Full text of Central Western Banker : May 1931, Volume 26, No. 5

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BANKER


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Federal Reserve Bank of St. Louis

«

W h a t the Service Charge
has done for Our Bank . . . 4

A few comments on the American
Institute o f B a n k in g .................

Bank Analysis
and General Operative Costs

C

Defalcation - Detection
Prevention . . 11

i


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Federal Reserve Bank of St. Louis

Personal

A

ttention

More than seventy-three years
o f b a n k in g e x p e r ie n ce in
Omaha and this trade area has
taught us that every customer
has special problems that de­
mand the personal services of
our officers.
We welcome you to this bank,
fo r we are interested in your
problems.

We gladly give the

personal attention you desire
in the solution of your bank­
ing problems.

The Bank of Personal Attention

irst N
Bank of
THE

DAY $

OF

COLD

DUST

ó

Central Western Banker, May, 1931

C E N T R A L W E /T E E N C A N C ER
410 A R TH U R BU ILD IN G

OMAHA
C l iff o r d D e P u y , Publisher
G erald A. S n id e r , Associate Publisher
W m . H . M aas , 1221 First National Bank Bldg., Chicago, Vice-President

R. W. M oo rh ead , Editor
L. D. V a n D o r a n , Associate Editor
F r a n k P . S y m s , 19 West 44th Street, New York, Vice-President
F r a n k S. L e w is , 840 Lumber Exchange, Minneapolis
Subscription, 25 cents per copy; $2.00 per year. Entered as second-class matter at the Omaha postoffice.

V ol.

26

TH E A N N U A L C O N V E N TIO N
of the Nebraska Bankers Association
will be held this year, in the Fall, at
Lincoln, Nebraska.
W . G. H A SK E LL, president c f
the Harlan County Bank, Alma, Ne­
braska, has been elected president of
the Harlan County Bankers Associa­
tion. W. B. Fowler, elected secretary,
is assistant cashier of the Harlan
County Bank.

M ay,

1931

N umber 5

BERT K. BAKER, 49, vice presi­
dent of the Richardson County Bank
at Falls City, Nebraska, is dead. He
had been associated with the bank
for 26 years.

D E PO SITO RS of the Nebraska
State Bank at West Point, Nebraska,
agreed with creditors to a reorganiza­
tion of the bank, under a plan for
immediate payment of 50 per cent of

IN SA L IN E CO U N TY, the Bank­
ers Association has elected E. H.
Stech president. He is cashier of the
Bank of Dorchester. The Association
secretary is Ralph Doty, cashier of
the Citizens State Bank, Dorchester.
PRE SID E N T G W Y E R Y A T E S
of the United States National Bank
took a 3-weeks’ trip during April, at­
tending a meeting of the American
Bankers Association executive com­
mittee in Augusta, Georgia, and a
conference of reserve city bankers in
Richmond, Virginia. He then went
to New York before returning to Ne­
braska. Before his trip south and
east Mr. Yates attended a meeting of
the Northwest Bancorporation execu­
tive committee in Minneapolis, Min­
nesota.

the deposits, followed by liquidation
of the bank and organization of a
new one.
MRS. HELEN LITTLEJO H N ,
assistant cashier of the First Nation­
al Bank at Minatare, Nebraska, re-

.................................................. .
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HUGO A. W IG G E N H O R N , pres­
ident of the Farmers and Merchants
National Bank of Ashland, Nebras­
ka, since 1904, died at an Omaha
hospital in April. He had lived in
Ashland since boyhood, and had been
an official of the bank since it was
established by his father, E. A. W ig­
genhorn, in f883. He had been mayor
of Ashland and for many years a
member of the school board. Mr.
Wiggenhorn was 68 at the time of
his death.
MISS V E N A BECK, 40, teller of
the Omaha National Bank, died in
April.

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Federal Reserve Bank of St. Louis

CONVENTION DATES FOR
STATE ASSOCVATIONS
N ew Mexico
Carlsbad______________ April

24—25

Kansas
Topeka________________ May

2 1 -2 2

Colorado
Estes Park___________ June

1 9 -2 0

South Dakota
Huron____________ June 21, 25, 26
Wyoming
Cheyenne__________ September 4 - 5
Nebraska
L in c o ln _____________Undetermined
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centlv caught her second forger. The
man, who attempted to pass a check
for $50.00, has been sentenced to a
year in the state penitentiary.

TH E LIV E STOCK N A T IO N A L
B AN K of South Omaha paid their
regular quarterly dividend of U/2%
and a special dividend of 1/2% as of
April 1st. Alvin Johnson, vice presi­
dent of the Live Stock National, in
commenting upon present business
conditions and future prospects ex­
pressed the feeling that we were in
far better condition comparatively
speaking than other parts of the coun­
try, and were in a position to develop
this territory along constructive lines
whenever the readjustment of the eco­
nomic factors involved in the present
depression have been made.

AN IN CREASE in bank deposits
and decrease in loans was reported by
Omaha banks March 25, 1931, as
compared with the figures of March
27, 1930, the recent call by the comp­
troller revealed. Deposits this year
were $114,314,310 and loans $54,298,286, as compared to deposits of $113,209,530 and loans of $60,479,348 the
previous year. At the time of the last
preceding call. December 31, 1930,
deposits were $112,232,675 and loans
$53,974,006.
The March 25 statement by the va­
rious banks follow s:
L oans

D epo sits

Omaha National_____ _____$18,902,533 $36,810,805
First National_____ ___
11,382,545 28,133,579
United States National___ 6,626,804 23,412,121
Stock Yards National____
8,059,929 9,687,224
Live Stock National..........
2,617,005 5,227,306
State Bank of Omaha....... 2,020,219 3,270,351
Packers National__________ 1,451,733 3,076,971
Union State______________
753,215 1,746,087
South Omaha State...........
882,754
1,113,003
South Omaha Savings.......
961,784
978,637
Farmers and Merchants ...
510,435
688,880
Bank of Florence................
129,330
169,346

A FO U RTH D IVID EN D of 8 per
cent is being paid to creditors of the
closed People’s State Bank of Ra­
mona, South Dakota, according to an­
nouncement by officials of the state
banking department, bringing the total
paid since suspension to 43 per cent.

4

Central Western Banker, May, 1931

^ h a t the Service Charge
^ a s ©one for (9ur c^ank
AN K S are corporations of pri­
vate capital chartered by the
State and authorized by law to
accept deposits and make loans. H ow­
ever, accepting deposits and loaning
money are not the only functions of
a bank, and interest collected on loans
is not sufficient to carry on the oper­
ating expenses, absorb losses and pay
a legitimate dividend to the investor.
Neither is it adequate to set up proper
reserves to strengthen the bank and
keep it a safe place for the people to
deposit money and transact their bus­
iness.
Since the inception of banking va­
rious departments have been added
and a large number of miscellaneous
services are being constantly rend­
ered to the public. All of these ser­
vices cost money to the bank and
must be sold at a profit. Banks have
set up a financial system reaching to
every nook and corner of the earth.
Through this system of which every
bank is a working part money and
credit are transferred from place to
place and from one individual to an­
other with greater speed and safety
and at less expense than through any
other medium. These services are
necessary to the business world of
today. Miscellaneous services form a
large part of the bank’s volume but
do not pertain directly to the deposit
department and their expenses can­
not legitimately be absorbed by it. A c­
counts of business concerns as a rule
are large and very active and have a
large volume of float. The average
account carried by individuals is small
and active. This makes these accounts
expensive to handle and their bal­
ances inadequate to absorb their
handling costs. All accounts do not
come within these classes for some
of them are profitable to the bank
and are exempted from any charge.
These accounts should be safe­
guarded through sound management
and the building of proper reserves
to protect them.

B

~p^URING recent years banks have
adopted the practice of levying a
service charge on accounts for the
purpose of carrying this expense.
Five years ago we adopted the ser­
vice charge plan. At that time we had
1,453 checking accounts averaging
below $50.00 — in fact the average
balance was $14.61. Thus 56 per cent
of our checking accounts represented

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Federal Reserve Bank of St. Louis

By J. M. SORENSEN

Before putting it into effect a pam­
phlet entitled “ A Conversation Be­
tween Depositor and Banker,” writ­
Vice President, Stephens National Bank,
ten by our president, was mailed to
Fremont, Nebraska
each depositor in full explanation of
the charge. This colloquy asks and
only 2.9 per cent of the total of de­ answers every conceivable question
posits. Forty per cent of the concerning the charge. The American
bank’s operating expenses was charge­ Bankers Association has sold two mil­
able to these accounts. A few months lion copies of this pamphlet to banks
after the service charge was adopted throughout the United States and
we found that there remained only Canada to be distributed among their
356 accounts in this class with an customers before putting the service
average balance of $37.75. W e dis­ charge into effect.
covered that some accounts had been
This charge is fair both to the cus­
eliminated and others combined until tomer and to the bank and it helps us
bookkeeping costs were greatly re­ to sell our services more nearly on a
duced. Many of the small accounts measured basis which is the only just
also were increased with the result and business-like way of rendering
that our total deposits showed a large bank services. W hy should a few cus­
gain.
tomers, who have worthwhile ac­
counts, be penalized by having to fur­
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nish banking benefits and services to
a! 111: i 111111:111■1111111: i: i: 1111111n 111111111111111111111111111111i 1111111111111111{1111111111111111(11111m 111111111111(11111! 1111111, i
a large number of customers whose
(Xote.— The article appearing
accounts are costly to handle and have
on this page was awarded Fifth
a great deal of float? Benefits received
Prize in the prize letter contest on
from profitable accounts should be
the subject: “ What the Service
Charge Has Done for Our Bank.”
used for operating expenses and for
This is the final article in this
creating reserves which will strength­
series.
en the bank and thus furnish greater
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protection to the depositor.
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This protection is the greatest ser­
vice a bank can render to its custo­
During the year 1929 our service mers and should be its first consider­
charge schedule, including all services ation. We are convinced that a banker
formerly furnished without charge, has no more right to render services
netted over $11,000.00 additional rev­ at a financial loss than he has to make
enue to the bank. This is not all a loan which he knows at the time
profit as these services are expensive will not be paid. Nor do we believe it
to render but a part of it is profit and is fair to use the profit from profit­
the whole of it is new revenue. It is able accounts to carry the expense of
a goodly sum for a bank with $100,- a large number of costly ones. The
000.00 capital and helps to keep our service charge helps to properly dis­
stockholders satisfied. Through care­ tribute the expense of operation
ful management and the enforcement where it belongs by charging the peo­
of the service charge the standing of ple, who require and receive these
our bank has been such that its stock services, a reasonable price for
has never been offered for sale to them.
anyone outside of the bank. Stock in
this bank has been a good investment
| T TS hoped that bankers every­
even when double liability has been
where will carefully analvze their
considered. Owners of bank stock are business and determine their costs
entitled to (although they do not as a and market their services accordingly.
rule receive it) a larger dividend than When that day comes bank failures
ordinarily obtained on other stocks will be reduced to a minimum and the
because of the double liability risk. public will appreciate the services
furnished by their banks and gladly
r|AHE SERVICE charge has worked pay for them.
A out splendidly and with practically
I am sure that all banks having
no dissatisfaction. It has reduced op­ once tried the service charge practice
erating costs and has made our bank are satisfied with its working and
more efficient and has greatly in­ would not care to go back to the old
creased its strength.
way of giving away services for noth-

5

Central IV estern Banker, May, 1931
ing to the point of capital depletion.
Whenever we explain a charge to
a customer we do it on the basis of
its cost to the bank and its value to
the customer. W e sell him on the
ground that these services are our

stock in trade. They are what we
have to sell and if the customer is in
need of them he should be willing to
pay us just as he would when making
a purchase at a store. The trouble
with most bankers is that they do not

appreciate the value of their own ser­
vices.
Present day banking has proven
beyond the question of a doubt that
salesmanship is as necessary a qualifi­
cation as sound credit judgment.

