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Making More Money on Float Charges

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

F ir s t

N a t io n a l b a n k ,

1863

rjpO

B ETTER serve our customers,
we have announced p la n s fo r a
large addition to the First National
Bank Building. This a d d itio n will
practically double the size of our pres­
ent banking rooms and will enable us
to serve you better.
W ork on the new addition will start
soon, but will not interfere in any way
with our banking service. The new
banking room will be ready May 1.
The new addition has become neces­
sary because of the steady growth of
business. When our present building
was erected in 1917, our capital stock
was $500,000 and our deposits totaled
$15,000,000. Today our capital stock
totals $1,250,000 and our deposits are
more than $25,000,000.


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Federal Reserve Bank of St. Louis

r

......... ... .........................................

First National

I Bank of Omaha

FIRST TRUST CO M PAN Y

W. B L A IR has been elected comp' troller of the Foreman National
C o r p o r a tio n of Chicago, Robert B.
Whiting, vice president, announced re­
cently. Mr. Blair formerly was assoc­
iated with Price, Waterhouse & Co. of
New York. The Foreman National
Corporation is the securities affiliate of
the Foreman National Bank of Chica-

T H E S T O C K H O L D E R S of the
Seaboard Bank of the City of New
York has ratified the merger agree­
ment between the Seaboard Bank and
the Equitable Trust Company. Actual
consolidation is to become effective 0:1
or about September 16th.

ber of years has analyzed and prepar­
ed organization plans for many banks
throughout the country.
T H E ILLIN O IS STA TE BAN K1 E R S A S S O C I A T I O N has an­
nounced a state wide school for the in­
struction of employes of banks, to be
put into operation the first of October.
This plan is the largest along educa­
tional lines ever promoted by the bank­
ers of Illinois.
J3 O Y A. YOUNG, governor of the
Feferal Reserve Board, was a re­
cent visitor at the Federal Reserve
Bank of Boston. W. P. G. Harding is
governor of the Boston Bank.

y ^ N O U T G R O W T H of the merger
of several Seattle banks will re­ T H E MERGER of the Chase Nasult in the largest banking institution
* tonal and the National Park Bank,
west of Chicago, and north of San both of New York into one institution
Francisco. This will be the formation has been approved by the stockholders
of the Seattle-Dexter-Horton Securi­ of both banks at a recent meeting.
ties Company. The merger is expected
Capital, surplus, and undivided profts
to be completed around November 1, will total around $238,000,000.
and will bring fo rth an
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institution with resources iimiimiiiiimiiimiiiiiimiiiiiiiiiiiiimiiiiiiiiiiiiiiiiimiiiiiiimiiiiiiiimiiiiimiimmii
in excess o f $ 1 2 0 ,0 0 0 ,G00 .
Voi. 24 No. 8
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L. PIER, form e r
well-known Oma­
ha ban k er w ho som e
time ago w ent to F o rt
Worth, Texas, to become
a member of the official
staff of the Stock Yards
N a tion a l Bank of Fort
Worth, has been elected
President of that institu­
tion.

4 4 p A N K Administra­
tion” is the title of
a new b o o k by H . N.
Stronck, C h ica g o bank
administration expert. It
is published by Rand M c­
Nally & Co. of Chicago.
The a u th or is a profes­
sional bank management
engineer, and for a num­


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Federal Reserve Bank of St. Louis

OMI N ATIO N S recently annotine^ ed for future officers of the In­
vestment Bankers A s s o c ia tio n list
Trowbridge Callaway, of Callaway,
Fish & Co., New York, as president.
Many other investment bankers are
slated for the several vice-presidencies
and on the board of directors.
^ ^ E X T year the Bankers Associa­
tions of the states of Montana,
Wyoming, and Idaho are planning to
hold a joint convention instead of the
usual separate ones as in the past. The
date has not been named, but the place
will be in Yellowstone Park.
y Y W A L L Street banking house is re­
ported to soon be ready to launch
a new investment corporation to spe­
cialize in American, Canadian, and
European railroad stocks.

yY"T A RECEN T meeting of the ex­
ecutive committee of the board of
trustees of the Equitable Trust Com­
pany of New York, William J. Eck
was ap p oin ted a vicepresid en t o f the c o m ­
pany. In the past M r.
Eck has been secreta ry
September, 1929
of the trust com pan y,
and will retain that posi­
tion.

In This Issue

Last Minute News . . . . , ............................. .
3
Shall W e Forgive Cur D e b t o r s ? .......................................... 4
Making More Money on Float C h a r g e s ...............................5
Holding the Stockholder . .
. . .................................... 8
Bonds and I n v e s t m e n t s ..........................................................13
I n s u r a n c e ......................................................................
19
Nebraska N e w s ...........................................................................23
News of the Omaha S t o c k y a r d s .............................................27
South Dakota N e w s ................................................................... 30
Kansas N e w s ................................................................................32
Colorado News
............................................................................33
Wyoming N e w s .................................... .................................. 31

T h e C e n tr a l W estern B a n k e r , O
PubR'Imd monthly at 4 16 Arthur Bldg.. Omaha.
Subscription, 25 cents per copy; $2.00 per
Entered a3 second-class matter at the Omaha
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.111111111111111111111111111.i

maha
Nebraska
year.
postoffice.

.................
1111:1111111111111111111111111111111111111111111111111111111111111111111111111111111111111111¡

rP H O M A S O ’BRIEN,
president of the South
Dakota B ankers Assoc­
iation, announces legisla­
tive committee appoint­
ments as fo llo w s : W .
F. Mailand, M ob ridge,
chairman; A. C. F lin d ­
ers, Platte ; M .L.Thom p­
son, Vermilion; R. A. PL
B randt, B ison ; W . Z.
Sharp, S io u x Falls; R.
E. Montgomery, Colonie ;
and A. B. Cahalan, Mil­
ler.
p L A N to be at the
Nebraska Bankers
convention in Omaha.

Central Western Danker, September, 1929

'hall W e Forgive Our Debtors
By A, L
and L O A N
Them More?
Alcester, South Dakota

I NASM UCH as the topic of this ar­
ticle is not an autobiography of my­
self, the first person form will be used
only as an introductory note to the
thought to lie conveyed herein.
At the time my parents were inter­
viewed by a banker relative to employ­
ing me, a sixteen year old boy, in his
bank, T was attending high school and
was taking among other stu dies a
course in business bookkeeping. When
told of the “ golden opportunity,” I felt
that I was not sufficiently educated to
commence work in a bank, but the
thought occurred to me that 1 had my
bookkeeping experience as taught in
the school, so accepted the offer. How­
ever, about one day in the bookkeeping
department of the bank proved to me,
without a question of doubt, that there
was only one thing gleaned from the
course of value, and that was, that 1
knew the difference between debit and
credit, consequently I blossomed into
a mediocre high chair boy quite rapid-

What About the Others?
Speaking of banks now in the pro­
cess of liquidation, it may appear that
the fact that an individual does not
pay the trust is no concern of the live
banker, but are there not thousands of
such men who have failed to pay or
have affected compromises of legiti­
mate obligations— notes given in ex­
change for good United States money
— who are now becoming the custo­
mers of good solvent institutions and
may in the future undertake to liecome indebted thereto, as a gradual
Hood of normalcy spreads over the ag­
A. L . L a w r e n c e
ricultural section of our country?
In this era of rehabilitation this lax
method of paying must be coped with
correspondents of these banks, have by and the borrowing public re-educated
accepting rediscounted paper, a more along the line of restoring their credit
diversified class of paper to add to standing, impressing upon them the
their own commercial paper, the task true meaning of a promise to pay, for
iyof loaning, collecting and renewing have we not had enough “ Kathleen
Underlying Factors
with a minimum of loss, confronts Mavorneen” notes? (It may be for
Since time immemorial the terms each individual institution. In this re­ years and it may be forever.) Through
debit and credit have been, and are at gard the country banker is informed a process of elimination all undesir­
this tim e, the underlying
able in d iv id u a ls must be
factors in all transactions
weeded
out and the pass­
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i1111111111111111111111II11111111111111111111111
handled th rou gh a bank,
ing depression has brand­
irrespective of whether or
ed the w eak sisters, so
not the specific debit and
that they may be know n
credit p ro v e d a d v a n ta ­
in the transaction o f f u ­
geous to the bank. Now by
ture business, provided a
“ Every bank should keep a record which may be called a
certa in ch an ges in the
system is inaugurated by
‘Moral Tickler’ in which the names of each customer would ap­
sp e llin g o f these tw o
each bank or money lend­
term s, we have the tw o
peal-, as a liability ledger and where all information available
er, to identify them.
words debtor and creditor,
To assist in overcoming
with regard to his past record be entered, together with a
and as we are speaking of
ultimate losses caused by
history of the method and manner in which he attended or paid
banking, we will be oblig­
loaning money to experi­
his obligations!”
ed to call the bank the
enced dead beats, d is ­
creditor and the individu­
charged ban k ru pts, e x ­
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lllllllllllllllllllllllllllllllll
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al, firm, pa rtn ersh ip or
perts
in c o m p ro m isin g ,
'iiiiiiimiiiiiiinmi
I Iil I I HIil Iti Iiiiiiiiiiiiiiiiiiiiiiiii I
corporation b o r r o w in g
calamity howlers and oth­
therefrom, the debtor.
ers w ho threw up their
For no other reason than that of the as to the conditions existant in his en­ hands in despair during the past de­
fact, that a bank is organized, charter­ tire district covered.
pression, I would suggest, not a rem­
To a great extent, the depression of edy for reforming this class, but a
ed and opened for the purpose of real­
izing a margin of profit of its capital the last decade has weakened the av­ system whereby no loans would be
stock, it becomes necessary to loan the erage individual’s conception of good made to them. Every bank should keep
funds of its trusting depositors, to credit standing, his paying morale is a record which may be called a “ Mor­
such risks as operate in the territory broken, causing him to think lightly, if al Tickler,” in which the name of each
in which the bank is located, regardless at all of his obligations. He is not pay­ customer would appear, as in a liabili­
of their line of endeavor. The only al­ ing so promptly, nor is he so prompt in ty ledger and where all information
ternative being to invest its rising re­ renewing and in a great many cases available with regard to his past rec­
serve outside its territory at a lower has not and does not intend to pay at ord be entered, together with a history
interest rate and consequently declare all. This however, is more true in his of the method and manner in which
dealings with closed banks and obliga­ he attended or paid his obligations.
no dividends.
Assuming that the average country tions incurred under inflated prices, of All applicants for new loans would be
bank is loaning its funds locally, as which a certain amount is still held first entered therein and their record
they are, and that city banks being by going institutions.
(C o n tin u e d on Pag-e 20)

A Moral “ Tickler”

h

Central Western Banker, September, 1929

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

h h

Making More Money on Float
Charges

nPH E ABSEN CE of adequate float
* charges costs the banks o f this
country millions of dollars annually
and is one of the greatest causes of
profit leakage, in the opinion of R. W.
Putnam, vice president and cashier of
the Security Bank and Trust Com­
pany of Red Wing, Minnesota, presi­
dent, also, of the Minnesota Bankers
Association. Banks of that state, how­
ever, have gone into the float charge
quite thoroughly and their work mer­
its study and attention.
In a recent special report made to
the C le a rin g h o u se Section of the
A.B.A., Mr. Putnam brings out these
facts:
In Minnesota

General adoption of float charges such
as now are practiced in Minnesota
would help bankers througho it t t h e c o u n t r y

collection of checks the charge will be
increased 12 cents per $ 1,000 .
2. On all checks not collectible thru
the Federal reserve bank charges shall
be as follows :
(a) On all checks of $10 or un­
der a minimum charge of 10
cents per item.
(b ) On all checks of over $10 a
Banks in the state of Minnesota
minimum charge of 15 cents
have made further progress in the de­
per $100 or fraction thereof.
velopment and general adoption of a
(c) Exceptions: When a corpor­
system of charges for float items in ac­
ation, firm, or individual de­
counts than those of any other state.
posits a sufficient volume of
The situation in that state, the system
items so that the total charge
of charges established and the actual
thereon is equivalent to $9
results so graphically indicate what
per $ 1,000 or more, it shall
may be expected m the country at
be discretionary with the re­
large from a general adoption of an
ceiving bank to make a flat
adequate system of float charges that
charge per $ 1,000 ; in such
it merits examination in detail. The St.
event, however, the minimum
Paul and Minneapolis banks operate
flat rate to be $9 per $1,000.
under the following schedule :
3. Charges on checks drawn upon
1.
On all checks collectible through Minneapolis, St. Paul, South St. Paul,
the Federal reserve bank charges shall
be as follow s:
(a) On all items of $25 or under
a minimum of 3 cents per
item.
(b ) On all items over $25 up to
$100 a minimum charge of 5
cents per item.
(c ) On all items over $100 up to
$200 a minimum charge of 7
cents per item.
(d ) On all checks over $200, as
follow s:
25 cents per $ 1,000 on items
collectible two days after
receipt. (Minimum charge
7 cents per item.)
37 cents per $ 1,000 on items
collectible three days after
receipt.
50 cents per $1,000 on items
collectible four days after
receipt.
62 cents per $ 1,000 on items
collectible five days after
receipt.
$1 per $ 1,000 on items collec­
tible eight days after re­
ceipt.
When Sunday or a holiday inter­
venes causing one day’s delay in the


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Federal Reserve Bank of St. Louis

R. W.

P utnam

Chicago and New York shall be dis­
cretionary with the collecting bank.
Another Schedule
Seven counties and the Northern
Minnesota Clearing fdouse Associa­
tion and the Northwestern Minnesota
Clearing House Association, compris­
ing about twenty banks each, and sev­
eral other towns in the state, operate
under the following schedule :
On checks and drafts collectible thru
the Federal reserve bank—
On all items of $25 or under— 5 cents.
On an item over $25 and up to $100—
10 cents.
On all items over $100 and up to $200
— 15 cents.

On all items over $203 the following
schedule shall apply except that tne
minimum charge shall be 15 cents.
17 cents per $ 1,000 on items collectible
one day after receipt.
34 cents per $ 1,000 on items collectible
two days after receipt.
50 cents per $ 1,000 on items collectible
three days after receipt.
67 cents per $ 1,000 on items collectible
four days after receipt.
83 cents per $ 1,000 on items collectible
five days after receipt.
$1 per $ 1,000 on items collectible six
days after receipt and 17 cents per
$ 1,000 for each additional day there­
after.
On all checks and drafts not collectible
through the Federal reserve bank on
which the drawee bank makes an
exchange charge the above rates ap­
ply in addition to the exchange
charged by the drawee bank.
While these charges are specific for
each class of item, they are, in fact,
based upon interest rates. Disregard­
ing rates on small items, which include
a certain amount of margin for the
cost of handling such items, it can
readily be seen that the rates charged
in the Minneapolis and St. Paul banks
are, in fact, roughly 4 per cent inter­
est on the items for the time they are
in the process of collection, while in
the country banks the rate is 6 per
cent. On the basis of the rates sched­
uled, the St. Paul and Minneapolis
banks collect over $500,000 a year in
float charges. What these ch arges
mean to the income of country banks
can be appreciated from the fact that
fifty-eight banks in towns ranging in
populaton from 10,000 to 100,000
population, with a total capital of $ 1,562,000 and total commercial deposits
of $6,287,000, and operating on the
country bank schedule above given,
collect from float charges $46,545 a
year, which amounts to 3 per cent of
their total capital and
per cent of
their total commercial deposits.
As star examples of what can be ac­
complished by the float charge in rural
banks, the Northern National Bank,
of Bemidii, in a town of 8,000 popula­
tion, capital $50,000, commercial de­
posits $325,000, earned in the year
ending March 31, last, $3,300 on float
charges, which is 6.6 per cent of the
bank’s capital and over 1 per cent of
its total commercial deposits. During
the current year the rate of float earn­
ings is running 7.2 per cent of the
bank’s capital. T he First N ational
Bank of Thief River Falls, a town of

Central Western Banker, September, 1929

ó
only 5,250 population, capital $50,000
and commercial deposits of $165,000,
earns $2,750 a year from float, 5.5 per
cent on its capital. As above noted, a
bank in Parkston, South Dakota, is
collecting from 10 per cent to 14 per
cent of its capital annually in float
charges.
The successful manner in which
these and other banks have prevented
losses and effectively increased their
earnings by the imposition of float
charges naturally is exciting the inter­
est, and perhaps the cupidity, of the
banking world, and this interest is re­
sulting in a considerable movement
among banks generally to adopt some
system of float charges. However, it
should be noted that all the banks
which have so far failed to adopt float
charges do not submit to all the losses
which that fact might imply. Many in­
dividual banks and many groups of
banks all over the country, for in­
stance, follow the sound rule of not
crediting the proceeds of an out-oftown check until they have actually
been collected. This in itself involves
extra trouble and expense which prop­
erly should be charged for, but it at
least removes the factor of an advance
of funds. Many individual banks also
make a charge for collecting out-oftown checks.
Analysis of the several systems of
float charges in operation in various
parts of the country indicate two fac­
tors. The first is that of a fee or re­
muneration to a bank for the addition­
al trouble and expense involved in the
collection of out-of-town checks; the
second is that of interest upon funds
advanced a customer-depositor in cre­
diting him with funds before they are
actually received by the bank. Extra
trouble and expense are involved in
every case of the deposit of an out-oftown check for collection. The matter
of interest depends upon whether there
is any actual advance of funds and
several other considerations.
It is possible to claim too much in
the matter of float losses. There is a
certain amount of “ backwash” in the
transfer of funds, and while a bank
may be “ out” a considerable sum in
total of out-of-town items credited and
not collected, it usually is “ in” con­
siderable sums in the way of checks
drawn upon it and cashed or deposited
in other places and not yet charged to
the account of the drawer. Some bank­
ers claim that such cross currents of
float cancel each other, and undoubt­
edly there are some cases in which this
is true.
However, the fact remains that in
crediting an out-of-town item before it
is collected a bank is potentially out

the amount of the item; it is really ad­
vancing such amount to the depositor
for. from one to ten days or longer in
anticipation of repayment. That is a
very definite fact and is a matter which
concerns the bank and the customer so
favored. On the oth er hand, the
amount of float in checks drawn upon
the bank is a matter between this par­
ticular bank and other banks which re­
ceive them. It involves the trend of lo­
cal or domestic exchange, keeping up
city balances, regional or other clear­
inghouse charges, and other problems.
In giving immediate credit to the ac­
count of a depositor of an out-of-town
check, a bank advances funds, runs a
risk of collection, and grants a real
service to the customer which is inde­
pendent of and separate from its re­
sponsibilities to other banks. Whatever

Chicago Trust Company was award­
ed first prize for having the best mort­
gage and finance advertising display
at the convention of the National As­
sociation of Real Estate Boards held
at Boston. The prize was a bronze pla­
que.
The display was submitted by Ches­
ter L. Price, in charge of the advertis­
ing and new business department of
the Chicago Trust Company.

