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Korrect Etikette for Country Bankers Special Bond and Investment Section (Page 25) TH E PHOTO BELOW : Joseph W ayne, Jr., now p resid en t of the new P hiladelphia-G irard N ational B a n k of P hiladelphia. T h e new bank teas fo rm e d by a m erger of th e G irard N ational and P hiladelphia N ational last m onth. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 2 THE NORTHWESTERN N o rth w e ste rn N ational April, 1926 BANKER DIRECTORS F. A. C ham berlain..............P resid en t F irst N ational B ank E. W. D eck er.........P resid en t N orthw estern N ational B ank Life Insurance C om pany C. T. Jaffray.....................................President “ Soo” R ailw ay J. A. L a tta ....V ice P resid en t N orthw estern N ational Bank MINNEAPOLIS, MINNESOTA E. L. C arpenter....President Shevlin-C arpenter-C larke Co. B. F. N elson ............................. P resid en t H ennepin Paper Co. A. F. P illsb u r y _____ Treasurer P illsb u ry Flour M ills Co. T. F. W allace.-S ec’y-T reas. Farm ers & M echs. Sav. Bank A PURELY M UTUA L, O LD-LINE, W ESTERN in 1857—68 years ago; and during this period through conservative, s u b s ta n tia l b a n k in g T H E F IR S T NATIONAL has rendered an unexcelled service to correspondent banks in the west. ounded Ifitfl ««ft ‘ft«« In ti « F iS S fi ssii tí inriitf » s s a is u n i i S ix ty -e ig h t y e a rs affo rd am p le te s t a n d su p p ly conclusive p ro o f o f th e s ta b ility o f a n y in s titu tio n — p a r tic u la r ly t h a t o f a bank. COM PANY O. J. A rnold..............P resid en t N orthw estern N ational L ife Advertised almost daily Newspapers in leading cities describe new Bond issues. C. T. KOUNTZE V ice P res, and Chairman F. H. D A V IS P resident N a tio n a l B ank of O m a h a i r s i H E Des Moines business of Iowa banks is invited. T hese banks are th o r o u g h ly equipped in every department. T 'i n 11 bn !» S ü > !& jÄ .! s jfff m f l î T I flff liïïüïïFïïf V alley Bank B uilding Established 1872 Combined Capital and Surplus S I ,100,000.00 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Valley National Bank C h ic a g o , D a v e n p o rt, M in n e a p o lis , S t . P a u l, O m a h a , St. L o u is , K a n s a s C ity , K a n . SIOUX CITY serves one of America’s richest farming territories, and its commercial import ance in the West makes a good banking connection in this city highly valuable. We invite correspondence regarding our service to banks and bankers. AND Valley Savings Bank D E S M O IN E S , IO W A R. A. CRAW FORD, President D. S. CHAM BERLAIN, V ice President C. T. COLE, JR ., V ice P r e si dent W. E. BARRETT, Cashier JOHN H. GIN SBER G , A sst. Cashier C. M. CORNWELL, A sst. Cashier ¿/ou x CAPITAL ONE MILLION DOLLARS NORTHWESTERN NATIONAL BANK A Service Ideal is B a c k of Northwestern service s an ideal. Briefly stated, it is this: Day in and day out, and for all time, we must win and hold the good will of every customer we serve. You would ask for nothing more than that. We expect you to ac cept nothing less. If you are not already a customer here, let us apply our service ideal in your case in meeting your banking needs. MINNEAPOLIS Affiliated with T he M innesota Loan and T ru st Company COMBINED RESOURCES $110,000,000 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4 THE NORTHWESTERN April, 1926 BANKER ¿ ia j ii i a i i ii a ii i i a i i i ia i ii i a i i i i a i i ii a ii i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i M i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i i i a i i iia ': g j ^ l l B I I II B I II I B II I I H I I I I W I I I B I I I IB I I II B I II W II I I B II I I B I H IM I I Il H l I ll B l Il lB lI l lB lI l lM lI ll B l I ll H l Il lH lI l lH l i a i a i ll lB ln l B l I ll B U l lB lI ll B l I ll a lU l B l I ll B U ll B U l lB lI ll B U l lB lI l lB lI ll B l I ll B l I ll H lI l l^ lU l B l Il lH lU l B l li r j S N O R T H W E S T E R N BA N K ER DES M O IN E S The Oldest Financial Journal W e s t o f the Mississippi T hirty-first Y ear C O N T E N T S FO R A PR IL, 1926 N umber 464 Page Page A cross fro m th e P u b lish e r............... B y C lifford D eP u y 10 I n th e D ir e c to r s ’ R oom ............... ........... ..................... ........ F ro n tis p a g e ...................................... ...... Jo sep h W ayne, J r . 12 Selling th e V igilance P la n ....................... ...... ....... ............. . 19 18 I n th is Is s u e .............. ................ ............................,................ 13 B e tte r G olf ......................................B y “ C h ic k ” E v a n s 20 B y T h y L o a n s ................................ .............. B y P . C. L ie n 14 N ew s a n d V ie w s........................................... ............ ............. 21 L e tte r s o f R e c o m m e n d a tio n ............... ...... ...... ............ ..... 15 L eg a l D e p a rtm e n t-....... .................................. ...................... 22 T en Y e a rs A g o ................................... ....... ............................. . 16 Special B ond a n d In v e stm e n t S ection ................. ............. 25 K o rre c t E t i k e tt e .............................. — B y R oscoe M acy 17 Special F lo rid a S ection........................................................... 59 P e rs o n a l P a r a g ra p h s ................ ............................ . 74 M innesota N ew s......... ................................................. In su ra n c e Section .................... 81 N o rth D a k o ta N ew s...................................... B an k ers a n d T h eir W a n ts ........................................ 88 Iow a N ew s..................................................................... S o u th D a k o ta N e w s.................................................. 89 In d e x to A d v e rtisers......... ................................ N e b ra s k a N ew s ..... 93 97 101 103 118 DE P U Y P U B L IC A T IO N S A N D TH EIR T E R R IT O R Y N orthwestern B anker T rans -M ississippi B anker DES M O IN ES K A N S A S CITY Mid-Continent B anker I nsurance Magazine S A IN T LOU IS K A N S A S CITY U nderwriters R eview S outhwestern B ankers J ournal DES M O IN ES FORT W O RTH I owa B ank D irectory L ife I nsurance S elling DES M O IN ES ST . LOUIS T H E N O R T H W E S T E R N B A N K E R , P ublished by D eP uy P ublishing C o., I nc ., Capital S tock, $100,000.0u 555 Seventh S tre et, D es M oines. C liffo r d D e P u y , Publisher ; G. A . S n id e r , A ssociate Publisher ; R. W. M o o r h ea d , Editor. R ex V . L e n t z , A dvertising Director. H . H . H a y n e s , A ssociate M anager. M in n e a p o l is O f f i c e : Frank S. Lew is, 840 Lumber E xchange Bldg., Phone Main 3865. C h ic a g o O f f i c e : Wm. H. Maas, 1221 First N ational Bank Bldg., Phone Central 3591. N e w Y o r k O f f i c e : Philip J. Sym s, 150 N assau St., Phone 4836 Beekm an. S t . L ouis O f f i c e : Donald H. Clark, 408 Olive St., Phone Main 1342. K a n s a s C it y O f f i c e : Glen D. M athews, 405 R idge Bldg., Phone Harrison 5857. F ort W o r t h , T e x a s , O f f ic e : H. Lawson H etherw ick, 409 F. & M. Bank Bldg. S a n F r a n c isc o O f f i c e : George W ight, 600 B aldw in B ldg. Entered as second class m atter a t th e Des Moines postoffice Subscription R ates, $ 3 .0 0 per year; 5 0 cents per copy Official P u b lication of THE SOUTH DAKOTA B A N K E R S A SSO CIATION TH E IOWA FARM MORTGAGE A SSO CIATION THE IOW A BOND D E A L E R S A SSO CIATION =IñlllBllliailllBIIIIBIIII«|ll|«|ll|B|ll|B|ll|«|ll|«|ll|B|ll|B|ll|«|ll|B|lllB|H|B|ll|B|ll|B|ll|B|ll|B|ll|B|l.lia!jl|!■ II !!■! IIiail U l!| Ii ail lilil l u l l m i l H ill H ill Ii ail [IBI! m i l Ii ail IIBII Ii ail Ii ail Ii ail lia n m i l l i t ! U B T íila liila liila liila liila liila liiia !iila liila liila liila liila liila liila liila liila liila liila liila liila liila liila liiia liila l"l*liila H ila liila liila liila liila liila liila liila liila liila lu la liila liila liila liila liila liíT a i- https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A April, 1926 THE NORTHWESTERN BANKER The Foreman Banks I n te llig e n t In v estm en t A dvice Is P art of O ur Service W E SPECIALIZE IN INVESTMENTS FOR BANKS T he Foreman T ru st and Savings Bank T h e Forem an N ational Bank La Salle and W ashington Streets CHICAGO Com bined C apital, Su rplu s an d Undivided P rofits E xceed $ 1 0 ,0 0 0 ,0 0 0 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 5 6 THE NORTHWESTERN BANKER April, 1926 LARGEST BANK AND TRUST COM PANY IN IO W A AND ILLINOIS, EXCEPT CHICAGO, IN CAPITAL, SURPLUS A N D PROFITS Union Savings Bank & Trust Co. of Davenport, Iowa Capital, Surplus and Profits, $2,500,000.00 Total Resources Over $20,000,000.00 Two of the oldest and strongest banks in Iowa, the Union-Davenport Trust Bank, each backed by nearly half a century of progressive banking, consolidated on April 1, 1926, to form the Union Savings Bank & Trust Company—a banking institution of ample size to meet all demands. &Savings Bank and the Scott County Savings This bank, managed by experienced and capable officers and directors, can and will give the kind of service that is rightly expected of a correspondent bank. We invite you to do business with us and profit by keeping your balance in Davenport. All inquiries will receive prompt and careful attention. O FFICERS: President— W illiam Heuer. Vice Presidents— J. H. H ass, Otto H ill, Gustav Steuben and Jos. J. Brus. Cashier— Smith Blackm an. A ss’t V ice Presidents— Fred W. Zabel, Albert J. Jansen and A. H. Bierkamp. A ssistant Cashiers— Henry H. True, Leon H. Hass, Roy Krabbenhoeft, George L. H am ann and Chester U . Schaefer. DIRECTORS: W illiam Heuer, J. H. H ass, F. H. Bartem eyer, G. A. Koester, Theodore Krabbenhoeft, I. L. Sears, H. J. Zeuch, W. R. Weir, W. H. Gehrmann, Chris D. Kuehl, J. H. Schaefer, Dr. R. E. Peck, W illiam Richter, Gustav Steuben, J. B. Richardson, J. C. H all, Joseph Deutsch, A lex N aeckel, J. W. W atzek, George W hite, Dick R. Lane, Sm ith Blackm an, E. P. Adler, W illiam H. Voss, Louis Hanssen, Dr. D. J. McCarthy, Joseph J. Brus, Charles Grilk, George Dempsey, Bert Dow, R. H. Harned and A. H. Stoltenberg. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis a A April, 1926 THE Y o u ’re w orking in a bank. A pile of checks is before you. You start to go through them. You speed along for a while—then stop . . . what under the sun is that amount ?—it looks like 37. . . . I f o n ly th e s e people could write clearly . . . And so it goes —start— stop, start— stop. Puzzling over the amount line . . . wishing you didn’t have to be a hand-writing ex pert. Time after time those hard-toread hand-written checks halt you like a traffic officer’s hand stops you in motor ing. An hour’s work takes two hours. And always a chance fo r a mistake that takes time to find. On the other hand, if those checks were written on the Personal Pro tectograph, you would be as free from “stops” as you are when speeding along the highway in open coun try. For this remarkable ma chine writes in large, clear fig ures, legible at a glance. W hat’s more, these figures specially Trade NORTHWESTERN 7 BANKER Send for the bankers’ plan designed, for utmost safety, are shredded into the very fiber of the paper—positive protection against erasures and “pen changes.” The Personal Protectograph costs only $18, a price every depositor can pay. An opportunity for someone in every bank Many bankers have told us of their appreciation of this machine and have welcomed it as insurance of better relations with their depositors. Many tellers, clerks and others are co operating in popularizing the Personal Protectograph by be coming agents for its sale at Mark profit to themselves. For those who are i n t e r e s t e d , we have developed a c o m p le te p la n w h e re b y b a n k s may aid in the quick distribution of the Personal P r o t e c to g ra p h . Nearly two thou sand banks, many of them large city institutions, have already found this plan practical and advantageous. Details are yours for the asking. The Todd Company, Protectograph Division. (E st. 1899.) Rochester, N. Y. Sole manufacturers of the Protectograph, Super-Safety Checks and Todd Greenbac Checks. THE TODD COM PANY Protectograph Division 1149 University Ave., Rochester, N . Y . G entlem en: W e w ou ld lik e to know more about th e advantages to us of the plan by w hich already n early tw o thou sand banks are introducing th e Personal Protectograph to their depositors. P lease send fu ll particulars. Bank........................................................... A ddress.................................................................... N am e of official.................................................. TODD SYSTEM OF CHECK PROTECTION https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 8 THE NORTHWESTERN BANKER April, 1926 LYTLE Co Tfie Cajoiitjjl Some of the Finest B o $ te m B ank B uildin g Ban\ Structures in the J\[orthwest Are “ Lytle Built" “Master Builders” E A R S ago th ere were o rganized in E n g la n d vario u s groups of w orkm en who re p resen ted th e m an y d iffere n t tra d e s an d c ra fts . E ach se p a ra te u n it w as called a Guild, a n d to i t belonged those who w ere th e m ost skilled in th e ir p a rtic u la r cap acity , w hether it m ig h t be p rin tin g , d e co ra tin g , c a rp e n try or m asonry. N o t only w ere these w orkm en highly efficient in th e ir special tra d e , b u t th ey exercised th e m ost p a in s ta k in g c are in th e p e rfo rm a n ce of th e ir w ork, a n d used only th e b e st o f m ate ria ls. T hey were M aster Builders. Y T h ere a re to d a y b u ild e rs who ta k e th e sam e p rid e in th e ir w ork, w ho p u t in to i t th e b e s t o f s k ill a n d m a te ria ls , a n d who also, due to th e a p p lic a tio n o f th e m o st m o d ern m ea n s a n d m e th ods, a re a b le to k e ep th e c o st a t a n o m in a l figure. L e a d in g th e N o rth w e s t in c ra fts m a n s h ip o f th is h ig h ty p e s ta n d s T H E L Y T L E C O M PA N Y , B a n k A rc h ite c ts a n d B u ild in g E n g in e e rs. T he L y tle C om pany is a M aster B uilder— a c re a to r o f b a n k in g hom es— a n o rig in a to r o f p e rm a n e n t s tru c tu re s fo r a ll b a n k in g p urposes. T he L y tle C om pany does n o t slig h t m a te ria l or w orkm anship. T h ey b u ild f o r p e rm a n en c e . T h ey k n o w th e v a lu e o f c o n v e n ie n t in te r io r a rra n g e m e n t. T h ey k n o w t h a t y o u w a n t in y o u r b a n k th e p ro p e r in v e s tm e n t v a lu e . A n d a b o v e all, th e y re a liz e t h a t econom y is a re a l v ir tu e — a n d p ra c tic e it. I f you a re c o n te m p la tin g a n ew b a n k in g hom e, ask y o u r b a n k e r frie n d s a b o u t L y tle B a n k C o n stru c tio n . T h en ta l k to th e L y tle C om pany. T h ey w ill c o o p era te w ith y o u in e v e ry w a y — alw ay s. J. A. RAVEN, President The Lytle Company B a n k Architects and Building Sioux City, Iowa https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Engineers « Consult your RAND M9NALLY Bankers Directory. It offers you the most complete collection of accurate informa tion to be found anywhere in the banking held. You may be sure th at all the facts and figures are up to date if you have the latest edition. R and M 9 N ally & C om pany publish the Blue Book twice a year w ith the many revisions th at six m onths’ normal business changes bring about. More than 2.00,000 changes are necessary before the book can go to press. You can judge from this w hether or not it pays you to have the latest edition. For more than half a century Rand M fN ally & Company have been specialists in banking pub lications. During these many years they have established a net-work of dependable informa tion sources and an unequalled system of checking and classifi cation. Bankers and all others who must have trustw orthy financial information depend upon these R and M ?N ally p u b licatio n s. They have learned through years of experience th at they are abso lutely reliable, th at they com prise a complete service for every bank use. Rand M9Nally Bank Publications Bankers Directory (Blue Book) The Bankers Monthly Key to the Numerical System of A. B. A. The Bankers Service Bulletin The Bankers Service Guide Banking and Business Ethics Maps for Bankers H a n d MFM m j l t & C o m p a n y Aiap Headquarters Dept. 536 S. Clark Street, Chicago Washington D -29 San Francisco 270 M.adison Avenue, New York Los Angeles L a r g e s t Publishers o f Banking Publications in the World, E sta b lis h e d 1856 Official Numbering Agent, American Bankers Association https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 10 THE NORTHWESTERN BANKER April, 1926 ACROSS THE DESK FROM THE PUBLISHER f A EORGE JEAN NATHAN, in an article in the Amer ican Mercury, argues that too much system in our modern business concerns frequently spoils good service. With a part of Mr. Nathan’s suggestions I agree, namely, that the human element and the personal service should not be lost sight of in all of our modern machinery with which we do business. Mr. Nathan says: ‘‘The way to please a customer is not to do everything that he expects the shop to do—the cus tomer takes that as a matter of course; the way to please him is to do various small things that he doesn’t expect it to do. “ But these small things the perfectly systema tized shops never take into consideration. And, as a result, they lose customers every day to the little unsystematized concerns who kick the system pro fessors, salesmen of triplicate checking books, in stallers of self-opening showcases, inventors of auto , i ''4 matic goods-packers and other such up-to-the-minute nuisances out into the street and install in the stead of them and their devices a little old-fashioned trading common sense and a little old-fashioned understand ing of human nature.” Tn the banking business cer tainly no one can object to the modern machinery and modern equipment which makes the work easier and quicker and more accurate, both for the banker and for the customers. The part which must not be lost sight of and which Mr. Nathan brings out is that personal serv ice, acts of courtesy and kindness are really the things which tie the customers to your insti tution. Personally, I can see no reason why the up-todate banker can not use whatever modern equip ment he wishes, and at the same time keep in close personal touch with his customers and thus render them good service. The Trend T o w a rd B on ds rT^HE Northwestern Banker has conducted re-*■ cently a bond survey among the bankers in this territory. The striking thing about the survey, which has been revealed by the hundreds of letters received at our office, is the increase in the amount of bonds and securities which were owned by banks a year ago and which are owned now, the increase being all the way from 18 per cent to over 500 per cent. For example, a bank which had $8,455 a year ago now has $51,363 in bonds, an increase of 507 per cent. Another bank which had $1,000,000 in bonds a year ago has $1,682,615 in bonds at this time, or an increase of 68 per cent. These figures are indicative of a definite trend on the part of banks to purchase bonds not only for use as sec ondary reserve, but also for resale through their bond departments to their customers. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The situation is well summed up in a letter we received from a prominent country banker who said: “ From a bank standpoint, we believe that the bond business has just started and is a lifesaver to the small country bank where crop conditions are more or less of a gamble, 'and where they can not afford to carry large cash reserves for six or eight months awaiting the harvest of the next crop. It not only gives them a fair earning power by using bonds as a secondary reserve, but it also shapes their bank investments so that it is not necessary to take on questionable loans during more prosperous times. ’’ Here, as we see it, is the entire answer to the tre mendous increase in the purchase of bonds by banks during the last few years in this section. If the community derives its main income from one product or one manufactured article, and any- » April, 1926 THE NORTHWESTERN BANKER thing happens to that article in any given year and position to render a greater service to its customers the banker has loaned all of his money in that com and to its community. munity, both the bank and the hank’s customers are This survey indicates a very definite trend to bound to suffer. If, on the other hand, only a part wards the increased purchasing of bonds by those of such funds are loaned in the community, and the banks which are interested in rendering a greater other part is placed in good substantial bonds which service to their customers and placing their insti can he liquidated in an emergency, the bank will tutions on a sounder and better basis by keeping not only be in a much better shape, but will be in a their assets liquid at all times. R educing the S ervice C harges TN THE March issue of T he Northwestern Banker we suggested that the service charge which bankers are making on accounts averaging less than $100 should be better understood by the customers of banks if bankers expect to maintain the good will and friendship of their patrons. Recently the Clearing House Association of Mem phis, Tennessee, passed a ruling that all banks should charge $1.00 per month on accounts which average less than $100 in their daily balance. Many of the members of the Clearing House ob jected to this. In order to get around this ruling, those who objected are advertising that they will loan $100 to each customer at 3 per cent interest, the borrower agreeing not to check on this $100 during the year, thus the daily balance on the de- posits will never fall below $100 and the customer will save $9.00 a year. Even if the interest rate was 6 per cent, the cus tomer would still save $6.00, or be able to reduce the cost 50 per cent during the year as far as the service charge is concerned. Some banks may look with disfavor on this loan ing plan in order to help the customer reduce his charge and allow the bank to still come within the ruling of the Clearing House, but whatever indi vidual banker’s ideas may be on the subject, we still maintain that the customer should be given definite reasons why the service charge is being made. He should be “ sold” on the service which the bank is rendering and for which it must make a service charge. Im p roved C onditions rT'HE N orthwestern Banker has been receiving that for the year ending July 1, 1926, the gross numerous letters during the past month from income of Iowa farmers will be about 712 million its subscribers throughout the territory, in which dollars, as compared with 692 million dollars for they give an expression of the financial situation the year ending July 1, 1925. The two items, and business outlook in their local communities. which vary most in the Iowa farm er’s income, are In all of these reports there has been a decidedly corn and hogs. The Brookmire people estimate optimistic note based on improved conditions in that for the year ending July 1, 1926, the Iowa these various localities. farmer will get an income of 260 million dollars One banker wrote us as follows: “ The farm er’s from hogs, as compared with 256 million dollars condition has improved during the last year and the year previous. In the case of corn, they esti the majority of our farmer customers show, on their mate 80 million dollars for the year ending July financial statements the first of the year, a decided 1, 1926, as compared with 60 million dollars for increase during the year 1925.” the year previous.” In another letter the writer said: “ It is my per The cashier of another bank, in his letter, said: sonal opinion that the economic conditions in this “ Our farmers are satisfied with the price of corn, territory will show a decided improvement within as they are getting from one dollar to one dollar the next few months. I base my claim on the better and twenty-five cents per bushel through the feed financial condition, and the more settled frame of ing process and are all making money.” mind of the farmers, brought about by the higher level of prices on the products from which they Such reports are certainly conclusively evidence obtain most of their spending money.” that conditions are rapidly improving throughout “ The Brookmire Economic Service estimates the richest agricultural area in the world. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 11 ADOLPH J. VIEGEL Com m issioner of B anks, M innesota Adolph J. Viegel has been Commissioner of Banks for the state of Minnesota since May 1, 1923. He has had a substantial amount of both city and county banking experience. In Minnesota the Commissioner of Banks acts also as receiver for closed banks. At the present time Commissioner Viegel is at the head of a department which has 180 employes on its roster. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis These Kind Words Help IND words and an occasional bouquet always help. Hence, we are greatly pleased with recent comment from sub scribers. R. P. Galt, cashier of the Farm ers State Bank, Silver City, Iowa, writes in to say: “We enjoy T h e N orthw est ern B anker greatly and think you are getting out a very helpful journal.” W. H. Bangs, veteran vice president of the First National of Fairfield, Iowa, says: “We want you to know we get a lot of ‘kick’ out of your magazine and it is an excellent paper.” J. R. Carley, president of the First National of Grand Forks, North Dakota, is likewise congratulatory, saying: “ T h e N orthwestern B anker is one of the best publications of its kind that we receive both from the standpoint of appearance, editorials and general news items.” K Special Bond Issue O KEEP step with the increasing in terest of bankers in all lines of in T vestment, IN T H IS IS S U E Features of this Issue N THIS issue there is likewise a wealth of feature articles, all of in Iterest and profit. Our many readers who have been laughing and smiling with Roscoe Macy, a new feature contributor to T h e N orthwestern B anker will chuckle again this month when they read “Korrect Etikette for Kountry Bankers,” on page 17. It is replete with homely banking philosophy, and a smile in every line. “By Thy Loans They Shall Know Thee,” on page 14, is another gem of this issue. It is as practical as an old broom, sound as a dollar and interesting, too. T h e N orthwestern B anker , three years ago, began publication of a special bond and investment section in its April issue. The banker’s interest in bonds and in vestments has continued to grow, until this phase of banking has become one of the largest departments of this magazine. The present issue containing a special bond and investment section starting on page 25, is the largest ever published by T h e N orth w estern B anker and should be a text book on investment to every reader. Of especial interest to the banker will be the article telling of the investment sur vey completed last month by this maga zine on page 26. “What Bonds Should the Banker Buy,” on page 25, presents a clear-cut analysis of the bank’s secondary reserve investments and how to arrange them. Every banker will likewise be in terested in the article on page 29, entitled, “How Our Bond Department Helps Our Bank Business,” as well as a dozen other splendid articles, all with the purpose of acquainting our many readers with every phase of the bond and investment business. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis “ Chick” Evans on Golf OW that the first balmy zephyrs of springtime are wafting the promise N of better days ahead, bankers everywhere in towns large and small, are thinking of fairway and green. Verily, America seems destined as a nation of golfers. Every banker-golfer, with an ounce of ambition, wants to improve his game if possible. To meet this desire T h e N orth western B anker has arranged for a series of articles on “Better Golf For Bankers,” by one of the world’s foremost golf instructors, Charles “Chick” Evans, of Chicago, the first of which appears on page 20 of this issue. Mr. Evans happens to be a very inter esting writer as well as a great player, and he knows bankers thoroughly. “Tee Oft” with “Chick” in this issue, be sure to “fol low through” with the entire series and you’ll “Hole out” at the end of the season with a lower score than you ever thought possible. Joseph Wayne, Jr. HE merger of the Philadelphia Na tional Bank and the Girard National Bank, both of Philadelphia, into one or ganization, the Philadelphia-Girard Na tional Bank, with total deposits of more than $200,000,000, brings into the financial limelight one of the leading bankers of the country, Joseph Wayne, Jr., president of the new bank, whose photo appears on the cover page of this issue of T h e N orthwestern B anker . Mr. Wayne was born in Philadelphia, in 1873, graduating from Philadelphia schools, and entering the employ of the Girard National in 1890 as an office boy. He occupied various positions with the bank until his election as president and director in 1914. In addition he is a director of the Philadelphia Federal Reserve Bank, the Provident Mutual Life Insurance Com pany, the Germantown Trust Co., the Penna. Fire Insurance Company, the Lee Tire and Rubber Company, the American Ice Company, the Provident Trust Com pany, the Independence Indemnity Com pany, and the Insurance Company of North America. Mr. Wayne was a member of the Exec utive Committee handling all loans in the Third Federal Reserve district dur ing the war. Golf, tennis and cricket are his recreations, and he is a member of a half dozen clubs. T Convention Dates April 28-30 Reserve City Bankers, Atlanta, Ga. May 3-6 Spring Meeting, A. B. A. Executive Council, Pinehurst, S. C. June 7-9 Wisconsin, Wausau. June 9-11 Minnesota, Minneapolis. June 15-16 South Dakota, Watertown. June 17-18 Illinois, Springfield. June 21-23 Iowa, Sioux City. June 22 North Dakota, Grand Forks. October 4-7 A. B. A. Convention, Los Angeles. 