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https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ©ANKER ST. LOUIS M a re k , 1927 A N N U A L B O N D A N D IN V E S T M E N T N U M B E R Is Y o u r B on d A c c o u n t P ro fita b le ? (A S u r v e y o f 2 2 0 0 B a n k s) W k a t tk e B o n d I n v e s to r W a n ts to K n o w N e w A rk a n sa s L a w on D is tr ic t B o n d s W k a t D o e s tk e M o n e y D o ? A S e lle r s M a r k e t m B o n d s D o e s tk e S a le o f B o n d s T a k e W e a ltk O u t o f C o m m u n ity ? C o u n try B a n k s a n d tk e B o n d B u s in e s s A N e w B a sis fo r M o n e y V a lu e s W k o Is Y o u r In v e s tm e n t B a n k e r ? C o u n try B a n k s C a n D o M u c k to E n co u ra g e D iv e r s ifie d F a rm in g OKLA ARK \ LA / ^ ---------- ------ Mid-Continent Banker A Long Established Investment Service for Banks Choice General List Securities and Con servative First Mortgage Bonds enable The House of Forman to meet completely all of the requirements of Banks and Bankers. C fff' H E HO USE OF FO R M A N , for many years, has pro- \ J j / vided safe and profitable employment for the funds of many American, Scotch, Dutch aud British Banking Houses. Today comprehensive offerings of carefully selected General List Securities and conservative issues of First Mortgage Bonds place this organization in a commanding position to render experienced and balanced investment service for Banks. Long fam iliarity and association with Banks and Bankers enable the House of Forman to serve financial institutions faithfully and successfully—to meet their requirements fully, whether they seek safe and profitable employment for insti tutional funds, or bonds which they can unhesitatingly offer to their own customers. Inquiries are invited—please address Division of Banks and Bankers “ ” George MF orman 6 Company Investment Bonds Since 1885 Boatm en’s Bank Building, St. Louis, M o. Chicago New York San Francisco Indianapolis Pittsburgh Minneapolis Springfield, 111. Peoria The Mid Continent Banker is published monthly by the Commerce Publishing Company, 408 https://fraser.stlouisfed.org Volume 23. No. 3. Entered as second class matter Federal Reserve Bank of St. Louis Des Moines Lexington, Ky. Olive St., St. Louis, Mo. at St. Louis Postoffice Subscription price $3.00 per year St. Louis, March, 1927 3 Maturities to Suit obvious that there are advantages to a bank, as to other investors, in a close connection with an es tablished investment house. A connection o f this type is particularly useful when the investment house offers a list o f securities broad enough to meet most o f the bankers’ outside investment needs. T IS I The offerings o f A . G . Becker & Co. include bonds, short term notes and commercial paper, thus embrac ing investments with maturities o f from 3 months to 30 years, and more. The bonds and short-term notes on our list are the carefully selected obligations o f rail road, public utility and industrial corporations o f strong credit and o f domestic and foreign municipalities. Commercial paper offerings include the names o f some o f the leading industrial concerns in the country, with whose financing we have been identified for many years. It has been our privilege to serve several thousand banks during the past 33 years. We welcome the oppor tunity o f placing this extensive experience and the facil ities o f this national organization at your disposal. W e are always glad to supply credit and investment in formation and analyses, or to submit offerings to meet specific investment requirements. A. G.Becker & Co. 137 South La Salle Street, Chicago NEW YORK SAN FRANCISCO Bonds https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ST. LOUIS SEATTLE Short Term Notes MILWAUKEE PORTLAND MINNEAPOLIS SPOKANE Commercial Paper Mid-Continent Banker 4 Federal Surety Company D A V E N P O R T , IO W A Condensed Financial Statement December 31, 1926 As reported to the United States Treasury Department ASSETS B ook V alue of Real E state........................................................................$ 7,192.Cb First M ortgage L oans on Real Estate...................... -...................... .... 1,020,715.25 B ook V alu e o f B on ds........................................-..................................... .... 28,073.28 Cash in Office and Banks.................................. 338,238.60 Prem ium s in Course o f C ollection........................................................... 527,886.9o D ue from Suspended Banks..................................................................59,516.42 Due from Reinsurance Com panies.....................................................86,043.39 A ccou n ts R eceivable Secured......................................................... ...-..... 236,270.13 A ccru ed Interest .............................................................................. ....-....... 51,315.91 O ther A ssets ....................................... -...........................................-............ 182,172.10 G R O S S A S S E T S ................................................................................. 2,537,424.05 D educt A ssets not A dm itted............................................................. 194,557.37 A dm itted A ssets ............................ .,................................................. ...,$2,342,866.69 l ia b il it ie s T otal U npaid Losses and Claim s............................................................. $ 358,492.59 U nearned Prem ium R eserve.................................................................... 634,225.23 U npaid Current A ccou n ts.................................... 20,339.52 E stim ated T a xes ................... 36,000.00 Com m issions due A gen ts............................................................................ 87,097.80 Due Reinsurance Com panies......................................... .......................... 46,711.55 Contingent R eserve ..................................................................................... 35,000.00 T otal Liabilities except Capital......... ........................... 1,217,866.69 Capital paid up...................... ....................................................$725,000.00 Surplus over all Liabilities................................................. 400,000.00 Surplus as regards P olicyh olders............ ........... TOTAL ............................. Casualty Insurance 1,125,000.00 $2,342,866.69 — Fidelity— Surety Bonds W. L. TAYLOR Vice-President and General Manager B R A N C H O F F I C E S AT CH ICAG O D ETR O IT https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis DALLAS M IN NEAPO LIS DES M OINES DENVER W A SH IN G T O N , D. C. Over $800,000 on Deposit with Iowa Insurance Department for the Protection of Our Policyholders St. Louis, March, 1927 5 f| How many checks does your bank write monthly ? . . . How many employees are assigned to this task? . . . How long does it take them to do the work? G et the answers to these questions, and w ith them in fro n t o f you, con sider these facts about The New Todd Super-Speed Protectograph A r e a s o n a b l y experienced operator can write the amount line on checks at the rate of 1200 to 1500 an hour. Such speed often makes it possible to assign your check-writing problem to one employee instead of taking the time of several. The Todd Super-Speed takes up little room whether used on a desk or equipped with compact all-metal stand. Valuable space is saved. Its mechanical simplicity permits any employee to become proficient on it at short notice. Checks can be fed in singly or in sheets of six. The machine writes like an adding machine. Press a key and it repeats any amount automatically. I f an error is made, the machine can be instantly cleared before the imprint. Re inking is seldom required, but when necessary the ink rollers can be changed speedily— without fuss or muss. These are time and money saving fea tures that you cannot afford to pass by without investigating. And remember that The Todd Company, in presenting the Super-Speed to the banking world, assumes a full responsibility for its flaw less performance. The years spent in designing it, improving it and perfecting it indicate our insistence that the SuperSpeed be worthy of the name Todd in every respect. A t your convenience a Todd expert will show you the Super-Speed. W ire, write or mail the coupon. The Todd Company, Protectograph Division. (E st. 1899.) Rochester, N . Y . Sole makers of the Protectograph, Todd Greenbac Checks and Super-Safety Checks. The Todd Super-Speed’s Ten Points of Excellence 1 Writes 1200 to 1500 checks an hour. 2 Operates 3-2 ' THE TODD COM PANY, Protectograph Division 1151 University Ave., Rochester, N. Y . Gentlemen: Please send me the facts about tin New Todd Super-Speed Protectograph. Name of bank Name of officer. Address________ like an adding machine. auto 7 Can 3 Protects amount line from check-fraud artists. 4 Shreds words and figures into fiber of paper in large, clear type. 5 Simplifies quick and clean operation. 5 Repeats amounts matically. re-inking to a be instantly cleared for corrections. 8 Takes checks singly or in sheets of six. 9 Covered by the Todd guar antee. 10 Sturdy all-metal stand. TODD SYSTEM OF CHECK. PROTECTION https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mid-Continent Banker 6 INDEX Abraham Lincoln Life Insurance Company, Springfield, 111........................ 86 Aid & Co., Inc., St. Louis.......................... 81 Allyn & Co., A. C., Chicago...................... 81 American Banks, Nashville.........................120 American Fixture Company, Kansas City ................................................. 93 Augustine & Co., St. Louis........................ 71 B Baird & Warner, Inc., Chicago................ 48 Baker, Kellogg & Co., Inc., Chicago. . 36 Bank of Commerce & Trust Company, Memphis .................................. 99 Bank of New South Wales, Sydney, Australia ...................................... 6 Bartlett & Gordon, Inc., Chicago.......... 83 Becker & Co., A. G., Chicago.................. 3 Berkowitz Envelope Co., Kansas C ity.. 54 Bitting & Company, St. Louis.................. 61 Boatmen’ s National Bank, St. L o u is ... 91 Bowman & Company, St. Louis................ 81 Broadway Trust Company, St. L o u is.. . 94 Brookmire Economic Service, New York 85 Burr, George H ., & Co., St. Louis.......... 30 Byllesby & Co., H. M., Chicago.............. 10 C Caldwell & Company, Nashville................ 57 Camp, Thorne & Co., Inc.. Chicago----- 123 Chapman, P. W ., & Co.. Chicago.......... 56 Chase National Bank, New Y ork.......... 94 Chemical National Bank, New Y o r k .. 97 Chicago Trust Company. Chicago.......... 34 Commerce Trust Co., Kansas City......... 118 Commerce Trust Company. Bond Department, Kansas C ity...................... 42 Compton Company, W m . R.. St. Louis. 77 Continental & Commercial Banks, Chicago ...........................................................104 TO ADVERTISER s D Dawes, Maynard & Co., C h i c a g o ........ _6 Doherty & Co., Henry L., St. L o u is.. 53 D ’Oench, Duhme & Co., Sit. Louis.......... 79 Equitable Bd. & Mtg. Co., Chicago........ 79 Equitable Trust Company, New Y o r k .. 82 F Federal Commerce Trust Co., St. Louis 70 Federal Laboratories, Inc., Pittsburgh. 115 Federal Surety Company, D avenport... 4 Fidelity Bond & Mortgage Co., St. Louis 68 Fidelity Trust Company, Detroit............ 7 First Illinois Company, C h ic a g o ........... 35 First National Bank, Chicago.................. 96 First National Bank, Louisville............... 110 First National Bank, St. Louis................ 20* First National Company, St. Louis........ 21 Fletcher American Company, Louisville 58 Foreman Banks, Chicago.............................103 Forman & Company, George M., Chicago .......................................................... 2 Francis, Bro. & Co., St. Louis.................. 17 G General Motors Acceptance Corporation, New Y ork ............................ 52 H Halsey, Stuart & Co., Chicago.................. 22 Hanover National Bank, New Y ork----- 112 Hibernia Bank & Trust Co., New Orleans ...................................................107 . g7 Hilliard & Son, J. J. B., L ouisville... 40 Hoagland-Allum & Co., Chicago............ Hotels Batimore & Muehlebach, Kansas City .................................................. 98 Hotel Eimpire, New Y ork............................ 94 Hotel Knickerbocker. New Y ork ................. 6 I Illinois Honor Roll B anks.......................... 105 Illinois Merchants Trust Co., C hicago..106 Industrial Acceptance Corp., New York 71 J Jones & Co., Edward D., St. Louis........ 84 K Knight, Dysart & Gamble, St. L o u is..-. 44 Koeppe, Langston, Loper & Company, Chicago ...................................... 85 Krenn & Dato, Chicago.............................. 43 L Lacy Company, L. D., St. Louis............ 91 Liberty Central Trust Co., St. L o u is ... 80 Liberty Insurance Bank, L ouisville.. . . 94 Love, Van Riper & Bryan, St. L o u is ... 27 M Marine Bank & Trust Co., New O r le a n s ...................................................116 McClintock Co., O. B., M inneapolis... 84 Mercantile Trust Company, St. L ou is.. 8 Mercantile Trust Company Bond Department, St. Louis.................. 39 Merchants Laclede National Bank, St. Louis .........................................................llo Missouri Honor Roll B anks...................... 121 Midland Bank, London, England............. 120 Mississippi Valley Trust Company, St. Louis ...................................................... 51 Mortgage & Securities Co., St. L o u is.. 75 N National Bank of Commerce, St. Louis. 124 National Bank of the Republic, Chicago 78 National City Company, New Y o r k .... 74 National Park Bank, New Y ork............ 113 New England Investment Trust, Inc., New York ...................................................... 69 Northern Bank Note Company, Chicago 99 Northern Trust Company, C h ic a g o .... 91 P Palm Beach Guaranty Co., W est Palm Beach, F la............................ 84 Peoples Trust & Savings Bank, Chicago 47 Potter, Kauffman & Co., St. Louis........ 19 Q Securities for Investment D aw e s , M ayn ard $ Co m pan y 111 W EST MONROE STREET CHICAGO BANK OF NEW SOUTH WALES, A ustralia Paid-Up Capital $30,000,000.00 Reserve Fund - 23,750,000.00 Reserve Liability of Proprietors - 30.000,000.00 $83,750,000.00 EST A B L ISH E D 1817 H e a d O ffic e s G E O R G E S T ., S Y D N E Y , New Sou th W ales L o n d o n O ff ic e ! Quality Park Envelope Company, St. Paul, Minn...............................................115 Reed & Banker Associates, P. M., Chicago .......................................................... 84 Reinholdt & Company, St. Louis.......... 54 Rogers Park Hotel, Chicago....................... 113 Ruppert & Company. H. L., St. Louis. 61 S St. Louis Bank Equipment Co., St. Louis ........................................................ 98 Seaboard National Bank, New Y o r k .... 89 Smith, Moore & Company, St. L o u is.. . 14 Steinberg & Co., Mark C., St. Louis ........................................... 62-3-4-5-6 Stern & Co., Lawrence, Chicago............ 69 Stickney. Denyven & Co., St. L o u is ... 81 Stifel, Nicolaus & Company, St. L ou is.. 36 Stix & Company, St. Louis...................... 69 Stock Yards National Bank, Chicago.. 101 T Todd Company, Rochester.......................... 5 IT Union & Planters Bank & Trust Company, Memphis ...................................114 Union Trust Company, Chicago...............102 Union Trust Company, E. St. L o u is .... 25 W Waldheim-Platt. & Co., St. Louis.......... 59 W alker & Co., G. H ., St. Louis.................72 W ant Ad P age.................................................109 W essling Services, Lytton, Iowa............ 92 W etzel & Company, St. Louis.................. 85 W hite-Price Company, Minneapolis........ 28 W hitney Central Banks, New Orleans.. 117 Roger B. W illiams, Jr., & Co., New York .................................................................. 79 Willson, James C., Co., Louisville.......... 76 W ise Construction Co., J. H ., St. Louis 93 Woodruff Securities Company, Joliet... 80 A MAGNIFICENT NEW HOTEL 4 0 0 R o o m s w ith B a ths $3 —andup f o r One Person §4r~anchip fo r Two Persons TH READ N EED LE S T ., E. C. auTSpt **1926 } $410,975,720.00 H O T E L O S C A R L IN E S , G e n e r a l M a n a g e r 431 Branches and Agencies in all A u stralian States, New Z e la n d , F iji, Papua, M an d a ted Territory of New G u in ea and London A u s tr a lia Population, 6,000,000; Area, 2,974,581 square miles; Sheep, 80,110,000; Cattle, 14,350,000; Horses, 2,400,000; Imports, $785,500.000; Exports,$805,600,000. A n n u a l V a lu e o f A u s tr a lia ’ s P ro d u c ts Agricultural, $405,625,000; Pastoral, $514,215,000;Dairying, $210,559,000; Mining, $111,159,500; Manufacturing, $1,742,888,000; Total, $2,984,446,500. FO REIG N BILLS C O L L E C T E D —Cable remittances made to, and Drafts drawn on Foreign places D IR E C T . Circular Notes issued, N E G O T IA B L E T H R O U G H O U T T H E W O R L D . S t. Louis A g en ts: N A T IO N A L B A N K OF C O M M E R C E https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis s fc , ' N E W Y O R K ^ W E S T 4 5 ^ STREET Just East o f B ro a d w a y Times Square heart of Dheatrical and Shopping District ^SÊm BÉÊiÊÊm BÊBÊÊÊÊÊBÊÊËÈÈÊUÊÊÊÊÊÊm St. Louis, March, 1927 7 GUI DANCE It is one of the unwritten laws of the Universe, that man be given guidance for every step into the unknown. It has been since the beginning. The wise men of the East were guided by a Star! Columbus, when about to turn back, saw birds, denoting presence of land, they guided him to America! Byrd was guided over the uncharted course across the pole by the Compass. In every phase of life— profession or calling— occupation or business— Q U ID A N C E into the unknown is a ne cessity and has always been available! https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis In matters concerning investment of money — of Trust matters, of which many are not familiar — Institutions like ours have men who know— whose services are freely given to those who ask. Be guided in these mat ters by men of experi ence— of responsibility — of known reliability. No obligation on your part whatever by con sulting with our Trust Officers concerning your affairs. FIDELITY TR U ST COMPANY 1 4 7 W ’ CONGRESS ST * Proof of this and of other success ful trust ads sent upon request. M ats at a nominal cost Address: e. h. McI n t o s h , Publicity Director Fidelity Trust Company Detroit, Michigan Mid-Continent Banker 8 T he In d u stria l P rogress o f St. L ouis O FFICIAL figures of the U. S. Census of M anufactures recently com pleted show that in the last six years, including 1925, St. Louis has gained steadily as an industrial center, while other dom inant industrial points, except Detroit, show losses in the num ber of wage-earners employed, am ount of wages paid annually, or value of products m anufactured. These Governm ent statistics show that St. Louis paid out $32,000,000 more wages in 1925 than in 1919, that 7,000 m ore w ageearners were employed, and increased $70,000,000 in value of products. The following table gives the comparative Governm ent figures of industrial activities in 1919 and 1925 in the great industrial centers: Year S t . L o u is .. 1925 1919 B a ltim o r e ... .1925 1919 B osto n ........... .1925 1919 Cleveland. . . .1925 1919 C hicago........ .1925 1919 D etroit.......... .1925 1919 P ittsb u rg h .. .1925 1919 Philadelphia .1925 1919 Wage Earners Value of Products Wages Paid 1 1 4 ,0 0 2 1 0 7 ,9 1 9 $ 1 4 0 ,7 5 8 ,3 5 5 1 0 8 ,5 5 7 ,3 2 6 $ 9 4 1 ,8 5 1 ,0 6 2 8 7 1 ,7 0 0 ,4 3 8 89,061 97,814 78,093 88,759 136,577 157,730 375,196 403,942 180,099 167,016 73,108 83,290 247,618 281,105 95,334,359 103,129,096 104,845,860 96,401,002 207,820,914 211,206,276 571,137,698 507,753,924 292,071,581 245,433,882 100,540,284 109,859,218 333,196,074 326,792,395 669,096,505 677,878,492 602,332,668 618,921,962 1,124,278,727 1,091,577,490 3,48 7 ,37 2 ,9 52 3,657,424,471 1,689,092,743 1,234,519,842 551,926,441 614,726,978 1,963,748,590 1,996,481,074 This remarkable industrial gain in six years dem onstrates that St. Louis’ development has been along sound lines, and its progress has been steady and substantial. The M ercantile Trust Com pany has for 27 years been a leading factor in aiding this industrial growth, through the services of its various departm ents, including Banking, Real Estate Loan, Bond, Corporation Finance, etc. We invite bankers and banks, corporations and business m en to utilize the valuable knowledge of St. Louis conditions which this experience has given us. Mercantile Trust Company Capitald J in plu r Ten Million Dollars M ember Federa/ R eserv e Jysdem -T O EIGHTH AND LOCUST SAINT LOUIS S H S H S H S H H H 5 H H H 5 H 5 H S H H H S H E Í5 S H S H 5 H S E E H ET ELEc LEH i https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ST. C H A R LE S 9 St. Louis, March, 1927 Convention Calendar State Date Association Place April 14-16—Florida ............... Sarasota April 21-23—North Carolina. .Pinehurst April 27-28—Arkansas ....L ittle Rock May 10-11—Mississippi............................ May 10-12—Texas .................... El Paso May 12-13—Tennessee . . . . Chattanooga May 16-18—Georgia ...................Atlanta May 17-18—Missouri ....................Joplin May 18-20—Kansas ..............Manhattan May 18-21—California ......... Del Monte May 19-21'—Alabama ............... .......... June —Idaho .......... Hayden Lake June 3- 4—Oregon Gearhart-by-the-Sea June 8-10—Minnesota ............. St. Paul June 9-11—Washington ....... Tacoma June 15-16—North Dakota. .Jamestown June 15-17—Ohio .............Cedar Point June 21-23—Wisconsin ............Madison June 23-24—Illinois ................. Danville June 23-25—Virginia.. . .Virginia Beach Sept. Kentucky........... Louisville Other Date Associations Place March 28-29—Secretaries, Central States Confer ence ......... Omaha, Nf.b. May 1-7—Spring Meeting Executive Council, A. B. A. ....................Hot Springs, Ark. May 19-21—Reserve City Bankers ....................Pittsburgh, Pa. July 11-15—American Institute of Banking ___ Detroit, Mich. Oct. 24-29—American Bankers Asso ciation -----Houston, Texas. Savings Bank Division Regional Conference March 17-18—California .........Oakland March 24-25—Ohio .................Cleveland March 29-30—Missouri ......... St. Louis April 7-8—District of Columbia, ........................... Washington Abraham Lincoln Life Sets New February Record Recent appointments to the agency staff of the Abraham Lincoln Life In surance Company of Springfield, Illi nois, include Elmer S. Crink of Illiopolis, Illinois; Prances Gregory, Chi cago; H. H. Higginson, Evansville, In diana; Hugh L. Martin, Decatur, Illi nois; N. J. Payne of the Sullivan Coun ty Bank, Milan, Missouri, and L. A. Rockefeller of Wood River, Illinois. February was designed as “Presi dent’s Month” in honor of H. B. Hill, president of the company, and business received during the month made it the biggest February in the history of the company. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Financial Magazine of the Mississippi Valley CLIFFO RD D E PU Y , Publisher D O N AL D H. CLAR K Editor and Manager JAMES J. W E N G E R T Associate Editor ST. L O U I S M A R C H , 1927 VOL. 23 NO. 3 W IL L IA M H. M AAS Vice-President Manager Chicago Office 1221 First N at’l Bank Bldg. Telephone, Central 3591 CO N TEN TS FOR M A R C H ANNUAL. BOND AND I NVES TMENT NUMBER. Page Is Your Bond Account Profitable?.. . ...................... .......... ........................... ........... W h at the Bond Investor W ants to Know— By Leroy D. Peavey.................... Business Cycles— By Merle Thorpe ........................................................... ................. W h at Effect W ill the New Arkansas Law Have on District Bonds?— By John R. Thomas ........................................................................................................... A Seller’s Market in Bonds— By W alter P. Barclay.............................................. Does the Sale of Bonds Take W ealth Out of Your Community?— By Laurence H. Sloan ................................................................. ................................... Our Good Friend, the Bond Man—Give Him a Hand!— By Roscoe Ivlacy... Country Banks and the Bond Business— By Kelton E. W h ite ....................... W hat Does the Money Do?— By Ray V ance.............................................................. The Growth of Customer Ownership— By Phil W . Creden................................ How to Analyze an Electric Power and Light Bond from Its Circular— By Addison W . Warner ........................................................... ............................... W hat to Look at in Buying Building Construction Bonds—By S. J. T. Straus ............................................................................................................................... The Advantage of Real Estate Bonds—By J. U. Menteer................................. Olive Street Notes ............................................................................................................... A New Basis for Money Values—By T. S. Clayton................................................ W h y Railroad Securities Have Again Come Into Their Own— By F. Richards .......... W ho Is Your Investment Banker?— By W m . F. Dowdall.................................. Some Facts About the Ice Industry— a Public Necessity— By H. R. W alton ............................................................................................................................... United States Post Office Bonds................................................................................... Guaranteed Mortgage Bonds— How They Are Selected and Safeguarded— By E. R. Price. ................................................................................................................ Future Opportunity in Foreign Bonds Based on Past Developments—By J. C. Lutweiler ................................................... Southern Securities in Strong Demand— By R. G. F ie ld s ............................... LaSalle Street Notes— By W m . H. M aas.................................................................... Real Estate Mortgage Bonds— By J. C. Johnson................................................... Interesting Men in the Banking Field ........................................................................ Country Banks Can Do Much to Encourage Diversified Farming.................. My Advice to Young Man is “ Choose Your Line’’— By Geo. T. McCandless Principal and Ancillary Administration—By Legal Editor.................................. News and Views of the Banking World—By Clifford DePuy.......................... STATE NEWS Illinois .......................... ...................... 100 Kentucky .................... ......................110 Indiana ........................ ......................113 Arkansas .................... 11 15 18 23 26 29’ 31 33 37 41 45 49 52 54 55 57 59 60 68 70 73 76 78 80 86 88 90 92 97 S E C T IO N S Louisiana .. Mississippi . Oklahoma .. Missouri . .. .118 Published by the Commerce Publishing Company, 408 Olive Street, St. Louis, Mo. Clifford DePuy, President; James J. Wengert, Vice-President; W m . H. Maas, VicePresident: Donald H. Clark, Secretary-Treasurer. Telephone GArfleld 2138. M E M B E R A U D IT B U R E A U OF C IR C U L A T IO N S , F IN A N C IA L A D V E R T IS E R S ’ A S S O C IA T IO N DE PU Y PU BLICATIO N S AN D T H E IR T E R R IT O R Y Mid-Continent Banker St. Louis Northwestern Banker Des Moines Trans-Mississippi Banker Kansas City Southwestern Bankers Journal Fort Worth Life Insurance Selling St. Louis Underwriters Review Des Moines Insurance Magazine Kansas City New York office: Frank P. Syms, 25 West 45th St. Chicago office: W m . H. Maas, 1221 First National Bank Bldg., phone Central 3591 Kansas City office: G. D . Mathews, 405 Ridge Bldg., phone Victor 5254 Fort Worth office: Lawson Hetherwick, 409 F. & M . Bidg. Phone 2—2513. Des Moines Office: Clifford DePuy, 555 Seventh St., phone Walnut 2201 Minneapolis Office: Frank S. Lewis, 840 LC mber Exchange. Entered as second-class matter at the St. Louis post office. Subscription rates $3.00 a year; 35 cents a copy Copyright, 1927, by The Commerce Publishing Co., St. Louis, Mo. Mid-Continent Banker 10 --i* ^ P œ p f e s * ¿¿*£2*' 3§^»*x Z. J : l ■**>»,^ a » " * * * » * * . ... Super Power Standard Gas & Electric Co. System an Outstanding Example " Q U P E R ” P O W E R attains efficiency, good service ^ and reasonable rates by — massing production in large plants. — distributing energy over wide markets. — inter-connecting transmission systems. — marshaling engineering and operating ability. — concentrating purchasing power. — consolidating credit and financial strength. — recognizing public and private rights. This system has— — 144 power plants. — 1 ,4 9 2 ,9 7 6 horsepower generating capacity. — 40,641 miles o f lines. — 1 ,4 8 5 ,0 0 0 customers. — 2 6 0 ,0 0 0 investors. I N e w 4-color m ap o f U n ite d States Tj sent free w ith 3 2 -p a g e illustrated | booklet. A sk for E N -376 JJ H . M . Byllesby 3C Co. Inrestment Securities = s 231 South La Salle Street, Chicago NEW YORK D E T R O IT BO STON M IN N EA PO LIS P H IL A D E L P H IA ST. P A U L P R O V ID E N C E K A N S A S C IT Y Investm ents Backed by S u cc e ssfu l E n g in ee rin g -M a n a g em e n t https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis C O L O R A D O Saint Louis Twenty-third Year March, 1927 Number Three The Financial Magazine o f the Mississippi Valley Is Your Bond Account Profitable? Survey of Banks in M id -C o n tin en t Territory Indicates That 88% of Banks A re B uying Bonds for Secondary Reserve or Resale to Custom ers E FEEL that the bond business in the country towns is in its infancy, and that it can best be developed by the local banks and bond houses working together. We ex pect to buy more bonds in 1927 than in the past, both for our own account and for our customers.” W This quotation from a Missouri bank er expresses briefly an attitude which is growing among bankers in the midwestern and southwestern states. Many bankers have decided that their bond account can be a source of profit as well as a convenient and liquid second ary reserve; they have found further that more and more of their customers are coming to them for advice on se curities and about investment houses. Banks in the larger cities are estab lishing bond departments to handle their customers’ investment needs; many of the banks in the smaller towns have established connections with city bond dealers so that their friends can be served directly through the bank by a house which the bank knows to be reliable. Throughout the entire United States the bond business has been making tremendous strides the past few years. During the past year the total amount of bonds sold in the United States was $7,491,000,000 which figure represents an increase of $500,000,000 over the bonds sold in 1925. Of the total bonds sold last year $6,441,000,000 were new capital issues, and $1,049,000,000 repre- \ p By Donald H. Clark Editor Mid-Continent Banker sented bonds sold for refunding pur poses. Banks in the United States at the present time have more than $5,000,000,000 invested in bonds aside from Government securities. There were enough bonds sold in the United States last year so that every man, woman and child theoretically purchased a $65.00 bond. If we figure four to the average family this means that there were $260.00 in bonds sold per family in the United States last year. This is really a remarkable fig ure when we consider that the average annual income among wage earners and salaried people in the United States, per white family, is $1,513.00. In order to secure accurate figures on the bonds carried by banks in this territory, and the attitude of these bankers toward investment securities, the Mid-Continent Banker sent ques tionnaires to 3,000 representative banks, including about half the banks in Illi nois and Missouri, and a selected list in Indiana and Arkansas. A few hanks in Kentucky, Tennessee and other ad joining states were also questioned and the answers were in most cases sim ilar to the replies from the four states which have been tabulated for this ar ticle. Replies were received from 2,180 banks and the average of their answers to questions are shown in the charts on this and following pages. You Buy More Or Leos Bondo In ' 2 7 ? These reports show principally three things: 1. The extent to which banks are buying bonds for their own use. 2. The extent to which they are buy ing bonds for re-sale to customers. 3. The extent to which banks are asked for their advice on bonds and in vestments and on the stability of in vestment houses. The first question the Mid-Continent Banker asked these three thousand banks was “do you buy bonds for your secondary reserve?” Seventy-two per cent said YES and 28 per cent NO. Analyzing the reasons given by the 72 per cent for buying bonds, 62 per cent said PROVIDES LIQUID ASSETS was the chief factor. Other reasons were SAFETY, 13 per cent; PROFITABLE 19 per cent, and miscellaneous 6 per cent. Many of the banks, of course, re plied that all of these reasons influ enced their purchase of bonds for re serve funds. This question is important as it shows the tendency of banks to maintain strong secondary reserves in the form of readily marketable securi ties, thus providing liquid assets for any emergency. Next the banks were asked, “ Of the total amount of bonds bought for your secondary reserve what was the per centage of the following classes?” and the answers were Government, 29 per cent; Industrial, 24 per cent; Munic ipal, 22 per cent; Public Utility, 16 per Do Your Customer orten Consul! With You Regarding T M b ilit y Of Investment H ouses? Do Your Custom ers Ask Y o u r Advice On Bonds ^ iNvestments? bZY. The above charts are based on answers received by the Mid-Continent Banker from 2200 banks in the middle western states https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12 Mid-Continent Banker “•v' ^"'TfhrL w MORE; 16 per cent same; 28 per cent less, and 12 per cent none. In other words, 88 per cent of the bankers re plied that they would buy some bonds in 1927, either for reserve funds or re sale, or both. Does Your Bank Buy Bonds For Itj Secondary Reserve ? IfvSo-Whu ? PROVIDES LIQUID ASSETS 62* MISCELLANEOUS IS* 19* 6* SAFETY PROFITABLE TOTAL Fully as interesting as the figures re ceived were the many letters from bankers which indicate a keen interest in the bond business and which also emphasize that caution is needed both by the bond houses in the kinds of bonds which they sell bankers and the bankers in the kind of bonds that they buy both for their own use and for their customers. Excerpts from a number of these let ters follow. As all replies to the ques tionnaires were confidential, no names are published: 100% Bonds are ideal for a bank’s reserve fund, as they are both safe and liquid cent; Railroad, 4 per cent; Foreign, 3 per cent; and Land Bank bonds, 2 per cent. Real estate bonds were not con sidered in this question because of the restrictions placed upon national banks in this connection; several hundred state banks reported * considerable amounts of these bonds in their reserve account. “Does your bank sell bonds?” brought 48 per cent of the replies as YES and 52 per cent NO. Analyzing the YES replies, 87 per cent said they regarded this business as profitable. Some 27 per cent of the banks replying declared they had regularly organized bond de partments, the others considered it a desirable service to their customers, even though not a money-making one. While this figure seems high, it really shows that 27 per cent of the banks sell sufficient bonds to consider them selves as having a regular bond depart ment, whether or not they could so classify from a technical standpoint. Furthermore, 52 per cent of the banks declared they were interested in the further sale of bonds to their cus tomers, and were anxious for more in formation from the Mid-Continent Banker and other sources. Of the banks replying 45 per cent said that the future was bright for the bond and investment business in their community. Only 4 per cent thought “the bond business overdone,” and 11 per cent believed their towns too small for profitable bond business. Analyzing the bonds sold to cus tomers during the past year, Govern ments ranked first with 54 per cent; Municipal, 18 per cent; Real Estate, 11 per cent; Industrial, 5 per cent; Public Utility, 5 per cent; Land Bank bonds, 4 per cent; Railroad, 2 per cent; Foreign, 1 per cent. Generally speaking, the highest percentages on Governments came from the small https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis F ertile Field in towns where the banks sold few bonds and had no bond departments. The larger banks usually sold a higher per centage of real estate, industrials, foreigns and the like. Extremely significant as reflecting the “banker influence” in the purchase of securities in the smaller cities, was the next question: “Do your cus tomers often consult with you regard ing the stability of investment houses?” Sixty-seven per cent said YES; 33 per cent, NO. To the question, “Do your customers ask your advice on bonds and investments, 82 per cent said YES and 18 per cent NO. Certainly there is nothing more important to bankers than to purchase bonds from invest ment houses of integrity and stability and the banker should only recommend those houses which are known to him to be well established and thoroughly reliable. The last question asked the bankers was: “Will you buy more or less bonds in 1927?” Forty-four per cent said Rural Sections of Missouri. “We feel and always have felt that there is quite a fertile field for bond business in the rural sections of Mis souri. The only securities heretofore thought of by the average country in vestor has been first mortgages on farms or other real estate. Due some what to their recent experience in this direction, and the lowering of interest rates, they are no longer interested.” Bond Business In Its Infancy. “I consider the bond business in its infancy, and that it is going to become as much a part of the commercial bank as the savings department or any other inseparable branch of the present bank ing system. The people are being ed ucated that their local banker will and can give them better advice on securi ties which they wish to purchase than any bond salesman.” 95 Per Cent Buying Bonds At Increased Ratio. “ The investors in our community are buying bonds at an increased ratio and 29% O f The TOTAL Amount of Bonds You 24% . Bought For Your Secondary Reserve, H I What Was The Percentage of The 6* Follnw/inn Qa55e5 ? 4% v3% 2% Government Industrial Municipal Public Utilitij Railroad Foreign Joint Stock L.B. Diversification is needed in a bank’s bond account, and the above chart shows the types of bonds favored 13 St. Louis, March, 1927 have confidence, either through per sonal acquaintance with some of the heads of the concern or by reason of recommendations from our principal correspondents. In general, we do not believe that a country bank, such as ours, is justified in investing very heavily in the general run of bond of ferings without the approval of the bond department of its chief city cor respondent.” Need Laws Against Issues T h a t Fail. “We hope some day to know of a law covering bond and stock issues making it a serious offense for a set of men to float an issue or sell an issue that fails, just as the bank laws cover bank ers.” will continue to do so. We do not be lieve this will have a detrimental effect on savings accounts, but rather it will be an incentive to increase savings in order to buy more bonds. It takes con siderable time to educate people along these lines, but we believe that inter est in this subject is growing rapidly.” in St. Louis, wish they had. Good bonds placed in the investor’s hands by his banker or a reliable broker offers him an investment free from the usual trouble of real estate loans.” Banks W i l l Sell Bonds More and More to Its Customers. “We are often asked for advice on investment by customers and as we be lieve that the tendency here is for a more general investment, we are trying to get a list of bonds, which we can recommend without hesitation. The most common practice of the bond houses with whom we deal is to send their traveling representative to our office. This is a practice which we do not care for, as four or five of these salesmen are young and inexperienced men who know very little about the actual worth of their offerings and who are frequently a nuisance to get rid of. We do most of our business with houses who regularly send us circulars of their offerings, and in whom we “We believe if the proper care is ex ercised in choosing bonds, the bond business will grow and eventually the rural bank will sell bonds more and more to its customers.” P re fe r Municipals And Listed Securities. “We carry a large bond account, but for the most part buy only short-time municipal bonds or listed securities. We do not solicit our customers to buy —but gladly take care of their wants after they have mentioned the matter. We sell bonds at a small profit and buy back at a small discount. This |)jan is made clear to the purchaser at the time. We prefer to buy from re sponsible bond houses and through our correspondent banks.” ‘ Our Customers Often Ask Our Advice.” B anker Is Investor Of Customers’ Money. “We believe the banking business is changing considerably. The banker is no longer a keeper of other peoples’ money, but an investor for them. The banker was formerly satisfied to accept funds for safekeeping and expected to derive his source of income from the reinvestment of these funds. Nowadays he is becoming more like the chain store in that he must figure his profits from the turning of his capital-making his small profit on each turn of the cap ital.” “ Sm a ller Yield, but Safe and Liquid.” “ Our idea of a bond investment is short maturities that are readily sala ble for reserve purposes, and interest yield the last consideration. Smaller yield but safe and liquid.” Public Likes to Buy Bonds From T h e i r Own Bank. “The public is buying more bonds and the tendency is to buy more and more. Especially is this true as re- Bond Houses Should W a tch Diversification. “Bond houses best serve banks in selling only securities of a high type and high class and watching our ac count through their records to see that the proper diversification is maintained and that we do not purchase too many of one kind or in one geographical lo cation.” Purchase of Bonds Is Still in Infancy. “The purchase of bonds by individual investors is still in its infancy. This al ludes to investors in rural communities. The city investor has long bought bonds and today many more, especially https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Government bonds have the best sale in the smaller towns; city bank customers prefer the higher yield obtained from other types of bonds Mid-Continent Banker 14 gards the purchase from bankers as an armour of safety first. People want to feel the security that comes from dealing with parties that have a repu tation for stability, success and con servative judgment—someone they know all about, that will be there when the bond comes due and that they can consult at any and all times with ut most confidence in their integrity.” Prize E ssay Contest Because the subject is of such vital interest to bankers in the Mississippi V a lle y states, the M id-Continent Banker of St. Louis in co-operation w ith the N o rthw este rn B a nk e r of Des Moines, announces an essay con test on the subject: Ple n ty of Money For Bonds in Arkansas. “ PROPER D IV E R S IF IC A T IO N OF A B A N K ’S S E C O N D A R Y R E S E R V E .” T h r e e cash prizes w ill be pre sented f o r the best essays of not more tha n 1,000 words each as follows: F irst prize $50. Second prize $30. T h ird prize $20. T h e judges of the contest in clude an official of the Invest ment Bankers Association and the presidents of two state bank ers associations in this t errito ry . Prize w inn ing essays, and oth ers w inn ing honorable mention, w ill be published in the Mid-Con t in e n t Banker. All bond and investment deal ers and bankers in the Mid-Con tin e n t B a nk e r t e r r i t o r y are eli gible to compete. Essays must be in the office of the Mid-Continent Banker, 408 Olive Street, St. Louis, on or be fore March 20, 1927. “In our opinion, there never was a period when there was more actual money in Arkansas banks than at the present time, and I believe we are just entering a new era of financing. We realize we must from necessity get away from the old time high yield real estate loans which have been so at tractive in this territory for many years. Due to the fact that so much devel opment and so many improvements are being made in Arkansas at the present time we feel that our Bbnd Department will do a very profitable business.” Should Help Customers T o Invest in Bonds. “In our opinion when agricultural conditions get better and get back to normal so that the farmer is able to begin to see his way out and funds be come more plentiful, that it will be good business to assist our customers as a whole to invest some money in good bonds, as much for a reserve in hard times as for anything else. If the gen eral run of country bank customers had had some investments in good bonds during the past few years instead of having spread out so, the country would he better off now.” Public L earning Differences Between Stocks and Bonds. “Since the war people inquire about good bonds and we have become used to dealing in them. We have more bond buyers than ever before and the prospects are bright that this demand will continue as the public generally are learning the difference between bonds and stocks and investing their money accordingly.” W i l l Sell More Bonds in 1927. “ We believe that there will be more bonds sold to individuals in the coming year than in 1926. This is largely due to the fact that people are becoming more acquainted with the various in vestments that are being offered today. They also look for higher yields in in terest rates.” Customers Not Y e t Educated to Bond Buying. “We sell mostly farm loans—a few bonds—but our customers have not been educated to price fluctuations in bond market and hesitate to' buy above par, also dislike to sell their bonds be low cost to them.” Bond Sales A re Necessary f o r Profits. “I think that the bank that will not handle bonds in the next few years will not have very much profit at the end of the year. While we have not been buying very many on account of too much local demand for our money, we expect to gradualy build up.” Sale of Questionable Bonds H u rts Business. “We feel that the many questionable bonds being sold will go a long way to hurt the bond business in the future. Many people think anything with the word bond attached to it is all that is necessary, and we know of many in vestments of that nature that we feel will not mature to the satisfaction of the buyers.” Take a straw and throw it up into the air, you may see by that which way the wind is.—Seiden. The philosophy of one century is the common sense of the next.— Beecher. Sm it h , M o o r e & Co. For many years we have been successfully serving banks and institutions in: Building up liquid secondary reserves, consisting of sound bonds. Maintenance of bond accounts at the peak of efficiency. The partners will be pleased to give the benefit of their long experience in this field to your investment problems. J. Herndon Smith 5 0 9 Olive Street https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Chas. W. Moore Wm. H. Burg W. C. Morehead St. L ouis, M o. 15 St. Louis, March, 1927 W hat the Bond Investor Wants to Know HEN buying a bond—or any other security—the average per son should talk it over with his ■banker. Isn’t it true that before making an important contract, people consult a lawyer or an engineer? In matters of health, they seek professional ad vice? Then why, when purchasing se curities, do the most ignorant of peo ple think they know it all? They blindly go ahead by themselves with out benefit of counsel. As a result, the public loses millions upon millions of its hard-earned money in worthless ■“securities”—which are really inse curities. Worst of all, this terrible sacrifice falls chiefly upon those who can least afford it—small business men, professional people of limited means, the proverbial widow or orphan. Much of this economic waste and wreckage is avoidable. W By Leroy D. Peavey President, The Babson Statistical Organization emphasize once more that I am refer ring not to the periodic swings of ex pansion and depression occurring every few years, but rather to the long-range view of bond values that may span a dozen years or so. The sharp upward Must Ap prec ia te Outlook From an experience of more than twenty years, in contact with thou sands of investors, I will outline some of the things which the bond buyer needs to know, if he is to employ his funds with safety and success. It is necessary at the outset—and every banker will second me in this—to ap praise the fundamental situation and outlook. In the last analysis, the bond market rests upon economic founda tions. What, then, is the trend of fun damentals? The dominant feature at present is the course of commodity prices and interest rates. Following the World War, the broad movement or prices and interest rates has been downward. True, there have been minor ups and downs, but the basic slant has been one of decline. Thus history is repeating itself, for you find the same price tendency as in the aftermath of the Civil War, and indeed of all other great conflicts in modern his tory. As the general level of commodity prices and interest rates decline, the investment market tends to advance. This must necessarily be so. Not only are bond prices governed by the pre vailing money rates, but a decline in commodity prices and the cost of liv ing also means that the fixed income from bonds will “go further,” and this increased purchasing power of the bond’s income results in a rise in bond prices. With the prospect of further gradual declines in commodity prices as well as in interest rates, we may look for a more or less continued strengthening tendency in the bona market. In making the foregoing statement I https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Leroy E>. Peavey movement from 1920 to date—more particularly 1920-22—has been phenom enal. It was the natural rebound from the excessive depression in bonds of 1917-20. From now on a more order ly movement is to be expected. A study of the accompanying chart dis closes, however, that bond yields are still far above the average for the greater part of the last forty years. In other words, bond prices are still low in comparison with the levels existing prior to entrance of the United States into the war. W h a t the C h a r t Shows A comparison of the bond market fol lowing the World War and the Civil War is readily made from the accom panying chart. The extraordinary sim ilarity of the two periods (1920-1927 and 1878-1885) cannot continue indefinitely. In a general way, however, the main trend in the next decade may reason ably be expected to follow that marked out forty-odd years ago. Current fluc tuations in monetary conditions must be given due consideration from the standpoint of the immediate present. If we are correct in our belief that the broad swing of commodity prices and interest rates is downward, then we may logically expect increased pur chasing power of the dollar, increased value for each bond coupon, and higher price levels for bonds. In this connec tion we believe developments out of the study of a Royal Commission on the matter of exchange and currency in India is of interest. The commission is convinced of the “possibility, indeed the probability, that, unless great econ omy is exercised in the use of gold, we have to look forward to a prolonged period of steadily falling commodity prices throughout the world.” So much for the general fundamen tals. In addition to this, the investor must know which securities best fit his own individual circumstances, condi tions and requirements. “ Fitting the investment to the investor”—here is where a banker can be of untold aid 16 Mid-Contincut Banker to those who seek his counsel. Because a certain investment secur ity seems exactly fitted to the require ments of one buyer, does not mean that it is a desirable purchase for others. On the one extreme, for example, is the multimillionaire. While safety of his investments is desirable, no ques tion arises of poverty or want. He has a freedom of choice which other men cannot properly exercise. Neverthe less, his purchases are often restricted by the unfavorable tax situation which surrounds him. On the other extreme, is the situation perhaps best described as that of the “ widow or orphan,” where funds are just sufficient to pro vide income for necessities. Under no circumstances can such a person de part from conservatism. Between these two groups can be placed a practically unlimited number of examples. They will agree in many respects, but certain differences as to age or state of health, dependents and general responsibilities, temperament and similar factors will inevitably call for modifications. The funds of many investors are defi nitely divided into two parts: (1) a fund to be used for what is called per manent investment, and (2) a fund for the purchase of stocks and similar se curities when opportune periods ar rive. The buyer uses the first fund, not for appreciation in price, but for steady income with sufficient security. An investor with wealth and an an nual income of say $100,000, would now need a taxable bond, returning 5.26 per cent in order to get the same net return as he would receive from a taxexempt at 4 per cent. A 5.59 per cent taxable return would compare with a 4.25 per cent tax-exempt, and a 5.92 per cent return with a 4.50 per cent tax-exempt. This, of course, refers sim ply to the interest received from any bonds bought after reaching the $100,000 income mark. Prior to that, com parison is more favorable to the cor poration group. Not the Best Combination For such bonds as will be affected by maximum taxation, therefore, the very wealthy man will now get the best combination of security and return by buying tax-exempt. His position is such that, assuming fundamental sound ness of the issues concerned, highest marketability is not essential. He can afford to take a certain proportion of relatively inactive issues for their greater return. * As to the well-to-do business man, I am assuming that he owns a good-pay ing business with a substantial cash surplus. His wealth, however, is al most entirely a matter of that business. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis He is primarily a business man, and secondarily, an investor. His investment problem, therefore, has principally to do with the placing of the surplus of his business. These funds may or may not be needed later in the business. It is essential that they should be treated in such fashion that, if needed, they will be available. It is desirable, therefore, to empha size short-term notes which can be liquidated without the possibility of suf fering depreciation. Liberty Second 41/4’s are also particularly good since the present 13 ^ per cent corporation tax is avoided. Moreover, excellent marketability is assured and whether or not these are called, there seems little question as to depreciation. How about the well-to-do salaried man? The investment program here is based on personal family conditions. This man’s first job is to build up an investment backlog, the income from which will come reasonably near sus taining his family in their accustomed scale of living. Thereafter, emphasis can gradually be shifted toward more speculative things. No arbitrary statement is possible as to the amount of such backlog, but the type of bonds to purchase, whether tax able or nontaxable, must depend on the salary. If highest surtaxes are met, New Eastern Representative for Mid-Continent Banker Frank Syms has been appointed east ern representative of the Mid-Continent Banker with offices at Suite 1103, 25 West 45th Street, New York City. He will handle the editorial and ad vertising interests of the publication in the eastern ter ritory. Mr. Syms will also represent other DePuy bank ing publications, Frank p. Syms the Northwestern Banker, Des Moines; Trans-Mississippi Banker, Kansas City, and the South western Bankers Journal, Fort Worth. Mr. Syms is a graduate of Columbia University and has also been associated with Singer Sewing Machine Company and the National Park Bank of New Y ork. During his university days he was active in athletics, being on the Junior Varsity football squad and runner-up in the boxing tournament in February, 1926. He also served as assistant in structor in gymnasium classes. He is a member of the Delta Upsilon Fra ternity. tax-exempts should receive due consid eration. If salary is not such as to push this man into the higher brack ets of income taxation, he should start building up his fund with taxable bonds. Earliest purchases should be largely in reasonably conservative corporation is sues. Gradually a few higher-yielding issues may be included. The man of moderate earning capac ity, after his life insurance is provided, can build up an investment list. The tax situation is not restrictive here and taxable bonds should be purchased. Emphasis should be placed from the start on conservative issues. In this particular case very often re sponsibilities exist in the way of de pendent relatives. On the other hand, the family income is often increased in moderate amount from outside sources, and fair-sized legacies are not uncom mon. These are often sufficient to per mit very definite changes in the invest ment program. Such conditions deter mine the extent to which the investor in this group seems warranted in drift ing away from wholly conservative is sues. Must he provide for outside de pendents; will he be provided for in part by others; or is he in the purely neutral position that he will neither give nor receive aid of this kind? These are questions he must consider. We now come to the proverbial “widow and orphan” investment. The probability here is that the investment fund is small. Moreover, it is not a fund which can be added to out of earnings, as would be the case if a business man’s surplus were under con sideration. In view of this situation, 80 per cent or upwards of the invest ment should be placed in long-term corporation bonds of conservative char acter. While it is desired to get the highest yield possible, the need for se curity far outweighs question of re turn. It is imperative that principal be kept intact. If good yield is not ob tainable except by sacrifice of adequate security, there is no choice but to ex cept lower return. Naturally, in space of this article we cannot hope to cover even the most important phases of the subject of in vesting. The points, however, that we want to emphasize are (1) every inves tor should clearly understand in his own mind just what he is trying to ob tain, and he should be sure that the program he is following is the one best suited to his purpose. (2) If possible, each investor should provide himself with the fullest statistical information regarding each security before he buys. If, however, he is unable to get such information for himself, he always will find that he can secure sound informa tion and counsel from his bank. 17 St. Louis, March, 1927 T. H. FRAN CIS C. H. H IEM ENZ IOHN E. R IL E Y J . D. P. FRAN CIS D. R. FRA N CIS, J R . TALTON T. FRA N CIS https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis E stablished 1877 BOND SERVICE Bankers contem plating the installation o f a B ond D epart ment are cordially invited to utilize the facilities o f our office, either in person or b y letter. T he leading investm ent statistical services are on file for you r p eru sa l; an extensive system o f private wires is at you r disposal for obtaining late inform ation and p r ic e s ; a Bond B oard quotes the last sale on over 750' issues listed on the N ew Y ork Stock E x ch a n g e ; m em berships on the principal security exchanges facilitate the prom pt execu tion of you r orders at regular com m ission rates. A nd in addition to these statistical and m echanical con veniences, the practical experience w e have acquired dur ing the past fifty years is always at you r disposal. FRANCIS, BRO. &, CO. Investment Securities 214-18 North Fourth Street ST. LOUIS Kennedy Building TULSA 18 Mid-Continent Banker “ Business Cycles” — Can Intelligent Investment Offset Them? ATIONAL banks, under the pro visions of the National Bank Act of 1863, were not given specific authority either to invest their funds in bonds or to buy and sell corporate se curities. They were intended to be pri marily commercial banks, employing their funds principally through loans and discounts for their customers. The majority of state banks other than trust com panies and savings banks have taken on this commercial char acter also. Real estate and farm loans have from the first been carefully restricted. It was natural, how ever, that commercial banks should invest their surplus funds in corporate bonds and like securities. It would be neither prac tical nor safe for banks to employ all of their funds in loans. It is imperative that they maintain a reserve. That reserve cannot be definitely fixed in amount, but must be capable of expansion on short notice. The sur plus funds which banks in the early days found on hand could be put into high grade bonds at a higher rate of re turn than would be se cured if they were merely placed on de posit in other banks in the financial centers, and indeed larger than was for the most part obtainable in loans upon the stock exchange of New York. N Good Secondary Reserve Moreover, these securities formed the most satisfactory kind of a secon dary reserve. When cash on hand be came depleted it was possible to liqui date security holdings on short notice and thus increase the supply of cash. This advantage resulted from the fact that the machinery of security ex changes was early developed and there was a quick and constant market. In this way the bond reserve stood be hind the legal reserve. It came to be https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By Merle Thorpe Editor, “ Nation’s Business” Published by U. S. Chamber of Commerce considered conservative banking to maintain a good percentage of total assets in high grade bonds even though the rate of return was not so high as might have been obtained by the usual convenient loans. Merle Thorpe The very nature of their business brought it about that the investment in securities was a natural activity for bank officers. Their customers were continously asking their advice as to private investments. Moreover, in ap proving or rejecting applications for loans, it was customary for bankers to scrutinize the financial set-up of con cerns who dealt with them, and it was necessary in many cases to recommend an increase to capital stock or a bond issue The development of trust func tions for banks involved dealings in securities. The pioneer investment houses had no country-wide network of distributing agencies, and it was logical for them to use distributing facilities of commercial banks. In such opera tions it was inevitable that the banks should become something more than distributing agencies. Bond invest ments seemed to be of importance be cause in them it was possible to conform to one of the fundamental precepts of business operation — diversifica tion of investments. Thus commercial banks came to deal in investment securities, not only for their own account and for the ac count of their custom ers, but also to under write issues. Out of this practice grew the affiliated investment houses specializing in that type of activity. W h i l e perhaps not strictly legal for na tional banks, it was not objected to, and in fact, was given a quasi-legal status by interpretation of the national banking act by the comptroller of the Currency. It is interesting to note that the McFadden-Pepper bill, which is at pres ent before Congress, w o u l d legalize that practice on the part of the national banks. With the establish ment of the Federal Re serve System, it was thought by many that the importance of bonds in the portfolios cf commercial banks would be lessened. Through the machinery of the Federal Reserve banks, the eligible rediscountable paper in the hands of member banks became in reality a secondary re serve. When additional funds were needed, eligible paper could be sent to the regional reserve bank, instead of placing reliance on the sale of bonds. It was hoped, too, that the bankers’ ac ceptance would develop to such an ex tent that it would form a substantial part (Continued on page 83) St. Louis, March, 1927 19 y ////////////^ y y ///y y ////////////////////y y y //^ /W https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis An Invitation Banks A R E there bonds in your investment portfolio about which you would like to get more information ? Are you holding bonds which are now selling at or above their call prices ? Are you sure that you are making the maximum amount of profit from your bank’s bond account ? W ithout obligation to you, we are pre pared to make an analysis of the invest ment account of your bank---an analysis that will give you facts that will surely help you make more profit from your securitv holdings. Po tter 5 11 Locust Street , Ka u ffm an & Co cin corp ora ted ------------------------ ~ Saint Louis G A rfield 7460 Mid-Continent Banket 20 FIRST for Greater Service to Banks—in the “ Mid-Continental” District, What Can St. Louis’ Largest Bank D o For You? FIRST NATIONAL BANK CAPITAL AND SURPLUS https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis $ 15,000 , 000.00 St. Louis, March, 1927 21 e le c t in for Secondary Reserves h e in v estm en t o f a bank’ s Secondary R eserve involves considerably more than the mere trading o f dollars for securities. T In selecting securities suitable for investments o f this character, there are special conditions governing the investment o f funds constituting a bank’s Secondary Reserve, and these conditions should be given careful consideration. Safety, yield, marketability and prop er diversification are all important factors that should be considered carefully at the time o f selecting securities. The First National Company is most favorably situated to render excellent cooperation in investing secondary reserve funds. As the Investment Di vision o f the First National Bank in St. Louis, it is frequently consulted by correspondent banks and has estab lished a reputation for handling their investment accounts satisfactorily. The facilities o f the First National Company include direct wire com m unications w ith all o f the large investment centers, complete and up-to-the-m inute statistical data, well diversified lists o f sound securi ties, together with an experienced and capable sales organization who are at the command o f bankers re quiring services in matters pertaining to investments. W e will be pleased to discuss this service in detail or answer inquiries by correspondence. e ; s p https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis N A T IO N A L COMPANY iT :1: INVESTMENT DIV ISIO N o f the FIRST NATIONAL BANK BROADWAY-O UV E- LOCUST SAINT LOUIS, MO. CTfjifV' / iaj Vv r? Mid-Continent Banker B O N D S TO F IT TH E IN V E S T O R H ow much o f a bank's assets can safely be invested in long-term bondsf V E R Y banker has the dual problem o f keeping liquid E ' and at the same time realizing all the incom e he can from his assets. Some earn a high return but invest too largely in local loans and discounts which are more or less slow. Some do not earn enough on their secondary reserve. They sacrifice incom e for more liquidity than they really need. There is a safe and profitable middle course for every in stitution. It varies o f course with changing conditions; it varies for different banks. But a proper equation can be formed. A w orkable plan can be made, suited to the needs o f any bank, according to the nature o f its deposits, loans or other assets. W e have formulated such plans for hundreds o f banks, many o f which com e to us periodically tor readjust ment to suit changing conditions. we be o f service to you? H A L S E Y , S T U A R T & CO. INCORPORATED C H IC A G O SOI South La Salle St. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NEW YO R K 1 4 W all St. D E T R O IT CLEVELAN D 6 0 1 Griswold St. 9 2 5 Euclid A v e . P H IL A D E L P H IA h i South 15th St. S T . L O U IS BO STO N M IL W A U K E E 3 1 9 North 4th St. 85 Devonshire St. 4 2 5 East W ater St. M IN N E A P O L IS 608 Second A v e ., S. St. Louis, March, 1927 23 W hat Effect Will the New Arkansas Law Have on District Bonds? N the early part of February, 1927, the General Assembly of the state of Arkansas passed an act which the governor of that state signed and it is probably one of the most impor tant steps that any state has ever un dertaken regarding the indebtedness of its political subdivisions. Briefly it de clares that it is the policy of the state to take over, repair, construct and main tain all the roads in the state, compris ing the state highways, and that it will pay the coupons and bonds of the dis tricts which issued these securities in the past. I The history of Arkansas district l)onds goes back to 1874 when the peo ple of Arkansas enacted in their con stitution an article forbidding the issu ance of bonds by their political masters .and allowing no bonds to be issued in the usually accepted form of direct ■obligations, payable out of ad valorem tax. They did, however, in another ar ticle, allow cities and counties to form districts in which the taxes were col lected solely on land and which oper ated in practice like a “ single tax law.” This is the way the majority of im provements in the states have been fi nanced, particularly roads, levees, ■drainages and other districts. At a later date an act known as the Alex ander Act was approved March 30, 1915, although not a large percentage of road districts obtained money in this way, the majority of them being formed by special acts of the legislature. How ever, the districts themselves were lo cally managed and the taxpayers had the right to appeal to the courts for protection on the assessing of benefits and damages against their property. In 1923 the General Assembly of Ar kansas passed what is known as the Harrelson Act, which provided for a special tax on gasoline and oil sold within the state, and a higher automo bile tax, which moneys were to be nsed, (a) for the creation of a highway department for the maintenance of roads, (b) a state program of roads, in stead of the haphazard building of them by districts without regard for the rest of the' state, (c) aiding finan cially in each county, an amount de pending on its population. This last clause put the road bonds in a preferred position as the state aid paid as high as 100 per cent of all the county road district taxes and also al https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By John R. Thomas Assistant Sales Manager, William R. Compton Company lowed them in most instances money for road maintenance. some This assistance was timely and strengthened the obligations of the en tire state, but was not comprehensive enough. Practically every state now realizes the importance of a complete intelligent road system, comprising main trunk lines of highways as well as inter-county connecting roads and inasmuch as the territory and benefit J. R. Thomas are so general, the obligation of assum ing the debt and managing the enter prise is rightfully in the state’s hands. It is obviously not equitable to tax heavily a county for a road that runs in and out of that county for the bene fit of the general tourist and merchant. Consequently, the gasoline and heavier auto tax are fast becoming recognized as sound economic measures and state after state gets its road income from this source. Arkansas, one of the most progressive of the Southern states, realized this, but due to its constitu tion has been handicapped in being able in the past to formulate some sys tem by which money for roads would be well spent. It is obviously not sensible to allow every county to build its own road, re gardless of the neighboring counties, or to go to greater extremes and let dis tricts in different parts of the same county build roads without regard for the general county scheme. Everyone is cognizant of the large increase in municipal financing since the war, brought about by the increased cost of living, by general prosperity and chiefly by improvements in transportation. Dif ferent states have enacted programs of road building running well over $100,000,000, and it is almost possible now to ride from coast to coast on a wide white ribbon of concrete, which, no doubt, enhances the value of abutting property, but mainly serves as an ar tery for some great center and pro vides ways for the auto tourist and passenger and freight auto trucks. So regular has this become that every city of any importance has bus lines to adjacent points and they drive at high speed through rural counties that a few years ago were inaccessible in bad weather except on horse-back. These main highways are valuable as military roads to the Government who has been giving Federal aid and to the state as adjuncts to the railroad and electric lines. These roads furnish country produce fresh at the cities’ door, allows the cities to furnish sup plies to the country in hours rather than days and give the residents of the state great pleasure by enlarging their touring possibilities, besides bringing in millions from tourist trade, which would not come in without a fine road system. The present state aid program was really started following the act of 1923, known as the Harrelson Act, and the passage of a similar act was attempted in 1925 but failed for lack of a few votes. Last autumn, however, the present governor and most of the legis lature were elected on a platform pledged to construct and maintain a comprehensive highway system and support it with its own income. This act passed the lower house January 27th, and the senate February 1st, and was signed by Governor John E. Martineau on Friday, February 4, 1927. Briefly, the new act authorized: 1. The formation of a highway de partment with provision for paying the personnel, and the fact that this com mission be appointed by the governor. 2. The taking over of all road dis tricts now existing that form part of the highway system. 3. The paying of the valid bonds and interest of these districts from reve nues collected from automobile, gasoline Mid-Continent Banker 24 and oil taxes. For this purpose $6,500,000 is annually set aside and that amount is approximately $400,000 more than the necessary amount. There is also provision for the annual appropri ation of $1,500,000 to be used for the maintenance and construction of roads not in the highway system. 4. That the circuit clerk of each county shall certify to the commission the amount necessary to pay the ma turing indebtedness of each road dis trict in the county and the commission shall in turn “each year, beginning with the year 1927, allot to each road dis trict in the state now having outstand ing bond issues an amount equal to its bonds maturing during the year, to gether with the interest payable by such districts during the year, plus a pay ing charge of one-eighth of one per cent of bonds to be paid and one-fourth of one per cent of interest to be paid, and shall certify to the state auditor the amount alloted to each road dis trict.” 5. “The auditor shall issue warrants for such amounts on the State Highway Fund, and procure St. Louis, Chicago or New York Exchange for said amount payable to the order of the bank or trust company named as payee in the pledge or mortgage of the road district, and if more than one bank or trust company be named as payee, then to one of the named payees. Such war rants shall state in the face of the war rant that it is for exchange payable to --------------- Bank or Trust Company for the account of the particular road district. Said exchange shall be mailed in all cases to the payee at least ten days before maturity or payment date of bonds or interest.” 6. The commission is authorized to hasten road construction, special atten tion being paid to those counties in which roads embraced in the highway system have not been constructed by districts. 7. The maintenance of all roads in the highway system. 8. The issuance of notes; not more than $13,000,000 a year for four years for the construction of roads in the system and necessary means for paying these notes. 9. That all suits for delinquent taxes shall be pushed in an effort to collect past due taxes and that such collec tions, together with road funds avail able prior to 1927 shall be turned over to the commission. Certainly this is a big step forward for the district debt of Arkansas, for while it only relieves the people of road taxes, these taxes are about 50 per cent of the total tax in practically all the counties with a system of roads. In other words, while only paying the road https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis debt it renders the levee, drainage and school debt, etc., less burdensome and strengthens the entire outstanding ob ligations of the state and this without the assessing or payment of any new taxes. It also gives us a new class of bond to classify. It is not a state obligation and yet not a district or county obliga tion. Though it should be remembered that this aid in no way relieves the dis trict from its valid obligations and in the event of this act being discontinued from any cause, the lands of the dis trict are still liable for the full amount of its benefits, as in the past. This is of some importance and should be re membered since it will cause the value of these bonds in the future to be gov erned to some extent by the statement of the issuing district. While such a contingency is remote and not ex pected, yet the investor will do well to examine the record of the district in the past when they handled their own affairs and note the debt per acre and tax per acre as well as the fact that the bonds were properly approved by reputable attorneys and handled by an experienced investment banking house. Just what effect this will have on the market price of the district bonds is hard to state. Certainly they cannot be considered state obligations and the multitude of issues makes it hard to determine what price or basis they will go to, or if the range will be as wide in the future as in the past. During the fall of 1926 and this winter, Arkan sas road bonds sold from a 5 per cent to a 5.40 per cent basis, depending on the character of the district and the maturity, coupon and size of offering. Will they now all sell on the same basis despite the different characteris tics of the district, and will they go to prices in line with their new standing? Possibly the best way is to consider them medium grade municipals which eventually will sell at considerably higher prices. It is not suggested that holders of these bonds, however, try to realize a profit until the market has adjusted itself and a proper basis is es tablished by the demand. One thing is certain, the holders of these bonds, or for that matter, any valid Arkansas is sues, are materially helped and should rank their Arkansas bonds considerably higher than they have in the past. Start W ork on New Home for J. C. Willson CSk Co. has been started on the new building at 130 South Fifth street, Louisville, which is to be occupied by James C, Willson & Co. investment security dealers, now lo cated in temporary quarters in the Marion E. Taylor building. The new building, which will be one of the most beautiful in the entire city of Louis ville, will be ready for occupancy about June 1st. It will be designed along the lines of the Italian Renaissance period, with all ornaments true to this period and exe cuted by capable craftsmen. The main entrance, situated in the center of the first floor, will be constructed of orna mental iron. The building will be situated on a lot 25 feet wide by 96 feet deep, and will contain three floors, covering the entire lot area. The main offices will be situated on the first floor, which in design and beau ty will not be excelled in the entire city. The interior also will be executed in the Italian Renaissance period. There will be a heavy beamed ceiling, Tra vertine stone walls and tile floor. All fixtures will be constructed of solid American walnut. The walls and ceilings will be beauti- C o n s t r u c t io n fully frescoed in appropriate design and colors to harmonize with the archi tectural treatment. Upper floors will be used for miscel laneous purposes, such as mailing room, wire room, etc. The architects had in mind the efficiency of operation, as well as the aesthetic treatment in the gen eral arrangement of the building. James C. Willson, who is head of the company, has been a member of the board of governors of the Invest ment Bankers Association of America and is now a member of the committee on Ethics and Business Practice of the Mississippi Valley Group of the Invest ment Bankers Association of America. Appointed Fiscal Agents of the State of Oregon The National Park Bank of New York has received a letter from the Governor of the State of Oregon, ad vising them of their appointment as fiscal agents for the State, effective March 1st, 1927. All maturing bonds and coupons of the State of Oregon should be present ed at this bank on or after March 1st, 1927. St. Louis, March, 1927 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 25 Our 1nvestment Service Merits Your Confidence The selection of bonds for investments demands keen judgment and experience of the broadest kind. M any bankers buy bonds from us because they know that we make a careful study of each issue before investing our own funds. Then, too, experience has shown them that our recommend ation of a bond can be relied upon as an expres sion of our honest opinion. W e offer you a service that is reliable and com plete; one that will enable you to invest your bank’s funds in bonds which represent safety and a good interest return; and, of equal impor tance, choose only those secureties that will best fit your particular requirements. I aioa Tki o r Ea Member st s t Federal S Company t .L o u i s Reserve System Mid-Continent Banker 26 A Seller s Market in Bonds The Future of Bond Prices Is Nothing Less Than the Future of Interest Rates HE perennial query of the busi ness man is as to the outlook for business. If it is satisfactory, will it continue so? If disappointing, is is about to improve? To the dealer in bonds it is a two-edged problem. To him good business means an active de mand for bonds involving not only the profitable origination and distribution of new issues, but the accumulation and resale of existing securities. It also involves for him a consideration of the trend of money rates. He must consider whether active business will mean such a call on the supplies of funds for the carrying on of com: merce and industry as to raise the cost of money, as expressed in interest rates, to a level where bond prices must decline to maintain an income yield greater than the rent receivable for loans. The trend of bond prices will be in inverse ratio to the trend of money rates. That is, the future of bond prices is nothing less than the future of interest rates—whether they will be high or low. If interest rates are go ing to continue low bond prices are certain to work higher; if interest rates are going to work higher, bond prices are hound to recede. T Future Bond Prices Currently there is less argument as to the trend of the bond market than as to the length of the period during which price advances may be main tained. There are few dissentient voices to the opinion that bonds are on the road to higher prices. How long may we safely project that view point into the future? Perhaps this circumstance may be enlightening: One of the great banking institutions of the country has decided that too large a proportion of its investments, about 25 per cent, mature about 1936 and it is embarking upon the task of switch ing the millions so invested into bonds of more distant maturity. That is one of the most impressive answers to the query as to how long we may look for ward to low interest rates or, in other words, to high bond prices. So great is the flow of new securities into the hands of investors that one constantly meets puzzled interroga tions as to the identity of the buyers. Directly or indirectly, you are buying the bonds—you and your neighbor, your employer, your employe, your butcher and baker and candlestick https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By Walter P. Barclay of the Wall Street Journal maker; but that is another story. We are here concerned mainly with the tendencies of the bond market and why it seems scheduled to maintain its upward drive even though the momen tum of the rise may not be so spec tacular in the next few years as in the last two or three. Prosperous conditions for several years have created a seemingly unlim- “ It is axiom atic t h a t for sound investm ent the investor should put his money into the securities of companies producing an a r ticle occupying an established po sition in the re quirements of the people. In oth er words, he should eschew the products w hich are subject to the w him s of fashion, of popular favor, or of the exclu sive set. Profits in the la tte r field may be huge— w hile they last— but tastes are fickle.” ited volume of funds over and above the regular needs of business. The post war appreciation of securities as in vestment media is variously ascribed to the Liberty Loan campaigns of the war period, to the efforts of security distributing concerns through wisely directed advertising and capably di rected sales forces to place before the people of the country the opportuni ties to achieve financial independence through sound investment and to the educational work of such a publication as The Wall Street Journal in the dis semination of information about secur ities and the course of business and fi nancial progress. Be that as it may, there is an almost insatiable appetite for bonds and other investment securi ties. Unless new securities can be manufactured at a rate to keep pace with the flow of funds available for investment, competitive bidding for bonds must carry them upward and on ward. Influence of Easy Money We have for this movement the great foundation stone of comparative ly easy money based on our huge reser voir of gold. Far from shrinking, this reservoir seems inclined to expand with its buying power reinforced by a downward tendency in commodityprices. In the early postwar years we were able to make substantial loans to the noncombatant nations of Europe. As these adjusted their economic houses they ceased to be insistent borrowers. But with the formulation and accept ance of the Dawes Plan we loaned heavily to the victors and vanquished in the war; to Germany particularly we advanced funds for government, provincial, municipal and corporation, purposes. But Germany is following in the wake of the neutral countries and is able to handle more and more of her financing internally, thus re* moving one of the popular outlets for the funds of American investors. It is true that Italy has become an im portant borrower and French corporate demands are expected to be fairly heavy once settlement of the inter governmental debt question is achieved. But it is to be doubted whether these borrowings with those of the sounder South American lands will be sufficient to make important inroads upon our surplus funds. United States Government bonds are ,in diminishing supply. And as con fidence grows in other high grade in vestments there will be “ switching”from Liberty Bonds into the highest grade of state and municipal securi ties. This will have the effect of forc ing prices of the latter higher. The banks will continue to take Liberty Bonds liquidated by the individual be cause they need them for reserve pur poses. Surprising as it may seem the sup ply of tax-exempt bonds is not increas ing to any extent. B'y tax-exempt bondsis meant the issues of states and po litical subdivisions thereof. A decade or more ago it was calculated that the average life of the municipal bond was in the neighborhood of thirteen years. Since then the serial bond of shorter maturity has come into vogue so that such issues are being paid off more rap idly than is generally appreciated. Influence of Stock Issues Increasing financing strength and brighter prospects of the railroad com panies, public utilities and sound in dustrials hold promise that a growing amount of financing will be done through stock issues, to the advan tage of the corporations concerned. In St. Louis, March, 1927 27 U nited States Post O ffices https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis First M o r tg a g e Sinking Fund GOLD BONDS Denominations $ 1 ,0 0 0 and $ 5 0 0 These bonds are secured by First Mortgages on lands and Post Office Buildings under lease or contract for lease to the United States Gov ernment. The leases referred to are in the form designated by the United States Government Post Office Department as NON-CANCEL ABLE. In each case the leases extend beyond the maturity of the bonds themselves. The annual rentals received from the Gov ernment are more than sufficient to provide for payment of the interest and sinking fund re quirements of each issue. Yielding 5 K % - 6%. A s k fo r B o o k l e t D -8 Love,Van Riper &Bruan IN VE STM E N T S E C U R IT IE S S . w . C u r . 4 t h 1 / P ine 5 t . Lo u i s Mid-Continent Banker 28 some instances in the last year issues of bonds have been replaced by stock issues. To keep pace with the growth of the country plant expansion will be necessary in various industries and to the extent that these are financed from earnings or stock issues the buyer of bonds will be deprived of such addi tional opportunities to invest his funds. There is an increasing tendency to transfer the ownership of privately owned business to public hands. A re cent instance of this movement was the sale of the Victor Talking Machine Co. Proceeds of such transactions are frequently placed by the former owners in tax-exempt securities to a great ex tent though a portion finds its way into other forms of corporate investment. Only a few days ago New York news papers featured a campaign on behalf of a prominent hospital for an endow ment fund of $5,000,000. This means, to the extent that the aims of the spon sors of the movement are attained, in vestment of those funds in bonds. Cre ation of endowment funds for hospitals, colleges, aged and superannuated cler gymen, institutions for indigent mem bers of fraternal associations, their widows and orphans, and similar wor thy purposes tending to remove their maintenance from the uncertain stage of voluntary contributions and annual drives for funds, adds to the volume of money which will seek a resting place in long-term interest-bearing securities. More and more those having profits from business enterprises and some having speculative gains tend to place them in whole or in part in the security of the government, municipal and cor poration bond. A factor of importance, more so per haps than many persons realize, is the steady destruction of the machinery and scattering of the personnel for the manufacture of worthless “ securities,” although symptoms of it still remain in the somewhat lurid literature many of us receive from the oil fields of Texas. Much of the money formerly so wasted finds its way, directly or indirectly, in to sound securities. The editor of The Mid-Continent Banker asks what type of securities a bank should sell its clients. That looks like a formidable proposition. Per haps it would seem simpler to phrase it another way—what kind of securities should an investor buy? Buy Long-Term Securities If our judgment is correct that the trend of interest rates is in the direc tion of money ease for an extended pe riod, is it not obvious that the investor should buy long-term bonds? If the prominent institution referred to above has concluded to switch millions of its investments from securities maturing in about ten years is not that an inti mation to the individual investor to put his money into securities running twenty or thirty or more years? It is axiomatic that for sound invest ment the investor should put his money into the securities of companies pro ducing an article occupying an estab lished position in the requirements of the people. In other words he should eschew the products which are subject to the whims of fashion, of popular favor or of the exclusive set. Profits in the latter field may be huge—while they last—but tastes are fickle. And when the prospective investor is examining the security of a bond he should by all means count earning power as one of the most important factors in that security. What makes a thing valuable is its present or pro spective earning power. The selection of a security is a mat ter of the utmost importance. The in vestor cannot afford to do it with his eyes shut. And not only must the in vestor choose well, but he must watch and study the influences of the vary ing factors which tend to alter the value of his investment from week to week and even from day to day. Positive Protection in Guaranteed Mortgage Bonds Is Afforded by a Guaranty Fund of $54,000,000.00 Independent Guarantee The United States Fidelity and Guaranty Company, with assets of over $54,000,000.00, guarantees every mortgage securing these bonds, and its entire resources are pledged to protect the bondholders. We recommend these bonds for the most conservative investor, to Banks and Bond Dealers, and solicit inquiries regarding their sale and distribution. Maturities to suit your requirements. Bates and concessions quoted upon application. W HITE- PRICE-COMP AN Y BAKER BUILDING https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MINNEAPOLIS St. Louis, Marcii, 1927 29 Does the Sale of Bonds Take Wealth Out of Your Community? N YOUR recent letter of January 11th, you ask us a very interesting question, viz: “Will a bank located in an agricul tural community impair in any way the prosperity and well being of that com munity by selling to its customers the bonds of industrial concerns located in a large city?” Before coming to grips with the main question itself, it is necessary to raise, and to answer, several preliminary ques tions relative to the terms which you use in your letter. (a) What is a bond? I What Is a Bond? It is a promise, usually made by a corporation, to pay a definite sum of money upon a fixed date, and to pay definite sums of interest, also at fixed dates, for the use of the money which the bondholder advances. In effect, a bond is nothing more nor less than a document certifying that an individual has loaned a certain sum of money to a corporation, and promising to repay that sum with interest. For all prac tical purposes, therefore, the purchase of a bond is an operation identical with that of making a promissory note. All corporations are not able to keep their promises to repay the sums that they have borrowed from bondholders. Some times they default. Therewith, the bondholder loses, just as he would lose if instead he had lent his money to a friend or to a local business man, who were likewise unable to repay. Still further, the promises of differ ent corporations are regarded with dif ferent degrees of assurance by inves tors. Therefore, their bonds sell at different prices, and to return different yields. The point is this: There is nothing intrinsically safe about a certificate of indebtedness merely because it is a labeled bond. Some bonds are safe; others are unsafe, just as some person al debts are good and some personal debts are bad. Further reference to this fact will be made later on. (b) What is wealth? Physical property, mainly. To name only a few types: land, along with the minerals that lie beneath the surface, and the plants and animals which live and grow upon the surface; buildings; furniture; equipment of all sorts, such as tools and machinery; improvements, such as bridges, roads, etc.; clothing, etc. The list is interminable. The to tal value of our physical possessions https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis sical wealth, therefore, that it will have for its own enjoyment. The fact that the exchange of these goods is ef constitutes what is known as our fected through the medium of money need not complicate the matter in the “wealth.” slightest. It is the goods that give the (c) What is money? A medium of exchange. The total enjoyment to those who produce them, wealth of the United States, i. e., the not the money. Money itself gives no total value of its physical possessions enjoyment; it is what the money will —is estimated at well over 300 billions buy that is of importance. In view of the foregoing, we may of dollars. The total of our money, in cluding gold, silver, government notes, now ask: Does the purchase of a bond by the resident of any community actually re sult in the transference of real wealth Editor's N ote:— The article on from that community? this page is a very fu ll and com Only if the purchaser, to get com plete report made by the Stand mand of the purchasing power which ard Statistics Company of New he needs, sells and ships from the com York City, to one of its client munity equipment used in the proceeds banks, which had submitted this of production. He cannot transport question: “ W ill a bank located the land, of course. But, for example, in an agricultural community im a farmer near Waterloo, Iowa, could pair in any way the prosperity denude his farm of implements, sell and well being o f that commu them to a second hand dealer in Des nity by selling its customers the Moines and place the proceeds in the b o n d s o f an industrial con bonds of the United States Steel Cor cern located in a large c i t y ? " poration. If so, he would have really Laurence H. Sloan, managing ed subtracted from the community’s pro itor o f the Standard Statistics Co., ductive power, and therefore, from its Inc., is the author of the treatise. wealth. Since this question is in the But aside from the utter absurdity of mind of every country banker, such a program, it need be given no th e M I D - C O N T I N E N T B A N K E R recommends this ar consideration here for the reasons that ticle fo r careful study by its the funds which usually gravitate into banker readers. bonds are not of this type. They are surplus funds, seeking employment. So ininminimmiiiimmimmini... ...... we are quite safe in assuming that the Federal Reserve notes and National purchase of a bond, regardless of the Bank notes amounts to only about five location of the corporation which is billions. Money is the means by which sues that bond, virtually never results we exchange wealth. It is, therefore, in the transfer of any actual wealth essential not to confuse money with from a given community. wealth in the consideration of a ques Does it then, result in the transfer of tion such as is herein involved. any money? (d) Upon what does the “ prosperity If the purchaser draws against his and well being” of any given commu checking account in the purchase of nity depend? the bond, the “money in the bank” is, By Laurence H. Sloan Managing Editor, Standard Statistics Company, Inc., New York T he Answ er Not upon the actual quantity of money that is circulating in that com munity, but upon its wealth and upon the volume of new goods which it is able to produce from year to year. Wealth is only useful when it is at work. The only way it can work is by producing goods. The greater the product of a given community, the greater will be the volume of goods that it will have for its own consump tion, and that it will have to exchange for the goods of other communities; the greater will be the volume of phy in theory, decreased by just that much. But the purchaser is buying income, which will be coming back to him regu larly. He has a promise of the ulti mate return of his principal. If he holds a good bond, the principal will be repaid when the bond matures. If he wants his money back before the maturity date, he can sell his bond in the open market. Moreover, he can offer his bond as collateral at any time that he desires and borrow against it. And if, in the original instance, he does not buy his bond for cash, but Mid-Continent Banker 30 borrows money from his bank to do so, that bank’s deposits and loans will actually increase by a corresponding amount. No P erm an en t Loss So there is considerable question as to whether the purchase of a good bond results in even a temporary loss of money to a community. It is certain that no permanent loss is suffered, be cause the bond (if it is a safe one) is ultimately redeemed by the corpora tion, and because the bondholder re ceived income from his capital during the time that it is tied up in the bond. There is still another angle of ap proach. Suppose that, instead of pur chasing a bond of some outside cor poration, the local capitalist with sur plus funds should establish a factory, or some other productive mechanism of that sort at home. Would this pro cedure not be better for the community than the purchase of the bond of an outside corporation? Yes—providing the enterprise turned out to be a successful one. The new factory would increase the community’s output of goods, would probably bring in new workers, would lift real estate values, etc. But if it was successful, the community might in the long run find itself worse off than before. It would have actually wasted a portion of its surplus savings. The United States is strewn with the wrecks of such loyal “home enterprises”—productive mechan isms which should never have been built, and which after they were built found that they could not compete with the large scale organizations operating in the same field. They account for considerable waste of savings. The question then becomes one of the degree of risk which an individual capitalist is willing to assume. If he is willing to take long risks he might greatly benefit his community by add ing to its productive facilities. On the other hand, he might waste his sur plus. If he wishes the minimum of risk, he will be well advised to buy bonds of the highest grade thereby conserving his capital, adding to his current income and insuring that he will be repaid ultimately the sums which he invests. By no method of reasoning is it pos sible to assume that when the resident of a community purchases the bond of an outside corporation the community is worse off than it was before. It loses no wealth if the bond is a safe one; in fact, it gains wealth through the income from the bond. And prob ably except for temporary readjust ments, the community does not even lose any money in such a transaction. We do not see how any bank can harm either its own interests or those of its community by encouraging the citizens of the community to place some of their surplus capital in good bonds. In fact, we cannot see but that The Follow Thru every one would be benefited. The only danger lies in the character of the bonds which the local bank recom mends and retails. It should take every possible step to see that the interests of its clients are safeguarded in this respect. Federal Surety Now Entered in Twenty-Three States Admitted assets of $2,342,866.69 are shown in the condensed financial state ment as reported to the United States Treasury Department by the Federal Surety Company of Davenport, as of December 31, 1926. The paid-up capital of the company was $725,000, with $400,000 surplus over liabilites. First mortgage loans on real estate were $1,020,715.25. The Federal Surety has had a very successful year, and now doing business in twenty-three states through 1,500 agents and several branch offices. Oper ating expenses last year reduced, in cluding average premium commission, which show an average of less than 22 per cent. Vice-President and General Manager Wr. L. Taylor is optimistic over the 1927 outlook for his company, predicting that this year’s figures will show the company producing a premium value of about $2,500,000. — Keeping our custom ers posted on their investments, thru regular and reliable reports, is a much appreci ated detail of our service to bankers. G E O . H. B U R R & C O M P A N Y Investment Securities * Short Term Bonds * Commercial Paper ST. L O U IS N E W Y O R K * BOSTON * H A R T F O R D * C H IC A G O * A T L A N T A * P H IL A D E L P H IA r P IT T SB U R G H f S A N FR A N C IS C O ' LOS A NGELES * SEATTLE ^ CLE V E L A N D https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis --V- -V -«■ ..-y.- —■*' -a* T T - V W - V ~W~ "** St. Louis, March, 1927 31 Our G ood F riend, the Bond Man G ive Him a H and! “Yes, Mr. Billings, I can hear you per fectly. What kind of bonds did you have in mind?” “What kind? You got more than one kind? Oh, I guess I see what you mean. What we want is home negotia ble bonds. Prime, they call ’em, don’t they? We want ’em for our statement, you know.” B y R oscoe M a cy O. DON’T want any bonds to day,” Henry Billings, presi dent of the Peoples’ State Bank of Warfield, frowned menacingly at the salesman on the other side of his desk. “No,” he continued, “Won’t even have time to look ’em over this afternoon,” and he turned to rustle about busily among the papers on his desk. The next day, a neat folder in the stack of morning mail caught his eye, and he opened the latest published statement of the Warfield Savings B'ank, his competitor down the street. “H-m,” he muttered, as he glanced over the figures. “What’s this? ‘Other Bonds, $42,363.80.’ Huh! More of that new cashier’s nonsense, I reckon,” with a dubious shake of his head. “Pretty good statement, though, outside o’ that,” he conceded, grudgingly. A few minutes later he picked up the folder again. Once more, “Other Bonds, $42,363.80” loomed out from the column of figures on the “Assets” side. “N H e n r y ’s Note Case. Somewhat impatiently, Henry called for his note-case. Yes, there was that mortgage on the Miller “ eighty,” that the Gruhn boys wanted to buy the other day—and these others which the Mur phy Mortgage Company had been after for a month. Maybe it would be better to sell them while they would still com mand a little premium. With another look at that boldfaced “ Other Bonds, $42,363.80,” he gave vent to a snort of a derision, and began to burrow about among the litter of papers on his desk. At last, he succeeded in unearthing the object of his search—a business card, neatly engraved, “ Bernard J. Woodson. Representing Black, White and Gragreen. High-Grade Bonds.” Then he reached for the telephone and placed a long distance call. In due time, the bell rang, and the following conversation ensued: “ Hello. This Mr. Woodson? Well, this is the People’s State, at Warfield; thousand dollars worth of bonds.” “Pine, Mr. Billings. And what kind?” “I said I wanted to buy fifty thousand dollars worth of bonds.” https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis There was a momentary hesitation at the other end of the wire. Then Mr. Woodson cleared his throat. “Ah—I see. Well, fortunately, we do not handle any thing but prime paper. About what issues do you want?” Henry Becomes An gry “ Shoes?” shouted Mr. Billings. “Who said anything about shoes? I want to buy BONDS—B-O-N-D-S—fifty thousand dollars worth! See here”—as a mo mentary doubt assailed him, “Is this Woodson, the man that sells bonds?” Mr. Woodson apparently had a rather bad cold. He was taken with a paroxysm of coughing, but at last regained con trol of his voice. “ You misunderstand me, Mr. Billings. Seems to be some thing wrong with this connection. What I meant to get at was the par ticular issue or issues of bonds you had in mind.” “ Oh. I see. Well, I hadn’t thought about that.” “Well, let’s see what we can work out. Now, about what income do you expect?” Mr. Billings flared up again, “Looky here, young man,” he shouted, “it don’t make a bit of difference about my income. You bring your old bonds down here and I’ll pay for ’em. I got the money—don’t have to pay for ’em out of my income.” “No, no. I meant what yield—what interest rate would you expect to real ize on your investment?” “Why, ain’t they all four and a quar ter?” “Listen, Mr. Billings. Suppose I drive down there again and go over this with you personally. I can come around that way in the morning.” “No, no. That won’t be necessary.” And Mr. Billings muttered to himself, “they don’t play that on me. Charge me for an extra trip—I guess not.” “Well, suppose we leave it this way, then. I’ll have our secretary make up a trial order of fifty thousand, assorted to fit in with your particular needs, and we’ll ship them subject to your ap proval on examination. All right, Mr. Billings, I’ll be around to see you as usual next trip. Goodbye.” Fortunately, Black, White and Gragreen are a reputable firm, with a long 32 list of satisfied customers and a repu tation for fair-dealing which they can’t afford to lose. And fortunately for the rest of us, Henry Billingses in small banks all over the country, most of the established, well-known bond houses fall into the same classification. The chances are five to one that the ship ment of bonds received in due time by the Peoples State Bank of Warfield comprised the best assortment obtain able for their purposes. Unwittingly, President Billings has chosen what is probably the safest and best method of buying bonds, in the case of one who is untutored in the intricacies of the bond game. His purchase was made up by an established expert, in the employ of a concern which cannot af ford to make a mistake. The good salesman comes into your bank and mine, and he makes us think we know all there is to know about the various issues he has on his list. But if he works for a reputable, welladvertised house, he will steer us care fully away from any issue that is un suitable for our needs at the time— and will make us think it was on our expert judgment that led us to reject that particular paper. You don’t know the young man who visits you for the first time with his bond lists and prospectuses, but the https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mid-Continent Banker chances are you will recognize the name of his firm. It may be an old estab lished concern that has been in the business for generations—or it may be a new company whose advertisements you have read in your bank journals. In either case, you are probably in safe hands. The bond .selling institution that stages an intensive advertising campaign is making an investment in good will which they cannot afford to throw away through unwise sales, any more than the firm with a fifty year reputation for conservatism and reli ability can risk that reputation for the sake of a temporary increase in busi ness. each director inspect the real estate, check the abstract with the local reo ords and strike up an acquaintance with the mortgagor? Not at all. The valuation is based upon the estimates of independent appraisers, the abstract w ork entrusted to a reputable abstract er, and the investigation into the char acter and earning power of the mort gagor is left to the local hanker or loan agent. Each step is entrusted to an expert who has a reputation to up hold. Why, then, should we country bankers who buy bonds ever think of matching our judgment against that of an expert bond appraiser and against the reputation of his firm? Leave it to Good Bond Men The expert judge of bonds is a ge nius in his line, and few of us country bankers, with the limited experience available to us, can hope to match his skill. If he is backed up by a firm name whose reputation has been built up by large expenditures of time or money, or both, we can better trust his judgment than our own, after mak ing sure that he understands our par ticular investment needs. The purchaser of a bond is, in effect, lending upon a mortgage. When the directorate of a large insurance com pany approves a real estate loan, does T he audited balance sheet of the M id land Bank Limited, made up on Decem ber 31, 1926, shows total assets of 430,557,103 pounds sterling as compared with 411,485,767 pounds sterling for the corresponding date in 1925. W illiam H. Arnold has resigned as president of the American Trust Com pany, Kokomo, Ind., and has been suc ceeded by Cly R. Humston. John H. Smith has succeeded the late W. H. Barnhart as vice-president of the Exchange Bank of Churubusco, Ind. 33 St. Louis, March, 1927 Country Banks and the Bond Business General Business and Economic Conditions Point to a Further Appreciation in Sound Investment Issues ¿¿THT THERE can I obtain literature y Y that will tell me how to or ganize and operate a bond de partment?” That is the substance of a letter now on my desk from an am bitious banker. My reply is that the most illuminating literature on this subject at this time is the books of the bond houses that do an exclusive or almost exclusive retail, or distribut ing business. For the last year many bond houses, sound, established, very able concerns, have not made money. One widely known authority on the business says that that assertion is true of 90 per cent of the houses that depend chiefly on the retailing of syn dicate participations from originating houses. They’ve made a living, and that is about all. After expenses had been paid, profits were nil or exceed ingly thin. And that, too, has been the condition in the bond business in the face of the fact that practically all these houses did a larger volume of business in 1926 than in almost any previous year. I have set down the foregoing as a sort of side-door entrance to this dis cussion. If readers of this magazine will accompany me we’ll go into the quiet board room and see if we cannot find out what there is in bonds and the bond business for the average bank, and why it is or isn’t there. Obviously there is one essential question, first, or there is utterly no use in going on with our conference. That question is, “What can a bank make out of bonds, either by handling them as a dealer or by using them as secondary reserves?” The answer to both divisions of that question is laid down by world-wide as well as by domestic business and eco nomic conditions. The O p p o rtu n ity fo r Banks As to the question, “What opportu nity has a bank for a speculative profit in bonds?” I should say that that kind of hazardous profit is without the realm of banking. True, banks often may buy bonds with a sound anticipation of profit above the interest yield, but that gain is not a speculative increase. It is an economic, not a speculative profit. It is frequently called appreciation and it is the result of economic forces that the well managed investment account takes into consideration and endeavors to foresee. These economic forces may be general, as in the present period with easy money, a persistent tendency https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis B y K elton E. W hite, G. H . Walker 8b Company toward lower interest rates and re peatedly the calling of high-rate bonds and the refunding of those same issues by means of bonds of substantially lower coupon rate. Or, these economic forces may be peculiar to a given class of bonds, or to certain individual bonds. For more than a year we’ve seen a rather steady appreciation in bonds. Although I do not wish to commit my self to gratuitous prophecy, I can see no reason why this condition should not be progressive. Generally, busi- keeping large deposits busy, the ne cessity for greater safety in more thor ough diversification, especially in agri cultural and one-industry communities, is the undeniable economic force that directs this course. And that, too, is another condition that is virtually cer tain to be progressive. In other words, bonds have become general, a necessity for increasing safety and prof its in modern banking. Without the large capital issues of the last few years, to employ huge reserves and other accumulations profitably, the banks of this country would be money poor, their profits undoubtedly consider ably less. Do Not Speculate Kelton E. White ness and economic conditions point to further appreciation in sound invest ment issues. I do not mean to seem to place profit in bonds as the first consideration. There is a vast difference between the sound banking wisdom of economic profit in bonds and the foolish gambling for a fanciful, dangerous, speculative profit. I have perhaps emphasized tne foregoing because it is a natural ten dency for all of us to look for larger profits. Usually the speculative profit is a dangerous will o-the-wisp, especi ally for banks. American banking is in an entirely new situation today. Banks that never before or only meagerly went into the bond market for secondary reserve earning assets are today buying bonds. The necessity for Hence, I do not think it out of place to warn against the dangerous, un sound, all-too-alluring speculative profit, and to emphasize the legitimate, desir able economic profit that is to be had in the well-managed bank’s investment account. The order of the qualities of such an account should be safety, liquid ity, yield and appreciation, or eco nomic profit. But, getting back to the opportuni ties for a bank’s making a profit as a dealer in bonds, there is a great deal of very plain recent bond house his tory, not apparent to those not in the business, that should be useful to bank ers, investors and all others using or interested in bonds. The oft-repeated facts of the increase in this country’s gold supply and the awakened public appetite for investment securities, be cause of the Liberty Bond issues, needs no further repetition here. Rather we may begin with 1921 and 1922, two re markable years in the American bond business. That was the thawing-out period following the post-war depres sion. Prosperity was ahead, capital was coming out of hiding. There was an enormous demand for investments and for new capital. Interest rates were very attractive. To handle this business, which has generally continued through the subsequent years, the bond houses had to provide greatly increased machinery. It had to be built and put into operation all over the country, a very expensive procedure. T h e 1922 M a rk e t The bond business as a whole was moderately profitable in 1921 and 1922, to the bond houses. It was remarkably 34 Mid-Continent Banker You W ill Find in Our Investment Departments a wide choice of securities from which to make your selection of offerings. Government Municipal Public Utility Industrial First Mortgage Real Estate Bonds profitable for the discerning investors who bought sound, high-yield issues with almost positive certainty that those issues would increase greatly in value. But most of all was it profitable to a number of young men who had but entered the business as salesmen. These new men, with a more or less finished training as bond salesmen, ex perienced a happy beginning. About all they had to do was to take orders. Real salesmanship was not necessary, so much money was eagerly seeking investment. If the bond houses could only have kept the many sound issues they sold in 1921 and 1922 and thereby have saved the salaries and commis sions paid to salesmen and order tak ers, and have cashed in on the appreci ation they were sure would accrue to investors, they would in many in stances have made considerably more money than by selling securities. The foregoing is just a plain way of reciting actual business history, to show that the bond business is not a bed of roses even in more prosperous years. In 1923, the edge began to go off the bond market. During the previ ous two years the bond business had expanded enormously, especially in per sonnel. Much of this personnel had never been tested by a highly competi tive market, and when it ceased to be practical to take orders without the salesman giving real investment coun sel and service, a big part of this new personnel, trained at considerable ex pense, quit the bond business to look for something easier. Thus the bond business, voluntarily and involuntarily junked a considerable part of its new equipment at a very heavy cost. Since then it has been slowly replacing this junked personnel at additional expense. gamble, than to invest safely. however, will admit this truism. None, The jolly bull market could not last forever, although some seemed con vinced that it was immortal, ever-as cending. Came the bear market of March, 1926, short, but sharp. Fortu nately, the market recovered. Values and earning power behind many securi ties were too large to permit a general slump or depression. It, however, had a wholesome effect. Possibly the in creasing demand for high grade bonds is some evidence of this effect. What ever the various causes, the volume of new investment issues was the great est of any peacetime year of this coun try. Our war financing, of course, can not be included in a comparison of this sort. Unfortunately for quick placing of investment securities, interest rates had proceeded to decline. This should have stimulated investors to act against probable future lower interest rates. Many investors, however, while eager to invest, still had the yields of 1922 and similar years in mind. They could not quite appreciate that 1926 had rolled around with entirely new condi tions. They demanded sound securi ties, but they wanted yields of 1922 or thereabouts. This was especially true of a large part of the new crop of in vestors created by the war and the Lib erty issues, and it included individuals, corporations and some banks. In their investment minds they were still liv ing in 1921 and 1922—some people are still living in those years in their con ception of what sound investments can and should yield. This in face of the fact that one notable investment com mentator has clearly shown that for the last 500 years the civilized world has universally experienced a steady decline in interest rates after every great war. T h e 1924 M a rk e t BOND DEPARTMENT J. W aller M arshall, V ic e -P r e s . REAL ESTATE LOAN DEPARTMENT D ayton K eith , V ic e -P r e s id e n t ChkagoTrust Oompany Lucius Teter JohnW O'Leary President Vice-President CH ICAG O https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis In April, 1924, the bull market, fore cast to run two years, started its daz zling career. A number of stocks were far too low. Naturally, many investors were attracted to stocks. Unfortunate ly for some of them they were still under the spell of the bull movement when a number of stocks, having been much too low, became too high. I men tion this because it was the kind of competition that the investment busi ness could expect and should be able to meet. During those years of this bull market the volume of new capital issues was large. The major part of it, which consisted of investment is sues, had to be placed in competition with a speculative market that was very alluring. It was not an easy thing to do. Given a good excuse, a consid erably part of our substantial citizenry would much prefer to speculate, even Money is P le n tifu l Naturally, the bond business had to put a great deal of time and money into selling lower-yielding bonds in the face of the situation described in the preceding paragraph. Added to this the bond houses were in sharp competi tion for new issues. Money was and is plentiful. There is a profit for the houses that can get the business, if they can get it at the right figure. And since there are many able, dependable bond houses with greatly enlarged fa cilities, built up since the war, they’ve got to have business to take care of the greatly increased overhead. Con sequently profits grow narrower and narrower as competition grows keener. There is nothing fearsome in this sit uation for the capable, substantial house, large or small. They will have simply to live on less and to develop St. Louis, March, 1927 efficiency in economies in doing busi ness. But undoubtedly some smaller firms, that are scarcely more than small selling partnerships, face a se verer situation. This is unfortunate, for many of these smaller concerns are composed of fine, capable, ambitious, dependable investment bankers, per forming a useful and honorable work. It’s simply that they are the victims of changed economic conditions. The bond house or bond department of a bank that hasn’t the ability and backing to work out of these changed conditions cannot expect to make a profit, or to grow, although they could probably have made a fair profit under condi tions of a few years ago. As a nationally-known authority recently said, five years ago was the time to think of starting a bond house or a bond de partment, not today. T he Present O p p o rtu n ity Rather clumsily no doubt, I have re cited the essence of recent investment banking history, in this reply to the young man who wished literature on how to start a bond business. He will find this history confirmed throughout the whole country, if he will but look in the books to which I referred him, namely, the books of the bond houses. However, the other side of the picture, that side having to do with those who would buy investments, not sell them, is much brighter. In fact, I do not see how it is possible generally for banks to obtain safety and profits in a fuller measure without a greater apprecia tion and use of their second reserves in relation to sound, liquid, diversified investment securities. The reasons for this situation are simple, although world-wide economics has produced them. This country still holds approximately half the world’s monetary supply of gold. It has pro ductive powers greater than ever be fore, and on a sounder basis than in any era of widespread prosperity the United States, at least, has ever known. In a practical way we might say that the ability of American industry to produce new wealth is almost unlim ited. A huge pile of accumulated cap ital is heaped all about us. It is being added to day by day. It must be kept busy, soundly and constructively busy. Consequently bank competition is at a razor edge, especially for that great essential short term credit business. That condition cuts into profits deeply. On the other hand business has devel oped widespread new economies that have lessened and shifted the demand for credit. A striking example of this is the credit economy effected by the widely practiced custom of hand-to-mouth buy https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 35 ing, and the maintenance of low inven tories by commercial establishments. True, this is to a large extent a shift ing of the credit load. Where the merchant depends on smaller and more frequent commitments the manufac turer may have to carry larger inven tories and thus be a larger user of short term credit. This means quite a considerable shifting of mercantile credit from smaller towns and cities to the large industrial centers, and to keep their funds profitably employed the banks in these towns are thus faced by the situation that has confronted the large city banks for years, that of go ing outside their home communities to obtain yield, greater safety and wider diversification. D iversification Essential In going out of the home community for business, there is, of course, the time honored custom of buying com mercial paper. It is a splendid earn ing asset. Where bought of reliable houses there is none better for its pur pose. Its record for safety is excel lent. It has that great essential of liquidity. But its yield is low. In con sequence there is practically no other alternative in maintaining the yield, safety and liquidity of second reserves than that of the well selected invest ment account, properly diversified as to maturities, as to geography and as to enterprises so that it shares in no harm ful degree in the risks of any single line of business, any period or any com munity. There is an especial advantage in the diversification of the secondary re serve where the community depends largely on one industry or on very lim ited industrial activity. That is true no matter what the industry may be, whether farming or automobile manu facturing. However, I am afraid this discussion grows too long. I may err in length because, to me, there are few more important business problems than that we in America learn the value of sound investing, both as bankers and as individuals. For those who have not made a comprehensive study of the subject I would suggest a little booklet, “ The Investment Account of the Smaller Community’s Bank,” pre pared by the educational department of the Investment Bankers’ Association of America. It is entertainingly written, but very sound and with a conscientious desire to be practical and helpful. I have a copy on my desk. It cost me five cents, but I have a feeling that if any banker wrote to the Investment Bankers’ Association and told them he saw this booklet recommended in this publication he would get one for noth ing more expensive than the asking. The Stability o f a Bond House T H E stability of any busi ness organization rests fundamentally in the product or service sold — and more particularly in the degree and composite of various qualities possessed by such product or service. Y Y Y A sound foundation is no as surance of the strength and the efficiency of operation of the structures it supports, but no structure can be any stronger than its foundation. Y Y Y A bond house sells bonds, and the foundation supporting the operating and financial structures built by the house’s management is the degreeand composite of such loan quali ties as safety, marketability and income possessed by the bonds the house sells, and it is well to remember that all loan qualities disappear if there be not safety of prin cipal. First Illinois Company BONDS FOR INVESTMENT CH ICAGO AURORA M ILW AUKEE DAVENPORT ST. LOUIS Boatm en's Bank Bldg. 36 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mid-Continent Banker A SPECIALIZED SERVICE IN Foreign Securities FOR BAN KS AND DEALERS ♦ BAKER, KELLOGG& CO., Inc. I l l W est Monroe Street C H IC A G O TELEPHONE RAN D OLPH 0415 NEW Y O R K D ETR O IT LONDON BUENOS AIRES St. Louis, Marcli, 1927 37 What Does the Money Do? Showing How American Capital Is Building America and Reconstructing the Remainder of the World By Ray Vance Economic Counsellor to the Brookmire Economic Service, Inc. sure the safety of the investor’s money. Ray Vance N INVESTMENT banking house is an institution which sells securi ties to me. That is a common idea. And it is not strange that this idea should be prevalent, since it is as selling agencies that such firms advertise and as selling agencies that they come into busi ness contacts with large numbers of people. Of course, the use to be made of the money is mentioned both by advertisers and by direct salesmen. In a few outstanding instances it is stressed. But, in 1925 evitably, the major em phasis is placed upon the financial soundness of the issuing corporation or mu 1926 nicipality which will in- A to feel that we are playing a part in the general progress of the universe, I have no desire to quarrel with this rather than just living in our own little established policy, for it is fundamen corner. tally sound, and, for appeal to great This is really a quite serious fault institutions, it is sufficient. It does, for those investment houses which ap however, have the negative fault of peal to small institutions and to indi failing to play up to one of the strong viduals. In other words, we like to est of all human traits. That is the know that our thousand dollars is safe ingrained human instinct to push back and that we shall receive each year an our personal horizons, to relate our income of forty or fifty or sixty dol selves to activities of other men and lars, but, if one man offers us that alone while another offers us the same plus the men N E W C A P I T A L R A I S E D ANNUALLY tal satisfaction of know ing that we are sharing in some great achievement, I am quite sure that most of us will buy from the sec ond man. I will even go one step further and say the second man may get us so inter ested that we will save more money to buy his se curities. Then I will go still another step and say that since the payment of our annual income and the ultimate payment of THE BROOKMIRE P E R C E N T T O T A L N E W C A P IT A L GOING TO V A R IO U S BORROW ING GROUPS https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ECONOMIC SERVICE,INC P E R C E N T N E W CO RPO RA TE C A P IT A L GOING TO V A R IO U S B O R R O W IN G GROUPS 38 Mid-Continent Banker our principal depends on future rather than on past financial soundness, the second man is really giving us an addi tional part of the picture to which we are entitled. A Big Job Since 1921 If it were not for the ever present farm problem, it would be a little diffi cult to realize that the country we live in today is only five years away from the despondent one that saw the open ing of 1922. Our broken down rail roads are now a matter for boast; we have a “hard road” mileage of which we did not dream in 1921. Electric power is being made and used at new record levels everywhere. Instead of a national “housing problem” we have our homes, our offices, our stores, our schools, all of our institutions, better housed than ever before. And with it all we buy and consume current goods at a per capita rate greater than at any time before the war. Almost every line of activity is claim ing the credit. Bankers say it was the Federal Reserve System. Engineers credit quantity production. Others say it came from installment selling. Each one has some truth in his claim. But surely much of the advance would have been impossible had we not added rap idly to the material equipment of civil ization. And just as surely that addi tion would have been impossible had not an army of investors saved excep tional amounts of new capital and, through investment houses, poured that new money into payments for this in creased equipment. The accompanying chart No. 1 shows how the volume of new money (exclud ing refunding operations) raised by public offering of securities has in creased in recent years. The box on this page shows how that money has been divided. V is u a lizin g the Results The figures in the preceding table mav look dull enough, but they are really the blood pressure record of the transformation which we have seen go ing on about us. Some of the six bil lions of new money borrowed by po litical units in the United States dur ing the past five years have taken a physical form as roads and city pave ments to carry the great increase of motor cars and trucks. Others of them have built new government buildings, adding to the beauty of our cities and adding tremendously to the direct mar ket for building materials, as well as the indirect market for all types of things because of the wages which have been paid to laborers. Still more ap pealing in the human sense, others of them have taken form as hospitals where those already sick can be treated or as parks, swimming pools, golf https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis N E W C A P IT A L R A IS E D A N N U A L L Y (Millions of Dollars) TYPE OF ENTERPRISE 1926 1925 Railroads .................................. .