Central Western Banker, September, 1929

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

advantage there may be to a bank in
the float of its own checks cashed or
deposited in other places is largely off­
set by the additional cost of crediting
such checks to banks in other places,
often in fact involving an actual trans­
fer of currency. O f course much de­
pends upon the trend of local ex­
change in cross current float. That is
the risk of the banker, not the deposit­
or or the drawer of the check. In any
event it is evident that wherever there
is an advance of funds or other service
it should be paid for.
The Whole Question
The entire question as to the charg­
ing of loss by float, or, in other words,
to charge customers for services thus
rendered by a bank rather than to con­
tinue to absorb the loss or cost of such
service in other operations, as has been
the general custom in the past, is mere­
ly the question of whether or not
banks can afford to continue to give
something for fancied good will or to
meet competition, and whether or not
it is good policy and sound banking to
do so. It may be assumed that the cost
of receiving or paying out actual cur­
rency or perhaps local checks is properlv chargeable to ordinary overhead
in banking. The reception of any other
item over the counter, however, in­
volves other factors. Even in the case
of local checks and credits there are
certain additional costs involved in the
collection of such items through the lo­
cal clearinghouse or otherwise. In the
case of out-of-town checks, these ad­
ditional costs are increased.
Experts calculate that on an aver­
age it costs from three and a half to
four cents to receive an out-of-town
item over the counter, run it through
the transit department, get it into the
mails for collection, and get returns.
Where such items are at once credited
to the depositor’s account, which was
once an all but universal practice and
is still a quite general practice, the
bank potentially loses interest on the
amount of the deposit until it is col­
lected. The actual and just basis for a
float charge, therefore, is the addition­
al cost of collecting out-of-town items
plus the interest on funds placed at the
disposition of the depositor before the
money has actually been co lle cte d .
This interest factor is larger than
might at first appear. An average float
of $ 10.000 each day, running an aver­
age of three days (Sundays included),
for collection means an actual outlay
of $30,000 each day in the year, or at
6 per cent, a loss of interest of $1,800
per vear.
There are a good many banks that
advocate a flat charge, say of five
(C o n tin u e d on P a g e 21)

STOCK YARDS NATIONAL BANK
SOUTH OMAHA SAVINGS BANK
Announce Affiliation With

NORTHWEST BANCORPORATION
OMAHA, the
SOUTH
the United States,

second largest live stock m arket in
w ill profit by the decision of the
Stock Y ard s N ational B ank, the South Omaha Savings B ank
and the Cattle Feeders Loan Company, Inc., to affiliate with
th irty other leading banks form ing the N orthw est Bancorporation group. W ith the increased resources and facilities
com ing from this affiliation, these institutions w ill be able
to render even greater service th at ever before to South
Omaha and the live stock industry as a whole.

The Stock Y ard s N ational B an k is a consolidation of
the South Omaha N ational B ank and the Union Stock Y ard s
N ational B ank, which were established in 1887 , la rg e ly for
the purpose of financing the live stock industry and to pro­
vide banking accom m odations for Omaha and the trade te r­
rito ry trib u tary thereto.
This institution has enjoyed a
healthy growth and, by uniting with this large group of
successful financial institutions, brings South Omaha ade­
quate resources for financing fu tu re requirem ents of the
live stock and other allied industries.
There w ill be no change in the directorate of officer
personnel, but three directors, Mr. Ford E. H ovev, President
of the Stock Y a rd s N ational B ank, Mr. Jo h n E . W agner,
T reasu rer of the Cudahy P ackin g Company, and Mr. J . E.
Davidson, President of the N ebraska Pow er Company, w ill
become D irectors of the N orthw est Bancorporation.
Oll'icers and Directors
STOCK VAItD S NATIONAL, RANK
F o r d E. H o v e y , P r e s id e n t
E. A. C u d a h y, C h a irm a n o f the
B o a rd , C u d a h y P a ck in g - Co.
L. K. M o o re , A s s is t a n t to
P r e s id e n t
J. E. D a v id s o n , P re s id e n t
N e b r a s k a P o w e r Co.
Jas. B. O w en , V ic e -P r e s id e n t
E. F. F o ld a , B a n k e r
F. J. E n e r s o n , V ic e -P r e s id e n t
W . H. D r e ssie r , C a sh ie r

R. C. H o w e , C a p ita lis t

H. C. M ille r, A s s is t a n t C a sh ie r

G eo. W . J o h n s to n , C a p ita lis t
W . H. S c h e llb e r g , P re s id e n t
U n io n S to c k Y a r d s Co.

C. L. O w en , A s s is t a n t C a sh ie r
H. A . H o v e y , A s s is t a n t C a sh ie r
T. G. B o g g s , A u d ito r

E. S. W a te r b u r y , M a n a g e r,
A r m o u r & Co., O m aha

L e s te r A r m o u r, V ic e -P r e s .,
A r m o u r & Co.

J o h n E. W a g n e r , T re a su r e r ,
C u d a h y P a c k in g Co.

THE NORTHWEST BANCORPORATION

This greatest of N orthw est financial consolidations was
form ed for the m utual benefit of participating banks and to
prom ote the growth and developm ent of com m unities which
they serve. The banks form ing this group are strong, in­
dependent, key banks located in leading cities of the W est
and N orthwest.
Under the plan of organization, each affiliated bank
operates as a unit under the m anagem ent of local officers
and directors, p rim arily and alw ays in the interest of its
own com m unity, but all are bound together by interlocking
stock ownership, and th eir interests and aim s are m utual.
B y this association, the N orthw est B ancorporation and a f­
filiated banks w ill be able to render a complete and uni­
fied service at all points in the N orthw est, pooling th eir re­
sources and m an-power to serve the financial needs of the
N orthw est in a more com plete, stable and economical way.
I n s tit u t io n s A lt'ilia ted W ith
N O R T H W E S T I1ANCO It 1*0 R A T IO N
M in n e a p o lis, M in n e s o ta
N o r th w e s t e r n N a tio n a l B a n k an d A ffilia te d B a n k s
M in n e a p o lis, M in n e s o ta .......... .............M in n e s o ta L o a n & T ru s t Co.
M in n e a p o lis, M in n e s o ta ............. —_______ T h e M in n e s o ta C o m p a n y
D u lu th , M in n e s o ta ..................... F ir s t an d A m e r ic a n N a tio n a l B a n k
O m aha, N e b r a s k a ............. .....................U n ited S ta te s N a tio n a l B a n k
O m aha, N e b r a s k a ................................. U n iie d S ta te s T ru s t C o m p a n y
O m aha, N e b r a s k a .................................. ....S tock Y a r d s N a tio n a l B a n k
O m aha, N e b r a s k a ..................... ........ ........ S ou th O m ah a S a v in g s B a n k
M a son C ity, I o w a ............................... ........................ F ir s t N a tio n a l B a n k
F a r g o , N orth D a k o t a ..................... F ir s t N a tio n a l B a n k & T ru s t Co.
S io u x F a lls, S ou th D a k o t a ..................... ...... S e c u r ity N a tio n a l B a n k
L a C rosse, W is c o n s in ..............................N a tio n a l B a n k o f L a C ro sse
A b e rd e e n , S ou th D a k o ta ............................. ....... ...F ir s t N a tio n a l B a n k
D e a d w o o d , S ou th D a k o ta ....................... .............F ir s t N a tio n a l B a n k
F a ir b a u lt, M in n e s o ta .-S e c u r ity N a tio n a l B a n k & T ru s t C o m p a n y
F e r g u s Fall3, M in n e s o ta ____ _______ F e r g u s F a lls N a tio n a l B a n k
H u ron , S ou th D a k o t a ...................................N a tio n a l B a n k o f H u ro n
J a m e s to w n , N orth D a k o t a .......... ........ J a m es R iv e r N a tio n a l B a n k
L ead , S ou th D a k o t a ................... ............................F ir s t N a tio n a l B a n k
M in ot, N orth D a k o t a .............................. ................. F ir s t N a tio n a l B a n k
M o o rh e a d , M in n e s o ta .............. ........................... ...F ir s t N a tio n a l B a n k
O w a to n n a , M in n e s o ta ............................................S e c u r ity S ta te B a n k
R a p id C ity, S ou th D a k o t a ...................................F ir s t N a tio n a l B a n k
S tu r g is , S ou th D a k o t a .............................. C o m m e r cia l N a tio n a l B a n k
W a h p e to n , N orth D a k o t a .............................. C itiz e n s N a tio n a l B a n k
W a te r t o w n , S ou th D a k o t a ......... .....................C itiz e n s N a tio n a l B a n k
W a t e r t o w n , S ou th D a k o t a ............................ ......F ir s t N a tio n a l B a n k

STOCK YARDS NATIONAL BANK


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

SOUTH OM AHA, NEBRASKA
A F F IL IA T E D

W IT H

NORTHWEST BANCORPORATION
COMBINED RESOURCES OVER $267,000,000
Central Western Banker, September, 1929

There are a number of important rulings of vital intercsi both to
the creditor and the stockholder of a corporation. It is impossible to
summarize all of them but the article on this page covers a number of
interesting points which will well repay the reader.— E d i t o r ’ s N o t e .

agreement that it should
T H E CREDI T O R and
he paid in work, and the
stockholder met in the
Supreme C ou rt o f that
eastern co rn e r o f the
state ruled that the stock­
Commercial Club.
holders could not escape
“ T h e X corporation’s
liability on the note on
in bankruptcy,” the cred­
the ground that he was
itor suggests, “ and they
ready and willing to do
owe me $ 10,000 .”
the
work
which
had been rendered un­
“ And I paid cash for $10,000 worth
necessary on account of the insolvency
of its stock at par that’s a dead loss,”
By the Legal Editor
of the corporation.
the stockholder declares. “ I was lucky,
The Practical Effect
though, in a way, as I subscribed for
$20,000 worth but only paid for half.” all its creditors ; and hence, whilst the
“ The practical effect of a ruling in
“ Yes, and its a lucky thing for us company, as long as it continues a go­ favor of the stockholder would be to
creditors, too.”
ing concern, may call it in, and the allow him to setoff a claim for serv­
“ H ow ’s that ?”
stockholder, w ith ou t doubt, set off ices, although the claim was never in
“ Because now you’ve got to hand against it any demand he may have existence, as the services were not
over the unpaid balance to the receiver against the company, yet when the rendered. The fact that the rendition
for the benefit of the creditors.”
company becomes insolvent, and there of the services became unnecessary, by
The point involved in the foregoing- is not enough to satisfy all its credit­ reason of the corporation’s insolvency,
imaginary but plausible conversation ors, this trust fund manifestly cannot did not absolve the subscriber from
is one of vital interest to both creditor lie appropriated by a creditor who is a liability on the note, merely because he
was ready and willing to
and stockholders and there
render th e m ,” said the
are a number of importam
iiiii! iiiiiiiiiit iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiitiiitiiiiititiiiiitiiiiiiiiiiiiiiiiiiiiiiiiiiiiiitiiiiii!n itiitiiiiiiiiiiiii!iiin iiim iiiiiiiiiiiii:iiiiiiM iiiiiiiiiiii:iiiiiiiii'iiiiiiiii!i!ii'iiiiiiiiiiiii:iiiiiiiiii
111111111111111111111111111111111111111111111111111111111II1111111111:1111111111111111111111111111111!Ill 11111111>11111111111111111111111111111111111111111i11111:1111111i11.111111111! 11111111111111111111■11111111111111111
South Carolina Courts.
rulings by the A m e rica n
cou rts c o v e r in g various
Cases also arise w here
phases of the question.
the stockholder practically
sets up his own wrong as
An Interesting Situation
a defence.
“ There are a number of states in which laws have been
A t the v ery outset, an
“ The state law says that
passed
providing
that
the
liability
of
the
stockholder
for
fu­
interesting situation arises
every stockholder shall pay
ture calls shall continue even after he has transferred the
w here the stockholder, a
at least 10 per cent of his
stock to a third party and these laws are liberally construed
lawyer, for instance, ad­
subscription at the tim e,
by the courts.”
mits that he owes the cor­
and 1 paid only 5 per cent,
poration on an unpaid sub­
iiiiiiiiiiii!iiiiiiiiiiiiiiiiiiiii:iiiiiiiiiiiiiiiii!iiiiiiiiiiii:iU iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii!M im iim iiiiiiiiiiiiiiiiiiiiiu iiiiiiii:im iiiiiim iiim iiiiiiiiiiiiiiim iiiim iM iiiiiiiiiiiiiiiiiiiiiim
so that lets me out,” the
scription, but the corpora­
111■U1111111i 1111111!1111111111111i I!i Ii 11111111M!111111i 11111M111111111111111111111111i 111111111111111111U111111111111111111111111111M11111111111111111111111111111111111111111111111111111111111111111111111111II11111
stockholder declares.
tion owes him the same or
There are decisions both
a larger amount for legal
services, and then the corporation em­ stockholder, to the exclusive payment ways on this point, but in a leading
New York case where the stockholder
igrates into the popular and populous of his own claim,” says a leading legal
did not pay the required amount, but
textbook on this point.
state of bankruptcy.
Another interesting defence which
acted as director, pocketed his divi­
“ It’s true that 1 owe the corporation,
hut it owes me, and I ’ll just offset one is! sometimes raised by stockholders is dends, and sold his stock for real mon­
debt against the other, and call the in cases where a plumber, carpenter or ey, the Court of Appeals of that state
lawyer subscribes fo r stock on an ruled he could not escape liability.
thing square,” the lawyer suggests.
“ Carefully distinguishing things said
“ Nothing doing— to do so would be agreement that he is to pay for it in
to give you an unjust preference over plumbing, carpentry or legal services, from things decided, the conclusion
other stockholders who have paid for and the corporation goes into bank­ that the subscription, if invalid for
their stock in full, and, besides, the as­ ruptcy before the services are per­ want of such payment, may become
enforceable not only by a subsequent
sets o f the corporation, including- formed.
“ There’s my written contract, I ’m cash payment, but by a course of deal­
claims for unpaid subscriptions consti­
tute a trust fund for the benefit of the ready and willing to perform the serv­ ing between corporation and stock­
creditors which cannot be impaired by ices, and that relieves me from paying holder, is entirely reasonable and con­
allowing a setoff,” the receiver con­ my subscription,” the stockholder ar­ sistent with the reported cases. To jus­
tify a conclusion that the subscriber
gues.
tends.
“ No. W e don’t need the services was not a stockholder although he had
On this point the great weight of
authority is against the stockholder’s now, but we will take the cash,” the taken the stock and agreed to pay for
it, acted as director of the corporation,
receiver retorts.
setoff.
The law on this point is not clear, received dividends, and sold the stock,
Such a debt, as we have seen, is
deemed in! equity a part of the capital but there is a South Carolina case we must resort to legal subtleties, ra­
stock of the company, and is a trust where the stockholder gave a note to ther than to natural inferences, and it
cover his subscription, but on an
(Continued on Page 12)
fund to be devoted to: the payment of

Holding the
STOCKHOLDER

“ Liberally Construed ”

Central Western Banker, September, 1929

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Federal Reserve Bank of St. Louis


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Federal Reserve Bank of St. Louis

9

Central Western Banker, September, 1929

10

OF THE

LEADING M EN
NORTHW EST
On D irectorate
florthw ests Greatest
Banking Group

" O í >AK o t a

MINN.

° Dakota

HEBRASka

of
!Om

«s.MisÁ

Territory Served l*y (lie Northwest Staneorporation

The Northwest Bancorporation has called to its directorate the Northwest’s
leaders in business and finance, men w ho have m ade outstanding
successes in their particular fields.

The knowledge and experience o f

these men are now available to the entire Northwest through this great
banking institution, and its affiliated banks and trust com panies.

'Directors of ISlprthwesi ^Bancorporation^
E. W . DECKER

.

J. C. TH OM SON

.

.

.

.

