Full text of Central Western Banker : November 1928, Volume 23, No. 11

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CENTRAL WESTERN


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Federal Reserve Bank of St. Louis

NOVEM BER

19 2 8

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

The first electric light plant in
Omaha was started in 1883.
The power company has in­
creased its efficiency steadily
until today the Nebraska
Power Company is rated as
one o f the best public utility
companies in the
United
States.
The First National Bank o f
Omaha began business in
Omaha in 1857— twenty-six
years before electric lights
were inaugurated in Omaha.
M any o f our correspondent
banks have been customers for
more than half a century.

First National
I R ank o f

Omaha

FIRST TRUST COMPANY
I

------------------------------------------------------------------------ J

3

ast>
m in u te

sinks

send "Bankers'

N E W d
T N O R D E R to m ake the increased
A dividend o f B an citaly C orp oration

has been definitely abandoned.
-------------

effective before the stock is turned in
for the TransamencaCorporation
shares, a recent letter to stockholders
states that the $1 disbursement will

. M ERGER was recentl consum.
alarm, and it was but two hours un/ l matedin DesMoines
b ' tween the bl the authorities had the young man
Bankers Xrust Co
and the Pe0.
custody,
pIes Savings Bank The business of

be m ade to holders o f record D ecern-

the

-C1

118 -is- an in ciease ovei

fo rm e r rate o f 5 6 cents a share, and
uas

o

ave

>een pan

ree m o n t s

a er'

the bandit attacked her parent w ith
the butt
o f his gun.
T h is gave the

tw0 institutions is n ow conducted

in the quarters and under the nam e o f
the B an k ers T r u st C om p an y .
C om bined

resources

are

m ore

than

$ 9 ,-

0 0 0 ,0 0 0 .
BANKERS

COMPANY

of

p u r c h a s e

BY

THE

W . S A R G E N T , president o f

the C h icago & N o rth w estern R a ilw a y , recently took an inspection trip
over com p an y lines, and reports b u siness conditions in the N o r th w e st to be
sound financially, and to show indi-

------------T H E

1? R E D

N ew Y ork

i ? tions o f steady im provem en t.

M r.

New York, recently formed to
conduct the investment banking bus.ness previously carried on by the bond

I Stock Exchange of the Blair & SaiXent mentioned a number of ex­
Company building and advanced ne- Pans. T Prolect? wh,ch £hls road were
otiations for thbe purchase o f the considering m the near future.

departm ent o f the B an k ers 1 rust C o .,
u
ca ■ u
j
-a.
1
7 ’

W .i m 1
i 1 -Lr
-n
C ostal le le g r a p h b u d d in g near it, w d l

b u sin ess 0*3 T h i s ^ e s t a b li s h m e i f f C f ° a

V

separate securities organ ization is in
line w ith the trend o f large
financial

e *he N e w Y o *
M ° Ck

E x c h a n Se an en"
the“ ' ex p a n slo n

P‘ ° g r a m '

________
A

N

IN T E R N A T IO N A L

corp o ra-

tion: w hich wil1 have one o t the
largest initial capita structures o f any

institutions to segregate this division
o f their business.

-vet organ ized m the U n ited States,
RAPTURE
OF
AYOUTHFUL
w a s announced recently by D illo n ,
^ bandit w h o had robbed the B an k
R ea d & C om p an y , coincident w ith an
o f M o r rill, K a n sa s, recently, w a s the
o fferin g o f $ 5 0 ,0 0 0 ,0 0 0 o f its p r e fe r pLA N S
H A V E recently been a cresult o f a ch ild’s scream .
E n terin g red stock. T h e new com p an y w ill be
cepted by the A m e r ic a n Ir v in g
the bank w ith her fath er, the little kn ow n as the Lfnited States & In terT r u s t C o m p a n y fo r its n ew 4 4 story
girl let out a scream o f frigh t w h en national Secu rities C orporation ,
bu ildin g
at
N o.
1
"
----------------W a ll
street.
T h e
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k o fr dem
olish in g
W n il h L h K ,
the buildings n ow o c V o l. 2 3 , N o . 1 1
N O V E M B E R , 1928
president
of
th e
cu pyin g the site w ill
begin
early
next
spring and w ill p ro vid e an area o f a p p ro x im a tely
2 0 ,0 0 0
square feet fo r the
erection o f the new
structure.

U n io n
1 rust C o m PanY- C h icago, recently to id m em b ers o f the

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r
I n
/ A / e
/ e e f i p
- f / f l / f l O l O O U L ,

A
RECENT AN J^ ‘N O U N C E M E N T

T h i r t y W a y s to F i g u r e I n t e r e s t ..................................................... 4
C h ic a g o L i v e S t o c k E x p o s it i o n
......................................................6
P r o te c tin g Y o u r B a n k A g a in s t E x c e s s iv e T a x a tio n
7
BY thoknton cooke
S c ie n c e D e c la r e s W a r o n C r i m e ............................................. 8
F o r e c lo s u r e s a n d H o w to A v o i d T h e m ...................................... 9
by a . kopperud
L e g a l D e p a r t m e n t .......................................................................................10
C a r t o o n s o f t h e M o n t h ......................................................................... 11

A u to m o tiv e
E q u ip m ent A sso c ia tio n that
he did not believe in­
d i v i d u a l initiative
w o u ld be throttled by
chain store m ethods.
H e said that success
cam e fr o m intelligent
m erch an disin g and a

by S am u el P . A r n o t,
president o f the C h icago B oa rd o f T r a d e ,
discloses t h a t t h e
board w ill deal a ct-

B o n d s a n d I n v e s t m e n t s ............................................
• • • 1*5
I n s u r a n c e ............................................................................................................. L l
N eb rask a N ew s
•
* • •
24
N e w s o f t h e O m a h a S t o c k y a r d s ...................................................2 7
S o u th D a k o t a N e w s .................................................................................. >0

close study o f cu sto m ers’
needs,
and
that any one w h o e x ercised those facilities
had an equal chance

ively in stocks, as w ell
as grain. T h is w o u ld

K a n s a s N e w s .................................................................................................... 3 2
C o lo r a d o N e w s ..................................... ■
• •
• • • 33

to succeed.
r > y r;

indicate that the p ro posed
m erger
b e. raar. .1
-p
1 r
LWeen tne H oard OI
T r a d e and the C h icapo S to ck E x c h a n v e
S


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Federal Reserve Bank of St. Louis

H , T jp u m

T h e 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
Published monthly at 416 Arthur Bldg., Omaha, Nebraska
Subscription, 2S cents per copy; $2.00 per year.
Entered as second-class matter at the Omaha postoffice.
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(Continued on Page 19)
t> a

J jIU H 1

Central Western Banker, November. 1928

4

30

W ays To
Figure Interest

'T ' HE well-known Heinz
company, with its 58
varieties, has nothing on
the interest figuring habits
of bankers of America, ac­
Date
cording to an exhaustive
Jan.
1
survey made by the Com­
6
mittee on Bank Facilities
11
and Service, Savings Bank
Feb. 16
Division of the A. B. A.
24
Exactly fifty-two methods
28
Mar. 15
are explained in a recent
26
folder gotten out by the
April
4
committee, which forms the
13
basis for the article on this
18
25
and the following page, al­
25
though but thirty methods
26
are given herewith. First
29
of all, a typical account,
May
3
7
Account No. 1, is shown
7
in the box on this page.
June
1
The thirty methods in
question, are given as fol­
lows, together with the in­
terest computed on this ac­
count, at the end of each method, in
brackets. The thirty methods follow :
Deposits go in interest from first
of each month, on all sums on de1 posit for at least one calendar
month preceding interest date.
Withdrawals deducted from latest
deposits. No interest on withdraw­
als between interest periods. Com­
pounded semi-annually. ($23.72).
Deposits go on interest from first
of each month on all sums on de2 posit for at least one calendar
month preceding interest date.
Withdrawals deducted from first
deposits (beginning of six months
period). No interest on withdraw­
als between interest periods. Com­
pounded semi-annually. ($7.90).
Interest from date of deposit to
3 date of withdrawal. Compounded
semi-annually. ($60.86).
Deposits go in interest from first of
r each month on all sums on deposit
4 for at least one calendar month
preceding interest date. On with­
drawals interest ceases from first
of month preceding that in which
withdrawal is made. Compounded
semi-annually. ($37.07).
Deposits go on interest from first
of each month on all sums on de5 posit for at least one calendar
month preceding interest date. On

ACCOUNT No. 1

Debit

| Credit

Balance

Principal

1 Withdrawls

Deposits

$78
60
65
20
20
20
20
63
15
1,700
$50
100
2,000
150
100
150
30
4,500

withdrawals interest ceases from
first of month in which withdraw­
al is made. Compounded semi­
annually. ($53.72).
Deposits go on interest from first
of each month an all sums on
6 deposit for at least one calendar
month preceding interest date. In­
terest computed on lowest balance
for each quarter, except when bal­
ance for second quarter is lower,
then the lowest balance for onehalf year is used. Compounded
semi-annually. ($23.72).
Interest is calculated by calendar
months on the amount of credit
7 shown by the account on the first
day of the preceding month. Com­
pounded semi-annually. ($55.27).
Deposits go on interest from first
of each month on all sums on de8 posit for at least one calendar
month preceding interest date. In­
terest is calculated by calendar
months on the amount of credit
shown on the first day of the cur­
rent month. Compounded semi­
annually. ($39.0).
Deposits go on interest from first
of each month on all sums on de9 posit for at least one calendar
month preceding interest date. In­
terest is figured monthly on low­
est balance carried each month
during six months period. In case

Central Western Banker, November, 1928

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

1

Interest

Balance

$2,205
2,238
2,343
2,408
2,428
2,448
2,468
2,488
2,551
2,566
4,266
4,216
4.116
6.116
5,966
5,866
5,716
5,686
1,186

of withdrawals thruout the six months
which cause the balance
to be lower at any time
during the six months
then the interest is fig­
ured on the balance
for the entire period.
Compounded semi-an­
nually. ($23.72).
Deposits go in interest
the first of each month
10 on all sums on deposit
for at least one calendar
month preceding inter­
est date. Interest is cal­
culated on minimum
monthly balances. Com­
pounded semi-annually.
($54.78).

Deposits go on interest
from
first of each
11 month on all sums on
deposit for at least one calendar
month preceding interest date. On
withdrawals interest ceases on first
day of quarter in which withdraw­
al is made. Monthly system on
deposits — quarterly system on
withdrawals. Compounded semi­
annually. ($35.18).
Interest is calculated on the aver­
age monthly balance regardless of
12 dates of deposit or withdraw­
als. Compounded semi-annually.
($58.61).
Deposits go on interest from first
of each month on all sums on de13 posit for at least one calendar
month preceding interest date.
Withdrawals made between the
30th of the current month and the
15th of the subsequent month are
charged back to the first of the
previous month.
Withdrawals
made between the 15th and 30th of
the current month are charged
back to the first of that month.
Interest compounded semi-annu­
ally. ($27.18).
Deposits go on interest from first
of each month on all sums on de14 posit for at least one calendar
month preceding interest date. On
withdrawals interest ceases on the
first of the month during which
notice of withdrawal has been giv­
en. Two months’ notice is re-

5

Adopted by
•E XE C U TIV E

C O M M IT T E E ,

S A V IN G S

BANK

D IV IS IO N

T O S E C U R E U N IF O R M IT Y
“A

Interest to be compounded semi-annually. Depos­
its to draw interest from date of deposit, on all sums
on deposit for at least one calendar month preceding
interest date. Year to be divided into four quar­
ters. No interest to be allowed on withdrawals
made during the quarter. Withdrawals to be de­
ducted from latest deposits.

“B

Interest to be compounded semi-annually. Deposits
to draw interest from date of deposit, on all sums
on deposit for at least one calendar month preced­
ing interest date. No interest to be allowed on
withdrawals made during the six months period.
Withdrawals to be deducted from latest deposits.

“C

Interest to be compounded semi-annually. Deposits
to draw interest from first of each month on all

sums on deposit for at least one calendar month
preceding interest date. Year to be divided into
four quarters. On withdrawals interest to cease
on first day of quarter in which withdrawal is made.
Withdrawals to be deducted from latest deposits.
D

Interest to be compounded semi-annually. Depos­
its to draw interest from first of each month, on all
sums on deposit for at least one calendar month pre­
ceding interest date. Deposits made after the first
of each month to draw interest from the first of the
following month. No interest to be allozved on
withdrawals betzveen interest periods. Withdrawals
to be deducted from latest deposits.
On savings accounts remaining dormant for two
years, where the balance is $5.00 or less, it is recom­
mended that payment of interest cease.

quired. Compounded semi-annu­
ally. ($38.19).

months period. Compounded semi­
annually. ($34.69).

Deposits go on interest from first
of each month on all sums on de16 posit for at least two calendar
months preceding interest date.
Interest is calculated on minimum
monthly balances. Compounded
semi-annually. ($54.80).

Deposits go on interest from first
of each month on all sums on de21 posit for three months or more.
Interest figured on lowest monthly
balances carried in bank for three
months or more. Compounded
semi-annually. ($54.48).
I
Deposits go on interest from first
of each month on all sums on de22 posit for three months or more.
Withdrawals charged back to first
month in which drawn. Interest
earned during last quarter carried
over until next six months period.
Some do not carry over credit to
following period, hence this is
mentioned. Compounded semi-an­
nually.
($54.80).

Deposits go on interest from first
of each month on all sums on de17 posit for at least two calendar
months preceding interest date.
Withdrawals deducted from first
balance of six months period and
subsequent deposits. Compounded
semi-annually. ($8.43).
Deposits must remain three full
calendar months or no interest will
18 be paid thereon. If withdrawals
exceed amount on deposit prior to
April 10 no interest will be allowed
on the account. Same applies to
October 10 for second half of year.
Compounded semi-annually. ($0).
Interest is calculated on deposits
which are in bank full three
19 months during six months period.
Do not use calendar quarter as a
basis for calculations. Compound­
ed semi-annually. ($43.84).
Deposits go on interest from first
of each month on all sums on de20 posit for three months or more.
Interest figured on minimum bal­
ance on deposit for each three


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Federal Reserve Bank of St. Louis

Deposits go on interest from first
of each month on all sums on de23 posit for three months or more.
Withdrawals charged back to first
of month in which drawn. Inter­
est earned during second quarter
is not carried over to next six
months period. Compounded semi­
annually. ($43.59).
Deposits go on interest from first
of each month on all sums on de24 posit for three months or more.
When no withdrawals have been
made during quarter interest fig­
ured on low balance for each quar­
ter. Compounded semi-annually.
($35.46).

Deposits go on interest from first
of each month on all sums on de25 posit for three months or more.
Withdrawals deducted from first
posits. Compounded semi-annually. ($7.92).
Deposits go on interest from first
of each month on all sums on de26 posit for three months or more.
No interest allowed on withdraw­
als made during first quarter. On
withdrawals made during second
quarter interest ceases first of
month in which withdrawal is
made. Compounded semi-annu­
ally. ($43.86).
On deposits interest starts ten days
after deposit is made, and ceases
27 ten days before withdrawal is
made provided ten days’ notice of
withdrawal is given before mak­
ing withdrawal. Interest is calcu­
lated only on such amounts as re­
main on deposit for three months
or more. Compounded semi-an­
nually. ($7.36).
Deposits go on interest from first
of each month on all sums on de28 posit for three months or more,
Withdrawals deducted from latest
deposits. Compounded semi-annu­
ally. ($23.72).
Deposits go on interest from first
of each month on all sums on de(Continued on Page 28)

Central Western Banker, November, 1928

6

A t last year’s International Live Stock Exposition in Chicago, Nebraska live stock won many
honors. Above is shown “ Vinetta,” the grand champion Red Polled female ozmed by Graff Broth­
ers, Bancroft, Nebraska.

