Full text of Central Western Banker : September 1934, Volume 29, No. 9

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CENTRAL WESTERN

BANKER
Omaha

How W ill the A . I. B.
Deal with the Banking Problem?
Page 3

Farm Income Increased
Page 4

Co-operative Credit Associations
Operating in Nebraska
Page 5

The Public Attitude
Toward Banks and Bankers
Page 9

September

1934

Make Our Bank Your Office
When You A re in Omaha


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•

The First National Bank of

Omaha and the banking institu­
tions in the surrounding area have
grown up side by side in a spirit of
friendly co-operation.
W e are interested in your prob­
lems and in the conditions in your
territory. That is why we ask you
to drop in whenever you are in
Omaha and talk things over.
Make this bank your Omaha office.
Have your mail addressed here,
and use our telephone exchange,
Atlantic 0500, for your calls.
Whether you are a customer or
not, we are always glad to see you.

FIRST NATIONAL BANK
OF OMAHA
MEMBER

OF F E D E R A L

RESERVE

SYSTEM

3

Central Western Banker, September, 1934

C E N

T R A L

W

E X T E R N

C A N C E R

410 ARTHUR BUILDING
OMAHA
C l iffo r d D e P u y , Publisher
R . W . M oo rh ead , Associate Publisher

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

F r a n k S. L e w i s , 511 Essex B ld g ., Minneapolis

F r a n k P . S y m s , Vice-President, 19 West 44th Street, New York

Subscription, 25 cents per copy; $2.00 per year. Entered as second-class matter at the Omaha postoffice.

V o l u m e 29

S E P T E M B E R , 1934

N umber 9

H ow W ill The A . I. B.
Deal With
The Banking Probl em?
By O. HOWARD WOLFE
Cashier
The Philadelphia National Bank
Philadelphia

O R M A N Y years we have been
talking about the ignorance of the
public concerning banking and cur­
rency. W e were in the habit of telling
funny stories illustrating the truth of
that fact. O f all the educational institu­
tions in the country, the American Insti­
tute of Banking is probably the only one
which has made an intelligent, organized
effort to teach sound banking principles,
not only to bank students, but to the pub­
lic generally as well. In spite of the
progress that has been made, we have
lived to see that widespread ignorance of
banking and currency can result in trag­
edy. For this, at least, it is unfair to
blame the bankers. O u r educators are
at fault for omitting from our textbooks
and curricula the simple, fundamental,
economic facts which every school child
should know.

F

Need Clear Thinking

It is because of this universal misun­
derstanding of banking and currency
that we have ceased to think clearly or
even to think for ourselves. One might
suggest a hundred phases of the banking
problem on which thinking is muddled
to a degree that has contributed largely
to the delay in the restoration of pros­
perity. F or example, the theory that we
can all get richer by increasing the

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amount of money in circulation; the al­
most total misunderstanding of the fact
that the real money of this country is
bank deposit currency and not silver or
gold coins. Due to this habit of mud­
dled thinking, there has been since 1933
a vast amount of unfair criticism of
bankers, and the theory seems to prevail
that none of the thousands of bankers in
this country are to be trusted either as
to their honesty, their efficiency, or their
sincerity because a few score have proven
unworthy.
Many Fallacies

There are many fallacies in public and
private thinking that are of particular
interest to bankers, as, for example, that
banking laws under which we operate
have been written by bankers; that all
who operate banks are, per se, bankers;
that banks are refusing to make loans;
that frozen deposits represent so much
tied up spending pow er; that somehow
these frozen deposits can be thawed out
without first requiring borrowers to pay
back their loans, or calling upon taxpay­
ers to make good the losses of others, a
simple plan which seems to proceed on
the theory that although many banks
have failed, all other businesses are sol­
vent and can pay back what they have
borrow ed; that banks can survive with­
out making profits.

O. Howard W olfe

One fallacy that crops up very fre­
quently is the theory that the Govern­
ment can and should operate the banks.
First it should be pointed out that there
is no other business, public or private,
that is so closely restricted and regulated
as the banking business. N ot a bank
failed but that had been subject to at
least two examinations annually. These
examiners are Government employees,
and I have no thought whatever of crit­
icizing them in any way, but we must
not expect the impossible. By what proc­
ess can a bank examiner be a better
judge of credit than the bank that ex­
tended it ?
Something for Nothing

T he best illustration I can think of,
of unsound thinking is the reasons which
are advanced for the cause of the depres­
sion. There is an old Roman proverb
that reads: “ Barbarians fear that which
they do not understand,” and we might
well remind ourselves of a boom and a
crash that everybody understood perfect-

4

Central Western Banker, September, 1934

ly. I am referring to the Florida land
boom. Everyone understood exactly
what was happening. Few if any bought
land in that state to use it, but only to
sell it to the next fellow at a higher
price. W hen the collapse in Florida
came, nobody blamed it on the bankers,
the war debts, on the vested interests, on
W a ll Street, or on the Republican party.
So far as I know, no corrective legisla­
tion has been attempted. W h at happened
in Florida after the collapse is what hap­
pened in the country at large when peo­
ple bought securities as the Florida spec­
ulators bought real estate, not to be held,
not for investment, but merely to be sold
at a higher price to the next fellow. A ll
the legislation in the world will not dis­
courage the invincible optimism that
somehow we can get something for noth­
ing.

O u r outstanding banking problem is
therefore first, how to restore public con­
fidence in banks and bankers. T h e the­
ory that sound banking can be achieved
by legislation is pretty well exploded.
As a matter of fact, consider carefully
first the reasons for the banking upset in
the latter days of the depression, and
then ask yourself if any single piece of
new banking legislation that has been
proposed or enacted can of itself prevent
a repetition of what happened from 1926
to 1933, except to the extent it may re­
inspire public confidence.

Another major item of muddled think­
ing is the belief that it was the President
who closed the banks in M arch, 1933.
T he President merely set the date. It
was the public that closed the banks.
T he great majority of these financial in­
stitutions were and are sound, strong,
and well-managed, but the public has

T h e American Institute of Banking is
a body having no other aim than the ed­
ucation of bankers— to produce bankers
in whom the public can and w ill have
confidence. T h e obvious thing to suggest
is that each should look to his own
housecleaning, and see to it that he will
leave no stone unturned to increase in

continued to nurse the belief that the
closing was due to banking weakness. If
confidence is lost, the public can close
any form of institution, including the
Government itself.
Restore Confidence

knowledge and in understanding of
sound banking doctrines. T h e Institute,
however, in my judgment has a larger
job. W e must cease being merely an or­
ganization of students, and become an
organization of teachers; teachers not
only from the public platform, the for­
um, and the classroom, but teachers by
example, as well as by precept.
T h e next two years should determine
whether the American Institute of
Banking has the courage of its convic­
tions ; if it has the courage to accept fi­
nancial educational leadership. Have we
the courage to teach that small, weak
banks unable, under any but the most
favorable circumstances to earn a living,
are a menace rather than a help; that a
real estate mortgage is not a loan unless
it is properly amortized; that the dual
banking system has its weaknesses as well
as its strong points; that deposit insur­
ance can never be better than a tempo­
rary expedient for inspiring confidence
in banks; that what is needed is a bank­
ing system founded on economic laws
and administered by trained bankers, ed­
ucated in the theory and practice of
sound finance ?

FARM INCOME INCREASED
T N THE drought area, the extreme
^ conditions which have been paint­
ed so darkly by the public press, will
be greatly minimized by various re­
liefs furnished by the Federal Gov­
ernment as well as by bonuses for re­
stricted acreage earned at the begin­
ning of the season. It would seem that
the condition in this area will in no
wise be as serious as the propaganda
is endeavoring to indicate.
A prominent financial authority,
after careful investigation, makes
the following statement:
“ The drought is not expected to cut
farm purchasing power by a single
dollar. Farm income last year was
about $6,500,000,000. It is expected to

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run to $7,000,000,000 this year, plus
about $600,000,000 in 'benefits/ plus
from $200,000,000 to $300,000,000 in
drought relief. In the drought sec­
tions, income from crop sales will be
substantially less, but will be brought
up to last year’s figures by 'benefits/
“ In the corn-hog area, the gross in­
come will be larger than it was last
year, by reason of 'benefit’ and relief.
Unfavorable weather over the next
several weeks will not change the pic­
ture as to farm income, since any
further crop losses would be compen­
sated for by additional relief.
“ The Government’s experts are
convinced that the drought will not be
a serious factor in fall business.”

Central Western Banker, September, 1934

5

Co-operative Credit Associations
Operating in Nebraska
The banks are finding it difficult as it is to make earnings on their investment, and
if they are subjected to competition of this kind, the chances for earnings
are very much limited or entirely e!iminated//
H E R E has been organized in L in­
coln, Nebraska, during the past
few months a concern known as
the Union Credit Association. W h ile ap­
parently organized for the purpose of
conducting a small loan business, the
units of the parent Association seem to
be extending their operations into the
realm of general banking. Commenting
on the activities of this new Association,
a Nebraska banker says:
“ This association is organized by C.
A . Sorensen, former attorney general of
Nebraska, together with his partner, L.
R. Newkirk, and since that time M r.
Barkley of the Lincoln Joint Stock Land
Bank has become president of this asso­
ciation. T hey have organized a number
of Co-Operative Credit Associations,
principally in towns without banking
facilities.
“ Under the law, fifteen members at
$10 each can organize a bank or Credit
Association, and all new members are
voted in by the board of directors. They
can accept deposits, both demand and
time, and must enter into the pass book
ninety per cent of such deposit as a de­
mand or time deposit and ten per cent
as shares. In other words, a member de­
positing $100 gets credit for $90 which
is subject to withdrawal or assignment
of any kind and $10 is entered upon the
pass book as shares. A fter a member has
withdrawn all his cash subject to with­
drawal, he can also withdraw the
amount deposited in shares, provided
there is sufficient funds or reserve on
hand to pay him, if not, the Association
can require thirty days’ notice.