^ P resid en ts

V i c e - P r e s i d e n t a n d Q e n e r a l .M a n a g e r

MARSHALL W. AL W ORTH , Capitalist . . . .
Duluth, Minn.
W ARD AMES, JR., V.-Pres., Barnes-Ames Comp :~ty
.
Duluth, Minn.
SHREVE M. ARCHER, Pres., Archer-Daniels M idland Co., Minneapolis, Minn.
E. W. BACKUS, Pres., Backus-Brooks Company .
.
Minneapolis, Minn.
W. G. C. BAGLEY, Pres., First Mational Bank .
.
.
Mason City, la.
JULIUS H. BARNES, Grain E x p o r t e r .............................. Duluth, Minn.
JAMES F. BELL, Pres., G eneral Mills, Inc. .
.
.
Minneapolis, Minn.
W. B. T. BELT, Pres., Northwestern B ell Telephone Co. .
. Omaha, Neb.
H. G. BLACK, Asst. Treas., Arm our & Company
.
.
. Huron, S. D.
NORMAN B. BLACK, Publisher, Fargo Forum . . . .
Fargo, N. D.
RALPH BUDD, Pres., G reat Northern Ry. Company .
.
St. Paul, Minn.
GEORGE W. BURTON, Pres. National Bank of La Crosse La Crosse, Wis.
H. M. BUSHNELL, V.-Pres., United Stttes Trust Company Omaha, Neb.
JOSEPH CHAPMAN, Pres., Donaldson Realty Company, Minneapolis, Minn.
W. P. CHINN, Gerì l M gr., Mining Div., Picklands, M ather
& Co.................................................................................. Duluth, Minn.
ALBERT C. COBB, Lawyer, Cobb, Hoke, Benson Krause &
.
Minneapolis, Minn.
Faegre ....................................................
.
.
Duluth, Minn.
T. F. COLE, M i n i n g ......................................
.
.
Duluth, Minn.
EDWARD C. CONGDON, Mining
JOHN CROSBY, Director, G eneral Mills, Inc.
Minneapolis, Minn.
GEORGE D. DAYTON , Pres., The Dayton Company
Minneapolis, Minn,
EDWARD W. DECKER, Pres., Northwestern National
B a n k ................................................................... Minneapolis, Minn
R. E. DRISCOLL, Cashier, First National B a n k .............................. Lead, S.D,
W. A. DURST, Pres., The Minnesota Loan & Trust Co., Minneapolis, Minn.
H. J. FAHNESTOCK, Pres., First National Bank
.
. Watertown, S. D.
C. O. FOLLE1T, Pres., Smith, Follett & Crowl . . . .
Fargo, N. D,
G. C. FULLINWEIDER, Pres., National Bank of Huron .
. Huron. S. D,
FRANK T. HEFFELFING2R, Pres., F. H. Peavey & Co., Minneapolis, Minn.
F. A. IRISH, V.-Pres., First National Bank & Trust Co. . . Fargo, N. D.
F. E. KEELER, Pres., Mason City Brick & Tile Co.
.
,
Mason City, la,
CHAMBERS KELLAR, A t t o r n e y .................................................... I ead, S.D
FREDERICK E. KENASTON, Capitalist .
.
.
Minneapolis, M»'nn
R.E. MACGREGOR, V.-Pres., Northwestern National Bank, Minneapolis, Min
HANFORD MacNIDER, Chairman of Board, First National
Bank
.
.
.
.
.
.
.
.
.
.
.
Mason City, I ,

Northwest

W. E. MAGNER, Pres., Cutler-Magner Company
. .
Duluth, Minn.
SETH MARSHALL, Pres., Marshall-Wells Company . .
Duluth, Minn.
C. F. MICHEL, Pres., La Crosse Refining Company
.
.
La Crosse, Wis.
OSCAR MITCHELL, Washburn, Bailey & Mitchell, Attorneys, Duluth, Minn.
ISAAC S. MOORE, Pres., First and American N ational Bank, Duluth, Minn.
L. T. MORRIS, V.-Pres., Citizens N ational Bank
.
. Watertown, S. D.
EDGAR M. MORSMAN, JR., A t t o r n e y .............................. Omaha, Neb.
ROBERT P. MORSMAN, Pres., United States National Bank &
United States Trust Co............................................................. Omaha, Neb.
C. A. PARKER, V.-Pres., First National Bank .
.
.
Mason City, la.
LYNN PEAVEY, Pres., Security N ational Bank & Trust Co., Faribault, Minn.
JOHN 5. PILLSBURY, V.-Pres., Pillsbury Flour M ills Co., Minneapolis, Minn.
PHILIP L. F AY, Executive V.-Pres., First and American
National B e n k ............................................................Duluth, Minn.
CAMDEN RAYBURN, V.-Pres., National Bank o f Huron
. Huron, S. D.
ARTHUR R. ROGERS, Pres., Rogers Lumber Company, Minneapolis, Minn.
N. F. RUSSELL, Pres., Bridgeman-Russell Company .
,
Duluth, Minn.
HENRY F. SAL YARDS, Pres,, Ely, Salyirds & Company, Duluth, Minn.
H. A. SCANDRETT, Pres., C., M. & St. P . & P . Railway Co., Chicago, 111.
W. Z. SHARP, Pres., Security N otional Bank .
.
, Sioux Fills, S. D.
GEORGE H. SPENCER, V.-Pres., Consolidated Elevator Co., Duluth, Minn.
ADAM G. THOMSON, Pres., A. D. Thomson & Company, Duluth, Minn.
J. C. THOMSON, V.-Pres. and Gen’ l M gr., Northwest
B a n c o r p o r a t io n ........................................................... Minneapolis, Minn.
H. D. THRALL, V.-Pres., The Minn. Loan & Trust Co., Minneapolis, Minn.
GEORGE P. TWEED, Iron O r e ............................................... Duluth, Minn.
H. B. WAITE, Pres., H. B. W aite Lumber Co. .
.
Minneapolis, Minn.
A. McC. WASH3URN, Washburn, I ’ ailey & Mitchell, Attys., Duluth, Minn.
E. J. WEISER, Pres., First National Bank & Trust Co.
.
. Fargo, N. D.
A. C. WEISS, Investm ents ..............................................................Duluth, Minn.
GEORGE W. WELLES, Pros., Kelly-How-Thomson Company, Duluth, Minn.
D. R. WEST, V.-Pres., The Minn. Loan and Trust Co. . Minneapolis, Minn.
DAVID WILLIAMS, Chairman of Board, First and American
National B a n k ..................................................................... Duluth, Minn.
THEODORE WOLD, V .-nres., Northwestern N at’ l Bank, Minneapolis, Minn.
G, H, YATES, V.-Pres,, United States National Bank
.
. Omaha, Neb.

M I N N E A P O L I S -

.

corporation
-

MINN

Combined Resources over $ 255,0 0 0 , 0 0 0 22
Central Western Banker, September, 1929

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

11

L E A D I N G B A N K S OF THE
NORTHW EST
A ffilia te
liorthw ests Greatest
Banking Group

T e r r ito r y S e r v e d b y th e N o r t h w e s t B a n e o r ito r a tio n

The N orthw est Bancorporation is a group o f leading financial in­
stitutions located in key cities o f the Northwest, affiliated to increase
the fin a n c ia l stren gth and resources o f this great empire o f
11,000,000 people.

These financial institutions, all under able local

management, are now affiliated under this great banking institution.

Institutions ^Affiliated with Idjrthwesl dBan corporation-»
FARIBAULT, MINN.

MINNEAPOLIS, MINN.
Northwestern National Bank and
affiliated hanks in Minneapolis

Security National Bank & Trust Co.

FERGUS FALLS, MINN.
Fergus Falls National Bank

MINNEAPOLIS, MINN.
Minnesota Loan and Trust Company

HURON, SOUTH DAKOTA
National Bank o f Huron

MINNEAPOLIS, MINN.
The Minnesota Company

JAMESTOWN, NORTH DAKOTA
Jam es River National Bank

DULUTH, MINN.
First and Am erican National Bank

OMAHA, NEBRASKA
United States National Bank

OMAHA, NEBRASKA
United States Trust Company

MASON CITY, IOWA
First National Bank

FARGO, NORTH DAKOTA
First National Bank & Trust Company

LA CROSSE, WISCONSIN

LEAD, SOUTH DAKOTA
First National Bank

MINOT, NORTH DAKOTA
First National Bank

MOORHEAD, MINNESOTA
First National Bank

OW ATONNA, MINNESOTA
Security State Bank

RAPID CITY, SOUTH DAKOTA
First National Bank

STURGIS, SOUTH DAKOTA

National Bank o f L a Crosse

SIOUX FALLS, SOUTH DAKOTA

Commercial National Bank

WAHPETON, NORTH DAKOTA

Security National Batik

ABERDEEN, SOUTH DAKOTA

Citizens National Bank

WATERTOWN, SOUTH DAKOTA

First National Bank

DEADWOOD, SOUTH DAKOTA

Citizens National Bank

WATERTOWN, SOUTH DAKOTA
First National Bank

First National Bank

No r t h w est Ba n c o r p o r a t io n
M I N N E A P O L I S -

.

- M I N N

Combined Resources over £2 5 5 ,0 0 0 ,0 0 0 2£

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

Central Western Banker, September, 1929

12
Holding the Stockholder
(C o n tin u e d fr o m P a g e 8)

would clash with our established ideas
of equity if one in prosperity thus
dealt with by the corporation as a
stockholder should, in bankruptcy, be
able to escape liability on the ground
that a statutory provision, useful, if
for any purpose, to provide a fund for
creditors! and to prevent fictitious sub­
scriptions, had not been co m p lie d
with,” said the Court.
The majority of the cases which
have been fought out, however, in­
volved instances where stock was is­
sued as fully paid up and non-assess­

able when in fact it has not been paid
in full, and a creditor dealt with the
corporation knowing that the stock had
been issued at a discount.
“ You extended credit w ith you r
eyes open, and now you can’t come
back on us for more than the corpora­
tion asked for our stock,” the stock­
holder avers, after the corporation has
gone on the rocks.
On this point the weight of authori­
ty is that such creditors are not in a
position to enforce the stockholders’
liability.
A California Case
In a C a lifo r n ia case one dollar

shares were issued as fully paid up
and non-assessable for 10 cents per
share, and the Supreme Court of that
state ruled that creditors who dealt
with the corporation with full knowl­
edge of the issue had no remedy as far
as the stockholders were concerned.
“ Where, however, it appears, as it
does in this case, from the pleadings,
the uncontradicted proofs, and the
clear and positive findings of the court,
that the particular creditor at the time
the credit was given extended the cred­
it with full knowledge of the differ­
ence between the par value of the
stock and the value of the property re­
ceived for it, an exception to the rule
exists,” said the court, and the same
rule has been laid down in Georgia,
Indiana, Iowa, Kansas, Michigan, Min­
nesota, Nebraska, Oregon, Washing­
ton, Wisconsin and other states.
On the other hand in a few states,
including Delaware, Illinois and Ken­
tucky, the courts have ruled that the
knowledge of the creditor will not pre­
vent him from enforcing payment on
the part of the stockholder.
In a Delaware case where the cred­
itor not only knew that the stock had
not been paid in full, but actually took
part in the issuance of it, the Supreme
Court of that state ruled that he could
still enforce his claim as against the
stockholders.
“ It is a plain case of an issuance of
stock by the company and acceptance
by the holder without being paid for.
Under such circumstances there can be
no doubt that the acceptor impliedly
agreed, and is equitably bound, to pay
for the stock. Then it follows that
even if the corporation, because of its
agreement, could not enforce payment,
the receiver appointed under the In­
solvency Statute would have a right,
in a court of equity and under the di­
rection of the chancellor, to collect it,
there being no other assets out of
which the debts of the corporation
could be paid. Money or property paid
for capital stock are assets liable for
the debts of the company, and why
should money due but unpaid for such
stock not be equally liable? Unpaid
subscriptions unquestionably are liable
because they are legal assets, and in
our opinion the acceptor of stock not
paid for or subscribed for, is likewise
bound to pay for it, and his liability
constitutes an equitable asset which a
statutory receiver can enforce. It is
admitted that such a receiver has pow­
er to collect unpaid subscriptions to
the corporation for capital stock be­
cause the relation between the stock­
holder and the company is contractual
and the unpaid subscription an asset
(C o n tin u e d on P a g e 16)

Central Western Banker, September, 1929

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Federal Reserve Bank of St. Louis

13

rP H E E V E R “ An acu tely
critical situation
1 G R O W IN G
arose when the
dem ands of the
n e g o tia t io n s
American stock
which culminat­
market for loans,
ed in the Young
w ith i n t e r e s t
Plan appeared
rates constantly
late in April and
in cre a sin g , are
Our high interest rates are reduc­
at, the very beginning of May in dan­
having a far-reaching' effect on the
ing our capacity to finance foreign
ger of being broken off. With, memor­
world’s money markets, declared Dr.
bonds and are attracting foreign
Benjamin M. Anderson, Jr., economist
ies of the collapse of the mark in mind,
money to be loaned on American
a great deal of nervousness manifested
of the Chase National Bank of New
call m a rk et, says N ew
York, speaking at this year’s conven­
itself in Germany, and a quiet but very
York Economist
substantial movement of funds out of
tion of the Montana Bankers Associa­
Germany began, which greatly inten­
tion. He said our high interest rates
have operated to tighten the world
“ The lending countries of Europe in sified an already difficult situation.
“ But the Reichsbank held the situa­
money market in two w ays: First, by the past few years have been England,
reducing very sharply the placing of The Netherlands, Sweden, Switzer­ tion vigorously in hand, and the Ger­
foreign bonds in our foreign market; land, and, more recently, France. Lon­ man banks held together loyally. New
second, by attracting foreign money to don appears to have little leeway for York, and possibly some other foreign
be loaned on call in our own stock further loans to the Continent at pres­ money markets, lent the necessary tem­
market.
ent. The Netherlands have been with­ porary assistance. Confidence is now
Dr. Anderson continues:
re sto re d , German funds
are returning hom e, and
“ In Europe, the resu lt
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has been to create a very
the Reichsbank’s reserve
definite financial strain.
ration, which had gone to
The lend ing countries of
around 40' per cent, rose
Europe have ceased to be
to 51.5 per cent by June
ready lenders to the b o r ­
22 .
“ It we look at the position of the world at large, it is
rowing countries, and, in
“ But the essential diffi­
clear that money is far tighter than it was a year ago and the
som e cases, have w ith ­
cu lties remain. Germany,
financial strain is greater than it was a year a g o !” — Dr A nd er­
drawn funds p r e v io u sly
if unable to get large for­
son.
lent. The borrowing coun­
eign loans, must reverse
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tries of Europe, which for
the direction of her indus­
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several years had adjusted
trial and trade activities,
their e co n o m ic life to a
reducing lo n g -tim e con­
large inflow of foreign funds, have drawing funds from other countries, struction and domestic consumption
found themselves suddenly pulled up especially from Germany. Sweden has and increasing production for export.
short, with the necessity of paying ra­ ceased to be a ready lender. Switzer­
The Position of London
land and Belgium could spare funds
ther than borrowing.
“ A borrowing country is an import­ for investment abroad on a moderate
The British banks, in their effort to
ing country. It brings in the proceeds scale. But the only European country
revive British trade by extending bank
of foreign loans in the form of goods which is in a position to make foreigncredit, have allowed the percentage of
primarily. Domestic demand is strong, loans on a great scale is France.
their “ advances,” i. e., customers’ loans
resisting the export of domestic goods
The
Position
of
Germany
and overdrafts, to rise to over 56 ¡per
and attracting fo r e ig n g o o d s. But
The tightening of the money mar­ cent of then; deposits, whereas 50 per
when loans cease and repavment must
he made, the scene shifts. The borrow­ kets of the world, with the sharp re­ cent is looked upon as the normal up­
ing country must develop an excess of duction of foreign loans to Germany, per limit. In addition, the drains upon
exports over imports. When a transi­ came at a time when Germany was un­ the gold reserve of the Bank of Eng­
tion of this sort must he suddenly der the necessity of increasing her land, particularly those of June and
made, it is almost inevitable that there payments under the Dawes Plan from early July, have reduced the reserve
should be a period of depression dur­ 1.750.000. 000 marks per year to 2.- ratio oi the Banking Department from
000 marks. Germany has made55.8 per cent on May 22 to 41.9 per
ing which labor and resources shift 500.000.
from production for the domestic mar­ these payments, and continues to make cent on July 10. Britain’s capacity to
kets to production for export, and dur­ them. But the difficulties have been extend loans to the rest of Europe is
ing which prices are reduced to permit real, the German money market has evidently greatly reduced, and new is­
more effective competition in the ex­ been very tight, and Germany has been sues in London have not been going
very short of cash.
very well.
port trade.


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Federal Reserve Bank of St. Louis

Europe and Our
MONEY MAR

Tighter Than a Year A go

Central Western Banker, September, 1929

14
Concern lest our high rates should
pull in a great deal of gold from Eng­
land was a restraining factor in Feder­
al Reserve policy during the whole of
1928. The, rise in the discount rate of
the Bank of England from 4)4 per
cent to Sy2 per cent early this year re­
lieved the situation for a time. But the
pressure on sterling continued. One

contributing factor is presumably the
very large holdings by the Bank of
France of sterling exchange. The opin­
ion is expressed in London that when­
ever sterling shows any strength, there
is French selling.
But a further very important factor
in the persistent weakness in sterling
and loss of gold by England has, of

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TN T H E handling' o f business from banks a char* acteristic part o f our service has always been—
IN D IV ID U A L

A T T E N T IO N

to

every trans­

action.

R ufu s E . L e e &

C ompany

Investment Bankers
1116-1122 City National Bank Bldg.

Omaha
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Us Help You
W henever you need help in furnishing
a client with information about certain
securities don’t hesitate to get in touch
with us.
For just such a purpose we have es­
tablished a Special Bankers Depart­

ment through which all o f our statisti­
cal information, nationwide connections
and advisory counsel become immedi­
ately available to you— and through
you to your clients.

Tl q y d P

h illip s

C oJNC

Investm ent Securities
20E205 Union Bank Bldg.

