Full text of Central Western Banker : May 1933, Volume 28, No. 5

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CENTRAL WESTERN

BANKER
Omaha
Conference Goes to Bat
For Dual Banking
Page 3

How The R. A. C. C.
Helps T he Country Bank
Page 5

Economic Policy Commission
Report
Page 6

The Outlook
For Real Estate is Good
Page 11

M ay

1933


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Central Western Banker, M ay, 1933

3

CENTRAL WETTERN RANKER
410 ARTHUR BUILDING
OMAHA
C l if f o r d D e P u y , P ublisher
R . W . M oo rhead , A ssociate P u b lish er
H . H . H a y n e s , E d ito r
H . E . O ’C o n n o r , F ield R ep resen ta tive
W m . H . M aas , V ice-P resident, 1221 F ir s t N a tio n al B ank Bldg., Chicago
F r a n k P. S y m s , V ice-P resident, 19 W est 44th S tree t, N ew Y ork
F r a n k S. L e w is , 218 E ssex B ldg., M inneapolis

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

V o l u m e 28

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

MAY, 1933

N umber 5

CONFERENCE G O ES T O BAT
FOR D U AL BANKING
A LLED FO R the purpose of tak­
ing steps toward the preservation
of the dual system of banking in
the United States, representatives from
fourteen middle-western states met in
Des Moines on April 22. Attending the
conference were state banking commis­
sioners, and association presidents, vice
presidents, secretaries and treasurers
from Arkansas, Illinois, Indiana, Iowa,
Kansas, Michigan, Minnesota, Missouri,
Nebraska, North Dakota, Ohio, Okla­
homa, South Dakota and Wisconsin.
The conference included among other
things reference to some of the delibera­
tions that ensued during the recent meet­
ing of the A.B.A. Executive Council at
Augusta, and serious discussion with re­
spect to the possible attitude of the Ad­
ministration and Congrees toward bank­
ing reform, especially regarding any pos­
sible attempt that would have for its end
the obliteration of the State Banking
Systems, or any part of them, and substi­
tute other forms of banking. The meet­
ing was historic, in a way, because it was
dealing with a vitally important matter.
Before the day was over, each represen­
tative of every State was given an op­
portunity to express himself upon the
issue for which the conference was
called.

C

T he R esolu tio n s

The resolutions adopted at the con­
ference, a copy of which went to Presi­
dent Roosevelt, Governors, Senators and
Representatives of the respective States,
are as follows:
(1) BE I T RESO LVED, T H A T this
conference of Banking Commission­
ers and Officials and representatives
of the Banking Associations in the
fourteen M id-W est States (Arkan­
sas, Illinois, Indiana, Iowa, Kansas,

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Representatives From Fourteen States M eet to Discuss
Ways and Means to
Preserve the Dual Banking System of the United States
Banking Commissioners and State A ssociation O ffic ia ls M a ke Plans for
The Defense o f State Banking Systems

Michigan, Minnesota, Missouri,
Nebraska, North Dakota, Ohio,
Oklahoma, South Dakota, Wiscon­
sin) held at Des Moines, Iowa, on
Saturday, April 22, 1933, hereby
commends to the serious considera­
tion of the Federal administration
under the outstanding leadership of
President Roosevelt, so ably attack­
ing the great economic and depres­
sion problems that beset farming
and all other lines of business :
(a) (Vested right of States also to
establish own banking system)—T H A T
full recognition be given to the right
vested in each and every State, and as
its own Legislature may prescribe, and
to the right of the country as a whole as
Congress may prescribe, to have and to
maintain each its own respective Bank­
ing System; and
(b) (States can also be entrusted to
develop bank sa fety)— T H A T it can
safely be entrusted to each State Legis­
lature and to the Congress to develop,
alter and to correct as it may at any time
be found necessary their respective Bank­
ing system, having in mind at all times
the proper safety of funds of depositors
and the sound and adequate financing of
all local farming and business and com­
munity needs; and that we urge Con­

gress, as well as the respective State Leg­
islatures, to enact any fair and sound
Legislation that shall strengthen Bank­
ing in general everywhere throughout
the Nation, but likewise at any time that
would in effect strangle or destroy any
class or group of sound Banks in any
State in our country; and
(c)
(Request States also to help pro­
tect National banking system)—T H A T
we suggest that our respective States
lend all constructive efforts to help to
preserve the National banking system
and likewise do we respectfully request
and entreat a similar sympathetic and
mutual consideration from Congress to­
ward our State banking systems, in order
that the Federal body in the future may
always continue its past fair attitude of
not at any time enacting Federal Bank­
ing Legislation that shall be in contra­
vention to the will and to the wish of
the people themselves of any Common­
wealth as they may so express it through
their own General Assemblies with re­
spect to that form of Banking that they
themselves prefer within their own State.
(2) BE I T F U R T H E R RESOLVED,
T hat we, the Banking commission­
ers and officials and representatives
of the said Banking Associations
represented here today:

Central Western Banker, May, 1933

4

Iowa— N. G. Kraschel, Lt. Gov. of
Iowa,
Des Moines; L. A. Andrew, Supt.
R E SO L U T IO N S C O M M IT T E E :
Banking, Des Moines; D. W . Bates,
H. W . K o e n e k e , Topeka, Chairman
Incoming Supt. Banking, Des M oines;
Kansas Bank Commissioner
0 . P. Bennett, State Senator, Des
J. N. P e y t o n , St. Paul
Moines; Fred J. Figge, President, I.B.
Minnesota Bank Commissioner
A., Ossian; Robert W . Turner, Vice
G. W . W oods, Lincoln
Pres., I.B.A., Council Bluffs; B. D. HelNebraska Bank Commissioner
scher, Treasurer, I.B.A., Sigourney;
Ivan O. Hasbrouck, Retiring Pres., LB.
O. H. M oberly , Jefferson City
A. , Jefferson; Frank W arner, Secretary,
Missouri Bank Commissioner
1. B.A., Des Moines; A. S. Andresen,
R obert E. W a it , Little Rock
Banker, Ossian; Reginald B. Figge,
Secretary
Arkansas
Bankers
Assn.
(b) (Recommend President to appoint
Banker, Calmer; Clifford De Puy, Pub­
National Commission) — Recommend W . H. H u g h e s , Omaha
lisher, Northwestern
Banker, Des
Secretary Nebraska Bankers Assn.
that a commission be appointed by the
Moines; R. W . Moorhead, Associate
President of the United States that shall W a l l G. C o a p m a n , Milwaukee
Publisher, Northwestern Banker, Des
hold public hearings and give careful
Secretary Wisconsin Bankers Assn.
Moines.
consideration to any proposed basic E u g e n e G u m , Oklahoma City
Kansas— H. W . Koeneke, Bank Com­
changes in our present dual system of
Secretary O klahoma Bankers Assn.
missioner,
Topeka; W . A. Hayes, Pres.,
Banking before that Federal Legislation
C lifford D e P u y , Des Moines
K.B.A.,
La
Crosse; Fred M . Bowman,
is considered so that Congress may act
Publisher Northwestern Banker
Sec.
K.B.A.,
Topeka; M . A. Lunbochwith full information; we are funda­
er, Chrmn. Leg. Com. K.B.A., Topeka;
mentally opposed to any Federal Legis­ F r a n k W a r n e r , Des Moines
Geo. W . Snyder, Banker, Topeka.
Secretary Iowa Bankers Association
lation which will operate to the benefit
Michigan—Kenneth M . Burns, Exec.
of one bank at the expense of another ;
M
gr., M.B.A., Detroit.
and
Minnesota—J. N. Peyton, Bank
(c) (Authorize a Committee with THE FOLLOW ING letter, to g eth er w ith
Com.,
St. P au l; O. W . Lundsten,
power to a c t)— T H A T the Chairman a copy o f th e R eso lu tio n s, w as d is­
Chrmn.
Leg. Comm., M .B .A .; M . F.
patched
to
P
resid
en
t
R
o
osevelt:
of this conference appoint at once a
Ernst, Pres., M .B.A., St. Paul.
Committee of seven of which he shall be My dear Mr. P resid en t:
Missouri—O. H. Moberly, Bank
a member with power to act to carry out
In con sid erin g th e su b ject m atter of
Comm.,
Jefferson City.
the full purposes and intent of this meet­ th e a ttach ed resolu tion , it is our p lea s­
Nebraska—
Geo. W . Woods, Bank
ing, this to include among other things u re to say th a t th e B a n k in g C om m is­
the authority to attend any conferences sion ers and B a n k in g A ssociation officials Comm., Lincoln; H. A. Schneider,
or hearings in Washington relating exp ressed again and a g a in th ro u g h o u t Chrmn. Ex. Council, Plattsm outh; R.H.
hereto, to enlist the support of any and today's conferen ce th a t th ey had every Barber, Pres., N.B.A., Paxton; W m. B.
all other Banking Commissioners and confidence in you as our n a tio n a l leader, Hughes, Sec. N.B.A., Omaha.
other Banking Associations’ officials and and th e A d m in istration in gen era l w ould
North Dakota—A. L. Peterson, Com.
their members and to counsel and advise see to it th at fa irn ess w ill a lw ays be Ex. Council, Buffalo; C. C. W attam,
with them, and to do all other proper given , lo o k in g tow ard th e m u tu a l p res­ Sec., N.B.A., Fargo.
things and to use all proper means at ervation o f our N ation al and S tate b an k ­
Ohio — Bedford P. Atkinson, Ass’t.
their command as and when the time in g system s. F or your con sid erate a t­ Sec. O.B.A., Columbus.
may arise that shall effectuate the pur­ ten tio n d u rin g th ese b u sy hou rs th at
Oklahoma— Eugene P. Gum, Sec. O.
poses and declarations of this Banking press you from a ll sid es, w e g ra tefu lly
B. A., Oklahoma City.
conference, and
exten d h erew ith th e th an k s of to d a y ’s
South Dakota—J. C. Vandagrift,
(d) (Send copies to :)—T H A T with con feren ce o f th e rep resen ta tiv es from Mem. St. Bkg. Com., Sioux Falls; T .
respect to these resolutions (1) that a th e fo u rteen M id-w est S tates.
M . Brisbine, Pres. S.D.B.A., W oon­
R esp ectfu lly subm itted,
copy be personally delivered by the Hon.
socket; Geo. A. Starring, Exec. M gr.,
N. G. Kraschel, Lt. Governor of Iowa,
F R A N K W A R N ER
S.D.B.A., Huron.
advisory member of the foregoing men­
Secretary.
Wisconsin— Geo. F. Poundstone, Rep.
tioned Committee, to the President of
Banking Dept., Madison; R. B. Wood,
the United States, (2) that copies be
V.P., W.B.A., Adams; W . G. Coap­
sent by the conferees here today to each
In attendance at the conference were : man, Sec., W.B.A., Milwaukee.
Senator and Representative in Congress
Arkansas— Robert E. W ait, Secy., A.
and Governors of our respective States,
B.A.,
Little Rock; W ill G. Akers, Att.
Dick: Say, M att, if you had five bucks
(3) and that copies also be sent by the
A.
B.A.,
Little
Rock.
in
your pocket, what would you do ?
Committee above referred to to Bank
M
a tt: Check up to find out whose
Illinois—Thomas
F.
Ford,
Rep.
St.
Commissioners and Banking Association
officials throughout the LTnited States ex­ Bank Dept., Springfield ; Harry C. pants I had on.
pressing the hope to the latter that the Hausman, Rep. 111. B.A., Chicago.
Amos: You says anything to me, big
Indiana—W . A. Collings, Pres. Ind.
contents of these resolutions be brought
to the attention of their individual mem­ B. A., Crawfordsville ; Fred A. Weick- boy, an’ Ah’ll make ya eat yo’ words.
Andy: Fried chicken, watermelon and
ber banks and in turn their support to ing, Chief Ass’t. Att. Gen’l, Indian­
hot biscuits.
apolis.
the same obtained.