$ 364 $ 380 Industrials .............................. . 1,198 1,098 Public Utilities ..................... . 1,604 1,495 General Real Estate................ . 709 715 Federal Farm Loan.................. 91 169 Miscellaneous Corporate......... . 500 411 1924 $ 780 690 1,326 333 179 193 1923 $ 465 896 889 251 337 202 1922 $ 523 676 726 162 344 249 Sub-Total ............................... .$4,448 * Municipal (United States). . . 1,321 * Canadian Municipal ............ . . 61 Other Foreign Government.. . 481 $3,501 1,388 132 571 $3,040 1,051 26 187 $2,680 1,114 94 416 Grand T o ta l ........................... .$6,311 $6,223 $5,593 * Municipal includes state, county or provincial. $4,304 $4,304 courses and other municipal play grounds where wholesome recreation can act as a preventive of sickness. Most appealing of all, one of the larg est divisions of this group of dollars has been turned into school houses which have relieved the unsanitary and inefficient conditions of crowding and part time, which prevailed in the schools of most cities, after the shut down of building which accompanied the war. Incidentally, the cure of this condition is still far from complete and a mobilizing of investors’ dollars for that purpose will be a feature of the next few years. Very closely connected with the mu nicipal loans is the still more striking increase in the raising of new capital for public utilities. I have already spoken of the tremendous increase in the use of electric power. Electric washers and vacuum cleaners have in creased tremendously in number. Elec tric refrigerators have changed from a curiosity in a few homes to a relatively common thing. Radios have made their initial appearance and have come into almost universal use, and each of these things has tended to demand more electric current for home consumption. Then there has been almost a revolu tion in the application of electric power to manufacturing in plants which have not moved, and a tremendous migra tion of manufacturing industry from points where coal produced power is exoensive, to parts of the country where either hydraulic or steam pro duced electricity power may be had at much lower rates. In view of these things, we might be tempted to beTeve that the expansion of public util ities is nearing its end. While the use of electric current may not grow so much in the next few years, it is still far from the saturation point. More important from the standpoint of de mand for increasing public utility de velopment are the problems of gas and of transportation. It is imposible to divide the money that has been spent for public utility construction into these different fields, but we know that whereas electric cur $4,268 1,364 49 541 rent has been reduced to its pre-war price in most places, and even below in some cities, the price of gas remains near its war peak and the producing companies have made only a beginning in seeking new uses. The use of gas in refrigeration and its use in the heat ing of homes are both infant industries at the present time. Their expansion probably will not be so great as that of the use of electric current, but it will offer a very fruitful field for the investment of dollars during the next decade. The more pressing need is that for forms of urban and interurban transpor tation. With the general popularity of the motor car, interurban railroads ceased to be attractive properties, and with the popularization of the motor bus, even the lines within city limits have found their business tremendous ly reduced. In the meantime, the bus developments have by no means re placed the properties which have been allowed to deteriorate. Here is an in dustry even further behind the needs than the railroads and general public utilities were behind the needs of the country in 1921. The new develop ments mav take the form of bus lines or of subways, but they offer a tremen dous and immediate need for new cap ital. A S trik in g Change The most striking of all the changes shown in this table is to be found in the increase of general real estate bonds. Of course, this increase is very largely due to a change in the method of marketing by which much of the monev that used to be placed through building and loan associations or by the private placing of mortgages, has come to be placed through public mar keting of mortgage bonds. However, we must not forget that much of the monev listed as having been raised by municipal bonds, by public utility is sues, and by industrial issues has really been raised for building purposes. Fur thermore, the real estate bond houses which market publicly have not placed a great many issues on small private homes. Therefore, the increase in this St. Louis, March, 1927 figure from a little over $160,000,000 a year to well over $700,000,000 a year is very nearly a measure of the increased building of hotels, large apartment houses and large office and store build ings. It may be that this type of con struction is overdone today. In fact most of the leading authorities who is sue that type of bonds are inclined to believe that it is overdone for the pres ent. Even though that be true, the record of' such bond issues in recent years is really the record of the re building of the central sections of our great cities and there is no doubt that a let-down in this type of financing would be a temporary one only. The increase in industrial financing has been the response of industry to a quickened demand because of the higher prosperity dependent upon the material purchases and wage payments in other forms of expansion. The in crease in “ miscellaneous” financing is largely the raising of capital to finance installment payments, and the decrease in Federal farm loans represents a growing ability of the farmers to fi nance themselves through private sources, as well as continuing to hear witness to the fact that agriculture is still the “poor relation” in all the pros perity that the country has had. One other industry also shows a slightly different picture from the aver age. That is the railroad industry. In 1922, railroads borrowed heavily and began the reconstruction of their phy sical property. This carried to a peak in 1924 with the resultant work spread ing over into the first half of 1925. Since then, the railroads, while refunding many of their high coupon rate bonds, have raised relatively little new money. The efficiency of the past two years should not blind us to the fact that roll ing stock and rights of way are prob ably wearing out faster than they are being replaced, and almost certainly the total facilities are failing to keep pace with the general growth in busi ness. Another expansion in railway re construction is almost a certain devel opment during the next five years. Foreign Financing With all of this growth in domestic use of capital, the investing public of the United States have saved money faster than it has been needed and the yield which an investor can demand on his money today is lower than at any previous time since the early part of 1913. Part of the surplus has been annually taken up by loans outside of the country, though the percentage of total new capital going to foreign bor rowers has not varied greatly from 1922 to 1926. (See Chart No. 2.) This chart does not, however, tell all the story of the developments which https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 39 have been going on in the American market for foreign securities. In 1922, American investors were buying con siderable amounts of foreign govern ment bonds, but only 4x/2 per cent of all the money raised for corporations that year went outside of our own boundaries. Of even that small amount exactly one-third went to Canadian con cerns which appeal to the security buyer in the United States more as do mestic than as foreign securities. Through 1923 and 1924, the change was not marked, but in 1925, some real pio neering work in the way of marketing foreign corporate securities in the United States began. This movement gained additional strength in 1926. (See Chart No. 3.) Here is probably the greatest of all fields for expansion in the use of American investment capital. America has secured physical possession of a wholly abnormal percentage of the world’s monetary gold. Her people have surplus incomes which allow them to save capital for investment at a rate which is now running very consider ably beyond our own capital needs, and in the meantime the rest of the world has not gotten much further along with postwar reconstruction than America had gotten by 1924; possibly not much further than America had gotten in 1922. Politically, probably, the vast majority of our people are isolationists, and there is undoubtedly a strong ele ment which would prefer economic and financial isolation, but no amount of legislation or propaganda has ever been able to prevent the operation of natural economic laws for any very great length of time, and already there is strong evidence that the American investor is going to finance the recon struction of the rest of the world much as he has financed the reconstruction of his own country since 1921. \ Investment Recommendations Issue— Y ield A bout New Orleans, Louisiana, 4s due 1950/42.........................4.15% R idgew ay, Missouri, 5 y 2s, due 1928-29...........................4.40- 4.50 Avoyelles Parish, Louisiana, 5s, due 1943-48.................. 4.50 Henderson, North Carolina, 4V2s, due 1945-50................ 4.60 Lake Charles, Louisiana, 43%s, due 1958-59.................. 4.70 M exia, Texas, 5 y 2s, due 1942-65.................. 5.00 City o f M ontreal, Canada, 4% s, due 1966.......................4.70 Aluminum Company of Am erica I)eb. 5s, due 1952......5.00 Northern Indiana Public Service Co. 1st & R fg. Mtg. 5s, due 1966 .......................... 5.10 Interstate Pow er Co. 1st Mtg. 5s, due 1957.............. 5.16 Southwestern Gas & E lectric Co. 1st Mtg. 5s, due 1957 .......................................................... 5.25 N orthwestern Public Service Co. 1st M tg. 5s, due 1957 ........................... 5.25 Interstate Public Service Co. 1st Mtg. & R fg . 5s, due 1956 ................................................................ 5.25 P ickering Lum ber Co. 1st Mtg.6s, due 1946...................6.15 D escriptive Circulars Furnished Upon Request BOND D E P A R T M E N T Mercantile TfflgtGompaiiy Member refera / R eserve Jpr/em Capfe/eiJurp/ur Ten Million Dollars ^ E.IGHTH AND LOCUST —T O ST. C H A R L E S St. Louis V////////////.'//////fe//////7/7//////M//////>/77/fe///////777/7ss77/s7777//777/77777sV/7/7777777/777777/7///}> Mid-Continent Banker 40 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis S u b sc r ip tio n s h a v e b e e n r e c e iv e d in e x c e s s o f t h e a m o u n t o f t h is is s u e New Issue $ 9 0 0 ,0 0 0 The Southwest Public Service Company First Mortgage 6 l/2 % Gold Bonds Series A T o be dated M arch 1, 1927 T o be due M arch 1, 1937 Interest payable September 1 and March 1, in Chicago and New York. Coupon bonds register able as to principal. Redeemable on 30 days’ published notice, on any interest date before March 1, 1932, at 102% ; thereafter at a gradually reducing premium. Mr. F. W. Woodcock, who is to be President o f the Company, summarizes his letter to us as follows: The Southwest Public Service Company will be organized as a Maryland corpor----------- ------ * ation, to render retail and wholesale ice and cold storage service in the southeast ern section of Kansas and the northeastern section of Oklahoma, including 43 cities and towns with a population of 79,600. B u sin e ss: The plants operate without active competition in the towns served. The --------- £-------------- 1 properties in Oklahoma operate under licenses from the Corporation Com mission of that state and have the same degree of protection from competition as the transporta tion, transmission and other public utility companies. C o m p e titio n : S e c u rity : These bonds are to be secured, in the opinion of counsel, by a direct first mort—— ------- — gage on all of the fixed assets of the company. Appraisal by independent engineers shows a value of the properties to be acquired, including fixed assets, considered collectively, as of September 30, 1926, of $1,500,000. E a r n in g s: -------------- s l l Consolidated income of the properties, as prepared by Messrs. Haskins and Sells, Certified Public Accountants, was as follows; Year Ended Dec. 31, 1925 Gross Incom e . . . . Operating Expenses Net incom e available for interest, depreciation and Federal Taxes Annual Interest requirements on $ 9 0 0 ,0 0 0 Series A Bonds (this is s u e ) ...................................................... Year Ended Dec. 31, 1924 Year Ended Dec. 31, 1923 $ 4 7 3 ,7 8 2 2 3 9 ,3 3 3 $ 3 7 6 ,0 4 9 2 1 5 ,3 5 2 $ 4 1 3 ,2 1 6 2 3 5 ,7 8 1 $ 2 3 4 ,4 4 9 $ 1 6 0 ,6 9 7 $ 1 7 7 ,4 3 5 $ 5 8 ,5 0 0 Such net income for the nine months ended September 30, 1926, was $196,405. Profits totaling $584,100 were distributed in cash during the period of three years and nine months ended September 30, 1926. The Company is to be controlled by Consolidated Public Service Company and the active management and operation of the properties are to be under the supervision of Messrs. Day and Zimmermann, Engineers, M a n a g em en t: together with local interests with more than 20 years’ successful experienee in the management of ice properties. O w n e r sh ip and .— --------- 1——------------ We offer these Bonds for delivery if, when and as issued and received by us, subject to the approval of legal proceedings by our counsel, Messrs. Cotton & Franklin, New York, except as to titles to property, which are to be passed upon by Messrs. O’Meara & Silverman of Tulsa, Oklahoma. It is expected that delivery will be made on or about February 17, 1927, in the form o f temporary bonds or interim receipts. Price 99V2 and Interest to Yield Over & h% H o ag lan d , A llum & (o . Established 1909— Incorporated 14 S. La Salle St. C H IC A G O 34 Pine St. N EW YORK The statements herein have been accepted by us as accurate but are in no event to be construed as representations by us St. Louis, March, 1927 41 The Growth of Customer Ownership Over 1,383,000 Customers Have Invested in Securities of Electric Power and Light Utilities in the Past 12 Years REICENT investigation by several leading investment securities houses on the distribution of se curities showed a rather surprising re sult, the facts found completely dis posing of the old idea that investment offerings were being taken by wealthy individuals and large institutions, for it showed that these houses were deal ing with a multitude of small investors rather than a few large ones. It dis closed that the real capitalists of this country—the people that provided the money for financial enterprises—are the great middle classes. They are the real buyers of investment securi ties, just as they are the controlling factor in the consumption of all kinds of merchandise from chewing gum to stillson wrenches up to radio sets and automobiles. A Cause of Developm ent Now, what brought about this devel opment—the uncovering of this great securities market? Surely, there must have been some basis for the old idea that the rich were the only buyers of stocks, bonds and the other securities that make up what we term invest ments. There was a time not long ago when such was the case—before the development of the plan of equity fi nancing known as customer-ownership of the public utility companies. On the face of it, the above seems to be rather a boastful statement, yet it has come to be an accepted fact that customer-ownership has done more to bring about the wide distribution of in vestment securities than any other sin gle factor. By putting high grade se curities of their companies into the hands of their customers, the public utility companies have built up a strong confidence on the part of the public for public utility investments—a confidence that has led some 1,383,000 customers to invest over one billion and a quar ter dollars in the electric power and light utilities in the past twelve years. The customer-ownership movement was started in 1914 and was pioneered and proven to be sound under the most adverse conditions arising from the economic crisis of the World War. Fol lowing the war period it gathered mo mentum rapidly and from year to year showed a steady increase in the amount of capital raised through this plan up to the year 1925, when over $297,000,000 of power and light utility stocks https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis B y Phil W . Creden, H. M . Byllesby & Company were placed in the hands of public utility customers throughout the coun try. From preliminary estimates the results for the last year will be within $50,000,000 of this figure. Customer ownership of the Byllesby properties—among the earliest pioneers of the customer-ownership plan—dur ing the past year showed a large in crease over the previous year, 36,801 sales being made which amounted to $25,061,600 par value. This was an in crease of more than fifteen per cent over any previous year. New share holders were added to the number of 17,000 to raise the total of customer shareholders of the companies con trolled by Standard Gas and Electric Company to 100,000. This figure does not include the Pittsburgh or San Fran cisco properties of the organization, where customer-ownership has not yet been started. A B e tte r Showing This showing was considerably bet ter than that of the nation’s electric power and light companies as a whole. Nationally the par value of sales in 1926 was sixteen per cent less than in 1925 and even slightly less than 1924. More than ten per cent of the national total was distributed by Byllesby com panies. In explaining the decline in the national customer-ownership fig ures, W. H. Hodge, advertising man ager of H. M. Byllesby and Company and the man who gave the customerownership movement its name back in 1915, recently said, “ the national slow ing down shown in the preliminary es timates of the distribution of public utility securities during the past year through customer-ownership was not Year Ending Dec. 31 1915 1916 1917 1918 1919 1920 1921 1922 1923 1924 1925 1926 No. of shares outstanding 83,867 121,520 139,349 157,478 177,390 203,408 247,419 274,918 340,404 401,675 491,804 558,845 due to any lack of confidence in this plan of equity financing itself, but to two causes: First, the relative econ omy of financing by the sale of bonds, and, second, the desirability of bond financing to equalize capital structures, the distortions, as a rule, being the result of previous equity, or junior fi nancing. Such a tendency may be ex pected to continue in 1927 and to effect the Byllesby companies as well as the majority of others. Financing of any kind except refunding operations obvi ously is limited by capital requirements of any property, and major construc tion activities do not necessarily occur every year. In any event, financing should always seek capital in a man ner that will make the average cost of capital for the total investment as low as possible.” Customer ownership was born of the utilities’ need of money and in recogni tion of the right of “public ownership of utilities” in its true sense, which is ownership by individuals who desire to become partners by investing their sav ings in the stock of the utility com panies. During the post war period when big money went hunting for taxexempt investments or opportunity with greater hazard and possibly large re turns, customer-ownership was a fi nancial salvation for many utility com panies. It provided a means for ob taining capital for necessary expansion when money was hard to obtain. Where a utility company had behind it a rec ord of always giving satisfactory and reliable service, customer-ownership has been the backbone of highly satis factory public relations. A F rie n d ly Contact Between the utility and the stock holder there is presumably a friendly No. of holders preferred stock 1,947 4,126 5,983 7,992 9,857 13,429 18,399 21,800 26,950 34,750 42.627 50,500 Average holding 43.07 29.45 23.29 19.70 17.99 15.14 13.44 12.61 12.63 11.55 11.53 11.06 Mid-Continent Banker 42 contact. However, that does not mean that public relations are solved by the utility by simply making their custom ers shareholders of the company. The customers must be satisfied customers who fully believe that their company is giving the best service that can be economically provided, then customerownership is a real strengthener of public relations. Theirs must be pride in the utility company and its accom plishments, otherwise the fact that a customer is a shareholder may act as a boomerang to the utility in a num ber of ways. It can be readily seen that customer- ownership is bringing about a real pop ular ownership of the public utility companies. By making the customer a holder of public utility company’s stock, it gives him a measure of proprietor ship in the organization and at the same time preserves the fruits of pri vate enterprise by eliminating the deadening effect of political control through municipal or government own ership. This popularization has rendered many activities less costly and difficult; moreover, it has had a pronounced ef fect upon the growth of the public util ity business and has served to attract We maintain active markets in the following issues: Long-B ell Lum ber Com pany first M ortgage 6s. to the industry employes of higher caliber and ability. From the first the public utility com panies pioneering customer-owner ship set out to get as wide a distribu tion of their securities among their customers as was possible. Rather than attempt to sell the so-called capi talist, they sold the wage earner. Such a buyer was the investor most prized by the utility companies; he and the small business man, the clerk, the pro fessional class; the people who most need safety, quick marketability in a pinch; those who value dependable in struction on investments and the culti vation of thrift. It is this quantitative character of customer-ownership that has done so much to bring about an entirely differ ent feeling on that part of the public living out of the financial centers to wards investments and especially pub lic utility investments. Its effect on public utility financing has been mate rially assisted in bond and debenture financing at lower rates of interest. S tren gth en ing W . S. D ick ey Clay M anufacturing Company first M ortgage 6s. D ew ey Portland Cornent Company first M ortgage 6s. Dierks Lum ber & Coal Company first M ortgage 6s. Manhattan Oil Company first Lien & R efunding 6s. W hite Eagle Oil & R efunding Company five-year S. F. 5^2®. Bowm an-H icks Lumber Company first M ortgage 6s. Central Coal & Coke Company first M ortgage 6% s. The Cereals Company first M ortgage OICs. Pickering Lumber Company first Mortgage 6s. Missouri Pow er & Light Company first M ortgage 6s. W est M issouri Pow er Com pany first M ortgage 6s. W est Missouri P ow er Company first M ortgage 6% s. * U niversity o f Missouri Stadium first M ortgage 6% s. A lso Missouri, Kansas and Oklahoma M unicipal Issues. Write for Quotations BO ND D E P A R T M E N T (ommercejrust (ompany7 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Resources Exceed 100 Millions K A N SAS C IT Y Public Relations B'ecause customer-ownership aimed at many citizen shareholders—citizens right on the ground who learn to know the corporation for exactly what it is, who have a proprietory interest there in, and who vote at the polls on elec tion day, the movement has strength ened public relations for the utilities. In certain cities of good size there are companies who have at least one share holder for seven or eight customers. There are cities in the 12,000 to 15,000 class where every fourth user of the service draws cash dividends from the company. If these customer share holders are satisfied with the com pany’s service and believe it is all it should be, such a company need not fear the attacks of misguided dema gogues seeking to destroy it for their own gain. Perhaps the greatest service per formed by the Byllesby organization in the cause of customer-ownership was the development of its democratic char acter and appeal, keeping it going suc cessfully during the war and giving wide publicity both to the subject and the results of the experiments at the Byllesby properties. The first Byllesby property to test the customer-ownership plan, and the second big utility company to give the movement its first trial on a large scale in this country was the Northern States Power Company. In 1915, this company, which now supplies electric ity to a population of 1,890,000, in 505 cities and towns in six North Central states—Minnesota, Wisconsin, North Dakota, South Dakota, Iowa and Illi nois, undertook a systematic effort to St. Louis, March, 1927 43 sell stock directly to its customers. By the first of 1917, 2,774 home sharehold ers were added to the company’s list of security holders. At the present time the Northern States Power Com pany has over 50,000 customer share holders and each year the number in creases. The tabulation on this page shows how the total number of preferred shareholders increased from year to year and how the average holding has declined with the rise in the number of shareholders—a result that the com pany has aimed at from the first. As before stated, the customer-owner ship plan of equity financing added* 17,000 new shareholders to the operated utilities of Standard Gas and Electric Company during the year 1926, raising the total of customer shareholders to approximately 100,000 at the close of the year. These figures include the following companies: The CaliforniaOregon Power Company, Coast Valleys Gas and Electric Company, Louisville Gas and Electric Company, Mountain States Power Company, Northern States Power Company, Oklahoma Gas and Electric Company, San Diego Consoli dated Gas and Electric Company, South ern Colorado Power Company, West ern States Gas and Electric Company, and Wisconsin Public Service Corpora tion. In addition to the 100,000 customer shareholders of the operated compan ies, Standard Gas and Electric Com pany has approximately 40,000 owners of its 7 per cent prior preference, 8 per cent cumulative preferred and common stocks, and Standard Power and Light Corporation has approxi mately 5,000 preferred shareholders. It is estimated that not less than 70 per cent of the employes and executives of.these companies have funds invested in the organizations with which they are affiliated. Following is the result of customerownership sales by years since 1915, when the policy was pioneered and named by the Byllesby organization: Sales Shares* ................................. 326 2,063 ................................. 2,039 11,468 3,30517,001 4,923 24,194 5,723 34,219 ................................. 11,579 62,314 .................................. 15,907 80,010 .................................. 18,992 107,685 .................................. 25,711 130,995 .................................. 35,884 192,842 .................................. 35,677 217,696 ................................. 36,801 250,616 . 1915 1916 1917 1913 1919 1929 1921 1922 1923 1924 1925 l 929 Totals ......................196,867 1,131,103 $100 par value. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis S T A B IL IT Y V E R Y bond sold or recommended by a bank must be a means of enhancing the confidence gained by thoughtful service over a period of long duration. E Of utmost importance to the banker are stability, per manence, reliability— the distinguishing features that determine the soundness of the bond; and further the strength of the house of issue. The high standards of underwriting employed by Krenn & Dato in making loans is such that all the known safe guards characteristic of highest grade first mortgage bonds are employed. Prominent corporate trust com panies serve as trustees; proceeds from the sale of bonds are deposited with the trustee and segregated for the account and uses of the particular building upon which such bonds are issued; payments are made monthly by the borrower on account of principal, interest and taxes direct to the trustee; bonds are certified by trustee and titles are guaranteed. B eyond these safeguards, the borrowers are always o f an excep tional degree o f responsibility and have a substantial investment in the project; the loans are made for conservative amounts against independently established valuations in the case o f construction loans. Ample insurance is carried, and all matters entering into the issue are painstakingly checked and verified b y executives of K renn & D ato — one o f the largest, most complete real estate organizations in the country. Krenn & D ato Bonds, when recommended b y banks to their depositors, further cem ent the ties o f confidence which is the greatest asset o f the bank. Bond Department K R E N N & D A T O , Inc Exclusive Agent fo r Edith Rockefeller McCormick Trust 39 S. LaSalle St. CHICAGO 111 B ro a d w a y N EW Y O R K Mid-Continent Banker 44 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Investm ent Securities BONDS U. S. Government, Joint Stock and Federal Land Bank, Public Utilities, Industrial, Railroad, Foreign. STOCKS Direct private wires to all principal cities of the United States. Listed on all the principal exchanges of the United States. For the convenience of banks and investors, we maintain an active Trading Department dealing in listed and unlisted securities, and a Statistical Department equipped to furnish complete information on practically all out standing issues. Knight, D ysart 401 Olive Street G am ble St. Louis, Mo. GArfield 7790 Members of New York, Chicago and Saint Louis Stock Exchanges St. Louis, March, 1927 45 H ow to Analyze an Electric Power and Light Bond from Its Circular “ MEASURING STICK” to deter mine whether or not an electric light and power bond is sound, and which can be easily and quickly applied to a circular describing such a bond, would be mighty convenient for any investor and especially to a banker. The purpose of this article is to ad vance such a “measuring stick.” A A sure way to start a warm argu ment in the bond business is to sug gest a “measuring stick” for determin ing the soundness of a bond. On one hand it is asserted that there are ruleof-thumb methods which are intensely practical, if not absolutely infallible, in measuring the worth of a bond. Others declare that it is ridiculous even to at tempt to evolve a “measuring stick” on the worth of a bond. Without taking sides as to whether or not there are quick, practical, value-determining rules, there is a middle course which may be followed, and this article pro poses to follow it. There are certain factors and certain relations in every bond circular which indicate the sound ness of that issue. They are not in fallible indices and they do not auto matically grade bonds within narrow limits, but they do grade bonds within wide limits. If the “measuring stick” grades the bond favorably, it can be assumed that an explanation is due from the bond house, and, in most cases, a reasonable explanation can be given. B y A ddison W . W arner Stevenson, P erry, Stacy & Co. formation necessary to judge those points. The circular does give or should give a consolidated income ac count and the capitalization, so any “measuring stick,” to be applied to the circular must be made up from those two factors. Such a “measuring stick” is not going to give a complete ana lysis of the security. As an indication, however, as I said before, it is very useful and convenient. In the public utility industry, the fixed investment, as compared with gross earnings, is so heavy, being ap- Addison W . Warner proximately five to one, that the indus 1. The valuation of the property; try’s operating expenses are more or 2. Any basis for determining the less fixed. In other words, there are stability of earnings of that company; certain expenses incidental to the gen 3. A record indicating the extent to eration of power which are going to which the service is used or could be continue even though that power is not expanded profitably; used and those expenses are heavy. 4. Facts by which the management For that reason, if gross earnings should of the company can be judged; decrease 10 per cent, the chances are 5. Facts upon which a future earn that operating expenses might not be ing trend can be estimated. cut at all; consequently, the full de In addition to all those factors, the crease would be reflected in the net mortgage restrictions, the territory earnings. served and the financial setup must be In leading up to this “measuring considered in judging the soundness of stick,” another factor must be con a bond. That makes at least eight sidered; the difference between a hold points which should be considered. The ing company and an operating com average circular does not give the in- pany. A holding company has one de https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis S afety a Broad T e rm This “measuring stick” to be applied to a circular, is supposed to determine whether or not a bond is sound. A sound bond might be termed a safe bond. Safety is a broad term. Safety for a widow would be much different than safety for a business man. In this case, then, safety is really what might be termed relative safety. A bond barely passing this test would be 1 elatively safe. A bond for a widow would have to pass the test with a wide margin to spare on each of the points. The “measuring stick,” con sisting of five checks, is shown at the top of page 46. It is necessary now to explain the five tests: 1. Balance of gross earnings a fte r all charges, including taxes, availab le fo r depreciation and dividends must be at least 15 per cent fo r a holding com pany and 20 per cent fo r an oper atin g company. W h a t the C irc u la rs Say A few years ago bond circulars in general were very complete. Now in formation given on electric light and power bond circulars may not be so complete. For instance, circulars may not give— cided advantage, its diversification. Some temporary readjustment in one part of the country would not material ly affect the earnings of a large hold ing company, because its properties are scattered so widely from a geographical standpoint. On the other hand, a local dis turbance within the territory of a small operating company might temporarily cripple that company. Consequently, we need two “measuring sticks”—one for a large holding company and the other for an operating company. The balance of gross earnings after operating expenses, fixed charges and taxes of an operating company should be at least 20 per cent. That 20 per cent of gross is available for depreci ation and preferred and common divi dends. The term “depreciation” needs to be explained in this connection. In this case it means depreciation alone and does not contain maintenance. From an accounting standpoint, depre ciation and maintenance are the same thing. The only difference is in time. Maintenance is an expenditure on prop erty which is made definitely each year. Depreciation is an estimated amount set aside yearly to be spent on the property at some future undetermined date. The purpose of both maintenance and depreciation expenditures are to maintain the properties in an efficient and up-to-date condition. As far as test No. 1 is concerned, maintenance is presumed to be part of operating ex- Mid-Continent Banker 46 A / M ' 11Ì ’ 1'31' i' ’ '5 6 7 ' a e a s u rin .g ' ' St i c k 10 ' 11 12 13 1* 15 10 17 1Ö 19 ¿0 21 22 23 2!* 25 26 27 23 29 30 31 32 33 34- 35 T esi N o .4 T eA H cT ) ^ T c -v d N o .2 T k /-i N o .l Ba lance ygross earning F ixe d C h a r g e , / ' Fixed C h a rts m u s t The amount°/bonds in be covered b g n e t cluding all prior liens must m ust n o t a fte r a ll charger, in earnings a t l e a s t - not be m o re th a n e x c e e c iclu d in g taxes, available for depreciation ^dividends 3 0 V g r o s s e a rn in g / 1 h t i m e x f o r a 5 tim e r gross f o r a fo ra H olding Company H o l d in g Company H o ld in g C o m p a n y must beat least1 5 *# * Holding Company 2 5 V grosz e a rn in g s 2 firnes f o r a n 5 tim e /g r o s s fo r an 2 0 ^ Operating Company for an Operating Company O p e r a tin g Company O p eratin g C om pany pense and it ought to run in the neigh borhood of 10 per cent of gross earn ings. It -would be less than that for a hydro-electric company. Depreciation, too should be treated as operating ex pense and depreciation many times is not given on the circular. This “meas uring stick” is to be applied to a cir cular, so we cannot treat depreciation as an operating expense. For the hold ing company, 15 per cent is arbitrarily chosen as the boundary line. All fixed charges of the subsidiaries, including preferred dividends, if there are any, must be included. In short, every thing which is prior to, or equal to the charge being considered, must have been paid and still leave a margin of 15 per cent. Applying only to hydro-electric bonds, the case is rare and it is not fair to raise check No. 3 and require fixed charges to be covered from 2% to 3 times over. That would be unfair to the general run of electric light and power companies because it would set the standard too high. Check No. 2 automatically requires that in those rare cases, interest charges will have to be earned more than twice over. that bond is really unsound in spite of its fancy dressing. operating company. 4. T h e am ount of bonds, including all p rio r liens must not be m ore than 5 tim es gross fo r a holding com pany and 5 tim es gross fo r an operating com pany. T h e Im p o rta n t Point At any rate, the important point to remember is, be sure to consider the total fixed charges of the holding com pany and the operating companies, too. Fixed charges in this class include everything prior to and including the interest on the bonds under consider ation; for instance, in the case of a 3. Fixed charges must be covered holding company it would include pre by net earnings a t least 1 J/2 tim es fo r ferred dividends of subsidiary compan holding com pany and 2 tim e s fo r an ies. The check of fixed charges against net earnings is probably the most com mon single check in judging bonds. Since we are to apply this measuring stick to a circular, it is necessary to M argin of S a fe ty That figure is the margin of safety. explain exactly what is meant by fixed It insures a well balanced financial charges. Many circulars describing structure. It gives an automatic check bond issues of holding companies have mentioned only the interest charges of ion operating ratio when considered with test No. 2 because the sum of the the holding ¡company, neglecting to two checks is the operating ratio. That give the fixed charges of the subsidiary check is also a rough measurement of or operating companies. The result is a possible decline in business which misleading and actually meaningless from an analytical standpoint. It looks the bonds can successfully withstand. 2. Fixed charges must not exceed as if fixed charges were covered by a wide margin, when in reality they may 30 per cent gross earnings fo r a hold be covered by only a small margin. In ing com pany, or 25 per cent of gross most cases fixed charges of the operat earnings fo r an operating com pany. Check No. 2 is necessary only in ing companies and the holding com some cases. Specifically it is neces pany, too, are all paid from the same sary to check hydro-electric issues. A gross earnings. Consequently, we are hydro-electric company might con interested in the relation between the ceivably have an operating ratio as low gross earnings and all of the fixed as 40 per cent. In that case, 60 per charges, not just part of them. We also cent of gross earnings would be avail want to see the relation between all the fixed charges and net income, not able as net and even though fixed charges were covered twice over, the merely the part that may be pinned on bond would not be particularly sound, to the holding company. By disregarding fixed charges of the because any relatively small decrease in gross earnings would be adversely operating companies, it is possible for magnified in the margin of net over in a holding company to show its fixed terest charges. Consequently, fixed charges covered ten times over. That charges must not absorb too large a bond would look attractive, yet that proportion of gross earnings, and in same bond, figuring total fixed charges those cases interest charges would of the holding company and the oper have to be covered more than twice ating company, too, may be barely cov ering its fixed charges. As a result over. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis T e s t N o. 5 The amount Naonds in cluding all prior liens must not be more th a n % tim e r net fo r a H o ld in g C om pany 9 tim e r n e t f o r an O p e ra tin g Company Our fourth check compares the amount of bonds, including all prior liens, with net earnings. It is really similar to our check No. 3, but it is a little finer distinction. For example, a large amount of bonds outstanding with a low coupon rate might show up strong under the third test and yet not so strong under this one. The practi cal working of this test No. 4 will usu ally result in keeping the amount of bonds outstanding between 50 per cent and 80 per cent of property value. In other words, It is working backward to make sure that the amount of bonds is not excessive as compared with the value of the property. Since it is generally considered that a public utility company should earn 8 per cent on its property and since 2 per cent would be a fair measure of depreciation, we can assume that the property should earn 10 per cent before depreciation. Consequently, the full value of the property must be in the neighborhood of ten times net earnings before depreciation. However, most properties are not operating at the maximum of efficiency, so if the amount of bonds for an operating company does not total more than nine times net earnings, we will have the issue out standing to the extent of from 50 to 80 St. Louis, March, 1927 per cent of the property valuation, de pending upon how near to maximum efficiency the company is operating. I have already explained that main tenance has been included in operating expenses. From an accounting stand point, then, maintenance and depreci ation together would come to about 4 per cent. It could be a little higher for a steam property and lower for a hydro-electric company. 5. T h e am o un t of bonds, including all p rio r liens, must not be m ore than 9 / 2 tim es net fo r a holding com pany and 9 tim es net fo r an o perating com pany. The F in al Check Finally, for our last cheek, we com pare the amount of bonds, including all prior liens, with gross earnings. Tem porarily, operating expenses might be unusually high, thus making check No. 4 against net earnings appear unfavor able. If this fifth check against gross earnings shows up favorably, the bond may be in a strong position after all. Of course, it is assumed in that case that the conditions causing the high operating expenses are temporary. If we place the amount of bonds out standing, including all prior liens, at a maximum of five times gross earnings, we have a point to work down from in order to determine the conservative ness of the bond issue. The larger the amount of bonds outstanding, as compared to gross earnings, the lower the operating ratio must be. In other words, hydro-electric companies with their low operating ratios are going to have the largest amount of bonds out standing, as compared to gross earn ings. Those properties can stand a rel atively larger amount of bonds because it is relatively inexpensive to operate the properties. That ends the five checks with which to measure the soundness of an electric light and power bond, from the data given on the average circular. The “measuring stick” must be used with caution because no “measuring stick” can be infallible. The stick can be ap plied blindly and work an injustice. Consequently, the important thing to remember is that if a bond does ap pear unfavorable after applying this “measuring stick,” do not immediately assume that is is unsound, but ask the bond house for an explanation, be cause many times that explanation, and a perfectly reasonable one, is available. Finally, this “measuring stick,” ap plies to owned operating and holding companies. In rare cases one com pany might lease another, showing only net earnings of the leased company on its own income account. In that case the “measuring stick” would not be applicable. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 47 M IC H IG A N BOULEVARD AT W A S H IN G T O N STREET Investm ent Service for Ranks Many o f our correspondent and other banks throughout the Middle West find the services o f the Bond Department o f the Peoples Trust and Savings Bank helpful in the investment o f their funds. Our com plete investment data is available to banks without cost or obligation. Our recommendations to banks are made only after careful consideration o f the individual investment needs o f those banks. Our well-diversified offerings o f sound bonds always include many issues which are especially suitable for bank investment. W e w ill be glad to send circulars and detailed information concerning specific issues o f the types o f bonds in which you are interested or to recom mend a list o f bonds that w ill meet your particular needs. PEOPLES TRU ST a n d SAVINGS BANK ----------------------- ----- O P C H I C A G O ----------------------------EARLE H. REYNOLDS, ‘President Mid-Continent Banker 48 B o n d s T h a t S a tis fy Every R e q u ir e m e n t In bonds of a certain class safety usually means a low return, ju st as a satisfactory return indicates a degree of safety not compatible with your requirements. But Baird & Warner Beal Estate bonds, put out by Baird & Warner, whose seventy-two years of successful, conservative real estate experience qualify them to know true real estate values, offer a maximum of safety combined with a percentage of interest that leaves nothing to be desired as a both safe and profitable investment. As you do not o f ligate yourself b y writing, we sug gest you let us know your requirements, so that we can send you our Investment Plan with authoritative information on bond issues, many o f which may exactly meet your condition. Even if you are not ready to invest right now, it will be helpful to have such information before you. BONDS AND MORTGAGES 134 South La Salle Street https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis CH ICAGO , U. S. A. Phone, Central 1855 St. Louis, March, 1927 49 W hat to Look for in Buying- Real Estate Mortg-ag-e Bonds HE art of successful investment is by no means a simple one. Un fortunately no magic formula is available by which automatically the sound investment may be distinguished from the unsound, the conservative and safe from the speculative and haz ardous. On the surface they have the same characteristics; to the uniniti ated, the facts presented or the claims made in selling circulars seem to be very much alike and are not subject to easy analysis. “It sounded just as good and it yielded a little more,” is the universal plaint of the investor who has been “ stung.” As with most commodities, particu larly those of high cost and where in tangible elements of value play an im portant part, perhaps the only simple guide to the buyer of securities is the character and reputation of the dealer offering them for sale. Most of us when we go to buy a diamond or a fur coat or a painting, seek out a merchant with a reputation and an established clien tele. We feel confident that we can rely upon the quality of his merchan dise and upon the truth of the repre sentations which he makes. We do not ourselves feel competent to make a sound discrimination between the good and the bad and we would not think of throwing ourselves upon the mercies of a “fly-by-night-dealer.” So it is with securities whose value often rests largely upon intangible elements. T Choose Experienced it will, of course, assure itself that the necessary junior money will be forth coming in order to complete the enter prise and also that the earning power of the project is or will be such as to provide an ample “factor of safety”—or in other words, leave a considerable surplus for the equity holders. But it should be clearly understood that the volve a thorough credit investigation by a competent credit department of the underwriting house. Not only must satisfactory answers be obtained to such questions hut the principal borrower must himself have a substantial stake in the enterprise. A second important consideration is the question of location. Is the par ticular site ideal or at least highly suited to the type of development pro posed? What is the trend of develop ment in the given section? Is the new structure in the path of development or is it in an old deteriorating section? Is the district likely to undergo im portant changes during the life of the loan, due to the shifting of business districts, changing transit conditions, development of nuisances, etc., or is it well protected against blight or decay by stragetic location or substantial in vestment or zoning restrictions? Location House. In selecting first mortgage real estate bonds, it is important to select a house of experience. For the ultimate in vestor, the best and easiest guide to the soundness of the underlying project lies in the character of the investment house underwriting these bonds. If that house is an established firm, with a reputation for competence and for fi nancial and moral responsibility, you can reasonably assured that the project is soundly conceived and will probably be satisfactorily executed. This, of course, does not necessarily mean that you can afford to accept any amount or any kind of junior securities with complete freedom from worry over pos sible losses. The first mortgage under writer is interested primarily in the safety of the first mortgage bonds; and you can be assured that a reputable house will use its utmost of experience and of skill to assure that end. As a necessary incident of its efforts to safe guard the first mortgage bondholders, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By S. J. T. Straus, Senior Vice-President, S. W . Straus & Co. S. J. T. Straus first mortgage underwriter as such is under no obligation to protect the hold ers of the junior securities against loss. One of the first considerations is the borrower—the principal behind the deal. What is his financial responsi bility? Will he be able to carry through the project to completion and support the enterprise during the initial operat ing period or other temporary periods when under unfavorable conditions operating losses may be incurred? What has been his past business his tory? Has he had successful experi ence with the erection and operation of similar enterprises in the past? Has he a reputation for carrying out his obligations, Is he resourceful enough to meet and overcome unexpected diffi culties? What of his moral responsi bility? Answers to these questions in Im p o rtan t. This factor of location is of enor mous importance in view of the dy namic character of our modern cities, the tendency of business and residen tial districts shift and the importance of convenence or accessibility in these days of congested transportation. It involves real estate judgment, a com prehensive knowledge of values and trends in the specific city and in other cities, and a certain “intuition” to sense coming developments, which is developed by experience. The ability to select locations shrewdly is what distinguishes the successful real es tate operator from the unsuccessful one, the successful real estate bond underwriter from the mediocre one. If it is decided that a proposed build ing is the right type of development for a given location, the next question is whether a demand for the facilities to be provided exists in degree and at prices sufficient to give an adequate re turn upon the necessary investment. If such a demand exists at the moment, is it likely to persist throughout the life of the loan? If the underwriter is to be able to make sound decisions bearing upon the supply of and demand for various types of building facilities, it must at all times have its lingers upon the pulse of the real estate market through contracts with real estate agents and property managers, frequent reports from buildings already financed record(Continued on next page) 50 Mid-Continent Banker “Select a Good Investment House — Then Follow Their Advice,” says Mrs. Ferguson time she has built a splendid business for her company in her territory and she has made a great number of friends throughout the country through her attendance at bankers’ conventions and through personal calls on her banker customers. She says that the biggest factor in selling bonds is winning the confidence of the customer, and that this is accom plished very easily when you are sin cere in your desire to be of service. She says that she is in the bond busi ness because she likes it and not be cause she expects to make a million dollars out of it—and that she is going to stay in the bond business not be cause it affords countless numbers of new hats, but because she can’t pos sibly imagine doing anything else. B U Y IN G Ora M . Ferguson RS. ORA M. FERGUSON, who has charge of the Louisville office of the Fletcher American Company, has a territory supposedly confined to Ken tucky and Southern Indiana, but she has a large number of women custom ers scattered all the way from Tennes see to New England—some in Mas sachusetts, some in New York, some in Michigan and some in Illinois—all women who have decided that the best way to handle their investment pro gram is to turn their funds over to Mrs. Ferguson and let her do the in vesting for them. Right along this line Mrs. Ferguson has some advice for bankers; she main tains that the banker will get better service and more profit out of his bond M https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis account if he will select one house and for the most part confine his dealings to that house. “If the banker does this,” says Mrs. Ferguson, “ the house so selected will have a finer appreciation of his needs and will be in a position to give him advice that will enable him to make the most profit out of his bond ac count.” Mrs. Ferguson, who is one of the out standing examples of women success ful in business, just happened to get into the bond game. She became in terested in it through various war ac tivities, including the Liberty Loan drives, and liked the work so well that she decided to follow it. In the short space of a few years B U IL D IN G C O N S T R U C T IO N BONDS. (Continued from preceding page) ing the results of their operating ex perience, and periodical rental surveys reporting the vacancies in individual buildings in the various areas in which the firm is loaning money, the amount and character of new facilities coming upon the market, the rentals being se cured for various classes of accommo dation, and any changes in rental rates, in the tone of the rental market or in the character of accommodations de manded. Such rental surveys must be made by the underwriter’s own organ ization. They should be supplemented, of course, as much as possible by check-up with outside experts, but the underwriter operating on a large scale can rarely afford to depend solely upon the judgment of any outsider. Its trained experts’ opinions should con trol the actions of the house. This accurate, exhaustive knowledge of the rental market and of the operat ing experience of existing buildings is particularly necessary, if reliable esti mates of the probable gross revenue, operating expenses and net income of the proposed structure are to be made. The accurate forecasting of net income is, of course, the crux of the problem of successful lending upon real estate. From net income must come the funds out of which interest is to be paid and the principal of the loan gradually amortized. The amount of net income is the only true basis upon which to determine the amount of money which can be safely loaned upon the enter prise. It is, of course, not the only consideration, but no loan, however low a percentage of the cost or value of the structure, is sound unless a con servative estimate of net income will indicate a satisfactory “margin of safety” over the amount of the fixed charges. St. Louis, March, 1927 ■ 51 S8H ^S^ Ëllsl Investment Suggestions for March a s iü M UNICIPAL BONDS St. Louis, Mo., Waterworks Revenue 4'/4S.Oct. 1, 1934-45 4.125% *Fulton, 111., Waterworks, 5s........................ July 1, 1928-37 4.20% City of Houston, Texas, D. O. 5 % .......................................July 15 6? Dec. 1, 1934-36 4.25% Dexter, Mo., School, 5s...............................July 1, 1933-43 4.40% Tupelo, Mississippi, Separate School Dist., 5s............................................................... Jan. 1, 1928-37 4.60% fv -V t ¡IS fi m iSSf" •ï-2r‘«,Â'Vti. • CO RPO RA TIO N AN D FOREIGN ISSUES City of Montreal, Canada, 20 Year 97.43 4,/2S.................................................. Feb. 1, 1947 Batavian Petroleum Co., 4'/2S Guar 96.25 anteed Debentures.......................... Jan. 1, 1942 ^Missouri Pacific R. R. Co., 1st 6? Ref. “ F” 5s.................................. Mar. 1, 1977 100.00 *Illinois Power 6? Light Corp., First 97.00 & Ref. “ C” 5s...............................Dec. 1, 1956 *State of New South Wales, Australia 96.25 External S. F. 5s......................... Feb. 1, 1957 ^Community Power & Light Co., 1st Coll. 5s............................................ Mar. 1, 1957 ^Electric Refrigeration Building Corp. 1st 6s.................................... Dec. 1, 1936 100.00 REAL ESTATE ISSUES *Ch. of Immaculate Conception (M aplewood), 1st 5s................................................ Oct. 10, 193’ *St. Aloysius Catholic Church, St. Louis, 100.00 1st 5s.......................................Dec. 15, 1936-38 *Ursuline Convent 6? Academy, St. Louis, 1st 5s............................ Jan. & July 1, 1931-32 100.00 *St. Margaret’s Hospital, (Hammond, Ind.), 1st 5J4s.........................................Apr. 1, 1938 100.00 ^Trustees of Broadway M. E. Church, Indianapolis, 1st 6s............... Sept. 1, 1928-31 *Southern Realty Corp., 1st 6 s . .. Sept. 1, 1928-46 °— $100 Denominations *— $500 Denominations. All Offerings M a d e Subject to Prior Sale or Bond D epartm en t Change in 4^Vi 4.70% 4.85% 5.20% 5.25% 6.00% 5.00% 5.00% 5.00% 5.25% Price Second Floor Annex iS tiS I https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1v ' ■ n a i l ü ü » iip a s fe itìlis i Mid-Continent Banker 52 The Advantage of Real Estate Bonds A Banker Seldom Gains the Confidence of His Customer by Giving Him Advice That W ill Curtail His Earnings HE recent survey conducted by the MID-CONTINENT BANKER shows that bonds are becoming increasingly popular as investment for surplus funds of banks. One reason for this is probably on account of the unfortunate position of farm securities the last few years; another being the greater understanding among bankers of the advantages of bonds. To my mind, the bond is the most practical investment for the banker. It enables him to diversify the bank’s investment among the various classes T By J. U. Menteer, President, Fidelity Bond and Mortgage Company of securities and spread his invest ments over practically the entire coun try and even into foreign fields if de sired. This diversification guarantees against losses of any magnitude caused by failure in any one community or of any one class of security. I know it is argued that the local bank must support its own community, which is true, but after all cannot the bank U R sh orts term obligations h a ves been pu r chased by more thans y ooo banks in the U nited States. G eneral M otors A cceptance Corporation Executive Office https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis - 2 .5 0 WEST 57 th ST. / Capital, Surplus & Profits • N e w York C ity Undivided $3 6 , 4 1 8 ,0 00 .0 0 better support its community by as suring its own solvency first and at the same time foster the interchange of its resources with banks in other com munities? It is gratifying to see this large in crease in bond investments and, being engaged exclusively in the real estate bond business, the question naturally presents itself as to what percentage of the bank’s surplus should be in vested in real estate bonds. While those of us in the real estate bond field, from a business standpoint, would like to sell all banks’ surplus in our bonds, still I do not believe any of us are so selffish or blind to the interests of bank and public to believe that it should be done. But we do believe, and I think rightfully, that a fair per centage should be in our class of bonds. The amount must necessarily depend to a large extent upon the character of the bank’s business. If the bank is mostly commercial and its loans are seasonal, which calls for a large amount of funds, say twice yearly, to take care of its regular business, then I would say its largest investment should be in government and listed bonds and securities, but on the other hand if the bank is largely savings, then by all means a very large per centage should be in real estate bonds. In the one case, the bank is liable to be called upon every few months to convert its surplus into cash and there fore should favor the low yield, quick convertible security; while in the other case, there is small chance of needing cash quickly; hence, better yield is highly desirable. The first class can afford to sacrifice yield for convertibil ity, but the latter has no need of quick convertibility. Between these two is a large class of banks with a steady busi ness, and they should distribute their holdings as seems best to meet their needs, diversifying between all classes. While all real estate bond houses maintain a market for their securities, the real estate bond is essentially an investment to maturity. That is the main reason for its greater yield. But its market is sufficient for all practical purposes and will meet any ordinary emergency. I have in mind a bank that closed its doors. It happened to have quite a few of our bonds. They sent them in to us and received immediate cash for them. They cashed up other S t. Louis, March, 1927 securities and have notified all de positors to come in and get their money. This was an emergency they did not torsee when buying, but they found our bonds in this emergency quite as liquid as any other securities. Our experience has been that too many bankers follow the line of least resistance in their own investments, as well as in their recommendations to patrons, and do not of themselves in vestigate the different offerings and the houses of issue. The banker has a moral duty to perform in connection with his advice to the public. He is looked up to in his community as being the embodiment of all wisdom in con nection with investments and his ad vice is followed implicitly. If he could see himself as some of us see him, probably he would not be so proud of himself. The average banker has heard some place, probably from a salesman of a brokerage house, that real estate bonds are not good, and he does not take the trouble to use his available means of investigation to verify the truth of same. Very often when one of our men approaches a banker, the following dialogue takes place: “Not interested.” “Do you know our company?” “No, not interested; don’t like real estate bonds.” “ Have you ever bought real estate bonds?” “No, don’t consider them safe and have no market.” “Do you know that real estate bonds have a better record for safety than any other class of security except per haps government bonds, and they do have a market for practical purposes?” “Well, no, can’t say I ever investi gated, but I buy all my bonds from soand-so and they are good people.” “ Yes, they are good people, but have you ever thought you might increase your yield, preserve your safety and di versify your holdings?” And so on. The point I desire to bring out Is that the banker is too often content to follow old habits and not keep himself abreast of the times. Investments and investment methods change with the times like other business and the bank er owes it to himself, his bank and his customers to keep informed so as to be able to give worthwhile advice to his customers. It does not take a smart banker to tell a customer he had “ bet ter keep his money in the bank” or “if you want to take your money out buy Liberty Bonds and you won’t lose your money.” This may be good advice to lots of people, but telling this to the customer fails to satisfy him. (Continued on page 85) https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 53 T h e a n d th e G r e e k *-l) E x p a n d i n g C ir c le — the guide to safety and the distinguish ing mark of security in Bank Investments. The Cities Service Company is a part of America’s 16 billion dollar public service industry and is fundamental ly more stable in every respect than the average industrial enterprise. As a bank investment, its securities are protected by assets in excess of $609,000,000—the physical value of holdings in over 1 0 0 subsidiaries of the company. To this is added also, the feature of “ Salability,” wherein a nation-wide market and a steady demand assures a quick turnover. W r i t e f o r B o n d a n d N o t e O ffer in g s SECURITIE^ADipARTMENT Henry L Doherty & Comp any H om e O ffice: 60 W all Street New York St. Louis Office: 901-04 B o a tm en ’s Bank Building Phone G A rfield 4143-44 54 Mid-Continent Banker with more than double real estate security OST investment authorities consider a mortgage of 60% to 66%% of the propertyvalue as conservative. The first mortgages behind S E C U R I T Y BONDS average less than 42% of the value of com pleted, fee sim ple properties. The value of each prop erty is determined by three sep arate appraisals. M w ith a $39,800,000 surety guarantee As additional security, payment of principal and interest on each mort gage is guaranteed uncon dition ally by the Maryland Casualty Com pany, with capital and surplus of $10,500,000 and total resources of $39,800,000. The guaranteed first mortages are deposited with the Maryland Trust Company, Balti more, Md., as Trustee. legal investm ents for national banks on SECURITY BONDS measure up to national bank requirements, and thus are highly desirable also for individual investors. The yield is 6%, plus a refund of any State tax up to 5 mills. $100, $500, $1,000 de nominations. 