Full text of Central Western Banker : March 1934, Volume 29, No. 3

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CENTRAL WESTERN

BANKER
Omaha
Courtesy, Civility and Cheerfulness
Pay G ood Dividends
Page 4

Banking Structure on a Firm
Foundation
Page 5

Changing Conditions in the
Grain W o rld
Page 6

The Recovery Program Understanding and Misunderstanding
Page 9

March

1934

Please Make
This Bank
Your
Omaha Office
Whenever
You Come
to

Omaha
We Shall he Glad to Assist You

First National Bank

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of Omaha
M E M B E R FEDERAL R E S E R V E S Y S T E M

3

Central Western Banker, M arch, 1934

C E N T R A L W E JT E R N
410 A R T H U R

LA N C E R

B U IL D IN G

O M A H A
C liff o r d D e P u y , Publisher
R . W . M oo rh ea d , A ssociate Publisher

H . H . H a y n e s , Editor
F r a n k P. S y m s , Vice-P resident, 19 W est 44th S tree t, N ew Y ork

F r a n k S. L e w is , 218 E ssex B ldg., M inneapolis

Subscription, 25 cents p e r copy; $2.00 p er year.

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

M A R C H , 1934

V o l u m e 29

N umber 3

The Teller Tells the W o rld
By C. W . F IS H B A U G H
H E O U T S T A N D I N G date of last year was M arch
4th, “ bank holiday.”
Oscar, the hired man in the
bank, made the remark to the president that he be­
lieved bankers should celebrate the anniversary of that mem­
orable day by declaring a holiday. T h e Pressie agreed, say­
ing: “ Oscar, that’s a good idea and w e’ll observe M arch 4th
by making it a holiday, none of the employes need come to
work on that day.” N o w I wonder if the fact that M arch
4th comes on Sunday this year had anything to do with his
decision!
<¿8 <¿5 ¿8

T

g A N K E R S have become “ float conscious” — most of the
codes call for figuring float charges when making service
charges.
In order to bring the customers into the bank
earlier, to avoid the last minute rush, we have adopted the
plan of calling a four day item four days up to two o’clock
and after tw o adding an extra day or calling the item five
days. T his is fair because any item that comes in after two
is usually held up and goes into the next day’s business. In
a month’s time this extra day float makes a lot of difference.
¿8 ¿8
/ ^ s L E G A L money got scarcer from 1931 on, more people
x
began making their own. In 1931, for instance, 11 new
counterfeit notes circulated . T h e secret service seized
$36,572 in bogus currency and $44,078 in spurious coins. In
1932, there were 17 new counterfeit notes, with currency
seizures of $540,538 and coin $49,773. In the west where
most of the nation’s silver is mined, the secret service found
a rapid rise in the number of counterfeit coins.
<¿8 ¿8 ¿8

W ITHG O L D

becoming “ outlawed,” people who have
had five and ten dollar gold pieces in their possession
for years have been turning them in. These folk are not
hoarders, but just Americans that became attached to the
pieces for sentimental reasons. It seems a shame they must
turn these in, but I hear no complaints. And if gold will
help bring the country out o f the hole, every American with
a five dollar gold piece w ill gladly kick in.
<¿8 <¿8 «¿8
Q L IP P E D

from one of our leading papers:

“ T his is a

good time to collect the right real estate and securities,
if you know how to select the right ones.” Aye, aye, there’s
the rub.

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J F R IP V A N W I N K L E had been a banker and slept for
say five years, starting his sleep in September, 1929, and
woke up today, what would he have thought. T hink about
it. Remember banking back in 1929 and then look at bank­
ing today; the difference is amazing. Things have changed
so gradually on one hand and on the other things have
changed so fast. T hat may sound like a paradox, but it’s a
fact. Anyway, I ’ll wager Rip Van W inkle would have
made the remark of his namesake, Ripley, and said: “ Believe
it or not.”
<¿5 ¿8 <¿8
J_^ E R E ’ S S O M E T H I N G interesting to bankers. N o other
corporation in the United States is permitted to use any
three of the words used in the name of the new Federal D e ­
posit Insurance Corporation. In other words, there is going
to be nothing confusing about the F D IC . (Please note that
the first two letters F .D . are the same as our President’s.)
¿8 ¿8 ¿8
| _T E R E ’ S A true story that was told at a recent bank
m eeting:
T w o brothers were running a bank. One o f their reg­
ular borrowers was the school teacher, that comes in and
borrows twenty-five dollars every couple of months. Always
paying it back, but rather slow. O ne day the brothers got
together: “ T e d ,” said the one, “ let’s cut out this small loan
stuff to Miss Blank.” “ O kay,” said the other, “ w e’ll stop it.”
A few days later one of the brothers was out for dinner,
Miss Blank came in and borrowed twenty dollars. T h e
brother put the note in the cash items. W h en they balanced
at night the other brother found it. “ W h a t’s this?” he in­
quired, “ I thought we agreed not to loan her any more
money.”
“ T h a t’s just it, W E did agree not to loan her any more
money, but you weren’t here,” came the unexpected answer.
<¿8 ¿8 ^8
Q U S T O M E R S that have had time certificates of deposit
in the past are somewhat at a loss to understand the
new laws on time deposits. Before you are through explain­
ing that a certificate cannot be made for 6 or 12 months,
cannot be cashed before due, and is subject to interest change
if so called upon to do so by the Federal Reserve and that
the interest rate is only two per cent, the customers is willing
to take the money and save the banker the trouble of caring
for it. T im e money is not asked for, in fact, it seems to be
shunned.

4

Central Western Banker, M arch, 1934

^Employes who use tact
in their contacts inside and outside
the bank are doing themselves and their bank a good turn^

Courtesy, Civility and Cheerfulness
Pay G o o d D ivid e n d s
A
F R IE N D of mine, whose father
for many years was the proprietor
of a successful store in a small
town, frequently repeats this sound,
home-spun business maxim of his mer­
chant father: “ M y son, always think of
your customer as your boss — and put
yourself at his command.”
T hat is
equally good advice for bank employes
and officers. Each one of us is a sales­
man. W e are selling the one staple that
a bank has to offer— financial service.
O u r direct orders come from executive
officers who determine the policies and
direct the functions of this great institu­
tion, but back o f them all are the more
than 500,000 depositors of the bank,
who must be satisfied with quick, courte­
ous banking service.

In spite of the many differences in
human nature, experience has taught me
that customers may be classed into three
divisions: the carefree, the business-like,
and the trouble customers. T h e carefree
ones enjoy a hearty salutation and brief
comment as to their health, their family
and affairs. T h e business-like person is
more concerned with speedy, efficient
service and though responding to a
cheerful greeting, prefers not to enter
into a conversation. T h e troublesome
customer is likely to take a lot of time
complaining about everything in gener­
al, and plenty in particular.
In retaining the good w ill of these
three kinds of customers we need to add
to the merchant’s home-spun philosophy
— a “ three-C” creed for bank employes:
Courtesy, Civility and Cheerfulness to
all. An employe keeping these funda­
mentals in mind w ill go far towards sat­
isfying all types of customers.
Prompt, courteous service with a smile
w ill do much to disarm the customers
who fall in the trouble classification. A
polite gesture or kind word and a few
moments spent in directing a person to a


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By E. B. MERRELL

Vice President
The Cleveland Trust Company

certain officer or department, may go a
long way in establishing a friend and
customer for the bank. A careless word
or ill-mannered gesture might blacklist
the institution forever in the mind of a
prospective customer.
Director Chapin at a recent meeting
told of an incident that is applicable to
our employes who meet the public.
A n employe of the National Acme
Company, discouraged because of lack
of advancement, discussed his problem
with President Chapin, who told him
that his greatest handicap was the inabil­
ity to meet people, and advised him to
cultivate the art of smiling. T h e man
promised to do so and spent many hours
before a mirror, he reported later to M r.
Chapin.
T hat employe is today the best sales­
man in the company.
T here are many lessons to gain from
from customer contacts. M any contacts
reveal important lessons of psychology
that an alert employe retains classified
in his mind under experience.
G ood prospects are often uncovered
where least expected. One cannot always
judge at first sight, the possibilities of a
prospect. A careworn, shabbily-dressed,
elderly woman entered a large uptown
branch of a N ew Y ork bank last spring
and told the guard that she wished to
open an account. It was n o o n ; three
officers were in the new accounts depart­
ment. T h e younger two were about to
go to lunch, and upon seeing the old lady
were convinced that their hunger could
not be staved off any longer. T hey made
their exit, leaving the manager of the
branch, who was busy with telephone
calls and several other urgent duties.
Presently, however, he was able to ex­
tricate himself from his work and ap­

proaching her, asked if he could be of
assistance.
A fter stating her mission, she asked to
see a statement of the bank’s financial
condition— this to the great surprise of
the manager, who was used to having
his bank’s financial condition taken for
granted, particularly by individuals un­
assuming in appearance as this forlornlooking lady. A fter reading the state­
ment through carefully she asked sever­
al intelligent and pertinent questions and
then informed him she was ready to
open an account. As he took down the
name, address and other usual informa­
tion, he thought it would be a small ac­
count— the woman was ostensibly poor.
“ H o w much do you wish to deposit?”
he asked.
“ Thirty-one thousand dollars,” she
answered casually and proceeded to
count out the money in various-sized
bills.
T h e old-time banker has been accused
of being unsympathetic and cold, but
the modern one is different. H e realizes
that he owes his position to the depos­
itors and most of them enjoy having him
show an interest in them. H e must be a
keen student o f human nature to recog­
nize quickly the type of person he is
dealing with. In any event, he should
abide by courtesy, civility and cheerful­
ness and not let silence indicate grouchi­
ness.
M any new accounts may be produced
by a silver tongue, but we who are in
constant touch with the public often find
that a guarded tongue is more truly
golden in the way of keeping them.
O ften damage is done by saying too
much, or the w rong thing.
Employes who use tact in their con­
tacts inside and outside the bank are do­
ing themselves and their bank a good
turn.— From the Cleveland Trust M a g ­
azine.

Central Western Banker, M a r eh, 1934

b

Banking Structure
O n a Firm Foundation
Remarks by Francis M. Law,
President of the American Bankers’ Association, and
President of the First National Bank of Houston, Texas
Before the recent M id-W inter Trust Conference in New York
F. M . L
** T T IS my opinion that the banking
| structure of the nation was never
on a more firm foundation than
it is today.”
T h e above is a verbatim quotation
from a speech delivered in N ew Y ork
a few days ago by a high government
official who has more intimate first-hand
knowledge of the real condition of banks
than perhaps anyone else. I refer to the
Honorable J. F. T . O ’Connor, Com p­
troller of the Currency. His statement
may be accepted with assurance.
A depression cannot long survive a
sound banking structure if the banking
structure is responsive to legitimate needs
and functions in a way that is virile and
alive. T h e most cheering fact of the
present situation is the knowledge that
our banks are in strong position. N o pro­
gram o f recovery could carry any guar­
antee of permanence otherwise.
The

very

satisfactory

condition

of

banks is due in large part to the program
of the Reconstruction Finance Corpora­
tion under which thousands of banks have
strengthened their capital positions by the
sale of preferred stock or capital notes.
T h e return of confidence has been aided
by the advent of the Federal Deposit
Insurance Corporation and the protec­
tion afforded thereby to 97 per cent of
the customers of the nation’s banks. Full
credit should also be accorded to the
bankers themselves, who have given their
all, sparing nothing, in a supreme effort
to clean house and to prepare to go
forward.

