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Vol. L No. 50 Des Moines, lowa April 17,1972 One Last L o o k al the 1 9 7 2 F o re c a sts By this time all the economists have copied each others figures, made their alterations and mulled over the results. The forecasts for 1972 are set and we will await the next nine months to see what actually happens. Expectations tend to cluster around a 9-10% increase in gross product. However, there is a considerable divergence regarding rea growth and price increases. Those who expect the highest real gains anticipate a diminishing inflation pattern. Thus, the most optimistic look is for an inflation factor (GNP deflator) o f around 3% with a real advance o f 6.0-6.5%. Those more fearful o f inflation (and we include ourselves in this group) see lower real gains with the prospect for stronger inflation, particularly late in the year. For the past three or four months, we have indicated that we believed the GNP deflator would rise by as much as 4% in 1972. Now it appears this figure may be too high. Although the strongly favorable pattern is unlikely to continue for an extended period, the improvement in productivity in recent months has been quite impressive. This will tend to moderate price pressures in manu factured goods. However, the significant question for purposes o f investment and business planning is not whether the GNP deflator is up 3.0% or 3.5% or 4.0% in 1972. The primary consideration is whether a new surge in inflation will develop late this year or early next. We believe this is a major risk. Also, it is important to make a judgment as to how ft * • effective fiscal and monetary policy can be in dealing with it. The record o f the past six years does not inspire confi dence. By Arnold C. Schumacher Vice President & Economist H alsey, Stuart & C o ., Inc., Chicago The econom y undoubtedly will per form well in 1972. Prior to the an nouncement o f huge government deficits we were estimating a real growth o f 5%, but the heavy flow o f dollars in the government sector would seem to assure an increase o f at least 5.5% or more. At the same time, the impact o f federal spending will be greater in the second half o f the year rather than the first. It is reasonable to expect a time lag o f 3-5 months before the full effect is felt. Contracts must be signed, orders placed and production schedules raised. All this takes time. However, federal outlays will be a potent factor in speeding the re covery. T o the extent that our ideas have changed over the past three or four months, we are now a little more opti mistic, both with respect to a short-term moderation o f inflation and. greater real growth. But the respite in the rate o f price advances is not likely to persist beyond the third or fourth quarters o f the year. Percentage gains in wage in creases for organized labor are still going up (and the Pay Board has all but caved in). F ood prices will rise more this year than last. World metal prices are again firming. The need for capital in all developed nations is staggering. There is no evidence that any o f these trends are going to reverse themselves in the near future. At certain times econom ic forecasts are more crucial than at others. For example, at the top o f a cyclical expan sion it becomes very important for the forecaster to define the character and timing o f the cyclical downtrend which lies ahead. However, the present is one o f those intervals in which precise forecasts (for purposes o f business planning) really do not vitally affect decisions. There is widespread agreement based on very convincing evidence that the recovery will continue in 1972. Businesses are planning for an expansion. As to whether inventory gains will amount to $8 billion or $10 billion or whether plant and equipment spending will be up 8% or 11% is not all that critical. The year 1973 will pose more difficult questions. The manner in which government officials constantly attempt to kid the public and minimize serious problems is a never ending lesson in the artful use o f political propaganda. It was evident im mediately upon the announcement o f the federal budget figures in January that (Continued on back page) • C o r r e s p o n d w ith th e b a n k th a t k n o w s th e im p o r t a n c e o f y o u r b a n k 1i h Ê Ê k . . \ .