14 THE NORTHWESTERN BANKER April, 1926 BY THY LOANS THEY SHALL KNOW THEE! T h e bank's best advertising is its reputation for saying “n o” to th e “ dead"beat” and unsecured borrow er By Pete C . Lien Cashier, Farmers and Merchants Bank Revillo, South Dakota P E T E C. L I E N EN years ago, the village banker was considered the King of the town, the Czar of the community and the lofty ideal to which proud fathers pointed to their sons as an example. It was every father’s ambition to see his son some day working in The Home State Bank. The village banker was never omitted from any committee o‘f importance; he held a life-long position as treasurer of the school, the church, the lodge and a hundred other community organizations, and for any member of the Finance Committee to question or glance twice at Banker Brown’s annual financial reports would have been a heinous crime. What a proud day for little Johnnie Jones, when Banker Brown laid his hand on Johnnie’s shoulder and gave him that bright new penny. The penny is treasured yet in the old clock which hangs over the homemade bookcase filled with the unread “Fall and Decline of the Roman Empire,” that Pa bought from that stranger with the little mustache the day he was plow ing corn on the north forty. For years Banker Brown had reigned supreme in his little kingdom. The young gazed at him from a distance with admira tion, the old came to him with their troubles and sought his counsel and ad vice. On Decoration Day it was always Banker Brown who was called upon to introduce the speaker of the day from the gorgeously draped band stand, and when he spoke even the children in their mother’s arms silenced their squalling and listened with reverence to the voluptuous wisdom that flowed from the tongue of their lead ing citizen. It seemed that nothing would usurp his throne. When any stranger happened to stay, over at the Commercial House and ex pressed a desire to Silas Westbrook, the landlord, that he would like to look the town over, if old Silas had gotten his evening chores done and the three cows milked, the stranger would always find him willing to accompany him on a tour T https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis of inspection. After taking the traveler through the Railroad Park and showing him the statute of Ephraim Janes, one of the home boys who “fit” and died at Gettysburg, Old Silas would always man age to trace his steps toward the domicile of Banker Brown. Standing before the front entrance of the banker’s home, Silas would strike a pose quite similar to that of his admirer, Daniel Webster, turn to the stranger and with one hand majestic ally waiving east by west, proudly repeat: “And they say it cost him over Forty Thousand Dollars.” But how times have changed. Today Silas rarely passes Banker Brown’s place except on his way to church, and the place is but a mere whistling post for him to spit out his cud of J. T. before he enters the House of God. In passing, he gen erally turns to his wife and with a nod of his head informs her that he can’t see how the old devil can keep his bank open until fall. The Finance Committee of the Methodist Church work late into the night auditing the books of their treasurer, and every time ^Pa comes from town he carries something that bulges in his hip pocket and the “bulge” is generally buried under the mattress in P a ’s room. When the “bulge” is exceptionally large, sometimes Pa carries it out to the barn with him, when he does his evening chores, but the bulge is always gone in the morning. When the dog barks at night or on a windy night when the old tree on the north side of the house rubs against the roof, Pa is always up in a minute and running around the house as though he expected someone. * * * * Such is the history of the home town banker in towns all over the Northwest. Everywhere you hear the cry from the bankers: “How can we re-establish confi dence in banks?” In places where banks are beyond re demption and where their earnings for years to come must go into their note pouch, then the question of confidence is indeed a difficult one. In such cases, the banker will need a ton of “guts,” two tons of willpower and a determination to bring the old ship safely into port, and we must admit that a hardy, weather-beaten Cap tain can bring many a schooner safely through a storm. Not long ago, a Civil War veteran came in to cash a check drawn by a bankrupt on a distant city bank. The old gentleman carried no account with us and I refused to cash the check for him as he was finan cially irresponsible and the maker of the check a trifle worse. Grabbing the cheek from my hand, he stamped to the door and in a snarling voice commanded me to depart for that warm place which is men tioned in the Bible, and informed me em phatically that I was everything but a gentleman. I remember that during the same day, a bankrupt trying to handle a $10,000 shipping association business on a shoe string and a flock of post dated checks drawn on our bank, called in and de manded a loan of $1,000 for thirty days on a straight note. I gently informed him that we did not care to make a loan to a bankrupt and his only hopes of securing credit with us was to die off and be born anew. There were possibly a half dozen customers in the bank at the time, and if I remember correctly it took him all of ten minutes to advise me what he thought of me and the institution with which I was unfortunately connected. In the course of his business transactions, he came in touch with all of the farmers in the territory and lost no time in telling them of our “ terrible” attitude toward bankrupts. The old Civil War veteran, too, had his friends and cronies and he is still harping about the “cur” in the bank, who refused to cash his check without an endorser. One would think that such free lance advertising would leave the wrong impres sion on depositors in general, but we know (Continued on page 90) April, 1926 THE NORTHWESTERN BANKER 15 THE DANGER BACK OF THE LETTER OF RECOMMENDATION individuals w e r e substan LETTER of recom tial and w h o s e character mendation — just a was a b o v e reproach, but piece of paper say who m i g h t be organizing “In short, I think the safe rule to follow in this matter of making ing t h a t John Jones is statements as to financial worth or credit standing may be said to be and promoting and offering everything that the persons not to make any statements which you do not know to be true of stock which should not ap with whom he does business your own knowledge, or if you do not know them to be true, then to peal to all classes of inves want him to be. And your state expressly that the information given is merely a matter of opin tors. The fact is that with ion or belief and should not be acted upon without verification.” name signed to the state By Charles E. Heckler, Counsel, the exception of l e t t e r s ment. Perhaps you think Illinois Bankers Association. which are purely means of you know John very well. identification we refrain Undoubtedly he is a good from issuing unless the re customer of yours, and his request isn’t much to grant considering tell us how their institution handled recom quest is urgent and the letter absolutely the business he does with your bank. So mendations, and we are giving their re justified.” plies for the benefit of our readers. 0. D. Pettit, cashier of the First Na you give him a good send-off. R. Alter, vice president and cashier tional Bank of Sioux City, Iowa, men But—the world is full of Jekyll’s and , I. Hyde’s. Your next door neighbor may be of the First National Bank of Grand tions that his bank does not issue letters a shouting deacon in the church on Sun Island, Neb., and also president of the of recommendation only in special cases. day, and a bootlegger all the rest of the Nebraska Bankers Association, believes He says that “we generally tell them that that while the bank issuing the letter the letters of recommendation are out of week. You never can tell. A short time ago a bank in one of our should use a great deal of care, it is also date and ask them to refer to us instead, larger middle-western cities was asked by necessary that the bank or business firm although in some special cases of respon one of its customers for a number of let receiving the letter should extend cour sible people, we give them letters of recom ters of recommendation. The man was a tesies only in strict accordance with the mendation and identification where they are to be used in a business way.” good customer of the bank, kept a rather statements given. Mr. Alter says: “I have no recollection of a letter of large account on the books, took care of “These letters, although ostensibly for his obligations promptly, and had in every the purpose of an introduction, are very recommendation having been harmful to way conducted his affairs in a seemingly often used as letters of credit or are at the bank.” A banker in southeastern Iowa tells us open and above-board manner. least relied upon to influence a credit. The bank was very glad to grant his re The issuance of a letter of recommenda that in his estimation a letter of recom quest, and gave him fifteen letters to other tion to a party who is not really entitled mendation carries very little weight with banks and business houses, some of them to an appreciable amount of credit, or the person or business man who receives addressed “To Whom It May Concern,” our refusal to do so, creates one of the it. Regarding the policy of his bank in and others to certain individuals, many of most embarrassing situations we come in this connection he says: “It is our policy to issue just as few them personal friends of the writer of contact with. The addition of paragraphs the letters. A few of the letters were or rubber stamp notations which limit our general letters as possible. We always rather general in character, but several responsibility or endeavor to in any way suggest that it is a better policy for any others spoke in glowing terms of the cus discredit the recipient of these letters, is one to have an inquiry directed to the tomer being introduced. On some of the both contradictory and should, and appar bank, and let us answer it, instead of giv letters was placed the customary stamp to ently does, destroy the intent of the let ing a letter addressed to the “world” in the effect that the statements given were ter so we do not use either. It, there general. “We feel that an open letter of recom intended only as an expression of opinion. fore, seems to resolve itself into a close Others contained no such statements. scrutiny of the letter by the bank to whom mendation carries very little weight, and is In about two weeks the fireworks com presented, and the granting of cour given slight consideration by any business menced. The party recommended in the tesies strictly in accordance with the state man, and that we are really doing our letters used them to establish credit in the ments in the letter and if the letter is dic customer a favor if we persuade him to purchase of property and personal effects tated as it should be, I can see no reason refer to us, rather than to carry such an open letter. that he had no intention of ever paying for a come-back. “When we know the designation of the for. Many institutions, good business “I do recall one or two eases, however, friends of the bank, were defrauded and where letters have been used either to at person, making a request, we frequently swindled of large sums of money. Later, tempt to establish a credit or to influence write a letter of introduction and recom it developed that the man who had re the sale of stock in which the recipients mendation to a bank located at that point, ceived such flattering letters of recom of the letter were interested, the former giving our customer a copy to serve as mendation was a well-known confidence meeting with no success, but unfortunately identification, and find that this has aided man, and already had several peniten some stock no doubt was placed on the materially in securing courtesies for our tiary terms to his record. strength of our letter to the latter, but people. “In writing a letter of recommendation, In an effort to discover just how far is probably fulfilling the promises and the average bank feels it wise to go in the net result of that was more caution it has been our policy to be very frank, letters of this nature, T h e N orthwestern in the future when requested to issue let as we do not feel that it is fair to use a B anker asked a number of bankers to ters of recommendation to those who as lot of high-sounding words with very little A https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A Lawyer’s Advice 16 THE meaning, just to make the bearer of the letter feel good, and possibly create a wrong impression in the mind of the reader.” Frank Abegg, cashier of the First Na tional Bank of Alliance, Neb., believes that in writing letters of recommendation it is wise to limit the opinions expressed, and make the letter deal with specific facts only, and those facts being known by the bank to be certainties. He says : “We generally give our customers who are leaving for another location, or who wish to go away on business, letters of recommendation. We generally try to safeguard our bank in the issuance of the same by limiting our opinion. “At this time we are unable to recall any specific instance where a letter of recommendation which we issued has been harmful to our bank as we have always tried to guard ourselves in giving definite facts. “I believe that a banker should give any customer whose business has been satis factory a letter of recommendation and also at the same time I think that the banker who issues the letter of recommen dation should ascertain the bank to which he expects to transfer his business and at the same time that the letter of recom mendation is issued write the bank giving them the outline of the manner in which he handled his business.” The above expressions from various bankers indicate the importance of using extreme care in issuing letters of recom mendation as to character or credit stand ing. It is true also, that the public is likely to attach more importance to such letters when they come from a bank, and they should, than if the letter came from almost any other source. Regarding l e g a l liability incurred through letters of this nature, Charles E. Heckler, counsel for the Illinois Bankers Association, recently expressed the fol lowing opinion : “The rule of law as to liability for mis statements as to financial, credit or busi ness standing is one of general applica tion and has no special reference to banks. It may be said to be a general principle of law that when one person undertakes to make a representation to another person concerning a business matter it is the duty of the person speaking to tell only what he knows and to tell the truth; and that if a person makes a statement of fact to another intending that the person to whom the representation is made will or may act in reliance on the truth of the statement, and at the time the statement is made the speaker knows the statement is untrue or has no reasonable ground to believe it is true, and the person to whom the statement is made relies upon the truth of the statement and acts upon the information given to his injury, the per son making the statement will be liable to https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NORTHWESTERN BANKER the person injured for any damage sus tained. “It is wholly immaterial that the per son making the statement gave the in formation gratuitously or that he did not profit personally. The rule of law cor responds with the rule of morals, that it is the duty of everyone who undertakes to speak at all to tell the truth. This rule applies to statements made with reference to the financial worth or credit or busi ness standing of a person as well as to statements with reference to any other business matter. Where a person makes a statement to another which he knows to be false, intending that the person to whom it is made shall rely upon it, and the person to whom the statement is made does rely and act upon the truth of the April, 1926 statement to his injury, the liability is clear. “Formerly the rule seemed to be that to render a person liable for making a mis statement it must appear that there was a fraudulent intent in making the state ment, and, therefore, a person would not be liable for making a misstatement in cases where he honestly believed the state ment to be true, even though it was false in fact. In recent times the tendency of the courts seems to be to hold that a per son may incur a liability for making a misstatement in cases where he is not guilty of deliberately and knowingly stat ing a falsehood; that it is enough to charge him with a liability if he makes a false statement as one of fact, whether he (Continued on page 79) |iiiiiiMiiiiiiiiiiiiiiiiiiiiiiMiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiimiiiiiiiiiiiiiiiiiimiiMiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiMii!iiiimi<iimiiiiiiiiiiimiiiiiii!iiiMiiMuui!iiiiiiimiiiuiiiiiii(Ë I TenYears A g o T oday B rie f bits of new s fro m T h e N o rth w e stern B anker, A p r il, 1916 Will A. Lane, cashier of the First Na tional Bank, Indianola, Iowa, is receiv ing the endorsement from numerous members of Group 6, who are anxious to see him elected as secretary when the group meets at Ames, on May 18th. Mr. Lane will make an active, efficient officer who will handle the duties of secretary in an able manner. 