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Recovery, even to the most pessimistic,
is no longer a myth or a rumor, nor is
it merely psychological. Abundant evi­
dence and proof lie on every hand— tan­
gible proof. W ith a return of confi­
dence the wheels have begun to go round
and a great many well managed busi­
nesses may look for a profit during this
calendar year with fair assurance at
least.
For what has been achieved let us
thank the President, who has labored
with courage and patience and vision.
Let us thank the Congress, whose mem­
bers during the emergency have put the
public welfare above partisanship. Let
us thank one hundred twenty-five mil­
lion of our own citizens who have re­
fused to be stampeded, but rather who
have kept alive the divine spark of faith
and hope.
N ow that this country has returned to
a gold bullion standard and the dollar
has been valued, the effect has been to
lessen uncertainty and to instill confi­
dence.
Sir Josiah Stamp, Director of
the Bank of England, is quoted as saying
recently: “ T h e new dollar is a good
foundation on which to build an im­
provement in international trade.”
W e may reasonably expect that the
recent action of the government in sta­
bilizing the dollar will have a marked
tendency to encourage industrial and
other business commitments.
Business
men need not be so exclusively engaged
in taking counsel of their fears now that
uncertainty does not so cruelly haunt
their dreams.
M uch has been said about the loosen­

aw

ing of credit by banks. During the acute
period of the depression hanks for the
most part have not been lending normal­
ly, nor should they be blamed. W ith
public confidence shattered the banker
was properly concerned in liquidity, hav­
ing in mind his primary obligation to pay
off deposits.
T h e situation has im­
proved to the point where super-liquid­
ity no longer seems necessary. Condi­
tions have materially changed.
Banks
will desire, for every reason, to return
to a more normal lending policy. This
does not mean loose credits or the mak­
ing of improper loans.
It does mean
a sympathetic attitude and a recogni­
tion of responsibility for his proper part
in the program o f recovery by the bank­
er as he passes upon and meets sound
credit requirements of business as it
swings into and continues on the upward
turn. I confidently expect to see loan fig­
ures rise.
T h e call is clear and compelling for
the bankers of the nation to show their
faith just now in the future and per­
manence of America and America’s bus­
iness. Leadership, able and unafraid, is
called for. T h e country has a right to
expect the bankers to assume a definite
measure of responsibility in this leader­
ship. It is at once a challenge, a duty
and an opportunity. T h e country, under
the heroic command of its President, is
on the march. T h e banker is needed to
serve unselfishly in directing the journey.
O ut of his experience he should be able
to point out pitfalls and dangers and
direct a safe course that will in due time
lead to real and permanent recovery.

Central Western Banker, M arch , 19¿4

6

Changing Conditions
In the
sumptive demand during recent years.
H E A G R I C U L T U R A L A djust­
T h e whims of nature at all times must
ment A ct has for one of its princi­
of course be recognized.
pal objectives the raising of the
price of agricultural products to a level
Processing Tax
which w ill give them the same purchas­
A t the time the wheat program was
ing power as these agricultural products
inaugurated the farm price of wheat in
enjoyed during the base period, 1909the United States was about 30 cents per
1914. T his objective, insofar as it relates
bushel below parity price. T h e processing
to wheat is frequently expressed briefly
tax was therefore fixed at 30 cents per
by saying that farm prices are to be
bushel; and incidentally, was worked out
raised to parity. O nly a few days after
very rapidly and actually put into effect
the approval of the act an informal con­
on July 9, 1933. W heat producers are to
ference of representatives of growers,
receive the full advantage of this process­
handlers, and processors of wheat was
ing tax, which it is hoped w ill give them
held in W ashington on M a y 26, and
a price for their wheat equal to parity
the ground work at that time was laid
throughout the entire United States.
for formulating the Agricultural A djust­
T h e advantages accruing to the farmers
ment Administration’s wheat program.
are: Lirst, direct payments amounting to
This program was announced on June
approximately 28 cents per bushel on
16, jointly by the secretary of agricul­
ture, the Agricultural Adjustment ad­
E X C E R P T S from the address of
ministrators, and approved by the presi­
dent. T h e program thus announced con­
Frank A . Theis, chief of the grain
tained among other things the follow in g:
processing and marketing section,
“ T h e object of the program is tw ofold :
A
g ricultural Adjustment Adm inis­
Lirst, it seeks to assure contracting farm­
tration, before the annual meeting
ers an income amounting to parity prices
on that part of their production required
of the Kansas Agricultural Conven­
for domestic consumption independent of
tion, held in Topeka
either the American or the world p rice;
second, by offering farmers direct finan­
that portion of their crop which is nor­
cial incentive to curtail their future
mally required for domestic utilization;
wheat production when required, it un­
second, a small part of the processing tax
dertakes to restore balance between sup­
is being used to facilitate exportation of
ply and market demand, providing a per­
the wheat surplus (which I will go into
manent life for the wheat price struc­
later). T h e success of this program de­
ture. T h e plan also very definitely stated
pends to a very considerable degree upon
that it permitted a free supply and de­
the cooperation of the various groups in­
mand price for wheat to operate in all
volved.
markets of the United States. W h en this
Another point in this cooperative pro­
open market price and world price for
gram which rests on the farmer is that
wheat become adjusted the way w ill be
of aiding the government in securing the
open for the free export movement of
full amount of the processing tax. T he
American wheat without detriment to
act
provides that producers of wheat may
the farmers’ income on that portion of
be exempt from the payment of the proc­
their wheat required for the domestic
essing tax on that portion of their wheat
market.
ground into flour used by their family,
T h e acreage reduction feature of the
household
and employees. T h e extent of
program is for the purpose of control­
this
exemption
and the loss to the proc­
ling, insofar as acreage reduction can
essing tax fund resulting from this ex­
control the production of wheat so that
emption has been carefully calculated
it w ill be more closely related to the
and the net receipts from the processing
probable future demands for wheat both
tax pro-rated for benefit payments and
domestic and export, than has been the
so forth.
relation between production and con­

T


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W o rld
Prices

One of the most constructive and
praiseworthy changes during the last year
that I can refer to is the question of
price which the Kansas farmer has been
receiving and is now receiving for his
wheat. As an example, on the last mar­
keting day, December 30, 1933, N o. 2,
hard, ordinary wheat sold on the Kansas
City market at an average price of 82
cents; whereas on the last of the year,
1932, this same grade of wheat was sell­
ing at 40 cents a bushel. Practically the
same situation prevailed in other grains.
N o. 2 mixed corn, selling the last day of
1933 at 43j/2 cents, and in 1932, 22
cents, and No. 3 white oats in 1933 sell­
ing at nominal 36 cents as compared to
15 cents the same day the previous year.
M ost assuredly a 100 per cent advance
in actual marketable value of wheat and
other grains is an encouraging sign. T he
income for wheat producers in Kansas
during the 1933-34 marketing year
promises to be considerably larger than
that of the previous year, in spite of the
fact that the 1933 crop in Kansas is the
smallest on record in recent years.
W e realize, of course, that wheat pro­
ducers are interested not only in an in­
creased price paid for wheat but also in
the total income received from the sale
of wheat. D uring the marketing year
1932-33, the sale of wheat from Kansas
farms gave to producers an income which
is estimated to be about $36,500,000.
D uring the 1933-34 year, when the sup­
plies of wheat to be marketed from Kan­
sas farms was very much smaller than
any previous year, the income from the
sale of wheat would also have been ex­
tremely small had the low wheat price
of 1932-33 prevailed. But because of the
improved price of wheat during the first
six months of the current season, the es­
timated income from the sale of wheat
from Kansas farms during that period
was about equal to the income for the
whole of 1932-33. Calculating the in­
come from the wheat now remaining on
farms available for sale at present prices
and adding that tp the estimated income
to January 1, brings the estimated in­
come for the 1933-34 season to approxi­
mately $47,000,000, considerably above

Central Western Banker, M arch, 1934

that of last year. In addition to the in­
come from the sale of wheat, Kansas
farmers have already received and will
continue to receive benefit payments un­
der the wheat program, amounting to an
estimated total of about $24,000,000.
T h e state of Kansas is indeed to be
congratulated on its whole-hearted sup­
port of the administration’s program.
Ninety-seven thousand, eight hundred
and eighteen wheat producers in Kansas
signed acreage reduction contracts; 12,548.000 acres were represented by these
farmers. Fifteen per cent of this acreage
w ill be taken out of production, that is
to say, about 1,880,000 acres w ill be tak­
en out of wheat production in. Kansas
this year under the terms of these con­
tracts. T h e
average acreage sown
to wheat in Kansas during the last three
years was 13,541,000 acres.

7

it. A nd as we all know, our exports last
year and a part o f this crop season have
been growing steadily smaller. T o be
more specific the net exports from the
United States of wheat and flour, which
does not include shipment in bond from
Canada, are as fo llo w s:
BUSHELS

192819291930193119321933-

29
30
31
32
33
34

..................................142,245,000
..................................140,289,000
..................................112,416,000
................................. 122,911,000
................................. 31,842,000
to N ov. 18............
2,000,000

I call particular attention to the ex­
ports of only 2,000,000 bushels from
July 1, 1933, up to November 18, for
the reason that the United States values
were practically on a domestic basis, be­
ing some 20 or 30 cents over the world
price.

tion and erecting various types of bar­
riers against the importation of wheat.
Increasing surpluses and low prices of
wheat in the United States had been ma­
terially affected by the general world
wheat situation. This world crisis was
precipitated by the large world crop of
1928, which amounted to more than four
billion bushels (exclusive of Russia and
C hina), and the nationalistic policies of
certain European importing countries of
the world, resulting in declining pur­
chasing power. It is significant to note
that prior to 1928 world consumption o f
wheat adjusted itself very close to world
production. Follow ing the large crop of
1928, however, world surpluses mount­
ed rapidly. T h e imports of wheat and
flour into the principal importing coun­
tries of the world declined materially, in
spite of the lowest prices on record. This
decline was accounted for very largely
by the policies adopted by France, Ger-

Reported wheat sowings during the
past fall were 11,953,000 acres, or 1,588.000 acres (11.7 per cent) under the
three-year (1929-1931) average, and
900.000 acres (7 per cent) under last
year’s planted acreage.

D uring recent years numerous E uro­
pean countries have adopted a policy of
self-sufficiency, promoting home produc-

O f course, this year the producers of
wheat throughout the entire southwest
have been able to maintain considerably
over w orld ’s price levels, averaging 20
to 30 per cent per bushel over export
prices throughout the season, and have
therefore not been dependent on the ex­
port market.

Farm Land for the Future

Export Outlet

T h e United States, partly due to its
tariff policy and partly due to other
causes which I w ill not attempt to dis­
cuss, has gradually lost its export outlet
for wheat during the past few years. It
is important to note that the tariff act in
force for the years 1920-21, collected an
average ad valorem rate upon dutiable
goods imported of 23 per cent. Under
the 1922 act which was in force for sev­
en years, the average rate upon dutiable
goods advanced to 38 per cent. T h e
Hawley-Smoot T a riff A ct of 1930 ad­
vanced the average dutiable rate to 53
per cent. Comparing our loss in export
trade during the post-war years with an
average ad valorem rate of 22 per cent,
the w orld export trade in wheat aver­
aged 625,000,000 bushels, of which we
furnished 41 per cent. D uring the seven
years of our 38 per cent tariff the inter­
national w orld trade in wheat averaged
791,000,000 bushels and we furnished
21 per cent of it. In the first two years
under our 53 per cent tariff the world
wheat trade reached 814,000,000 bush­
els, and we supplied only 15 per cent of

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A L L the factors that influence
the future need for farm land
only one can be measured with any pre­
cision,— namely, the population of the
Nation,” D r. O . E. Baker, Department
of Agriculture economist, declared at
Farm and Home W eek, Iowa State
College, Ames, Iowa, last month.
“ It is practically certain,”

he said,

“ that between now and January 1,
1940, the increase of population will be
3,000,000 to 5,000,000, and between
1940 and 1950 it may increase by as
much more. A t three acres of crops har­
vested per person this means that 9,000,000 to 15,000,000 more acres o f crops
would be needed by 1940 and 18,000,000 to 30,000,000 acres by 1950 than
are required for our present population,
other factors remaining equal.
The
present requirement, however, is much
less than the acreage now in cultivation.
Hence, no net increase in acreage de­
voted to crops may be necessary.
“ Should the diet shift from animal
products toward more cereals or sugar,
or should exports of farm products de­
cline further,” he continued, “ less land
would be needed than would otherwise
be required. H owever, per capita con­
sumption of farm products, considered

(C ontinued on page 12)

as a whole, has changed very little dur­
ing a third of a century, and it appears
that a new level in exports of farm prod­
ucts has almost been reached.
“ W hatever net change may occur in
the crop acreage necessary to supply our
requirements for domestic consumption
and exports, many millions of acres of
land w ill go out of use for crops in cer­
tain regions because of physical and eco­
nomic disadvantages, and many millions
of acres w ill come into use for crops in
other regions.”
Discussing “ the poor land program,”
the speaker said that “ the proposal to
purchase poor land, sometimes called
submarginal land, is in accord with the
trend of declining crop acreage in the
originally forested eastern and southern
portions of the United States, during
the decade 1920 to 1930.” H e said: “ I
believe in the poor or submarginal land
program because there are millions of
farm people whose land is capable of
maintaining only a meager standard of
living; because the poor land program
will conserve natural as well as human
resources; and because the program w ill
in many places help to reduce taxation.
T h e subsistence homesteads policy also
deserves support because it w ill benefit
both city people and farmers.”