\ m . % S to y o u r c o m m u n ity . IOWA-D ES M O IN ES NATIONAL BANK f i t Brock Hessing https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis (515) 284-8686 There ore so many ways we can help you That’s why over half the banks in Iowa are 9 Hi — MNB correspondents Tom Martin Assistant Vice President M ERCHANTS NATIONAL BANK CEDAR RAPIDS, IOWA 52401 Mimbtr F.D.I.C IOWA NEWS ANITA: W. Ben McLuen, president o f Anita State Bank, announced last week he is selling his controlling interest in the bank to an investment group headed by Frank L. Farrar o f Britton, S. D., and Robert R. Kruger, Omaha. Mr. McLuen will becom e chairman o f the board. He joined the bank in 1947 as cashier and became president in 1957. Mr. McLuen started with the Iowa banking depart ment in 1935, serving as an assistant examiner and later as senior examiner before joining the Anita State Bank. Mr. Farrar is a former Governor o f South Dakota. Mr. Kruger is president o f Bank Brokers, Inc. EARLVILLE: In last week’s issue it was stated that The State Bank o f Earlville has received FDIC authority to exercise limited trust powers. This is incorrect. The bank’s application for such powers was denied by the FDIC. ELGIN: Verlon L. Britt has purchased controlling interest in the Elgin State Bank from numerous stockholders and was elected president o f the bank at a meeting April 11. He succeeds T. F. Pollock, who is also retiring from the board. Mrs. Verlon (L olly) Britt was elected vice president. Other officers continue the same. N EBRASKA NEWS AVO CA: The Avoca State Bank will observe its 100th year in the banking business this year, since it was founded in 1872. The bank has named Edwin E. Doll as vice president. Succeeding Mr. Doll as cashier is Kenneth Woltmann, formerly assistant cashier. OMAHA: The Nebraska Department o f Banking has approved the charter appli cation for The Community Bank o f Nebraska. This is the first black-owned bank in the state. DES MOINES: Agricultural Credit Con ferences will be held this week as fol lows: April 18, Montrose Hotel, Cedar Rapids; April 19, Rogers Famous Foods, New Hampton, and April 20, Red Lyon Inn, Ottumwa. On April 25, a conference will be held at the Memorial Union in Ames. Registration starts at each place at 9:00 A.M. CHICAGO: Sears Bank & Trust Co. has elected Donald L. Whetstone as an asst, vice pres. P e r s o n a l A tten tion to A ll Y ou r C o rre sp on d en t N eed s ILLIN O IS NEWS ROCKFORD: Lloyd L. Heiser was named president o f Southgate Bank to succeed Bruce F. Eshelman, who re signed to become president o f the R ockton Centre Bank o f the Northwest under construction in the R ockton Avenue shopping center. Mr. Heiser, 35, has served 10 years with Central National Bank and Trust -Ar4 MINNESOTA NEWS 4* BURNSVILLE: The new First Burnsville State Bank will open for business this week according to President John A. Gargaro. Located in the southwest corner o f Nicollet and the Burnsville Crosstown in the Burnsville Office Park Building, First Burnsville State will have $600,000 in capital structure. President Gargaro said that plans are underway for a grand opening celebra tion to be held within the next several weeks at a date to be announced later. X 4ÌX HUTCHINSON: W. T. Richards, presi dent, First National Bank, Hutchinson, will serve as a director o f Mid America Bancorporation, Inc. Walter G. Andrews, chairman o f the board o f Mid America, said Richards will fill the unexpired term o f Blake Shepard. First National Bank o f Hutchinson, with deposits o f $12,900,000 at Dec. 31, 1971, became an affiliate o f Mid Amer ica Bancorporation last November. INTERNATIONAL FALLS: H. E. Sandstrom, manager o f a local furniture store, has been elected a director o f Inter national State Bank. A $ 'If V A MANKATO: First National Bank has received permission from the Comp troller to relocate its main offices to a new building it plans to erect on Second Street. Its new home will be adjacent to its drive-in facility. MINNEAPOLIS: First National Bank has announced that Dennis E. Evans, Chi cago, has been named as vice president in the trusts and investment management group. John R. Danielson, New York City, has joined the bank as a com mercial banking officer. Raul Aguilar, Milwaukee, Wis., was named an inter national banking officer. Richard M. Irvin was elected a commercial banking officer and R. Scott Jones has been named personal banking officer. « V' >r* V' A Banks Wanted Iowa, Illinois, Minnesota Christy Armstrong Leo Kane Bob Scott ‘W E H A V E W H A T Y O U W A N T in a correspondent bank* A m e ric a n T ru s t and Savings Bank https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4} Company, advancing to cashier. Both Central and Southgate are A tw ood fam ily banking interests. 