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Federal Reserve Bank of St. Louis
CENTRAL WESTERN
BANKER
Omaha
Strengthening
Public Confidence in Banks
Page 4
How " A C e n t u r y of Progress77
Does Its Banking
Page 5
Protective Equipment
A n d Careful Auditing Spells Lower
Insurance Rates
Page 7
Forty States Affected
By Government W heat Campaign
Page 9
September
1933
BA SED O N
THE
NRA
W e believe that the next few months
promise much for America . . . that the
fulfillment of this promise lies principally
in the successful operation of the NRA.
As a token of our cooperation with and
confidence in this unique crusade for pros
perity, the First National Bank of Omaha
is glad to fly the N R A Eagle and say,
“ W e do our part.”
WE DO OUR PART
When you are in Omaha, please
make our bank your Omaha
headquarters.
"iRST National
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Federal Reserve Bank of St. Louis
BANK OF OMAHA
Centi-al Western Banker, September, 1933
C E N T R A L
3
W E /T E C N
C A N C E R
410 ARTHUR BUILDING
OMAHA
C l if f o r d D e P u y , Publisher
R. W. M oo rhead , Associate Publisher
H. H . H a y n e s , Editor
F r a n k S. L e w is , 218 Essex Bldg., Minneapolis
Subscription, 25 cents per copy; $2.00 per year.
V olum e
28
H. E. O ’C o n n o r , Field Representative
F r a n k P. S y m s , Vice-President, 19 West 44th Street, New York
Entered as second-class matter at the Omaha postoffice.
S E P T E M B E R , 1933
N um ber
9
The Teller Tells the W orld
B y C. W . F I S H B A U G H
much as we need a Federal Guarantee of no more loans to
foreign countries.
<¿8 J8 &
E C E N T L Y a lawyer called up to ask about a certain
chattel mortgage we have. H e asked for a summary
of what the chattel covered. I read it to him, but
when I came to 2,000 bushel of corn, I accidently read it as
2,000 barrels of corn. N ow the lawyer can’t be convinced
that we haven’t plenty of security.
H A T bankers are in search o f :
Bankers need loans that are exactly like a darky with a
bottle of gin— self-liquidating.
¿8 ¿8 ¿8
<¿8 ¿8 ¿8
R
J F Y O U have a nickel in your possession, it’s the devil’s
own money. For in German the word nickel means devil.
Page M r. H itler!
¿8 ¿8 ¿8
JT
S E E M S to me that city banks are sending out older
men as contact men in the country banking field. A t the
Iowa convention recently practically all of the city bank rep
resentatives were passed the “ young man” stage. And for that
matter there were more gray haired and bald heads among
the country bankers themselves. M aybe the last two years
have made young men look o ld !
¿8 ¿8 ¿8
r p H I S story might apply to anyone trying to be a “ bull” on
the m arket: A city fellow out on a hunting trip was cross
ing a large field. “ Say,” he shouted to a farmer, in an adjoin
ing field, “ is that bull safe?” T h e farmer took a chew on his
tobacco and remarked, “ W e ll, I reckon he’s a lot safer than
you are just now .”
& ¿8 ¿8
W
NO W
W E have new rulings on holdup insurance: T he
new insurance ruling limits coverage of exposed money
on assured’s premises, that is, not in vaults, safes, chests, or
similar receptacles locked by timelock including delayed con
trols timelock to 15 per cent of policy. In other words you
can’t keep over 15 per cent of the money covered by your
policy for ready use. This brings up the question, what would
happen if a holdup occurred at the exact moment the timelock went off on your safe. It could very easily happen like
that. W ou ld the banker be expected to tell the gunmen to
wait while he reset the lock? O r would the insurance com
pany decide they owed their policyholder for such a coinci
dence ?
¿8
¿8
J T IS interesting to note these figures on the bank holdup
the longest day in the year. In 1932 the check tax was
put into operation on June 21st. This year the Glass Bank
ing bill was finally passed in June. T hey call August “ dog
days” after mad puppies, so let’s call June “ bank days” after
mad hankies.
,*8 .‘S ,*8
game. In twelve mid-western states (including Nebraska
and Iow a) for the years of 1930 and 1931 the holdup losses
were $5,784,456, while the premium available for losses was
only $3,180,216. In cold facts, the underwriting loss
amounted to $2,604,240. So, there is no doubt left that some
thing has to be done to stop holdups. And the insurance com
panies are trying the right way, that of making the bank
share the risk, and not saying: “ Oh, well, let ’em stick up
this bank, our insurance company w ill pay.” I don’t like the
idea of delayed cash, but I ’ve got to admit they have every
reason for asking it.
¿8 <¿8 ¿8
' y H E W A R debt problem of the U. S. will long be a bone
j\ J O W Y O U ’L L have to watch your pennies. A 1 cent
of contention in this country. It is claimed that the for
eign governments pay us 2.135 per cent interest (yep, even
worse than “ three dot tw o” ) and on that same debt the U. S.
taxpayer pays 4 per cent. T o one country alone we pay $81,680,000 yearly while that country pays us back only $2,552,500 interest and $12,200,000 principal. A nd this year even
this is in default. W hen Uncle Sam makes loans like this,
why should we cry over a $50 bad loan to John D oe ? W e
don’t need a Federal Guarantee o f Bank Deposits half as
counterfeit U . S. coin recently made its appearance in
Boston. It was so perfect in workmanship that an examina
tion with a magnifying glass almost failed to detect any ir
regularity. It was only when the coin was dropped that the
counterfeit was noticeable. However, the “ Feds” did not be
lieve it was the w ork of a real con man, but that someone
made a duplicate penny at a cost much greater than a cent.
Imagine a crook counterfeiting pennies when there’s still a
chance to rob blind men !
T U N E has always been a great month for bankers. It has
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Federal Reserve Bank of St. Louis
Central Western Banker, September, 1933
4
^Confidence is the keystone in the arch of banking.
W hen it is weakened, the structure must fall//
Strengthening P u b lic Confidence
In the Banks
F Y O U were in an airplane ready to
take off and while you still had time
to get out, you learned that your
pilot was reckless, would you stay with
I
the ship?
If you were standing in a hospital cor
ridor watching the white gurney being
wheeled down the hallway into the op
erating room, and on it lay someone very
dear to you, and you learned that the
surgeon was on the verge of a collapse
and that many cases upon which he had
recently operated, had been lost, how
would you feel ?
If you had placed your life’s savings,
the financial future of your wife and
children in a bank and you learned that
the bank was incapably managed, what
would you do ?
A N A D D R E S S by E r wi n V . H o l t o n , American Trust Company,
San Rafael, California, before the 1933 convention of the American
Institute of Banking. Mr. Holton was awarded the first prize in the
annual National Public Speaking Contest
prevented and to erase the blot from the
name of American banking put there by
those bankers who placed greed above
duty.
And today, as a consequence, Am eri
can banking desperately needs some leg
islated relief.
W e must have unified banking and it
will come in one or more of the follow
ing form s:
Through
the nationalization
of
all
banks.
Through the coordination
of
State
laws.
T hrough compulsory Federal Reserve
membership.
N o airplane is safer than its pilot.
Through nationwide branch banking.
N o hospital is more dependable than
its surgeons.
But it must be rigidly supervised to
be effective.
N o bank is stronger than its manage
ment.
W h en the man in the street places his
funds in a bank, he does so because he
believes that bank to be safe. W h en he
believes differently, it is urgent that his
banker shall promptly do something to
restore confidence in his institution.
Confidence
Confidence is the keystone of the arch
of banking. W hen it is weakened, the
structure must fall.
If we bankers cannot or w ill not work
together to correct our weaknesses, and
to strengthen public confidence, the G o v
ernment must whip us into line, for the
consequences of neglect are too serious
to be ignored.
But laws alone will not make banks
safe in the public mind and skill alone
w ill not build that which must first be
founded upon integrity. T h e bitterness
of it is that laws are being sought to cor
rect what honor and vision could have
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Federal Reserve Bank of St. Louis
For Public Good
Never again should banks be chartered
except for public good and then only
when adequately capitalized and when
everyone connected with banking, from
stockholders down, shall know and shall
be ready to meet his liability to deposi
tors.
A means must be found to make stock
market speculation in bank stocks an im
possibility.
Security affiliates must be cut away.
W h o is there who owns defaulted secu
rities who has forgotten who sold them
to him?
Bank officers and staffs must be prop
erly trained. T h e day is fast approaching
when claims to ability must be supported
by documentary evidence. N o profession
al man may practice without qualifica
tions, yet an unskilled doctor or lawyer
could injure only a few persons before
being restrained, but blundering bankers
can demoralize a nation.
Men and Character
But we discuss methods, while it i$
through men and not systems, character
and not devices, where lies the cure.
H ow much more important it is to be
able to guarantee the good faith and good
judgment of Am erica’s bankers than to
be obliged to guarantee their deposits.
T he man in the street knows a bank
by its representatives and it is through
the conduct of those representatives that
public opinion is formed.
W h at are you and I doing to
strengthen public confidence in our
banks?
Are we proving that we know our
business ?
Are we justifying the trust that is
ours?
A re we enjoying the leadership that
was our predecessors’ ?
If not, it is time that we looked with
in ourselves and made some adjustments.
A successful actor has said, “ W hen
my audience does not respond, I get be
fore the mirror in my room and there I
learn what is w rong with my work and
with me.”
Let us approach the mirror of public
opinion earnestly, eagerly, honestly, and
let us learn by what we see reflected
there.
Named Director
Frank R. Coon, president of the M im bres Valley Bank, has been named one
of the directors of the Santa Fe branch
of the Regional Agricultural Credit
Corporation, of W ichita, Kansas.
M r. Coon is to be congratulated upon
his selection as a director of this branch,
which w ill have charge of the agricul
tural credit system of N ew M exico.
5
Central Western Banker, September, 1933
HOW
" A Century of Progress
Do es It’s Ba nking
organized bank under any state law but
simply a place where all cashiers obtain
their change funds and through which
they clear when the day’s business is
completed.
A main bank is maintained in the A d
ministration building. Prior to opening
day, six and one-half tons of coin change,
amounting to approximately $200,00U,
was purchased from the loop banks. Each
morning a supply of silver and currency
is delivered from the main bank by
Brink’s Express armoured truck to vari
ous branch banks.
Banking Procedure
E l e c t r ic a l B u il d in g
“ A Century of Progress”
A N U N I Q U E financial organization
has been set up by A Century of
Progress to handle its daily busi
ness.
W hen it was decided, before the be
ginning of operations, that the exposition
would collect and handle all funds for
concessionaires in addition to the fair’s
own funds, a difficult problem was faced.
T h e mechanics of operation follow
very closely the accepted banking proce
dure and the money is checked in and
out of the main bank and branch banks
on approved receipts by the person in
charge of the particular bank. W h en the
money is received in the branch banks,
individual change funds for the various
revenue positions are made up and placed
in cash boxes. As employees report for
duty they present their identification card
and obtain upon receipt a change fund
and report to their positions.
T here were 1,800 revenue positions
which had to be controlled and audited
each day; the day commencing at 10 a.m.
and ending at 2 a.m. of the next morn
ing. A wide-spread area had to be served
with the opening change funds and sup
plied with additional change during the
day. Currency had to be picked up in
order to avoid the concentration of large
sums of money in any one place.
Uniformed collectors are assigned to
each branch bank and during the day
their duties require a constant circular
ization around the various revenue posi
tions in their district for the purpose of
supplying needed change and collecting
surplus funds for which the collector is
sues to the cashier a pre-numbered re
ceipt.
A tea Divided
A t the close of the day the cashiers
deposit with the branch banks a change
fund and the remaining receipts. T he
cashier prepares a deposit ticket covering
all receipts for the day and the deposit is
verified by the bank teller. A copy of the
deposit ticket prepared by the cashier is
delivered early the next morning to the
concessionaire, explaining in detail the
In order to meet this problem the
management realized the necessity of de
centralization and, therefore, it was de
cided to divide the exposition area, which
is approximately three miles in length,
into ten districts and to establish in each
district a bank. T h e name “ bank” does
not mean what it implies as it is not an
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Federal Reserve Bank of St. Louis
Change Fund
amount of business transacted the previ
ous day.