1916 C. B. Mills, vice president of the Scan dinavian-American National Bank, Min neapolis, in a recent communication, said: “ My son, Carl, and I have just been looking over the March issue of T h e N orthwestern B anker , together, and compliment you on the general good ap pearance of the magazine. Business re mains good with us. Deposits a year ago were a shade over $6,000,000 and they are now more than $12,250,000.” Such a record surely reflects credit upon Mr. Mills and the other officers of their fast growing institution. 1916 The Live Stock Exchange National Bank of Chicago have issued their Live Stock Year Book for 1915, which con tains much valuable information to every stockman, farmer and banker. M. A. Traylor, president of the bank, in his foreword on “ Successful Stockmen,” said: “ The successful stockman studies his situation, adapts himself and his work to changing conditions without switching recklessly from one thing to another, and above all he hustles wisely while others idly w ait.” Ford E. Hovey, formerly president of the Denver Union Stock Yards Bank, has been elected as a vice president of the Stock Yards National Bank, of South Omaha, and commenced his active duties the first of this month. J. C. French is the other vice president of the Stock Yards National Bank and has been re sponsible in no small degree for its con tinued growth and development, which is making necessary an addition to its administrative staff. 1916 Arthur Reynolds, vice president of the Continental & Commercial National Bank, Chicago, believes that the war will not be ended for at least another year. “ They have spent at least forty billions of dollars over there now and it would seem that they would be com pelled to quit from sheer financial ex haustion. But history has shown us that a nation can continue at war for an entire year after financial exhaustion or seeming exhaustion. That Europe is ap proaching strained financial circum stances is evidenced by the fact that American loans are being talked of in financial circles. The move is just start ing and I expect to see the European na tions get some American money. But they will get it only on the American securities they now hold. And they hold about three billion dollars’ worth of American credit. Their borrowing will improve the financial situation in this country. The financial situation is be coming brighter. There is an increased demand for money and as a result the interest rates are becoming firmer.” I April, 1926 THE NORTHWESTERN BANKER 17 KORRECT ETIKETTE for the KOUNTRY BANKER RO SC O E M A C Y By Roscoe M acy one seeking admittance, OST well-grounded there is only one correct bankers have long procedure for the 11Banker recognized the fact There are three kinds, says Mr. Macy, author of this delightful chat Who Cares.” Stride to that the intricacies of the on banking etiquette. The Prone, Supine and Vertical. All have the door, open it two and profession necessitate a their place in banking routine, but Mr. Macy relates a sad experience one-quarter inches, and code of etiquette which is with the Supine Method. yell, “ Well, what in Time not applicable to any other It seems that the Duke of Agar-AIbolene, noted lecturer, visited d ’yer want? Cantcha activity. However, no at Lynnville, Iowa, and the head of the reception committee brought the Duke to the bank, to show him to Mr. Macy (or to show Mr. read that there sign ? I t ’s tempt had ever been made Macy to the Duke) (let’s not argue that point). Then, in Mr. Macy’s eight minutes past fo u r! ’ ’ to incorporate the finer own words: “The duke had a commanding presence and I was prob By this method, you tend points of banking propri ably a little nervous in my greeting. I stuck out my paw under the to guard against a repeti ety into a treatise for the grating in the most approved Supine Fashion, and stammered, ef tion of such untoward oc fusively, ‘Pleased to meet up with you, Duke! Make yourself right ready reference of the busy at home.’ currences. Do not open banker until the writer un “There was a perceptible glint of surprise in the Duke’s eye for the door with a bow and dertook to codify the re a moment, there being nothing in his Coat of Arms about a teller, or a scrape, for this is both sults of many years of a teller’s hand, Supine, but his British composure was not to be per hypocritical and obsequi practical experience and of manently ruffled. He thrust his hand in his pocket, and with a ous, and never under any rumbled, ‘Thanks, my good man,’ left a two bit piece in my hand, observation of the habits of Supine!” circumstances hide behind representative bankers, and your desk in the hope that to present the result in con your customer will give it densed form for the benefit of readers of T he , N orthwestern may be used, one each day, during a spell up and go away; he may keep you hiding B anker . of cloudy weather, and a similar chart there for half an hour, and finally dis may be constructed to express, day by cover you in your undignified position by The Daily Saluation The first great care of the Korrect day in a different way, the state of any peering in through the front window. Personal Services Banker is in his daily choice of a uniform sort of weather. Should the weather salutation to customers. This choice change after you have chosen your phrase Always be frank with the customer should be made immediately upon arising for any particular day, you need not alter who seeks a service. Consult your ledger your choice, as no one notices what you in the morning. Generally it will consist openly—it is permissible even to read off of a reference to the state of the weather. say, anyhow. Other convenient saluta his balance aloud, th u s: ‘ ‘ Two dollars tion topics are the state of the roads, cur Glancing out the window, you note the and thirty-one cents. Sorry, Mr. Allgone, appearance of the elements, and upon rent funerals, and election returns. but I ’m very busy this afternoon,” or Dealing with the Overdraft this build your greeting for the day. It “ Eighteen hundred eighty-two, fortywill be well, in many cases, for the con Whenever there is presented at the six—why, certainly, Jason; glad to ac scientious banker to construct a chart, window a check upon Joe Jay, whose ac commodate you.” More involved cases outlining the various choices available count is overdrawn daily except Wednes may necessitate an extended soliloquy au for each particular weather phase; if days and Saturdays, do not shove it back dible to the customer, such as “Well, the this procedure is followed, it will never with a forbidding frown and an unequiv balance is small, but your great-aunt, Mebecome necessary to use the same de ocal ‘ ‘ No Good! ’’ Instead, examine your hitable, is in poor health and may remem scriptive phrase twice during any spell ledger with a look of wonderment, rub ber you in her will. I ’ll just take one more of weather of reasonable duration. Thus : the back of your hand across your eyes chance on you, Matthews. What provi and look again, and then say, apologeti sions do you want in your contract ?” Such ‘‘ Dreadful cally, to the holder of the check, “ We a process will place this feature of bank Nasty must have made a serious mistake on our ing on a business-like basis. Disagreeable books, because we do not show a balance The Banker at Leisure Gloomy sufficient for the payment of this check. ’ ’ The March 1st rush being over, the Frightful This may possibly arouse suspicion in the busy banker finds it possible to do more Damp day, ain ’t she, John?” public mind as to the efficiency of your of his banking in the directors’ room; Terrible bookkeeping, but it will insure the reten here, the request for an interview may Depressing tion of Jo e’s business for your bank. find you dozing over your afternoon cigar, Melancholy Be Yourself Dismal your chair reared back against the wall, Murky, or When the door of your bank is rattled and your feet cocked up on the table in Somber either before or after banking hours, by the conventional informal banking atti- M https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis “The Teller’s Handshake” 18 THE tude. Great care must be exercised to insure the correct reaction to the ap proach of each particular visitor. A frown and a shake of the head will an swer for the calendar salesman; a simple gesture performed with the left wrist and forearm will indicate to the checkwriter agent that you are not buying today; for the bond salesman, it is considered good form to lower one foot to the floor and assume an attitude of weary attention; at the entry of a good customer, place both feet firmly upon the floor, indicat ing that you would even be willing to rise, should it prove necessary; and when the comely lady depositor, in distress over her overdraft, enters your presence you should leap to your feet and offer her a chair. Handling Customers One of the first lessons to be learned by the banker is the proper attitude to as sume toward each particular species of customer. In the presence of the heavy depositor, it is generally considered quite the thing to adopt a deferential air, agreeing with everything he says, and wringing your hands constantly in an obvious effort to please. On the other hand, an attitude of brusque importance will invariably put the small depositor in his place, while the approach of the bor rower should call forth even more im pressive indications of the high authority of your position in the world. The needy seeker after credit will usually be in a more or less nervous state of mind, and it should be your aim constantly to enhance his nervousness as the interview pro ceeds. A sudden clearing of the throat, or the dropping of a paperweight—small things like these will tend to induce in Birthdays of the Month *Send ’em a card. Robert Alexander, Sec., White-Phillips Co., Davenport, April 2nd. Otto Hill, V. P., Union-Davenport Tr. & Sav. Bk., Davenport, April 4th. S. E. Coquillette, V. P. , Merch. NatT Bank, Cedar Rapids, April 4th. W. L. Baker, Pres., Minnehaha NatT Bank, Sioux Falls, S. D., April 9th. J. A. Raven, Pres., The Lytle Co., Sioux City, Iowa, April 14th. H. N. Boyson, V. P., Merchants NatT Bank, Cedar Rapids, April 15th. Sam Burns, Pres., Burns Brinker Co., Omaha, April 18th. V. C. Bonesteel, V. P., Security NatT Bank, Sioux City, April 23rd. W. M. Hetherington, Pres., F irst NatT Bank, Dubuque, April 24th. Ray Cundy, V. P., Priester, Quail & Cundy Inc., Davenport, April 27th. Carl Weil, V. P., National Bank of Com merce, Lincoln, April 28th. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NORTHWESTERN BANKER the importunate borrower a desire to fall on your neck in gratitude if you finally grant the loan—or, should you refuse it, he will be grateful to you for not calling in an officer and having him clapped in jail. The Teller’s Handshake Probably the greatest problem which confronts the modern banker is the dis covery of a method whereby he can shake hands gracefully through a teller’s wicket. In many up-to-date bank build ings, these wickets are built permanently into the cages; even where this is not the case, the process of unlocking the wicket with a key and swinging it open robs the handshake of its spontaneity. On the other hand, the truly sensitive banker cannot thrust his palm through or under the wicket without experiencing a sense of discomfort—almost as though something has come between him and his depositor. Conventionally, there are three broad classes of teller’s handshakes: The Prone, the Supine, and the Vertical. None of them has been uniformly suc cessful. The Prone method calls for the exten sion of the hand beneath the grating, palm downward. Now, the hand extended with the palm downward has been tra ditionally accepted as a gesture of re- That Diminishing Value “ Listen what I learned in school today, Daddy,” shouted the young hopeful. “ George Washington once threw a silver dollar across the Potomac.” “Yes,” grunted father. “And I sup pose it was worth about ten cents by the time it landed.” Bringing Him Around “ Dey had to t ’row water on Sam Johnson’s face at his wife’s funeral,” volunteered a recent mourner. “ Dasso? He done fainted?” asked a friend. “ No,, indeedy. H e’s je s’ an uncom monly soun’ sleeper.”-—American Legion Weekly. Crowning Insult The motorist en route for Chicago was stopped at night in the center of a little hamlet by the local traffic officer. “ Say, m ister,” said the constable, “ you’ve got to dim your lights going through town.” “ Yes, yes, I know,” replied the motor ist impatiently. “ By the way,” he added, “ how far is it into town?” April. 