1 to 5 year maturi ties. Write for the new illustrated booklet about SE C U R IT Y BONDS REINHOLDT &COMPANY Investment Securities B o a tm e n ’s Bank Building GArfield 4082 St. Louis, M o. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Olive S tr e et Notes T h e m any frie n d s of H e n ry M. T e n James F. Quigg, fo rm e rly m anager of ney, who has been advertising manager of the First National Company, the in vestment division of the First National Bank in St. Louis, for several years, are congratulating him on his appoint ment as assistant loan officer of the First National Company. Mr. Tenney is well known to many bankers and in vestment men throughout the country due to his active work in the Financial Advertisers’ Association. the municipal bond division of the Mis sissippi Valley Trust Company, has been named assistant bond officer. Mr. Quigg has been with the Mississippi Valley Trust Company since 1921. His first work was as representative of the company’s bond department in Chicago. Later he was transferred to Kansas City and finally brought to St. Louis to handle municipal issues. George D. Breen, fo rm e rly of Strea- ney, St. Louis manager for Bonbright & Company, Inc., are glad to learn that he is fast recovering from a re cent operation performed at St. John’s Hospital. Mr. McCourtney has been confined to the hospital for several weeks, but is now well on the road to recovery. T h e m any frie n d s of J. S. M cCourt- tor, Illinois, has been appointed St. Louis representative of A. G. Becker & Co., with offices in the Boatmen’s Bank building. T h e F. H. S m ith Com pany, dealers in first mortgage real estate mortgage bonds of their own origination, have opened a St. Louis office, in charge of Arthur Fuller in the Boatmen’s Bank building. The home office of the F. H. Smith Company is in Washington, D. C., and branch offices are maintained in New York, Chicago, Philadelphia, Boston, Pittsburgh, Buffalo, Minneap olis and Albany. Mr. Fuller, the new St. Louis manager, was formerly con nected with the St. Louis office of the Adair Realty and Trust Co. He came to St. Louis from New York in 1923. Isaac H. O rr, president of the St. Louis Union Trust Company, affiliated with the First National Bank and the First National Company, has been elected a director of the Securities In vestment Company. Arnold G. S tife l, to g e th e r w ith his charming wife, has hied himself off to the Argentine country for an extended sojourn. His trip, we are advised, is largely one of pleasure, but those of us who have watched his success in LatinAmerican Republic financing in recent years, look for more than a postal card greeting ere his return. Stifel, Nico laus & Co. started in business in 1890, and in addition to the executive offices in St. Louis have offices in New York and Dallas. K n ig h t, D ysart & Gam ble, Lage Im p ro vem ents on the new Stock Ex change building at Fourth and Locust streets are going forward rapidly, and it is expected that it will be ready for occupancy by the middle of the month. The entire building is being made ready for a gala opening. Clarence Gamble, Harry Stix, Ray mond Denyven and others now have under advisement a program that will tell St. Louisans that the stock ex change is keeping pace with the de velopment of the city. President W. H. Bixby has announced that a hand some sign will adorn the Fourth street front of the building. T. C. Tupper has succeeded A. E. Brooker as president of the Securities Investment Company. Other officers were re-elected. The company is capitalized for $500,000 eight per cent cumulative preferred stock and 40,000 shares of no par value common. Charles S. Blood, who last June was appointed St. Louis manager of George M. Forman & Company, has been elected assistant vice-president of the company, and will continue in charge of the St. Louis offices. Mr. Blood is a grandson of Captain Sullivan Blood, who came to St. Louis in 1817, and was the second president of the Boatmen’s Bank. & Co., and Hemphill, Noyes & Co., re cently offered 60,000 shares of con vertible preference stock of the Thatcher Manufacturing Company, the largest milk bottle company in the United States. The stock was of no par value and was priced at $45 per share to yield 8 per cent. H erm an C. S tife l, of S tife l, Nicolaus & Co., and Walter W. Smith, vice-pres ident of the First National Bank in St. Louis, have been added to the board of directors of the United Rail ways Company. Both men are promi nent in St. Louis banking and busi ness affairs. St. Louis, March, 1927 55 A New Basis for Money Values By T. S. Clayton, Vice-President of the Fidelity Trust Company, Detroit, Michigan NYONE who has had occasion to follow the bond market closely for the past several years cannot be other than impressed by the rather steadily declining rates for money. The past year has been particularly event ful in this respect. Prices in the invest ment market, not only of securities of standard grade but also of issues which are commonly classed as second-grade, have shown a consistent advance until they stand today at their highest level since the war. There are many ex planations for this rise. First and fun damentally, there is the enormous in crease in the wealth and income of this country. According to the nation al bureau of economic research, the total “ current income” of the people ot the United States rose from about $62,700,000,000 in 1921, to nearly $89,700,000,000 in 1926. This enormous in crease in national income has naturally resulted in an even greater correspond ing increase in the surplus available for investments, accounting in a large measure for the exceptional buoyancy which security prices have continually shown. Then, too, there is the fact that the fund for investment has been increased by the release of a large amount of capital which before the war was in fixed and, in many cases, in non-pro ductive assets. Add to these reasons the debt reduction policy of our Gov ernment, the general prosperity of business, the increasing stability of Europe, the strengthening of working capital positions, the shortage of new issues in comparison with the demand, and what is of no small import, the growing acquaintance of the American people with investment securities, and this tendency toward higher levels in security prices, or smaller yields on investments, whichever one may care to term it, is very satisfactorily and easily explained. A Low In te re s t demand for money became even more insistent and acute. In the depression period of 1920 and 1921 it was not diffi cult to find a working place for sav ings at 7 and even 8 per cent. Borrow ers had to have money to weather the storm period and they were quite will ing to pay high for it. But that bor rowers realized the high rates of the reconstruction period were only tem porary is evidenced by the fact that into many issues of that time call pro visions were inserted, giving the bor rower the right to pay off his debts within a specified period by paying a premium on all bonds called. Conditions have changed very dras tically since 1917. When the United States entered the war, a great part of the world was employed in destroying capital. There was demand without equal for money and the things money would buy. Naturally, the price of money soared. How great was the de mand for capital then can be judged from the fact that United States Gov ernment bonds, the safest security in the world, which had sold but a few short years before at a price to yield less than 2 per cent, were issued at 4y2 per cent, to drop later to as low as 82. With peace and the readjustment the Within the last five years we have seen a speedy return to what is called normal. Our corporations have thrown off the burdens of war and depression; many of the high interest bearing is sues have been called and replaced with others bearing a lower interest rate; production and consumption have continued at high levels; prosperity has been widespread, and each year we have marked up an increasing surplus of capital. What is more important, our proportion of saved earnings has increased annually and these savings, partly because of the financial educa- The Dem and fo r Securities T . S. C layton , th e author of the article on this page, says th at our return to low yields follow ing th a t prevailed the rates im m ediately after th e war is explained by the fact th a t our return to a h igh , p eace-tim e production rate Rates There is no need to point out or to explain this depression of bond yields to bankers or to those who are in daily contact with investment securities and their markets. But there is such a ne cessity in the case of thousands of American investors, who were brought up on the high yields of the war and post-war days. Many of these inves tors had their first acquaintance' with corporation bonds in the high-interest period. They easily found dependable https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis issues bearing as high as 7 per cent, some as much as 8 per cent, issues that were bound very closely to valuable properties. They saw an apparently in satiable demand on the part of borrow ers for money and a willingness to pay high for it. And, in view of their in experience in the money markets, it is but natural that they should find it diffi cult to understand today, under changed conditions, why their return should be cut down as much as 2 and 2y2 per cent, and that they should remain blind to the fact that the day of high money rates is past, for a number of years at least. He is w ith ou t precedent. says, “ Today’s m oney- worth is dictated by present econom ic con dition s, and even a cursory study of these conditions will m ake evident th e fact th a t m on ey today is receiving very fair w ages.” T . S. Clayton Mid-Continent Banker 56 tion spread by the Liberty Bond drives and partly because of the attraction of the former high interest rates, have come into the money markets in greater amounts yearly. Today we are experi encing a new set of investment condi tions in this country, and not the least among them is the growing investment demand over investment supply. In 1926 the new bond and note issues of fered to the American public amounted to more than $7,000,000,000. Financing in the first two months of this year has climbed to new high records for any like period. Yet in the face of this constant stream of new issues high prices for both listed and unlisted bonds continue to hold. There is but one answer to this situation. Our great surplus of capital available for invest ment, the improved conditions of busi ness and industry and the growing con- tact of the American people with the forms of intangible wealth have ef fected a fall in the return on capital. T h e T re n d of M oney Rates Today, for these very obvious rea sons, money is not worth what it was in 1920 and 1921. Money generally to day, employed safely and productively in the highest grade securities, is worth less than 6 per cent. As a reflection of the continued ease in money rates, the yield on 15 high grade public util ity bonds at the end of 1926 was less than 5 per cent. In 1921 tnese bonds sold to yield 7 per cent. Fifteen rail road bonds which showed an average yield of close to 6 per cent in 1921 were selling to yield less than 4.5 per cent at the close of last year. This drift to lower yields has been evident through out practically the whole investment list. Today a six per cent return on a Water Company Securities T h e underlying obligations o f privately ow ned W a ter Com panies have earned a high standing am ong public utility investm ents. In m ost instances, the regulation o f these W a ter Com panies is under the supervision o f public util ity com m issions. T he service w hich W a ter Com panies supply is vitally necessary to the life o f every com m unity and its demand is therefore practically constant. T he plants and equipm ent of W a te r Com panies are subject to a m inimum o f depreciation— far less than is the case in any other branch o f the public utility industry. W e are ofifering a num ber o f underlying bonds of well established W a ter Com panies at prices to yield from 5.20 to 5.70%. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A n in te r es tin g b ook let o n W a t e r C o m p a n y B o n d s w ill be s en t o n r eq u est w ith o u t o b lig a tio n P. W. CHAPMAN & CO.,INC. 170 W. Monroe St. 42 Cedar Street CHICAGO NEW YORK S t. L o u is O ffice : 1103 B oa tm e n ’ s Bank Building Telephone GArfield 3840 St. Louis quickly marketable, high grade security is the exception rather than the rule. Further, if prophecies are to be con sidered seriously, there will be nothing to disturb the investment market for some time to come; rather, future con ditions will tend to intensify the ten dency toward lower yields. While the investment market has advanced mate rially in the last six years, prices are still below what they were in the early part of the century. There is nothing strange or unusual in all this picture. The history of money-worth, or interest rates, for the last 500 years has shown a decline in rates after every great war. If our return to low yields has been more rapid than history records, it is be cause our return to a high peace-time production rate is without precedent. And so it is that investors must make up their minds to accept a lower re turn from their working dollars from now on. The price the world puts on money in safe employment today is somewhere between 4% per cent and 6 per cent. These are not the rates of 1900 when a return of 3 per cent or less from safe investments was not uncom mon. Nor are they the rates of the days immediately after the war, when it was quite easy to get a return of 7 per cent or higher on well-regarded investments. Today’s money worth is dictated by present economic conditions and even a cursory study of these con ditions will make evident quickly the fact that money today is receiving very fair wages. F . H. Smith Company Opens Offices in St. Louis The F. H. Smith Company, an invest ment house dealing exclusively in real estate first mortgage bonds, has opened a St. Louis office in the B'oatmen’s Bank Building. B. Bryan Pitts, chairman of the board of The F. H. Smith Com pany, is a member of the committee recently appointed by Franklin D. Roosevelt, which is now making a na tion-wide survey of the real estate bond business. The other members of the committee, of which Mr. Roosevelt is chairman, are: S. W. Straus, Edgar M. Greenebaum, Edward Sonnenshein and W. J. Moore of Chicago; J. Ulmer of Cleveland, and Judge A. L. Murphy of Detroit. The F. H. Smith Company was founded in 1873 and has its main office in Washington, D. C. The com pany also has offices in New York, Philadelphia, Boston, Pittsburgh, Buf falo, Albany, Chicago, Minneapolis and St. Louis. Arthur Fuller is the man ager of the new St. Louis office. St. Louis, March, 1927 57 W hy Railroad Securities Have Again “Come Into Their Own” ROM comparative poverty, receiv ership and the verge of bankrupt cy to prosperity, financial inde pendence and affluence—such is the “ about-face” of many of the great rail road properties of the United States in the past ten years. A brief decade spans the receivership of three of the four leading railroad properties con verging at St. Louis—the Missouri Pa cific, Missouri, Kansas & Texas, and Wabash roads. This does not by any means include other roads at one time or another under the jurisdiction of the court, including the Chicago & Al ton, Chicago & Eastern Illinois, Illinois, Toledo, St. Louis & Western, and others. As one wag expressed it: “The rail roads were not in the hands of their bankers—they were in their arms!” Whereas for years railroad securities (even the choicest mortgage obliga tions) were at times referred to as a “ drug on the investment market” and only quality liens of the highest type commanded instantaneous attention, to day the spectacle is afforded of an in vestment public clamoring for junior securities of trunk-line properties. Even common stocks are being accorded the fullest recognition and apparently their worth has an irresistible appeal—for several important and momentous fi nancial operations have but recently been successfully concluded, involving an actual oversubscription for railroad common shares. What a far cry it is from the days of Daniel Drew and Jay Gould! And how those erstwhile Titans would rub their eyes could they behold today’s happenings! A logic of events of course brought this about. Here are the “high spots” in the sensational “ come-back,” or re turn to favor, of railroad securities: First: Rehabilitation of properties after the abnormal conditions experi enced during the World War period. Second: Restoration of operating ef ficiency to pre-war standards and in stallation of improved methods of train loading and other important advances in transportation skill. Third: Readjustment of the labor factor. Fourth: Reduction in inventories, top-heavy in some instances. Fifth: Building up a strong cash and credit position, which experience through enforced economies showed to be the part of wisdom. F https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By F. Richards, Bowman 8s Co., St. Louis Sixth: Sharing a measure of the larger earnings resulting from forego ing constructive measures with the stockholders. Seventh: Favorable! realignment, from standpoint of future earning power, of numerous situations through proposed consolidation plans under Transportation Act of 1920. Eighth: Possibilities of further fa vorable developments in final adjudica tion of valuations of railroad properties in the United States and the realiza tion that, from standpoint of intrinsic value and future worth, many railroad properties are quoted at below such final certificated valuations. These, briefly, are the contributory causes to the bringing about of per haps the greatest market for both rail road bonds and stocks—principally the latter—in the history of American fi nance. It may be worth while to contrast, for a moment, the prevailing market with previous great periods of activity in the “rails.” In 1906—which marked STABILITY A well diversified list of bonds lends slability to a bank. Local businesses, by the law of averages, must have their years of prosperity and years of depression. Local credit conditions likewise must vary. Sound bonds, however, remain the same. Their fluctuations are negligible, and the interest payments are regular. They are easily and quickly converted into cash. Good bonds are stable and lend their stability to the bank that owns them. Our current offering list of Southern munici pals contains some attractive issues. M ay we send you a copy? Caldwell & Company Southern Securities 1 1 7 North Fourth Street St. Louis, Missouri OFFICES IN PRINCIPAL CITIES 58 Mid-Continent Banker rC(5^--------------------------------------------------------------------------------- — —--------¿e)?;,w 9 com p lete and reliab le in v e stm e n t service that has attracted and held the patronage o f m ore than five hundred Indiana banks. Fleiclier American Coinpanif DETROIT INDIANAPOLIS oAffiliated with T h e Fl e t c h e r A m e r i c a n NATIONAL BANK 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis LOUISVILLE the culmination of the greatest rail road “ bull” market up to that time— prices of railroad shares rose until they sold at 15.2 times the roads’ incomes. Whereas recently, in spite of a steady appreciation as concerns shares, they have sold at better than 10 times the roads’ incomes. On account of wider diffusion of own ership of securities than in any previ ous era, the steady and sustained in crease in prices of both senior and junior securities of American rail road securities has had marked na tional influence. Some of the recent evidences of this interest are typified by the offering by a single banking house of $95,000,000 railroad bonds and over subscription the same day, the repeated unfilled demand for railroad shares, spectacular advances in securities of various transportation units included in new “deals” and the abundance of credit for any common carriers requir ing capital either for improvement, ex tension or refunding purposes. An idea of the contrast this picture presents to those roads engaged in add ing thousands of miles to existing trackage is to be gained from the recol lection that at one time during the period of 1912 to 1916 railroad mileage in the entire United States increased at the rate of less than 500 miles per year! To this generally higher standing of the American railroads should be add ed, finally, a tribute to those keenminded and far-sighted executives who have earnestly labored to bring about a better understanding between capital, labor and the consuming (or traveling) public. Among such leaders are to be mentioned C. H. Markham of the Illi nois Central, L. W. Baldwin of the Mis souri Pacific, and J. M. Kurn of the Frisco Lines. And there are a number of others. For the patient and confident owner of railroad securities 1927 thus far has indeed been a year of grace. For the American people seem at last to have awakened to a realization that they really have the greatest transportation system in the world, run by the best operating “talent” to be found any where. H ilyard Resigns as Officer of Philadelphia Girard Harry L. Hilyard, an assistant vicepresident of the Philadelphia Girard National Bank, has resigned. Mr. Hil yard had expected to study engineer ing before he entered the banking field, and he is retiring from the serv ice of the Philadelphia Girard to return to that profession. He will complete his engineering course at Cornell. St. Louis, March, 1927 59 W ho Is Your Investment Banker? I F YOU were asked this question https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis B y W m . F. Dowdall, Geo. H. Burr & Co., St. Louis self correctly as to whom your invest ment banker is. Please don’t misinterpret the idea that the writer is attempting to convey. In most all cases your dealings are un doubtedly with reliable and responsible houses and the ’ thought that should come from your assimilation of the foregoing remarks is only to inform yourself correctly regarding your in vestment banker. When considering the offering of a bond consider also the dealer who has put this offering be fore you. As he is responsible for the necessary safeguards surrounding the security offered and is in reality acting as your investment counselor—buy ing bonds for you rather than, a sales man, selling bonds to you. It is evident from available informa tion at this time that the banker in rural communities is playing a more important part each year in the distri bution of investment securities through out the United States and as this seems to be the trend it is therefore vital that you inform yourself not only re garding investment dealers but invest ments in general. Even the most conscientious invest ment dealer is human and, while his vision at the time the original offering of the security is such that he feels the future is sound for that particular industry, it sometimes happens that unforeseen occurrences take place and by reason thereof alter the desirability of the investment in question as re garding its future value. In closing it would be well for you to consider the advisability of obtain ing current information as it is avail able on bonds which you have pur chased. For example, you buy a bond today on the basis of the present con dition of a company and its past per formance. It is, therefore, logical to assume that you will be more interested in the condition or progress of this com pany six months or a year hence than you are at the time of your original in vestment. Such information should come to you automatically from the dealer through whom your purchase is made. However, if such is not the case, it should be part of your invest ment program to get such information and analyize it as to its effect, one way or another, on your investments. Securities Quality Plus Marketability Moody’s Rating Issue AAA Batavian Petroleum Co Deb........... AAA State of Missouri................ AAA Detroit, Mich., School................ AAA St. Louis City W. W. Revenue............. AA Boston Consolidated Gas Co. Deb___ AA Province of British Columbia, Can... AA A A A BAA Rate Maturity Price 4y2% 1/ 1/42 9614 4 % 11/ 1/36 100 3y2% 1/16/35 9614 m % 10/ 1/38 101 5 % 1947 103 4y2% 6/29/45 96.29 Aluminum Co. of America............... 5 % 3/ 1/52 100 Argentine Government Ext............. 6 % 2/ 1/61 9814 Chicago & Northwestern R. R. 1st Ref. 4y2% 5/1/2037 95 Ohio Power Co. 1st & R ef............. 4y2% 6/ 1/56 Mkt. Missouri Pacific R. R. 1st & Ref.. 5 % 3/ 1/77 100 General Motors Corp. Pfd Stock... 7 % 120 W A L D H E IM - P L A T T O O it would probably not be difficult to answer and in a great number of cases the answer would probably refer to several houses through whom the majority of your purchases are made. In your community, there are a num ber of prominent citizens—the number depending on the size of the community —with whom you are familiar and should the writer of this article walk into your bank and ask you who one of these men were your answer would immediately bring to your mind your impression of this man. He is honest, capable and successful, as the case may be. These attributes are synony mous with your mentioning his name. Consequently when you answer the question which forms the subject of this article there should come to your mind a corresponding number of char acteristics as regarding your invest ment banker. Since the war and since the time when the Liberty Loan campaign made the buying of bonds more of an every day occurrence, there have been a great many investment houses formed. The figures, which would indicate the num ber that are in business today as against ten years ago, would probably be more convincing. They are, how ever, not at hand and it will suffice to say that there has been a tremendous increase. Who are these dealers—and, not only what is their financial responsibility, but to what extent does their integrity enter in to the investment advice which they are broadcasting daily? You, as a banker, are alone responsi ble for the result of your purchase of bonds and not alone this, you are un doubtedly asked quite often to advise a client of your bank regarding some contemplated investment. Such being the case—don’t you think that you owe it to yourself and to your clients to in form yourself in a material way as to the qualifications of the investment house or houses with whom you are dealing? If the writer’s anticipation of the trend of your thoughts at this time is correct, you probably are thinking of the firm through whom you have purchased the majority of your bonds or investments. You feel they are prominent and reliable. Possibly be cause you read their name often in newspapers and periodicals and pos sibly because you have informed your self to an extent that you are willing to accept their advice regarding such matters. If the latter is not the case you should immediately inform your- Yield 4.85% 4.00% 4.10% 4.14% 4.77% 4.80% 5.00% 6.10% 4.85% 4.95% 5.00% 5.80% In c . ST. LOUIS, MO. Merchants Laclede Bldg. GArfield 4877 iiiimiiiiiiaiiiimmiiDiimmminmmiMiicimimimiDimmiminimiiigminiiiiiiiiiiitcmiiiiiimiDiiii Mid-Continent Banker 60 Some Facts About the Ice Industry— A Public Necessity I N the opinion of those who have By H. R. Walton made exhaustive investigations, the Sales Manager, Hoagland, Allum & Co., Chicago and New York manufactured ice industry is on the threshold of a period analogous to the of ice in the United States was 240 past 15 or 20 years in the electric power pounds-—at present it is estimated to and light industry, and the purpose of be in excess of 715 pounds. this article is to cite a few outstand The gross tonnage manufactured in ing facts concerning the ice business 1904 was less than 10,000,000 tons—in which seem to guarantee its continued 1926 the production was over 40,000,000 growth and greater prosperity. tons. It is estimated by accredited au First let us compare the two indus thorities that this figure will reach 60, tries just referred to. If an investiga 000,000 tons by 1960. tion is made of the factors responsible When we consider the fact that onlj) for the high esteem in which the elec 35 per cent of the homes in this coun tric power and light business is held, it try have provision for refrigeration of will be found that stable earning power any kind, and only 17 per cent of these is the factor of paramount importance. homes take ice during the entire year, What is responsible for this stable it is safe to assume that the future earning power? market for manufactured ice is assured. 1. A steadily increasing demand for Declining O peratin g Costs. its product. Next we have for consideration de 2. Declining operating costs. clining operating costs: 3. Absence of inventory and credit In the manufactured ice industry the extensions. (This is the rock upon cost of production is comparatively which nearly all industrial enterprises small. Water, chemicals for freezing, experience grief.) power and labor are the only items en 4. Absence of competition. tering into these costs. As everyone Any industry in which it can be knows, water is the cheapest com proved that the above conditions pre modity used in any manufacturing vail, can safely be said to have stable process, and. the chemicals are also earning power. purchased in large quantities at low A study of the manufactured ice busi cost. ness will show that the above factors Practically all modern ice plants are are present. Let us take them in order, electrically operated and as their powei first considering the subject of increas is required almost exclusively during ing demand: the day, power and light companies are In 1904 the per capita consumption eager to furnish them power at special 5 10 lb 20 rates as it gives them an outlet for current during a period when there is little demand from other sources. The labor cost is not excessive as comparatively few employes are neces sary in a plant and skilled labor is not essential except for operating plant ma chinery. In the busy season additional labor can be secured at nominal wages. Delivery is one of the principal costs in the ice industry. Through the proc ess of consolidation this cost is ma terially reduced by the elimination of duplicate delivery routes. Next let us consider the factor—absense of inventories and credit exten sions: Manufactured ice companies supply a product which is delivered to the cus tomer shortly after it has been manu factured. As the temperature rises, pro duction of ice is increased. This in creased production can be almost in stantly reduced if weather conditions warrant. In consequence, it is unneces sary for ice companies to carry large inventories. In the spring of the year inventories are considerably larger than normal, but production may be curtailed if expected hot weather does not materialize. The ice business, to a large extent, is on a strictly cash basis. In many of the larger companies the practice exists of selling coupons which, in effect, is payment in advance. In this respect, the ice industry more nearly resembles the electric light and power industry than any other business. 25 30 35 40 ■ ■■■I1I ■ W MILLION TONS MILLION TONS MILLION TONS MILLION TONS MILLION TONS MILLION TONS MILLION T O N ^ ' ■ ■ 1904 ■ 1925 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis M ■ 1 Ê Ê Ê r, Chart showing the growth of the Ice Making industry since 1904 : -V-r St. Louis, Marek, 1927 61 rrrmt t t t t t t t t t t t t t t t t t t t t y, T T h e Last Factor. The fourth and last factor for our consideration is competition: Competition in the ice industry is comparatively limited and as consolida tions take effect in the industry, this factor will decrease in importance. At present we select our own ice man from the two or possibly three dealers tttttttttttt that are serving our community. In many localities we have no choice as there is only one ice manufacturer in the field. The ice industry has already been recognized as a public utility in the state of Oklahoma, in that the ice companies operating in Oklahoma do business under licenses from the cor poration commission of the state and rm rrrrrrg have the same degree of protection from competition as the transportation, transmission and other public utility companies. Last year a bill was in troduced in the New York State Legis-. lature designed to class ice companies with utilities, and other State Legis latures are giving consideration to such regulation. TTTTTTTTTTTTTTTTTTTTTTTTTTTTT IOOO 2000 ICE PLANTS ICE PLANTS 4000 ICE PLANTS 3000 ICE PLA N TS 6000 ICE PLANTS 5000 ICE PLANTS 1 9 0 4 -< 1925 I 1 11111111 i i m i i i n m n i u n u i n m u i n i u i i i i m Chart showing the increase in the number of ice plants since 1904 BONDS ^ S ittin g and Investment S ecurities SHORT TERM NOTES North 8th Street SAIN T LOUIS O r ig in a to r s a n d D is tr ib u to r s o f C h u rch a n d I n s titu tio n a l S e c u r itie s of conservative character to meet the needs of banks, institutions and private investors. A complete list of current offerings will be sent upon request. & Co♦ Incorporated https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis P u b lic U t ilit y C o r p o r a tio n R a ilr o a d a n d M u n ic ip a l In v e s tm e n t B o n d s £ SPECIAL SER VIC E TO BAN K S H* L* Ruppert Republic Bank Building DALLAS 3 16 / 402 Pine Street Co. ST. LOUIS, MO. Mid-Continent Banker 62 On the page opposite you will find a copy of OUR MONTHLY PINK QUOTATION SHEET Containing Information of Interest to Almost Every Banker and Investor A m on g other items this sheet lists: 1. 2. 3. 4. 5. 6. Bid and ask prices of over 450 infrequently quoted stocks and bonds of general in terest. Dividends and interest rates and dates on these securities. Latest quotations on Joint Stock Land Bank Stocks. Brief description of important new bond offerings. A diversified list of over 75 investment recommendations yielding up to 7.84%. A list of important redemptions of bonds and stock issues. MARK C. STEINBERG & COMPANY M e m b e r o f the N e w Y o r k S to c k E x c h a n g e Mezzanine—Boatm en’s Bank Building GA rfield Very well, you say, but how about the mechanical household refrigerating unit that is now being extensively ad vertised from coast to coast? What is going to be the effect on the ice indus try in years to come? Such questions are very logical and just as easily an swered when the situation is thoroughly studied. There seems to be no doubt but what the mechanical refrigerator will be a success, but there is absolutely no dan ger of its putting the manufactured in dustry out of business. As a matter of fact, it won’t even hurt the ice industry and here are a few reasons why it will not: The potential market for the mechani cal unit is undoubtedly limited to per sons with an annual income of at least $4,000. In 1923 there were 1,586,565 in dividuals in the United States or a trifle over 1 per cent of the population with incomes of $4,000 or more, according to government income tax returns. (These are the latest figures available.) The number reporting incomes of $3,000 and over for 1923 was 2,343,000, or approxi mately 2 per cent of the population. If everyone of these 2,343,000 ceased to use ice, what would be the loss to the industry? The average family con sumption of ice is about two tons per year. Of course, the average for the family owning a mechanical refriger ator would be greater, so we might fig ure that 2,343,000 persons using 7,500,000 tons of ice would be lost to the in dustry. According to the best avail able figures it will take at least ten years to sell and install these ma chines, during which time the natural growth of the country will add approxi mately 600,000 families a year, of which at least 50 per cent will require refrig eration, or in ten years 3,000,000 new customers will have been created. We must bear in mind, too, the fact that of the families now using ice, only 17 per cent of them use it the year around, which further illustrates the https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ST. LOUIS 4600 limited potential market for the me chanical unit, as well as the tremen dous undeveloped market for the ice manufacturer. There is no doubt that the mechanical refrigerator is or will be used by the family that can enjoy the luxuries of life, but the great masses of the people will continue to use man ufactured ice during the next several generations. The advent of the elec tric light did not do away with gas. On the contrary, gas consumption to day is ten times what it was in 1890. Nor did the automobile sound the doom of horses, as there are now more horses in the United States than ever before. We all have a tender spot in our heart for luxuries, and those of us who can afford to have these various luxuries will undoubtedly have as many of them as our pocketbooks will allow. But won’t we, for instance, buy an electric washing machine, which certainly is one of the most useful household ap pliances ever invented, before we start our payments on a mechanical refrig erator—which merely replaces some thing we already have in a more eco nomical form? Yet the figures show that the estimated number of electric washing machines in use in this coun try January 1, 1925, was only 2,642,600. Big and Secure Returning to the ice industry, we find that it is both big and secure. Any in dustry with an invested capital of $750,000,000, and yearly sales of over $300,000,000 can be fairly classed as large, and of considerable importance. Lead ing trade authorities agree that the an nual sales of manufactured ice will ex ceed $450,000,000 by 1940. From fig ures of the twenty leading ice com panies, we find that gross earnings for 1922 were 6.3 per cent more than in 1921; for 1923, 12.5 per cent more than in 1922; for 1924, 10.4 per cent more than in 1923, and for 1925 12.6 per cent more than in 1924. In the last twenty years the number of plants has increased from 2,218 to 6,262. The manufactured ice industry until recently has had very little attention. It has been confined to small plants owned and operated locally without much thought of modern manufacturing methods. It is interesting to find at the present time, however, not only a tendency toward consolidations, but a decided move on the part of several of the large public utility operators toward acquisition of ice plants. An analysis of net income as reported by numerous large public utility companies already shows a substantial amount earned from manufactured ice with this branch of the business growing and new plants rapidly being absorbed. The industry is still in its infancy. To more clearly bring out this point I must again refer to the outstanding success of the public utility properties. Before the consummation of the large consolidations, the small local electric light company was either satisfied to go along in its own way, or did not have the knowledge or money to do other wise. One need only look at the pub lished figures to see the enormous growth in the gross business when and after the small properties were brought under the efficient leaders. These re sults could not have been attained if the bankers of the country had not supplied the required capital for ex pansion. You are going to hear a lot about this “lusty giant,” and you will prob ably receive numerous invitations to invest in the securities of ice com panies. Before accepting any of these invitations, it is suggested that you give careful consideration to the following factors: Management, territory served, competition and past record of earn ings. ENVELOPES—For Every Purpose H E C O — C H IC A G O This Folder, issued m o n th ly , will be sent free on request. M ONTHLY Q U O T A T IO N File for future reference. SH EET (See Inside Pages for Quotations) The purpose of this sheet is to furnish investors periodically with markets on securities of widespread interest. Those men tioned herein Include listed and unlisted, active and inactive bonds and stocks and, while the number quoted Is necessarily limited, we will always be glad to furnish, on request, and without obligation, quotations or information on any security in which the investor may be Interested. MARK C. STEINBERG & COMPANY Members New York Stock Exchange, Chicago Stock Exchange, St. Louis Stock Exchange, Chicago Board of Trade M E Z Z A N IN E -B O A T M E N ’S BAN K BRANCH O F F 1C E - J E F F E R S O N BU ILD IN G HOTEL ST. LOUIS GA rfield 460 LISTED AND UNLISTED STOCKS AND BONDS—ACTIVE AND INACTIVE SECURITIES—IN ALL MARKET GA rfield 4600 M A R C H , 1927 Important Bond Offerings of Past Month We describe briefly, or list below, the principal industrial, public utility, railroad, municipal and foreign bonds offered during the month of February. Descriptive circulars, on these or any others in which you may be interested, sent upon request. $95,000,000 M IS S O U R I P A C IF IC R A IL R O A D C O M P A N Y F irs t & R efunding M ortg age 5 % Bonds D a t e d M a r c h 1, 1 9 2 7 . D u e M a r c h 1, 1 9 7 7 . Secured by a first lien on 3,383 miles of railroad, together with termi nal property, depots, etc., issued to refund over $57,000,000 of 6% obli gations and to pay $12,000,000 of notes maturing July 1, 1927, also for improvements and betterments to the company’s property. The rail road’s earnings have shown a steady increase in recent years, amount ing to $24,930,072 for the year ended December 31, 1926, as against total interest charges on entire funded debt of $15,181,261. A p p li c a ti o n $24,000,000 S T A N D A R D P O W E R & L IG H T C O R P O R A T IO N 6 % Debentures D a t e d F e b r u a r y 1, 1 9 2 7 . D u e F e b r u a r y 1 , 1951 The company controls the strong Philadelphia Company, througl ownership of 94% of the common stock, Duquesne Light Company, th Market Street Railway Company of San Francisco, and other successfu public utilities. Net earnings of the Standard Power & Light systen for the 12 months ended November 30, 1926, were $28,659,565, or ii excess of this entire issue. Followed by preferred and common stock having a present market value of over $72,000,000. O rig in a l O ffering P rice 99|/2 and In te re s t, to Y ie ld 6.03% w ill be m a d e to list o n N e w Y o r k S t o c k E x c h a n g e . O rig in a l O fferin g P rice 100 and In te re s t, to Y ie ld 5.00% $3,750,000 L E X IN G T O N U T I L I T I E S C O M P A N Y F irs t & Refunding M ortgage 5 % Bonds D a t e d F e b r u a r y 1, 1 9 2 7 . D u e F e b r u a r y 1, 1 9 5 2 . $2,500,000 C IT Y S T A T E . B A N K B U IL D IN G (C hicago) F irs t M ortg age 6 % S in k in g Fund Bonds D a ted F e b r u a r y 1, 1927 D u e F e b r u a r y 1, 194 ‘ Secured by a direct first mortgage on a substantial portion of the company’s property and by a direct mortgage, subject to a divisional lien on the balance of the company’s property. Issued to refund $3,037,950 of 6% bonds. Both gross and net earnings have shown a steady increase for a number of years with 1926 net income 3.2 times interest requirements. Secured by a closed first mortgage on land and the present 17-stori building and the proposed 23-story addition thereto, located in the Looj District of Chicago on Randolph and Wells Streets. Appraised value o: the property, $4,319,000, making this a 58% mortgage. The groun< floor, second floor and large amount of upper space will be occupied b: the City State Bank. O rig in a l O fferin g P rice 9 6 '/2 and In te re s t, to Y ie ld 5.25% O rig in a l O ffering P ric e 100 and In te re s t, to Y ie ld 6.00% O T H E R IM P O R T A N T B O N D O F F E R IN G S O F T H E P A S T M O N T H O rig in a l O ffering Prices $60,000,000 A lu m in u m C om pany of A m eric a , D e b e n tu re s ............................................................... 5 % Due 1952 @ 100 to yield 40.000. 000 Associated Gas & E le c tric Com pany, C o n v e rtib le D e b e n tu re s ............................. Due 1977 @ 95% . 5!/2% to yield 27.500.000 Republic of C h ile, E x te rn a l S in k in g F u n d ....................................................................... 6 % 1961 @ Due 9 3 /4 to yield 25.000. 000 5 % 1957 @ Due 96/4 to yield 20.572.000 Chicago & N o rth W e s te rn R a ilw a y Com pany, F irs t & Refunding M o rtg a g e .. 4 / 2 % Due 2037 @ 95 to yield 20 .000. 000 In te rs ta te P o w er Com pany, F irs t M o rtg a g e ................................................................... 5 % Due 1957 @ 9 7 /2 to yield 15.000. 000 C ities S ervice Com pany, R efunding D e b e n tu re s ......................................................... 5 % Due 1966 @ 91% to yield 14.000. 000 Republic of B olivia, E x te rn a l S e c u re d ............................................... 7 % Due 1958 @ 9 8 /2 to yield 11.500.000 9334 to yield 4|/2 % Due 1967 @ 11.000. 000 C o m m u n ity P o w er & L ig h t Com pany, Firs 5 % Due 1957 @ 9 5/2 to yield 10.000. 000 T h e J. L. Hudson Com pany, S e rial Notes 5 % Due 1930-1936 @ Prices to yield 10.000. 000 Los Angeles Gas & E le c tric C o rp oratio n, F 5 % 1961 @ Due 9 8 /2 to yield 5.007c 5 .7 57 6.507 5.25% 4.74% 5 .167 5.50% 7.127 4 .7 5 7 5 .3 0 7 4.85-5.02% 5.15% A n a d d itio n a l l is t o f i n v e s t m e n t s u g g e s t i o n s w i ll b e f o u n d o n th e o u t s i d e ba ck p a g e o f th is s h e e t important Redemptions of Bonds and Preferred Stocks This is a partial list. A record of other called issues and drawings is always available at our office to anyone interested. A m o u n t Called Lexin gton U tilitie s Co., F irs t Lien & Refunding 6s, due 1929, 1936 and 1946.................................... Enti E n tire Issues Julius K ayser & Com pany, F irs t M ortgage 7s, due F e b ru a ry 15, 1942......................................Enti E n tire Issue Enti C o m m un ity Pow er & L ig h t Co., F irs t Coll. T r. “A ” 7/> s, due A p ril 1, 1942............................. E n tire Issue C o m m un ity P o w er & L ig h t Co., F irs t Coll. T r. “ C” 6 '/2 s , due O ctober 1, 1933...................... ' E n tE i.n . tire Issue Associated Gas & E le c tric Com pany, Secured 6s, due J a n u a ry 1, 1955............................................... E En n tire tire Issue Issue A lu m in u m Com pany of A m eric a , D ebenture 7s, due O ctober 1, 1933............................... ! ! . ! ! . ! ! EE n tire Issue C h ile Copper Com pany, C o n v e rtib le C oll. T r. Series “ A ” 6s due A p ril 1, 1932................E n tire E n tire Series Illin o is P o w e r & L ig h t Com pany, D ebenture 7s due A p ril 1, 1953........................................................ E En n tire tire Issue C a lifo rn ia P etro leum C orporation, 10-year 6 ^ % Notes, due O ctober 1, 1933......... .. . . . . . E En n tire tire ÌIssue G overnm ent of the French Republic, 25-Y ear E x te rn a l 8s, due Sep tem ber 15, 1945......... $2,000,000 S a a r Basin Consolidated Counties, E x te rn a l 7s, due M arch 31, 1935................................................. $158,500 $158,500 G erm an C e n tral B ank of A g ric u ltu re , F irs t Lien 7s, due S ep tem ber 15, 1950......... ............. $205,000 U n ited Steel W o rk s of B u rbach-E ich-D udelange (A rb e d ) 7s, due A p ril 1, 1951....................................$81,500 S o uth w estern Gas & E le c tric Com pany, G eneral 6s, due N o vem ber 1, 1957.................. .. E En n tire tire Issue Issue C o m m u n ity P o w e r & L ig h t, F irs t C oll. T r. 5/>s, 6s, 6/> s, due 1955, 1950 and 1938.................... E n tire Issues Julius K a yser & Com pany, $8 N o -P ar P re fe rre d S to c k ............................................................................ E En n tire tire Issue Issue C ollins & A ik m a n Com pany 7 % C o n v e rtib le P re fe rre d S to c k ............................................................... E E nti n tire Issue M ay D e p a rtm e n t Stores Com pany, 7% P re fe rre d S to c k ............................................................................ E En n ti. tire Issue S tand ard O il Com pany of N ew Jersey, 7 % P re fe rre d S to c k ................................................... E n tire E n tire Issue Owens B ottle Com pany, 7 % P re fe rre d S to c k ......................................................................................... $3,950,000 * C a ll D ate 4 / 1/27 8 /1 5 /2 7 4 / 1/27 4 / 1/27 4 / 1/27 4 / 1/27 4 / 1/27 4 / 1/27 4 / 1/27 3 /1 5 /2 7 4 / 1/27 3 /1 5 /2 7 4 / 1/27 5 / 1/27 30 Days’ Notice 4 /1 1 /2 7 5 / 1/27 4 / 1/27 3 /1 5 /2 7 4 / 1/27 Proposed redemption, not yet official, but bonds accepted by us now at the call price in exchange for other securities. C all P ric t 1 0 1 -1 0 2 / 107/ 110 105 105 105 110 105 103/ 110 102 100 100 105 105 120 110 125 115 115 Investors should pay p a rtic u la r a tte n tio n to th is colum n, as called securities C E A S E T O P A Y IN T E R E S T OR D IV ID E N D S A F T E R T H E Digitized R Efor D EFRASER M P T IO N D A T E . If a lis t of y o u r holdings is given to us, it w ill be checked con stan tly, w ith o u t o bligation, against advance redem ptions. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MARK C. STEINBERG & COMPANY Members New York Stock Exchange. Chicago Stock Exchange. St. Louis Stock Exchange, Chicago Board of Trade Fast Direct Wires to All Principal Markets. BOATMEN’S BANK BUILDING, ST. LOUIS GArfield 4600—Prompt Service by Phon« -GArfield 48i Q U O TA T IO N S M A R C H , 1 9 2 7 BAN K AND TR U ST C O M P A N Y STO C K S BANK STOCKS American Exchange Natl........... Cherokee National Bank............ Citizens Bank of Maplewood... Clayton National Bank.............. First National, Clayton, M o ... First National, East St. Louis.. First National, Wellston, M o... Jefferson Bank............................. St. Louis National B a n k .......... Water Tower Bank..................... TRUST COMPANY STOCKS Chippewa Trust Company........ Chouteau Trust Company........ Kirkwood Trust Company........ Mercantile Trust Company----Mississippi Valley Trust Co----Mound City Trust Company... Title Guaranty Trust Co........... Union-Easton Trust Co.............. Bid 130 185 120 275 152 420 270 135 190 120 ankers of Milwaukee 140 155 130 175 200 205 155 135 150 135 310 3i Ò 210 170 285 156 130 140 130 3ÓÓ 120 160 125 190 320 120 600 160 225 125 140 162% 125 ÍÓÓ 150 200 200 180 145 140 124 125 425 Ì2Ó 145 210 130 350 200 170 38 Ì75 130 175 115 140 When Payable Book Value Began business 3-22-24.. 130 189 144 211 152 552 283 120 196 127 123 171 125 177 291 151 163 151 117 114 135 132 248 198 168 184 202 145 217 157 148 138 112 471 122 170 118 178 284 127 617 152 175 117 157 158 ChicagoRy.Equip.,pfd.($25par). do common ($25 par)... Cities Service Co., pfd.................. do common ($20 par)... Citizens Finance, pfd. ($25 par).. 161 143 140 127 146 187 132 183 164 147 131 126 376 269 137 148 303 120 221 134 160 142 120 155 127 219 173 180 Le Gear Medicine ($50 par)........ Libbey-Owens Sheet Gl’s($25par) McQuay-Norris Mfg., (no par).. Medart (Fred) Mfg. Co., p fd .... do common (no par).. . . 8* 6 12 J 8 121 lo t 145 265 200 190 350 168 190 145 130 130 140 125 285 200 294 200 165 200 280 155 124 130 West for St. Louis Trust Co............ Digitized FRASER https://fraser.stlouisfed.org JOINT ST O C K Federal Reserve Bank of St. Louis Asked Div. Rate 10 6 10 121 af 121 121 8 12 6 6 Began business 2-27-25.. Dec. annually................... Jan. and July................... June 30 and Dec. 3 1___ Mar. quarterly................. June 30 and Dec. 3 1 . . . . 6 8 12 Mar. quarterly................. 8 lOae 8 81 81 12 8111 6 6 12 4 Jan. quarterly.................. 135 ad 8 20 125 6 201 81 81 135 6 125 150 61 168 135 145 105 91 6 9 6 6 8 12 210 10 155 12 155 6 128 130 6 430 241 290 16 130 9 61 215 June and Dec................... Mar. quarterly................. Mar. 15, quarterly.......... 1% monthly...................... Last 1 X % Jan. 1, 1925. 2 % monthly..................... Jan. quarterly.................. Last 1% Jan. 1926.......... 161 121 8 40 105 Last 1% April, 1924....... Began business 7 -6 -2 5 ... 81 $61 180 6Ì 125 8 165 61 Mar. quarterly................. LAND BAN K STO C KS 14 20 Last paid 1 % 10-1-25 É M ISCELLANEOUS ST O C K S— Continued 105 Community Pr. & Lt., 1st p fd ... Consolidated Lead & Zinc “ A” .. Cons. Retail Stores, pfd., w. w .. . Dalton Adding Machine, common Eagle-Picher Lead. ($20 p ar).... E. St. L. & Inter. Water 1st pfd. Electric Bond & Share, pfd......... Ely-Walker D. G., 1st pfd........... do 2nd pfd........................ do common...................... Emerson Electric Mfg., pfd......... Fidelity Bond & Mtge ($50 par). Frost Lumber Industries, In c .... Fulton Iron Works, pfd ... . . . . . . Geller-Ward & Hasner, pfd.......... Globe-Democrat Pub., pfd........... Godchaux Sugars, Inc., 1st pfd... Hamilton-Brown Shoe ($25 par) Hercules Powder Co., pfd........... Hussmann, Harry L., Rfrg.&Sup. Huttig Sash and Door, pfd.......... do common (no par).. . . Hydraulic Press Brick, pfd.......... Illinois Power & Light, 1st p fd .. International Shoe, pfd................ do common...................... Jaeger Machine (no par).............. Jersey Central Pr. & Lt., pfd___ Johansen Bros. Shoe Co., (no par) Johnson, Stephens & Shinkle___ Kroger Grocery & Baking, pfd... do common...................... Laclede Gas & Elec., pr. lien pfd. Laclede Gas Light, pfd................. do common...................... Laclede Steel Company................ Bid Asked 24 29% 91% 58 18 200 98 14 95 79 35 26 97 107 112 88 31% 105 45 285 58 10% 25 30 92% 59 22 225 101 U% 98 81 37 27 Ü4 18 36% 116 31 100 27% 73 4% 99 108% 165 27% 97 28 53 112 124 98 110 187 165 18 24% 20 133 17% 100 do common...................... Natl. Enameling & Stampg., pfd. National Public Serv. “ A " Com. N. O. Nelson Mfg., common.. . . Ohio Bell Telephone Co., pfd----Pacific Gas&Elec., pfd. ($25. par) Parke, Davis & Co., ($25 par)... Patchogue-Plymouth Mills. . . . . . Pedigo-Weber Shoe, com. (n. p.). Pet Milk Company, pfd............. Piggly-Wiggly Corp., pfd............. Piggly-Wiggly Stores, Class A .... Pittsburg Plate Glass, com.......... Polar Wave Ice & Fuel, “ A ” . . . . Rice-Stix D. G ., 1st pfd............... do 2nd pfd........................ do common (no Dar).. . . 117 108 14% 49% 1% 108 101 85 81 21% 75 70 111 24 137 52 29% 106 90 15 15 235 33% 108 99% 7 $3 6 6ww 8 7 E 8 $5 $1.60 7 108 6 114 7 90 6 32% $lee 107 7 55 8 310 12 62 8 11 100 7 116 7 21 7 37 $3LL 118 7 33 $2.50pp 100% 7 29 $1.50r 75 6** 4% 103 7 109 6 166 $7 28% $2.50 99 7 30 $1.50 55 $2 114 7 127 $2qq 100 7 115 5 188 12kk 175 8m 26% 25 137 19% 102 29 75 do do common (no par).. Middle West Utilities, Prior Lien Missouri-Illinois Stores, pfd........ do common...................... Mo.-Portland Cement ($25 par). Div. Rate 35 118 no 15 50 2% L $2nn 8 $2 7 $2 8 8 80c $2p 7 7 86 7 83 7 21% $1.60 7 8Ò 6 113 7 26 6 139 «2* 59 $4 30 $2.50 110 7 95 8 17 17 245 n on 34% $2.50 no 7 100 7 20% *1.50 PUBLIC U T IL IT Y BONDS When Payable Jan. quarterly Jan. quarterly 50c monthly Monthly Jan. quarterly Not published Feb. 1 quarterly None being paid Jan. quarterly Jan. quarterly None being paid Mar. quarterly Mar. quarterly Feb. quarterly Jan. and July 15 Jan. and July 15 Mar. quarterly Jan. quarterly Jan. quarterly No fixed dates Passed 9-1-26 11-1-23 last paid Jan. quarterly Mar. quarterly Last paid Oct. 1» 1923 26c monthly Feb. 15 quarterly Apr. quarterly Jan. 1, quarterly Jan. quarterly Jan. quarterly None being paid Jan. quarterly % % monthly Jan. quarterly Mar. quarterly Jan. quarterly Mar. quarterly Mar. quarterly Jan. quarterly Mar. quarterly Mar. quarterly June and Dec. Mar. 15 quarterly Jan. quarterly None being paid None being paid No set time Mar. quarterly None being paid Jan. quarterly Feb. quarterly Feb. quarterly July annually Mar. 16 quarterly Feb. quarterly Jan. quarterly Feb. quarterly None being paid Mar. and Sept. 12 Mar. and Sept. 12 Mar. and Sept. 12 Mar. quarterly Mar. 15 quarterly Jan. . uarteriy Jan. and July Jan. quarterly Feb. 15 quarterly Jan. quarterly Mar. quarterly Apr. quarterly Jan. quarterly Jan. quarterly None being paid None being paid Jan. quarterly Mar. quarterly Jan. quarterly Jan. quarterly Rate Alton Railway Gas & Electric.... Alton Railway & Illuminating.. . . Alton Water Company. 1st............ Appalachian Power, Deb................ Arizona Power Co., 1st Mtge........ Associated Electric, Conv.............. Bloomington, Decatur & Champ.. Carolina Power & Light, 1st......... Central Illinois Public Service.. . . Cent. States Elec., deb. with wrts. Central States Gas and Elec. Citizens Independent Telephone... do Ref. & Ext..................... City Light & Tr. of Sedalia, Mo... Community Power & Light “ D ” .. do Series “ B” ...................... do Series “ E " ...................... Dallas Telephone Company, 1st... Des Moines City Railway............. E. St. L & Interurban W ater.. . . do 1st & Ref. “ B” ............. E. St. L. & Suburban, Coll. T r.... E. St. L. Light & Pow., 1st M tg.. Houston Lighting & Pow., 1st lien do 1st lien B ........................ Illinois Electric Power Co., 1st.. . Illinois Pow. & Light, 1st * Ref... Kansas City Railways, 1st Mtge.. do 2nd Mtge....................... do 2-Year Notes................. do 3-Year Notes................. Kinloch-BIoomington Telephone.. Kinloch Long Dist Telephone.... Kinloch Telephone, 1st Mtge........ Knoxville Gas, 1st M tge................ Laclede Gas Lt., 1st Coll. & Ref.. do 10-Year Notes............. do Refunding..................... Middle States Water Wks., 1 s t... Missouri Edison Elec., 1st Cons. . National Public Service Coll. Tr.. Northern Indiana Gas & Elec....... Northern States Power (M inn.)... do Non-conv. Notes.......... do 1st lien & gen’l Mtge.. do 1st lien & gen’l Mtge.. Ozark Pow. & Water, 1st M tge... Public Service of Colorado, lBt.. . Public Serv. Co, of No. 111., 1st... do 1st Lien ......................... St. Clair County Gas & Electric.. St. Louis & Suburban Ry., Gen'l.. St. Louis County Gas, 1st M tge.. St. Louis County Water, 1st ........ St. Louis Transit Co., Notes......... Southern 111. Light & Power, 1st.. Southwestern Bel! Tel., 1st............ Southwestern Power & Lt., Deb... do 1st Lien........................... Suburban Tel. (Clayton, Mo.) 1st Texas Elec. Railway, 1st & R ef... do Conv. Deb.................... Union Elec. Light & Power, 1st... do Refunding & Ext........ do General Mtge................ Union Elec. Light & Pow. of 111... United Light & Power, Deb.......... United Light & Railway, Deb...... do lBt lien & Con. Mtge.. do 1st & Ref. Mtge.......... United Ry. of St. Louis, Gen’l . . . . Virginian Power Co., 1st & Col.. . Yadkin River Power, let M tge,.., 5 5 4% 6 6 5% 5 5 5 6 7 5 6 5 6 6% 5% s 6 5 6 6 7 6 5 6 5 SX SX 5 6 5 SX 6 SX SX 6 SX 5 SX 5 SX 5 5 5 SX 5 6 5 6 5 5 5 6 5 5 5 SX SX 6 6 5 4 5 5 Bid 89 89 89 100 101 97 84 100% 97% 94 89X 98 100 89 104% 104% 104% 99 63 95 101 88% 96 98 103 103 102 64 X 5% X 74X 8 1X 99% 100 101 91 104% 100% 102 99 100 100 104 112 103 103% 101% 91% 97% 99 105 98% 80 99 101 72X 103 103 100 97 96 50 30 101% 102% 100% 102% 99% 94% 102 97 77 100% 100% Asked Due 102 103 99 87 101% 98% 96 94X 100 100% 91 105% 105% 105 101 70 97 104 90 98 100 105 105 104 66X 7% X 78X 84X 100% 100% 101% 93 105 101% 102% 101 100% 101 106 114 104 105 103 93% 99% 101 106 100 83 101 103 75X 105 103% 102 99 100 55 35 102% 102% 102 103% 101 96% 104 99 77% 102 102 1939 1939 1931 2024 1933 1946 1940 1956 1952 1945 1933 1936 1950 1952 1950 1938 1955 1933 1936 1942 1942 1932 1940 1953 1953 1943 1953 1944 1944 1919 1921 1948 1929 1928 1933 1953 1935 1934 1936 1927 1955 1952 1933 1933 1948 1950 1952 1954 1956 1962 1959 1923 1951 1945 1924 1931 1954 2022 1943 1936 1947 1942 1932 1933 1954 1954 1974 1973 1952 1932 1984 1942 1941 Apr. & Oct. Apr. & Oct. Apr. & Oct. Jan. & July May & Nov Apr. & Oct. May & N ov. Apr. & Oct. Feb. & Aug. May & N ov. Mar. & Sept. Jan. & July May & Nov. June & Dec. Jan. & July Jan. & July June & Dec. Apr. & Oct. Jan. & July Jan. & July Jan. & July Apr. & Oct. June & Dec. Mar. & Sept. Apr. & Oct. Apr. & Oct. Apr. & Oct. Jan. & July Y Jan. & July Y Jan. & July Y May & Nov. Y Jan. & July 15 Jan. & July Feb. & Aug. April &Oct. Feb. & Aug. Feb. & Aug. Apr. & Oct. May & N ov. Feb. & Aug. Feb. & Aug. May & Nov. May & N ov. May & N ov. May & N ov. June & Dec. Mar. & Sept. Mar. & Sept. Apr. & Oct. June & Dec. Mar. & Sept. Apr. & Oct. Apr. & Oct. June <i Dec. Apr. & Oct. Y Jan. & July Feb. & Aug. Mar. & Sept. June & Dec. May & Nov. Jan. & July Jan. & July Mar. & Sept May & Nov. June & Dec. Jan. & July May & Nov. Jan. & July Apr. & Oct. June & Dec. Jan. & July June & Dec. Apr. & Oct. IN D U STR IAL BONDS Amalgamated Sugar, 1st M tg e .... 103% | 105 i 1937 I Apr. & Oct. D e n v e r , C o l o r a d o ........................... . D e s M o in e s , I o w a ............................ F r e m o n t , N e b r a s k a ......................... K a n s a s C i t y , M is s o u r i................... L in c o ln , N e b r a s k a ............................ S t. L o u is , M i s s o u r i : ........................ V ir g in ia n o f W , V a . (8 5 p a r ) . . . 98 47 90 63 112 130 4 J a n . & J u l y 1 ....................... L a s t p a id 1 % 1 -1 -2 6 .......... 7 J a n . & J u ly 1 ....................... N o n e b e in g p a i d ................. 9 J a n . & J u l y 1 ....................... 9 M a r . q u a r t e r l y ..................... 4 0 c J a n . a n d J u ly 1 ................ 102 53 98 68 116 140 6 8 120 114 136 123 124 124 6 INSURANCE STOCKS (N 9 U R A N C E S T O C K S B id A sk e d A m . B a n k e r s In s . ( $ 2 .5 0 p a r ) . . . . A m . C r e d i t I n d e m n it y ($ 2 5 p a r ). A m . D r u g g is t s F ir e ($ 2 5 p a r ) ....... A m . N a t 'l A s s u r a n ce ($ 5 0 p a r ) . . A m . S u r e t y C o . ($ 6 0 p a r ) ............... C e n tr a l S t a t e s L ife ($ 5 p a r ) ......... C h ic a g o F ir e & M a r in e ($ 1 0 p a r ) C o n t in e n t a l L ife (S . L . ) ($ 1 0 p a r ) In t e r n a t io n a l C o . o f S t . L . ($ 1 p a r ) I n t e r n a t io n a l L ife I n s . ( $ 2 5 p a r ) . I n t ’ l L ife & A n n u it y ($ 1 0 p a r ) . . I n t e r -S o u t h e r n L if e ($1 p a r ) . . . . M a r q u e t t e N a t ’l F ir e ($ 1 0 p a r ) . . M is s o u r i S t a t e L if e ($ 1 0 p a r ) . . . . do r ig h ts .. N a t io n a l S u r e t y ($ 1 0 0 p a r ) ........... N o r t h A m e r ic a n L i f e I n s ................ S t a n d . A m . F ir e I n s . ( $ 2 5 p a r ) . . S t a n d a r d L i f e o f 111. ($ 5 p a r ) . . . . S o u t h e r n S u r e t y C o m p a n y ............ 1 53 70 70 212 20 9 35 3 54 2(4 70 8 2(4 72 62 235 155 2 200 80 218 24 12 38 2(4 80 10 2(4 6 75 65 245 170 15 4 235 D iv . R a te 16 lO c c $8 f 80c ag 17 12 6 12 D 9g hh 16 W h e n P a y a b le N o n e b e in g p a id J a n . q u a r t e r ly M a r . a n n u a lly N o n e b e in g p a id A p r il q u a r t e r ly J a n . 31 a n n u a lly J a n . q u a r t e r ly Ir r e g u la r D e c . 31 q u a r t e r ly J a n . q u a r t e r ly L a s t p a id 6 % 1 92 0 F e b . a n n u a lly P d . 5 % in s t o c k A p r il, 1923 M a r . 31 q u a r t e r ly E x p ir e 4 -1 5 -2 7 J a n . q u a r t e r ly N o fix e d d a t e s N o t p u b lis h e d R e in s u r e d w it h I n t i. L ife J a n . q u a r t e r ly MISCELLANEOUS STOCKS A l o e (A . S .) C o m p a n y , c o m m o n . . A m e r ic a n C a n d y , p f d ........................ A m e r ic a n I n v e s t m e n t “ B ” ............. A m e r ic a n S t o r e s C o . ( n o p a r ) . . . A m e r ic a n S t o v e C o m p a n y ............. A r m s t r o n g C o r k , c o m m o n ............. A s s o c ia t e d G a s & E l e c t r ic , p f d . . A s s o . S im m o n s H a r d w a r e , p f d . . . B a e r , S t e r n b e r g & C o h e n , 1 st p f d do do 2 n d p re fe rre d , do do c o m m o n ( n o p a r ).. B e a t r ic e C r e a m e r y , p f d . .................. B e ck & C o r b itt C o m p a n y , p f d . .. B erry M o to r C a r, co m . (n o p a r ) . . T h e B e s t - C ly m e r C o m p a n y .......... B o y d -W e ls h S h o e C o ., ( n o p a r ) .. B r o w n S h o e C o . , p f d .......................... do com m on (n o p a r ) .. . . B r u c e , E . L . C o . , p f d ......................... do com m on (n o p a r ). . . . B r u n s w ic k -B a lk e -C o lle n d e r , p fd . B u t le r B r o t h e r s ($ 2 0 p a r ) ............... C e lo t e x C o m p a n y p f d ........................ do com m on (n o p a r ) .. . . C e n tr a l C o a l & C o k e , p f d ............... do c o m m o n ............................ C e n t u r y E l e c t r ic C o .......................... C e r t a in -t e e d P r o d u c t s , 1 s t p f d . . . do 2 n d p f d .............................. do c o m m o n ............................ a fagb- dddeef- M$- n- ttt- 34 52 72 135 170 9 4 (4 50 97 99 20 1 0 2 (4 97 14 37 40 110 32 97 35 105 23 88 72 78 65 107 97 4 7 (4 35 57 8 73 140 180 9 6 (4 58 98 100 22 1 0 4 (4 100 16 40 4 0 (4 112 33 99 36 107 2 3 (4 91 77 85 75 125 109 100 4 8 (4 $ 2 .5 0 7 $2 10 6dd 6 (4 7 7 8 $2 7 7 $ 1 .2 0 b $3 $3 7 $2 7 $2 7 $2 7 $3j 5 6 ff 7 7 4 J a n . q u a r t e r ly J a n . q u a r t e r ly J a n . q u a r t e r ly M a r . a n d S ep t. J a n . q u a r t e r ly M a r . q u a r t e r ly L a s t p a id , A p r . 1 , 192 4 J a n . q u a r t e r ly J a n . q u a r t e r ly June and D ec. J a n . q u a r t e r ly J a n . q u a r t e r ly M a r . 3 1 , q u a r t e r ly F e b . q u a r t e r ly J a n . q u a r t e r ly F e b . q u a r t e r ly M a r . q u a r t e r ly J a n . q u a r t e r ly J a n . q u a r t e r ly J a n . q u a r t e r ly F e b . 15 q u a r t e r ly J a n . a n d J u ly J a n . q u a r t e r ly L a s t p a id , J a n . 1 5 , 192 4 L a s t p a id , 1 ( 4 % 1 -1 5 -2 4 M a r . q u a r t e r ly J a n . q u a r t e r ly J a n . q u a r t e r ly J a n . q u a r t e r ly S t . L o u is A m u s e m e n t , C la s s A . . . S t . L o u is C a r C o ., p f d ....................... do c o m m o n ........................... S t . L o u is C o k e & I r o n . 1 s t p f d . . do 2 n d p f d ........................ do com m on (n o p a r ) .. . S t . L o u is C o t t o n C o m p r e s s ............ S t . L o u is I n d e p e n d e n t P a c k i n g . . S t . L o u is N a t l. L e a g u e B . B . C lu b S t . L o u is N a t io n a l S t o c k Y a r d s . S t . L o u is P u b li c S e r v ic e , p t . p d . . S t .L o u i s R o c k y M t n .& P a c ., c o m . S t . L o u is S c r e w C o . , p r e f e r r e d . . . do n e w c o m m o n ($ 2 5 p a r ) . S c r u g g s - V a n d 'v o o r t - B a r n e y . l p f d do 2 n d p f d .............................. do com m on (n e w ) $25 p a r. S e c u r it ie s I n v e s t m e n t , p f d .............. do c o m m o n ............................ S h a p le ig h H d w e . l s t p f d . ( p a r $ 2 5 ). do 2 n d p fd . (p a r $ 2 5 ) ............ do c o m ., n e w ( p a r $ 2 5 ) . . . . S h e a ffe r P e n C o ., p f d ........................ do c o m m o n ................................. S h e ffie ld S t e e l, c o m m o n ................... S h e r w in -W illia m s , c o m . ( p a r $ 2 5 ) S ie lo ff P a c k in g ( n o p a r ^ ............... S k o u r a s B r o s ., C la ss ‘ S o u t h e r n A c i d & S u lp h u r , p f d . . . . do c o m m o n ............................ S o u t h e r n B a k in g , c o m m o n .............. S o u t h e r n I c e & U tilit ie s , p f d . . . . do c o m m o n , c la s s ,rA ” . . . . S o u t h w e s t e r n B e ll T e l ., p f d ........... S t a n . S a n it a r y , c o m ., ($ 2 5 p a r ) . . S t ix , B a e r & F u lle r , c o m m o n ____ S u p erh ea ter C o m p a n y (n o p a r ). U n io n E le c . L ig h t & P o w e r , p f d . do do do do d o o f I llin o is .. . . U n io n M e t a l M fg . p f d ...................... do com m on (n o p a r ) . . . . U n it e d A c c o u n t in g M a c h i n e ,u n it s U . S . & F o r e ig n S e c ., fu ll p d . p f d . do 7 5 % p d . p f d ................... W a g n e r E le c t r ic M f g ., p f d ............. do com m on (n o p a r ) . . . . W m . W a l t k e & C o . , p f d ................... do com m on (n o p a r ) .. . . W e s t e r n C a r t r id g e , p f d . n e w . . . . do c o m m o n ............................ W in c h e s te r -S im m o n s , p f d ............... 43 95 1 6 (4 60 38 20 n 2 4 (4 45 97 18 70 45 25 $ « .5 0 7 mm 7 6 Ù 4n $ 1 .3 0 2 5 (4 80 83 8 1 8 (4 1 9 (4 23 20 2 95 100 7 20 25 85 6 85 7 2 2 (4 2 1 (4 $2 104 106 8 38 39 $ 2 .5 0 s s 25 23 6 25 23 7 61 58 $5 91 96 7 100 103 27 2 7 (4 $2 48 49 $2z 18 19 $1 2 0 43 44 $3 99 100 7 43 45 $3 150 142 85 90 7 15 30 117 1 1 7 (4 7 85 88 $5k 30 $ 1 .5 0 2 9 (4 150 170 $6w 105 110 7 101 103 6 103 101 6 101 104 8 40 42 $3 25 30 87 89 $6. 80 82 $3. 69 70 7 20 21 110 $7 68 69 2 .4 0 t ............. 95 6 95 6 32 25 J a n . q u a r t e r ly F e b . q u a r t e r ly mm N o n e b e in g p a id N o n e b e in g p a i d N o n e b e in g p a i d J a n . 31 q u a r t e r l y F e b . q u a r t e r ly N o n e p a id y e t J a n q u a r t e r ly N o n e b e in g p a id J a n . q u a r t e r ly F e b . q u a r t e r ly N o n e b e in g p a id J a n . a n d J u ly J a n . a n d J u ly F e b . q u a r t e r ly J a n . q u a r t e r ly J a n . q u a r t e r ly F e b . q u a r t e r ly F e b . q u a r t e r ly N o t p u b lis h e d N o t p u b lis h e d J a n q u a r t e r ly F e b . 15 q u a r t e r ly J a n . q u a r t e r ly F e b . q u a r t e r ly J a n . q u a r t e r ly M a r 16 q u a r t e r ly N o n e b e in g p a id M a r . q u a r t e r ly N o n e b e in g p a id J a n . q u a r t e r ly F e b . 15 q u a r t e r ly M a r . q u a r t e r ly J a n . 15 q u a r t e r l y J a n . q u a r t e r ly Ja n . q u a rte r ly Jan . q u a rte r ly J a n . q u a r t e r ly J a n . q u a r t e r ly N o t p u b li s h e d F e b . q u a r t e r ly F e b . q u a r t e r ly J a n . q u a r t e r ly N o n e b e in g p a id F e b . q u a r t e r ly F e b . q u a r t e r ly J a n . q u a r t e r ly J a n . 15 q u a r t e r ly N o n e b e in g p a id B e a v e r r r o a u c t t ^ d . , m e ., 1 s t .. . . B o w s e r (S . F . ) & C o . , 1 st M t g e . . . C a m p b e ll B a k in g C o . , 1st M t g e . . C e l o t e x C o m p a n y , 1 s t M t g e ............ do 3 y e a r C o n v e r tib le N o te s . do 1 0 y e a r C o n v e r t i b l e D e b .. C h a p in -S a c k s , I n c . C o ll. T r ............. C h e s e b r o u g h B u ild in g C o . , 1 s t ___ C o n s o lid a t e d I n v e s t m e n t , 1 s t . . . . C o n t in e n t a l M o t o r s , 1st M t g e . . . . C u d a h y P a c k in g C o m p a n y , D e b .. D a lt o n A d d in g M a c h i n e , C o n v . . . D o l d ( J a c o b ) P a c k . C o . , 1 s t ............ D r i v e r - H a r r i s C o ., 1 s t M t g e ........... F e r r y S t a t io n P o s t O ffic e , 1 s t .......... F le is h e r , I n c . ( S .B . & B . W . ) 1 s t. . F r is c o A n n e x R e a lt y , 1 st M t g e . . . F r is c o B u ild in g , 1st M t g e ................. G o d c h a u x S u g a r s, I n c ., 1st M t g e . H e a r s t P u b lic a t io n s , g u a r . 1 s t ____ H e in e B o ile r C o . , 1st M t g e ............. H o u s t o n O il C o . , 1 0 -y e a r N o t e s . . . H y d r a u lic P r e s s B r io k , 1 s t ............... I llin o is G la s s , D e b e n t u r e .................. I n c o m e L e a s e h o ld , 1st M t g e ........... I n d e p e n d e n t B r e w e r y C o . , G e n ’ l .. K e llo g g ( S p e n c e r ) & S o n s , I n c ., d e b . L i q u i d C a r b o n ic , 1 st C o n v ............. L u d lu m S t e e l C o . , 1st M t g e ............ M e n g e l C o m p a n y , 1 s t M t g e ............ M in n e s o t a T r i b u n e , 1st M t g e . . . . M o . P o r t la n d C e m e n t , 1 st M t g e .. M o n s a n t o C h e m ic a l W o r k s , 1 s t .. . N . O . P o n ch a rtra in B r id g e , 1 s t ... P a c i f ic M ills , 5 - Y e a r N o t e s ............. ! P r ic h a r d H o t e l , 1 s t M t g e .................. S t . L o u is N a t . S t o c k Y a r d s , 1 s t . . . S t . L o u is R o c k y M t n . & P a c .......... S a n ta A n a S u g a r , 1st M t g e ............. S c r u g g s -V a n d e r v o o r t - B a r n e y .......... S c u llin S t e e l, 1st M t g e ....................... S e v illa -B ilt m o r e H o t e l, 1 st M t g e . S p ie g e l, M a y , S t e r n C o . , D e b ......... S o u t h e r n I c e & U tilit ie s 1 s t c o n v . A . E . S t a le y M f g . C o . , 1st M t g e .. S t a n d a r d B a k e r ie s , 1 st M t g e .......... S w ift & C o m p a n y , N o t e s .................. T r i-S t a t e B a k in g C o ., 1 st M t g e . . . W a g n e r E le c . M fg . C o . , 1st M t g e . W a r d B a k in g C o . , 1 st M t g e ............ W h it a k e r P a p e r C o . , 1 st M t g e . . . . W r ig h t B u ild in g , 1st M t g e ............... W u r lit z e r ( R u d o l p h ) C o . , D e b . . . . •✓ a 7 6 (4 6 (4 6 6 7 6 5 6 (4 5 (4 6 6 8 6 6 5 5 7 (4 6 (4 6 (4 6 (4 5 6 5 6 6 6 7 7 6 (4 6 (4 7 7 5 (4 7 4 5 8 7 6 7 (4 6 (4 6 6 (4 7 5 7 7 6 7 5 6 FOREIGN BONDS Late B r a z il, L o a n o f 1895, £ ..................... B r a z il, L o a n o f 1889, £ ..................... B o l i v ia ( R e p u b li c o f ) , $ ................... C u b a , In t e r n a l L o a n o f 1 9 0 5 . . . . E u r o p e a n M t g e . & I n v . 1 s t ........... F r e n o h P r e m iu m L o a n , f c s ............. F r e n ch V i c t o r y L o a n , f c s ................ K a r s t a d t ( R u d o l p h ) , 1st M t g e . . S a o P a u lo ( C i t y o f ) , E x t . $ ........... t u n e d I n d u s t r ia l ( G e r m a n y ) . . . P a id 26% e a c h D e c . 24. 192 2, 1923. 1924 a n d 1 92 5, a ls o 30% la s t o c k D e c ., 192 8, a n d 109 % J a n . 15. 1925. P a i d 2 % i n D e c . , 1 9 2 4 , 6 % D e c . , 1 9 2 5 , 3 % in J u n e a n d 4 % i n D e c . , 1 92 6. P a i d 2 % J a n . 1, 1 9 2 5 , a n d 3 % F e b . 1, 1 9 2 6 . P a i d 5 0 % s t o c k d i v i d e n d M a r c h 1, 1 9 2 6 . , p a i d 9% J u n e 30 a n d 1 5 % D e c . 3 1 , 1 9 2 6 , 1 0 % J u n e 30 a n d 1 5 % D e c . 31, 1 9 2 5 . P a id $1 e a c h F e b . 16, 1 9 2 4 , a n d F e b . 1, 1 9 2 6 . » a i d 5 0 c e x t r a J a n . 2, 1 9 2 6 . R e d u c e d r e g u l a r r a t e f r o m $2 t o $ 1 .2 0 S e p t . 2 2 , 1 92 6. P a id 5 0 " e x t r a J a a . 1 5 , 1 9 2 6 , a n d 7 6 c e x t r a J a n . 1 5 , 1 9 2 » . S t o c k h o ld e r s o f r e c o r d 2 /2 8 /2 7 h a v e r ig h t to b u y 1 n e w s h a r e @ $10 f o r e a c h 2 s h a r e s h e ld . P a i d 5% e x t r a in s t o c k J a n . 15, 1 9 2 6 . P a i d $ 2 .0 0 f o r 1 9 2 6 . L a s t p a y m e n t 12 ( 4 c t o h o l d e r s o f r e c o r d 1 2 / 1 5 / 2 6 . P a id 6 0 c e x t r a J a a . 1 5 , 1 9 2 5 , a a d 7 5 c e x t r a J a a . 1 5 , 1 9 2 6 . N o f ix e d r a t e . P a i d 1 2 % J a n . 26, 1 9 2 3 , 1 4 % J a n . 2 1 , 1 9 2 4 , 1 5 % F e b . 1, 1 9 2 5 , 1 6 % J a n . 3 0 , 1 9 2 * . ■P a i d 1 0 % e x t r a I n s t o c k D e c e m b e r 22, 1 9 2 6 . P a i d e x t r a s o f 6 0 c e a c h 3 / 3 1 / 2 6 a n d 9 / 3 0 / 2 6 ; $ 1 .5 0 e a c h 1 / 2 / 2 6 : 6 / 3 0 / 2 6 a n d 1 / 3 / 2 7 . in a r r e a r s 4 8 % . P a i d 1 % J u l y 1, 1 9 2 5 , a n d 1 % J a a . 1, 1 9 2 6 , o n t h e b a c k d i v i d e n d s . A l s o e x t r a d i v i d e n d in 1 9 2 6 ; A m e r i c a n T r u s t 1 % , B a d e n 1 % , B e l l e v i l l e S a v i n g s 3% , B r e m e n 8% , C a s s A v e n u e 2 % , F i r s t N a t i o n a l , S t . L o u i s , 4 % , F i r s t N a t i o n a l , E a s t S t. L o u i s , 4 % , F i r s t N a t i o n a l , W e lls t o n 3 % , L o w e ll 2% , M a n c h e s t e r 2% , M e r c a n t ile T r u s t 2% , N o r t h w e s t e r n T r u s t 3% , S t. L o u is U n io n T r u s t 4% , S a v in g s T r u s t 1% , S t a t e N a t io n a l 2% , S t a t e o f W e l ls t o n 5% , T o w e r G r o v e 4 % , U n i o n T r u s t , E a s t S t. L o u i s , 4 % , V a n d e v e n t e r T r u s t $ 1 .5 0 , W a t e r T o w e r 1 % , W e b s t e r G r o v e s T r u s t 3 % , W e s t S t . L o u i s T r u s t 2% . P a i d 5 % e x t r a e a c h F e b . 16 a n d O c t . 1, 1 9 2 5 a n d 1 9 2 6 , a l s o d e c l a r e d s a m e e x t r a p a y a b l e F e b . 1 5 , 1 9 2 7 . P a i d 2 5 c e x t r a in e a c h q u a r t e r o f 1921b___________________________________________________________________________________ 5 4 6 5 7 (4 5 5 7 6 6 B id 66 55 90 95 99 31 24 104 88 95 A sk ed 68 58 93 97 101 34 28 108 91 97 g— h— hh— J— k— kk— L— H— m — m m — H— nn— P— PP— Q.Q— r— a— ss— t— w— ww— x— D ue 1 95 7 1966 1940 N one 195 0 198 0 N one 193 0 1943 1 94 5 In terest D a te s F eb. A p r. A p r. M ay M ay M ay Feb. A p r. M ay June & A ug. & O ct. & O ct. & N o v . 28 & N ov. & N ov. 16 q u a r t e r ly & O ct. & N ov. & D ec. 100 10.3 i o o (4 98 97 97 9 7 (4 101 105 102 100 99 100 9 9 (4 1 0 1 (4 9 7 (4 too 87 104 99 84 96 96 91 9 9 (4 96 1 0 3 (4 95 1 0 0 (4 99 1 25X 101 1 0 6 (4 1 0 0 (4 100 104 io o (4 100 97 93 98 96 77 9 9 (4 100 9 9 (4 100 9 9 (4 9 4 (4 100 99 99 100 99 1 0 3 (4 1 0 4 (4 94 io o (4 103 98 104 89 106 101 89 99 99 93 1 0 1 (4 100 1 0 3 (4 100 1 0 2 (4 100 30X 103 1 0 7 (4 1 0 2 (4 102 106 1 0 1 (4 102 99 98 101 9 7 (4 79 101 1 0 0 (4 1 0 0 (4 102 io i(4 97 102 103 100 103 100 105 106 98 102 R A IL R O A D C h ic ., N . S h o r e & M ilw a u k e e , 1st do 1 st & R e f . M t g e ............ L i t t le R o c k & H o t S p g s ., W e s t n ... M a n ila R a ilr o a d ( S o u t h e r n L in e s ) M is s o u r i & I llin o is B r id g e B e l t . . . N e w O rle a n s G r e a t N o . R y . , lB t .. S t . C la ir , M a d is o n & S t . L . B e l t . . S t . L o u is B r id g e C o . , 1st M t g e . . . S t . L o u is M e r c h a n t s B r id g e , 1 s t . . S t . L . M e r c h . B r id g e & T e r ., 1 s t .. j S o u t h e r n 111. & M o . B r i d g e , 1 s t . . . 5 6 4 4 4 5 4 7 6 5 4 1942 1 93 4 1943 1939 1929 1936 1934 1 94 8 1936 193 9 193 7 1941 1942 1931 1934 1939 1928 1928 1941 2 7 -3 6 2 7 -3 3 1936 2 7 -3 2 1 93 3 1936 1 94 3 1938 194 1 194 3 2 8 -3 4 1942 1927 2 8 -4 0 1946 1931 2 7 -3 9 1930 1955 193 1 2 8 -3 9 1941 193 7 1932 1946 1938 1938 1932 2 8 -3 1 2 8 -3 7 1937 1 94 2 1 93 1 1938 .ran. & J u ly Jun e & D ec. A p r. & O ct. A p r. & O ct. A p r. & O ct. June A p r. & O ct. June & D ec. Y F e b . & A ug. A p r. & O c t . A p r. & O ct. A p r. & O ct. Ju n e & D ec. J u n e & D e c . 15 M a y & N ov. J a n . & J u ly 15 BONDS »7 100 8 6 (4 67 65 87 74 103 101 9 9 (4 80 99 102 8 8 (4 68 70 89 77 105 102 101 82 ly a t j 1955 1939 1939 195 1 1955 1951 1 92 9 1 92 9 1 93 0 195 1 J a n . & J u ly M ay & N ov. F eb . & A ug. A p r. & O c t . A p r . & Oct". M a y & N ov. P a i d 2 % e x t r a M a r c h 1, 1 9 2 6 . P a i d 5 0 c e x t r a D e c . 1, 1 9 2 6 , a n d 4 0 c D e c . 1, 1 9 2 5 . P a i d 4 3 % s t o c k d i v i d e n d J a n . 10, 1 9 2 5 , a l s o $5 c a s h e a c h J a n . a n d J u l y , 1 9 2 6 . P a i d 1 0 0 % s t o c k d i v i d e n d in N o v e m b e r , 1 9 2 6 . P a id 25 % In s t o c k . $ 1 .2 5 e x t r a c a s h 2 / 1 4 / 2 6 a n d 75c e x tr a 2 /1 5 /2 « . R e g u la r r a t e r a is e d to 12% a t d ir e c t o r s ’ m e e t in g 2 /1 8 /2 7 . P r e v io u s r a te 8% a n d e x tra s . P a i d 4 % J a n u a r y 3 1 s t a n d d e c l a r e d 3 % p a y a b l e J u n e 1, 1 9 2 7 . A ls o 2&c e x t r a D e c e m b e r 2 3 , 1 9 2 4 a n d 6 0 c J a n 2, 1 9 2 6 . P a i d 5 % e x t r a D e c e m b e r 10. 1 9 2 6 , a n d 4 % D e c e m b e r 10. 1 9 2 5 . I n i t i a l d i v i d e n d o f 5 0 c d e c l a r e d J a n . 2 5 t h , p a y a b l e F e b r u a r y 1, 1 9 2 7 . P a i d $ 6 5 a s h a r e e x t r a in c a s h t o h o l d e r s o f r e c o r d J u l y 1, 1 9 2 6 , a l s o 1 % e x t r a e a c h F e b . M a y 1, 1 9 2 5 ; J a n . 31, a n d A p r . 3 » , 1 9 2 6 . N o q u o t a t io n s in c e p a y m e n t o f d iv id e n d . p a i d e x t r a s o f $1 a n d 2 0 % s t o c k 1 / 1 5 / 2 6 ; $1 o n 1 2 / 1 / 2 6 , a l s o $1 e x t r a 1 / 1 5 / 2 7 . P a i d e x t r a s t o t a l i n g $1 in 1 9 2 5 a n d a t o t a l o f $ 1 .2 5 e x t r a i n 1 9 2 6 . P a i d 6 2 ( 4 c e x t r a J a n u a r y 3, 1 9 2 7 , a n d J a n u a r y 2 , 1 9 2 6 . P a i d 5 % e x t r a in s t o c k J u n e 1, 1 9 2 6 . P a i d 5 0 c e x t r a J a n u a r y 3, 1 9 2 7 . P a y a b l e $2 o n M a r c h 1 a n d $1 q u a r t e r l y . S a m e r a t e p a id In 1924 a n d 1925. A l s o 6 0 c e x t r a p a i d O c t . 1, 1 9 2 5 , a n d O c t . 1, 1 9 2 6 . P a i d 6 0 c e x t r a F e b r u a r y 1, 1 9 2 7 . P a i d $4 e x t r a i n e a c h 1 9 2 5 a n d 1 9 2 6 , a n d $5 e x t r a J a n . 5, 1 9 2 7 . A l s o (4 o f 1 % a m o n t h in c o m m o n s t o c k . F r o m N o v . 15. 1925, h a s p a id 2 5 c e x t r a e a c h q u a r t e r . X — S e lls fla t. Y — In D e fa u lt . “ ’ H e a v y t y p e d e n o t e s m o n t h o f m a t u r it y . W e w ill fu r n is h q u o t a t io n s o f o th e r s e c u r itie s o n r e q u e s t. O u r fa c ilit ie s e n a b le u s t o d e v e lo p m a r k e t s o n in a c t iv e a n d c lo s e ly h e ld is s u e s . Q u o t a t i o n s a re n o m i n a l ly a s o f J a n u a r y 3 1 , 1 9 2 7 , a n d c a n h e file d fo r f u t u r e r e f e r e n c e . https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis & D ec. W rite, W ire or Phone Us A bout A n y Security in W h ic h Y ou A re Interested, lo n ot guarantee the statistics and in form a tion in this pam phlet, b u t have obtain ed them from sources deem ed r e lia b le . 2nd W E M A IN T A IN A D E P A R T M E N T E X C L U S IV E L Y FO R T H E P U R C H A SE A N D SA L E O F L IB E R T Y B O N D S A N D U N IT E D S T A T E S G O V E R N M E N T O B L IG A T IO N S Diversified Recommendations F O R M A R C H IN V E S T M E N T T h e p resen t F ed era l In c o m e T a x la w perm its a la rg e r return fro m in vestm en ts than at a n y tim e since the W o r ld W a r. W e believe that this fa c to r, to g e th e r w ith p rosp ectiv e fu rth er tax red u ction and the great abun dan ce o f capital still seek in g in vestm en t, w ill m ov e sou n d b on d s and p referred sto ck s to substantially h igh er levels. W e re co m m e n d the f o llo w in g issues, a m on g m a n y oth ers, fo r pu rch ase at p re va ilin g prices. * D e n o t e s is s u e s a v a ila b le in $100 p ie c e s a t p r e s e n t t i m e . A ll p r e f e r r e d s t o c k s c a n b e p u r c h a s e d i n a n y a m o u n t f r o m 1 sh are u p . P U B L IC U T I L I T Y , I N D U S T R I A L , R E A L E S T A T E 8b F O R E IG N B O N D S Rate S tandard O il C o m p a n y o f N e w Y o rk , D e b e n tu re — ----------------------------4/ 2 % M issou ri P a cific R a ilroa d C om p a n y , F irst and R efu n d in g M o r t g a g e - ___ 5 % 5 % N o rth A m e rica n E d ison C om p a n y , C o n v e rtib le D e b e n tu re s--------- -----In d ia n a p o lis P o w e r & L ig h t C om p a n y , F irst M o r t g a g e — ........ ............ ____ 5 % .... . 5 % — 5^% ...... 6 % ...... 6 % ...... 6 % C ity State Bank B u ild in g (C h ic a g o ), F irst M o r tg a g e -----...... 6 % je~_ 6^4% . 6 % ♦ L o n g -B e ll L u m b er C om p a n y , C o n v e rtib le C olla tera l N o t e s ......6 y 2% ♦ N ational T ile C om p a n y , 1 0 -Y ea r D e b e n tu re --------------------------— . 6 / 2% ...... 6 y 2% ..... 6 ^2% S a w yer B iscu it C om p a n y (C h ic a g o ), F irst M o rtg a g e . ...... 6 ÿ 2% ___ 7 % C ape G irardeau ( M o .) B rid ge C om p a n y , F irst M o r t g a g e ------------Various Railroad Equipment Trust Issues Maturing in 1 to 20 Years, to yield. Approximate Yield Maturity 1951 4.65% 5.00% 1977 5.12% 1957 5.12% 1957 1952 5.25% 1940-45 5.50% 1937 5.98% 1942 6.00% 1947 6.00% 1957 6.03% 1928-38 5.50-6.25% 6.45% 1931 6.50% 1937 6.50% 1934-35 6.60% 1937-41 6.60% 1945 1941 6.70% 7.00% 1947 • .4.75 to 5.25% M U N IC IP A L A N D G O V E R N M E N T B O N D S C ity o f K ansas C ity, M issou ri, S ch o o l D is tr ic t-----------------------------------C ity o f O m ah a, N e b ra s k a .................................................. ..... - ............... - ............ _ . ..... ........ State o f S °u th D a k ota ............— ....... ....... ......... .... — — 4 y 2% 454% 6 % 4^2% 5 % 554% S^% 1947 1947 1938 1943-46 19301931-36 1936-56 Other Municipals to Yield Up to----------- 4.10% 4.15% 4.25% 4.25% 36 4.30% 4.90% 5.30% _ 6.00% uoted on Request. CKS Rate .... 6 % In tern a tion a l S h oe C om p a n y , P r e fe r r e d — .... 6 % .. 7 % E ly -W a lk e r D r y G o o d s C om p a n y , F irst P r e fe rre d . — . 7 % B ro w n S h o e C o m p a n y , P r e fe r r e d -------------------------------..... 7 % N a tion a l C a n d y C o m p a n y , F irst P r e fe r r e d --------------— 6 % & 7% ..._ $6 ......... 6^2 % ..... 7 % Illin o is P o w e r & L ig h t C o rp o ra tio n , F irst P r e fe r r e d .............................................. ........ 7 % A . S. A lo e C om p a n y , P r e fe r r e d --------- --------------— 7 % M o lo n e y E le c tr ic C om p a n y , P r e fe r r e d ........ ........... ........ 7 % St. L o u is S cre w C om p a n y , P r e fe r r e d --------------------7 % R ic e -S t ix D r y G o o d s C om p a n y , S e co n d P r e fe rre d .. 7 % B aer, S te rn b e rg & C oh en , In c., F irst P r e fe r r e d — _ 7 % B e ck and C o rb itt C o m p a n y , P r e fe r r e d ........ — ......... ......... 8 % M is s o u r i-I llin o is S tores, C o n v e rtib le P r e fe r r e d --------. _ $3 Scu llin Steel C o m p a n y , P a rticip a tin g P r e fe r e n c e ----........ 8 % F re d M ed art M a n u fa ctu rin g C o m p a n y , P r e fe r r e d — ......... 8 % B aer, S te rn b e rg & C oh en , In c., S e co n d P r e f e r r e d - Approximate Yield 5.50% it 6.07% it 6.20% it 6.30% it 6.35% u 5.82-6.36% (( 6.60% 98 6.63% Market 6.80% it 6.85% it 6.85% a 7.00% a 7.03% a 7.15% a 7.15% 7.30% 38 y2 7.75% Market 7.84% “ 8.00% Price Market All offerings subject to prior sale and change in price. Write or send for detailed circulars on any of these issues or ask to have one of our representatives call. M A R K C. STEINBERG & C O M P A N Y M embers New York, Chicago, St. Louis Stock Exchanges and Chicago Board of Trade M ezzan in e—B o a tm e n ’ s B an k B u ild in g GA rfield 4600 BRANCH OFFICE—JEFFERSON HOTEL GA rfield 4600 S T . L O U IS Careful Investors Benefit by Considering Our Offerings W e d o n o t g u a r a n t e e t h e I n f o r m a t i o n a n d s t a t i s t i c * i n t h i s p a m p h l e t b u t h a v e o b t a i n e d t h e m f r o m s o u r c e s d e e m e d r e li a b l e https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis St. L ou is, M arch, 192? 67 Coolidge, the Friend of Mid -W est F armer B y W . L. Taylor Vice-President and General Manager of the Federal Surety Company YT7HEN the question is asked what * ’ help the farmer wants, one gen erally gets the reply, “We farmers want relief from the East. We don’t want the East to have all the prosperity while we are going broke feeding the country.” Another statement is, “ Cool idge Is a Yankee lawyer and has no interest in the agricultural district,” which is the farthest from the truth. The writer lived in New England sev eral years and knows somethng of Cal vin Coolidge. He has also lived in Iowa for the past seven years, and through his business has had a good opportunity to know something of the agricultural situation and he asks the readers of this paper just to lay aside their preju dices and study the facts. The President has always been opposed to any “price fixing” law, and because he has the courage of his convictions to come out and stand against any such plan many farmers feel he is not their friend. In his address before the Republican Club in New York, February 12, 1924, he made himself clear on “price fix ing.” He said: “What I am most anxious to im press upon the prosperous part of our country is the utmost necessity that they should be willing to make sacrifices for the assistance of the unsuccessful part. I do not mean by that any unsound advice like price fixing, which I oppose, because it would not make prices higher, but would in the end make them lower. ❖ * In the President’s address to the Association of Land Grant Colleges November 13, 1924, he said: “ The permanent maintenance of our country’s superior level of hu man comfort and well-being will re quire that our agriculture be made and kept the most efficient in the world!. Our agricultural community must be maintained through con stant improvement of methods and constant strengthening of the place it holds in the social structure, more prosperous, better educated, more contented, than that of any other na tion. If we ever permit our farming population to fall to the level of a mere agricultural peasantry, they will carry down with them the general social and economic level. Every citizen among https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis us has a personal concern for the welfare of the farmer. The fortunes of all of us will in the end go up or down with his.” So it can be seen that President Coolidge in his addresses and mes sages for the past four years has set forth administration efforts! for such relief as well as a discussion of principles whereby agriculture would be restored to a basic quality with industry. He makes no attempt at price fixing. President Coolidge is not alone in his stand against “price fixing.” It is safe to say that every student of agriculture econom ics will agree with the President. Professor C. L. Holmes of the Iowa State College says: “ The practice of better economics on the farm is the solution. * * * Price fixing is not the answer because farm production is not elastic and change in price would not change production.” Calvin Coolidge is a man who goes into every proposition thoroughly before he acts. He is a man that seeks out wise counsel, but when he arrives at the crossroad of decision he will follow the finger board that points to princi ple, no matter how rough the road may be or what effect it may have on his chances for 1928. That is why he is the greatest President since Lincoln. il l ia r d s e r v ic e H The Value of Conservative Advice: f W h a t is th e “ S e r v i c e ” w h ic h y o u b u y w i t h y o u r bond? W h a t is it th a t y o u P h y s i c a l fa c i li t ie s , y e s ! A w a n t and e x p e c t? c o n v e n i e n t p la c e to tra n s a c t y o u r b u s in e s s , p r iv a t e w i r e s to in s u r e s p e e d in e x e c u t i n g y o u r o r d e r s , c o m p l e t e s ta t is tica l i n fo r m a t io n , t h e s e a n d th e o t h e r m o d e r n e q u ip m e n t o f a w e ll-o r g a n iz e d i n v e s t m e n t o ffic e a re a n e c e s s a r y p a r t o f b u s in e s s . T h e i m p o r t a n t f a c to r , h o w e v e r , c a n n o t b e “ in s ta l le d ” o v e r n i g h t . I t is t h e e x p e r i e n c e g a in e d th r o u g h y e a r s in h a n d lin g s e c u r i t ie s , t h e i n t i m a te k n o w led g e of v a rio u s c la s s e s m e n t , and, a b o v e all, t h e I n g r a i n e d of in v e st C on serva tis m w h ic h c h a r a c te r iz e s an o r g a n iz a tio n , s u c h a s th is, w h ic h h a s e n d u r e d t h r o u g h f i f t y y e a r s o f p e a c e a n d w a r. f j . J . T h e v a lu e o f c o n s e r v a t i v e a d v ic e in i n v e s t m e n t s c a n n o t be o v e r e s t im a t e d . I t I S t h e s e r v i c e w h ic h w e ren d er. B . M EM B ER S H N E W i l l i a r d YORK STOCK & EXCH AN GE Investment Securities dI9 West Jefferson Street LO U I S V I L L E S o n , K Y. M id -C on tin en t B an ker 68 United States Post Office Bonds A Brief Description of These Securities I N DISCUSSING Post Office Bonds it is well to understand the condi tions that make possible the issu ance of these securities. Parcel Post Mail, both domestic and international, has increased tremendously since its inception some years ago, and the fa cilities for handling this mail have been continuously enlarged and im proved to meet the increased demands. The handling of this class of mail re quires, among other things, the use of a large fleet of motor vehicles. As a result the Government Motor Vehicle Service was organized in 1914 and is now established in some 582 cities throughout the country. Business houses that formerly used freight and express service almost ex clusively are now shipping all their packages, weighing not more than 50 to 70 pounds, by parcel post. They are aware of the many advantages of this means of transportation. Although em bargoes have been placed on both freight and express from time to time FIDELITY- MEANS-KEEPING-FAITH Trustworthy Before an individual is adm itted to business partnership, his trustworthiness is established. W e suggest th at you apply the sam e principle in selecting a first m ortgage real estate bond house, whether for your own fu n ds or for those of clients. Choose an in stitu tion w ith a proved record of integrity, conservatism and experience. For these determ ine the true value of your investm ent and its safety. Th is com pany invites every prospective purchaser of Fidelity Guaranteed Bonds to investigate first the H o u s e B e h i n d th e B o n d s. A list of Fidelity Issues will gladly be m ailed upon request. Denominations $ 1 0 0 , $ 5 0 0 and $ 1 0 0 0 F id e l it y \ BONDf MORTGAGE CO.JL J .U .M E N T E E R .P r a t ó s i- c^ , I N C O R P O R A T E D 1913 H om e Office: 651 Chem ical B ldg., St. Louis Ch icago— Denver KR817 FIDELITY-GUARANTEES-EVERY-BOND https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis in different parts of the country, parcel post service has continued to function without a break. The reliability and speed of this method of transporta tion has resulted in an almost unbe lievable growth of this branch of the Post Office Department. As a consequence, the post office quarters available in Federal buildings constructed years ago have long since been outgrown. Consequently, en larged facilities are required if the present and future needs for the han dling of this class of mail are to be ad equately met. The present policy of the Post Office Department in obtain ing additional space required is typical of the era of economy and the introduc tion of modern business methods in Government administration. The time is passed when contracts for new post office buildings might be considered as political favors to be dispensed with a lavish hand. In its stead there has been adopted a sensible business like policy towards the housing of postal fa cilities. The Government, similar to many of our great business corporations, has found it more economical to lease quarters for such purposes than to con struct their own buildings. This has been especially true during the last few years (owing to the lack of appro priations for Government building purposes). The construction of one or more post offices in every town, hamlet, village and city would involve a tre mendous outlay of capital on the part of the Government. This policy of leasing suitable quar ters on the part of the Government has resulted in the issuance of Post Office First Mortgage Bonds. Briefly, these bonds represent a first mortgage on land and buildings under lease or contract for lease to the United States Government for post office purposes. In other words, the property securing any issue of these bonds is under lease or contract for lease to the United States Government Post Office Depart ment before the bonds are ever issued. As might be readily imagined, the Government requires centrally located properties for post office purposes. As a consequence, the properties securing Post Office Bonds are generally situ ated in business sections where values are firmly established and in most cases are on the increase. This is a very important and desirable feature of the security underlying these bonds. St. L ou is, M arch, 1927 All buildings must be constructed ac cording to plans and specifications ap proved by the proper Post Office De partment Officials. It is necessary in this connection to submit plans and specifications for the buildings to the Department prior to the execution of the contract for lease. This procedure assures the construction of the build ing in accordance with Government re quirements. In leasing properties for post office purposes, the Government uses two forms of lease. One is known as the standard form of lease which permits cancellation by the Government at any time upon reasonable notice—generally one year—if the Government wishes to move into a Government-owned building or if it desires additional space and is unable to obtain this addi tional space in the present location. The other form of lease is the standard form of lease with these two cancella tion clauses stricken out and is desig nated as the non-cancellable form of lease by the Post Office Department. All leases are signed by the Postmaster General and approved as to their le gality by the Solicitor General of the Post Office Department, on behalf of the Government. The leases to the Government always extend beyond the maturity of the bonds. This is a very important fea ture as it insures 100 per cent rental of the property during the entire life of the bonds to the best tenant in the world—the United States Government. After all, income is the basis of value —“a property is worth what it will earn.” It would be difficult to find any other form of real estate security w h e r e the earning power of the prop erty is both established and assured and the financial standing of the ten a nt above question. Yet this is the fact in the case of all Post Office Bonds. The form of mortgage under which the bonds are issued generally pro vides that the annual rentals received from the Government shall be paid di rectly by the Government to the Trus tee under the mortgage. The Trustee is then required to deduct the neces sary amount for interest and sinking fund charges before paying anything to the owners of the property. This provision means that the money goes directly from the Government to the payment of principal and interest of the bonds. In order to protect the bondholder against all contingencies, such as dam age to the property by fire or storm, the necessary forms of insurance, in cluding rental insurance, are carried on the property and the policies are made payable to the Trustee for the benefit of the bondholders. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 69 INVESTM ENT SERVICE TO BANKS AND BANKERS Quotations furnished on all securities, listed or unlisted. Accurate check made of all bonds called for redemption. List of available and suitable investments furnished. Inquiries Invited J?77X 4 Co. SAIN T LOU IS 509 ©Live st. Lawrence Stem and Company 231 South La Salle Street • Chicago B OARD OF DIRECTORS J O H N H E R T Z , Chairman of the Board of Y ellow Truck A Coach Manufacturing C o. W I L L I A M W R I G L E Y , J R . .Chairman of the Board of W illiam W rigley Jr. Company J O H N R . T H O M P S O N , Chairman ofthe Board of John R . Thom pson Company H ERBERT L. STERN , Balaban & Katz Corporation A L B E R T D . L A S K E R , Chairman of the Board o f Lord & Thom as and Logan President cf A L F R E D E T T L I N G E R , Vice President S T U Y V E S A N T P E A B O D Y , President o f the Peabody Coal Company J O S E P H J. R I C E , Vice President C H A R L E S A . M c C U L L O C H , President of Parmelee Company L A W R E N C E S T E R N , President & This company conducts a general securities business, originating and participating in high-grade investment issues and devoting special attention to first mortgage real estate bonds. Collateral T rustee Shares of the NEW ENGLAND INVESTMENT TRUST, Inc. (Federal National Bank of Boston—-Trustee) are o ffe re d b y in v e s tm e n t b a n k e r s in 4 3 cities th r o u g h o u t th e U n it e d S t a te s a n d C a n a d a S e c u re d b y liste d s to c k s o f 8 0 le a d in g A m e r ic a n c o r p o r a tio n s D iv id e n d s in 1 9 2 6 o v e r 8 % o n th e p r e s e n t se llin g price Write fo r Circular M B N E W ENGLAND INVESTMENT TRUST, Inc. 85 D E V O N S H IR E S T R E E T , BOSTON New York Springfield 70 M id -C on tin en t B an ker Guaranteed Mortgage Bonds---How They Are Selected and Safeguarded HERE are various types of Guar anteed Mortgage Bonds on the market today. The greater por tion of bonds under this classification are, however, in collateral trust form, and it is this type of bond that we will deal with principally in this article. The security underlying these bonds, in practically all cases, is first mort gages on improved city real estate, the T B y E . R. Price Vice-President and Treasurer Guaranteed Mortgage Co., Minneapolis mortgages being pledged with an Inde pendent Corporate Trustee for the ben efit of the holder of the Collateral Trust Bond. The originating company issues the bonds as its direct obliga tion, and its entire resources are INVESTING THE FUNDS OF YOUR BANK N this day of rapidly expanding commerce and industry, with its countless issues of bonds for improvements, the investment of bank funds is becom ing a bigger and bigger I problem. ' 'T o be certain you have acted wisely, you need the help and guidance of an organ ization that is in constant touch with conditions in all lines of business—a company that special izes in investments and backs its judgment by purchase o f the securities it offers for sale. In the selection o f bonds, marketability is a factor that must have strong consideration. Our bond list represents the mature judgment of officers and directors of this institution and therefore is of the highest type. This company is owned by the same stockhold ers as the National Bank o f Commerce in St. Louis. Its seventy years o f achievem ent and progressiveness need no introduction.The same men who direct its destinies safeguard your in vestments whenyou purchase securities from the unpany National BanK°/ Commerce ! https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis in St.Louis pledged for the payment of principal and interest. In addition to the prime obligation of the borrower executing the mortgages, and the direct obliga tion of the issuing company on its bonds, the payment of the principal and interest of each mortgage secur ing the bonds is guaranteed by one of the large surety companies having re sources of many millions of dollars. Purchasers of Guaranteed Mortgage Bonds thus have back of their invest ment, the properties pledged, the re sources of the issuing company, and the assets of the surety company. Loans Are Spread. It is not customary for mortgage companies issuing bonds of this type to confine their operations to one lo cality, but to spread their loaning ac tivities over several states, specializing for the most part in large numbers of small sized loans in moderate-priced properties. Wide geographical and numerical diversifications of the mort gaged properties is of particular signi ficance to investors in this type of bond. Stability of values is insured by selecting properties in regions where natural resources and favorable cli matic conditions assure production of the basic materials upon which pros perity depends. Increasing population and rising standards of living assure us that such localities will always find a ready and profitable market for their varied products. Real estate in such regions provides a security of excep tional stability. The utmost care is exercised in se lecting the cities in which the funds of the issuing companies are to be loaned. To illustrate this point, I will refer here to some of the methods used by our own company to make its bonds absolutely safe. Before any loan con nection is established, a personal inves tigation is conducted by the officers of this company to determine whether or not the city under consideration meets the high standards required for ap proval. A survey is made of the city’s industrial growth and possibilities for future development, its building needs, the general characteristics of its peo ple, and the probabilities for enhance ment of real estate values. Besides meeting the requirements of the issu ing company, each city in which loans originate must be approved by the Surety Company. The company issues its bonds against St. L ou is, M arch, 1927 the aggregate of moderately sized first mortgages diversified as to location, utility and ownership, thus eliminating, to a marked degree, the possibility of a serious general depreciation in the value of the underlying security. It is of the utmost importance to the bond buyer that the issuing company be composed of men experienced in the mortgage loan and investment bank ing field, and that the management consistently exercise sound conserva tive judgment in the choice of the un derlying security. The Board of Di rectors of the issuing company should be composed of widely experienced and successful business men who are thor oughly familiar with real estate values in the territory in which the company originates loans. By specializing in one type of investment and by apply ing certain standardized precedure in safeguarding the underlying security, mortgage companies have succeeded in creating an investment which merits the confidence of discriminating in vestors. The inherent safety of Guar anteed Mortgage Bonds is apparent to all those who are familiar with the pro cedure followed in the selection of the underlying mortgages. A brief ex planation of the procedure followed by the originating company is given below: 71 Telephone yo u r subscriptions for Bonds o f A ll New Issu es to us reversing p h on e charges. A U G U STIN E & CO. 608 Security Bldg. L o n g D is ta n c e T e l e p h o n e L . D . 32 o r G A rfield 6270 M E M B E R S T . L O U IS https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis STOCK EXCHANGE S e l e c t e d b y b a n k s n a t io n -w id e for PRIM E SHORT-TERM INVESTMENT Maturities i to 1 2 months. Customary i o -day Option. Checkings in any Financial Center. Complete Credit Data on Request. ALWAYS MOST CONSERVATIVE Industrial A ccep ta n ce C o rp o ra tio n Steps in Selecting Our Own Security. 1. Mortgages Selected According to Co nserv ative Standards. —The company limits its selection of loans to high grade completed city properties; largely owner-occupied homes and in come producing properties of moderate size. No mortgages are accepted on buildings in course of construction or buildings situated on leasehold prop erty, or on theaters, garages ware houses, or other large single-use properties. The property must be well located in a progressive city where real estate values are sound and stable and where there is a constant demand for this type of structure. The prop erty must be fully improved, conform to the building requirements of the city, and be adapted to the rental de mand of the district in which it is lo cated. This careful selection safe guards the security from depreciation in value. 2. W id e Margin of Safety Required. —Loans made by the company never exceed 60 per cent of a conservative certified appraisal of the property made by independent appraisers. Be sides conservative appraisals, the mar gin of safety is increased by requiring that all mortgages maturing in more than five years be reduced by monthly, quarterly or annual payments of the principal. These payments are held in trust by the trustee to meet the prin- ST. LOUIS, M O. F IN A N C IN G S T U D E B A K E R D E A L E R S E X C L U S IV E L Y Collateral Trust Gold Notes (T H E N A T I O N A L C I T Y B A N K O F N E W Y O R K , T rustee) Executive Offices IO O EAST 42N D STREET, NEW YORK Commercial Paper Offices NEW YORK r DALLAS r M IN N E A P O L IS / SAN F R A N C ISC O C H IC A G O 1 10 5 South L a Salle Street S T . L O U IS 1 Boatm en’ s B an k Building ENVELOPES FO R BAN KS Safety Pay Envelopes H E C O —C H IC A G O HECO ENVELOPE C O M P A N Y C h ic a g o , I llin o is M id -C on tin en t B a n k er 72 cipal and interest on the bonds. An amortized mortgage is in itself a guar anty against decline in values. Guar anteed Mortgage Bonds have the cu mulative strength of continually in creasing equities. 3. Ex pert Appraisals — Accurate evaluation of the property is secured by employing competent appraisers ex perienced in building and rental values. Besides the preliminary appraisal by experts on the staff of the company, in dependent appraisals are always re quired before a loan is closed. These independent appraisers must be disin terested in their findings and thor oughly familiar with realty values in the locality under consideration. The qualifications of appraisers are inves tigated by and must have the approval of the Surety Company. Each property is also appraised by the Surety Com pany on the basis of its statistical rec ords and direct knowledge of real es tate values. 4. Borrowers Investigated.— In addi tion to a thorough analysis of the prop erty itself to determine whether or not it measures up to the high standard re quired by the company, a careful in vestigation is made of the financial re liability of the borrower and his ability G. H. WALKER & CO. BONDS GOVERNM ENT M U N IC IP A L P U B L IC U T IL IT Y R A IL W A Y C O R P O R A T IO N D ir e c t p r iv a te w ires to all p r in c ip a l m a r k e ts e n a b le us to ren d er p r o m p t a n d efficien t se rv ic e in b u y in g https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis M EM BERS AND a n d se llin g liste d b o n d s . NEW YORK. C H IC A G O S T O C K BROADW AY AND S T . ST. L O U IS EXCHANGES L O U I S , LOCU ST M O . to carry out the terms of the loan. The company takes every precaution to re strict its loans to responsible bor rowers. Careful Analysis. 5. Careful Analysis of Each Loan. —If the preliminary analysis indicates that the application is worthy of con sideration and when all necessary in formation has been secured relative to the property and the borrower, the ap plication together with complete re ports covering every phase of the loan, is submitted to the loan committee of the mortgage company for considera tion. This committee consists of five members from the board of directors of the company. To determine the desir ability of the loan under consideration, the committee carefully investigates the following data: The signed appli cation of the borrower, credit reports on his financial condition, floor plan, showing interior arrangement of the building, detailed reports from ap proved appraisers as to the value of the property, photographs of the prop erty and of the neighborhood. The members of the loan committee analyze the loan and supplement the facts presented with their own expert knowl edge of real estate values. Only those mortgages which prove acceptable in every way receive the approval of this committee. 6. Mortgages Subm itted to Surety Company.- —Following the approval of the loan by the Guaranteed Mortgage Company, the important reports and accompanying papers are forwarded to the Surety Company and submitted to its loan committee for approval. Each separate mortgage, besides meeting the rigid tests of the company, must be ap proved by the Surety Company before it can qualify as security for the bonds. If the mortgage is acceptable, the Surety Company certifies its approval of the loan and the acceptance of the mortgage under its guaranty. The Surety Company operates under the in surance laws of the several states, and adheres in its choice of risks to prop erties which conform strictly to con servative and sound mortgage princi ples. The surety guaranty which un conditionally guarantees prompt pay ment of principal and-interest is proof of the absolute soundness and the in trinsic merit of each separate mort gage, the aggregate of which consti tutes the security for bonds. 7. Security Held in T ru st. —The Guaranteed First Mortgages pledged as security for the bonds are assigned to and deposited with the trustee, under a trust indenture existing between it and the Guaranteed Mortgage Com pany. The company is at all times re(Continued on page 84) St. L ou is, M arch, 1927 73 Future Opportunity in Foreign Bonds Based on Past Developments ANY people who are turning- to foreign bonds for investments do not fully appreciate what a large diversification is offered in this field. The following charts tell an in teresting story of what changes have taken place during the last six years in respect to foreign issues that have been floated in this market. In order to study these developments in foreign financing European government dollar bonds have been grouped according to the time of issue. In order to secure a representative selection of the bonds issued during different periods we have taken the ten highest grade European government bonds issued in the period (1) 1919-1921; (2) 1922-1923; (3) 19241925*. The following chart shows the price course of the three groups of bonds** up to the present and brings out the marked improvement in the prices of European securities. But, more interesting is the period during which each group made its greatest ap preciation in price. The preceding chart clearly indicates that group (1). the issues of 1919 to 1921, underwent its main price appreciation in 1921 and 1922. Similarly, the bonds of 1922 and 1923 rose most in the period just fol lowing their issue, namely, 1924 and 1925. In like manner the issues of 1924 and 1925 have shown marked im provement in 1925 and 1926. This situ ation seems to indicate that the oppor tunities for appreciation are in the more recent issues. M Group 11) Ten highest grade ment issues of 1919-1921*: govern Berne 8/1920. Christiania 8/1920. Copenhagen 5V2/1919. Danish 8/1920. Danish Cons. Mur,. 8/1920. Norway 8/1920. Sweden 6/1919. Switzerland 8/1920. United Kingdom 5%/1919. Zurich 8/1920. Group (2) Ten highest grade gov ern ment issues of 1922 and 1923**: Austrian 7/1923. Czecho 8/1922. Denmark 6/1922. Netherlands 6/1922. Norway 6/1922. Prague 7%/1922. Serb. Croats-Slovenes 8/1922. Seine 7s/1922. Dutch E. Indies 6/1922J[. Queensland 6/1922§. Group ( 3 ) : Ten highest grade govern- https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis B y J. C. Lutweiler President. Baker, Kellogg & Company, Inc., Chicago ment issues of 1924 and 1925f: Belgian 6%/1924. Czecho-Slovak 7%/1925. Finland 7/1925. French 7/1924. German 7/1924. Hungarian 7%/1924. Netherlands 6/1924. Norway 6/1924. Swiss 5%/1924. Swedish 5/1924. Group (1), which is composed of the highest grade European Govern ment bonds issued between 1919 and 1921, indicates that the American in vestor moved cautiously into this new field of foreign financing and loaned funds to the countries least affected by the war and those of the best credit standing in Europe. These countries whose government obligations sold be fore the war on a 3% per cent or 4 per cent yield basis, were forced to borrow in this market on an 8 per cent yield basis. The bonds in this group sold on an average yield of 8.07 per cent in April, 1921, and rose in price as the American investor understood their worth, until April, 1925, when they were selling at a price to yield 5.93 per cent. This meant a rise of 15 points in the index during that time. Then various features which allowed the bonds to be retired at prices lower than they were then selling, caused many of them to decline in prices as may be seen on the chart. For ex ample Berne . 8/1922 sold in January, 1925, at 111% but were callable at 107 after 1925 which caused a gradual de cline to 107 in April, 1926, when they were retired. Practically no further appreciation in price can be expected of the bonds still outstanding in this group because of call features or oper ations of their sinking funds which re tire them at prices around present lev els. Group 2 Group (2) is made up of the ten highest grade European government bonds issued in 1922 and 1923. It in cludes some of the bonds of the coun tries which had borrowed previously as well as countries whose economic condition had suffered greatly from the effects of the war and which could not obtain loans in New York until the way had been paved by these previous for eign government loans. The American investor by this time was willing to go one step further and lend to other countries besides those less acutely affected by the war. Therefore this group includes such countries as Aus tria and Czechoslovakia. The index of Group (2) rose 14 points from the beginning of 1924 to the first part of 1926. The chart shows how the prices of these bonds have tended steadily to improve since the last of 1923, along with the better conditions in Europe and the growing popularity of foreign bonds in this market. The opportu nity for profitable investment in 1924 and 1925 was in this group rather than Group (1). Many of these bonds are selling at such prices that either oper ation of their sinking funds or call features keep them from improving M id -C on tin en t B a n k er 74 further. For example, Czechoslovakia 8/1922 are now selling at 104% but have semiannual drawings for the sink ing fund at par. Group (3) consists of the 10 highest grade European government bonds is sued in 1924 and 1925. In this group we have several countries which had not borrowed in this market before, such as Germany and Hungary, show ing that we were willing to lend to still other countries which had only recent ly developed a sound financial basis. This group also includes loans to some of the same countries which had bor rowed in 1919 and 1921 but these coun tries now borrowed with a coupon of 5% per cent or 6 per cent instead of 8 per cent as in the earlier years. For instance, Switzerland which borrowed at 8 per cent in 1920 was able to bor row in 1924 at 5% per cent; and, again, Norway which borrowed at 8 per cent in 1920, issued a 5% per cent dollar loan in 1925. The chart shows us that this group of bonds has been steadily appreciating in value but there is room for further appreciation for two reasons; either because these are issues of countries which will probably gain a higher credit standing during the coming year; or because they have low coupon rates such as the B'elgian 6%s and can sell at a much higher price before sinking fund or call features operate to limit their price. The bonds that constitute these vari ous groups shows quite clearly the de velopment in foreign borrowings in New York. Of the total European gov ernment issues in 1919 to 1921, 10 per When i question of marketability a n y b a n k e r s lik e to d e a l w ith M T h e N a t io n a l C i t y C o m p a n y b e ca u se its n a t io n -w id e o rg a n iz a tio n is q u ite a s h e lp fu l in m a in ta in ing a m a r k e t secu rities as fo r its o u ts ta n d in g in o b ta in in g broad d is trib u tio n o n its n e w issues. A te lep h o n e call to ou r n earest office w ill b rin g cu rre n t offerin gs r e c o m m e n d e d fo r b a n k in v e s tm e n t. The National City Company National City Bank Budding, New York Offices in more than 50 leading cities throughout the world BONDS https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ' SHORT TERM NOTES * ACCEPTANCES cent had 8 per cent coupons and 10 per cent had 6% per cent or 6 per cent coupons, while in 1924-25, 5 per cent had 8 per cent coupons and 30 per cent had 6% per cent or 6 per cent coupons. Practically all of the borrowing coun tries now can issue loans at lower cou pon rates than could Switzerland, Sweden, Denmark and Norway in 19191921, when we were skeptical of all foreign issues. For instance, we have Belgian 6%s, French 7s, Hungarian 7%s and German 7s among the 10 high est grade issues of 1924-25. Now Borrowing Less The countries which borrowed here in 1919-1921 are borrowing less in pro portion to the total foreign loans in New York than in the earlier days. They are issuing loans now in their home markets or are obtaining loans from other European countries. At the same time they are buying back the dollar bonds of their own countries in this market. This is especially true of Sweden and Holland and more recent ly Germany has been purchasing its own issues here. The years 1924-1925 brought a new development in foreign financing. Mu nicipalities, provinces and industries, which heretofore were unable to ob tain credit, secured large amounts of funds through loans in this market. In order to study more carefully the re cent development in foreign financing, issues of 1924-1925 were divided into three main groups: (a) The ten high est grade national government issues; (b) the ten highest grade municipal and provincial issues; (c) the ten highest grade industrial issues. The accompanying chart gives the price course of these groups* and reveals that the greater appreciation during 1926 was in the industrial, provincial and municipal bonds, the relatively new field of financing. The index of the provincial and municipal bonds, as well as that of the industrials, rose 6 points since the beginning of 1926, while the government bond index rose 3 points. There is a definite tendency in the amounts lent to provinces, municipali ties and industries to increase in pro portion to the amounts lent national governments. This is shown in the fact that in 1919 to 1921, 57 per cent of the number of issues in this market was by governments as compared with 31 per cent in 1924 to 1925. Also dur ing 1919 to 1921 there were no Euro pean industrial issues while in 1924 and 1925, 41 per cent of the issues were by European industries.* " A ”— G overnm ent Belgian 6%/1949. Czecho-Slovak 7%/1945. Finland 7/1950. French 7/1949. St. L ou is, M arch, 1927 75 $276,725,000, or 80 per cent. tFifty-six European government issues were offered in 1924 and 1925. The 10 government issues in Group (3) totalled $410,000,000 of a total lending to European govern ments of $1,039,800,000, or 39 per cent. UPossession of the Netherlands and approved by the government of the Netherlands. §Queensland, a state of one of the British Dominions. Five of this group were retired by May, 1926. Service Charge Experts in New and Larger Quarters Devlin, Merrill, Price & Bennett, Inc., financial sales and advertising counsel lors of Chicago, because of their rapid growth the past year, have been forced to seek enlarged quarters. They have recently moved from the Wrigley build ing to more commodious quarters in the Lake Michigan building, 180 North Michigan avenue. T h e recent sta tem ent of condition of Hungarian 7^/1944. Netherlands 6/1954. Norway 6/1944. Swiss 5^/1946. German 7/1949. Swedish 5^/1954. the First National Bank of Danville, Illinois, shows total resources of ap proximately $3,500,000. Deposits are more than $2,500,000. J. L. Tincher is president of the hank, and C. P. Nelson is cashier. This advertising organization is per haps best known for its campaign which has been used with great suc cess in Dayton, Ohio, and other Middle West cities for installing a service charge on unprofitable checking ac counts. “ B”— Mun icipal and Provincial Finnish Mun. 6%/1954. Rotterdam 6/1964. Beilin 6V2/1950. Bremen 7/1935. Cologne 61/6/1950. Graz 8/1954. Hung’n Cons. Muni. 71/6/1945. Bavaria 61/6/1945. Dresden 7/1945. Upper Austria 7/1945. “C ”— Industrials Paris-Lyons Med. 7/1958. Nord 61/6/1950. German General Elec. 7/1945. Ger. Cent. Bk. for Agr. 7/1950. Ind. Mtge. Bk. Finland 7/44. Rhine-Main-Danube 7/1950. Rhine-Westphalia 7/1950. Sauda Falls 5/1955. Tyrol 71/2/1955. Saxon Public Works 7/1945. The increase in loans to industries and smaller governmental units that has taken place in the past will in all probability continue in the future. In time the New York market will very likely be in the same position as the London market with several times more industrial issues than govern ment issues. Many opportunities for profitable investment in foreign indus tries and smaller governmental units await the investor who will buy such securities before they have their full value recognized and have risen to their true investment level. Investment Headquarters in New Orleans for 22 years -¡Twenty-two issues of various European governments, provinces and municipalities were offered in this market between 1919-1921 in clusive. The 10 issues in group (1) used in the chart represent $388,000,000 out of $882,051,000 loaned Europe during this same pe riod, or 45 per cent. ^Eighteen European government issues were offered in this period. The 10 issues used in Group (2) represent $222,700,000 out of a to tal including Dutch East Indies of Mortgage Securities Co. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis JN all these years we have striven to ad vance our customers’ interests first. To offer nothing but the of the past as cri terion we know we have been success ful. For no bond holder of ours has ever lost a cent of safest possible issues — attractively priced capital or interest. To our regular patrons and to those unacquainted with and with high interest yield. To supervise all loans until the final penny has been paid the bond holder. To maintain safety always. In these, taking our record O r le a n s our service — we extend a cordial invitation to write for our current list of offer ings. * S a i n t J b o u is j) M id -C on tin en t B a n k er 76 Southern Securities in Strong- Demand People W h o Are Putting Money Into Southern Securities Now Have Good Cause to Expect a Profitable Investment ITH the substantial growth of the South in recent years there has arisen naturally a strong de mand for capital in this section, which has been supplied in large measure through the issuance of bonds secured by Southern properties. Because of this demand Southern bonds have normally paid a better rate of interest than those originating in old established industrial sections where the demand for capital is not so great. This comparatively high yield, to gether with the fundamental safety im- W B y R. G. Fields Advertising Manager, Caldwell 65 Company corporated in these issues, has given them a splendid market in the northern and eastern financial centers, as well as at home. Through the sale of these se curities, northern capital has moved into the South in enormous amounts, making possible the expansion of southern indus tries, the financing of state, county and municipal improvements, and the erec tion of needed buildings of income-pro ducing character. Complete Investment Service Especial Attention Given Investment Accounts of County Banks and their Clients. We Invite inquiries by wire at our expense. James C.Willson &Co. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4 0 7 M A R IO N E -TAYLO R BLDG. LCUISVILLE^KRNTU CKY^ The people of the South have used their credit to construct splendid high way systems, schools, churches, hotels, office buildings and other needed better ments. Securities given in exchange for this capital have as a general rule been of a constructive type, providing sound investments for northern and eastern capitalists as well as for investors in the South itself, many of whom have put considerable sums at work in their own section through buying securities of southern origin. Not so many years ago southern secu rities were held in small repute in the northern and eastern financial centers, but with the rapid industrial develop ment of the South in recent years and the better knowledge of this section which northern and eastern people have gained, southern bonds have risen in the esteem of the old conservative investors " T h e South has only just begun its real development, and in the course of the next ten years it is certain t h a t many choice issues of Southern securities w ill be avail able through the developm ent of southern industries. Capital must be secured f o r this development, and conservative financing w ill see to it th a t this capital is obtained through the issuance of sound se curities. T he industrial leaders of the South have only started. T h e gre ate r portion of t h e ir w o rk lies in the fu tu re .” until now they are rated among the choicest securities. The year 1926 probably saw the larg est volume of financing in the South’s history. Southern industries particu larly were developed through the pro viding of additional capital. At the same time the building of conservative income-producing properties in the larger cities continued from the previ ous year without interruption and the volume of municipal financing in south ern states continued to be very consid erable. The outlook for 1927 is that the South will go ahead with its construction pro grams in all lines. This being the case, the volume of southern securities will undoubtedly remain at a high level. Southern investment houses specializ ing in securities of this section are find- St. L ou is, M arch, 1927 ing a splendid demand for southern bonds and anticipate that such demand will be increased rather than dimin ished during the coming twelve months. One of the primary reasons why southern bonds are regarded as a par ticularly good investment by wealthy people of other sections is that these bonds are showing a decided tendency to enhance in value through the growth of the security behind the bond issue. This growth is taking place as the re sult of the present progress of the South, and affects municipal, corpora tion, railroad and industrial bonds in a greater or less degree. As the South develops, the physical property covered by the mortgages of these bonds is in creased in value. The natural result is that the bonds themselves become more valuable year by year. This feature ur sound southern securities has been more or less obvious in recent years and have proven decidedly profitable to holders of southern bonds. As Northern and Eastern people have invested money in the South, their in terest in this section has grown more than ever. A person is naturally inter ested in the locality in which his funds are invested. It is thus seen that nor only has prominence of the South in the eyes of people of other sections tended to better the market for south ern bonds, but also the broader sale of southern bonds tended to increase the interest of others in this section. The South has only just begun its real development and in the course of the next ten years it is certain that many choice issues of southern securi ties will be available through the de velopment of southern industries. Cap ital must be secured for this develop ment and conservative financing will see to it that this capital is obtained through the issuance of sound securi ties. The industrial leaders of the South have only started. The greater portion of their work lies in the future. With splendid labor conditions, enor mous natural resources, cheap water power in quantities sufficient for any conceivable usage, favorable climatic conditions and numerous other advan tages, the people who are putting their money into southern industries now have every reason to expect a profit able investment. 77 A Selected List Bonds for a Bank's Secondary Beserve High Grade Bonds have stood the test of time, as investments for a Bank’s Second ary Beserve. We give below a list of Bonds combining a high degree of security, in their respective classes, with a good return of interest. City of Philadelphia D . 0 . . . . . 4 .0 8 % State of North Carolina Sch. & Hwy. 4¡L£% 4 .1 0 % Akron, Ohio, Sewer 4 p 2 % ............................. 4 .2 5 % State of Louisiana Port Commission 5 % . . 4 .4 0 % St. Louis Joint Stock Land Bank 5 % . 4 .5 5 % Gulfport, Mississippi, D . O. 5 p f% . • • • 4 .7 0 % Batavian Petroleum Company 4p 2% . . . 4 .8 5 % Atissouri Pacific B y. Co. 1st and Bef. M tg. 5 % 5 .0 0 % Interstate Power Company 1st M tg. 5 % Bepublic of Chile Sinking Fund 6 % . 5 .1 6 % . . 6 .5 0 % William R.fbmptonCompany Investment Bonds St. Louis T h e recent statement of condition of the Commercial Trust & Savings Bank, of Danville, Illinois, shows total re sources in excess of $1,824,000, with deposits in excess of $1,337,000. Geo. W. Telling, an active worker in af fairs of the Illinois Bankers Associa tion, is president of the bank. John H. McCormick is cashier. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Seventh and Locust Streets N e w York 44 Wall Street C h ica g o 105 S. La Salle Street B o ston 73 Water Street D e tr o it M ilw a u k e e K a n sa s C ity 1001 Ford Bldg. 429 Broadway 618 Dwight Bldg. C in c i n n a ti 312 Dixie Terminal Bldg N e w O rlea n s 1404 Hibernia Bank Bldg M id -C on tin en t B a n k er 78 A long L a Salle Street = B y W m . H . M aas = The recent death of Lym an J. Gage, former secretary of the treasury under President McKinley’s administration and nationally known banking author ity, recalls a career in many ways similar to that of his friend, the late David R. Francis of St. Louis. Mr. Gage was the first president of the World’s Fair in Chicago in 1893, while Gov. Francis was chairman of the board of the World’s Fair held in St. Louis in 1904. Their deaths occurred within a few weeks of one another. More honor fo r one of Chicago’s lead It ing citizens. Eugene M. Stevens, who a few weeks ago was elevated to the position of president of the IllinoisMerchants Trust Company, has been elected a trustee of the University of Chicago. He is 56 years old and a native of Preston, Minn. He came to Chicago from Minneapolis in 1917. George month. At this writing, he is in Florida literally hitting a little golf ball at Valparaiso. Emery, vice-president of the National Bank unit of the Stockyards Banks and one of the oldest officials of the affiliated institutions, has been hitting the ball since 1889, when lie started in as messenger at $30.00 a is interesting to recall th a t Dale Cham berlain , pl anthat enabled one bank extra to declare y r ? extra 10 dividend a A year ago, one o f our correspondents asked us to work out an investment program whereby we would assist that corres pondent to keep its surplus cash resources invested from day to day, at a favorable rate, and at the same time keep the funds in such form that they would be readily available. The plan was developed! The correspondent adopted it! Practically every surplus loanable dollar was kept working from day to day, and due to this increased income, that bank de clared an extra 2 °Jo dividend on January ist. The plan is simple. It is based on safe and sound banking principles. It is broad enough to cover the requirements of the bank that has a permanent, year ’round surplus— yet flexible enough to meet the needs o f the bank that has a surplus for only afew days or weeks. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Send for Tour Copy Our Service Department has prepared a booklet which outlines the plan in detail. Merely write for a copy o f booklet entitled, “ A Plan That Enabled One Bank to Declare a 2 °fo Extra Dividend.” The National B ank o f the R E P U B L I C * • O F C H IC A G O • * Office o f New Y ork Representative, N o. 1 W all St. J o h n A . L y n c h Chairman o f the B oa rd D a v i d R . F o r g a n , Vice-C hairm an G e o r g e W o o d r u f f , Vice-Chairm an H . E . O t t e , P resid en t I N . B . R . 1927 vice-president of the Drovers Banks, is now prepared for the summer months. An expensive Panama chapeau was included in the tropical gifts which his colleague, Frank Covert, brought back from Panama last month. William C. Cummings, presi dent of the Drovers, chose California for his winter vacation and is in Los Angeles with his family. Joining qA dur ing his thirty-eight years service, he has served under seven chiefs. In 1889, Elmer Washburn was president of the National Institution, and, through the years, the following: L. D. Doud, S R. Flynn, W. A. Heath, Melvin A. Traylor, and S. T. Kiddoo, who re cently was made chairman of the board. Charles N. Stanton recently was elected president of the two institu tions. in the late w inter hegira toward Southern sunny climes, P. M. Reed and his charming wife arrived in 'New Orleans in time for the Madri Gras. Later, of course, their itinerary included Havana. P. M. Reed & Banker Associates has become a well known term in a great many of the thirty thousand banks throughout the U. S. Interesting findings showing the growth of the bond business through out the entire Middle West, were un folded by this magazine recently to bond executives in Chicago and St. Louis. More than eighty leading houses were represented at the luncheon given for La Salle Street in vestment men by The Mid-Continent Banker at the Hotel Sherman. A simi lar meeting at the Hotel Statler in St. Louis brought out an attendance of almost equal size. Representative of the Investm ent Bankers Association, Illinois Bankers Association, Illinois Bond Men’s Club and Financial Advertisers’ Association were honored guests. In addition to sales managers and bond house execu tives there were in attendance a num ber of well-known financial economists of the larger banks. T hree bits of com ment fro m La Salle Street which came to this writer following the luncheon are very ap preciated; “I never saw so many men making notes at a business meeting; “It was the most ethical luncheon meet ing ever given of a similar nature by S t. L ou is, M arch, 1927 a publisher in Chicago;” “ The MidContinent Banker and Northwestern Banker have given Chicago bond houses a great deal of valuable information on the bond situation in the Middle West.” BONDS fo r INVESTMENT 79 “ When in Rome, Do as the Romans Do,” runs an old saying. And that is exactly what W. W. Welsh, Chicago district manager of Baker, Kellogg & Co., Inc., is doing while on a vacation with Mrs. Welsh at Rome, Ga. Mr. Welsh, who is one of the best posted men in Chicago on foreign securities, is taking his first vacation in four years. Yesterday, F eb ru a ry 28th, was a gala Sixty-Seven Wall Street New York City https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Th e requirem ents of banks are given special considera tion by th is com p an y. W e are g l a d to recom m en d bonds suitable for your secondary reserve account or for resale to cu stom ers. day for De Wolf & Company, Inc., marking as it did the removal to their new executive quarters to the One Hun dred West Monroe Building, at 100 W. Monroe St. Some people have been wont to say ROGER B. WILLIAMS, JR., & CO. Bankers that bankers have no hearts. A wellknown cashier of a bank in a large Middle Western town recently proved otherwise in the presence of this writer when he told us of an unfortunate situation in his institution brought about by three young men in his em ploy who had embezzled a total of ap proximately $25,000. The bank was protected by the bonding company naturally, but it hurt the cashier to jail these boys, one of them married, and all three having been “faithful” employes for a number of years. The stock market caused their downfall. M U N IC IP A L BO N D S IN V E S T M E N T S E C U R IT IE S D’Oench, Duhme & Company 507 Locust Street Phone GArfield 6940 S T . LO U IS, M O . M em ber, S t. L o u is S to ck E xchange “ EQUITABLE BONDS BUILD SURE FINANCIAL INDEPENDENCE ’ ■ are underwritten by an investment house of unquestioned integrity. Officers of this organization enjoy an enviable record and are financiers and business men of longstanding. Supported by ample capital, sound policies and ex perienced technical men, Equitable is in a position to fully safeguard the interests of its clients. S u it a b le ; B O N D & M O R T G A G E CO . Representatives in 17 Principal Cities 110 N . D ea rb orn Street, C H IC A G O J- C . J O H N S O N , P r e s id e n t M ILLE R W E IR , M anager B a n k D e p a r t m e r 217 South Fifth, L O U IS V IL L E E. L . A U G U S T U S , V i c e - P r e s i d e n t a n d M a n a g e r L o u is v i ll e O ff ic e E. R A Y M O N D D U T R O , D i s t r i c t M a n a g e r U n ion -D a v en p ort B ank B uilding, D avenport, Iow a M id -C on tin en t B an ker 80 Real Estate Mortgage Bonds H ow to Distinguish the Good from the Bad I T IS, of course, highly desirable from B y J. C. Johnson the standpoint of the investor, that he should be able to determine whether or not his investment is good. Ac the same time, it is more or less difficult for him to determine to his satisfaction whether or not his railroad bond, his public utility bond or his in dustrial bond has the desirable quali ties of not only being good, but that the income on such properties is suf ficient to meet the coupons and the serial maturities. It is equaly desirable in an invest ment that it shall have continuous and sustained earnings, as well as being intrinsically good. Earnings are a very important element in the “goodness” of a bond. I have said that it would be difficult for the holder of general mar ket securities, such as railroad, public utilities or industrial bonds, to deter mine as to whether or not sufficient in trinsic value is there behind the bond to make it a good and safe bond, for the reason that it would be a matter of vast expense and difficulty, ordinarily to make an appraisement of any such President, Equitable Bond & M ortgage C o., Chicago properties. Therefore, the purchaser of this kind of securities must rely ex clusively upon the high character and reputation of the house which sells them. It is somewhat different, however, for the investor who is a purchaser of first mortgage real estate bonds. It is comparatively a simple proposition for an investor to obtain accurate in formation regarding the value of build ings and ground securing the bond is sue in which he is interested. It is also comparatively simple to obtain an accurate statement showing the net in come or earnings of such real estate property. Such real estate properties can be visualized; the holder of first mortgage real estate securities can per sonally inspect the property and by inquiry, if he is not personally up on real estate or land values, can obtain within a period of an hour or such a matter, a very fair estimate of the value Complete Financial Service W e S o lic it Y ou r St. Louis Account of any real estate property upon which he may hold bonds. I do not mean to say that an exact and accurate ap praisal can be made in such haphazard manner, or within the short space of an hour or two, but I think almost any intelligent man or woman can, by in quiry, come within shooting distance oi: the value of a property. Certainly very much more accurately than one could in desiring to know the value of a railroad or a public utility com pany’s properties, or a vast industrial plant, properties of which may and are usually scattered about and located in various parts of the state or country. Real estate bonds, therefore, have this desirable feature, that anyone can readily obtain accurate and dependable information regarding the intrinsic value of property securing a bond is sue, and can easily secure a statement ot the earnings and expenses and net earnings. One of the features of strength which I regard as inherent in good real es tate bonds, is the amortization feature. That is, the borrower or debtor agree- Joliet. 111. UNDERWRITERS - DISTRIBUTORS OF GOVERNM ENT IN D U S T R IA L P U B L IC U T I L I T Y R A IL R O A D M U N IC IP A L REAL ESTATE BONDS Is your s one of the one thousand Bantus in the Correspondence Invited hbm a &.ntrai. Trust Company M EM BER FEDERAL RESERVE SYSTEM https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ST. L O U IS Middle W est that is making use of the Free Services furnished by our Statistical Department? George Woodruff, C h a ir m a n o f the B o a r d Frederick W . Woodruff, P r e s i d e n t Fred M . Chamberlin, V i c e -P r e s id e n t Alfred J. Stoos, V i c e -P r e s i d e n t Louis R. Peyla, V i c e -P r e s id e n t Richard B. Vance, S e c r e ta r y & T r ea s u re r 81 St. L ou is, M arch, 1927 ing in the provisions of his trust deed that he will, out of the income of the property, deposit a certain amount each month with the trustee to cover the accruing interest and accruing amorti zation. In my thirty years experience in banking and finance, I believe I can state that in the handling of all man ner of investments, the first mortgage real estate bond on well located prop erty in a city of metropolitan size, is about the only security that I know of where the income is so certain and continuous that the borrower or debtor is justified in agreeing in his trust deed that he will make a monthly deposit anticipating the accruing interest and P U B L IC U T IL IT Y R A IL R O A D IN D U S T R IA L BONDS A ID & C O M P A N Y , Inc. S e c u r it y B ld g . ST. L O U IS S tic kn ey -D e n y v e n &CO. Garfield 3140 A B R A H A M L IN C O L N S A ID in his famous “ House D ivided” speech: If we could F I R S T know where we are and whither we are going, we could better judge what to do and how to do it.” A n intelligent investment program concerns itself first with the “ where” and “ whither” — that there m ay be no waste or loss in connection with the “ w hat” and “ how .” M o r e a b o u t th is m e th o d i f y o u are in terested . W r i t e u s w ith o u t o b lig a tion . BOW M AN & COMPANY IN V E S T M E N T S E C U R IT IE S 220 N O R T H F O U R T H S T R E E T S T . L O U IS , M O . J. C . Joh n son amortization out of the net income of the property each month. Perhaps there is no form of investment in ex istence which is known to have the record for continuous and constant in come, as well-located apartment prop erty in metropolitan cities. I consider the feature of “ diversity of income” a very important element of strength in first mortgage real estate bonds. Income from apartment house property or office property is not de pendent upon market conditions or the income of any one individual, and is largely free from many of the hazards incident to business. Income is de rived from thirty, fifty or a hundred tenants living in the building—usually of various and diverse occupations, thus rendering the monthly income of the property comparatively safe from the usual hazards. For many, many years the farm mortgage was considered the ideal form of security and investment to such an extent that many of our large insurance companies invested the major portion of their funds in these securities. These mortgages had been good for a thousand years, but https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis W e underwrite and distribute Public Utility, Industrial and Municipal Bonds. Special service to Banks in bonds for investment or re-sale. Full details on request. A.C.ÄLLYNANDC O M PA N Y Planters Building—ST. LOUIS—Phone GArfield 2100 C H IC A G O NEW M IL W A U K E E YORK Registered M ail Envelopes HECO ENVELOPE C O M P A N Y Chicago, Illinois BO STON M IN N E A P O L IS P H IL A D E L P H IA SA N F R A N C IS C O NEED ENVELOPES? W r ite H E C O — C H IC A G O 82 M id -C on tin en t B a n k er the defect is that they are dependent upon one source of revenue, namely, the crops, which are affected by vari ous climatic and other conditions. The question of “management,” so largely controlling the success or fail ure of various enterprises is not a very important element in apartment house or office building property. It is high ly desirable, of course, to have efficient management, but the proposition does not entail great technical skill; the employment of an army of employes and the greatly involved problems con fronting the management of railroads, public utilities or other industries. It is the universal experience in every city of this country of metropoli tan size that real estate values through out such cities have constantly in creased in value from the very day that such cities have taken on metro politan proportions. It is true there may be spots in such cities where real estate values are depressed or are sta tionary, but they are insignificant com pared with the great growth and devel opment and increasing values con stantly going on in other parts of our American cities. These increasing val ues are adding equity and security be hind your first mortgage real estate bond, and while bonds of other charac ter, secured by various kinds of equip ment, machinery, turbines, etc,, are wearing out and the security getting proportionately less, it is almost the universal rule that the equity and se curity behind mortgage bonds located in advantageous and desirable loca T o officers of corporations The Equitable acts in the following cor porate trust capaci ties: 1. As trustee under mort gages and deeds of trust, securing bonds of rail road, public utility and industrial corporations. 2. As transfer agent and registrar of stock, (I n the tr a n sfer sh a re o f even of th i r ty -f iv e stock a sin g le th e r e sep a ra te are st e p s . E a c h o n e o f th e m is v ita l to a p r o p e r t r a n s f e r ; i f a s in g le er ro r is m a d e c o n fu s i o n , lo s s o f t i m e a n d e x In the transfer of one share o f stock you can make thirty-jive mistakes p e n s e w i l l r e s u l t .) 3. As depositary under protective agreements or under plans of reorgani zation of railroad, public utility and industrial cor porations. 4. As agent and deposi tary for voting trustees. 5. As assignee or receiver for corporations under action for the protection of creditors. And any of those mistakes may cause ex pensive litigation, loss of prestige and per haps the loss of a customer. The appointment of The Equitable as transfer agent assures the complete and proper execution of that phase of business. Read the column at the left . . . then send for our booklet, The Equitable Trust Company o f N ew Y ork, Transfer Agent. The E q u it a b l e TRUST COMPANY 6. As fiscal agent for the payment of bonds, and coupons of states, munic ipalities and corporations. OF N E W C W ith o u t incurring any obligation, con sult the nearest office of T h e E q u i t a b l e with regard to any o f the services rendered by ou r C o r p o r a te Trust Department. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis YORK 37 W A L L S T R E E T h ic a g o : 105 South L a Salle Street Telephone: State 8312 D is t r ic t R e p r e s e n t a t iv e s Ba l t im o r e Ph il a d e l p h ia Sa n F r a n c i s c o A tlanta F o r e ig n O f f ic e s London Pa r i s M e x ic o C it y H o m e O f f i c e , 37 W all Street, N e w Y o r k , connected by direct private w ire w ith C h ica go office. Total resources more than $475,000,000 © E . T . C. o f N . r., IQ 27 tions in metropolitan cities are con stantly getting more valuable from year to year. Chicago is not a city of mushroom growth, but is a city that increases its population by approximately 90,000 peo ple every year. It is a city of conser vative growth and cannot and will not have a boom. B'ooms occur very rare ly in the older and substantial cities of our country. Chicago is too large to have a boom. The modern trust deed is a vast im provement over the old-fashioned mort gage. It contains many provisions of safety for the bondholder which are not usually incorporated in the ordinary mortgage. For example, the modern trust deed provides for the administra tion of a building by the trustee if the owner misapplies or misuses the in come and defaults in his payments for longer than sixty days. This is of ad vantage to the investor who holds first mortgage real estate bonds on such property. He has a very reliable, Ca pable attorney in the form of the inde pendent trustee representing him, and in my judgment this provision is one of the elements which explains why there have been comparatively very few fore closures on bond issues in the city of Chicago. ; Of course it is highly desirable to pay due regard to the quesfon of locaton. Well located property is? always in demand and commands a ready mar ket. Well located property is always rentable and thus insures the necessary income. Locations near but not too close to a market or shopping center, within easy walking distance of trans portation and in a neighborhood which commends itself to the discriminating individuals argue much for the safety of one’s investments in first mortgage bonds on property within such ap proved locations. And lastly—the character, reputation of the bond house and the individuals operating it should be taken into con sideration. Such a bond house need not of necessity be the largest or the oldest, but it should have a good repu tation both for integrity as well as abil ity. I believe that if the prospective in vestor in first mortgage real estate bonds should observe the foregoing fun damental principles in the making of his investment and in the purchase of first mortgage real estate bonds, that his losses during his life-time by the purchase of such bonds will be prac tically nothing. Piety is the right performance of a common duty, as well as the experi ence of a special moral emotion.— Beecher. St. L ou is, M arch, 1927 83 "B U S IN E S S C Y C L E S ” (Continued from page 18) of the secondary reserves of many banks. The commercial paper dealt in by note brokers also had begun to occupy a place as a standard invest ment for funds of commercial banks. Notwithstanding the fact that the Federal Reserve rediscount facilities afforded a secondary and readily avail able reserve for member banks, other opportunities for the use of invest ments on the part of banks developed which more than offset an apparently diminishing need for investment. Mem ber banks are permitted to borrow on their own notes for short periods from the regional reserve banks using United States securities and corporate bonds as collateral. This privilege has tended to emphasize the importance of bonds as a secondary reserve, since instead of rediscounting, the member banks can borrow on corporate security collateral. Not Enough Comm ercial Paper In recent. years, too, there has been a surplus of funds in the money mar ket. There has not been sufficient short-time commercial paper to absorb the money available in investment. Under such conditions it is quite logical that the banks should turn to longer time corporation securities to employ profitably their idle funds. The ex tent to which commercial banks have entered the investment field is indi cated by the fact that at the present time the proportion of bonds to the total deposits of all national banks of the country is double what it was in 1914. While the commercial banks at the present time are carrying heavier bond investment than ever before, this move ment may have a much greater possi bility than merely adding to the profits of banks. Could not the banks with their large investment buying power by intelligent and concerted action reg ulate or control business cycles and aid materially in smoothing out the curves of business prosperity and depression? Study of the causes of the business cycles is increasing, and there is little doubt that with an intelligent under standing of the underlying reasons for these cyclical fluctuations they can be materially reduced. When the peak of business prosperity is approaching with the tendency to over-production and inflation, then the question arises whether it would not be advisable to shift from the commer cial field to well-seasoned securities un likely to be seriously affected by de clining activity. Such a shift by mild ly curtailing credit would have a ten dency to tighten the short time money market thus checking inflation and also https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis since the bond market weakens in time of heavy demand for commercial money there is presented a favorable opportu nity for the banks to invest in longer time securities. A period of depres sion has a tendency to strengthen the bond market and when recovery be gins, the banks by disposing of their bonds would then increase the money available for commercial purposes, thus aiding recovery by cheapening money rates and at the same time taking ad vantage of a favorable opportunity for disposing of their bonds. Business cycles have been the bane of our economic life and have caused untold waste. They were formerly re garded as inevitable. Recently more systematic and scientific study of causes have led us to question the in evitableness of these devastating fluc tuations. All the facts and theories as to the cause of these cycles and reme dial measures which have been so la boriously collected by economists are useless, however, unless the business world is willing to co-operate intelli gently, and be guided by the theories as they are worked out from time to time. Can the banks aid in smoothing out the economic curve? If so, will they whole-heartedly do their part? C o n s e rv a tiv e S ecu rities Maturity Indianapolis Power & Light " A ”....... 1/1/57 1st Mortgage Rate Price Yield 5% 98 5.125 Michigan Home Telephone Co...... 11/1/46 1st Mortgage 6% 102 5.83 Florida Public Serv ice Co. “B ”.......... 4/1/55 1st Mortgage 6% 100 6.00 Middle States Tele phone Co. of 111. 1/1/47 1st Mortgage 6% 100 6.00 Barnhart Bros. & Spindler ............ 4/1/32-35 Serial Notes 6% 100 6.00 City State Bank Building ................ 2/1/47 1st Mortgage 6% 100 6.00 Swiss Oil Corp. Lexington, Ky... 1/15/28 Notes 7% 10 1 6.25 Powell McLean Building Corp...... 12/1/29 1st Mortgage 6^2% 100 6.50 Southwest Public Service Co______ 3/1/37 1st Mortgage 6i4% 99.50 6.50 Circulars Upon Request BARTLETT & GORDON IN C O R P O R A T E D First National Bank Building, Chicago First Wisconsin National Bank Building, Milwaukee M id -C on tin en t B a n k er 84 GUARANTEED Guaranteed Bonds W e endorse each bond guaran teeing interest and. principal, which we promptly. collect and pay Bonds are secured by first mortgages on centrally located office buildings, com mercial property, hotels and apartments in Florida worth twice amount of loan, as deter mined by independent apprais als. W e sell individual mort gage loans known as “ standard life insurance company loans.” M any insurance and t r u s t companies purchase our secu rities. Our company, estab lished s e v e n y e a r s a g o , specializes in first mortgage loans. Interest payable New York City if desired; titles insured by New York Title and Mortgage Company. Booklet M C gives full particulars. Palm Beach Guaranty Company Net Assets Over $1,300,000 G u a r a n t y B u ild in g W e s t P a lm B e a c h , F lo r id a 3 New Features: 26.6% greater size— 6 more painters— 50% more color — all at the old price in Reed’s Massdnagazine Plan for 1927. See it fo r yourself. 26.6% g re a ter size in Reed’s M ass'm agazine Plan for 1927, but no in crease in price. S ee i t f o r y o u r s e l f https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MORTGAGE BO N D S . (Continued from page 72) quired to maintain, in the hands of the trustee, mortgage collateral, cash or obligations of the United States Gov ernment at least equal to the par value of the outstanding authenticated bonds. Each bond carries the certificate of the trustee as assurance that approved col lateral equal to 100 per cent of the bonds has been deposited as security. Policies covering fire, tornado and title insurance are also deposited with the trustee. 8. All T itle s Guaranteed.— All titles are based on fee simple ownership of the property. For the protection of the bond holder, the titles of all mort gaged properties are insured by ap proved title companies satisfactory to the guaranteeing companies. 9. Insurance and Taxes. —Adequate fire and tornado insurance is required and maintained on each property se curing the mortgage underlying these bonds in companies whose capital and surplus is not less than $1,000,000. Pro vision is also made for the payment of taxes. We have outlined above some of the most important steps followed by our own company which issues bonds of the guaranteed type. A thorough un derstanding of the procedure in creat ing an investment security is funda mental for an intelligent appreciation of its relative desirability. The inde pendent investigation which the issu ing company and its mortgages must undergo at the hands of the Surety Company, assures investors in bonds of this type that their security is in trinsically sound. Additional safeguards provided for this form of investment are embodied in certain requirements: 1. The principal of the mortgages must be reduced by monthly or quar terly payments, with corresponding increase in the margin of safety. 2. The makers of the mortgage notes must be of good character, with adequate financial responsibility. 3. The issuing company must guar antee the payment of the underlying security. It must also assume the di rect obligation for the payment of the bonds it issues, and must be approved by the Surety Company. 4. Positive proof of protection against loss must be furnished invest ors in the form of an unconditional guarantee of a large Surety Company, which covers the payment of princi pal and interest of every mortgage, se curing Guaranteed Mortgage Bonds. Bonds of this type are being offered to the public to yield from 5y2 to 6 per cent by investment bankers, banks, and trust companies, in nearly every state. W e Specialize in short time seasoned Bonds for Banks and Dealers W r ite f o r O u r L is t o f B o n d s fo r B an k I n v e s tm e n t a n d f o r R e s a le EDWARD D. JONES & CO. M E M B E R S S T . L O U IS STOCK EXCHANGE Boatmen’s Bank Building GArfield 8771 ST. LOUIS Bond Salesman Wanted Established St. Louis bond house has opening for a man, age 25 to 35, who can sell se curities in Central and South ern Illinois. Banking experi ence will be considered a valuable asset. A splendid opportunity for the right man. If interested, write in confi dence, giving age, experience, education and references. If these meet with requirements, an interview will be arranged. Address J. J. W ., care the Mid-Continent Banker, 408 Olive St., St. Louis, Missouri. S ta te m e n t Envelopes H E C O — C H IC A G O St. L ou is, M arch, 1927 85 f----------- ------ > We specialize in J o in t S to c k Land B ank Stocks an Bonds KOEPPE LAN G STO N LOPER 6 CO. 3 9 South LaSalle Street T e le p h o n e -R a n d o lp h O 9 8 O ^ C H I C A G O a WANTED T w o B o n d S a le sm e n M en of h ig h c h a r a c te r , w ith b a n k e x p erien ce p r e fe rre d , to sell b o n d s Illin o is banks and to cor p o r a tio n s . S p le n d id C h i cago of Com pany d e siro u s d e v e lo p in g s ta t e -w id e o r g a n iz a tio n . Address W . H. M ., Room 1221, No. 38 S. Dear born Street, Chicago. 50% more color in Reed’s Mass magazine Plan for 192.7; printed in fulkcolor gravure. See it fo r yourself. Ten nationallydcnown paint' ers—twice as many as before —helped to make R eed’s Mass'magazine Plan for 1927. See it fo r yourself. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ADVANTAGE OF REAL ESTATE BO NDS. (Continued from page 53) PARTICIPATORS & DISTRIBUTORS For instance, generally speaking, the man who has only a few hundred or few thousand to invest, has no business holding government bonds, except in governmental emergency. The interest is too small to make him feel his money is worth anything, hence the first smart salesman who comes along gets his bonds in exchange for what will be “ better than Bell Telephone stock ever was” in just a few years. The investor takes the attitude that he does not need the money, it is earning him a very little, and he could just as well invest it where he has a chance to make a million.” How different this would be if his banker had taken a per sonal interest in his welfare by advis ing with him how to invest his $500 or $1,000 so as to earn the maximum in terest with safety—at the same time arousing his interest in how compound interest actually accumulates over a period of years. To state it differently: A banker seldom gains the confi dence of his customer by giving advice that curtails his earnings, but does gain his confidence by helping him in crease his earnings. The average man is not so much interested in how to “keep” his money as in how to make it double in the shortest space of time. The real estate bond is the ideal in vestment for the banker to sell his cus tomers, for the reason that its interest return is good, its safety is unques tioned if put out by a conservative house and the customer is already ac quainted with the real estate mortgage as a safe form of security. The aver age man has had experience one way or the other with mortgages, so it is not hard to explain to him that a bond is simply one of the notes secured by a mortgage. It may bewilder him to talk about “general underlying bonds” or “debentures” or “first preferred,” hut when you tell him about a real estate mortgage, he understands. It only re mains for the banker to first satisfy himself as to the character of the house underwriting the bond issue, its reputa tion for conservatism and integrity. There are reliable and unreliable bond houses, the same as there are reliable and unreliable banks. Real estate securities now form a much larger percentage of the invest ments of the great life insurance com panies than any other security, also that of savings banks and large es tates, particularly in the older states. Banks in general are increasing their holdings rapidly, and as a security for resale to its customers, the banks are of HIGH GRADE Bonds Notes Stocks WETZEL & COMPANY INVESTMENTS Boatmen’s Bank Bldg. St. Louis Three entirely new fea" tures in Reed’s Mass" magazine Plan for 1927 See them fo r yourself. Safety Pay Envelopes H E C O —C H IC A G O If You Can Answ er These Questions — and answer them correctly your investment profits will show im mediate improvement. (1) Is the trend of stock prices up— or down? ( 2 ) Is this a time to buy or to sell stocks: what stocks? (3) Are long- or short term bonds the best investment now? The coupon is for your convenience in securing authoritative informa tion. If the answers to these ques tions interest you clip it now. There is no obligation. BROOKMIRE ECONOM IC S E R V IC E , Inc. 25 W e s t 45th St., N ew Y ork Please Name send free Bulletin M.B. ............................................................ Address ........................................................ finding the real estate bond most satis factory from the standpoint of both safety and salabiltiy. 86 M id -C on tin en t B a n k er A Bank Cashier Wanted— Interesting Men in the Banking Field Ben Edwards Began Banking Career at Age of Sixteen Back in the days when St. Louis was pretty much of a prairie beyond Grand avenue there was born a boy who is now one of the oldest bankers in Mis souri in point of service. to earn some extra money a few months ago, so he decided to write insurance, with the under standing that it would not in terfere with his duties at the Bank. $4 0 0 PerMonth on the average was the re sults of his first two months’ work on a part time basis only, writing all his busi ness after banking hours. Promotion work, as it relates to the increasing of your sales, is constantly c a r r i e d o n through direct mail adver tising and up-to-the-minute Policies. Are You the Man? W e want bankers in every community in Illinois, In diana, Iowa, Missouri, Michigan and Ohio to write and ask us about our plan. ABRAHAM LINCOLN LIFE INSURANCE COMPANY (Formerly Mutual Life of Illinois SP R IN G FIE LD , ILLIN O IS H. B . H ILL, P resid ent F. M . FEFFER, V ice -P re s id e n t an d A g e n c y D irector https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis That boy, now 67 years old, is B'en Edwards, who was born on the last day of the year 1859, in a house that was located near what is now the cor ner of Eleventh and Locust streets. At the age of four, Mr. Edwards’ family moved to Kirkwood, where he received his early schooling. In those days Mr. Edwards says he had a lot of fun playing baseball and attending the annual fairs at the old Fair Grounds on North Grand avenue. To attend the fairs he used to ride a Missouri Pacific train from Kirkwood to the Grand avenue station and then “hoof it” north until he came to the fair grounds. Sometimes he was lucky and caught a ride with a farmer driving a wagon. On his sixteenth birthday, believing the better the day, the better the deed, Mr. Edwards began his banking career as a messenger for the old St. Louis National Bank, located at 215 Olive street. He served as a messenger and in various other capacities for four years, then went to the Bank of Com merce (now the National Bank of Com merce) as assistant correspondence clerk. In 1887 he abandoned the banking business for a time to go with his father and organize the brokerage firm of A. G. Edwards & Son. He remained in this business for five years, then re turned to the Bank of Commerce as assistant cashier. In 1899 the Bank of Commerce took over the old St. Louis National Bank, with which Mr. Edwards had started his banking career, and Mr. Edwards became cashier of the combined insti tutions which then became known as the National Bank of Commerce. He subsequently became vice-president of the bank, and in 1908 he was elected president, succeeding J. C. Van Blarcon. Five years later, in 1913, he left the National Bank of Commerce and was not actively engaged in the banking business again until March 1, 1915, when he became president of the Cen tral National Bank. He continued in this position for five years and then, in 1921, he organized and became president of the National City Bank of St. Louis, which was opened for business on July 21 of that year. Deposits of the new bank amounted to approximately $1,500,000 on the open ing day, and in five and a half years they have increased to approximately $17,000,000. A part of this substantial growth can no doubt be attributed to the long hours of work which Mr. Edwards ex acts from himself—at any event, you will find him at his desk at eight-fifteen every morning. He believes in lots of hard work, but he also believes in offsetting the hard work with recreation—according ly, he plays golf, and in his younger days, baseball and other outdoor sports wTere favorites, even though it was nec essary at that time to use resin, in stead of a glove, to take the sting out of catching a ball. Mr. Edwards is a member of the Noon Day and Glen Echo clubs. He is also a member of the board of trustees of Westminster College at Fulton, Mis souri. His hobby is unquestionably banking, but he is fond of all outdoor sports, especially golf, and he has al ways taken a great interest in church work. Be a philosopher ; but, amidst all your philosophy, be still a man.— Hume. St. L ou is, M arch, 1927 87 National Bank of Commerce Celebrates Its Seventieth Anniversary r I 'I HE National Bank of Commerce in St. Louis, which was granted a charter on February 14, 1857, under the name of the St. Louis Build ing and Savings Association, celebrated the seventy years of its existence the week of February 14, last. Full page advertisements were pub lished in newspapers, picturing the first home of the institution and the customs of this period. Women were shown in front of the bank, dressed in hoopskirts and carrying the small para sols of the day, with men clad in the long coats and beaver hats that were then the mode. In the background along the Mississippi River front was a steamboat moored at the levee, and a train with its odd-looking, funnel-like smokestack. The bank also had an unusual window display, showing in miniature the four homes in which the institution has been housed, with a silhouette pageant above these that paraded in review fig ures and objects that characterized the various styles and developments from 1857 to 1927. Inside the bank were interesting ex hibits of old coins and bank notes used in the early days of St. Louis banking, in addition to other relics of that pe riod. A young lady dressed in a hoopskirt handed out flowers to the hun dreds of visitors who came to view the unique display. The charter of the St. Louis Building and Savings Association provided it might engage in banking as well as the building and loan business. But the banking appeal was the strongest, so the new institution decided from the very start to confine itself to banking activities. It is interesting to note that in those early days loans were limited to $1,000 and that the salary of the first presi dent was only $750 a year. It was this cautious attitude of the founders that enabled the institution to emerge safe ly through the panic of 1857, the first year of its founding, and later through the trying days of the Civil War. The name was changed to “The Bank of Commerce” on November 3, 1868, and the word “ National” was added on December 14, 1889, when the institu tion voted to take advantage of the Na tional Bank Act and become a national banking organization. When the bank officially opened its doors for business on July 6, 1857, its paid-up capital was only $8,500. Now https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis it is $10,000,000, additions having been made from time to time in the seventy years to meet continued growth. John G. Lonsdale has been president of the National Bank of Commerce since 1915. Under his able guidance such departments as Savings, Trust, Investment, Foreign, Advertising and Central File have been added until the institution is now one of the large banks of the country, with service con nections throughout the world. Al though the bank is seventy years old, its officers regard that as only a good start and are looking forward to an ever-increasing era of usefulness as the institution further develops with the rich territory it serves. W hat Are They Reading? Not one of the latest novels, but nevertheless a book filled with ro mance, for it is the first ledger placed in use by the National Bank of Com merce in St. Louis, when it began busi ness seventy years ago. The ledger was a portion of an interesting display which the bank arranged in commemo ration of its seventieth birthday. And the young ladies, dressed in the hoopskirts that were the fashion away back in February, 1857, when the bank had its beginning under the name of the St. Louis Building and Savings Associa tion, were the center of attraction for thousands who called to congratulate the institution and its officers on its splendid achievements. Thousands of flowers were presented to the visitors and most of them remained to examine with evident satisfaction a display of old coins, bank notes and other relics of 70 years ago and other periods. Percy H. Johnston Now on South American Trip Percy H. Johnston, president of the Chemical National Bank of New York, sailed recently on the Santa Ana for a South American trip. He will visit the Bahamas, Cuba, Peru, Bolivia, Chile, Argentina, Brazil, Trinidad and Porto Rico. M id -C on tin en t B a n k er 88 Country Banks Can Do Much to Encourage Diversified Farming I N an effort to secure more effective co-operation between banks and their farmer customers, S. L. Cantley, Missouri Commissioner of Finance, is urging more attention to a program of diversified farming in the state “There is no disputing the fact that the solvency of our banks in rural com munities depends upon the ability of the farmer to pay; and the ability of the farmer to pay depends upon the profit derived from the products he places on the market,” says Mr. Cantley. “In communities purely agricultural, and I mean by that communities grow ing grain or cotton crops and producing live stock for the market, prices of grain, cotton and live stock thus pro duced have, for the past several years not returned sufficient profit to the pro ducer to enable him to more than meet current expenses of operation, with the result that, except in isolated cases, debts contracted during the period of inflated values have not been fully liqui dated. It has been clearly demon strated that corn, cotton, cattle and hogs will not pay mortgages under pres ent conditions, but it has been shown that where poultry and dairying—by products of the better farming sec tions—were strongly in evidence and made to at least absorb the overhead, thus rendering available for debt pay ing purposes bulk sales of grain, cotton oi live stock, progress toward normal recovery has been noticeable. Po ultry and Dairy ing Profitable “It should, therefore, be apparent to all that greater diversification in pro duction is the solution to a part of our troubles. There is not any part of Mis souri in which poultry and dairying could not be made profitable, whether it be primarily adapted to grain, cotton, fruits or berries, but it should be as sociated with all of the above. In some sections these should predominate, in others they should bear the burden of expense, leaving as profits, the major productions. “I believe that bankers all over the state should interest themselves tre mendously in the activities of their cus tomers and should encourage by way of extending credit, properly placed, to farmers who show a willingness to in crease their flocks of chickens and herds of dairy cattle. A portion of every board meeting in rural commu nities, might very properly be de voted to a discussion of these prob https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis lems, with the view of co-operating and advising with deserving borrowers, toward a solution of their difficulties. “ Stress business methods in farming, to the end that records be kept by farmers and the unprofitable lines of endeavor be curtailed and more atten tion given to those lines which rec ords show to have been profitable. Loss of soil fertility and a resulting decrease in acreage production in the better soiled sections of Missouri is conclu sive proof that sooner or later a change must come, and the time is certainly ripe.” O ther Missouri Bankers H e a rtily Endorse Diversification. “We heartily agree with Commis sioner Cantley,” says Chris R. Maffry, president of the State Exchange Bank of Macon. “We are, we have been, and we will continue to co-operate with our farmer customers in the direction of encouraging them to diversify. As a result of this long continued policy we feel that we have come through the stormy period, just over we hope, in splendid shape. “In writing this letter we are think ing of Will Rogers’ recent farm relief bill in which he says: ‘Every time a Southerner plants nothing but cotton on his farm, year after year, and the Northerner nothing but wheat and corn, why, take a hammer and hit him twice between the eyes. You may dent your hammer, but it will do more good than all the McNary-Haugen bills you can pass in a year.’ “Experience has taught us that in or der to exist we must practice diversi fication.” W . W . Alexander, secretary of T re nto n T ru s t Company, says: the “ Be ing in a position to observe this for the past few years especially, I, per sonally, know that diversification has solved the problem for a number of fellows. I am also pleased to say that where we find dairying and poultry given proper attention the parties have had very little financial difficulty. Our one-crop farmers are not getting ahead. “We are, for the coming year, going to devote most of our efforts to this one particular development. The thing our farmers need is more education along this activity, and I feel if we work out a solution to the problem for them they will do the rest. “I feel that our present commissioner is keeping very close touch with this situation in Missouri and are looking forward for some very constructive things from his office.” “We have encouraged diversification for farmers for several years, says R. R. Arnold, president of the First N a tional Bank of Mexico, “particularly, keeping at all times a well balanced supply of brood sows, cows and chick ens, according to size of farm, together with raising sufficient grain, beans, clover or hay to feed all stock and poultry kept. “Farmers should always keep in mind, particularly those living in Mis souri, that you can neither buy nor sell your grain and prosper over a pe riod of ten years. ‘Raise Everything,’ is a good motto. I am of the opinion if you stick to this for a few years the wolf won’t howl around your door. If you don’t succeed working under this plan, then you might try raising hell with the government, or someone else. “It appears to me the only logical Pruning D em onstration in connection with cou ntry school house meetings for farmers held b y E . C. W illiams, president Bank o f N oel. St. L ou is, M arch, 1927 89 way to help the farmers is to make loans on farm land tax exempt over a period of ten years, thereby reducing the present prevailing farm loan rates possibly from 1 to 1y2 per cent.” George U. Shelby, vice-president and cashie r of the Charleston-Mississippi County Bank, and secretary of Group Six of the Missouri Bankers Associa tion, says: “ I believe that the bank ers throughout this section are now realizing more than ever before the value of co-operating with the farmer. It is now apparent that the one-crop system is beginning to give way to livestock and dairy associations, poul try and general diversification. This policy cannot keep from resulting in a better economic condition. “Farm relief will surely come, hut I fear it will not come in the manner most of us would desire. There must first be created the desire to have, and if that desire is strong enough to in culcate self denial, frugality and effort, then in my opinion conditions will change rapidly. “ Those of us who are in farming sec tions that have taken their losses now seem, to be gaining ground and much hope1is held out for a better year dur ing 1927.” Your tomorrow’s growth An excellent example of how a banker can help to improve agricul tural conditions in his community is shown by E. C. W illia m s , president of the Bank of Noel, “in the Ozai'ks.” Three years ago Mr. Williams worked out a farm development program with J. F. Newsom and R. L. Barrett, agri cultural agents for the Kansas City Southern Railroad. Some of the defi nite results of the program are: an in crease in strawberry acreage from 38 to 595 acres; increase in the grape crop from practically nothing to 10 carloads; location of a 14,000-egg ca pacity hatchery in Noel; and introduc-. tion of better dairy cows and the pur chase of an excellent pure bred bull. One of the features of Mr. Williams campaign has been a series of meet ings in the country school houses where the farmers attending have been given practical information on better farming methods. As many as 150 at tended some of the meetings, and as they lasted ten days, more than 1,000 farmers were reached during the cam paign. The accompanying picture shows a pruning demonstration in con nection with one of the country school house meetings. These meetings and the work with farmers in general has been responsible for a great improve M A I N ment in the Noel community which will result in increased profits to the farm ers and merchants as well as to the bank. S. F. Lum m, cashier https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis of the State DO Y O U R CUSTOM ERS call for a more extended service? A wider knowledge of trade requirements? More accurate information on foreign or domestic markets? As your New York correspondent, we can further your progress through sound advice and quick attention to requests for information or action. The Seaboard N a t i o n a l B a n k of the City of New York OFFICES: BROAD AND BEAVER STREETS 90 M id -C on tin en t B an ker Bank, Lebanon, says: “The directors o' this bank have long advocated crop diversifications; indeed it is the only method of farming which could pos sibly be made to pay in this region. Only creek and river bottom lands may be put to corn regularly with any de gree of profit. “This bank is backing the work of the Missouri College of Agriculture through the work of the District Ex tension Agent by assisting in financing the work in the district. “We extend credit freely to farmers who are working along this line. They are practically the only ones who are making any degree of success. Dairy ing and poultry raising are the prin cipal avenues, but small fruits are also being raised very successfully, and our local association, in conjunction with the Ozark Fruit Growers’ Association, is marketing strawberries and grapes profitably as a rule. “F'ruits for the cash crop, and hens and cows to keep the old pot ‘a-bilin’ ’, are the life-savers for Ozark farmers, and this bank is doing all in its power, both by advice and extension of credit, to further this kind of development. I might add that as a side line to dairy ing we advocate the keeping of a few brood sows; and that a small bunch of sheep on the farm tends to round out the industry and help improve the land, as well as provide a nice little source of revenue. “ Our observation is that farmers who work the old style ‘cawn’ and ‘hawgs’ and cattle method, unless they are living on exceedingly rich lands, are gradually making a failure.” My Advice to the Young Man of Today “Choose Your Line” AST week I attended a vaudeville show. There were three acts that stood out above the others: one was an orchestra of college boys; one an English chappie and an Ameri can; one a rough and tumble comedian who tore his shirt every time he ap peared till he ran out of shirts. He had a knack of destroying or damaging some part of his apparel every time he expressed an emotion. Consequently when he left, after making his final bow, he resembled our ancestor Adam. L The thought predominant with me when the entertainment was over was: “How wonderfully smooth.” Every act was marked by a finished technique which could have been attained only by long preparation and practice. I admire cleverness. I like to see a man stand out above the mob. If a man choses burglary as his profession, I like to see him good at it. Likewise I admire a brilliant preacher, or speaker or doctor. And strange to say the seeming ease of rendition is what marks the artistry. The well-dressed man or woman is not conspicuous in any one particular that can be described. One is only conscious of harmony and pleasure. Excellence is not always consciously expressed, but it is there just the same. We like to have our entertainment exellent and furnished us with as little effort as possible on our part. We are getting to be a lazy nation. We are so much engrossed in guiding the car land watching the road ahead that we have no chance to view the scenery. I wonder how many men who have driven across the country could give an intelligent narrative of anything except the state https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis B y Geo. T . McCandless “ The M an Behind the Counter” George T . McCandless, author of the artic le on this page and well - known to hundreds of bankers as “T h e Man Behind the Counter,” has m o v e d to W a s h o ugal, W a s h in g ton, w h e re he has pur chased an in- Geo. T . M cCandless terest in a bank of w hich he be comes president. In doing this, Mr. McCandless returns to his first love; he was first a banker and late r a bank examiner. L ate r he devoted a great deal of tim e to w ritin g , and this he w ill con tinue fo r the M id-Continent Banker. careless nation. But the men who ar rive and are in demand are those who notice everything possible as they jour ney here and there. The men who read every page in the book—who do not “skim” or do as the young lady across the way who turned to the last page to see who married who. The all-around man is getting scarce. Specialization has become the order of the day. There are 50 different kinds of lawyers, doctors and professors. Our children have seven studies in the grades and seven teachers. The moral for my younger readers is to specialize along your chosen profes sion or business. A few years ago a boy of 19 entered the treasury department. He read everything he could find on internal revenue. At 27 years of age he is con sidered the outstanding authority in his line in the country. Would he have reached this high position if he had been a loafer or a slip-shod reader of cheap literature? My advice to the young man of to day is: “ Choose your line.” Perfect of the roads or the inferiority of the ho yourself in knowing all you can about tels en route. your job. You won’t be lost in the The effect I see in this is that we are shuffle. Business and the professions getting so we don’t notice things which are looking for “the man who knows.” do not directly concern us or our pleas The boys who took their own time in ures. We rush through our meals—• the evenings to attend sessions of the we race madly down the streets on foot A. I. B. have made a wonderful record. or in auto and never give a thought And the boy or man who really tries to to the interesting faces or windows we see what is going on in the world is pass. People and vehicles we regard forging ahead of the selfish, shiftless as nothing but obstructions in our way “ skimmers,” whose chief characteristic which delay us. Tell me the next time is speediness without thoroughness, and you take a walk or ride what you saw a nimble tongue unbacked by brains. along the way and what impressions Again let me repeat— specialize. Be you had when you returned. one of the best in your line. You’ll And so we are becoming a selfish, enjoy it as well as profit by it. St. L ou is, M arch, 1927 91 BANK•STRIA TURKS f — The ’B U I L T ' BY* B o a tm e n ’s N ational B an k S P E C IA L IS T S ■+ ♦ * * o f St. L o u is W ho ■ c o m f i a e t h e ir e f f o r t s t o t h i s oi\e l i n e s h o u ld b e , t h e m o s t s a l t e d to th e O LDEST B A N K IN M ISSO U R I F o u n d e d in 1 8 4 7 m e e d s o f t h e b&tvler a.tvd to th e c o m fo r t * o f h is c u s t o m e r s . M ake th e “ B Your Bank, in St. Louis After you have formed a connection LET- US TELL YOU ABOUT O U H > J 3 E P L V IC J L L .D .L A C Y COMPANY S Y N D IC A T E . T R U ST B U IL D IN G , * ST . LOUIS , AYO- with the “ Boatmen’s” you may look upon us as you would upon one of your own representatives. Our record of eighty years of successful banking has given us a fine apprecia tion of the needs of correspondent banks. OFFICERS: The individual treatment accorded the business of correspondent banks as sures to each the impor tance it rightfully deserves. JU LIU S W . R E I N H O L D T . President L E R O Y C. B R Y A N . Vice-President and Cashier A A R O N W A L D H E IM . B. F. B U S H , Vice-President Vice-President E D G A R L. T A Y L O R . J. H U G O G R I M M . Vice-President and Vice-President and Trust Officer Counsel ALBERT W AG EN FUEH R . F. L E E M A J O R . Vice-President Vice-President C. C . H A M M E R S T E I N , RUD O LPH FELSCH. Assistant Cashier Assistant Cashier H . A L F R E D B R ID G E S . O L IV E R W . K N IP P E N B E R G . Assistant Cashier Assistant Cashier L o c a te d in th e h ea rt o f the Fina ncial D istrict THE NORTHERN TRUST COMPANY C a p ita l, S u r p lu s a n d U n d iv id e d P r o fits O v e r $ 7 ,5 0 0 ,0 0 0 RESOU RC ES: N orthw est Corner LaSalle and M onroe Sts. O ver $ 2 5 ,0 0 0 ,0 0 0 .0 0 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis CHICAGO Mid-Continent Banker 92 Principal C E b Ancillary Administration Letters Granted by a Court H ave No Authority Beyond the Jurisdiction of the Court Granting the Letters may be either domestic or foreign. The domestic or home administration at the domicile is referred to as the domicil iary administration. The foreign ad ministration is referred to as the an cillary administration. The adminis tration at the domicile is the principal administration, even though letters of administration be first granted in a foreign state. The domiciliary repre sentative has a legal title to all assets belonging to the decedent regardless of their location, and it is his duty to col lect and preserve such assets subject, A d m in is t r a t io n A n O l d C B y the Legal Editor however, to foreign local administra tion. A debt or property voluntarily paid or delivered to the foreign domi ciliary representative will be a good discharge of the debtor for his obliga tion to the estate, if there is no local administration pending in the foreign jurisdiction, and as a rule such volun tary payment to the foreign principal representative will be good as against the demand of an administrator subse quently appointed in the local jurisdic tion for the possession of the property. u s t o m ■ — but, like many old customs, that of mak ing a will can be vastly improved. In addition to the Trust P r o g r a m , which has been pop ular throughout the United States, W essling Services now offer a unique and effective educational program for the Life Insurance T r u s t . Write for informa tion about it! https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D o you know that 90 per cent of all es tates of $5,000 or over in the United States are entirely dissipated after 7 years? A banker owes it to his patrons to ad vise them about conserving their estates through their wills. W essling publicity has proved, over and over again, that a bank can educate its patrons until they are eager to create trust funds. Often, incidentally, they make the trust department or officers of the bank executors of the estates. PLANNERS AND CREATORS OF W E SSLIN G LYTTO N, ORIGINAL BANK SERVICES S E R V IC E S IO W A This rule, however, does not obtain in all of the states, Missouri being one of them. These states do not recog nize the authority of a foreign repre sentative. Since he has no title to the property he can not give a good re ceipt or valid discharge for the prop erty, and by reason of this fact a vol untary payment to the foreign repre sentative will not discharge the debt. A public administrator subsequently ap pointed may recover the property, even though previously paid to the foreign representative. An ancillary repre sentative has title only to assets located within the jurisdiction of his appoint ment, and the payment of a foreign debt to him will not discharge the debt even though voluntarily made by the debtor, for the reason that he has no title to the property and no right to re ceive it. In speaking of foreign administra tion, we do not have reference to the non-residence of the administrator or executor, but rather to the foreign char acter of the representative capacity. Thus the courts of one state are not re quired to recognize the authority of an administrator or executor appointed un der the authority of another state. If they do recognize this authority it is merely a matter of comity. The let ters granted by a court have no au thority beyond the jurisdiction of the court granting the same. They have no extra territorial effect and are limited to the state’s own jurisdiction, within which they are granted. T ra n s fe r of T itle . At the common law the domiciliary representative could transfer the title to foreign assets, because in law he was the absolute owner of such prop erty. The ancillary representative, however, may only transfer the title to such property as is within his local jurisdiction. Many of the common law rules have been changed by statutes in the vari ous states, so that they do not now generally obtain. Thus it has been held that a foreign executor or adminis trator can not endorse a note or bill of exchange, so as to enable the en dorsee to sue the maker thereof. In such a suit it would be necessary for the endorsee to make his title to the paper through the endorsement of the foreign representative. This would be St. L ou is, M arch, 1927 a local recognition of the foreign au thority. Some states as heretofore mentioned refuse to recognize this au thority. Neither can a foreign repre sentative assign a cause of action to a non-resident so as to authorize a suit by the assignee in the foreign jurisdic tion. In some states corporate stocks will not be transferred when endorsed by a foreign executor or administrator where the stock is issued in the name of the decedent. As a general rule a foreign executor or administrator can not sue for the co’ lection of assets in a foreign state, where he would be required to prose cute the action in his representative capacity. This is not true, however, where the executor or administrator may sue in his own name and not in his representative capacity. It has been held that where a note is payable to bearer; where endorsed by the payee in blank, and where maturing after the decedent’s death, that in any of these cases the representative may sue in his own name as an individual and as the owner of the debt. In such cases he may sue in a foreign jurisdiction. If a note is given to the executor in his representative capacity, he may like wise ignore that capacity and sue upon that note personally in a foreign juris diction. Where, however, the obliga tion is payable to the decedent and matured before his death then a suit can only be prosecuted by the executor or administrator in his representative capacity and such suit could not be brought in a foreign jurisdiction. 