Chicago peo­
HE Horn of
Plenty will
ple in particu­
be tipped tolar are looking
w a r d Chicago
forward to this
the last of this
first w e e k in
month, when the
December. For
best products of
over a quarter
the fields, feedof a century,
lots, and farms
this has become
of America will
the established
be sent to Chi­
cago to compete
Finest animals from all parts of America will compete for ribbons time when the
country comes
for the high rec­
at International Live Stock Exposition to be held
to town.
The
ognition that the
In te rn ati onal
great Internat­
December 1 to 8 in Chicago
brings t h e m ;
ional Live Stock
Exposition offers. It is to be in ses­
animal life is the loadstone. Human­
Farm Youth in Spotlight
sion this year from December 1 to 8.
ity swarms to the great pavilion out at
O f recent years, the International
Opening, as it does, always on the
the Chicago Stock Yards, that houses
Live Stock Exposition has fostered
first Saturday following Thanksgiv­
these blue-bloods of stud, feed-lot and
the National Boys’ and Girls’ Club
range.
ing, it both symbolizes and crystal­
Congress within its gates. This gath­
lizes the real spirit of this holiday sea­
Here the millionaire fancier of the
ering comprises, as a rule, some 1500
son, with its big ampitheatre, and its
East meets and mingles with the cow­
girls and boys from all parts of the
numerous supplementary barns and
boy from the range. This is the com­
country, who have won their trips to
sheds full to overflowing with the
mon ground where the breeder of
this national congress by reason of
cream of the year’s crop.
pedigreed stock and the feeder for
their outstanding excellence in one or
In the mammoth Grain and Hay
the market strive for a place at the
more lines of club work in their home
Show, products of the fields of Sas­
ring side. Over 11,000 of the finest
state and county fairs.
katchewan will be seen along those
beef cattle, horses, sheep, and swine,
Railroads, fair boards, breed asso­
comprising some 40 breeds of live
from Australia and New South Wales,
ciations, and various other organiza­
while those from the slopes of the
stock are here assembled and ap­
tions interested in the progress of
praised by the most expert judges
Pacific will vie for the visitor’s atten­
Farm development are instrumental
who can be had.
tion with those from the tidewater
in paying the expenses of these out­
country of the Atlantic. It is the most
Men who are noted for their ability
standing young people of the farm to
truely international exhibition of the
to spot and rank relative merits of
the International Club Congress,
harvests of the agricultural world,
animal form are brought to this great
where they meet and further compete
with entries numbering about 5,000
exposition from the four corners, to
for national honors in the many ex­
samples of the world’s choicest crops
perform the work of picking the best
hibits and demonstrations open to
on display.
(Continued on Page 34)
them.

C h ica

the M ecca

for

L ive S tock G row ers

Central Western Banker, November, 1928

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

7

Protecting Your Banks

By T H O R N T O N C O O K E
President, Columbia National Bank
Kansas City, Mo.
(From address before Nebraska
Bankers Association
Convention )

broaden the tax base and reach more
C O M E TIM E S, studying the geogof the citizens who were able to pay,
^ raphy of taxation, I think bank tax
began some years back to tax bonds
methods are catching. No state in
and other forms of credit at rates
New England relies wholly upon the
much lower than those imposed upon
general property tax, while almost all
T h o r n to n C ooke
tangible property, 2 x/2, 3, 4
of the Central and North
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and 5 mills, the latter being
Central states use, or until
the Nebraska rate. The courts
lately have used, little else.
“ Nebraska banks have not arrived at a
hold that no higher rate than
And now, under recent decis­
final solution of their tax problem. You
that can be imposed upon the
ions, Minnesota, South Da­
shares of any kind of Nebras­
are not sitting pretty but have work to do
kota, K a n s a s , Oklahoma,
ka banks. You are, as the
Montana and Nebraska, a
to safeguard your banks against excessive
saying is, “ sitting pretty.”
great empire here in the Cent­
taxation!"
Or, are you? The Ameri­
ral West, have no legal right
can Bankers Association will
to tax their national banks ex­
III111111III 111111111111111111111;11||| 111111111111|111!11|111111|11||Hi; in III || 11|11|111in ¡mu 11111|11|1111III 11HI 111|111111|III 11III || 11|III || III 111||Hill 11II
III II
never initiate any movement
cept at the preferential rates
to change the tax system of any state
granted to moneys and credits. None never efficient as to anything else. The
of these commonwealths, of course,
against the wishes of the bankers
day has passed when almost all wealth
wishes to tax its state banks substan­ was tangible and when the general
there; but I assume that you wish
tially more than their national com­ property tax therefore fell upon the your own tax situation discussed,
citizens in accordance with their abil­ rather novel and rather unusual as it
petitors.
How It Happened
ity to pay. Economic progress has is. And I assume that you want my
You know how this condition has created wealth in many forms, and honest judgment. It covers six points
come about. The states have no in­ there are men of large means who own
and I shall take twenty-five minutes to
herent right to tax the national banks relatively little tangible property. The
explain them.
flour mill, for instance, is no longer a
at all, and to make sure that taxation
1. Nebraska banks have not arrived
should not be used to destroy the na­ small water-power affair owned by at a final solution of their tax prob­
tional banking system, Congress, ever the miller himself, but a structure cost­ lem.
since it granted limited power 64 years ing a million to build and equip, much
2. You are not sitting pretty, but
of the million furnished by hundreds
ago, has limited taxation of national
have work to do to safeguard your
bank shares to rates not greater than of people who have bought its bonds.
banks against excessive taxation.
those imposed upon competing m on­ Bonds are easy to hide— are hidden if
3. The aggregate of taxes will not
eyed capital in the hands of individu­ we try to tax them like real estate—
and men of wealth then escape with come down.
als.
4. A change in your system of bank
But the general property tax has taxes less than they could afford to
taxation is inevitable, and is coming
pay. Many of the states, including
broken down as to everything except
soon.
Nebraska, therefore, in order to
real estate and banks, or rather it was


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iiiiiiii

Central Western Banker, November, 1928

8
5. The change should be to an ex­
cise measured by net income.
6. Bankers must be active for this
change, or there will be a different
change that will subject banks to all
but unbearable tax discrimination.
W hy do I say that the aggregate of
taxes will not come down? W hy?
Because all over this country we are
doing in a public way things that we
did not attempt to do governmentally
or as communities a few years back,
and we are expanding beyond anticipa­
tion such enterprises as were already
functions of state and local govern­
ment.
The Exact Situation
What is the exact solution ? In 1926,
$8,555,000,000 of taxes were collected
in this country. Thirty-seven and onehalf per cent of this amount was for
the general government, and 62 y2
per cent for state and local govern­
ments. The latter, indeed, cities, coun­
ties, school districts and other admin­
istrative divisions, collected more than
three times as much as the states. A c­
cording to the National Industrial
Conference Board, from whose pub­
lications much of the statistical infor­
mation in this address is drawn, onetenth of all the national income, that
is, one-tenth o f all the wealth that
you and I and our fellow citizens pro­
duce, goes to public administration and
for public works. Are we satisfied
with that proportion ? Or do we want
it reduced? What functions would
you curtail ? “ Where, precisely,” asks
Eric Englund, “ is the waste of tax­
payers’ money ?” about which you and
I and everybody else have com­
plained? Education? Shall we cur­
tail that? It accounts for 25 per cent
of the total tax burden. Shall we re­
duce our expenses for the protection
of persons and property and for na­
tional defense, including provision for
the costs o f past wars ? Twenty-four
per cent goes for these purposes.
Highways? They take 18 per cent of
all taxes.
Perhaps, as to taxes for education,
something might be done. A Kansas
cattleman complained to the writer
one day that the taxes on his ranch
had been raised in order to send out a
bus each morning to fetch the children
of the township to school. And on
the same day a rich city resident drop­
ped in to complain because money was
being spent in the new high school for
a swimming pool and a gymnasium.
But are we likely to take swimming
and athletics out o f our educational
piograms? Or cooking? Or sewing?
Or carpentry? They belong there as
much as any studies. The teaching of
(Continued on Page 12)

deu ce Declares W ar on Crime

Burgess Smith (right) and his assistant in the anti-forgery department at
Rochester, New York

I N A laboratory at Rochester, New
York, Burgess Smith, formerly in
charge of the anti-counterfeiting
measures of the U. S. Bureau of En­
graving and Printing, has been work­
ing for the last ten years to erect ob­
stacles in the path of the horde of
check criminals that now exacts an
annual tribute of approximately $100,000,000 a year through check forgery
and alteration.
When Smith, in 1919, resigned
from the Bureau which prints all of
the Government’s bank notes and se­
curities, he was convinced that it was
entirely possible to produce a check
that would reduce the opportunities
for wholesale forgery, and that would
be as hard to alter by means of eras­
ures as a $100 bill. His objective, he
says, was a check that could not be
counterfeited and that would come
as close as possible to yelling “ Mur­
der !” when anyone tried to tamper
with it.
Smith’s first difficulty was to dis­
cover an ink that would be made dar­
ker, instead of being bleached out, by
the application of acid. No such ink
existed and it took a year and a half
of constant research to discover the
proper combination of chemicals.
Then to bring to fruition the plan he
had in mind, he had to devise for the
background of the check a design that
involved the resources of mathemat­
ics, chemistry and photo-engraving.
Standing beside a camera weighing
three tons, and holding in his hand
three glass plates, Smith explained

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the complex process to which he was
forced to resort. On one of the plates
the huge camera had photographed
thousands of dots spelling hundreds
of repetitions of the word “ void.” On
each of the other two, an intricate dot
pattern had been photographed by the
same camera.
Smith placed the two latter plates
on top of each other. A design of
rosettes appeared.
He shifted the
top plate and the design changed to
one of frost crystals. When the two
plates were placed under the third
one, the dots forming the “ voids” com­
bined with those on the other plates
became invisible.
The rosettes or
frost crystal remained.
“ The metal plates from which the
check paper is printed are exact dup­
licates of these plates,” Mr. Smith
said. “ The dots are arranged in ac­
cordance with a secret mathematical
formula. By shifting the relative po­
sitions of the plates a fraction of an
inch we get literally thousands of de­
signs. The warning words are indis­
tinguishable until eradicating acids
are brought into contact with the pa­
per. Then, the rest of the design
fades out and the “ voids,” printed in
the ink that it took so long to discover
leap from their hiding place.”

Friendship is constant in all other
things,
Save in the office and affairs of love.
— Shakespeare.

9

H O RO U G H exami­
nation of the pros­
pective borrower’s finan­
cial standing and the
condition of his farm
should be made before a
real estate loan is grant­
ed, A. Kopperud, vicepresident of the Federal
Intermediate C r e d i t
Bank of Omaha, ded a r e d last
month in an ad­
dress before the
secretary-treas­
urers of the Nat i o n a 1 Farm
L o a n associa­
tions who con­
vened in Oma­
ha. Mr. Koppe­
rud said in part:
The s o u r c e
from which the
funds will be obtained each six months
to pay installments as they become
due is the important factor. The lo­
cal loan committee and the secretarytreasurer should know something con­
cerning the history of production of a
farm offered as security for a loan,
which includes a history of the abil­
ity of the farmer as a producer. If
the prospective borrower has any con­
siderable amount of debts above a
reasonable first mortgage the loan is
usually unsatisfactory. If the bor­
rower has not been able to keep his
land in a good state of cultivation and
if the buildings are in need of repair
and paint, and conditions generally
around the farm show distress, then
why take the application? The thing
to be considered is definite evidence as
to the size of loan that can successful­

T


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A . K opperud

ures of the Federal
Land bank has been too
large second mortgages
and too many other
debts. In many cases
the secretary-treasurer
was not careful in re­
porting to the bank the
borrower’s total indebt­
edness.
Some of our
foreclosures were caused
because the loan
made was too
large in propor­
tion to the pro­
ductive ability
o f t h e farm.
Some fore­
closures w e r e
caused because
we made loans
t o m e n who
never had been,
and never would
be competent farmers. On some loans
we have had foreclosures because the
local taxing district voted a consoli­
dated school after our loan was made
and taxes became prohibitive. Also,
foreclosures have been caused on ac­
count of heavy drainage or ditch taxes
that have been created after our loan
was made.
It is very evident to the officers of
the bank that many foreclosures can
be avoided because of the ability and
close attention of the local secretarytreasurer. Some of the largest asso­
ciations in each state in our district
have never had a collector nor have
they had any loss on a foreclosure. If
foreclosures for any reason have been
necessary, the land has sold for mroe
than our investment.
From time to time we have inter-

H ow to A void Them
ly be carried by the farm and the ap­
plicant. It is not good business to let
the pull of sympathy for a needy
neighbor influence you in recommend­
ing a loan. No person has ever been
benefited by being loaned too much
money.
It is my opinion that we have few­
er and fewer requests by prospective
borrowers and secretary-treasurers to
make loans that exceed 50 per cent of
a fair valuation of the land and 20
per cent of the insurable value of the
improvements. W e also have fewer
requests to make loans on farms
where owner is insolvent. In the past
some of our secretary-treasurers
thought we should make loans re­
gardless of the size of junior liens.
The cause for many of the foreclos­

Centrai Western Banker, November, 1928

10
viewed secretary-treasurers who have
LOOKING INTO THE
been successful in avoiding foreclos­
FUTURE
ures. Some o f the methods used have
“ Looking into the future, I can
been an aid to better farming. One
see some obstacles fo r successful
secretary-treasurer tells us that he
farm ing: First, the taxation prob­
keeps in touch with all of his borrow­
lem, but that problem can and
ers and often visits them at their
must be solved. Second, scien­
farms. If he finds a borrower who
tific and practical marketing. This
does not operate his farm in a practic­
is a matter of great importance
al manner he tries by tactful conver­
and will require the most careful
sation to show this farmer the advant­
study and attention of our best
age of raising more alfalfa or sweet
thinkers!”
clover, the advantage of having good
i111111111!11111111111111111111111111111111111111111111111111111111111111111111111111111111„„11,1
,
dairy cows, or if he is already a diary
man and is not prosperous, he shows
the secretary and visit the farm of a
the borrower the advantage of having
neighbor where certain good farm
cows that are tuberculin tested, and
practices are being used. By spend­
the further advantage of belonging to
ing the day on the neighbor’s farm
a cow testing association so that the
and getting the enthusiasm of good
borrower can eliminate the worthless
farming, the poor borrower has some­
cows. Cow testing associations have
shown some marvelous records in in­ times returned to his own home and
adopted better farming practice. In
creasing the production of the same
number of cows. This increase in every community there are successful
farmers who can be used as examples
production has come about by culling
to the borrower who is slipping.
of poor cows and by proper feeding.
In some cases where the borrower will
Raising- Turkeys
not listen to a discussion of his prob­
One secretary-treasurer in W yo­
lem he has been induced to go with
ming induced a number of his farm­

ers to raise turkeys. All parts of our
district cannot raise turkeys success­
fully. Turkey raising in parts of
Wyoming and South Dakota has been
very profitable. I have myself cashed
checks running from $1,000 to $2,000
per farmer.
The cow, sow and hen, is a good
combination.
One of the striking features of our
business is that we have fewer fore­
closures where there are good cream­
eries than in adjoining neighborhoods
where there are no creameries, but
where land and climatic conditions are
the same. A monthly income on the
farm is much to be desired.
I will be glad to give any secretarytreasurer special information as to the
value of creameries and cheese fac­
tories.
Secretary-treasurers tell us that if
all attempts at better farming seem
hopeless they then induce the bor­
rower to list his farm for sale, and
they make the attempt to sell the farm
before the foreclosure is necessary so
that the farmer may realize something
out of his land above the indebtedness.
(Continued on Page 12)

Accepting a Draft In
Payment o f Check
tp V E R Y business day, a bank may
offer to give their bank draft to a
party who presents a check drawn on
that bank and requests payment there­
of. This is one method used by a bank
to make payment of checks drawn up­
on it. When the holder of the check
takes in exchange a bank draft, has he
forfeited certain rights that he had as
possessor of the check?
A transaction of this nature can
arise by a party being indebted to a
man here referred to as O. L. Camp
on a promissory note for $300. This
party named Ralph H of, when the
note became due gave Camp his check
for the amount of the note including
interest, drawn on the State Bank,
wherein he had a balance greater than
the amount of the check given. Upon
receipt of the check, Camp marked
the note “ Paid” and gave it to H of.
Camp surrendered the check with
some others to the bank on which it
was drawn and accepted a draft for
the total amount o f the checks pre­
sented. The H of check was stamped
“ Paid” and charged to H o f’s account.
Before this draft was collected, the
drawer, the State Bank, being insolv­
ent, closed its doors. Immediately

By The Legal Department
after the closing of the bank, an o f­
ficer of the bank, assisted by Camp,
induced H of to give Camp a new note
for the amount of the check, dated
back to the day that the former note
was surrendered. The bank official
told H of that Camp had received no
money on the check. H of presumably
supposed this was because the bank
had closed its doors. The note was
later renewed with interest. Soon
thereafter, H of learned the facts and
brought this action to cancel the note
for want of consideration and fraud.
Camp had a perfectly good check
which he presented to the bank on
which drawn on. The money was there
to pay it. He was entitled to the
money, and could have had it. For
reasons of his own, he saw fit to ac­
cept a draft. He did it of his own
volition and not for or in behalf of
H of. Camp had no right to take any­
thing but money to the extent that he
was acting in his own contractual re­
lationship with Hof.
The check was a conditional pay­
ment. The payment would have be­

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come absolute had Camp demanded
the money. Instead of taking the
money which was available, and the
only thing Camp had a right to take
so far as H of was concerned, he ac­
cepted a draft. He surrendered H o f’s
obligation and in lieu of the available
money which would have instantly be­
come his property, accepted the obli­
gation of the bank. By the trans­
action the bank ceased to be H o f’s
debtor to the extent of the check, and
became the debtor of Camp, as evi­
denced by the draft. The result of the
transaction was that H o f’s indebted­
ness evidenced by the note was paid.
When the new note which H of
signed and delivered to Camp was
given, at the solicitation of a bank o f­
ficial, H of did not owe Camp any­
thing. H of got nothing for the note
which was without consideration. A l­
though the note imports a considera­
tion, that merely makes a prima-facie
case which is completely destroyed by
the facts related.
Where a debtor gives his creditor a
check for which the creditor receives
a draft from the drawee bank, the
debt is paid.


