being spent to influence legislation have been made in a form letter being sent to the bankers of N ew M exico. House members are up in arms ov6'r the allegation that they are being bought, and are threatening to call witnesses in an investigation designed to go into charges in a letter being mailed under the caption, “ N ew M exico Bankers’ A s sociation.” T h e letter which caused the furor was sent to bankers all over the state, but leaders of the house say they are convinc ed that officers of the bankers association know nothing about it. T h e letter is headed, N ew M exico Bankers’ Association, La Fonda, Santa Fe, Bulletin 22.” One paragraph in it said: “ T hey are spending money in every wav, including buying of votes, just as they did last session, in an effort to de feat this bill.” T h e N ew M exico Bankers’ Associa tion did not sanction a statement by its secretary which alleged legislative votes were being purchased to defeat bank leg islation, Arthur F. Jones, association president, said. “ T h e bankers’ association has every confidence in the intergity and the ability of the members of the state senate, the house of representatives and the gov ernor. W e feel that we are all deeply in terested in the welfare of the state and we only wish to be of service and to co operate in any legislation tending to that end,” said M r. Jones. A U S T R A L IA BANK OF N E W SO U T H W A L E S E S T A B L IS H E D '] l ! ‘ »?I:»»!' 1817 i W i t h w h ic h a re a m a lg a m a te d T H E W E S T E R N A U S T R A L I A N a n d T H E A U S T R A L I A N B A N K O F C O M M E R C E L t d .) P A ID -U P C A P IT A L .....................................................................................................£ s R E S E R V E F U N D .................................................................................................................. R E S E R V E L I A B I L I T Y O F P R O P R I E T O R S ............................................... iW M\T- BANK 8 .7 8 0 , OOO 6 ,1 5 0 ,0 0 0 8 ,7 8 0 ,0 0 0 £ s 2 3 ,7 1 0 ,0 0 0 Aggregate Assets 30th September, 1931, £s 90,111,427 A G E N T S — F IR S T N A T IO N A L BANK, OM AHA, N EBRASKA H E A D OFFICE, GEORGE ST., S Y N D E Y https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis GENERAL M ANAGER, ALFRED CHARLES D A V ID S O N LONDON OFFICE, 29 T H R E A D N E E D L E ST., E. C. 2 6 0 4 B r a n c h e s a n d A g e n c i e s in A l l A u s t r a l i a n S t a t e s , F e d e r a l T e r r i t o r y , N e w Z e a la n d , F i j i , P a p u a , M a n d a te d T e r r it o r y o f N e w G u in e a a n d L o n d o n Consolidated Statement https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis of NORTHWEST BANCORPORATION and Affiliated Institutions D ecem ber 31, 1932 ★ ASSETS Cash and Due from B an k s........................................................................ $ 7 0 ,5 1 1 ,3 9 2 .6 5 United States Government Securities.................................................... 4 4 ,5 3 6 ,0 7 8 .3 5 Other Bonds and Securities....................................................................... 7 2 ,2 9 2 ,2 9 7 .2 9 Loans and Discounts.................................................................................... 1 4 7 ,5 5 2 ,2 4 9 .9 2 O v e r d r a f t s ................................................................................................. 6 1 ,9 0 2 .4 6 Customers’ Liability on Acceptances..................................................... 1 8 4 ,8 4 2 .2 9 Bank Premises and Real Estate............................................................... 1 2 ,3 6 4 ,3 8 8 .1 0 Redemption Fund.......................................................................................... 522,42 5.00 Other A ssets.................................................................................................... 3 ,6 1 2 ,9 8 0 .9 3 Assets o f Union Investment Company, (less Reserves, and ex clusive o f Investments and Deposits in Affiliated B a n k s )... 9 3 1 ,9 1 8 .5 8 Assets o f Northwest Bancorporation, (exclusive o f Investments and Deposits in Banks and Other Affiliated Companies and 2 9 3 ,6 9 2 .0 5 Other Inter-Company Accounts)...................................................... T O T A L ..................................................................................... $ 3 5 2 ,8 6 4 ,1 6 7 .6 2 LIABILITIES Demand Deposits....................................................... $ 1 6 1 ,2 2 1 ,1 9 4 .8 8 Tim e D eposits............................................................. 1 2 8 ,9 8 9 ,3 1 1 .1 4 TOTAL DEPOSITS................................................... 290,210,506.02 Bills Payable and Rediscounts................................................................. Circulation........................................................................................................ Letters o f Credit and Acceptances.......................................................... Dividends Payable January 3, 1 9 3 3 ....................................................... Other Liabilities............................................................................................. Reserves for Interest, Taxes, and Expenses....................................... Reserves for Losses and Depreciation.................................................. Minority Interest in Capital Stock and Surplus o f Constituent Banks and Other Affiliated Companies.......................................... Reserve for Contingencies......................................................................... 3 ,0 87,8 5 5.50 1 0 ,4 3 7 ,1 7 0 .0 0 1 9 7 ,7 6 7 .2 9 2 4 2 ,0 6 9 .8 5 1 ,2 5 7 ,5 2 9 .8 7 1 ,6 0 0 ,6 1 7 .9 0 1 ,1 9 8 ,5 2 3 .4 2 2 ,3 4 0 ,9 4 6 .3 5 1 3 ,0 3 2 ,6 2 0 .5 3 Capital Stock and Surplus: Capital Stock (Authorized 2 ,0 0 0 ,0 0 0 Shares Without Par Value): Shares Issued........... 1,679,5 01 Deduct........ 6 5 ,7 0 2 Stated Value____$ 2 5 ,0 0 0 ,0 0 0 .0 0 Held in Treasury 9 7 7 ,9 9 8 .8 2 Outstanding 1 ,6 1 3 ,7 9 9 ............................... $ 2 4 ,0 2 2 ,0 0 1 .1 8 Surplus............................................................................ 5 ,2 3 6 ,5 5 9 .7 1 2 9 ,2 5 8 ,5 6 0 .8 9 T O T A L .................................................................................... $ 3 5 2 ,8 6 4 ,1 6 7 .6 2 NOTE: There have been eliminated in the foregoing statement, all inter-Company accounts includ ing deposits o f $22,652,932.36 amount carried by affiliated banks in the ordinary course o f business with key banks in the group. Before such elimination, the combined Balance Sheet showed total deposits, $312,863,438.38 and total resources, $378,142,294.93. Northwest Bancorporation MINNEAPOLIS, M INNESOTA https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis
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