8

Central Western Banker, M arch, 1934

Return of Lo n g-Term Investment
M arket N e e d e d for
Sound B usiness R e co v e ry
O
P E N IN G up of the long term
investment market will provide
a powerful stimulant to sound
business recovery, in the opinion o f M .
A . Linton, president of the Provident
M utual L ife Insurance Company of
Philadelphia. M r. Linton, speaking be­
fore the trust company division of the
American Bankers Association at their
midwinter session held in N ew Y ork, in
reviewing some of the obstacles which he
believes are retarding business recovery,
said that when the investment market
is again normal the life insurance com­
panies, with their great reservoirs of
credit w ill be able to do their share in
bringing back prosperity.
A t present a number of obstacles are
hindering the restoration market. “ F or­
tunately,” M r. Linton said, “ these ob­
stacles are man-made and hence may be
removed. One is the uncertainty about
the future value of the dollars. W e can
but hope that the 59 cent dollar will pro­
duce stability and a feeling of confi­
dence in the future. People naturally
hesitate to lock up their funds for a long
time if the dollars that will come back
are going to purchase a lot less than
present dollars.
“ Another is the Securities A ct, which
imposes such heavy liabilities upon those
responsible for the conduct of even the
best businesses that they hesitate to incur
the risk of issuing new securities. T h e
life insurance companies desiring to in­
vest their funds wish that these hin­
drances could be removed.
“ Finally, rising costs of production
under the N R A codes have endangered
profits in many lines of industry. W ith ­
out profits borrowings cannot be paid
back. T here can be no valid objection to
higher wages for labor provided the con­
ditions exist under which the industry
can continue to operate with a proper
margin between production and selling
costs.
“ Because these obstacles exist the gov­
ernment has found it necessary to make


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large financial commitments of its own
both to support emergency relief and
made-work measures and to make long­
time capital loans. T h e requisite funds
are being borrowed and large offerings
of government securities are in the offing.
Are these securities best adapted to the
needs of the life insurance companies ?

“ A first consideration is that the com­
panies must invest their funds at a cer­
tain minimum rate of interest in order
to fulfill their contracts with their pol­
icyholders.
M oreover they should in­
vest in long-term securities. If the gov­
ernment issues long-term bonds on a
basis that meets the requirements of the

TH E uncertainty regarding dollar
value, securities legislation, and
rising production costs are do minant factors in business situation
at present
companies, the very fact that the gov­
ernment must pay so high a rate would
have a serious effect upon the securities
markets generally. T hus we are face to
face with an awkward dilemma.
“ T h e solution carries us back to the
consideration of currency stability, ob­
stacles to new capital issues, and a means
of making the rise in the production costs
of industry follow actual profits rather
than precede hoped-for ones.
W hen
these problems are solved the long-term
investment market w ill come into being
again and will provide a powerful stim­
ulant to sound recovery. T h e life insur­
ance companies will be back in the field
investing their funds conservatively in
mortgages and corporate bonds in ac­
cordance with the new needs. Life in­
surance reserves are great reservoirs of
credit which w ill do their share in
bringing back prosperity just as soon as
they are given a chance.”

Discussing present investments of the
life insurance companies of the country,
M r. Linton estimated that of all farm
mortgages the life insurance companies
own 21.8 per cent; of urban mortgages
20.2 per cent ; of the obligations of rail­
roads 21.8 per cent; of the obligations of
states and local units of government 4.3
per cent.

The Best
Tarm Relievers^
Secretary of Agriculture W allace has
continually emphasized the need for
acreage reduction as a solution to some
of the most perplexing of farm problems.
As he has observed, it is simply the part
of wisdom for American farmers to stop
adding to a constantly growing surplus
of all the agricultural commodities.
M r. W allace’s aid is being sought
now, through governmental action, and
in certain fields definite results have been
obtained.
In the cotton industry, for
example, plow-under payments have
caused striking economic revival. But
in the long run, the greatest results will
come through education— through con­
stant and unremitting presentation of
facts to farmers. A nd in this work, the
agricultural cooperatives w ill be the
prime influence.
T hey have shown that influence al­
ready. T h e American Cotton Coopera­
tive Association, for example, did essen­
tial work in helping develop the govern­
ment’s cotton program, and it is still
working ot see that the greatest benefit
is secured. T h e Dairymen’s League C o­
operative Association in N ew Y ork is
the powerful ally o f dairy farmers in
that locality. These and other major
cooperatives have done fine work in dis­
posing of the production of their mem­
bers and in educating their members re­
garding production and distribution
problems. T hey are the greatest “ farm
relievers” of all.

9

Central Western Banker, M arch, 1934

The Recovery Program—
Understanding and Misunderstanding
A n address made recently by Hon. John Dickinson, Assistant
S e c re ta ry of C< mmerce, in which he empl asizes the unified
character of the recovery

T IS from looking at certain parts of
the recovery program in isolation,
without relating them to the pro­
gram as a whole, that most of the mis­
understandings spring which give rise to
what little criticism there is of the pro­
gram. I would like to clear some of these
misunderstandings away at the outset,
and three of them in particular: First,
the misconception that in some way or
other the program embodies an “ anti-in­
dustrial complex” ; secondly, it regiments
industry and saps individual initiative;
and thirdly, that it sacrifices the interest
of the consumer. A t least two of these
charges would seem to be inconsistent
with the third, but they represent, appar­
ently, the incipient nuclei about which
criticism of the administration seems
likely to crystallize.

I

T h e suggestion that the administra­
tion’s program embodies an anti-indus­
trial complex and is colored by hostility
to business rests squarely upon picking
out certain specific parts of the program
and viewing them from a distorted angle.
These are, first, the use of the National
Recovery A ct for the purpose of main­
taining or increasing wages; second, the
effort to relieve the debt burden by pro­
moting an increase in the price lev el;
third, the policy of increasing the pur­
chasing power of the farm er; and fourth,
the program of public works. It is sug­
gested that all of these measures result
in diminishing the share of the national
income which has in the past been going,
and would otherwise go, to the business
man or investor, and that the program
is accordingly directed against the inter­
est of these classes in the community for
the special advantage of other, more fa­
vored, classes, especially labor and the
farmer.
The Business Man

I suggest that such an inference can
only result from viewing the interests of
business and of business men in isolation

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program for th e d o u b l e
reason that unless we grasp
it at th e o u t s e t , we are
almost certain not only to
fail to understand the pro­
gram, but actually to mi s ­
u n d e r s t a n d it.

and apart from the interests of the com­
munity and from the nature of the ec­
onomic process as it functions in the in­
dustrial civilization in which we are liv­
ing. Let us take the interest of the busi­
ness man and see how it is related to the
policy of increasing wages, increasing the
farmer’s purchasing power, and alleviat­
ing the debt burden. Are we simply to
say that if wages are not increased, the
business man will make more profit arid
that therefore to increase wages is to
strike a blow at his interests? Are we
simply to say that to increase the price of
agricultural commodities is to increase
the price of raw materials and thus, once
again, to diminish the business man’s
profits ? Are we to say that an attempt to
relieve the debt burden tends to decrease
the value of the investments in which
business men have salted away their
profits ?
A ll these things are true. D o they,
however, represent the full truth, or the
whole truth as to the relation between
the business man’s interests and the re­
covery policies under consideration? In­
creased wages, for example, represent a
decrease in profits, if we assume, but
only if we assume, an equal sales volume
when wages are low as when they are
high. Increased prices to the farmer for
raw materials represent decreased profits

only on the same assumption. Can we
make the assumption in question if we
squarely and honestly face the facts of
our national economic system, as we have
been made familiar with those facts dur­
ing the years of the depression? W ages
fell to very low levels during the past
four years, and were continuing to fall.
Did that fact result in increasing profits?
T h e prices of foreign products fell to
very low levels during the same period.
W as there any consequential boom in the
industries using foreign products as raw
materials ?
T h e answer is of course no, and the
reason is obvious. It is that wages and
farmers’ income supply, under current
economic conditions, the greatest part of
the effective demand for the products of
industry. W e cannot assume that the
business man can go on selling goods and
making profits while wages continue to
fall and while farm income continues to
decline. It is only at the price of paying
the farmer more for raw material and
paying his laborers more as wages that
the business man can make the volume of
sales which is indispensable if he is to
make any profit at all. W e are not tak­
ing profits away from him by increasing
his costs. W e are simply attempting to
reestablish the conditions which make
profits possible. W e can only regard the
recovery program as an attack on profits
if we leave half of the picture out of ac­
count. T h e same thing is true of the ef­
fort to alleviate the debt burden. This
can be regarded as an attack on the value
of investments only if we assume that in­
vestments would otherwise maintain
their value. Every creditor knows that
there are times when he can preserve
more of the value of the debt owing to
him by scaling it down somewhat than
by insisting on his full pound of flesh. An
effort to raise the price level in order to
restore the economic activity of the com­
munity is not in itself an attack on the
investing class.

10

Central Western Banker, M arch , ÌP54
Second Error

Let me turn now to the second mis­
conception which I have mentioned,
namely, that the recovery program reg­
iments industry and saps individual in­
itiative. T his again results, I submit,
from failing to envisage the economic
process as a whole as it is now organized
in this country. It results from looking
at regulation as a purely bilateral matter
between government on the one hand and
the individual on the other, to be decided
in terms of the right of the particular in­
dividual to do the thing from which gov­
ernment is seeking to restrain him. Sup­
pose we attempt to apply this view to
such a governmental regulation as the
restriction on gold withdrawals from the
banks and the treasury. Is it not an in­
vasion of a private right to forbid the in­
dividual to have something to which he
is entitled ? Suppose, however, that we
look farther than this particular individ­
ual and do not confine our view simply
to the relations between government and
this one individual. Suppose we regard
him, as in fact he is, as but one of a se­
ries of individuals, all having equally
good titles to withdraw gold. It at once
becomes apparent that there is simply
not enough gold to go around. If one
takes that to which he is entitled, an­
other w ill be excluded from that to
which he is equally well entitled. Are we
to close our eyes to this consequence? In
short, in order properly to approach the
problem of regulation, we must look at
individuals as linked together, as they
are, by the economic processes within
which they function. Those of their acts
which have a bearing on the economic
well-being of all who are enmeshed in
the process cannot always be left to pure­
ly private determination, any more than
each separate musician in an orchestra
can be left to play in his own way with­
out the leadership and guidance of a con­
ductor.
If in this way regulation is conceived
in terms of the whole economic problem,
the argument that it saps individual in­
itiative will, I believe, fall to the ground.
Individual initiative always has operated,
and always must operate, within the
limits of a system of arrangements de­
signed to maintain and protect the social
processes of the time. Properly planned
regulation touches those activities, and
only those, which link the individual into
these indispensable social processes. T o ­
day, our economic system is such that
wages and prices and credit must be in­
ter-related in particular ways if the proc­
esses are to go on upon which our indus­

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trial society depends for its subsistence.
T hey can no longer safely be left in the
field of purely private determination, any
more than in an automobile age street
traffic can be left to the arbitrary ju d g ­
ment of the individual drivers. Plenty of
room for individual initiative is left, but
it must be diverted at some points into
new channels.
Business Selfishness