T

Counter Checks

“ In transacting their business, they
have regular counter checks for the with­
drawal of cash, and they also have a reg­
ular check book with the stub, in which
they can make an assignment of any part
or all of their deposit, subject to with­

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drawal. In other words, this blank pro­
vides that the member hereby assigns so
many dollars to whoever it may be pay­
able, instead of using the words “ pay to
the order o f” as used in the usual bank
check. These assignments seem to circu­
late the same as checks, but it is danger­
ous for a bank to receive them as checks,
but should always receive them for col­
lection, for the reason that the amount
deposited to the credit of a member is
subject to any fines, or loans or other
obligations to the Association.
Partial Assignments

“ A further question arises as to wheth­
er or not a partial assignment can be
made as is attempted in these Co-O pera­
tive Credit banks. T h e organizers for
the Union Credit Service Association re­
quire that $100 be paid in cash, and they
require a contract to be signed in which
they agree to render certain services to
such local associations as enumerated in
the contract. T h e contract runs for
twenty-five years, and the local Associa­
tion agrees to pay one-half of one per
cent on the first $50,000, and one-fourth
of one per cent on all deposits in excess
o f that sum, on December 31st of each
year for twenty-five years. In other
words, it would cost a local association
around $10,000 for the twenty-five year
period, and the services rendered to them
amount to nothing, because the law re­
quires that the Banking Department
shall examine and supervise such asso­
ciations.
“ T h e Banking Department of N e­
braska as at present situated, not only
consents to such associations being or­
ganized, but as a matter of fact they en­
courage their organization, and it is ru­
mored that the present department head
is secretly interested in the Union Cred­
it Service Association. H e was formerly
a vice-president in the Lincoln National
Bank, of which W . E. Barkley was

president.
“ T h e manner of the organizing of
these Associations was condemned in an
editorial of the Omaha W orld-H erald
and an editorial of the Nebraska Union
Farmer, as being mushroom banking,
and recently the Attorney General, Paul
L. Good, rendered an opinion that the
stockholders in such associations are sub­
ject to a double liability provided for
banks in this state.
Original Purpose

“ T he original purpose of this law was
the organization of associations in in­
dustrial enterprises where they have a
lot of employees so that they could loan
money to each other and not be com­
pelled to deal with so-called “ loan
sharks,” and the original purpose was
laudable, but the attempt to make bank­
ing institutions out of such associations is
fraught with a great deal of danger, for
if a few of them fail, such failure will
reflect upon regular commercial banks,
and for the further reason that this
state, like all others, was very much
over-banked, and the theory was ad­
vanced that no new charters would be
issued where existing banking facilities
are adequate.
“ There are no restrictions against the
organizing of these credit associations,
and they can be organized in any town
where banking facilities exist and arc
amply able to take care of the situation.
“ It is believed that an attempt w ill be
made by the sponsors of these credit as­
sociations to amend the present law, to
remove some of the present restrictions,
and license such associations in every vil­
lage and hamlet in the state.
“ T h e banks are finding it difficult
now to make earnings on their invest­
ment, and if they are subjected to com­
petition of this kind, the chances for
earnings are very much limited or en
tirely eliminated.”

6

Central Western Banker, September, 1934

THIS BUSINESS OF

BA NK1NG
O R M A N Y centuries the principal
operation of the banker has been the
receipt of deposits and the repay­
ment on demand of sums so deposited.
Any amount of legislation cannot fu r­
ther emphasize the axiom which is bred
in the bone of bankers : the sanctity of
the contract to repay other peoples’
money.
But banks could not remain mere
community safety deposit boxes. T h e
excess funds of the butcher and the bak­
er were loaned to the candlestick maker
to meet his current requirements. Thus,
the banker’s second job is the making of
loans, and it is proper for him to make
them so long as he has, in exchange for
money loaned, good assets— the obliga­
tions of persons who will honor their
debts and repay money borrowed from
the banker in order that he may, when
called upon, repay the money deposited
with him.

F

Bankers Criticized

Bankers have been criticized for their
unwillingness to make the loans which,
by some, are regarded as essential fur­
ther to promote the national recovery.
T h e American banking system, as a
whole, has been even more severely crit­
icized for the failure of a large number
of banks to weather the storm which
culminated with the bank holiday of re­
cent memory. Undoubtedly, the Am eri­
can banking system has much for which
to answer, but that system is the product
of American economic wisdom of the last
century and a half. It is, among the
great banking systems of the world, one
of the most completely supervised and
thoroughly controlled by government.
Its faults cannot therefore be charged
wholly to a system so governed unless
those by whom supervision has been ex­
ercised assume some responsibility for
past errors.

F R O M a recent radio address by
Norman E.Towson, assistant treas­
urer of the Washington Loan and
Trust Company, Washington, D.C .
M r. Towson points out that bank­
ers, who after all are human, are
trying to the best of their ability
to meet the demands made upon
them by the problems of the day.

people are willing now as in the past, to
respect their obligations, to be fair in
their judgments, and to shoulder the re­
sponsibility for their own errors.
Banking is no longer merely a matter
of receiving deposits and paying checks.
T h e American Bankers Association de­
fines good bank management as demand­
ing the three qualities of technical com­
petence, economic understanding, and
conscientious responsibility. T his is a
high standard, and one which cannot be
achieved by any amount of legislation.
Legislation can only make illegal such
acts as the public conscience has come to
define as dishonorable. T h e determina­
tion of whether an act is dishonorable
and should be made illegal cannot pre­
vent damage. T h e ethics of bankers
which guides them in the basic principles
of right action must, in the last analysis,
be depended on to raise the business of


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Committee Chairman
A former Omaha banker, W alter W .
Head, of St. Louis, has accepted chair­
manship of the National Committee for
Religion and W elfare Recovery. M r.
Head was at one time president of the
Omaha T rust Company, and was a
member of the Nebraska State Capitol
Commission at the time of the erection
of a new $10,000,000 state capitol build­
ing.
M r. Head is also a former president
of the American Bankers Association. In
business life he is president of the Great
American Insurance Company of St.
Louis. H e takes an active interest in
youth welfare. He is president of the
National Council of the Boy Scouts of
America.

1934
C O N V EN T IO N
Nebraska

Bankers

Association

Confidence Regained

T h e public has now regained its con­
fidence in the banks of the country, and
such confidence is justified. It remains,
now, for the bankers to regain their con­
fidence in the public; to learn that the

hanking to the level of a profession where
it can fulfill its highest obligations to the
economic welfare of the nation.
If those now planning to make a ca­
reer of banking have not a high sense of
conscientious responsibility— not alone to
their depositors and stockholders, but to
the community and the nation, if they
are unwilling to content themselves with
a reasonable income in recompense for
long and diligent labors for the public
good, if they w ill not aid in making of
banking a profession dedicated to the
welfare of the entire national economy,
then they should seek elsewhere for their
proper vocation.

L i n c o l n ,

N o v e m b e r 8-9

Housing Bill
T o stimulate recovery and employ­
ment, the Administration is pinning
great hopes on its new housing bill,
which will go into operation shortly. Un­
der it, a part of mortgage loans are
guaranteed and interest rates lowered—•
it is thus supposed to benefit both lend­
er and borrower. Its proponents believe
it will liberate $1,500,000,000 of private
capital and provide employment for mil­
lions.

Central IVestern Banker, September, 1934

Nation’s Capital
Invites You!
♦

♦

♦

1934 CONVENTION
of

A M E R IC A N

BA N KERS

A S S O C IA T IO N
to be held in

WASHINGTON, D. C.
OCTOBER 22-25
The Willard Hotel, Convention Headquarters

H E N the curtain rises on the
autumn scene in the nation’s
capital next October, spectators
on hand w ill have a chance to see and
participate in a variety of activities o f­
fered nowhere else in the world.

W

For O ctober is W ashington’s most ex­
citing time during the year— and most
beautiful. Facilities for relaxation and
diversion are at their best. Educational
benefits are in full swing. National and
international activities are renewed with
gusto after the lackadaisical summer
months. It’s the time for fun-loving as
well as the serious-minded.
Particularly this fall, W ashington
w ill have more than ever before to o f­
fer its visitors. For its mammoth build­
ing program is fast nearing completion,
and by October, the tall fences which
surround Uncle Sam’s new headquarters
will be taken down to reveal some of the
finest buildings in the world.
If you are coming to W ashington for

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relaxation, here are a few of the things
you w ill fin d :
Twenty-five up-to-date golf courses
all available from any downtown hotel
and always in good condition.
M iles of bridle paths in
hundred acre Rock Creek
in the heart of the city,
through other picturesque

the seventeenPark, located
and winding
scenery.

Speed boat rides and steamer excur­
sions down the historic Potomac River,
and deep-sea fishing on Chesapeake Bay,
only an hour’s distance from W ashing­
ton. W ashington is one of the ranking
yachting centers of the nation.

Hundreds of parks, planned by the
finest horticulturists in the country;
parks that present a beautiful back­
ground in the fall with their brilliant
plots and beds of vari-oolored blooms.
W id e streets and roads both within
and without the city to carry you to
sights of national historic interest, sights
o f unusual beauty, and sights peculiar to
Washington alone.
Educational Benefits

Some of the finest night clubs, cock­
tail rooms, cafes and dining rooms in ho­
tels in the country, patronized by nation­
ally-known personalities.

Taking for granted that the average
persons in the United States is familiar
with the internationally-known sights so
characteristic of W ashington — sights
that offer educational benefits of every
kind— here are a few comparatively un­
known facts about the nation’s capital
that w ill interest the visitor:

Regular polo games between Uncle
Sam’s crack Arm y teams from Fort
M yer, a sport fast becoming one of the
most popular in the nation’s capital.

D id you know that the exhibit of
strange kinds of money collected by the
Smithsonian Institution in Washington
from all parts of the globe is considered

Central Western Banker, September, 1934

one of the most interesting of its kind in
the w orld? Assembled by the Smithso­
nian ethnologists, it includes such arti­
cles as shells, bright feathers, axes, spear
heads, fish hooks, blocks of salt, blocks
of pressed tea and tobacco, all sorts of
skins, glass bottles, coconuts, eagle
feathers, cocoa beans, whale teeth, por­
cupine quills, tails of animals, red hair
from behind the ear of the flying fox,
stone and clay beads, mill-stones of yel­
low limestone, hoes and spades, crosses
of copper, ingots of iron, buffalo robes
and hundreds of other articles.
D id you know that the Government
print shop here is the largest in the
world ?
Did you know that there are more
automobiles in W ashington than any
other city its size in the country ?

D id you know that the concourse at
the Union Station is the largest room
in the world, that it could house a stand­
ing army of fifty thousand men ?
D id you know that the famous reptde
house in the U . S. Zoological Park is
the only place of its kind in the world
except the one in Netherlands, H olland?
D id you know that the Chamber of
Commerce of the United States which
has its beautiful headquarters in W ash ­
ington is the largest national trade or­
ganization of its kind in the world ?
W ashington, the people’s city, is as it
should be. It has a wide appeal for ev­
erybody, young and old. It is a manysided city and is at its peak in activities
of all kinds in the fall of the year.
T h e nation’s capital opens wide its
doors to the members of the American
Bankers Association.