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11

C A R TO O N S OF TH E M O N T H

Central Western Banker, November, 1928

12

Foreclosers and H ow T o A void Them
(C o n tin u e d fr o m P a g e 10)

Hundreds of foreclosures have been
avoided in our district because of the
ability of some secretary-treasurers to
dispose of land where the borrower
was having financial trouble. In many
of such cases our real estate depart­
ment has assisted in making the sale.
Some secretary-treasurers have told
us of from 12 to 20 cases where the
land has been sold in their associa­
tion. A foreclosed farm is an eyesore
to the secretary-treasurer, to the local
community and to the Federal Land
bank. If there are many foreclosures
in the same community, it spreads a
blight over the whole area which it
takes years to overcome.
General Outlook
With the exception of the problem
of taxation, the present outlook for
the farmer and ranchman is better
than since 1921. Taxes are so high
in some communities in our district
that we have discontinued making any
loans in those particular communi­
ties. In other places we have had to
make drastic cuts in the loan values
on account of heavy taxes. Taxation
should be based on ability to pay. “ It
seems to me that the time has come
when a non-political study of the
problems of taxation is necessary,”
said Dean Russell. “ Taxation should
be placed on a sound and modern ba-

sis. It is a fair question to ask
whether the relation between taxes
now levied on incomes throughout all
of the states of the Union is properly
correlated with those levied on real
property. Eighty per cent of all taxes
paid in the United States is paid by
real estate.” I think most of us are
acquainted with men who have large
incomes from their profession or as
managers of large businesses. Some
of these men live in an apartment and
they may or may not own a small
amount of furniture. Surely such
men escape their just share of tax­
ation.
Many people object to a state in­
come tax, but why should not a per­
son pay taxes according to his ability
to pay, and why should not taxes rise
and fall with the income? W e all
know that taxes do not rise or fall
with the income when it comes to tax­
ing farm lands. Our secretary-treas­
urers cannot find any more import­
ant problem to solve than the matter
o f taxes in their local taxing district,
as well as the state and county taxes.
Looking into the Future
Looking into the future, I can see
some obstacles for successful farm­
ing: First, the taxation problem, but
that problem can and must be solved.
Second, scientific and practical mar­

keting. This is a matter of great im­
portance, and will require the most
careful study and attention of our best
thinkers. The American people have
never set about with resolution to
solve a problem and failed. W e will
not fail in solving proper marketing
and it will probably come through
strong, well managed co-operative
marketing associations. Third, de­
mand for food is definitely limited.
Advertising can divert attention from
one food to another: “ An apple a day
keeps the doctor away,” but it means
less orange juice used. Slenderizing,
so fashionable in certain circles, is
materially reducing per capita use of
food with a large group of the popu­
lation. The stream-line waist is bad
for the American farmer. There are
good reasons, however, why agricul­
ture should continue to prosper. The
population of America is increasing
at a tremendous rate and in the last
five years the farm population has
moved to the cities at the rate of about
a million per year. The encouraging
part, therefore, is that statisticians tell
us the demand for food is now catch­
ing up with the food supply and the
farmers who remain, with their ability
of increased production, should have
a better future than for many years
past.

Banks Against Excessive Taxation
(C o n tin u e d fr o m P a g e 8)

these subjects costs money, however,
money that we did not have to spend
a few years ago. And we want the
country children in school, if it did
cost Indiana, for example, $4,265,000
in 1927 to fetch them there and take
them home.
There are, indeed, some municipal
colleges and some monumental school
buildings that involve expenditures
disproportionate to the means of some
communities; but if everything that
you and I would call extravagance in
education were removed from the to­
tal tax burden, you could hardly notice
the saving in terms of percentage of
the national income. Popular educa­
tion has been our pride and on the
whole has proved its worth. But the
costs are enormous. From 1890 to
1925 the cost of grammar and high
school education in this country in­
creased from $140,500,000 to $1,946,000,000. Allowing for the change in
the price level that took place in the
interval, there was involved an in-

crease of 137 per cent from 1890 to
1910, and 160 per cent from 1910 to
1925.
All the states had to catch up
with war-time deficiencies, with sal­
aries that had lagged behind, as sal­
aries always do, and with the building
needs that were not met in the years
our treasure and our might were spent
abroad. Then, too, school enrollment
increased enormously, although not by
any such percentage as taxes. W e did
however, lengthen the school term
from an average of 134 days in 1890
to 157 in 1910, and to 169 in 1925.
The children attend better, too, the
percentage for the country as a whole
rising from 54 per cent of enrollment
in 1890 to 80 per cent in 1925. Then,
while 1.6 per cent of the whole school
¡enrollment were in high school in
1890, 15 per cent were there in 1925,
and in high schools it costs two and
one-half times as much per pupil as in
grade schools. These changes are all
to the good, are they not? W e cannot

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say that the cost per child per day is
excessive, and it would seem, there­
fore, that we cannot greatly curtail
our expenses for education. The
problem rather is to broaden the tax
case, obtaining more adequate con­
tributions from sources that have not
been paying a full share of the cost
of education and government.
I have dwelt at length on education
because, to my mind, any study of
school finance confirms the opinion I
have expressed, that the aggregate of
taxes will not become less. Other in­
quiries lead to the same result. High­
ways? Agricultural experiment sta­
tions ? How, without them, should we
learn how to conquer the corn borer,
the cotton weevil, and the other in­
sects that contend with the human
race for the products of the earth?
Inspection of milk and other foods?
Water supplies and sanitation? Hos­
pitals? The decline in the rate of
deaths from typhoid and tuberculosis
— the lengthening of the span of life-—

13
to lead in an effort to broaden the tax
base
by reaching men who could well
Gladstone: “ A boy that is
afford liberal contributions to the pub­
taught to save money will rarely
lic purse, and by submitting the banks
be a bad man or a failure.”
themselves to fair taxes, measured by
Wanamaker: “ No boy ever be­
their income.
came great as a man who did not
When Nebraska banks drop from
in his youth learn to save money.”
What Budgets Do
general property rates to a five mill
Washington:
“Economy
makes
All this time you have been think­
rate, the difference is too great. Your
happy homes and sound nations.
ing that our governmental expenses
state and your cities cannot afford
Instill
it
deep.”
and therefore our taxes, could be re­
such a loss.
duced by modern budget procedure. uiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiuiiiiiiiiiiiiiiiiiiiiiiiiiiiiuiiiiiiiiiiiiim
iiii
I said that you should go to the
Something could indeed be done that
excise basis. How can that be done?
way. North Carolina affords an ex­
imposed upon real estate. This is an You will recall that after the famous
cellent example. Each of the more effort to adapt taxation to the tremen­ Richmond decision of the United
than sixty spending agencies of the dous changes that have come about in States Supreme Court brought it
state is required to submit to the Bud­ the forms m which wealth is held. It home to the Tax Commissioners of the
get Bureau detailed estimates of the is possibly, a solution of the problem various states, that national bank
manner in which it plans to utilize its arising from the undoubted need for
shares could be taxed no higher than
/funds, Tin addition, /they show tjie
more revenue, for, as it seems to me, intangibles, Congress, in 1923 and
revenue it is estimated they will col­ even economy, even budget systems,
1926, amended Section 5219 R. S. U.
lect. Each unit is required to submit will only postpone and not prevent the S., not changing the provision that na­
figures to the Budget Bureau compar­ growth of public expenditure. But tional bank shares could be taxed only
ing actual expenditures with those au­ states and municipalities that have pre­ so high as competing moneyed capital,
thorized and to measure actual reve­
ferential rates on moneys and credits, but providing three alternatives. If a
nues with those previously estimated;
will lose so much money in bank taxes state chooses not to tax the shares it
and so it is assured that the spending that they will have to repeal the laws may now tax the bank’s income, or
agencies operate within their income. granting such rates, and subject the may include dividends in the taxable
Budgetry control effected a saving banks to full general property ad va­
income of the shareholder (and may
over the legislative appropriation for
lorem taxation once more, unless the do both of these things if it does so
the fiscal year 1926 of about 10 per banks can show the legislators the way
for other corporations and their share­
cent, or $1,270,778.07, and so pre­ out. And that is why I said at the holders), or it may impose upon a na­
vented a deficit. North Carolina outset that banks must take an active tional bank a tax measured by its net
counties also have this system. Mary­ part in tax reform.
income. In the last case the tax shall
land, too, has a most excellent plan.
be no higher than the taxes on other
Another Reason
Pennsylvania, by reorganization of its
financial corporations, and no higher
I will give you another reason.
governmental machinery and by budg­
than the taxes on mercantile, manu­
etary control of expenditures, saved Twenty-one states, including Nebras­
facturing or business corporations,
$24,000,000 in 1923 and 1924, or some ka, that have sought to obtain reve­ whichever of the three are most highly
25 per cent of the amount expended in nue from the owners of intangible taxed. Now this does not mean that
property by giving such property pre­
the previous biennium.
the corporation taxes by which nation­
ferential rates, will have to change al bank taxes are thus limited must
It seems scarcely possible, however,
that the use of the budget principle their laws, or Congress will have to themselves be measured by income. In
will actually reduce taxes. It may en­ change Section 5219. The tax com­
Massachusetts, to take an actual ex­
able state and local governments to do missioners who have appeared before
ample, the Commissioner of Corpo­
congressional committees this year ration figures each year what the taxes
more with the same money, and so
believe, indeed, that over forty states of the most highly taxed class of Mas­
postpone tax increases for a while.
are in one way or another violating sachusetts corporations amount to as
More beneficial yet to the public and
that section. Frankly, few bankers a percentage of total income. These
the bankers would be the just appor­
who appeared at the last session of
tionment of taxes, and we certainly do
taxes include a 2jG per cent state in­
not apportion them justly now.
Congress to oppose the Norbeck Bill
come tax, a state excise on capital, and
believed that banks ought to get off local ad valorem taxes on machinery
I said that a change in bank taxation
was coming— soon. In most states with a three-mill tax in Minnesota, or and other tangible personal property.
with four mills in South Dakota and And so you see that if you want bank
there must be a more general change,
mustn’t there? If, as was said by a Oklahoma, or five mills in Nebraska,
excise taxation in Nebraska, you need
witty financier of France, Colbert, a or six mills in Iowa, or nothing at all no constitutional amendment. The
in Colorado, as they would if they legislature already has power to clas­
century or two ago, the art of taxation
consists in plucking the goose with the chose to stand on recent decisions.
sify you for taxation. Let your bank
The states affected are not going to taxes be measured by your net in­
least squawk, we must change our sys­
tem. W e are getting too much squawk rest under any such condition, nor are come, and that measure may include
from two important classes, the farm­ those states that exempt mortgages or
the income from government and
impose only nominal registration taxes municipal bonds if the state includes
ers and the bankers, although just now
on them.
most Nebraska bankers are satisfied.
them in the income of other corpora­
In other words, the American
W e have been asking the owners of
tions when figuring what proportion
Bankers Association Committee on of income the taxes paid by Nebraska
farms and city lots for too large a pro­
portion o f the money for state and Taxation is afraid of something very
corporations are. Simple, isn’t it?
much like an explosion, and believes Just a few minutes arithmetic, and the
local government. Coming? In 21
that it is the part of wisdom for bank­
states, a change has been made, as you
Massachusetts Commissioner of Cor­
have made it in Nebraska, by granting ers, themselves, seriously and impar­
porations ascertains that the tax burto intangibles a lower rate than that tially, and without effort at advantage,
(C o n tin u e d on P a g e 34)
all are worth the taxes they cost.
Street paving? W e want more o f it.
Lighting? How could we face the
crime wave if it were curtailed? No,
these things that taxes pay for are not
going to be diminished.


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Federal Reserve Bank of St. Louis

THRIFT SAYINGS

Central Western Banker, November, 1928

14
Elected Cashier
Charles Lukl, for several years as­
sociated with the Nemaha County
Bank in Auburn, is now cashier of the
First State Bank of Crete, Nebr. Mr.
Lukl is a young man who possesses a
high degree of ability and has the per­
sonality necessary to success in his
new position. The officers and stock­
holders of the Crete bank were fortu­
nate in securing him for the place of
cashier.
Talks to Realtors
Warning bankers that the collec­
tion of interest should not terminate
their interest in Nebraska’s future and
the realtor that he would do well to
look beyond collection of commissions,
when negotiating land sales, R. C.

Peters, Omaha banker, addressed
members of the Nebraska Real Estate
Boards at Grand Island recently on
'“ Relationship Between the Banker,
Realtor and Farmer.”
He expressed confidence in Ne­
braska farms and farmers and the
ability of the latter to meet their
problems, but suggested that they are
entitled to a helping hand in the so­
lution of their troubles.
Lower
freight rates, better production and
marketing methods and better high­
ways he listed as developments that
would aid the farmer.
Change in Officials
Announcement was made recently
of a change in the officials and man­
agement of the First State Bank of

Crete, Nebraska. J. E. Sperry, for­
merly cashier of the First National
Bank of Gresham, becomes president
of the Phrst State, and Chas. Fukl,
formerly with the Nemaha County
Bank of Auburn, will be the cashier.
L. E. Uden, the retiring president,
still retains an interest in the institu­
tion and was elected vice-president.
Reorganized
The Farmers State Bank at W a­
bash, Nebraska, has changed hands
and is now owned and controlled by
local men. The officers and directors
are L. R. Stanley, president; R. E.
Dorr, vice-president; Ray R. Ward,
cashier; Carl Hanson, R. L. Keckler,
H. J. Hohman and Warren T. Rich­
ards. The other stockholders are J.
C. Brown, F. S. Marshall, W . F.
Langhorst, John H. W ood and W a­
bash Grain Company.
Sells Bank Control
F. O. Binderup has sold controlling
interest of the Loup Valley Bank of
Palmer, Nebraska, to Bruce Gage,
Palmer, and Ray Smith, formerly
with the Central City National bank,
the transfer taking place recently. Mr.
Binderup, who has been connected
with the bank for the past eleven years
has no definite plans for the future.
Urges Guaranty Remedy
Phil Hall, newly elected president
of the Nebraska Bankers Association,
in a statement issued at his home at
Greenwood recently, urged the state
legislature to investigate and remedy
as it sees fit the defects of the state
guaranty law, which drew forth di­
verse opinions from bankers at the
state association’s convention in Oma­
ha recently.
“ W e have had some bankers who
have broken a sacred trust, and have
not kept honesty of purpose as the
beacon of their calling; others who
through inexperience or unwise ad­
vancement of credit have caused their
banks to be closed, yet Nebraska is to­
day in a better financial condition than
most of our sister states in the agricul­
tural district.
“ There has been considerable dis­
cussion and agitation relative to the
guaranty law of Nebraska. This law
was enacted by the legislature with
the idea of stabilizing credit. Whether
it has served its purpose, and is a just
law, or whether it needs amending and
rebuilding, is a matter that should re­
ceive the serious attention of our next
legislature after a careful investiga­
tion of its operation since becoming a
law.”