This emphasis upon business initiative,
business responsibility and business selfgovernment has no doubt led to the third
misconception to which I have referred,
namely, that the administration is sacri­
ficing the interests of the consuming pub­
lic to business selfishness. T his charge is
of course directly inconsistent with the
other charge which I have already men­
tioned, namely, that the administration’s
program is hostile to business and based
upon an anti-business complex. It again
results from a partial and incomplete
view of the recovery program which
singles out and emphasizes certain ele­
ments of that program without relating
them to the program as a whole.
Is it true that the interest of consum­
ers consists simply in bringing prices
down to the lowest possible level ? Does
such a statement represent the full truth
or the whole truth? L ow prices repre­
sent an advantage to the consumer only
on the assumption that the consumer has
as much money to spend in buying at
low prices as in buying at high. If, when
prices are low, he has a greatly decreased
income, it may well result that actually
he cannot buy as much as he could buy
at higher prices with a larger income.
T h e assumption that with prices of the
lowest possible figure the consumer will
have as much money to spend as when
prices are higher is not necessarily or
probably true if we regard the national
economic process as a whole. T h e con­
sumer derives his income inevitably from
the processes o f production either as
wage-earner, investor or entrepreneur.
I f prices are low, due to a general paral­
ysis of business activity or to cut-throat
competitive practices which
depress
wages and destroy profits, the consumer
gets no real benefit from such low prices.
His interests are advanced by increasing
his income, even if prices must go up
somewhat at the same time. His inter­
ests are associated with the restoration
of sound business conditions and competi­
tive methods which will enable the in­
dustries of the country to be self-sup­
porting and to pay a decent return to
labor, investor and owner. A sick indus­

try is of no advantage to the consuming
public, and the recovery effort to elim­
inate wasteful and destructive competi­
tive methods represents no attack upon
the interests of the consumer.
Details of Execution

In discussing the various misconcep­
tions of the recovery program, I have
necessarily indicated some of the major
outlines of that program and of the the­
ory on which it rests. It is of course obvi­
ous that the success or failure of the pro­
gram w ill largely depend upon details in
the course of its execution. F or example,
much depends upon the proper timing
with relation to one another of the vari­
ous steps in the program. If purchasing
power is to be revived and if this necessi­
tates an increase in prices, clearly the
price increase must not come so soon, or
proceed so far, as to overtake and undo
the effects of increased purchasing pow ­
er. If increased costs go hand in hand
with increased purchasing power a way
must be found to cause increased prices
to lag behind increased costs. T o date
most of these difficulties have been suc­
cessfully negotiated. T h e price level,
while rising, has kept behind the in­
crease in available purchasing power in
the form of wages and farm income.
T h is difficult corner has been turned in
part as a result of some of the other
measures of the recovery program. Thus
hundreds of millions of dollars o f in­
creased income have flowed into the
hands of the farmers, and through them
into the channels of trade as a result of
the government’s payments for acreage
reduction and of the increase in agricul­
tural prices brought about by the crop
reduction policy. Again, the rapid open­
ing of the closed banks has released an­
other large reservoir of purchasing pow­
er. T o a lesser extent, the same result
has follow ed from governmental re­
financing of mortgages on farms and
homes. T h e public works program has
begun to stimulate the construction and
capital goods industry, and the lending
policy of the Reconstruction Finance
Corporation has released another stream
of funds into the currents of trade.
Success or failure depends, as I have
said, largely upon the proper timing of
the steps in the recovery program with
relation to one another. It depends upon
some forces and tendencies being held
back at one time, while others go for­
ward and then at the proper time being
released, while the others are held back.
T his has given rise to another miscon­
ception, namely, that the program is in(C ontinued on page 13)

11

Central Western Banker, M arch, 1934

?

B O N D S or S T O C K S
For the Trust A c c o u n t

?

A lfre d Fairbank, vice president and trust officer of the Boatmen s Bank, St. Louis,
says that trust officers are being urged to buy common stocks instead
of bonds, which latter normally make up the bulk of most
* S A S O -C A L L E D hedge against
r\
feared inflation, we are urged to­
day to buy common stocks. T h e
idea is that business w ill be greatly stim­
ulated by a program of inflation, that
company earnings will increase, that
market prices of stocks w ill rise in con­
sequence. Since inflation w ill reduce the
purchasing power of the dollar, it is
urged that the purchase of common
stocks will offset this tendency and w ill
prevent the wiping out either partially
or entirely of the corpus of the trust.
T his brings the question clearly to our
attention. In 1929, the urge was to in­
crease the corpus and the income of the
estate through such purchases, whereas
in 1934 the urge is made to preserve the
corpus and increase the earnings and
thus preserve purchasing power.
T rust officials as a group must not and
cannot joint the common herd. T hey
must not be stampeded. T h ey should
not be easily tossed as a cork on the un­
certain waves of a threated storm.
If the experience of France and G er­
many are to be adjudged at all rele­
vant in our own situation, then we can
generalize that hedging against inflation
on the stock market w ill require the in­
telligence of genius, the agility of an ac­
robat, and the courage of a centurion,
together with a liberal admixture of
pure luck and the help of Divine guid­
ance.
T h e government has announced a tre­
mendous deficit.
T h e N R A has an
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trust accounts.

H is discus­

sion of the subject is given
here in part as presented at
the recent mid-winter trust
conference of the A . B. A .
held in New York City
nounced many plans which w ill affect
the earnings of industry. ETndoubtedly
the government in wrestling with this
huge deficit will increase present existing
taxes on corporations, and w ill think up
new and burdensome taxes for corpora­
tions to bear in order to overcome this
deficit. T h e prospect for increased earn­
ings on the part of corporations is there­
fore uncertain.
A trustee may approach the switch
from fixed income bonds to stocks seek­
ing a hedge against actual inflation with
the greatest care and study, only to find
after he has selected his stocks that he has
picked the w rong ones, or that they do
not show sufficient enhancement to war­
rant the risk which he has taken. W o e
be to him if he has made so serious a
mistake as to lose his principal in the
stock purchase after switching from his
high-grade bond. N o corporation, de­
spite its past record o f performance, has
as yet any history under T H E N E W
D E A L that gives trustees any assurance

that they can maintain for any reason­
able time the dividends that they are
now paying, or that under inflation they
can increase those dividends in propor­
tion to the reduction of the purchasing
power of the dollar.
Some of our trustees are trying to
safeguard principal against extreme in­
flation during the next few months by
purchasing short time government obli­
gations. In this way they are trying to
keep an account in a position to take ad­
vantage of any opportunity presenting
itself in the near future to purchase
longer-term high-grade bonds. It is in­
teresting to note that before our present
monetary problems arose and while we
continued on the gold standard, the pur­
chasing power of money fluctuated con­
siderably, yet I do not recall any agita­
tion during these years, or any criticism
of trustees because they did not attempt
to chase these fluctuations. T here is no
question but that the matter is pressing
at this time, but the difficulty of predict­
ing the ultimate outcome of the present
uncertainties should caution us against
exaggerating the importance of this point
of view.
It is well to stop and consider the le­
gal decisions.
It is the first duty of
trustees to preserve the corpus of the
trust. T h e law, as thus far developed,
lays a heavy hand of obligation on the
trustee to adhere to this principle. T h e
courts have not yet said that it is the
duty of the trustee to so maneuver the

Central Western Banker, M arch, 1934
corpus of the trust that it w ill keep pace
with the changing purchasing power of
the dollar. T o assume this as a cardinal
principle is in my judgment an invita­
tion to speculate with trust funds.
Is there in the present situation a suf­
ficient basis in law for trustees to aban­
don policies developed over a period of
more than fifty years? W ou ld the courts
approve our actions if we were fortunate
in our common stock purchases, and
would they absolve us from responsibil­
ity if it should unfortunately develop
that we guessed w rong? It occurred to
me that it would be desirable to get the
viewpoint of some of our leading trust
men of the United States.
T h e results of his questionnaire led
to the follow ing conclusions:
1. T h at the weight of the evidence
indicates that the frequent changes of
purchasing power of the dollar have at
times favored the beneficiaries of trust
funds and at other times worked against
them; that none o f these periods has
called for a radical departure in trust in­
vestment policy.
2. T hat the present situation has not
yet reached the place where corporate
fiduciaries have any sound basis for
throwing overboard the policies which
have given stability and anchorage in the
past.
3. T hat it is the
generally that the
stocks is not an
against inflation, if

opinion of trust men
purchase of common
adequate protection
it comes.

4. "1 hat the decisions of our courts
generally pronounce that it is the duty
of the trustee to conserve principal in
dollars.
5. T hat any determination to pursue
the purchasing power of the dollar is a
decision to embark upon an uncharted
sea and run the risk of self-destruction.

C H A N G I N G C O N D IT I O N S
IN T H E G R A IN W O R L D
(C o ntinued from page 7)

many, Italy and other principal wheat
importers of Europe. Those countries
stimulated production of wheat, in­
creased their import duties and estab­
lished a system of quotas and licenses
which required that very high percent­
ages of domestic wheat be used in their
local mills.
Other Factors

In the United States there were other
factors which have aided materially in
reducing exports during the last five
years; but the most important of which
is the policy of the United States which
has prohibited an exchange of goods with
the principal wheat importing countries.
Because o f the absence of the opportun­
ity to sell in the United States an equiv­
alent amount of goods produced in the
importing countries, it meant that inter­
national settlements as between the U nit­
ed States and wheat importing countries
had to be made very largely by ship­
ments of gold. T his was not possible in

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many of these countries for any consid­
erable period of time, and consequently
many of the European importing coun­
tries bought their wheat in Argentine
and Australia where there was a market
for European exports.
It appears therefore that if the United
States is to adopt a permanent future
policy which would permit the exporta­
tion of wheat, it is necessary that the
program set up take cognizance of the
factors which caused the recent decline
in wheat exports. It seems only reason­
able that the LTnited States, in order to
maintain its export trade in wheat, or
even if to maintain a portion of that
trade, must look to those importing coun­
tries who produce products which the
United States desires to import and that
agreements between the United States
and those countries be effected which
will permit an exchange of products on
an equitable basis for both parties con­
cerned. This may force the United
States to depend on a relatively large
number of small importing countries,
many of which are outside of Europe.
Recovery Program

T h e agricultural recovery program
adopted by this administration was de­
signed, first to bring relief from the pres­
ent emergency; and secondly, to build
for the future a program which will pre­
vent a recurrence of the agricultural
crises of the past few years. It cannot be
stated at this time whether or not the
program in its present form can be used
to prevent a recurrence of the agricul­
tural crises as it affected wheat. Three
general policies have been suggested:
First, it might be attempted to control
the wheat production in the United
States to the absolute level of domestic
utilization. T. his policy would involve
the abandonment of our export trade and
if extended to other commodities would
ultimately mean the taking out of more
than 50,000,000 acres of productive
lands in this country. Second, we might
assume a completely international atti­
tude, scaling down the tariffs and per­
mitting the importation of perhaps an
additional billion dollars of foreign
goods, thereby restoring trade for our
surplus agricultural products to that ex­
tent. This would undoubtedly adjust do­
mestic prices to w orld ’s levels. A third
policy would be. in the nature of a mid­
dle ground policy. In general it would
involve a certain measure of control of
production with the maintenance of
farmers’ income on domestic prices held
above w orld ’s levels until such time as

Central Western Banker, M arch, 1934

world prices advanced to their normal
relationship with the domestic price.
This policy would be sufficiently elastic
to permit the maintenance of some of
our export trade in wheat and flour and
would permit the maximum utilization
of wheat lands consistent with the main­
tenance of the farmers’ income on do­
mestic price levels near parity. It is my
hope that this latter course can be
worked out intelligently and with proper
government guidance and assistance. T h e
latter course would also involve aggres­
sive action to restore foreign markets for
agricultural products.
Fixed Prices