Nebraska Officer
T he Federal Housing Administration
has a nation-wide organization consisting
of ten regional directors and a director
in each state. These representatives will
be located in permanent headquarters at
key points to cooperate in all phases of
the Better Housing Program. Through

Mortgage Bankers to
Convene in Chicago
H

E R A L D E D as the most significant
mortgage banking event in two dec­
ades, the twenty-first annual convention
of the M ortgage Bankers Association of
America will be held in Chicago at the
Edgewater Beach Hotel, O ctober 4 and
5. Coming as it does during a period of
much federal mortgage legislation and
especially with regard to construction fi­
nancing that is affecting building pro­
grams in all sections of the country, this
convention is felt to be of significance to
all phases of property management, fi­
nancing and sales.
Highlighted with addresses by lead­
ers in the affairs of the country, the con­
vention w ill be taken up with pertinent
and timely round table discussion, par­
ticipated in by recognized authorities
representing divergent points of view.
T here w ill be six principal speakers
with a balanced affiliation insofar as the
beliefs of the present administration are
concerned. Those that can be announced
as this story goes to press are: Frank C.
W alker, chairman, National Emergency
C ouncil; Colonel Frank Knox, publisher
of the Chicago Daily N ew s; and John
H . Fahey, chairman, Federal Home
Loan Bank Board, and Arthur F. Hall,
president, Lincoln National Life Insur­
ance Co., Ft. W ayne, Ind.

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M r. W alker is known as the Presi­
dent’s lieutenant in all recovery and re­
lief projects. T h e N E C coordinates the
operation of the Home Owners Loan
Corporation, Farm Credit Administra­
tion, Agricultural Adjustment A dm in­
istration, National Recovery Relief A d ­
ministration and subsidiary bureaus. An
address by the executive director of this
coordinating council w ill be of vital and
of timely interest.
Colonel Knox, as publisher of one of
the country’s leading newspapers, locat­
ed in the second largest city and in the
heart of the great middle western farm­
ing area, w ill present to the M ortgage
Bankers Association Convention a most
interesting address.
Although M r. Fahey has not an­
nounced his subject at this writing, his
talk will no doubt illuminate the sub­
ject of governmental lending. T h e activi­
ties of the Government in the mortgage
field will hold the center of interest at
this convention and it is for this reason
that the men best equipped to know the
activities of the administration in this
field have consented to present to the
convention the most complete knowledge
of the subject. These talks will stimulate
constructive discussion and will excite
nation-wide comment.

E. N. Van Home

the cooperation of the American Bank­
ers Association, a representative has been
appointed to act as liaison officer in each
state between the financial institutions
and the Federal Housing Administra­
tion. T h e latter arranges for representa­
tion (starting August 15) at state head­
quarters for the purpose of providing in­
formation in response to requests of fi­
nancial institutions regarding the credit
phase of the program.
T h e liaison officer for Nebraska is E d­
win N. Van Horne, president of the
Continental National Bank of Lincoln.

Your Bread an d Butter
T h e greatest service being rendered
to our country today by editors, is their
help in awakening the people to the fact
that t h e p e o p l e are the government,
that the constitution which protects
them is the greatest document in the
world guaranteeing life, liberty and pur­
suit of happiness in social and business
activity, and that encroachments and
limitations which are made on it detract
from the opportunities of our citizens.
T h e safety of American property
rights lies in a widespread and general
understanding of these simple basic
propositions.

9
Central Western Banker, September, 1934

The Public A ttitude
Toward Banks
E X C E R P T S from an investigation
conducted for the past few months
by Trust Companies Magazine, with
a view to determining just how the
public feels toward its banking in­
stitutions. W h ile there has been
some improvement, the sentiment
still seems to be sub-normal

H IL E the question might be
raised as to whether public opin­
ion was subject to mathematical
appraisement, Trust Companies M a ga ­
zine, in a recent issue, has gone a long
way in proving that such is possible.
T heir investigations have been especially
directed toward how the public regards
its banks and bankers, including editoiial
attitude of newspapers throughout the
United States. T h at “ the pen is might­
ier than the sw ord” still holds true, and
there is no question but what adverse
criticism of the press has done much to
mold public opinion in the same direc­
tion. W h at is the attitude of your local
newspaper? Is it for you, or against you?
If the latter, perhaps a little serious con­
versation with your local editor would

W

help.
In discussing the public attitude
toward banks, we quote from Trust
Companies M agazine as follow s:
“ W h ile our immediate interest is in
the public attitude toward banking in­
stitutions, we feel that the study has a
much broader significance. As a general
rule, if a man is distinctly hostile toward
banking institutions as a group, you can
safely class him as a radical, politically
and socially; if he objects to hasty criti­
cism of banking institutions and yet
points out their shortcomings, looking
with favor on proposals of reform, you
can safely class him as a liberal in his po­
litical leanings ; if he is an outspoken
champion of banking institutions as a
group, the chances are that he is a con­
servative in his political alliances and is
strongly opposed to socialistic tendencies.

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Federal Reserve Bank of St. Louis

and Bankers
“ Obviously, the editorial attitude of
the newspaper you read does not neces­
sarily reflect your own attitude. In fact,
it has been demonstrated repeatedly that
the editorial stand of a newspaper on
specific questions may be directly counter
to that of the majority of its readers.
“ Nevertheless, most thoughtful men
will doubtless concede that readers nat­
urally drift toward publications which
reflect views in substantial agreement
with their own.
“ Take a radical newpaper as illustra­
tion. Can it be doubted that a majority
of its readers are themselves radical?
“ O f course, conservatives are found
among the readers of radical publica­
tions, and radicals among the subscrib­
ers to conservative journals. In either
case, however, the majority of readers
find their own sentiments reflected in the
paper of their choice, because the suc­
cess of a newspaper depends largely upon
the ability of its management to gauge
the temper of its own public.
“ A t the outset we recognize that the
evidence of one editorial might not be
sufficient to warrant a classification of
the attitude of the paper itself, and here­
tofore we have based our reports on the
number of editorials falling in each class.
This took no account of the relative im-

1934

C O N V E N T IO N
Nebraska

Bankers

Association
Lincoln,
November

8-9

portance of newspapers. Furthermore,
during the early months of our study, it
did not seem practicable to make allow­
ance for the fact that a larger number of
editorials were being received from pa­
pers holding extreme views than from
those whose attitude might be termed
“ normal.”
“ T h e next step was to devise a meth­
od of rating the attitude of each paper,
as a preliminary to calculating a weight­
ed rating for each state.
Method of Rating

“ As will be recalled by those who have
been follow ing these reports, each edi­
torial was placed in one of five groups:
“ ( 1) Editorials distinctly favorable to
banking institutions— this term used in
its general rather than its technical
sense;
“ ( 2) Those more favorable than oth­
erwise ;
“ ( 3) Comments indicating uncertain­
ty of editorial attitude or so balanced in
their effect as to make classification un­
satisfactory;
“ ( 4 ) Editorials leaning toward hos­
tility; and
“ ( 5) Those indicating a distinctly
hostile attitude or presenting a distor­
tion of fact.
“ In further explanation, we have
called attention to the fact that many of
the editorials placed in Group 2 con­
tained no adverse flavor and might be
described more accurately as “ mildly fa­
vorable,” whereas others in the same
group contained sentences or paragraphs
which detracted from their generally fa­
vorable character.
75 Considered Normal

“ T h e policies follow ed in making the
original classifications and the method of
calculating individual and combined rat­
ings cause us to believe that for the coun­
try as a whole a rating of 75 would be
the approximate “ normal.” In support of
(Continued on page 12)

10

Central Western Banker, September, 1934

Canada, Too, Has
Plan For Agriculture
The Natural Products Marketing Law, enacted in the last session of Parliament of
the Canadian government, is given here in its principal features.

Because of

widespread interest in various plans of agricultural production and
marketing control, it is well to know what our neighbors to
the north are doing in this connection.

W ork has

not yet been organized under the new law.
W E E P I N G authority to regulate
imports, exports, and domestic mar­
keting of all natural products ex­
cept those of the extractive industries
such as mines, quarries and oil wells, has
been placed in the hands of the Canadian
Governor in Council under the provi­
sions of the Canadian Natural Products
Marketing L aw enacted during the last
days of the late session of Parliament,
according to a statement issued by the
Foreign Agricultural Service, Bureau of
Agricultural Economics. T h e law em­
powers both the Canadian Government
and organized producers to set up and
put into operation codes or marketing
schemes which become law simply by
approval of the Governor in Council
without reference to Parliament. It is to
be administered mainly through a D o ­
minion M arketing Board headed by a
Minister to be designated by the G over­
nor in Council.
Natural products are defined in the
A ct as including animals, meats, eggs,
dairy products, cereals, seeds, fruits and
fruit products, vegetables and vegetable
products, maple products, honey, tobac­
co, lumber, and such other natural prod­
ucts of agriculture, forest, sea, lake or
river, and any article of food or drink
wholly or partly manufactured or de­
rived from any of those products as may
be designated by the Governor in Coun­
cil. Products of Canada’s mines, quarries
and oil wells are not included.

S

Marketing Board Created

T h e keystone of this program will be
the Dominion M arketing Board to be
appointed by the Governor in Council.
T h e principal function of this Board


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Federal Reserve Bank of St. Louis

will be to supervise and act as the parent
organization for such local marketing
control agencies as may be set up either
by groups of persons engaged in the pro­
duction and in the marketing of the
product in question or by the Governor
in Council upon his own initiative.
A ll plans must be approved by the
Board and by the Governor in Council
before they can be put into operation.
Such plans, whether set up under P ro­
vincial initiative or directly by the Fed­
eral Government, will be administered
by local agencies operating under the di­
rect supervision of the Dominion M a r­
keting Board. T h e Board may delegate
any or all of its powers to such local
agencies and it may at any time with­
draw the authority to exercise such pow ­
ers.
Since the individual Provincial G ov ­
ernments have sole control over trade
and commerce within their respective
borders they are expected to enact sup­
plementary legislation patterned after
the Natural Products M arketing A ct in
order that the powers of the A ct may be
applied to intra-Provincial marketing.
Several of the Provinces have already
enacted such legislation.
In the broader field of inter-provincial
marketing, however, the new law pro­
vides that the G overnor in Council may
authorize the Dominion
M arketing
Board to organize and enforce market­
ing control plans on its own initiative,
whenever it is found that the lack of
such control plans is injuriously affect­
ing trade and commerce in any product
specified in the Act. Before any scheme
regulating inter-provincial marketing is

approved by the Governor in Council he
must be satisfied that the principal mar­
ket for the natural product is outside of
the province in which it is produced or
that some part of the product in question
may be exported.
A m ong the powers delegated to the
Dominion Marketing Board are autho­
rity to set up and operate local boards
or agencies for regulating the marketing
of natural products specified in the A ct
or to supervise the operation of agencies
set up for the same purpose by groups
of persons engaged in the production and
marketing of such products. T h e Board
can regulate the time and place at which,
and designate the agency through which,
the regulated product shall be marketed.
It can decree the manner of distribution,
the quantity and quality, grade or class
of the regulated product that shall be
marketed by any person at any time, and
it may entirely prohibit the marketing of
any regulated product.
Licenses and Reports

