Full text of Central Western Banker : September 1930, Volume 25, No. 9

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Daylight Hold-up Is
Bankers’ Greatest Menace

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First National

I Bank of Omaha

FIRST TRUST COMPANY
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3

Central Western Banker, September, 1930

CEN TRAL W EXTERN RANKER
OMAHA
410 A R TH U R BUILDING
C l iff o r d D e P u y , Publisher

G erald A . S n id e r , A ssociate P ublisher

R. W . M oorh ead , E ditor
L. D. V a n D oran , A ssociate E ditor
F r a n k P. S y m s , 25 W est 45th Street, New Y ork, Vice-President
F r a n k S. L e w is , 840 Lum ber Exchange, Minneapolis
Subscription, 25 cents per cop y ; $2.00 per year. Entered as second-class matter at the Omaha postoffice.

W m . H. M aas , 1221 First National Bank Bldg., Chicago. Vice-P resident

SEPTEMBER, 1930
Voi. 25, No. 9
chants have taken the
T 'H A T TH E service
attitude of disliking to
charge p r o g r a m,
lose a cash sale by rewhich is consistently be­
.fusing to cash a check.
ing pushed by William
The “ rubber check”
B. Hughes, secretary of
artists usually work af­
the Nebraska Bankers’
Seeing Europe Through the Eyes of a Nebraska
ter closing hours of the
Association, is slowly
Banker .........................................................................
4
local bank and are us­
gaining in momentum is
Daylight Hold-up Is Bankers’ Greatest Menace .
5
ually on the way before
very well proven by the
the
worthlessness of
fact that the banks of
When Free Storage Meant No Liability . . .
6
their paper is discovered
Phelps, Gosper, Harlan
How Nebraska Bankers Spend Their Summers .
7
by the unfortunate mer­
and Dawson counties
chant.
Bonds and In v e s tm e n ts ......................................................9
have adopted a whole
Proper
education
s c h e d u l e of service
Insurance
...........................................................................15
among retail merchants
charges effective on and
Nebraska N e w s ............................................................... 19
w o u l d unquestionably
after August 1st, 1930.
save them a great deal
These banks have issued
News of the Omaha S to c k y a rd s .................................. 23
of money, and the local
a printed circular signed
South Dakota N e w s ......................................................... 27
bankers a great deal of
by twenty-two banks of
Colorado N e w s .....................................................................28
annoyance and incon­
these counties announc­
venience.
ing the schedule of
New Mexico N e w s ............................................................... 29
charges that went into
Kansas N e w s ............................................................
30
A L V I N E. JOHNeffect on that date.
SON, vice - presiService charges have
dent of the Live Stock
been in force in most
National Bank of Omaha, and family,
ment recently issued by Walter H.
Iowa banks for some time past, and
have returned from a most enjoyable
Hadlock, state bank examiner, after
the bankers of that state are very well
his return from the annual conven­
pleased with the results so far ob­
vacation among the lakes of Minne­
sota. W e have no record of Mr.
tained. Bankers of Nebraska would
tion of the National Association of
Johnson’s piscatorial achievements,
State Bank Commissioners at Boston.
do well to follow the footsteps of
their neighboring state and plug up
but undoubtedly he has confided these
He said that it was the general sen­
this exasperating leak in their gross
deep secrets to his closer associates.
timent of the convention, at which
revenue.
every state was represented, that the
JO SE P H M UNDIL, assistant cashW e urge all those banks who have
past year has been one of the most
critical in the history of the country,
not as yet installed their service
^ ier of the Clarkson State Bank of
charges to do so at the earliest possi­
but that conditions were gradually
Clarkson, Nebraska, and Miss Flor­
improving.
ble moment and cooperate with the
ence Lindgren of Los Angeles, were
Secretary of the Nebraska Bankers’
married in the Presbyterian church at
Association to this end.
T H E M E RCAN TILE Bank and
Clarkson on July 26, 1930. The new­
Trust Company of Boulder, Colo­
lyweds immediately left by train for
C A M U E L T. CH A PM A N , of Colo­
Los Angeles where their honeymoon
rado, has adopted a most effective
rado Springs, Colorado, member
will be spent. They will make their
slogan and trade mark for use in ad­
of the board of county commissioners,
vertising their thrift campaign. They
future home in Clarkson.
has purchased the interest of Fred D.
are making use of a trade mark illus­
Moberly in the First State Bank of
J T A R R Y C. NICHOLSON , welltrating a squirrel alertly perched upon
Calhan and has been elected a mem­
the limb of a tree energetically push­
known Nebraska banker, is now
ber of the board of directors of that
ing dollars through the entrance of
the Executive Vice-President of the
bank. Mr. Chapman has been one of
his habitation. Underneath are the
Seaboard National Bank, Los An­
the most substantial stockmen and words “ Think! Have M oney!”
geles, California, and cordially invites
farmers in eastern El Paso county for
all his old friends to call on him when
the last thirty years.
T H E SOU TH D A K O T A Bankers
vacationing.
Association has issued a warning
T H E S T A T E OF U T A H has a to its members against the cashing of
P
J. CLAASSEN, President of the
most enviable record in that in the
checks presented to them by stran­
* Farmers
National
Company,
last year it is one of the four states
gers. The “ rubber check” evil is one
Omaha, has written a 42-page book
in the Union that has had no bank
which requires eternal vigilance to
entitled “ Profitable Farm Managefailures. This is according to a state­ successfully combat, for many mer­
( C o n c l u d e d o n P a g e 14)

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Contents

4

Central Western Banker, September, 1930

Seeing Europe
Through the E yes o f
A Nebraska Banker
HE PR E SE N T summer has
been a most interesting one for
M. Weil, president of the Na­
tional Bank of Commerce and the
Commerce Trust Company of Lin­
coln, Nebraska. With his family he
toured a greater portion of Europe,
visiting many places of historical in­
terest, and gaining impressions which
will prove most valuable in the con­
duct of his affairs in Lincoln.
W e are giving below Mr. W eil’s
own story of his trip.

T

T E A V IN G Lincoln on May 30th,
and making a business trip to
New York, on June 6th, accompanied
by my wife, we sailed on the wonder­
ful steamer, lie de France, and land­
ed at Havre June 12th, exactly six
days of the most wonderful ocean
trip.
A special steamer train brought us
to Paris in time for dinner. The fol­
lowing day we started for Saarguemines. This is in Lorraine where the
big coal and ore mines are located and
formerly belonged to Germany. We
made our headquarters at Strassbourg and it was most convenient for
us to travel from there. W e spent a
week around my old home territory
where we found crops and crop con­
ditions most excellent. In fact, bet­
ter than they have been in years. All
kinds of fruit, vegetables, grain, etc.
People in this part of France, as
well as all over France, seem to be

very happy and prosperous and so
especially so, that they want to re­
tain the low value of their franc
which normally was 20c and is now
a fraction under 4c. Everybody has
money and everything that is sold
brings lots of francs and they have
money to spend. Besides, all of these
people are now doing what was never

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B y W . W E IL
President, National Bank of Commerce
Lincoln, Nebraska

done before, having bank accounts
and money in banks, and are invest­
ing their money in their government
securities.
From France, we made the trip to
Switzerland, which is one of the most
beautiful countries we have ever had
the pleasure of visiting. W e spent
some time at Bale and at Berne, where
we took the electric train to Thun and
took an excursion steamer to Interlacken which is a wonderful tourist
city, with fine hotels and parks. Here
we again took the electric train and
climbed up to an elevation of over
11,000 feet and within three hundred
feet of the wonderful Jungfrau top.
On our return, we circled the Wetterhorn which is equally noted for its
glaciers and snow covered peaks. It
was wonderful to make this trip so
high amongst the mountains and yet
feel comfortable, and on our return,
within half an hour, we were where
everything was green and flowers
blooming. It was quite a sight to see.
JJ'ROM there we came to Lucerne
and from Lucerne we took the
train to Vienna, Austria. This is the
beautiful capital city of a former big
empire and now cut up into a small
state. The people here seemed to he
very happy. The shops are full of
merchandise and the tourists keep
them busy. It is a beautiful city to
shop in and they have fine hotels,
wonderful opera houses and parks.
W e had delightful weather all along
this trip. From Vienna we traveled
into Czechoslovakia which is a very
rich farming country and has beauti­
ful cities. People seem very content­
ed and working hard.
W e finally landed at Dresden, Ger­
many, and happened to be there on
Saturday when the last French troops
passed thru their city from German
soil and that night there was a cele­
bration and rejoicing that was a won­
derful sight to see and how well be­

haved and happy the people seemed to
be, not so much having the French
soldiers leave their territory, but that
they were free again amongst them­
selves and were saved the terrific ex­
pense it cost them to maintain these
people on their soil.

Germany is working very hard; the
people are industrious and doing their
level best to meet their obligations
from the war, but money is scarce
with them as it takes too much of
their earnings to pay their taxes so
that their reparations claims can be
met and it seems that sixty years
ahead of them to meet these heavv
taxes is a bigger burden than they are
able to carry and one can’t be sur­
prised that some of these people be­
come discouraged.
Then, there appears to be two
classes of people in Germany. The
working people or the poorer class
and the upper class and it is freely
stated that the aristocrats and mon­
eyed element keep their money in
America and Switzerland to avoid
paying taxes while the laboring men
cannot do this and in many instances
the facts are, is not kept together as
it should be on that account and if
governments could get together and
release Germany of at least a big por­
tion of this reparations money, it is
the general opinion that not only the
condition of Germany would improve
but of all Europe.
'T 'H E CROPS thru all of these terA ritories are the best they have had
in years and we heard no complaints
whatever except there seems to be a
general feeling against America, not
the American people, but against
American politics and that we are
drifting to a socialistic state with our
tariff. Europe will not purchase our

5

Central Western Banker, September, 1930
goods unless they can
commodities in return
be done under our new
iff and if someone has

sell us their
which cannot
excessive tar­
the idea that

it is going to help our agricultural ter­
ritory, they should go to Europe and
see the feeling that exists and efforts
are being made to get along without
American products and in some in­
stances, it is openly a spirit of retalia­
tion along these lines and it is bound

to affect our business industries as
well as our agricultural territory.
The German people are trying their
best to accustom themselves to a re­
publican government but it seems to
them a long ways off and will take
years to bring about the desired re­
sults.
On the whole, we had a very fine
vacation of two months and a won­
derful visit with my family and a
beautiful trip home on the same
steamer and the smoothest sea we
have ever seen for six days, but at
the end, it was a mighty happy land­
ing when we returned to our own
America and especially to Lincoln to
our own dear ones, but one can’t help
but feel that this is a wonderful coun­

try and that there isn’t any place that
looks as good, feels as good and prom­
ises as much as America and the good
State of Nebraska.

The weather was very hot when we
came home, but it was kind to us and
has now moderated and is very com­
fortable and I am again back at my
desk working as usual and very
happy to be at it. Greetings to all
our Nebraska friends.

Daylight Hold-up Is
Bankers’ Greatest Menace
L L J g o t t a b u m r a r 1 didrdt
••I
do de job of sticking up that
A bank.” '
That, in substance, was the invari­
able answer given us by a number of
convicted bank robbers while visiting
one of the largest penal institutions a
short time ago. The judge and jury
treated them unfair, they were merely
innocent bystanders or they got the
wrong man. Their side of the story
back of the bars often invokes the
sympathy of the layman, especially if
a person is softhearted and has given
little thought to the rapidly growing
number of hold-up attacks on banks.
But there is another side to the pic­
ture. It is happening every day in
every section of the country. They
drive up to the curb outside— 5 ban­
dits in a fast car. Armed to the teeth.
Four of them file in and cover the
staff with their guns, while the other
one waits in the car with the engine
running. Something is sure to hap­
pen. Either someone is hurt or money
taken or the bandits are captured.
“ The daylight holdup is the biggest
problem in bank protection today,” ac­
cording to an interview given The
Central Western Banker a few days
ago by H. A. Noble, vice president of
The Diebold Safe & Lock Company,
at their general offices in Canton. He
is one of the foremost authorities on
the subject in the country, and while
by temperament a kindly and humane

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B y W IL L IA M H . M AAS
Vice President, Central Western Banker

gentleman, becomes hardened when
discussing the matter of bank ban­
ditry.
“ The criminal follows the line of
least resistance,” said Mr. Noble. “ He
has turned from burglary to hold-up
because the physical protection of
massive bank vaults has made unprof­
itable the temptation for daylight
hold-up will exist.
“ The results of an investigation of
33 recent bank daylight holdups show :
“ $1,207,650 taken in cash and se­
curities.
“ Eleven people killed outright, sev­
enteen seriously injured.
“ Seventy-one customers covered by
bandits’ guns, thirty-eight robbed.
“ Three cashiers slugged by bandits.
“ 147 bandits actively engaged.”
It is estimated that fully 50,000
people in the LTnited States were tear
gassed last year with perfect safety.
Tear gas has been used to defend
banks and jewelry stores in holdups;
to prevent prison and jail deliveries,
such as the recent Auburn, Rhode Is­
land and Missouri uprisings; to dis­
perse communist and student riots;
and to protect law enforcement offi­
cers.