D uring the past six months there has
been a certain amount of pressure exert­
ed to establish fixed or pegged prices on
both futures and cash grain. These sug­
gestions have been explored from every
possible angle and the conclusion of our
section in Agricultural Adjustment A d ­
ministration has been that the only way
to establish fixed prices is to be prepared
to set up a government buying agency to
take all the surplus grain that is offered
over and above immediate needs, some­
thing similar to stabilization operations.
T h e history and the failure of recent at­
tempts along this line are too fresh in
our minds to become involved in any
such venture again. Also it is considered
that the benefit payment plan is much
more adequate and effective and certain­
ly far less hazardous.
Regarding our present marketing and
distributing methods : in the past and oc­
casionally even now, too much stress has
been placed on existing marketing ma­
chinery and too little importance has
been centered in the true fundamentals
of the agricultural problem— adjusting
production to effective demand both do­
mestic and export and allowing supply
and demand to function normally.
In my opinion the present marketing
machinery is highly efficient, economical
and reflects the greatest possible return
to the producer; and until some plan
which may be more scientific and work­
able is developed, efforts should be made
to strengthen rather than to weaken the
present system of grain handling in the
United States. It is of course true, as is
in anything that is developed by human
endeavor, that there are certain imper­
fections and abuses that should and can
be corrected. F or some little time past
our processing and marketing section has
been giving study and consideration to
the codes of fair competition for the va­
rious industries attached to agriculture,
and it is to be hoped in the very near fu ­

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Federal Reserve Bank of St. Louis

13
ture that these codes of fair competition
for the grain exchanges, the flour mill­
ing industry, the corn milling industry,
the wholesale and retail feed industry,
the terminal grain elevators, and the
country grain elevators w ill be perfected
and approved. These codes of fair com­
petition will undoubtedly prove correc­
tive of many trade abuses and be very
helpful not only to the industries them­
selves but also to the entire agricultural
interests of the United States.
THE RECOVERY P R O G R A M U N D E R S T A N D IN G
A N D M IS U N D E R S T A N D IN G
(C o n tin u ed from page 10)

trinsically inconsistent because, to put
the thought in the way in which it is
commonly put, some parts of the pro­
gram are said to be “ inflationary,” while
other parts are said to be “ deflationary.”
For example, it is sometimes said that
the attempt to hold prices back until pur­
chasing power was well started on the
increase was “ deflationary” and there­
fore inconsistent with the supposedly “ in­
flationary” tendency of the effort to re­
store industrial activity and the general
price level. W ithou t pressing too far for
an accurate definition of catchwords like

the words inflationary and deflationary,
I suggest that charges of inconsistency,
such as the one which I have mentioned,
are precisely as if one were to say that a
fly-wheel was inconsistent with the plan
and purpose of an engine because it op­
erates to balance it by holding it back, or
that a brake was an inconsistent part of
an automobile. Necessarily, in any pro­
gram which is proceeding along a broad
front, the tendency at some parts of the
front must be to limit and restrain the
tendency at other points; if this be incon­
sistency, we must make the most of it.
T h e recovery program does not lay
claim to providing a final solution for all
the economic problems of the nation.
There w ill be problems as long as we
have an economy, and new problems will
arise from year to year. Nothing is morecertain than that these new problems
will increase in complexity. W e cannot
expect of any program that it will solve
all problems finally and lay them to rest.
T h e most that we can expect is that it
will keep us abreast of our problems and
keep us able to maintain a healthy, wellnourished, active national economy while
we are meeting current problems. This
is the aim of the administration’s pro­
gram.

"Carry Me Back to Old Virginny”—or

old

Indiana, or the old home wherever it may be. This
minute the telephone is carrying someone back to
old friends and old ties.

Telephone service is as

modern as a stream-lined ’plane, yet its value as a
link to the cherished past should not be overlooked.

Bell Telephone System

Central Western Banker, M arch , 1934

14

7,The Perfect Investment71

Keep Insurance

H ow would this strike you as an in­
vestment opportunity?
Y ou are offered the chance to put
your money, as much or as little as you
like, into a long-established concern
which is nationally celebrated for ability
and trustworthiness of its management.
T h e concern operates under stringent
laws, passed to protect you. It takes your
money and reinvests it in government
bonds, real estate mortgages and the se­
curities of basic industries. T o make
your protection more complete, it has be­
hind it a large cash reserve to care im­
possible depreciation, and to pay back
the investor if conditions make it unwise
to sell any of its assets.
A contract is drawn in which you stip­
ulate precisely how much capital you
want to invest — in monthly, quarterly
or annual payments. It may be twenty
or more years before you have finished
paying. H owever, if you should die in
the meantime— no matter how little you
have paid in— the entire amount con­
tracted is paid to your heirs. In addition,
after you have been paying for a certain
period of time, you have the privilege of
borrowing against your contract, or
turning it in for cash.
Impossible, you say— there is no such
investment. But there is, and you’ve
probably dodged persons who were try­
ing to sell it. It’s life insurance. And the
foregoing shows why so many Am eri­
cans are now turning to it as “ the per­
fect investment.”

W ritin g on life insurance in the Bos­
ton News Bureau, Henry H . Putnam of
the John Hancock Co. of Boston, said:
“ It is quite true that life insurance has
proved a great bulwark during the past
three years’ crisis, but the psychology of
the moment does not call for any boast­
ing on that score, important as it is as a
historic fact.
“ W e deal with the present and the fu ­
ture. N o doubt the present year w ill see
the payment of more billions of dollars
to policyholders by the life insurance
companies— as great as last year, possibly
greater, even with the various states
holding down the lid on excessive cash
withdrawals.
“ I would like to cite the story of a
policyholder who came into an insurance
office to demand his full cash reserve.
T h e agent’s argument was so good that
instead of taking out his reserve the pol­
icyholder returned the next day with
$100,000 cash for a retirement income
policy.
“ T his true incident . . . shows . . .
the general feeling o f confidence in finan­
cial security of life insurance companies
as a whole. Unless there is some real, im­
mediate need . . . there is no better place
to keep the reserve than in a life insur­
ance company.”
It is doubtless true that many citizens,
because of panic and fear, have unneces­
sarily sacrificed all or part of their life
insurance investment. Nothing is more
foolhardy. Cash value and borrowing

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O U T S T A N D IN G

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In O m aha, it’s . . .

HOTEL

FONTENELLE
The Fontenelle is Omaha’s welcome to
the world! Its comfort, courtesy, con­
venience

and

service

have

made

it

known everywhere as the home of real,
old - fashioned

Nebraska

hospitality.

Operated by E P P L E Y H O T E L S CO.

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Federal Reserve Bank of St. Louis

400

privileges should be utilized only as a
last resort — to meet genuine distress,
when there is no other place to turn.
L ife insurance, as an industry, is as safe
as any humanly conceived institution can
be and we should make every effort to
keep existing policies unimpaired.

A Lesson
W e ll Learned
It’s often said of life insurance that it
has taught the nation the meaning of
thrift. L ife insurance has done something
else, the past few years especially, that is
of equal value— it has shown the average
citizen what sound investing is and isn’t.
It has shown him the difference be­
tween an investment and a speculation—
and he has learned that very few people
are sufficiently supplied with excess funds
to take fliers. H e has discovered, expen­
sively and painfully, that genuine invest­
ments don’t often return 20 per cent div­
idends— and that you can t double your
money over the week-end, with safety.
M ore and more life insurance policies,
large and small, are being sold purely be­
cause of the investment angle, the pur­
chaser believing them best fitted to guar­
antee him an income or an estate.
T h a t is what life insurance, aided by
that other great educator, depression, has
taught the American people. A nd it’s
pleasant to record that as more jobs are
provided, and the general purchasing
power rises, concrete evidence is appear­
ing in the life sales figures to prove that
the lesson isn’t easily forgotten.

“ M y husband,” she explained, “ got in­
cited and stepped on the celery instead of
the brake puddle, so we had a headin col­
lusion. So our regulator was dentaled,
the mud gutters was shuttered, the
lances of the headlands was smashed to
smattereens, and the man had to come
from the surface station with the whack­
er and tow us in.
“ W hen we got to the barrage we
found out one of the cinders was crackled
and had to be wilted. A nd, besides that,
we had to get new pistols and a new
commentator and a new correcting rod.”

ROOMS

*2.50
UP

Headline: Russia Recognized.
. . . By those long whiskers, of course.
Saleslady: N ow , sir, what kind of un­
derwear do you desire— silk?
Gangster: Jeez, no, give me gunmetal.

15

Central Western Banker, M arch, 1934

\

IN SURANCE
Ap

plication

H ow I G o t a P o lic y
O n H ousehold G o o d s

tothe Hanking

"\

looked around through

the smoke.

I stood ankle-

deep in feathers and water,
I looked like a scarecrow77

No agent would choose this method of getting business but
here is a true 77true77 story about how a Minnesota
agent got the name on the dotted line

I

T W A S N ew Y ear’s eye. A blus­
tering wind was blowing from the
North and it was cold.
Revelers
were scurrying here and there bent on
an evening of fun, and I was headed for
a town about ten miles distant to join in
the merry-making there.
Passing through the edge of our town
I noticed the chimney on one of the
small frame houses along the road was
belching forth a stream of sparks that
fell all over the neighborhood. I was
late for my appointment even then, and
my thoughts were not centered on a few
stray sparks caused by some one shaking
up the fire.
I sailed on past the house, but on look­
ing back I noticed the sparks still con­
tinuing to light up the sky. I turned
around and went back a block or so
past the house, trying to figure out what
was going on. I turned again and drove
by the house, and this time the stream
of sparks was worse.
I decided it was time to investigate, so
parking the car along the road I rapped
on the door. T h e people were home I
knew, for the lighted windows threw a
cheerful radiance from the Christmas
decorations.
T here was no response to my rapping.
I went around to the rear and rapped.
Soon a woman and two children ap­
peared at the door trembling and ner­
vous. I knew then that something was
wrong and felt glad I had stopped. A
few questions brought out the fact that
the furnace fire had been kindled too
lively, and the woman was trying to
check it. Sparks were still flying from

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

By E. D. SWANBERG
IVorthington, Minnesota

the chimney in a steady stream, blown
by the wind.
It was obvious the woman was up
against it in checking the fire and the
spread of the sparks.
“ W h a t shall I
d o ? ” she said. A hurried examination
showed me there was no time for argu­
ments, I asked the name and address, and
phoned in an alarm. T h e children were
crying, and more concerned over the
safety o f their toys than anything else.
G oing outside again I was met by a
neighbor who had been attracted by the
sparks, and together we found a ladder,
clambered to the roof and poured two
pails o f water down the chimney. By
this time one truck of the fire company
had arrived, with no one but the driver.
G oing back into the house we found the
fire had broken out in one of the closets,
and the bedroom was full of smoke.
There we were with a job on our
hands and it looked like a bad mess. W e
carried some of the burning pillows and
clothing to the backyard, and with me
at one end o f the hose from the fire
truck, and the fireman working the ap­
paratus, I tugged the snake-like life
saver through the doors and rooms until
I had the nozzle aimed into the flames.
W ith a pull on the handle a burst of
water shot into the burning mass. It had
quick effect, not only on the fire, but in
the feeling of relief that came over me,
too.
I could see the flames above through
the cracks in the boards which formed

the closet ceiling. W ith an axe these
were loosened, and the water made short
work of M ister Fire which was just
ready to eat its way through the roof.
Things had been happening in this
short space of time, and there was plenty
of excitement. T h e fire was out so I
turned off the hose. I was almost scared
of what I had done, for in the next
room the water was dripping from the
wet ceiling to the floor and I thought
what a mess that was.
I looked around through the smoke.
There I stood ankle deep in feathers
and water. One of the feather pillows
had been burned through and feathers
scattered all over the floor, clinging to
my clothes. I looked like a scare crow.
By this time the balance of the fire
company had arrived and without any
ceremony I turned the hose over to more
experienced hands and went on my way
to the town I had set out for.
W hen I arrived some three quarters
of an hour late I had a good deal of ex­
plaining to do, trying to convince the
merry crowd that I had been putting out
a fire.
T hey accused me of stealing
chickens by the looks of my clothes. Any
way, I was satisfied I had saved some
company a bad fire loss and saved the
home owner a comfortable house.
Returning to town early the next
morning I stopped in the office to see if
we carried the insurance.
N o record
was found, so the next day I called at
the house out of curiosity to see the
amount o f damage, and was gratefully
received. T h e best part of it was I got
a policy on the household goods.