T h e Board can also compel all per­
sons engaged in the production or mar­
keting of a regulated product to register
their names, addresses, and occupation
and to take out licenses. These licenses
are subject to cancellation by the Board
for violation of any provision of the A ct
or of any regulation made under it. It
can require full and periodic informa­
tion in regard to production and market­
ing from all persons engaged in it as well
as access to inspect their books and prem­
ises.
T h e new law goes further than mere
regulation of marketing. It recognizes
(Continued on page 13)

11

Central Western Banker, September, 1934

" A rehabilitated mortgage is a
lot more satisfactory than a costly piece of real estate

Salvaging Real Estate Mortgages
T IS perhaps a truism that investors
in real estate mortgages, particularly
savings banks and trustees, never ex­
pected to have to salvage them. In dis­
cussing the subject I shall not touch on
making mortgages nor the proper servic­
ing of mortgages after they are made. A
mortgage should be properly made, and
by that I mean all the word “ proper
implies, and it should be adequately and
efficiently serviced. I shall confine myself
to the subject and discuss the mortgage
from the point of view— it needs salvag­

I

ing.
In connection with this salvaging of
real estate mortgages, let me make it
clear at the start that 1 am talking of
that mortgage in your portfolio, made by
your own company through its invest­
ment committee, and which has haa your
servicing— or that mortgage which you
bought guaranteed and which has since
come into your possession for your own
servicing minus the guarantee. I am not
referring to guaranteed mortgage certifi­
cates nor real estate bonds. 'I here is a
similarity in salvaging, but the situation
is not identical.
Common Sense

T hat quality of judgment which is
most needed in salvaging, as in placing
mortgages, is common sense. A panicky,
not conducive to sound reasoning nor
fearful, condemnatory point of view is
good judgment. Keep your mind on an
even keel, weigh each contributing angle
in the case of each particular mortgage
carefully. Here, I have given you the
keynote of successful salvaging. Each
mortgage in need of salvaging must be
handled strictly on its own merits. Y ou
can have a few general principles, but
you cannot lay down rules and regula
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Federal Reserve Bank of St. Louis

A N address by Charles F. Ellery,
assistant trust officer, Fidel ity Union
Trust Company, Newark. Mr. Ellery
em phasizes fi ve common-sense
principles to use in salvaging mort­
gages, and several serious points to
consider before starting foreclosure
proceedings

tions, from which one may not deviate,
to fit all cases.
T h e first principle, and the one which
I emphasize the most and which perhaps
after all is not a principle but which I
reiterate, is common sense. In using this
it necessarily follows that you will abide
by the others.
2. Handle each case separately.
3. Co-operation— and I mean co-opera­
tion that works two ways— that is,
for the owner and for the mortgagee.
4. Fairness— or perhaps I should call it
honesty. O f course, I know you will
not steal any money, but have the
fairness work both ways as well as
the co-operation.
5. Efficiency.
An Illustration

N ow , principles of themselves do not
solve problems, but their correct applica­
tion does. T o illustrate:
Y ou have in your portfolio a mortgage
on a two-family house owned, let’s say,
by a plumber. W ith the inertia in build­
ing his income has been decreasing for
several years. He, thinking the upturn
would soon come, which viewpoint was
encouraged if not justified, did not seri­
ously curtail his expenditures, and let his

taxes slip, figuring on paying them the
next year. Y ou on your part were a lit­
tle lenient on taxes, reasoning that the
municipality did not sell for two years
and thus abetted him in his delinquency.
Suddenly, the owner, you, and the mu­
nicipality have realized that taxes are
two years delinquent, and the owner in
addition finds he cannot pay his interest.
T h e municipal tax sale looms, you vis­
ualize the laying out of more cash to pay
the arrears thus increasing your mort­
gage, wonder how much the foreclosure
costs are to be, and if you are to add an­
other parcel to “ other real estate
ow ned.” Y ou condemn yourself for not
insisting on taxes having been paid when
due. Perhaps you wonder where the in­
vestment committee’s brains were when
it made the loan, and become a little
panicky wondering how many more
there are.
N ow reverse this situation. Realize
that the tax situation came about as a
matter of common practice of years’
standing, that the majority of property
owners pay on time, that your invest­
ment committee was entirely justified in
making the loan at the time the loan
was made, and further that the majority
of your mortgages are of such calibre
they will give you no trouble. Having
arrived at this point of view, your com­
mon sense asserts itself, and you send for
the owner, who is, as I said, a plumber.
Together you go over his finances, figure
the extent to which he can pay monthly,
and you start saving the property for
him and sweetening your mortgage by
applying the monthly payments first to
the payment of taxes, or to your reim­
bursement if you have paid them to avoid
a sale, and then to your interest.

12

Central Western Banker, September, 1934

A year has passed, you find the arrears
of taxes have been paid, and you are
starting on your interest. Y our owner is
encouraged and so are you, for your
mortgage is well on the road to recovery.
Another Case

This time you have a larger mortgage
on a business property, let’s say stores
and a moving picture theatre. T h e mort­
gage called for amortizations which were
for a time made, but with changing
times the pinch becomes felt and fore­
closure imminent. In the case I have in
mind foreclosure is actually started, for
in this type of property delays are dan­
gerous, and you move quickly. Investiga­
tion proves the theatre is well patronized
and w ill carry your mortgage, pay taxes,
and amortize to a degree. Investigation
of the bondsmen has meanwhile satisfied
you that you can expect no relief there
if there is a deficiency, so when the ten­
ant of the theatre comes to you to buy
the property, you call all subsequent
mortgagees, and interested parties to­
gether, lay the facts before them, tell
them that on receipt of all delinquencies
as to interest, taxes, amortizations, and
foreclosure costs, the foreclosure may be
stopped and the mortgage put in good
standing.
In the case I have in mind this brought
no results, so at a stated time a contract
to sell if and when the property was ac­
quired was entered into. This contract,
which has been carried out, provided for
the releasing of the bondsmen in consid­
eration of the assignment of rents, the
payment by the purchaser in cash of all
arrears of taxes, interest, and the costs,
and the taking of a purchase money
mortgage for the balance for a period of
years with interest, and a given amort­
ization payable monthly, as well as a
provision for the payment of taxes
monthly. T w o years have elapsed in this
case, payments have all been made, and
by the time the mortgage matures it will
have been reduced to the point where it
should be safe under any conditions, and
with a reasonable turn in affairs the
owner may re-finance if necessary.
Business Property

N ow , let us consider a strictly busi­
ness property — a mortgage well over
$100,000 where interest becomes de­
linquent. Y ou analyze the situation—■
find that the property has been sold
twice since you made your mortgage,
once for $400,000 and once a wash sale
for convenience with no consideration
named. Y ou find a mortgage of $90,000


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second to yours. Y ou find the property
in fair condition, but not all occupied.
T w o years’ taxes are in arrears. It looks
like foreclosure. O n consultation the
second mortgagee takes an assignment of
rents and goes into possession, remitting
monthly with detailed statements to you.
Y ou check his disbursements, watch his
management, and pay first the arrears of
taxes, and then your interest. In one
year the buildings have been filled, two
years taxes have been paid, and six
months interest— all this with reduced
rents. In another year the mortgage will
be in good standing.
In these few word pictures, and I
could go on with a great many more, I
have tried to give you the application of
the rules emanating from the principles
enumerated as I have found them in my
personal experience. T o summarize, you
will agree that in no case has any great
brilliancy of judgment been displayed,
but plain common sense has been used.
Rota has not been followed, but each
case handled individually according to
its own merits.
Contrary motives have not been used,
but co-operation has been much in evi­
dence.
T h e methods followed have been fair,
alike to owner and mortgagee.
As for efficiency, the results speak. A
rehabilitated mortgage is a lot more sat­
isfactory than a costly piece of real es­
tate.

T rue, each case does not work out.
There are numerous cases where fore­
closure is by far the best procedure, but
before foreclosing consider carefully
whether or not the operation of any or
all of the follow ing is better, and I give
the items to you in this manner, not as
any miraculous formula, but as a rec­
ommendation :
a. Inspect the property mortgaged.
b. Re-value it.
c. Consider the condition of the build­
ings and the cost of re-habilitating.
d. Consider foreclosure costs.
e. Consider arrears of taxes and muni­
cipal charges, all in relation to the
amount of your mortgage.
If the result is not to your liking, then
give consideration to the follow in g:
1. Reduce the interest rate.
2. Take payments monthly of interest
and arrears.
payments

monthly

4. Take an assignment of rents and ap­
ply them in your discretion, including
the making of repairs (o f course, pro­
tecting yourself by proper legal agree­
m ents).
5. W a it for your interest, as long as
taxes are paid.
6. Postpone amortizations of principal,
so long as interest and municipal
charges are paid.
7. In the extreme case, take your loss,
and re-write your mortgage in a re­
duced amount.
Since a boy of fourteen, I have been
involved in and with real estate. I have
seen it in times of need and times of
plenty. I have praised it and damned it,
but after all is said and done, it is there
when all else is gone. T he real estate
moitgage has stood up well way past the
time of the stoppage of income on other
securities, and in spite of the many press­
ing problems and all the vicissitudes I
maintain and believe that, saving a na­
tional calamity, the majority of real es­
tate mortgages are good and will be paid,
and that they w ill long be what they
have been in the past— a prime invest­
ment for conservative investors.

THE PUBLIC ATTITUDE
TOWARD
BANKS AND BANKERS
(Continued from page 9)

Recommendations

3. Take

amounts, applying them first to taxes,
and wait for your interest.

in stated

this view we give a few scattered illus­
trations.
T h e N ew Y ork Times is a notable
example of a newspaper which has
earned the respect and confidence of fi­
nancial interests. O u r present rating of
the editorial attitude of the N ew Y ork
Times toward banking institutions is
87.6.
“ In contrast, the N ew Y ork Evening
Post, once regarded as conservative, has
a current rating of 17.2.
T he Philadelphia R ecord has a rat­
ing of 21.0, the St. Louis Post-Dispatch
8.3, and the Los Angeles H erald and
Express 12.5.
T h e total circulation of newspapers
lepresents in our ratings is approximate­
ly 25,600,000, or more than fifty-five
per cent of the total circulation of all
daily newspapers published in Continen­
tal United States.
Metropolitan Rating Lower

“ T he weighted rating for the country
as a whole is 63.6.

Central Western Banker, September, 1934

“ T h e five largest metropolitan areas
(N e w York, Chicago, Los Angeles, Phil­
adelphia and D etroit) have a combined
weighted rating of 52.7. A similar com­
bined weighted rating for Continental
United States outside of these five areas
is 66.4.
“ In N ew England, Connecticut is the
only state having a rating lower than
the national rating of 63.6, the figure
for that state being 63.3.
“ In the W est North Central area, a
high rating is shown for all states other
than Iowa and Missouri, both of which
have 57.7.
,
“ Arkansas and Louisiana compare fa­
vorably with N ew England, whereas
Texas is slightly under the national rat­
ing, and Oklahoma, with 52.2, pulls
down the district rating.
“ T h e only dark areas in the East
North Central district are Wisconsin
and the Chicago metropolitan area,
which have ratings of 57.6 and 47.6 re­
spectively.
“ In the Rocky M ountain area, M o n ­
tana, Colorado, N ew M exico and N e­
vada are well under the average, where­
as W yom ing, Arizona, Utah and Idaho
are well over.