Central Western Banker, November, 1928

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Federal Reserve Bank of St. Louis

15

A Look Into the Future
I^ X C E P T during the recent past,
whenever we have had an excess
of gold and an abundance of cheap
bank credit available for business and
speculation, we have seen rising com­
modity prices and business inflation.
This condition of lack of business in­
flation, even though all the ordinary
contributing causes were present, has
caused considerable confusion in the
minds of many people and in their
predictions as to what the future holds
for business and finance.
The lack of commodity and busi­
ness inflation during the last several
years, we believe, has been due pri­
marily to the conditions existing in
Europe. European prices of com­
modities, when translated to a gold
basis, have been in the majority of
cases lower than our prices in this
country, with the result that whenever
our business began to experience ex­
treme activity and a tendency toward
rising commodity prices, we were
flooded with foreign goods. This ever
ready supply of foreign goods has
tended to keep the United States on a
very level business basis.
Currencies Stabilized
The majority of the European cur­
rencies have now been stabilized long
enough to permit the necessary read­
justment of the European commodity
prices to the gold basis existing in this
country, so that this deterring effect
from Europe will possibly not be as
pronounced as it has been in the re­
cent past.
In the June issue of the C e n tr a l
W estern B a n k e r was quoted the fol­
lowing from Clarke, Lewis & Com­
pany’s house organ, the Financial
News: “ * * * W e also believe that
the world as a whole, barring adverse
political developments, will by 1929
see the greatest period of prosperity
in its history.” The recent national
election seemed to do away with the
political uncertainty for the next sev­
eral years and we can see no reason
why every banker, investor and busi­
ness man should not set his sails for
better business.


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Federal Reserve Bank of St. Louis

point reached in June of this year.
New bond offerings have made a sub­
President, Clark Lewis & Co.,
stantial increase from the low levels
Investment Bankers, Omaha
of this summer, having been in prac­
tically all instances well received and
The general business activity of our
now selling with a free market at or
country today is making new high
over the issue price.
records and at the same time gather­
Liquidation by some banks to take
ing strength in the price level. The
care of the seasonal demand and the
transportation systems of the coun­
increase of new issues of the last
try are, with a slight further increase
month, together, caused a considerable
of business, going to be hard pressed
increase on the supply side of the
for necessary equipment to properly
market. The fact that the general
transport the business of the nation.
price levels have been showing im­
The railroads have been increasing
provement in spite of this is substan­
their efficiency instead of purchasing
tial evidence of a change of a more
new equipment and it appears will
or less permanent nature toward more
either be faced with the problem of
stable prices.
again figuring out ways and means
History has shown clearly that
of carrying more goods per car or of
when borrowers at the Federal Re­
scrambling for equipment deliveries
serve Banks are increasing rapidly,
from the manufacturer. The indus­ banks become rather reluctant to loan
tries which were considerably over­
money on stock market notes or call
planted at the end of the war have
money, which is not rediscountable.
been working off their surplus produc­
It has also been shown a number of
ing capacity, either through deprecia­
times that when demand for liquid
tion, obsolesence or conversion to
funds in business shall be increased,
other industries, with the result that either through a larger volume of ope­
today very few of our important in­
ration, or a smaller volume of profit,
dustries in the United States could
private corporations are not able to
furnish a continually increasing
stand a considerable increase in vol­
ume of business upon short notice.
amount of call money. The time will
The prospects of a lack of immedi­ no doubt come when the competition
ate manufacturing facilities and quick,
of commercial requirements will stop
efficient transportation, a high level
the expansion of speculatve funds
and even force a curtailment of these
of employment, a sufficiency of credit
funds. At such time the upward
with strong speculative securities mar­
ket, we feel can very conceivably cause trend in stocks will collapse. The
a tendency toward stocking of inven­ possibility of such a spectacle in the
tory with the consequent marking up near future does not exist in the pres­
ent situation, although a technical re­
of prices.
action very soon, is not improbable.
Market Stronger
Real Bargains
There has been a gradual strength­
The bond market has stood enough
ening in the bond market the last
month, even in the face of an in­ bad news and excess supply the last
creasing seasonal demand for com­ several months to quiet the fears of the
most pessimistic. W e do not believe
mercial borrowings and the sales of
large amounts of bonds to help take it likely that large speculative prolts
can be made buying bonds for a quick
care of the increasing commercial de­
turn, although we do feel prices in
mand. Investment holdings reported
to the Federal Reserve Board declined general today represent real bargains.
approximately $175,000,000 for the The banker who is interested in ac­
quiring bonds for a more or less per­
month prior to October 15th and as of
the middle of October were approxi­ manent reserve will no doubt be the
mately $350,000,000 below the high one who will make the largest return
B y J.

W . L e w is

Central Western Banker, November, 1928

16
on his reserve funds, as he will, in
putting his bonds away, not be tempt­
ed to take small trading profits and
thereby lose a good market position.
There seems to be little doubt that
eventually bonds will return to the low
yielding levels popular prior to the
W orld War. When this occurs it will
mean that many bonds will have
shown enough increase in price, that
adding the average annual increase to
the net interest coupon return on the
invested capital, one will have a very
handsome gross return on the funds.
It is very easy for one to place
money in the call money market with
the present attractive rates and to
pass up the opportunity to acquire ex­
tremely safe securities on a good yield
basis for a long period of time. When

interest rates are low, bond yields are
low and the prices high, while when
interest rates are high, bond yields
are high and prices low, and condi­
tions are always in a state of change.
The stability of foreign bonds of
the better class, convertible bonds and
bonds with warrants attached, have
demonstrated to the investing public
the desirability of these securities dur­
ing periods of general business pros­
perity. These three types of bonds
can, very conceivably, be the popular
form of investment the next six to
nine months.
Conditions Favorable
The Central Trust Company of
Chicago, in its digest of trade condi­
tions for November, finds the situa-

Putting the wires
underground

N 1881, five years after the first
sentence was transmitted by
telephone, a conversation was car­
ried on by underground cable be­
tween points yf mile apart. Today
the Bell System operates more than
40,000,000 miles of wire under­
ground. And still the work of
“ putting the wire underground”
goes on.

I

Basic facts on American Telephone
and Telegraph Co. as an investment

With its predecessors, the American
Telephone and Telegraph Company

has paid dividends regularly for
forty-eight years. Its earnings as­
sure an ample margin of safety
above dividend requirements. Its
stock is held by more than 430,000
investors. It is constantly seeking
to bring the nation’s telephone
service nearer to perfection. It
owns more than 93% of the com­
bined common stock of the operat­
ing companies of the Bell System
which furnishes an indispensable
service to the nation.
Write fo r booklet “ Some Finan­
cial Facts.”

BELL T E L E P H O N E
S E C U R I TI ES CO. Inc.
195 Broadway

Central Western Banker, November, IVdS

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Federal Reserve Bank of St. Louis

New York City

tion favorable to a continuance of the
high level of business that was reach­
ed late in the summer.
“ Wherever complete records of
business and financial operations for
September and October are avail­
able,” the Central Trust Company says
“ we find ample evidence of the unus­
ual improvement which has taken
place during the last three weeks of
summer and the first three weeks of
the fall season.
“ Some conditions are unfavorable
to a continuation of present volume,
or an increase in activities, but these
unfavorable are so few and so unim­
portant by comparison, that the whole
picture of business as it presents it­
self at this time must be accepted as
a most satisfactory picture. The rec­
ord breaking steel operations, created
principally through the activities in
building operations, and in the manu­
facture of motor cars, machine tools
and farm implements, is the great out­
standing fact of this present business
situation which almost insures a con­
tinuation of present conditions into
the early weeks of the new year.”
Legality of Speculation
judge Davis, in the circuit court of
Bureau County, 111., has upheld the
report of a master in chancery who
has ruled that futures trading on the
Chicago Board of Trade is gambling.
A resident of Judge Davis’ circuit,
after prospering for years by tradingin grain futures, began to lose. He
ran into debt to the firm of brokers
which handled his trades. To satisfy
the debt he gave the firm a note for
$55,000, secured by a mortgage on
two farms. The brokers paid out of
their own pockets all his losses, as
well as large sums in federal taxes on
the grain trades in which he had en­
gaged. Suing on the note, they were
met by their former customer’s asser­
tion that the note was invalid on the
ground that it had been given to pay
losses incurred in gambling. Now this
defense has been upheld by the cir­
cuit court.
Doesn’t Seem Possible
Bootlegger (to man fishing) : “ Have
any luck?”
Man: “ No.”
Bootlegger: “ Try some of this on
your bait.”
Man pours something from bot­
tle over the worm on the hook and
lowers it into the water. Soon a great
splashing about is heard and the line
is jerked up. The worm had a stran­
gle hold on a catfish and was punching
him in the eye with his tail.

17

Brokers Loans and Bank Credit
From address by Benjamin M.
Anderson, Ph. D., Economist of
the Chase National Bank,
N ew York
T T H AS been the progressive mounting of money rates that has evoked
the great volume of loans to the Stock
Exchange by firms, corporations, for­
eign banks, individuals, and others.
This money is available for Stock E x­
change use at a price, but only at a
price. Declining money rates would
drive it back again into other uses.
While the stock market is depending
upon so large a volume of loans from
these unusual sources, it can hardly
expect to enjoy monetary ease.
For “ Account of Others”
Fear has been expressed that this
large volume of outside money,
loaned by individuals and institutions
which have no responsibility for the
safety and stability of the money
market of the securities market, may
be subject to sudden and capricious
withdrawal. I do not share this fear.
If it should be withdrawn suddenly,
it is quite clear that money rates
wuold have to rise to very high figures
indeed as the Stock Exchange and the
banks readjusted their position. At
a price, it could be done. But sudden
and capracious withdrawal of large
blocks of money by these private lend­
ers would make real difficulties.
I do not, however, believe that there
will be or can be sudden and capraci­
ous withdrawals of vast amounts. Any
one lender can, of course, make a
sudden withdrawal and need feel no
particular responsibility. But the
lenders are very numerous, and their
interests are very diversified. The
one thing that would make a concert­
ed sudden withdrawal would be a
sharp drop in rates of interest, last­
ing for anyhow several days. W ith­
drawals on a great scale would then
come. But on the other hand the bid­
ding up of rates of interest which
would have to follow such withdraw­
als would bring the money back again.
But such a situation usually means
that rates will be kept high enough all
the time to prevent large concerted
withdrawals. The outside money, so
far as short periods of time are con­
cerned, is available at a price, but not
at such a price as would constitute an
easy money market.
Their Source and Future
What are the prospects that this
great volume of outside money will
remain permanently at the disposal of


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Federal Reserve Bank of St. Louis

the Stock Exchange? The answer to
this question is to be found by con­
sidering the original source from
which this great volume of free money
came. How does it happen that the
corporations and foreign banks and
individuals and firms are in posses­
sion of large volumes of highly liquid
funds which they can place at the dis­
posal of the stock market in call loans
at a price? It has never happened be­
fore in our history, even when money

rates were much higher. W hy should
it be true today?
The answer is to be found in the
expansion of bank credit between
early 1922 and early 1928. Between
June 30, 1922, and April 11, 1928,
we had an expansion of commercial
bank credit amounting to 14 billions,
512 millions in loans and investments
and to 13 billions, 544 millions in de­
posits. In the closing five months of
1927, from July 27, 1927, to January

Commercial Paper and Acceptances
Short and Long Term Bonds
Investment Trusts

W e can supply your needs in any m aturity of thirty
days or longer at rates from 4H% to 7%.

Please send for our lists

C L A R K E , L E W IS

& CO.

318 SOUTH NINETEENTH STREET
OMAHA

Central Western Banker, November, 1928

18
4, 1928, we had an expansion of 3
billions, 361 millions in loans and in­
vestments, and of 3 billions 117 mil­
lions in deposits.
This great expansion of bank credit
represents savings only in minor part.
It represents primarily the efforts of
the banks to utilize excess reserves,
the excess reserves being due (a ), to
excess gold, and (b ), to easy money
policies of the Federal Reserve Banks.
The result was a multiple expansion
of bank credit based on excess re­
serves, which continued and contin­
ued as increased gold and successive
periods of easy money policy at the
Federal Reserve Banks kept commer­
cial bank reserves excessive.
The expanding bank credit, unneed­
ed by commerce, was utilized in real
estate mortgage loans, in installment
finance paper, and above all in the
buying of bonds and in loans against
securities. One result was an im­
mense increase in the volume of new
security issues, which made it possible
for every business of substantial size
and good credit standing to finance its
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needs through the securities market,
the proceeds of which could be used
to pay off bank loans, to increase the
working capital, to finance extensions
of plant and finally to build up liquid
reserves of cash. An immense flota­
tion of foreign loans took place in the
same period, which placed the outside
world in possession of a tremendous
volume of short term funds in dol­
lars.
Rise in Prices
As the process went on, we have
had a great rise in the prices of ur­
ban and suburban real estate, and an
immense speculative rise in the prices
of securities. The old holders of real
estate and securities who have sold
their holdings have thus come into
possession of their original capital in
liquid form plus large profits, which
many of them are in a position to lend
to the Stock Exchange pending the
time when the prices of securities or
of real estate suit them better. The
great abundance of mortgage money
and of funds obtained by the sale of
mortgage bonds in the securities mar­

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ket has made possible the refunding
of many mortgages held by local
mortgagees (with the result that they
are in possession of liquid funds which
are coming back to the general capital
market, including loans to the Stock
Exchange. Investment trusts, float­
ing their issues easily in the period of
bank expansion, also have, in many
cases, large funds for stock market
loans.
The primary source, then of the
great volume of free funds is possesiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiitiiiiiiiiii„iiiiiiia,iiiiii

W ILL BECOME NORMAL
“ Investors lending temporarily
to the Stock Exchange look fo r­
ward to the time when security
prices will he more attractive and
when they will take securities
themselves, instead of holding
loans against securities. In all
these, and other ways, the tend­
ency will he fo r this great extra­
ordinary and unusual fund of
liquid money in the hands of pri­
vate lenders, to he reduced to
more normal proportions, unless
it is fed by a further spurt of
hank expansion.”
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um
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R ufus E. L ee & C ompany
Investment Bankers
204-210 City National Bank Building

Omaha
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C entral T y p ew riter E x c h a n g e , Inc.
1912 FARNAM ST.

{Established 1903)

Central Western Banker, November, 1928


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Federal Reserve Bank of St. Louis

OMAHA. NEBR.

sion of individuals, firms, corpora­
tions,
foreign banks, investment
trusts, etc., available for loans on the
Stock Exchange, is the prior expan­
sion in earning assets and deposits by
the banks. What does the future hold
by way of increase or decrease in the
volume of such funds? The answer
seems fairly clearly indicated. For
the present, certainly, the expansion of
bank credit is over. W e no longer
have incoming gold making excessive
reserves. On the contrary, we have
lost in the last year 500 million dol­
lars of gold. The Federal Reserve au­
thorities, with their credit expanded
to a volume of over a billion and a
half dollars, and with their reserves
cut under, and no longer pursuing an
easy money policy. The reserves of
the banks of the United States are no
longer excessive. The volume of new
securities currently floated is greatly
reduced and the interest rates at which
new bonds can be placed are not at­
tractive to borrowers who do not need
to borrow.
Would Diminish
Assuming then, that the period of
very easy money and rapid bank ex­
pansion is over, the presumption
would be that the volume of liquid
funds in outside hands available for
loans on the Stock Exchange, would
diminish rather than grow. At 7 per
cent, Canada is glad to leave a large
volume of funds loaned on call at the

19
New York Stock Exchange. With a
call rate of 5 per cent, Canada would
find it more profitable to employ her
funds at home, and in the process of
withdrawing them would presumably
take out substantial amounts of gold
which she needs and desires for in­
creasing the gold reserves behind her
admirable banking system. With 7
per cent call money, France and other
European countries would leave their
dollars here. If our market works
toward ease, however, there is no
reason to suppose that they may not
resume, to some extent, at least, the
process of exchanging their dollar
credits for gold. Gradually, in any
case, if we reduce the volume of new
loans to the outside world, the out­
side world will use up its excess sup­
ply of short term dollar funds in mak­
ing payments here.
Business corporations with liquid
funds in excess of their needs would
gradually tend to use them. Maturi­
ties of existing obligations come. In
a very easy money market, the cor­
porations would refund them. In the
face of substantial money rates, they
would prefer to pay them off. In
most cases, presumably, the corpora­
tions have issued securities, not merely
to get cash, but with a view to very
definite purposes in the future, and
they have got their money while it
was cheap instead of waiting until the
actual need should come, when the
money might be harder to get. When
the time comes they will use the funds
obtained for the purposes they had in
mind. With the growth and expan­
sion of business of various corpora­
tions, they will gradually use their
funds more closely. With plant ex­
tension they will use them.
Investors lending temporarily to the
Stock Exchange look forward to the
time when security prices will be more
attractive, and when they will take
securities themselves, instead of hold­
ing loans against securities. In all
these and in other ways the tendency
will be for this great extraordinary
and unusual fund of liquid money in
the hands of private lenders, to be
reduced to more normal proportions,
unless it is fed by a further spurt of
bank expansion.
Pioneer Banker Dies
J. F; Steele, president of the Par­
sons, Kansas Commercial Bank, drop­
ped dead recently while playing golf.
At the time of his death Mr. Steele
was 77 years of age.