(a) (Request Banking Associations to
support all fair and sound banking re­
forms)—Advocate with all our strength
that our respective Banking Associations
join in supporting every fair and prac­
tical reform looking toward the preser­
vation of and the surrounding of each of
the National and State Banking systems
with all proper safeguards, and to that
end we, as we may be able, in our offi­
cial capacities, shall also bend our best
efforts, and


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(Signed)

Central Western Banker, M ay, 1933

5

How The R. A . C. C.
HELPS THE COUNTRY B A N K
The states have discovered the full breath of its activity and unhampered
by curious, but legal, clauses they have been able to act quickly
to save their solvent, but credit-bereft, farmers77
E HAVE a new agency, the
product of a collapse of optimism,
that efficiently does two things to
aid country banks:
1. Provides borrowers whose natural
credit sources have disappeared with
a means to carry on.
2. Provides banks with a means of trans­
ferring good paper to an outside
source without liability.
This credit source is the Regional Ag­
ricultural Credit Corporation, and for
our purposes, it is the branch of the cor­
poration at Omaha which is managed by
Charles C. Kuning.

W

By CHARLES A. CLARK
Council Bluffs

and avoid forced sales and it has been
a godsend to banks in need of liquidat­
ing a part of their note case. Wherever
farmers have found their credit barred
by the hysteria of their neighbors; wher­
ever banks have held or known of chat­
tel loans whose transfer would release
credit to a community, there the
R.A.C.C. has measurably served. In
many localities, over entire sections of a
state, cattle, horses and mules have
shown a reasonable increase in price.

Sm all B egin n in g

F a ile d to T ake A d van tage

Whatever the distinguishing marks of
branches in other cities, no consideration
of this one is complete unless we turn
an eye to this man. He came to Omaha
five months ago with a secretary and a
few lean papers. From this small begin­
ning the corporation has become a swift­
ly moving being, turning out an average
of a hundred and twenty-five loans a
day; an average daily outgo of a hundred
and forty thousand dollars. Seventy in­
spectors roam through the states served:
Iowa, Nebraska, South Dakota, and
Wyoming. There are a hundred and for­
ty employees in the Omaha office, includ­
ing a day and night shift of stenograph­
ers. Most of the men in the organization
have long worked mornings, noons, and
nights. Together they have completed
loans of more than ten millions in four
and a half months and half again that
amount has been approved.
The work of the management ha£
made Omaha the largest branch in the
country in point of numbers of loans
completed, and the branch has the larg­
est total loaned and approved. T hat is
accomplishment and leadership of deep
meaning to this territory for it has al­
lowed many farmers to keep their stock

All this is true, and yet many banks
and other important agencies have failed


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and handicapped in getting its share. Of
course, Iowa farmers are probably less
used to giving chattel mortgages than
are farmers in many other states and
this may account for some slowness in
making use of the Corporation. There
is, however, a definite handicap to a
great body of Iowa farmers. The diffi­
culty lies in the fact that many of its
real estate mortgages carry a chattel
clause expressly providing that it cover
the crops to be grown on the land there­
in described until the mortgaged debt is
paid. Where this mortgage is recorded
and indexed as a chattel mortgage, it is,
in legal effect, a chattel mortgage and is
a lien on the crops raised or to be raised
on the land until the mortgage debt is
paid.
L ien on F eed

IN W H IC H the author explains
in detail the efficient operation of
the Omaha office o f the Regional
A gricu ltural C r e d i t C orporation,
under the capable management of
Chari es C Kuning

to take advantage of the Corporation’s
existence. After all, it takes but a trial
or two at making out the necessary
papers and the rest will run smoothly
through the mill. This is a mail order
business possessed of one face to face
contact with the borrower through its
inspector, and it is no more than meet
and natural that there are a few more
papers than would be true in the bank’s
own instance. However, these are sim­
ple; the demands not unjust.
Nebraska for instance, has taken to
the corporation like a duck to water.
Territory considered, this has also been
true of South Dakota and Wyoming. On
the other hand, Iowa has both* been slow

W here a mortgage is so filed and in­
dexed it is necessary to get a certified
copy of the mortgage to be submitted to
the Corporation’s attorney. If the mort­
gage is found to constitute a present lien
on crops, a sub-ordination agreement is
necessary by which the mortgage holder
agrees to allow the corporation a first
lien on feed. The Corporation is thus en­
abled to extend the life giving flow of
credit a little further.
Unfortunately, incorporated holders
of mortgages bearing this type of clause
have in most instances dammed the flow
of credit to both farmers and liquidating
banks by refusing to allow the Govern­
ment to have security, preferring rather
to allow the farmer to sit on the door
sill of his debts and watch the sustaining
flow of credit run past his land to the
hills and valleys owned by farmers liv­
ing in states adjoining Iowa. Thus, in
many instances, a tenant farmer has a
better chance of getting a loan through
than a land owner, because invariably
the landlord is interested in the success

Central Western Banker, M ay, 1933

6
of his tenant and waives his chattel
right as a matter of good business.
Once responsible organizations agree
to waive this mortgage clause, which is
not effective in other states in the terri­
tory, the value of the corporation to
Iowa will be measurably increased.
The Corporation makes chattel loans.
The Corporation cannot, by the terms
of its creation, loan on land or land
equities. The prime securities are cattle,
sheep, mules and horses. Secondary, but
necessary, the feed for the animals. Ad­
ditional, brood sows, farm machinery.
Left out for running expenses: poultry
and very often hogs. If feed is held in
large quantities, a part of it is left avail­
able to the farmer for sale.
H ow It W orks

A check through a sample file and a
little study of the Corporation may be
of considerable help.

1. The first sheet is the application which
carries an outline of the applicant’s
personal history, his feed, livestock
and real estate, plus a condensed fi­
nancial statement and a declaration
as to the truth.
2. The second sheet is the abstract of
chattel mortgages with provision for
listing chattels, taxes, judgments and
suits. This first chattel abstract is su­
perseded near the loan’s close by a
chattel abstract showing necessary
liens cleared and priority of the
RA.C.C.’s lien on the required col­
lateral.
3. The recommendations come next:
copies of letters to and letters from
the applicant’s references.
4. The Inspector’s report.
5. Note and Chattel Mortgage.
6. Landlord’s Waiver or Mortgage Su­
bordination Agreement.

Outside the R.A.C.C. office these
papers are handled in the following w ay:
A—The Applicant, or the banker and
the applicant make out the applica­
tion.
B—The Court House tends to the two
chattel abstracts.
C—The recommendations are the work
of the applicant’s references. (And
do the bankers write good ones on
dead horses.)
D —The Inspector’s Report is handled
entirely by the R.A.C.C.’s field
man.
E—The note and mortgage are made out
by the Inspector, the Applicant, his
Banker or Attorney.
F—The Landlord’s Waiver goes to the
applicant for forwarding to the
landlord, who is expected to sign
and return it to the corporation.
(C o ntinued on page 13)

Economy Policy Commission Report
of the A . B. A .

A REVISED Glass bill should be
enacted now, and the Federal Ad­
ministration should create a com­ Has been presented to the
mission to recommend after mature de­
liberation the further changes that executive council of that
should be made in our banking system,
in our Federal Reserve System, and in body by Leonard P. Ayres,
our monetary system.
2. In order that banks generally may vice president of the Cleve­
become members of the Federal Reserve
land Trust Company, and
System the provisions of the Reserve Act
should be so broadened as to allow for approved.
A summary of
admission to membership of numerous
state chartered commercial and mutual the re p o rt is given here
savings banks not now within the Sys­
tem.
3.
Provision should be devised
7. A Federal Commission on bank­
against the independent proclamations of
banking holidays by governors of states. ing legislation should consider regulation
4.
Branch banking privileges shouldof interest payments on all classes of de­
be uniform within states for all banks posits, and of requirements that deposi­
whether holding national charters or tors should give notification of intention
state charters.
to withdraw time deposits.
5.
Reasonable limitations should be 8. Federal legislation should provide
devised to control the sudden shifting of
for the careful and rigorous regulation
large commercial deposits.
of the granting of loans by banks to their
6.
Restraint on real estate specula­
own officers and directors.
tion would probably prove to be a safe­
9. As the general banking system is
guard to American banking comparable
strengthened
the postal savings system
to that which would result from a re­
striction of speculation in commodities should be progressively restricted.
10. Deposits of public funds in banks
or securities.

1


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should have the same status as private
deposits, and should not be accorded spe­
cial and additional security.
11. A more effective coordination of
the activities of the Federal Reserve
Banks is needed.
12. The present emergency provisions
with respect to member bank borrowing
from the Federal Reserve Banks should
be retained as permanent provisions.
13. Consideration should be given to
a possible modification of the Federal
Reserve Act by which the System would
be given power to change the amounts
of member bank reserves required, for
this power would afford control over any
threat of dangerous credit inflation.
14. Consideration should be given to
a change in our Federal Reserve Act by
which a minimum required relationship
would be established between our stock
of monetary gold and the combined total
of our Reserve Notes and our bank de­
posits. This would nullify most of the
dangers inherent in the hoarding of cur­
rency.
15. Expansion of business activity is
our most pressing national need. It
should be fostered by the National Ad­
ministration, by the Federal Reserve
Banks, by all commercial banks, and by
business men generally.

Drawing of the “Sky Ride” which
will be one of the spectacular fea­
tures of Chicago’s 1933 World’s
Fair—A Century of Progress Ex­
position. Two steel towers 625 feet
high and 1,850 feet apart will be
connected by cables at the 200 foot
level, over which rocket cars will
carry passengers. At the tops of
the towers will be observation plat­
forms from which visitors will be
able to see Chicago and its sur­
rounding area for miles in all direc­
tions. High speed elevators will
carry visitors aloft to the rocket
cars and to the observation
platforms.

N T H E S E hectic days comes a re­
freshing note. A note that rings not
so much of confidence as it does of a
stubborn determination to do business
and keep men at work in spite of all ob­
stacles.