13
Price Control Features

1934
C O N VEN TIO N
Nebraska

Bankers

Association
Lincoln,
November

8-9

and to authorize the local boards to act
as its agent in the collection and dis­
bursement of the charges. This fund
may be utilized by the Federal Board or
by the local boards upon authorization
by the General Board for the adminis­
tration of their respective schemes and
for the creating of reserves. T h e Board
is also empowered to assist by grant or
loan the construction or operation of fa­
cilities for preserving, processing, stor­
ing, or conditioning the regulated prod­
ucts and to assist research work relating
to the marketing of such products.

One of the features of the new mea­
sure is the authority which it gives the
Minister designated by the Governor in
Council to administer the A ct to conduct
investigations into all operations con­
nected with marketing, adaptation for
sale, processing, or conversion of any
natural product, whether regulated or
not, for the purpose of ascertaining the
spread received by any person in the
course of such marketing, adaptation,
processing, or conversion. T h e law pro­
vides that any person who, to the det­
riment or against the interest of the pub­
lic, charges, receives or attempts to re­
ceive any spread which is excessive or
results in undue enhancement of prices
or otherwise restrains or injures trade in
a natural product, is liable to a penalty
not exceeding $5,000 or if a corporation,
to a penalty not exceeding $10,000. T he
effect of this provision is that it gives the
Board a certain measure of control over
natural products for which no marketing
control schemes have been put into ope­
ration.
Foreign Trade

Another outstanding feature of the
new law is the authority which it gives

“ This study has now been under way
approximately six months. Each month
gives us added confidence in the sound­
ness of the principles employed and the
reliability of the inferences that may be
drawn.
“ T h e public attitude toward banking
institutions is still subnormal, notwith­
standing the marked improvement re­
ported in June. This improvement is ap­
parently continuing.”

CANADA HAS A PLAN
FOR A G R IC U LTU R E

A Crisis

a

Minute.

r‘I want a policeman,” "Thirty

(Continued from page 10)

day’s extension — please,” "The hot water pipe is

the principle of compensation for losses
sustained as a result of the operation of
marketing control schemes. A ny person
who sustains a loss by withholding from
the market or forwarding to a specified
market any regulated product in accord­
ance with an order of the Dominion
M arketing Board may be compensated
for such loss. Compensation covering
losses due to depreciation of currencies is
also included.

leaking,” "Baby broke her doll.” Crises big and little

T h e Dominion M arketing Board is
also authorized to establish a separate
fund in connection with any scheme of
regulation by levying charges or tolls on
the marketing of the regulated product,

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Federal Reserve Bank of St. Louis

are being continually reported by telephone.

At

trifling cost in relation to the values at stake, it
helps you to get action when action is all important.

Bell Telephone System

Central Western Banker, September, 1934

14

the Governor in Council to regulate im­
ports and exports of natural products.
Under this provision of the A ct the
Governor in Council may regulate or re­
strict the importation into Canada of any
natural product which enters Canada in
competition with a regulated product.
H e may also regulate or restrict the ex­
portation from Canada of any natural
product specified in the A ct. Control
over imports and exports is to be accom­
plished by a licensing system under which
no one except holders of licenses can im­
port or export.
T h e G overnor in Council may also
from time to time authorize payment to
the Dominion M arketing Board out of
moneys to be appropriated by Parlia­
ment of such sums as may be necessary
to defray the operating expenses of the
Board or of any local marketing control
agencies set up by the Board.

ment to 5,000,000 men directly or in­
directly dependent on building for their
livelihood. Hom e building is a local in­
dustry. . . . it will put men to work in
their own home towns at their own jobs,
and will give business to local contrac­
tors, lumber dealers, hardware stores,
electrical and supply shops and other lo­
cal businesses.”
Every type of business and worker is
benefited when a wave of building and
modernizing sweeps through a commun­
ity. Every dollar spent starts a great fi­
nancial circle— the money goes to work­
men who pay their bills and are able to
buy more products; it goes to stores
which in turn are enabled to meet their
obligations and restock; it goes to farm­
ers and to doctors and, in the form of
taxes, to government. Eventually it
comes back, with interest in the coin of
better business, to the original spender.

Five M illion Jobs

The Ground Floor

T h e importance of home building and
repairing in the fight for recovery was
well summarized recently by Bernard L.
Johnson, editor of the American Build­
er, when he said:
“ T h e tremendous decline in expendi­
tures for home building from an average
of $3,000,000,000 a year to less than
$200,000,000 in 1931 and 1932 was a
major cause of depression and unemploy­
ment. Stimulation of home building and
repairs . . . will eventually give employ­

M ost observers believe that recovery
will come slowly, and that there is little
fear that any severe set-backs to the
progress already made will occur.
If that is true, there is one investment
the far-sighted citizen can make that
w ill bring him “ dividends” — a modern
home. It will give his family something
that cannot be adequately measured in
dollars and cents— a higher standard of
living. And, through the act of building
it, he will stimulate recovery. N o dollar

G M A C SHORT TERM TROTES

available in limited amounts
upon request

G
A

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c c e p t a n c e
Executive Office -


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57t h

o t o r s

o r p o r a t io n
Street -

P R I N C I P A L

7s[eu> Tor\, H- T.

CITIES

we spend does more to provide employ­
ment and to stimulate industry than the
construction dollar.
Prices are rising, and strong forces,
backed by government itself, are at­
tempting to accelerate their rate of
climb. Build now, repair now— and “ get
in on the ground floor.”

Put Up or Shut Up!
“ Put up or shut up was the idea tact­
fully expressed by one utility getting hot
under the collar by a spasm of local mu­
nicipal ownership agitation,” says the
Electrical Journal. “ T h e power com­
pany inserted the follow ing ad in the
newspaper:
“ ‘T o any person who can show us
figures that w ill prove that any munici­
pal plant has paid for itself entirely out
of earnings, without resorting to taxa­
tion, on rates as low as those in ----------we w ill pay in cash $500.’
“ N o one came forw ard.”
T h e point of this little story can be
applied to a thousand municipal plants
in towns boasting exceptionally low elec­
tric rates. It is perfectly possible to pro­
vide electric service absolutely free— if
the public treasury pays the bill. T o get
a step further, it would be possible, on
the same principle, to pay customers of
municipal plants for using the service, if
the taxpayers could be made to fork up
the necessary money, or give them tree
newspapers or free food.
Unprejudiced
experts have made
many surveys of municipal and private
electric rates— and practically everyone
has come to the conclusion, backed by
statistics, that when all costs, including
taxation, are taken into account, the pri­
vate utilities, on the average, give cheap­
er and better service than do public sys­
tems. T o use as an example of success­
ful municipal operation a plant which
sells power at a loss, and must be sub­
sidized by all the taxpayers in the inter­
est of the power-user, is to distort the
true picture beyond recognition.

M oney in the A ir
One hundred years ago, Daniel W e b ­
ster, speaking in the Senate, said: “ G old
and silver is the money of the constitu­
tion ; the constitutional standard of value
which is established and cannot be over­
turned ; to overturn it would shake the
whole system.”

Central Western Banker, September, 1934

15

INSURANCE

lis Application to the

■ FIDELITY

Yraternity

CO VERAG E

■

M a k e Your Business M en
Safe from Dishonesty Losses
O B U S IN E S S is safe from dis­
honesty losses unless its em­
ployees are bonded. This fact is
fully demonstrated every business day,
and experience shows that no business
organization, however well managed,
can be absolutely confident that it will
be continually safe from the dishonesty
of trusted employees.
In seeking means of economy in times
of depression, employers sometimes elim­
inate entirely, or drastically reduce their
fidelity coverage. T his is a false econ­
omy, as the temptation to steal, or rather
to “ borrow ,” the employer’s money is in­
creased in hard times, and the undiscov­
ered loss factor ought never to be over­
looked.
N ow that we have every indication of
improvement, and in view of the many
illustrations before us proving the need
for adequate fidelity coverage at all
times, this is an opportune time for
agents to sell new or additional fidelity
coverage to all classes of business organ­
izations.

N

No Yardstick for Honesty

There is no yardstick by which the
honesty of an employee can be measured.
It is practically impossible to determine
the proper amount of coverage for a
given official or employee. Because of
this, surety companies offer several
forms of bonds simplifying the task. If
every employer can be made to realize
that fidelity losses arise where and when
least expected, and that some emergency
may arise which will lead the most faith­
ful and trusted officer or employee to the
improper use of his employer’s fu n d s;
that adequate coverage may prevent seri­
ous financial difficulties for the concern

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

"\ f yo u are not s e l l i n g
Fidelity

today, you are

o v e r l ooki ng an avai lable
medium through which your
commission income may be
increased77
By W. H. BENNEM
Manager, Fidelity Department
American Surety Company, New York

in the event of a substantial loss, and
that fidelity suretyship is just as impor­
tant, and of the same type of proven in­
vestment as fire, casualty or other forms
pf insurance, etc., then the sale of the
fidelity schedule, or blanket bond, is sim­
ple.
Some years ago certain employers held
to the opinion that it was unnecessary to
bond old and tried employees and that it
bordered on an insult to ask such people
to complete a surety company applica­
tion. Events have shown the fallacy of
such reasoning.
Prudent business men of today appre­
ciate that fidelity coverage is an invest­
ment, and employees are educated to the
point where an honest man or woman is
glad to fill out the fidelity application,
knowing that approval by the surety is a
badge of merit.
I f the employer carries individual or
schedule bonds, the employer should de­
cide on the amount of coverage for each

man, or position, by the scope of the re­
sponsibility attached thereto, giving due
consideration to the possible shortage
that might be created in such a position.
All Losses Covered

T he primary commercial blanket bond
and the blanket position bond cover all
officers and employees of the named in­
sured, and indemnity against loss sus­
tained through proven dishonesty on the
part of any one or more of the em­
ployees acting directly or in collusion
with others. T h e primary commercial
blanket bond is written in the minimum
penalties of either $10,000, $15,000,
$20,000 or $25,000 covering twenty
class A and B employees or less, or in
the penalty of $2 p ,000 and multiples
thereof covering twenty-five employees
or more.
T h e blanket position bond is written
in the minimum penalty of $2,500 and
multiples thereof, not exceeding $20,000
as a maximum, exclusive of specific ex­
cess indemnity which may be granted
by rider on designated positions.
T h e excess commercial blanket bond
provides indemnity to the employer
against that part of direct loss he may
sustain in excess of the primary fidelity
suretyship carried on such employee.
Under the primary commercial blank­
et bond and blanket position bond in­
creases and decreases in the bonded per­
sonnel are automatically cared for by
the provisions of the bond without the
necessity of the employer notifying the
surety; except in the event of a merger
or consolidation with another organiza­
tion. Such bonds provide for full salvage
to the employer in the event of an excess
(Continued on page 22)

Central Western Banker, September, 1934

16

THROUGH THE G ATE CITY OF THE W E ST
. . . are despatched daily — via ten major trunk lines —
some 200 passenger and mail trains . . . countless box
cars, Hat cars, tank cars. T h e “ gate” began to swing
open in 1860 when President Lincoln chose Omaha for
the eastern starting point of the western half of the first
transcontinental

railroad — Union

Pacific.