Branch banks are provided with auto
matic coin counting, sorting and wrap
ping machines. T hey are also equipped
with two key combination time-locked
burglar-proof safes which are used dur
ing the day for depositing surplus cur
rency through a slot provided in the safe.
This safe can be opened only when col
lections are being made by Brink’s E x
press messenger for the purpose of trans
porting the money to the main bank.
T h e person in charge of the branch
bank is required to maintain a daily blot
ter showing thereon the source from
which the money was received and this
record is used in order to credit the funds
so obtained to the revenue accounts of
the concessionaires.
Daily Audit
A t the close of the day, all moneys
are transferred from the branch banks
to the main bank and the main bank is
required to audit and check the branch
banks. T h e money is then turned over
to the vault custodian, who prepares the
funds for deposit in the loop banks. In
order to avoid concentration of money
these deposits are made at frequent in
tervals during the 24-hour period.
In the first two months of operation a
total of more than 10 million dollars was
handled, consisting of coins and bills of
small denominations. A ll money trans
fers from the. main bank to the branch
banks and to the loop banks are trans
ported by Brink’s Express armoured
trucks.
T h e equipment in the branch banks
and the main bank consists of a steel net
work enclosure of the type commonly
found in banks. For the purpose of pro
viding adequate safety for all the funds
held in the bank four time-lock burglarproof safes were purchased and a bur
glar alarm system installed. Armed
6
Central Western Banker, September, 1933
guards are constantly on duty in the
main bank and all branch banks. T h e
branch banks operate 20 hours a day
while the main bank operates 24 hours a
day. A ll banks are used for the purposes
above specified and no business is tran
sacted with the public.
M oney obtained from the various rev
enue positions, as recorded in the branch
bank, is checked either against cash reg
ister readings, turnstile readings or au
tomatic ticket vending machine readings.
In order to control effectively the rev
enue in the various positions 1,200 cash
registers, 246 automatic ticket vending
machines and 557 recording turnstiles
were purchased.
Trust Funds
T h e funds collected daily from con
cessionaires are segregated and consid
ered as trust funds. Each week a settle
ment check is forwarded to the conces-
sionaire. In the interest of efficiency and
ease of operation, certain classes of con
cessionaires have a week ending on M o n
day, others on Tuesday and so on,
through Saturday, which makes it poss
ible to obtain an even flow of work at a
minimum of expense.
T he entire personnel of the banking
division is experienced bank men with
many years of training.
A ll cashiers are given special instruc
tions concerning counterfeit money with
the result that numerous counterfeits
have been detected and retained without
loss. In order to make it extremely diffi
cult for counterfeiters to dispose of large
bills, cashiers are not permitted to accept
a bill of a larger denomination than $20.
Persons requiring change for large bills
are requested to go to the nearest branch
bank where expert tellers can very easily
detect counterfeits.
Public Relations Conference
A ro u sin g Interest
DU E
T O the unique theme of its
convention this year the National
Public Relations Conference of the F i
nancial Advertisers Association is arous
ing considerable interest among bankers.
Following, as it will, upon the heels of
the A .B .A . Convention which meets in
Chicago September 4 to 7, it is under
stood that quite a few are planning to
add to their trip a visit to N ew Y ork to
take in this conference and make some
necessary calls while there.
T h e conference w ill be held at the
W aldorf-A storia Hotel, September 11 to
14.
T h e theme of the convention is unique
in the sense that Public Relations is a
subject practically new to bankers con
ventions. W h ile there have been sporadic
addresses on some phase or another of
this question there never has been a con
ference devoted to a thorough all around
consideration of it.
But bankers have come to realize that
a new element has appeared in banking,
or at least, an element they had over
looked has arisen to confound them. As
a result they have been giving increasing
attention to the question of better pub
lic relations.
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Federal Reserve Bank of St. Louis
It is to make possible the development
of a sound public relations policy that
the Financial Advertisers Association
will provide a national opportunity for
the discussion of this subject at its con
vention.
T h e F .A .A . men will not do all the
talking, however. Instead, they have in
vited a group of banking leaders who
have been in the vanguard of the public
relations movement to come and lay
down the broad principles of the ques
tion.
T here is Herbert H . Lehman, gover
nor of the state of N ew York, whose po
sition speaks for itself.
Francis H . Sisson, a pioneer in public
relations work.
James L. W alsh, vice president of the
National Bank of Detroit, who led the
publicity counter-attack against the on
slaught made against the Detroit banks.
Henry Bruere, who came out of the
business world several years ago and
made the Bowery Savings Bank in N ew
Y ork the most talked of as well as the
largest mutual savings bank in the coun
try.
George W . Davison, perhaps one of
the most favorable to country bankers of
all the N ew Y ork bankers. H e is chair
man of the noted Central Hanover Bank
& T rust Co.
John H . Puelicher, leading exponent
of the training of bank personnel in pub
lic relations. President of the Marshall
& Ilsley Bank, M ilwaukee, and past
president of the American Bankers A s
sociation.
Thomas R. Preston, also a past A .B .A .
president, president of the Hamilton N a
tional Bank in Chattanooga, who has
won recognition as a popular writer on
banking.
G uy Emerson, active leader in the Re
serve City Bankers Association.
Col. Allan M . Pope, past president of
the Investment Bankers Association.
Bayard F. Pope, executive vice pres
ident of the M arine M idland Corp.,
N ew Y ork state’s great group banking
system controlling 22 banks.
T h e most technical aspects of the sub
ject as applied to the various forms of
banking will be discussed at a group of
supplementary departmental discussions
devoted to public relations, trust develop
ment, commercial banking, savings bank
ing and investment banking.
The Return of Silver
Silver: 38JJ cents per ounce.
T hat quotation probably doesn’t ex
plain much to you. But it means that
the poor man’s gold recently touched its
highest level since M ay, 1930.
D uring three long years of depression
silver has been on the bargain counter—
it’s been offered at fire-sale prices. And
that statement, too, explains little until
cause and effect are related, until it is
expressed in the terms of purchasing
power, trade among nations, jobs. T he
collapse of silver was the principal eco
nomic cause of the decline in world
trade— a decline which finally became a
rout. M ore than half the w orld ’s people
saw their purchasing power drop to less
than half of former levels, and factories
all over the world, here and in England
and Germany and elsewhere, closed be
cause cheap silver had taken their mar
kets from them.
Silver is coming back. A nd that means
that prosperity is coming back in a dozen
states and in a score of great industries.
It means that men are going to work,
and that great markets are again going
to open up.
7
Central Western Banker, September, 1933
"\
believe that since bank insurance rates are approaching
prohibitive levels, especially for those banks reporting little or no losses,
the future trend will be toward better p r o t e c t io n within the banks7'
Protective Equipment and Careful
Auditing Spells Lower Insurance Rates
Y T H E very nature of their trus
teeship of public and private funds,
securities and other valuables,
banks and trust companies in the United
States carry a greater volume and varie
ty of insurance coverage than any other
element active in the business life of this
country. And there never was a time
when a dollar saved in expense meant so
much in earnings, so that it seems ap
propriate and timely for bankers to dis
cuss the cost of insurance and dollar val
ues in prevention of loss.
B
Premium rates charged for bank fideli
ty, forgery and robbery insurance and
blanket bonds have mounted higher and
higher until the cost of insurance against
loss through fraud or criminal acts now
constitutes a m ajor item in bank operat
ing expenses, particularly in the smaller
banks. T h e chief reason for these in
creases, of course, is the fact that under
writers’ losses on virtually all types of
bank risks have climbed almost without
interruption during the past ten years,
the ratios of losses to premium revenue
rising sharply since 1927. In each of the
past five years, bank losses paid by cas
ualty and surety underwriters exceeded
the loss payments of any previous year.
Sound Underwriters Imperative
M u ch the same as state insurance de
partments which supervise and regulate
insurance carriers, banks, more than any
other group of policyholders, should be
keenly concerned in the underwriters’
financial stability and ability to pay in
sured losses ; also to avoid discriminatory
practices, especially in the rate schedules.
If only to assure prompt payment of
losses, the frequency and amounts of
which cannot be predetermined, under
writers must be kept on a sound finan
cial basis. Irrespective of profit or loss on
investments, sound underwriting de
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Federal Reserve Bank of St. Louis
By JAM ES E. BAUM
Deputy Manager
American Bankers Association
rnands that ample reserves be set aside to
cover undiscovered losses and numerous
other contingencies. These debits, plus
ordinary operating expenses, must also be
provided for in any rate table to develop
premium revenue adequate to meet their
loss liability on the risks underwritten.
If anybody doubts the trend from
night burglary to daylight robbery of
banks or the rise in embezzlement losses,
witness the fact that during 1932 bank
holdup losses aggregated about $2,000,000, compared with night burglary losses
of no more than $160,000. M oreover,
this total of about $2,160,000 reflects an
increase of more than 100 per cent in
bank burglary and robbery losses com
pared with losses in 1917. In presenting
these statistics, I should make it clear
that they represent only the amount of
insured losses and do not include the un
insured amounts, namely, the excess of
burglary or robbery losses above the
amount of insurance carried.
W hereas forgery once caused a rela
tively small portion of bank losses, this
stealthy type of crime has spread until
the forger now accounts for more than
the tribute paid to bank burglars and
bandits combined.
Rates Higher
It is not surprising, therefore, to find
the premium rates now quoted for vari
ous types of bank insurance ranging from
100 to 900 per cent higher than the
amounts charged but ten years ago.
Say what we w ill about the high cost
of bank insurance and the hank crime sit
uation, there may be consolation in the
fact that these rising costs are becoming
so burdensome that insurance protection
will no longer be solely relied upon as
the line of least resistance, almost to the
exclusion of effective measures of pre
vention. T h e loss experience of under
writers and their failure to adjust rates
so that the business of bank insurance
will become profitable, also indicate that
this form of protection is sagging under
its own weight.
T h e practice of “ Robbing Peter to
Pay Paul” may be frowned upon in oth
er lines of business, but it is no secret
that diverting or distributing the pre
mium income from many banks to pay
the losses of the few merely follows a
fundamental principle of insurance.
H owever, the gist of protests against
the present high rates received from
banks having little or no loss is that un
derwriters are “ robbing” them before the
crooks can get to them! In other words,
I believe that since bank insurance rates
are approaching prohibitive levels, espe
cially for those banks reporting little or
no losses, the future trend will be
toward better protection within the
hanks. If so, the advantages of self-in
surance for at least a portion of the risks
may prove more attractive to these bet
ter protected banks than carrying insur
ance at high costs.
Credit Risk
Another factor in this picture involves
what might be termed the credit risk of
underwriters. T h e unprecedented emer
gency conditions which have confronted
banking in recent years emphasize the
importance of adequate insurance protec
tion and this also means care in the selec
tion of underwriters. N ot unlike banks,
the financial condition of underwriters
generally has suffered from a shrinkage
in the value of their investments during
a period when losses expanded. T h e cap
ital structure of underwriters has been
constantly changing and some companies
must sooner or later face the facts con-
8
cerning their investment valuations. T h e
value of insurance depends largely upon
the readiness and ability of the insurers
to discharge promptly their liability on
losses for which protection was bought
and paid.
Since bank holdup in broad daylight
endangers life, more than other bank
crimes, all bankers should be xxo less con
cerned with prevention of robbery at
tacks than they are in a mere schedule of
the prices charged for insurance. A fter
all, essential as we regard adequate bank
insurance, this form of protection has
beeix abused to a degi'ee which finds
crime subsidized as a business risk. In
other words, I believe that the protec
tive program in thousands of banks, and
particularly the smaller banks, is limited
to the promise of indemnity alone.
D ollar values in prevention are more
profitable than ever in these times, but I
sometimes wonder how many hankers
measure the value of prevention by the
amounts of reinstatemeixt premiums
which they pay to restore their insurance
coverage after loss. Eased upon the re
ports of underwriters’ ratiixg bureaus to
our Insurance Committee in 1932, the
banks and trust compaixies of this coun
try paid no less than $17,000,000 for
last year’s coverage against loss through
criminal acts alone and without regard
to other forms of insurance, such as de
pository bonds, fire, public liability and
other hazards common to all types of
busiixess aixd property. O f this huge out
lay, made for the purpose of securing in
demnity of losses through crime only, I
estimate that reinstatement charges or
the amount of premiums duplicated ac
counted for at least $2,000,000. Trans
lated into preventive measures these re
instatement charges, which accomplished
nothing more thaxx to restore the bank’s
insurance to original amounts, would
have defrayed the cost of installing ade
quate pi’otective equipment or stronger
auditing procedure within the banks.