I

Seldom, if ever in the past, have large
industrial units found themselves in a
position where they would listen to a
proposition to gamble with their money
and materials. Such companies, with im­
pregnable positions in the business world,
would, and did, frown on any proposal
where the financial results were not
amply secured. Yet today, we have a
change.
Look you at a site on the grounds of
A Century of Progress Exposition where
the lofty twin towers of the Sky Ride
are rearing their majestic heads into the
clouds, and you find attached thereto a
placard bearing the names of the build­
ers and sponsors: The Otis Elevator
company, the John A. Roebling’s Sons
Co., the Great Lakes Dredge and Dock
Co., the Mississippi Valley Structural
Steel Co., and the Inland Steel company.
A B ig Job

As you read these names keep these
facts carefully in m ind: The completed
structure will cost $1,200,000; it will
be a thrill ride; these companies are put­
ting up the money to build i t ; they have
no guarantee of any sort they will ever
get their money back; if they do get
their money back it will have to be with­
in 153 days, the duration of the Fair.
Sizable proposition, isn’t it?
The unusual spectacle of such com­
panies stepping out of character and
banding together to finance and build an
amusement for a world’s fair gives pause
for a moment to consider motives.
The inevitable question to arise is,
why in these times should such companies


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Tak ins A

variance

W ith $1,200,000
A ,7Thrill Ride^ which must return that amount
in 153 Days to break even
assume needless risks with their cash and
materials? The answer is thoroughly
convincing.
Sky Ride is not the result of whim or
caprice. Its majestic twin towers are ris­
ing now as the spectacular culmination
of more than a year of careful planning.
Representatives of each company first
made a careful study of the Exposition’s
financing and found it sound. They
studied the possibilities of the Exposi­
tion’s success and found them excellent.
J hen, and only then, was work on a de­
sign begun.
D rew th e P la n s

W orld famous suspension bridge de­
signers, Robinson and Steinman of New
York, were called in, told of the idea
and commissioned to draw the plans.
They kept their heads bent over draw­
ing boards for three months and brought
back detailed plans for the Sky Ride; the
construction of twin towers placed 2,000
feet apart, one on the mainland south of
Soldiers Field and the other on man­
made Northerly Island, the towers to
stretch 628 feet into the sky and topped
by observation platforms, when complet­
ed to be higher than the Washington
Monument or any Chicago building;
elevators to be installed to whisk pas­
sengers sixty stories aloft— from which
height would be possible to see four

states—while below, like a vast animat­
ed map would be the colorful Exposition
grounds, Lake Michigan and Chicago ;
at the 200 foot level the towers to be
connected by stout steel cables from
which fascinating rocket cars would be
suspended, traveling back and forth
across the W orld’s Fair lagoons; the
span between the towers to be greater
than most of the huge suspension bridges
of the country— the span of the Brook­
lyn bridge is 1,595 feet, the Williams­
burg bridge is 1,500 feet and the M an­
hattan bridge 1,470 feet; Sky Ride to
have a maximum capacity of 4,800 per­
sons per hour, each passenger occupying
an individual seat, affording an excellent
opportunity for a bird’s-eye view of the
grounds; the cars to have the appearance
of a rocket with a tapering nose at the
front and exhaust tubes projecting from
the stern; the whole design to be ultra­
modern.
This, then, is the giant amusement
feature on which these companies are
wagering engineering skill and money. It
is the only structure of its kind in the
world.
Its erection is a striking illustration
of the confidence big business has in Chi­
cago and its works. W ith such support,
the Fair will sweep to success on a tidal
wave of popularity never before wit­
nessed.

Central Western Banker, M ay, 1933

8

W hat Uncle Sam
H opes To Accom plish Through
Useful W ork in the Forests
N T H E last day of March, Pres­
ident Roosevelt signed the bill
enacted by Congress which au­
thorized the vast program for unemploy­
ment relief through the performance of
useful work in the forests.
Under this authorization, some 250
thousand men from all walks of life—
men who are now traveling the streets
and highways in quest of jobs, men who
are subsisting upon charity but would
rather gain their subsistence by honest
work— some 250 thousand of these men
will be given healthful outdoor employ­
ment in the forests. The effect will un­
doubtedly be felt all the way up and
down the line; there will be 250,000
fewer men competing for available jobs
in private industry and for local relief
through charity. There will be increased
business for local markets through the
business of providing wholesome food
and necessary equipment for these thou­
sands of forest workers.

O

B u ild in g for F u tu re

At the same time we shall be accom­
plishing some enormously important pub­
lic work—work much needed for the
protection and improvement of our for­
ests. W e shall be developing and safe­
guarding a vital national resource, build­
ing for future national wealth. While
the purpose of this big forest work pro­
gram is primarily unemployment relief,
it by no means calls for “made work,”
intended merely to keep men busy. The
labor performed in the forests will ren­
der a great public service by helping to
put the forests of the country in a pro­
ductive condition which would have tak­
en decades to attain under ordinary cir­
cumstances. It will help to check the
huge losses we now sustain each year
from fires and from floods. It is work
that should eventually yield direct and
indirect benefits to the Nation far be­
yond its present cost.
It is also significant that the work to

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Federal Reserve Bank of St. Louis

By R. Y. STUART
Chief Forester

be carried on under this program is large­
ly work which does not supplant any
other employed labor. It will throw no
other men out of jobs, and its products
will not replace those of any other indus­
try. The men who enlist for work in the
forest camps, therefore, will in no sense
be living on the bounty of their Govern­
ment. They will be performing useful
work of a high public service nature. As
we see it, the camps will provide the op­
portunity to thousands of men to get
away from a state of idleness, malnutri-

" A S W E envision the pro je ct, it
w i l l g i v e t h o u s a n d s o f men a
chance to face the w orld with a
clearer eye and a renewed pur­
pose, at the same t i m e that it
builds fo r future national wea Ith "
tion, discomfort and discouragement,
and through their useful labors attain an
earned measure of comfort, self-respect,
and hopefulness for themselves and their
families.
M en W ork in g

W e are working hard these days to
put the program into operation in the
shortest possible time. W e expect to be
ready to have some men actually at work
by May first. Four departments of the
Government are working together on the
project — the Departments of Labor,
W ar, Interior, and Agriculture. A direc­
tor has been appointed by the President
to head up the whole program. Men who
apply for admission to the camps are
being enrolled by the Department of
Labor. Thousands of men have been en­
rolled by the Department of Labor,
working in cooperation with Federal

and State employment services and with
welfare agencies in the cities selected.
The W ar Department is beginning to
convey these men from the places of se­
lection to nearby conditioning camps.
The Departments of Interior and Agri­
culture will lay out and supervise the
work of the organized crews on the na­
tional forests, the national parks, the
forests on Indian reservations, and on
other federally owned lands. Much of
the work will be done on our national
forests, under the jurisdiction of the For­
est Service of the Department of Agri­
culture. The national forests with a total
area of more than 161 million acres, and
located in 30 states, offer unlimited op­
portunities for useful work. I have al­
ready assembled here in Washington the
Regional Foresters from the nine nation­
al forest regions of the country and they
are now engaged at mapping out plans
for starting the work immediately. All
of this work on the national forests will
be in line with an established, long-term
improvement program. It will include
the reduction of fire hazards on areas
where the greatest danger of fire exists.
It will include the improvement of tim­
ber stands by thinning and other cultural
practices that make for better, faster
growing trees. It will bring about better
fire suppression through the construction
of fire breaks, telephone lines, lookout
stations, fire protection roads and trails,
and emergency landing fields. It will in­
clude work to eradicate insect pests and
diseases of the forest trees. It will also
include the planting of trees on burnedover and denuded areas, but the amount
of tree planting that can be done is of
course limited by the amount of avail­
able nursery stock for planting. It should
perhaps be made clear that, while the
forest work program has been spoken of
frequently as a reforestation program, re­
reforestation, in the narrow sense of tree
planting, is only one of the many lines
of work that can be undertaken with a

9

Central Western Banker, M ay, 1933
view to the conservation and develop­
ment of our national forest resources and
the improvement of the national forest
facilities for the benefit of the public.
P ro tect R esou rces

All this work on our national forests
will be in line with existing long-term
plans for the development and protection
of the forest resources. The plan will
mean a vast speeding-up of an established
national forest improvement program.
The decentralized and flexible organiza­
tion of the Forest Service will aid it in
putting the program into effect on the
national forests in a systematic way, and
in minimum time. The Forest Service’s
facilities for adapting itself suddenly to
demands of fire and other emergency
jobs requiring quick organization and su­
pervision of large bodies of men have
been highly developed over a period of
years. In fact, we are proud of our or­
ganization ; we feel confident that we
can meet this emergency call for under­
taking a huge program of work on our
national forests promptly, efficiently, and
effectively.
The act of Congress which authorized
the forest work plan provided also for
extension of the work to State-owned
and private forest lands under coopera­
tive agreements. The Secretary of Agri­
culture has sent telegrams to the Gov-

ernors of the 48 States, inviting them to
send representatives to a conference in
Washington for the purpose of making
plans for the execution of the program
on State and private lands.
F o r P u b lic B en efit

Congress made the provision in the
Act for the extension of the work to pri­
vate lands in order that a larger share of
the work might be carried on in the
States east of the Mississippi, where only
selectively small areas of Federal and
State forest lands exist. Perhaps it is not
thoroughly understood that work under
this program on privately owned lands
will involve only such types of projects
as are primarily of public benefit, rather
than chiefly of benefit to the owner of
the land. By this, I mean such kinds of
work as the prevention and control of
forest fires, the eradication of insect pests
and tree diseases, the control of floods
and checking of soil erosion, all of which
work is of direct public interest, and the
value of which extends far beyond the
boundaries of a given tract of land. The
Federal Government is already author­
ized by Congress to cooperate with the
States and private land owners in carry­
ing on work of this kind.
So the Nation’s forest resources are
being called upon as a means of prompt,
effective, large-scale relief for unempfoy-

ment. O ur forests time and again have
contributed to the solution of important
national economic problems. They were
the first and greatest natural resource to
be drawn upon when the American col­
onies were established. They contributed
to the rapid development of the pioneer
West, and their wealth went into the
building of cities, railroads, and farm­
steads. Timber from America’s forests
played no small part in winning the
W orld W ar. Now the forests are being
called upon to help meet a national peace
time emergency. It is our job to bring
the work and the workers together in a
systematic way, to give them the oppor­
tunity for respectable, healthful, and use­
ful work.
W e do not see this project as a perma­
nent cure for the depression: it will not
take care of all of our unemployed, nor
will it start all the wheels of idle indus­
try. But we do believe that it will be a
real help—-a help to men in distress, and
at the same time a vast forward step in
the great task of rehewing, protecting,
and upbuilding vital public resources.
While the relief may be temporary, it
may mean life itself to thousands of our
citizens. As we envision the project, it
will give thousands of men a chance to
face the world with a clearer eye and a
renewed purpose, at the same time that
it builds for future national wealth.

G old Coin Comes O u t of Hiding
H E N President Roosevelt issued
an executive order setting May 1
as the deadline for the return of
all gold coin and gold certificates to the
Government, it was the climax of a
patriotic appeal which up to April 15
has resulted in the return of more than
$630,000,000 and has brought to light
many unusual coins as well as incidents
connected with the history of coinage.
To the amazement of many persons,
the coins for which patriotic Americans
dug down into safe deposit boxes and
trinket caches frequently were not the
conventional eagles, half eagles and
double eagles of circulation. Sometimes
they were such rarities as gold $3 pieces,
gold dollars and gold 25 cent pieces.
Sometimes they were worth more than
the amount stamped on the face. The
value of a California quarter dollar
which came to light was estimated at
$25. The “California slug,” an octagon

W


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Federal Reserve Bank of St. Louis

shaped $50 piece, has sold for as much
as $1,000. It is recorded that a collector
at one time offered $75,000 for the
double eagle of 1849 of which only a
single specimen was made in gold. At the
same time, an example of very early coin­
age may bring practically no premium.
Values are mysteriously arrived at by
the numismatist and a price brought for
a particular coin is no guide for a ama­
teur since it may reveal only the whim
of the collector.
P riv a te C oinage

It is a curious fact that not all of the
gold returned to the banks was of Gov­
ernment coinage—that part of it was pri-

A N T I- H O A R D IN G O rd e r brings
to light many unusual coins, as
well as incidents connected with
the history o f coinage

vately coined. Georgia, California, North
Carolina and Utah, for instance, all had
private gold coinage.
“ Uncle Sam slipped,” is the way Law­
rence W . Schmidt puts it after making
a study of gold coinage for Administra­
tive and Research Corporation. Indi­
viduals for years were permitted to is­
sue gold coins although Federal laws ex­
pressly forbade any state to issue any
coins bearing a state stamp. The issu­
ance of such coins by individuals was not
prohibited until an act of Congress dated
June 4, 1864.
Numerous private coins differ from
coins issued by the Government only in
minor details likely to escape the atten­
tion of the casual observer. Usually the
name of the issuing firm was substituted
for the word “Liberty.” Undoubtedly
some private gold coins still are passing
from hand to hand as millions of dollars
worth were made.