LAST MINUTE NEWS
(Continued from Page 3)

kota. Figures show that the robbers
have been more successful this year
than they were last. While there
were to date five more robberies last
year, the amount secured did not total
as much as obtained so far this year.
YXf

M. K N U TSO N , representing
the Illinois Merchants Trust
Co. of Chicago, in Iowa, Nebraska,
Minnesota and South Dakota, for the
past five years, has been assigned to
travel Iowa exclusively. He will devote
his entire time to building up Iowa
business for the Continental Illinois
Bakn & Trust Company, recently

formed by the consolidation of the
Illinois Merchants Trust and the Con­
tinental National.
Meet in Avoca
The Cass County Bankers Associa­
tion met at Avoca, Nebraska, recent­
ly. Those in attendance from Eagle
were Mr. and Mrs. H. K. Frantz, and
Mrs. A. M. Longman. All the ladies
were entertained at tea at the home
of Mrs. Fahnastock, and at 6:30 the
association banquet was held, at which
Mr. Frantz was on the program as
one of the speakers. Carl Ganz of
Alvo was elected president, and the
next meeting will be held at Plattsmouth.

J p E W single banks or institutions can
afford to employ a real financial e x ­
pert, yet these experts are at your dispos­
al through the financial services to which
our house subscribes.

W e place at your disposal the opinions o f
the best informed financial experts.

Consult them through us.

Ask for special reports on any corporation
or partnership.

SMITH, LANDERYOU & CO.
640 First National Bank Building
OMAHA, NEBRASKA
Telephone JA ckson 5065

It is a strange desire, to seek power
and lose liberty.— Bason.


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Federal Reserve Bank of St. Louis

Central Western Banker, November, 1928

20

crune! Conditions in Bond Market
/C O N F ID E N C E in the sound under^ lying conditions in the bond mar­
ket was evidenced by the increase in
new investment financing in October.
The total was the largest of any month
since last June, but fell considerably
behind the record amount of October
a year ago.
New bond and note offerings in O c­
tober totalled $405,739,000, according
to the compiliation of Lawrence Stern
& Company, Chicago investment bank­
ers. This compares with offerings of
$942,977,500 in October, 1927, and
$357,108,700 in September, 1928.

Foreign issues totalling $91,165,000,
led last month’s offerings, but showed
a substantial decline when compared
with the $245,622,500 total in that
class in October, 1927. Tax E x­
empts, public utilities and industrials
all showed substantial decrease when
compared with their respective totals
in October of last year, but all ex­
cept public utilities showed an in­
crease over September, 1927. Only
railroad and real estate offerings were
larger last month than in October,
1927, and September, 1928.
The total of all offerings for the

Winning

New depositors
through Bonds
People like to deal with a bank which
helps its depositors invest their money.
By using The National City Company
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depositors a broad range of desirable
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National City Bank Building, New York
Offices in more than 50 leading cities throughout the world
BONDS

'

SHORT

TERM

NOTES

Central Western Banker, November, 1928

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Federal Reserve Bank of St. Louis

'

ACCEPTANCES

ten months of 1928 amounted to $5,487,083,000, compared with $6,949,408,000 for the corresponding period
in 1927. This is a decline of about 21
per cent.
Last months’ offerings, excluding
tax exempts, included 143 separate
issues. This compares with 183 such
issues offered in October a year ago,
and 98 in September, 1928. There
were 67 major issues of a million dol­
lars or more brought out in the mar­
ket last month, compared with 50 in
September, 20 in August, and 88 in
October, 1927.
The Lawrence Stern & Company
monthly bond review concludes as fol­
lows :
“ The bond market during the month
o f October was relatively quiet, with
an undercurrent of considerable
strength. This undercurrent developed
during the latter half of the month,
into a moderate degree of activity, ac­
companied by a tendency toward firm­
er prices.
“ In sympathy with the high price
levels on the stock exchange, convert­
ible bonds were particularly active,
and a number of very considerable
price changes in an upward direction
were registered, following similar
movements in the stock involved.
“ During the latter two weeks of the
month, some very noticeable institu­
tional buying of the higher grade, low
coupon issues made itself felt. In­
crease of a point or more in the quo­
tations for some of these issues were
registered. It has been stated by a
number of close observers of the mar­
ket that in many cases institutions
which have been taking advantage of
high call money rates have returned to
the bond market with funds which un­
til recently have been placed on call.
This factor has resulted from a rea­
lization of the fact that the purchase
of high grade, long term issues at
present levels is likely to prove more
profitable in the long run than to take
the risk of having to make long term
committments later at a level yielding
perhaps one-half per cent less than is
obtainable now.
“ Without attempting to estimate the
duration of the present upward move­
ment in the stock market, the general
feeling among bond men is that each
week brings us closer to a time when
extensive profittaking or liquidation
will provide an enormous volume of
funds which will, to a large degree,
find placement in the bond market.

21

Insurance

W hen Insurance and Science
Join Hands
'T 'W E N T Y -T W O years ago there
were thirteen billion of insurance
in force in the United States, cover­
ing approximately sixteen million
lives. Today there is in excess of
eighty-seven billion, covering sixtytwo million lives. Then, corporation
assets were expressed in terms of mil­
lions ; today, of billions. There are in
the United States today ten corpora­
tions with over a billion and a quarter
of assets, and it is of peculiar interest
to us that of these ten, one is a bank,
one is a public service corporation,
two are manufactories, three are rail­
roads and three are Life Insurance
companies. W e have in the United
States but 7 per cent of the world’s
population, but we have 33 per cent
of its railroad mileage, over 60 per
cent of its telephones, and over 80
per cent of its life insurance.
A Successful Relationship
The growth of our ten leading cor­
porations and of our thousands of
other smaller successful business in­
stitutions, which in the aggregate have
brought us the industrial leadership
of the world, has been due to the suc­
cessful working relationship which has
developed between science and indus­
trial management. Each one of these
ten typical American corporations
owes its success to this irresistible
modern combination of science and
capital under aggressive leadership;
the telephone and telegraph based up­
on physics; manufacturing largely
upon chemistry; railroads on physics,
and life insurance on mathematics and
medicine.
It is highly significant that the pub­
lic expressions from many of our
leading executives in recent years
have recognized the new scientific era
in business. Reasonable wages, sales
pressure, economy in management no
longer fully meet modern industrial
demands. A new vision is necessary,
a vision in which science joins indus­
try as a working partner. W e are
mutual debtors each to the other—
business administration and scientific
research.
It has been estimated that Ameri­
can corporations spend one hundred
million dollars annually in research.
The supremacy o f American industry


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Federal Reserve Bank of St. Louis

By 0. J. Arnold
President Northwestern National Life
(From address before Medical Sec­
tion, American Life Convention)
may be largely attributed to this utili­
zation of science and scientific method.
As competition grows keener and the
margin of profit is smaller, as it in­
evitably must, the relative importance
of scientific research and the applica­
tion of methods to industry will be­
come more clearly recognized. As
has been said, “ The price of progress
is research, which alone assures the
security of dividends, and that pro­
gress is made not by raising tariffs,

O. J. A rnold
but by devising new methods, new
equipment, new organization for ope­
ration, distribution, and control.”
An Era of Progress
The intimate and organic union of
science and industry in the modern
giant strides of material advancement
is so recent a development that we
can only inadequately anticipate even
the immediate future. The power and
light industry has come into existence
within the adult life time of a man
still living and still actively advancing
scientific frontiers. It was in 1882
that Edison opened in New York the
first central generating system in the

world, and within the present century
still only a quarter over, there was
built at Niagara Falls the first long
distance transmission line. What will
even the next decaded in this century
bring forth? Perhaps in chemistry,
the release of the energy binding the
electron in the various atomic com­
binations, or more certainly new mole­
cular discoveries for fuel and other
industrial needs; in physics, new
uses of wireless electrical waves, or
the solution of commercial aeronauti­
cal transportation; in medicine, new
chemical and physical cures of which
insulin and radium are only the fore­
runners ; in Life Insurance mathe­
matics, the application of a new mor­
tality table; and in Life Insurance
medicine, constantly new diagnostic
aids such as the x-ray and the electro­
cardiogram, both up here for discus­
sion at a Life Insurance meeting for
practically the first time, exemplifying
methods which will permit continual­
ly new refinements and subdivisions
of our present substandard classes. Is
not the prospect before us dazzling
and fascinating?
Science and Industry
I congratulate you, who are so for­
tunate as to have had the best of
scientific training joined with busi­
ness administrative experience, on the
opportunities lying before you.
“ There is a tide in the affairs of men
Which, taken at the flood, leads on
to fortune.”
W e are at the flood-tide of scientific
and industrial opportunity. Let us
keep Lowell’s couplet in mind and
“ Launch our Mayflower, steer our
vessel o’er life’s unresisting sea,
Nor attempt the future’s portal, with
the past’s blood rusted key.”
Certainly the inaccurate mthods which
are possible with success in an early
stage of industrial progress, unques­
tionably spell failure in a more ad­
vanced stage of competitive and scien­
tific development. The aphorism, “ To
stay where you are in the United
States you have to keep moving,” has
been supplemented by Dr. Von KleinSm id: “ Research is the slogan of the
hour; it is the only method in these
days by which we can run fast enough
to keep up with ourselves.”

Central Western Banker, November, 1928

22

H ow T oo Many Laws Can Hurt
Life Insurance
p R I C E fixing and rate making have
* no place in the life insurance busi­
ness, declared Nebraska Insurance
Commissioner John R. Dumont, in an
address last month at Rapid City, S.
1)., before the annual meeting of the
Insurance Commissioners’ convention.
Instead, friendly co-operation, clean
competition and honest management
will assure the public of equitable
rates. Government control, he assert­
ed, through legislation, is always an
expensive way to accomplish good.
Speaking in part on this subject,
Commissioner Dumont said:
“ The Armstrong investigation was
a lesson which none should forget.
Twenty-two years have proven the sta­
bility of legal reserve life insurance
companies.
“ Twenty-two years through epi­
demics, wars, rising costs, competition
and fighting against adverse public
opinion and legislative whims, and still
these companies have continued to
grow to their almost startling magni­
tude, rendering a service unequaled by
any other business, at a steadily reduc­
ing cost to the public.
“ Is this not a record to be justly
proud of ? Does such a record require
government regulation of acquisition
costs or rates? I hardly need to say
that I, for one, am convinced that the

facts prove otherwise. I am more than
ever convinced after my careful study
of the situation, that it is not time for
the government to attempt price fix­
ing or rate making for life insurance.

H o n . J o h n R. D u m o n t

1 am already on record more than
once as regards other branches of the
insurance business.
“ Safety first should be the watch­
word, particularly with regard to life

W HY PAY MORE
For a 24-Hour Service Than an 8-Hour Day One.

We are always at your call at every tick
of your watch, be it day or night— and if
under one of our SAFE OR VAULT
MAINTENANCE CONTRACTS, at no cost
to you.
Save Money on New and Used Safe and
Vault Equipment
Fireproof or Burglar Proof Safes
Safe Deposit Boxes
Night Depositories

F. E. DAVENPORT SAFE COMPANY
Official Safe, Vault and Timelock Experts for
Nebraska and Iowa Bankers Associations

2061 Farnam Street
Telephones:

Office Jackson 1821; Residence, Kenwood 3123
or Kenwood 6382

Central Western Banker, November, 1928

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Federal Reserve Bank of St. Louis

Omaha, Nebraska

insurance. No state has a right, mor­
ally, under any circumstances, to at­
tempt to drive insurance rates down
below a point of safety and this might
easily be the result if legislative action
is taken to further control acquisition
costs.
“ Whenever the state governments
will really play fair in the matter of
taxes on premiums, then they can ail
do considerable toward bringing down
the cost of insurance to the public.
May 1 ask how any legislature has the
nerve to seek a reduction in acquisi­
tion costs in any line of insurance,
when all are guilty of charging many
times more in taxes on premiums than
enough to pay for proper supervision,
which is the only excuse for such
taxes ?
“ Latest reports show that over the
country the average premium tax dol­
lar is divided into less than 4 cents
for supervision and more than 96
cents for state general fund expendi­
tures.
“ My advice to the life insurance
companies is to fight to the last ditch
any attempt to foist on them, acquisi­
tion cost regulations and rate regula­
tions such as have been saddled on
the fire, casualty and surety compa­
nies in some jurisdictions.
“ In offering such advice I am look­
ing to the future and have primarily in
mind the best interests of the policy­
holders. Such attempts at regulation
toward some of the more flagrant
abuses and particularly to discrimi­
nation, at least between citizens of the
several states.
“ Acquisition costs can best be regu­
lated by honest management, friendly
co-operation, decent competition and
proper publicity. Government con­
trol through legislation is an expens­
ive, unnecessary measure which will
accomplish no real good.”
Will Pay in Full
Commissioner Dumont finds that
the state hail insurance department
will be able to pay claims in full this
year. Premiums collected and avail­
able for use for payment of losses
Dec. 1 total $21,386, while losses were
$19,603. The money is now in the
hands of county treasurers, who have
30 days in which to remit. Policies
numbered 422, compared with 1,265
last year. This is about a tenth of the

23
maximum premium income of the
fund ten years ago, and since then it
has steadily declined, due to the num­
ber of years in which it was impos­
sible to pay losses in full. Last year
the privately-owned companies col­
lected $2,400,000 in premiums and
paid $1,100,000 losses.
Faces Rate Raise
As a result of the decrease in the
number of firemen on duty at any one
time, due to the refusal of the city
commission to provide adequate funds
for the department, a sharp rise in in­
surance rates is threatened in Omaha.
Joseph Barker, head of one of the
large agencies of the city, said that
his companies are insisting that a raise
of from 20 to 50 per cent be made if
the council refuses to adequately fin­
ance the department.
Mr. Barker’s prediction is affirmed
by William DeRohan, engineer for the
National Board. He says that the
rates are certain to go up unless im­
mediate measures are taken to rem­
edy the weakened condition of the
fire-fighting forces.
Fulfilling Family Obligations
Americans are as far ahead of any
nation in history in their practical ful­

fillment of family obligations as they
are in their standards of living, re­
cently asserted Winslow Russell, vicepresident of the Phoenix Mutual Life
Insurance Company, addressng a pub­
lic round table on the Life Insurance
Trust, sponsored jointly by the Nor­
folk National Bank of Commerce &
Trust Co., and the Norfolk Life Un­
derwriters Association. In support of
his claim, Mr. Russell cited the fact
that more families now own their own
homes than rent them, that the volume
of savings bank deposits never has
been so high, nor the investments in
building and loan associations and
other types of securities.
“ The records show that there are
16,000,000 holders of securities in the
United States today and that the num­
ber constantly grow s; we know that
the year-end payments of dividends
and interest last year ran well beyond
a billion dollars. Yet only recently
have the banks and life insurance com­
panies together awakened to the fact
that life insurance holdings represent
the most far-reaching and important
asset of all, with 63,000,000 policy­
holders and more than eighty billion
dollars of insurance in force. Life in­
surance investments, up to the time of
their payment to beneficiaries, receive

a degree of skilled and experienced
management that is proverbial; but
when they mature as claims in the
beneficiaries hands, all too often they
become a school for the scandalous
mismanagement of funds,” the speak­
er asserts. Continuing, he pointed out
that of the billion or more that will
be paid this year on matured policies,
fully half will be paid in lump sums,
and that probably, not a tenth of that
half will fall to the hands of any per­
son who knows how to increase or
even to conserve capital from loss. The
correction of this condition he de­
clared to be the gravest duty and the
greatest responsibility facing Ameri­
can finance today.
“ It is a healthy sign of banking sa­
gacity that the funds of the relatively
small owner of capital now can get the
same skilled and responsible guidance
which long has been enriching very
wealthy estates. The level of Ameri­
can prosperity and security will be
raised many degrees when liquidated
insurance policies receive as much ex­
pert care as when the funds were still
in the hands of the companies. Every­
one has seen substantial insurance es­
tates sacked and dissipated by inex­
pert handling; everyone has realized
that these estates were the fruits of
self-denial and has regretted their loss.