F r e m o n t, N eb r.

mi 111 m n11111 h1111111111 [11111 m 11 iLLiiiJj^gn^cQLLiiJ nn11 nIn1111111 n 111111111111 h11itttttttt

Central Western Banker, September, 1929

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

course, been the cessation of American
loans to Europe, and the steady flow
of funds from Europe to New York
attracted by the high rates at the New
York Stock Exchange. The drain on
England’s gold has begun much earlier
this year than last year.
The foregoing does not mean, of
course, that Britain’s position is fun­
damentally weak. B a sica lly , Britain
has immense financial strength. If the
Bank of England chose to use its dis­
count rate in accordance with pre-war
policy, she could undoubtedly protect
her position quickly and effectively,
just as The Netherlands Bank, by
raising its discount rate in the spring,
converted an outflow of funds into an
inflow of funds. Incidentally, the best
Dutch financial opinion in May was
that the increased rates of interest in
The Netherlands had not interfered
with business in The Netherlands.
The Position of France
The French money market is the
one money market which has immense
strength and great capacity to expand
credit. The Bank of France has a gold
reserve of 44 per cent against demand
liabilities, which is not high, since 40
per cent is looked upon by the finan­
cial authorities as the point below
which they would not wish to go. But
the Bank of France has, in addition,
over a billion dollars of gold exchange,
the major part of which is probably
held in London, though a large part is
also in New York.
France has, a natural and justifiable
desire to convert her foreign exchange
into gold. As a first-rate financial cen­
ter, she is unwilling to carry perman­
ently her reserves in foreign countries.
Moreover, France sees clearly the dan­
gers of unsound credit ex p a n sion
throughout the world when great coun­
tries employ the gold-exchange standand rather than the strict gold stand­
ard.
But France can bring in gold only
by taking it away frotri other coun­
tries, chiefly England, but also the
United States. In the present situation,
France is moving slowly, cautiouslv
and with special consideration for all
the interests involved. She took gold
from London in 1927 and 1928, and
she took 310 million dollars of gold
from New York in these years. Even
in 1929. France has been able to add
about 182 million dollars to her gold
reserves, but she has obtained much of
this from Germany, while Germany in
turn has taken the gold from London.
France has no wish to disturb the
international money market. But those
who look forward to very easy money
in the near future will do well to have
in mind that easy money, in all prob­

15
ability, would be an immediate signal
to France to bring gold from New
York and London, with a tightening of
rates in New York and London.
Is Money Getting Easier?
In gauging the position of the Amer­
ican money market, we must take a
world-wide view, and we must have a
certain perspective in time— at least
enough to allow for seasonal varia­
tions. If we compare our position in
June and July of 1929 with the same
period of last year, it is clear that
money is decisively higher than it was
a year ago, although we thought then
that it was very high.
The “ high” for call money in fuly
of last year was 10 per cent as against
15 per cent this year. On July 5 of last
year, call money “ renewed” at 6 per
cent, and the renewal rate stood at
5 y2 and 6 per cent down to July 11.
This year, the renewal rate was 7 per
cent on July 5. It rose to 9 per cent on
July 9, at which figure it remained un­
changed down to July 15. Time money
at the New York Stock Exchange was
5j4 to 6 per cent in late June and in
early July in 1928, whereas it has
ranged from 7j^ to 8 per cent in the
same period in 1929. Commercial pa­
per stood at
to 5j4 per cent in this
period of 1928 as against a straight 6
per cent in late June and early July in
1929. Acceptances, despite the easing
in July of this year, still stand a full 1
per cent above last year’s quotations
at the same time.
And if we look at the position of the
world at large, it is clear that money is
far tighter than it was a year ago, and
the financial strain is greater than it
was a year ago.

slightly over half the total of last
month.
In stock financing the greatest gain
was registered in investment trust and
financial company issues which com­
prised 60 per cent of the total volume
for the month as compared to 34 per
cent last month and 11 per cent for
July 1928. Industrial and public utility
issues registered declines from the to­
tals of last month and July a year ago,
while real estate and foreign both
showed substantial gains.
O f the combined stock and bond to­
tal, New York City wrote by far the
larger share— 53 bond and note issues
totalling $271,219,000 and 29 stock is­

sues totalling $158,219,000. Chicago
was in second place with 35 bond and
note issues totalling $50,648,000 and
7 stock issues totalling $15,190,000.
Boston was third with a combined to­
tal of $34,510,000 followed by Pitts­
burg, Cleveland and St. Louis.

Modern Service
Mrs. Nuritch was determined that
the world know of her fortunes.
“ Molly,” she said, to the new maid,
“ You may take the dog out now and
give him some air.”
“ Yes, ma’am,” acquiesced Molly,
“ and please, ma’am, where will I find
the nearest service station?”

A m e r i c a n F o u n d e r s C o rp oration
It is difficult for any man though he is familiar with
the activities of

A m e r i c a n F o u n d e r s C orporation
to completely visualize the size and qualifications of
this organization, which, through its numerous depart­
ments, has its finger on the financial pulse of the world.
The American Founders Corporation has one of
the largest statistical departments in the United States
and Europe, and the organization is composed of finan­
cial, industrial and economic experts, who are familiar
with conditions local and general in all parts of the
world.

New Financing
New' stock, bond and note financing
in July totalled $582,069,113. accord­
ing to figures compiled in the monthly
investment review of Lawrence Stern
and Company, investment bankers of
Chicago and New York. This is an in­
crease of 27 per cent over the same
month last year but a decrease of ap­
proximately 16 per cent from the June
volume.
Bond and note financing in July to­
talled $325,710,814 which is 17 per
cent greater than the volume of July
1928, but 27 per cent below the total
of lune. Stock offerings aggregated
$256,358,299. which is 41 per cent
larger than the total for July 1928 and
3 per cent greater than last month.
All classifications in the bond list
with the exception of foreign and tax
exempt offerings, registered substan­
tial gains over June. Foreign issues de­
clined approximately 78 per cent in
volume, and tax exempts were but


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Federal Reserve Bank of St. Louis

Few organizations are so well qualified to make
investments as the American Founders Corporation,
and its remarkable growth during the past seven years
clearly shows the results such an organization can ac­
complish.

Ask for Complete Details

SMITH, LANDERYOU & CO.
210 Farnam Building,
Omaha, Nebraska
Ja. 5 0 65

Central Western Danker, September, 1929

lò
Plan New Orleans Convention

Bankers who deal in figures for oth­
er folks are now taking time to do
some computing on their own account
that may revolutionize the mortgage
loan business, according to E. E. Mur­
rey, President of the Mortgage Bank­
ers Association of America.
For men who can split pennies in
making accurate appraisals of proper­
ties up for loan, often cheat themselves
in the way they figure their profits,
says Mr. Murrey who is vice-president
of the American Trust Company of
Nashville, Tenn.
Thus, five hundred members of the
b a n k e r s’ association, located in all
parts of the country have set to work
making elaborate surveys of what it
costs to handle all types of loans and

the results of this survey will be made
public as a feature of the coming con­
vention of die association to be held in
New Orleans, October 29 to 31.
Meet in Raton

Group number two o f the New
Mexico Bankers’ Association met re­
cently in Raton, New Mexico. The
group includes officers and employes
of all banks in Union, Mora, Harding,
Taos and Colfax counties, and the
next gathering will be held in Taos
somet'me during the month of Octo­
ber. The following officers were elect­
e d : chairman, J. Van Houten; vice
chairman, C. R. Keyes; secretary, J.
T. Conway. A dinner was held at the
Swastika hotel on the evening of the
meeting.

A NATIONAL CITY
MAN CAN HELP YOU

. . . w h e n y o u w ant
to a d ju s t
your holdings
The National City Company employs a corps
of economists, statisticians, and engineers
whose duty it is to keep abreast of industrial
growth, progress of invention, trade develop­
ments and other economic changes which may
affect the value of investment holdings. Ex­
perienced bond men at our various offices will
make available to you the benefits of this con­
stant study and research. It will be worth your
while to submit your bond list for an occa­
sional analysis and review.

The National City Company
National City Bank Building, New I ork
Offices in more than 50 cities throughout the world
BONDS

SHORT

T E R M

N O TE S

Central Western Banker, September, 1929

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

-

A C C E P T A N C E S

Holding the Stockholder
(C o n tin u e d fr o m P a g e 12)

of the corporation,” said the Delaware
Courts in the case referred to.
When X subscribes for stock, does
not pay in full, transfers his' stock to
Y, and then the corporation becomes
in so lv e n t, X, o f course, takes the
ground that Y should pay and Y is
equally insistent that X is the victim.
There are a number of states in
which laws have been passed provid­
ing that the liability of the stockhold­
er for future call shall continue even
after he has transferred the stock to a
third party, and these laws are liberal­
ly construed by the Courts.
“ The manifest purpose of the fram­
ers of our Constitution was to protect
the public against the well-known, de­
ceitful, and fraudulent practice indulg­
ed by some corporations of issuing
shares of capital stock without receiv­
ing the par value therefore either in
money or its equivalent. Obviously it
was intended to provide that a corpor­
ation should receive, and the share­
holders to whom the same was issued
should be bound for, the full par value
of its stock, thus making the assets of
the corporation worth the face value
of its shares of stock when issued. The
liability thus imposed upon one who,
by accepting corporate stock as an or­
iginal shareholder, obligates himself to
the corporation therefor in money, la­
bor done, or property, is a continuing
one, at least so far as the creditors of
the corporation in good faith are con­
cerned, and is not discharged by the
mere transfer of such stock to an in­
nocent holder; otherwise one who had
contributed little or nothing to the
capital stock of a corporation might
obtain shares of its stock, dispose
thereof profitably, and entirely escape
liability to corporate creditors. It is
the plain duty of the courts to construe
and enforce this provision so as to
render it effectively remedial of the
evil against which it is directed,” says
the Oklahoma Court in construing a
law along this line.
On the other hand, where there is
no law to the contrary, the general
rule is that a transfer of stock made
in good faith and recorded on the
books of the corporation carries with
it the liability to future calls.
The foregoing brief paragraphs do
not profess to cover and in an article
of this type it would be impossible to
cover all the: minor points which arise
in connection with this subject, but it
does point out the outstanding fea­
tures, and will it is hoped, repay at
least a casual perusal.

17

Investors Lose Billion a Year
A/TO RE than a billion dollars in sav­
ings are lost annually by the
American people because they are ig­
norant of investment principles and
because they possess the gambling in­
stinct. Such, in brief, is the message
contained in a bulletin recently made
public by the National Better Business
Bureau, Inc., 383 Madison Avenue,
New York, N. Y. The bulletin outlines
an intensified national program which
the Bureau is launching to expose
swindling practices and provide the in­
experienced investor with some practi­
cal information on how he can protect
himself.
Buying fraudulent stock and dealing
with fraudulent promoters constitute,
according to the bulletin, problems
which can only be solved through edu­
ca tin g the p u b lic to fra u d u le n t
schemes. There is, however, the bulle­
tin continues, always need for sound
legislation and able law administration
aimed to punish those who perpetrate
frauds.

ing them believe that these offerings
are bonafide, the bulletin goes on to
describe the “ tipster sheet” evil and
declares that schemes to defraud are
endless and law enforcement activity
necessarily slow.
The need for investment education
is emphasized in quotations made by
E. H. H. Simmons, President of the
New York Stock Exchange; Horace
Donnelly, S o lic it o r o f the United
States Post Office Department; the Fi­
nancial Editor of the New York Eve­
ning Post and others.
Better Business Bureaus, the bulle­

W ho owns
the Bell System?

Quotes State Commissioners
The bulletin cites statements made
by Blue Sky Commissioners from thir­
ty-three states. It quotes those made
by commissioners in Arkansas, Cali­
fornia, Connecticut, Georgia, Idaho,
Kentucky, Mississippi, Nebraska, New
Hampshire, North Dakota, O re g o n ,
Pennsylvania, South Dakota, and W is­
consin to show that the victims of
fraud come from both the educated
and uneducated classes, education in
practical financial matters being lacked
in both. According to the bulletin this
lack of education is astounding and
gives the fraudulent promoter a clear
advantage over u n in fo r m e d people
who take chances on promises and
representations that would be immed­
iately recognized as having the suspic­
ious ear-marks of fraud by persons
with only a practical elementary knowl­
edge of securities.
The bulletin quotes the commission­
ers of California, Indiana, Kentucky,
Massachusetts, Minnesota. Mississippi,
Nebraska, New York, North Dakota,
and Tennessee on the need for invest­
ment education, while Wisconsin cites
several cases which show how easy it
is for people to lose money if they do
not investigate before investing.
Briefly calling attention to the tre­
mendous public interest in securities
and the broad variety of issues which
provide ample opportunity for fraud­
ulent promoters to build up schemes to
deceive uneducated investors by mak-


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Federal Reserve Bank of St. Louis

tin continues, learned ten years ago
that the most successful method of
protecting the public is to warn invest­
ors of existing fraud and to advise
them to investigate before investing.
This is a system which is known as the
“ Before Y o u In v est — Investigate”
plan.
In conclusion the bulletin states that
the National Better Business Bureau
has made plana to intensify its educat'onal program by providing a means
by which all legitimate business inter­
ests can unite to prevent fraud. The
bulletin asks all such interests to give

I

N eight years the number
of American Telephone
and Telegraph Com pany
stockholders has increased
from 140,000 to 450,000 peo­
ple. Not one of these stock­
holders owns as much as 1%
of the total capital stock. The
fact that the ownership is so
wide-spread and diffused im­
poses an unusual obligation
on the management to see to
it that the savings of these
hundreds of thousands of peo­
ple are secure and remain so.
American Telephone and Telegraph
Company Stock
as a Conservative Investment

The Bell System has shown every
year a continuous growth both in
telephones and plant investment.
Back of American Telephone and
Telegraph Company stock is a total
plant investment of over three and
a half billion dollars. The company

is spending more than $1000 a min­
ute night and day for plant and
equipment.
The Bell System aims to provide
a telephone service for the nation
more and more free from imperfec­
tions, errors or delays and always
at a cost as low as is consistent with
financial safety.
May we send you a copy of our book­
let, “ Some Financial Facts?”

BELL T E L E P H O N E
SECURITIES CO. Inc.
1 9 5 Broadway

New York City

Central Western Banker, September, 1929

18
serious thought to the possibility of co­
operating with the Bureau.
These plans include: the weekly is­
suance of a series of fifty-two posters
designed to protect industrial employes
from many types of fraud; the publi­
cation of a practical booklet of finan­
cial information; the expansion o f
Better Business Bureau work by ex­
tending it to communities which can­
not finance organizations the size of
the present affiliated Bureaus; the ex­
tension of protective work among cus­
tomer owner stockholders; and the in­
creasing of co-operation between the
National Bureau and other agencies
engaged in the business of exposing
and suppressing fraud.

Foreign Investments and Travel
T N OU R prosperity we invest in for-

1 eign bonds and other securities, and
as we realize how prosperous we are
we travel in foreign countries more
freely and more frequently. Our na­
tional income is increased by the in­
terest and dividend payments received
from abroad, but the expenditures of
Americans are also increased by their
fondness for foreign travel. During
the past nine years our income from
foreign investments has increased some
15 times, and oddly enough our ex­
penditures for foreign travel have ad­
vanced in not far from equal propor­
tion.

¥

What Is a Bank
Investment Account?
IVha is its purpose?

W h a t is its utility to a bank?

H ow large should it b e?

O f what should it be com posed?

Shoul

Should it hare no bonds?

it include bonds?

Should it be composed partly o f bonds and partly o f other assets?
fi hat kinds o f bond should be included there in?
Should it contain short term or long term bonds?

T h ese and o th e r
similar questions are dis­
cussed in a brochure pre­
pared by our economist,
Dr. Paul M . Atkins, en­
titled: Bank Secondary
Reserves and Investments.

We shall be glad to send any
bank a copy upon request.

Ten years ago American invest­
ments abroad amounted to only about
50 million dollars, while by last year
they had advanced to some 733 mil­
lions. Tourist expenditures in other
countries amounted to about 50 mil­
lion dollars 10 years ago, and they
have increased during most of the per­
iod since then almost as rapidly as
have the returny from the foreign in­
vestments. For 1928 they are estimat­
ed as being about 614 millions. These
are net figures. The tourist expendi­
tures are those: of our tourists abroad
minus what fo r e ig n tourists spend
here. The income from foreign invest­
ments is the difference between what
we get from these sources abroad, and
the amounts we must send abroad on
account of in vestm en ts foreigners
have made here.
That the expenditures of American
tourists abroad should almost equal
our national income from foreign in­
vestments is an impressive fact, and
particularly so when we remember
that the income from foreign invest­
ments includes the interest payments
on the huge war debts owed us by for­
eign governments. The sums spent by
our tourists abroad greatly aid foreign
debtors in paying the interest charges
on the sums they owe us, but at the
same time the fact that we have such
large sums to spend on foreign travel
that is mostly for pleasure purposes
suggests the thought that we can af­
ford to be generous in our attitude to­
ward foreign governments engaged in
repaying war loans. — From C leve ­
la n d

T rust C o m p a n y B u l l e t in .

Must Have Been Potent

“ Did you get home all right last
night, sir?” asked the street car con­
ductor.
“ O f course— why not?” came back
the passenger.
“ Well, when you got up to give your
seat to that lady last night, you were
the only two people in the car.”
The Road Hog

AmeSjEmerich & Co.
105 South La Salle Street, Chicago
ROBERT G. INGWERSON, Representative
826 City National Bank Bldg., Omaha
New York

Philadelphia

St. La-iis

Milwaukee

San Frandico

Los Angeles

(to companion as huge
truck takes up all the road ahead of
them) : “ Well, I ’ve tried everything
but I can’t seem to attract that driv­
er’s attention.”
His C o m p a n i o n : “ Just leave it to
me, Jim. Maybe you didn’t know that
I’m the champion hog-caller of the
world.”
M otorist

Corrupted freemen are the worst of
slaves.— Garrick,

Central Western Banker, September, 1929

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Federal Reserve Bank of St. Louis

19

Insurance

What Investment Does the Public
IV/TUCH has been said about life in1 A surance as an investment and the
high standing that it should occupy in
the minds of most people, but it is not
the most popular form of investment
as indicated by a Bureau study of over
1,900 men and over 800 women. The
most popular investment among men
is bonds, the choice of 29 per cent of
all the men interviewed (see chart).
Life insurance and real estate tied for
second place, each being chosen by 16
per cent. Among the women, savings
banks ranked first with 29 per cent,
bonds came next with 27 per cent ; real
estate third with 13 per cent; building
and loan associations, 12 per cent ; and
life insurance came fifth, with only 11
per cent of the women giving it the
preferred position. The table What
Form of Savings or Investment Do
You P refer? indicates in detail the in­
vestment preference of both men and
women.
A Poor Showing
The relatively poor showing of life
insurance as the preferred form of in­
vestment is surprising when we realize
that most people regard life insurance
as a form of saving. Only 18 per cent
of the men and 14 per cent of the w o­
men said that they did not regard life
insurance as a form of saving.
It is interesting to note that although
the investigation was m ade in the
spring of 1928 when unusually great
interest was shown in the stock mar­
ket and when many people thought
that the' country was being undermin­
ed by a wave of speculation, only 9 per
cent of the men and only 6 per cent of
the women stated that they preferred
stocks as a form of investment.
A large number of facts were col­
lected about each person interviewed,
and by comparing the answers we can
find out more about what classes and
tvpes of people prefer life insurance
and what classes prefer other forms of
saving. The business and professional
men are more interested in life insur­
ance and less interested in savings
bank and building and loan associa­
tion investments, than any other group.
They also show a greater preference
for stocks. The group of male clerical
workers and teachers has just the av­
erage preference for life insurance,
and decidedly higher than the average
preference for savings bank and build-


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Federal Reserve Bank of St. Louis

ing and loan association methods of
saving.
Smaller Incomes

Prefer
By

Considering the income of the per­
sons interviewed, we find that the
smaller the income the stronger the
preference fo r savin gs banks and
building and loan accounts. The pref­
erence for life insurance increases as
the income increases up to $ 10,000 per
year. The investigation covered too
few persons with larger incomes to
make definite conclusions possible, but
the tendency shows less interest in life
insurance as incomes increase above
$10,000. The preference for bonds,
real estate, and mortgages increases as
the income increases.