10

Central Western Banker, M ay, 1933
Coins R eg u la ted

M r. Schmidt pointed out that the law
establishing a mint and regulating the
coins of the United States was signed by
the President, April 2, 1792. The act
provided for an eagle, a half eagle and
a quarter eagle, all of the fineness of 22
carats or .917. The first deposit of gold
bullion for coinage was at the United
States mint February 12, 1795, and the
first return of gold coins July 31, 1795.
These new coins were half eagles. On
the obverse they bore a Liberty head, 15
stars, the word “Liberty” and the date
“ 1795.” On the reverse was an eagle
with a laurel crown in his beak and a
palm branch in his talons. Surrounding
the bird were the words “ United States
of America.”
Coins issued in 1796 had sixteen stars,
evidence that another state had been ad­
mitted to the Union. But fortunately
for the temper of the mint workers the
idea of increasing the number of stars
with the number of states was abandoned
soon afterward.
It was not until 1807 that coins were
marked with their value. Fortunately


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they are marked today because the aver­
age individual sees so few of them that
he would have a hard time guessing
value.
Gold D ollars D iscon tin u ed

The smallness of gold dollars always
made them nuisance pieces and their
coinage finally was abandoned. But the
nuisance of the gold dollar was as noth­
ing compared with the nuisance of the
gold half eagle. Unfortunately it is just
about the size of a five-cent piece. More
than one hurried commuter groping in
his pocket for a nickel to make a tele­
phone call has seized upon a half eagle
by mistake and dropped it down the slot.
Telephone companies, upon request, re­
trieve half eagles for customers when
they are notified of such mistakes but if
the loser has made several calls during
the day he is up against it.
Quarter eagles had the queer faculty
of disappearing. Each year banks would
put in great stocks of them for men and
women who wished to give gold for
Christmas— gold in minimum quantity.
Bright young nephews and nieces with
shining faces would receive them with

thanks. And that would be the end of
the quarter eagles. The bands would
never get them back. Where they went,
no one knows. Disappearing quarter
eagles is one of the minor mysteries of
American economics.
In 1929 the mint quit coining quarter
eagles. The coinage of the $3 piece was
discontinued in 1889 and the coinage of
the gold dollar was discontinued in the
same year.
M otto R estored

Few episodes in President Theodore
Roosevelt’s administration caused more
furore than the elimination of “In God
W e T ru st” from the eagle and double
eagle of a new design issued in 1907.
This motto first appeared on a 2-cent
piece dated 1864 and owed its appear­
ance to the increased religious sentiment
growing out of the Civil W ar. On No­
vember 30, 1860, Secretary of the Treas­
ury Chase addressed a letter to the di­
rector of the mint at Philadelphia say­
ing, “No nation can be strong except in
the strength of God or safe except in his
defense. The trust of our people in God
should be declared on our national
coins.”

C ontinental I llinois N ational
Bank and T rust C ompany
o f CHICAGO

Commercial B anking

11

Central Western Banker, M ay, 1933

Six Reasons
W hy THE O U T L O O K For
Real Estate Is Good
IX REASONS occur to me which
justify my belief that the outlook
for real estate is good :
Real estate is the fundamental and
most important form of wealth.
History and past performance seem
to indicate that by natural laws a re­
revival of real estate activity is about
to begin.
T he public went wild over other
forms of investment—and it is now
natural that people should turn again
to the most essential, enduring and
useful form of wealth.
The deflation has occurred and real
estate can now be bought at its eco­
nomic value.
The influences and excesses that made
the deflation of real estate necessary,
have been largely corrected or are
being studied and will be corrected.
Experience has demonstrated that real
estate securities, conservatively and
wisely selected and issued, have stood
up and continued to yield income bet­
ter than did other forms of invest­
ment.

S
1.
2.

3.

4.

5.

6.

F u n d am en tal W ea lth

As to real estate being the funda­
mental form of wealth the following
facts are significant :
T he wealth of our nation in 1929, es­
timated by U. S. Department of Com­
merce, totaled $320,804,000,000 of
which 58 per cent or $176,415,000,000
was real estate.
T he wealth of Ohio in 1929 was esti­
mated to be $21,281,000,000 of which
64 per cent or $13,619,840,000 was real
estate.

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Federal Reserve Bank of St. Louis

By A. A. McCASLIN
Vice President
The Cleveland Trust Company

The wealth of Ohio (in real estate)
has increased as follows:
Tax value 1915 . . $4,725,344,000
Tax value 1929 . .
9,524,729,000
a 100 per cent increase.
According to B. C. Forbes, “real es­
tate has made more millionaires than any
other line of business.” Other authorities
have said on this subject:
Marshall F ield: “Buying real estate
is not only the best way, the quickest way

"\ BELIEVE this is a good year
to buy residence p ro p e rty /' states
M r. M cCaslin in a recent issue of
the Cleveland Trust Magazine, and
he proceeds to te ll why he thinks
as he does

and the safest way, but the only way to
become wealthy.”
Andrew Carnegie: “Ninety per cent
of all millionaires become wealthy
through owning real estate. More money
has been made in real estate than in all
industrial investments combined.”
Russell Sage: “Real estate is an im­
perishable asset ever increasing in value.
It is the most solid security that human
ingenuity has devised. It is the basis of
all security, and about the only inde­
structible security.”
Franklin D. Roosevelt: “Real estate is
different from other investments in that

it cannot be lost or stolen nor can it be
carried away.”
Study o f R en ta ls

Confucius is credited with having said
nearly 3,000 years ago: “If you would
forecast the future, study the past.” And
history tells us that rentals—the true
evidence of values— follow commodity
prices.
A recent study in the St. Louis area
covering the fluctuation in dwelling
house rentals in that section from 1851
to 1932, makes a comparison with
changes in commodity prices for the same
period— 82 years. It showed that rental
income increases when commodity prices
go up.
Another study shows the rise and fall
of commodity prices during the twenty
years affected by the Civil and W orld
wars, respectively. About eighteen years
after the beginning of the Civil W ar,
commodity prices began to rise; inci­
dentally it is now eighteen years since
the W orld W ar began and again com­
modity prices show an upturn.
Is it not reasonable to assume that
rental income will rise with commodity
prices as heretofore?
M arriage R ate

A study was also made in 1932 in St.
Louis to determine the relationship be­
tween real estate activity and the mar­
riage rate since 1881. This was interest­
ing and important because it showed that
as business improves, living quarters are
needed by a lot of newly-married people.
It was stated that in St. Louis the
marriage rate has been below normal
since 1924 and that the accumulated

12

Central Western Banker, M ay, 1933

shortage of living quarters is nearly 17,000; also that their marriage rate varies
in cycles which coincide almost exactly
with cycles in construction, vacancy, fore­
closures, rents, real estate activity and
prices.
It is estimated that “doubling up” ac­
counts for an equally large potential de­
mand for homes. Economic recovery will
release these factors and quickly absorb
available homes.
T he attitude of the public will change
immediately. As a result, the downward
trend will reverse itself and rents and

SA LMON P. CHASE -

sales will go up as they did in 1900 and
1918.

Corrections
The influences and excesses that have
to be corrected are: Speculation, E x­
travagance, Confiscatory Taxation, Loss
of Confidence and the Racketeer.
It is hard to tell which of these evils
has done the most harm.
As to taxation, we know that it has
multiplied over six times in twenty years
and real estate pays the greater part of it.
Loss of confidence has been a fearful

S ec reta ry o f th e T r e a s u r y u n d e r L I N C O L N

blight. M r. Coolidge said, early in this
depression, “Because of some decline in
trade, we have set about finding fault
with nearly everybody and everything.
. . . The most casual consideration shows
us that the whole structure could not
turn sour over night. . . . It is time to
begin sympathizing and helping.”
The sale of tremendous quantities of
unsound, so-called real estate securities,
especially leasehold bonds and certificates
of equitable interest, has done untold
harm to individuals and society and has
made people lose confidence.
Because investments in real estate and
real estate securities are basically so
sound, the mortgage racketeer and ex­
ploiters have taken advantage of this
fact, and have used real estate as a ve­
hicle for their nefarious practice. This
has been made possible because of the
general inadequacy of knowledge pos­
sessed by the average investor, and his
apparent unwillingness to take proper
counsel in matters of this sort.
So much for the blighting influences
and excesses that made deflation inevit­
able.

Sound Mortgages
THE

C h a se N

a t io n a l

B ane

o f the City of ' Cf e w York

W in t h r o p W . A ld rich
Chairman Governing Board and President

C ha rles S. M cC a in

J o h n M cH ug h

Chairman
Board of Directors

Chairman
Executive Committee

The Chase is a commercial bank that
since 1877 hasoffered every protection, fa­
cility and convenience known to banking.


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Federal Reserve Bank of St. Louis

The strongest argument in favor of a
bright future for real estate is the fact
that sound mortgages and other real es­
tate sécurités, have stood up.
The Penn M utual Life Insurance
Company publishes the fact that on De­
cember 31, 1932 it had in mortgages
$194,571,379 and that its real estate ac­
quired through foreclosure represents
2.51 per cent of its ledger assets.
Oberlin College has had most satisfac­
tory returns from investments in Cleve­
land mortgages.
George S. Van Schaick of New York,
State Superintendent of Insurance, re­
cently concluded a speech referring to
real estate as the country’s basic invest­
ment as follows: “Confidence in real
estate as the fundamental security of the
country continues to be held by our great
financial institutions because it is the
most permanent and useful of posses­
sions.”
I submit that real estate securities have
been recognized as the best of all securi­
ties through the depression, and that
therefore real estate is equally good if
purchased at the right price.
I believe that this is a good year to
buy residence property.
One person in every seven can drive
a motor car. And he would drive it bet­
ter if the other six would shut up.