1926 nunciation, rather than invitation. F ur thermore, there is ordinarily little space left between the hand and the counter, and the customer or friend is likely to feel some hesitation in inserting his own hand into that small space. He may sus pect a trap. The Supine method calls for the pre sentation of the hand beneath the win dow, palm upward. At first thought, this seems the logical procedure, and it is the one which I adopted, after careful con sideration, when I first entered the bank ing profession. I often found myself somewhat disconcerted, however, when the fellow on the other side of the grat ing, instead of grasping my hand, would instinctively retract the deposit he was about to offer, and recount it, misinter preting my gesture as an indication that I had noted an error in my favor in the original count, and was anxious to get my hands on the money before he could discover his mistake. But I was not com pletely cured until the day the great Eng lish publicist, the Duke of Agar-Albolene, visited our town in the course of a lecture tour, and was led into our bank by a member of the reception committee, who was showing him the sights of the city. The duke had a commanding presence, (Continued on page 78) Faster the Train, Harder the Bottle (Literal translation o f a notice in the Paris-Marseiile Express) It arrives very frequently that the em ployes walking upon the line are wounded by the objects solid, the bottles empty in particular, launched from the carriage doors and of which the shock becomes more violent as the rapidity of the train is more grand. Monsieurs the travelers are pressingly requested to abstain from this practice. Wretch! “I wish I had enough money to get mar ried, ” reflected the Guy. “ Yes?” asked the Girl softly. “ And —and—what would you do?” “ Well,” replied the Guy, after careful consideration, “ I guess I ’d get properly intoxicated. ” Always Right ‘ ‘W hat’s a super-man, pop ? ’’ “ A woman, son.” The Inevitable “ Do you play cards for money?” “ No; merely with money.” April, 1926 THE NORTHWESTERN BANKER 19 How the Vigilantes Sold Themselves to Clinton County, Iowa Recapture of Clinton bandits by Iowa and Illinois vigilantes again proves the vigilance idea is practical and efficient T MAY not be advisable to stage a have been small chance of their capture. By H. R. Boles robbery or a jail delivery in your It is interesting to note that two of the A ssistant Cashier, Peoples Trust & six men who comprised the Chadwick county to “ sell” the people on the Savings Bank, Clinton, Iowa Augilantes or town guards are bank cash vigilante or home guard idea. But that is the way in which the people of Clin score heavily. From Chadwick came six iers. Five of the six men are married ton county, Iowa, were won to the vigi men on a truck. Two of these were cash men Avith two or three children. These lante cause a few weeks ago—and it is iers of banks in Chadwick. They met men realized what this encounter might mighty effective sales ta lk ! The attempt the bandits on a steep hill and there mean to their oAvn families. They were of two bandits to escape from the Clin “ fought it out.” The Chadwick vigi simply offering their lives to preclude the ton county jail with the aid of three out lantes narrowly escaped death several escape of law-breakers. In this splendid side “ pals” and the subsequent capture times when shots from the bandit’s guns example lies the reason for the assured of all of them was a great triumph for crashed through the truck’s windshield success of the vigilante movement as fos the vigilantes of the Iowa and Illinois or shattered the driver’s cab. The vigi tered by the county bankers’ associa county bankers’ associations. lantes of Clinton and Whiteside (Illi tions. Here is the story. Alfred Fairfield nois) counties were now closing in from Vigilantes who took any part in the and John Redman had staged a daylight behind and there was no chance of escape. capture of the bandits were recently en holdup of a messenger carrying a C. & The driver of the bandit car stepped out tertained by the Kiwanis Club of Clin N. W. payroll from a Clinton bank to and was instantly killed by a shot from ton. On this occasion they were pre the railroad shops. The bandits were one of the vigilantes. This completely de sented with a check for one hundred fifty convicted and on February 9, 1926, were stroyed the morale of the bandits and the dollars from the Clinton County Bank in the Clinton county court house receiv four survivors quickly surrendered. The ers Association. Later, one of the Clin ing their sentences. A big gray auto entire chase had lasted two hours and ton newspapers presented a fund of four mobile parked near the court house; a had trailed through three counties and hundred dollars accumulated from sub man stepped from it and sauntered leis four towns. scribers who appreciated the splendid urely on the court house lawn. The pris To the readers of T h e N orthwestern deed of these men. oners were then being taken back to the B anker this is more than an account of In discussing the capture of the ban jail. They had gone but a short distance an exciting jail delivery and recapture. dits, several suggestions were made by when the man who had been loitering on It is the story of complete vindication the Angilantes Avhich may be helpful to the lawn pulled a shotgun from beneath for the time and money expended in or other county associations. It was agreed his overcoat and ordered the deputy sher ganizing the vigilante movement. Trav that handcuffs are a most necessary part iff to release the prisoners. Things hap elers arriving in Clinton during the morn of vigilante equipment. Immediately pened rapidly during the next few min ing reported guards were on duty at after capture the bandit should be hand utes. Many shots were exchanged. The every crossroad watching traffic for the cuffed to preclude him shooting his way manacled prisoners shuffled their way to fugitives. Undoubtedly the capture of to liberty again in case he might get hold the automobile and within two minutes these men would have been effected had of another Aveapon. Another very im the first scene was over. they chosen any other route out of Clin portant suggestion—the man in charge The bandits headed for the high bridge ton. When captured they were proceed of vigilante operations should be a man connecting Clinton with Fulton, Illinois, ing toward Milwaukee or Chicago and of coolness and presence of mind. In the (Continued on page 78) dashed across it. and were speeding into Avithout vigilante resistance there Avould Illinois. Within a remarkably short time the vigilantes of Clinton county were posted and the town guards (as the Illi nois vigilantes are called) were also posted and waiting for the bandits. The bandit’s car was being trailed very close ly by the vigilantes and sheriffs from several counties. At Thomson, Illinois, a posse of citi zens compelled the bandits to turn around and seek another road of escape. Causing the desperadoes thus to retrace their way very materially aided in their capture since they were thwarted from continuing in the direction of Milwaukee or Chicago. Pursuers were now only a few rods behind the bandit car and with steady exchange of shots the chase was growing hotter as it neared the town of ChadAvick, Illinois, some thirty miles from Clinton. A b o v e a re p ic tu re d th e v ig ila n te s o f C had w ick , Illin o is, w ho b a ttle d th e C lin to n The vigilante organization was soon to c o u n ty , Io w a , b a n d its a n d a s s is te d in th e ir fin al c a p tu re . I https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 20 THE NORTHW ESTERN FROM TEE TO TEE with “CHICK” EVANS By Charles “Chick” Evans always the prominent member of the country club. Editor’s Note:—This is the first of a Knowing this so well, and so long, I series of articles on “Better Golf Makes congratulate the editor of T h e N orth Better Bankers,” by former international western B anker on the inauguration of golf champion, “Chick” Evans, written especially for The Northwestern Banker. a department of golf in this magazine A similar article will appear in each is and I feel highly honored by the request sue during the rest of the year. Mr. to aid in spreading a knowledge of golf Evans is not only a veteran of many amongst the bankers of the Northwest. championships, but an excellent in structor, and, from sixteen years’ expe I wonder if it is necessary for me to rience in the bond business, is well assure them that golf is not only a versed in the language of both golfers healthful game but a pre-eminently and bankers. Let “Chick” Evans help friendly one; and if any word that I may your golf game through The Northwest ern Banker! say chances to lead them into this charmed world of good-fellowship I shall iimiiiiiiiiiiimiiiiiuiiiiiiiiiiitiiiiiiiiimiiiiiiiiiimiiiiiiuiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiHiiiiiiiiiiiiiiiiiiiiiiiimi be happy indeed. There is one thing perhaps in which F THERE is one thing more than an other that bank directors demand of I think that I can aid the banker who is their officers and employes today, it a beginning golfer, and that is in equip is efficiency. To keep to the highest ment, for the golfer must have the right point of efficiency one must he physically sort of tools for his work. First, there is the matter of clubs. A well. N oav it is impossible for a man to a t t a i n physical set of clubs for the average business man well-being with or banker should consist of a drivingout some form of brassie, spoon, midiron, jigger, mashie, out-door recrea dead-stop, niblick and putter. To the tion. And of all actual beginner I advise the use only of the sports with a brassie, a midiron, a mashie and a which I am ac putter. Unless one plays every day it is quainted I am impossible to learn the use of the insure that golf is betiveen-lofted clubs. Too many clubs the best suited to to get one out of trouble may lead to the average man carelessness, and it is almost criminal to or woman of sed overburden the caddy with seldom-used entary habits and clubs. This year I have decided to use a varying age. Golf dollar-and-a-half cotton golf bag when h a s lengthened actually playing around the course, so the life of many that I can lighten the load of the dear a big business little fellow who is at my side. If I man and enabled travel I can put it inside of my big heavy him to carry on bag. I hope others will follow me in this i n t o o l d a g e . and then we won’t have men with their Surely we need right shoulder higher than their left. “ CHICK” Evans all the bankers of There are a great many styles of put our great country ters, as many almost as the golfers ivho to head our financial institutions and help use them. In this club the shaft is more us on to even better prosperity than it important than the blade. It must not has been our privilege to enjoy. be springy. It must have balance, too. Golf is not alone an advantage, great Balance is something I cannot explain, though it may be, to the individual but an experienced golfer can feel. I banker, but it is also a benefit to the com think that the face of a putter should be munity and the nation of which bankers nearly perpendicular and that it should are always an important part; and the be of aluminum. The length of the club mutual health, interest and friendship depends upon one’s style of play. The that is built up upon the links redounds manufacturers have standard lengths and equally to the advantage of all. I have I would f ollow them, bearing in mind the found this particularly true in rural com all-important comfortableness of feel. munities where the country banker is No one can lay down an absolute rule for n iiiiiiiiiiiiiiiiiiiiiiriiiiiiiiiiiiiiiiiiiiiiiu iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiitiiiiiiiiiiiiiiiiiiiitu iitiiitiii I https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis April, 1926 BANKER golfers to follow, for they have putted badly and well with every conceivable style of putter. Balls should be carefully selected to suit one’s individual game, but when once selected that particular ball should be used throughout the season. “ Know your ball!” is a good motto for a golfer. For those who have played before I advise starting the season with clubs in perfect shape. First examine the shafts : they must be straight and alive. No dead or crooked wood will serve the purpose. If the preference is for steel shafts I think it is better to have them all steel, but whichever you prefer, steel or wood, stick to it throughout the season. All clubs that need it should be reshafted before the season begins. Choosing the proper length of shaft is a difficult un dertaking and much individual care should be given to it. I usually leave the length and whip of the shaft to the man ufacturer. It is a good thing for one’s game not to be able to blame one’s clubs when the game goes wrong. Comfort has much to do with the en joyment of golf, and although I am not an authority on golfing clothes I suggest they be selected for practical reasons, such as comfort and trimness. I prefer knickers to long trousers, a light hat or cap to shade the eyes when the sun is too strong, and a bare head when it isn’t. My best of best wishes go out to you for a long, pleasant journey on the newold road of golf and may every step along the way lead you to increasing joy. Approves “Better Golf for Bankers’" The announcement in the March N orthwestern B anker that the noted golf player, “ Chick” Evans, of Chicago, will conduct a special course of lessons in golf, starting in the April issue, written especially for N orthwestern B anker subscribers, is meeting with much approval among this magazine’s readers. Before autumn, there should be little, if any, excuse for any banker in the Middle West remarking, “ I don’t understand golf and wouldn’t know how to swing a caddie if I owned one. ’’ “ I want to congratulate you on this series of articles,” writes A. K. 0. Coch rane, Iowa representative for the Union Trust Company of Chicago (incidentally, Brother Cochrane is no apprentice at the game, being one of those lads who give a hundred to charity every time their score is above 77%). Monsieur Cochrane com ments as follows: “ I have just read in the March N orth western B anker that ‘Chick’ Evans (Continued on page 116) April, 1926 THE NORTHWESTERN BANKER 21 The amalgamated institutions will have combined resources of $1,051,455,420. The Chase National Bank will be the second largest in the country, ex ceeded in size by only the National City Bank. , —----- The ladies of the Des Moines Bankers Club entertained their husbands at the ladies annual party recently and started an innovation at the banquet which might be well followed throughout the United States. In view of the fact that the ladies were giving the party you might assume that there were long speeches and many of them. But such was not the case. In fact, not a single speech was made, but at each place the following verses were printed on a neat and attractive card: “Greetings to guests and to husbands! We hope you’ll all have a good time; There will not be a long speech of welcome, But only this poor little rhyme! “So as soon as the dinner is over, Meet us out on the big dancing floor, There will be lovely music to lure you, And we hope you will have fun galore.” A. E. Bryson, for many years publicity director of Halsey, Stuart & Co., of Chi cago, has been appointed vice president of that organization. Mr. Bryson has been a close student of bond and investment