It is too much, of course, to expect
that we can entirely eliminate dishonesty
from baxxking or rid the country of bank
ci’ooks. Eut I respectfully submit the
plain fact that the penalties imposed by
these reinstatement charges desexwe more
serious consideration and appraisal, espe
cially in comparison with the costs of in
stalling real preventive machinery and
methods. Apart from the element of ex
pense or the outlay necessary to secure
all the advantages of prevention to both
your employees and customers, the dam
age resulting from bad publicity follow
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Federal Reserve Bank of St. Louis
Central Western Banker, September, 1933
ing loss is a poor medium for building
good-will or profits.
Protective Equipment
Equipped with modern pi'otective ma
chinery within the banks and sufficient
police power outside, the bankers at
tacked would not only avoid the nerve
shock experienced in daylight holdup;
they would also save themselves unfavor
able publicity that invariably results
from such crimes, to say nothing of the
expense and inconveniences of identify
ing and prosecuting the criminals.
T o give you an insight into the experi
ence of surety companies with blanket
and fidelity bonds, I requested their rat
ing bureau to shed as much light as poss
ible on their experience under these
bonds. Unfortunately, it has been im
practicable from an underwriting stand
point to segregate by states the revenue
and loss experience under these surety
risks. A ccording to the rating bureau, in
the six years 1926 to 1931 inclusive, the
surety companies received premiums on
bank fidelity bonds totaling $13,573,047
and paid out losses aggregating $9,965,704. I hold no brief for the underwriters,
but it is only fair to point out that the
full amount of premiums received should
not be regarded as net revenue received
at the head offices. An average commis
sion of 30 per cent remained in the state
where the assured banks were located
and taxes took up another 2fA per cent.
In addition, the expense of handling the
business amounted to about 16 per cent,
so that the premium dollar paid for fi
delity bonds dwindles to about 51^4 cents
by the time it reaches the hoixxe offices. If
we reduce the above gross premium rev
enue of $13,573,047 by 48}4 per cent to
cover commissions, overhead and operat
ing expenses other than insured claims,
you can readily see the conditions confronting surety companies. Provision
ixxust also be made for losses sustained
but not yet discovered, as this is a vital
hazard assuxxxed on bank fidelity risks.
Insurance a Stabilizer
M ay I repeat that bank insurance
costs have reached a new high, chiefly
because too maixy banks found that in
surance indemnity was their only means
of protection. M oreover, too many
crooks are just as much aware of this
condition as the bankers are themselves.
It is true that insurance acts as a
stabilizer of business in distributing the
loss burden of one assured over or be
yond his community or state, but under
writing was ixever inteixded to subsidize
crime risks nor substitute for adequate
preventive measures. A nd
adequate
means of prevention within the banks
represents but a short step along the road
we must travel to suppress bank crimes.
T here is much more to the bank crime
problem than mere mechanical equip
ment. Am ong the many outside forces
with which bankers must deal before
they can hope to solve the problem, two
contributing causes stand out, and they
can be dealt with. I refer to bringing
about (1 ) a higher caliber and efficiency
in the constituted police and prosecuting
authorities with regard to the prosecu
tion of criminals, greater man power and
more modern equipment given the po
lice in an emergency which finds them
sorely tried, and (2 ) modernized laws
and particularly the procedural laws
and a more sincere effort toward law
making that will curb law breaking.
Facts of Interest
rj AK A V E L by airplane in the past few
years has increased at a surprising
rate. From an estimated 1,000,000 pas
senger-miles in 1926, aerial travel in
creased to 127,000,000 passenger-miles
in 1932, according to a recent survey.
In the same period, railroad passenger
travel dropped from 35 billion to 17 bil
lion passenger-miles.
¿8 & ¿8
p E D E R A L receipts in the first eight
months of the fiscal year were $1,716,000, a gain of $160,000,000 from
the same period of the preceding year.
Miscellaneous income, including the tax
on beer, was the most important source
of revenue in the period.
A ¿8 ¿8
pH E
O F F IC IA L
estimate of the
American Petroleum Institute indi
cates a decline of 3.4 per cent in domes
tic gasoline consumption for the six
months from April to September of
1933, compared with the corresponding
period of 1932. T h e decline in 1932
from 1931 was 7.5 per cent.
<^8 ^8 ^8
JN
1932, the decline in gasoline con
sumption was greatest in states where
gasoline taxes were highest. In states
with a tax of three cents a gallon, gaso
line consumption dropped four per cent
from 1931, while there was a di-op of
11.9 per cent in states with a tax rate
o f six cents a gallon.
9
Central Western Banker, September, 1933
FORTY
STATES
AFFECTED
By Governm ent W heat Campaign
R E P A R A T I O N S for the Govern
ment’s wheat campaign neared com
pletion last month as the Govern
ment Printing Office began printing 1,500,000 applications for wheat adjust
ment contracts which will be distributed
to farmers by the Agricultural A djust
ment Administration before asking the
farmers to sign up under the wheat plan,
according to Chester C. Davis, director
of the production division.
P
Shortly follow ing the distribution of
the applications, the Administration will
mail 1,000,000 specimen wheat contracts
for inspection and study by farmers, M .
L. W ilson, chief of the wheat section of
the production division, said. T h e wheat
campaign will affect approximately 1,200,000 farmers in 1,200 counties in 40
states. Applications should be in farm
ers’ hands by this time, M r. W ilson says.
Preliminary education and organiza
tion work in the chief wheat producing
countries has been under way for several
weeks, and applications and specimen
contracts will be distributed as the edu
cational program nears completion.
The Contract
In the contract, farmers are offered
cash adjustment payments of not less
than 28 cents a bushel for 1933 on an
allotment of 54 per cent of their adjust
ed average past production, of which 20
cents will be paid this fall and the re
mainder next spring when farmers prove
that they have complied with the
acreage reduction for 1934 which may
be required by Secretary W allace.
T h e acreage reduction, if any, to be
required for 1934 was announced A u
gust 24. Final conclusion on the course
this country may take in restricting pro
duction will await the outcome of the
international wheat conference in L on
don.
Determination of farm allotments and
signing of contracts will begin about the
time the acreage reduction requirement
is announced, M r. W ilson said. M ost of
the contracts will be signed by Septem
ber 15, it is expected.
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Federal Reserve Bank of St. Louis
A g ric u ltu ra l Adjustm ent
Adm inistration Distributes
W heat A d ju stm e n t Con
mal requirements. T h e intention to pro
vide such adjustment payments for 1934
and 1935 as will tend to bring the parity
return to farmers on their allotment is
stated in the contract.
Application
tracts to 1 ,2 0 0 ,0 0 0 Far
mers in 1,200 Count ies in
the United States
County Committees
Under the decentralized administra
tion plan, county allotment committees
of three members each, chosen by and
from county wheat production control
associations and in cooperation with com
munity committees, must determine each
farm allotment. T ota l individual allot
ments and non-cooperating acreages are
to be adjusted to make their total coin
cide with the total county allotment com
puted from official records.
N o contracts are valid until accepted
by the Secretary of Agriculture. A fter
a county committee compiles figures on
farmers’ acreage and production, the
Contract Records Unit of the A gricul
tural Adjustment Administration in
W ashington, D . C., will check the state
ments with official records. If they are in
substantial agreement they will be ac
cepted. If there are discrepancies, county
committees must correct them, and re
submit their figures to W ashington. This
county total must be approved before any
adjustment payments can be made in
that county.
The Details
T h e contract sets forth in final form
the details of the Government’s offer to
wheat farmers and the conditions to
which the Government will ask farmers
to agree. It specifies the allotment for
the farmer, division of allotments be
tween tenants and landlords, and use of
land take out of cultivation, and defines
maximum and minimum acreages which
the farmer agrees to sow to wheat, and
limits use of commercial fertilizer to nor
In the application a farmer submits a
full record of all crops planted on his
farm in 1933. H e also gives acres of
wheat seeded and harvested, and bushels
harvested in 1930, 1931, and 1932. F i
gures for 1928 and 1929 also are re
quired in some instances. T h e farmer
must file a sketch map of his farm with
his application and will be asked for
supplementary statements on disposal of
his crop, threshermen’s certificates, and
certificates of sale of his wheat. From
this information, which is certified by lo
cal community or township committees,
the county allotment committees will de
termine the allotment for each farmer.
Fhe farmer agrees in his application
that the statements made by him may be
published in the local newspapers. T he
wheat plan contemplates publishing state
ments o f all contracting farmers so that
each may compare his statements and al
lotment with his neighbors’ .
Important Points
Important points in the contract are :
Land taken out of cultivation in the re
duction of acreage must be representa
tive of the farm and shall not include
waste, gullied, or eroded land.
Land taken out of production may be
publicly marked.
Land taken out of production of
wheat may not be used to produce any
nationally produced agricultural product
for sale, but may be summer fallowed,
planted to soil-improving or erosion-pre
venting crops, to food crops for home
consumption on the farm, or to feed
crops for the production of livestock or
livestock products for home consumption
on the farms.
Commercial fertilizer on land to be
seeded to wheat in 1934 and 1935 shall
not be applied in greater amounts per
acre than during a specified base period.
Allotments and the contract run with
10
Centrai Western Banker, September, 1933
the land and are to be obligatory on fu
ture purchasers or tenants.
Farmers agree to plant wheat on suf
ficient acres to produce, at an average
yield, at least their farm allotment.
Tenants
Tenants leasing land for cash are en
titled to all adjustment payments during
the period of their leases.
Share tenants are to share 1933 ad
justment payments in the same propor
tion as they share in the crop. Share ten
ants operating the farm in 1934 and
1935 shall receive the same pproportion
as in 1933, if the farm was operated un
der a share lease in 1933.
If a farmer ceases to produce wheat
on the farm, his rights to adjustment
payments for future crop years cease.
Producers agree that county adminis
trative costs may be deducted from their
adjustment payments on a pro rata basis.
property-improvement, where it will give
him something of real and permanent
value. T here is hardly one of us who
hasn’t let his property slide a little the
past few years. W e have put off paint
ing, repairing, installing labor-saving
machinery in kitchen and laundry, build
ing a new garage, overhauling the heat
ing plant, repairing or replacing the
roof, walks, fences, etc. But we have
now reached the point where if we put
it off any longer it w ill mean dollars
out of pocket.
And when we build and repair, we
are doing our bit toward stimulating
employment. O u r dollars will pass
through the hands of workers in a hun
dred industries. W e are increasing pur
chasing power, and laying the ground
work for future prosperity for ourselves
as well. D o n ’t forget that investment
and employment are cheaper than char
ity.
Rights to adjustment payments are
not assignable nor negotiable.
If the current average farm price of
wheat for the 1934 crop year is below
the parity figure, adjustment payments
w ill be made. T h e first, approximately
two-thirds, is to be made between July
1 and September 15, 1934, and the sec
ond after a date when no more wheat
can be seeded in that locality to produce
a crop for 1935.
Similarly, in 1935, if adjustment pay
ments are determined upon, the first in
stallment will be paid between July 1
and September 15, 1935, and the re
mainder some time after November 1,
1935.
Yes, Prices are Going Up
For two consecutive months, accord
ing to a graph in the N ew Y ork Times,
the index of commodity prices has been
moving upward without interruption.
T h e nation-wide policy of the moment
is to raise prices to a more normal level
and, by one means or another, keep them
there.
Here are two facts that should inter
est every property-owner, and every po
tential builder. T hey mean that present
low prices are doom ed; that w e’ re going
to pay more for what we buy— whether
it’s food and clothing, or a new house.
T h e wise citizens who possibly can,
will spend now, when it will get him
the largest dollar’s worth he has ever
known. And he will spend largely on
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Federal Reserve Bank of St. Louis
Can’t Dodge
M oney Question
In the disagreement that characterized
the first meetings of the W o rld Etonomic Conference, one fact stands out :
N o matter how the great nations differ
on most policies, they are one in the be
lief that currency stabilization is essen
tial to recovery.