Henry Niles

A ssistant M anager Research
Bureau
limiiiiiMiiitiiiiimiimmiiiiiiiiiitimiiimiiiiiiiiiiiiiimiiiiMiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiKiiH

This is one of a series of articles
which appeared in M anager ’s M a g­
azine, giving results of studies made
by the Research Bureau on the value
of co-operative advertising. The facts
are pertinent to the sale of life insur­
ance and indicates rather definitely
the position it occupies in the
field of investments.— E d.
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiinmii

Conversation

ing and loan association investments.
Real estate and mortgages do not at­
tract them particularly. A pronounced
preference (44 per cent) was shown
by women for savings bank and build­

“ I ’ve been window shopping.”
“ Whadda ya mean, window shop
ping?”
‘‘Why, looking in windows.”
“ That’s silly. Nobody’s going to bed
this time of night.”

Bonds Most Preferred Investment
The white figures show the proportion of the 2200 men inter­
viewed who preferred the form of savings or
investment listed.

Bonds

Life Insurance

Real Estate

Savings Bank

Bldg.

8c Loan

Stocks

Mortgages

Central Western Banker, September, 1929

20
N . Y . Life Investments

An average of $469,450 per day or
a total of $171,818,789 was invested
by New York Life Insurance Com­
pany during each of the 366 days of
1928. O f the total $81,712,682 was
invested in city mortgages, $17,958,621 in residence mortgages, $31,493,868 in preferred stocks, and $40,362,399 in the securities of municipalities,
railroads, public utilities, and indus­
trial corporations.
The company’s total investments as
of January 1, 1929, are subdivided as
follows : City building loans $390,433,998, resident loans $104,168,171,
stocks and bonds $671,103,570. The
law which permits life insurance com­
panies to invest in preferred stocks
went into effect during 1928.
Resigns

B. H. Mickey, who has long been
cashier of the W ood Lake Bank, hand­
ed in his resignation which was accept­
ed. His place was taken by Earl Han­
na, who until five years ago had been
employed in the bank.
Nebraska Insurance Business

Insurance companies in Nebraska,
132 of which are domestic and 454
foreign, did a steadily increasing busi­
ness last year, according to a report
filed recently by State Insurance Com­
missioner [. A. Kizer. Premiums to­
taled $52,021,255, or an increase of
$2,608,439. Residents of the state re­
ceived $19,836,845 in losses, or an in­
crease of $2,608,439 over the previous
year.

Shall W e Forgive Our Debtors
and Loan Them More?
(C o n tin u e d fr o m P a g e 4)

investigated before making the loan
and with all the bank’s old customers
entered with their record, the tickler
should be consulted before advancing
any money. Then about twice a year
this tickler should be reviewed and
the borrowers who have not paid or
attended their indebtedness promptly
on maturity, should be eliminated from
the record or in other words placed on
the black list, as continued loans to
such an individual or firm will ultima­
tely result in a loss.
No Longer Good Risks
My theory is that once a man has
avoided payment of his obligations, he
is no longer a good credit risk, and the
next time a flurry of depression or a
year of poor crops comes along, he
will again seek to avoid paym ent.
Some cases may be termed victims of
circumstances in the past, which is
true, nevertheless the act that placed
him in that class was poor judgment
and shortsightedness, but the manner
in which he coped with the situation
in bringing himself back on his feet, is
the criterion to be used in making fur­
ther advances to him, as he has or has
not a streak of weak backbone in ex­
treme adverse conditions, which fact
was brought out during the past de­
pression, and may be used advantage­
ously by a banker in acting upon his
application for a loan of money. The
moral tickler system referred to, will
at least eliminate a large percentage of
the risk.

The

SERVICE LIFE INSURANCE COMPANY
of Lincoln, Nebraska
B. R. B A Y S , President

The Service Life is known as a company of Service,
Ideals and Aggressive Principles

W E STAND ON OUR RECORD
STA R TE D B U SIN E SS SE P TE M B E R 20, 1923
Total Admitted Assets

Standard Business in Force

$125,682.73

$140,737.36

$303,724.87

$522,557.94

$767,380.73

Dec. 31, 11)23

Dec. 31, 1924

Dec. 31, 1925

Dec. 31, 1926

Dec. 31,1927

$11)6,000

$3,142,500

$7,058,600

$10,829,700

$13,071,662

$1,013,048.00 Dec. 31, 1928 $15,506,000
Central Western Banker, September, 1929

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Federal Reserve Bank of St. Louis

What has caused the public to be­
come lax in the payment of their obli­
gations, making it difficult to collect
notes today? For the past six years i
have been assisting to liquidate several
defunct banks in South Dakota and
Iowa, both State and National and
give a few reasons, gathered from
that experience:
1. Lost moral responsibility.
2 . Intentionally avoiding payment to
closed banks— soothing their con­
sciences by telling themselves that
the bank won’t pay anything any­
how.
3. The urgent need of cash for luxur­
ies and amusements— and how.
4. Discouragement and lost confidence
in banks.
5. Having gotten by with continued re­
newals in the past.
6 . Not being bound to pay by the giv­
ing of security at the time of incur­
ring the obligation.
Right here I want to ask why the
the precentage of repossessed cars sold
under conditional sales contracts, is so
small ? For the reason that the Finance
Company has a mortgage and the own­
er an equity— and besides the mortga­
gor will not walk.
Banking methods in the Northwest,
insofar as loaning funds is concerned
must change and have ap p a ren tly
changed in the past two or three years.
The taking of a name only as security
on a note should be, with few excep­
tions, done away with in the agricul­
tural portion of the country, otherwise
the relationship between debtor and
creditor is not established in its true
sense. Bankers have been obliged to
buy bonds which are backed by a trust
mortgage on a city building, railway
property or public utility holdings and
such investment is an investment in
securities. Therefore, why should the
same banker loan his bank’s funds lo­
cally without securing the note with
a marginal mortgage, diversifying his
loans and discounts with some capital
loans, liquid call loans and longer time
paper, all well secured?
This stringent rule of loaning mon­
ey will never be censored and as the
depositing public learns that this pol­
icy is being carried out, much of the
lost confidence in banks and bankers
will be restored and the business again
elevated to the plane to which it has
heretofore, been its right to enjoy.
Come Again!
C u s t o m e r : “ I want to buy an au­

tomobile tire.”
C lerk : “ I’m sorry, sir, but we don’t
handle automobile tires.”
C u s t o m e r : “ Don’t handle them?”
This is a h— 1 of a drug store.”

21
Making More Money
on Float Charges
(C o n tin u e d fr o m 1’ ag-e (i)

cents, on each out-of-town item as a
convenient and inexpensive method of
making good this loss, but a little re­
flection will show that this method,
while convenient and while it doubt­
less would go a long way toward cov­
ering the loss in the average bank, is
essentially unfair. There is very little
difference in the actual cost of collect­
ing a large or a small out-of-town item
aside from the loss of interest. The ab­
solutely fair manner of making the
charge would be to assess this cost of
collecting common to all items, large
and small, and then assess the proper
interest charge. This method is, in fact,
the basis of the rather advanced sys­
tem generally adopted by a large pro­
portion of the banks in Minnesota. O f
course, in the pure theory of banking,
no item can properly be credited a de­
positor until it is actually collected in
cash or placed to the credit of the re­
ceiving bank at its option.
So long as American banks find it
either convenient to themselves or nec­
essary for the accommodation of their
customers to credit out-of-town checks
immediately upon deposit and at par,
their remains for them no alternative,
to prevent loss, than to make a charge
for collection, including interest, upon
the funds they have thus advanced
during the period of collection.

»tate Banks Show Bîg Gains
F ) N. SIMS, Secretary-Treasurer of
the National Association of Su­
pervisors of State Banks, has submit­
ted to the Association a statement
which shows in detail by States the
capital, surplus and undivided profits,
deposits, loans and discounts, stocks
bonds and securities, and total re­
sources of all State Banking Institu­
tions of the continental United States,
together with totals of these items of
the National Banks, and all covering
as of March 27, 1929.
The report of Secretary Sims cov­
ers the only available accurate and de­
tailed data of the State Banking Insti­
tutions comparable with the report of
the Comptroller of the Currency which
covers the National Banks.
Mr. Sims said: “ The figures given
are very gratifying and reflect, as a
w h o le, a healthy condition o f the
Banking Institutions of our country.
“ The capital, the deposits, and the
total resources of our banks are larger
than ever before.
“ On March 27, 1929 there was a
total of 25,932 banks of which 18,357
were State Banks and 7,575 National
Banks, and in round numbers a total
capital, surplus and undivided profits

of $9,274,242,341, total deposits of
$58,610,581,757, and total resources of
$72,666,752,001. Total deposits of all
banks were $1,896,064,896 above the
previous high record of February 28,
1928, and total resources $3,227,280,777 above resources of that date.
“ On March 27, 1929, in round num­
bers the capital, surplus and undivided
profits of the State Banks were $5,573,901,341, and of the National Banks
$3,700,341,000 showing the capital re­
sources of the State Banks to be 50
per cent in excess of the National
Banks. The deposits of the State
Banks were $35,737,701,757, and ol
the N ation a l Banks $22,872,880,000
showing the deposits o f the State
Banks 56 per cent in excess of the Na­
tional Banks. The total resources of
the State Banks were $43,644,840.001,
and of the National Banks $29,021,912,000, showing the recources of the
State Banks 50 per cent in excess of
the National Banks.
“ Between March 27, 1929 and Feb­
ruary 28, 1928 deposits of the State
Banks increased $1,302,266,896, and
deposits of the National Banks in­
creased $593,798,000. During the same
period total resources of the State
Banks increased $1,779,055,776, and

Stretching It
C onductor — “ How old is this boy ?”
L ady — “ Four.”
C onductor — “ How old are you,

The Time, The Contract

sonny ?”
S o n n y — “ Four.”
C onductor — “ Well I ’ll let him ride

And The Man

free this time, but I know what he’s
going to be when he grows up.”
L ady — “ What is. he going to be?”
C onductor — “ Either a liar or a
giant.”

W e might aid you in bringing
Fair Exchange

There were two partners in the firm,
and one of them happening to pass on,
a young employe approached the sur­
viving partner, with whom he was not
what you could call a favorite.
“ I am sorry, sir, to hear of Mr.
John’s demise and I have come to ask
if you would like me to take his
place.”
“ Yes, I should, very much,” was
the reply, “ if you can get the under­
taker to arrange it.”
The tendency to presevere, to per­
sist in spite of hindrances, discourage­
ments, and impossibilities— it is this
that in all things distinguishes the
strong from the weak.

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Federal Reserve Bank of St. Louis

about the proper combination
of these three elements.

O m a h a

L i f e In s u r a n c e

Co m pan y

O m aha, Nebraska
H. E. W O RRELL, Sec.-Treos.

Central Western Banker, September, 1929

22
total resources of the National Banks
increased $1,448,225,000.
“ Since June 30, 1919, which was the
date of my first complete statement,
capital, surplus and undivided profits
of the State Banks have increased $2 ,674,238,664, and the National Banks
$1,336,863,000. The deposits of State
Banks have increased $14,104,879,745,
and the National Banks $6,948,015,000. Resources) of the State Banks in­
creased $17,679,164,165, and the Na­
tional Banks $8,222,362,000. The de­
crease in the number of State Banks
totals 2,671. The decrease in the num­
ber of National Banks totals 210.

“ This^ makes a total increase in all
banks of the United States since June
30, 1919 as follows:
Capital, Surplus and Undivided
Profits . . . . $ 4,011,101,664 or 76%
Deposits . . . . 21,052,894,745 or 56%
Resources . . . 25,901,526,165 or 55%
Number of In­
stitutions . . . 2,881 (decrease)
“ Both classes of banks perform
equally useful and necessary func­
tions and I do not make comparisons
for the purpose of disparagement, but
to emphasize the colossal size of the
two great banking systems and to di­
rect attention to the importance and

DE

National B ank
'.Trust Company
O M A H A

‘An Unbroken Record o f Seventy Years
is a Guarantee o f Safe and
Satisfactory Service”

OFFICERS:
M.

T.

B ar lo w ,
R.

P.

President of the Board

M orsm an,

G. H . Y ates , Vice-President
J. C. M c C lure , Vice-President
T. F. M u r p h y , Vice-President
C. F. B r i n k m a n , Ass’ t V -President
P. B. H endricks , Ass’ t Vice-President

President

R. R. R a in e y , Cashier
H . E. R ogers, Assistant Cashier
E. E. L andstrom , Assistant Cashier
A. L . V ickery , Assistant Cashier
V . B. C aldw ell , Assistant Cashier

need of both in the development and
handling of our country’s business.”

Honesty
I he cashier of a small movie house
was selling tickets as a pal looked on.
A customer brought a quarter ticket,
threw down a half dollar walked away,
leaving his change.
“ Does that often happen?” asked
the cashier’s friend.
“ Very often,” replied the ticket sel­
ler.
“ What do you do in a case like
that?”
“ Oh,” says the man in the wicket,
I always rap on the window with a
sponge.”

He Won His Seat
A witty political candidate for an
agricultural district, after making a
speech, announced that he would be
glad to answer any questions that
might be put to him.
A voice came from the audience.
“ You seem to know a lot, sir, about
a farmer’s difficulties. May I ask a
question about a momentous one?”
“ Certainly,” replied the candidate,
nervously.
“ How can you tell a bad egg?”
went on the merciless voice.
The candidate w aited until the
laughter died away. Then he replied:
“ If I had anything to tell a bad egg,
I think I should break it gently.”
He was returned at the head of the
polls.

As Usual
N i t t : “ Once I saved a man’s life,

The
Continental National Bank
LINCOLN, NEBRASKA

t(A Bank f or Bankas ”
Our consistent growth and progress, contributed to
largely by our correspondents throughout Nebraska, is
indicative of the careful service and prompt attention
rendered them.
We solicit the accounts of Banks and Bankers, offer­
ing every facility and service.

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

Central Western Banker, September, 1929

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Federal Reserve Bank of St. Louis

but I never got a medal for it.”
W i t t : “ Give particulars, please.”
N i t t : “ A drunkard once came home
to his apartment, turned on only the
hot water to take a bath. He would
have been scalded to death, only I
happened to be the janitor of the build­
ing and there was no hot water.”

Why Worry
A salesman sold an old c o lo re d
farmer a tractor. A few days after
the machine was delivered the sales­
man called on his customer for pay.
“ Can you pay me for the tractor,
Uncle Jim?” he asked.
"Pay fo ’ de tractor?” he asked in
astonishment and wrath. “ Why man,
yo’ done tole me dat in free; weeks, de
tractor would pay fo ’ hisself.”

1 he longer I live the more my mind
dwells upon the beauty and the won­
der of the world. I hardly know which
feeling leads, wonderment or admira­
tion,—John Burroughs.

23
„„„nimm,mm,um

mm

immillili

immmmmi

nimm

mmmmmii

Nebraska News
........................ .
from undivided profits to surplus. This
now gives this bank $60,000 capital
and surplus.

ters that have caused delay have been
definitely determined and work is now
being rushed toward re-opening of the
bank.

Reopens
I'HTIIj TTAIjLi, President
Nebraska B ankers Association

After having been closed since Feb.
8 , 1929, the Farmers and Merchants
Bank, of Bloomfield, Nebraska, re­
opened for business under new man­
agement and a new subscribed capital
stock of $50,000.
The new officers are William Lamprecht, president; A d o lp h G ord au ,
vice-president, and James A Cline, Jr.,
cashier.
Becomes Cashier

W M . B. H U G H ES, Secretary
Nebraska Bankers A ssociation

Moved to Alliance

The Potash State Bank, which has
been operated at Antioch, Nebraska,
erstwhile potash boom city of the war
days, has been merged with the First
State Bank of Alliance. Records and
deposits were moved to Alliance re­
cently. Following the decline of the
potash business most of the business
houses closed down, but the bank was
one of the few remaining.
Savings Department

The National Bank of Ainsworth,
Nebraska, in carrying out its purpose
to be the largest possible service to
Ainsworth and community are plan­
ning to open a savings department as
allowed by its charter.
Opens in Abie

The Abie States Bank, of Abie, Ne­
braska, in whose name was brought
suit to contest the right of the state to
collect the special bank guaranty fund
assessment, reopened for business re­
cently after having been closed since
June 22.
The bank starts out with new capi­
tal and a legal cash reserve. The offi­
cers include Charles D. Ocekal, presi­
dent, W . F. Pavel, vice-president and
Ed Brt, cashier.
Hold Meeting

The semi - annual meeting of the
stockholders of the Farmers State
Bank of Grant, Nebraska was held
recently. At this meeting a cash divi­
dend of 10 per cent was declared to
stockholders and $8,000 was moved


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R. M. Herre, former Norfoilcan,
who was secretary of the Nebraska
Dairy Development Company, is cash­
ier of the reopened Citizen's State
Bank of Ainsworth.
Mr. Herre was vice-president of the
bank before its closing on February
20 , last.
Has Birthday

The Chapman State Bank, Chap­
man, Nebraska, recently celebrated its
twenty-seventh anniversary, its organ­
ization date being August 18, 1992. Its
capital and surplus is $50,000, depos­
its $346,000, loans $281,000, primary
and secondary reserve $105,000 and
total resources over $400,000.
Elmer E. Ross is the president, D.
E. Magnuson, cashier and J. P. Roubal, assistant cashier. Mr. Ross has
been connected with the bank since its
organization, Mr. M agnuson since
1906 and Mr. Roubal since 1917.
Banker-Farmer

W . G. Boedeker, president of the
Murray State Bank of Murray, Ne­
braska, who operates one of his farms
near Murray in partnership with the
tenant, Wm. Wehrbein, have fed dur­
ing the past feeding season, eleven car
load of choice steers which they pur­
chased in the sand hills of Nebraska
last fall. A part of these cattle have
been, sent to the Chicago market, top­
ping that market each time. They have
five loads of these cattle yet in their
yards and five car load of hogs all to
be marketed in the near future.