The non-toxic or non-poisonous gas
has a background of ten years in the
prevention of violence and bloodshed.
It is the product of the Lake Erie
Chemical Company, of which Col. B.
C. Goss is president. Col. Goss is
Chemical Consultant to the Chemical
Warfare Service, U. S. A., and as
Reserve Officer, is assigned to the o f­
fice of the Assistant Secretary of
War. He was in every big battle in
which Americans took part from Chateau-Thierry to the attack of the Sec­
ond Army on the tenth of November,
1918. He drew up the plan for gas
and smoke operations in the Argonne
fight.
In support of the tear gas idea, Col.
Goss lists the following reasons for its
application with the bank:
“ It discourages holdup attacks. It
defeats attempted holdup attacks. Be­
fore the bandit can complete his raid,
the gas has the situation in hand. It
saves life. The bandit is gassed be­
fore he can pull a trigger. It is as
harmless as salt water, except for the
copious tears it produces for a period
of fifteen minutes to a half hour. It
cannot be accidentally discharged. It
is an electrically controlled, closed cir­
cuit system requiring two positive
contacts to discharge the gas. It is
positive since any member of the staff
may release the gas from any point in
the bank. It materially reduces hold­
up insurance rates.”

6

Central Western Banker, September, 1930

When Free Storage
Meant No Liability
HE C A SH IER of the Regal
Bank tapped the top of the
glass-topped desk thoughtfully,
and listened to Arthur Hunt’s recital
of his financial status.
“ I ’ve got about $20,000 on deposit
here, about half as much in good
sound bonds, and that’s one of the
things I called to see you about,”
Hunt explained.
“ I bought the bonds as a safe stand­
by for a rainy day, but I never know
when I ’ll want to use them as security
for a loan, so they are all payable to
bearer.”
“ Where are they?” the cashier
asked.
“ In my safe at the office, but I don’t
feel easy about them. Any live bur­
glar, I imagine, could open it in less
than half an hour.”
“ I am sorry that we have no regu­
lar safety deposit department in con­
nection with our bank,” the cashier
replied. “ I ’ve urged our directors to
establish something along that line,
especially since so many of our de­
positors own bonds, but I never could
make it go.”
“ I was brought up in the country
and a safety deposit box doesn’t ap­
peal to me— too much red tape con­
nected with it,” Hunt said, “ but you
have your own vaults at the bank, and
they are certainly safe enough. It oc­
curred to me that I might arrange to
leave the bonds at the bank to be kept
in the same way as you keep your
own securities.”
“ W e’d certainly be glad to do that,
and you can leave them with me and
I ’ll see that they’re taken care o f.”
“ That’ll be very satisfactory, and
I ’ll be particular to have them at the
bank this afternoon before it closes,”
declared Hunt. “ O f course, I am
perfectly willing to pay the same as
I ’d pay for a deposit box in a big city
bank. I feel safer with the bonds in
your vault, and it is far more con­
venient.”
“ Y ou’ll do nothing of the kind,” re­
torted the cashier. “ When a customer
has a credit of over $20,000 on de­
posit we can afford to give him vault
space for a few private papers with­
out making him pay anything.”

T

'T 'H R E E months later the local daily
1 carried the following front - page
news item:

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By M . L. H A Y W A R D
“ The wide distribution of Liberty
Bonds and similar securities during
the past year, mostly payable to bear­
er, has led to a marked increased ac­
tivity on the part of the professional
burglars, and last night a gang of ex­
pert crooks gained access to the Regal
Bank, blew open the vault and got

“ The law is that if one party
deposits property with another for
safe keeping and does not pay the
receiving party for doing so, the
party receiving the property is not
liable for its loss or for causes
not due to his own fault or neg­
lect.”

away with a big haul. The most re­
liable information which we can ob­
tain shows that they did not get more
than $5,000 or $6,000 in cash and se­
curities belonging to the bank, but
that they did get about $75,000 in
bearer bonds, which had been left with
the bank for safe keeping by one of
the customers, whose name the bank
refuses to divulge. The criminals
made a very clean getaway, and, while
the local police are working on the
case, they admit that it looks rather
hopeless as the burglars left no clue
whatever to work on. Mr. John Han­
son, one of our leading citizens, who
had considerable experience on the
western frontier in the wild days, has
organized a posse ‘of his own.’ and is
confident that he can run down the
culprits— but the result remains to be
seen. Personally, we fear that times
have changed too materially since Mr.
Hanson’s success in rounding up
horse thieves and stage-coach ban­
dits.”
“ I don’t suppose there’s anything
new from the police?” asked the pres­
ident of the Regal Bank, when the
directors met in special session the
evening following the “ break.”
“ I just left the chief’s office, and
he admitted frankly that he had no
news and very little hope,” replied the
cashier. “ He says that the break was
the work of experts, and they’ve cov­
ered their tracks completely. Say’s

he’s out of his class entirely when he
tries to match wits with ’em. O f
course, he’s wired to the police all
over the country, but that doesn’t cut
much ice. If they could get in here
and make a haul like that and get out
again without leaving a single clue
behind, it’s mighty easy for them to
hide now.”
“ No word from Hanson, I sup­
pose?”
“ None at all,” was the reply. “ I
saw him and his crowd when they
started, and he was wild and profane.
I think he was partly pleased in a
way, for it gives him a chance to pull
off some o f his western stunts. He
had about twenty men, and five or six
old Ford cars, and he was leading
them on horseback.”
“ Well, that may be true, but at any
rate he is financing his own expedi­
tion without any expense to the bank,”
the careful director pointed out.
“ By the time we’ve made good Mr.
Hunt’s bonds and added it to our di­
rect loss, I don’t think the question
of expense will bother us very much—
it’ll be a question of calling in the
Bank Examiner to report on our sol­
vency,” declared the president, bit­
terly.
“ I don’t suppose there’s any doubt
at all about the bank being in the hole
and liable to make good the loss,”
the vice-president suggested quietly.
“ How could there be?” snapped the
president. “ Hunt left the bonds with
us for safe-keeping. W e had no claim
on them as we were bound to hand
them over whenever he called for
them. If we can’t show up the bonds
we’ve got to produce the cash value.
That’s only plain commonsense.”
“ It may be very common sense, and
as plain as your face, but is it the
law?” persisted the vice-president.
“ Director Montgomery is a lawyer
— why not ask him?” somebody sug­
gested.
“ If you want my opinion I’ll give it
quick enough,” Montgomery assured
them.
“ Sure— that’s what we’re after.”
“ How much did Hunt pay for the
privilege of storing the bonds in the
bank vaults?” Montgomery demanded.
“ He didn’t pay us a cent, as I told
him the bank’d be glad to keep them
for him as long as he liked without
(C o n tin u e d on P a g e 21)

7

Central Western Banker, September, 1930

(]Co\Y c5\(^ebraska ja n k e r s

expend ^ h e ir eiummers
TL_T

J. W RAG G E, the complacent
* gentleman in picture Number
One, makes no lament for the burden
he bears. And we don’t blame him,
for he is supporting enough brain
food to supply a good sized family for
quite some time. When not fishing,
Wragge may be found at the First
National Bank of Tekamah, Nebras­
ka, where he is cashier.

tentment as is evidenced by the faces
of the four occupants of picture Num­
ber Two. Reading from left to right,
top ro w : Betty Lou and Swanson
himself; front row, seated: Tabby
and the well-trained pup. We are
sorry Swanson did not call in one of
the neighbors to act as photographer
as we would have liked to include
Mrs. Swanson in the view.

\ S J E ASK ED L. C. Farwell, cashier
of the State Bank of Du Bois,
for a vacation picture of himself and
he sent us this close-up of Mr. Bruin.
However, Farwell is in the picture,—
the gentleman in the white shirt. The
chap with the Bobby Jones stance and
the one armed with white galluses are
unknown to us.

A
E. SW A N SO N , cashier of the
1 ' First State Bank at Gothenberg,
Nebr.. considers himself most unfor­
tunate in that he is unable, this year,
to spend his customary vacation in the
mountains. W e disagree with him.
Every day is a vacation, spent in the
environs of such happiness and con­

JJMGHTEEN beauties, so heavy it
takes a board fence, heavily
guyed, to support them. R. H. Holsten, of the Farmers State Bank,
Dodge, Nebraska, is to be congratu­
lated on his ability with rod and fly.
Nice, cool, shady background, isn’t
it?

M.


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E. ISAACSON , of the First
’ National Bank. Marquette, en­
joys a lofty view of things. That
screened-in porch certainly is high
enough to catch any vagrant breeze
that might blow. Wonder what the
view is like from up there?

8


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Central Western Banker, September, 1930

The Time To B uy
Guaranteed Bonds
Bond prices probably will continue to advance as
improved conditions appear and develop.
The time is opportune fo r Bankers and Security
Dealers to make connection to distribute Surety
Guaranteed 6% First Mortgage Bonds, as offering
complete safety and high income.
Bonds underwritten by us bear 6% interest and are
jointly guaranteed by two old-line surety companies
who have been approved by the United States Treas­
ury Department as sureties on Federal bonds.
The guarantee of the surety companies appears di­
rectly on each bond and is a binding obligation on
their part that protects the bondholder at all times
and assures him that interest and principal will be
paid when due.
We shall be pleased to send offering circulars and
other data descriptive of this high grade type of
investment.

Provident State Securities Company
134 North LaSalle Street

CHICAGO,

ILLINOIS

9

Central Western Banker, September, 1930

Fundamentals of
Sound Bank Investing
B y E. T . S L O A N
Statistician, Peoples-Pittsburgh Trust Co.
Pittsburgh, Pennsylvania

IFE insurance companies are the
largest individual buyers of
J bonds and each company main­
tains a very elaborate organization to
handle its purchases. Each depart­
ment, Government, Railroad, Utility.
Municipal, and Industrial is in charge
of a specialist, with a general buyer
in charge of all. A legal department
is maintained to study and approve
indentures, and most elaborate statis­
tical files are kept. Why do they do
it? So that they will know what they
are buying and be able to follow what
they have bought. If bank investing
could be handled in the same way as
insurance company buying, there
would be far less grief than there is
today. Obviously that would be im­
possible, but the individual bank can
follow to a certain extent the funda­
mentals which the life insurance com­
panies have adopted.
Every bank has three primary du­
ties; (a) to meet the demands of its
depositors; (b ) to supply credit lo­
cally, when needed; (c) to earn divi­
dends for its stockholders. A good
secondary reserve is the one best
means to all three ends. It is obvious
that if all its funds were employed
locally, it might not be able to meet
its depositors’ demands without un­
due hardship to its borrowers, and
for that reason a good percentage, and
I think most authorities agree that a
minimum of 25% of the bank’s total
assets should be kept in this liquid
reserve. This may be in the form of
call loans in New York, outside com­
mercial paper, or securities. Here
the personal element is not present
and the officers of the bank can oper­
ate the fund to suit their require­
ments. It is the part of this fund
invested in securities with which we
are particularly interested.

L


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Federal Reserve Bank of St. Louis

'T 'H E FIRST fundamental of bank
1 investing is to adopt a buying pol­
icy. Many banks still adhere to the
theory that no investment should be
purchased without approval of the
board. What is the result? Those
banks rarely get the bargains. New
issues such as American Telephone
and Telegraph 5s, Western Union
Telegraph 5s, Texas Corporation 5s
and others, offered at very attractive
VI i 111111111*11111}11111•]11111111111111111111111111111111111111i 11111111111111111111111111111111111111111111111111111111111111II11111111

“ Every bank has three pri| tnary duties:
(a) To meet the demands of
its depositors;
(b) To supply credit locally,
when needed;
(c) To earn dividends for its
stockholders.
\ A good secondary reserve is the
\ one best means to all three ends.”

|
\
\
\
|
\
|

Ti 11111111111111111111111111111111111111111111111111111111111111111111111:1111111i111111■1111111111111111111111■11111111111111111' 111<111iv

prices, were absorbed very quickly
and were selling at a substantial pre­
mium before those banks could act.
Every bank should have at least one
officer who is authorized to buy or sell
securities and whose principal duty
is to follow the investment account.
He should study securities, know in­
vestment values, and be able to decide
when one bond is attractive and when
another bond is not, when to buy a
well secured inactive bond to bring
up his average yield and when to
confine his purchases to short matur­
ities. To acquire this knowledge re­
quires constant application and effort,
through study of security markets,
commodity markets and i n t e r e s t
trends, as well as trends of industries
and world wide credit conditions.
The proper man having been se­
lected and given the necessary author­
ity, the second fundamental is to form
an investment program to meet the
bank’s requirements of security and
liquidity. The question of security is

a matter which must be determined
to suit' the board of directors. Some
boards insist on very high standards
and others will allow a wider range
with correspondingly greater income.
A bank having 60% of its deposits on
time and narrow fluctuations in its
demand deposits does not need as
large a percentage of very liquid se­
curities as the one with a heavy per­
centage of demand deposits and sharp
variations. One may have heavy sea­
sonal demands for loans, another very
uniform demands.
These factors
must be taken into account when
forming a program. A good method
of determining seasonal swings is to
make a chart of deposits and loans
by months, for several years past.
This will show seasonal withdrawals
and demands for loans.
The degree of security and liquid­
ity determined, it is then necessary to
decide on the diversification by groups
and maturities. Then per cent U. S.
Governments, 20% Railroads, 30%
Utilities, 30% Industrials, and 10-%
Foreign is considered a good distribu­
tion. It is now necessary to go a step
farther and divide the rails and foreigns geographically, the utilities and
industrials geographically and by in­
dustries, always bearing in mind that
you should never place more than 2%
or 3% of the list in any one company,
nor over 10% in any one industry,
except Railroads.
W e have now come to the question
of maturities. I believe every list
should have at least 20% maturing
within five years and another 20%
between five and ten years, leaving
60% for long terms. The long term
ratio should be scaled down material­
ly during periods of high prices and
the shorter maturities increased. Un­
der normal conditions short term in­
vestments return a smaller yield than
long term, but as a matter of insur­
ance it is well to carry some short
term securities as protection against
demands for funds when interest rates

10

Central Western Banker, September, 1930

are advancing and prices declining.
A small change in price makes such
a large difference in yield, that they
do not fluctuate a great deal and are
readily salable without undue sacri­
fice.
When you have determined your
program, do not be discouraged if
you find it is going to take you sev­
eral years to work it ou t; it probably
will. By taking advantage of market
strength in the issues you want to
sell, selling others at profits to aver­
age the losses, and only buying to fit
your program, you will work it out in
time.