A Few Comments on the
American Institute o f Banking
OR M A N Y years I have been
deeply interested in the work and
progress of the American Insti­
tute of Banking, have cooperated with
them in a number of different ways,
and in talks before the local Chapter
I have from time to time reiterated
one reason for this interest, which is
that I think any body of workers will­
ing to use their leisure time and con­
tribute some of their own money to
an honest attempt to improve them­
selves and increase their efficiency,
should be encouraged to the limit, and
1 am glad to have the opportunity of
expressing my views somewhat more
at length and to a larger audience,
which I trust will include not only
members of the Institute but bankers
who at present do not appreciate what
the Institute is doing.
After an experience of more than
twenty-five years as a bank executive
I have concluded that bank clerks as
a class are an exceptional body of in­
dustrious, intelligent and honest young
men and women. They must be at the
bank before it opens, and when the
legal hour of closing arrives they have
a mass of work still to be done. If
they are accurate and rapid, and the
day is a normal one, they may finish
their work by five o’clock, but an er­
ror on their part by which their ac­
counts fail to balance, or an excep­
tionally heavy day, or the complica­
tions of a merger, may keep them al­
most indefinitely. I have scarcely ever
had a complaint on this score and
never a refusal to stay. Throughout
all these hours, working even under
pressure, they must be accurate, alert,
on the lookout for errors, irregular­
ities in checks, carelessness of custom­
ers, and the sharp practices of multi­
farious crooks. Furthermore, they
must remain courteous at all times,
even under provocation.
Now, after such a day, one might
imagine they would all go home to a
well-earned rest or else turn to some
relaxation, if not actual dissipation,
but what do we find ? Over seventyfive thousand of them have accepted

F


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Federal Reserve Bank of St. Louis

By W A L D O N E W CO M E R
Chairman o f Executive Committee
Baltimore Trust Company

membership in the A. I. B. and are
paying dues. It is true that this num­
ber includes certain officers, and per­
haps some who join more for the
pleasure of contacts, dances, etc., but
even these side issues are incidentally
of great benefit to them, and far su-

W a l d o N ew c o m e r

perior to other relaxations they might
adopt, but the records show that the
enormous number of more than fortyfive thousand are actually enrolled in
classes of the A. I. B., and two thou­
sand or more of them are enrolled in
more than one class. For what pur­
pose? To make themselves more val­
uable to their employers. I assert that
even if I thought they were deriving
no benefit whatever from these classes,
I should still encourage them, on the
ground that any man or woman will­
ing to devote his leisure after a day
of hard work to improving his ability
in his work, and to be more valuable
to his employer, should be encouraged.

o ne may

take a less idealistic view
and say that the real motive in
their minds is to enable them to make
more money. Granted. But what of
the intelligence that leads them to take
this method of doing so? W e are all
working for greater gain, some at­
tempting to achieve it merely by work­
ing harder, some by taking odd jobs
in their hours off from their regular
duties, some by strikes for higher
wages, and some perhaps under the
stress of hunger, temptation or lack
of moral fiber by dishonest methods,
but these young people have volun­
tarily undertaken to work intelligently
and cooperate to improve their own
value, and to earn a deserved promo­
tion. Our labor unions work for the ad­
vancement of their members, but they
do it by strikes, restriction of hours,
and restriction of the amount of work
to be done per hour. Think what it
would mean if bricklayers instead of
agreeing to lay not more than so many
bricks per day took lessons to increase
the number they were able to lay, and
instead of striking became so efficient
that they were worth more.
But, coming back to the clerks, I
have said that they should be encour­
aged even if no benefit were resulting,
but what is the benefit? They take
courses in banking practices, commer­
cial law, public speaking, and numer­
ous other related subjects. They make
themselves more efficient, more inter­
ested in their work, better able to per­
form their present duties, and better
fitted for higher positions. These are
not empty words. If any banker is
skeptical, let him check over his clerks
and select the more efficient and those
who have shown the greatest improve­
ment in the course of two or three
vears, and then ask how many of these
have been active in the A. I. B., and
taking its courses. Then let him check
the least satisfactory group and ask
the same question. He will be sur­
prised.
I am not unaware of the danger
expressed by the poet in the w ords:

6

Central Western Banker, May, 1931

“ A little learning is a dangerous thing;
Drink deep or taste not the Pierian
Spring.”
W e all know the danger of having a
slight knowledge of law, for instance,
and thinking we can act on legal ques­
tions without a lawyer’s advice, and
some may feel that there is danger
that a young teller, for instance, hav­
ing taken a course in commercial law
may feel himself competent to pass on
technicalities, when he is ignorant of
court decisions, changes of law, and
variations in the statutes of different

states, where another without any
knowledge of law, conscious of his
ignorance would refer the matter to a
lawyer, but in my experience with
graduates of the A. I. B. in our own
institution, I have never found one
who was in the least conceited over his
knowledge or relied upon it too fully.
They all turn readily to a lawyer or
to a senior officer for advice, but the
advantage is that their education has
taught them the technicalities to be
looked out for, and which are impor­
tant, where one without their knowl­
edge would not recognize the import­
ance of the question.

Tears . . . without sorrow
I n t e r i o r o f a Ita n k , e q u i p p e d w i t h D ie b o ld 2 4 - h o u r p r o t e c t i o n f r o m B u r g l a r y , F i r e ,
B a n d itr y .
B o b b y , a ll e n t r a n c e s a n d e x i t s a r e f u l l y p r o t e c t e d w i t h t e a r g a s a t
th e in s ta n t o f r e le a s e .

Business at its height . . . money
lying unprotected behind tellers’ win­
dows . . . the vault door open. Un­
announced, bandits enter, armed to
the teeth. A hold-up!
But before they can get their
hands on any money — before they
can start slugging and shooting — a
sudden haze Alls the lobby, as if
someone had taken a flashlight pic­
ture of the entire scene. The bandits
drop their dangerous guns.
Their
hands fly to eyes unexpectedly flooded
with tears. Piebold-Lake Erie Tear
(las!
Depositors and employees cry, too.
But their tears stop soon, the hold-up
is thwarted and the helpless bandits

grope their way out of the bank, easy
subjects for police attention.
Piebold-Lake Erie Electrical Tear
(«as Systems are the most effective
means yet devised for the prevention
of daylight hold-ups with their usual
atrocities.
The criminal knows and fears tear
gas — it takes away his chance for a
getaway . . . it endangers his liberty.
Piebold - Lake Erie Tear Gas Sys­
tems reduce insurance rates 25 % .
Piebold Service is available at any
point in the United States within
twenty-four hours — in metropolitan
areas, immediately. Write for full in­
formation. By the makers of Piebold
Bank Vaults and Vault Poors.

D I E B0 L D
SAFE AND LOCK COMPANY . . CANTON, OHIO
OVER

SEVENTY


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Federal Reserve Bank of St. Louis

YEARS

OF

BANK

SERVI CE

JS IT any wonder that the banks are
coming more and more to encour­
age them in various ways?
Many
banks contribute liberally to the A. I.
B. Many of the officers join and pay
dues to encourage them, even when
they have no intention of taking the
courses, and they attend their ban­
quets and public meetings and show
their approval in various ways. En­
thusiastic as 1 am I have never fully
approved of having a bank pay the
dues of its employes in the organiza­
tion, and even question the advisabil­
ity of paying them their tuition in the
courses, broadly speaking. It helps
their self reliance and insures their
real interest to have it cost them some­
thing, and the dues are not heavy
enough to be a burden on the average
clerk. If tuition in the courses is paid
many would enroll on the principle of
getting something for nothing, which
is merely human nature, anti then
would not attend regularly and either
through lack of interest or lack of
ability fail to take a certificate, and
much of the money would be wasted,
but a practical and unobjectionable
form of assistance is to say to your
employes: If you are sufficiently in
earnest to pay your own way and suffi­
ciently competent to take a certificate,
the bank will feel that you are both
efficient and earnest and will refund
its cost. W e do this, and it has worked
well.
As to the courses themselves, they
are very sensibly laid out, and appar­
ently well taught. It may be that they
are better in some places than others,
as, of course, a certain amount must
depend on the ability of the local
teachers, and, of course, this depends
upon the character of the supply avail­
able in a given locality, but the courses
are standardized and to a great extent
uniform, and speaking from my own
experience with the graduates, I have
found that they are extremely satis­
factory.
Storm Causes Heavy Loss

Cattle losses in western Nebraska,
resulting from the severe March snow
storm, are now estimated to have been
between 20,000 and 30,000 head, ac­
cording to the state and federal divi­
sions of agricultural statistics.
The storm is believed to have caused
heavier loss than that of 1913 and pos­
sibly was more severe than the bliz­
zard of 1888, the report states. Radio
warnings are believed to have pre­
vented more severe losses.
Heaviest stock losses were reported
from Garden, Grant, Arthur and Mc­
Pherson counties. Losses for these
counties were as follows: Garden, 3,820; Grant, 2,625; Arthur, 3,000; and
McPherson, 1,900.

7

Central Western Banker, May, 1931

“ I

1 9 3 1 / roves
the value ofa
RESERVE FUND
h i s year, because of depressed business con­
ditions, holders of Corporate Trust Shares
may experience a practical, yet gratifying
demonstration of the value of a cash re­
serve fund in a fixed investment trust.
Unless conditions immediately take an unexpect­
ed turn, distributions from stocks of leading Ameri­
can corporations held by this and similar invest­
ment trusts may not return enough to pay the base
coupon rates of the trusts on forthcoming distribu­
tion dates. Without thisreservefund holders ofshares
would face the possibility of reduction in returntemporary, perhaps, but nevertheless disappointing.
Holders of Corporate Trust Shares, however,
have the satisfaction of knowing that they will
receive the full base coupon rate of 35c per share
on June 30,1931, the next semi-annual distribution
date. Should receipts from the underlying stocks
fall below this base amount, the reserve fund will
supply the difference. Any amounts withdrawn
from the reserve fund will be later replaced from
distributions in excess of the base coupon rate.
Thus Corporate Trust Shares protect the share­
holder’s return when he needs it most—in times of de­
pression. And when the reserve fund is not used for
this purpose, it is earning interest for the shareholder.
Because of this very important protective fea­
ture, because unclaimed monies always remain in
the hands of the trustee until called for, and be­
cause this trust is in all points inherently fair to the
investor, Corporate Trust Shares are finding in­
creased preference among thoughtful investors.

T

C O R POR ATE T R U S T
SHARES represent an ow ner­
ship interest in these 28 com ­
panies, the shares o f which are
deposited with an independent

trustee.