Increase Surplus

At the regular meeting of the direc­
tors of the Page State Bank held at
Onman, Nebraska, an increase in the
surplus account of the bank was made,
bringing the bank’s capital and surplus
up to $24,000. Since May 1. 1928, the
bank increased their capital from $15,000 to $20,000 and has increased the
surplus account from $3,000 to $4,000,
all of which arose from the normal op­
erations of the bank.
Named President

Mrs. Herman Hogrefe was recently
named president of the Battle Creek
Valley Bank, of Madison, Nebraska,
at a meeting of the directors of the
bank to succeed her late husband,
Herman Hogrefe. Other officers and
directors will remain the' same.
It is believed that Mrs. Hogrefe is
the only woman in Nebraska who has
the distinction of being the head of an
institution with resources closely ap­
proaching the million mark.
W hich?

Which is the oldest bank in Nebras­
ka ?
Two banks of Omaha claim the
honor hut their claims are disputed by
two Nebraska City institutions. First
National of Omaha claims to be 72
years old, being organized as the firm
of Kountze Brothers in 1857. U. S.
National traces its origin to the old
firm of Barrows, Millard & Co., estab­
lished in 1856, but pioneers say that
Barrow, Millard & Co., at first was a
real estate company and the bank was
not instituted until two years later.
The Merchants National was found­
ed in Nebraska City in 1857, the Ne­
braska City National in 1859 and the
Otoe County National in 1865. All are
still in existence.
First record of banking in Nebraska
dates from establishing of the Bank of
Florence in 1856, according to histori­
cal records. Many banks were started
in ’59 and ’58 but most of them folded
up during the ’58 panic.

Reorganizing

Large Nebraska Institution

The Sutton, Nebraska, State Bank
committee reports progress toward re­
re-organization. Some important mat­

The First National Bank of Grand
Island, Nebraska, originally chartered
in 1881 and one of Nebraska’s oldest

Central Western Banker, September, 1929

24
financial institutions, has not only ad­
vanced to the position of the largest
financial institution in Nebraska, out­
side of Omaha and Lincoln, hut is
proud of a continuity of management
record which is equalled by few banks
in the middlewest, S. N. Wolbach hav­
ing headed the institution since 1881,
and at present is chairman of it’s
board of directors, having but recent­
ly relinquished the presidency to Emil
Wolbach. 1. R. Alter, vice-president
and cashier, has for thirty years been
identified with Grand Island banks
and for years past the managing offi­
cer of the First National Bank, and
F. J. Cleary, vice-president; P. R.
Birk, first assistant cashier and T. B.
Murray, assistant cashier, are men
with years of experience in banking,
primarily in this old bank.
The modern banking home erected
in 1925 at a cost of a quarter of a mil­
lion dollars has recently been equipped
with a night depository vault and
plans are now being considered to en­
large it’s cage facilities to better han­

dle it’s constantly increasing volume of
business. With a deposit total of three
million four hundred thousand dollars
and a cash and second reserve total of
one million two hundred fifty thou­
sand dollars, the First National Bank
continues in it’s policy of constructive
conservatism, seeking to co - operate
with the enterprises of Grand Island
in financing not only the local ag­
riculturists, but a large number of live
stock producers and finishers— two es­
sential lines of which it has given a
close analysis.
Messrs. S. N. Wolbach, capitalist;
Emil Wolbach, general merchandise;
J. L. Cleary, attorney, V. E. Evans,
loans and insurance; Oscar Reimers,
ranches and live stock; I. R. Alter and
F. J. Cleary constitute the bank’s board
of directors and have been actively
and successfully engaged in their re­
spective lines for years past.
Celebrates Birthday

Cornelius Collins, president of the
Hebron State Bank of Hebron, Ne­

braska, recently celebrated his 45th
birthday, and claims to be the oldest
banker in his county. He was born in
the same building now occupied by the
bank.
His father, A. G. Collins, celebrated
his 82nd birthday this year, coming to
Hebron back in 1882.
Becomes Cashier

A. E. Kopesky has recently succeed­
ed Vernon Rice as cashier of the
Farmers State Bank of Chapman, Ne­
braska. Mr. Kopesky comes to Chap­
man from Yoakum, Texas, where he
was connected with a bank in that city.
Mr. Rice is taking a position with
the Commercial State Bank at Lin­
coln.
Merge at Stratton

The two banks at Stratton, Nebras­
ka merged recently, and are now oper­
ating under the name of the Commer­
cial Banking C om pa ny. The State
Bank of Stratton lost its identity in
the merger, but will be well represent­
ed in the new organization.
Iowa Shows Increase

A 4 per cent increase in the number
of cattle on feed on Iowa farms for
market August 1 this year over Aug­
ust 1, 1928, was shown in statistics re­
leased by Alfred C. Brittian, federal
agricultural statistician.
Shipments of Stocker and feeder
cattle into Iowa from 12 markets have
been heavier this year than last from
the period March to August, the re­
port shows.
Reports of feeders as to probable
weights of their cattle when marketed
indicate that the average weight, while
probably below normal, will be above
last year.
The demand for feeders this fall, he
predicted, will be centered on calves
and yearlings with a slight decrease in
demand for calves and a correspond­
ing increase in demand for yearlings
under 750 pounds.

COM PLETE D E P E N D A B L E
F IN A N C IA L , IN V E S T M E N T
A N D TRUST SERVICE

The First National Bank
AND

The First Trust Company
OF LINCOLN, N E B R A S K A

The Touch System

Ì

TYPEWRITERS

Î

AND

Î

A D D I N G M A C H IN E S

j

EVERY MAKE—l ARCE OR FORT ABLE

Î

Î

Î

i
Î
Ì
Ì

Standard Four Bir,k Keyboard
—Wide Carriage

7 Col.

“ CO RO N A’

*£ £ 0
ip u u

Adding
Macliinon

F. J. WEISS

10 Col.
$ 8 0

GEO. F. PINNE

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

(Established 1903)

Central Western Banker, September, 1929

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

OMAHA. NEBR.

j

i
j
i

i
i
i
i

"M y grandfather,” said the English
boy, “ was a very great man. One day,
Queen Victoria touched him on the
shoulder with a sword and made him
a knight.”
"Aw, that’s nothin’,” the American
boy replied, "One day an Indian touch­
ed my grandfather on the head with
a tomahawk and made him an angel.”

I

i

i

"They also serve who only stand
and wait” would make a nice motto
for the waiters’ union.

25

this

. . .

U

n

i o

n

of
B


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

a

n

k

i

n

g

N addressing our first joint statement
since the union of these two great banks
was announced, we are constrained to look
back a few years into Chicago’s financial
history.

I

50 years ago— the State Bank of Chicago
was founded. Firmly intrenched in the
minds of its founders were these fundamem
tal principles: To counsel with men as
neighbors. To meet the problem of the in'
dividual with generous understanding. To
win - and merit—the lifelong loyalty of its
friends.
67 years ago— The Foreman National
Bank was founded. Had the charters of
these two banks been drawn at the same
council table, their ideals could not have
paralleled more closely Through the years
—the founders of this bank have lived and
worked for an ideal.
“To deal humanly with our clients, to

St a t e B a n k

i

d

e

a

l

s

share the common interests of our friends,
to serve with generous understanding on 3
common ground with our patrons, to make
this a bank where people feel at home.”
For years these two great banks have
prospered as neighbors. They have been
warm, friendly institutions with constant
policies— unvarying ideals. They have grown
to recognize in each other the identical
principles upon which the success of each
has been assured.
It was but a natural sequence—that one
day these two banks should unite, in the
interests of greater service to their patrons.
The union will result in one bank of
greater warmth and friendliness, and greater
service to all who enter its doors.
To this end, we jointly pledge to our
friends the same personal attention, the
same officers to a man, in the new and
greater institution.

of

Ch icago

La Salle and M onroe Streets

T he F o rem an N a t io n a l B a n k
T he Foreman T rust A nd Savings Bank
La Salle and Washington Streets

Central Western Banker, September, 1929

26

To Tulsa
Wade H. McDowell, teller at the
Miami County National Bank, Paola,
Kansas, has resigned to take a com­
mercial position in Tulsa.

Standing Committees
OFFICERS
FORD E. H OVEY, President
JAS. B. OW EN, Vice-Pres.
F. J. ENERSON, Vice-Pres.
W. H. DRESSLER, Cashier
L. K. MOORE, Asst, to Pres.

OUR B A N K IN G
M A IN

ROOM

FLOOR RIGHT

H. C. MILLER, Asst. Cash.
C. L. OW EN, Asst. Cash.
H ENRY A. H OVEY, Asst. Cash.
T. G. BOGGS, Auditor

An Account With the Stock Yards National
Bank of South Omaha Insures
Quickest possible returns on pro­
ceeds of live stock shipments.
Efficient handling of grain drafts
through our special facilities.
Instruct Live Stock Proceeds Deposited
With Us.
Send Us Grain Drafts in Your Cash Letter.

Stock Yards National Bank
of
South Omaha
The Only Bank in the Union Stock Yards

Central Western Banker, September, 1929

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

The Executive Council of the Ne­
braska Bankers Association authoriz­
ed President P. L. Hall, Jr., and
Chairman P. R. Easterday to appoint
all standing committees of the associa­
tion for 1929-1930, which they have
done as follow s:
Com m ittee on Education, Public Relations
and T hrift
W . A. S e lle ck , c h a ir m a n . P r e s id e n t L in ­
c o ln N a tio n a l B a n k a n d T ru s t C o m p a n y ;
W . E. H e n ry , c h a ir m a n o f b o a r d L o u p C ity
S ta te B a n k ; C. A. P h illip s , c a s h ie r C a m ­
b r id g e S ta te B a n k ; J. E. C o n k lin , p re s id e n t
H u b b e l B a n k ; W . H. D r e ssie r , c a s h ie r
S to c k y a r d s N a tio n a l B a n k , O m aha.
Service Charge Committee
A r th u r J en sen , c h a ir m a n . V ic e -p r e s id e n t
N e b r a s k a N a tio n a l B an k , M in d e n ; I. R . A l ­
ter, v ic e -p r e s id e n t F ir s t N a tio n a l B an k ,
G ra n d Is la n d ; C. MS H itc h m a n , v i c e - p r e s i ­
d en t F a r m e r s S ta te B a n k , B la ir.
County O rganization Committee
O. A. R ile y , c h a ir m a n . C a sh ie r S ta te
B a n k o f H a s t in g s ; W a d e R. M a rtin , p r e s i­
d en t C o m m e r c ia l B a n k in g C om p a n y , S t r a t ­
t o n ; O tto K o t o u c , p r e s id e n t H o m e S ta te
B a n k , H u m b o lt.
A gricultural Committee
T. H. P o llo c k , c h a ir m a n . P r e s id e n t F a r m ­
ers S ta te B a n k , P la t ts m o u t h ; H. D. M iller,
p re s id e n t F r s t N a tio n a l B a n k , S ta n to n ; C.
S. B r o w n , v ic e -p r e s id e n t F id e lit y S ta te
B a n k , A u ro ra .
Protective Committee
A. L. C oad, c h a ir m a n . V ic e -p r e s id e n t
P a c k e r s N a tio n a l B a n k , O m a h a ; C. F.
Gund, p re s id e n t F ir s t N a tio n a l B a n k , B lu e
H ill; Ju l P e te r m ic h e l, v ic e - p r e s id e n t O ak
C re e k V a lle y B a n k , V a lp a r a is o .
Membership Committee
A. J. J o r g e n s o n , c h a ir m a n . P r e s id e n t th e
A m e r ic a n B a n k o f S id n e y ; H. M. L in k ,
c a s h ie r E x e t e r N a tio n a l B a n k ; G e o r g e H.
H a ase, c a s h ie r F a rm e rs S ta te B a n k , E m e r ­
son.
Tim e Lock Committee
D e n m a n K o u n tz e , c h a ir m a n . V ic e - p r e s i­
d en t F ir s t N a tio n a l B a n k , O m a h a ; R a y S.
W ilfle y , c a s h ie r F ir s t N a tio n a l B a n k , F a ir b u r y ; D. W . G r e e n le a f, p re s id e n t F a r m e r s
S ta te B a n k , T e k a m a h .
District Clearing House Committee
J. M. S oren sen , c h a irm a n . V ic e -p r e s id e n t
F r e m o n t S ta te B a n k ; A. J. G u en d el, p r e s i­
d en t N e b r a s k a S ta te B a n k , G ran d Is la n d ;
R. I. S tou t, p r e s id e n t F ir s t N a tio n a l B a n k ,
T ekam ah.
County Credit Bureau Committee
J M. S oren sen , c h a irm a n . V ic e -p r e s id e n t
F r e m o n t S ta te B a n k ; J. G. S a w y e r, c a s h ie r
S a lin e C o u n ty B a n k , W e s t e r n ; W . E. M in ier, c a s h ie r O a k la n d S ta te B an k .
Insurance Committee
F. R. H a g g a r t , c h a ir m a n . V ic e -p r e s id e n t
St. P a u l S ta te B a n k ; F r a n k B o y d , v ic e p re s id e n t O m ah a N a tio n a l B a n k ; F. R.
K in g s le y , Jr., c a s h ie r M in d en E x c h a n g e
N a tio n a l B an k.
T axation Committee
E lm e r W illia m s , ch a irm a n . Pt. C o m m e r ­
c ia l S ta te B a n k , G ran d Is la n d ; C. E. B u r n ­
ham , p re s id e n t N o r fo lk N a tio n a l B a n k ; C.
B. H a rt, p r e s id e n t P r o s s e r S ta te B a n k ;
G eo. W . H olm e s, p r e s id e n t F ir s t T ru s t
C om p a n y , L in c o ln ; J. R. C ain, Jr., v ic e p r e s id e n t P e te r s N a tio n a l B a n k , Om aha.
Finance Committee
T h is c o m m itte e , b y th e te rm s o f its c r e a ­
tion , is to c o n s is t e a ch y e a r o f th e p r e s i­
dent, th e c h a ir m a n o f th e c o u n c il, an d on e
o t h e r m e m b e r o f th e c o u n cil. T h e p r e s id e n t
a n d c h a ir m a n t h o u g h t ; l p r o p e r to h a v e
th e tr e a s u r e r on the fin a n ce c o m m itte e , so
its p e r s o n n e l s ta n d s as f o llo w s : th e p r e s i­
d e n t; th e c h a ir m a n ; th e tre a s u r e r .
Publicity Committee
C. J. C la a ssen , c h a ir m a n . V ic e -p r e s id e n t
P e te r s T ru s t C om p a n y , O m ah a ; F r e d D.
S ton e, c a r e o f F ir s t N a tio n a l B a n k , L in ­
c o ln ; T. L. G reen , v ic e - p r e s id e n t P la t te
V a lle y S ta te B a n k , S c o tts b lu ff.
L egislative Committee
T h e a p p o in tm e n t o f th is v e r y im p o r ta n t
c o m m itt e e w a s d e fe r r e d fo r a s h o r t tim e
b y th e p r e s id e n t and c h a irm a n .

27

N ews o f the

Omaha

Stock Yards

-

Affiliates W ith Northwest Bamcorporation
T3A R T IC U L A R interest is evidenced
by bankers in the Central West,
and particularly by those in the great
Omaha trade territory, in the an­
nouncement made by Ford E. Hovey,
president of the Stock Yards National
Bank of South Omaha, concerning the
affiliation of that institution with the
Northwest Bancorporation, and the
thirty other institutions identified with
the central corporation.
Bankers and business interests in
the Nebraska territory have found ad­
ditional interest in this business trans­
action because the United States Na­
tional Bank of Omaha had already in
July become affiliated with the North­
west Bancorporation so that this most
recent development means that two of
Nebraska’s leading financial institu­
tions, one an outstanding commercial
bank and trust company, the other
long recognized as one of the leading
authorities in matters concerning the
details involved in handling the mar­
keting and financing of middle western
live stock, are now part of the same
bank group. This is particularly true
in view of the fact that South Omaha
is the second largest live stock' market
in the United States.
It is quite apparent that with the
greatly increased facilities and re­
sources resulting from this affiliation
that the Stock Yards National Bank
and its subsidiaries, the South Omaha
Savings Bank and the Cattle Feeders
Loan Company, Inc., which are in­
cluded in the group transaction, will
be in a better than ever position to ex­
tend and broaden its service to Central
Western live stock interests.
Coincident with this announcement
it is made known that there would be
no changes in the personnel of the o f­
ficial force or the directorate, but that
three directors of the Stock Yards Na­
tional Bank, Ford E. Hovey, Presi­
dent, John E. Wagner, Treasurer of
the Cudahy Packing Company, and


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

J. E. Davidson, President of the Ne­
braska Power Company, will become
directors of the Northwest Bancorpo­
ration.
The combined resources of the
Stock Yards National Bank and its
affiliated institutions, the South Oma­
ha Savings Bank and the Cattle Feed­
ers Loan Company, are listed at $13,187,000, with deposits of $9,586,959.