H A V IN G

selected the man and
fixed the program, let us discuss

some of the things he should do. The
first and most important is to make
up his mind that lie is going to buy
bonds, buy only those which fit into
the program, and not have bonds sold
to him. I know of actual cases where
a salesman has gone into a bank, not
once but several times, and sold the
cashier $5,000 each of issues the
names of which the cashier had never
heard before, and I doubt if he could
have remembered them afterward had
the salesman failed to leave circulars.
He should know what he is buying
and be sure that the price is right.
When considering a new issue he
should check the market record of
outstanding issues of the same com­
pany to see if the price has been run

F e d e ra l Land B an k
Bonds
E SP E C IA L L Y A T T R A C T IV E AT THIS TIME

Under date of August 16th, Standard Statistics Com­
pany issued a bulletin on the Federal Land Bank situation
and we quote from them in part, as follows:
“ No one has ever seriously questioned that each
maturity of these bonds and their interest pay­
ments would be met when due. If the System is to
continue, it is obvious that bond issues will always
be taken care of through refinancing.
“We believe that Federal Land Bank Bonds are
selling very considerably ‘out of line,’ due largely to
an exaggerated idea as to the probable effects upon
the banks of the present agricultural situation and
failure to realize the ability of the System to raise
cash without calling upon Congress for aid provid­
ed even that the results of the agricultural crisis
were as bad as could possibly be expected.
“We recommend the purchase of all of these tax
exempt bonds. We regard them as particularly
attractive from the standpoint of yield and also
feel that the 4% to 41/4% bonds may be counted
upon to show much better than average apprecia­
tion if the advance in the general bond market,
which we have been counting upon, develops.”
Ask us for quotations

SMITH, LANDERYOU & CO


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Federal Reserve Bank of St. Louis

210 Farnam Building,
Omaha, Nebraska
Phone Ja. 5 0 6 5

up on the old ones to make the new
look attractive. If it appears that it
has: beware! If there are no other
issues of the same bond, compare the
bond for quality and price with sea­
soned issues; if it is favorable, but it.
Frequently large issues are offered
which are not well received. When
you see the same issue on a number
of lists some time after the offering
has been made, take it as a danger
signal. The issue is a sticker. There
was an example of this recently. A
strong syndicate offered a large issue
of 5% bonds at a medium price.
Every dealer had a good supply of
bonds, then with a sign of strength in
the bond market the price advanced a
point on the New York Curb. Dur­
ing the few days that the market was
above the issue price there must have
been twenty salesmen call me to offer
bonds at the list price, less the bank
discount of one quarter per cent. Each
one had the same story. “ Just a few
left on the list and we would be will­
ing to clean them up at the original
price.” It was not long until the syn­
dicate closed and the bonds broke a
couple of points below the offering
price. Don’t think that a slight ad­
vance in public quotations means that
the issue has been successful; it is
very often done purposely.
If you set up the list of securities
in convenient form, by groups, show­
ing the name, maturity and carrying
price, so that it can be reviewed and
appraised frequently without loss of
time, you will be surprised to find how
many profit opportunities there are
and this is the best way to find them.
In the railroad and utility groups you
will often see a few bonds selling ma­
terially above the level of correspond­
ing issues. It is generally caused by
some institution or large buyer round­
ing out a block and willing to pay a
good price to do so. As soon as his
order is filled the price sags again, and
the fellow who watches his list and
sold his bonds has profited. In the
industrial and foreign issues, many
good opportunities are afforded by
sinking fund operations. Most of
these types have a sinking fund pro­
vision requiring the retirement of a
certain amount each year and which
permits purchase in the open market.
Some operators of these funds pick
up bonds during weak markets and
hold them, others are either not so
sensible or do not want to use the
funds until necessary. I had a pe­
culiar example of the opportunities
sinking fund operations offer about a
year ago. A 5% industrial bond was
selling from 103 to 104, which was
far out of line, and yet very few
bonds were being sold. This aroused
my suspicions and upon investigation


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Federal Reserve Bank of St. Louis

12

Central Western Banker, September, 1930

I discovered that a large number of
these bonds must be tendered to the
trustee on April 1, or the necessary
amount drawn by lot at 105. I waited
until March 30 and then called the
treasurer of the company, offering
him bonds at the callable price. He
called me in an hour and said he
would take a part of them.
This
showed he needed bonds badly. 1
said, all or none. After a few mo­
ments of skirmishing, he agreed to
take them provided delivery would be
made at the office of the trustee be­
fore 3 o ’clock the next day. Within
two weeks odd bonds were selling at
101.
V \ /'H E N E V E R an issue is offered
which you know you should buy,
do not let it pass for lack of funds. If

W ILL

BE

OUR
MAI LED

you are not in position to increase the
investment account, buy some of the
bonds and then go over your list to
determine what you should sell, and
do not always look for something you
can sell at a profit. Exchanges, if
properly handled, are very advantage­
ous and it should always be your aim
to strengthen the list whenever you
make a trade. Every list has some
issues which should be worked out,
either because they are undesirable
holdings or do not fit into the pro­
gram. It is this type which should
be traded, and not the best of the list
merely because it can be sold at a
profit. Profits are very nice, but they
are the fourth consideration in any
account. Do not be one of the many
who disregard the first fundamentals
of an investment : safety and market-

OFFERI NG LIST
REGULARLY UPON

REQUEST

G M A C obligations
en joy the protective background o f highly
liquid assets, with credit factors widely diver­
sified in region and enterprise. Long regarded as
a national standard for short term investment,
they have been purchased by individuals, institu­
tions and thousands of banks the country over.
available in convenient maturities and
denominations at current discount rates

G e n e r a l M otors
A c c epta n c e C o r po r a tio n
OFFICES

IN

P R I N C I P A L

Executive Office ' B R O ADW AY a t

CAPITAL,

weitst


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Federal Reserve Bank of St. Louis

57

t h

CITIES

STR EET

-

J^ew T or\ City

S UR P L US AND U N D I V I D E D
OVER $8 0,000,00 0

PROFITS

ability, in order to show a profit or
greater yield. A good question to ask
yourself, when considering an ex­
change is : “ Am 1 getting as good as
I am giving up?” If you are satis­
fied on that point, then figure out
where you will gain. Will it be greater
degree of safety, marketability, in­
come, callable feature or maturity?
Check these points over, and if you
are not gaining one of them without
sacrifice, don’t make the exchange. I
venture to say, and I base it on ob­
servations of exchanges I have known,
and judging from exchanges suggest­
ed to me by enterprising salesmen,
that at least 75% are made entirely
for the other fellow’s benefit. You
must realize that every exchange sug­
gested to you, if it is made, will be
profitable to the other fellow.
It
should also be advantageous to you.
Some very successful bond sales­
men who have the confidence of cer­
tain bank officers are constantly
watching market changes so that they
can trade out bonds which have had
a slight advance, and substitute a new
issue. One case of this comes to mind.
A banker in a small town had never
kept his account very active. Early
in 1926 a salesman persuaded him to
do some trading. The market was
advancing and during the next two
years he bought about four hundred
bonds, while his list never exceeded
three hundred thousand. Each trade
he made cost him a certain degree of
quality, because he wanted to keep
the rate up to his 1925 return. In
February, 1928, the bank examiners
came to his bank and found an assort­
ment of real estate issues, medium
grade foreign and slow industrials, a
number of which could not be readily
appraised. During the period of ac­
tive trading the undivided profits ac­
count grew rapidly, but to follow the
bank examiner’s recommendations it
was necessary for him to take sub­
stantial losses, which wiped out his
entire profits and even resulted in
charges against surplus. He was so
anxious to report profitable sales to
his board that he utterly disregarded
the first rule of trading, which can be
put into four words, “ Trade like tor
like.”
rP H E R E is another point which
A many bankers overlook. Idle funds
earn nothing but the rate allowed by
correspondent banks, yet there are
bankers all over the country who do
not bend every effort to make each
dollar work full time. You must pay
interest on deposits from the time
you receive them and it is essential
that you make that money pay for its
keep. How many of you have kept

13

Central Western Banker, September, 1930
surplus money and not taken the trou­
ble to find a suitable investment for
it? You should do the same as your
correspondent bank. Get busy and
buy something that will pay you bet­
ter than the rate allowed on balance;
don’t wait until a salesman comes
along to sell you something. If you
do, it is an even bet that you will buy
a new issue which will not be ready
for delivery for two or three weeks
and what is the result? You pay ac­
crued interest at the coupon rate, sup­
pose it is 5% , until the bonds are
ready for delivery, which we will say
is twenty days, while you are receiv­
ing only 3% on balance. The differ­
ence between the 5% you pay and
the 3% you receive on a $10,000
transaction would be equal to the in­
terest on over $1,100 for sixty days at
6% . Suppose you sold those ten bonds
at the same price at the end of one
month, how much interest would you
have earned? A little more than 4%
on a 5% bond. The answer is: when
you have funds, invest them.
Permit me to mention another
point: the callable feature. In times
of high rates and low bond prices,
callable and non-callable bonds will
sell on pretty much the same basis,
and when they do, but the non-calla­
ble even at a slightly lower basis if
necessary. Let me give you an illus­
tration of this. In March, 1929, a
banker asked me which issue to buy,
Southern Railway 6s or Northern Pa­
cific 6s. They were selling within a
half point of each other, between 110
and 111. I told him to buy the South­
ern Railway 6s, as they were noncallable, while the Northern Pacific 6s
were callable in 1936 at 110. He did.
and early in December, needing holi­
day cash, sold them at 119; the North­
ern Pacific 6s were 112 at that time.
Buying the non-callable bond gave
him nearly 13% on his investment,
against a possible 7% on the callable
bond.
Tax-free income is another point
which every buyer should keep in
mind. A majority of members of the
Federal Reserve system carry a cer­
tain amount of U. S. Governments
and those who do not, should. The
non-members also carry a certain
amount of Municipal bonds for re­
serve purposes. All of these are tax
exempt. State banks and trust com­
panies can increase their tax exempt
income by a judicious selection of
high grade preferred and guaranteed
stocks. In today’s market you can
buy United Gas Improvement 5%
Preferred, Duquesne Light 5% Pre­
ferred, and Consolidated Gas o f New
York 5% Preferred to yield about
4.90%, U. S. Steel 7% Preferred and
International Harvester 7% Pre­

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Federal Reserve Bank of St. Louis

and many of them are non-cancellable.
Now suppose you have a net income
from operations of $50,000. If none
of it is tax exempt you pay 11% or
$5,500, in Federal taxes, leaving $44,500 for your stockholders. Yet if
you arranged your program so that
you had a tax-exempt income equal
to your net earnings, your stockhold­
ers would have the full $50,000. If

ferred about 4.80%, Atchison Pre­
ferred and Union Pacific Preferred
about 4.70%. I would be glad to have
someone show me bonds giving these
returns, which offer better investment
value, yet the income from these
stocks is exempt from the 11% Fed­
eral tax. They are all legal for life
insurance companies in New York,
which assures a very ready market,

Financing Agriculture’s
Intermediate Credit Needs
Since their organization under Act of Congress in 1923, the twelve regional

Fed eral Interm ed iate Credit Banks
have loaned over

$ 5 0 0 ,0 0 0 ,0 0 0 to cooperative marketing associations
and

$ 4 8 0 ,0 0 0 ,0 0 0 to discounting institutions
the money being used for agricultural purposes.

M ake Two Types of Loan
The 12 banks have loaned to 92 farmers’ cooperative marketing associa­
tions with more than a million members upon warehouse receipts, represent­
ing about a score of staple agricultural commodities. The largest loans
have been upon cotton, wheat, wool, tobacco and canned fruits and vege­
tables. Practically all warehouses are state or federally licensed and the
law permits loans not exceeding 75 % of the current market value of the
products.
Nearly 700 financial institutions have availed themselves through discounts
of this medium of credit for agricultural purposes.

FEDERAL INTERMEDIATE CREDIT BANKS
S p rin g fie ld , M a s s .
N ew O rle a n s, L a .
S t . P a u l, M inn.
H o u sto n , T e x .

B a ltim o re , M d.
L o u isv ille , Ky.
O m aha, N ebr.
B e rk e le y , C a l.

C o lum b ia, S . C .
S t . L o u is, M o.
W ich ita , K a n .
S p o k a n e , W a sh .