Central Western Banker, M ay, 1933

How the
R. A . C. C Helps
The Country Banker
(C o n tin u ed from page 6)

The Subordination agreement is
sent to the mortgage holder if it is
necessary for the completion of the
loan. Now for the handling of the
application in the hands of the
R.A.C.C.
In th e Office

A loan will take from ten days to a
month to complete. As the application
and chattel mortgage abstract come in
they are first checked for mechanical er­
rors as: lack of signature, witnesses, ad­
dresses, etc. They are numbered, file
cards are made and acknowledgment sent
to the applicant. Copies are completed
and the application is ready for the ex­
aminers.
These men are experienced in live­
stock, farming and the dissection of cred­
it statements. No frightened depositors
act as hazards to their capacity to judge
a loan on its own merits.
After the examiners check the loans,
the applicant’s references are written, if
the loan shows possibility of working out
it is ordered for inspection. Notices are
sent to the livestock and farm inspectors.
A day or a day and a half in the mails
going out and as much more in the ap­
plicant’s hands, plus the time in getting
back to the office, and three to four days
are gone. On return of the inspection
papers the loan is dissected and loan
papers on the smaller loans are sent out
and their completion requested. (Chat­
tel mortgage, chattel releases and note.)
The completed papers go to the loan
committee which rotates from week to
week and which is made up of distin­
guished Iowans and Nebraskans who are
closely familiar with the farms of the
territory served. The organization is for­
tunate in that there are enough such per­
sons to keep the corporation in commit­
tees for years. In the committee the bor­
rower’s condition is weighed, the exam­
iner’s opinion and the inspector’s report
considered. The picture offered the com­
mittee is quite complete; the farmer’s
own statement of his condition, the esti­
mation in which he is held by his friends
and business acquaintances, and the in­
spector’s valuation of his property. Each
application makes the round of the com­
mittee members to be judged and ini­
tialed.

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Federal Reserve Bank of St. Louis

13
P apers C om pleted

Next, the records of the committee
are written and notices sent to the ap­
plicant of approval and the amount for
which the loan is approved. From there
it goes to the Pay-Out Department.
These men are the looseners of the purse
strings and the tenders of the sluice gates
of credit. Here papers are completed.
Here loans must wait until the appli­
cants have carried out and completed the
loan papers. It should be remembered
that loans are pressed as far along
through the organization as is possible

in spite of any mechanical errors, occas­
sional mistakes, or failures on the part
of the applicant. The entire effort of
the organization is bent on getting good
loans through the mill and paid out. It
is in the Pay-Out that all the final tech­
nical check-up must come for if it is not
done right the loan will not go through
Washington re-discounting and the flow
of credit will be decreased by the loan’s
face.
At the loan’s completion the checks go
to the farmers or to those whose payment
he has directed. Copies of essential

Y our sales rep resen tatives cover m ore grou n d at
le ss cost w h en th e y u se L on g D ista n ce. (P h ila­
d elp h ia to N ew Y ork , 50c).
L ong D ista n ce te le p h o n e serv ice has p roved
itse lf a r e lia b le b usin ess-getter. It has p la y ed an
im portan t part in sa les cam p aigns fo r refriger­
ators, fu rn itu re, oran ges, h ats, coal, secu rities.
(C leveland to P ittsb u rg h , 70c).
M any o f th e se cam paigns h a v e b een con d ucted
in accordance w ith p la n s d ev elo p e d b y B e ll
S ystem com m ercial m en . In fo rm a tio n ab out them ,
and su g g estio n s for a p la n a p p lied to your B u si­
n ess, can b e secu red b y ca llin g th e telep h o n e B u si­
n ess Office. (Chicago to St. L ou is, $1.25).
C h a r g e s l i s t e d a b o v e a r e f o r s t a t i o n to s t a t i o n , d a y t i m e c a lls . E v e n i n g a n d n i g h t
r a te s a r e c o n s i d e r a b l y lo w e r . W h e r e t h e c h a r g e is 50c o r m o r e a f e d e r a l t a x a p p lie s
a s f o l l o w s : 50c to 99c, t a x 1 0 c ; $ 1 .0 0 to $ 1 .9 9 , t a x 1 5 c ; $ 2 .0 0 o r m o r e , t a x 2 0 c.

Central Western Banker, M ay, 1935

14
papers are then made, sent to Sioux City
and Washington for re-discount, and the
Omaha file made available to the collec­
tion department which must keep track
of cattle deaths, sales, illegal convey­
ances and so carry the loan through to
its conclusion in re-payment.
The procedure is simple, direct, and
generally rapid when consideration is
given to the time consumed in the mails.
Those who use the corporation’s facili­
ties have quickly grasped the technique
and once the drawback mentioned in the
fore part of this outline has been over­
come, Iowa can use the corporation to
much greater extent. This is evidenced
by the fact that adjacent states have dis­
covered the full breadth of its activity
and unhampered by curious but legal
clauses they have been able to act quick­
ly to save their solvent but credit bereft
farmers.
No time is wasted by Kuning’s organ­
ization ; no energy is spared to keep a
broad river of credit flowing out to the
distant reaches of the territory.

Chase National Statement
A statement of The Chase National
Bank as of March 31st shows total re­
sources of $1,777,727,000, as compared
with $1,856,290,000 on December 31,
1932. Cash in the bank’s vaults and on
deposit with the Federal Reserve Bank
and other banks amounted to $289,489,-

000 as compared with $391,297,000; in­
vestments in United States Government
securities, $179,904,000 as compared
with $214,996,000; securities maturing
within two years, $134,113,000 as com­
pared with $116,305,000; other bonds
and securities including stock in the Fed­
eral Reserve Bank, $123,598,000 as com­
pared with $115,400,000; loans and dis­
counts, $905,532,000 as compared with
$887,187,000. Total deposits were $1,306,745,000 as compared with $1,236,000,000 on March 3rd before the bank­
ing holiday and with $1,466,000,000 on
December 31, 1932.
Earnings of the bank for the first
quarter exceeded dividend requirements
by more than two million dollars, which
amount was added to undivided profits,
making the March 31 figure $13,199,000 as compared with $11,130,000 on
December 31st, 1932.

Low Rates
The railroads of the entire country,
according to a formal announcement
made by C. L. Hunter, chairman, Pas­
senger Department, T runk Line Asso­
ciation, have adopted a new low-rate
plan for the convenience of visitors to
Chicago’s Century of Progress Exposi­
tion, whereby prospective visitors may
purchase in advance and before leaving
home hotel accommodations in Chicago ;
transfer from the railroad station to

G MAC SHORT TERM MOTES
available in limited amounts
upon request

hotel and back again; tickets of admis­
sion to the Exposition, and a sightseeing
tour of the city. Everything but meals
is included in this new plan, which com­
bines the several advantages of lower
prices to the visitors, of relieving them of
any inconvenience in securing hotel ac­
commodations, and of enabling them to
know, before they leave home, just what
the trip will cost.
These “visits” to the Century of
Progress will be sold at every railroad
station in the United States. They will
allow stays in Chicago from one day up
to five days or more. The prospective vis­
itors will have a choice of 27 first-class
hotels in Chicago from which to select
accommodations.

Confidence Restored
The sharp decline of the dollar in
terms of foreign currencies, which oc­
curred previous to and during the first
part of the moratorium period, has been
superseded by a return of confidence on
the part of foreign nations in the sound­
ness of our currency, according to
Moody’s Investors Service.
This return of confidence was reflected
in a sharp gain in dollar quotations to
about the levels of last October, shortly
after the banks were reopened. Since the
middle of March the dollar has been
relatively stable at levels well above the
gold export point.
From February 10 to March 4,
Moody’s index of 4 foreign gold stand­
ard exchanges, expressed as percentages
of parity, and which indicates the posi­
tion of the dollar, rose from 99.90 per
cent of par to 101.04 per cent of par,
well above the gold export point. Since
then, however, the rise in the dollar has
forced these quotations down to levels
around 100.31 per cent of par, and gold
exports would be unprofitable at present
levels.

Pays Usual Dividend
G eneral M otors
A c c e p t a n c e C o r p o r a t io n
Executive Office " B roadway at 57 th S treet - Mew Y or\, M- Y.


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Federal Reserve Bank of St. Louis

OFFI CES

IN

PRINCIPAL

CI TI ES

Alvin E. Johnson, vice president of
the Live Stock National Bank of Omaha,
announces that his institution has de­
clared the usual quarterly dividend of
\]/2 per cent, payable on March 31 to
stockholders of record M arch 28. An
uninterrupted dividend record, especially
in times through which we have just
passed, speaks well for the management
of this well-known institution.

Central Western Banker, M ay, 1933

15

IIts Application
N S Uto R
A
N
C
E
^
the Banhing Yraternityß^
Every dollar

placed

in L i f e

I n s u r a n c e b r i n g s an i n d i v i d u a l

and his f a m i l y nea r e r t o f i n a n c i a l i n d e p e n d e n c e
t han any pl an of w h i c h we k n o w 77

F IN A N C IA L INDEPENDENCE
Th rough Life Insurance
I

WAS sitting with a group of busi­
ness men the other day at luncheon
and I asked each one of them what
was the main thing they wanted to know
concerning their life insurance, and all
of them answered with the question,
“Are the companies in which I now
carry my insurance financially sound ?”
The American Public has a right to
know the exact condition of Life Insur­
ance Companies in this country, and espe­
cially so when you realize that over onehalf of the population of the United
States or 65 million individuals are pol­
icyholders in companies which have 108
billion dollars of insurance in force.
The question which these gentlemen
asked me at luncheon is a natural one
growing out of the economic turmoil
through which we have been passing.
I want to discuss with you for a few
minutes, two subjects:
1. T he S tab ility o f L ife Insurance
2. H ow to Gain F in an cia l Indepen­
den ce T hrough L ife Insurance

W ith a decrease in the value of securi­
ties of all kinds, including railroad bonds,
industrial bonds, and real estate mort­
gages, how does it happen that insurance
companies which have many of these
bonds and mortgages in their portfolios,
show a gain in assets in the past three
years of approximately 3 billion dollars
or one billion dollars for each of the
three most trying years in recent times.
Putting it very simply, it is because
the insurance companies do not carry all

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Federal Reserve Bank of St. Louis

By CLIFFORD D e PUY

Publisher, The Central Western Banker
Omaha

of their eggs in one basket and have their
investments diversified as to kinds of in­
vestments, as to maturity dates, and as
to their geographical location.
This plan has greatly increased the
stability of life insurance.
Let’s look for a moment at these in­
vestment baskets which contain $21,000,000,000 of assets and see how these vari­
ous eggs are distributed.
I have heard, as you have, about the
difficulties Life Insurance Companies

T H E L I F E Insurance Facts given
here were b r o a d c a s t by M r .
DePuy over stations W H O , DES
M O IN E S , and W O C , D A V E N ­
PORT, on A p r il 18, in connection
w i t h th e g e n e ra l o b s e r v a n c e o f
Financial Independence W e e k
must be having on account of their in­
vestments in farm mortgages, but it may
interest you to know that less than 9 per
cent of their assets come under the class­
ification of first mortgages on farm prop­
erties.
Other A ssets

W e also hear a good deal about first
mortgages on city property, but these
amount to only 27 per cent of the total
assets of insurance companies.

And of course there is never a group
gathers around the bridge table or in the
smoking room of a pullman, that doesn’t
discuss railroad bonds and what effect
these will have on insurance companies,
yet I find that the total railroad bonds
held by all insurance companies in the
United States are only 15 per cent of
their investment fund.
Then there are policy loans about
which you hear so much, but these only
comprise 18 per cent of the total assets.
The other investment eggs are carried
in baskets which are divided as follows:
Nine per cent invested in first
mortgage public utility bonds; 2 per
cent in first mortgage industrial
bonds; 8 per cent in government
bonds; 3 per cent in stocks; 4 per
cent in real estate; and 5 per cent
in cash and other admitted assets.