Industrials
Amer. Radiator & S. S.
American Tobacco
du Pont
Eastman Kodak
Ingersoll Rand
International Harvester
National Biscuit
Otis Elevator
United Fruit
United States Steel
Woolworth

Railroads
Atchison, Top. & Santa Fe
Illinois Central
Louisville & Nashville
New York Central
Pennsylvania Railroad
Southern Pacific
Union Pacific

Oils
Standard Oil of California
Standard Oil /Indiana^
Standard O il /N e w Jersey^
Standard Oil of New York
Texas Corporation

Utilities
and Quasi-Utilities
American Tel. & Tel.
Consolidated Gas of N . Y .
General Electric
Westinghouse Electric
Western Union Telegraph
M O O D Y ’ S C O M P O S IT E
PORTFO LIO R A T IN G “ A ”

'T '

T '

'T '

C O R P O R A T E T R U S T SHARES A R E IN T E R N A T I O N A L L Y A D V E R T IS E D ,
I N T E R N A T I O N A L L Y S O L D , A N D E N JO Y A N IN T E R N A T I O N A L M A R K E T

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N E W ORLEANS

T h i s is one c f a g r o u p o f i n v e s t m e n t t r u s t s s p o n s o r e d by A


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Federal Reserve Bank of St. Louis

OMAHA

d m in istr ative

and

R esearch

C o r p o r a t io n

8

Central Western Banker, May, 1931

c^ank o A nalysis and
C/eneral Operative ßosts
m a n y economic changes
that are resulting in decreased
bulk earnings are familiar to all
of us and without a doubt we are
agreed that something must be done,
that banking should, and must be, ad­
justed to meet present-day conditions.
The banker does more for nothing
than any other professional, and when
a recent survey revealed that banks of
the United States are giving away
services each year that cost them over
$300,000,000.00, we can begin to un­
derstand, in part at least, why we
bankers have need to complain of in­
creased costs and decreased earnings.
During the past twenty years the
gross income from deposits of all Na­
tional Banks (excepting a period from
1919 to 1922) has not varied over 1/ij
of 1 % and that the average annual
gross income has been maintained at
about 51/ 2 % .
Deposits during this
same period have increased /nearly
180%. Operating expenses have in­
creased from 2.89% to about 4 % of
deposits. In 1908 about 45% of gross
earnings went to operating costs. In
1929 this had increased to more than
70% . Net profits have declined from
2.12% of deposits in 1910 to approxi­
mately 1.13% in 1929, or about 47% .
From these figures we must assume
that had the 1908 percentage of net
earnings to deposits been maintained,
out net earnings would have been
100% greater in 1929.
The fact that our gross income to
deposits has been maintained at about
the same figure during the past twenty
years while our operating costs have
increased approximately 50% should
be sufficient proof that we bankers
have given the greater portion of our
time to loan and investment policies
and not enough thought to the deposit
and cost side of our business. After
analyzing the figures our conclusion is
that if we are to increase our net earn-

T

he


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Federal Reserve Bank of St. Louis

B y LYALL BARNHART
First National Bank and Trust Co.
Oklahoma City, Okla.

ings we must increase our gross earn­
ings without a proportionate increase
in expense, or we must reduce our ex­
pense without materially affecting our
deposits.
Some banks have attempted to raise
their earnings by increasing the rate
of return from their earning assets,
but this policy has not met with such
success. The higher the return the
greater the hazard, resulting many
times in frozen assets and failed
banks. The public is beginning to real­
ize that a profitable bank is a safe bank
and the best advertising that any bank
can have is a reputation for conserva­
tism and profits.
When we consider ways and means
of reducing our expense without af­
fecting our deposits we think first of
our internal operating expense, but we
have that item pared down to a mini­
mum, and, therefore, cannot expect
to help our earnings materially along
that line.

JN

ORDER to maintain fair earn­
ings on our capital investment
many of us have gone in to the “ by­
product” business; that is, the open­
ing of bond departments, trust de­
partments, personal loan departments,
etc., but let us examine for the mo­
ment the real purpose of the business
itself. Just what is the true mission of
banking? W e may operate these spe­
cial department; we may draw con­
tracts, manage properties, compete
with the loan shark in our small loan
departments, and what not, but after
all the real purpose of banking is the
accepting of deposits and the lending
of funds. The fundamental law of
all business is profit and if that law is
not to be violated by banks in the
transaction of the real business of

banking, then we must secure our de­
posits at a fair price and “ sell” them
for an increased price and the mar­
gin between must be sufficient to pay
the operating expense, provide for
losses, and leave a fair profit for our
stockholders. If we are to continue on
our present basis and depend upon
our “ by-products” to provide our
earnings, then why not divorce our­
selves from commercial banking and
go into the “ by-products” business al­
together ?
Competition is largely responsible
for our increased costs due to the fact
that so few of us are analyzing our
business properly and, therefore, have
little or no idea of the true value of
much of the business that we are bid­
ding for, or are attempting to hold,
and as a result, the customer is taking
advantage of the situation by demand­
ing more and more free service. When
the banker feels that he has gone his
limit, the customer threatens to move
his business to another bank that has
been bidding for his account and the
banker does not have the courage to
carry out his convictions, but concedes
to the customer’s demands in order to
retain the account and thereby enters
another invisible debit against his al­
ready fast diminishing earnings ac­
count.
The administration of any success­
ful, profitable bank of today requires
knowledge, and a wise use of that
knowledge— knowledge of all of the
factors that determine profit or loss
and not just those factors that deter­
mine sound loan and investment poli­
cies. A knowledge of the factors that
determine the price paid for deposits
and service and the price that must be
received for those “ commodities” so
that the margin between will be suffi­
cient to pay the operating expense,
provide for losses, and a fair profit
can be obtained only by analysis.
Cost analysis is just as essential to
the banking business today as cost ac­
counting is to the manufacturing in-

9

Central Western Banker, May, 1931
dustry. Just imagine if you can a man­
ufacturer who would attempt to mar­
ket a product without first installing a
system of cost accounting. No manu­
facturer would even think of doing
this and yet we bankers are selling
our “ commodities” without^ any idea
of the cost of producing them unless
we, too, apply the microscopic eye of
analysis to our business, but we seem
to take the attitude that so long as our
profits show a fairly good net result for
the year, whether they were earned
from the “ by-products” or from the
business itself, we are inclined more
or less to let the matter slide. No other
successful business is conducted m
this manner and it is high time that
we bankers awaken to the fact that
this “ hit or miss” method is no more
practical in our business than it is in
other lines of endeavor.
J F W E are to determine between a
profitable and an unprofitable
checking account how can we possi­
bly do so accurately and intelligently
unless we know the factors that deter­
mine profit or loss of a commercial
account? How can we possibly know
whether our schedule of charges in
our Collection Department is sufficient
to compensate us for that service and
return a fair profit unless we know
the transaction costs of our Collection
Department? As a matter of fact, the
non-cash collection department in the
average bank is operating at an actual
loss each month and a large percent­
age of the checking accounts on the
ledgers of the average bank today av­
erage so small in deposit balances and
so high in activity that the monthly
loss of carrying them, if known, would
be astounding.
Our slogan not so long ago was,
“ It pays to advertise,” but some of us
at least are beginning to realize that
this advertising has brought us a large
amount of business that is anything
but profitable and that with our ever
increasing operating costs without a
proportionate increase in gross in­
come, our present slogan should be,
“ It pays to analyze.” In my opinion,
every bank regardless of size should
adopt a complete analysis program, in­
cluding cost analysis. This may sound
absurd and impossible to many bank­
ers, but if we are to know all of our
profit and loss factors and if we are to
remedy unprofitable practices wisely,
then there is no other way out except
by analysis. If the bank has no one
in its organization capable of install­
ing the system, then an outside ac­
countant should be employed to install
it. The accountant will furnish a com­
plete report or outline that will con(C o n tin u e d on P a g e 18)


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Federal Reserve Bank of St. Louis

Heads Philadelphia Company

Frank R. Phillips was elected pres­
ident of the Philadelphia Company at
a meeting of the stockholders of the
company held, in Pittsburgh last
month, it has been announced by John
J. O ’Brien, president of Standard Gas
and Electric Company. Mr. O ’Brien
has been president of the Philadelphia
Company since May, 1929. At that
time Mr. Phillips was elected senior
vice-president of the company and his
election as president comes as the re­
sult of the many years during which
he has been associated with the Phila­
delphia Company and its subsidiaries,
according to Mr. O ’Brien.
Commenting on Mr. Phillips’ elec­
tion, M r. O ’Brien said: “ I am de­
lighted that the stockholders of the
Philadelphia Company have elected

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Mr. Phillips as president of that com­
pany. It is a reward which he deserves
as the result of his achievements as a
public utility executive. It is just rec­
ognition of his untiring efforts and in­
dicates the high esteem which is held
for him not only among employes and
friends but also by the stockholdlers
of the company.”
The Philadelphia Company and its
subsidiary and affiliated companies is
a subsidiary of the Standard Gas and
Electric Company.
Mr. Phillips has been connected
with utilities in Pittsburgh for the past
21 years and is a nationally known
figure in the public utility industry.
He went to Pittsburgh in 1909 to as­
sist in the development of the street
railways of that city. In 1910 he was
made superintendent of equipment of

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available in convenient maturities and
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Central Western Banker, May, 1931

10
the Pittsburgh Railways Company
which position he held until July, 1923,
when he was made acting general
manager for the receivers. Upon the
lifting of the receivership in Febru­
ary, 1924, he was appointed mechan­
ical and electrical engineer and also
representative of the company to the
Traction Conference Board. On Sep­
tember 1, 1926, he was elected vice
president and general manager of the
Duquesne Light Company and its sub­
sidiaries and in April, 1928, was elect­
ed vice president of the Equitable Gas
Company and its subsidiaries. On May
24, 1929, he became senior vice presi­
dent of the Philadelphia Company and
president of its affiliated corporations.
He has been active in the American
Electric Railway Association, having
served on many important committees,
is a past president of the Pennsylvania
Street Railway Association, the Amer­
ican Electric Railways Engineering
Associantion and the Pennsylvania
Electric Association.
W ith Auto Finance Company

Announcement of interest to bank­
ers and insurance executives through­
out the Middle West has been made of
the election of Colonel William L.
Taylor as executive vice-president of
Lewis E. Bower, Inc., and the Atlas


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Federal Reserve Bank of St. Louis

Securities Company, both of Chicago.
Executive headquarters of the com­
panies are located in Chicago at 55
West Wacker Drive. Col. Taylor was
formerly president of the Federal Sur­
ety Company of Davenport.
In retiring from the insurance bus­
iness and entering the automobile fin­
ance field, Col. Taylor advises that
arrangements are being made to estab­
lish distribution through Middle West­
ern states on the sale of collateral trust
notes. The Atlas Securities Company
is the selling organization for Lewis
E. Bower, Inc., the latter company
have been in business in Chicago for
the past twenty years. The expansion
program calls for an increase of cap­
ital in the Bower organization to
$ 1,000,000 .00 .

The manufacture of automobiles,
according to Col. Taylor, has devel­
oped into a key industry in America,
a barometer by which the welfare of
the nation may be measured. “ Motor
traffic,” he points out, “ has shown a
steady increase in all parts of the
country. The average citizen curtails
other expenses but must have his au­
tomobile. He uses it to ride to and
from work, keep the youngsters in
school, for recreation and numerous
other uses, making it indispensable.”
Five branches of the Bower Company
are operated in Chicago.

Pioneer Banker Dies

Edwin J. Bent, a pioneer of the San
Juan region and widely known in
Colorado banking circles, died last
month at Grand Junction, Colorado.
He was 68 years old, and had been ill
several months from a stomach ail­
ment.
He was born in Louisiana, Pike
county, Missouri, and educated in the
Denver public schools. In 1883 he
moved to Lake City, Colorado, where
he was connected with the Thatcher
brothers in the Miners & Merchants
bank.
From 1888 to 1917 he was cashier
of the Miners & Merchants bank at
Ouray, Colorado. He resigned and re­
tired from active business in 1917.
Mr. Bent was a distant relative of
Gen. William Bent, after whom Bent
county was named.
Superintendent of Service Life

B. R. Bays, president of the Service
Life Insurance Company of Lincoln,
announces the appointment of Pete
Elderson as superintendent of agents
for the Service Life. Mr. Elderson
was formerly a district superintendent
of agents for this company.

$1,235,354.58 Cash Surplus

I IaS

PAID Nebraska farmers $876,934.55.

Writes hail protection in eastern Nebraska.
Full coverage automobile insurance— Fire, Theft, Liability, Collision,
Property, Wind, Hail, Transportation.
A most attractive policy at a price all can afford.
Agents needed in every town in Eastern Nebraska.
Farmers Mutual Hail Insurance Association of Iowa, 722 Sixth Ave.,
Des Moines, Iowa.

11

Central Western Banker, May, 1931

I N

S U

R

A

N

C

E

Its Application to the Jianhing Yraterniti/

Defalcation — Detection — Prevention
HEN stocks were selling at
thirty
times their earnings,
Rolls Royces were at every­
body’s doorstep, and every new deal
in order to be sold had to have “ ro­
mance” attached to it, some of the
folks called it a new era and it was
then that suggestion whispered in the
ears of many that they, too, could get
rich— over night—-with the result that
many defaulters are today paying the
penalty for their folly. Over 65 per
cent of the losses sustained by banks
in this country are by way of em­
bezzlement, according to a report
from the American Bankers Associa­
tion ; therefore, this is a rather impor­
tant subject both to the banker and
to the insurance company.
To expose every known method
or trick used by embezzlers in banks,
and to work out a program of preven­
tion, is the duty of every bankhead.
Why bank employes attempt to de­
fraud their institution is always a
mystery, for eventually the cleverest
of schemes is uncovered. There seems
to exist a false sense of shame
amongst bank officials regarding un­
fortunate defalcations within their
own shop and there is a great tend­
ency to cover up any story, yet each
loss has its own peculiar method and
how can a recurrence be prevented in
other banks unless the banker knows
of the defaulter’s method. If this
column can be made a medium for
the frank exposure of methods of
bank embezzlement, a real service
will have been rendered to the banker.
The defaulter usually goes through
three stages— First, the delusion that
his stealing will not be discovered and
that the money will answer all of his
desires (which it never does) ; then
the awakening to the fact that he had
been deluded by this mental reason­
ing ; and finally the realization that he
must pay a penalty. If that penalty is
not imposed by a court sentence, it
most certainly is important to both
banker and dishonest employe that
the punishment is sufficient to cause
an awakening within the employe’s
conscience that thieving is an unporfitable investment.