F ord E. H ovey

Following the official announcement
of the affiliation of the Stock Yards
National Bank with the Northwest
Bancorporation interesting statements
were made by J. C. Thompson, vicepresident and general manager of the
Northwest Bancorporation, who was
directly responsible for handling the
successful negotiations, and also by
President Ford Hovey of the Stock
Yards National Bank. Their state­
ments are as follows:

j. C. Thompson said: “ The man­
agement of the Northwest Bancorpo­
ration is enthusiastic over the possi­
bilities offered by the affiliation of the
Stock Yards National Bank with other
leading banks in the Northwest Bancorporation.
“ Livestock is one of the foundation
industries of the northwest. This area
produces the major portion of the live­
stock that is marketed in three great
livestock centers of the northwest, in­
cluding South Omaha, which is the
second largest livestock market in die
United States.
“ When such foundation industries
so necessary to the prosperity of the
northwest, such as livestock, grain and
dairying, can be assured of adequate
financial support when credit is need­
ed, the northwest as a whole will en­
joy a more steady and continuous
prosperity.”
President Ford Hovey said: “ The
Stock Yards National Bank of South
Omaha is a consolidation of two banks
organized in 1887 to finance the live­
stock business centering at the South
Omaha market and caring for the
large financial requirements of the
trade territory tributary to Omaha.
At the start its organizers associated
with them prominent packers such as
Armour & Co., Cudahy Packing Co.,
and these men have continued their
interest and association in the bank
from date of its organization until the
present time.
“ The bank and its affiliated institu­
tions have been an important factor in
financing the great livestock business
in states tributary to this market,
which include Nebraska, Iowa, Colo­
rado, South Dakota, Idaho, Wyoming
and Montana. It is serving a large
number of country banks as their cor­
respondent in Omaha, and through its
connection with these banks has been
able to keep in very close touch with
the livestock and agricultural indus­
try of the territory which it serves.
“ The board of directors includes

Central Western Banker, September, 1929

many outstanding business men of the
middle west and northwest.
“ Herbert G. Black, assistant treasur­
er of Armour & Co. of Chicago, has
been actively interested in the growth
and development of the bank and is
now serving as a member of the board
of directors of the Northwest Bancorporation and is also on the advisory
board of the National Bank of Huron,
South Dakota, which is also a member
of the Northwest Bancorporation.
“ The South Omaha Savings Bank
was organized as an affiliation of the
South Omaha National Bank. In
1911 the South Omaha National Bank
consolidated with the Union Stock
Yards National Bank under the title
of the Stock Yards National Bank of
South Omaha.”

WILL

BE

OUR
MAILED

Officers and directors of the Stock
Yards National Bank at the present
time are: Ford E. Hovey, president;
L. K. Moore, assistant to president;
Jas. B. Owen, vice-president; F. J.
Enerson, vice-president; W. H. Dress­
ier, cashier; H. C. Miller, assist­
ant cashier; C. L. Owen, assistant
cashier; H. A. Hovey, assistant cash­
ier ; T. G. Boggs, auditor; Lester A r­
mour, vice-president Armour & Com­
pany; E. A. Cudahy, chairman of the
board, Cudahy Packing Co.; J. E.
Davidson, president Nebraska Power
C o.; E. F. Folda, banker; R. C. Rowe,
capitalist; Geo. W. Johnston, capital­
ist; W. H. Schellberg, president Union
Stock Yards Co.; E. S. Waterbury,
manager Armour & Co., Omaha;
and John E. Wagner, treasurer, Cud­
ahy Packing Co.

OFFERING
LIST
REGULARLY
UPON

REQUEST

A National Standard
for Short Term Investment
G M A C obligations have been purchased by
a clientele o f nearly 8,000 banks, insurance
companies, institutions and individuals, the
country over. Their rating, os a national stand'
ard for short term investment, reflects estab'
lished public confidence in G M A C prestige.
offered at current discount rates

G eneral M otors
A cceptance C o rpo ration
OFFICES

Executive Office '

CAPITAL,

IN

PRINCIPAL

Broadway at 57 th Street ' ]\[ew T or\ C ity

SURPLUS
OVER

AND UNDIVIDED
$ 6 6 ,000,000

Central Western Banker, September, 1929

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

CITIES

PROFITS

Fewer Cattle on Feed
There are 1(1 per cent less cattle on
feed in Nebraska than a year ago, ac­
cording to the August 1 estimates of
the state and federal division of ag­
ricultural statistics and extension ser­
vice. For the 10 corn belt states there
is an increase of 1 per cent.
Corn belt states east of the Missouri
river have more cattle on feed than a
year ago, but the increases in these
states were almost offset by the mark­
ed decreases in Nebraska and Kansas.
The number of feeder cattle to be
purchased! by corn belt feeders during
the last five months of this year will
be about the same as for the same per­
iod in 1928, if the reports from a large
number of feeders made August 1 as
to their intended purchases this year
are typical. However, there is more
uncertainty as to purchases this year
due to the questionable outcome of the
corn crops and less contracting of
feeder cattle to date. The development
of the corn crops and trends in prices
of both fat and feeding cattle will be
important factors in determining corn
belt purchases of feeder cattle this
year.
Estimates in per cent of the num­
ber of cattle on feed as compared to
last year are as follows :
Nebraska, 90; Kansas, 90; South
Dakota. 105; Missouri, 105; Iowa,
104; Minnesota, 107; Michigan, 102 ;
Illinois, 110; Indiana, 104, and Ohio
107.
Big Money for Calves

Included in receipts one day last
month were a few calves from Pan­
ama, la., that had been prepared by
4-H club boys for the Iowa State Fair
at Des Moines, but crowded out of the
carload lot.
John C. Muell got $14.75 for one
calf and $16 for another, both well
finished Herefords, and Lawrence Olinger got $15.25 for one and $16.25
for another of the calves he fed.
The boys were well pleased with
the prices their calves brought on the
Omaha market.
Breed Averages Increasing

In reply to the criticism of one au­
thor that the dairy breeds have not im­
proved their production with the pres­
ent system of selective breeding, Prof.
W. W. Yapp of the Illinois College of
Agriculture asserts that investigators
of genetics (breeding origin) during
the past 20 years have formulated bas­
ic principles and made specific discov­
eries which can now be applied and
which when followed can increase
breed averages as a whole through se­
lection,

29
Speaking to more than 300 breeders
of purebred Holstein-Friesian cattle
at the Illinois state association meet­
ing, he asserted that breeding tests
with Holsteins and other dairy ani­
mals at the University of Illinois and
in Wisconsin, Maine and Denmark
show that dairy herds can be readily
graded up for milk production, for fat
percentage, for solids such as ash or
protein or for color of milk by keeping
to the newly established breeding prin­
ciples.
Grading up is a 50-50 proposition m
many respects, he finds. True, some
animals do not pass on their good pro­
duction qualities to their young, but
by mating those that do, the produc­
tion in the long run will be half way
between that of the parents.
Five Sets of Exhibits

The Nebraska Dairy Herd Improve­
ment Association, the Agricultural ex­
tension service, and county agents
have prepared five sets of similar edu­
cational exhibits which will be shown
at the county fairs this year. Each set
demonstrates some part of successful
dairy management. They will circulate
in the state and be displayed at nearly
all the county fairs.

Counties in which these exhibits will
be shown include the following ac­
cording to L. K. Crowe, secretary of
the Nebraska Dairy Herd Improve­
ment Association: Johnson, Adams,
Thayer, Cuming, Custer, Valley, An­
telope, Saunders, Deuel, Polk, Hamil­
ton and Phelps. Requests from others
are expected. A schedule has been ar­
ranged and the displays routed to make
the fairs with the least possible trans­
portation costs.
County agents, cow testers, and oth­
ers in charge of arranging county
dairy displays have their choice from
among the five sets of exhibits. It is
expected that additional material will
be supplied to supplement these at the
various fairs.
One set of exhibits demonstrates
feeding and watering dairy calves and
cows. Protein requirements for differ­
ent ages of animals is brought out in
this arrangement. A n o th e r d isp la y
points out the advantages of cow test­
ing to determine whether or not the
dairy herd is yielding a profit to the
owner. “ Who carries the load” is the
caption on one of these displays.

by E. M. Sherman, Charles City, la.,
is the highest 305-day milk producer
of the Jersey breed by 2,167 pounds,
or more than a ton of milk. She won
this world championship with her lat­
est completed official production test
record of 18,047 pounds of milk and
818.19 pounds of butterfat in a 305day test made with calf and starting
when she was 7 years and 1 month of
age. Her yield of butterfat in this test
makes her the sixth highest 305-day
butterfat producer of the Jersey breed
and won the award of an American
Cattle Club Medal of Merit.
In establishing her world’s Jersey
record Tormentor’s Saucy Meg in her
best month of test produced 98.56
pounds of butterfat and 2,205 pounds
of milk. Her production was main­
tained at a very even rate throughout
the 305 days, never falling below 69
pounds of butterfat per month, and
for three months she yielded above
2,000 pounds of milk per month.
The victory of success is half won
when one gains the habit of work.—
Sarah A. Bolton.

A Great Cow

Tormentor’s Saucy Meg, high pro­
ducing pure bred Jersey cow, owned

Quiet clothing oft bespeaks depend­
ability.

CAREFULLY SELECTED BONDS
may be procured thru our

BOND DEPARTMENT
Write Us

LIVE STOCK NATIONAL BANK
Union Stock Yards
OMAHA
W. P. A D K IN S, President

A L V IN
HOW ARD O. W ILSO N , C ashier

R. IT. K R O E G E R , Asst. C ashier


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

E.

JO HNSON,

V ice-President

L. V. P U L L IA M , Asst. Cashier
W. S. H OGUE, Asst. C ashier

Central Western Banker, September, 19^9

30

South Dakota News
W ith Bancorporation

Affiliation of the National Bank of
Huron, South Dakota, with the North­
west Bancorporation of Minneapolis
was announced recently by officials of
Huron’s largest bank.
The local bank has resources in ex­
cess of $3,879,000 and deposits of
more than $3,500,000. The combined
resources of affiliated banks in the cor­
poration are now more than 243 mil­
lion dollars.
The affiiliation will be accomplished
through exchange of stock.
There will be no change in the di­
rectorate or personnel of the Huron
bank.
The National Bank of Huron was
established in 1896 and is the oldest
bank in Huron and the third largest in
South Dakota.
Seek New Bank

A representative of the F ederal
Banking department was in Chamberlain, South Dakota, recently, looking
over the ground to determine if the de­
partment was justified in granting a

charter for a new national bank to be
established there. The department rep­
resentative was getting ail information
possible.
W ith Chicago Bank

Eaton R. Johnson, former head of
the Brookings County, South Dakota,
Bank, has accepted a position with the
Continental Illinois Bank and Trust
Company of Chicago, and will repres­
ent that institution in the state of Mis­
souri, with headquarters at Kansas
City.
Dies in Chicago

J. W. Ohlman, 55, president of the
American State Bank of Yankton,
South Dakota, died in a Chicago hos­
pital recently. Mr. Ohlman, a son of
the late M. P. Ohlman, sr., pioneer
Yankton business man, succeeded his
father as president of the bank.
Afflliate

Affiliation of the F irst N ational
Bank of Rapid City and the Commer­
çai National Bank of Sturgis, South
Dakota, with the twenty-eight other

banks in the Northwest Bancorpora­
tion, was announced by officials recent­
ly. There will be no change in the di­
rectorate or officer personnel of the
banks, but they will have the benefit of
combined resources “ in ex cess o f
$253,000,000,” the announcement said.
A .B .A . Convention Schedule

A preliminary outline program show­
ing the order of meetings for commit­
tees, commissions, sections, divisions,
general sessions and oth er events
scheduled for the American Bankers
Association convention to be held in
San Francisco September 30 to Octo­
ber 3 as issued by W. G. Fitzwilson,
Secretary of the association, indicates
that all phases in the banking field will
be covered. The schedule is as fol­
lows :
Monday, September 30 at the Hotel
St. Francis: Membership Committee,
8:15 a . m . ; Public Relations Commis­
sion, 9 a . m . ; Insurance Committee, 9
a . m . ; State Bank Division Executive
Committee, 9:30 a . m . ; Savings Bank
Division Executive Committee. 9:30
a . m . ; National Bank Division General
Meeting, 9:30 a . m . ; Trust Company
Division Executive Committee, 9:30
a . m . ; Tax Conference, Special Com­
mittee on Section 5219 United States
Revised Statutes and Committee on

m)t

-t h a t ’s a ll
you need
to k n o w /

C liasc R a tio n a l Panfc
of the City of New York
PINE STREET CORNER OF NASSAU

C a p it a l........................................ $
61,000,000.00
Surplus and P ro fits................
79,937,918.04
Deposits (March 27, 1929) 1,048,009,157.21
OFFICERS
Albert H. Wiggin
Chairman o f the Board

John McHugh

Robert L. Clarkson

Chairman o f the E xecu tive Com m ittee

P resident

Vice-Presidents

Carl J. Schmidlapp
Reeve Schley
Henry Ollesheimer
Tames T. Lee
Sherrill Smith
Alfred C. Andrews
Robert I. Barr
George E. Warren
George D. Graves

Frank O. Roe
Harry II. Pond
Samuel S. Campbell
William E. I ake
Charles A. Sackett
Hugh N. Kirkland
James FI. Gannon
William E. Purdy
George II. Saylor

M. Hadden ITowe'l
Joseph C. Rovensky
Rnel W Poor
Edwin A. Lee
Leon H. Johnston
Wm. H. Moorhead
Horace F. Poor
Edward E. Watts
J. Sperry Kane

Vice-President and Cashit

William P. Holly
Second Vice-Presidents

Frederick W. Gehle
Alfred W. Hudson
James L. Miller
Joseph Pu'vei-macher
Franklin H. Gates
Arthur M. Aiken

S. Frederick Telleen
Otis Everett
Harold L. VanKleeck
T. Arthur Pyterman
Ambrose E. Impey
Robert J. Kiesling

Lvnde Selden
Thomas B. Nicho's
George S. Schaeffer
George A. Kinney
George T. Milne, Jr.
Frank M. Totton
Russell C. Irish

Central Western Banker, September, 1929

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

jp

Eppley Hotels are
known throughout
the country for hos­
pitality, courtesy,
service. If it’s an
Eppley Hotel
“ that’s all you need
to know!”

Omaha, Neb. . . . Hotel Fontenelle
Hotel Rome
Hotel Logan, Apartment Hotel
Lincoln, Neb.............. Hotel Lincoln
Hotel Capital
Norfolk, Neb.............. Hotel Norfolk
Council Bluffs, la. . . . Hotel Chieftain
Marshalltown, la. . . Hotel Tallcorn
Cedar Rapids, la........ Hotel Montrose
Sioux City, la............... Hotel Martin
Sioux Falls, S. D. . . Hotel Carpenter
Hotel Cataract

E.C. E P P L E Y , P R E S I D E N T
E X E C U T I V E
O F F I C E S
~
O M A H A

31

Taxation, 9:30 a . m . ; Economic Policy
Commission, 10:30 a . m . ; Commerce
and Marine Commission, 12:15 p . m . ;
Clearinghouse Section Executive Com­
mittee, 12:30 p . m . ; State Secretaries
Section Board of Control, 1:30 p . m . ;
50th Anniversary Committee, 2 p . m . ;
State Legislation Committee and State
Legislative Council, 2:15 p . m . ; Foun­
dation Trustees, 2:30 p . m . ; Clearing­
house Section Managers Conference,
2:30 p . m . ; Trust Company Division
General Meeting, 2:30 p . m . ; Agricul­
tural Commission, 2:30 p . m . ; Public
E d u ca tio n Commission, 3:00 p . m . ;
Federal Legislation Committee and
Federal Legislative Council, 3 :30 p . m . ;
Executive Council, 9 p . m . On call of
chairman the following meetings will
be held : Administrative Committee,
Finance Committee, National Bank
Division Executive Committee ; Speci­
al Committee on Section 5219 United
States Revised Statutes and Resolu­
tions Committee.
Tuesday, October 1 at the Hotel St.
Francis: State Secretaries S ection
General Meeting, 2 p . m . ; Examiners
Conference C le a rin g h ou se Section,
2:30 p . m . ; Savings Bank Division
General Meeting, 2:30 p . m . ; Nominat­
ing Committee, 5 p . m . ; Resolutions
Committee, call of chairman ; subscrip­
tion dinner, National Alumni Associa­
tion American Institute of Banking,

6

P .M .

Wednesday, October 2 at the Hotel
St. Francis: A u d ito r s Conference,
Clearinghouse S e c tio n , 2:30 p . m . ;
State Bank Division General Meeting,
2 :30 p . m . ; Resolutions Committee, call
of chairman ; incoming president’s din­
ner to American Bankers Association
incoming state vice presidents, 6 :30
p .m

.

Thursday, October 3, at the Hotel
St. Francis: Second Meeting Auditors
Conference C le a rin g h o u se Section,
2 :30 p . m . ; Executive Council Meeting,
afternoon or evening, followed by A d­
ministrative C om m ittee. Resolutions
Committee, on call of chairman.
The sessions of the general conven­
tion will be held in the convention hall
the mornings of October 1, 2, 3, open­
ing at 9:45 a . m . each day.
Permanent quarters for special activities will be maintained for the en­
tire convention period in the Hotel St.
Francis as follows: Press headquar­
ters, rooms 270-72-74 ; separate State
Secretaries, rooms 211, 212, 201, 202,
203, 207, 276, 288, 289: State Secre­
taries have no separate headquarters,
room 210; hotel committee and infor­
mation bureau, the hotel lobby; bank
library exhibit, the mezzanine; officers
of the association, registration coun­
ters, golf desk, post office, desk for


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

validation of railroad tickets and pullman reservations, hotel lobby.
No Loose Talker

Two farmers met in town a few
days after a cyclone hit the country­
side.
“ Yes, it did quite a bit of damage
out our way,” said one reflectively.
“ By the way, Hank, was that new
barn of yours injured any?”
The other shifted his wad of chew­
ing tobacco.
“ I can’t say rightly,” he answered
slowly. “ 1 ain’t found it yet.”

A

But Mandy W asn’t

Mandy had been troubled with a
tooth ache for some time before she
got up sufficient courage to go to a
dentist. The moment he touched her
tooth she screamed.
“ What are you making such a noise
fo r?” he demanded. “ Don’t you know
I’m a painless dentist?”
“ Well, sah,” retorted Mandy, “ mebbe yo’ is painless, but Ah isn’t.”

It isn’t where you are that counts;
it’s how far you’ve progressed.

SSISTING banks and bankers
with their investment prob­
lems is one of the major ac­

tivities in our relationship with
correspondents.

Your bank may

wish to avail itself of this service.
It is thorough and experienced.