Since

then,

only three other cities in the United States have woven
about them a greater web of rails.

16 Y E A R S BEFORE THE FIRST IRON HORSE
. . . puffed into Omaha from the East (across the Union
Pacific B ridge), Barrows, M illard & Company came to
town. T h a t was in 1856, a year before the incorporation
of Omaha itself. A few years later this company was re­
christened the United States National Bank. T oday the
United States National is one of the strongest and is the
oldest bank in all Nebraska.

United States National Bank

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Federal Reserve Bank of St. Louis

O M A H A ’ S O L D E S T BAN K

Affiliated with N O R T H W E S T B ANCORPORATION

17

Central Western Banker, September, 1934

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W I L L I A M P». H U G H E S , S e c re ta r y
N e b r a s k a H a n k e rs A s s o c ia tio n

E . E . P L A C E K , P re sid e n t
N e b r a s k a B a n k e r s A s s o c ia tio n

.......................... .
Just to Be Safe
R. J. Stromberg, vice president and
general manager of the F. E. Daven­
port Safe & Lock Company is spending
a few weeks’ vacation fishing up in the
north woods of Canada.
A story is told that M r. Stromberg
carried along an ample stock of canned
salmon and other varieties of fish just in
case fishing would not be good. As he
exclaims, it would be foolish to wait
nineteen years to go fishing and then not
have enough fish to eat.
W e trust that he w on ’t have to de­
pend upon his canned stock to satisfy
his hunger.

Bank Opens
T h e newly organized Clarkson Bank
is open for unrestricted business. T he
new bank w ill assume all trust accounts
of the Clarkson State Bank which term­
inates its existence as a going concern.
Another 15 per cent on all restricted de­
posits has been declared and is now pay­
able at the Clarkson State Bank. This
is the bank’s fifth dividend and brings the
total amount so released to 45 per cent.
Fifteen stockholders compose the new
corporation. T h e directors of the new
bank are: Messrs. Emil Petr, D r. F. B.
Schultz, Joseph R. Vitek, Joseph F. Jirovec, George C. Novotny and J. A.
Kucera. M r. Petr heads the new bank
as its president. J. A . Kucera is the cash­
ier, Frank Vidlak, assistant cashier, and
Leon Petr, bookkeeper. T h e bank has a
capital structure of $45,000.

To Merge
A ccording to reports, a merger be­
tween the banks at Sunol and Lodge
Pole is being considered in the near fu ­
ture. It is understood that the merger
w ill be completed as soon as government­
al terms are met. Depositors in the Su­

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

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nol bank have been notified that the mer­
ger probably will be consumated soon
and headquarters will be at Lodge Pole,
it is reported.

Protective Device
A . G . H ow ard of Lincoln invented a
“ Dillinger proof” protective device for
banks, before the gangster met his death
at Chicago. N ow that Dillinger is dead,
H ow ard believes that it w ill be sure to
keep out ordinary bank robbers.
H e has shown the device to sheriffs,
police department officials, bankers and
other business men, all of whom said
they believed the system practicable.
T h e device provides for instantaneous
locking and sealing of vaults and money
drawers, with a burglar alarm sounded
at the same time. Anyone employed in
the bank may trip the mechanism by
pulling a cord, if he remembers to do so
in the flurry that follows the visit of
bandits to a bank.

Rules Too Strict
Dissatisfied with the state banking de­
partment’s rigid restrictions on the lend­
ing power of banks, L . P. W irth of the
Falls City State and W . A . Schock, Jr.,
of the Richardson County Bank went to
Lincoln to lay a plea from the Fourth
Regional Clearing House association be­
fore the banking department.
T h e two were authorized as represen­
tatives of the association at a special
meeting held in Humboldt.
Bankers explained that the require­
ments of the banking department in the
last two or three examinations have been
particularly harsh and that as a result,
the banks are handicapped and that the
restrictions have made it impossible for
the banks to lend money on ordinarily
good risks and that they have most of
their funds in government bonds or cash.

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RACC Helps
H o w the Regional Agricultural Cred­
it Corporation program for drouth relief
has helped Fremont as well as stock
raisers and feeders in the drouth regions
was explained by J. M . Sorensen, vicepresident of the Stephens National bank
and a director of the R A C C , to mem­
bers of the Fremont Rotary club at the
weekly luncheon at H otel Pathfinder re­
cently.
M r. Sorensen explained that 4,500
cattle are being fed at the Fremont
Stockyards.
Feeding operations such as those at
the stockyards mean much to a commun­
ity. In this particular instance a total of
1,200 bushels of corn, 10 tons of prairie
hay and straw, 10 tons of molasses feed,
and two tons of cotton cake are used
daily. T h e expense for feed alone runs
more than $1,000 per day.
“ This feeding operation has created
an additional market for all feeds, in­
cluding 1,000 tons of straw which was
bought by the stock yards company due
to the shortage of hay to be fed with hay
as roughage,” Sorensen said. “ A ll of this
feed was bought locally when available.”
M r. Sorensen was a member of the
original loan committee of the R A C C .
For the last year he has been on the
board of directors and also has served on
the loan committee.

New Malmo Bank
T h e Security Home bank of M alm o,
a new institution, opened August 11,
with capital stock of $25,000. Emil Bar­
ry will be its president, and J. C. U rlander, cashier.

Brule Bank Opens
An announcement is made of the
opening of the Bank of Brule, which had
been moved there from Lemoyne and

18

Central Western Banker, September, 1934

was known as the Lemoyne State Bank.
G . D . Adams, a former Big Springs res­
ident, is president and cashier.

Buys Warrants
Registered warrants against the Fre­
mont school district, totaling about $68,410.82, and now drawing 5 per cent in­
terest will be taken up and re-sold to the
Stephens National Bank at an interest
rate of 3p2 per cent, according to action
taken by the board of education.
A communication from the loan com­
mittee of the Stephens National Bank
stated that the bank would be willing to
purchase half or all of the warrants at
the 3^2 per cent interest rate. Steps will
be taken to begin taking up the warrants
now outstanding at once, and to issue
new warrants at the lower rate of inter­
est to the bank.

New Money
Bankers expect to receive their first
supply of the new silver currency very
shortly. This will be accomplished by
distribution through the federal reserve
banks as production of the certificates
increases. Already engraved is $24,440,000 of one dollar and five dollar bills to
be followed by tens, twenties and hun­
dreds, all of which are backed by bul­
lion. Approximately 47 million dollars
worth of the certificates will be printed.

Promoted
Charles A. Swanson, connected with

the First National Bank of Santa Ana,
Cal., for the past ten years, has been
promoted to assistant cashier. T he bank
is capitalized at $1,200,000 with de­
posits of $7,500,000. A ir. Swanson was
formerly in the Farmers and Alerchants
Bank and furniture business in W ahoo.

Department Lenient
State banks in Nebraska will not be
subjected to “ hard-boiled” examinations
and requirements during the next year,
and they in turn w ill be able to deal
more leniently with their farm borrow­
ers, State Bank Superintendent E. H .
Luikart announced recently.
Because of the destruction of crops by
drouth and the forced sale of livestock
on which farmers ordinarily depend in
large part for their income, thousands of
them will be unable to meet notes due
for payment in the fall. Ordinarily they
would have money coming in at that sea­
son to take up their obligations. In the
existing situation they must have an ex­
tension of credit until they can raise
something to sell next year.

Banker Dies
A . L. Bishop, prominent W heeler
county banker, lawyer and land owner,
passed away recently at the St. Francis
hospital in Grand Island. He had made
his home in Bartlett for forty-three
years, and had always been identified
with the business life of the community.

Your Cash and Collection Items
W ill Be Given
SPECIAL ATTENTION
( Try

Our

S ervice)

LIVE STOCK NATIONAL BANK OF OMAHA

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Federal Reserve Bank of St. Louis

OM AH A

H e was president of the Bartlett State
Bank at the time of his death.

Resigns
H arry Dickson, field man for the
Omaha Federal Land Bank, has re­
signed to become branch office manager
of the farm loan department of the C on­
necticut Alutual L ife Insurance compa­
ny. He will have charge of 19 counties
in northwestern Iowa, with headquarters
at Storm Lake.

Co-operative Bank
T h e Litchfield Co-operative Credit
Association, Litchfield’s new banking in­
stitution was officially opened for busi­
ness recently. T h e new institution is un­
der the management of H . I. Lang as
cashier together with a board of direc­
tors composed of five stockholders.
Arrangements have been made with
George Polski, receiver of the First N a­
tional Bank, to use the building for the
new bank. Air. Lang states that the first
day’s business was very satisfactory and
that as soon as the public in general was
notified that the new bank was open for
business the deposits would grow.

Visits Omaha
F. W . Peck of W ashington, F C A
co-operative bank commissioner, was in
Omaha for two days recently to inspect
the local bank, of which Jerry Alason is
president.
W h ile the drouth emergency is being
handled by other branches of F C A , Air.
Peck said, the banks for co-operatives
aie attempting to work out a long-range
program. Since January loans have been
granted to 450 co-operative associations,
compared with 150 by the old farm
board. O f a total of 28 million dollars in
loans, the Omaha bank has closed 25
for a total of 234 thousand dollars.

Largest Day
T h e Omaha federal land bank had
the biggest single day’s business in its
history July 31, closing 520 loans for a
total of $1,912,000.
F. A . O ’Connor, general counsel of
the farm credit administration, attribut­
ed the showing of the bank to more effi­
cient handling of loans since all of its
activities have became concentrated un­
der one roof, the farm credit building
and its new addition.
T h e previous high total for one day’s
closing was $1,500,000, established last
A4arch.
T h e Omaha land bank continues to

19

Central Western Banker, September, 1934

lead all other land banks in the United
States with a total of 188 million dollars
in loans closed since the emergency farm
refinancing act went into effect June 1,
1933. T here are about 1,000 employees
in all departments of the bank.

Another Co-operative
Greenwood is the first town in Cass
county to organize a Co-operative asso­
ciation. Officers are: N. D . T alcott,
president; John S. Gribble, vice presi­
dent; Norman Peters, treasurer; Ernest
Smith and C. W . Newkirk, directors;
E. L. M cD onald, Rex Peters and E. H .
Armstrong, special committee to investi­
gate and pass on loan applications; M a ­
bel Boucher, H . G . W ilkins and Leo D .
Peters, advisory committee.