9TH A N D M AIN , DUBUQUE, MEMBER FDIC-FRS IO W A We have buyers ready, willing and able to purchase majority bank stock with assets up to $25 million. Buyer pays finder's fee. Negotiations strictly confi dential. Contact David R. Utroska, President BANK B R O K ER S O F IOWA, INC. Specialists in the purchase and sale o f m ajority bank stock 20 00 South B lu ff, Clinton, Iowa 5 2 73 2 (319) 243-4652 or (319) 391-8200 A *A Call on the "Performance Specialists in underwriting and distributing Municipal Bonds. *- FIRST NATIONAL BANK & TR UST COMPANY OF LINCOLN 1 3 th a n d M S t r e e t • L in c o ln , N e b r a s k a 6 8 5 0 1 • M em b er. F .D .I.C . - > •i' •t- r » > A MINNEAPOLIS: The U.S. Dept, o f Lab or announced $257,238 JOBS contract with the Minneapolis Chapter o f A.I.B. to hire 114 persons as general office clerks. JOBS stands for Job Oppor tunities in the Business Sector. The JOBS program will last 18 months and follows an earlier program o f equal length sponsored by the Minne apolis banks. O f 132 persons hired in the first program, 86 com pleted the training and are still on the job . Sixty o f the 132 are black; 58 white, 14 Indian and tw o listed as “ other.” The new employees train 40 hours a week for four to six weeks. Trainees, mostly women, are paid regular salaries by the banks from their first day in the program. Starting wages in the current contract range from $1.73 to $2.12 per hour during training and $1.93 to $2.32 per hour after training. MINNEAPOLIS: Funeral services were held last week for Richard I. Rose, executive vice president, Midland Nat ional Bank. Mr. Rose, 44, had open heart surgery one week before his death and was recovering. ST. PAUL: First National Bank o f Saint Paul is holding its correspondent bank conference at the St. Paul Hilton today, April 17. ST. PAUL: Gerald E. Mark was named assistant vice president, Valley National Bank, Eagan Township. '# tr VIRGINIA: In the April 3 issue it was stated that “ Norman J. Swanson has joined the State Bank o f Virginia’s man agement training program.” This was incorrect. The item should have read: “ Norman J. Sampson, vice president o f the State Bank o f Virginia, announces that Robert J. Rich, Jr., has joined the staff under the Northwest Bancorporation management trainee program. Mr. Rich was graduated from the University o f Minnesota in his native Duluth in 1965 and has spent the past six years in the United States Air Force. He was released in February, 1972, with the rank o f Captain.” MONTANA NEWS HELENA: Fred Heinecke, 78, who re tired in 1959 as president o f the First National Bank & Trust Co., died in a Denver hospital April 8. Mr. Heinecke started his banking career in Montana in 1918, joining a predecessor o f the First National Bank & Trust in 1923. He served as president o f the Montana Bank ers Association in 1943-44. NORTH DAKOTA NEWS FARGO: David A. Lee has been elected assistant vice president, The Merchants National Bank. Most recently, he has been employed by the First Bank System in Minneapolis as a credit analyst. Pre viously, he was cashier o f the First National Bank o f East Grand Forks. SOUTH DAKOTA NEWS CLEAR LAKE: Harold F. Anderson, executive vice-president, Deuel County National Bank, retired as o f April 1. Joining the bank in 1932, he has served as executive officer for the past 12 years. HURLEY: Plans have been made’ to build an addition on the Hurley State Bank. Bank o f Englewood and the Jefferson County Bank. DENVER: Three new officers have been appointed at United Bank o f Denver. They are: Charles H. (Todger) Anderson, trust investment officer; Donald J. Pet ring and Eugene V. Wazeka, personal banking officers. WYOMING NEWS LOVELL: Western National Bank has started an $85,000 expansion program, and com pletion is expected June 1. LUSK: The Fed has approved the acqui sition o f the Stockman’s National Bank by Wyoming Bancorp oration. The Fed has also approved acquisition o f the First National, Rawlins, and the First Nat ional, Lander, bringing to eight the num ber o f banks in Wyoming affiliated with the holding company. NEWCASTLE: Max Miller has resigned as exec, vice president o f the National Bank o f Newcastle to join the First Security Corp. Banking System, Cedar City, Utah. RAPID C IT Y : Funeral services were held recently for John M. Ryan, retired presi dent o f the First National Bank o f the Black Hills. Mr. Ryan, .71, suffered a heart attack in Pine, Arizona. He was associated with the bank for 39 years and retired in 1960. He was named president o f the bank in 1950.. COLORADO NEWS BOULDER: United Bank o f Boulder has named tw o new directors. They are Homer B. Ball, business manager at the University o f Colorado, and J. Edward M ock, president o f M ock Realty. DENVER: Robert D. Bammerlin has been named vice president o f the com mercial loan and real estate department o f Lakeside National Bank. He was pre viously with the Continental National you’re in firs! national territory https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis firs!national bankofomaha united m issouri bank THE NEW MARK IN BANKING IS HERE. C ITY NATIONAL BANK A:A 4« A N D TRUST CO M PA N Y Kansas City, Missouri 1972 F O R E C A S T S. . . . WANT ADS (Continued from front page) the Treasury faced enormous strains in