C harles R. Dunn, Fiscal Agent
31 Nassau Street

New York City

CALL US FOR Q U O TA TIO N S ON A L L R E A L E STA TE
BONDS
CODES
P IE R C E
W E S T E R N U N IO N

TELEPHONE
C E N T R A L 5564
ALL DEPARTM ENTS

H . S
I

m

i t h

8 c C o m p a n y

n v e s t m e n t
B A N K E R S

B o x n s

B U IL D IN G

C H IC A G O , IL L IN O IS

W e have hundreds of Buy and Sell Orders for Listed and Unlisted
Bonds.
W e maintain the largest Trading Department on Unlisted First Mort­
gage Real Estate Bonds in the Middlewest.
(S E N D F O R O U R L I S T O F C U R R E N T O F F E R IN G S O F D IS C O U N T B O N D S )

14

Central Western Banker, September, 1930

you look over your lists I am sure
you can find a place for stocks of this
type.
GOOD selection of convertible
or other special privilege bonds
is very desirable, and if wisely chosen,
will prove profitable. Bonds of this
type should only be bought on an in­
vestment basis.
By that I mean,
sound from the standpoint of security
and where the possibilities of profit
warrant taking a slightly lower return
than may be had from issues of equal
grade without special features. There
are three things to consider when pur­
chasing bonds of this type: first and
always, security; second, return; and
finally, the possibilities of profit. Last

year there were three very choice is­
sues offered to stockholders, Ameri­
can Telephone and Telegraph Converible 4 y 2s, Atchison, Topeka and
Santa Fe Convertible 4]/2s and South­
ern Pacific 4y2s with warrants. From
a security standpoint there was very
little choice, the coupon rate was the
same, but the special privilege varied.
The American Telephone 4 y 2s may
be converted into 10 shares of stock
on payment of $80 per share, and for
that reason have point for point with
the stock, the Atchison 4 y2s into 6
shares of Common Stock, therefore
not fluctuating so widely. The South­
ern Pacific 4y2s have a warrant to
purchase 3 shares of stock at a rather
fancy price. The first two issues

proved very profitable to early buyers,
while the last broke five points when
the syndicate closed. It is necessary
to keep all three features in mind.
Bond buying is like buying mer­
chandise. There are good buyers and
poor buyers. In the bond field there
are three types: some who will buy
only the very highest grade and ac­
cept the correspondingly low return
— this is fine for the depositors, but
not so good for the stockholders;
others who buy nothing yielding less
than 6 % ,— this is not so good for
either depositors or stockholders and
has been the cause of a great deal of
trouble to the banking department. O f
the two, the former is much to be
preferred. The third is the one who
strives for a fair average return, and
this can only be accomplished by ad­
hering to a definite program and buy­
ing bonds.

LA ST M IN U TE N E W S
(C o n tin u e d fr o m P a g e 3)

ment and Sale.” Mr. Claassen is well
qualified to write on this subject and
the book is a very readable contribu­
tion on a very timely topic.

65,000,000 sales a day
TELEPH ON E income is based
primarily on sales of small
units of service'— each one
made to order— and 65,000,000 orders are handled a day.
These sales are going on
continuously, so that the plant
is never idle.
In the aggregate, net earn­
ings of the Bell System, made
up of little increments, amount
to more than four times inter­
est charges. Telephone reve­
nues grow as the use of the
telephone grows.
One reason for increased


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Federal Reserve Bank of St. Louis

BELL

f AU REN CE W IL L IA M S , cashier
of the Prosser State Bank at
Prosser, Nebraska, spent a most en­
joyable two-weeks vacation in the
mountains around Denver and Colo­
rado Springs.

use of the telephone is that the
Bell System has consistently
applied large sums to broaden­
ing the service. During the
next five years more than
$2,000,000,000 will be de­
voted to construction and im­
provements, anticipating and
encouraging still greater use.
In the Bell System far­
sighted m anagem ent goes
sh ou ld er-to-sh ou ld er with
conservative financial policy.

A. H ALL, cashier of the W il* sonville State Bank, Wilsonville,
Nebraska, took his family to Boul­
der, Colorado, early in August for a
vacation trip. He has confessed that
he walked up Flag Staff Mountain
and that it was some pull. Charles is
Scotch in blood lines and since there
is an admirable highway up Flag
Staff, it is believed that his ancestral
instincts convinced him that the wear
and tear on shoe leather represented a
smaller financial investment than gas
for his car.

M a y w e sen d you a copy o f
ou r booklet “ B ell Telephone
S ecu rities” ?

Out of Sight

,

TELEPHONE

SECURITIES

CO . Inc..

195 Broadway, N ew York City

A certain New York restaurant
man may be given credit for a rather
novel window display. This man
didn’t have much money for advertis­
ing, so he bought the biggest fish bowl
he could get hold of, filled it with wa­
ter, and put it in the window with this
sign:
‘‘Filled with invisible goldfish from
Argentine.”
It took 17 policemen to handle the
crowd.— Portland Adv. Spotlight.

15

Central Western Banker, September, 1930

INSURANCE

Its A pplication to

th e B a n k in g Y ra t

E D IT O R

More About Losses
T IS quite difficult for a banker to
ascertain solely from his own ex­
perience the insurable r i s k s
through which he is most likely to
sustain a loss.
The information upon which statis­
tics might be based is widely scattered
and, due to the reluctance of many
banks to disclose their losses, it is
impossible to obtain exact figures
based upon the loss experience of
banks in the United States. The fol­
lowing remarks are based upon the
experience of a number of banks
which represent as nearly as possible
a cross-section of the banking estab­
lishments throughout the U n i t e d
States, and whose loss records have
been studied.
The experience of these banks
shows that of every hundred losses
76% were occasioned through pay­
ment over the counter or through the
clearing house of forged checks. Em­
bezzlements represent 8% of the num­
ber of losses. Holdups represent 2% ,
and the remaining 14% represents
losses or misplacement of currency,
checks, documents, and securities
while on the premises of the banks or
while in transit in the hands of bank
messengers. Embezzlements usually
represent substantial losses and the
size of the loss sustained is usually in
direct proportion to the amount of
confidence and authority reposed in
the defaulter by his superiors.
The defaulter, at first, almost in­
variably conceals his wrongdoing by
charging inactive accounts, and there
is, of course, greater risk of a short­
age existing in savings accounts than
in checking accounts for the reason
that monthly statements of accounts
are not usually rendered to depositors
in the savings department. The larg­
est losses are usually sustained by
operations in the Collateral Loan De­
partments for the reason that such de­
partments may hold hundreds of
thousands of dollars worth of securi­
ties which may not be called for by
the pledgers for periods of many
months. It is very seldom that a bank
employe steals money where the im­

I


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Federal Reserve Bank of St. Louis

mediate discovery of his thefts is cer­
tain.
ly /fA N Y losses through embezzle^ A ment are not discovered by banks
during the periodical audits of the
bank’s books and records. This is not
surprising because a defaulter con­
ceals this wrongdoing with the peri­
odical audit in mind.
In a recent case a bank teller was
able to conceal his thefts over a long
period of time by reason of the fact
that he knew exactly when the rec­
ords in his department would be au­
dited. On the day that his accounts
were to be audited, he would re-credit
depositors’ accounts with the amounts
he had fraudulently charged against
them, and he would place among the
deposits received on that day one or
more checks equal in amount to his
defalcations, drawn upon an account
maintained by an accomplice in an
out-of-town bank.
The auditors always found his
books and records to be in order as
the only evidence of his wrongdoing
was concealed in the loss of out-oftown items in the process of collec­
tion. As soon as the auditors had fin­
ished examining his accounts, the tell­
er would steal and forward to his ac­
complice sufficient cash to deposit
with the out-of-town bank for the
payment of the checks used to cover
up his thefts, and the loss was only
discovered when the officials of the
out-of-town bank became suspicious
of the number of checks that were
met by cash deposits on the day the
checks were presented for payment by
the clearing house.
It is safe to say that surprise con­
stitutes a great deal of the value of an
audit as far as checking up on the
honesty of employes is concerned. If
any of the employes of a bank are
given wide latitude and authority in
their department, and their records
and transactions are not carefully
scrutinized by auditors, it is possible
for heavy losses to be sustained over
a long period of time without discov­
ery. The decline in stock values in

October and November last uncov­
ered large number of losses in collat­
eral loan departments.
I N ONE CASE, a loan clerk who
* had authority to place orders for
the purchase or sale of securities with
brokers opened a fictitious loan ac­
count on the books of the loan de­
partment and transferred to this ac­
count securities deposited with the
bank by its customers as collateral to
loans so that at all times the fictitious
account appeared to be amply secured.
The clerk then made loans to himself
through the fictitious account and pro­
ceeded to speculate in stock. When a
general decline in the value of stocks
set in, and the bank requested addi­
tional securities of several of its cus­
tomers, the loss was discovered.
It is apparent that an audit of a
hank is not complete until some disin­
terested and experienced auditor has
subjected the accounts of every officer
and emplove to the closest scrutiny,
taking nothing for granted and real­
izing that those persons who enjoy the
greatest confidence and exercise the
most authority are in a position to
subject the bank to the largest losses.
Loss prevention is the answer on
the part of the banks if they contem­
plate ever receiving lower premium
rates in the insurance protection that
the banks must have. O f course, losses
through dishonesty and embezzle­
ments will always be sustained by
banks and it is practically impossible
to guard against isolated thefts. It is
possible, however, to prevent repeated
thefts by the employe if careful and
thorough audits are made, and the ele­
ment of surprise is made a part of
each audit.
Burglary rate, robbery rates and
now fidelity bond rates have all been
increased within the last 60 days. It
is predicted by your Insurance Editor
that Bankers Blanket Bond rates will
next be increased. If you are inter­
ested in rates being reduced, then let’s
get together and reduce losses. “ Eter­
nal vigilance is the price of safety.”

16

Central Western Banker, September, 1930

QUESTIONS A N D A N S W E R S

— Wall St., New York, N. Y.
July 7th, 1930
Mr. Henry Scarborough, Jr.,
175 W. Jackson Blvd.,
Chicago, Illinois
Dear Scarborough:
1 have for acknowledgment your
letter of June 20th, 1930, for which
please accept my thanks, and have
particularly noted the following ques­
tion with respect to the coverage of
American Bankers’ Blanket Bond,
Form No. 2, in the case mentioned in
your letter:
“ A situation was recently called
to our attention upon which I un­

derstand that some of the American
companies have denied any respon­
sibility under the American Bank­
ers Blanket Bond, Form No. 2, with
misplacement rider. The situation
is this: An employe of an invest­
ment company who had authority
to place orders with various broker
members of the New York E x­
change placed orders to sell several
thousand shares of stock. He did
not have orders from the bank’s
customers but was merely placing
this order for his own account, fig­
uring on selling it and covering on
a declining market and taking the
profit for himself. Instead, the
market went up, and when the in­

Casualty Insurance?
Yes!
Surety Bonds?
Certainly!
Service?
Absolutely!
W R IT E TO

Federal Surety Company

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Federal Reserve Bank of St. Louis

I

W . L. T A Y L O R
President

Home Office

Davenport, Iowa

vestment company became aware of
the situation, they had to step in
and buy the stock to cover and suf­
fered a loss of several thousand
dollars. In my opinion, this is just
a plain case of using the investment
company’s funds for his own ac­
count, and 1 do not believe that the
bonding company would have a leg
to stand on if it was taken into
court. Some of the eastern brok­
ers or banks have probably had the
same situation and I would appreciate
it if you would give me your opin­
ion on this transaction; also wheth­
er or not Lloyds have paid any
losses on similar situations and un­
der what form of bond the losses
were paid.”
The provisions of the Form No. 2
Bond are, in effect, as follows:
“ The Insurance Company agrees
to indemnify the assured against
the direct loss of any money or se­
curities, or both, through any dis­
honest act wherever committed of
any of the employes, whether act­
ing alone or in collusion with
others.”
The other provisions of the bond
do not affect the coverage, and the
coverage, if any, must be obtained un­
der Section 1 and Section 1-A.
The wording of this bond is not too
clear, but it is clearly the intention of
the Insurance Company to limit the
coverage to the loss of money or se­
curities. When such a limitation is
included in a bond, the bond does not
cover losses sustained by the assured
with respect to the acts of its dishon­
est employees. To recover under the
bond, there must be a dishonest act
and the loss of money or securities.
In the case quoted in your letter,
it seems that the claim of the assured
is for a “ trading loss.” The employe
has dishonestly bound the employer to
a contract which resulted in loss to
the employer. The employe has not
stolen the money or securities of the
assured. He has entered into a dis­
advantageous contract for the assured
dishonestly.
To carry the thought out in detail,
we will assume that on January 2,
1930, the dishonest employe pur­
chased 100 shares of United States
Steel with the assured’s money at
$100 per share, the current market
price. This does not represent a loss
to the assured for the reason that,
while the assured’s money has been
paid out, the assured has obtained title
to a security of equal value. The se­
curity, in the usual course of business,
is delivered to the assured and is
placed in the assured’s vault for safe­
keeping. The next day the stock falls
10 points. However, the assured has
not sustained any loss of money or se-

Central Western Banker, September, 1930
curities because it still holds the cer­
tificate of stock. Assume that the next
day, with the market off 10 points, the
dishonest employe sells the certifi­
cate. At the time the certificate is
sold at 90 points, there is no loss sus­
tained by the assured as that is the
market value of the certificate at that
time. There is no doubt that the as­
sured has sustained a loss of $1000
for it purchased the certificate for
$10,000 and some days later sold the
certificate for $9,000.
The loss is there but it is not a loss
of money or securities. It is a loss
occasioned by the depreciation in
value of securities held by the as­
sured. It is not covered by the Form
No. 2 policy because the policy only
covers the assured against direct loss
of money or securities.
Personally, the form of this policy
is quite misleading because the bold
type of Sections “ A ,” “ B” and “ D ”
does not mention the important lim­
itation and, if you will turn to SubSection “ F ”—
“ Any loss resulting from author­
ized or unauthorized transactions
in Foreign Exchange arising out of
fluctuations in such Exchange.”
It would satisfy almost any layman
that the policy would cover authorized
or unauthorized transactions on the
Stock Exchange. In short, the Amer­
ican Bankers’ Blanket Bond, Form
No. 2, does not cover the loss men­
tioned in your letter. It apparently
was never intended to cover such a
loss.
I do not say, however, that there
would not be a good chance of recov­
ering in the event of suit because the
misleading elements in the policy
might lead a court astray and, of
course, in case of any ambiguity in a
policy of insurance, the policy must
be construed in favor of the assured.
Underwriters have paid numerous
trading losses under the Lloyd’s H.A.
N. “ C” (Amended 1927) Form Pol­
icy.
Sincerely yours,
“A

P

r o m in e n t

A

tto rn ey

”

Stranger: I hear that this is a great
section for fox-hunting.
Oak Tree Inn Host: Yes, siree;
parties come down from the city ev­
ery fa ll; come in grand style, to o ;
been coming for years.
“ Isn’t there danger that you will
run out of foxes?”
“ Not a bit. W e are still using the
fox we began with.”— Phoenix Mutu­
al Field.
And How!