93 Union Trust Co. Issues New Radio Index and Log The Union Trust Company, Chicago, has just issued the fifth edition of its Radio Index and Log in response to widespread demand. The folder lists almost 200 of the principal stations in the United States. The wave lengths and kilocycles of all stations are given and three columns are provided for recording dial readings of the various stations which are classified according to call letters and wave length chan nels. In addition the Log provides space for recording features which the radio fan may wish to tune in on weekly. The Union Trust Company will be pleased to furnish copies of these fold ers on request as long as the supply lasts. W. W. Smith Now a Director of United Railways Walter W. Smith, vice-president of First National Bank in St. Louis, was elected a director of the United Rail ways Company of St. Louis at a meet ing of the stockholders held Tuesday, February 8th, 1927. Mr. Smith is prom inent in the St. Louis banking and busi ness affairs. C ourt O rd er Necessary. In order to sell or transfer the assets of the estate it is usually necessary for the representative to first obtain an order of court authorizing the sale or transfer. This order of court is only valid with respect to local property un less such order of court is recognized by the laws of the foreign state. Thus the courts of one state could not order the sale of property located within an other state, unless permitted by the laws of such other states. Finally upon completion of the ancillary or for eign administration the decedent’s es tate will be forwarded to the domicil iary representative for distribution at the domicile. The laws of the domicile will govern the distribution of personal property in either event, whether the distribution be made at the domicile or in the foreign jurisdiction. The local foreign court would have the authority to distribute the property under its own process and to the parties entitled without transmitting the same to the domiciliary representative, although the latter course is generally pursued. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The above Bank Building, and Interior Equipment, was de signed lor a small Bank in Missouri. Instructions were for a building pleasing in design, to be characteristic of its use and economical in construction. Note the effective simplicity of design, detail and pleasing results obtained. Information as to costs of this Bank Building upon request. Write us for consultation on your requirements. No obligation for this service. The J. H. WISE CONSTRUCTION COMPANY, B A N K Designers B U ILD E R S — Engineers — Constructors M ANUFACTURERS OF SYNDICATE TRUST BUILDING IN T E R IO R - E Q U IP M E N T - mm ST. LOUIS, MO. M id -C on tin en t B a n k er 94 Œije CifjaöeiBattonal I^anfe of the City of New York 57 B R O A D W A Y C a p ita l . . . . . . . . $ S u r p lu s a n d P r o fits . . . D e p o s it s (D e c e m b e r 3 1 , 1926) 4 0 ,0 0 0 ,0 0 0 .0 0 3 8 ,2 0 4 ,4 7 3 .5 8 8 5 2 ,4 5 6 ,1 1 4 .2 4 O F F IC E R S Albert H. Wiggin Chairman of the Board Prompt Service Alw ays! Gates W . McGarrah John McHugh Chairman of the President Executive Committee Robert L. Clarkson Vice-Chairman of the Board Vice-Presidents George E. Warren Samuel H. Miller George D. Graves Carl J. Schmidlapp Frank O. Roe Reeve Schley Harry H. Pond Sherrill Smith Samuel S. Campbell Henry Ollesheimer William E. Lake Alfred C. Andrews M. G. B. Whelpley Robert I. Barr William P. Holly Vice-President and Cashier Second Vice-Presidents James L. Miller Frederick W . Gehle Joseph C. Rovensky George W . Simmons Benjamin E. Smythe Edwin A. Lee Joseph Pulvermacher William E. Purdy Leon H. Johnston George H. Saylor Franklin H. Gates M. Hadden Howell Arthur M. Aiken Alfred W . Hudson We Solicit Your St. Louis Account E . C . Adams, President Leopold G , Leo G . Desobry, ssberg, Vice-President Vice-President H . F . Hoener, H . L . Rogers, Secretary-Treasurer Vice-President F. Hoffm an, Assistant-Secretary Thomas Ritchie Comptroller BROADWAY TRUST COMPANY Foreign and Trust Department Facilities o f ST. LOUIS UnTEI Serving the Fourth Generation H U IL L rn/IDIDE Broadway at Sixty-Third L I tI I I K li Street NEW YORK CITY M. P. MURTHA, G e n e r a l M a n a g e r A complete up-to-theminute bank, offering every modern banking service L IB E R T Y IN SU R A N C E BANK LOUISVILLE The NEW fourteen-story fireproof structure containing every modern convenience and “ Servidor” service (R o o m , private toilet - - $2.50 R A T E S : < Single R oom with bath - 3.50 ( D ° u kle R oom w ith bath - 5.00 T h e lo c a t io n is u n i q u e : S u b w a y , e l e v a t e d , s t r e e t c a r s, b u s e s , all a t t h e d o o r R E S O U R C E S O V E R $28,000,000 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis F i n e s t p a r k in g s p a c e in t h e c i t y St. L ou is, M arch, 1927 95 Savings Conference to Be Held in S t Louis RRANGEMENTS have been com pleted for the Midwest Regional Savings Conference to be held in St. Louis, March 29 and 30, under auspices of the American Bankers Association, according to H. H. Reinhard, vice-pres ident of the National Bank of Com merce in St. Louis, who is chairman of the Arrangements Committee. A A well-balanced but busy two-day program has been scheduled for the representatives who are expected to be here from banks in fifteen states, in cluding North and South Dakota, Ne braska, Kansas, Oklahoma, Texas, Min nesota, Wisconsin, Alabama, Iowa, Mis souri, Louisiana, Mississippi, Arkansas, Tennessee and Illinois. This will be the third regional conference of the year, one being scheduled at Oakland, California, on March 17 and 18, and the other at Cleveland, March 24 and 25. A fourth one will be conducted at Washington, D. C„ April 7 and 8. “ The Dilemma of Thrift,” F. S. Wettack, cashier First National Bank, Coffeyville, Kan. A banquet will be held on the eve ning of March 29, at which Walter B'. Weisenburger, vice-president of the Na tional Bank of Commerce in St. Louis will be toastmaster. Speakers at this gathering will be Fred H. Shepard, executive manager of the American Bankers Association, and Eugene Angert, a St. Louis attorney. The program on March 30, the clos ing day, will be: “Savings Bank Taxation and Other Handicaps,” W. S. ,Webbj, president Missouri Savings Association Bank, Kansas City, Mo. “ Printed Figures Versus Pen and Ink,” Stephen C. Thorning, manager savings department, First National Bank, Kansas City, Mo. “School Savings,” Paul S. Abt, vicepresident Southern Illinois National Bank, East St. Louis, 111. “Fashions Have Changed in Savings,” Mrs. L. D. Sultzer, manager savings department, Mercantile Trust Company, St. Louis. “Developing the Bank’s Personnel,” Fred W. Ellsworth, vice-president Hi bernia Bank and Trust Company, New Orleans. “ Savings Bank Literature,” E. E. The program for the St. Louis meet ing includes speeches from leaders in the savings bank field and a number of round-table discussions, where every day problems will be threshed out. The speakers and their subjects for March 29 are: Address of welcome by John G. Lons dale, president of the National Bank of Commerce in St. Louis and head of the St. Louis Clearing House. Address by W. R. Morehouse, pres ident of the Savings Bank Division of the American Bankers Association and vice-president of the Security Trust and Savings Bank, Los Angeles. “ Competition for the Savings of the People,” by Rome C. Stephenson, pres ident St. Joseph Loan and Trust Com pany, South Bend, Indiana. “ Methods of Procuring New Busi ness,” John W. Rubecamp, assistant cashier Illinois-Merchants Trust Com pany, Chicago. “Building Savings Balances,” Gaylord F Morse, assistant cashier State Bank, Chicago. United States Federal Reserve Bank Little Rock, Arkansas Thompson & Harding Architects Architectural woodwork, marble and bronze, executed Address by Noble R. Jones, savings manager First National Bank of St. Louis. by the “ Organizing and Building a Savings Department,” Arthur R. Cooney, assis tant vice-president, Texarkana, (Tex.) National Bank. American Fixture Co. “ The Value of Savings to the Com munity,” C. B. Mudd, cashier First Na tional Bank, St. Charles, Mo. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Benton Plaza and Bellefontaine KANSAS CITY, MISSOURI Mid-Continent Banker 96 McCleish, president Williams-ElliottGraves Company, Chicago. “Paid Space,” Charles H. Wetterau, assistant vice-president American Na tional Bank, Nashville, Tenn. “ The Blue Sky Menace,” H. W. Riehl, manager Better Business Bureau, St. L ouis. The regional conferences, according to Chairman Reinhard, are becoming increasingly important and valuable as a place to swap ideas and learn worth while lessons from what the other fel low is doing. A large crowd is ex pected and .every effort is being made by St. Louis^ bankers to see that the visitors are well entertained. T he F id e lity T ru s t & Savings Bank has absorbed the business of the North Shore Trust & Savings Bank, Chicago, 111. Palm Beach Guaranty Co. Votes Capital Increase Stockholders of the Palm Beach Guar anty Company of West Palm Beach, Florida, have voted to increase the cap ital stock of the company from $1,000,000 to $3,000,000. The vote provides for a stock divi dend of $100,000 to be paid by the com pany to the present holders of its com mon stock and the immediate offering for subscription of 2,500 shares of its 8 per cent preferred stock and 2,500 shares of its common capital stock in units of one share of common and one share of preferred. The increase, according to officials of the concern, will enable the com A S p e c ia liz e d S ervice for Banks and Bankers, which is the result of more than sixty years of experience, is offered by The First National B a n k of C h i c a g o and the First Trust and Savings Bank f and provides complete facilities for active and inactive accounts, collections, B /L ’s, investments, letters of credit and foreign exchange transactions FR AN K O. W E T M O R E C hairm an M ELVIN A. T R A Y L O R President pany to establish stronger connections with financial institutions and increase its already great volume of business. Records of the Palm Beach Guaranty Company point out that at the close of the year 1926 its capital assets totaled $1,303,152.12, the largest, according to its officials, of any mortgage company in Florida. The progress of the company has been one of steady growth since its organization with a paid-in capital of $25,000 nearly eight years ago. Records of the company disclose an increase in capital to $150,000 in 1920 and further increases from time to time through stock dividends and subscription. The last increase, prior to the present of fering, was made in 1925 when an issue ot $500,000 was subscribed by its stock holders, it was stated. The business of the company is that of loaning of money on real estate and the selling of the bonds and mortgages secured by such real estate. Officials of the company stated that a large por tion of the financing done by the con cern at present is handled in connec tion with large surety companies in the nature of guaranteed bonds, which bonds are then sold to northern banks and trust companies. D. F. Dunkle has been president of the company since 1920, having been elected to the presidency from his for mer position of vice-president. B. D. Cole was elected vice-president in 1920, and Edward C. Gross was elected secretary in 1922, both having continued in these positions since their election. Lynn S. Nichols formed his connec tion with the concern in 1925 as its active vice-president. He has been ac tively engaged in mortgage and bond financing for about 23 years. O. H. Breidenbach, treasurer and bond officer, entered the employ of the company in 1925, after having been for several years manager of the bond de partment of a large securities concern in New Orleans. L. A. Hogarth, manager of the mort gage department, has been with the company since 1922. The other officers and heads of vari ous departments of the concern are fully experienced in their respective po sitions. Lon Edmondson has resigned as cash Combined Resources Exceed $ 4 5 0 , 0 0 0 yOOO https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ier of the Republic State Bank, Repub lic, Mo., and has been succeeded by F. A. Winter. St. L ou is, M arch, 1927 97 News ^.View 5 The Banking Worlk B y C liffo r d D e F *u y P u b lish e r De Puy Banking Publications T h e United States seems to be a na tion of lawmakers and lawbreakers. This is the lawmaking season as all state legislatures are having meetings this year except Kentucky, Louisiana, Mississippi and Virginia. In 1925 the state legislatures passed 13,000 new laws out of a total of 40,956 bills which were introduced. Many of these laws were for tax in creasing purposes. Others were sup posed to be panceas for our business, social and domestic conduct. It is the old, old story—what we need is fewer laws and more enforcement of those which we now have. The Episcopal service was read, and while no eulogy was delivered the pas tor in a prayer referred to Mr. Knox as “A fine example of thrift, industry and kindliness which he always exhib ited during his lifetime.” -¡H chairman of the executive committee of the Chase Na tional Bank, has resigned his position Gates W. M cG arrah, with the bank and has accepted the chairmanship of the Federal Reserve Bank of New York, effective May 1st. In commenting upon Mr. McGarrah’s appointment the Chase National Bank issued a statement, in which it said, “Keen regret was expressed that the bank would lose the services of so dis tinguished an official and so warm a friend. At the same time it was recog nized that no one is better qualified than Mr. McGarrah to assume these im portant public duties because of his in timate knowledge of banking condi tions, both in this country and in Eu rope, and that in losing one of its most important officials the entire financial and commercial community is being benefited.” — $— vice-presi dent of the Cleveland Trust Company, in commenting on business conditions says: “ The prices of bonds, preferred stock and investment common stocks have been rising strongly, and the value of bond trading has risen to ex ceptionally large proportions. Short time interest rates have steadily de clined. These developments will prob ably prove to be the forerunners of new advances in the activity of general business.” This is simply stating in different words the old fundamental principle that whenever we have had ample credit in this country we have never had a business depression. Colonel Leonard T. Ayres, According to D. F. Houston, presi dent of the Bell Telephone Securities Company, there are in this country to day 17,000,000 telephones, and each day there are 70,000,000 telephone conver sations. While our illustrious President does not talk much, his constituents seem to make up any deficiency in the conversa tion line. As a Chemical Depositor you will find that this Bank is just as interested in holding your account as it was in securing it! IN F A C T , M O R E IN T E R E S T E D , B E C A U S E TH ER E’S / I Over 1,000 mourners were present at the recent funeral of William E. Knox, president of the Bowery Savings Bank and formerly president of the Amer ican Bankers’ Association, who com mitted suicide last month. The funeral services took place at St. Bartholomew Church, which was packed to overflow ing. In one of the rear pews a negro sat and wept. He was an elevator man in the Bowery Savings Bank and for years had greeted Mr. Knox each morn ing as the banker arrived at his office. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MORE O C C A S IO N FOR IT . THE C N hA TeI m ic a l O N A L . BANK OF N E W Y O R K B ’ W A Y at C H A M B E R S , F A C I N G C I T Y H A L L F IF T H A V E N U E at T W E N T Y - N I N T H S T R E E T M A D I S O N A V E N U E at F O R T Y -S I X T H S T R E E T M id -C o n tin e n t B a n k e r 98 Years o f study and planning have enabled us to develop beauti ful and practical structures such as this bank. Bank Building Service that means Satisfaction OM PLETE data and a guaranteed estimate o f costs be fore you build, and complete satisfaction after you have built, are the outstanding features of our service, if you are approaching the subject of building or remodeling, you will find much valuable information in our booklet, Prelimin ary Service for Contemplated Bank Buildings.” * * * * e A copy will be sent you for the asking. St . L o u is B a n k B u il d in g a n d E q u i p m e n t C o m p a n y ‘B a n k s N IN T H AND E x c lu siv e ly S ID N E Y S T R E E T S - - • S T . L O U IS , M O . https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis M , _J jg C = 1M S k V ^ * * * « 8 ., « 1 2 th S treet a n d B a lt im o r e A v e n u e K A N S A S C IT Y , M O N the very center of the business district, the combined buying power giving the best in room accommoda tions,cafe and dining service at fair prices. [ = S. J. W h it m o r e . Chairman Prof. W i l l i a m Z. Ripley of Harvard University, who has written several ar ticles opposing the issuance of non voting stock by corporations, has just published a hook, entitled, “Main Street and Wall Street,” and in this he takes objection to the issuance of stock of no par value. He says that this practice is “egregious malversion of the rights of shareholders and the public general ly.” To save you reaching for your dictionary, the word “ egregious” means “excessive.” To our way of thinking there is much more danger in issuing of non-voting stock than the issuing of stock of no par value. When an individual becomes a stockholder in a corporation which has no par value for its stock he is a participant in the earnings of that cor poration in just proportion to the stock which he holds. Therefore, we can see no great harm in the issuing of stock of no par value. In non-voting stock there may be serious evils arise because it prevents the holder from ex ercising his right of franchise at any of the various stockholders meetings. Approx im a te ly 696,800 individuals borrowed $165,876,000 from the Morris Plan Banks throughout United States in 1926. The average Morris Plan loan is about $212.00. The Morris Plan Bank takes care of the small borrowers and makes a very satisfactory profit doing it. T he Belgium National Bank has re duced its discount rate from 6% per cent to 6 per cent. This reduction of the discount rate follows the general movement of money rates in the prin cipal European cities. To the student of agricultural conditions this has its significance. If the discount rates are being lowered in the principal Eu ropean cities this means that additional credit is available for purchases abroad and these purchases will naturally in clude farm products. Therefore, we may translate the reducing of discount rates in the leading European cities to mean that the farming territory will be im proved to just the extent that this ad ditional available credit is used for agricultural purchases in the United States. Benjamin W e im e r, a broker in New York, entered the Hamilton National Bank of that city recently and opened a new account. Instead of making his initial deposit in one sum he made the following deposits of $8.40, $1.70, $76.00, $25.27 and $7.50 and then asked the teller to mark the pass book No. 707-A. When the teller inquired as to why the various amounts had not been con solidated into one deposit he informed St. Louis, March, 1927 99 him that he was a proud father ana that these deposits represented a his torical record of the date, location and other statistical data concerning his first born child, which had arrived at 8:40 in the evening at 170 West 76th street, under the date of 2/5/27, the weight of the child being 7y2 pounds, and that finally the room number at the hospital was 707-A. No doubt the moral of this is that records of new babies can just as well be placed in bank books as in baby books. $— across the Atlantic and some of our friends at home rant and rave that money due the United States should not be paid, we are re minded of the following quotation: “ While the money is looked for and for a short time after it has been received, he who lends it is a friend and a bene factor; by the time the money is spent and the evil hour of reckoning is come the benefactor is bound to have changed his nature and to have put on the tyrant and oppressor. It is an oppres sion for a man to claim his own money; it is not to keep it from him.” W h e n our friend s — $ - The National Bank of Co mm erce in St. Louis celebrated its 70th birthday on February 14th. When the bank of ficially opened its doors for business in 1857, the paid-up capital was only $8,500. Now it is $10,000,000. John G. Lonsdale has been president of the bank since 1915. Sp eaking of bond issues, Dillon, Reed & Company have just been appointed fiscal agents for the United Steel Works Corporation of Germany. Or, in other words, for the “Vereinigte Stahl werke Aktiengesellschaft.” The head ing of the circular is “Rheinelbe Union”—“Gelsenkirchener BergwerksAktien-Gesellschaft Deutsch-Luxem burgische B'ergwerks-Und Hutten-Aktiengesellschaft Bochumer Verein Fur Bergbau Und Gussstalfabrikation.” This should all be very clear to our good German friends and maybe a few others. O. Ho w ard W o lfe , cashier of the Philadelphia-Girard National Bank, of fered a resolution at the meeting of Group One of the Pennsylvania Bank ers Association recently inviting the American Bankers Association and American Institute of Banking to hold their annual conventions in Philadel phia in 1928. D e p e n d a b ility has been one of the n otable traits o f the M id -S o u th ’s highest capitalized and m o st resourceful banks— for m ore than 50 years. B a n k OF C o m m e r c e AND T r u s t C o m pa n y M E M P H IS CAPITAL,SURPLUS AND UNDIVIDED $ 5 , 0 0 0 , OOO. OO Ü A M K G i ï B ü & S ** l & r ï S & s ï B & I J S ä f i ü m s m m s t i S A 'x s ® m s OP OlklUFM MID O&fW&MOPI Service*" the biggest thirig ive have, and most cheerfully given m An active campaign for securing the convention will be made at Houston at the annual meeting, which will be held there this fall. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis PRO FITS ............. i 100 M id -C o n tin e n t B a n k e r Illin o is »Bank N e w s [ a- O F F IC E R S IL L IN O IS B A N K E R S A S S O C IA T IO N : W . B . C r a w fo rd , W e s t F r a n k fo r t, P r e s i d e n t ; J . M . A p p e l , H ig h la n d C o u r t , V i c e - P r e s i d e n t ; M . A . G r a e t t i n g e r , C h i c a g o , S e c r e t a r y ; O li v e S . J e n n in g s , C h i c a g o , A s s is t a n t S e c r e t a r y ; W . H . D r e w e l , C h a r le s t o n , T r e a s u r e r . G R O U P C H A I R M E N : I — E . F . A n s o n , K e w a n e e ; I I — G . K . S lo u g h , A b in g d o n ; I I I — H . H B a d g e r , A m b o y ; I V —-A. K . F o r e m a n , C h i c a g o ; V — C . A . M u e l le r , K a n k a k e e ; V I — E . E. C o r e , R o b i n s o n ; V I I — E . B . A p p l e t o n , L i t c h f i e l d ; V I I I — J . C . W h i t e f i e l d .i Q u i n c y ; I X — L . G . G e e , L a w r e n c e v ille ; X — E a rl K a r ra k e r , M o u n d C it y . W . B . C ra w fo rd , P res. G R O U P S E C R E T A R I E S : I — C . D . D e P a u w , K e w a n e e ; I I — J o h n B . F le m in g , P e o r ia ; I I I — F . P . B a k e r , S t i ll m a n V a l l e y ; I V — W . M . G iv l e r , N a p e r v i l l e ; V — W . D . K i t c h e l l , D a n v e r s ; V I — G . H . B a k e r, U rb a n a ; V I I — J. E . M c D a v id , R a y m o n d ; V I I I — G e o rg e D y s o n , R u sh v i l l e ; I X — H e n r y E v e r s m a n , E f f in g h a m ; X — B . G . G u ll e d g e , M a r i o n . M a n y B a n k M ergers A re C o m p leted in Illinois Among the recent bank mergers in Illinois are the following: F ir s t National Bank of Sycamore, a consolidation of the Sycamore Nation al Bank and the Citizens National Bank, with resources of $2,898,775. J. R. Waterman is president; A. E. Hammerschmidt, W. M. McAllister, F. E. Claycomb and B. P. Stroberg, vice-presi dents; T. M. White, cashier; Floyd Rose and K. J. M. Cormack, assistant cashiers. Chandle rville State Bank, a consoli dation of the State Bank of Chandler ville and the Peoples State Bank, with capital of $60,000 and surplus of $30,000. Dr. J. D. Franklin is president; V. P. Ainsworth, vice-president, and D. W. Ainsworth, cashier. Central Sterling, T ru s t and Savings Bank of consolidating the Sterling State Bank and the Farmers and Mer chants State Bank, with capital of $100,000 and surplus of $50,000. A new banking home costing $100,000 is planned. H. V. Bittenorf is president; Ezra Mathew, vice-president; W. L. Frye, cashier, and C. A. Burr, assistant cashier. Farm ers T ru s t and Savings Bank of Ashkum consolidated with Farmers and Merchants Bank of Ashkum, under for mer name. Resources are $500,000. Senator R. R. Meents is president and Albert Lemenager will be cashier. has absorbed the Tremont National Bank. F ir s t Na tional Bank of T re m o n t I. B . A . W ill M e e t a t D a n v ille June 2 3 -2 4 Plans are already under way for the 37th annual convention of the Illinois Bankers Association, which will be held at Danville, June 23 and 24. Ho tel Wolford will be convention head quarters. The general convention committee in cludes: C. V. McClenathan, president Second National Bank; J. A. Foster, cashier American Bank & Trust Com pany ; George W. Telling, president Commercial Trust & Savings Bank; J. L. Tincher, president First National Bank; M. J. Wolford, president Palmer National Bank. A hotel committee has been ap pointed, of which J. A. Foster, cashier American Bank and Trust Co., is chair man, the other members being Woods H. Martin, vice-president of the Second National Bank, and John W. Telling, vice-president of the Commercial Trust and Savings Bank. The following committee chairmen have been appointed, each one of whom will select his own committee: J. L. Tincher, entertainment committee; M. J. Wolford, registration committee; G. W. Telling, banquet committee. M . A .G r a e t t in g e r , S e c ’ y ILLINOIS GROUP MEETING SCHEDULE F ir s t W eek .6— Barry .............................................. 17— Litchfield ......... 18— Murphysboro ................................ 19— Mt. Vernon .................................. 20— Casey .............................................. May May May May May 23— Dixon ................................... 24— Kewanee ........................................ 25— Peoria .............................................. 26— Pontiac ............................................ 27—-Woodstock .................................... S econ d 8 7 10 9 6 W eek 3 1 2 5 4 W ir t W r ig h t N o w Is P resident a t E v a n sto n Wirt Wright, former president of the Illinois Bankers Association, has been elected as presi dent of the State Bank and Trust Company of Evans ton, to succeed F. J. Scheidenhel who becomes chair man of the board of directors. Mr. William A. Dyche Wirt Wright has been made chairman of the executive committee. Mr. Wright was for 15 years president of the National Stock Yards National Bank at the St. Louis National Stock Yards. Recently he has been vice-pres ident of the Evanston bank. C. J. Luther and L. J. Knapp were both promoted to positions as vice-pres idents, while F. O. Potter was named secretary. F. U. Carlborg was ad vanced from assistant cashier to cash ier. Protecting Peoria County Banks Some of the guns and ammunition distributed among Peoria county banks at the recent meeting completing! organ ization of the county protective system. Rifles, sawed-off shotguns, special shells and equipment, and instructions and targets for practice were included in thig $2,500 purchase. Left to right are Sheriff Grant Minor. Joseph H. Stickelmaier, cashier of the Bartonville State bank and secre tary of the Peoria County Bankers Federation; Maynard E. Tarpy, First State and Savings bank, Elmwood, and secretary of the Peoria County Protective association; F. M. Blossom, vice-president of the Central National bank, Peoria, and R. C. Saunders, head of the Protective Department, Illinois Bankers association.—Peoria Star Photo. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis G rou p M ay May May May May St. L ou is, M arch, 1927 101 N e w V a u lt Door Ready For Commercial National. F. E. W o rr e ll Is Cashier at Vienna. The new 17,000-pound vault door for the new Commercial National Bank Building of Rockford has been installed and the interior of the new home is rapidly nearing completion. The struc ture will be finished about April 1. F. E. Worrell, who has been county superintendent of schools, has been elected cashier of the First National Bank of Vienna, succeeding D. W. Chapman, who has been made second vice-president. P. T. Chapman is president of the institution. Schell is President Exchange National, Polo. W. T. Schell has been elected presi dent of the Exchange National Bank of Polo, and B'. H. Unangst has been pro moted from assistant cashier to cash ier, the position formerly held by Mr. Schell. J. D. Herb has been elected first vice-president and John Yeakel, second vice-president. W . D. Kitchell Southern Tour. On W. D. Kitchell, cashier of the Farm ers State Bank of Danvers, is leaving early in March with his family for a month’s trip. He will drive through Missouri and Arkansas and to Corpus Christi, Texas. Mr. Kitchell is secre tary of Group Five of the I. B. A. Sta te m e nt of State Bank of Burnside. The State Bank of Burnside now has deposits of $173,576 and resources of $229,088. W. J. Singleton is president; J H. Pettit, vice-president; F. J. Reu, cashier, and L. E. Dorothy, assistant cashier. Gauldoni Heads Sesser State Bank. Charles Gauldoni has been elected president of the Sesser State Bank to succeed J. P. Isom, who has retired after many years of excellent service. O. S. Martel and E. L. Lewis are vicepresidents, and J. W. McGinnis is cash ier, with Mrs. J. W. McGinnis assistant cashier. B. Van R. Moore Heads Moore State Bank, Monticello. B. Van R. Moore has been elected president of the Moore State Bank of Monticello, succeeding D. M. Moore, who resigned. The new president has been treasurer of the Pepsin Syrup Company and has long been identified with business and banking interests in Monticello. Other officers of the bank are Allen F. Moore, vice-president; R. B. Weddle, cashier, and W. L. Plankenhorn and George P. Martin, assistant cashiers. The Moore State Bank is one of the strongest banks in central Illi- C. J. M oy e r Heads Corn Belt Bank, Bloomington. C. J. Moyer has been elected presi dent of the Corn Belt Bank of Bloom ington to fill the vacancy caused by the death of J. J. Pitts. Claire McElheny was elected cashier. J C. Burtschi Heads Peoples State. Joseph C. Burtschi of Vandalia has been elected president of the Peoples State Bank of Ramsey to succeed Jas. G. Hunt, who resigned. O. G. Casey is vice-president; Hershel Hill is cashier, and Nellie O’Conner and J. M. Brown, clerks. A r t h u r Rogers Is Now at W aukegan. Arthur Rogers of Evanston has been elected cashier of the Peoples State Bank of Waukegan, and Perry A. Peter son, former cashier, has been named vice-president to succeed the late Ar thur Zitt. C. E. Staley was re-elected president. Mr. Rogers was also elected a director of the bank, Charles Gorham retiring from the board. Rushville St ate Gains $513,216 in Deposits. The recent statement of the Rush ville State Bank of Rushville shows de posits of $841,590. The bank has gained $513,216 in deposits since 1917. George Dyson is president; A. P. Rodewald, John L. Sweeney and C. S. Loring, vicepresidents, and Guy H. Miller, cashier. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Understanding gained through long years of intimate service—ability generated by constant thought and study of customers’ problems and needs—admirably fit the staff of this institution for serving bankers who appreciate personal executive atten tion. THE STOCK YARDS NATIONALBANK THE STOCK YARDS TRUST&SAVINGS B A N K o / - C H IC A G O M id -C o n tin e n t B a n k e r 102 nois, and has probably the finest build ing of any Illinois bank located in a city the size of Monticello. B a rric k Is Assistant Cashier. L.inn Barrick has been named assis tant cashier of the Byron State Bank, to succeed Henry Hewitt, who re signed. Charles Linn is president of the bank and Ray Barrick, cashier. ident of the bank; F. W. Gebhard, vicepresident, and F. C. Ferguson, assis tant cashier. Mr. McGrath will con tinue in the insurance business in Mor ris. Rak e s tr a w Is President at W yoming. Geo. S. Rakestraw has been elected president of the Scott, Walters and Rakestraw Bank of Wyoming, to suc ceed the late John W. Walters. Arthur J. Walters was elected cashier; Harry A. W . Buck N e w E. Rakestraw, vice-president, and Roy Cashier at Morris. A. W. Buck has been elected cashier D. Rakestraw and Harold W. S. Wal of the Farmers and Merchants National ters, assistant cashiers. The capital Bank of Morris, to succeed R. J. Mc and surplus will be increased to $85,Grath, resigned. O. E. Collins is pres 0 0 0 . Bank of Galesburg Has Promotions. Charles E. Johnson, former cashier, was named vice-president of the Bank of Galesburg at the annual meeting. Lawrence D. Johnson was named cash ier and elected to the board of direc tors. L. H. Streedain becomes assis tant cashier. C. C. Craig was re-elected president. Gridle y Heads F irst National, L ib ertyville. G. Carroll Gridley was elected presi dent of the First National Bank of Libertyville recently, Benjamin H. Mil ler becoming chairman of the board. John L. Taylor was re-elected vice-pres ident and William C. Hubbell was ad vanced to cashier. Harry C. Meyer and Dale S. Collins are assistant cash iers. Plan N e w Building For Milton Bank. The Farmers State Bank of Milton is planning a new bank building to be modern in every respect. It will be lo cated on the southwest corner of the square. L. C. Campbell Becomes F ir s t National Cashier. Who isYour Chicago Correspondent? I “For many years we have worked with the Union Trust Company, one of Chicago’s oldest commercial banks, Its resourcefulness and the spirit of help fulness it has shown in handling our requirements have been remarkable.” W e invite bankers to become better acquainted with our specialized services to correspondent banks. 1927 1869 F red erick H. R a w s o n H a r r y A. W heeler C h a ir m a n o f th e B o a r d P r e sid e n t C r a ig B. H a z l e w o o d V i c e -P r e s id e n t U N IO N T R U S T CO M PAN Y L. C. Campbell, for several years vice-president of the First National Bank, Milton, is the new cashier of the bank, following the election of offi cers by the directors for this year. Mr. Campbell will take the place heretofore occupied by J. C. Mitchell, who becomes chairman of the board of directors. Both Mr. Mitchell and Mr. Campbell will also continue as vice-presidents. The complete list of officers for the new year is as follows: President, Shannon Holland; vice-presidents, Joab Goodall and J. C. Mitchell, L. C. Camp bell; cashier, L. C. Campbell; assistant cashiers, W. S. Burkhart, Bon E. Mit chell, Sara Fitzgerel and Edith Rob erts. The board of directors is composed of Shannon Holland, Joab Goodall, J. C. Mitchell, George L. Roberts, George A. Wallace, E. T. Aikman, Rolley Hol land, W. L. Dunston and L. C. Camp bell. The First National B'ank in its re port on December 31, 1926, showed de posits of $1,851,451.30, which was an increase over the amount on the same date a year ago. It is one of the strong financial institutions of southern Illi nois, as well as one of the oldest. C H IC A G O Complete https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Private W ire Service — D irect B /L and C ollection Facilities Ne w Officers At M anufacturers, Rockford. A. P. Floberg, who has served as cashier of the Manufacturers National S t. L o u is , M a r c h , 1 9 2 7 103 Bank, was elected vice-president re F ir s t State Reopens cently. H. A. Conklin was promoted F or Business at Stronghurst. to the position of cashier. The First State B'ank of Stronghurst has reopened. Stockholders provided Four new assistant cashiers were added to take care of the increasing $100,000 so that the bank could con business of the bank. The assistant tinue business. cashiers are E. J. Hinz, R. A. Peter Judge Ne w ha ll On son, H. R. Leaman and H. P. Helm. N. F. Thompson is president of the Board at Aurora. Judge John K. Newhall has been bank and August P. Floberg and A. R. elected a director of the Old Second Floberg, the vice presidents, with H. A. Taylor, vice-president and trust offi National Bank of Aurora. William George is president; Harry J. Cooper, cer. vice-president; R. H. Robinson, cash Three new directors were added to ier, and George A. Seargeant, James the directorate at the annual meeting W. Dunlop and Emily A. Hurd, assis of the stockholders. They are E. S. tant cashiers. Ekstrom, Fred Peterson and B. A. Wil son. N e w Bank Formed A t New Lenox. W . P. Landon Heads The newly organized New Lenox State Bank has named Fred A. Francis as president; Harry W. Storm, vicepresident; Henry J. Schluntz, secre tary, and Ceward W. Batson, cashier. The bank is capitalized at $25,000, with $5,000 surplus. Lincoln Ba nk Has B irth day Party . A huge Birthday cake with 40 can dles burned in the lobby of the Amer ican National Bank of Lincoln during the 40th birthday party of the bank re cently. The party also served as a housewarming for the enlarged build ing, and was attended by hundreds of customers and friends. The officers are: W. F. Longan, president; Robert Schuster, vice-president, and W. H. Rochelle National Bank. The controlling interest of the Ro chelle National Bank, Rochelle’s old est banking institution, has changed hands, the stock of John B. Hayes hav ing been sold to Attorney W. P. Lan don, who succeeds Mr. Hayes as the bank’s president. The Rochelle National Bank will be reorganized as a community bank but will continue to do business without change in the personnel of its officers with the exception of Mr. Hayes. The following will be retained as di rectors: Thomas Southworth, chair man of the board; A. B. Sheadle, vicepresident; J. A. Herrmann, cashier; Thomas Kelley. The new directors will be Stanley Pierce, of Creston; John Babcock, of Flag Center; Wil liam Ravnaas, of Stewalrd; Dexter Stocking, George Schabacker, Charles Collier, Ben B'erve and W. P. Landon, of Rochelle. Two other members will be added to the board later, to repre sent the factory interests of the city. A l v a L. Sh ro ut W i t h T a y l o r v i l l e National. Alva L. Shrout, former county treas urer, has been named vice-president of and director of the Taylorville Nation al Bank. T. L. Long is president of the institution, and F. C. Achenbach, cashier. THE FOREMAN BANKS F O U N D E D 1862 Resources exceed 100 million dollars Ph il M itchell Retires A t State, Rock Island. Phil Mitchell has retired as presi dent of the State Bank of Rock Island, which position he has held since the bank’s organization in 1905. He has been identified with Rock Island banks for 65 years. I. S. White, former vicepresident, has been named president. B. D. Connelly is vice-president; K. T. Anderson, cashier, and C. F. Channon and B. J. Mitchell, assistant cashiers. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis T he Forem an National Bank The Forem an Trust and Savings Bank La Salle and Washington Sts. C h ica g o M id -C o n tin e n t B a n k e r 104 Berger, cashier. Directors are: J. T. Tabke, chairman; Adam Denger, Rob ert Schuster, F. W. Longan, J. D. G. Hill and August Baker. Up-Town Bank Consolidation. Where Officers Talk Your Language This institution has accounts representing all lines o f busi ness and maintains 120,000 credit files covering virtually every important business name in the United States. N o mat ter what your problem, there is E. C. Hart, president of the Fidelity Trust & Savings Bank, of Chicago, has announced that effective November 1st, the Fidelity Trust & Savings Bank ab sorbs the business of the North Shore Trust & Savings Bank, which organiza tion has been in existence about five years. The rapid growth of the Fidel ity Trust & Savings Bank, established six years ago, will he further augment ed by an increase in deposits of $1,000,000 bringing total deposits, accord ing to the last call, up to $6,434,907.55 and total assets in excess of $7,000,000. Mr. E. C. Dose, cashier of the North Shore Trust & Savings, will be as sociated with the Fidelity Trust and Messrs. Rudolph Lederer, I. B. Perl man and David Saul Klafter will be added to the board of directors of that institution. F. L. Schneider Has Resigned. Fred L. Schneider, cashier of the Legris Trust and Savings Bank, Kan kakee, 111., who was connected with the bank since it was founded, first as assistant cashier, has resigned. His successor has not been appointed. some officer here who can under stand it and''talk your language” ^ e C O N T IN E N T A L W C O M M E R C IA L https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BANKS CH IC AG O Re s o u r c e s H a l f a B il l io n — a n d m o r e Ne w Bank In Chicago. The Edison Park State Savings Bank, Chicago, Illinois, has been opened for business with a paid-in capital of $200,000.00 and surplus of $30,000.00. O. A. Christensen, president of the new bank, is also president of the Cap itol State Savings Bank and of the North Town Savings Bank and is a di rector of the Cook County Bankers’ As sociation. W. C. Gorden and W. C. McLennan are vice-presidents. Mr. McLennan is a realtor and Mr. Gorden is also in the real estate business. E. J. Zuehls, cashier, has had 14 years of banking experience, four years of which were spent acting as bank examiner in the State Auditor’s office. R. F. Deppe is assistant cashier. The Peoples State Bank of Auburn, 111., which opened for business on Au gust 22, 1926, had total resources in ex cess of $93,000 at the close of business on December 31. The bank is capital ized at $25,000. Officers are: A. C. Moffet, president; J. F. Hummel, vicepresident; C. F. Seales, cashier, and R. R. Smith, assistant cashier. St. L ou is, M arch, 1927 Insu rance P rem iu m Savings C lu b Is D e v ise d A new savings plan, known as the insurance premium savings club, for holders of insurance policies and an swering the problem of keeping pre miums paid up by distributing the total amount of the annual premiums over a period of fifty weeks, has been origi nated and copyrighted by W. E. Burwell, cashier of the Rockford National Plank. It is meeting! with approval from underwriters and insurance com panies all over the country. Of particular appeal to the policy bolder under the new plan is the fact that besides being able to meet his premium at the beginning of the year without financial embarrassment, he is offered 3 per cent interest on all de posits made in the club, as well as the 6 per cent cut which most insurance companies allow on annually paid pre miums. This savings club service is avail able to anyone desiring to pay their in surance premiums annually, and as many premiums as the holder wishes may be combined in the savings plan. Dates upon which the premiums of all policies are due could be arranged so that they would fall together, the total premium divided by 50 and the result will be the amount of the weekly pay ments by the policy holder. F irst N a tio n a l, E . St. L ou is, W ill E n large B u ild in g Dr. J. F. Reid has been re-elected chairman of the board of directors of the First National Bank, East St. Louis, which plans to observe its sixty-second year by erecting a building which will give the institution three times the space it has at present. Work upon wrecking the buildings that adjoin the present bank building will begin in March. The present building, which is comparatively new, will not be wrecked, but will be im proved. The approximate cost of the addition and renovation will be $500,000. A. C. Johnson has been re-elected president of the bank and given the following staff of officers: A. W. Baltz, W. K. Cannady and J. J. Halpin, vicepresidents; R. F. Reader, cashier; C. G. Rogers, L. A. Pfeiffer and H. W. Chitty, assistant cashiers. The directors of the bank are. A. W. Baltz, G. W. Brichler. W. K. Cannaday, P. T. Chapman, A. C. Johnson, E. C. Kramer, Charles F. Marker, Dr. J. F. Reid, J. W. Rendleman, Dr. J. Clark Waddell and A. S. Vien. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 105 “ ROL of HONOIr BÜINKS ILLlJiUIo 1 ìli It is an honor to be listed among the Honor Roll Banks of Illinois. It indicates that the bank has Surplus and Undivided Profits equal to or greater than its capital! Such distinction is accorded to the banks listed on this page. By careful banking and sound management they have achieved this enviable position. These banks will be especially glad to handle any collections, special credit reports or other business in their communities which you may entrust to them. Correspondence is invited. City Bank Abington....... First National........................ ..$ Alexander..... ....Alexander S ta te .................... Assum ption... ....Illinois State............................. Capital 75,000 25,000 Surplus and Profits $ 175,000 50,000 25,000 65,000 Beardstown........First S ta te ............................... 100,000 180,000 Berwick......... ....Farmers S ta te ......................... 30,000 35,000 American S ta te ....................... 100,000 336,000 Bloomington ... Corn Belt State....................... Canton............ ...Canton N ation al..................... 100,000 255,000 125,000 175,000 Bloomington Chapin............ ... Chapin State.............................. Chicago.......... ....Central M fg. District............ Chicago.......... ....Cont. & Com. Tr. & S vg.... . Chicago........... ...Drovers Tr. and S vg............. Chicago........... ...First Tr. and S vg................... . 25,000 56,000 500,000 670,000 5,000,000 11,377,000 250,000 517,000 6,250,000 10,534,000 Chicago.......... ...First N a tio n al........................ . 12,500,000 Chicago.......... ...Foreman National..... 4,000,000 I Chicago.......... ...Harris Tr. and Svg............... 3,000,000 Chicago.......... ...Illinois M erchants.............. 15,000,000 Chicago.......... Northern Trust Co............ 2,000,000 Chicago........... ... State Bank of Chicago........ 2,500,000 C hicago....... Union Trust Company 3,000,000 17,956,000 4,588,000 4,874,000 35,231,000 5,347,000 6,563,000 3,923,000 160,000 De Kalb.......... ...First N ation al.......................... D ixon.............. ...City National Flora................. ...First National......................... 100,000 100 000 50,000 200 000 75,000 Freeport.......... ....First National.................... Grand Ridge... ... First National............. Greenfield....... ....Farmers State.......................... Joliet................. ....First N a tio n al.......................... 150,000 430,000 25,000 25,000 400,000 33,000 30,000 600,000 Joliet................. ....Joliet National.......................... 150,000 Joliet................. .. Joliet Trust and Savings Bank 100,000 La Salle........... ...La Salle National Bank....... 200,000 Murphysboro ...City National ....................... 50,000 M t. Vernon.... ...Third National ...................... 125,000 N ew Athens... ....State Bank of New Athens 25,000 200,000 45,000 Rushville...... . ....Rushville S ta te ....................... 100,000 105,000 Tiskilwa...............First S ta te ...... ........................ Urbana............. ...First N a tio n al... W arren............ ...State Bank....... ... 25,000 30,000 60 000 95 000 50 000 75,000 650,000 119,633 330,000 62,000 106 M id -C o n tin e n t B a n k e r Miss lia M. H u n t e r has been elected PERSONAL assistant cashier of the Aurora Trust & Savings Bank, Aurora, 111. N O TES OF IL L IN O IS B A N K E R S H. H e n r y B. Wern sing, president of the First National Bank, Effingham, is can didate without opposition for re-elec tion as mayor, having already served four years as mayor. James E. Loye, has been elected vice-president of the Chatham State Bank, Chicago, 111. A. Champion, cashier of the Lake City State Bank, Lovington, 111., died recently. Alfre d C. Sm ith , cashier of the F irst National Bank, Marengo, 111., has been elected vice-president of the American National Bank, Woodstock, 111. E. Earl D. A m s le r has been elected first vice-president and cashier of the First National Bank, Grand Ridge, 111. He succeeds George L. Dearth who has been cashier of the bank for the past ten years. George M. Hayes has retired as pres ident of the Altrui State Savings Bank, Chicago, and has been succeeded by Newton Jenkins. Julius F. Szatlowski has been elected vice-president. C. W. Johnson, cashier, and F. C. Pet erson, assistant cashier. C. H. Backus has resigned as presi dent of the State Bank of Hampshire, 111. Chas. S. Backus has been elected president; Alex Reid, vice-president; I. Gutel is the newly elected cash ier of the Yorkville National Bank, Yorkville, 111. L. D. Smith has been promoted fro m assistant cashier to vice-president of the Second Security Bank, Chicago. He has charge of the real estate loan de partment. Ogden P. Bourland, president of th e National Bank of Pontiac, 111., died re cently. James J. McG rath , vice-president of the Merchants and Farmers Trust & Savings Bank, Ottawa, 111., died re cently. R. W . M ille r has been elected to suc ceed the late L. R. Phillips as presi dent of the Henry National Bank. Mr. E. C. Dose has been elected cash ier of the Fidelity Trust and Savings Bank, Chicago, succeeding Mr. T. J. Nihill, resigned. F. Guy H i t t has been elected president of the First National Bank of Ziegler. He retains his directorship at the First Na tional Bank of Christopher. Harold M ill e r has been elected as sistant cashier of the First National Bank of Earlville. He has been serv ing the bank as teller. Conservative Traditions in Modern Banking Arnold V a l t e r has been made assist ant cashier of the Gallatin County Bank, Ridgeway, succeeding W. B. Phillips. In the Illinois Merchants Trust Company, the traditions of a half century of conservative banking stand back of each trans action. <!W ith its large financial resources, its highly developed and specialized facilities and organization, its intimate business and governmental contacts at home and abroad, this institution is today one of this country’s leading banks — a logical choice for banks or commercial concerns establishing a Chicago bank ing connection. <1Personal attention to inquiries concerning our specialized services will gladly be given by our officers. I l l in o is M e r c h a n t s TRUST COMPANY Capital & Surplus LA SALLE, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis JA C K SO N , CLARK 45 AN D SMillion D ollars Q U IN C Y STREETS - C H IC A G O M. E. Graff has resigned as cashier of the First National Bank of Ply mouth to join the staff of a bank at LeRoy, 111. E. D. A m sle r of Chicago has become cashier of the First National Bank of Grand Ridge, succeeding George Dearth who resigned because of ill health. John L. H a m ilto n of Columbus, Ohio, but formerly of Danville, died last month following an illness of four months. He founded the Citizens State Bank of Watseka, the Hoopstown Na tional Bank, the American Bank and Trust Company of Danville, the Com mercial Trust and Savings of Danville St. L ou is, M arch, 1927 107 and several others. He was president of the Illinois Bankers’ association in 1900, and the American Bankers asso ciation in 1905 6. A. J. Busscher has been elected president of the Proviso State Bank, Maywood, succeeding George A. Hart, who becomes chairman of the board. Mr. Buscher has been cashier of the Citizens State Bank of Melrose Park and will retain his office of director in that bank. R. O. C la rid a has been added to the board of directors of the Citizens Trust and Banking company of Marion, suc ceeding B. N. Rice, resigned. “ Pa s k y ” Fla m inio has become United States Cold Storage Company; S. T. Kiddoo, president the Stock Yards National Bank; Eugene V. R. Thayer, capitalist; Charles N. Stanton, presi dent the Stock Yards Trust and Savings Bank; G. F. Emery, vice-president the Stock Yards National Bank. The Stock Yards Trust and Savings Bank: Officers—Charles N. Stanton, presi dent; S. T. Kiddoo, vice-president; Ar thur G. Leonard, vice-president; H. I. Tiffany, vice-president; J. T. Mangan, vice-president and cashier; Roy M. Zehr, assistant cashier; James Burgess, assistant cashier; Joseph G. Porter, trust officer. Directors—Arthur G. Leonard, presi dent Union Stock Yards and Transit Company ; M. A. Traylor, president First National B’ank, Chicago; Charles H. Swift, vice-president Swift & Co.; Thornhill Broome, president Midland Warehouse and Transfer Company; S. T. Kiddoo, president Stock Yards Na tional Bank; Charles N. Stanton, presi dent the Stock Yards Trust and Sav ings Bank; Arthur Meeker, vice-presi dent Armour & Co.; Clyde H. Schryver, president Chicago Merchandise and Equipment Company; G. F. Emery, vicepresident the Stock Yards National Bank ; H. I. Tiffany, vice-president Stock Yards Trust and Savings Bank. as sistant cashier of the First National Bank of Desplaines. He was formerly with the Toluca State bank. E. B. Kundtson, president of the First National B'ank of Wilmette, was elected vice-president of the Wilmette Chamber of Commerce at the annual meeting. John Schwinn has been elected to the board of the Farmers and Me chanics State Bank of Averyville, to fill the vacancy caused by the death of his brother William Schwinn. Miss Hazel Gudgell has been ap pointed assistant cashier of the Farm ers State Bank of Hooppole, succeed ing N. R. Jacobsen who has moved to WTalnut, to become associated with the Walnut Lumber Co. Glendon W eir has been made as sistant cashier of the Sandwich State Bank, Sandwich, succeeding Miss Vir ginia Brady, resigned. Sto ck Ya rds Banks M a k e Fine Statement. The Stock Yards National B'ank of Chicago now has deposits of $18,777,100 and its affiliated institution, the Stock Yards Trust and Savings Bank, has deposits of $10,366,800. Resources of the combined banks are $32,252,900. Officers and directors include: Stock Yards National Bank—S. T. Kiddoo, president; Charles N. Stanton, vice-president; G. F. Emery, vice-presi dent; B. I. Peterson, vice-president; M. D. Goldberg, vice-president; D. R. Ken dall, cashier; A. W. Axtell, assistant cashier; H. E. Herrick, assistant cash ier; J. J. Staiger, assistant cashier; A. S. Bagnall, assistant cashier. Directors—Arthur G. Leonard, presi dent Union Stock Yards and Transit Company; Louis F. Swift, president Swift & Co.; F. Edson White, presi dent Armour & Co.; M. A. Traylor, president First National Bank, Chi cago; Thomas E. Wilson, president Wil son & Co.; H. E. Poronto, president https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis New Orleans XXVI The International Trade Exhibition T h e N e w O rleans P erm a n en t Internation al T ra d e E xhibition (above) h as on display acres o f local, dom estic and foreign m a n u factured and natural products o f e v e ry class and type. T h e E xhibition en joys a m o n th ly a v e ra g e attendance o f 3 0 ,0 0 0 visitors fro m all parts o f the w orld, and the E xhibition C o m p a n y m aintains its o w n selling o rg a n ization for the benefit o f exhibitors. Hibernia Bank & Trust Co. N ew Orleans, U. S. A. M id-Continent Banker 108 NEWS AND N O T E S OF GROUP FOUR By W . M. Givler, Secretary Group Four, Naperville, III. The banks outside! Cook County, be longing to Group Four, are nearly all located in towns or cities through which passes one of the several hard roads radiating from Chicago. That territory bounded on the north by the state line, on the south by the Kankakee River, and an the east and west by Lake Michigan and the Fox River, respective ly, seems to be destined to be taken out of agriculture and dairying and sub divided into city lots; painted sticks now appearing where crops and herds hitherto evidenced pastoral life. The writer remembers that a similar subdividing orgy took place between the years 1890 and 1895. Trees plant ed thirty years or longer ago now mark the boundaries of what were designed to be city blocks, but are still unim proved. Somebody may have owned these blocks and lots since the World’s Fair, held in 1893, hoping each year that the boundaries of Chicago would push out and create a market, and thus fulfill the vision created by the “real tor” in the mind of the purchaser. Hope history does not repeat itself. 1 just bought 26 lots thirty miles from the loop. I read with great personal interest that health hoards in Wisconsin cities, towns and villages are preparing to ad minister to school children tablets con taining iodine. This might be a proper movement for bankers in Group Four to encourage in each community. Spent three days at the Clinic at Rochester last week. Many others besides the writer might have been spared much discomfort had the benefits of pre ventive medicines been recognized earlier in our lives. One resolution was made early in the year 1927—that I would never be guilty of “ Speaking of Operations.” Irving Cobb covered that subject nicely for all time. The item “ Other Real Estate” does not appear to be over large in recent published statements of banks in Group Four. During the past few days I have had occasion to note statements of banks in the northwest and have also been told that “Real Estate and Build ing” and “ Other Real Estate” accounts are noticeably large. Our group officers are stressing the importance of all projects advocated by the state association. Town Guard pro grams, however, are receiving major attention because of the fact that all roads lead to Chicago, making possible a quick and complete getaway by the bank bandit. Last week an officer of one of the largest western money loaning agen cies, which specializes in farm loans, asked me to answer the following ques tions: “In the event of a general infestation of the corn borer what would be the probable extent of the crop loss?” “Would the remainder of the crop be good quality corn?” “What is your personal opinion as to the effect of such infestation on land values?” “Would not the probable increase in price of corn due to any decrease in crop compensate the farmer to an ex tent that would possibly keep land values at least more or less as they are at present?” Twenty Thousand Attend Bank Opening S c e n e in t h e N e w P u l l m a n T r u s t a n d S a v i n g s B a n k o n O p e n i n g D a y A record crow d C h ic a g o th e l o b b y o f end E F B r y a n t is E . P ea rson , se cre ta ry https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis a t t e n d e d t h e o p e n i n g o f t h e n e w h o m e o f t h e P u l l m a n T r u s t a n d S a v in g s B a n k . w h i c h is s h o w n i n t h e a b o v e p i c t u r e . T h e b u i l d in g is o n e o f t h e fin e s t in t h e S o u t h p r e s id e n t o f th e b a n k , D o n a ld R . B r y a n t , v ic e -p r e s id e n t , E . G . S w e e n e y , c a s h ie r, P . a n d A . E . P r i c e , a s s is t a n t s e c r e t a r y . T h e b a n k h a s d e p o s i t s o f m o r e t h a n s ix m il l io n . The above questions are pertinent and the reader may guess the burden of my reply, which was largely colored by what I said and heard on two in spection trips into the European corn borer infested areas of Ohio, Michigan and Ontario in 1925-1926. The writer believes in miracles, and he hopes the evidences of destruction to the corn crop in the present infested areas will not be seen in the corn growing states west of Ohio and Michigan. Our en tomologists and quarantine offices will need the help of every agency to keep the pest under control when it reaches the Mississippi Valley. Southern Illinois B a n k s A re U n u su a lly Prosperous By B. G. GULLEDGE Marion State & Savings Bank, Marion, 111., Secretary Group Ten, I. B. A The banks of Southern Illinois (es pecially those in the coal belt), are now enjoying a period of prosperity that is reminiscent of the World War period. This revival of the “good old days” is very welcome, too, because the coun try is just emerging from nearly three years of depression caused by the inactivity of the coal mining in dustry upon which a goodly number of counties in Southern Illinois are de pendent in varying degrees. This in dustry has been very active of recent months and has been conductive to a very marked increase in deposits. This is most noticeable in the savings de partments of the different banks, many of which claim that these departments are now greater than ever in their his tory. The present mining agreement ex pires the 31st of March of this year and needless to say, not only the banks but business in general is looking for ward with much uncertainty as to the outcome of the coming conference be tween the miners and operators. In my opinion, this feeling of uncertainty is having much to do with the in crease in bank deposits. The business and working men are both laying up a cash reserve to fall back upon in the event of a strike or a shutdown. The banks in turn are being more conserva tive in making loans in their own com munities and are turning more toward investment paper of a good character, a fair yield and a ready market in the event their reserve should warrant sale. The banks located in the Fruit Belt of Group 10 (the south fourteen coun ties in Illinois), are also in good con dition due to the fact that the counties had a bumper season and while the St. L ou is, M arch, 1927 • 109 V 1N'- price on the market was not -so high as usual, the yield was most abundant and tended to overcome a lowered price by quantity shipments. Southern Illi nois is one of the biggest fruit produc ing districts in the country, unexcelled for its apples and peaches, and a con tinual increase in orchard acreage is bringing in greater revenue each year. This tends to increase very greatly the wealth of this district and heretofore small banks are becoming outstanding institutions of their kind. The increasing money wealth of the banks in Group 10 is also tending more and more to develop the small town banker into a real wide-awake-to-theopportunities-of-Southern-Illinois, co-op erative human from the old secretive, suspicious and afraid-to-co-operate type. He is looking around and picking up many of the mannerisms and customs of his city cousins in conducting his institution. In fact, very few of the last mentioned type are now to be found in Group 10. What I write here is best verified by the fact that many of the counties are developing and op erating Credit Bureaus, adopting a system of service charges, operating under the Town-Guard System for pro tection from bandits and are co-operat ing in many other ways for their mu tual benefit. Many are they who would be sur prised from already formed opinions of an undeveloped, backwoods type of country if they would only treat them selves to a tour of the Southern end of Illinois and much greater would be their surprise if they could be shown the yet undeveloped wealth of this dis trict lying in wait for those seeking an opportunity. Bond Salesmen Wanted Old established security house has good opening for three Salesmen in City of St. Louis and for one man to travel in Southern Illinois Address W . H . M . in care of THE M ID -C O N T I N E N T BANKER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis What Do You Want? — tell us and we will help you find it. W e have created this new classified ad department as a free service to subscribers. If you have something to buy or something to sell, or if you want anything, you can make it known to the bankers in the Mid-Continent territory without cost. If you are not a sub scriber, your check for $3 will pay for a year's subscription and entitle you to free use of the want ad columns. Position Wanted by assistant cashier who desires better oppor tunity for advancement. Twentyeight years of age. Pour years’ experience as assistant cashier. Best of references. Address V. B. M., The Mid-Continent Banker— 7 . ______ Bank for Sale: Small inland town, Southern Illinois, 600 popula tion. Capital stock, $15,000. Sur plus, $9,000. Undivided profits will be $4,000 by March 1st. Deposits and loans average around $60,000. Net earnings last year were 20%. Cashier’ s salary, $2,400 per year. Small bank, but a money maker. Good reasons for sale. New man agement can increase business. All paper guaranteed. Price, $200 per share, cash. If size, town, bank, location and price don’t interest, please do not make inquiries, as these details should be enough in formation for party wanting to buy a bank. Address No. 1000, care Mid-Continent Banker. Position Wanted as assistant cashier in medium size bank by young man twenty-eight years old. College graduate, four years bank ing experience. Also enrolled with the LaSalle Extension University, Chicago, in Law. Address V-12, M. C. B.