W

\ M O ST disturbing type of loss
has' occurred recentlv which
should be brought before the exec
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Federal Reserve Bank of St. Louis

By

IIY

SCARBOROUGH , J r .

utive heads of banks with the idea
of preventing such a situation with­
in their own institutions. A trust offi­
cer empowered with the authority to
make various kinds of trusts with
customers thought that he was clever
enough to get away with the follow­
ing plan:
Certain trusts which came to him
were of the cumulative nature, and
had securities which he could easily
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“ Let him that stole steal no
more, but rather let him labor,
working with his hands the thing
which is good, that he may have
to give to him that needeth!”
— Ephesians, 4—28

within the savings cage. Where pos­
sible, savings tellers should not have
to post the books. Vigilance ever con­
stant should be uppermost in the
minds of the management of this
department.
The apparatus known as the LIE
D ETECTOR is being used most
successfully to detect embezzlements
both petty and large within banking
institutions. This apparatus h a s
proven itself to be most positive in its
ability to detect and eliminate the
employe who has stolen monies, and
with this machine in popular usage,
the employe is going to think twice
before he succumbs to that influence
which suggests to him that he can
take the money and bring it back to­
morrow.

VE R Y defaulter will admit start^ J ing in a small way— taking just a
dollar or two. Something within him
dispose of at a later date. He drew seems to weaken and his moral fibre
up the trust papers, gave the bank’s disintegrates, and having gotten away
letter of receipt to the customers and with the small peculation he goes
placed the securities, together with a deeper and deeper in dishonest acts.
copy of the receipt, in his own pocket. ; The LIE DETECTOR is capable of
detecting the slightest theft, and the
Several thousand dollars worth of
securities were obtained in this man­ greatest favor that can befall the in­
ner which he subsequently sold in the dividual who has stolen his first
open market for his own benefit until money is to be discovered in this early
stage and be punished for his seem­
his little scheme was uncovered.
It is to be suggested that when ingly insignificant theft. Somehow
trust funds are brought into the bank, there seems to be no reformation
the officer handling such accounts without punishment and it is the duty
should be instructed to accompany of bank heads to remove the em­
the customer to the proper cage ploye who is too weak to resist the
where the teller gives a receipt to the temptation of taking money. Bank­
customer for the money or securities ers are inclined to be sympathetic
with young employes who have gone
which are to be left in the trust.
Excess collateral should be fre­ wrong, even to the extent of recom­
quently checked by others than those mending the employe to t h e i r
having constant charge of it, and brother bankers, not desiring to ruin
most assuredly at certain periods the the career of the young thief. This
bank should verify with their custo­ covering-up process has been dismers the collateral held. Experience asterous to the young man who has
points out that the checking of excess not straightened himself out because
collateral will prevent many large in his own mind he has gotten away
with something, and it is disastrous
embezzlements.
The savings department in a bank to both banker and the insurance
should be safe-guarded by every pos­ company. W e predict that the LIE
sible check. Inactive savings accounts DETECTOR will be as useful in the
— that is. accounts in which there are prevention of bank defalcations as
no deposits or withdrawals within a it is in detecting the loss that has al­
twelve months period — should be ready occurred.
The present situation is not hitting
under lock and key, anti a bank offi­
cial should himself make periodic the surety companies quite as hard
checkups by waiting on customers as the earlier losses which were more.

.................................... n u n ............................................................................................................................

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12

Central Western Banker, May, 1931

numerous, as most of the present
embezzlements are so staggeringly
large that the institutions suffering
them are usually far from being ade­
quately insured. A recent embezzle­
ment in an Illinois bank, announced
in the papers, amounting to over
$1,000,000 caused a run upon the
bank, and only by the immediate
action of a Chicago bank which
furnished currency by airplane was
the run stopped. This was all in the
newspapers but the interesting un­
published item was the fact that the
bank had a 10,000 fidelity bond on
the defaulting employe. This brings

up the auestion — What is an ade­
quate insurance program ?
There is being worked out at the
moment a method to measure the
amount of insurance a bank should
carry, using several factors, princi­
pally total resources, in determining
the program.
Too many banks have bought their
insurance thinking first of how much
they were going to spend and not of
what they had at risk. A bank officer
has not only his directors and his
stockholders but his depositors to
consider in arranging his protection
program and the subject deserves far

Omaha L ife Insurance Company
CAN PLACE M EN IN
MISSOURI
U N D ER EN ERG ETIC COM PETENT

more thought and study than most
officials are inclined to give it, and
after the program has been worked
out as to amounts of insurance to be
carried, the executive head should
just add fifty per cent for good
measure.
Farmers Mutual Hail

Admitted assets of the Farmers
Mutual Hail Insurance Association,
Des Moines, as of December 30, 1930,
reached the comfortable total of $1,379,312, a fine increase over last year.
The company is now in its 39th year
of operations.
Paid in losses for last year reached
a total of $490,866. Insurance in
force as of December 30, 1930, was
$52,298,326.
The Farmers Mutual Hail is writ­
ing a full coverage automobile policy,
including fire, theft, wind, hail, trans­
portation, property, collision, and lia­
bility. In addition this year the com­
pany has brought out a new horticul­
tural policy.
According to Secretary W. A. Rut­
ledge, last year was the best in the
company’s history and the company
anticipates increasingly fine develop­
ment during the current year.

ST A T E A G E N T
or
Will give General A gen t’s Contract
in certain parts of Iowa or Kansas

W . E. M cCAND LESS,
Vice-President and
Manager of Agents
OMAHA

The banks of Hitchcock County
recently perfected an organization at
a meeting held in Trenton, Nebraska,
naming G. G. Eisenhart of Culbert­
son president, and A. Thuman of
Trenton as secretary.
Business of special importance to
bankers was considered and one im ­
portant ruling was made affecting the
patrons of the bank. It is that all
banks in the count}^ will after April
1st put into effect a service charge of
50 cents per month on all checking
accounts under $50.00, if more than
three checks are written in any one
month.
Group Two Holds Meeting

Phone Harrison 5453

SCARBOROUGH &COMP ANY
175 W . JACKSON BOULEVARD

CHICAGO

Insurance Counselors to Banins
A most important subject is the bank’s own insurance, and the
program to fit the particular case should be planned by those who
know.


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Federal Reserve Bank of St. Louis

Banks Organize

W rite to us about your insurance problem

Earl C. Burdic, vice president of the
Plateau State bank of Herman, -Ne­
braska, was elected president of group
two, Nebraska Bankers association,
at the district organization’s 33rd an­
nual meeting held in Fremont. Mr.
Burdic succeeds D. V. Blatter of A l­
bion.
Norman Shaffer, cashier of the
First National bank of Hooper, was
chosen vice president and Herman
Meyer, cashier of the Farmer’s State
bank of Scribner, secretary. More than
200 bankers from 110 member banks
in 10 counties attended.

Central Western Banker, May, 1931

13

.1. G . L O W E ,
P r e s id e n t , N e b r a s k a B a n k e r s A s s o c i a t i o n

Adopt Service Charge

At a meeting of the Dakota County
Bankers’ Association, held in Dakota
City, Nebraska, all o the banks of
Dakota County adopted a schedule of
charges for services rendered similar
to the one now used by the Sioux City
banks. The Omaha and Lincoln banks
have had such a schedule of charges
in operation for some time, and the
Nebraska Bankers Association has
worked out a schedule of charges,
with the aid of a firm of expert ac­
countants, and has recommended that
all Nebraska banks adont this sched­
ule or a similar one, and almost all
Nebraska banks are now using such a
service charge schedule, not with the
idea of deriving a profit from it, but
to meet the expenses incurred in tak­
ing care of the detail work of their
customers’ accounts and business, and
in order that they may be in a posi­
tion to render the best type of service
to their patrons and the Banks of
Dakota County decided that it would
add to the standard of their business
to adopt methods that have been tried
and approved bv the efficiently oper­
ated larger banks. While the banks
of Dakota County have been con­
templating the adoption of such a
schedule of charges for some time,
their decision to put this schedule in
effect at this time was made neces­
sary by the action of the Sioux City
banks putting their charges in effect
March 1st, 1931.
Installs More Safety Boxes

The First National Bank of Chadron, Nebraska, announces the addition
of 146 new safety deposit boxes to
their vault equipment. The new boxes
were installed during the past few
days and are now ready for use. Mr.
Webster, cashier at the bank, states
that many of them have already been
rented by customers of the bank.

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Federal Reserve Bank of St. Louis

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

Weight of the new equipment to­
taled four tons. The First National
bank now has 598 safety deposit boxes
weighing 16 tons altogether.
Group Three at Norfolk

An address by S. D. Thornton, Jr.,
president of the Security State bank
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NEBRASKA GROUP MEETINGS
The remaining Nebraska Group
Meetings (Groups Two and Three
having met April 22nd) will be
held as follows:
Group 1— Beatrice________ May If)
Group 4— Hastings________June 2
Group 5— North Platte____ June 3
Group 7— Hyannis________ June 4
Group 6— Chadron________ June 5
Arrangements are being made
for a special pulhnan car to make
the last four of the above meet­
ings in one trip.
This car will start from Omaha
at 1 0 :1 5 Monday night, June 1st,
returning to Omaha Saturday
morning, June 6th, at 1 0 :4 5 .
Illllllllllllllllllllllllllillllllllllllllllllllllllllllllllllllllllllllllllllllliillllimillllllilllllllllilllllllllllllililllllllllllllll
111111111111111111•11111111111111111!111111111111111111111111111111111!11111111111111111:111111111111111111111111111111:11111111111111111111

of Neligh, Nebraska, was the main
feature of the opening session of
group three of the Nebraska Bankers
association, held in the ball-room of
Hotel Norfolk. Mr. Thornton’s talk
was on “ Cost Analysis” and he ex­
plained the basis for the charging of
service fees.
The convention, scheduled to open
at 10 o ’clock, was not called to order
by President Rollie W. Ley of
Wayne until almost an hour later.
The session was opened with an invo­
cation by the Rev. Chester Minton,
rector of Trinity Episcopal church,
after which Frederick M. Deutsch,
president of the Norfolk Chamber of
Commerce, gave a brief welcoming ad­

dress and P. A. Sullivan, Wynot, re­
sponded for the bankers.
E. H. Luikart, formerly of the Lin­
coln National bank, and now with the
state department of trade and com­
merce, spoke briefly. He commented
on the agreeable surprise it had been
to him to find the number of strong
banks and capable bankers in Nebras­
ka in his work as a banking examiner.
He said the picture of depression in
Nebraska usually painted by pessi­
mists is greatly overdrawn.
Committees appointed by President
Ley w ere: Resolutions, C. A. Smith
of Tilden, C. H. Randall of Randolph,
W oods Cones of Pierce, A. H.
Schmale of Winside and C. H. Hertert of Hartington; nominating, H. D.
Moller of Stanton, R. B. Genaways of
Neligh, R. G. Rohrke of Ploskins, B.
N. Saunders of Plainview and O. G.
Evans of Homer.
Seven Banks Pay Dividends

Dividends for the month of March
on seven Nebraska banks, paid by the
receivership division of the depart­
ment of trade and commerce, were
announced by Governor Bryan. The
First State Bank of Alliance paid
$62,919.61, a 10 per cent dividend;
Ralston State Bank, $12,200.96, a 7
per cent dividend; Security State
Bank of Wakefield, $27,292.62, a 7
per cent dividend; Farmers & Me­
chanics Bank of Havelock, $10,492.77, an 8 per cent dividend; Farm­
ers & Merchants Bank of Ulysses,
$7,060.19, a 4 per cent dividend; First
State Bank of Ulysses, $8,747.71, a
3 per cent dividend, and the State
Bank of Minatare, $26,205.77, a 14
per cent dividend. A total dividend of
$154,919.63 was paid by the banks in
the state operating under the receiverdivision for the month of March.
To Reorganize

Depositors committee of the Ne­
braska State Bank of West Point
plans to call a meeting of depositors
to organize preparatory to opening a

14

Centrai Western Banker, May, 1931

new bank. Directors elected include
G. T. Collins, Gerhard Stalp, Earl

Reppert, J. A. Jerman, and W . T.
Knievel.