YOUR OPPORTUNITY
Banking and Life Insurance go hand in hand.
Both institutions teach the principles and advant­
ages of thrift.
The banker is in a better position to educate
the public on the thrift idea than any other citizen
in the community.
W e are, therefore, anxious to obtain a num­
ber of progressive banker agents in Nebraska and
adjoining states and are offering an unusual parttime contract with liberal commissions and sales
training by experienced insurance men.
G uarantee

F

und

L

if e

B

u il d in g

Write Agency Department for Details.

18th and Douglas Sts., Omaha

W e Write
O R DIN ARY LIFE
20 YEA R ACCUMULATION
20 Y EA R ENDOW MENT
ENDOW MENT AT 65
ENDOW MENT A T 70
Y E A R L Y REN EW ABLE TERM
TERM INSURANCE FOR 5, 10, 15,
20, 25 AND 30 YEARS
DOUBLE IN DEM N ITY
D IS A B IL IT Y BENEFITS
W A IV E R OF PREM IUM
JUVENILE INSURANCE


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Federal Reserve Bank of St. Louis

Gu a r a n t e e F u n d

LIFE

A ssociation
- OM AH AAssets Exceeding $13,000,000.00

Central Western Banker, November, 1928

24

T

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P H I L H A L L , P r e s id e n t
N e b r a sk a lia n k e r s A s s o c ia tio n

W M . 15. H U G H E S , S e c r e t a r y
N e b r a s k a IS a n k ers A s s o c ia t io n

DAN V. STEPH EN S, president of
the Fremont State Bank, was elected
vice-president of the state bank divi­
sion of the American Bankers Asso­
ciation, at the national convention in
Philadelphia in October. At the con­
vention Mr. Stephens addressed the
bankers on the subject of the regional
clearing house association of Dodge
county banks, of which he is the
originator and president.
H E R B E R T FRENCH, director of
the Stock Yards National Bank of
Omaha, and Omaha representative of
Brown-Crummer, investment house,
died at Philadelphia October 15, after
a collapse at Atlantic City the day be­
fore.
G W Y E R Y A T E S, returning from
the convention of the American Bank­
ers Association, and visits to New
York, Detroit and Chicago, said that
business is good everywhere, with the
business men finding that the “ presi­
dential election year slump” was not
a factor in business this year.”
W. K. PO TTER, former Omaha
banker and father of Herbert Potter,
vice-president of the Peters National
Bank, died at San Diego, Cal., early
in October. In 1893 Mr. Potter was
vice-president, and later became re­
ceiver for the Nebraska Savings &
Exchange Bank of Omaha.
DEPOSITS of the 739 state banks
of Nebraska, totalling $268,735,731 on
September 20, showed a gain of $7,674,332 over deposits on June 30, the

last previous state bank call, accord­
ing to the state department of trade
and commerce. Bonds and securities
held by the banks gained $4,987,332
to a new total of $44,201,619. Cash
in the banks gained $1,009,612, the
total becoming $11,042,543.
Loans
and discounts increased $3,098,887 to
a total of $182,256,285.
T H E R E A L E ST A T E department
of the Nebraska guaranty fund com­
mission has obtained about $4,500,000
in the past three years from sale of
farm and town properties in assets of
failed banks taken over by the com­
mission, according to an announce­
ment by the department. The real es­
tate department was established Sep­
tember 1, 1925. The actual sales from
that date up to and including Sep­
tember 30, 1928, were $4,498,106. O f
the receipts $2,293,198 was paid on
the mortgage indebtedness of the land,
leaving a balance of $2,204,908 for
payment to depositors of suspended
banks. The report did not reveal the
expenses of administration, interest,
taxes and upkeep, nor did it reveal
the rental received from the proper­
ties. Secretary Van E. Peterson’s
records showed, however, that during
the fiscal year ending last June 30, the
commission collected $218,284 in
rentals and paid $293,182 on the prop­
erties.
GUY H OFFER, formerly of the
Burns-Potter Co., of Omaha, has been
named by H. M. Byllesby & Co., of
Chicago, to represent it in the Oma­
ha territory. The Byllesby Company
has been actively identified with the
development and progress of the
electrical industry, having made a
specialty of financing electric light,
and power, gas and other public utili­
ties, dealing also in state, municipal
and industrial securities.
TH E A N N U A L meeting of the secretray-treasurer of the national farm
loan associations of Nebraska, Iowa,
Wyoming and South Dakota was held
in Omaha recently, under the auspices
of the Federal Land Bank of Omaha.
Eugene Meyer of Washington, D. C.,
commissioner of the federal farm loan
board, came to Omaha to speak, and
with him came Floyd R. Harrison, a
member of the board; Chester Mor­
rill, secretary and general counsel of
the board; and H. M. Shields, repre­
senting the national farm loan asso­

Central Western Banker, November, 1928

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Federal Reserve Bank of St. Louis

ciations, all of Washington. Mr.
Meyer addressed the Omaha Cham­
ber of Commerce at a public affairs
luncheon at noon. Approximately
150 secretary-treasurers attended the
meeting. The speakers were D. P.
Hogan, president of the Federal Land
Bank of Omaha; E. D. Morcom,
treasurer; E. F. Iroutok, S. D. Thorn­
ton, Andrew Kopperud, manager of
the Omaha Intermediate Credit Bank ;
A. F. Beck, J. A. Ontkes and Mr.
Meyer. Mr. Kopprud was toastmas­
ter at a banquet held at the Fontenelle in the evening, and the speakers
were T. C. Hornby, vice-president of
the Omaha Land Bank; J. C. Under­
wood of Cheyenne, Wyo., and Chan­
cellor E. A. Burnett of the University
of Nebraska.
FIR ST N A T IO N A L BAN K, W ahoo: Loans and discounts, $631,809;
government securities, $166,966; other
securities, $191,847; banking house,
$48,642; reserve with Federal Reserve
bank, $51,676; cash items, $246,218;
capital stock, $80,000; surplus, $80,000; undivided profits, $17,276; due
to banks, $229,347; demand deposits,
$451,777; time deposits, $460,153.
CE N TR A L C ITY N A T IO N A L
BANK, Central City: Loans and dis­
counts, $482,757 ; government bonds
and other securities, $28,250 ; cash
items, $106,319; capital stock, $50,000; surplus, $50,000; undivided prof­
its, $13,709; deposits, $516,426.
FARM ERS ST A T E BANK, Polk :
Loans and discounts, $162,638; capi­
tal stock, $25,000 ; individual deposits,
$59,799; time deposits, $113,680.
FIRST N A T IO N A L BAN K, Gor­
don: Loans and discounts, $551,835;
government securities, $105,350; cash
items, $273,700; capital stock, $50,000; surplus, $50,000; undivided
profit, $13,983; demand deposits,
$636,270; time deposits, $280,440.
P O T A SH ST A T E BANK, Anti­
och : Loans and discounts, $22,899 ;
deposits, $26,552.
Inspects Property
Walter W . Head, president of the
Omaha National Bank and director
of the Chicago & Northwestern rail­
road, recently made a tour of inspec­
tion of the road with other directors.

25
Meet in Hebron
The second annual meeting of the
Thayer County Bankers Association
was held in Hebron, Nebraska, re­
cently. A banquet was served and a
general good time is reported. Deshler bankers attended one hundred per­
cent. Fred Bruning of Bruning, is
president, and L. C. Krutz is secre­
tary-treasurer.

E X P E R IE N C E
PERM ANENCE

IN CONTINUOUS EXISTENCE
SINCE 1891

Chosen Cashier
V. E. Warren was chosen to fill the
office of cashier of the Commercial
State Bank of Ogallala at a meeting
of the board of directors recently.
This office has been vacant since tbe
death of C. H. Menck which occurred
in the spring. Since that time Mr.
Warren has been acting cashier and it
was thought by many to be only a
question of time until he would suc­
ceed to that position.

PACKERS
NATIONAL BANK
Affiliation

P A C K E R S N A T IO N A L
COM PANY
INVESTMENT BONDS

In New Quarters
The State Bank of Minatare, Ne­
braska, opened for business in the
bank building formerly occupied by
the Minatare Bank. The building was
purchased by the officers of the State
Bank from the Guarantee Fund Com­
mission several months ago, and since
that time workmen have been engaged
in remodeling and repainting it to
suit the needs of the new owners. The
interior has been completely redeco­
rated, the heating plant has been re­
modeled and with the other changes
made they now have one of the most
convenient and well lighted banking
rooms to be found in the valley.

SOUTH

O M A H A
“ An Unbroken Record of Seventy Years
is a Guarantee of Safe and
Satisfactory Service”

The First
National Bank
Established

1871

OFFICERS
S. H . B U R N H A M , Ch. o f B o ard .
H . S. F R E E M A N , P re sid e n t.
P. R . E A S T E R D A Y , V ic e -P r e s .
W . B. R Y O N S , V ic e -P r e s id e n t.
S T A N L E Y M A L Y , V ic e -P r e s .
J O E L. B U R N H A M , V ic e -P r e s .
L E O J. S C H M IT T E L , Jr. V ic e -P r e s .
B. O. C A M P B E L L , Jr. V ic e -P r e s .
E. H . M U L L O W N E Y , C a sh ie r
H O W A R D F R E E M A N , A s s ’t C ash ier.
F R E D D. S T O N E , M g r. S e rv ice D ept.

CAPITAL & SURPLUS
$1,050,000.00
ASSETS OVER $14,000,000.00


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Federal Reserve Bank of St. Louis

OMAHA

National Bank
Trust Company

Donates Church
A new Methodist church and par­
sonage costing $25,000 was dedicated
recently in Martel, Nebraska. It is
to serve the three former congrega­
tions at Highland, Centerville and
Martel. The former two disposed of

OF LINCOLN, NEBRASKA

FID E L IT Y

OFFICERS:
M.

T. B a r l o w , President o f the Board
R. P. M o r s m a n , President

G. H . Y a t e s , Vice-President
R . R . R a i n e y , Cashier
C. M c C lu r e , Vice-President
H . E. R ogers , Assistant Cashier
F. M u r p h y , Vice-President
E. E. L a n d s t r o m , Assistant Cashier
F. B r i n k m a n , Ass’ t V -President
A. L. V ic k e r y , Assistant Cashier
B . H e n d r ic k s , Ass’ t Vice-President V . B. C a l d w e l l , Assistant Cashier

J.
T.
C.
P.

N A T IO N A L B A N K O F C O M M E R C E
L IN C O L N ,

M.
CARL
C a p ita l

W E IL ,

W E I L , V ic e -P r e s id e n t
B Y R O N D U N N , C a sh ie r
$ 3 0 0 ,0 0 0 .0 0

S u r p lu s

NEBRASKA

P re s id e n t
E R N E S T C. F O L S O M , V ic e -P r e s id e n t
B. G. C L A R K , A s s ’t C a sh ie r

$ 1 0 0 ,0 0 0

U n d iv id e d

P r o f it s

$ 1 0 0 ,0 0 0

Central Western Banker, November, 1928

26
their buildings and federated with the
Martel church.
Rev. R. H. Chenoweth, pastor and
District Superintendent F. F. Travis,
had charge of the dedication. The
building was donated by FI. H. Moore,
president of the Martel State Bank.

OFFICERS
FORD E. HOVEY, President
JAS. B. OWEN, Vice-Pres.
F. J. ENERSON, Vice-Pres.
W. H. DRESSLER, Cashier
L. K. MOORE, Asst, to Pres.

OUR B A N K I N G
M A IN

FLOOR

w

H. C. MILLER, Asst. Cash.
C. L. OWEN, Asst. Cash.
HENRY A. HOVEY, Asst. Cash.
T. G. BOGGS, Auditor

ROOM
RIGHT

O R K IN G for the best interests o f
our customers is our constant aim.

W e invite your correspondence and will
consider it a pleasure to be o f assistance
to you in every possible way.

Let us

handle your live stock credits.

Stock Yards National Bank
of
South Omaha

The Only Bank in the Union Stock Yards

Central Western Banker, November, 1928

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Federal Reserve Bank of St. Louis

Automatic Cashier
A machine known as an automatic
cashier, has been installed at the
First National Bank of Auburn, Ne­
braska. The machine greatly facili­
tates the handling of coin in such ope­
rations as making change, is absolute­
ly accurate and works very rapidly. It
is an addition to the already up-to-date
equipment in the way of adding and
bookkeeping machines.
Holt County Banks
Holt county, Nebraska, banks with
a total amount of deposits of over
five million dollars, as shown by their
latest statements of condition, are all
healthy institutions and the First Na­
tional Bank of Atkinson has the dis­
tinction of being the largest bank in
the county, with a capital, surplus and
undivided profits of $132,639.44 and
deposits of $899,620.99. The secur­
ity State Bank of Atkinson was the
second largest bank in the county on
the day of their call, September 20,
with capital, surplus and profits
amounting to $76,564.13, and deposits
to the amount of $535,697.02. The
Citizens State Bank of Stuart was the
largest state bank, capital, surplus and
profits being $63,096.72 and deposits,
$702,779.24.
The banks of the county, 12 of
them, present a total capital, surplus
and profits of $744,149.73, and a to­
tal amount of cash on hand at $1,452,548.19. Their combined deposits are
$5,161,804.43 and their total loans $2,999,896.96. Holt county banks own
$564,300.00 worth of government se­
curities and $687,000.00 worth of
other marketable bonds. They are
operating with no borrowed money or
re-discounts.
Named Vice-President
Frank Borden, for so many years
associated with the mercantile life of
York, Nebraska, has severed his con­
nection with that field of activity en­
tirely, and having been named vicepresident of the City National bank,
will devote his time in the future to
that institution.
Mr. Borden has for a long time
served as a director for the City Na­
tional and the fact that his services
were available for more intensive
work has been recognized.