My friend died of lead poisoning.”
“ W here’d he get it?”
“ Chicago!”

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Federal Reserve Bank of St. Louis

17
Takes Brotherhood Bank

The Central Trust Company of Cin­
cinnati, which recently took over the
Brotherhood of Railway Clerks Na­
tional Bank of the same city, after it
closed, following a heavy run, will op­
erate the bank as a branch of its own
institution. It is stated that former de­

positors of the bank will be fully pro­
tected and their accounts will have
the same status as before the bank
closed.
Someone says it is a sure sign of
spring when a Scotchman throws
away his Christmas tree.

O maha L ife Insurance Company

Has an exceptionally good
opening for an agressive
man in Des Moines.

W R IT E FOR PA R TIC U LA R S

W . E. M cC A N D L E S S
Vice President and Manager of Agents

O M A H A , NEBR.

| Lifeinsurancej
;
the B a n k e r's F rie n d \
Banks are the medium through which modern business of all kinds is
! carried on. They, in turn, are dependent on general business activities for
{ their own prosperity.
Life insurance does much to stabilize business operations. It safej guards mercantile and industrial enterprises against loss occasioned by the
j death of their managing heads. It steps in and meets the financial needs of
j a family whose breadwinner has been taken. It provides steady incomes for
• people who have taken forethought for their later years.
The beneficiaries of life insurance are customers of the banks in their
| home communities, and the money paid them soon finds its way into deposit
j accounts, investments, and the channels of everyday business.
For his own self-interest and the general good of those who rely upon
| him, every banker should protect his own institution and family with adei quate life insurance and encourage his patrons to do likewise.
!

;

1
j

j
j
j
!

j
!
;

The

SERVICE LIFE

| B. R. BAYS,

I

I
j

President

INSURANCE CO., LINCOLN, NEBR.
Home Office Bldg., 15th and N Streets
JOHN L. OESCHGER,
Sec’y-Treas.

!

j
j
j

Central Western Banker, September, 1930

18


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Federal Reserve Bank of St. Louis

The 1 5th Annual Convention of the Financial
Advertisers Association will be held this year
at Louisville, Kentucky, September 1 7 to 20, at
the Brown H o t e l................. Leaders in bank, trust,
and investment advertising and selling will fore­
gather to discuss the most resultful ways to meet
the challenge of the next decade.
H The problems of the metropolitan institution,
those located in medium size centers and small
cities, will be studied.
The elemental problems
as well as the latest developments will find expres­
sion .............. Three days of intensive study.
fE A balanced, forward program.
^ A demonstration of how financial houses are meet­
ing their fast-moving, daily changing advertising
and selling problems.
A n d further, an opportunity to analyze your
advertising against that exhibited by hundreds
of financial houses......................... A n opportunity
to check your work against others.

you

A R E IN V IT ED T O A T T E N D

A BUSINESS CONFERENCE
THREE DAYS - RESULTFUL
For further in form ation address Preston E. Reed, Executive Secretary, 231 S. La Salle St., Chicago

Central Western Banker, September, 1930

19

LuiiiiiiiM iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiim iiiiiiiiiiiiiiiiiiH iiiiiiiiiiiiim iiiiiiiiim iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiM iiiiiiiiiiiiiiin iiiM

Depositors’ Claims
Reduced 9 Millions
A

FIN A L report dealing with his
audit of the Nebraska state bank
administration,
including the
guaranty fund, the guaranty fund
commission and the state banking de­
partment, was made in mid-August
by former Governor A. C. Shallenberger, in a report to Governor W eav­
er.
The audit, for which the legisla­
ture appropriated $150,000 cost Ne­
braska $99,027.82. This expense was
segregated by Mr. Shallenberger as
follows: Salaries of auditing depart­
ment, $64,080.81 ; legal expenditures
under direction of the attorney gen­
eral, $17,232.05; chief examiner’s o f­
fice, salaries, $15,395.34 expenses, $2,319.62.
Allowed claims of depositors in
failed state banks, claims which are
still unpaid, total $29,206.21, accordto the report. This total is given as
of June 30. Cash on hand at that
time amount to $1,644,146.79. Mr.
Shallenberger estimated 7 million dol­
lars would be realized from remain­
ing assets, to reduce the claim to $20,561,681.82.
Finding much in favor of the new
state bank administration under the
direction of the department of trade
and commerce, with Bank Commis­
sioner George W. W oods in charge,
Mr. Shallenberger said:
“ Past abuses are no longer permit­
ted. As a consequence failures are
few and should be a thing of the past.
Restoration of sound banking is rap­
idly building the foundation of pub­
lic confidence and credit which is es­
sential to public prosperity.
“ The banking commissioner is ap­
pointed for six years and can only be
removed for cause, thereby taking the
supervision of banks out of politics.
With banks and bank credits on a
sound basis, further expenditure of

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Federal Reserve Bank of St. Louis

public money for investigation of past
failures where possibilities of prose­
cution or recoveries are outlawed, is
unwarranted.”
Mr. Shallenberger, in his report,
discussed the cause of failures as be­
ing both due to economic causes and
to violation of the banking .laws. De­
flation after the war, he pointed out,
“ swept business men, farmers and
bankers from a maelstrom of specula­
tion to disaster.” He mentioned the
fall in values of farm property as do­
ing away with supposed securities and
causing serious destruction of credit.
He added that “ Only the strong, care­
ful and experienced banker could
weather this storm.”
The chief examiner found that Ne­
braska was “ overbanked,” with the
state department of trade and com­
merce utterly without remedy to halt
the granting of charters, which re­
sulted in dangerous increases in loans
and credits.
Mr. Shallenberger, as governor in
1908, had signed the bank guaranty
law. He commented upon it, as fol­
lows :
“ Banking laws, no matter how
sound and how carefully drawn, will
not be effective in protecting the inter­
ests of depositors and the public if
bankers are permitted to continually
violate their most important provi­
sions. The guaranty portion of the
Nebraska law established an insur­
ance policy for the protection of de­
positors.
“ The greatest blot on our state gov­
ernment is failure to enforce the laws
enacted for the protection of prop­
erty and the punishment of crime.
“ Permitting broken banks to run
only delayed the deluge. Lax law en­
forcement did not save the banks, it
did cost depositors large losses and
piled up a mountain of bank failures

when conditions could no longer be
concealed.”
One of Air. Shallenberger’s recom­
mendations was that bank examiners
be given authority to obtain absolute
verification of the validity of notes
and bills receivable in banks they au­
dit. He also urged that the double­
liability law should be made effective
immediately upon the closing of an
institution.
Joins Bancorporation

The State Bank of Hastings, Ne­
braska, has become a member of the
Northwest
Bancorporation
group.
This increases the number of group
member banks in Nebraska to six and
the total number of financial institu­
tions in Nebraska that are in the
group to nine. Other Northwest Bancorporation affiliates in the state are
the First National Bank, Fairbury ,
Continental National Bank, Lincoln;
United States N a t i o n a l Bank
Omaha; Stock Yards National Bank,
South Omaha, and the South Omaha
Savings Bank. Three finance or se­
curities companies, the Continental
Company of Lincoln, United States
National Company, Omaha, and the
Cattle Feeders Loan C o m p a n y ,
Omaha, also are in the group.
The State Bank of Hastings was
organized in 1919 and is capitalized
at $100,000 with surplus of $28,500.
Deposits at last report were $1,000,000 and resources $1,921,883.
H. G. Pratt is President of the
State Bank of Hastings, O. A. Riley
and R. R. Vance, Vice President, Ivan
C. Riley, Cashier, and Chas. E. Deets
and H. E. Nelson, Assistant Cashiers.
Directors are H. G. Pratt, O. A.
Riley, Stephen Swingle, C. E. Byers,
Bert Mott, and R. R. Vance.
Affiliation of the Hastings bank
brings the total number of banks and
trust companies in Northwest Bancorporation group to 113 and the to­
tal number of affiliates including fin­
ance companies to 125. Combined re­
sources of Northwest Bancorporation
group members exceed $483,000,000.

Central Western Banker, September, 1930

20

Assisting Alvin E. Johnson, vice
president of the Live Stock National
bank of Omaha, who is chairman, are
A. L. Schantz, president of the State
bank of Omaha, Chairman of the re­
ception committee; and Victor B.
Caldwell, assisting cashier of the
United States National bank, chair­
man of the entertainment committee;
and Mrs. John S. McGurk, wife of
the president of the South Omaha
State bank, head of the ladies’ com­
mittee.
The later dates suggested will give
the bankers an opportunity to visit the
annual fall Ak-Sar-Ben livestock
show and horse show.

A T TH E RE Q U E ST of Omaha
bankers, it is probable that the fall
convention of the Nebraska Bankers
association will be held in Omaha,
Thursday and Friday, November 6
and 7. For the convention four speak­
ers have already been obtained :
Walter W. Head, president of the
Foreman State National bank of Chi­
cago and chairman of the board of
the Omaha National bank.
M. A. Kendall, vice president of the
Farmers Deposit National bank of
Pittsburgh, Penn.
J. V. Webster, cashier, the FirstNational bank of Chadron, Neb.
Oliver P. Cordill, assistant cashier
of the Federal Reserve bank of
Omaha.

A F F IL IA T IO N of the State Bank

The
Continental National Bank
“ A Bank fo r Bankers”
Our consistent growth and progress, contributed to
largely by our correspondents throughout Nebraska, is
indicative of the careful service and prompt attention
rendered them.

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 oard .
E D W I N N. V A N H O R N E , P re sid e n t
W . S. B A T T E Y , A s s t. 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. JO H N S O N , A s s t. 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 s s t. C a sh ier.

-MMIIIIIIIIIIIMIIIIIIIIIIIIIIIIIIHIIMMIIItllllllllllllllllllllllllltllMllllllllinillllllllllllllllllllllHHIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIinilllllllinilMllllllllllllllllllllllllllllllllllllllllllllllllllllHIIIIIIIIIIIIIIHIIIIItlMlllllllllinillllllllH

Complete Commercial, Savings, Investment
Banking and Trust Services

The

I

First National Bank
I

AND

The
I

First Trust ( Company
of

I

LIN CO LN , N E B R A S K A
....................................................................... ......................................................... .......................................................................................................................... 1!.


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Federal Reserve Bank of St. Louis

H I

.

FORD H O V E Y , president of the
Stock Yards National bank of Omaha,
has accepted the chairmanship of the
annual Omaha Community Chest
campaign for funds. He will be as­
sisted by Victor B. Smith, vice presi­
dent of the Omaha National bank, as
chairman of the publicity committee.

Adopts Service Charge

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

n

O M A H A BAN KERS are prepar­
ing for the meeting of the Nebraska
Bankers association, October 22 and
23, under the general chairmanship of
Alvin Johnson. Secretary Hughes of
the state association is planning for
speakers of more than state reputa­
tion, who will discuss vital features of
banking practice. The usual hospit­
able entertainment program will be
carried out.

C. T. KOU N TZE, vice president
and chairman of the board of the
First National bank of Omaha, has
returned from his annual trip to Eu­
rope.

LINCOLN, NEBRASKA

I

of Hastings, Nebr., with the North­
west Bancorporation was announced
August 18th by officials of the Bancor­
poration. The Hastings institution
has deposits of $1,800,000 and re­
sources of $1,921,883.

.mn I............ »m um ......

The First National bank of Bayard,
Nebraska, has adopted a fifty cent
service charge for depositors whose
banking account does not equal fifty
dollars per month. There is naturally
a number of things connected with a
bank which the public takes as a mat­
ter of course, which to the institution
itself, greatly increases the labors of
it along with considerable expense. A
person who may deposit twenty or
thirty dollars a month in a bank, may
write twenty or thirty checks against
it. This account will perhaps involve
more work to keep track of, than an
account representing five or ten times
more money. It is due to this, that
has caused most banks to adopt a
service charge which should be worth
the small charge of 50 cents per month
to have it looked after. In the ma­
jority of cases at least, a check serves
as a receipt and to have such a record
for money expended should certainly
be worth something. This service
charge will put a stop to the issuing
of “ no fund” checks, on which there
is also a 25 cent charge and should
also be one of the very effective ways
of making a few people stop issuing
worthless checks. There are about
1200 accounts in the First National
and of this number, there is twice
as much work involved in the care of
half of them than there is in all the
rest of them.