United States National Bank
O M A H A
“ An Unbroken Record o f Seventy Years
is a Guarantee o f Safe and
Satisfactory Service”

Sloan Elected President

The office of president of the Gen­
eva State Bank, Geneva, Nebraska,
left vacant by the death of Edward
T. Dempster, was filled when Charles
FI. Sloan, vice president, was elected
to the presidency. Cashier Earl IT.
Wilkins was made vice president. As­
sistant cashier Carl E. Schneider was
elected cashier to succeed Mr. W il­
kins, and Melvin L. Ralston was
elected assistant cashier. Frank O.
Edgecombe was elected director.

OFFICERS:
W. B. T. B elt, Chairman of the Board
R. P. M orsman , Chairman Executive Committee
G. H. Y ates , President
S. S. F ord, Vice President
H. M. B ushnell , Vice President and

Trust Officer
J. C. M cC lure, Vice President
T. F. M urphy , Vice President
P. B. H endricks, Vice President

New Bank Building

Work on a new home for the Bank
of Rulo, Nebraska, to replace the
structure destroyed by fire several
weeks ago began last month.
It will be a one-storv building with
a front of red face brick. It will have
a front footage of 25 feet and will be
50 feet deep.
For a time there was some talk of
making it a two-story affair to give
quarters above the bank for the Odd
Fellows lodge, but that plan had to
lie given up.

C. F. B r in k m a n , Assistant Vice Pres.
V . B. Caldwell, Assistant Vice Pres.
R. R. R a in e y , Cashier
H. E. R ogers, Assistant Cashier
A. L. V ickery, Assistant Cashier
H. W. Y ates, Assistant Trust Officer
J. F. R ingland , Assistant Cashier

Bank Reorganizes

Announcement is made of the reor­
ganization of the Commercial State
Bank of Grand Island, Nebraska, and
the changing of the name to the Com­
mercial Bank of Grand Island. Out­
side capital is b eir- brought in in the
sum of $135,000 Iw Edward Huwaldt, formerly of Omaha, and who
during the years of 1914-15, was a
member of the Grand Island high
school faculty. Mr. Huwaldt will be
one of the active heads of the new
organization, being elected to the o f­
fice of vice president. David Kauf­
man is the president of the new com­
pany.

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

“ A

Bank for B ankers”

Our consistent growth and progress, contributed to
largely by our correspondents throughout Nebraska, is
indicative of the careful service and prompt attention
rendered them.

Falls City Banker Dies

W e solicit the accounts of Banks and Bankers, offer­
ing every facility and service.

Bert K. Baker, 49, an important
financial figure in southeast Nebras­
ka, died suddenly at his home in Falls
Citw Nebraska, last month of heart
disease. He was vice president of the
Richardson County Bank.

O F F IC E R S
C H A S. T. K N A P P , C h a irm a n o f th e B oa rd .
E D W IN N. V A N H O R N E , P r e s id e n t
W . S. B A T T E Y , A sst. V ic e -P r e s .
T B. S T R A IN , V ic e -P r e s id e n t
R A Y C. JOH NSON, A sst. V ic e -P r e s .
E D W A R D A. B E C K E R , C a sh ie r
W H E A T O N B A T T E Y , A sst. C ash ier.

Reorganizes Bank Force

l
j

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

I

(EST. 1903)

TYPEWRITERS, ADDING MACHINES, CHECK WRITERS
LATEST MODELS AT RIG DISCOUNT

j

ASK TO SEE

A¥

I r ’ TYT \ \ J A I C C

A L L c n -W A LU j
1912 Farnam St.

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Federal Reserve Bank of St. Louis

THE FINEST

“HEAVY DUTY”

a d d in g m a c h in e m a d e

j
j

Omaha, Nebraska j
_____________

The Farmers and Merchants Na­
tional Bank of Ashland, Nebraska, of
which the late Hugo A. Wiggenhorn
was the president, has reorganized the
staff of bank officers made necessary
by the death of Mr. Wiggenhorn.
Ernest Wiggenhorn, formerly vice
president of the bank, has been
named as president to succeed his
late brother in the office while Airs.
Edwin A. Fricke, daughter of the late
Mr. Wiggenhorn, has been named as
director of the bank. Other officers
named were W . E. Harnsberger, vice
president, Arthur Pancoast, director,

15

Central Western Banker, May, 1931
while Edwin A. Fricke, formerly of
Plattsmouth, has been named as cash­
ier of the bank.

File Suits

Two suits asking injunction to
prevent payment of money to the de­
positors final settlement fund in Ne­
braska, were filed in the district court
of Lancaster County in the middle of
April.
William G. Barber filed one suit on
behalf of the depositors in the Bank
of Florence at Omaha. William F.
Kuhr filed the second on behalf of
the depositors of the Home State
Bank at Kennard, Nebraska.
Governor Bryan and the secretary
of the Department of Trade and
Commerce are the defendants in the
suit.
Both banks in the suit were reor­
ganized under the statute enacted by
the legislature two years ago whereby
the depositors permit their deposits
to be scaled down. The depositors
complain that the money for the set­
tlement fund should be paid by the
stockholders instead of taken from
depositors.
The settlement fund is that for
which the special session of legisla­
ture, in 1929 when it repealed the
bank guaranty law, provided a tenyear levy on the average deposits of
the state banks, the proceeds to go
into the fund for repaying, as far as
possible, the depositors in failed
banks under the guaranty law.

Heads Group Two

Earle C. Burdic, vice president of
the Plateau State Bank of Herman,
Nebraska, was elected president of
Group No. 2, of the Nebraska Bank­
ers Association, at the annual meet­
ing, held as usual, on Arbor day,
April 22, at Fremont.
He succeeds D. V. Blatter, Albion,
Nebraska.
The other officers of the Group are
Norman Shaffer, who is cashier of
the First National Bank of Hooper,
vice president ; Herman Meyers,
cashier of the Farmers .State Bank of
Scribner, secretary.
More than two hundred bankers
of the 110 member banks in the ten
counties of the group attended the
meeting.
After an invocation by Rev. H. P.
Schenck, Mayor Rohmof, Fremont,
welcomed the bankers as the con­
vention opened at the Pathfinder
Hotel. Mr. Burdic responded to the
welcome address.

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Federal Reserve Bank of St. Louis

banking practices and giving too
much credit in times of thriving bus­
iness.”
John S. McGurk, president of the
South Omaha State Bank, conducted
a question box, taking the place of
E. F. Folda, who for years has con­
ducted question boxes at bankers’
gatherings in Nebraska.
Others on the program were Pro­
fessor H. C. Folly of the State Uni­
versity College of Agriculture; J. M.
Sorensen of Fremont, and Ed Polley
of Lincoln. Dale Milliken was ban­
quet toastmaster. Dr. Charles Dur­
den of Omaha spoke.

In his annual report President
Blatter reviewed the banking prob­
lems of the year. The secretary’s
report was also read.
T. B. Strain, vice president of the
Continental National Bank of Lin­
coln, Nebraska, talked on “ Depres­
sion: Its causes and Remedies.”
He discussed business crises of the
past, similar to those of the present
time.
He said legislation on un­
economic lines could not cure depres­
sion.
“ The bank failures,” said Mr.
Strain, “ would probably have occur­
red in any event, due to unsound

Experience
that only years can bring

t
THE FIRST NATIONAL BANK
AND

THE FIRST TRUST COMPANY
OF

LINCOLN, NEBRASKA
“ Since 1871’ ’

16

Central Western Banker, May, 1931
State Banks in Fine Condition

The nine state banks of Lincoln
county, Nebraska, were called upon
to render a statement of their condi­
tion at the close of business on April
11. The total capital stock of the nine
banks is $245,000 which is just the
same as a year ago. The total surplus
is $55,500 which compares well with
$51,000 a '''ear ago. The undivided
profits is $42,046.96 while a year ago
this amounted to $35,385.00. The
total deposits in these nine banks is
$2,176,560.76. These figures do not
include any but state banks.
New Bank at W est Point

The Farmers’ and Merchants’ bank
is the name of the new bank which

opened its doors. It has taken over 50
per cent of the deposits of the old Ne­
braska State bank and starts business
with a sound financial standing as
seen by the following statement: as­
sets, loans and discounts, $49,105.59;
banking house and fixtures; cash,
$130,796.13 Total $193,401.72. Lia­
bilities, capital, $50,000; surplus, $10,000; deposits, $133,401.72. Total
$193,401.72.
G. T. Collins is president, Gerhard
Stalp, vice president; W. T. Kneival,
cashier; Dorthea Reppert, assistant
cashier.
The board of directors is G. J. Col­
lins, Gerhard Stalp, Earl Reppert,
Joseph A. Jensen, and W . T. Ivnievah

Bank Merger at Gresham

The First National Bank of Gresh­
am, Nebraska, merged with the
Gresham State Bank last month. The
officers and directors of both banks
thinking that the consolidation of
these two good banks would be for
the best financial interest in this communitv and could in this way better
serve the patrons of both banks. The
bank will operate under the name of
Gresham State Bank with the followino- officers.
Robert Heineke. Chairman of
Board; David Yung, president; IL K.
Diers, vice president; Arthur Walford, cashier; Arnold Inner, assistant
cashier.

Retires from Bank

In step with a
quick-step age
The modern world won’ t wait.

apparatus and operating methods,

It is hungry for speed. With the

and by the development of special

telephone it gets speed — actually

services such as overseas, ship
to shore, teletypewriting and

miles per second.
The telephone is in step with

telephotography.

the age. Its use has grown steadily,

Progressive response to the

and with it Beil System facilities.

trends of the day is one reason

Plant investment in 1900 was

why the Bell System has been

$181,000,000; today it is more

able to make dividend payments

than $4,000,000,000.

without interruption.

The urge for speed is being

May we send you a copy of our

answered by improved telephone

booklet 44Some Financial Facts ’ ’ ?


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Federal Reserve Bank of St. Louis

Edward Huwaldt of Carroll, Ne­
braska, has announced his retirement
from his duties as an active officer of
the Carroll State Bank. Mr. Huwaldt
has been vice president and manager
of this bank for a number of years
and has placed the institution on a
sound financial foundation and on a
dividend-paving basis. Mr. Huwaldt
has not made known his future plans
beyond the fact that he continues to
have a stock interest and will retain
a personal interest in the bank and its
welfare. He continues as vice presi­
dent and director, but not in a man­
aging capacity
A. R. Cochran of Sterling, Colo­
rado, a practical banker of experience,
has acquired a substantial interest in
the Carroll bank and will manage its
affairs, assisted by N. M. Patton, also
of Sterling, and previously associated
with Mr. Cochran as cashier. Vaughn
G. Williams continues as assistant
cashier.

BELL TE L E P H O N E
S E C U R IT IE S CO. Inc.
1 95 Broadway, New York City

Dies on Pacific Coast

J. C. Bassett, 65, pioneer South Da­
kotan, chairman of the board of the
Aberdeen (S. D.) National Bank and
Trust company and a director of the
Ninth District Federal Reserve bank
and the P'irst Bank Stock corporation,
died in a hospital in Los Angeles, last
month.
Stricken with an abdominal ailment
while spending the winter in Califor­
nia, Mr. Bassett had been ill several
months.
Surviving are his widow, a son,
Clarke of Aberdeen; and three daugh­
ters, Mrs. Dale Goldthwaite of Yank­
ton, S. D., Mrs. Clarence Boteler of
Huron, S. D., and Mrs. Earl Wilkin­
son of Oak Park, 111.