advertising, and has made a real success of that branch of the work for his company, and his many friends are delighted that his serv ices have been thus recognized by his organization. Haynes McFadden, the popular pub lisher of the Southern Banker, has been on the sick list for some time, but is much better now. In a note from him recently he said, “They gave me a rough ride, but I hope I ’ll soon be as good as new.” His many friends are certainly wishing him a speedy recovery to normalcy again. The bond business in Iowa and adjoin ing states has been increasing all the way from 18 to over 500 per cent with many banks. This is the information which has been secured by T h e N orthwestern B anker , based on a recent questionnaire which was sent out to over 1,000 banks. If anyone doubts that this territory is not coming back with speed and ve locity as far as the bond business is con cerned, they should see these figures. Speaking of T h e N orthwestern B anker , Mr. S. Douglas Malcom, general manager of the advertising department of the American Express Co. of New York, referring to the March issue, said, “That was an exceptionally interesting number of T h e N orthwestern B anker , https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis and I have sent it around to our offi cials.” Many officials do this every month, be cause they find so many worthwhile ar ticles which are valuable to all of the officers of their institution. “Analysis of the Savings Market” has just been issued by Albert Frank & Co. This is the address of W. Frank McClure, vice president of their organization, be fore the Financial Advertisers’ Associa tion in Columbus last October. If you have not received a copy of this booklet and will write to Mr. McClure, 134 S. La Salle Street, Chicago, I know he will be glad to send you one. W. O. Boozer, secretary-treasurer of the Florida Bankers Association, has an nounced the dates of April 23d and 24th for the annual convention of their state association, to be held in Jacksonville. That should indeed be a very wonder ful convention because most all of the members present can discuss one prob lem, namely, the percentage of increase in their deposits during the last few years. No state in the Union has shown such wonderful increase in deposits as has Florida. Perhaps the following story also ap plies to some past due loans: “Oh, ah, by the way,” remarked the doctor in some embarrassment, “how about that little bill I sent you last month?” “Oh, yes,” agreed the patient airily. “Well, you know you told me not to worry over anything.” One of the Representatives from New York has the name of Celler. It is un necessary to state that he is a “wet.” The House committee on alcoholic liquor traffic decided it would investigate the effects of prohibition, and this is what Representative Celler remarked: “The Committee on Alcoholic Liquor Traffic has been sleeping over ten years. You can’t expect much from somnambu lists. With one notable exception, La Guardia, these committeemen are so dry they will not allow anyone to ‘drink in’ the morning air, and even prohibit a golf bag to have a ‘stick’ in it.” The Chase-Mechanics merger has been approved by the action of the share holders, and thus completes the largest bank consolidation in the history of the United States. In paying a tribute to Col. John B. Coolidge, Vice President Dawes very ap propriately said, “Colonel Coolidge died in the knowledge of the honorable suc cess of his own son—a knowledge which is the greatest boon that can come to a father in his life, and which can decorate with happiness even the long and painful days when the shadows of death are lengthening.” The twelve Federal Land Banks had net earnings available for distribution, on January 31st of this year, of $28,654,855.47. Real estate acquired by the bank through foreclosure totaled $7,194,520.42, and this amount was charged off. After this amount was charged off there was left available for dividends, over $15,000,000. This is certainly a very good showing in spite of the amount of loans that were considered as “no good.” P. C. Lien, cashier of the Farmers & Merchants Bank at Revillo, S. D., in a letter to The N orthwestern B anker concerning the bond situation, said, “From a bank standpoint, we believe that the bond business has just started and is a life-saver to the small country bank where crop conditions are more or less of a gamble, and where they can not af ford to carry large cash reserves for six or eight months, in anticipation of a crop failure in the locality. It not only gives them a fair earning power by using bonds as a secondary reserve, but it also shapes their bank investments so that it is not necessary to take on questionable loans during more prosperous times.” The fact has recently been brought out by statistics gathered by many banks that only 15 out of every 100 bank cus tomers use more than one department. If this fact is true, here is certainly a fine opportunity for banks everywhere to ad vertise to their customers the depart ments which these customers are not now using. After you get a customer into your bank to use one department, it should be easy to sell him the services he can se cure from the others. The Farmers State Bank of Kearney, Neb., has sent out a folder on the Ne braska Guarantee Fund, and on this same folder published a statement of their bank. One of the questions asked in this (Continued on page 76) 22 THE MiniiiiiiiiiiiiiiiiiiiniiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiimiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiMiiiiiiiiiiiniiiiiiiiiiiiiiiiiiii Questions of interest to bankers are discussed in this department and any subscriber has the privilege of writing for information and advice on legal sub jects. If the inquiry can be definitely answered without the preparation of a brief, the answer will be given by our attorney free of charge. If, however, the inquiry involves ex tensive research in a Law Library, and the preparation of a complete brief, The Northwestern Banker will so notify the subscriber and upon his instruction, we will ask our attorney to prepare a brief of the case at a cost to the subscriber of only $10. The preparation of a brief is entirely optional with the subscriber. In writing for information, kindly en close a 2-cent stamp for reply and ad dress, “Legal Department,” care The Northwestern Banker, 555 Seventh St., Des Moines, Iowa. •iiiiiiiiiiiiiiiiitiiiiiiiiiiitiiiiiMiiiiimiiMiiittiiiiiiiiitiiiiiiiiiiiiiiiiiiiiiiiiiiiimiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiitiiit BANK oftentimes may accept from one of its borrowers a note payable to the borrower in set tlement of the borrower’s note to the bank. The borrower may place his blank endorsement on this note and fully guar antee payment of the same. The bank in a transaction of this kind from ap pearances has even more security for the payment of the indebtedness due the bank than if only the borrower’s note were held. However, there is a possibility that the bank may have great trouble in securing payment of said note when due. A bank completed a transaction in the manner stated above and was obliged to start an action in court to recover on the promis sory note. The court record showed that parties designated as May and Day executed and delivered to Yutes the note sued on, that Yutes endorsed this note to the bank, and was given in return therefor the note he had signed for the money borrowed from the bank. As May and Day had defaulted in the payment of the note after maturity, the bank sued on the note, making as de fendants in the action the two makers of the note and Yutes as endorser. The bank claims to be a purchaser of the note sued on before maturity in good faith, in due course, for value. May and Day admit the execution of said note, but pleaded in court that this execution and delivery were induced by misrepre sentation and fraud on the part of Yutes, the payee. They also deny that the bank was the purchaser of said note in due course, and in good faith. A provision of the law is as follows: “Every holder is deemed prima facie to be a holder in due course, but when it is shown that the title of any person who has negotiated the instrument was defective, the burden is on the holder to prove he or some person under whom he A https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NORTHWESTERN BANKER April, 1926 THE HOLDER By the Legal D epartm ent IN DUE COURSE OF A NOTE claims acquired the title as a holder in due course.” The court found the evidence sufficient to support the finding that the note was obtained by Yutes by fraud and misI’epresentation. Therefore, the burden was upon the plaintiff to prove that it was a holder in due course. The law defines who are holders in due course: “ A holder in due course is a holder who has taken the instrument under the following conditions: “ First. That it,is complete and regu lar upon its face. ‘ ‘ Second. That he became the holder of it before it was overdue, and without notice that it had been previously dis honored, if such was the fact. ‘ ‘ Third. That he took it in good faith and for value. “ Fourth. That at the time it was ne gotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it.” The bank contends that the evidence that it was a holder in due course is un disputed and uncontradicted. The cash ier of the bank at the time of the pur chase of said note was the only witness that testified relative to the purchase of said note by the bank. He testified, in substance, as follows: That he was cashier of the bank; that he represented the bank in the purchase from Yutes of the note sued on; that he had known Yutes for a considerable length of time, during which he did his banking business with the bank; that at the time of the purchase of the note said bank held a note which was executed by Yutes, which (Continued on page 71) Dressing Up Your Back Yard M ost b an k s a re p ro u d of th e ir m assive fro n t doors, th e ir polished counters, a n d fixtures, b u t th e v a c a n t lo t b a ck o f th e b a n k som etim es tells a d iffe re n t story. M a rth a P o rte r, a D es M oines n ew spaper w rite r, se n t in th e above photo to T he N orth western B anker , w ith th e follow ing com m ent (M a rsh a llto w n p a p ers p lease copy) : ‘ ‘ W hile in M arshalltow n, Iow a, la s t sum m er, I a d m ired th e b a ck y a rd o f th e S ta te B ank. L a te r a p h o to g rap h w as se n t to me. I t occurred to m e th is photo m ig h t be of use to you to encourage sm all tow n b a n k s to set th e good exam ple in civic p rid e b y m ak in g th e av erage back y a rd a b e a u ty spot. T his b e a u ty spot in re a r o f th is b a n k has done m uch to a d v ertise it a n d cause fa v o ra b le com m ent. I t w as th e idea of th e b a n k p re sid en t, M r. C. C. T rine, whose p riv a te office overlooks th e back y ard . ’ ’ THE April, 1926 NORTHWESTERN 23 BANKER i PER1ENC 57 Years of Seasoned Experience in every phase of banking service has qualified this bank to act for you as “A Thoroughly Satisfactory Chicago C orrespondent.” We cordially invite you to utilize the broad ex perience, conservative counsel and sincere helpful ness which our correspondents uniformly enjoy. 1869 Frederick H. Ra w so n 1926 H arry A. W heeler Chairman of the Board President Cra ig B. H azlew ood Vice-President U N IO N TR U ST COMPANY C H IC A G O SAFETY https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SPIRIT EXPERIENCE CALIBER CONVENIENCE COMPLETENESS PRESTIGE I I 24 THE NORTHWESTERN BANKER April, 1926 A BANKERS BOND HOUS E Through our organization over 1500 bankers in the middlewest are kept in touch with prevailing high grade investment oppor tunities. Analyzing and recommending millions of dollars of Bonds annually requires care which only years of study can give. It is our aim to offer to midwestern Bankers the full benefit of our conservative experience and we are adequately equipped to give such investment counsel. A large part of the Bonds recommended are purchased by Bankers who are building up a secondary reserve. We specialize in Bank paper in the form of short term Notes, and mortgage Bonds such as the following: D ue P ric e Y ie ld N orth eastern Iow a P o w er Com pany__5% % 5-1-26 4.50% C entral L ight & P ow er C om p an y ____ 5 J%% 3-15-27 100 5.50% S ac C ounty E lectric C om p an y_________ 5%% 3-1-28 99 6.00% P acific M i l l s -----------------------------------------5%% 2-1-31 96% 6.25% W ood m an o f th e W orld B u ild in g ________ 6% 3-1-44 99 6.10% T exark an a & Fort Sm ith R a ilw a y ____ 5%% 8-1-50 100V 2,5.46% A request will bring you a carefully selected list of Bonds suit able for Bank investment. QUAIL € CUNDy.IJVn BONDS FOR INVESTMENT First National Bank Building DAVENPORT, IOWA https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 29 South La Salle Street CHICAGO April, 1926 THE NORTHWESTERN 25 BANKER W h a t Bonds Should Bankers Buy, and How Should They Be Chosen ? By Walker D. Hanna President, Hanna-Shreves Co., Burlington, Iowa OUNTRY banking is changing along with the times. In the old days the country bank purchased all the farm mortgages and took ample care of any industry in its territory. Today, the cream of the farm mortgages are being absorbed by the insurance companies, the federal and joint stock land banks on ac count of their low rates. This rate auto matically eliminates the country bank, to gether with the per cent being paid on time deposits. Of course, you can obtain a better per cent if you are willing to loan more per acre. But then, you are only fooling yourself as to the quality of your loan. Suppose you have loaned all of your money in your community and one of your best customers wants to borrow a sub stantial amount. If you take care of him, you also must borrow, either from the Federal Reserve or your correspondent bank. You really do not like to do this for obvious reasons. Or suppose you have some heavy withdrawals to pay for some land transactions or to make private loans. If you only had a certain amount of high grade bonds, you could market them readily and then gradually build up your bond reserve again. From our experience, we believe the average country banker today is “sold” on bonds for bank investment. You might ask, “What bonds should the average coun try bank buy ?” May we respectfully sug gest that you counsel with a reliable bond house or with a reliable bank having a bond department adequate facilities ? You wouldn’t attempt to take out your own appendix nor try your own lawsuit nor fill your own teeth, neither should you attempt to select your own bonds. The extreme importance of your selection of C https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis W A L K E R D. H A N N A your investment counselor cannot be over emphasized. You choose the best surgeon for your operation, the best lawyer for your lawsuit and the best dentist for your dental work ; then, rely on their judgment. Your investment counselor should analyze the local conditions of your bank. Some of their questions would be: 1. What per cent of your deposits are time ? 2. Do your time deposits fluctuate much? 3. How much money do you have in large amounts on time deposit? 