W hat form this will take is still a
question.
But it is likely that some
means of stabilizing silver will be adopt
ed. For a great many generations mil
lions of people have regarded silver as
the one money-metal— with justice, it
has been called the poor man’s gold.
Silver is selling now at ruinous prices,
and the result is paralyzed foreign trade,
and a tremendous drop in the purchas
ing power of whole nations.
T h e United States, and in particular
western states where mining has been
the principal employer, taxpayer and
purchaser, will be watching the C onfer
ence’s action on silver with intense in
terest.
Continued Improvement
M ost encouraging phase of the gen
eral business situation is not only that
improvement has appeared in basic lines,
but that it is being continued. In recent
months there have been no “ downs” —
there have been many “ ups.” Recently
reported was the sixth consecutive
weekly increase over 1932 in electric
power output— and each gain was larg
er than the one directly preceding it.
Carloadings are up— during the week
ending June 10, they were 12.5 per cent
over the same week in 1932. M ay cot
ton consumption was close to double that
of M ay last year. T h e commodity and
security price indexes have shown climbs
for several consecutive months.
T he
number of business failures has taken a
sharp drop. Iron ore consumption in
M ay reached the highest monthly total
since November, 1931. Improvement in
employment and wage situations is re
ported from all parts of the country.
T he United States is not alone in ex
periencing signs of recovery.
Unem
ployment in the United Kingdom has de
clined. Favorable factors predominate in
French business indexes. Conditions in
Spain are fairly satisfactory. T rade op
timism persists in Canada. N ew business
activity is appearing in Japan. W h ile
economic conditions in N ew Zealand are
dull, prices of export products have
shown sharp rises. Prices for Philip
pine export products have been firm.
A Great Responsibility
T h e builder of a fire engine assumes
a tremendous responsibility. O n that en
gine a whole community may depend. It
may be the means of saving millions of
dollars in property values and hundreds
of lives. If it fails when it is most need
ed, a small fire may get beyond control
and become a roaring, life-consuming
holocaust.
T h e maker of a truck or an automo
bile, for example, has no such respons
ibility. If a car breaks down it is annoy
ing, but not usually important. It may
cause delay in a trip, and some expense
to the owner, but the chances are that
it w on’t cost lives.
T hat is why fire engines should be
purchased from the standard makers—
those that have built up, through genera
tions, an unbroken record of equality and
of service. T hey have proven that they
can be trusted with the responsibility
they assume when they sell a town a fire
fighting weapon. T h ey have never sacri
ficed quality to meet a price, never done
a thing a little less well because it would
cost a little less.
O u r huge annual fire loss will be
greatly lessened when every community
learns that only the best of fire fighting
equipment is good enough.
11
Central Western Banker, Septetnber, 1933
A
lack of enlightened co-operation, with resulting misunderstanding on the part of
employes of the relation between the investment of capital and the invest
ment of labor is here pointed out by the author.
Discussing
problems confronting the railroad industry, M r. Harrison
emphasizes the influence of
The Human Element
N R A I L R O A D S as well as in other
industries, particularly those indust
ries which need vast amounts of
man power, employment expands and
recedes in close parallel to the flow of
traffic. In good times the railroads fur
nish many jo b s; in bad times they are
forced to throw men out of employ,
ment. A part of this unfortunate situ
ation is caused by the inflexibility in the
working rules and wage scales, due to
Federal statute, and it is possible that
m u c h distress could be eliminated,
though not by any means all of it, by a
change in the basic relationship between
employer and employe.
T h e nation has never more solidly
supported the course of action of gov
ernment as the present one to advance
us out of depression. It is a time for
abandoning self-interest that is short
sighted and subversive of the whole,
just as it is time for abandoning collect
ive-interest that is short-sighted and des
tructive of individual initiative and re
sponsibility. If the principles of sound
economy are maintained in the read
justments through which we are going,
we can be certain of the protection of
the balanced interests of all.
I
Labor Wants to Share
Labor insists that since the employes
have invested their lives in the service,
they should be given a right to be heard
when this investment of their lives is
threatened with impairment. T h eir con
ception of labor is not as a commodity
on which the price can fluctuate up and
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Federal Reserve Bank of St. Louis
in the
By M ILTO N W . H A R R ISO N
President, Security Owners Association
down, but as a definite investment which
is entitled to a stabilized return in the
form of wages.
W h en times are good, labor wants to
share fully in the profits. It complains
bitterly that capital is overly greedy in
absorbing the profits which labor helped
to produce. It contends that since the
employes have invested their lives in the
service they should receive a larger re
turn than investors who invest only capi
tal, not realizing that such capital often
represents many years of thrifty ac
cumulation derived from labor. Bond
holders expect a fixed income regardless
of business conditions, says labor, while
workers are cast out of employment and
deprived of their income during times
of depression.
T here are many anomalies in this situ
ation. It is true bondholders expect to
receive their interest payments at all
times. Long term bonds issued by rail
roads usually bear low rates of interest,
and the holders of these bonds forego the
possibilities of obtaining a high return
on their capital during prosperous times
in order to be assured of a stable return
under all conditions. Stockholders, on
the other hand, share in the profits dur
ing times of prosperity, but they run the
risk of receiving nothing on the capital
they have invested during times when
business is slack.
Investment bonds, as I have said, re
Rail Problem
ceive a low return in both good and bad
times, yet labor apparently desires to be
considered as an investment only in good
times. In times of prosperity it seeks to
share to the fullest extent in the profits.
It seeks to secure the full fruits of pros
perity; but when business meets with
reverses, it does not want to share losses.
In other words, labor appears to be
lieve its investment of lives merits the
rights which accrue to both stockholder
and bondholder. It wishes an assured
fixed standard of living in the form of
wages and a share in profits without the
acceptance of any of the uncertainties
and this, in my opinion, is where much
of the discord starts between employers
and employes.
Present Difficulty
In the present economy the diffi
culty arises from the fact that labor ap
propriates, through high wages, its share
of the profits of the railroad industry
before the product of transportation is
sold and before it is established that
there will be profits. T h e insistence that
a high standard of living wage be in
cluded in the cost of operations results
in a paradox, making it impossible to
stabilize the investment of capital. If
this system is allowed to endure, it is apt
to m a k e inevitable complete public
ownership, with a shifting of individual
responsibility to the shoulders of a pol
itical bureaucracy.
Have we not reached the time in em
ployer-employe relationships for a new
12
Central Western Banker, September, 1933
alignment of capital and labor that will
Affects All Industry
Surplus
give both a definite participation in in
come and hence a mutuality of object
T h e suggested new alignment of labor
and capital in the distribution of income
must extend not alone to the railroad in
dustry but to all industry. Human re
lationships and purchasing power are
very delicately interrelated. If a limited
employment ol labor is permitted to ab
sorb, through high wages, an undue
share o f the proceeds of any industry,
the purchasing power of the consuming
public is impaired. M oreover, balance
between production and consumption is
destroyed and all industries and their
employes from which it buys materials
and goods, suffer from the reduction of
purchasing power. .
In evolving a plan for the distribution
of the income of industry among both
capital and labor, there are several
points which must be carefully and
clearly considered. T h e many important
responsibilities of ownership and man
agement should be kept separate and
distinct from the functions of labor in
the operation of industry. Does not the
proposed integrated employer-employe
relations demand the most expert skill
in management? Though adequate pro
vision must be made for the protection
of the rights and interests of labor, the
status of each should carefully be main
tained. T o permit the function of labor
and management to overlap, or to inject
the voice of labor into the affairs of man
agement, would be largely to destroy
mutuality of objective and foster hind
rance and internal dissension.
T h e second point to be considered is
conservation of a reinvestment surplus.
W hen any enterprise is undertaken it is
administered for the purpose of foster
ing growth and development. In most
industries expansion i s accomplished
largely through the reinvestment of
earnings. D uring the period since Fed
eral control the railroads, for example,
have invested approximately eight bill
ions of dollars of their earnings in im
proving and expanding plant and equip
ment. Employe participation in income
distribution must not be permitted to
impair the ability of an industry to de
velop, lest all progress cease.
It should be possible, however, to
make labor and capital partners in in
come. W ith this responsibility on the
part of labor established, the common
objective will give the individual invest
or of labor a sense of operating his own
business, with his own financial welfare
involved, carrying the direct stimulus,
pride and responsibility which the indi
vidual feels when everything is “ up with
him.”
I have observed a lack of an enlight
ened cooperation, and hence, misunder
standing on the part of employes of the
relation between the investment of
capital and the investment of labor.
Continued unenlightenment and failure
to bring about a realignment in such re
lationship w ill result in disastrous soc
ial disorder and chaos. It is essential that
labor be treated as an investment if it is
to assume a proportionate responsibility
in the cost of production. T h e industries
of the nation must voluntarily give labor
a new incentive and responsibility for
its task through a direct interest in the
financial results of operations and in ac
cordance with labor’s contribution to in
come. Each investor of labor must be
given a conscious part in the constructive
development of the industry. It is not
necessary for us to drift completely into
State socialism if the individual invest
ors of capital and labor w ill take their
share of the industrial responsibility.
T h e release of the nation from the diffi
culties of the current depression does not
need to carry us permanently into soc
ialism, if we seek and accept the re
sponsibilities and obligations of our part
icular tasks.
T h e present situation with respect to
control of government has arisen chiefly
through the yielding over the past two
decades of our individual responsibilities
to the government. W e should seek a
ive? Such a new employer-employe al
ignment would enable labor to share in
the proceeds of profitable operations, and
at the same time impose upon them a re
sponsibility to share with capital the
losses f r o m
unprofitable operation
losses from unprofitable operation through
temporary acceptance of a less satisfac
tory wage return. W ithout this new align
ment what must transpire? Is labor to be
an unlimited first fixed charge on all
earnings, regardless of the rights of capi
tal ? If so, the result will be inevitably a
stagnation of the flow of capital for es
sential purposes under private owner
ship. Labor should not share through
high wages in the profits of industry be
fore industrial products are sold, any more
than capital can share in the profits of
industry before the cost of production is
met. T h e readjusted economy of the
country must provide for a balance of
those interests in the distribution of in
come. Labor must be assured of a cost
of living wage as part of the expense of
operations. Above this its growing stand
ard of living must depend upon its status
with capital as an investment. Capital
and labor are both investors,, and both
should have their respective interests in
income, and should participate in a divi
sion of income after a minimum return
is paid to both the capital and labor in
vestors.
G M A C SHORT TERM KOTES
available in limited amounts
upon request
G eneral M
A
cceptance
Executive Office ~
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Federal Reserve Bank of St. Louis
otors
C orporation
B r o a d w a y at 57th S t r e e t "
OFFICES
IN
PRINCIPAL
7{ew Yor\, 71. T.
CITIES
13
Central Western Banker, September, 1933
way by which the government w ill be
released from continuing to assume our
responsibilities after the immediate need
has ended. T h e way to proceed was
pointed out by the great Lincoln in re
ference to the preservation o f t h e
U n ion :
“ I love the sound of this word
‘ U nion.’ It is not the hollow shell of a
great idea, at all, my friends, for our
every-day life is composed of a multi
tude of small unions, the union of man
and wife, the union of employer and
employed, the union of capital and labor
for their mutual benefits, the union of
man-power and the machinery of gov
ernment, and on and on.
This increases the bank’s capital stock to
$2,500,000 and provides for the com
plete elimination of all notes and securi
ties that might be subject to criticism.
“ By this action the Omaha National
Bank has complied not only with the
letter but also the spirit of the new hank
ing law. It will continue, as it has for
67 years, to lend its active support to
sound business enterprise throughout its
territory. W ith increased capital stock
and with attention and effort devoted ex
clusively to banking and fiduciary activi
ties, we feel that we can render more
adequate and satisfactory service than
ever.
New Bond House
Bankers and investors of Iowa and
Nebraska will be interested in the recent
formation of a new investment house in
Omaha to be known as the KirkpatrickPettis-Loomis Company. T h e firm will
conduct a general investment business,
and its offices are at 1616 Farnam Street,
the ground floor of the Omaha National
Bank Building.