Central Western Banker, May, 1931

17

News of the Omaha Stock Yards
Calf Crop Normal

The spring calf crop in the eastern
end of the Sandhills of Nebraska is
not only of usual proportions this
year, but the calves as a whole are
heavier and stronger than usual, ac­
cording to the ranchmen in that area.
As one drives through the cow herds
he can see that the little fellows are
an unusually sturdy lot and that weak
calves are the exception. Ranchers be­
lieve that the mildness of the winter
was responsible for this.
The size of crop in numbers will be
right around normal in the eastern
part of Cherry county where the re­
cent blizzard was not severe. Although
some lost no calves in the storm, most
of the ranchers lost a few head, but
not enough to materially decrease the
total number. The heaviest losses
seemed to be among the yearling cat­
tle and the older cows. Most of the
calves killed were those that were born
during the storm.
When the ranchers were asked what
they intended to do about the selling
of their cattle this year, a variety of
answers were given. Many intend to
follow their policy of recent years and
sell the calves. Others thought they
would winter the calves themselves if
they have a good hay crop this year.
And in many cases the men said that
they intended to hold back more of
their heifer calves than usual as they
had been selling too many of their best
heifer calves the last year or two, at
the expense of their cow herds.
The hay crop last year was just
about right size to fill the winter’s
needs. Some of the ranches will have
a small carryover. In other places the
cattle were skimped through the last
week or two or else hay had to be pur­
chased. The meadows are making a
good early growth and many of them
are being pastured at the present and
are furnishing a lot of good early
feed. The hill pastures, however, have
not advanced so rapidly and a good
warm rain would be beneficial.
South Dakota Using More Horses

It is estimated that tractor and
horse-power in farming operations in
the west river district of South Da­
kota is on a 50-50 basis this season,
whereas last year tractor power was in
the lead. Reduced prices of grain and
resulting necessity of repossession of
numerous tractors by companies is
given as the reason.


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Federal Reserve Bank of St. Louis

This calls for an increase in the
number of horses used in farming op­
erations, as well as a decrease in acre­
ages farmed.
In the Presho county, however, ex­
tensive tractor operations are being
carried on by J. E. Stanley, who has
increased the number of tractors used
on his farm. He has more than 1,000
acres of winter wheat which has come
through in fine shape. He has put
in several hundred acres of spring
wheat and will break up 600 acres of
land for Hax. He will plant 460 acres
of corn.
Cattlemen to Meet at Alliance

Secretary - Treasurer F r a n k M.
Broome of Alliance has sent out a
prospectus of the Forty-first annual
convention of the Nebraska Stock
Growers’ association to be held in that
city Wednesday, Thursday and Fri­
day, June 10, 11 and 12.
Alliance has always been the head­
quarters for the Nebraska cattlemen
and most of the association’s meetings
have been held there, but North Platte
in 1924, Broken Bow in 1926, Ogallala in 1928, Valentine in 1929, and
Chadron in 1930 demonstrated that
other places also welcome the asso­
ciation conventions. The Alliance peo­

ple, however, are always glad to have
the stockmen there and will see that
that they have a good time.
The tentative program arranged by
President Robert Graham and Secre­
tary-treasurer Broome is a most com­
prehensive one showing the many and
varied interests in which the modern
stock grower is concerned. Producing
high grade cattle for the Corn Belt
feeders and the meat packers is only
one of the activities occupying the
thoughts of the cattlemen of Ne­
braska.
Included in the addresses scheduled
to be delivered by outstanding speak­
ers will be papers on transportation,
stock yards, markets, banking stock
inspection, market reporting, veterin­
ary matters, meat packing, breeding,
feeding and care of cattle, prospects
for profits in 1931 and a number of
related subjects in which every stockman has a vital interest.
As usual, ample provision has been
made for the entertainment of the
visiting stockmen and their ladies, the
banquet in the R oof Garden, Thurs­
day evening at which Harry Coffee of
Chadron will preside, being an event
always looked forward to at stock
meetings. The forty-first annual con­
vention at Alliance in June promises
to be a most important as well as
enjoyable affair for the stockmen of
the state.

OFFICERS
F O R D E. H O V B T , P re s id e n t
L. K . M O O R E , A sst, to P res.
JAS. B. O W E N , V ic e -P r e s .
H. C. M IL L E R , A sst. C a sh ier
F. J. E N E R SO N , V ic e -P r e s .
C. L. O W E N , A sst. C a sh ier
W . H. D R E S S L E R , C a sh ie r
H E N R Y A. H O V E Y , A sst. C ash.
T. G. BOGGS, A u d ito r

‘TOCK YARDS NATIONAL SERVICE has a sig­
nificance which is best realized by the many cor­
respondents who have availed themselves of it.
We would appreciate an opportunity to demon­
strate it to you.

Stock Yards National Bank of SouthOmaha
Affiliated with the Northwest Bancorporation

The Only Bank in the Union Stock Yards

Central Western Banker, May, 1931

18
ploye who is familiar with banking de­
tail by using the accountant’s report
as a guide.

B A N K A N A L Y S IS AN D
G E N E R A L O PER AT IVE COSTS
(Continued from Page 9)

tain a comprehensive picture of the
business as a whole. It will show by
comparison with other banks the op­
erating expense of each department,
the item and transaction costs and the
earnings and expense of the various
fund groups and revenue-producing
departments. The outside accountant
need be employed for only one such
survey, however, as future surveys
can be made by any competent em­

T H E benefits that can be derived
A from analyses are many. Cost anal­
ysis, the most essential of all, will, as
I stated before, furnish a complete
picture of our departmental expense
and thereby aid us in keeping that ex­
pense at a minimum. It will furnish
accurately our item and transaction
costs and the necessary information
to arrive at the actual earning and ex­
pense of each fund group and rev­

enue - producing department of our
bank. It will furnish the basic figures
for comprehensive and worth while
account analysis, for an equitable and
profitable service charge on small ac­
counts. Analysis will reveal accurately
the cost of producing our service or
cost that we are paying for our de­
posits and thereby enable us to arrive
at a fair and profitable “ selling” price
for these commodities. All of these
things will naturally result in in­
creased earnings, either by effecting a
reduction in costs or an increase in
gross revenue, or both.

■I

!■

!■

■I

Condensed Statement March 2 5 , 1 93 1

V

RESOURCES

r
■I

$2,617,005.94
522,347.09
987,302.28
16,500.00
59,000.00

Loans and Discounts . . . .
Marketable Bonds and Securities
U. S. Government Securities .
Stock in Federal Reserve Bank .
Banking House and Fixtures
Other Real E s t a t e .......................
Cash and Sight Exchange

1.00

1,751,105.14

LIABILITIES
.............................................
Capital
Surplus
..............................................
Undivided Profits, N e t .......................
Unearned D is c o u n t............................
Reserved for Taxes, Interest, etc. .
Reserved for Dividend
Payable March 31, 1931 .
D e p o s i t s ..............................................

$5,953,261.45

■I

$

450,000.00
10 0 , 000.00

82,923.88
29,372.33
54,658.90
9,000.00
5,227,306.34
$5,953,261.45

LIVE STOCK NATIONAL BANK OF SOUTH OMAHA
UNION STO CK Y A R D S - O M AH A
All Collections Handled Promptly
OFFICERS

■a

W. P. ADKINS, President
ALVIN E. JOHNSON, V. President
HOWARD O. WILSON, Cashier
R. H. KROEGER, Asst. Cashier
L. V. PULLIAM, Asst. Cashier
W. S. HOGUE, Asst. Cashier

AUSTRALIA

BANK OF N EW SO U T H W ALES
E S T A B L IS H E D
(W ith

w h ic h

is a m a l g a m a t e d

THE

1817

W ESTERN

A U S T R A L IA N

BANK

$37,500,000

P A I D - U P C A P I T A L ------------------------------------------------------R E S E R V E F U N D ----------------------------------------------------------R E S E R V E L IA B IL IT Y O F P R O P R IE T O R S —

3 0 .7 5 0 .0 0 0
3 7 .5 0 0 .0 0 0
$ 1 0 5 ,7 5 0 ,0 0 0

Aggregate Assets 30th September, 1929, $454,031,485
A G E N T S — F IR S T

N A T IO N A L

BANK,

OM AHA,

NEBRASKA

H E A D OFFICE, GEORGE ST., S Y D N E Y
5 8 8 B r a n c h e s a n d A g e n c i e s in a ll A u s t r a l i a n


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Federal Reserve Bank of St. Louis

GENERAL

M ANAGER, ALFR ED

CHARLES

D A V ID S O N

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

S ta te s, F e d e ra l T e r r ito r y , N ew
N e w G u in e a , a n d L o n d o n .

Z e a la n d ,

F iji,

Papua,

M a n d a te d

T e r r ito r y

of

19

Central Western Banker, May, 1931
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|South Dakota News j
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Prepare Group Programs
The programs for the South Dako­
ta Group Meetings which will start
on May 9th at Huron and end on
May 18th at Belle Fourche, promise
many interesting features for the
South Dakota Bankers and others
who are fortunate enough to attend
this series of meetings.
The committee in charge of the
meeting of Group 3 to be held in M it­
chell, has reversed the order of hold­
ing their meeting by having all pre­
liminaries out of the way on the
afternoon of May 14th and holding
the main portion of their program in
the evening.
The important events of each of
the programs so far received are as
follow s:
M

eeting

G roup
D., M a y

oe

3, M i t c h e l l . S.
14, 1931

'2:00 p.m .— Golf
4:00 p. m .—Registration at Country Club
House
4:15 p.m .—Business Meeting and Smoker
Appointment of Committees
Special entertainment for the ladies at
4:15 p .m ., Metropolitan Theatre
6 :30 p. m .— Banquet —- Masonic Temple —
Eastern Star Ladies
Music—McDonald String T r io - Helen,
McDonald, Carroll Whitcomb, Lucille
McDonald
Address—Chairman, W. H. Shaw, Pres­
ident, Hutchinson County Bank, Parkston, S. D.
Male Quartet—Dakota Wesleyan Uni­
versity
Address—Mr. A. B. Cahalan, President,
South Dakota Bankers Association,
Miller, S. D.
Address—Mr. Harry Yaeger, Deputy
Governor, Federal Reserve Bank, Min­
neapolis
Address—Mr. B. V. Moore, Vice Presi­
dent, First Minneapolis Trust Com­
pany
Report of Committees
Election of Officers
M

eetin g

D., A

of

G roup

u d ito riu m ,

4, M i l b a n k :, S.
a y 12, 1931

M

9 :00 a . m .—Registration — Appointment of
Committees
9:00 to 12:00—Golf tournament
1 :30 p.m .—Music
Invocation—Rev. Arthur Mayer
1:45 p. m .—Address of Welcome—Robert
Bull, president of Milbank Commerce
and Community Club
Response — D. H. Lightner, Aberdeen,
S. D.
2:00 p.m .—Remarks—A. B. Cahalan, Mil­
ler, President, South Dakota Bankers
Association
2:15 p.m .—Announcements—Geo. A. Star­
ring, Hurron, Secretary South Dako­
ta Bankers Association
2:30 p. m .—“ Float Charges”-—F. B. Stiles,
Watertown
Music

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Federal Reserve Bank of St. Louis

2:45 p.m .—“Loan Policies”'—L. A. Jacob­
sen, Bryant
3 :0 0 p .m .—“ Analysis of Accounts and Per
Item and Service Charges” by Don W.
DeVey, Westport
3:20 p. m .—“ Interest Rates on Deposits”—
by Charles Carpenter, Clark
Discussion invited on each subject above
3:40 p. m .—“ Our State Coal Mine”—J. W.
Parmley, Ipswich, Commissioner of
South Dakota Coal Mine Commission
3:50 p. m .— Selection of 1932 meeting place
6 :30 p. m .'—Banquet—Milbank Auditorium
—J. H. Kissinger, Hecla, Toastmaster
Music and entertainment for the eve­
ning by artists from Watertown School
of Music