27

the

Omaha

Cock Y ards

Ak-Sar-Ben Livestock Show
Great Success
'T 'H E first live stock show given at
the new Ak-Sar-Ben den in Oma­
ha, November 3 to 9, and the horse
show, given also at the den, Novem­
ber 5 to 9, will be followed annually
by similar expositions, the board of
governors announced at the con­
clusion of the exposition. Attendance,
while not considerable for the stock
show, was large for the horse show
features, and cattle breeders, stock­
men and farmers generally were
found in attendance at the live stock
exposition.
Critics of shows ranked the Omaha
exposition as one of the best in the
country, commenting especially upon
the excellent showing of all cattle
breeds. Entries came from 17 states,
and buyers were rewarded with ex­
cellent stock.
Sponsors of Show
The Omaha Banks, through the
Clearing House Association, and the
Union Stock Yards Company of Oma­
ha, were among the large sponsors and
boosters for the show. The clearing
house association awarded a $2,000
sweepstake prize in the horse show—
a trophy that was won by Mrs. W . P.
Roth of San Francisco, Cal., for her
horse, “ Chief of Longview,” as the
best five gaited horse in the show.
The Stock Yards Company gave a
prize of $1,000 for the best single
roadster, and this also was taken by a
Roth entry, “ My Souvenir.”
The banks and packing and com­
mission firms, as well as Omaha mer­
chants, joined in awards for the vari­
ous classes of live stock.
Praise for the show was given by
such veterans as E. A. Cudahy, Jr.,
of Chicago, who called it outstanding
among the expositions in the country,


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Federal Reserve Bank of St. Louis

Two o f the pure bred animals that
zoon honors at the Ak-Sar-Ben live
stock exhibition in Omaha. Above, How­
ard Hill, Earlham, Iowa, boy, with his
pure bred Aberdeen-Angus, “ Black Cap
Lad,” grand champion of the show. Be­
low, Arland Schmidt, Madison, Nebras­
ka, boy, with “ Tunney,” reserve cham­
pion and Hereford champion. Bankers
throughout the middle west sponsor the
boys and girls clubs of this type of
farm activity.

and said that such an exhibit was a
great value to the cattle industry of
the United States.
Sir Thomas Lipton, the British tea
merchant and sportsman, spent three
days at the show, and praised it highh'One of the most valuable and inter­
esting features was the exhibits of the

various 4-H clubs of boys and girls of
Iowa and Nebraska. The two states
shared honors in the prize lists, and
the boys and girls were able to sell
their prize winning stock at large
profit.
The show was made possible by the
completion of the large new Ak-SarBen coliseum at Sixty-fifth and Cen­
ter streets, a building with a seating
capacity of 10,000— largest in Omaha.
This new “ den” as it is called, in mem­
ory of the famous old den destroyed
by fire, was first thrown open to the
public at the time of the coronation of
the Ak-Sar-Ben king and queen late
in October, when Walter W. Head,
president of the Omaha National
Bank, became king, and Miss Emma
Nash, queen.
The exposition building is a large
brick and concrete fireproof structure,
costing over $400,000. It is admirably
suited to livestock expositions—-the
primary purpose of its building— and
for large conventions. It will be the
scene of the weekly meetings of AkSar-Ben next year, when out of town
visitors are always welcomed.
Charles R. Gardner, secretary of
Ak-Sar-Ben, expressed disappoint­
ment that the people of Omaha and
Nebraska and Iowa generally, had not
realized the significance of the stockshow, and had not attended. But the
fact that farmers and breeders from a
wide radius came to Omaha for the
show, was held to be most encourag­
ing.^
The second show will be held about
the same time in 1929.
Clover Seed in Good Demand
Approximately 20 per cent of the
sweet clover seed grown by farmers in
southeast Nebraska had been sold on
October 1, this year, says the state and
federal division of agricultural sta­
tistics. In other sweet clover seed
states the movement is faster than a
year ago, but for the country the

Central Western Banker, November, 1928

28

movement is much more sluggish than
in 1927.
Two years ago 45 per cent of this
seed had left growers’ hands on O c­
tober 1, last year 20 per cent and this
year 25 to 30 per cent. In the main
producing sections of Minnesota and
the Dakotas the average price of $4.70
per bushel was 10c higher than last
year, but compared with a price of
$8.60 two years ago. Quality is re­
ported as good to very good despite
damage from rains and frost, and
prices have advanced 10c per bushel

this year at the same time that a year
ago they declined 20c per bushel.
Nebraska prices this year on the
first averaged $5.45, as compared to
$5.80 in 1927. The 1926 sweet clover
acreage in Nebraska was 33,023
acres, producing a total of 129,901
bushels. At that time the total sweet
clover acreage in the state was 416,388
acres. The acreage this year in all
sweet clover is estimated, according
to preliminary information, at more
than 450,000 acres.

A Complete Banking Service
The Midland Bank offers exceptional facilities for the transaction
of banking business of every description. Together with its
affiliations it operates over 240c branches in Great Britain
and Northern Ireland, and has agents and correspondents in
all parts of the world. The Bank has offices in the Atlantic
Liners Aquitania, Berengana and Mauretania, and a foreign
branch office at 196 Piccadilly, London, specially equipped for
the use and convenience of visitors in London.
AMERICAN DEPARTMENT : POULTRY, LONDON, E.C.2

MIDLAND BANK
LIMITED

HEAD O FFICE : 5 TH RE AD N EE D LE STREET, LO N D O N . E.C.2

FA C ILITIE S

TO

M EET A L L

BA N K IN G REQ U IREM EN TS

Hogs Trucked From Wyoming
All records for long distance haul­
ing of live stock by truck to the Oma­
ha market, were shattered recently
when Ralph B. Hackney of Upton,
W yo., trucked down 10 head of hogs
from that place.
Upton is in the neighborhood of 700
miles from Omaha, and this, without
a doubt, hangs up a new record for
distance. O f the 10 head of hogs, six
were sows good enough to bring $8.25,
with the balance butchers that sold
at $9.10.
Mr. Hackney shipped a load of cat­
tle down by railroad, but had some
things in mind to take back from
Omaha, so decided to drive his truck
down and put the hogs in so he could
cash in on the trip both ways.
Nebraska Outlook Bright
An unusually successful tour of the
southeast and south central sections of
Nebraska was completed last month
by a group of Lincoln executives and
general agents, under the leadership
of Maurice A. Hyde, chairman of the
insurance subdivision of the Lincoln
chamber of commerce. The main idea
stressed in the speeches was that in­
surance in its various forms and actities is the foundation stone of prog­
ress and prosperity, and that every
human responsibility, all property in­
terests, all credit and all commerce,
are stabilized and protected from loss
and impairment of insurance, which
protects against all hazards.
Mr. Hyde says that a general feel­
ing of optimism was found among the
bankers and other insurance men visit­
ed. Fire insurance men report an
unusually small number of losses the
last four months.
Thirty Ways to Figure Interest
(Continued From Page S)

29

F IR S T N ATIO N AL
B A N K » CHICAGO
Affiliated

FIRST TRUST AND
SAVINGS BANK
Resources Exceed
$450,000,000.00

Central Western Banker, November, 1928

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

Frank O. Wetmore, Chairman
Melvin A. Traylor, President

30

posit for four months or more.
Interest on withdrawals charged
against the first deposits made dur­
ing the four calendar months per­
iod immediately preceding such
withdrawal. Compounded semi­
annually. ($42.54).
Deposits go on interest from first
of each month on all sums on deposit for four months or more.
No interest allowed on withdraw­
als made during second quarter in­
terest ceases first of month in
which withdrawal is made. Com­
pounded semi-annually. ($42.54).

No man can be happy without a
friend, nor be sure of him till he’s un­
happy.— Scotch Proverb.

29
Hybrid Corn Experiment»
Farmers and seed dealers interested
in corn breeding work recently gather­
ed on the John Gilmore farm a mile
north o f Valley, Nebraska, to look
over the extension experiments which
Mr. Gilmore, a former county exten­
sion agent, has conducted this year in
co-operation with the agricultural ex­
tension service.
Hybrid corn comparisons drew the
most attention.
O f many crosses
planted in the tests, probably two
stand out as exceptional. These two
have sturdy stalks, the ears are uni­
form in type and in height on the
stalk, and the rows give every indi­
cation of a high yield.
Hybrid corn is to the corn grower
what a mule is to a livestock man. P.
H. Stewart of the extension service
told the group. Hybrid corn is a
cross between two pure lines of corn.
Sometimes the cross is a good one,
but often times it only brings out the
weakness of the parents. As with
cross breeding in livestock, the second
generation of hybrid corn is never as
good as the first cross, and farmers
should always get the first-cross seed
in purchasing or using hybrid corn.
D. L. Gross of the extension service
spoke briefly regarding the tests on
the Gilmore farm with commercial

ARE

treatment of seed corn. Corn was
picked out of seven different farmers’
planter boxes last spring. Treated and
untreated samples of each lot was
planted and a mixture of all of them
was also compared this year. No
benefit of the treatments could be not­
iced by the visitors. Tests in Iowa
and Illinois seem to give good results
from treatments, but no benefit has
ever been noticed in experimental tests
in Nebraska. Climatic conditions, de­
ficiencies in the eastern soils, and the
prevalence of disease are thought to
be the reasons why the treatments give
results in the east and not here.
W. H. Brokaw, director of the ex­
tension service, was present and took
a keen interest in the success that Mr.
Gilmore is making on his farm. His
corn will make over 70 bushels per
acre this year. He puts half of his
farm in oats and barley with Hubam
clover seeded in it, and the other half
in corn each year. He harvests the
small grain, gets from 100 to 150
pounds of Hubam seed and a lot of
feed
from the annual clover, and
still has time to fall plow the land for
corn the next year. The scheme keeps
his entire farm in grain crops continu­
ally, and gives him three crops every
two years off his land. The farm is in
the Platte valley and sub-irrigated.

YOU

Another meeting of similar nature
was held at the Charles Grau farm
near Bennington and another at the
George Gramlich farm near Papillion.
C pH E ST A T E B AN K of Litchfield,
Nebraska, was voluntarily turned
over to the state department of trade
and commerce, October 25, poor crops
in the district and slow loans making
the move advisable, after attempts to
negotiate a merger with the First Na­
tional bank had failed. No losses are
expected. William Saunders was
president of the bank, whch had a
capital of $25,000.
Forty per cent of the women in the
country are working women. The
other 60 per cent are working m en!
W e speak proudly of ambition and
we mean aspiration. They are as far
apart as self-respect and conceit.
To err is human; to persist in error
is devilish.
Power is ever stealing from the
many to the few.— Phillips.
Every noble work at first seems
impossible.

IN T E R E S T E D

IN GETTING

Q U IC K E R


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RETURNS ON

L IV E S T O C K

S H IP M E N T S !
WRITE US

L IV E S T O C K

N A T IO N A L

Union Stock Yards

BANK

OMAHA

BOND INVESTMENTS
W rite fo r Our Attractive List o f Carefully Selected Bonds

Central Western Banker, November, 1928

30
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outh Dakota News

...........................................................................................................
TH E
M ARSH ALL
C O U N TY
Bankers Association was a strong
backer of the county 4-H dairy club
which placed first at the 1928 state
TH E FARM ERS AN D M E R ­
CH AN TS State Bank of Herreid has
installed a silent watchman on the
vault door.
TH E FARM ERS A N D M E R ­
CH AN TS B A N K building at Huron
is now decorated with new cast bronze
signs.

SHORT

TERM

J. D. M U L L A N E Y has resigned as
cashier of the Wentworth Bank at
Wentworth, to become adjutant of the
American Legion, with headquarters
at Watertown. Helen Harrington
has been elected cashier to succeed
him.
A. W . CARTO N was elected vicepresident and a member of the board
of directors of the Tripp County
State Bank at Colome. Jas. H.
Bradt was also elected to the board of
directors. Both men have been local

INVESTMENTS

FOR

BANKS

residents since the opening of the
Rosebud Reservation. On October 31,
this bank celebrated the 20th anniver­
sary of its opening. An application
has been made for extension of char­
ter.
A. W . PO W E LL, cashier of the
First National Bank of White Rock,
recently made a preliminary talk in a
meeting addressed by F. W . Murphy
at Sisseton. John L. Caldwell, presi­
dent of this bank, and his wife, are
making their home in Wheaton, Min­
nesota, 12 miles distant.
TH E FIR ST N A T IO N A L BAN K
of Miller is building a 45-ft. addition
to its building, which will give them
a structure 45x110 feet. They have
also the addition of the stairway strip
purchased from the owner of the ad­
joining lot. The banking rooms will
use 87 feet of the remodeled build­
ing, with commodious private office in
front and large vault machine room
in the rear. New fixtures and attract­
ive decorations will combine to make
this one of the most beautiful and con­
venient banking offices in the state.
TH E N U N D A ST A T E B A N K
has redecorated its banking house both
outside and inside.

UR sh o rts
obligations h a ves been p u r­
chased by more thans 6,ooo
banks in the U nited States.

G e n e r a l M o to r s
A c c e p t a n c e C o r p o r a t io n
Executive Office * BROADWAY at 57TB ST. * New York City
Capital, Surplus & Undivided
Profits . $52,156,000

Central Western Banker, November, 1928

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Federal Reserve Bank of St. Louis

V. S. W H IT L E Y has resigned as
assistant cashier of the State Bank
of Gregory.
TH E CITIZENS N A T IO N A L
BAN K of Watertown and the Clark
County National Bank of Clark, have
recently installed McClintock vault
ventilators.
TH E CORN E X CH AN G E S A V ­
INGS B A N K of Sioux Falls has com­
pleted a series of 36 ads run weekly in
the Sunday edition of the Sioux Falls
Argus-Leader presenting the industri­
al and civic facts about Sioux Falls.
The series began on February 5. This
bank has now begun a new series, one
each week, to be devoted to present­
ing the outstanding facts relative to
South Dakota.
O. V. Meynhaus,
president of the bank, states that the

31

institution has received many appreci­
ative letters relative to this type of
advertising and he believes it worth­
while.
BRICK W O R K on the building
erected by the First National Bank of
Beresford was completed last month
and work on the interior is in full pro­
gress. It is planned to have the build­
ing ready for occupancy early in N o­
vember.
THE C O M M E R C IA L N A T IO N ­
A L B A N K of Sturgis is enjoying the
space added to their building. Several
thousand dollars were spent in making
additional alterations and improve­
ments. A new vault has been in­
stalled.
RU SSE LL BARD, cashier of the
Hand Co. State Bank of Miller, was
low medal player in the second annual
Huron Country Club invitation golf
tournament on September 30, in com­
petition with 42 golfers from 5 central
South Dakota towns. Eight-man
team honors went to the Highmore
team of which R. J. Drew, cashier of
the Bank of Highmore, is a member.
A T T H E recent convention of the
Indiana Bankers Association, a con­
siderable amount of discussion was
given to the interest rate which banks
in that state should pay on time de­
posits. The prevailing rate in that
state is 4 per cent. The consensus of
opinion seemed to be that this rate is
unprofitable and should be reduced to
3 per cent.
R O B E R T YOUN G, bookkeeper in
the Farmers and Merchants State
Bank at Wessington, has been pro­
moted to the position of assistant
cashier.
M A X GUTZ was elected assistant
cashier of the First National Bank of

Selby at the regular October meeting
of the board of directors.
MISS H A ZE L TO LLEFSO N ,
daughter of A. I. Tollefson, president
of the State Bank of Melette, has been
chosen a delegate to the International
Livestock Exposition in Chicago in
December. She received this trip as a
prize for canning and other exhibits
displayed in the 4-H section at the re­
cent State Fair in which she won the
county championship.
Deposits Increase
Prosperity among residents of
Hamlin county, South Dakota, is in­
creasing, to judge by the constant in­
crease of deposits in the banks of the
county. The current official reports
of the banks show they have aggre­
gate deposits of $1,220,601.65. This
shows a gain of $375,871.08 over the
October 3, 1927 reports, when the ag­
gregate deposits were $944,730.57.
The reports further show that the
increase from June 30, this year,
amounted to $140,933.04. There are
seven banks in Hamlin county. The
Bryant State Bank leads in deposits
with over $333,000.
In New Home
The Dakota Territory’s oldest bank
recently merged with the 20-year-old
First Loan & Trust Company, will
soon occupy a modern new building in
Yankton, South Dakota.
First organized in 1871, and char­
tered on December 12 of the following
year, the First National Bank is the
pioneer institution of the Dakota ter­
ritory which at that time included
Montana. The First Loan & Trust
Company was organized in 1909.
Opening with a capital stock of $50,000 the new institution has a surplus
fund of $10,000, undivided profits of
$5,000, and building reserve of $10,000. E. R. Heaton of Yankton and
C. W . Botgler of Minneapolis are

president and vice-president respect­
ively of the new concern, the men,
taking over the interests of Mr. Hea­
ton’s brother, W . E. Heaton. The first
officers of the bank when it organized
in 1871 were Moses K. Armstrong,
president, L. D. Farmers, vice-presi­
dent, and Mark M. Parmer, cashier,
all pioneers of the Dakota territory.
Growth in Deposits
Improvement in the financial con­
dition of local people and farmers of
Estelline, South Dakota, is shown by
the fact that the deposits in the Farm­
ers’ National bank of Estelline stead­
ily are increasing.
The bank was opened for business
only last February, and already has
deposits of more than 114,000. The
bank is in very good condition. Cash
on hand due from banks, bonds, reg­
istered warrants and commercial pa­
per to the amount of more than $96,
000 is available within 24 hours to
take care of the deposits. The bank
is being managed very conservatively
and extreme care is taken in the mat­
ter of making loans of the bank’s
money.
Visits Denver
Harold Stonier, national education­
al director of the American Institute
of Banking, visited the Denver chap­
ter of the organization recently, for a
meeting with officers of Denver banks
and the officers of the institute. Ston­
ier is also president of the Pacific
Coast Advertising Club and until last
November, when he succeeded Steph­
en L. M iller as director of the educa­
tional work for the institute, was vicepresident of the University of Cali­
fornia. Luncheon at noon with the
bank officials and a party at 8:30 p.
m. featured Stonier’s visit.
Art must anchor in nature, or it is
the sport of every breath of folly.
w
— Hazlitt.

BANK OF N E W S O U T H W ALES
AUSTRALIA
P A ID -U P
RESERVE

C A P I T A L _________________
F U N D ______________________

R e s e r v e L ia b ility

o f P r o p r ie to r s.