21

Central Western Banker, September, 1930
Hold Meeting

The regular meeting of the stock­
holders of the First National bank of
Auburn, Nebraska, was held recently,
at which time the following officers
were elected : A. L. Allen, vice-pres­
ident ; H. C. Kleckner, vice-president ;
William H. Bousfield, cashier; B. C.
Howe, assistant cashier ; E. T. Avey,
John S. Howe and Wilber Maclay,
tellers and E. Phippenny, caretaker.
The bank is in the best possible con­
dition and there is a steady growth
in the volume of business which is
very gratifying to stockholders and all
others interested.
To Reorganize

Reorganization and opening of the
Norfolk, Nebraska, state bank, which
was closed recently with deposits to­
talling more than one million dollars
was brought nearer as waivers were
signed by more than half of the de­
positors cutting 20 per cent from their
deposits.
The reopening is predicted within
two weeks, local banking authorities
say.
A committee of nearly 100 persons
are working to secure waivers from
the other depositors involved in the
bank’s collapse, and as soon as this is
done, the doors will be opened once
more. The outlook is bright, officials
report.

up last night?” queried Montgomery.
"Certainly, I was the last one to
leave the bank, any everything was in
proper order and locked up tighter
than a drum.”
"Well, it’s too bad for Hunt, but
he certainly has no claim on the
bank,” was Montgomery’s dictum.
"But, what’ll we say when he de­
mands his bonds?”
"Say we took reasonable care of
’em, but the burglars were too sharp
for us.”
"And that lets us out?” the presi­
dent fairly shouted.
"Beyond a doubt,” Montgomery ex­
plained. "The law is that if one party
deposits property with another for
safe keeping and does not pay the re­
ceiving party for doing so, the party
receiving the property is not liable for
its loss not due to his own fault or
neglect. In this case there is no ques­
tion of the bank being at fault, for
we can prove that you used every rea­
sonable precaution to protect the loss
of the bonds.”
“ W e certainly did,” declared the
cashier. "The last time the inspector

W H E N FREE STORAGE
M E A N T NO L IA B IL IT Y
(C o n tin u e d fr o m

hall, and Hanson burst into room.
He wore a typical western sombrero,
a pair of murderous looking “ guns,”
and an air of belligerent triumph.
"Check that stuff over,” he boomed,
throwing a heavy parcel on the table.
The cashier fell upon the heavy
wrappings with trembling fingers.
"The whole swag”— in an awed
whisper.
"Plow did you land ’em?” demand­
ed the president.
"Oh, it was as easy as tracking a
horse thief after a rain, and I round-

O M A H A
“ An Unbroken Record of Seventy Years
is a Guarantee of Safe and
Satisfactory Service”
OFFICERS:
W. B. T. B elt, Chairman o f the Board
R obert P. M orsman , President
G wyer H . Y ates , Vice-President
P erry B. PIendricics, A ss’ t. V.-Pres.
H. M. B ushnell , Vice-President and R alph R. R a in e y , Cashier
Trust Officer
H arry E. R ogers, Assistant Cashier
Joseph C. M cClure, Vice-President
E rnest E. L andstrom A ss’ t. Cashier
C
t~. •
»r
t t A ustin L. V ickery , Assistant Cashier
T homas F. M urphy , Vice-President
v ICTor B. Caldwell, Assistant Cashier
C harles F. B r in k m a n , A ss’ t. V.-Pres. H. W . Y ates , Assistant Trust Officer

P a g e 6)

making any charge,” the cashier ex­
plained.
"And you kept them in the bank
vault with the rest of the bank
papers?”
"Certainly.”
“ And the vault was reasonably
safe, I presume?”
“ It was manufactured by the best
company in the country and installed
by an expert workman,” replied the
cashier.
"And I suppose you took reason­
able care that everything was locked

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Federal Reserve Bank of St. Louis

/V H E A V Y STEP sounded in the

United States National Bank

Busy Opening Day

In the first two hours after the re­
organized Oak Creek Valley bank
opened in Valparaiso, Nebraska, for
business, more than $10,000 in depos­
its were received. The bank was
closed early in April when it collapsed
with other members of the Kirchman
banking chain in Saunders county.
The new officers are J. W . Pokorny,
president; R. E. Novak, cashier; W.
J. Johnson and E. E. Placek, direc­
tors.

was here he said our bank was nearer
burglar proof than any other bank of
its size in the State.”
The president threw himself back
in his chair with a sigh of weary re­
lief.
“ O f course, it’s too bad for our
customer,” he said regretfully.
"H e took the same chances he
would have taken if he’d left the
bonds with any other bank in the
country under the same conditions,”
Montgomery explained.

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

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LATEST MODELS AT BIG DISCOUNT
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1912 Farnam St.

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Omaha, Nebraska

I

22

Central Western Banker, September, 1930

OUR

B A N K IN G

M A IN

FLOOR

ROOM
RIGH T

OFFICERS
FORD E. HOVEY, President
JAS. B. OWEN, Vice-Pres.
F. J. ENERSON, Vice-Pres.
W. H. DRESSLER, Cashier
L. K. MOORE, Asst, to Pres.
H. C. MILLER, Asst. Cash.
C. L. OWEN, Asst. Cash.
HENRY A. HOVEY, Asst. Cash.
T. G. BOGGS, Auditor

L et Us H ave F a ith in
th e F u tu re
Nebraska Conditions are Good
Nebraska’s wheat harvest is, figuratively
speaking, in the bin. The yield is greatly in
excess of last year’s crop and while the price
is less per bushel it will be made up by the dif­
ference in quality and yield.
Live Stock Commission Men and Dealers at
the Omaha market are the equal of any. The
steady growth of the market indicates its favor
with producers.
Omaha’s business houses are prosperous and
we have less unemployment than any other sec­
tion o f the country.
Omaha and Nebraska have every reason to
face the future with optimism and courage.

Stock Yards National Bank
of
South Omaha

Affiliated with the
Northwest Bancorporation
The Only Bank in the Union Stock Yards


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Federal Reserve Bank of St. Louis

ed up the whole bunch down in by
Allegosh siding,” was the reply. “ They
were plannin’ on jumpin’ a freight
there but we interrupted their little
game mighty sudden,” tapping the
weapons at his side with a significant
gesture.
“ Where are they now?”
“ Down at the police station,” was
the disgusted reply. “ In the good old
days we’d’a disposed of ’em right
then and there but I thought it best
to give the judges and lawyers a
chance at ’em.”
To Have Interesting Exhibit

One of the features of the coming
convention of the American Bankers
Association at Cleveland, September
29 to October 3, will be a carefully se­
lected exhibit of financial books, pe­
riodicals and services, of practical use
to bankers in the various phases of
bank work. Models of different types
of information files, consisting of
pamphlets, circulars, statistical re­
leases, clippings, etc., will also he
shown, as well as other examples of
the many services which an up-todate and efficient bank library will
perform.
A booklet containing a list of the
best books and periodicals recom­
mended for such a library is being
prepared for distribution in connec­
tion with this exhibit.
This exhibit will be prepared by the
Financial Group of the Special Li­
braries Association. The members of
the committee in charge are:
Emma M. Boyer, Librarian, Union
Trust Company, Cleveland
Alta B. Claflin, Librarian, Federal
Reserve Bank, Cleveland
Edna I. Casterline, Librarian, Mellon
National Bank, Pittsburgh, Penna.
Ethel L. Baxter, Librarian, American
Bankers Association, New York, N.
Y.
Helen G. Prouty, Librarian, Com­
monwealth Securities, Inc., Cleve­
land, Ohio.
Record for Chicago Exchange

The transactions of the Chicago
Stock Exchange for the first half of
1930 were larger in volume than any
other first half year in its history.
Shares of stock handled amounted to
45,276,800, against 29,086,000 the first
six months last year. Bonds last year
were $3,118,000 and this year $21,280,000.
She: I hear the Scotchmen are try­
ing to put an end to all the jokes
about them.
He : And why ?
She: Everyone of them is at a
Scotchman’s expense.

23

Central Western Banker, September, 1930

Nebraska Dairying Decreases

A decrease of over 10 per cent in
the dairy business is shown by rec­
ords of production of dairy products
for the first half of the year, says A.
E. Anderson, agricultural statistician.
There is a small decrease for the
country as a whole.
The production of creamery butter
for the first quarter of the year was
13 per cent below the same period of
the previous year. For the second
quarter it was 10.4 per cent lower.
Production of ice cream was 9.3 per
cent greater for the second quarter of
the year, while production of Amer­
ican cheese was 3.4 per cent lower.
The report for the United States in­
dicates a reduction of 2.18 per cent in
the production of creamery butter for
the first half of the year. June showed
a decrease of 5.35 per cent. All other
months showed a decrease except May
when the production was 2.04 per cent
higher than the corresponding month
a year ago.
Due to the extremely poor condi­
tion of pastures in July, that month
is likely to show a rather sharp reduc­
tion, and the same is expected for A u­
gust. Pastures were quite favorable
during July and August a year ago.
A rather marked decrease may be ex­
pected during the third quarter of the
year. The decrease in the dairy in­
dustry in Nebraska has been much
greater than for the country as a
whole. If the reduction has been due
to the elimination of the poorer cows
the reduction of 10 to 13 per cent in
butterfat would indicate a larger re­
duction in number of cows than 10 to
13 per cent because the higher pro­
ducing cows would be retained.
Federal Aid Not Needed

County agents of Douglas and
Sarpy counties in answering question­
naires on the drouth sent out by Sec­
retary of Agriculture Hyde replied
there was little damage done in east­

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

ern Nebraska. There is plenty of feed
for live stock, they said.
From present indications, there will
be no need for federal aid for stock
feeders and farmers in Lancaster
county, Nebraska, County Agent Purbaugh said today upon receipt of a
telegram from Secretary Arthur Hyde
of the United States Department of
Agriculture inquiring as to conditions
in the country.
County Agent Purbaugh said he
would not answer the telegram until
lie had made a complete survey of the
county but that he believed that all the
help the farmer in this section will
need can be furnished locally.
He has heard of no distressing sit­
uations in the county. He was of the
opinion that farmers will have enough
feed.
Farmers in Lancaster county
have had two good crops of alfalfa
and had some hay left over this
spring. They also had fairly good
crops of wheat and barley and a good
crop of oats. Pastures are all dried
up in the county and farmers are now
using winter feed.
No Decrease in Feeders

The number of cattle on feed for
market in the 11 corn belt states Au­
gust 1 this year was about 1 per cent
smaller than at the same date in 1929,
according to the estimates of the De­
partment of Agriculture.
The states east of the Mississippi
river as a whole had about 8 per cent
less cattle on feed this year than last,
while the states west of the river had
2 per cent more.
Substantial increases in the number
on feed are shown for Iowa and Ne­
braska, while all of the other states
had decreases or no change from last
year.
Reports of feeders as to the weights
of cattle on feed show a rather
marked decrease from last year in
prospective market supply of cattle
weighing over 1,000 pounds with a

corresponding increase in cattle weigh­
ing from 900 pounds to 1,100 pounds
and little change in cattle under 900
pounds.
Reports of feeders as to the prob­
able number of feeding cattle to be
bought by them during the last five
months of this year indicate a sharp
decrease in the movement of stocker
and feeder cattle into the corn belt
states during the last half of 1930
compared to the same period in 1929
and 1928.
These reports reflected the poor
pastures and unfavorable prospects
for corn production early in August
as well as the unfavorable returns
from fed cattle marketed in recent
months.
Improvement in any of these condi­
tions would undoubtedly tend to
strengthen the demand for feeder cat­
tle. According to the reports of feed­
ers demand will be centered this year
even more than last year on calves
and yearlings and a much larger pro­
portion of purchase will be at stock
yards markets with a corresponding
decrease in direct purchases.
The estimated number of cattle on
feed August 1 this year as a percent­
age of the number August 1, 1929, is
as follows: Ohio, 100; Indiana, 90;
Illinois, 90; Michigan, 85; Wisconsin100; Minnesota, 100; Iowa, 108; Mis­
souri, 85 ; South Dakota, 100; Ne­
braska, 108; Kansas, 95; 11 states
weighted 99.3.
Studies in Securities

The 1930 issue of Studies in Secur­
ities has just been published by Jas.
H. Oliphant & Company, 61 Broad­
way, New York. This book comprises
studies of over a hundred different
companies selected as outstanding ex­
amples of varied enterprises. Copies
may be had free of charge on applica­
tion to this company by mentioning
that the writer saw this notice in the
C

en tral

W

estern

B

a n k e r

.

24

Central Western Banker, September, 1930

o^nnounce ^Qist
of cÌA^ominations
W E N T Y -T W O nominations for
offices in the Investment Bank­
ers Association of America, se­
lected as the regular ticket for sub­
mission to its annual convention in
New Orleans, October 12 to 15, have
been announced by the association’s
board of governors.
The list is headed by Henry T. Ferriss, executive vice president of the
First National Company, St. Louis,
nominee for president.
Since nom­
ination by the association’s board of
governors in the past has always been

T

equivalent to election, it is expected
that Mr. Ferriss will take office for
the 1930-31 term at the close of the
association’s October meeting.
He
will succeed Trowbridge Callaway of
Callaway, Fish & Co., New York.
Alden H. Little of Chicago has
been named to succeed himself as ex­
ecutive vice president, and Sidney R.
Small, Harris, Small & Co., Detroit,
and William J. Wardall, Bonbright &
Company, Chicago, have been nom­
inated to succeed themselves as vice
presidents. The three new vice presi­
National City brings yon
complete financial service—
world-wide in scope.

Your customers may wish
to revise their holdings . . .
strengthen your advice with
National City facts.