Bert L. Reed is resident vice president
in charge of the Lincoln office at 501
First National Bank Building, Lincoln.
Members of the new firm include
Stewart R. Kirkpatrick, Donald L. Pet-
“ T h e pattern, you see, is, as a whole, a
kaleidoscope of national affairs from
which labor cannot be taken.”
Eliminate
Security Affiliate
W . Dale Clark, president of the O m a
ha National Bank, has announced the
divorcement of their security affiliate,
the Omaha National Company, as the
bank w ill hereafter engage only in com
mercial banking and trust service.
T h e Omaha National Company will
become the Nebraska Bond and M o r t
gage Corporation, the president of which
is Charles W . M ead.
T he investment activities of the O m a
ha National Company will be taken over
by S. R. Kirkpatrick, a vice president of
the Omaha National Company, and by
Donald L. Pettis and Arthur L. Loomis,
who have organized the Kirkpatrick,
Pettis, Loomis Company for this pur
pose.
In commenting upon this new ar
rangement, M r. Clark said:
“ In carrying out this program the
bank determined also to take advantage
of other provisions of the federal law to
increase its capital stock and thereby pro
vide further protection for its depositors
and additional invested funds for the
conduct of its business. It will issue an
additional $1,250,000 par value of pre
ferred stock, which it has sold to the Reconstructio n Finance Corporation for
cash. T h e corporation’s investment is not
a loan but an investment in stock of the
hank, made after a thorough investiga
tion of the bank’s affairs had satisfied the
corporation of the soundness of its posi
tion as a stockholder, subordinate in ev
ery respect to the claims of depositors.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
He may be your most important customer, but
too busy to see you or your representative. Some
times thousands of dollars hang in the balance, de
pending on an interview.
Then especially you value Long Distance tele
phone service. For a fraction of a dollar, or maybe
a little more, you are brought "fa c e to face.”
The 75c referred to above is the daytime rate
for a three-minute station-to-station call from Phila
delphia to Washington, D. C. Equal value is evident
in the rates for other such calls as from Omaha to
Denver, $2.05; Chicago to Minneapolis, $1.60; De
troit to Cleveland, 60c.
The charges listed above are fo r station-to-station, daytime calls. The rates fo r evening
and night calls are considerably lower. Where the charge is 50c or more a federal tax
applies as follows: 50c to 99c, tax 10c; $1.00 to $1.99, tax 15c; $2.00 or more, tax 20c.
Central Western Banker, September, 1933
14
tis and Arthur L. Loomis, all of whom
have been associated for many years with
the Omaha National Company, and are
widely known in Nebraska and Iowa in
vestment circles.
M r. Kirkpatrick is president of the
new firm.
invested, the w idow with $100 invested,
or the laboring man with a job, in the
Pacific Gas & Electric Company of San
Francisco.
This company had its taxes raised by
the last California Legislature, $1,150,000. Congress placed a 3 per cent tax on
the production of electricity used for do
Payrolls vs. Taxes
T h e time has arrived when the people
— laboring man and capitalist— feel the
pinch of taxation with equal force. Take
the specific case of the man with $10,000
mestic and commercial purposes, which
added another million a year. Congress
also levied a tax on the company’s stock
which amounted to another $200,000.
O n top of this Congress placed a tax of
5 per cent on all dividends to stockhold
Financial S ta tem en t
of the
N ational S urety C orporation
VINCENT CULLEN, President
June 30th, 1933
ASSETS
Cash .......................................................................
Bonds* .......................................... $4,666,321.46
Stocks*
..................... 1,099,212.00
$ 1,02/,246.74
5,765,533.46
Premium accounts taken over
from National Surety Com
pany ............................................ $2,327,079.11
Less: Reserve originally estab
lished
.....................
727,633.62
1,599,445.49
Premiums in course of collection
National Surety Corporation.........................
First Mortgages and Real Estate.....................
Accounts Receivable............................................
Home Office Building..........................................
1,171,367.15
656,662.51
349,821.12
1,000,000.00
$11,570,076.47
LIABILITIES
Reserve for Unearned Premiums.......................
Reserve for Claims..............................................
Reserve for Commissions and Expenses..........
Reserve for Additional Overdue Premium AcReserve Paid-In for Claims and other contin
gencies ................................................................
Capital ...................................................................
$ 1,587,408.21
385,279.50
680,645.93
4,416,742.83
1,000,000.00
$11,570,076.47
♦ T h e s e a m o u n t s r e p r e s e n t t h e a c t u a l m a r k e t q u o t a t i o n s a s o f J u n e JO, IO JJ.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
ers, which meant another million, and
ordered the company to deduct the 5 per
cent before sending out dividend checks.
Leaving out the $1,000,000 to be col
lected from stockholders, this company’s
total tax bill for a year will now exceed
$ 10,000,000.
Compare this sum with the wages and
salaries paid by the company for 1933,
which amount to $15,000,000. For each
$1.50 paid in wages the company must
pay $1 to tax collectors— state, federal
and municipal.
W h at becomes of savings, and earn
ings on the same, for thousands of stock
holders who have worked and slaved to
accumulate a few dollars to put into an
industry which would pay them a rea
sonable annual return ? W h at is the fu
ture prospect for additional jobs for
thousands of laboring men, clerks, and
other employes of a company that has
to pay out a dollar in taxes for each dol
lar and one-half of wages and salaries?
Another five or ten years of propor
tionate tax increases and there w ill be no
money for jobs.
Think it over. W hen you break a pri
vate company with taxation, who will
furnish the revenue for government,
which the tax-exempt government-owned
enterprise now escapes?
A negro who was well known to the
judge had be hailed into court on a
charge of having struck a relative with
a brick. A fter the usual preliminaries
the court inquired:
“ W h y did you hit this m an?”
“ Jedge, he called me a black rascal.”
“ W e ll, you are one, aren’t you ?”
“ Yessah, maybe I is one. But, jedge,
s’pose someone should call you a black
rascal, w ouldn’t you hit em ?”
“ But I ’m not one, am I ? ”
“ Naw, sah, nawsah, you ain’t on e;
but s’pose someone’d call you de kind of
rascal you is, what’d you d o ?”
H elen: “ H ere’s a picture of my hus
band standing in front of a saloon.”
B ill: “ T h a t’s funny, I don’t see your
husband.”
Helen (examines the picture) : “ W h y
the big bum went in there again.”
“ Robert,” said the teacher, to drive
home the lesson which was on charity
and kindness, “ if I saw a man beating a
donkey and stopped him from doing so
what virtue would I be show ing?’’
“ Brotherly love,” said Bobby.
Central IVestern Banker, September, 1933
15
INSURANCE
Us Application to the B anking Fra tem iti/
Selective selling, which incorporates
organized prospecting as opposed to haphazard soliciting
is one big secret in making your working time show a dollar-and-cents return
W h ere A r e Your Prospects?
P R O S P E C T is any man who can
pay a premium. And this defini
tion, though neglecting various
other qualifications, comes near being ab
solutely correct— at least to all practical
purposes.
A
T here just isn’t any use in trying to
sell a man who hasn’t the money to pay.
H e may be completely sold, but, lacking
the ability to buy, the salesman’s time
has gone for naught.
Exerting sales oratory on an unem
ployed man is like sewing seeds on a con
crete walk with the chance of a harvest
being nil. N or can such solicitations jus
tify the time they take on the basis that
the party so approached may be able to
furnish names of people who might buy.
Names might be offered, but, in most
cases, the salesman would find himself
traveling from one depression-hit man to
another.
So call it materialism if you w ill; it
still remains that the success of an in
surance agent depends on soliciting peo
ple with money to buy. T h e importance,
therefore, of knowing before hand
whether or not a prospect w ill be worth
your while is apparent. But, you ask,
how are you going to tell ?
Occupations
Here is some help. A listing agency
not long ago went over the various oc
cupations, noting those that seemed to
be productive of the most business. Take
your list of prospects, and check their oc
cupations against the occupations they
list as least hit depression-wise. Here
they a re:
Officials, executives, owners, foremen,
clerks, factory workers, inspectors, pub
lic school and college teachers, employes
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Federal Reserve Bank of St. Louis
of the government— local, state, nation
al ; members of building trades, contrac
tors and superintendents; garage owners,
mechanics and managers; creamery and
dairy employes; railroad employes (offi
cial and managerial personnel more espe
cially) ; employes and officials of print
ing, advertising and publishing organiza
tions; stenographers, office clerks; oil
producers and refiners; grocery owners
T H E R E A R E those in every com
munity, who are always in a posi
tion to buy. The agent’s problem
is to find them. There are, in this
article, suggestions that will help
you to spend your time among
really promising prospects
and employes; salesmen; truck operators
and drivers; employes of public utilities;
brokers and brokerage office employes
(currently very good) ; jobbers; retailers
and finance and banking institutions.
This is not to say the above occupa
tions have come through the depression
unscathed. It is simply that they rep
resent the more fortunate occupations
and the occupations that seem to be feel
ing the upturn in business most notice
ably.
Variations in the most favorable occu
pations must be expected in particular
sections of the country. T h e agent, how
ever, need not depend on outside listings
but can, instead, make his own. An anal
ysis of the individuals to whom you have
sold within the last year should throw
considerable light on the local trend.
Who Are Buyers?
Check back over your books. People
in what occupations seemed to buy in
surance more frequently? W h at classes
are represented more often in the higher
premium divisions? Before prodding in
this manner very long, you will probably
find that very definite occupations and
classes predominate in your personal list
ing.
T h e list you make should point a clear
path for current sales effort, and afford
the most favorable leads for establishing
centers of influence that will make the
time-tested endless-chain method of pros
pecting most effective.
A fter you have a list of those who
should represent the best prospects, do
not, as the old-timers like to phrase it,
go off half-cocked.” T o o often this
leads to the pitfall of an approach tak
ing the form, “ Can you spare a few mo
ments to discuss insurance?” T h e pros
pect can too easily answer, “ N o,” and
imply that the agent might better be
moving along.
The Interview
Spend a little time carefully planning
each interview. Learn as much as you
can about a man ; his occupation ; prob
able income; property holdings; hobbies;
whether married; how many children;
when should be the best time for an in
terview; what line or lines should inter
est him m ost; whether the first call
should be made to cultivate good will
or whether you should get down to brasstacks.
Have something definite and interest
ing to suggest to prospects. M ake them
like you ; the chances are then better that
what you have to tell them will be heard
with interest.
Central Western Banker, September, 1933
16
Some potentially large buyers of in
surance may be difficult to approach as
far as selecting one definite line is con
cerned. Yet, this makes it all the more
important that you should approach them
with some concrete, valuable recommen
dations. These cases afford you an oppor
tunity to sell yourself as an insurance
expert and the facilities of your agency.
Interest the big insurance buyers by
employing the Analysis of Insurance ap
proach. T e ll him why he should have an
audit of his insurance— what it means,
what it may save, what it may mean in
actually increased protection. If you can
sell the idea of an analysis, you needn’t
worry about sales; the sales w ill take
care of themselves most generously, if
your analysis clearly demonstrates what
your agency can accomplish for the buy
er.
T h e time you spend in studying and
hand-picking your prospects, instead of
being fruitlessly spent, actually insures
that an increasing proportion of your in
terviews will bring premium dollars into
your agency. Y ou can’t know too much
about a prospect; too frequently it is a
case of knowing too little. T h e more you
know, the greater is the likelihood that
you w ill approach a prospect with such
a clear-cut knowledge of his insurance
needs that he will see that your recom
mendations fit his case perfectly.— C on
tinental Agents’ Record.
National Surety
Cash Increases
T h e June 30, 1933, financial state
ment of National Surety Corporation,
made public recently by Vincent Cullen,
president, is receiving much favorable
comment in insurance and financial cir
cles.
National Surety Corporation started
business on April 29, 1933, follow ing the
appointment of George S. Van Schaick,
superintendent of insurance of the state
of N ew Y ork, as rehabilitator of Nation
al Surety Company, and the June state
ment reflects the progress made by the
corporation in its first two months. On
June 30th the corporation had cash of
$1,027,246.74, an increase in two months
of $373,242.60. Bonds and stocks ap
preciated over $600,000 in the two
months, and are shown in the statement
at market value of $5,765,533.46.
he
corporation took over from the National
Surety Company outstanding premiums
of $4,035,059.20. Some of the premiums
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
have been collected and those uncollect
ible have been charged off reducing this
item as of June 30th to $1,599,445.49
with a reserve of $500,000 carried in the
liabilities against possible further shrink
age.