This diversification of the kinds of in­
vestments has added to the stability of
life insurance.
You have also observed that all these
securities represent first mortgages or
first liens as insurance company funds are
only placed in investments of this char­
acter.
T im e and P lace

Life insurance assets are also diversi­
fied geographically throughout the entire
United States, with approximately 38
per cent of life insurance funds placed
along the Atlantic coast from Maine to
Florida, and about 46 per cent through­
out the Ohio, Missouri and Mississippi
basin, and about 10 per cent in the Paci-

16

Central Western Banker, M ay, 1933

fie coast region, and 6 per cent in Can­
ada and the territories of the United
States.
This geographical diversification of
assets is another reason why insurance
companies have shown so much stability.
Life insurance companies are not pri­
marily interested in the day to day mar­
ket value of their securities as they buy
to hold and not to sell and they arrange
the maturities of their securities so that
they never all come due at the same time.
This diversification as to the maturity
of assets also increases the stability of
life insurance.
You have noticed therefore that the
stability of life insurance funds is main­
tained in 3 ways.
1st. Stability through diversification
as to the kinds of investments.
2nd. Stability through geographi­
cal diversification.
3rd. Stability through diversifica­
tion as to maturity dates.

During the year 1932, just as a little
frosting on the life insurance cake, liv­
ing policyholders received over $2,175,000,000 in cash on paid-up life insurance
policies.

And now I want to give you one more
reason why life insurance has made such
a remarkable record for stability and it
is this—

2nd. By creating an estate for your­
self by the purchase of life in­
surance, the cash value of
which will pay you a monthly
income when you are ready to
retire from business.

Incom e E xceed s E xpense

The total income of life insurance
companies has been far greater than their
total expenditures even in these days.
Here are the figures for 1929-19301931, the last 3 years for which figures
are available and which show that the
premiums paid by policyholders and in­
terest income from investments received
by insurance companies amounted to
$13,700,000,000 and was enough to pay
all expenditures and leave over $4,000,000,000 to be added to the assets for the
protection of policyholders.
Such a record is certainly additional
proof of the stability of life insurance.
One more question may be in your
mind about the stability of life insurance
companies and it is this, “ Have all life
insurance companies met all their matur­
ing obligations during this trying pe­
riod?”
The answer is emphatically yes as is
proven by the fact that every death
claim, every endowment policy, every an­
nuity payment and every other maturing
contract between policyholders and bene­
ficiaries has been paid by the life insur­
ance companies.
This is the record of life insurance
companies up to the first of this year,
and what a marvelous record it is! U n­
equaled in any other branch of American
business!

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Federal Reserve Bank of St. Louis

Y our F u tu re

If what I have presented to you so far
convinces you of the stability of the in­
stitution of life insurance as a whole,
then let us look for a moment at the sec­
ond division of this subject:
“How to gain financial independence
through life insurance?”
There are primarily just two ways for
you to gain financial independence
through life insurance and they are
these:
1st. By creating an estate through
the purchase of life insurance
which will take care of your
family if anything happens to
you, and thus make them fi­
nancially independent.

So, I suggest that you give real
thought to your life insurance program
remembering that while only 3 per cent
of the income dollar is invested in life
insurance, that in spite of this small per­
centage, 85 per cent of the solvent es­
tates are composed of life insurance
funds.
Certainly no stronger evidence could
be presented than this, that every dollar
placed in life insurance brings an indi­
vidual and his family nearer to financial
independence than any plan of which we
know.
Another reason why the premium dol­
lar which you invest in life insurance,
buys so much, is because in building a
general estate, you have to produce the
principal before you secure the interest,
but through life insurance, by depositing
the interest, you can create the principal.
T he B u sin ess P eak

The course of business in the last three
years reminds me of a mountain range
with its peaks and its valleys.
If you have been in Switzerland, you
have seen the beautiful Alps and have
noticed that Mount Blanc rises snow­
capped above all the other peaks of the
range.
If you have viewed the Andes in

South America or the Rocky Mountains
in this country, you have noticed that
from whatever point of vantage you may
look at these gorgeous exhibitions of na­
ture, there is always one peak that still
rises above the clouds and lifts its shaft
of stone and granite towards the sun.
In the business and financial world,
these high peaks, from whatever place
you may wish to look at them, are rep­
resented by the institution known as life
insurance.
These peaks rest on the solid and sub­
stantial foundation of a sound invest­
ment policy, backed by a diversification
of collateral, plus a record for careful
and conservative management which has
been unparallelled in our economic life
up to now.
So, in conclusion, I hope I have given
you some evidence of the stability and
solidarity of this great institution known
as life insurance and, second, that if you
want to be assured of financial independ­
ence, both for yourself and for your
loved ones, remember that every pre­
mium dollar you invest in life insurance
brings you nearer that goal.

Much Improved
The industrial picture is mixed. How­
ever, it is much improved over what it
was a few months ago, even disregarding
the favorable consequences of the legal­
ization of beer. Retail trade is improv­
ing. Electric power production made the
most favorable comparison with 1932 for
some time.
During the last few days of March
and early April a definite sales upturn
in the automobile industry was regis­
tered. The industry sees this as an indi­
cation of a normal month during April
now that banking difficulties are settling
and financing can continue unimpaired.
Increased requirements have already re­
flected in substantial gains in steel ingot
production.
On the back side is the gradual shut­
ting down of American copper mines—
indeed, when this is read there may not
be a single one in production. Producers
are simply unable to operate at present
price levels. It is believed that a tem­
porary complete shutdown would im­
prove the picture.
The railroads’ net profit is appreciably
below the 1932 level, which was ex­
tremely low. Much hope is placed in the
working out of the Administration’s rail­
road program.

17

Central Western Banker, M ay, 1933

W M . R. H U G H E S, S e c r e ta ry ,
N e b r a s k a R a n k e r s A s s o c i a t io n

R . H. B A R B E R , P r e s i d e n t
N e b ra s k a R a n k e rs A s s o c ia tio n

Banks Consolidated
T he Farmers State Bank of Shubert
has been consolidated with the Richard­
son County Bank at Falls City, the de­
posits being moved to the county seat
and depositors paid in full without re­
strictions. T he Farmers Bank was es­
tablished in 1895. Guy Hutchins was
president and W . L. Evans cashier. Shu­
bert now has but one bank.

Pioneer Dies
Ed Wilkinson, pioneer of Dixon coun­
ty and former banker of Newcastle, died
at the age of 79, after a short illness with
influenza. He was an early settler of
Daily township, and moved to Newcastle
thirty-two years ago to become president
of the Farmers State Bank, an office he
held for twenty years. During the past
twelve years he was in the grain business.

Miss Blanchard Passes
Miss Anna Laura Blanchard, 59, busi­
ness woman active in investment bank­
ing, died recently in an Omaha hospital
following an appendectomy. She headed
the Farm Land company, formerly was
manager of Stull Bros., and at one time
managed the farm mortgage division of
the former Omaha T rust company.
A resident of Omaha about 25 years,
she had been a member of the Omaha
W oman’s club. H er charity work was
extensive, but it was known only to her
most intimate friends.

New President
R. Emerson is the new president of
the Dawson County State Bank, succeed­
ing S. B. Cole, who resigned.

Approve Loans
Another step in reconstruction of the
banking system was taken last month at
the Omaha office of the Reconstruction
Finance corporation, when authorization

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Federal Reserve Bank of St. Louis

was received for purchase of stock in na­
tional banks and for loans to permit such
purchase.
Local officials expect that a number
of Nebraska banks—none in Omaha—
will take advantage of this to strengthen
their capital structures.
The act was intended to encourage
communities to assist in the reorganiza­
tion of national banks. The banks could
issue preferred stock, not subject to
double liability; and this could be bought
either by local persons with funds lent
by the R.F.C., or by the R.F.C. itself.
An open bank which is to continue
business, a closed bank about to reorgan­
ize, or a bank to be newly formed are
eligible to apply for the loans.

Given Ovation
The people of Taylor and vicinity met
recently and tendered Robert Rusho of
the Bank of Taylor an ovation in recog­
nition of the capable manner in which
he has handled the bank situation during
the past trying months. The affair was a
complete surprise to M r. Rusho, but
none the less gratifying.

Hidden Wealth
Secretary Luikhart of the Nebraska
department of trade and commerce esti­
mated that the cream of $20,000,000 in
hidden wealth is finding its way into the
country banks of Nebraska.
Previous reports indicated that nation­
al banks received large new deposits of
gold and bills soon after the reopening.
Luikart made known the fact the state
banks had not been forgotten by the de­
positors.
“The amount of money deposited has
been astounding,” he said. “In some
places the percentage of new deposits is
unbelievable. None of the banks has re­
ported to me that it failed to receive
more money than was withdrawn.”

Heads Stock Yards Bank
James B. Owen, vice-president of the
Stock Yards National Bank, was elected
to succeed Ford Hovey as president of
the bank at the annual meeting of stock­
holders. M r. Hovey was elected chair­
man of the board of directors.
The change was made, it was an­
nounced, because M r. Hovey’s duties as
chief of the agricultural division of the
Reconstruction Finance corporation are
expected to keep him in Washington
most of the time.
M r. Owen began his banking career
34 years ago as a clerk for the South
Omaha National Bank. In 1911, when
that bank was merged with the Union
Stock Yards National to form the pres­
ent bank, he was made an assistant cash­
ier.
W . A. Sawtell, for the past 13 years
with the Stock Yards National of St.
Paul, now an affiliate with the North­
west Bancorporation, has just resigned a
vice-presidency there, and was elected ex­
ecutive vice-president of the Omaha
bank.
Other officers re-elected are: Vicepresident, F. J. Enerson; assistant to the
president, L. K. Moore; cashier, W . H.
Dressier; assistant cashiers, H. C. M il­
ler, C. L. Owen and H. A. Hovey;
auditor, T . G. Boggs.
Directors will be the same as before,
with the addition of M r. Sawtell.
Ford E. Hovey, chairman of the board
of the Stock Yards National Bank, is
one of those mentioned as successor to
Gardner Cowles of Iowa on the Recon­
struction Finance corporation board at
Washington.
Resignation of M r. Cowles, owner
and publisher of the Des Moines Regis­
ter-Tribune, took place recently.
M r. Hovey has been in Washington
for a number of months and it is said his
work as organizer and head of the

18

Central Western Banker, M ay, 1933

Regional Agricultural Credit corpora­
tion, R.F.C. affiliate, has attracted much
favorable attention.

New Bank
The stockholders of the Farmers’ State
Bank and the First State Bank of Tecumseh have decided upon a merger of
the two institutions, to be known as the
“Johnson County Bank.” This plan has
been under consideration by the bank
officials for some time, and, after a de­
cision to go ahead with the plan, appli­
cation was made to the department of
trade and commerce of the state of Ne­
braska, financial arrangements were per­
fected under supervision of that depart­
ment, and license was granted for the
merger and to open the new bank im­
mediately.
The officers of the Johnson County
Bank will be as follows: Frank Dafoe,
president; J. V. Johnson, executive vice
president; Al. N. Dafoe, vice president;
H. W . Schepman, cashier. The directors
will be Dr. A. P. Fitzsimmons, Frank
Dafoe, J. V. Johnson, Al. N. Dafoe, C.
E. Stewart and Charles A. Dafoe.