its financing operations in the current year. However, last week the Treasury began a series o f softening up speeches and press conferences to tell the public there is really nothing to worry about. Under Secretary Volcker said more em phasis would be placed on regularizing financing by applying the same type o f weekly offerings now confined to the bill area to other segments o f the market. Following Mr. V olcker’s soothing balm another Treasury official assured a group o f Chicago investment bankers that “ although unusual Treasury borrow ing pressures on the market will occur from now through June, this will not be impinging on already overloaded credit markets.” N ow we have the official word and can all relax. The facts are that the Treasury’s combined direct and agency financing in the present _calendar year will call for raising about $45 billion in new money, nearly one billion dollars every week. In this situation officials will try to “ reg ularize” financing, twist the yield curve, rely heavily on the short end o f the market, and perhaps even com e up with some new savings bond gimmicks for individuals. Obviously, every trick in the book will be used to avoid market disruptions. But, any way you cut it, a substantial amount o f this new debt will have to be monetized through the bank ing system and this precludes any mean ingful restrictive monetary policy for as far ahead as anyone can see. Rates 25 cents per word per insertion. Minimum: 12 words. NORTHWESTERN BANKER 306 15th St., Des Moines, Iowa POSITION WANTED Wish to enter banking business as ag rep or similar level. Single, age 23. Top educational background: MS in Ag E conom ics, Purdue U., Janu ary, 1972, with 5.91 grade average (on 6.0 s ca le ); BS in Ag B usiness, Iowa State, June, 1970, with 3.5 grade average (on 4.0 s ca le ); paid all own expenses plus academic scholarship; member three honorary fraternities based on achievement. Leadership background in F F A ; win ner public speaking con tests; helped family farm. Good references. E x ce l lent health. Available immediately. Write Box f f i U ,c /o NORTHWESTERN BANKER, 306 Fifteenth Street, Des Moines, Iowa 50309. BANK WANTED Control . of small bank desired. Iowa-Nebraska. Independent ownermanager is prospective purchaser. Write Box PBC, in care of the N o r t h w e s t e r n b a n k e r , 306 15th St., Des Moines, Iowa 50309. WANT TO BUY $5 million bank north central Iowa or south central' Minnesota. I wish to b’uy on my own and f or no one e ls e . Cash available. Contract preferred for tax purposes. Write File CNS, NORTHWESTERN BANKER, 306 15th St., Des Moines, Iowa 50309. Y o u d o n ’t n e e d u s . W e need pt Central National Bank 8-Trust Company LOCUST AT SIXTH AVENUE, DOWNTOWN DES MOINES, PHONE 243-8181. MEMBER FDIC. FOR SALE Complete, modern set of tellers* fixtures; five window teller line, lobby desk , work table, and two unit coupon booth. David C ity Bank, David City, Nebraska 68632. LOWER YOUR FARM LOAN RISK By sending him DOANE’S Farming For Profit, the hard-hitting, factfilled monthly newsletter that pro vides help in management, produc tion and marketing. Free sample subscription for 6 months. Write D. R . Gorr, DOANE Agricultural Service, Inc., Dept. 701, 8900 Man chester Road, St. Louis, Missouri 63144. WANTED - TRUST OFFICER Substantial eastern Iowa bank has opening for trust officer. Should be lawyer; know how business functions; have knowledge of investments in b onds, stocks and property; analytical mind; accounting talent, around age 35; good personality; Iowa or mid west oriented. Write Box ITO, in care of the NORTHWESTERN BANKER, 306 Fifteenth Street, Des Moines, Iowa 50309. 4+ * 4r *1 ,4' V* POSITION WANTED Well-known banker with general bank ing experience seeks Tirst or second man position in central or western financial institution. E xcellent quali fications and references. Write File KXW, in care of NORTHWESTERN BANKER, 306 - 15th St., D es M oines, Iowa 50309. QUESTIONS ABOUT INTERNATIONAL TRADE How to handle foreign c o lle c tio n s. . . questions on export and im port f inaneing . . . where to obtain letters of c r e d it. . .how to locate and develop new contacts overseas. Fortunately the answers are as near as your phone. LaSalle National Bank’ s International Banking Group is ready to give you the benefit of its extensive experience. A sk Cy Kirk or Max R oy, your LaSalle men in Iowa, or ca ll our International Banking Group direct at (area code 312) 443—2650._______________________ V o l. 1. No. 50 Northwestern Banker Newsletter is published weekly by the Northwestern Banker Company, 306 Fifteenth Street, Des Moines, Iowa 50309. Subscriptions 25tf per copy, $6 per year. Second c la s s postage paid at D es Moines, Iowa. 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