In commenting upon the affairs of the
corporation, President Cullen pointed
out that its assets were highly liquid and
that 80 per cent of its portfolio consisted
of bonds. H e stated that during M ay
and June the corporation had written
more than $1,500,000 in net premiums
and that the volume of new and renewal
business was most satisfactory. He stated
that the loyal agents and brokers, na
tionwide, were chiefly responsible for this
excellent showing, and that the corpora
tion had been approved by the largest
banks, railroads and financial institutions
in the country.
Remember
A n O ld Truth
There is a rather curious attitude
abroad now in the kingdom of politics.
Members of the political courts admit
that the trend of legislation in all forms
of government is toward higher taxes—
but insist that these additional costs will
be taken care of by new sources of rev
enue.
T h e potential tax on liquor is a good
example of this. A t this writing 22 states
have ratified repeal, and none have
turned it down. And at W ashington and
in two score state capitals, public men
chirp gleefully to the effect that a liquor
tax will produce millions in revenue,
and make possible more bond issues,
more governmental ventures into strange
and attractive realms.
Apparently no one in public office has
taken the trouble to point out that there
is only so much money in the country. It
can buy only so much— it can pay only
so much in taxes. A new tax, whether
on liquor or on anything else, doesn’t
create more national income. It simply
takes its money from a different place—
which leaves less money in another place.
T a x juggling has been the curse of
modern governmental economy. It’s the
old dodge of spending out of the citizen’s
right-hand pocket instead of his left. For
ten years we have listened to speeches on
tax reduction and have permitted the na
tional expense account to soar. A nd it’s
time we remembered a fact of the ut
most simplicity — the only way lower
taxes can be had is for government to
spend less money.
Americans Developing
Characteristics of Thrift
In a recent month sales of ordinary
life insurance were but 10 per cent be
low the same month last year— an expe
rience representing the smallest monthly
decrease for a year and a half. It like
wise is a very favorable record in com
parison with other basic industries.
N ow that recovery has really started
— that men are going back to work—
that the wheels of industry are turning
steadily faster— the life insurance indus
try has every right to expect a bright fu
ture. M r. Average Citizen has learned
much in three years. H e has learned that
to look for quick and gigantic profits on
a small investment is to court bank
ruptcy. H e has learned that security and
safety are the true arbiters of any invest
ment. L ife insurance offers these— plus
benefits nothing else can offer.
Every time another life insurance pol
icy is sold, another American has demon
strated a growing national characteristic
of thrift, foresight and wisdom.
Purdy Retires
A fter an association of forty-two years
with T h e Chase National Bank, W i l
liam E. Purdy, vice president, is retiring
to private life.
M r. Purdy was one of the charter
members of N ew Y ork chapter, Am eri
can Institute of Banking, and of the
Association of Reserve City Bankers. He
has also served as a member of the E x
ecutive Council of the American Bank
ers Association and on several of its com
mittees, and has a record of attending
twenty-eight consecutive annual conven
tions of the association. T hrough the
contacts thus formed, M r. Purdy has
built up an extensive acquaintance among
bankers in every part o f the country.
Adam was toiling home at the end of
a hot summer’s day, carrying his shovel
and hoe, while little Cain trotted be
side him.
O n reaching the Garden of Eden, littale Cain peeped through the palings
and said: “ Gee, pop, I wished we lived
here.”
And pop replied: “ W e did once un
til your mother ate us out of house and
home.”
Central Western Banker, September, 1933
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17
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3
Nebraska
News
I !. I I . R A K R E R , P r e s id e n t
N e b r a s k a IS an k ers A s s o c ia t io n
W M . 1!. H U G H E S , S e c r e t a r y ,
N e b r a s k a R a n k e r s A s s o c ia tio n
......" " ..................................................................................................................... ...............................................................................................................................................................................................„ 1,11,m i,I,I,I..........mil, I"
....... .
Group Two Meets in Fremont
jy /J E M B E R S of Group 2 of the N e
braska Bankers’ association, meet
ing in Fremont, adopted resolutions urg
ing that the postal savings system be
abolished, opposing legislation permitting
the growth of branch and chain bank
systems, and urging repeal of the check
tax. T h e annual meeting was held at
H otel Pathfinder.
Officers who served during the past
year were re-elected. T h ey are P. J.
Ternus, cashier of the Farmers’ State
bank of Humphrey, president; F. W .
Shonka, Jr., assistant cashier of the
Schuyler State bank, secretary; and M .
M . T aylor, Colum bus; H. R. Coufal,
Howells, and R. 1. Stout, Tekamah,
members of the resolutions committee.
In the absence of Ternus, J. M . Sor
ensen, vice president of the Stephens N a
tional bank of Fremont, presided. He
introduced W illiam Edward Johnson,
of Chicago, president of the firm of
Johnson, Reed and W ohlw end, consult
ing bankers, follow ing the address of
welcome by J. D . M illiken, vice presi
dent of the Fremont National bank.
M r. Johnson expressed his opinion
that the guaranty system enacted this
year is uneconomical in that it sets no
tax to collect the money, but makes pro
vision for assessments when banks fail.
W hen banks fail is the time others are
the least able to pay, he stated. H e
thought a tax should be paid and that
this should come from depositors, who
really obtain the benefits from a guaran
ty system.
W illiam B. Hughes, secretary of the
Nebraska Bankers’ association, was in
troduced and devoted some time to a dis
cussion of the new banking legislation—
both state and national— and explained
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Federal Reserve Bank of St. Louis
the new corporation tax. H e cautioned
the bankers present regarding the ruling
of insurance companies on burglary and
robbery insurance.
Dan V . Stephens, president of the
Stephens National bank, was introduced
and stated that the bankers of the vari
ous communities could be of great service
to their communities in cooperating with
any movement concerning public works.
H e said that the public works board for
Nebraska would listen to any and all
propositions submitted and would lend
every cooperation where they thought
the project was proper and beneficial.
40-Hour Week
Fincoln banks, through the Fincoln
Clearing House association, have adopt
ed a 40-hour week in compliance with
the national recovery act. T h e new pro
gram became effective August 1.
Both banks and trust companies will
be open to the public shorter hours. T he
banks will he open from 10 to 2 o ’clock
on week days, instead of from 10 to 3.
Enlarge Space
Changes are to be made in the Hast
ings National Bank building that will
Convention
Nebraska Bankers
Association
W ednesday and Thursday
November 15-16
Omaha
I,,,I,
......„„m i
......... ........................................................... , J
provide more office space and more pri
vacy for officers, more working room for
employes and at the same time enlarge
the lobby and provide more door open
ings for patrons entering and leaving the
institution.
Plumbers began work in the basement
recently, but a large part of the interior
work will be done during the Fabor Day
holiday and all will be completed by the
time the bank opens on Tuesday, Sep
tember 5, the day follow ing Fabor Day.
Stephens Accepts
Dan V . Stephens has had a message
from President Franklin D . Roosevelt
notifying him of his appointment as a
member of the Nebraska advisory board
of the federal public works administra
tion and at once wired his message of
acceptance.
F ollow ing is the message he sent to
the president :
“ Replying to your wire of July 26, I
greatly appreciate the honor and oppor
tunity of service to you, the state and na
tion in accepting appointment on board
of public works.”
Date Extended
A four months’ extension of the time
limit hitherto set for state banks operat
ing under restrictions in Nebraska to get
back into 100 per cent operating condi
tion, placing the date ahead from Sep
tember 1 to January 1, is announced by
State Banking Director Fuikart.
In order to receive the additional grace
period, however, banks must show some
improvement in their affairs within the
period originally fixed. A half dozen or
more, Fuikart said, w ill probably be un
able to do this, and these will be closed
about September 1. There will be some
additional suspensions at the end of the
year, but how many cannot be foretold
at this time.
Central Western Banker, September, 1933
18
Loan Bank Opens
From Colorado
Home Loan Attorney
T h e Federal Home Owners loan
bank, Lincoln, did a “ land office” busi
ness the first day of its operation. Be
fore the office had been open more than
three hours there had been 125 applica
tions for loans of which, however, only
60 per cent were actual “ distress’ loans.
D on W achter, head of the hank, said
the distress loans, that is, loans to those
who were in immediate danger of fore
closure, would be handled first and that
others should wait until later before fil
ing applications.
W . F. Nicholson, resident partner in
Colorado Springs, Colo., of Boettcher,
Newton & Co., investment banking
house with headquarters in Denver, and
M . R. Glaser of Rosenbaum Bros., Chi
cago grain concern, were in Omaha re
cently for the formal opening of the new
enlarged Omaha offices of BoettcherNewton on the second floor of the O m a
ha National Bank building.
F. M . Deutsch, prominent N orfolk
lawyer, has been named by Charles
Smrha, state manager, as attorney for
the N orfolk branch of the Home O w n
ers’ Loan corporation in Madison coun
ty. These appointments were announced
W ednesday by L . P. Pasewalk, manager
for the N orfolk branch.
P. E. M cK illip of Albion is district
counsel under the N orfolk branch.
Heads Committee
D . P. Hogan, president of the Federal
Land Bank of Omaha, has accepted the
chairmanship of the chamber of com
merce agricultural committee, made va
cant by the resignation of Carl R. Gray,
president of the Union Pacific.
Investigation?
On C. of C. Committee
Alvin E. Johnson, vice president of
the Live Stock National bank, has been
appointed chairman of the revenue com
mittee of the Omaha chamber of com
merce for the ensuing year, it was an
nounced recently by W a lter F. Cozad,
chairman of the chamber’s executive
A court contest over the right of State
Auditor Price to make an examination
of the Nebraska banking department
seem imminent.
E. H . Luikart, director of the bank
ing department, said its receivership di
vision is under court orders and a state
official cannot order an investigation of
board.
it.
Price asserted he would bring a man
damus suit if necessary to gain access to
Visit “ Fed” Banks
J, J. Thomas, Nebraska member of
the federal reserve board, and George R.
James, another member of the board,
left W ashington, D . C., recently for a
“ swing around the circle” visit to reserve
banks in four cities.
T h e two members will inquire into
the work of the banks in Chicago, Kan
sas City, St. Louis and Dallas, confer
with heads of the banks on the financial
situation and generally investigate the
present status of the system.
Correspondent
D r. Leo R. Beattie has been asked by
Bert W addell, Land Bank Commission
er, to serve as his correspondent for Keya
Paha county, and has accepted. D r.
Beattie will close all approved loans
made in this county. T h e commissioner
loans will be appraised by Federal Land
Bank appraisers. It is expected that sev
eral new land bank appraisers w ill soon
be appointed in north Nebraska, and
the work will then rapidly go forward.
the records.
Governor Bryan backed Luikart with
the statement it would be an insult to
the courts which appointed the banking
director as receiver to let Price look over
the receivership division books.
A bout two years ago, attorneys for
Clarence Bliss tried by a replevin action
to get control of bank receivership books
when he left the banking department o f
fice. H e was receiver for a number of
banks.
Unrestricted
Feed Lot Loans
Given Special Attention
LIVE STOCK NATIONAL BANK
O M A H A
This Bank H a s N O Affiliated Companies
M e m b e r o f F e d e r a l R e s e r v e S y ste m an d O m ah a C learing- House Association
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Federal Reserve Bank of St. Louis
T w o more Nebraska banks opened for
business recently without restrictions
making a total of 255 unrestricted.
T hey are the Elyria State bank and
the Stromsburg bank. Both were reor
ganized by stockholders.
A t the same time the exchange bank
of Bladen, which had been operating on
a restricted basis and in process of liq
uidation since M arch 3, 1933, was taken
over by the state department of banking
for financial liquidation.
Home Loan Bonds
Director Luikart of the state banking
department denies that he has ordered
building and loan associations not to ac
cept bonds of the new federal home loan
bank.