THE NORTHERN
TRUST COMPANY
Northwest Corner LaSalle and Monroe Streets

C H IC A G O

Central Western Banker, September, 1929

32
Resigns

Reorganized

Elected Cashier

Jn the reorganization of the RussellFarmers State Bank, of Russell, Kan­
sas, H. M. Laing was elected presi­
dent and J. W . Blair, L. W. Banker,
and John G. Deines were elected di­
rectors to succeed M. K. Brundage, C.
A. Johnson and E. M. Wentworth, re­
s’ gned.

O. W. Sage, who has been closing up
the affairs of the First National Bank,
Osborne, Kansas, was recently elected
cashier of the Exchange National at
that place. R. D. Bickneil remains as­
sistant cashier, R. M. Raney is presi­
dent, and O. M. Madison, vice-presi­
dent.

W ith Bond Company

Buys Into Bank

Earl Swofford, for the past five
years assistant cashier at the Exchange
State Bank, Parsons, Kansas, has tak­
en a position with the Parsons office
of W. B. Foshay and Co.

Carth McMillen, cashier of the Peo­
ples State Bank of EeRoy, Kansas,
has purchased stock in the Peoples
State Bank, Coldwater, Kansas, and
become active vice-president there. F.
W. Jacks, from whom he purchased
the stock will remain president of the
bank but devote more time to other in­
terests.

Visits Family

J. PL Sandell, cashier of the Peo­
ples National Bank, Kansas City Kan­
sas, recently visited at Scandia where
he attended the meeting of the Bank
of Scandia, of which he is a director
and also visited his wife and their son
who are spending several weeks with
friends in Scandia.

New Loan Company

United Building & Loan is the name
of a new loan association of Wichita,
Kansas, to be operated under the man­
agement of the Fisher-Moore Invest­
ment Co.

Marion J. Shane, cashier of the
First State Bank, of Argentine, Kan­
sas, resigned recently to engage in the
real estate business. Mr. Shane was
with the bank for over twenty years.
Howard Haines, vice-president, will
probably handle the cashiership.
An Alfalfa Experiment

To find out whether alfalfa pasture
will make cattle bloat or grow fat is
one of the reasons why farmers are
watching a unique experiment at the
a g ricu ltu ra l experiment station at
North Platte. Pasturing steers and
heifers on alfalfa has been practiced
by some Nebraska feeders with satis­
factory results. Others have not been
so successful.
These experimental cattle will rema'n on the alfalfa pasture twentyfour hours every day during the fat­
tening period regardless of weather
conditions. In addition they will re­
ceive a full grain fattening ration.
LeD:oyt and Sons, cattle feeders
near North Platte, Ted Techer of
Parks, Nebraska, and J. W. Rice of
Wilsonville have used this system of
feeding beef cattle. Its greatest advan­
tage is the saving in labor which it
makes possible, they say.

The Banker’s Confidential Market
b a n k in s o u th w e s te r n M is s o u r i t o w n a b o u t 500
p o p u la tio n . Gas, e le c t r ic it y , c it y w a te r , g o o d s c h o o ls , th re e
P r o t e s t a n t c h u rc h e s . S a la r y $2,160 00, v e r y g o o d ‘ ‘sid e lin e s ,”
a t t r a c t iv e e a r n in g s on s to c k . R e q u ir e s $11,500.00 in v e stm e n t.

W liD — 85 to 120 s h a r e s o f th e s t o c k o f o n ly b a n k , ea ste r n
O k la h o m a to w n o f a r o u n d 1,000 p o p u la t io n o ffe r e d at $125
— s u b s t a n t ia lly b o o k v a lu e .
C a r r ie s s a la r y o f $2,400 p er
y e a r, t o g e t h e r w it h w e ll d e v e lo p e d “ sid e lin e s .”

HOD—
c it y o f
s a la r y
q u ire s

ITSA— M a n a g e m e n t o f o n ly b a n k , sm a ll g o o d w e s t e r n M is ­
so u ri t o w n c a r r ie d b y s t o c k o ffe r e d a b o u t b o o k v a lu e. S a la r y
$1,800. R e q u ir e s in v e s tm e n t $10,000.00, w h ic h c o u ld be r e ­
d u ced q u ite m a te r ia lly t h r o u g h d is tr ib u tio n o f la r g e “ u n ­
d iv id e d p ro fits .”

J A A — O n ly

S p le n d id o p e n in g f o r t w o m en, n o r t h e r n O k la h o m a
o v e r t w o th o u s a n d p o p u la tio n , n o t o v e r b a n k e d . G o o d
an d e a r n in g p o w e r.
S to c k r e a s o n a b ly p rice d .
R e­
$35,500.00.

E B E — C o n tr o l c a r r y in g p r e s id e n c y o f o n ly b a n k in g o o d
s o u th w e s te r n I o w a t o w n o f a r o u n d 600 p e o p le o ffe r e d fo r
a b o u t $16,000.00. B a n k s h o w s g o o d e a r n in g p o w e r. S a la ry
an d sid e lin e e a r n in g s a b o u t $2,800.00 p e r y e a r.
B M R — C a s h ie rs h ip o f sm a ll b a n k , a t t r a c t iv e ly lo c a t e d in
su b u r b o f g o o d , sm a ll c ity , h a v in g all m o d e r n c o n v e n ie n c e s .
S a la r y $200.00. R e q u ir e s in v e s tm e n t o f $4,500.00.
H G A — L e a d in g b a n k , w e s t e r n M is s o u r i c o u n t y sea t t o w n d e ­
s ir e s to s e c u r e c a s h ie r w h o h a s th e a b ilit y n e c e s s a r y to s u c ­
c e e d p re s id e n t in a f e w y e a r s .
B a n k ’ s d e p o s it s w e ll o v e r
h a lf-m illio n m a rk . R e q u ir e s in v e s t m e n t o f $21,500.00.

T l ’ B— C a sh ie rs h ip o f g o o d b a n k , m o d e rn , c o u n t y se a t to w n
o f m o re th a n 3,000 p o p u la t io n can be h a d b y a c c e p t a b le
b a n k e r t h r o u g h in v e s t m e n t o f $17,500.00. S a la r y $200.00 p er
m on th . K a n s a s L o c a t io n w ith sp le n d id fu tu re .
M l’ R — O n ly b a n k , g o o d n o r th A r k a n s a s t o w n o f 1,000 p o p u ­
la tio n . G o o d s c h o o ls a n d c h u r c h e s a n d c o n s id e r a b le in d u s ­
tria l p a y ro ll. B a n k h a s $25,000 c a p ita l, u n u s u a lly “ s t r o n g ”
b o a rd o f d ir e c t o r s , an d e a r n e d 20% la s t y e a r .
125 to 165
sh a re s o ffe re d at $155— p r a c t ic a lly “ in v o ic e v a lu e .”
C on­
s e r v a t iv e b a n k e r ca n be s u b s t a n t ia lly “ fin a n c e d ” on th is
p u rch a se .
W l ' A — $11,250 s e c u r e s 75 sh a re s o u t o f 350, c o n s e r v a t iv e ly
m a n a g e d b a n k in W e s te r n M is s o u r i t o w n o f 700 to 800
p o p u la tio n . C a r r ie s m a n a g in g p o s itio n at s a la r y o f $1,800.
B a n k c a p a b le o f e a r n in g m a te r ia lly m o re th a n th e 1 2 y 2 %
d iv id e n d d e c la r e d in 1928. P r ic e a b o u t “ b o o k v a lu e .”
F or Further D ata

(IB P — $13,000.00 b u y s 61 o f th e 100 s h a r e s o f g o o d c e n tra l
K a n s a s b a n k in on e b a n k to w n , t o g e t h e r w it h th e c a s h ie r ’ s
r e sid e n t, w h ic h is v a lu e d a t $2.500.00.
S to c k p r ic e d a b o u t
in v o ic e v a lu e. B a n k has v e r y g o o d e a r n in g h is to r y . S a la r y
$1,800.00. L a r g e c o m m is s io n s fr o m “ sid e lin e s .”
CIS A — A n in v e s tm e n t o f o n ly s e v e n t y -s e v e n h u n d r e d d o l­
la r s w ill p u t y o u in c a s h ie r ’ s p o s itio n in o n ly b a n k in
w e s te r n M is s o u r i t o w n o f a b o u t 250 p o p u la tio n . S a la r y and
c o m m is s io n s a b o u t $1,800.00. V e r y g o o d e a r n in g p o w e r.
IvOS?— $11,000.00 s e c u r e s c o n t r o l o f o n ly b a n k , sm a ll to w n ,
e a st c e n t r a l K a n sa s.
S a la ry , $1,800.00, c o m m is s io n s fr o m
sid e lin e s a b o u t $600.
L C i?— 56 o f th e 150 s h a r e s o f s t o c k s p le n d id b a n k , e a st
c e n t r a l K a n s a s , c a r r y in g c a s h ie r s h ip a t $1,920 o ffe r e d a t
$300.00 p er sh a r e — litt le m o re th a n in v o ic e v a lu e .
V ery
h ig h d iv id e n d r e co r d .
G o o d c o m m is s io n s .
M R A — S p len d id n o r t h w e s t e r n M is s o u r i b a n k — o n ly b a n k in
g o o d , sm a ll t o w n in g o o d a g r ic u lt u r a l t e r r it o r y , w e ll p o s i­
t io n e d as to m a r k e ts . S a la r y $200.00 p e r m on th . H ig h e a r n ­
in g p o w e r on s t o c k a n d u n u s u a lly w e ll d e v e lo p e d “ sid e
lin e s .”
E ith e r 50 p er c e n t or 25 p er c e n t o f b a n k ’ s s t o c k
o ffe r e d a t a p p r o x im a t e ly “ in v o ic e v a lu e .”
E ith e r p u r ch a s e
c a r r ie s m a n a g in g p o s itio n .
M W B — C o n t r o l o f s p le n d id c e n t r a l K a n s a s b a n k h a v in g h ig h
e a r n in g p o w e r o ffe r e d a t $210.00 p e r sh are. B a n k h a s w e ll
o v e r a h a lf-m illio n d o lla r s in d e p o s its a n d is in g o o d litt le
c it y o f o v e r on e t h o u s a n d p o p u la tio n .
P u r c h a s e c a r r ie s
p o s itio n o f p re s id e n t at s a la r y o f $400.00 p er m on th . A n ­
nu al d iv id e n d s on s t o c k o ffe re d a re a b o u t 64,000.00.

On These Or Other Offerings, Address

BANKERS
BROKERAGE COMPANY
(Successor
to the C. C. Jones Investment Company)

919 Baltimore Avenue
Central Western Banker, September, 1929

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

Kansas City, Missouri

33
Savings Are Large

Colorado News
Liquidates

Announcement is made by the comp­
troller of currency in Washington, D.
C , of the voluntary liquidation of the
First National Bank of Ault, Colo.,
which has been absorbed by the Farm­
ers National Bank of Ault. The First
National had capital of $25,000. B. B.
Hemlick and Earl B. McCall of Ault
have been announced as the liquidat­
ing agents.
To Open Branch

B. I. Barnes, cashier of the Com­
monwealth Industrial Bank of Boul­
der, Colorado, was in Longmont re­
cently and announced that this institu­
tion would open a branch office in
Longmont, the location to be announc­
ed later. Robert H. “ Bill” Blum, son
of Sheriff Robert Blum, will have
charge of the Longmont office. The
exact date of opening has not been
definitely decided upon.
Officers and directors of the com­
pany are : Robert V. Blum, president ;
John R. W olff, first vice president ; H.
H. Donnelley, second vice president;
B. I. Barnes, cashier; T. A. McHarg,
Mrs. Robert V. Blum and John M.
White.
Individual Debits

Debits to individual accounts in Col­
orado Springs, Colorado, totaled $15,-

N O W

605,000 for the four weeks ending
June 26, according to the monthly re­
view of the tenth federal reserve dis­
trict made by the Federal Reserve
Bank of Kansas City. For the 26
weeks ending June 26 the total of deb­
its to individual accounts was $97,213,000 .
Building permits issued during the
four weeks numbered 65, the estimat­
ed value being $88,854. The total num­
ber of permits for the 26 weeks was
349 and the estimated value $545,336,
the report shows.

For the first time in the history of
Delta, the savings accounts of the Col­
orado Bank & Trust Company reached
the total of $100,000 recently.
The remark is often heard that peo­
ple nowadays do not save their money
and they spend it before they get it.
However, the splendid showing of this
bank in this department seems to dis­
prove the assertion.
The most remarkable thing about
this new record is that it comes during
the time of year when least expected.
There is less money in circulation now
than at any other time of the year, ow­
ing to the investments for crops, the
returns for which have not been re­
ceived.

Heads Loan Department

Hold Open House

H. D. Dopf, former active head of
the Farmers State Bank of Brule,
Nebraska, is now in charge of the loan
and discount department of the Citi­
zens State Bank of Holyoke, Colorado.
Mr. Dopf has purchased an interest in
this growing institution and will be an
active vice president.

All Englewood, Colorado, was invit­
ed to attend open house at the new
home of the Englewood State Bank,
which was held recently.
The new bank quarters have just
been completed and are up-to-date in
every way. Furnishings thruout have
been built especially for the bank and
are of the most improved construction.
Among the principal features will be
the large vault with its ventilating sys­
tem, the adequate safe deposit facili­
ties and other improvements.
Associated with Mr. Bish in the di­
rect management of the bank are Mrs.
Clara Cameron, cashier, and Howard
Thatcher, assistant cashier. Dr. W. C.
Crysler is vice-president. The hoard of
directors includes Mr. Bish, Dr. Crys­
ler, Mrs. Cameron, E. W . Crysler, H.
V. Moore and J. J. Mackin.

Clearings

Another large increase in the bank
clearings of the five Pueblo, Colorado,
banks was reported by R. G. Dun &
Co., local finance reporters. An in­
crease in excess of $85,000 over the
corresponding period in 1928, was re­
vealed by the report.
Clearings for one week totaled $1,578,062.34 compared with $1,492,00004 for the corresponding period last
year.

R E A D Y

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Savings Bank and Security Trust & Savings Bank, two
jof the.oldest and largest banks in Southern California
J. F. SARTORI
President and Chairman o f the
Executive Committee

The Security-First N a t io n a l is fully
equipped to do every kind o f banking
business, and has branches in 61
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PAUL K . Y O ST , V ice President
52 W a ll Street, N ew Y ork City

New York City


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Federal Reserve Bank of St. Louis

Central Western Banker, September, 1929

34

Wyoming News
.................................................................................................................................................................ir umilimi

State Bank Report

John A. Reed, Wyoming State Bank
Examiner has just received from the
National Association of Supervisors
of State Banks, a report which shows
that over all the nation banking institu­
tions generally are in a healthy state.
“ The capital, deposits, and total re­
sources of our banks are larger than
ever before,” the report states, adding:
“ On March 27, 1929, there was a
total of 25,932 banks, of which 18,357
were state banks and 7,575 national
banks, and in round numbers a total
capital, surplus and undivided profits
of $9,274,341, total deposits of $58,610,581,757, and total resources of
$72,666,752,001. Total deposits of all
banks were $1,896,064,896 above the
previous high record of Feb. 28. 1928.
and total resources $ 3 ,2 2 7 ,2 8 0 ,7 7 7
above resources of that date.
“ On March 27, 1929, in round num­
bers the capital, surplus and undivided
profits of the state banks were $5,573,901,341, and of the national banks $3,700,341,000 showing the capital re­
sources of the state banks to be 50 per
cent in excess of the national banks.
The deposits of the state banks were
$35,737,701,758, and of the national
banks, $22,827,880,000 showing the de­
posits of the state banks 56 per cent in
excess of the national banks. The total
resources of the state banks were $43,644.840 001, and of the national banks,
829.021,912,000, showing the resources
of the national banks.

“ Between March 27, 1929, and Feb.
28, 1928, deposits of the state banks
increased $1,302,266,806, and deposits
of the national banks increased $593,789.000. During1the same period total
resources of the state banks increased
$1,779,055,776, and total resources of
the national banks increased $1,448,225.000.
“ Since June 30, 1919, which was
the date of my first complete state­
ment, capital, surplus and undivided
profits of the state banks have increas­
ed $2,674,238,664, and the national
banks $2,336,836,000. The deposits of
state banks have increased $14,104,879,745, and the national banks $6,948.015.000. Resources of the state
banks increased $17,679,164,165, and
the national banks $8,222,362,000. The
decrease in the number of state banks
totals 2,671. The decrease in the num­
ber of national banks totals 210.
Sells Interest

The major interest of John W. Hay
in the First National Bank of Lara­
mie, Wyoming, has been sold to John
A. Guthrie of Laramie and George J.
Forbes and Mrs. Anna L. Forbes of
Cheyenne.
Guthrie became president o f the
bank, and Forbes succeeded him as
vice president. Hay, a Rock Springs
man, will remain a director and stock­
holder in the concern. Forbes has been
associated with the Stockholders Na­
tional Bank in Cheyenne.

Central Western Banker, September, 1929

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Federal Reserve Bank of St. Louis

Hay purchased the interests of the
late Edward Ivinson, who founded the
bank in 1869.
Postal Savings Deposit

Cashier A. C. Meloney of the Se­
curity State Bank of Basin, Wyoming,
calls attention to the fact that the bank
has been named as a depository for
postal savings funds.
Visits in Rawlins

J. E. Cosgriff, president of the First
National Bank of Rawlins, Wyoming,
and of the Continental National Bank
of Salt Lake City, was a visitor in
Rawlins recently. He was accompani­
ed by Mrs. Cosgriff and two children,
Marion and Walter. They were en
route to Glenwood Springs and Steam­
boat Springs for a vacation outing.
To California

Mrs. Jack Horrocks and daughter,
Edna, have left for Los A n g e le s,
where they expect to spend the next
four months. Mrs. Strombaugh has
taken Miss Horrock’s position at the
First National Bank of Gallup, New
Mexico, during her absence.
Deposits Increase

Bank deposits in Clovis, New Mex­
ico, increased from $1,652,974 on June
30, to $2,/00,000 on July 16, gain of
over $1,000,000 in approximately two
weeks.
Great conflagrations from little mat­
ches grow !
“ Honesty is the best policy” and
there are no premiums.

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Federal Reserve Bank of St. Louis

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Federal Reserve Bank of St. Louis

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