Dies in McCook
Fayette M . Harwick, Moorefield
banker, 45 years of age, died at McCook
recently. He had suffered for many
months from an anemic condition.
M r. Harwick was associated with the
Bank of Moorefield for 18 years and
was one of the most active and promin­

In

th e

ent men in the community and well
known throughout Frontier county. Ex­
pressions of regret at the passing of M r.
Harwick and sympathy for the bereived
family have been commonly made in
Curtis and other communities as well as
in Moorefield.

Merge at Thayer
The Thayer Bank, formed by the con­
solidation of the Bank of Thayer and
the Farmers State Bank of Thayer,
opened recently under a new charter.
The merger was agreed to by all stock­
holders of the two institutions.
The new bank has capital stock of
$15,000 and a surplus of $1,500. C. A.
McCloud is president; A. A. Price, vice
president; and Paul Mueller, cashier.
The Bank of Thayer was organized in
1882 with G. W .Post as president. M c­
Cloud became president in 1912. The
Farmers State bank was started 15 years
ago with Price as president and Mueller
as cashier.

Heads Bank
Waldo Hancock, president of the
Hancock Implement company of H er­
man, with branch houses in Tekamah
and Blair, has been elected president of
the Burt County State Bank of Tecumseh, succeeding his brother, W arren D.
Hancock, who retires from the business
on account of impaired health. Roy Han­
cock, in charge of the implement com­
pany’s business at Tekamah, becomes a

T iTIS

sound bank offers

C A P IT A L

you the advantages of its

of

facilities, developed through

NEBRA SK A

almost 25 years experience
in serving its correspondents
and other depositors.

(fPf®

Elected President
Edwin J. Wolbach, prominent in the
business and civic affairs of Grand Island
and Hall county since 1899, was elected
president of the First National bank, at
a meeting of its board of directors. M r.
Wolbach is a son of one of its founders
and its first president, the late S. N.
Wolbach, and succeeds his brother, Emil
Wolbach, the second president of the
bank, who met death several weeks ago
in an airplane accident. The bank was
organized in 1871.
I. R. Alter, as executive vice-presi­
dent, will continue in active charge of
the business of the bank. F. J. Cleary is
vice-president, P. R. Birk, cashier, and
T . R. Murray, assistant cashier, while
the board of directors, for the time being
at least, will be composed of the six mem­
bers of the board elected at the last an­
nual meeting, E. J. Wolbach, I. R.
Alter, F. J. and J. L. Cleary, V. E.
Evans and Oscar Reimers.

Easy Money
Nebraska’s loss to bank robbers in one
week stood at approximately $163,000,
after the $10,480 obtained by two gun­
men from the Central City National
bank was added in.
The last of the three holdups came
five minutes before closing time at the
Central City bank. Practically all the
loot was in currency and a perfunctory
check showed no bonds missing. No one
was hurt. The robbers apparently es­
caped.

Cashier Resigns
H. S. Kirkbride has resigned his posi­
tion as cashier of the Franklin County
Bank. M r. and Mrs. Kirkbride plan to
continue to make their home in Hildreth
where M r. Kirkbride will represent the
Bankers Life Insurance Company. Earl
VanSteenberg will be promoted to M r.
Kirkbride’s position as cashier and Miss
Tena Straatman will be assistant cashier.

Dies in North Platte

Affiliated with

CONTINENTAL
NATIONAL BANK

N o r t h w e st B a n co r po r a tio n

LINCOLN, NEBRASKA


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Federal Reserve Bank of St. Louis

director of the bank. Another brother,
R. K. Hancock, cashier of the bank, re­
mains in that position.

E. F. Seeberger, 73, until two years
ago chairman of the board of directors
of the First National bank of North
Platte, and at one time president of the
bank, died at his home recently. He had
been in ill health for a year.

Central Western Banker, M ay, 1933

Business Booming
Deposits of the Douglas County bank
of Omaha in Benson have increased to
the “verge of $200,000,” an increase of
more than $30,000 since December 31,
Clement L. Waldron, president, de­
clared recently. He said depositors are
“flocking to the new institution,” and
that this was an indication “business is
booming” in Benson.
“There isn’t a vacant store in Ben­
son,” M r. W aldron said. “Every busi­
ness in Benson is improving rapidly.”

Wins First
Dale E. G. Scott, of the Stock Yards
National bank, won first honors recently,
in an oratorical contest of the Omaha
chapter of the American Institute of
Banking. The subject was “Strengthen­
ing Public Confidence in Banks.”

Consolidated
Tenseness owing to the unstable local
banking condition has been relieved in
Cozad by the merging of the Cozad
State bank and the Stockmen’s State
bank.
The new institution has taken over the
charter of the Cozad State, with a capi­
tal of $35,000, and the total deposits of
the two banks amounting to more than
$250,000.
C. T . “Cliff” Young, well known live
stock man and farmer, is president of the
new institution; Roy F. Stuckey, vice
president; G. E. Stuckey, cashier.
Former presidents of the two banking
houses, S. D. Ralston of the Stockmen’s
bank and C. P. Hord of the Cozad State,
have retired.

19
trict elected W . Dale Clark a director
of the Omaha branch to succeed the late
Robert O. Marnell of Nebraska City,
Neb.
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Return Money
The anti-hoarding dictum is produc­
ing results in Pueblo, according to re­
ports made by local banks. The banks
report that considerable hoarded money
has found its way from safe deposit boxes
and domestic hiding places back into the
banks’ vaults.
No unusually large amounts have been
reported with most of the deposits being
for smaller amounts. It was reported,
however, that several deposits ranging
from $3,000 to $10,000 have been made.

Unrestricted
Sixty-one of Colorado’s 102 state
banks not federal reserve members on
April 7 were operating on an unrestrict­
ed basis, Grant McFerson, state banking
commissioner, announced.
This number compares with 36 on the
Monday following the end of the na­
tional banking holiday.
Additional applications to be placed
on the unrestricted list are being received
daily, McFerson said, and several are
now awaiting action.

Larger Clearings
Denver’s total bank clearings for
March, which will go down in history
as the month of the bank holiday, gave
Denver businessmen a pleasant surprise
when announced.
Although banks were open only nine­
teen days in March as compared with
twenty-three days in February, clearings
in March were more than $1,700,000
greater than in February.

Satisfied
Satisfaction in the condition of the
First National Bank of Eads was ex­
pressed at a meeting of 35 stockholders
in the institution last month.
President F. L. Pyles of the deposi­
tory presided at the meeting and an­
swered all questions regarding the con­
dition of the bank and gave a report on
the assets and liabilities of the institu­
tion. He reported that enough actual
cash was on hand to pay 50 per cent of
the bank’s deposits.

Normal Business
The Citizens State Bank of Ouray
has opened for the transaction of normal
banking business. This action was taken
after a meeting of directors of the bank
and a committee of representative citi­
zens.
It showed the bank was in a very liq­
uid state, that its paper was good, that it
could liquidate under a plan approved by

McBride Dies
Edward J. McBride, 80, a resident of
Bluehill since 1892, died there recently.
Born in Lake county, Iowa, M r. M c­
Bride came in the employ of the Bluehill cooperative. He was said to have or­
iginated the now world famous Bluehill
butter and cheese.
In 1905 he organized the Commercial
bank and remained as president of the
institution until his death.

SAVE TIM E
B y U sing Our

COLLECTION SERVICE

Dale Clark Honored
W . T . Kemper, chairman of the Com­
merce T rust company, Kansas City, was
elected the tenth district member of the
federal advisory council in Washington
to succeed W . S. McLucas, who recently
became president of the newly formed
National bank at Detroit. The tenth dis­

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

LIVE STOCK NATIONAL BANK
UNION STOCK YARDS—OMAHA

TH IS BANK HAS NO A FFILIA TED COMPANIES
Member Federal Reserve System and Omaha Clearing House

20

Central Western Banker, M ay, 1933

the state banking department and pay
out its deposits in a short time and have
money left over for the stockholders.

Home Loan Funds
Between 2 and one-half and 3 million
dollars worth of new credit will become
available for Colorado home owners
through the federal home loan banking
system, O. A. King, Denver member of
the board of directors of the Federal
Home Loan bank of Topeka, Kan., an­
nounced.
King said four Colorado building and
loan associations have been accepted for
membership in the bank and that favor­
able action on the applications of ten
other associations in the state is expected.
“The fourteen associations combined
expect to bring more than half a million
dollars into the state for immediate use
and will have a total credit rating with
the bank of nearly 3 million dollars,” he
declared.
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Merged
Merger of the Farmers and Merchants
State bank and the Effingham State bank
as the Farmers and Merchants State
bank of Effingham, was announced re­
cently. W . C. Roche is president of the
new bank. Both are pioneer banking
houses.

Board Member
George E. McKinnis, president of the
Fidelity Building and Loan association,
returned to Shawnee recently after at­
tending a meeting of directors of the fed­
eral home loan bank in Topeka.
McKinnis was reappointed as a board
member from the tenth district at the
Topeka meeting. The tenth district com­
prises Oklahoma, Kansas, Nebraska and
Colorado.

Representatives from other states at
the Topeka session were optimistic con­
cerning present business conditions and
noted a decided uptrend in general im­
provement, McKinnis said.

Hanna Dies
As dramatically as he had lived,
George W . Hanna, of Clay Center, 71
years old, died unexpectedly in the office
of Governor Alf M . Landon at Topeka.
There apparently to interview the
governor on political appointments af­
fecting Clay county, M r. Hanna was
overcome while waiting to see Landon.

New Bank
An enthusiastic crowd of more than a
hundred persons met recently to consider
the establishment of a new bank in Long­
ford. It was explained that a plan was
approved by the state banking commis­
sioner.
After the explanation of the situation
and remarks concerning the plan in mind
for the organization, every person pres­
ent was called on for opinions. There
was no single instance of disapproval of
the plan to organize a new financial in­
stitution.

Deposits Increase
The board of directors of the Kansas
State bank, of Newton, expressed them­
selves as well satisfied with the financial
report at the regular quarterly directors’
meeting.
The financial statement showed an in­
crease of $100,000 in deposits in the past
month which was received by the board
as indicative of the return of better
times.

Annual Meeting
The annual meeting of the Butler
County Bankers’ Association was held
at Augusta recently. The meeting was
scheduled to be held on March 8, but it
was postponed.
The meeting was held at the Augusta
Community Hall, with John T . Wilson,
of Augusta, chairman of the program
committee. The meeting was opened with
a dinner at 6:30 o’clock. This was fol­
lowed by a program and business meet­
ing. The program was featured by an
address by Judge J. D. Dickerson, of
Wichita.
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iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiip iin m iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiu

Renamed

No Service Charge

Gov. Alf M . Landon announced re­
cently the reappointment of three mem­
bers of the state banking board. Those
reappointed were W . A. Hayes of LaCrosse, W illard J. Breidenthal of Kan­
sas City, and B. F. Boys of Indepen­
dence.

In order to encourage deposits, the
Lusk State bank has temporarily sus­
pended service charges on checks and
limited deposits, Cashier C. W . Erwin
announced.

Re-opened
Re-opening of the Cheney State bank,
which has been closed since the banking
holiday, was announced recently by H.
W . Koeneke, state bank commissioner.
The Rose Hill State bank also has been
re-opened.
j

C e n tra l T y p e w r ite r E x c h a n g e , Inc.