E S T A B L IS H E D

.$

« 7 ,5 0 0 ,0 0 «

-

2 8 ,2 5 0 ,0 0 0

-

3 7 ,5 0 0 ,0 0 0

1817
------- $ 1 0 3 ,0 6 0 ,0 0 0

Aggregate Assets 30th September, 1937

$438,905,640

A G E N T S — F I R S T N A T I O N A L ItA N Iv , O M A H A , N E B R A S K A
G E N E R A L M A N A G E R , O S C A R L IN E S

HEAD OFFICE, GEORGE ST., SYDNEY

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

5 1 8 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 , N e w Z e a l a 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
L o n d o n . T h e B a n k C o lle c ts f o r a n d U n d e r ta k e s th e A g e n c y o f O th e r B a n k s , a n d t r a n s a c t s e v e r y
d e s c r i p t i o n o f A u s t r a l i a n B a n k in g - B u s i n e s s .


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Federal Reserve Bank of St. Louis

G u in e a

and

Central Western Banker, November, 1928

32
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Kansas Group Officers

Group Five

Group One

Chairman, F. A. Vomiman, presi­
dent Peoples State Bank, M cPherson;
member state nominating committee,
James Lorton, president Winfield
State Bank, Winfield.

Chairman, R. W . Ferguson, presi­
dent Kendall State Bank, alley Falls;
secretry, C. T. Gephart, cashier, Citi­
zens State Bank, Valley Falls; mem­
ber state nominating committee, J. H.
Riley, cashier Kansas State Bank,
Holton.
Group Two

Chairman, C. N. Emery, chairman
of board, Miami County National
Bank, Paola; member state nominat­
ing committee, F. J. Miller, president
First National Bank, Ottawa.
Group Three

Group Six

Chairman, I. B. Parker, president
Graham County State Bank, Hill City;
secretary, John F. Griffith, cashier
Farmers and Merchants Bank, Hill
City; member state nominating com­
mittee, C. W . Campbell, president
First National Bank, Norton.
Group Seven

Chairman, A. N. Allen, president
First National Bank, Chanute; secre­
tary, J. H. Riley, vice-president Bank
of Commerce, Chanute; member state
nominating committee, N. C. Kerr,
cashier, First National Bank, Iola.

Chairman, C. O. White, president
Farmers National Bank, Stafford;
secretary, R. Boyd Wallace, president
First State Bank, Stafford; member
state nominating committee, C. W .
Shinkel, cashier Peoples State Bank,
Lyons.

Group Four

Group Eight

Chairman, G. H. Bramwell, presi­
dent First National Bank, Belleville;
secretary, A. R. Moss, president Belle­
ville State Bank, Belleville; member
state nominating committee, A. J.
Troup, cashier First National Bank,
Clay Center.

Chairman, E. M. Scott, cashier Val­
ley State Bank, Syracuse; secretary,
H. E. Roundtree, cashier First Na­
tional Bank, Syracuse; member state
nominating committee, O. D. New­
man, cashier Coates State Bank,
Coats.

m

Cfjasr Rational limit;

H otel Fontenelle

Capital............ ...... ................................. $ 60,000,000.00
77,000,000.00

L IN C O L N

Hotel Lincoln

(July 2, 1928)

S IO U X

OFFICERS
Albert H. Wiggin
Chairman o f the Board

Samuel H. Miller
Carl J. Schmidlapp
Reeve Schley
Sherrill Smith
Henry Ollesheimer
Alfred C. Andrews
Robert I. Barr

CEDAR

Comptroller
Thomas Ritchie

Central Western Banker, November, 1928

R A P ID S

Hotel Montrose

Vice-Presidents
George E. Warren Hugh N. Kirkland
George D. Graves
James H. Gannon
Frank O. Roe
William E. Purdy
Harry H. Pond
George H. Saylor
Samuel S. Campbell M. Hadden Howell
William E. Lake
Joseph C. Rovensky
Charles A. Sackett

Second Vice-Presidents
Frederick W. Gehle Franklin H. Gates
T. Arthur Pyterman
Edwin A. Lee
Arthur M. Aiken
Ambrose E. Impey
Alfred W. Hudson
S. Frederick Telleer Robert J. Kiesling
James L. Miller
Otis Everett
Lynde Selden
Benjamin E. Smythe Wm. H. Moorhead Thomas B. Nichols
Joseph Pulvermacher Harold L. Van Kleeck George S. Schaeffer
Leon H. Johnston

C IT Y

Hotel Martin

Robert L. Clarkson
President

Vice-President and Cashier
William P. Holly


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Federal Reserve Bank of St. Louis

Goes to Garden City
R. N. Wownie, formerly vice-presi­
dent of the First National Bank of
Burlingame, Kas., has recently accept­
ed the same position with the Fidelity
State Bank of Garden City. Other
officers of the Garden City Bank are:
Frank Reed, Jr., vice-president, and
G. C. Scherziner, cashier.

OM AHA

of the City of N ew York

John McHugh
Chairman of the Executive Committee

Becomes Cashier
With wide experience in banking,
ranging over a period of 25 years,
Urban Tracey has taken a position
as cashier of the Farmers and Mer­
chants Bank at McPherson, Kansas.
He succeeds H. L. Austin, who re­
signed in order to take a position as
cashier and manager of the First State
Bank of Locus Grove, Okla.

HOTELS OF
H O S P IT A L IT Y

k

Surplus and Profits.............................

Kansas group meetings in 1929 will
be held at the following places, ac­
cording to decisions reached at the re­
cent meetings:
Group 1-—St. Joseph, Mo. (joint
meeting with Group 3 of Missouri as­
sociation.)
Group 2— Paola.
Group 3— Chanute.
Group A— -Belleville.
Group 5— McPherson.
Group 6— Hill City.
Group 7— Stafford.
Group 8— Syracuse.

S IO U X

FALLS

Hotel Carpenter
C O U N C IL

BLUFFS

Hotel Chieftain
A n d in
L o s A n g eles,
H o tel
A le x a n d r ia
$2 Up.

M ARSH ALLTOW N

Hotel Tallcorn
and
O p era ted

fo r

TEN

o th e rs

Your

C o m fo r t

by

EP P L E Y HOTELS CO M PAN Y

33
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Deposits Heavy
Longmont, Colorado, bank deposits
are at present the heaviest in years,
it is shown in statements issued to
the comptroller of currency. The
three local banks have a total of $2,869,000 in deposits. Business condi­
tions in Longmont this fall should be
excellent with present large deposits
and beet payments of $1,500,000 to
be made in the next two months. The
first pay day for beets was November
15.
Elected Assistant Cashier
At the regular meeting of the board
of directors of the First National
Bank of Montrose, Colorado, James
A. Dutcher was elected assistant cash­
ier. The officers of the First Nation­
al are: T. B. Townsend, president;
C. B. Alcard, vice-president; T. B.
Townsend, Jr., cashier; N. B. Calla­
way, assistant cashier; James A.
Dutcher, assistant cashier.
Install Fighting Equipment
Colorado struck its first real blow
against bank robbers recently, accord­


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Federal Reserve Bank of St. Louis

ing to Leonard De Lue, head of the
De Lue Detective Agency, when he
announced that the first sharpshooter’s
nest to be installed in a bank this far
west is being placed in the First Na­
tional Bank at Pueblo.
The “ nest” will house one expert
rifleman, with the necessary “ tools,”
who will be on duty in the nest during
all banking hours.
“ The bandit who goes into the
Pueblo bank just doesn’t exist, that’s
all,” said De Lue. “ That bank is safe
now from robber raids. The safes,
wonderful deposit vaults, mighty
doors, to protect their money at night,
but few of them take any adequate
measures to protect it during business
hours— when bandits always strike.
Good Condition
Splendid condition of the First Na­
tional Bank of Gunnison, Colorado,
is shown by the financial statement.
Total resources are considerably over
a million, and as this is but the be­
ginning of the stock shipping season,
those figures will be boosted a hund­

red thousand or more within a short
time.
In 1929
More than 150 members of the
American Bankers Association will
visit the San Isabel National Forest
region in 1929, according to word re­
ceived by the Pueblo, Colorado, Com­
merce club. Mrs. Winifred Ralls, as­
sistant secretary, announces that the
club has been asked to work out an
itinerary for the bankers. They will
be returning from their annual con­
vention in San Francisco and have
chosen the San Isabel forest as a stop­
ping-off point on their return trip.

Clearings Increase
A presidential year means pros­
perity instead of a slump for Denver,
figures revealed by the Denver Clear­
ing Piouse for October showed re­
cently.
October was the biggest month
Denver has had in 10 years with to­
tal clearings of $193,239,589.23, $20,962,387.40 more than the clearings
for the same month last year. The
total is considered remarkable in view
of the nearness of the Christmas buy­
ing season.

34
Protecting Your Bank
Against Excessive Taxation
(Continued from Page 12)

den of corporations is such and such a
percentage of income. Then that per­
centage of itjs own income is the
measure and amount of the tax each
Massachusetts national bank will pay.
It works out now about 5j^ per cent.
How could a tax measured by in­
come, and called an excise, be valid
in Nebraska when a tax directly upon
income would be unconstitutional?
Probably I shouldn’t take time to ex­
plain now. It involves a technical
legal point, but some of the ablest
lawyers in the United States, includ­
ing one here in Omaha, have assured
me that the excise would be valid in
all the states where the legislatures
have tax classification powers, except
California, Utah and Kansas. And
California will vote upon the necessary
amendment to her constitution next
month.
Can’t Stand Pat
Bankers can’t stand pat. If they
do Nebraska banks will be swept back
into the old general property tax,
which so long penalized capital, dis­
couraged surplus and prompted bank
failures. W orse than that, stand pat
and one of the Norbeck or Goodwin
bills will pass— and you could not
blame a Congress, that, if the banks
stood in the way of any change in
their state laws that would permit
real tax reform, and give the banks
the excise and justice— you could not
then blame a Congress that should re­
fuse longer to hold the State Tax
Commissioners back.
Then what?
You know where the state and local
tax-gatherers have been wont to look
when they needed maney— they have
looked to you. Can anyone doubt
that, with the protection of Section
5219 gone, they would try to amend
state constitutions so as to make the
separate classification of banks for
taxation at any rate the states, cities,
school districts and all might see fit
to impose? And, if the laws of Con­
gress did not prevent, would it be too
difficult to pass such an amendment
over the objection of only the banks?
I am afraid that in my state it would
not. I don’t know how you feel about
branch banking, but I put it to you
whether, after an amendment like
that, independent banks could make

enough money to pay taxes and divi­
dends both.
But the bankers are not standing
pat. All over this country they are
organizing taxation higher on their
shares than on competing moneyed
capital, or higher on their incomes than
on the incomes of other corporations.
It is the hardest fight in Congress the
bankers have ever faced. There has
been organized a voluntary association
called the Association of States on
Bank Taxation. Able men are in it,
men who know politics and can argue
plausibly. It is not too early, now, for
the bankers here to take the matter up
with Senators and Congressmen and
candidates, and ask that they see to it
that the laws that for 64 years has
safeguarded national and consequently
state banks too, be kept on the statute
books without any change in its re­
quirement that moneyed capital invest­
ed in bank shares shall be taxed with­
out adverse discrimination. I ask you
to do this now, and to follow up with
letters or talks after election, and to
keep busy on the same line right
through this Congress and the next.
Taxation is a big part of a bank’s
budget, and controllable only if when
we have a safeguarding law we keep
it. And bankers are studying tax­
ation and serving on commissions that
will frame systems in harmony with
modern fife.
The situation has two points of
danger for Nebraska banks. In your
defense keep in mind these two ob­
jectives, the excise at home, Section
5219 saved in Washington. It is thus,
and only thus, that you can safeguard
your banks against excessive taxation.
Worth the Price
Sandy had been courting the fair
Jean for two years. One evening af­
ter Sandy had been silent for some
twenty minutes Jean murmured-—“ A penny for your thoughts, Sandy.”
“ Weel,” replied Sandy, with sud­
den boldness, “ I was thinkin’ I ’d like
tae kiss ye, lassie.”
Jean blushed happily as this opera­
tion took place, but Sandy once again
fell silent.
“ An’ what are ye thinkin’ about
noo?” asked the girl hopefully. “ An­
other ?”
“ Na, lassie; it’s muir serious this
time. I was just wonderin’ when ye
were goin’ tae pay me that penny for
ma thochts.”

TH E C E N TR A L W E ST E R N B A N K E R OF O M A H A ,

P u b l is h e d

by

Chicago, the Mecca for
Livestock Growers
(Continued from Page 6)

individuals in the many different divi­
sions of the show. Distance is not a
factor, in as much as for the fourth
time, Walter Biggar, of Dalbeattie,
Scotland, is to cross the Atlantic for
the express purpose of tieing the rib­
bons on the fat bullocks at the Inter­
national.
Foreign Judges Sought
Popular opinion is that the work of
picking the best steers in this huge
display of fat stock (always a diffi­
cult matter) has never been more
faultlessly performed than by this
Scottish judge. His services are there­
fore being again drafted for the com­
ing event. An Argentenian, Mr. Mar­
tinez de Hoz, will make the trip to
Chicago from Buenos Aires on a
special mission to judge the Shorthorn
breed of cattle, and one other foreign
judge, W . A. Dryden, of Brooklin,
Ontario, will serve on the committee
judging Aberdeen-Angus cattle.
Chief among other leading features
of the exposition are the price soar­
ing, record breaking auctions of fat
cattle that follow the judging in these
classes. Auctions of the choicest of
bullocks, up to the number of about
2,500 head, are on the docket. Bids
of $45 to 55 a hundred weight on car­
load winners, and $3.60 a pound on
steer champions, have been received
in these sales.
Until the spot-lighting of the
dressed carcass upon the block, show­
ing its relation to the animal on the
hoof, the public was more or less un­
informed as to the character and qual­
ity of the different meat grades. H ow­
ever, after the institution of the first
Meat Shoppe at the International Live
Stock Exposition in 1924, visitors to
this great exhibition have carried
away with them a vivid impression as
to how the dressed and final form of
championship beef appears.
The educational value, therefore,
of “ The Meat Shoppe” exhibit is not
to be over-estimated, clarifying, as it
does, for most every one who sees it,
a subject that but few knew anything
about— that is, the ability to select
and distinguish between the many dif­
ferent kinds and cuts of meat that face
the buyer over the butcher’s counter.
D eP uy

P u b l is h in g

Com pany

416 Arthur Bldg., Omaha, Nebraska
C l iff o r d D e P u y , Publisher

G erald A. S n id e r , Associate Publisher

R. W . M oorh ead , Editor

Wm. H. Maas, 1221 First National Bank Building, Chicago, Vice-President

Central Western Banker, November, 1928

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Federal Reserve Bank of St. Louis

H. H. H a y n e s , Associate Editor


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Federal Reserve Bank of St. Louis

T

H E C ontin en tal N a tio n a l Bank and Trust C o m p a n y
an d the Illinois M erch an ts T ru st Company soon will
be con solidated as the C on tin en tal Illinois B an k and

T ru st C om p a n y . T h e con solidated b an k will have capital o f 75
m illion dollars, surplus o f 65 m illion and reserves o f 10 m illion .
D ep osits w ill b e app roxim ately 900 m illion and resources will
exceed o n e billion . G e o r g e M . R eyn old s will be chairm an o f the

executive com m ittee. A rth u r R eyn old s will be chairm an o f the
b oard . E u gen e M . Stevens will b e president. C orrespon d en ts
o f b o th banks will be able to transact their business at the
con solidated b an k w ith officers w h o are n o w serving them .
T h e united b an k will have direct relations w ith m ore banks
in the U n ite d States than any oth er bank, an d its foreign
b a n k con n ection s w ill run in to the thousands. It is plan n ed
that the con solidated b a n k will be a m em ber o f th e Federal
Reserve System . A ffilia ted w ith the con solid a ted ban k will
b e an investm ent securities co m p a n y — the C on tin en tal Illinois
C o m p a n y . It will have a capitalization o f 20 m illion dollars

CONTINENTAL
N A T IO N A L B A N K
& TRUST COMPANY
OF CHICAGO

Your

Omaha Items


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For 62 years The Omaha
National Bank has rendered
exceptional service on Omaha
items. Today we serve many
of the leading banks through­
out the country. Your bank
can profit by the advantages
we offer.

The Omaha
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