The National City Company
National City Bank Building, A ew 1 ork
BONDS


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Federal Reserve Bank of St. Louis

'

SHORT

TERM

NOTES

-

ACCEPTANCES

dents selected, to succeed Willis K.
Clark of Portland, Henry T. Ferriss
of St. Louis, and Jerome J. Hanauer
of New York, are Charles D. Dickey,
Brown Brohters & Co., Philadelphia;
William H. Eddy, Chase Securities
Corporation, .New /York City, and
Bernard W . Ford, Tucker Hunter
Dulin & Co., San Francisco.
William T. Bacon of Bacon, W hip­
ple & Co., Chicago, is proposed for
Treasurer, and C. Longford Felske,
Chicago, for Secretary. Ten naminations to positions on the association’s
board of governors for terms expir­
ing in 1933 are:
George W . Bovenizer, Kuhn, Loeb
& Co., New Y ork; Robert E. Christie,
Jr., Dillon, Read & Co., New Y ork;
Robert A. Gardner, Mitchell, Hutch­
ins & Co., Chicago; Samuel W. White,
National Republic Company, Chica­
go; Donald O ’Melvaney, E. H. Rol­
lins & Sons, Los Angeles; Philip T.
White, Cleveland Trust Company,
Cleveland; John R. Chapin, Kidder,
Peabody & Co., Boston; Albert E.
Schwabacher, Schwabacher & Co.,
San Francisco; Kenelm Winslow, Jr.,
Seattle Company, Seattle; and, Almon A. Greenman, First Securities
Corporation of Minnesota, St. Paul.
Nominations to fill unexpired terms
on the board of governors are:
Trowbridge Callaway, Callaway,
Fish & Co., New York, ex-officio a
member of next year’s board; Canton
O ’Donnell, O ’Donnell - Owen a n d
Company, Denver, to succeed himself
for his own unexpired term ending in
1931; and Ralph Fordon, Guardian
Detroit Company, Inc., to succeed
himself for his own unexpired term
ending in 1932.
The selection of Mr. Ferriss for the
highest honor in the organized invest­
ment business of the country is a rec­
ognition of his long and active serv­
ice on the board of governors of the
Investment Bankers Association of
America and on a number of its com­
mittees in furthering sounder prin­
ciples of long-term financing.
He
served as a member of the associa­
tion’s board of governors for three
years beginning in 1926, and as a vice
president from 1929 to date. His
committee record includes four years
on the real estate securities committee,
one year on the industrial securities
the membership committee and two
years as chairman of the municipal
committee, two years as chairman of
securities committee.
Mr. Ferriss was born in St. Louis,
February 25, 1882. His father, Hon.
Franklin Ferriss, was for many years
a judge of the Circuit Court of the
City of St. Louis, and also of the Su­
preme Court of Missouri. It is not
surprising, then, that Mr. Ferriss

25

Central Western Banker, September, 1930
and Industrial Clubs, and the Mis­
souri Athletic Association. In 1907
he married Miss Edith Platt of Lake
Forest, 111. They have four children.

should have turned to the study of
law after graduation from Cornell in
1902. In 1905, with a degree of bach­
elor of laws conferred by Washing­
ton University Law School, he began
the practice of law in St. Louis. In
1915 he became vice president and
counsel of the Mortgage Trust Com­
pany, and, when that company was
purchased by the First National Bank
of St. Louis in 1920 and renamed the
First National Company, he was elec­
ted its executive vice president in
charge of operations, a position he
still holds.
Mr. Ferriss is a member of the St.
Louis Country, Noonday, Commercial

In Middle W est

Chatham Phenix National Bank
and Trust Company of New York an­
nounces the appointment of William
Hoyt Gray as the bank’s special rep­
resentative for St. Louis and neigh­
boring states. Mr. Gray will be asso­
ciated with Mr. Robert P. Brewer,
vice president, and Mr. Paul L. Har­
desty, assistant vice president, in the
handling of correspondent bank busi­
ness.

Mr. Gray is a Minnesotan and a
graduate of North Dakota State Col­
lege at Fargo, North Dakota, where
he distinguished himself in athletics
as well as college activities. His edu­
cational background also includes
post-graduate work in the Graduate
School of Business Administration,
Harvard University. He was for­
merly associated with Mr. Hardesty
in the Union Trust Company, Chi­
cago, and his business experience also
includes retail merchandising and
sales management.
Many people who have nothing to
say keep right on saying it.

FEEDER LOANS
W rite Us

LIVE STOCK NATIONAL BANK OF SOUTH OM AHA
Union Stock Yards
O M A H A

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W rite fo r our attractive list of carefully
selected bonds

AUSTRALIA

BANK OF NEW SOUTH WALES
E S T A B L IS H E D
(W ith

w h ic h

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

THE

1817

W ESTERN

A U S T R A L IA N

RANK
$ 3 7 ,5 0 0 ,0 0 0
3 0 .7 5 0 .0 0 0

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

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

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

N A T IO N A L

BANK,

OM AHA,

N EBRASKA

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


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

GENERAL M ANAGER, ALFRED

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

LO N D O N OFFICE, 29 T H R E A D N E E D L E ST., E. C. 2

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

Z e a la n d ,

F iji,

Papua,

M a n d a te d

T e r r ito r y

of

26

Central Western Banker, September, 1930
Legion to Guard Banks

The Redfield, South Dakota, Amer­
ican Legion, as a part of its program
of community service, has formed and
equipped a corps of 12 of its mem­
bers to guard the two local banks
against daylight robberies. This corps
will work in conjunction with Sheriff
F. E. Bradley and Chief of Police J.
D. Finnerty, and has been painstak­
ingly instructed and drilled as to its
duties in case an emergency arises.
High-powered rifles have been se­
cured and issued to the members of
the organization, each one of whom
will be at a stragtegic position in case
of a robbery. A silent alarm system
has been installed to notify the rifle­
men in case of an attempted robbery,
which alarms will be given by a per-

son so situated in the bank building as
to have full view of the banking room
at all times without disclosing his
presence to persons in the room. Au­
tomobiles in readiness to take up the
chase in any direction are stationed
in the streets and alleys of the city,
and the members of the corps have
been instructed as to what they shall
do in case pursuit becomes necessary.
Tn addition a machine gun has been
obtained and Deputy Sheriff Grant
Haggerty is an expert machine gun­
ner, having seen service with the 3rd
Machine gun battalion during the
World war, when he received special
instruction in this department of the
service, in addition to the usual in­
struction given to all machine gun
troops.

A
Correspondent
Service
developed
from 68 yea rs’
experience

FO R EM AN -STATE

N ATIO N AL BANK

F O R E M A N -S T A T E T R U S T A N D S A V I N G S B A N K
C H IC A G O

Although the Redfield banks are
keeping the absolute minimum of cash
on hand in their vaults at the present
time, Redfield has experienced one
bank robbery within the past year,
and is determined that the “ easy
money” boys shall not get away with
another one.
The services of this organization
are intended to be at the call of all
towns within Spink county and the
corps will be ready to take up the
chase of bandits whenever called upon
to do so.
Hold Quarterly Meeting

Group No. 4 of the New Mexico
Bankers’ association held its regular
quarterly meeting recently in Mountainair following a dinner in the pri­
vate dining room of the Shafer hotel.
The group includes the counties of
Santa Fe, Torrance, Catron, Valencia,
Socorro, Sandoval and Rio Arriba.
Present at the meeting were Chair­
man L. C. Becker, W . L. Davidson,
Harry Culver, Marion Hurlihy and
Silvia W olf, Belen; Guy Rogers, W.
J. White, H. L. Snyder, Fred Luthy,
Oscar Love, J. E. Cox, Fred Howell,
Ira Boldt, and Mrs. Margaret Barnes,
secretary of the association, all of A l­
buquerque; H. B. Jones, Tecumcari;
F. M. Brickley, Carrizozo; J. C. Hes­
ter, Wilbur Jones, J. L. Hunt, Dr. C.
I). Ottosen and C. J. Amble, Mountainair.

To Develop Tract in Peru

To a group of American investors
headed by W . R. Davis, New York,
a tract of 100,000 square miles in the
wilds of eastern Peru has been
granted. The award ends what was
known as the Bertram Lee concession,
a colonization and railway project,
which included the building of what
was designated as the Yurimagnas
railway.
Last year the Peruvian Govern­
ment cancelled Lee’s concession, alleg­
ing that the time limit had expired.
Davis was associated with him in the
plan, the capital to be supplied by
New York and Pittsburgh interests.
Under the new concession, Davis
must build a railway between the
Yurimaguas River and the coast, thus
opening a new route for Peruvian
products. Great petroleum fields are in
the area.
Joins American Founders Staff

RESOURCES

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

EXCEED

200

MILLION

DOLLARS

Malcolm C. Rorty has been elected
vice-president of the American Foun­
ders Corporation. He is also president
of the International Telephone Secur­
ities Corporation.

27

Central Western Banker, September, 1930

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

Announce Rewards

I South Dakota News |
111111111111111111111111111111111111111111111111111111111111111111111111111111111111W1111111111M11111111!111111111111111111111111111111!M11111111111111H11111111111111111M1111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111ì1111fr

Name Committees

Committees which will serve the
South Dakota Bankers association
during the coming year were an­
nounced from the group’s state office
by A. B. Cahalan of Miller, president.
C. L. Chase, Willow Lake; Cam­
den Rayburn, Huron, and Walter
Burke, Pierre, are the members of the
committee on agriculture.
Group chairmen, who will act with
the state committee on agriculture,
and with county chairmen within their
groups, are: J. E. Danforth, Yank­
ton, group one; F. E. Jackson, Hur­
ley, group two; R. H. Seydel, Menno,
group three; W . S. Given, Milbank,
group four; Russell Bard, Miller,
group five; M. I . Larson, Mound
City, group s ix ; and W . E. Dickey,
Spearfish, group seven.
Three men, L. M. Larsen, Wessington Springs; E. W . Aadeke, Alexan­
dria ; and J. V. Lowe, Sioux Falls,
were named on the committee on
banking practices, a combination of
two former committees known as
“ analysis of accounts” and “ service
charges.”
H. M. Hanten, Watertown; W . F.
Mailand, Mobridge; and T. M. Brisbine, Woonsocket, will serve on the
committee on insurance.
The executive council of the asso­
ciation will serve as the committee on
legislation. Membership of the pro­
tective committee is secret, as in all
other bankers associations.
Three other committees were named
by Mr. Cahalan. They are:
Public relations: Ira A. Moore,
Sioux Falls; W . B. Penfold, Belle
Fourche; and Scott M. Banbury,
Geddes.
Standard forms: George C. Fullinweider, Huron; Charles E. Barkl,
Huron; and F. D. Greene, Huron.
Taxation: J. W . Bryant, Mitchell;
William C. Rempfer, Parkston; and
R. E. Driscoll, Lead.

New Banks at Chamberlain

The First National Bank and Trust
Company, Chamberlain, South Da­
kota, has been organized and opened
for business Tuesday, August 5th.
The new bank will become a member
of the Northwest Bancorporation
group.
R. E. Montgomery who has long
been connected with the Banking De­
partment of the state of South Da­
kota, has been selected as cashier.

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

Chamberlain in Brule County on
the Chicago, Milwaukee, St. Paul and
Pacific Railroad and on the east side
of the Missouri River is the center of
a wide area devoted to cattle raising
and Mr. Montgomery was selected be­
cause of his knowledge of the live­
stock industry.
The First National Bank and Trust
Company, Chamberlain is capitalized
at $25,000, surplus $10,000, and undi­
vided profits $2,500.

I

Member banks of the South Dakota
Bankers’ association have been sent
new cards announcing the $1,000 re­
ward for the capture of bank bandits.
The cards were mailed by George
A. Starring, secretary of the associa­
tion. They contain information that
the reward applies only to members
of the association, which now includes
95 per cent of all hanks in the state.
Non-members will be included as soon
as they join.
Letters were also sent to state’s
attorneys, sheriffs and county judges
in all counties, listing member banks,
to avoid any chance of misunder­
standing.

N this bank your busi­
ness w ill be handled in

a careful individual way.
N othing w ill be delegated
to c le r k s w h i c h s h o u l d
h ave the decision

and

experience of an officer.

THE NORTHERN
TRUST COMPANY
N orth w est Corner L a S a lle and M on roe
C H IC A G O

S ts.

28

Central Western Banker, September, 1930

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Cashier Resigns

Walter A. Schertz, who has served
as cashier of the La Junta State bank
in La Junta for several years, has re­
signed his position to become mana­
ger of the La Junta office of the Rail­
way Savings & Building association.
The offices of the building loan asso­

ORDER

NOW

May-June number of the

ciation are being moved from the
Winchell Abstract Co. location to a
room in the Draper block, at 106 West
Second street.
W . L. Woodall, of La Junta, book­
keeper for the Mason Candy Co., has
been made cashier of the La Junta
State bank, to fill the vacancy made
by the resignation of Walter Schertz.
Woodall has had a number of years’
banking experience before coming to
La Junta, Miss Blanche McCune, of
Lajunta, will take the position as sec­
retary in the new building loan office
under the new manager.

American Bank Reporter

Hotchkiss Banks Consolidate

D ESK EDITIO N

The First State Bank of Hotchkiss,
Colorado, is a consolidation of the
North Fork State bank and First Na­
tional bank, with a capital of $25,000,
surplus $7,500.
Officers are: J. Edcl Hanson, pres­
ident; H. H. Adams, active vice pres­
ident ; C. E. Myers, cashier; Arley
Sylvester, assistant cashier; Fredda
Burris, bookkeeper.
The entire directorate of the two
former institutions compose the board
of directors for the balance of the
year of the First State bank.

Convenient for Desk Use and to
carry with you
Issued Twice a Year
P r in t e d o n H ib le P a p e r
S iz e 6 x :U /2 I n .
R e d L e a t h e r ItindiiUA

C o n ta in s a co m p le te lis t o f B a n k s,
B a n k e r s, S a v in g ’s B a n k s, T r u s t C o m p a ­
nies, In v e s tm e n t, A c c e p ta n c e and D is ­
cou n t C o rp o ra tio n s, in th e U n ite d S ta tes
an d C a n a d a w ith n a m e s o f Officers,
C a p i t a l , S urplus, U n d i v i d e d Profits,
L o a n s, D e p o sits, P rin c ip a l C o rre sp o n d ­
ents, L is t o f F o r e ig n B a n k s, E tc .