Paid Up
The First National Bank of Green
River, which was robbed by two youth­
ful bandits, received a draft for $19,720,
or the amount of cash and currency tak­
en.
The draft was from the Fidelity and
Deposit company of Baltimore, the bank’s
insurer.
The sheriff’s office was following in
turn an endless number of clues in the
robbery but officers indicated their belief
the robbers had effected a successful es­
cape from the country.

(E S T . 1903)

N EW AND R E B U IL T T Y PE W R ITE R S, ADDING M ACHINES, CHECK
W R IT ER S — FU L L Y GUARANTEED.
R EB U IL T MIMEOGRAPHS, STENCILS AND INKS
LOW EST PRICES

ALLEN-WALES
1820 Farnam St.

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

THE F IN E ST “H EA VY D UTY ’
ADDING M ACHINE M ADE

Omaha, Nebraska

Apply for Charter
Informal application for a charter for
the new Riverton National Bank has
been sent in to Washington, signed by
the local bank organization committee.
This is the first step to be taken follow­
ing which the Treasury Department will
send an inspector or inspectors to the

21

Ceiitral Western Banker, M ay, 1933
community to study local conditions and
the possibility of assurance for the bank
to be established and given sufficient sup­
port to prosper.

Home Loan Credit
Wyoming members of the Eleventh
District Home Loan Bank have had
credit lines amounting to $125,000 ex­
tended to them, Charles H. Stewart,
vice president and manager, announced.
T he bank is located in Portland, Ore.
T he office has to date loaned $175,000
to its members, he said. Two loans were
made to building and loan associations in
Montana, one in Washington and one in
Oregon.
Stewart said lines of credit amounting
to $4,295,000 have been extended to 26
institution members in the six states com­
prising the eleventh district. Credit lines
in Oklahoma amounted to $1,160,000.
This credit extension amounts to 12
times the stock subscriptions of member
institutions.

Membership
The federal reserve board announced
the Farmers’ State bank of Worland,
Wyo., had been admitted to membership.

Named Depository
The Stock Growers National Bank
and the American National Bank, both
of Cheyenne, were designated depos­
itories for city funds by the city council.
The designation is to be effective from
April 1, 1933 to March 31, 1934.

In Las Cruces
C. C. Ozment of Albuquerque, well
known to Las Cruces citizens through
his work as receiver of the old Bowman
bank, has been selected to fill the posi­
tion of the late W . P. B. McSain as ac­
tive vice-president and manager of the
First National bank of Las Cruces.
M r. Ozment has had extensive experi­
ence in banking in both this and other
states, as well as having had fifteen
years’ experience in receiverships of in­
solvent banks in various parts of the
country. He comes to the First National
bank with the highest of references, and
as a well-known and highly regarded
banking authority it is felt that he will
be a big asset to the bank, as well as the
community.

Washington, $22,500,000; Colorado,
$6,014,000; New Mexico, $5,075,000 ;
Utah, $4,200,000 ; Montana, $2,500,000; Idaho, $2,634,000; Nevada, $2,022,000; Oregon, $18,400,000; W yo­
ming, $1,700,000.

Corn H as
Better Prospects
United States corn will meet less ac­
tive competition in world markets this
year because of prospective short supplies

Exempt
Banks in New Mexico are exempt
under the new income tax law because
the state has no authority to impose new
taxes on national banks. State banks are
given the same treatment to avoid dis­
crimination, according to a statement is­
sued by Attorney J. O. Seth.
M r. Seth says the federal government
permits national banks to be taxed in any
one of four ways, which are stipulated
by law. Banks in the state are now taxed
on their value, so no other tax can be
imposed on the national institutions. The
same exemption is allowed state banks to
keep them all on the same footing.

Estimates Increase

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Open in Gallup
After 38 days without a bank, Gallup
recently ended its banking holiday. The
Merchants bank resumed normal busi­
ness, subject only to Federal Reserve
bank restrictions on gold withdrawals
and hoarding.
The bank was opened under orders of
State Bank Examiner John Bingham.
L. N. Cary, active vice president of
the Merchants bank reported a business
pickup under “entirely normal’’ condi­
tions. Many new accounts were opened,
deposits were mounting, and a large
amount of business was finally tran­
sacted.

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Federal Reserve Bank of St. Louis

Present estimates for 1933 highway
construction expenditures in 10 Far
Western states indicate an increase of
$21,000,000 over the 1932 aggregate
total for this area, according to comment
by the Bank of America, Pacific Coast
Branch Banking institution. The esti­
mated expenditure of $96,000,000 for
highway development in the Far West
this year is hailed as a forerunner of em­
ployment throughout the remainder of
the year.
California, already noted for its ex­
cellent highways, has a two-year pro­
gram of $61,700,000. M ajor work al­
ready recommended provides for im­
provement on 151 projects, involving a
total of 867 miles. The budget also pro­
vides for maintenance of a system of
highways totaling approximately 7,349
miles throughout the state.
Funds as reported from other states
providing for 1933 construction are:

Modified Rates
on A ll Classes
of Rooms
400
ROOMS
WITH
BATH

fr o m

M o re than 150 Rooms Priced at
$2.50 and $3
Omaha's l a r g e s t and finest
h otel, th e cen ter o f business,
so cia l and tra v el activ ity. E x­
cellen t food in th e b eau tifu l
m ain d in in g room , and popular
Indian Grill.

Operated by EPPLEY H O T E L S C O .

Central Western Banker, M ay, 1933

22
of Argentine corn and the marked reduc­
tion in the South African crop, it is ex­
pected by the Bureau of Agricultural
Economics.
The Argentine corn crop is forecast
at 264,000,000 bushels against 293,000,000 bushels produced in 1932, and the
record harvest of 420,000,000 bushels in
1931. Stocks of old crop corn are low
with supplies for export estimated at ap­
proximately 8,000,000 bushels as of
March 1, says the bureau. Shipments
during March were about 7,600,000
bushels.
The bureau says that shipments dur­
ing the next Argentine crop season be­
ginning M ay 1 will have to be drawn
principally from the new crop. The qual­
ity of the new crop is reported as satis­
factory although rain interrupted har­
vesting in some areas.
Stocks of old corn are reported mate­
rially reduced in the Danubian coun­
tries, with available exports estimated at
about 35,360,000 bushels as of April 1.
Russia is offering small quantities of
corn, but the United States is said to be
the only important country which still
has a relatively large surplus.
Supplies of corn in the United States
are reported as being materially greater
than a year ago, although farm consump­
tion is reported as being heavy.

How Good Times
Can Start
T he offices of America are radiating
centers-of-contact wherein the spirit of
business is created, says L. C. Walker,
president of Shaw-Walker company. In
effect, they are factories, manufacturing
a product — Business Opinion — which
spreads quickly to the homes of the coun­
try.

This product, Business Opinion, is al­
most chemical in its effect, with an amaz­
ingly prompt reaction for good or ill,
depending on whether it is colored by
confidence or gloom.
This is how it works: The office ex­
ecutive’s secretary is going to need a new
spring coat. She has $35 saved up but is
not quite sure she should spend it.
H er boss comes in, growls over the
morning mail, grouses with his associates
about the news in the morning papers,
dictates some pessimistic letters, and re­
fuses to O. K. a requisition for 500 new
letterheads.
Is she likely to buy that spring coat?
She is not! She decides to get along
with her two-seasons-old coat.
But it does not end there. The office
grapevine telegraph picks up the gloom
news, carries it through all departments
—sales, production, service. Spreads it
even to distant plants and branch offices
or stores. Everybody connected ever so
remotely with the enterprise goes home
and spreads the gloom. Inside of 24
hours that $35 lost sale has been multi­
plied literally by hundreds.
Such is the product that so many of
our offices are turning out today— Busi­
ness Opinion that is poisoning the stream
of public thought and making recovery
doubly difficult.
Just as surely as the sun rises in the
East the return to “good times” must
start in the offices of America.
M ark Sullivan, thoughtful student of
affairs, w rites:
“The end of a depression, the begin­
ning of prosperity, comes unnoticed. And
it comes solely because of recuperative
forces which are within the world of
business itself. Government action can do
little to help. The speeches of politicians,
especially those running for office, help

not at all. Cure comes solely through the
aggregate of the working and planning
of individuals.”
Which gets us right back to the office
—where the working and planning or­
iginate. It is the nerve center of Ameri­
can business life.

Great Payroll Industry
The Railway Age, in a special issue,
recently published a vital message, ad­
dressed to legislators, to regulatory au­
thorities and to the public.
It points out what followers of the
railroad problem have long known—that
prosperity cannot be achieved until the
rails are on a sound earning and finan­
cial basis.
This is easily proven. As The Rail­
way Age shows, the railroads are our
largest industry, excepting agriculture.
Their condition influences the welfare
of every American citizen.
Eighteen billion dollars of the savings
of our people are in railroad securities—*
five billions of it being held by savings
banks and insurance companies.
In normal times 1,700,000 families
depend on the railroads directly for their
livelihood— and millions depend on them
indirectly.
In normal times the railroads disburse
annually $6,000,000,000— and every in­
dustry gets a share.
Government—national, state and lo­
cal—taxes the rails $1,000,000 a day.
Is it any wonder, with this great in­
dustry subject to the most unfair kind
of competition and the most stringent
kind of regulation, we are finding the
work of recovery difficult? And it will
continue to be difficult until our basic in­
dustries are given new life— and the rail­
road is one of the most vital.

AUSTRALASIA

BANK O F NEW SO U T H W ALES
E ST A B L IS H E D 1 8 1 7

( W i t h w h ic h a r e ¡im a lg a m a t e d T H E W E S T E R N A U S T R A L I A N B A N K
a n d T H E A U S T R A L I A N B A N K O F C O M M E R C E L td .)
P A ID -U P C A P IT A L
........................................................................................... £A 8 ,7 8 0 ,0 0 0
R E S E R V E F U N D .......................................................................................................
6 ,1 5 0 ,0 0 0
R E S E R V E L I A B I L I T Y O F P R O P R I E T O R S ...........................................
8 ,7 8 0 ,0 0 0
£A 2 3 ,7 1 0 ,0 0 0

Aggregate Assets 30th September, 1932, £A 107,525,115
A G E N T S __ F I R S T N A T IO N A L B A N K , O M A H A , N E B R A S K A

HEAD OFFICE, GEORGE ST., SYNDEY


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Federal Reserve Bank of St. Louis

GEN ERAL M AN AGER, ALFR E D

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

LONDON OFFICE, 29 THREADNEEDLE ST., E. C. 2

7 1 0 B r a n c h e s a n d A g e n c i e s in A l l A u s t r a l i a n S t a t e s , F e d e r a l T e r r i t o r y ,
N e w Z e a la n d , F i j i , P a p u a , M a n d a t e d T e r r i t o r y o f N e w G u in e a a n d L o n d o n

For Yo ur Directors . . .


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Federal Reserve Bank of St. Louis

Send the C E N T R A L W E S T E R N
B A N K E R of O M A H A to y o u r
Directors—they will thank you, and be
inspired by reading in each issue:
1. Helpful articles on banking subjects.
2. Ideas which have made money for
other banks.
3. Suggestions for improved banking
service.
4. And the business and banking news of
your own State.

|
j
j

Central Western Banker
410 Arthur Bldg.
Omaha, Nebraska

\

Gentlemen:

\

Please send me information on special rates for subscriptions to
our directors.

? 1933

Nam e......................................................................................
Î

Address..........................
City

State


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Federal Reserve Bank of St. Louis