“ T hat is not true,” he said. “ Building
and loan associations have asked if they
might accept home loan bank bonds in
payment of loans made by them. I have
told them they may do so but that the
Central Western Banker, September, 1933
bonds must be taken at their market val
ue and not face value. These bonds are
likely to vary greatly in price from time
to time and I don’t see how I can arrive
at any other decision than to have them
accepted at market price.”
T h e home loan bonds, he said, are se
cured by mortgage and guaranteed as to
interest for fifteen years but are not
guaranteed as to principal.
Returns from Europe
Fred W . Thomas, vice president of
the First National Bank of Omaha, re
ports a most interesting vacation trip,
spending a month in Europe, where he
and M rs. Thom as toured England,
France, Switzerland and Southern G er
many. T hey returned last month.
Conditions in both England and G er
many appear to be gradually becoming
better, according to M r. Thomas, who
was particularly impressed with the great
progress being made by Germany under
Hitler. Despite reports to the contrary,
Flitler, in his estimation, is a real pa
triot, striving not particularly for power
for himself, but for a rebuilt and re
juvenated Germany.
Although France seems to be in good
shape financially, M r. Thom as is doubt
ful that conditions in that country will
continue as prosperous as they now are.
“ T h e feeling in England is for pay
ment of the debt to the United States,”
M r. Thom as says. “ France, however, is
doing as little as it can towards payment
of its debt to us. T hey still want to hold
onto their gold supply, knowing that lat
er the nation w ill need it badly.”
This was due, M r. Thom as says, to
the French budget, with expenditures
exceeding income.
Fie says there was an undercurrent of
militarism in France and in the Rhine
country, with the young generation of
Germany feeling some day they must
gain for Germany that land now occu
pied by France but which they insist
rightfully belongs to Germany.
“ W h ile France won the war, it still
feels uneasy over the future, knowing
the spirit of militarism among the young
er German generation,” M r. Thomas
says.
M r. Thom as said H itler is gaining in
favor, due to his less radical policy and
in that he is now receiving the support
of the more substantial classes, not en
tirely to the liking of the radicals who
put him in power.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
19
First National, Lincoln
Business in Lincoln is showing sub
stantial improvement, and business in
general seems happy to cooperate in the
N R A campaign, according to Executive
Vice President P. R. Easterday, o f the
First National Bank of Lincoln. Depos
its of the First National, according to
its June 29th statement, were in excess
of eleven million dollars. T ota l resources
were $13,342,363.
T h e First T rust Company, affiliate
institution, has total resources of $5,
741,323, according to its last statement
of condition.
S. H. Burnham 111
S. H . Burnham, dean of all Nebraska
bankers, chairman of the Board of the
First National Bank of Lincoln, has
been sick for the past three weeks, and
confined to his bed at his home in Lin
coln. Illness is due to old age complica
tions. M r. Burnham is now in his 84th
year.
“Colonel” Alvin E. Johnson
T h e name “ Johnson,” to N R A work
ers in Omaha and vicinity, has a double
meaning. W h ile the noted “ General
Johnson does his stuff in Washington,
D. C., Alvin E. Johnson, genial vice
president of the Live Stock National
Bank of Omaha, holds the rank o f “ man
power Colonel in Omaha, in charge of
a thousand N R A workers who are speed
ing the work of mobilization under the
Yo U K
N R A banner. T hey are working to get
complete cooperation between N R A em
ployers and N R A consumers.
A Bandit Scare
T h e South Omaha Savings Bank em
ployees had a bandit scare last month
when an Omaha man, later alleged to be
demented, appeared in a small office in
the front of the building with a hand
kerchief over his face. Uncertain as to
whether a holdup was contemplated, but
taking no chances, Vice President A . J.
Halias called the police, and Frank Kocarnek, cashier, fired a shot in the air.
T he would-be bandit fled, but was
later captured and identified.
Continental National Bank
T otal deposits in excess of five and
one-half million dollars are shown in the
last statement of condition of the Con
tinental National Bank of Lincoln. As
of June 30, the bank had total resources
and liabilities of $6,224,495.
T h e Continental National is capital
ized at $200,000 and has $200,000 in
surplus. Undivided profits and reserves
are $37,876. It is affiliated with the
Northwest Bancorporation group.
On Military Basis
T h e appraisal department of
eral Land bank of Omaha has
ganized on a military basis, it
nounced last month by D . P.
the Fed
been or
was an
Hogan,
C A PITAL C ITY
CORRESPONDENT
C
o ntinental
N
atio nal
LIN COLN , N E B R A S K A
B
ank
Central Western Banker, September, 1933
20
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president, with the chief of the appraisal
and loan division in charge.
T h e four states served by the bank,
Iowa, Nebraska, South Dakota and
W yom ing, have been divided into six
districts, with a captain in charge of each
district. T h e districts have been subdi
vided into zones, with a lieutenant in
charge of each zone, with a staff o f from
four to six appraisers under each lieu
tenant.
A ll the captains, with one exception,
have been with the bank since its early
days, according to M r. Hogan, and are
thoroughly experienced in their work.
A ll applications for loans are now sent
to the lieutenant of the zone in which
the property is located for investigation,
and if the appraisal appears out of line,
the lieutenant and his appraisers submit
a new appraisal to the captain of the dis
trict, who, in turn, submits it to the
bank’s executive committee.
T h e bank has received as many appli
cations for loans in the last 17 days as it
received during the entire year of 1932,
M r. Hogan said, and applications are
coming in at the rate of $1,000,000 a
day.
T h e force of appraisers has been in
creased from eight to 146, with 62 ad
ditional appraisers in training. Execu
tives in the loan department have been
increased from two to seven, with seven
additional assistants.
Agencies to Consolidate
Consolidation of federal farm loan
agencies in Omaha will be started imme
diately, D . P. Hogan, president of the
Federal Land bank at Omaha, said on
his return from a W ashington conference
of farm credit administrators.
T h e office of Bert W addell, district
agent of the farm loan commissioner,
will be made part of the land bank or
ganization and operate under land bank
supervision, according to the new order.
T h e consolidation w ill be complete by
September 1, when the Farm Land bank
moves to its new quarters in the Bankers
Reserve building.
“ T h e purpose of the consolidation,”
M r. H ogan explained, “ is to expedite
the work and to get service to the farm
er quicker.”
Under the new plan, farmers’ may
apply for both types of loan without
making separate application. W here a
farmer needs loans from both agencies,
the consolidation w ill eliminate duplica
tion in application, registering, appraisal
and approval of the loan.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
ï!!!IMIIM!l!l!ll1HIII!milllliinillllllllllllll1HIIIIIIIIIIII1llllllHllllllimilllllllllllllll"ll"llimilllllllllllllll«IIIIIHI
Sell Affiliate
Purchase by Henry C. Van Schaack
and associates of the entire business, good
w ill and assets of Denver National Co.
was announced recently.
Denver National Co., formerly affi
liated with the Denver National Bank,
is one of the largest and best known real
estate and insurance firms in the Rocky
M ountain region.
In a statement accompanying the an
nouncement, Roblin H . Davis, president
of the Denver National Bank, declared,
“ T h e provisions of the so-called GlassSteagall bill recently passed by the na
tional congress have made it seem advis
able and possibly necessary for the D en
ver National Bank to dispose of the bus
iness formerly carried on by the Denver
National Co., an affiliate. T h e Denver
National Bank will hereafter confine its
activity in accordance with the spirit of
the Glass-Steagall bill, to the customary
banking activities of the commercial, sav
ings and trust departments.”
Change Hours
T h e Berthoud National Bank will
open hereafter at 8 :30 in the morning,
closing at 4 in the afternoon as hereto
fore.
T his institution has long been entitled
to an N R A card, because it has always
paid well above the minimum wages and
has not worked its employees more than
the prescribed forty hours per week.
Depositors Committee
D r. James F. W illard was elected
chairman and Frank F. Dolan secretary
of the Boulder National depositors com
mittee at a recent meeting. President
Dudley Hutchinson and Conservator C.
G . W alton were present at the meeting
and gave members of the committee de
sired information regarding the bank’s
affairs.
The Blue Eagle
Denver Clearing House association
banks have signed the bankers’ code and
started working under the national in
dustrial recovery act. T h e code contains
the provisions approved by the Am eri
can Bankers association. A bout 750 em
ployes are involved.
T h e bankers’ code provides a fortyhour week averaged over a five-week pe
riod. Such an average is necessary owing
to the periodic settlements, payments or
emergencies in serving the public, over
which the banks have no control.
M inimum salaries of $14.50 for D en
ver bank employes are provided.
Provisions for working hours do not
apply to guards and watchmen employed
to safeguard the assets of the bank, who
cannot be shifted or changed during the
night. Executives and other officials re
ceiving $35 a week or more are exempt,
as generally provided under the general
code.
A fter August 31 no person under 16
shall be employed, except that persons
between 14 and 16 may be employed for
not to exceed three hours a day, and
those hours between 7 a.m. and 7 p.m.,
in such work as w ill not interfere with
day school hours.
To Retire
George B. Harrison, former president
of the Denver National bank, and since
January 1, 1933, chairman of the execu
tive committee, has resigned from that
chairmanship, to take effect O ctober 1,
and will retire from the banking busi
ness to live in California.
His successor as chairman w ill be con
sidered later, according to President
Roblin H . Davis.
Harrison joined the Denver National
bank on July 15, 1926, and a few months
later was elected president. For many
years he was president of the N ew Eng
land National bank in Kansas City, M o .
H e had retired from that position and
was planning to go to California for
complete rest, when he was called to
Denver upon the death of John C.
M itchell, veteran president of the D en
ver National. Harrison accepted the
presidency for a specified term of five
years.
Bank Debits
Bank debits to individual accounts for
the four weeks ending June 28 totaled
$8,995,000 in Colorado Springs, accord
ing to the monthly review of the Federal
Reserve bank of Kansas City. T his com
pares with $9,935,000 with the same pe
riod a year ago.
Building operations increased in June
of this year over the same period a year
ago by $19,986 to $10,925, respectively.
Vice President
A t a meeting of directors of the D en
ver National bank, Herman L. Sanders,
21
Central Western Banker, September, 1933
for the last twelve years president of the
Stockyards National bank, was elected a
vice president of the Denver National
bank, making the third vice president
now in office. T h e two other vice presi
dents are James C. Burger and Henry
M . Porter.
T h e new vice president started his
banking career in N ew Y ork city, where
he was born, and came to Denver twen
ty years ago to become manager of the
savings department in the Continental
T rust company. H e remained manager
there until he started a private bank at
Crook, Logan county, Colo., in 1916.
H e owned and managed this bank with
great success five years. H e then dis
posed of the bank to become president of
the Stockyards National bank, for years
controlled by Arm our & Co. and Swift
& Co. A year ago Sanders resigned and
the bank now is being liquidated.
Highest This Year
Denver bank clearings took another
spurt during July reaching the highest
total of any month so far this year, the
Clearinghouse association announced.
T h e clearings were $77,529,611.79 as
compared with $75,486,792.53 in June
of this year and $74,332,872.65 in July
a year ago.
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Guaranty Condemned
A called meeting of Group 4 of the
Kansas State Bankers’ Association was
held in the Cloud County Bank in C on
cordia, with H . W . Koeneke, bank com
missioner, as a speaker. T h e meeting was
held to consider the possibilities of the
Glass-Steagall act which contains the
national guarantee clause.
Jay Close, president of the State E x
change Bank of Topeka, was also one of
the speakers at the meeting.
T en counties were represented, and
there were about forty-five bankers pres
ent.
T h e general sentiment of the men
who attended the meeting was that the
banks of this section of the state would
not be able to work under the guaranty
insurance act.
50 years M r. Badsky had been prom
inently identified with the business and
political affairs of his state and was al
ways one of the outstanding figures at
state and national conventions.
H e was the founder of the First N a
tional Bank of Overbrook, and one of
the large land owners in Osage and
Douglas counties. Seventeen years ago
M r. Badsky moved to Lawrence, enter
ing the banking business with T . J.
Sweeney, to found the People’s State
Bank of Lawrence.
Unrestricted
T h e Grant County State Bank, Lakin, opened for business recently on an
unrestricted basis. Following the bank
holiday in M arch, restrictions were im
posed upon depositors who at that time
had deposits in the bank totaling $110,000. Since that time unrestricted de
posits amounting to $40,000 have been
received, and the bank was opened with
deposits amounting to $150,000 and free
from restrictions.