10:00 p. m ., — Adjournment
Hotel Ball Room
G roup 6

at

M

ob r i d g e ,

10:00 a m . to 1:00

for
M

ay

dancing,

11, 1931

p. m .— Registration

at
Brown Palace Hotel
1:30 p.m .— Meeting at Odd Fellows Hall
Address of Welcome—Julius Skang,
President of Mobridge Commercial
Qub
Response—Jacob Jelm, Java
“ Agricultural Outlook for South Dako­
ta”—Dr. T. E. Dinwoodie, Editor,
Dakota Farmer, Aberdeen
“ South Dakota Coal”—Hon. J. W. Parmlee, Ipswich
“ General Bank Conditions”-—M. Plin
Beebe, Ipswich
“ World Wheat Market”—C. W. Cross,
Aberdeen
“ Float and Service Charges” —Wm. O.
Anderson
Association Report—A. B. Cahalan, Mil­
ler, President South Dakota Bankers
Association
Round Table Discussion
Report of Committees
Election of Officers
6:30 p. m .—Banquet at Brown Palace
Hotel, C. H. Belknap, Toastmaster

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111!1111til 1111111111111111111m 11111111it11111nm 111111111111111111111i11111i n 111)11111111111111111111:1111-111:1111:11111111111111111

SOUTH DAKOTA GROUP
MEETINGS
Group Place
Date
Five— Huron _____________May 9
Six— Mobridge ___________ May 11
Four— M ilb a n k _______________May12
Two— Madison ___________ May 13
Three— Mitchell __________ May 14
One— Wagner _____________May 15
Seven— Belle Fourche_____May 18
iiiiiii|iiiiiiiiii:miiii:iii:iiiiii!iiiiiiiiiiii|iiiiiiiiiiiini’iiiin!iiiiiii:iiii:imiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii(iiiiiiliiiiiiiii
lllllll'llllllllllllllllllillllllllilllllllllllllllllllllllMllllllitiillllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

Address—“ Agriculture in Russia and in
the Northern Great Plains of Ameri­
ca”
Reading—“ The Last Two Per Cent”-—
—Ruth Hunter, Milbank
Address by South Dakota’s Will Rog­
ers—“ Andy” Palm, Huron
Address—E. A. Ruden, Pierre, State Su­
perintendent of Banks
Report of Committees and election of
officers

M eeting of Group 5, H uron, M ay
9, 1931, M arvin H ughttt H otel
5:00 to 6:00 p. m .—Registration and ap­
pointment of Committees
6:30—Banquet at Elks Hall, Marvin
Hughitt Hotel
Invocation—Rev. F. E. Lockridge, Pas­
tor, First M. E. Church, Huron
Address of Welcome—B. F. Patton,
President Huron Chamber of Com­
merce
Response'— Russell
Bard,
President,
Group 5, Miller, S. D.
Coal in South Dakota—J. W. Parmley,
Commissioner South Dakota Coal
Mining Commission, Ipswich
Violin Solo—Elaine Larson, Lake Pres­
ton
“Laws”—I. A. Churchill, Attorney for
South Dakota Bankers Association,
Music— Courtesy of Huron College
“ Reminiscences of a Pioneer Banker”—
A. Kopperud, V. P., Federal Land
Bank, Omaha, N>eb.
Dance—Irish Sisters, Huron
“ The American Ideals”—L. G. Troth,
Secretary of Agriculture, Pierre
Open Forum, report of committees,
election of officers

Complete Program for State
Association

George A. Starring, secretary of
the South Dakota Bankers Associ­
ation, in a bulletin mailed on April
17th has given the members of the
South Dakota Bankers Association
the complete program for the state
convention to be held in Huron, June
24th, and 26th. He urges all mem­
bers to make their reservations early
in order that they may be assured
suitable hotel accommodations.
The list of speakers is practically
completed and includes the following:
Warren E. Green, Governor of South
Dakota; James E. Clark, editor
American Bankers Association Jour­
nal ; Theodore Christianson, O. B.
McClintock Company; Herbert V
Prochnow, vice president, First NaW ood, vice president, Foreman-State
Corporation, Chicago; L. G. Troth,
South Dakota Secretary of Agri­
culture ; Bruce Barnes, South Dakota
State Sheriff ; E. A. Ruden, South
Dakota Superintendent of Banks.
The program as outlined by Mr.
Starring is as follows :
Wednesday, June 24
10:00 a. m. Golf Tournament—Huron Country Club.
Thursday, June 25
10:00 a. m. Morning session, Mar­
vin Hughitt Hotel.
1 :30 p. m. Afternoon session,
Marvin Hughitt Hotel.
7 :30 p. m. Evening session, Mar­
vin Hughitt Hotel.
10:00 p. m. Dance, Huron Country
Club.
Friday, June 26
10:00 a. m. Final session, Marvin
Hughitt Hotel.
Noon Adjournment.

20

Central Western Banker, May, 1931

Colorado News
r iMIIIIIIIIIIIIIIIIIIIIIIIIII|||||||||||||||||||||HIIIIIIMIIIIIIIIIIIIinilllllHllli:tllllllllllllllllllllllllllllllllllllllllllllillllllllllllllllllllllllllllllllllllllillll|||||||||Hlllllllllllllllllillll||||||||||||l|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||,=

Organize Clearing House

would be held on the second Satur­
day of every April.
The organization will meet, in the
meantime, subject to the call of the
president.
It was reported that all the bankers
expressed approval of the Saturday
afternoon closing of the institutions.
They may put it into effect this sum­
mer. The Boulder banks are closed on
Saturday afternoons throughout the
year.

Organization of the Boulder Clear­
ing House, with all 11 banks in the
county as members, was completed
at a meeting in Longmont, Colorado,
at which representatives from the va­
rious financial institutions were pres­
ent.
Robert W. Joslyn, of the Mercan­
tile Bank, Boulder, was elected pres­
ident; W . E. Letford, First National
Bank of Longmont, vice president,
and J. Harrison Gibson, First Na­
tional Bank of Boulder, secretarytreasurer.
An executive committee is to be
appointed, to consist of one represen­
tative of all 11 banks.
State Senator Theodore Lashby, of
Boulder, gave an address at the meet­
ing, setting forth the necessity for a
new “ Blue Sky” banking law in Col­
orado.
“ The Boulder County Clearing
House banks will co-operate in aiding
customers, and to protect their
funds,” President Joslyn said.
It was decided that the annual
meeting of the newly-formed body


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Federal Reserve Bank of St. Louis

T
C

h ase

N

Pioneer Banker Dies

Frank G. Bloom, 83 years old, for
forty-three years vice president of
the First National Bank of Trinidad,
Colorado, and one of the pioneer res­
idents of southern Colorado, died re­
cently after a long illness.
Salida Banks Merge

The Commercial National Bank, of
Salida, Colorado, with a capitalization
of $50,000 and deposits of $480,000,
was merged with the First National
Bank, which has a capitalization of
$100,000 and deposits of one and onequarter million dollars.

he

a t io n a l

Bank

o f the C ity o f N ew York
P i ne S t r e e t c o r n e r of N a s s a u
»«

Capital
. . . $ 148,000,000
Surplus and Profits
211,000,000
D eposits . . . 1,883,000,000

Horatio Preston, brother of Orlan­
do Preston of the First National
Bank in Denver, is president of the
First National Bank. Aylmer Reeves
is cashier.
The merger, bank officials said, is
in line with the present national ten­
dency toward bank mergers. State
bank examiners indorsed the deal.
Building New Bank Vault

The Farmers State Bank of Yuma,
Colorado, has installed a new vault
at the rear of the bank building. Con­
struction is of reinforced concrete
and the walls are of such width as to
safeguard contents from fire or other
hazard. The room is 7x10 feet in size
and will be used as a safety deposit
vault.
Bank Debits Decline

Colorado Springs is the only city
in the tenth federal reserve bank dis­
trict whose bank debits show an in­
crease in March, it is shown in the
report of the Kansas City governor.
There are 29 cities reporting in the
district, and of this number 29 showed
declines, Colorado Springs being the
only exception. The increase here
was 1.9 per cent.
4 Wks. End.
Pet.
Mar. 4, 1931 Chg.
Albuquerque, N. M. ....------$
10,391,000 — 11.0
Atchison, Kan. ____________
4,420,000 ■
— 24.3
Bartlesville, O kla.__________
17,838,000 — 13.7
Casper, W yo...... ............... ....
4,698,000 — 23.2
Cheyenne, W yo__ ___________
5,042,000 — 8.6
Colorado Springs, Colo-------12,954,000
1.9
Denver, Colo...... ........
127,323,000 — 19.4
Enid, Okla.......
9,633,000 — 23.7
Fremont, Nebr__ _____ ....
3,125,000 •
— 21.4
2,360,000 -— 14.3
Grand Junction, C o lo .-------Guthrie, Okla....................
2,097,000 — 34.4
Hutchinson, Kan. __________
14,476,000 — 29.7
7,274,000 —42.6
Independence,
Kan. _______
Joplin, M o....... ........
7,394,000 — 32.1
Kansas City, Kan---- -----------13,594,000 •
— 24.5
Kansas City, M o______ __
298,032,000 -—21.6
Lawrence, Kan_____________
4,175,000 •
— 13.1
Lincoln, Nebr.... .............
27,717,000 — 13.1
Muskogee, Okia____________
7,544,000 ■
— 24.8
Oklahoma City, Okla. ...........
90,354,000 — 22.4
Okmulgee, Okla----------------3,286,000 •—43.6
Omaha, N ebr..__ ____
162,346,000 — 21.9
Pittsburg, Kan. .
4,498,000 — 19.5
Pueblo, Colo_______________
14,300,000 — 13.3
Satina, Kan.......
10,097,000 — 11.0
St. Joseph, M o_____ _
36,166,000 ■
— 25.3
Topeka, K an .............— .....
18,215,000 — 7.2
Tulsa, Okla__________
99,590,000 — 26.8
Wichita, Kan. ____________
47,139,000 •
— 34.8
Total 29 cities 4 weeks.
$1,066,078,000 •
— 22.3
Totai 29 cities 9 weeks---- .. 2,535,186,000 ■
—-19.6

Denver Gets 1932 Convention

T he Chase National Bank invites
the accounts of banks, bankers,
corporations, firms and individuals.
»«
General Banking • Trust Department
Foreign Department

Denver was selected as the 1932
meeting place of the Association of
Reserve City Banks, at the closing
session of its annual convention at
Richmond, Virginia.
Clark G. Mitchell, vice president of
the Denver National bank, was elect­
ed association treasurer.
The association is a subsidiary of
the American Bankers association and
its membership is composed of bank­
ers designated by the federal reserve
bank at reserve cities.

21

Central Western Banker, May, 1931
¿iiiiiiiiiiiiiiitiiiii)iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiitiiiiiinitiiiiiiiiiiiiiiiiiiiiiitiitiiiiMiiitiiiiiitiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii!iiiiiiiiiiiiiiiiii!iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiitiii!iiiiiiiiiitiiiiiiiiiiiiiiiiiiimiiiiiiiiiiiiiiimmiiiiiiiimmiiiiiiiinj

W yoming News
^liuilllllllllllllllllllllllllllllllllllllllllllllllliuilllllllllllllllllllllllllllilllllllllllltllllllllllllllllllllllllllllllllllllllllllllllllltlllllllllllllllltllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllillllllllllllllillllllllllitlllisillllllllllllllllllllllli^

Wyoming Banks Stronger

Despite a slight decrease in deposits,
Wyoming state banks are in a stronger
position today than they were a year
ago, John A. Reed, state bank exam­
iner, said in his quarterly report.
The reserve assets of the fifty-seven
state banks in Wyoming showed a
total reserve of $27,622,317 on March
25. While it was a net decrease of
$2,391,649, it was also a 1 per cent
increase in reserve position or in the
ratio between deposits and reserve.
The reserve is now 21 per cent and
the ratio between surplus and deposits
is now sixteen to one. The decrease in
deposits since Dec. 31, 1930, was $2,103,715.
Twenty-five national banks in the
state reported a total reserve of $39,897,995. This is a decrease of $1,359,092 from a year ago.
The total reserve of all Wyoming
banks is $67,520,312.