Central Western Banker, M arch, 1934
nmim miiiniiiim iiiiiiim iiiim im iimmim imiiiiiiiiiiiiiimimiiiiiiim im iiiiiiiiiiiim im iiiiiiiiiiiimiiiiiniii

Wyoming News
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiimiiiiiiimiiiiiiiiMiiiiiiiiiiiiiiiiiiiiiiimiiiiimiiiiitiiiiiuiiiiiiiiiiiiiiiiiiiiiiiiiiib

Annual Meeting
A t the regular annual meeting of the
stockholders of the First National bank
of Rawlins, the follow ing directors were
elected: J. E. Cosgriff, E. M . Tierney,
C. A . Brimmer, John K. Hartt and
George A . Bible.
T h e officers elected w e re : J. E. Cosgriff, president; E. M . Tierney, vice
president; George A . Bible, vice presi­
dent and cashier; and H . L. W illiam ­
son, assistant cashier.

Named V ice President
and Treasurer
Shirley S. Ford, executive vice pres­
ident of the United States National bank
of Omaha, has been named to succeed
A lex Highland of Minneapolis who re­
cently resigned as vice president and
treasurer of the Northwest Bancorporation. A ir. Ford also will succeed M r.
Highland as president of the Northwest

Moving Upward

Officers Re-elected
T h e stockholders of the Star Valley
State bank, A fton, met in their annual
meeting with a tone of optimism evident.
A fter the report of the activities of the
bank was given and discussed, a resolu­
tion of thanks was unanimously adopted
for the fine work of the directors, the
bank management and the employes.
President Clarence Gardner expressed
the appreciation of the board and the
management for their confidence and
loyal support. T h e entire old board con­
sisting of Clarence Gardner, Alvin R ob­
inson, G . W . W est, G . A . Newswander
and G . J. Call, were unanimously elect­
ed to succeed themselves as directors for
the coming year.
T h e board met immediately follow ing
and reorganized with Clarence Gardner
succeeding himself as president and A l­
vin Robinson succeeding himself as vice
president.
---------------------------

Bank Examiner
Alger E. Johnson, former assistant
cashier of the Lusk State hank, and for
the past several years city clerk of the
town of Lusk, has been appointed dep­
uty state bank examiner by G ov. Leslie
A .’ M iller.
M r. Johnson will be working under
A . E. W ild e, state bank examiner, and
he w ill undoubtedly spend the majority
of his time traveling.

Candidate
W illiam Rogers, cashier of the State
Bank at Green River, has been endorsed
by Green River Republicans as a candi­
date for the office of state treasurer of
W yom ing in the elections of 1934.
M r. Rogers has for the past 45 years
resided in Sweetwater county, the past
30 years in Green River. D uring his
entire residence he has been preminently
identified with the Republican party.

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Federal Reserve Bank of St. Louis

But it has long been the opinion of many
able economists and industrial leaders
that, in this complicated modern world,
gold is not enough. P roof of this is in
the fact that cheap silver has destroyed
the purchasing power of half the w orld’s
population, and has come close to de­
stroying foreign trade.
T he move, it is believed, will be fo l­
lowed by action in other countries. It is
a great experiment, with almost limit­
less possibilities for achievement.

Shirley S. F ord
Livestock Loan Co., principal stock loan
subsidiary of the Bancorporation.
M r.
Highland resigned to become executive
vice president of the First National
T rust & Savings bank of San Diego,
Calif., an institution with four branches.

Silver as M oney
T h e Administration’s recent remonitization of silver is a definite step toward
solving problems that have been talked
about for generations. It means imme­
diate benefits to workers, investors and
the public. T his is especially true of
the W est, where American silver mines
are located. T h e mining depression in
many states has been more severe than
the general depression.
Thousands of
jobs have been lost, a vast amount of
purchasing power has disappeared, and
one of the most important sources of
governmental revenue has dried up. Re­
vival of silver w ill help this condition.
As for the economic side of the move
and its influence on monetary matters,
only experience can supply the answer.

T h e country has been hearing talk of
a business boom for so long now that it
is inclined to be skeptical as to whether
or not such an animal exists. According
to the business and financial periodicals,
and the various reports of fact-gathering
organizations, it does. It isn’t a very
big animal yet, but it can be seen, felt
and heard. A ll of the consumer indus­
tries are finding themselves with more
orders than they’ve had for years. “ In­
dustry’s industries,” such as steel, which
sell their products to other businesses
and not directly to the consumer, aren’t
doing so well, but they’re moving up­
ward.
Detroit, which saw the worst of the
depression, is seeing the best of recovery.
According to T im e, this is the first pe­
riod in five years in which car manu­
facturers can’t fill their orders. In Jan­
uary, Chrysler, with the most unusual
of all the new stock cars, had 21,000
more men at w ork than last year. Ford
opened two additional assembly plants.
Nash estimated that it would deliver
more cars in the first quarter of this year
than in all of last. Cadillac reported
deliveries 50 per cent above last year.
General M otors faced 100,000 orders
for Chevrolet alone.
T ire companies
were jubilant, with a Goodyear expert
predicting tire sales for 1934 would
reach the great total of 46,000,000 units.
Abie was asked if the adjuster had
settled his claim for injuries sustained in
an automobile accident.
“ Oh, yes, I got $2,000 and Rachael
got $1,000.”
“ I didn’t know Rachael was hurt.”
“ Veil, I had the presence of mind to
smesh her in the jawT before the adjuster
got on the j o b !”
M rs. B loop: Does your car have a
worm drive?
M rs. Bleys: Yes, but I tell him where
to drive!

17

Central Western Banker, M a r c h ,1934
MIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIMIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIItllllllllllllllllllllllllllllllllllllllllll|||||tll||||||||||||||||||||||||||||||||||||||||||||||||||<||||||t|||||||||||!ll|||||||||||||||||tllllll||||II||||||||||||H

Executive Vice President
H . M . Bushnell, vice president and
trust officer of the United States Nation­
al bank, Omaha, has been selected by the
directors to succeed Shirley Ford as ex­
ecutive vice president.
M r. Ford has
gone to Minneapolis to become vice pres­
ident of the Northwest Bancorporation.
Succeeding M r. Bushnell as trust o f­
ficer w ill be H al W . Yates of the bank­
ing organization.

Estate Filed
T h e estate of the late Silas H . Burn­
ham, Lincoln banker, was valued in an
inventory filed with the county court at
$474,151, aside from real estate, house­
hold effects and certain stocks.
T h e largest single item was 2,396
shares of stock in the First National
bank there, listed at $239,000, and the
second largest was 1,349 shares in the
First T rust Co., with a listed value of
$ 1 3 4 ,9 0 0 .------------------------------

Bank Head
W . B. Roberts was re-elected presi­
dent of the Bank of Florence at the an­
nual meeting. A ll other officers and di­
rectors were also re-elected. T h ey are
Charles D . Saunders, vice president, and
R. H . H all, cashier. T h e officers re­
port a gradual increase in deposits dur­
ing the past year.

primarily to avoid any possibility of a
“ shooting match” in case of robbery.
Such a guard would discourage robbery
attempts and in that respect would safe­
guard lives of citizens, he said.

Re-elect Officials
A meeting of the stockholders of the
First National bank of Hayes Center
was held and all officers were re-elected,
R. C. M iller as cashier and H . M .
Counce as assistant w ill have charge of
the bank for the coming year. E. A.
W iggenhorn of Ashland and C. F. Bloedorn o f Denver were the out of town
members who attended the meeting.

Annual Meeting
T h e stockholders of the Plattsmouth
State bank held their annual meeting, se­
lecting the officers for the ensuing year
and hearing the reports of the last year
in the conduct of the bank.
T h e present officers were re-elected as
follow s: President, H . A . Schneider;
vice president, Henry H orn ; cashier,
Frank A . C loid t; assistant cashier, Carl
J. Schneider.
T h e reports of the bank show excel­
lent results in the year’s business and
increase in the months since the close of
the bank holiday.

Named Secretary
Armed Guard
T h e Columbus city council has un­
der consideration a proposal for placing
an armed guard at the Central National
bank to forestall possibility of a robbery.
T h e suggestion was made by M . M .
T aylor, vice president of the institution,
who recently frustrated a robbery at­
tempt by summoning police when he
noticed strangers in the building.
Pointing out that assets of the bank
are adequately protected by insurance,
T a y lor said the guard would be placed

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Harold Conroy, assistant cashier of
the First State bank of Shelton, was
elected secretary-treasurer of the B uf­
falo County Bankers association at the
■•nnual meeting of the organization held
in Kearney. Paul Kannow, vice presi­
dent of the Fort Kearney State bank
was elected president of the association
for the coming year.

Building Sold
Sale of the First National bank build­
ing to the city of Hastings for the sum

III III llll IIIIHill HUMIH'~

of $75,000 was confirmed recently.
T itle to the building w ill be passed
to the city on payment of the remaining
$60,000 owing.
It is planned to move the city offices
into the building, probably in the near
future.

Minick Honored
C. A . M inich of C raw ford was unan­
imously elected president of the Associ­
ation of Past Presidents of the Nebraska
Bankers’ association at a recent meeting
of the group in Omaha.
Formerly connected with the C raw ­
ford State bank, M r. M inick is well
known in state banking circles.
T h e honor came to the C raw ford man
entirely unsolicited as press o f business
kept him from attending the sessions in
Omaha. H owever, M r. M inick is al­
ready making plans for attending the
meeting over which he is authorized to
preside in the fall.
Prominent in business and education­
al circles, M r. M inick is in charge of an
insurance and loan service and president
of the board of education.

Foster Appointed
M erle N. Foster, chief examiner for
the state department of banking has been
appointed assistant superintendent of
banking, succeeding George W oods, who
has resigned to accept a position with a
reorganized Council Bluffs bank.
J. F. M cL ain, assistant to chief ex­
aminer, was advanced to fill Foster’s
place as chief examiner, G ov. Charles
W . Bryan announced.

Merged
W o r d has been received from W ash ­
ington, approving the plans for the con­
solidation o f the Peoples and W ebster
County banks of Red Cloud and on the
completion of the necessary minor de-

18

Central Western Banker, M a rch , 1934

tails, the new institution w ill open for
unrestricted business in the present loca­
tion of the Peoples bank.
T h e new bank will preserve in its
name of the two banks merged in the
consolidation and be known as the Peoples-Webster County bank.

Annual Meeting
T h e Citizens State bank of Dorches­
ter held their annual meeting recently.
Officers for the ensuing year were elect­
ed as follow s: F. A . Guggenmos, pres­
ident ; W . C. Clark, vice president;
James H . Clark, cashier; M iss M artha
Hansen, assistant cashier. T h e direc­
tors: W . C. Clark, A . T . Teale, R. D .
M orrasy, James H . Clark, and F. A .
Guggenmos.

New Federal Officer
Bert W addell, vice president o f the
Federal Land Bank of Omaha, has been
appointed an assistant treasurer o f the
new Federal Farm M ortgage Corpora­
tion, which will handle funds for the
second mortgage emergency “ land bank
commissioner’s loans.”
T h e land bank deposited a check for
about 850 thousand dollars with the fed­
eral reserve bank to pay off its outstand­
ing cash received from A . L. Peterson,
special disbursing agent.

Savings Increase
One Omaha bank reports twice as

many new savings accounts opened in
January as in the same month a year ago.
T h e increase in number of savings ac­
counts is general at all banks which go
after that class of depositors.
A ll this is in spite of general reduc­
tions in interest paid on savings accounts
in banks.

Named President
A t a meeting o f the stockholders of
the Bank o f Bennington, H . E. Roe was
made president of the bank, and M a r­
tin Splittgerber succeeds M r. Roe as
cashier. Fred O hrt and T im O hrt were
added to board of directors.