Price .$10.00 delivered
L o w est

P r ic e d

R a n k D ir e c to r y
M ark et

on

th e

Install Vault Ventilator

To guard against the possibility of
anyone suffocating in a bank vault,
should they accidentally be impris­
oned in the steel structure, an elec­
tric ventilator has been installed in
the record vault at the First National
bank of Leavenworth, Kansas.
A red light is constantly glowing
above the ventilator switch. Should
the huge door swing shut behind an
employe of the institution as he en­
ters the vault, a movement of the
lever assures a stream of cold, pure
air from the outside. The ventilator
operates with a loud, whirring sound,
sufficiently audible to attract the at­
tention of others in the bank.
Bank officials explained the ven­
tilator as one of the latest devices
for “ bank safety.”

New Bank at Colome

Steurer Publishing Co.
149th St., cor. Bergen Ave.
New York City

iC
Q
ej C lj a g e

Kiteley Leaves First National

Rae H. Kitely, former mayor of
Longmont, has resigned his position
of Trust Officer of The First Nation­
al bank of Longmont.

According to news reports the bank
of Wewela has filed with the secretary
of state of South Dakota an amend­
ment to their articles of incorporation,
by which they increase their capital to
$25,000, and change their name to
that of the Bank of Colome, removing
the business to that town.

R a t io n a l P a n fe

o f the City of New York

Retail Profit Margins

Pine Street corner o f Nassau

A schedule of retail profit margins
just issued by a research service
states that department stores in 1929
operated on a gross margin ranging
from 28.7 per cent of net sales to 34.4
per cent, according to the size of the
store, and women’s specialty apparel
stores on a gross margin ranging from
32.2 per cent to 35.8 per cent of net
sales. Total expense commonly ranged
from 29.8 per cent to 32.8 per cent of
net sales for department stores and
from 32.2 per cent to 33.8 per cent
for specialty stores. Net profit over
and above interest on investment
ranged from a loss of 1.1. per cent of
sales to a profit of 1.6 per cent for de­
partment stores of various sizes from
zero up to 2.1 per cent for specialty
stores.

DIRECTORS
A. H. Griswold
W illiam E. S. Griswold
H enry O. Havem eyer
Charles llayden
James N. Hill
A rthur G. Hoffman
Ralph C. Holmes
George H. Howard
Daniel C. Jackling
Otto H. Kahn
Lewis Cass Ledyard, Jr.
Tames T. Lee
L. F. Loree
H. Edmond Machold
John C. Martin
Thomas N. M cCarter
Charles G. M eyer
Albert G. Milbank
Teremiah Milbank
John G. M ilburn
George M. M offett
George W elw ood M urray
Joseph D. Oliver
H enry Ollesheimer
Eugenius H. Outerbridge
Thomas I. Parkinson
Frank L. Polk
Robert C. Pruyn


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Federal Reserve Bank of St. Louis

Mr. Kiteley is also disposing of his
interests in The First National. Mr.
Kiteley stated that he would probably
engage in the practice of law, opening
offices in Longmont within the next
few weeks.
The resignation of Mr. Kiteley was
accepted by the board of directors.
The directors appointed W . E. Led­
ford, president of the bank to the
position of Trust Officer and Lau­
rence B. Flanders, assistant Trust O f­
ficer.

Samuel F. P ryor
Lyman Rhoades
A ndrew W . Robertson
Ferdinand W . Roebling, Jr.
Reeve Schley
Carl J. Schmidlapp
Charles M. Schwab
A lfred P. Sioan, Jr.
Robert C. Stanley
John C. Traphagen
Cornelius Vanderbilt
Thomas F. V ietor
George P. W haley
F. Edson W hite
Henry Rogers W inthrop
A lbert H. W iggin
lohn M cHugh
Charles S. McCain
R obert L. Clarkson
W inthrop W . A ldrich
Frank Altschul
V incent A stor
Gordon Auchincloss
Earl D. Babst
H oward Bayne
Am os L. Beatty
Hugh Blair-Smith
H enry S. Bowers

E. N. Brown
Francis H. Brownell
Kenneth P. Budd
H. Donald Campbell
H enry W . Cannon
Newcom b Carlton
W alter S. Carpenter, Jr.
M alcolm G. Chace
H arold Benjam in Clark
T. S. Coffin
H oward E. Cole
Edward J. Cornish
H arvey C. Couch
F rederic R. Coudert
Clarkson Cowl
Paul D. Cravath
Bertram Cutler
Gerhard M. Dahl
Thomas M. Debevoise
Richard Delafield
Clarence Dillon
Franklin D ’ Olier
Frederick H. Ecker
Halstead G. Freeman
T. M. Girdler
David M. Goodrich
Edward H. R. Green

29

Central Western Banker, September, 1930
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bankers and investors who are affili­
ated with the Exchange National bank
and its associated banks have been
drawn to New Mexico by this move
and so become potential investors,”
said Frank Matchett, president of the
new bank.

I New Mexico News |
H1111111111111111111111111111111111111111111111111111111111111111111111111; 11111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111

Resources Increase

Total resources of 27 state banks
in New Mexico had increased to $14,541,601.01 on June 30, it is shown in
the summary issued by Lawrence
Tamme, state bank examiner, based
upon the call for that date.
Another report released by Exam­
iner Tamme shows that on June 30
the total resources of the building
and loan associations of the state had
climbed to $5,039,864.23, a gain of
$632,932.53 in a period of a year.
An analysis by Mr. Tamme of the
condition of the state banks follow s:
The combined resources of 27 state
banks as of the close of business June
30, 1930, were $14,541,601.01, an in­
crease of $565,736.04 over the call of
June 29, 1929, when 30 state banks
reported.
Loans and discounts decreased
$160,323.29 aggregating $7,596,360.24.
Investments in United States gov­
ernment securities decreased $497,854.68 showing a total of $1,775,730.18, which other bonds and securities
increased $360,884.33 to $1,653,412.45.
Demand deposits increased $564,829.68 to a total of $8,247,126.11 and
time deposits increased $52,569.48 to
$340,835.60.
The reserve ratio increased from 16
per cent to 24 per cent.
Balance due from correspondent
banks and cash in vaults totalled $2,916,881.49, an increase of $1,083,760.33.
Bank borrowings were $81,357.59
less than a year ago totalling $389,391.83.
The ratio of loans and discounts
to general deposits was 62 per cent
as compared with 66 per cent on June
29, 1929.
Bank at New Hobbs

Announcement was made of the
granting of a charter for the First
National bank in New Hobbs, New
Mexico. The bank is capitalized for
$25,000 and will open in about 30
days, according to J. F. Matchett, who
will be president of the new organiza­
tion.
The bank was organized by Harry
H. Rodgers, president of the E x­
change National bank of Tulsa, Okla­
homa, and J. H. Markham, Jr., presi­
dent of the Petroleum Corporation of
America.
The Exchange National
bank is recognized as the “ Oil Bank
o f America” and in a statement the
officers of that bank 'said “ we found

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Federal Reserve Bank of St. Louis

upon investigation that there was no
bank in New Hobbs and because of
the immense oil development now go­
ing on and contemplated we deter­
mined to give the community and our
oil customers who are developing
southeastern New Mexico the same
banking service which they would get
at Tulsa.”
“ The attention of hundreds of

Slips

Customer: Ed like to see some good
second hand cars.
Salesman: So would I.
To stumble twice against the same
stone is a proverbial disgrace.— Cic­
ero.

The Morrison is the
tallest hotel in the
world — 4-6 stories
high — with 1,950
rooms.

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

Chicago’s

MORRISON HOTEL
T a llest H otel in th e W orld
46 S tories H igh

1,950 Rooms -- $2.50 Up
500 R oom s Being Added

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

30

Central Western Banker, September, 1930

F ree!
To

Kansas New;
President of New Bank

Subscribers!
H A V E you a bookkeeping
machine, safety deposit
boxes, or other bank equip­
ment that you would like to
sell to advantage? Do you
need a cashier or experi­
enced bookkeeper to com­
plete your personnel?
The C E N T R A L W E S T ­
ERN B A N K E R will inaug­
urate in an early issue a
service
to subscribers
whereby they may insert,
free of charge to them, a
classified
a d v e rtise m en t
outlining t h e i r require­
ments.
The W ant Ad Depart­
ment will be for the free
use of C E N T R A L W E S T ­
ERN B A N K E R subscribers
only. To all others a charge
of five cents per word per
insertion will be made. The
insertion of a single adver­
tisement may pay for an
entire year’s subscription.
W e reserve the right to
edit all copy or to reject
such advertisements that
we deem unsuitable.
Send us your copy at
once. You will be pleased
with the results of this
FREE SER VIC E.
W ant Ad Department

Central Western Banker
410 Arthur Bldg.


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Federal Reserve Bank of St. Louis

OMAHA

Ben S. Paulen, former Kansas gov­
ernor and now president of the W il­
son County bank, announced recently
he had made a tentative acceptance of
the presidency of the new Security
National bank of Independence.
The new bank will be opened when
approval of the reorganization is re­
ceived from Washington and a char­
ter issued. Should this occur, Mr.
Paulen has agreed to accept the presi­
dency.
Mr. Paulen has been president of
the local bank since 1919, although
connected with the bank as an offi­
cial since 1916. He does not plan to
move to Independence, pending re­
ceipt of the charter, until some time
later and will of course for the pres­
ent continue as head of the Wilson
County bank.
Under an agreement approved by
the national bank governing officials,
the new bank is being reorganized un­
der an unique plan. All depositors
having $300 or over in the bank at the
time it was closed, have accepted 40
per cent of their former deposits in
stock in the new bank. Those havingdeposits less than $300 receive it in
cash. New officers and directors have
been chosen and it has been announced
that the Guernsey family will have ab­
solutely no connection whatever with
the new bank. With a surplus of
$250,000 and a capital of $250,000, to­
gether with the business already
pledged, the new bank, should it be
opened, will be one of the strongest
in southeastern Kansas.
Apply for Charter

Application for a charter for the
proposed Fowler State bank, Fort
Scott, Kansas, was received recently
by W . H. Koenecke, state bank com­
missioner.
Included in the list of those who
would incorporate the
new bank
w ere: J. T. Fowler, Arcadia, presi­
dent of the Home State bank, of A r­
cadia; James B. Connolly, Martin
Miller, mayor of Fort Scott; State
Sen. Harry Warren, W . L. Buzzard,
and F. E. Milligan, all of Fort Scott.

Adams has been with the bank for
almost five years, serving as assistant
cashier and director.
The stock in the bank held in the
name of George N. Billings, passed to
his wife, Mrs. Grace G. Billings, and
her name appears as one of the di­
rectors as G. G. Billings. The other
directors of the bank are Mr. Blake
Hull, J. S. Olds, H. D. Billings and
Mr. Adams.
As yet, no assistant cashier has
been elected.
Resigns Bank Post

W . C. Robinson, Jr., president of
the Security National bank at Arkan­
sas City, Kansas, has resigned his
position, and will leave Sept. 1 for the
Pacific Northwest, where he will en­
gage in the investment business.
Mr. Robinson’s new location will
be somewhere near Seattle, in one of
two or three cities that he visited dur­
ing a trip to the Northwest this sum­
mer. He has not made a definite de­
cision.
The Robinson family has lived in
Arkansas City for nearly eight years,
Mr. Robinson having come to the Se­
curity National Bank from Winfield,
where his father, W . C. Robinson, Sr.,
has for many years been a prominent
banker.
Wichita Gets Bond Company

A charter has been issued by the
Kansas charter board to the Union
Plan Bond and Investment Company
of Wichita. Capital 500 shares no
par class A stock and 200,000 shares
no par common class B.
The incorporators are Swan T.
Cox, formerly with the Guarantee
Title and Trust Company; John
Dunn, building contractor; H. R.
Godfrey, formerly with the Safety
Savings Corporation; H. E. Meyer,
former owner of the Southwest
Transfer Company and H. E. Riley,
formerly regional district manager of
the Wimsett System.
The company’s offices are at 223
East William Street.

Elected Cashier

Young and Dumb

At the regular semi-annual meeting
of the stockholders of the State Bank
of Delphos, Kansas, Alva S. Adams
was elected cashier of the bank to sueceed the late George N. Billings. Mr.

“ Jones’s wife thinks the world of
her husband.”
“ She does?”
“ Yes, she even believes the parrot
taught him to swear.”

" " 2 4 -H O U R
P R O T E C T IO N
M E H O L D -L A K E E R I E G A S

BV D A Y . . .
A I H I It O I.lt B A N K V A U L T

•’ N I G H T
DIEBOLD V A U L T S close banks to ban­
dits at night— now Diebold-Lake Erie Gas
disarms bandits in broad daylight! A t night
crooks despair of opening a Diebold Vault
Door when it is closed and fully checked.
They have thrown away their electric
torches and their nitroglycerine, and use
fire-arms instead. Now they are daylight
bandits — dangerous fellows, that take a
bank unawares while its vaults are open
and its valuables unlocked. Armed to the
teeth, they’re a menace to LIFE as well as
property.

Diebold has turned its attention to B A N K
PROTECTION E V E N W H IL E TH E D IE ­
BOLD V A U L T DOOR IS OPEN . Today,
with harmless but effective gas, we protect
banks, their property, employees, and pa­
trons against bandits. This gas renders the
bandit helpless instantly, and keeps him
that way until the police arrive.
The Diebold-Lake Erie Gas installation is
so arranged that it will completely cover
the room in a few seconds. Any teller can
set it off — even with his hands above his
head. The bandit is captured then and
there. No one is hurt. No money is lost.

W e now present 24-hour bank protection— Diebold-Lake Erie Gas by day— Diebold Bank
Vault by night. Write for booklet on gas installation and full particulars.

D iebold
Safe and Lock Company, Canton, Ohio
S e v e n t y

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Federal Reserve Bank of St. Louis

Ye

a r sof

B a n k

S e r


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Federal Reserve Bank of St. Louis