200,000. Cash in banks was increased
more than $2,000,000, evidence that
the banks are making their condition
much safer than ever before.
Total resources fell off during the
period more than $4,000,000. This was
due to the failure of four banks and
the withdrawal of deposits subject to
check. This decrease was from $29,-

023,432 in 1930 as compared with
$24,221,420 this year. While deposits
subject to check decreased, time cer­
tificates and savings deposits increased
more than $1,000,000. Bills payable
and rediscounts were reduced by more
than $600,000.
Total resources at the close of bus­
iness March 25 were $130,360,060, as
compared with $134,380,144 for the
same period last year.
Loans and discounts amounted to
$81,273,695 in 1931 and $89,364,228
in 1930. Stocks, bonds and securities
jumped from $22,275,846 in 1930 to
$24,453,199 in 1931.

The Morrison is the
Iattest hotel in the
world — 46 stories
high — with 1,950

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

Honored by Bankers

George A. Bible, cashier of the
First National Bank of Rawlins, W yo­
ming, was appointed to the executive
committee of group No. 1 of the W yo­
ming Bankers Association at a meet­
ing in Cheyenne last month.
It was an organization meeting of
the group formed as a more closelyknit sub-division of the state associa­
tion. The group organization is con­
fined to the 18 banks in the five south­
eastern counties of Wyoming, which,
geographically and economically, have
similar interests and industries.
In addition to Mr. Bible, R. A.
Logan, Homer France, and N. R.
Greenfield attended the meeting from
Rawlins; Fred Healey from Saratoga;
S. D. Briggs from Hanna; and R. R.
Finkbiner from Medicine Bow. Don
Wageman of Cheyenne was elected
president of the group, which will hold
its annual meetings in conjunction
with the state organization.
Loans Decline

Banks of Utah continued to de­
crease loans and build up their re­
serves during the past quarter, it is
shown in the consolidated statement
of 81 state banks, made public by
State Bank Commissioner, W . H.
Hadlock.
Loans were reduced more than $8,000,000 as compared with the same
period last year, and secondary re­
serves were increased more than $2,-


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

Chicago’s

M O R R IS O N H O T E L
t a l l e s t H otel in th e W orld
46 S tories H igh

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

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

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

22

Central Western Banker, May, 1931
^iiiHiiiiiiiiiiiiiiiiiiiiiiiniiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiHiiMiiiiiiiiiiiiiiiiiiiiiiiiiiiiii::tiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiniiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiMiHiiiHitiitiiiiiiiiiiiiiiMiH

Bankers W ants
This Bankers Wants Depart­
ment is for the free use of Central
Western Banker subscribers. To
all others a charge of five cents
per word per insertion will be
made.
W e reserve the right to
edit all copy or to reject such ad­
vertisements that we deem unsuit­
able. Address all communications
to the Bankers Wants Department,
Central Western Banker, Omaha,
Nebraska.

Position wanted. Married man, 40 years
old, with 15 years’ practical experience
in country banks, seeks employment
with bank in Nebraska. Can furnish the
best of references. Address Box 1002,
Central Western Banker.

Kansas News
FillllllillllllllllllllllllllllllllilUlllltlllllllllllllllUlllllllllllllllllllllllllllllllhllllllHIIIIIIIIIlIhlllUIIIIIIIIIIHIIIIIIIIIIIUIIIillllhllllllllllllllllillMlllllllllllllllllllllllllllllllllllllllllllllllllllllllillllllllllilllllllllllllUlllllllllllllllilllllllllllli^

Elected Cashier

New Bank at Soldier

A. T. McNutt, assistant cashier of
the Home State Bank of Lewis, Kan­
sas, one of the strongest and largest
banks of Edwards county, was elected
cashier at a meeting of the board of
directors. The action was due to the
death of L. W. Hilbish, cashier for
26 years, who died unexpectedly
while on duty at the bank.
Mr. McNutt came to Lewis June 1,
1928 from Haviland where he had a
wide experience in banking.
Carl D. Fitch was named assistant
cashier.

Opening of a new bank, the Sol­
dier’s State Bank, Soldier, Kansas,
has been announced by W . H. Koeneke, state bank commissioner.
Capitalized at $20,000, the bank
assumed the liabilities of and replaced
the State Bank of Soldier, which also
had a capitalization of $20,000.
The directors, all of whom were
directors of the liquidated institution,
are:
Jacob Mack, J. W . Crawley, J. A.
Sproul, of Soldier; P. H. Reed, T.
L. Reed, of Circleville, and J. W .
Lynn and J. H. Riley, of Holton.
Mr. Mack was president and Mr.
Sproul cashier of the discontinued
bank.

In Merger

O M A H A ’S W ELCO M E
T O TH E W ORLD

400 Rooms
with Bath from

$ 2.50
IOO Rooms Priced
From $ 3 DOWN!
1 50
Rooms Priced
From $ 3 . 5 0 DOWN!
Luxurious Accommo­
dations
Popular Dining Rooms
O PERA TED BY EPPLEY
H O T E L S CO M PA N Y

IN L IN C O L N —
HOTEL LINCOLN
HOTEL C APITAL

IN N O R F O L K —
HOTEL NORFOLK
Maximum Comfort at
a Minimum Rate

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

Merger of the Reserve State Bank
with the Planters State Bank of Salina, Kansas, became effective last
month. The plan was completely
checked by the state banking depart­
ment and approved by the depart­
ment.
The consolidation does not in any
way effect the capital structure of the
Planters State Bank, which remains
the same. Officers of the Planters
bank are unchanged. But from the
Reserve State come to the Planters
Martin Aldstedt as assistant cashier,
and Miss Anna Bengtson.
The merger of the two institutions
gives Salina the largest bank in cen­
tral and northwestern Kansas.
Franklin D. Adams, president of
the Reserve State, retains his office in
the Reserve bank location, Watson
building. He is president of the R.S.B.
I nvestment company.
Elect Two Bank Directors

Judge James A. McClure and Dr.
D. R. Paine were elected to the board
of directors of the State Savings
Bank of Topeka, Kansas, at the reg­
ular quarterly meeting of directors.
The regular \y2 per cent dividend
was declared by the directors at their
meeting. Satisfactory progress in all
branches of the bank was reported
and the outlook for the future is most
optimistic, the directors were in­
formed.
Officers of the bank are: William
Macferran, Jr., president; J. D. Gos­
sett, vice president and cashier; E.
L. Copeland, vice president; Bennett
T. Hornsby, assistant cashier. Direc­
tors are: F. M. Stahl, O. C. Neiswender, Warren M. Crosby, Jr., A. J.
Stout, Dr. C. F. Menninger, Mr.
Macferran, Mr. Copeland, Mr. Gos­
sett, Judge McClure and Doctor
Paine.

STATEM EN T
OF
THE
O W N E R S H IP ,
M ANAGEM ENT,
C IR C U L A T IO N ,
E T C .,
R E Q U IR E D R Y T H E A C T O F C O N G R ESS
O F A U G U S T 24, 1012

Of CEN TRAL W ESTE R N B A N K E R pub­
lis h e d m o n t h ly at O m aha, N e b r a sk a , fo r
A p r il 1, 1931.
S ta te o f I o w a , C o u n ty ot P o lk , ss.
B e fo r e m e, a N o t a r y P u b lic , in a n d fo r
th e S ta te a n d C o u n ty a fo r e s a id , p e r s o n a lly
a p p e a r e d L. D. V a n D ora n , w h o , h a v in g
b een d u ly s w o r n a c c o r d in g to la w , d e ­
p o s e s an d s a y s th a t he is th e A s s o c ia t e
E d it o r
of
th e
CEN TRAL
W ESTERN
B A N K E R , a n d th a t th e f o l lo w in g is, to
th e b e st o f h is k n o w le d g e a n d b e lie f, a
tru e s ta te m e n t o f th e o w n e rs h ip , m a n a g e ­
m e n t (a n d i f a d a ily p a p er, th e c ir c u la ­
t io n ), etc., o f th e a fo r e s a id p u b lic a t io n fo r
th e d a te s h o w n in th e a b o v e c a p tio n , r e ­
q u ire d b y the A c t o f A u g u s t 24, 1912, e m ­
b o d ie d in s e c tio n 411, P o s ta l L a w s an d
R e g u la t io n s , p r in te d on th e r e v e r s e o f
th is fo r m , to w it :
1. T h a t th e n a m e s a n d a d d re s s e s o f
th e p u b lish e r , e d ito r , m a n a g in g e d ito r , and
b u s in e s s m a n a g e r s a r e : P u b lis h e r , C liffo r d
De P u y , D es M oin es, I o w a ; E d ito r , R. W .
M o o rh e a d , D es M oin es, I o w a ; A s s o c ia t e
E d ito r , L. D. V a n D ora n , D es M oin es,
I o w a ; B u s in e s s M a n a g e r. G e ra ld A. S n id er,
D es M oin es, Io w a .
2. T h a t th e o w n e r is : D e P u y P u b lis h ­
in g C o m p a n y , D es M oin es, Io w a . C liffo r d
D e P u y, D es M oin es, Io w a . G e r a ld A. S n i­
der, D es M o in es, I o w a . W m . H. M aas, C h i­
c a g o , I llin o is .
3. T h a t th e k n o w n b o n d h o ld e r s , m o r t ­
g a g e e s , a n d o t h e r s e c u r it y h o ld e r s o w n in g
or h o ld in g 1 p er c e n t or m o re o f t o ta l
a m o u n t o f b on d s , m o r t g a g e s , or o th e r s e ­
c u r itie s a r e : N one.
4. T h a t th e t w o p a r a g r a p h s n e x t a b o v e ,
g iv in g th e n a m e s o f th e o w n e rs , s t o c k ­
h o ld e r s , an d s e c u r it y h o ld e r s, if an y, c o n ­
ta in n o t o n ly th e lis t o f s t o c k h o ld e r s an d
s e c u r it y h o ld e r s as t h e y a p p e a r u p o n th e
b o o k s o f th e c o m p a n y as tr u s te e or in a n y
o t h e r fid u c ia r y r e la tio n , th e n a m e o f th e
p e r s o n o r c o r p o r a t io n f o r w h o m su ch
tr u s te e is a c t in g , is g iv e n : a ls o th a t th e
sa id t w o p a r a g r a p h s c o n t a in s t a te m e n ts
e m b r a c in g a ffia n t’ s fu ll k n o w le d g e a n d
b e lie f as to th e c ir c u m s t a n c e s an d c o n ­
d itio n s u n d e r w h ic h
s t o c k h o ld e r s a n d
s e c u r it y h o ld e r s w h o d o n o t a p p e a r u p o n
th e b o o k s o f th e c o m p a n y as t r u s te e s
h o ld s t o c k a n d s e c u r it ie s in a c a p a c it y
o t h e r th a n th a t o f a b o n a fide o w n e r ; and
t h is affian t h a s n o r e a s o n to b e lie v e t h a t
an y p ers o n , a s s o c ia tio n , o r c o r p o r a t io n
h a s a n y in t e r e s t d ir e c t or in d ir e c t in th e
sa id s to c k , b on d s , or o t h e r s e c u r it ie s th a n
as so s ta te d b y him .
L. D. V A N D O R A N ,
(S ig n a tu r e o f A s s o c ia t e E d it o r )
S w o r n to a n d s u b s c r ib e d b e f o r e m e th is
26th d a v o f M a rch , 1931.
E A R L S. LIN N .
(M y c o m m is s io n e x p ir e s J u ly 4, 1933.)


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C o n t in e n t a l I l l in o is
BANK AND TRUST
COM PANY
C H IC A G O
INVESTED

CAPITAL

150

MILLION

DOLLARS


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Federal Reserve Bank of St. Louis