— 7 . ---------Position Wanted as cashier in good country bank or as assistant cashier in larger bank by married mar.. 15 years’ experience. Now employed. Desire better opportu nity for advancement. Best of references. Address No. 1010, The Mid-Continent Banker. Bank Control Wanted: Country banker desires to purchase control of good bank in town of not less than 1,000; American community in Central Illinois preferred. All communications confidential. Ad dress No. 1011, The Mid-Continent Banker. Interest in Bank Wanted: Would like to purchase controlling interest in a good bank in a town of 2,000 to 4,000 or to purchase a minority stock interest carrying with it an official position. I have had six teen years’ experience in a state bank. Now with National Bank with resources of $1,000,000, for three years as cashier and active manager. Address No. 105, The Mid-Continent Banker— 1. Position Wanted in bank by young man. Opportunity for ad vancement desired. No banking experience but good business edu cation. Two years’ college. Fu ture prospects will be considered more than large salary to start. Best references. Can invest. A d dress L. E. T „ The Mid-Continent Banker— 6. W anted: Excellent opportunity for banker favorably known in' Missouri, Kansas and Oklahoma, or all three states with progressive Kansas City bank, well thought of throughout that territory. Would want man capable of organizing and supervising country bank de partment and one able to bring considerable business to bank with him. Future would depend entire ly upon growth and success of de partment. Address No. 112, care The Mid-Continent Banker, 408 Olive Street. St. Louis. Banker, age 36, at present receiv ing a salary of $230 per month as cashier of a national bank in an Illinois town of 4,000, desires to1 make change where there will be greater opportunity for advance ment. Prefers position in growingbank in a town of from 5,000 to 15,000 population. Total footings of bank of which he is now cashier have increased from $160,000 to $350,000 in past four years. Best of references and more detailed in formation furnished on request Address A. F. B., c-o M id-Conti nent Banker. A Good Opening: W ill consider sale of $10,000 stock in good A r kansas bank to active banker Bank is twenty years old and has a capital of $50,000. Deposits average $350,000. Paying dividends since organization. Sale to carry active management at salary of $3,000. Would expect purchaser to take over modern dwelling- in town with lights, water, sewerage and on paved highway. Excellent school; four churches. Address M. J. T., c-o Mid-Continent Banker, Banker, married, age 36, uni versity graduate. Over fifteen, years’ experience in banking, the past ten years as cashier and only active officer of good sized country bank, has sold interest in present bank and desires to change. Splen did record as a business builder and good on credits. Prefers county seat town or city. Best references. Can invest. Address J. A. B., c-o Mid-Continent Banker. Bank Interest for Sale: W ant to sell interest carrying position of cashier with salary of $2,400. Stock holdings, $6,000. Bank in firstclass condition, good, well-organ ized business. City of 1,200 popula tion, fertile farming community. Would not sell except to experi enced man. Address No. 2010, care Mid-Continent Banker. F o r Sale: Controlling interest in successful National Bank with $100,000 capital and $900,000 totals. Located in good town of 7,500 pop ulation in good section of Illinois. All investments and loans guar anteed. One or two official posi tions go with stock. Do not an swer unless you have the capital, age and experience to manage a good, going bank. Address I. E. S., Mid-Continent Banker— 11. Fixtures for Sale: Marble and bronze screen surrounding Lobby, 72x20 feet. Ten cages with thir teen wickets and other equipment. Special selected English vein Italian marble. Very attractive. Also several sets of money chests. Available at once. Removal to new building necessitates sale. In quiries solicited. Price very rea sonable. Address Commercial N a tional Bank, Peoria, 111. Save Money— Buy These: Bur roughs bookkeeping machine (practically new). flat-top oak desk, Underwood typewriter No. 5, swinging desk stand for typewriter, office chair, a Writerpress dupli cating machine with full equipment of type, stand, trays, furniture, etc. Address A. H. Hicks, A ltamont, 111.— 4. M id -C on tin en t B a n k er 110 Buren M a r tin Kentucky O F F IC E R S : KENTUCKY S O C IA T IO N : R ic h m o n d ; S ecreta ry , L o u is v ille N a t io n a l T reasu rer, J. GROUP II— M. I — J. W . M a tth ew s T h om a s, W. P a ris ; H a rry Bank D. T u ck er, H a ll , R. G. B ld g ., H ardaw ay, C H A IR M E N D EN TS: BANKERS P r e s id e n t, AND E. AS T u rle y , S m it h , R. D. Jeter has succeeded G. W . Hi ll 300 as cashier of the First National Bank, Russell Springs, Ky., and A. V. Luttrell has been elected assistant cashier to succeed Lucy B. Oaks. L o u is v ille ; S h e p h e r d s v ille . V IC E -P R E S I R u s s e ll, O w en sboro; C a m n b e ll s v i ll e ; S h e l b y v i l le ; has been elected vice- president of the First National Bank, Greenville, Ky., succeeding C. E. Mar tin. III— I V — C. K. V — J n o . M . Y o s t , P ik e v ille ; F irst N a tio n a l, L ou isville, H a s F in e N e w H o m e The First National Bank of Louis ville, the oldest national bank in the business in the future will be con T w o W a lto n South, and the Kentucky Title Trust ducted under the name of the Peoples Banks Merge. Company are now located in the first Deposit Bank. Total resources of the The Walton Bank & Trust Company wing of their new $1,000,000 bank build and the Walton Equitable Bank of Wal two banks on December 31 was $1,ing. 296,299, according to a statement issued ton, Ky., have been merged and a char When completed, the new building ter has been granted to the combined by the officials of the banks. will be “'Ll” shaped with entrances on institution under the name of the Wal Market street, Fifth street and Court ton-Equitable Bank and Trust Com Elect T w o place. The Fifth street side of the Assistant Cashiers. pany, with capital of $50,000 00 and building will be three stories high; the John L. Hanes and K. B. Posey have surplus and undivided profits of $79,Market street side, two stories high. been elected assistant cashiers of the 000.00. R. C. Green is president of the The Market street building is 48x120 Citizens National Bank, Bowling Green, bank; J. D. Mayhugh, first vice-presi feet, and the Fifth street building will Ky., succeeding M. J. Hanley and Jones dent; R. B. Brown, second vice-presi be 82x140 feet when completed. There E. Mercer. dent; Sleet West, cashier, and Mrs. will be a total of 65,000 square feet of Hattie Metcalfe and C. D. Benson, as floor space. Ab ner V. C. Grant, 60, president of sistant cashiers. The exterior of the building, both at the First National Bank, Ludlow, Ky., the Market and Fifth street entrances, died recently. Ne w Bank will be finished in brick and Georgia A t Helier. white marble. The interior is finished The Bank of Helier, Ky., has been Chris D. Russell has resigned as as with ivory color plaster walls and solid opened for business with capital of $20,- sistant cashier of the Farmers and American walnut. No marble is used 000.00. E. L. Bailey is president; Al Traders Bank, Maysville, Ky. in the interior finishing and the result bert Bartley, vice-president; Basil is exceptionally pleasing. It gives an Bartley, vice-president, and J. E. HelJohn C. W o rs h am has been elected atmosphere of hominess that is very lier, cashier. president of the Ohio Valley Bank and pleasing. Trust Company, Prestonburg, Ky., suc Another feature of the interior is the ceeding B. G. Witt, who has resigned. T w o Burlington absence of cages. The walnut wood Banks Consolidate. work extends from the floor to counter W . S. Vanderen , cashier of the H a r r i The Peoples Deposit Bank and the height down both sides of the lobby, Boone County Deposit Bank of Burling son Deposit Bank, Cynthiana, Ky., died and the counters are topped with a low ton, Ky., have consolidated and the recently. bronze railing. Behind the counters the space is entirely free from any kind of cage work. The floors, throughout, are finished in terrazzo and rubber tile. The Kentucky Tile Company and the Kentucky Title Trust Company occupy the second floors of the buildings, and the third floor of the Fifth street build ing is given over to the director’s room and president’s offices. There will be also a gymnasium and a dining room for the bank’s employes. The vault department in the basement will be finished in ivory woodwork and there will be three vaults. Total resources of the First National Bank and the Kentucky Title Trust “ O ld e st N a tio n a l B a n k in K e n tu c k y ” Company are now in excess of $33,238,and 000, and total deposits are more than $i7,500,000. During the six years ending June 30, 1926, the First National Bank had L O U IS V IL L E , K E N T U C K Y an increase of more than 159 per cent in deposits and an increase of more R . E . T u rle y P r e s id e n t V I — L. F. T a y lo r , W in c h e s te r . B rash ear, H azard; V I I — R. P. H a r r y G . S m ith , S ecreta ry Combined Capital and Surplus Over $2,800,000.00 Combined Resources Over $33,238,445.00 FIRST N A T IO N A L B A N K K e n tu c k y Title T rust C o m p a n y https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis St. L ou is, M arch, 1927 than 224 per cent in surplus, profits and reserve earned. During this same period the Ken tucky Title Trust Company had an in crease of 125 per cent in deposits and an increase of more than 394 per cent in surplus, profits and reserve earned. 111 Louisville Bond House in Fine N ew Building D a v is P lans A n o th e r B ig B a seb a ll P a rty Arch B. Davis, vice-president of the Citizens Union National Bank, Louis ville, promises to break his own record again for the biggest baseball box par ty at the opening game of the 1927 season at Parkway Field, on April 12. He has reserved a block of 961 seats for this occasion. Four years ago, Mr. Davis broke all records for box parties at an athletic event when he gave a party to his banker friends from Kentucky, Indiana and Tennessee, and each succeeding year he has broken his own record and this time he hopes to eclipse all of his previous records. When the final game of the 1926 sea son was over, Mr. Davis made applica tion to the Louisville club for 1,000 seats, and he has just learned that he has been allotted 961 seats. On the opening day of the 1926 sea son here, 703 bankers were guests of Mr. Davis at a luncheon and at Park way Field. On the night before the game, Mr. Davis entertained his guests at a smoker and vaudeville and this year he also will provide entertainment other than the luncheon and ball game. J. E. Huhn Heads N e w Bank. John E. Huhn, first vice-president of the Liberty Insurance Bank, Louisville, Ky., was elected president of the High land Liberty Bank, which was opened at Bardstown road and Bonnycastle avenue, November 20th, Robert G. Bickel, assistant cashier of 'the Liberty Insurance Bank, was named cashier of the new bank. Directors elected were: Mr. Huhn, Henry Almstedt, O. H. Wathen, Fred Forcht, J. H. Horn, Ed. J. Reiss and H. E. Russman. M o ffe t t E le c te d D irecto r of N a tio n a l P a rk B a n k George M. Moffett has been elected a director of the National Park Bank ol New York City. Mr. Moffett is vicepresident and a director of the Corn Products Refining Company and is also a director of the Fidelity International Trust Company and of the Standard In surance Company. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I n t e r io r N e w H o m e , J . J . B . H il l i a r d 8s S o n , L o u is v i ll e The bond and investment firm of J. J. B. Hillard & Son, founded in Louisville in 1882 by J. J. B'. Hillard and now operated by his two sons, Isaac Hil liard and Edward H. Hilliard, with An drew J. Howard and Howard O. Hughes, is now located in its new building at 419 West Jefferson street, Louisville. The building, owned by members of the firm, has been said to be the finest in the South housing a bond and in vestment company. It is five stories in height, and the first floor is occupied by the Hilliard establishment. The other floors are to be rented out for office use. The facade of the building, finished in white stone and dark metal trim mings, attracts passers-by because of its picturesque design. Tall Gothic windows with stone and metal tracery give the building the appearance of an Old World cathedral. Grilled doors guard the entrance on the right. The interior combines utility and ornateness. The details of construction provide at once for accurate and swift transaction of business, ample room and light for employes and service and comfort for clients. Offices of members of the firm and of salesmen extend from the front of the building half to the rear of the first floor. Above the “cages,” which extend from the offices toward the back of the first floor, a skylight has been placed to provide natural light throughout the working day. At the rear of the first floor is the customers’ room, equipped with a “Trans-Lux” machine to record sales of the New York Stock Exchange. Lighting fixtures and carpeting, of up to-date design, lend a comfortable atmosphere to the firm’s business home. J. J. B. Hillard originally entered into the investment business in 1872 as a member of the firm of A. D. Hunt & Co. A. D. Hunt & Co. was dissolved in 1882, and J. J. B. Hilliard operated the firm under his own name until 1892. In that year Byron Hilliard became a part ner, and the firm name was changed to J. J. B. Hilliard & Son. Mr. Hilliard died in 1901, and in 1902 Isaac Hilliard became a partner. Edward H. Hil liard became a partner in 1906. An drew J. Howard became a partner in 1920. Byron Hilliard died in 1922. In the same year Morgan O. Hughes be came associated with the firm. The firm deals exclusively in invest ment securities, and it is a member of the New York Stock Exchange. The New York correspondents of the firm are Walker Brothers, and Clark, Dodge & Co. M id -C on tin en t B a n k er 112 Indiana H . C . R oth ert P re s id e n t O F F IC E R S IN D IA N A BANKERS AS S O C I A T I O N : H u g o C. R oth ers, H u n tin g b u rg , P re s id e n t; C. O. H o lm e s , G a ry , V ic e - P r e s id e n t ; F o r b a M c D a n ie l, I n d i a n a p o li s , S ecreta ry ; Jos. W . S p r in g e r , E liz a b e th to w n , T reasu rer; J on es, H a m m o n d & B u sch m a n n , In d ia n a p o lis , C o u n s e l. GROUP C H A IR M E N : I — R o llo N. W a lt e r , L a G r a n g e ; I I — J. G . W a llic k , E lk h a rt; I I I — E. S. G o o d r ic h , W in c h e s t e r ; I V — F . D . T h o m p s o n , E d in b u r g ; V — C . C . N e w l in , T e r r e H a u t e ; F o r b a M c D a n ie l , V I— W a lte r H u n g e r fo rd , S h e lb y v ille ; S e cre ta ry V I I — W . M . W e lls , S c o t t s b u r g ; V I I I — A . J. W e d e k in g , D a le . bank and trust company will include a general banking department, a real es M. Mayer has been elected president tate department, an insurance depart of the First National Bank, Covington, ment, a trust service and a safe de department. The investment Ind., succeeding W. W. Layton. David posit company will handle a complete and S. Ferguson was elected vice-president; J. E. Romine, cashier, and Lee Phil- diversified line of investment offerings, specializing in high grade Indiana se pott, assistant cashier. Mr. Layton, who had been at the head of the in curities. stitution for a number of years, is now F. B. Rowley in Florida, where he has large inter Now President. ests. Frank B. Rowley, postmaster of An M. Mayer Now President. H, L. Huddleston Elected President. At a meeting of the stockholders of the Burlington State Bank, Burlington, Ind., H, L. Huddleston, cashier of the bank for the past twelve years, was elected president to fill the vacancy caused by the death of W. T. Hindman. Miss Nell Everman, for many years assistant .cashier, was elected cashier. New Bank A t Indianapolis. The Inland Bank and Trust Com pany and the Inland Investment Com pany, Indianapolis, Ind., have been or ganized with a capitalization of $250,000. Leonard G. Wild is president. The gola, Ind., has been elected president of the Angola Bank & Trust Com pany. He succeeded D. R. Best, who resigned because of ill health. Mrs. Josie Wickwire is now vice-president of the bank and Claude Douglass, sec retary. South Bend Bank Elects Ne w Officers. Adam Hunsberger, formerly vicepresident of the Franklin Trust Com pany, South Bend, Ind., has been elect ed president of that institution to suc ceed M. S. Caldwell. Harvey Rostiser has been elected secretary and Wil liam Freeman has been re-elected treas urer. Mr. Caldwell, first president of the trust company, which was founded Hanover National Bank OF THE CITY OF NEW YORK Corner Nassau and Pine Streets E S T A B L I S H E D 1851 $ 5 ,0 0 0 ,0 0 0 $ 2 6 ,0 0 0 ,0 0 0 W IL L IA M H A Y W A R D , P r e s id e n t E. H A Y W A R D F E R R Y , V i c e - P r e s id e n t F R E D E R I C K A . T H O M A S , A s s ’ t C a s h ie r H E N R Y P . T U R N B U L L , V i c e - P r e s id e n t S A M U E L W O O L V E R T O N , V i c e - P r e s id e n t W A L T E R G . N E L S O N , A s s ’ t C a s h ie r J O S E P H B Y R N E , V i c e - P r e s id e n t C H A R L E S B . C A M P B E L L . A s s ’ t C a s h ie r J O S E P H S . L O V E R I N G , V i c e - P r e s id e n t W I L L I A M B . S M I T H , A s s ’ t C a s h ie r J A M E S P . G A R D N E R , V i c e - P r e s id e n t W I L L I A M H . A L L E N , A s s ’ t C a s h ie r G O R D O N H . B A L C H , V ic e -P r e s id e n t W I L L I A M J . L O G A N , A s s ’ t C a s h ie r W I L L I A M E. C A B L E , J r ., C a s h ie r F R A N K W O O L L E Y , A s s ’ t C a s h ie r J . N I E M A N N , A s s ’ t C a s h ie r E L T O N E. O G G , T ru s t M a n a g er G E O R G E E . L E W I S , A s s ’ t C a s h ie r https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis C. P. Packer, Jr., Elected President. John R. Farovid has been elected chairman of the board of directors of the Citizens Trust and Savings Bank, Hammond, Ind., and Charles P. Packer, Jr., formerly vice-president and secre tary, has succeeded Mr. Farovid as president of the bank. Twenty-three years ago, following his graduation from high school, Mr. Packer started his business career as a mes senger boy in the Corn Exchange Na tional Bank of Chicago. Since then he has followed the banking business very closely, working upwards through the ranks in the Illinois Trust and Savings Bank until 1913, when he became affili ated with the Citizens Trust and Sav ings Bank as cashier. A few years later he was promoted to the position of vice-president and secretary, which position he held until his recent ap pointment as president. C. B. Enlow, fo r m e rly vice-president, has been elected president of the Na tional City Bank, Evansville, Ind., suc ceeding Francis J. Reitz. S. Wallace Cook is now vice-president and Ster ling J. Perry, assistant cashier. Luthe r F. Pence has succeeded San ford H. Ketiner as president of the Anderson Trust Company, Anderson, Ind. Carl A. Ploch has been elected vice- president of the Farmers Trust Co., Indianapolis, Ind. Mr. Ploch was for merly vice-president of the Washington Bank & Trust Co., and has been suc ceeded there by Delmar G. Patrick, as sistant secretary. Wm. THE C apital Surplus and Profits about sixteen months ago, resigned be cause of the pressure of other duties. F O R E IG N D E P A R T M E N T W IL L IA M H . S U Y D A M , V ic e -P r e s id e n t a n d M a n a g e r R O B E R T N E IL L E Y , A ss’ t M a n a g e r F R E D E R IC A . B U C K , A s s ’ t M a n a g e r M. Ratcliff has resigned a fter thirteen years of active service as president of the Citizens State Bank, Kingman, Ind. P. S. Hodges, tre a s ure r of the A n de r son Trust Company, Anderson, Ind., has resigned to accept a position with the J. F. Wild Bank in Indianapolis. T h e W a y n e to w n State Bank has pur chased the Farmers and Bank, Waynetown, Ind. Charles P. Merchants M ulv ihill, assistant cash ier of the Citizens National Bank of Peru, Ind., has resigned. Otto C. Klein has been elected cash ier of the Mount Vernon National Bank & Trust Company, Mount Vernon, Ind., succeeding C. F. Hoover. St. L ou is, M arcli, 1927 T h e Am erican 113 National Bank, Rush- ville, Ind., has total resources of $1,063,995.14, with deposits of $848,959.84, according to their recent statement. Ed w ard W o od w ard has resigned as cashier of the First National Bank, Martinsville, Ind. He has been suc ceeded by John S. Whitaker, former county treasurer. James H y a tt has succeeded B. J. Castner as cashier of the New Marion Bank, Marion, Ind. boro, Tenn., has resigned to accept the assistant cashiership of the Farmers and Merchants Bank, Mount Pleasant, Tenn. T. A. Pope has been elected Cannon County Banking Com presi dent of the First National Bank, to succeed S. H. Blackburn, who resigned. J. B. Lee and W. L. Kelly are the new vice-presidents, and E. A. Lee has been re-elected cashier. Arlie H itt, fo r m e rly of Sh elbyville, Tenn., has been elected assistant cash ier of the Traders National Bank, Tullahoma, Tenn., to succeed Stanley Cortner, who has resigned. John T. Staples has succeeded A. C. Wiley as vice-president of the City Na tional Bank, Rockwood, Tenn. Clarence Enoch Chandle r has V. S. Parsons, active vice-president of the Citizens Bank, Shelbyville, Tenn., died recently. been elected cashier of the Farmers Bank, Sharon, Tenn., to succeed J. W. Taylor, who has resigned. Tennessee Notes T he pany, Woodbury, Tenn., has been changed from a state to a national bank. S. B. Hawkins has been elected president succeeding Dr. J. F. Adams. Paul M. Davis has succeeded P. D. Houston as president of the American National Bank, Nashville, Tenn. R. B. Broster Elected Cashier. Roy B. Broster, formerly assistant cashier, has been elected cashier of the First National Bank, Clarksville, Tenn. He succeeds M. A. Bland, who is now vice-president of the bank. THE N A T IO N A L S ARK BANK o fNEW Y O R K Established 1856 214 BROADWAY Uptown Offices: Park Avenue and 46th Street—Seventh Avenue and 32nd Street Gainesboro Bank Installs Ne w Vault. The Bank of Gainesboro, Tenn., has completed its new vault which is said to be one of the best pieces of vault equipment between Nashville and Knoxville. New safe and deposit boxes were also installed. J. W . Pearson Elected President. J. W. Pearson has been elected pres ident of the Gates Banking and Trust Company, Gates, Tenn., succeeding R. J. Moore. M. A. Whitaker was elected a director succeeding F. B. Bradford. F. L. Underwood has been L. Barg er has been elected as sistant cashier of the Bank of Hollow Rock, Tenn. Mr. Barger was formerly assistant cashier of the Atwood Bank ing Company. John H. Raines has succeeded the late J. J. R. Adams as vice-president of the Merchants State Bank, Humboldt, Tenu. T he First Sta te Bank, Collierville, Tenn., has changed its name Citizens Bank. DIRECTORS John G. Milburn William Vincent Astor Joseph D. Oliver Lewis Cass Ledyard, Jr. David M. Goodrich Eugenius II. Outerbridge Banking in all its branches Commercial and Travelers’ Credit issued. Correspondents in all principal Cities in the World. Foreign Exchange bought and sold. Corporate and Personal Trusts; Safekeeping of Securities; Collec tion of Income. Investment Service for Customers. Safes in our Safe Deposit Vaults at moderate rental. Capital, Surplus and Undivided Profits $34,000,000 to the A Royal Welcome Awaits You The Rogers Park Hotel is 22 minutes removed from the dirt and din of “ downtown” Chicago. In the heart of the beautiful North Shore District, on one of the world’s most famous boulevards, it offers you: Light, airy outside suites of 1, 2, 3 and 4 rooms (many with kitchens) — the comforts and refinements that assure absolute guest-satis faction. Service at the Rogers Park is effi cient, intelligently rendered and un obtrusive, in keeping with the splen did reputation that this hotel enjoys. Dining-room goodness. H. K ittr e ll, assistant cashier of the Commerce-Union Bank, Murfrees https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis are of savory Write or wire for further information. R O G E R S PA R K H O T E L C H I C A G O , IL L IN O IS meals Attractively low rates prevail. Single rooms as low as $3.CO per day; tworoom kitchenettes, for two peo ple, $5.00 and up. S h eridan R o a d a n d P ra tt B lv d . W. Kenneth P. Budd John H. Fulton Frank L. Polk Benjamin Joy George M. Moffett elected vice-president of the Hamilton Nation al Bank. Chattanooga, Tenn. Mr. Underwood also remains as vice-presi dent and trust officer of the Hamilton Trust and Savings Bank, Chattanooga. Sam ! Charles Scribner Richard Dela.field Francis R. Appleton Cornelius Vanderbilt Gilbert G. Thorne Thomas F. Vietor S end f o r beautifu lly Ulus trated booklet showing m a, o f C h icago’s fa m ou s P a r and Boulevard System , loco tion o f G olf L in k s, points o interest and how ro reac them. M id -C on tin en t B a n k er 114 R. M. Chambliss, president of the C. E. Castle has been elected cash First State Bank of Brownsville, Tenn., has been elected president of the Cham ber of Commerce, Brownsville. ier of the Jackson Bank & Trust Co., Jackson, Tenn. T h e Citizens Bank, Shelbyville, Tenn., First National Bank and the Cumber land Bank & Trust Company of Crossville, Tenn., died recently. James has increased its capital stock from $25,000 to $50,000. The Am eric a n Bank & Trust Co., Johnson City, Tenn., has been chartered with capital of $30,000. The W. F irst Dorton, president National Bank of the of Smith- ville, Tenn., has been organized with capital stock of $30,000. A rk an sas C o n v en tio n to B e H e ld in L ittle R o c k Announcement has been made that the second series of Arkansas Group meetings will be held from March 8 to March 17; the state convention is to be held Wednesday and Thursday, April 27-28, at the Marion Hotel in Lit tle Rock. The special car for the second series of group meetings will leave the Mis souri Pacific station, Little Rock, at 2:30 a. m., Tuesday, March 15, and re turning will reach Little Rock at 2:15 a. m., Friday, March 18. Group Five will meet at BentonB auxite, March 8; Group Two at Batesville, March 15; Group One at Jones boro, March 16, and Group Seven at MonticeUo, March 17. A rkansas Notes Lake Village Banks Consolidate. Handling Today’s Items— Today Hudspeth Purchases Harr ison Bank. Uncle Sam delivers us items from all over the country to handle. T h a t night, all over the Tri-State Region, Uncle Sam is handling our replies. In the m orn in g That’s the sort of correspondent service you can get in Memphis through the U & P and thebanks co-operating with it. ® M i§» & P lanters “ *SîV,Âî- â TR U ST CO M PAN Y lliC E J liil; S B . o s U ! https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis H iin iT ir m n i , F orw a rd w ith M e m p h i s — S in ce ’ 69 MEMPHIS The Chicot Trust Company, Lake Vil lage, Ark., has assumed all business formerly handled by Chicot Bank & Trust Company, having purchased all of its assets. The capital stock is $50,000; surplus $10,000, and undivided profits, $40,000, fully paid. Officers of the new bank are: A. B. Banks, pres ident; J. B’. Simms, vice-president; M. E. Rosensweig, vice-president; D. S. Clark, cashier and secretary. TENNESSEE All the stock of the Farmers & Mer chants Bank, Harrison, Ark., has been purchased by A. T. Hudspeth, who has assumed charge of the institution. He is vice-president of the Citizens Nation al Bank of Harrison, is extensively in terested in other banks in that part of Arkansas and a member of the board of directors of American Southern Trust Company, Little Rock, Ark. W e b s t e r is Now Vice-President. J. B. Webster has been elected vicepresident and trust officer of the Amer ican Southern Trust Company, Little Rock, Ark. B. M. Eagle has been elected vice-president, and R. L. Brad ley and James Keatts, assistant secre taries. Dr. A. R. Bradley Is Now President. Dr. A. R. Bradley, vice president of the First National B'ank, Morrilton, Ark. has been elected president to succeed W. O. Scroggin, who has resigned. E. T. Parette has been elected vice-presi dent. St. L ou is, M arch, 1927 115 E m m e t Mor ris Elected President. Emmet Morris has succeeded Gor don N. Peay as president of W. B. Worthen Co., Bankers, Little Rock, Ark. Steve Garwood is vice-president of the bank; James H. Penick, cashier, and B. M. Lamar, assistant cashier. B. A. One of the many banks that have adopted Federal Gas as protection against daylight holdups. W hite arrows show location of guns. The booklet “ Beat ing the Bandit” will give you complete data— send for it. Lynch, fo r m e rly vice-president of the Farmers Bank & Trust Co., Blytheville, Ark., has succeeded R. E. Lee Wilson as president of the bank. SAFETY OBLIGATIONS W . V. Moye and Chas. B. Dozier have been elected assistant cashiers of the Lee County National Bank, Marianna, Ark. E. H. Hearn s be rge r of Fordyce is now cashier of the Bank of Banks, Ark. Wilmot Routh, former cashier of this bank, is now cashier of the Leola First State Bank at Leola. Bryan M. Eagle has been elected as sistant vice-president of the American Southern Trust Company, Little Rock, Ark. A F E T Y for the lives of customers and employees, as well as for money and valuables, is an obligation of any fi nancial institution serving the public. And, its progress depends upon the good will and confidence it builds. Steel vaults and other forms of protec tion against night burglary have been S material factors in building confidence— but, although efficient against burglary, they are inadequate to cope with today’ s greatest menace, the daylight hold-up man. For this reason thousands of banks have adopted— Federal Gas M odel “ Y” equipment is endorsed and recommended by the Under writers’ Laboratories and consequently carries a reduction in bank insurance, Investigate now. F E D E R A L L A B O R A T O R I E S , In c. 1631 L ib e rty A v e n u e Boyce Coe of Ne w port, Ark., has ac cepted the position of cashier of the Bank of Tupelo, Ark., succeeding J. F. Coffman, who resigned to become cash ier of the Bank of Keo. W illiam S. L ittle, note teller, Branch Offices: New York. Philadelphia, Cleveland, Toledo, Chicago, Indianapo lis, Detroit, Kansas City, St. Louis, Minneapolis, Denver and Toronto. has been promoted to the position of assis tant cashier of the Faulkner County Bank & Trust Company, Conway, Ark., succeeding Ben T. Laney, who has re signed. B A N K ENVELOPES W e specialize on high grade Kraft and Leatheroid envelopes for Banks and Investment Houses. W e invite your inquiries for envelopes of all kinds, including everything from small passbook jackets to the larger size envelopes for mailing or filing. Quality Park Envelope Co. M. J. H ic k e y has been elected cash ier of the Bank of Russellville, Arkan sas. P itts b u r g h , P e n n . Midway St. Paul, Minn. W . N. Nabors of Keo has been elected cashier of the Hot Springs County Bank, Hot Springs, Arkansas, succeed ing John Ault. The Bank of Hoxie, Ark., has in creased its capital stock from $10,000 to $25,000. W a lter E. T ay lo r, vice-president of the Central Bank, Little Rock, Ark., has been appointed state bank com missioner to succeed Loid Rainwater, who has resigned. C apital S u rp lu s R. H. T ric e is the new assistant cash ier of the First National Bank, Stutt $3,500,000 Undivided P ro fits | | | | | Faithfully serving the needs of Industrial S t. Louis for the past 65 years, qualifies this hank to e x tend its depositors experienced financial co-op eration. gart, Ark. W illiam S. Little, note t e lle r at the Faulkner County Bank and Trust Co., Conway, Ark., has been elected assis tant cashier to succeed Ben T. Laney, who has resigned. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Merchants Laclede National Bank of St. Louis M id -C on tin en t B an ker 116 dore, vice-president, Cleveland; S. Thornton, secretary, Pawnee; R. S. Jar rell, treasurer, Ralston. Louisiana O F F IC E R S L O U IS IA N A B A N K E R S A S S O C IA T IO N : P r e s i d e n t — T r a v is O li v e r , M o n r o e ; V i c e - P r e s i d e n t — W . P . C o n n e ll, B a t o n R o u g e ; S e c r e t a r y — J. C . B a rry, L a fa y e tte ; T r e a s u r e r — W . J. M i t c h e l l , N e w O r le a n s . T he recent sta te m e n t of condition of the People’s Trust and Savings Com pany of Chillicothe, Mo., shows total resources of more than $650,000, with deposits of more than $475,000. A. T. Weatherby is president, and V. J. Gladieux is secretary. E X E C U T IV E C O M M IT T E E : L. O. B rou s s a rd , C h a ir m a n , A b b e v ille ; L e o n H a a s , O p e lo u s a s ; A . W . W a t s o n , N a t c h i t o c h e s , G . F . P r o v o s t , M a n s fie ld : W . P . O ’ N e a l, N e w O rle a n s ; T . J . L a b b e , S t . M a r t in v ille ; T r a v is O li v e r , M o n r o e ; W . D. H a a s , A l e x a n d r ia . T r a v is O liv e r , P r e s id e n t G R O U P C H A IR M E N ; “ A ” J . P . S e a ly . S h r e v e p o r t ; “ B ” Ja s. A . C h r is t ia n , P in e v ille ; “ C ” E . E . S o u lie r , L a fa y e t t e ; “ D ’ ’ E . G . D a v is , B a t o n R o u g e . Whitney Bank. W a l t e r Jacobs Elected Cashier. Walter B. Jacobs has been pro moted to the position of cashier of the First National Bank, Shreveport, La., succeeding W. L. Young, who is now vice-president of the bank. H. C. Teacle, former auditor, has succeeded Mr. Jacobs as assistant cashier. B. Col. J. Bryan Ardis has been elected Collins, fo r m e rly Hamm ond State The assistant Bank, IXKI Ham First State Bank and T ru s t The Pawnee County Bankers Asso ciation has been organized and the following officers elected: Frank Hud son, president, Pawnee; O. Y. Mullennxx DiKI By expanding its group insurance program, the Merchants Bank and Trust Company, of Jackson, Miss., has enabled its employes to increase their protection by $51,000, bringing the total amount of life insurance in force to $162,000. In addition to the actual protection established, the group plan also provides participating employes with the advantages of a visiting nurse service. Insurance under both the additional plan and the original contract, in force since 1921, is being underwritten by the Metropolitan Life Insurance Com pany. The original plan gave each em ployee $500 life insurance. This amount is increased $100 a year until a maximum of $1,000 is reached. The entire cost of the original insurance is being borne by the bank. The addi tional plan, however, is arranged on a contributory basis providing for the payment of premiums jointly by the employer and employes, Each of the latter receives $1,000 additional insur ance. If total and permanent disability oc- Sh re veport Pawnee County Bankers Organize. has been added to IXÎC pro minent x x ix x ix x Notes Jackson B a n k H a s G rou p Insurance P lan. Savings R. E. Gover, assistant cashier of the Hopkins county State bank, Dawson Springs, Ky., for the past three years, has resigned to accept a position with the state banking department. the directorate of the Whitney-Central National Bank, New Orleans, La,, and B. C. McClellan to the board of the DiXI & R. E. Gover Has Resigned. mond, La., has purchased the assets of the First State Bank and Trust Com pany. Sidney J. W h ite O’ Neal, Trust Company of Leesville and the Ex change State Bank, Leesville, La., have been merged under the name of the First State Bank and Trust Company. cashier of the Canal Bank and Trust Company, New Orleans, Louisiana, has been promoted to assistant vice-presi dent of the bank. The Central realtor, and C. M. Bennett, vice-presi dent of the Louisiana Oil Refining Cor poration, have been chosen directors of the Continental Bank and Trust Com pany, Shreveport, La. honorary chairman of the boards of the First National Bank and of the City Savings Bank and Trust Com pany, Shreveport, La. Charles F. Mississippi J. C . B a r r y . S e c ’ y ix x d HC ix x ix x : ix t e X L. M . P O O L, President J. A . B A N D I , Vice-President W . J. P IL L O W , Cashier A . J. C R O Z A T , Assistant Cashier W . T . M A R F I E L D , Vice-President G. J O H N D A N E , Vice-President F R E D B R E N C H L E Y ,V ice-P re sid e n t W . N . L O U Q U E , Assistant Cashier W . D . K I N G S T O N , Trust Officer R .W . B R A D Y , A ss’t-M g r. Foreign Dept. W . P. O ’N E A L , Vice-President J. F R U T H A L E R , Assistant Cashier T h e M arin e B an k & Trust C o m p a n y ix x : https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NEW ORLEANS, LA. R e s o u r c e s O v e r T h ir ty M illio n D o lla r s A C C O U N T S OF B A N K S A N D B A N K E R S IN V IT E D Y O U R I N T E R E S T S W I L L R E E C I V E P E R S O N A L A T T E N T I O N O F O U R O F F IC E R S ix XI * "3 ix x : ix XI ix x : ix x : ix XI D i XI ix x : ix x : ix x : ix x St. L ou is, M arek, 1927 117 curs before an employee reaches age 60 he will be paid in full amount of his insurance in monthly installments. Premiums will be waived by the in surance company during the disability period. Besides the visiting nurse service the Metropolitan Life periodically dis tributes pamphlets on disease preven tion and health conservation. T w o T u n ic a Banks Merge. The Citizens Bank and the Planters Bank of Tunica, Miss., have merged and the latter has taken over all the accounts of the former institution. The Citizens B'ank has a capital of $75,000.00 and a surplus of $15,000.00. A. Geren, vice-president, and R. O. Richardson, assistant cashier. This leaves but two banks in Davis, the City National and the First National. The First National Bank is capitalized at $50,000.00, with resources of $400,000.00. Aubrey Brock has been promoted to the position of assistant cashier of the State National Bank, Idabel, Okla. A. G. Blauner has retired fro m F. D. Lucas Now President. Marquis S. W. H. Lothman has sold his stock in the Guaranty State Bank, Weather ford, Okla , and has resigned from ac tive interest in the bank. F. D. Lucas becomes president and active manager, and the new board of directors will consist of Albert Eaton, A. L. Bishop, F. D. Lucas and Mrs. F. D. Lucas. J. T. Thomas has been elected pres ident of the Bank of Houston, Miss., which is a branch of the Grenada bank. H. B. Abernathy has been elected vicepresident; B. C. Adams, cashier, and A. M. Spencer, assistant cashier. H e rm a n Moore Elected Cashier. Herman Moore has been elected cash ier of the Planters Bank & Trust Com pany, Ruleville, Miss., succeeding M. W. Cooper. R. D. 'Wilbor, 1 F. R. Peterson, national bank exam iner and experienced banker, has be come active vice-president and cashier, as well as director, in the Citizens Na tional Bank of Okmulgee, Okla. He succeeds Crittenden Smith as vicepresident, and succeeds L. W. McLean as cashier of the bank. The DeSoto County Bank and the Hernando Bank, Hernando, Miss., have been merged. J. W. Barbee was pres ident of the DeSoto County Bank and R. P. Cooke, president of the Hernando Bank. Plan N e w Bank Building. The Bank of Lucedale, Miss., is mak ing plans for the erection of a new brick building for banking quarters. W. Layton has been tre a s u re r 9 2 7 Bank Advertising Rises to New Standards of Excel lence Each Year. —W hat will Your Bank do during 19 2 7 to establish its Leadership in this as in other respects? R. A. Smith Now President. Chas. form er —The day when one bank could create an advertising campaign of leadership is dead:—but Your Bank can still control the leading cam paign for its entire trading territory. Send for the full facts on Reed’s Mass-mag azine Plan for 1 9 2 7 . P. elected vice president of the First National Bank, Kingfisher, Okla., to succeed R. J. Angleman. M. Banker TRIBUNE TOWER R E E D A ssociates D ll C H IC A G O The W hitney-Central Banks New Orleans, La. Oklahoma Notes T w o Davis Banks Consolidate. The City National Bank and the Ok lahoma State Bank of Davis, Okla., have been consolidated under the name of the City National Bank. O. M. Wood ward, formerly cashier of the Okla homa State Bank, is cashier of the new bank; H. S. Emerson is president; W. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis W e in vite correspondence regarding the far-reaching service of the Oklahoma Cotton Growers’ Associ ation, and for the last year in charge of the new business and country banks W. T. Litten has retired as presi dent of the American National Bank, Pryor, Okla., and has been succeeded by R. A. Smith. Mrs. Kate Sutton oi Cleveland, and R. G. Webb, have re C. G. Ca llicott tired as members of the board of di Is Dead. rectors. The new officers of the bank C. G. Callicott, vice-president of the are: R. A. Smith, president; J. W. Bank of Clarksdale, Miss., died recent Shutt, vice-president, and W. H. Mely. Collough, cashier. T w o Hern ando Banks Consolidate. Morris, assistant cashier of the First National Bank, El Reno, Okla., is now vice-president of the in stitution. F. R. Peterson Elected Cashier. J T. Tho m as Now President. the presidency of the Drumright State Bank, Drumright, Okla., and has been succeeded by Jack Beesley. we have to offer. C a p i t a l a n d S u r p l u s , $ 6 ,6 0 3 ,0 0 0 .0 0 M id -C on tin en t B a n k er 118 department, has been elected a vicepresident of the American National Bank, Oklahoma City, Okla. E. A. Buckley, president of the F arm Last Month’s Advertisement https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ers National Bank, Cordell, Okla., has sold his interest in that institution to A. H. and A. E. Symcox. A. H. Symcox is the new president of the bank. Chester o f th e C om m erce explained how w e reach a n y p oin t in the cou n try in a few m o m en ts th rou gh the m e d iu m o f th e special W e ste rn U n io n wire d i rect from the bank. Gates has resigned as as sistant cashier of the Drumright State Bank, Drumright, Okla., to become as sistant cashier of the First State Bank, Seminole, Okla. T he Bank of Commerce, Jenks, Okla., has been organized with M. A. Steel as president; R. V. Downey, vice-pres ident, and R. K. Grain, cashier. C. J. Novak has resigned as cashier In Addition to That of the First National Bank of Hinton, Okla. Miss M ay Schofield has been elected a P R IV A T E bank W IR E provides sy ste m in the im m ed ia te and u n lim ited com m u n ica tio n w ith Kansas N E W YORK BOSTON BUFFALO B A L T IM O R E P ITT SB U R G H CLEVELAND CHICAGO D E TR O IT M IN N E A P O L IS ST. P A U L M E M P H IS ST. LOU IS N E W O R LEAN S T h e business y o u send to and through the C om m erce suffers no needless d elay. (ommerceyrust (ompany* C a p ita l and Surplus 8 M illio n s K A N SA S C IT Y assistant cashier of the Security Na tional Bank, Lawton, Okla., succeeding W. J. Thompson, who resigned. Notes C h erry vale Bank Elects Ne w Officers. !W. L. Dillman has been elected pres ident of the Montgomery County Na tional Bank, Cherryvale, Kansas, suc ceeding Lee Carson, who resigned. Charles Wright was chosen vice-presi dent, and S. J. Howard retained as cashier. Sedgw ick County Bankers Elect Officers. Standish Hall, vice-president of the Union National Bank, Wichita, 'Kan sas, is the newly elected president of the Sedgwick County B'ankers Associ ation. R. J. McKee, cashier of the State Bank of Clearwater, is the new vice-president ; J. J. Butterfield, cash ier of the Farmers and Merchants State Bank of Derby, is treasurer, and C. W. Ebnother, manager of the Wichita Clearing House Association, is secre tary. E u re ka Bank Elects New Officers. At a meeting of the board of direc tors of the Citizens National Bank of Eureka, Kansas, Allen E. Green, cash ier, was elected acting vice-president, and Joseph A. Fuller of Eureka was elected cashier. H. F. Rockhill, who has been active vice-president, am nounced his retirement some time ago. He will remain a vice-president of the bank, but will devote his time to per sonal business affairs. St. L ouis, M arch, 1927 119 M issou ri B ank N ew s O F F IC E R S M IS S O U R I B A N K E R S A S S O C IA T IO N : P re s id e n t, W . W . P o llo c k , M e x ic o ; V i c e - P r e s id e n t , E d w a r d B u d e r , S t . L o u i s ; S e c r e t a r y , W . F . K e y s e r , S e d a li a ; T reasu rer, E . B . J a co b s, C a rth a g e. G R O U P C H A IR M E N : 1— W . C . B r o w n , M a c o n ; 2— 0 . H . M o b e r l y , H a r r i s ; 3 — G . L . W i lf le y , M a r y v i l l e ; 4 — W . H . E r w in , U r i c h ; 5— C . A . E a t o n , S t . L o u i s ; 6— H e n r y S t o c k s , M a l d e n ; 7— C . W . M o o d y , S p r i n g f ie l d ; 8 — W . H . W a t e r s , J r ., J a s p e r . G R O U P S E C R E T A R IE S : 1— G u s D e l a n e y , H u r d l a n d ; 2— W . E . T o d d , B r o o k f i e l d ; 3— R . W . H o l t , C r a i g ; 4 — F . W . P e n d l e t o n , I n d e p e n d e n c e ; 5 — A . A . S p e e r , J e f fe r s o n C ity ; 6— G . U. S h e l b y , C h a r le s t o n ; 7— C . H . W h i t e , S e y m o u r ; 8 — E . C . W i ll ia m s , N o e l . Lee M e y e r Is Dead. St. Louis Bank Promotes Officers. On February 5th, Lee Meyer, vicepresident of the Farmers & Merchants Bank, Linneus, Mo., since 1892, died after a week’s illness with pneumonia. Mr. Meyer has been interested in the National Bank of Commerce, St. Louis, Central States Life Insurance Com pany, Rice-Stix Dry Goods Co., and other business institutions for many years. J. L. Rehme, formerly vice-president and cashier of the Lafayette-South Side Bank, St. Louis, Mo., has been elected vice-president of the bank. Wm. J. Jones, formerly assistant cashier and auditor, and George Hunsche also have been elected vice-presidents. O. L. Kupfeirer, formerly assistant cashier, has been promoted to the position of cashier. Roy Nelson Now President. On account of failing health, D. D. Hamilton has resigned as president oi the Citizens Bank of Marshfield, Mo., and has sold his stock in the bank to Roy Nelson. Mr. Hamilton had been connected with the bank since it was organized in 1896 and was its president for the past fourteen years. Roy Nel son succeeds Mr. Hamilton as presi dent; B. F. Julian is vice-president; Chas. F. Ellis, cashier, and W. B. Mil ler and G. W. Dailey, assistant cash iers. D. T. B. Duem ler No w President. G. E. Cox, who has been president the Citizens State B'ank, Seneca, Mo., for some time, has sold his interests in the bank. B. W. Buzzard is now chair man of the board; D. T. B. Duemler, president; W. A. Cox, cashier, and M. O. Plummer, assistant cashier. T w o Bernie Banks Consolidate. The Bernie State Bank and the Bank of Bernie, Mo., have been consolidated under the name of the State B'ank of Bernie. The new institution has com bined assets of $300,000.00. E. S. Jeffress is president and M. L. Piatt, cash ier. S. W . Ornduff Elected President. S. W. Ornduff has been elected pres ident of the Joplin State Bank, Joplin, Mo., to succeed J. W. Freeman, who resigned. L. B. Cook is vice-president; L C. Jones, secretary, and J. W. Jones, cashier of the bank. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bremen Bank To Have Ne w Home. The Bremen Bank, St. Louis, has awarded contract for a new $260,000.00 one-story, fire-proof stone building on the southeast corner of Broadway and Mallinckrodt streets. The classical architectural plans call for a portico of Bedford stone behind a row of Bedford stone columns. The public lobby, 22x80 feet, with a ceiling 26 feet in the clear, will have Tennessee marble floors, laid on a bias, and fourteen tellers’ cages. The rail ings of these cages are to be of Tavernelle marble with Bottoceno marble panels, while the upper parts will con of sist of cast bronze cornices and pilas ters, filled in with acid etched plate glass. The lobby will have no pillars. The three vaults, for safe deposits, money and books, will occupy a space 44x26 feet. The safe deposit section, designed to accommodate 3,800 boxes, and the money compartment will be protected by two burglar-proof doors, each 15 inches thick. Allen Riley Elected Cashier. At the annual meeting of the stock holders of the Kearney Commercial Bank, Kearney, Mo., Allen Riley was elected cashier to fill the vacancy caused by the death of George Riley, and Charles Riley, who had been with the bank since the first of December, was made assistant cashier. Conrad Hessel was elected to the board of di rectors to succeed George Riley. James Greenfield was re-elected president. W . F . K e y s e r, S ecreta ry Horace Dunn Elected President. After serving continuously for thir ty-nine and a half years as president and vice president, respectively, of the Harrison County Bank, Bethany, Mo., John L. Cole and Andrew Cumming have resigned their offices and are turn ing over their duties as directors to their sons, W. C. Cole and A. S. Cum ming. The two sons were elected to the board of directors at the annual meeting of stockholders. Horace Dunn is now president of the bank and A. S. Cumming, vice-president. Ne wto n-M cDonald Counties Elect Officers. E. C. Williams, president of the Bank of Noel, Noel, Mo., and secretary of Group Eight of the Missouri Bankers Association, proves that bankers of Newton and McDonald Counties are in terested in their association by report ing that sixty-two of them drove dis tances of from ten to eighteen miles through a storm to attend a recent meeting of their association. The association is only two years old, but it has accomplished many things. The bankers are working with the ex tension department of the University of Missouri, and most of the banks are financing the shipping in of lime, and are getting the farmers to use it on their fields. At the January meeting, held at Neo sho, J. E. Garm, vice-president of the Joplin National Bank, spoke on credit bureaus and county organizations. J. F. Johnston, president of the Bank of Neo sho, was elected president of the asso ciation at this meeting. E. L. Mahan, cashier of the Bank of Neosho, was elected vice-president; E‘. C. Williams, president of the Bank of Noel, second vice-president; O. A. Tandy, cashier of the Farmers Bank of Anderson, treas urer, and L. P. Kelley, cashier of the Neosho Savings Bank, secretary. There never has been a bank failure in either Newton or McDonald Counties since the organization of the associa tion, and only one failure in history. M id -C on tin en t B a n k er 120 Jasper County Bankers Elect. MIDLAND BANK L IM IT E D Chairman : THE RIGHT HON. R. McKENNA Joint Managing Directors : FREDERICK HYDE EDGAR W. WOOLLEY Statement of Condition December 31st, 1 9 2 6 RESOURCES $5 = Lee A. Daugherty of the Webb City Bank, was elected president of the Jas per County Bankers’ Association at its annual meeting held at the Connor Ho tel in Joplin, Mo. H. M. Boggess of Carthage was elected first vice-presi dent; H. A. Richardson, Joplin, second vice-president; G. E. Hough, Webb City, secretary, and W. C. Burch, Carterville, treasurer. Ed w ard Grubb, Jr., Now T r u s t Officer. £1 At the annual election of officers of the St. Louis Union Trust Company, Edward G. Grubb, Jr., was p ro m o te d from assistant trust officer to trust offi cer, and Warren McGinnis was pro moted from assistant trust officer to counsel. William G. Frazier was ad vanced to assistant trust officer. Cash in hand and Due from Banks . . $ 3 5 6 ,0 8 2 ,6 7 9 * 7 7 Money at Call and Short Notice .. 1 1 3 ,9 3 4 ,2 5 8 * 1 5 Investments •• •• •• •• 1 9 4 ,2 6 7 ,9 1 0 * 7 5 Bills Discounted •• •• •• •• 2 3 3 ,7 2 1 ,5 6 0 * 1 0 Advances .. .• •• •• •• 1 ,0 0 2 ,2 9 9 ,9 6 3 * 7 3 Liabilities of Customers for Acceptances and Engagements •• •» •• 1 8 5 ,3 2 7 ,2 2 5 * 9 6 Bank Premises .. .. •• 3 4 ,6 8 2 ,8 7 3 * 2 1 Investments in Affiliations •• •• 3 2 ,4 6 9 ,0 4 5 * 7 5 2 ^ 5 2 /7 8 5 ,5 1 7 * 4 2 LIABILITIES Capital Paid up •• •• •• Surplus •• •• •• •• Deposits •• •• •• •• Acceptances and Engagements . . Chicago Mem bers H e a r Dale Graham. 6 3 ,3 2 8 ,9 9 0 * 0 0 »• 6 3 ,3 2 8 ,9 9 0 * 0 0 »• 1 ,8 4 0 ,8 0 0 ,3 1 1 * 4 6 1 8 5 ,3 2 7 ,2 2 5 * 9 6 2 ,1 5 2 ,7 8 5 .5 1 7 * 4 2 Together with its affiliations the Midland Bank operates 2 3 6 0 branches in Great Britain and Northern Ireland, and has offices in the Atlantic Liners Aquitania, Berengaria and Mauretania. The Foreign Branch Office at 1 9 6 Piccadilly, London, is specially equipped for the use and convenience of American visitors in London. HEAD O F F IC E : 5 T H R E A D N E E D L E ST R E E T , L O N D O N , E.C. 2, E N G L A N D file BestBankfor You ||3 ll ïB Îi Heaton Bank Elects Officers. At the recent annual meeting of the stockholders of the Heaton Bank, Craig, Mo., the old board of directors was re elected, with the exception of W. R. Erwin. Mr. Erwin having sold his stock to R. W. Holt, was succeeded on the board by F. S. Holt. The present board is as follows: Andy Haer, R. W. Holt, F. S. Holt, R. C. Ball and Richard T. Nauman. Miss Gladys Kee was promoted to assistant cashier, mak ing the officer personnel as follows: R. W. Holt, president; R. C. Ball, vicepresident; Richard T. Nauman, cash ier, and Gladys Kee, assistant cashier. In Nashville— j Dale Graham, advertising manager, Mississippi Valley Trust Company, St. Louis, was the principal speaker be fore a recent meeting of the Chicago members of the Financial Advertisers’ Association. His subject was “Peaches and Lemons from the Garden of Fi nancial Advertising.” Following Mr. Graham, five Chicagoans gave talks of two minutes each on the same subject. Is one having a vision o f the future, enabling it to create today standards o f excellence for serving the needs o f tomorrow. The American is such a bank and, as such, invites your business. G. L. W ilfle y aA nother reason why In California. you should bank here “ A Greater Bank, for Greater Naslwille” <^à m e r ig_a n B a n k s ---------------J^ericanNational ^ A S H V I L L E 1‘AmGTjcan TrJ t- t— ^AmencarTNational Company _ (AFFILIAT ED) 1 - Seventh o f a Series '//////////////////////////////////////////////////////////////////////////////////////////////////////////////.A https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis G. L. Wilfley, president of the Farm ers Trust Company of Maryville, and chairman of Group Three of the Mis souri Bankers Association, is traveling with Mrs. Wilfley in California. In his absence, R. W. Holt, secretary of Group Three acted as the group’s representa tive at the recent meeting of the Council of Administration held at Sedalia. 121 St. L ou is, M arch, 1927 Shelby Co mm ents On Cotton Situation. A. J. Drinkwater has been elected director of the Charleston-Mississippi County Bank of Charleston, Mo., to suc ceed the late E. L. Brown, Sr., who was former president of the hank. Other officers and directors were re elected. Paul B. Moore is chairman of the board; Scott Alexander, president; E. P. Deal, vice-president; Geo. U. Shelby, vice-president and cashier; G. N. White and E. E. Grojean, assistant cashiers. Mr. Shelby is secretary of Group Six of the Missouri Bankers As sociation. “This group,” he says, “is essentially different from other groups in the state in that a large portion of it is adapted to cotton growing. While the depressed cotton market, though sharply felt, will leave its mark on the affected areas, yet there seems to be growing out of the situation plans and systems for the future that will ulti mately give much strength to this ter ritory.” “ ROLL of HONOR” BANKS in MISSOURI It is an honor to be listed among the Honor Roll banks. or greater than its capital. Such distinction is accorded to the banks listed on this page. B y careful management and sound banking they have achieved this enviable position. The banks will be especially glad to handle any collections, special credit reports or other business in their communities which you may entrust to them. Correspondence is invited. Surplus City Bank Capital A gency.............. ..Farmers Bank...............................$ Augusta..... Salem Bank Has Good Grow th. The First National Bank of Salem, Missouri, has made a splendid record during the past two years. In 1925, a 10 per cent dividend was paid and 20 per cent was added to surplus. Dur ing 1926, a new addition was added to the bank; this included a ladies’ rest room, a directors’ room, consultation room and two new filing vaults. The bank also purchased a new electric posting machine and a number of new safety deposit boxes. An extra book keeper was employed and several other improvements were made. In addition the bank paid a 10 per cent dividend during 1926 and added about 12 per cent to surplus. Biair Is Now Mortgage Loan Officer. Samuel B'. Blair, formerly assistant trust officer of the Mississippi Valley Trust Company of St. Louis, has been named mortgage loan officer of that institution. In this capacity Mr. Blair will have charge of the investigation and making of loans on large proper ties in St. Louis and other cities. C. C. Burnes, vice-president of the Burnes National Bank, St. Joseph, is making an extended trip with his mother to Havana and South American cities. J. D. Freund has been elected presi dent of the First National Bank, Brook field, Mo., succeeding Walton E. Todd, and H. W. Craig has succeeded Mr. Freund as cashier. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis It indicates that the bank has surplus and undivided profits equal to Bank of Augusta................. 10,000 20,000 and Profits $ 10,000 26 000 Bigelow ............ .. Bank of Bigelow................. ........ Buffalo O ’Bannon Banking Co__ ......... Cameron.......... ..First National...................... 10,000 12,000 25,000 31,667 50,000 55,000 Columbia......... Boone County Trust Co ........ Concordia........ Concordia Savings............. ........ 75,000 50,000 200,000 Dalton............... Bank of Dalton.................... ........ 10,000 20,000 Everton............ ...Bank of Everton................. ........ Farmington.... ..Bank of Farmington........ ........ 25,000 55,000 50,000 125,000 Gilman City.... Gilman Bank........................ 25,000 30,000 Hardin............. ..Bank of Hardin.................... 75,000 87,000 Hayti ............... Bank of H a y ti..................... ........ Ironton............. Iron County Bank............ Joplin................. ..Miners Bank........................... ........ 20,000 10,000 26,471.82 21,000 100,000 Kansas City........First National...................... ........ 1,000,000 Lebanon........... ...State B a n k ............................. ........ 30,000 Maitland........ ..Peoples Bank........................ ........ 20,000 Neosho.............. First N a tio n al...................... ........ Odessa............... ..Bank of Odessa.................... ........ Perry.................. Peoples Bank................................. Raym ore.......... ..Bank of Raymore............... ........ St. Joseph......... ..First Trust Co.................... ........ 52,000 175,000 3,470,000 35,000 35,000 50,000 85,000 50,000 75,000 25,000 50,000 10,000 27,000 100,000 St. Louis........... Jefferson Bank 200,000 St. Louis........... . Mercantile Trust Co.......... ........ 3,000,000 Sedalia............... ..Citizens N ation al. 100,000 South Gifford.. Bank of Gifford.................... ........ 10,000 Sullivan............. ..Bank of Sullivan................. 10,000 143,334 252,000 8,096,642 290,000 14,900 82,000 Steelville........... .First N ation al....................... ........ Stover................. . Stover Bank........................... ........ 25,000 30,000 15,000 22,000 Tarkio................ ..Farmers B a n k ....................... ........ T roy .................... .Peoples Bank....................... ........ Union...................Bank of Union.............. ....... 20,000 32,000 50,000 115,000 15,000 42,000 W alk er.............. .Farmers Bank........ 10 000 1 ? nnn 100,000 40,000 146,900 W ellston ........... .First N ation al.................. W in d sor............ . Citizens Bank.................... ....... ....... 60,000 M id -C on tin en t B a n k er 122 T h e F irst State Bank of Plano, Mo., Missouri Notes A. M. Riffe has been elected a direc tor of the Bank of Orrick, Mo., in place of Thos. Gooch. Arch Kirkham has been elected vice-president of the insti tution. Miss W in if r e d Haines has been elected assistant cashier of the First National Bank, Kansas City, Mo. D. D. H i t t has resigned his position as assistant cashier of the Bank of Rockville, Mo. and the Plano State Bank have been consolidated under the name of the First State Bank of Plano with capital of $50,000.00 and surplus of $50,000.00. W . J. Althouse, who is the principal stockholder in the Turney Bank, Tur ney, Mo., has been elected president, and his daughter, Mrs. Zola Wolfe, has been elected cashier. J. F ra n k Gearing has resigned as cashier of the Citizens State Bank, Browning, Mo., and has accepted a po sition as supervisor of the Standard Savings and Loan Association of Kan sas City. J. Roger Verts has resigned as assis tant cashier of the Bank of Meadville, Mo. A t the annual stockholders’ meeting at the Citizens Bank, Liberty, Mo., E. H. Norton was promoted to vice-presi dent; W. C. Crawford was made cash ier, and R. D. Hicklin, assistant cash ier. The Tex as County State Bank of Houston, Mo., has been organized with capital of $30,000.00 and surplus of $ 6, 000 . 00 . R. B. Berger, 61, president of the Farmers Bank of Middleton, Mo., died recently. L. M. Starb uck has been elected pres ident of the Peoples Bank, Queen City, Mo. J. C. Blackwell has resigned as cash ier of the First National Bank, Blackwell, Mo. F. X. Von Strobel has been elected assistant cashier of the Southern Com mercial and Savings B'ank, St. Louis. T. I. Johnson has resigned as vice- president of the Monticello Trust Com pany. Mr. Johnson is also cashier of the LaGrange Savings Bank, LaGrange, Mo. J. T. Dodds, fo r m e rly vice-president, T h e Farm ers Bank of Quitman, Mo., has moved into its new building which was erected at a cost of approximately $4,000.00. has been elected president of the Mound City Trust Company, St. Louis. John C. Tobin is the new vice-presi dent. S. P. D a rr has been elected cashier J. H. Clawson has resigned sistant cashier of the Citizens Bank of Trenton, Mo. as as The Bank of Maplewood, Mo., has in State creased its capital from $50,000.00 to $ 100 , 000 . 00 . H e n ry C. Hyslop, fo r m e r recorder of deeds, has been elected cashier of the Advance Exchange Bank, Bloomfield, Mo. John P. Meyer, assistant cashier of the Bank of Browning, Mo., to suc ceed J. Frank Dearing, who has re signed. Mrs. Marjorie Mairs has been chosen assistant cashier. of the Twelfth Street National Bank, St. Louis, has been appointed state bank examiner for the St. Louis district. F. W . Peters has succeeded Chas. C. Kunz as vice-president of the Lindell Trust Company, St. Louis, Mo. T w o Effective W indow Displays Both of these w indow s used by the A m erican National Bank of Lincoln, Illinois, are excellent examples of the “ Save for a Definite Purpose” idea t h a t is meeting w ith deserved success w h e r e v e r used. Instead of harping the word “ S A V E , ” these w indow s show the results of saving. T h e y depict something th a t the average individual wants and anticipates w ith pleasure— saving is brought out as a means to an end and the negative idea of den ying luxuries in ord er to have a sav ings account is mitigated. N. E. Hodnett, advertising m an ager of the bank, says t h a t the average cost of his windows, exclusive of materials t h a t he uses all of the t im e , is less than $5. T h a t is a small price to pay f o r any kind of a dver tising. It is especially small when one stops to consider t h a t d ep artm en t stores figure the advertising value of t h e i r windows in term s of hundreds and sometimes in term s of thousands of debars, and t h a t banks are coming to the conclu sion t h a t d ep artm en t stores reached years ago. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis St. L ouis, M arch, 19 ¿7 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 123 UP THe Y6A1R , v 4 w ay https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis back. in Stlouis’yesterdayS,wKen life and Indus- try hugged the river •••picturesque packets doited the levee •— the resplendent family barouche bounced along corduroy Olive•• the immortal Jenny Lind sang to the beavered and crinolined elite when‘that new fangled contraption* the railroad, was pushing bacK the western fringe of our civilisation •** In those brave, trying days, a b a n k , “ m il e s t o n e s d estin ed to become grea t had its beginning of co m m erce” --an institution that for three score years andO chartergrantsFcbruten has exerted a powerful and steadying in — fluence on the growth of St-Louis and the vast Louis3buiiVnTg"and Southwest, whose development it parallels........ Savings Association. a bank that, while wearing the"silver livery of Opened for business. advised age” progressively looks forward to juiy 6 ,1 8 5 7 . even more worthy service to the city and its of Commerce,” N ov 3, | ciÜ3 ens wKo " G w W W ith C O W U Q V C Q * 18 68. Word “ Nation al” was added Dec. 14, 1889. with which i* affi lutethe fe d eral Commerce Trust Com pany in St-Louis
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