T h e Grand County State Bank is the
only banking institution in Grant Coun
ty. George Daugherty is cashier.
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Federal Reserve Bank of St. Louis
Change Quarters
W illiam M acferran, jr., president of
the State Savings bank, of Topeka, has
announced that the State Savings bank
had leased the room at 824 Kansas ave
nue, and w ill move to that location in
60 days, or as soon as the redecorating
and remodeling can be completed. For a
long time the officers of the bank have
been desirous of having a banking room
on the sidewalk level for the greater con
venience of their customers, and have
felt the need of additional room for the
safety deposit department. T h e new lo
cation provides these.
Group Seven
Four hundred bankers from that sec
tion of the state are expected to attend
the Group Seven meeting of the Kansas
Bankers Association in Hutchinson Fri
day, September 29. Meetings will be at
the Chamber of Commerce.
Meet in Colby
New Cashier
August 1 marked the first day for
W illiam Messner as new cashier of the
Hesston State Bank. M r. Messner took
the place of George T oew s, who will go
to Inman to the Farmers’ State Bank.
M r. T oew s has operated the Hesston
bank successfully for the past three try
ing years and it is with the best wishes
of all the patrons of the local bank that
M r. T oew s takes up his work at Inman.
About sixty representatives of the
banks from the nine counties of north
west Kansas met in Colby recently tt>
talk over practical banking problems and
to make arrangements for the bankers
group convention which meets in Colby
September 21.
W . W . Bowman, vice president of the
Kansas State Bankers, association, of T o
peka, was present and addressed the
meeting.
New Bank
Group One
Plans for the opening of a bank in In
dependence were completed recently and
Messrs. H . C. Bergman and Clarence
Stewart are engaged in carrying out the
details necessary to conclude these plans.
A group meeting of the First district
Kansas bankers was held in Leavenworth
for the purpose of discussing the GlassSteagall bill as to how it applies to state
banks. T h e meeting was attended by the
C entral T yp ew riter E x c h a n g e , Inc.
(EST. 1903)
N E W AND REBUILT TYPEW RITERS, ADDING MACHINES, CHECK
W RITERS — FULLY GUARANTEED.
REBUILT MIMEOGRAPHS, STENCILS AND INKS
LOWEST PRICES
Dies in Lawrence
Jacob Badsky, 82, pioneer stockman,
banker and for many years one of the
leading democrats of Kansas, died at his
home in Lawrence recently. For nearly
A new bank, known as the Citizens
National bank will take the place of the
First National, and it will open with a
capital and surplus of $250,000.
ALLEN-WALES
1820 Farnam St.
THE FINEST "H E A V Y DUTY”
ADDING MACHINE MADE
Omaha, Nebraska
Central Western Banker, September, 1933
22
members of the board of directors of
this district.
C. E. Snyder, of the Manufacturers
State bank, is chairman of the board.
Other members present at the meeting
include Frank Idol, Robinson, K an.; A.
C. Ellis, Hiawatha; J. W . Thompson,
W a terv ille; and Claude F. Pack, Home
State bank, Kansas City, Kan.
Bandit Proof
W orkm en have installed a complete
set of bullet-proof fixtures in the Citizens
National Bank, of Frankfort. Part of
the bank’s old furniture has been thor
oughly modernized against burglary by
the installation of heavy bullet-proof
glass, which measures more than an inch
in thickness, and all interior furniture,
doors, etc., are lined with steel plate,
some of which are equipped with port
holes through which guns may be used in
case of robbery. Doors are controlled
with electric locks, and there are numer
ous other safety devices designed to
frustrate bandits.
............................................................................iiiiim im mmiiniiim im mmiiim miiniimiiim........
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Four Loan Units
W yom ing w dl have four units of the
federal home loan bank, according to in
formation received in Cheyenne. T he
principal office, employing eight or more
persons, will be in charge of Bayard C.
W ilson, in Casper. Branches w ill be in
Cheyenne, Rock Springs and Sheridan.
T h e home loan bank is not the same
as the Federal Home O w ners’ Loan
Corporation.
T he loan corporation is an emergency
relief governmental agency designed to
aid only the home owner who is in ac
tual distress. It deals with the individual
direct, through its own offices.
T h e home loan bank bears the same
relation to the building and loan asso
ciations of the country as does the fed
eral reserve system to the banks. It sup
plies government money and credit for
home building, but it does not deal with
the individual.
Conditions Improved
appraise farm lands in Northeastern and
Southeastern W yom ing for the Federal
Land Bank and for the federal farm
loan commissioner.
Rask is a graduate of the Lhiiversity
of W yom ing law college and has been a
resident of the state for the past 10
years.
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Advance in the price of wool and no
ticeable improvement in all lines of bus
iness have placed a cheerful complexion
on the condition of state and national
banks in W yom ing, O . E. W ild e, state
examiner, declared in a recent statement.
W ild e said : “ T h e combined statement
as of June 30, 1933, o f the 39 state
banks and 25 national banks operating
in W yom ing shows much improvement
as compared with the statement of a
year ago.”
Travelers Checks
There is only one bank in Jackson,
W y o .— a community of 535 inhabitants
— but Harry R. W eston, W yom ing state
treasurer and president of the Jackson
State Bank, claims it cashes more trav
elers checks than any other institution in
the state.
“ Tourists,” is W eston ’s explanation
of the big business of his bank in the
commercial negotiables which travelers
depend upon for exchange in strange ter
ritory.
Jackson is in the south-central part of
the famous Jackson H ole region, tourist
mecca, and is also visited by many mo
torists going into or returning from Y e l
lowstone Park by way of the southern
entrance.
Named Appraiser
Leslie N. Rask of Laramie has been
appointed a land bank appraiser for the
Federal Land Bank in Omaha and will
New Mexico
News
iiiiiiiiiim iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiu iiiiiiiiiiiim iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiu iim iiiim iiiiiii
Elected Assistant Cashier
George M . Bloom was elected assist
ant cashier of the First National Bank
of Santa Fe at a recent monthly meeting
of the board of directors. M r. Bloom
was with Drexel and Co., the famous
Philedelphia banking firm for nine years
before coming to Santa Fe in 1925. A
year ago he took charge of the collec
tion and collateral desk at the First N a
tional bank.
New Directorate
A new board of directors for the First
National Bank of Artesia was appointed
after the former board resigned at two
successive meetings. Inasmuch as there is
no provision made for the election of a
board of directors, new board members
were appointed as the old members re
signed. T h e new board includes: T . H .
Flint, T o m Heflin, J. H . Bridgman,
Hope, W illis M organ, Jim Berry, John
Runyan and Paul G . Schultz of Ros
well. Officers appointed to serve until the
annual election are: T . H . Flint, presi
dent; H . G . W atson, vice-president and
L. B. Feather, cashier.
Both officers and directors have volun
teered to serve until the annual election.
A U S T R A L A S IA
BANK OF N E W SO U T H W A L E S
E STA B L ISH ED
1817
( W i t h w h ic h a re a m a lg a m a te d T H E W E S T E R N A U S T R A L I A N
a n d T H E A U S T R A L I A N B A N K O F C O M M E R C E L t d .)
P A ID -U P
C A P IT A L
.....................................................................................................£ A
R E S E R V E F U N D ..................................................................................................................
R E S E R V E L I A B I L I T Y O F P R O P R I E T O R S ...............................................
BANK
8 .7 8 0 ,0 0 0
6 ,1 5 0 ,0 0 0
8 ,7 8 0 ,0 0 0
£ A 2 3 ,7 1 0 ,0 0 0
Aggregate Assets 30th September, 1932, £A 107,525,115
A G E N T S — F IR S T
N A T IO N A L B A N K , O M A H A , N E B R A S K A
HEAD OFFICE, GEORGE ST., SYNDEY
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Federal Reserve Bank of St. Louis
GENERAL
M ANAGER, ALFRED
CHARLES
D A V ID S O N
LONDON OFFICE. 29 THREADNEEDLE ST., E. C. 2
7 1 0 B r a n c h e s a n d A g e n c i e s in A l l A u s t r a l i a n S t a t e s , F e d e r a l T e r r i t o r y ,
N e w Z e a l a n d , F i j i , P a p u a , M a n d a t e d T e r r i t o r y o i N e w G u in e a a n d L o n d o n
PUBLIC
RELATIONS
¿4 m o te
Lit a n
t it a
JOB
n
lÏ Ï
Banks everywhere have been faced with a loss of public
B A Y A R D F. P O P E , Chairman Advisory Committee o f
confidence. They have found that their fate individually
and collectively is in the hands of their millions of
depositors. Today, the re-building of this faith is a
the Marine Midland Trust Company. Subject: What
the Alert Banker Should Expect of His Public Rela
major problem. Can it be done? How?
H E N R Y B R U E R E , President o f the Bowery Savings
To every bank officer this question of public relations
is a vital, individual problem. Perhaps for the first time,
public relations is universally acknowledged to be an
integral part of every bank’s activity.
The first opportunity for a comprehensive discussion of
the question of Public Relations will be the Convention
of the Financial Advertisers Association, to be held in
New York at the Waldorf-Astoria, September 1 1 ,1 2 ,1 3 ,
14. The speakers are men recognized as leaders, thor
oughly qualified by experience and achievement. The
program gives a complete picture of the task and prac
tical means of accomplishing objectives.
Speakers on the General Program
FRANCIS H . SISSON , President o f the American
Bankers Association, Vice-President o f the Guaranty
Trust Company o f New York, will preside at the banquet.
Colonel A L L A N M . P O P E , form er President o f the
Investment Bankers Association, President o f The First
o f Boston Corporation. Subject: ’ The Obligation of the
JOHN H . P U E L IC H E R , form er President o f the Am er
ican Bankers Association, President o f the Marshall and
Ilsley Bank, Milwaukee. Subject: ’’Place of the Em
ployee in Public Relations W ork.”
PRESTON
E.
CONVENTION
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Federal Reserve Bank of St. Louis
REED,
T . R. P R E S T O N , President o f the American National
Bank, Chattanooga, form erly President o f the Ameri
can Bankers Association. Subject: ’ The Public’s Obli
gation to the Banks.”
G E O R G E W . D A V IS O N , Chairman o f the Board o f
the Central Hanover Bank and Trust Company, New
York. Subject: "T h e Need for Cooperation.”
E M E R SO N ,
Vice-President o f Bankers
Trust
Company, New York, form erly President Reserve City
Bankers Association.
Governor H E R B E R T H . LEH M A N of New Y ork ,
form erly a partner o f Lehman Brothers, investment bank
It is expected that two or three other speakers, also of
national prominence, will address the group.
D e p a rtm e n ta l D iscussions — Departmental discussions will get
down to brass tacks on practical details of trust, sa vin g s, com
m ercial b a n k in g , in ve stm e n t and p u b lic relations program s.
The E x h ib its— Outstanding advertisements of the year will be on
Investment House to the Public.”
F I N A N C I A L
JAMES L. W A L S H , Vice-President, The National Bank
o f Detroit. Subject: "FacingtheFactsof Public Distrust.”
ers, will make an earnest effort to be present. His active
interest in politics and successful public record indicate
a firm grasp of the important task of public relations.
Some of the
ANNUAL
Bank. Subject: ” A Business Man Comes Into Banking.”
GUY
Every active banker is invited to attend. Just now there
can be no more advantageous expenditure of time for
the bank executive. Shape your summer plans so that
you can surely be at the W aldorf in September.
18th
tions Man.”
—
AT
display. Opportunity w ill be afforded for discussion with those
responsible for the creation of this material.
T h e W a ld o rf-A sto ria — The new W aldorf is one of the world’s
fine hotels, an experience in itself. Special rates: single rooms,
$4.50 and $5.25 per day; double rooms $7.00 and $7.50. The
W aldorf is located on Park Avenue at Fiftieth Street.
THE
WALDORF
A D V E R T I S E R S
SECRETARY
■ 231
SOUTH
IN
SEPTEMBER
A S S O C I A T I O N
LASALLE
STREET
■
CHICAGO
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
National Bank
@FedFRASER