Clearings Increase
Bank clearings in Lincoln showed a
million dollar increase in July, 1934, as
compared to the corresponding months a
year ago and a half million increase over
June, 1934, according to figures re­
leased by B. G . Clark, secretary of the
Lincoln Clearing Elouse association.
Clearings reported for July, 1934,
total $9,212,183.78 while the total for
the month in 1933 was $8,205,012.34.
June’s clearings were $8,731,243.44.

Organize
A meeting of Antelope county bankers
was held in Neligh for the purpose of
forming a county bankers’ association.
A fter the organization was completed
service rates were discussed details of
which will be published later.
O ut of town bankers present were H .
D . M iller and J. A . Van Kirk of the
Citizens State Bank of Clearwater,
Leonard Hales of the Brunswick State
Bank, D . L. Shenefelt, W . L . M orris,
and George Hunter of the Lirst Nation­
al Bank of Oakdale, and W . M . Costel­
lo of the Larmers State Bank of Ewing.

T h e plan on which this bank is built
permits fifteen persons with capital of
$10 each to start a credit association.
Every depositor is required to invest ten
per cent of his deposit in capital stock.
If he later increases his deposits he must
also acquire more stock. Thus the capital
stock is constantly kept at one-tenth of
the deposits.
H . L. Leslie is manager of the Bel­
videre Cooperative Association which is
located in the old bank building.

New Officers
A t a special meeting of the stockhold­
ers of the Bank of Lall River, held re­
cently, the follow ing directors were
elected for the balance of the year: B.
M . Brown, L. G . Brown, A . L. Brodrick, John C. Burns, A . L. Defever, T .
Clyde W est, and W . Q . Wickersham.
T h e follow ing officers were elected by
the board: B. M . Brown, president; A.
L. Brodrick, vice president; W . Q .
Wickersham, cashier.

........................................................ .
To St. Paul
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Ready to Open
T he last detail has been completed
and the new financial institution in Linn,
the Linn State Bank, is ready to open
the doors. Just as soon as the directors
are assured that the new institution will
be in position to guarantee the deposits
of its depositors up to $5,000, they will
order the bank opened.
One important act of the new direc­
tor was to elect officers. C. A . Johnson
was chosen president, Ernest Helms was
chosen vice-president, and R. D . O ltjen
was chosen secretary of the board and
cashier of the bank. T h e directors un­
officially elected at a recent stockholders’
meeting, and appointed on resignation
of the temporary board, include : C. A.
Johnson, Ernest Helms, Carroll Conk­
lin, L. R. Lobaugh, and R. D . Oltjen.
These men w ill guide the destinies of
the bank during the coming year.

T h e South M ound State Bank is to
move to St. Paul.
T h e former St. Paul State Bank
building has been purchased for the lo­
cation of the new bank and w ill be re­
modeled soon to suit the convenience of
the new institution.

Banker Dies
Henry Lord Harbaugh died recently
in W ellington.
A t the time of his death he was presi­
dent of the National Bank of Commerce,
W ellin gton ; president of the M cP h er­
son Hail Insurance company, president
of the Larmers M utual Telephone com­
pany,
director
in
the W ellington
Term inal Elevator company, and direc­
tor in the Southern Kansas M utual In­
surance company. H e was among the or­
ganizers of each of these corporations
and retained an active interest in them
until the time of his death.

Offering to Banks of Nebraska
“The Kind of Service you’ll Like”

Drop Insurance
T w o Nebraska state banks were listed
recently as having withdrawn from the
federal deposit insurance corporation.
T h ey are the Larmers State Bank of
Emerson and St. Libory State Bank.

C ontinental N

ational

LIN COLN , N E B R A S K A

Organize Co-operative
A fter being without a bank for five
years, Belvidere citizens have organized
a co-operative bank in conjunction with
the Union Credit Service Association of
Lincoln, and are now open for business.

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Federal Reserve Bank of St. Louis

B

ank

20

Central Western Banker, September, 1934

Assistant Cashier

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Election of Lawrence S. Blum as as­
sistant cashier of the Security National
Bank, Kansas City, Kansas, was an­
nounced recently. Blum has been affiliat­
ed with the People’s National Bank
since 1927 and when it was taken over
and changed to the Security National
O ctober 13, 1933, he remained in the
reorganized institution.

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Not Foreclosure
Federal land bank officials will not
foreclose on loans except as a last re­
sort, and w ill extend every facility to
farmers to work themselves out of debt,
declared L. E. Call, president of the
Federal Land Bank of W ichita, at Pu­
eblo recently.

T his makes three officers for the bank.
M . L. Breidenthal is president and
Claude W ilson, cashier.

Call, with J. B. M arcellus, engineerappraiser, and E. Lynn G uy of M o n t­
rose, regional supervisor and appraiser,
came to the San Luis valley to inspect
the region and to visit farms on which
the bank has made loans. Loans by the
bank in the San Luis valley total three
and one-half million dollars, the bank
president declared.

Consolidated
T h e First State Bank, Argentine’s
oldest bank from the standpoint of con­
tinuous service, was dissolved recently,
and its assets consolidated with those of
the Kansas-Merchants Bank in Arm ourdale.
Several months ago Clayton Bodley,
owner of the controlling interest in the
First State Bank, purchased a control­
ling interest in the Kansas-Merchants
Bank in Armourdale. A t that time the
announcement was made that the First
State would be continued as in the past.

Check Figures Increase
T h e six months report on bank check
totals and building permits for the tenth
federal reserve district, which includes
the Rocky mountain area, show big in­
creases in checks but declines in building.
T h e July building permit record for
Colorado Springs, however, w ill show
a mammoth increase, due to the civic
arts center figure. T h e total for July is
$415,479, compared to $10,885 in July,
1933.

Dies in Pittsburg
John Hughes Stephens, 62, former as­
sistant cashier of the First National
Bank, Pittsburg, died at his home re­
cently. M r. Stephens fell and broke his
hip and complications, believed to have
arisen from ill health prior to that time,
set in.

Debits to individual accounts, as re­
ported by banks in twenty-nine leading
cities of the district, for the five weeks
ended July 4, aggregated $1,096,669,000, or 11 per cent above the total re­
ported for the preceding five weeks and
13 per cent above that for the corre­
sponding five weeks of 1933.
Check payments during the first twen­
ty-six weeks of 1934 aggregated $5,195,032,000, an increase of $940,512,000,

M r. Stephens was born M arch 21,
1872, in M t. Sterling, Ky. H e had lived
in this district 35 years and for 28 years
he had been a resident of Pittsburg. He
was employed at the First National
Bank for about twenty years.

A re You Sending O ut Invitations For A Holdup Visit?
• ISank b a n d its n e v e r p lan a p a r ty
u n less th e y are g iv e n an in v ita tio n .
T h e y w a n t m o n e y an d w a n t
it
m ig h t y q u ic k — d e la y m e a n s tro u b le
in th e ir g e ta w a y . C h o o se y o u r v i s ­
ito rs. . . . D o n ’t in v ite th e m to c o m e.
In v ite th e m to s t a y a w a y b y d is p la y in g th e Y a le
ila n k tr o l S ig n .

Sold By . . .

f
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Ile fo r e p u r c h a s in g a s k fo r a d e m o n ­
s tra tio n o f th e n e w Y a le D e la y e d
C o n tro l T im e lo e k o f

1
I
/
F u lly je w e lle d c h ro n o m e te r m o v e m e n ts
U n d e rw rite rs L a b o r a to r ie s In sp ec te d

F. E. DAVENPORT & COMPANY


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Federal Reserve Bank of St. Louis

Official Experts for Nebraska Bankers Assn.
OMAHA, NEBRASKA

or 22.1 per cent over the like period last
year.

Denver Clearings
Bank clearings for Denver in July
were $93,127,902.78, the largest amount
of money cleared in more than two
years.
In July, 1933, clearings totaled $77,529,611.79.
A survey of railroads revealed that
officials believe shipments of merchandise
and commodities w ill continue to show
gains over last year for the remainder of
1934.
W ithout exception the major rail­
roads have shown gains month after
month during 1934, with the July in­
crease ranging from 12 to 20 per cent
in freight car loadings.
Tourist travel for the month of A u ­
gust will, it is believed, set a record. O f ­
ficials of tourist bureaus predict that C ol­
orado this year will do a $50,000,000
tourist business.

New Currency
Fifty thousand new dollars— in un­
soiled paper currency— has been placed
in circulation in Grand Junction and
vicinity. It is the first to bear the name
of the First National Bank in Grand
Junction.
T h e $50,000 issue of national cur­
rency was obtained by the First Nation­
al Bank in the customary manner, by
deposit with the U. S. treasury of gov­
ernment bonds for that amount. T h e
privilege of securing such national cur­
rency by bond deposits is limited to na­
tional banks.
T h e new currency is in denominations
of $50, $20, $10, and $5. It is being
placed in circulation through ordinary
banking channels, Cashier E. R. Thomas
said. Under the federal reserve act, only
government bonds earning interest of
3 } i per cent or less can be deposited in
exchange for such currency.

Named Cashier
A t the regular monthly meeting of
the board of directors of the Fremont
County National Bank, Canon City,
M rs. H . M organ Reynolds was elected
cashier of the bank. She had heretofore
been assistant cashier.
M rs. Reynolds has been connected
with the bank for the past twelve years
or longer and has occupied all positions
from collection clerk up to the position
she has now attained o f cashier.

21

Central Western Banker, September, 1934

Banker Dies
Thom as A . Rendle, 62, retired banker
and mining man who was widely known
in Colorado and W yom ing, died recent­
ly at his home in Denver.
M r. Rendle was the brother of the
late J. A . Rendle, prominent Colorado
and W yom ing cattleman, who died last
February.
H e was born in Campbellford, Onta­
rio, in 1872. T w en ty years later he es­
tablished himself in business at Rawlins,
W y o., where he lived for a number of
years, and also was associated with J.
W . Hugus & Co., which held extensive
banking interests in the west.
M r. Rendle also was interested in
mining ventures in Cripple Creek and
Arizona before 1900.
. 111111111

1

111111]1111111111■1111II111111II

W yoming News
liiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiimiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii

More Business
O ver 2,000,000 more dollars tinkled
through business channels last month
than during July, 1933, an analysis of
the monthly report of the Cheyenne
Clearing House association showed.
T h e report was issued by M orton
Nisbet, secretary of the association.
It showed that checks totaling $6,483,310 were written in July as com­
pared with $4,469,689 during July,
1933. This is an increase of $2,013,621.
T he increase over the month of June,
1934, was $899,878.
T h e figures are for both local banks.
T hey indicate that business generally has
shown a gain of over 25 per cent over
last year.
Bank clearings, which show the ve­
locity of business, increased nearly $1,000,000 over July, 1933.