Annual Meeting
T h e annual meeting of the stockhold­
ers of the Nebraska State bank of Bris­
tow was held last month.
T h e same officers as last year were re­
elected. T hey are: J. E. Olson, presi­
dent; Launce Gibson, cashier, and D r.
G . B. Ira and Frank T alich, directors.
This bank now has insured deposits.

Unrestricted
Authority has been secured by the o f­
ficials of the Hom e State bank, Homer,
licensing and authorizing them to run
an unrestricted bank.
T h e officers state that just as soon as
they get the necessary book work com­
pleted and the red tape ironed out they
w ill open for business under the federal
deposit guarantee plan.

W e Can Serve You
By Collecting Your L IV E STOCK PROCEEDS
By Taking Care of Your Other Omaha Business

LIVE STOCK NATIONAL BANK
O M A H A
This Bank Has N O Affiliated Companies
ARE


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Federal Reserve Bank of St. Louis

IN

THE

MARKET

FOR

FEEDER

Fears that a supreme court ruling for­
bidding national banks under certain
conditions to pledge securities to protect
deposits of public funds, would make
national banks ineligible as depositors
in Nebraska were quieted by clarification
of the supreme court ruling.
T h e court finding is not applicable in
states where state laws permit or require
state banks to pledge assets against de­
posits o f public funds.
Since the Nebraska statutes require
public depositors to pledge assets or post
bonds in protection of public funds on
deposit, it was at first feared huge sums
of state, county and municipal funds in
national banks would have to be with­
drawn under the ruling.

Elect Cashiers
Edward G . Gehrman, teller at the
Stock Yards National bank, Omaha,
was elected assistant cashier at a meet­
ing of the boards of directors. H e suc­
ceeds H arry M iller, retired, who had
been an employe of the South Omaha
bank for 47 years.
O tto Smolek, discount teller at the
bank, also was elected an assistant cash­
ier. A ll other officers were re-elected.

Heads Large Bank
Joseph Baily, son of a former Adams
county judge and a graduate of Hast­
ings college with the class of 1900, was
recently elected president o f the First
National T rust and Savings Bank of
Spokane, W ash., according to word re­
received in Hastings.
His election to the presidency of one
of the best known banks of the N orth­
west culminates a banking career started
in 1903 when he went to work as a
bookkeeper in the O ld National bank of
Spokane. T h e bank he heads has de­
posits of $2,930,409.

Wymore Banker Dies

By Financing Your F E E D E R LO A N S

WE

Does Not Apply

LOANS

Erie W . Fenton, early W ym ore de­
veloper and long time jeweler and bank­
er there, died recently in Chicago, where
for the past fifteen years he and M rs.
Fenton had been living with their son,
Arthur. H e was in his 70’s. Beatrice
Fenton Craig of Lincoln, temporarily in
California, is a daughter, and M rs. C.
C. Gafford of W ym ore a sister.
Born in Randolph, N . Y ., M r. Fen­
ton was left an orphan and was reared
by his uncle, Reuben Fenton, of James­
town, who became N ew Y o rk ’s wartime
governor and later United States sena-

19

Central Western Banker, M arch, 1934

tor. H e came out to Nebraska many
years ago and settled in W ym ore as a
jeweler. Eventually he went into bank­
ing, and was instrumental in developing
the town in its early days. H e was re­
sponsible for the erection of several W y ­
more buildings.

First Loans
First government loans to farmers’
cooperatives were made by the Omaha
Bank for Co-operatives, with H . C. Pet­
erson, treasurer, and H arold Hedges,
secretary, sitting as the loan committee.
T w o loans amounting to $23,500
were approved.

Changes Position
John Rada, who has been in the em­
ploy of the Tobias State bank, resigned
to take the similar position with the
Citizens National bank.

“ N ew legislation which permits us to
lend up to 75 per cent of the normal
value of the property has increased the
number of farmers who want to refi­
nance enormously. A large percentage
of these 75 per cent-farmers were mort­
gaged to a higher degree than that
amount. But the holders of these mort­
gages, in many cases the big insurance
companies, have decided to reorganize
their loss, which has already taken place,
and to accept the 75 per cent of the value
for total of their claims.

More Wheat Checks
T h e deposits in T h e First National
bank of Friend increased $28,095.76
in one day. A large part of this sum
came from wheat checks as the bank
cashed 245 of these on that day. T he
increase in deposits since Dec. 30th is
$51,353.19.
timmMitfiitfmiiiiniiiiiciiiiiiiititiiHiifitiittmiitiiiiiiiiiiiittiiiimiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiHitiiiiiiiiiiiiiiiitifn

immniiiiUMiiiiiiiiitimiiiiiiiiiiiHiimiiiiifiiiiiiiitiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiimiiiiiiiiiiiitiiHiiiiiiiiiiiiiiiiiiiiii

Elected Cashier
Banker Dies
Funeral services were held recently
for James M . H all, 69, president of the
Ithaca State bank, who died in an O m ­
aha hospital. M r. Hall, a long time
resident of Ithaca, is survived by his
wife, A nn a; two brothers, J. W ., of
Valley, and Robert of Omaha, and a sis­
ter, M rs. G . F. King of Papillion.

A t the annual election, W alter R.
Haskard was elected as cashier of the
Partridge State bank, taking the place
of Elmer Brown, who resigned. L. G .
Everett is president; E. L . M axw ell,
vice president; M anilla Brown, assistant
cashier; and George Thrap, Ed Siegrist,
W . N . Hamilton and Elmer Brown as
members of the board of directors.

Charges Same

Annual Meeting

T h e charge for cashing checks over
Sheridan county is all the same now.
T h e four banks have reached an agree­
ment whereby all the charges over the
county w ill be the same.

Little change was made in the officers
and directors of the First National bank
of Belleville at the annual meeting and
election of officers. G . H . Bramwell
was re-elected president, and W . H .
Billingsley became cashier as well as
vice president, taking the post vacated by
the removal of D . D . Bramwell, Jr., to
Iowa.
Directors in addition to the officers
named are M rs. Clara Bramwell, M rs.
Deane Billingsley and M rs. Ruby Bram­
well.

W heat Checks
Contrary to often heard prophecies
concerning the manner in which wheat
allotment checks would almost imme­
diately be spent for various and sundry
items, receivers of the checks near Pax­
ton seem to be bent on saving a part of
their benefit payments. A t least it would
seem so when the local bank officials re­
port an increase in deposits of nearly
twenty thousand dollars within a week
follow ing the issuance of checks. Offi­
cials of the Bank of Paxton stated that
their deposits had shown an increase of
twenty thousand in three days. N ot all
of the increase was due to wheat checks
nor was the increase necessarily perma­
nent, but with more checks to be re­
ceived, indications are that bank bal­
ances in W estern Nebraska w ill be in­
creased considerably due to the receipt
o f the wheat allotments.

Largest Week
T h e greatest week in farm financing
in the history of the world took place
recently, according to D . P. Hogan,
president of the Omaha Land bank. T he
Omaha bank set the w orld ’s record with
approximately $9,000,000 of loans in
one week.
“ A nd that’s an all-time record for
any farm financing institution in all the
w orld ,” says M r. Hogan.
“ T h e big insurance companies have
practically stopped lending money to
farmers. So have most of the private
concerns. T h e Federal Land bank is
practically the only concern now mak­
ing such loans.

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Federal Reserve Bank of St. Louis

To Incorporate
N ew articles of incorporation for the
Bank of Talm age were filed with the
county clerk recently. T h e articles listed
$25,00 capital stock, divided $15,000 in
preferred stock and $10,000 in common
stock.

Offering to Banks of Nebraska
“ The Kind of Service you’ll Like”

C ontinental N

ational

L IN C O L N , N E B R A S K A

B

ank

20

Central Western Banker, M arch, 1934

Parsons Banks
O nly one change in the personnel of
officers of Parsons banks was made at
the annual meetings of the institutions,
held recently.
T h e one change was the resignation of
Howard K. Read as cashier of the E x­
change State bank and the election to
that office of H arold E. Reece who has
been assistant cashier. M r. Read an­
nounced no plans for the immediate
future.
A ll other officers in the four Parsons
banks were re-elected. T hey are:
Exchange State— J. S. Vance, presi­
dent; Paul M cC onnell, vice president;
Pliny Hyde, vice president; H arold E.
Reece, cashier, and W illiam A . Smith,
assistant cashier.
State Bank— T . M . Flynn, president;
G . L . Maser, vice president; W . S.
Phillips, cashier, and J. J. Flynn, as­
sistant cashier.
Commercial— H . A . Bryant, presi­
dent; A. H . Noyes, vice president; R.
A. W oods, cashier, and W . C. C raw ­
ford, assistant cashier.
First National— Kirby Barton, presi­
dent ; A . C. Hoke, vice president; F. A .
Pfeiffer, vice president; Luther Cortelyou, Jr., cashier, and W . O . Haubold,
assistant cashier.

A t Goff
T h e First National bank of G off held
their annual meeting and elected officers
and directors for 1934. G . W . Sourk
will be president of the bank again for
the coming year; H . S. Clifton is the
new vice president, and A . H . Fitzwater, cashier; V . Hart, assistant cash­
ier; and A . R. H owland complete the
board of directors.

Director
F. M . Arnold, president of the Com ­
mercial National bank of Emporia re­
ceived a permanent appointment from

W ashington as an active director of the
Regional Agricultural Credit Corpora­
tion, which deals with personal security
offered for federal loans on cattle and
other agricultural commodities. M r.
Arnold is one of a hoard of three to pass
on security.

Leavenworth
Officers of the Leavenworth Savings
and T rust company for the ensuing year
as announced fo llo w :
Hubert S. T ullock , president; Hiram
R. W ilson, vice president; E. D . Lysle,
vice president; and W illiam S. Albright,
secretary-treasurer.

Dulaney Dies
W . R. Dulaney, for many years a
business leader of W ichita, died there
recently. H e had been confined to his
bed for the past four and one-half years.
M r. Dulaney was the senior member
of the insurance firm of Dulaney, John­
ston & Priest and a director of the First
National bank.
H e was one of the
founders of the Perpetual Building &
Loan association and helped to found
the Farmers & Bankers L ife Insurance
company, serving on the board of direc­
tors until health forced him into business
inactivity.

Open House
County Meeting
T h e members of the M cPherson
County Bankers association held a meet­
ing at M cPherson mainly for the pur­
pose of electing new officers.
There
was a splendid attendance. Elmer Pet­
erson of the Farmers State bank, Lindsborg, was chosen as the new president ;
A . Bartels of the Bank of Inman was
named vice president, and Carl A . Grant
of the M cPherson-Citizens State bank
of this city was re-elected as secretary.

Vice President
John Fields, former president of the
Federal Land Bank at W ichita, has be­
come active vice president and director
of the Union National bank of W ichita.
H is election as an executive of the Union
National bank was the result of the
unanimous action of the board of direc­
tors.
Comprising the Union National’s di­
rectory board, with the election of M r.
Fields, are: W . B. Harrison, president;
John Fields, vice president; W ilb u r
Harrison, cashier; D r. Elven O . Baker,
Austin B. Craig, C. A . M cC orkle and
Elbert S. Rule.
M r. Fields succeeds
Francis M . W elsh in the office of vice
president.

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

T h e Bank of Kiowa held open house
last month in celebration of their Golden
anniversary, this year marking the fifti­
eth year the institution has been associat­
ed with the business life of the commun­
ity.
A number of out-of-tow n guests were
present for the event, among them M r.
and M rs. M eade L. M cC lu re of Kansas
City, C. G . Chandler, V ictor M urdock,
and Dave Lahey of W ichita, and D en­
nis Flinn of Oklahoma City.
T h e Bank o f Kiowa was organized
very shortly after the town company of
N ew Kiowa was granted a charter, and
started in business a year before the rail­
way reached the new prairie town. T he
paid-in capital of the new hank was
$25,000.

Dies in Horton
John W . Brownlee, president of the
Bank of Horton, former Brown Coun­
ty commissioner, and for many years a
resident of this part of Kansas, died re­
cently at his home.
M r. Brownlee had lived in Brown
county since 1880— six years before the
town of Horton was founded. H e was
born near the town of Blooming Grove,
Ohio, on December 17, 1851, and was
therefore 82 years of age on his last
birthday.
He grew to manhood in
Ohio, and lived in the same neighbor­
hood and attended the same school with
the late President Harding.