State Convention
T h e annual convention of the W y o ­
ming Bankers’ Association is scheduled
to be held in Lander on August 31 and
September 1. A large representation of
bankers and their wives throughout the
state is expected, and plans are being
made by the Lander bankers for their
entertainment. Headquarters will be at
the Noble Hotel.
T his convention of state bankers will
be one of the most important sessions of
the association in recent years as the
program w ill include discussions of some
of the most perplexing problems to con­
front the financial interests of the coun­
try in recent years. It is expected that
several prominent leaders in the banking

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Federal Reserve Bank of St. Louis

world w ill be in attendance at the ses­
sions.
In addition to the business sessions of
the organization several entertainment
features w ill be arranged by the local
committee, including parties for the la­
dies, a banquet and dance and some in­
teresting sightseeing tours.
Officers of the state association in­
clude H arry R. W eston, of Jackson,
president; Kathleen Snyder, of Chey­
enne, secretary, and R. W . Allen, of
Cody, treasurer.

Service Charges
Like other institutions throughout the
W est, banks of W yom ing find it neces­
sary to install service charges to offset
the loss of income from loans, and the
increased cost of doing business. T w o
Laramie banks, the First National and
the Albany National, last month placed
uniform charges in effect. Last month
also, the First National Bank of River­
ton instituted such charges.
IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIMIIIIIIIIIIIIIIIIIIIMIIIIIIIIIIIIIIIIIIIIIIMIMIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIMIIIIIIIIIIIIIIMIIIIIIIII

Leo F. Schiff and Ira L. W righ t each
for two years, and E. W . W a rd and R.
P. Noble each for one year.
T h e officers elected at the meeting of
the board were Frank Light, president;
Leo F. Schiff, first vice president ; and
R. P. Noble, second vice-president. M rs.
Elizabeth Skelly will be the secretarytreasurer and H . O . Robertson attorney
for the association.

Deposits Gain
N ew M e x ico ’s 19 state banks showed
a considerable gain in deposits, accord­
ing to figures made public by John
Bingham, state bank examiner, for the
period ending June 30 this year.
A noticeable increase was shown in
demand deposits and time deposits, and
this was due, Bingham said, to the fed­
eral deposit insurance corporation guar­
antee by the government.
June 30 this year, the banks showed
resources and liabilities each of $6,446,539.57, as compared with $6,242,713.10
on M arch 5 of this year and $5,478,785.74 December 30, 1933.
T h e increase from 1933 to 1934 in
demand deposits was from $3,136,172.53
to $3,913,139.96.

miiiiiiiiimimiiiimiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiimiiiiiiiiiiimiiiiiiMiiiMiiiiiimiiiimiiiiiiiiiiiiiiiimmimiiiiiin

Organize Association
T h e Grant County Federal Savings
& Loan association was formerly organ­
ized in Silver City at a meeting at the
Chamber of Commerce and the charter
presented by Sam Strauss, field organizer
for the federal home loan bank in W ash ­
ington, D . C.
It was voted by the members to limit
the board of directors to five. A nom­
inating committee composed of M elvin
H . Porterfield, Sam H . Phoenix and
Vernon Glenn selected Frank Light,
Leo Schiff, Ira L . W righ t, E. W . W a rd
and R. P. Noble, who were unanimous­
ly elected. T h e length of service was
determined by drawing numbers. Frank
Light was thus elected for three years;

Moves Location
T he Merchants Bank, Gallup, will
move to the M orris building, Second
street and Coal avenue, as soon as altera­
tions and installation of fixtures in the
building can be completed, Spencer Bellmaine, cashier, announced.
Directors of the bank approved plans
for the move and okehed Bellmaine as
head of the bank with title of cashier.
Frank Burke was made assistant cashier.
Bellmaine was unable to say how soon
the bank could move to its new location,
but said it would probably be Septem­
ber 1.
T h e Merchants Bank has occupied its
present location since 1925.

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

i
|

N E W AND REBUILT TYPEW RITERS, ADDING MACHINES, CHECK

\

W RITERS — FULLY GUARANTEED.
REBUILT MIMEOGRAPHS, STENCILS AND INKS

j

LOWEST PRICES

ALLEN-WALES
1820 Farnam St.

THE FINEST “ H EA V Y DUTY”
ADDING MACHINE MADE

Omaha, Nebraska

22

Central Western Banker, September, 1934

F ID E L IT Y COVERAGE
(Continued from page IS)

loss. Premium for such bonds is com­
puted annually on submission to the su­
rety of a complete list of the names, pos­
itions and locations of all officers and
employees in the service of the insured
on the effective date a n d /or renewal date
of the bond.
Some Advantages

Some of the advantages of the pri­
mary commercial blanket bond or blank­
et position bond are:
T h e danger of underinsurance is min­
imized since all employees are covered up
to the full penalty of the bond. There
can be no failure to bond individual em­
ployees.
T h e employer’s task of determining
the amount in which to bond a particu­
lar employee is eliminated. This is al­
ways a matter of guesswork.
N ew employees are automatically cov­
ered, without notice to the surety, be­
ginning with the day of the employment.
T h e detail w ork of handling the no­
tices which are required under fidelity
schedule bonds when making changes in
the bonded personnel is eliminated.
Employees may be changed and their
duties enlarged or extended without the
employer having to make corresponding
changes in the amount of coverage— as
would be the case under individual or
schedule fidelity bonds. It is not neces­
sary that the surety shall be notified of
such changes.
Full recovery may be made under the
primary commercial blanket or blanket
position bond even though the employer
is unable to identify the dishonest em­
ployee, provided reasonable evidence is
established that the loss was due to an
act or acts coming within the items of
the bond. Under most forms of fidelity
bonds, the employer is compelled to iden­

tify the dishonest employee to effect re­
covery.
Other Services

In addition to the indemnity granted
by fidelity bonds, there are other impor­
tant features of the service rendered in
connection with fidelity suretyship, not
the least of which is that the employer is
relieved of embarrassment in dealing
with an employee or member of his fam­
ily in the event of defalcation. T h e loss
prevention service of the surety company
gives the employer confidence that the
employees bonded, so far as the surety
can determine, have a clean record and
qualified for the positions in which they
are bonded; labor turnover is reduced
through eliminating floaters, and the
type of applicant for employment is im­
proved.
Because fidelity bonds as issued by
surety companies are continuous in form,
they are steady producers of commission
income
and
require the minimum
amount of the broker’s or agent’s time in
servicing or handling a risk of such char­
acter. If you are not selling fidelity to­
day, you are overlooking an available
medium through which your commission
income may be increased.

W hose O x is
Being G o re d ?
“ A group of W ashington editors were
singing the praises of government owner­
ship of public utilities, railroads, oil and
gas distribution, steamships, mines and
what-not,” says an editorial in Skamania
County Pioneer, Stevenson, W ashing­
ton. “ T he writer asked them why not
include the country weeklies— and then
what a howl of disapproval went up.
“ N ot a single one of them wanted to
have his business included because it

‘would soon revert to complete annihila­
tion of personal rights.’ ‘W e should be­
come serfs under such a regime.’ ‘ It has
been the independence and fearlessness
of the press that has maintained the free­
dom of the American people through all
the years of its manifold political
changes.’ ‘W ithout a free and privately
owned press America would soon be un­
der the mailed fist of a military dic­
tator.’
“ So it all depends on one’s point of
view.
“ Government owned businesses are all
right for the other fellows, but it’s all
w rong when it comes to the business of
the man who advocates it.”

The Farm Home
One of the greatest potential fields
for stimulated construction lies in the
farm home.
About 50 per cent of the farm houses
in the country need extensive repairs.
T w enty per cent need new roofs. Fifteen
per cent need new foundations. It is es­
timated that if all the repairs were made
the total cost would come to $3,500,000,000— an average of $575 per house.
Further, a great majority of rural
residences are without interior plumb­
ing. Fewer still have modern labor and
time saving devices. It is said that the
farm home, as compared with a good ur­
ban home, is 25 years behind the times.
Here, then, is a vast opportunity— for
builders, equipment manufacturers and
other industries. It is likewise an oppor­
tunity to eliminate much of existing un­
employment, and to bolster lagging pur­
chasing power— when construction is on
a normal basis, every business feels the
good effects. A n increasing percentage
of farmers are becoming able to build,
repair and modernize their dwellings.

A U S T R A L A S IA

BANK OF N E W S O U T H W A LE S
E S T A B L I S H E D 1817
( W i t h w h ic h are 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 B A N K
an d T H E A U S T R A L I A N B A N K O F C O M M E R C E L td .)
P A I D -U P C A P I T A L
........................................................................................... £ A 8,780,000
R E S E R V E F U N D .......................................................................................................
0,150,000
R E S E R V E L I A B I L I T Y O F P R O P R I E T O R S ...........................................
8,780,000
£ A 23,710,000

Aggregate Assets 30th September, 1933, £ 111,512,302
A G E N T S — F I R S T N A T IO N A L B A N K , O M A H A , N E B R A S K A

H E A D OFFICE, GEORGE ST., S Y N D E Y


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Federal Reserve Bank of St. Louis

GENERAL

MANAGER, ALFRED

CHARLES

D A V ID S O N

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

710 B r a n c h e s and A g e n c ie s in A ll A u s tr a lia n S ta te s , F e d e r a l T e r r ito r y ,
N e w Z e a la n d , F iji , P a p u a , M a n d a te d T e r r ito r y o f N e w G u in ea an d L on d on

FINANCIAL ADVERTISERS
ASSOCIATION
ic y *

£3n n u a l

(S o n ven ir on

PLACE * Buffalo, N. Y.
E N IE * Septem ber lO, il, 1(2, 13, 1934

T H E M E *

H ow

to

Financial Inform ation.

M eet

th e

PRO G RA M

B u ilt and edited like a publication.

P u b lic ’s D e m a n d

fo r

* O rigin al, constructive.
S P E A K E R S * L e ad ers

with something to say — and who know bow to say it. D o n t
lo o k to them for brom ides, platitudes and self-laudation.

This

c o n v e n tio n w ill be lo n g on b u s in e s s — s h o rt on b a lly h 0 0 .
S C O P E ★ Financial A d vertisin g, with

emphasis

selling, public

S E S S I O N S * Four

and

custom er relations.

g e n era l; eigh t d e p a rtm e n ta l.

on

buying,

R e v ie w s at a g e n era l sessio n .

I N V I T A T I O N ★ T b is advertisem ent invites y o u t

F or reservations and in form ation :
Preston E. Reed, Executive Secretary
Financial A d v e rtise rs A s s o c ia tio n

<231 Soutk La Salle Street, Ckicago

★

T kis advertisement prepared ky Edwin Bird W


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son, Inc., financial advertising, N ew York.


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The Omaha
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