N E W AND REBUILT TYPEW RITERS, ADDING MACHINES, CHECK
W RITERS — FULLY GUARANTEED.
REBUILT MIMEOGRAPHS, STENCILS AND INKS
LOWEST PRICES

ALLEN-WALES
1820 Farnam St.


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Federal Reserve Bank of St. Louis

T H E FIN EST “ H E A V Y D U T Y ”
ADDING M A C H IN E M A D E

Omaha, Nebraska

Doubles Capital
Pioneering among the banks of north­
west Kansas and southwest Nebraska,
the First State bank of Norton has is­
sued and sold to the Reconstruction F i­
nance Corporation a block of $25,000
preferred stock in the institution, thus
increasing its capital to $50,000. M any

21

Central Western B anker, M arch, 1934

banks in the nation are taking the same
action to cooperate with the national ad­
ministration in its efforts toward a bus­
iness revival.
•IlllllllllllllllllllllllllllllllllllllllllllllllllltllltlllllllllllllllllllllllllllllUllllllllllllllllllllflllllllllllllllllllllllllltlli

Colorado News

until it was liquidated several months
ago.
H e is an exceptionally well qualified
young man. H e will take the position
made vacant by the resignation o f P. H .
Kastler, who was recently named tem­
porary postmaster for Brush.

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Year of Confidence
Nineteen thirty-four should be a year
of increasingly renewed confidence in
the government, in business and in the
public mind toward their own ability
and earning capacity, says Harold
Kountze, president of the Denver Clear­
ing House association.
T h e last year has been one of great
experiments (some good and some not
so successful) in government activities
and finance.
N ow should and will come the recov­
ery period with the consummation of
the past experiments, but let us not ex­
pect too quick results, as all this must
take considerable time.
Large public works expenditures, in­
creasing employment, industrial control
and better wages under codes, more sta­
bility in the financial structure and in­
creasing commodity prices are all in
prospect.

Bill Is Signed
G ov. Ed. C. Johnson recently signed
house bill N o. 3, passed by the special
session of the Colorado legislature, al­
lowing state banks the same privileges
as national banks in pledging securities
while in receivership for federal loans. He
also signed the resolution, passed by the
assembly, placing a constitutional amend­
ment on the ballot in November chang­
ing section 10 of the constitution to give
the legislature complete control over
taxation.

New Quarters
T h e Salida First National bank moved
last month to the building formerly oc­
cupied by the Commercial National
bank, which consolidated with the fo r­
mer institution some time ago.
T h e new house is directly across the
street from the present one. Lewis H o l­
lenbeck is president and F. Ford W hite,
cashier.

Accepts Position
W . Kyle M iller has accepted a posi­
tion with the Farmers State bank of
Brush. M r. M iller was form erly assis­
tant cashier of the Hillrose State bank


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Federal Reserve Bank of St. Louis

W ith Boulder Bank
George A . Gribble w ill be cashier and
active head of the new First National
bank of Boulder, it has been announced.
H e recently resigned as manager of the
Denver office of the Regional A gricul­
tural Credit corporation to accept the
Boulder position.
M r. Gribble was for several years and
up to two years ago vice president of
the State Bank o f Sterling, Colorado.
Before going to Sterling he lived in N e­
braska. He is 45 years of age.

1934 Convention
M embers of the Colorado Bankers
association will hold their annual con­
vention in Colorado Springs June 15
and 16, it was announced recently by L.
F. Scarboro, secretary of the association.
It is estimated that about 250 bankers
from points through out the state w ill
attend the meeting, which will be held
in the Antlers hotel.
Jefferson Hayes Davis of Colorado
Springs, vice president of the First N a­
tional bank, is vice president of the
bankers’ organization and was instru­
mental in bringing the 1934 convention
to this city.

Business Improvement
T h e last month has seen the biggest
change in sentiment in Denver financial
circles since the spring of 1930. D oubt
as to the uptrend, as reflected in the
opinions and attitude of brokers, bank­
ers and businessmen, changed to confi­
dence.
Rising markets for corporation bonds,
municipal bonds, and a trade on the
N ew Y ork stock exchange that was the
heaviest since July, 1933, were contrib­
uting factors. Denver bond dealers re­
ported that it virtually was impossible
to buy high-grade municipals. Second
grades were in good demand.
T h e reduction in the rediscount rate
by the N ew Y ork federal reserve bank
and devaluation of the dollar to 59.06
per cent o f the former parity stimulated
a feeling of renewed confidence. A $35
an ounce price for gold improved the
outlook for mining in this state.

Elected Director
Ralph R. Allen, prominent Gunnison
county stockgrower, was elected a direc­
tor of the Gunnison Bank and T rust
company at the annual meeting. Allen
takes the place left vacant recently of
R. P. Margelman.

Re-elected President
C. R. M cC arthy was re-elected pres­
ident of the First National bank of
G lenwood Springs at the annual meet­
ing. Other officers are : J. F. Benedeck,
vice president; J. F. Gregory, cashier;
Irwin Cramp, assistant cashier. D irec­
tors are Benedeck, M cCarthy, Gregory,
J. R. W e ir and Frank Zaitz, Jr.

50 C E N T R A L P A R K SO U TH

N EW YO R K
Direction: S. GREGORY TAYLOR

I nteresting A lw ays !
D ive rtin g... entertain in g ... fam ous
people from all over the world
m ake it their N ew Yo rk home . . .
overlooking Central Park's p ano­
rama . . . id e a lly convenient to the
fash io n ab le shops and theatres.
Rates: S in gle , $ 3 .5 0 -$ 5 ; D ouble,
$5-7; Suites from $8.
THE N E W C O N T IN E N T A L G RILL
for dinner and supper dancing
to L E O N B E L A S C O 'S alluring
rhythms . . . entertainment . . .
G a la N ig h t E v e ry T h u rs d a y .
9

Then there's C ocktail Hour in the
B A C C H A N T E BAR and in A m e r­
ica's only RUM PELM AYER, which
is open from breakfast thru th e a ­
tre-buffet.

22

Central Western Banker, M arch, 1934

T h e association last met in Colorado
Springs in 1929.

Gordon, vice president; H arry W .
Zacheis, cashier, and J. L. Ginder, as­
sistant cashier.

Named President
A t the annual meeting of the stock­
holders of the First National bank of
Meeker, L . B. W albridge was elected
president of the local banking institu­
tion. T h e bank has been operating with­
out a president since the death of the
late R. Oldland. Other officers elected
w ere: C. J. W ilson, vice president, and
Ernest Oldland, cashier, with L. B.
W albridge, C. J. W ilson, Frank D e ­
laney, M rs. M yrtle Oldland and Ern­
est Oldland as directors.

On Investment Board
Charles B. Engle of the Denver firm
of Engle, Adams & Co., was re-elected
to the board of governors of the Invest­
ment Bankers Association of America at
the recent meeting in Chicago.
M r . Engle w ill represent the Rocky
Mountain group of the association.
Upon his shoulders w ill rest the solving
of many of the problems of bankers in
this vicinity in the drawing up of new
banking regulations under the securities
act.

Reorganized
A new group of officers and directors
has been selected for the reorganized
Alamosa National bank.
A t a meeting of new stockholders,
the follow ing directors were chosen:
W alter N . Husing, Harry W . Zacheis,
Ben E. Gordon, Everett Cole and Leo
Long. M ore than 20 stockholders were
at the meeting and all the stock in the
reorganized bank was represented. E v­
ery share of stock in the new bank has
been placed.
T h e bank directors, at a separate
meeting, elected the follow ing officers:
W alter N . Husing, president; Ben E.

Henry
Dendhal,
vice
president ;
Charles J. Eckert, cashier; George
Bloom, assistant cashier and assistant di­
rector, Judge W right, attorney.

Rates Are Lowered
Interest on savings accounts in the
Denver Clearing House
association
banks will be cut to 2 per cent a year on
amounts up to $10,000 on April 1, while
on larger deposits 1 per cent w ill be
paid. A t present the banks are paying 3
per cent on savings accounts of $500
and less than 2 per cent on larger ac­
counts.
T h e rate now in effect was
established on April 1, 1933.
T h e new rate w ill be exactly the
same as that paid by Postal Savings
banks. Since all deposits up to $2,500
now are guaranteed by the government,
the local banks are on the same basis as
the postal banks.

Remodeled
Improved facilities for handling the
bank’s business and beautifying the in­
terior are the results of extensive changes
completed at the Merchants bank of
Gallup.
Under the new regime walls of the
bank are decorated with gay Chimayo
blankets. W ood w ork , walls and ceiling
glisten with new paint. A new executive
office and bookkeeping quarters have
have added. Rearrangement of employes’
cages is expected to add greatly to the
convenience for the bank clients.
Renovation of the bank’s vault was
included in the cleanup and new safety
deposit boxes are being added.

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FDIC Member
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Elected President
Paul A . F. W alter, for 14 years vice
president and trust officer, was elevated
to the presidency of the First National
bank of Santa Fe at the annual election
of stockholders. T here were 1371 of
the 1500 shares of stock represented, as
the work of the directors for the preced­
ing year was approved and commended,
and a resolution on the death of Presi­
dent Arthur Seligman was adopted.
A ll of the follow ing directors and
officers were re-elected:
Levi A . Hughes, chairman of the
board; John Pflueger, Paul A . F. W a l­
ter, Henry Dendhal, Judge Edward R.
W righ t, Bernard W . Spitz, directors.
T h e vacancy in the directorate caused
by the death of President Arthur Selig­
man was not filled.

It has been announced that the Farm­
ers and Stockmens Bank of Clayton,
N ew M exico, is now a member of the
Federal Deposit Insurance corporation.
This U. S. Government corporation
insures each and every depositor in the
bank 100 per cent insurance to the
amount of $2,500, and on July 1, 1934,
this amount w ill be increased to $10,000.
“ D id n ’t you claim when you sold me
this car that you’d replace any thing that
broke or was missing?”
“ Yes, sir. W h a t is it? ”
“ W e ll, I want four front teeth and a
collarbone.”
Neighbor— W h y are you painting one
side of your car red and the other green?
Speed M aniac— It’s a fine idea. Y ou
should hear the witnesses contradicting
one another!

A U S T R A L A S IA

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

1817

( W i t h w h ic h a r e a m a lg a m a te d T H E W E S T E R 5 Ì 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 .)

BANK

P A ID -U P
C A P IT A L
................................................................................................................... 8 ,7 8 0 ,0 0 0
R E S E R V E F U N D .........................................................................................................................
6 ,1 5 0 ,0 0 0
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 .......................................................
8 ,7 S 0 ,0 0 0
£ A 2 3 ,7 1 0 ,0 0 0

Aggregate Assets 30th September, 1933, £ 111,512,302
A G E N T S __ F I R 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


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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

7 1 0 B r a n c h e s a n d A g e n c i e s in A i 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 i N e w G u in e a a n d L o n d o n

A b o v e , P a n o r a m ic V ie w

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S tock y a rd s, S o u t h

O m a h a , N ebraska

Se r v in g t h e O m a h a
TRADE TERRITORY
A tremendous factor in the growth and development
of the Omaha trade territory is the Omaha stockyards.
An investment representing millions of dollars, it
is the focal point o f the vast livestock industry that
has contributed so heavily to the prosperity of the mid­
dle west.
•

Likewise serving the great Omaha trade territory
is the CENTRAL WESTERN BANKER of Omaha, the
personal banking publication of bankers in Nebraska,
and adjacent territory.
The financial institutions of this area, represented
in the advertising columns of this publication regularly,
know the value and prestige of the CENTRAL WEST­
ERN BANKER.
•

Consistent advertising in the CENTRAL
WESTERN BAN K ER brings results.
Write today for rate card and complete
information.

T he C entral W

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

estern

O M A H A

410 ARTHUR BUILDING

B anker

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

The Omaha
National Bank