4. Have you a heavy local demand? 5. Do you usually have a surplus during the year round? 6. Are your deposits increasing? Of course the most important considera tions for a bank are safety of principal, marketability and interest yield in this order. If you believe that you will have to liquidate the proposed purchase within 60 or 90 days, we would recommend put ting the money out on call or short-time, high-grade commercial paper. Of course we would all like to purchase bonds with the security of our own government bonds due in six or twelve months, yielding 6 per cent. That would be the ideal invest ment, but we all realize that is impossible. Don’t let your desire to secure a shorttime bond let you lose sight of the safety of principal. Short maturity, that is, from one to five years, does not neces sarily mean excellent marketability. Nor does listing on any exchange insure good marketability or security. Long maturi ties may have excellent markets. For example the New York Central Railroad have some 5s due in 2013, selling at 103, which yield over 4.85 per cent. We could mention many bonds due in less than five years with no such markets. One of the New York bond houses for mulated an investment table for banks which we respectfully submit for your ap proval : 1st Reserve—20 per cent Cash; 2d Reserve—20 per cent Government; 3d Reserve—20 per cent Bond Account; Loans—40 per cent Loaned. Holdings—$5,000 each. T ype 45 per cent Public Utility; 25 per cent Railroad; 20 per cent Industrial. 10 per cent Foreign. Maturity—27 per cent in 3 years; 13 per cent in 3-5 years; 16 per cent in 5-10 years; 3 per cent each year thereafter. Marketability—25 per cent very active; 30 per cent active; 45 per cent fairly ac tive. A “ good thinker” has that “ creative mind” which brings out suggestions and results in profit.—James E. Newburn. 26 THE NORTHWESTERN BANKER April, 1926 Bankers of the Middle W est See Bonds and Investments Growing By R. If . Moorhead Editor, Northwestern Banker W HEN Columbus broadcast the news that the earth was round, the good folk of Genoa almost sent him to the “crazy” house. Only a few years ago when the Wright brothers tried to climb through the air with a clumsy aeroplane, the Dayton, Ohio, populace threatened to have both of them psycho analyzed. Before the war, if a financial Solomon had prophesied that in March, 1926, fully 60 per cent of the banks of Iowa, Ne braska, Minnesota and the two Dakotas, would be selling bonds to their customers, he would have been hurried to the asylum. And that in March, 1926, over 90 per cent of the same banks would be buying bonds and securities in large, sub stantial volume, for their secondary re serve—well, the monetary Solomon would have been thrown to the lions, as a pre liminary penalty. The buying and selling of bonds and securities by banks of the middle west, has attained a high place on the financial horizon, according to an inclusive survey completed last month by T h e N orth western B anker . Better business condi tions, a keener study of investment op portunities by both bank and depositor, and general expansion of the country’s industrial forces, are only a few of the primary reasons for such a growth. For the middle west is starting to clip coupons. There was a time when middle western states of great wealth per capita, as for example, Iowa, were noted as the Paradise for the “ wildcat stock sales man. ’’ Iowa, in particular, paid a large fat fee for tuition in that field of invest ment—some place it as high as half a billion dollars in the year 1920, alone. But today the middle western investor and the banker of Iowa, Minnesota, Ne braska and the Dakotas, are thinking of investment in terms of safety, liquidity and marketability, rather than yield. And so, we have with us the bond and investment business, growing, according to T h e N orthwestern B anker survey, rapidly, but constructively. T h e N orthwestern B anker sent out to 1,000 banks of the above states, letters each containing five questions pertaining to the bond and investment business. As this goes to press, 512 complete answers have been received—enough to give a very accurate survey of the subject. The five questions in the letter, which is reproduced on this page, were as follows: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis T h e No r t h w e s t e r n Ba n k e r ■ Oes Moines.Iowa ■ Dear Friend: (1.) Does your bank sell bonds?---If so, what kinds? (Check 1,2,3, etc,., in the order of their importance) ___Government Industrials ____ Real Estate ____Railroad ____ Pub. Utilities ____ Foreign ____ Municipals ____ Joint Stock Land Bk. (2) Does your bank buy bonds for its secondary reserve?-- If so, what kind? (Check 1,2,3, etc., in order of importance) ___ Government ____ Industrials ____ Real Estate ____ Railroad ____ Pub. Utilities ____ Foreign ____ Municipals ____ Joint Stock Land Bk. (3) What features do you think the bond company should emphasize in its advertisements? (4) Please suggest subjects for articles you would like to see in the Bond and Investment Department of the Northwestern Banker. (5) Will you tell us on the back of this page or in a separate letter, what you think of the future of the bond and investment business in your com munity? Thank you , sincerely. T he bond q u estio n n aire th a t w as sent to 1,000 b a n k s in Io w a , M in n e so ta , N e b ra s k a , N o rth a n d S o u th D a k o ta . (1) Does your bank sell bonds? If so, what kinds? (2) Does your bank buy bonds for its secondary reserve? If so, Avhat kinds? (3) What features do you think the bond company should emphasize in its advertisements ? (4) Please suggest subjects for articles you would like to see in the Bond and Investment Department of T he N orth western B anker .. (5) What is your opinion of the future of the bond and investment business in your community? In answer to Question No. 1, “ Does your bank sell bonds?” 290 banks an swered, “ Yes” and 222 said “ No.” Compared with three years ago when T h e N orthwestern B anker in a similar survey, found that much less than 50 per cent of the banks in the northwest were selling bonds to their customers, the present survey shows that bankers are turning more and more to the bond and investment field to take care of their customers’ investment needs. The an swer to this question likewise shows that there is plenty of money in the rural west and that the shortage of money in the farm west most noticeable during the years 1923 and 1924, is n oA V largely a matter of history. AnsAvering the latter part of Question No. 1, “ What kinds of bonds do you sell, ’ ’ the folloAving table is given : Government ..........................202 Municipals..............................125 Pub. Utilities ........................103 Real E s ta te ........................... 90 Industrials ..............................40 Jt. Stock Ld. Bk................... 21 Railroad ................................ 19 Foreign .................................. 18 In answering Question No. 2, “ Does your bank buy bonds for its secondary reserve, ’ ’ 472 banks, or a little more than 90 per cent, answered, “ Yes.” Only 40 banks responded in the negative. Just Avhy banks are turning to this type of in vestment for secondary reserve purposes is best shoAvn in the personal comment that follows later in this article. In this second question, the banks ex pressed their preference for kinds of bonds as follows: Government ..........................297 Industrials ............................270 Municipals ............................201 Pub. Utilities ........................198 Real E s ta te ............................116 R ailroads............................... 72 Foreign .................................. 70 Jt. Stock Ld. Bk..................... 29 Question No. 3, “ What features do you think the bond company should em phasize in its advertisements?” was asked primarily to discover a few of the things that bankers want to knoAV about the high-class investment houses, through one avenue of approach—the advertise ment. The answers show that back in the mind of every banker, the “safety” of the bond, and the “reliability” of the invest ment house, are the two big factors that determine the sale of a bond, so far as the bank is concerned. Here are some of the features of the bond or the company that Mr. Banker says should be emphasized in the advertisement: “ Reliability and rates. Security, reliability of the house and the recommendation that the investor consult his banker in regard to the quality of the issuing bond house.” “ Safety and marketability.” “ Current assets, sinking funds, etc.” ‘ ‘ Security back of the bond. ’ ’ April, 1926 THE NORTHWESTERN BANKER 27 ‘ ‘ Honest recommendation only. ’ ’ “ Safety of principal and the classes of bonds that should be sold to certain classes of investors.” T h a t m ore th a n 90 p e r cent of the b an k s in Iow a, N ebraska, M in n e ‘ ‘ Some good bond company should sota a n d the D akotas are buying a su b stan tial volum e of bonds fo r put on an educational campaign among the small banks, for most th e ir secondary reserve. bankers do not fully understand the T h a t 60 p e r cent of these b anks are selling bonds a n d securities to technical terms used by bond th eir custom ers. houses.” “ Diversification of bond buying.” T h a t b a n k e rs who have a b o n d d e p a rtm e n t in th e ir b a n k find it is “ History of company.” a benefit to th e ir o th er b an k in g lines. “ I think most bond companies have excellent advertisements and I T h a t b a n k e rs th ro u g h o u t th e m id d le west agree th a t th e b o n d and do not see how the bond and invest inv estm en t business in th e ir com m unities is growing, “ ra p id ly and ment department of T h e N orthw est constructively." ern B anker can be improved.” 11Integrity of the underwriting house and the security of their bonds. ’ ’ vestment future in our community is gen reading and studying m arket quotations “ That the company does not dis and th e very valuable bond articles, such erally becoming more popular.” claim liability as an issuing house.” A Nebraska Banker: “ The bond busi as are published in T h e N orthwestern “ Liquidity and safety.” ness is a new kind of banking for us. We B anker , System m agazine and others. ’ ’ ‘ ‘Marketability. ’ ’ A Nebraska Banker: “ We believe bond have been using this form of im7estment Question No. 3, while asked primarily of surplus funds only the past four investments will be far greater in de to guide the editorial department of T h e months. We feel we should encourage mand in this community from now on. N orthw estern B anker in ascertaining our customers to invest in this class of Many banks met with difficulty and were compelled to suspend on account of not the big things the banker reader wants to securities.” A Minnesota Banker: “ To be honest, having bonds for a secondary reserve, but know about bonds and investments, will be enlightening to every banker. The I have never made much study of the as soon as conditions improve and the answers show the deep interest among bond business for the reason that we confidence of the people is again Avith the bankers in the field of bonds and invest have always been able to loan our money banks, the banks are going to carry a ments. As one Nebraska banker frankly in our own territory, but now our re good portion of their reserve in bonds. put it, ‘ ‘ What we don’t know about serve is so high above the legal reserve This bank anticipates carrying 20 per bonds’would fill a library, but we realize that Ave Avill have to look around for cent of its reserve in bonds in the that this is a phase of finance which we something, and to begin with, we are future. ’ ’ A Minnesota Banker: “ I t appears as must study and analyze, if we are to going to purchase government bonds. ’ ’ An Iowa Banker: ‘ ‘ The bond business though people are becoming educated re keep up with changing conditions.” A simple analysis of all types of bonds, the in our community is growing by leaps g ard in g investm ents in bonds, and th a t inside Avorkings of the bond house, an and bounds. This is a business that will it Avill soon be necessary fo r all banks explanation of all of the more or less deserve careful study by bankers in the to m a in tain a bond d e p a rtm e n t.” An Iowa Banker: “ Thus far we have technical investment terms, are only a future. ’ ’ had very little requirements for bonds in A South Dakota Banker: “ Your few of the hundreds of subjects akin to bonds and investments that bankers say N orthavestern B anker can do a great our community, but the indications are they \\Tant covered in their fa\mrite maga work by the educational articles you are that this is going to be a matter that we presenting on bonds and investments. will have to consider in the future. zine, T h e N orthwestern B anker . “ There is more money in the ru ra l Probably of greatest value of all the What we don’t know about bonds would communities again and the tendency is fill a library, but Ave realize that it is a questions, and giving both the banker and the bond man the best view of the present coming business and must be carefully to take p articu lar care in attem pting to get reliable in fo rm atio n on any in v est bond and investment situation in the mid studied. ’ ’ m ents th a t are m ade by the public in A North Dakota Banker: “ Great dle Avest, is Question No. 5, “ What do general in the fu tu re . It will devolve on future for bonds in this community. Peo you think of the future of the bond and the banks, even in th e sm allest commu investment business in your commu ple are beginning to realize the need for nities, to a t least knoAV w here they can diversity of im^estment. ” n ity ?” get such inform ation. T h e N orthwest An Iowa Banker: “ We have been sell Prom the corn prairies of Iowa, the ern B anker is rendering fine service in plains of Nebraska, the dairy commu ing securities now for almost six years. this respect through its editorial and adIt has been our observation that the as nities of Minnesota and the great rural A^ertising columns.’ ’ sections of the Dakotas, came an sistance our bond department renders A Minnesota Banker: “ W e are ju st our customers is really of great help to astonishingly uniform response: “ The bond and investment business in our com our deposits. Of course, if the invest a little bank and our bond business, of munity is rapidly groAving, for we are ment business generally had not become course, is small (com paratively), but we learning the need for diversity of invest so well developed, it would naturally fol have w ondered ju s t w hat effect th is ap low that surplus funds Avould stay in the p aren tly groAving dem and fo r bond in ment.” bank, but that day is past, and savings vestm ent will eventually have on the S in c e th e e n ti r e s u r v e y is a c o n fid e n tia l accounts are useful only to accumulate sm all co u n try bank. o n e, betAveen T h e N orthwestern B anker “ We buy for ourselves, for secondary funds for some definite purpose, such as a n d its r e a d e r s , t h e n a m e o f n o b a n k c a n the purchase of a home, a car, or a rainy- reserves, bonds of various nature, all b e shoAvn in t h is a r tic le . B u t h e re a r e day fund for investment. If Ave are not kinds that you have listed, except Joint j u s t a feAv r e p r e s e n t a t i v e re s p o n s e s to prepared to assist our depositors in the Stock Land Bank, and carry from $120,Q u e stio n N o. 5 : investment of their funds someone else 000.00 to $225,000.00 all the time. If (Continued on page 45) An Iowa Banker: “ The bond and in will. Every bank officer may profit by W h a t th e S u rv ey Show s https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 28 THE NORTHWESTERN BANKER April, 1926 The Romance of a Bond Issue By Leon C. Murdock Coffin, Forman & Co., Chicago REATING anything is a worthwhile job, and while it may seem a far cry from romance to earnings, net assets and liabilities, romance is there just the same, even though it may stretch your imagination to find it—but on the other hand—an investment security house new business department without imagina tion, would not only fail to find the ro mance, but would undoubtedly fail also to find the new business. Building a bond issue is creating, just as surely as is building a machine or a railroad and from t'he time the idea is first conceived until the crinkly, new, green and white parchment bonds are laid away in the safety deposit boxes of the inves tors, each step is one of creation, each operation one that has been carefully planned, superintended and carried out. Now let us see what these steps may be: Down deep in the consciousness of some corporation executive, an idea has ger minated. The company has been success ful, but in an effort to keep up with the times, to progress with its competitors, more money is needed, or perhaps a new building is essential. In any event, the idea continues to grow until it bursts forth into a suggestion before the directorate and application is made to some security house for the size loan deemed necessary. In all probability, no definite type of security has been asked for, the corpora tion being open to suggestion as to just what the market will absorb at that par ticular time, or what type of bonds, notes or debentures their particular circum stances or conditions warrant. The se curity house must stand ready to study the situation, make the proper suggestions and in doing so, look far ahead for both the corporation and for its—new partners to be—the investors. No detail is necessary as to how the corporation picked out its security house, for it is safe to assume that its local bankers were acquainted with some house, or the executives themselves knew the right type of house to handle their business, and negotiations were started. For the sake of example, rather than reality, we will call the corporation the American Manufacturing Company with net assets of $5,000,000 and earnings of $500,000 per annum. The amount of money necessary to carry out their plan of expansion is $2,000,000 and it has been C https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis determined that the securities issued shall be first mortgage, 6 per cent, 20-year bonds. It is the security house’s first task to examine carefully the balance sheets of the American Manufacturing Company, their operating statements and all other available information to ascertain whether or not it is at all interested in the issue. It then discusses the entire situation with the company’s executives until it is satis fied that there is a need for the money, that the amount asked for is possible to obtain, and that the future prospects of the company are such that the interest and sinking fund requirements will be available. All through this preliminary investiga tion, the head of the new business depart ment must bear in mind many things. He must be able to place himself in the shoes of the young bond salesman trying to sell the bonds, and so build the issue that his story to the prospective buyer will be short, simple and to the point. He must know at a glance whether the particular type of business of the com pany is new to the investing public, thus necessitating considerable preliminary ed ucational advertising, or already known, therefore eliminating this necessity. He must know his market and its possibili ties and must also try, in so far as it is possible, to anticipate what the market will be several weeks hence, when the technicalities have all been taken care of, and the issue ready to sell. He must also think in terms of the corporation, taking pains to safeguard its future financing possibilities. Satisfied that his house is interested in the business, a representative is sent to the company’s plants where he studies actual working conditions, meets the man agement, even meets many of the em ployes, all in an effort to satisfy himself that all is well; that the management is efficient, that the organization is so built that the loss of one man would in no way disrupt it, that the buildings are well kept, and, in so far as it is possible for a man not versed in that particularly business to tell, that the plants are operating effi ciently. During all of this time, he must keep his eyes open and his mouth closed. There are many cases where it would disrupt things materially to have it known that L E O N C. M U RD O CK the company was considering some new financing, and so he must keep his own counsel and let no one know his real pur pose. Returning, his report is made, recom mending the purchase of the bonds, sub ject of course to the technical investiga tion that is immediately gotten under way. This investigation consists many times of an engineering survey unless the prelimi nary investigations prove one unnecessary. Audits of the company’s books are made by auditors of prominence; appraisals of the assets of the company are made by accredited appraisors, while all through the entire deal, legal talent passes upon the company’s right to borrow, and upon the legality of each step in the negotia tions. Assuming that all of these are satis factory, the loan is accepted and prepara tions made to expedite the placing of the securities on the market. The terms of the issue have already been decided upon, and the trust deed filed with the trustee contains all of these provisions. The obligations of the issuing company, the manner in which the bonds are to be paid off, redeemed et cetera, requirements for a sinking fund sufficient to provide for the payment of all or a large percentage of the bonds at maturity, are set forth and everything is in readiness for the bonds which are in the hands of the en graver. In the meantime, the security house which may be called the “originating house,” has created what is known as a “buying group” which is designed to re lieve it of a part of its liability and to enlarge the wholesale distribution of the bonds. This group usually consists of two or three houses, each making a large com mitment for the bonds. For the sake of example again, we will (Continued on page 57) April, 1926 THE NORTHWESTERN 29 BANKER How Our Bond Department Helps Our Banking Business In w h ic h bankers tell o f th e benefits o f their bond departments EN years ago the bank in the medium-sized middle western city, that had a “bond department” was deemed by brother bankers as ultra progressive—not to term it, ; ‘queer. ’ ’ “ What?—a bond department, that will eat up all our savings deposits ? No, thank you, ’ ’ said Mr. Banker when some one casually mentioned a bank bond de partment. But times are changing rapidly, and the banking and investment field is no exception to the rule. Today there is a rapidly growing group of banks—not all of them in the larger towns, either—that considers a permanent, and separate bond department a wise step in the conduct of their institution. T h e N orthwestern B anker has made a survey of this tendency and finds some interesting facts thereon. “ If we don’t take care of our deposi to r’s investments, some one else will,” is the belief of Gwyer H. Yates, vice president and cashier of the U. S. Na tional Bank of Omaha. Mr. Yates says: “ We do not, ourselves, maintain a bond department, but our affiliated corporation, the United States Trust Company, has a se curities department through which bonds are bought and sold. T “ W e fe el t h a t a securities or bond de p a rtm e n t in connection w ith th e b a n k is abso lu tely essential, because a larg e num ber of our custom ers a re in v estin g in securities an d i f th e d e p artm e n t w as n o t provided, th ey w ould go elsew here a n d very likely into a com petitive in s titu tio n to m ake purchases. The p u rc h asin g of securities b rin g s th e cu s tom er in to close co n ta ct w ith such a d e p a rt m ent and th e re la tio n sh ip becom es m ore con fid en tia l th a n th e average b a n k in g requires, th u s m ak in g i t q u ite likely th a t th e investor would do his b a n k in g w here th e 'c o n fid e n tia l re la tio n sh ip ’ existed. I t is our opinion th a t every bank, re g ard less o f size, should have a d e p a rtm e n t w here in v estin g custom ers could p urchase securities, or i t sta n d s a chance to lose such custom ers and, needless to say, in v estin g custom ers of a b a n k a re usually th e m ost desirable as they are n o t borrow ers. ’ ’ “ Our bond department, established four years ago, has been of real service to our customers,” declares Irwin J. Green, cashier of the First National Bank of Davenport, Iowa. He continues : ' ‘ O ur bond d e p a rtm e n t was established a b o u t fo u r y e ars ago, th e p rim a ry purpose bein g to serve the investm ent needs o f our depositors. I t has been our p rivilege to https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis W h a t th e B ankers Say: “ If the b a n k does n o t have a b o n d d e p a rtm e n t, the custom er will go elsew here to m ake his p u rc h a s e s /’ “ O u r bon d d e p a rtm e n t has been of re a l service to our own cus tom ers, to o th er investors of th e city a n d a source of satisfactory profit to th e b a n k .” “ T he size of the b a n k has absolutely n o th in g to do w ith the estab lishm ent of a b o n d d e p a rtm e n t.” place several m illions of d ollars of highg ra d e securities in th e hands o f our custom ers d u rin g the period our d e p a rtm e n t has been in o peration. D u rin g th is tim e our savings deposits have g ra d u ally increased. We know of no b e tte r p ro o f of the fa ls ity of the a rg u m e n t th a t the savings deposits in a bank are adversely affected b y recom m ending to custom ers the purchase of investm ents. ' ‘ T his service is being used by h u ndreds of our custom ers, v a ry in g fro m th e in d iv id u al who purchases a $100 bond to th e in vestor who desires em ploym ent fo r larg e sums of money. ‘ ‘ O ur b a n k has an a v era g e of a little m ore th a n five m illion of deposits o f which a p prox im ately th ree-fifth s or th ree m illion, are tim e deposits. W e find enough w ork in th is d e p artm e n t to em ploy th e fu ll tim e of two experienced bond m en. I t is difficult to say how larg e a b a n k should be to j u s tif y the in sta lla tio n of a bond d e p artm e n t, as th is is a m a tte r t h a t depends larg e ly upon the local conditions an d th e clientele of the bank. “ W e have fo u n d th a t our bond d e p a rt m en t has been of re a l service to our own custom ers an d to other investors in th e city an d has been th e source of sa tis fa c to ry p r o f its to the bank. W e th e re fo re believe th a t th e in sta lla tio n of such a d e p a rtm e n t should prove a benefit to th e av erage b a n k a n d its custom ers. ’ ’ That the size of a bank has absolutely nothing to do Avith the advantages or dis advantages of a bond department, is the belief of L. J. Derflinger, cashier, the Cedar Rapids SaAdngs Bank and Trust Company, Cedar Rapids, Iowa. He has some excellent ideas on the subject: “ W e have been selling securities now fo r alm ost six years, th a t is, actively so. I t has been our observation a n d we feel stro n g ly t h a t the a ssistan ce ren d ered by a bond de p a rtm e n t to th e custom ers o f th e in s titu tio n is of considerable value and influence an d cannot help b u t be of benefit to th e de posits. O f course i f th e in v estm e n t business g enerally h ad n o t becom e so well developed, it would n a tu ra lly follow th a t surplus fu n d s would sta y in the bank, b u t th a t day is p a st an d savings accounts have become useful only to accum ulate fu n d s fo r some definite purpose, such as th e purchase of a hom e, a car, fo r the accum ulation of a rain y -d ay fu n d a n d fo r investm ent. I f we a re n o t p re p a re d to a ssist our d epositors in th e in v estm ent of th e ir fu n d s, someone else will. N o t only do we lose c red it fo r h aving re n dered th is assistance, b u t we lose a deposit an d p erh ap s a good com m ission upon th e securities. O f g re a t im portance, too, is the safekeeping d e p artm e n t w here your custom ers ’ securities a re re ta in e d a n d in te re s t collected a n d cred ite d to th e ir accounts. I t is su rp risin g how larg e a n a m o u n t is c red ited every y e ar fro m the safek eep in g d e p artm e n t. ' 'W e a re not p re p are d to te ll you the exact num ber of p ercen tag e of our custom ers th a t use our in v estm en t service. W e have trie d to place all of th e fa c ilitie s of our in s titu tio n b efo re our custom ers an d d aily we hold m any co n su ltatio n s w ith them concerning th e ir investm ent needs. “ A s we see it, th e size of th e b a n k has ab solutely n o th in g w hatever to do w ith the estab lish m en t of a bond d e p artm e n t. We believe th e id ea prevails, a t lea st to some extent, th a t a bond d e p a rtm e n t m eans a se p a ra te room or cage, a d d itio n a l help and a seg reg atio n of securities. A bsolutely n o th in g of the kind. F ir s t of a ll good bonds in your files b rin g sm iles upon the faces of th e b a n k exam iners. These bonds m ake up the secondary reserve a n d how well th ey do answ er th a t purpose. F ro m these bonds held fo r b a n k investm ent, why n o t fu rn ish your custom ers these good issues th a t you yo u rself have purchased w ith confidence? Sell these bonds 'a t the m a r k e t’ a n d re purchase to fill up yo u r reserve account, keeping in m ind, of course, th a t a secondary reserve of bonds m u st be k e p t in p roper balance as to diversification, of in d u strie s a n d m a tu ritie s . H a n d lin g bonds in th is w ay, it will be unnecessary fo r any bank, la rg e or sm all, to increase overhead to sell bonds. ' ' B anks c o n te m p la tin g th e sale of secu ri tie s should n a tu ra lly first o f all, m ake con nections w ith good, reliab le investm ent houses an d th en depend upon them fo r serv ice and advice. N a tu ra lly a n d p ro p e rly so, (Continued on page 56) 30 THE I p illlllllH IIIW I NORTHWESTERN BANKER lllllll lllllll ^ l l l l l l l l ! l l l l l M I I I I I I I I I I I I I I K ^ I ! ^ | | | | | | | | | | j j | P ^ | | | | | | | | | | | | | I M I I I I I I I I I I I I I i r a i l l l l l l l l l l l l l ^ l l l l l l l l l l l l l l K ^ ^ Ph e B o n d S c h o o l r o o m ¡ 1 » ifllllllllllllllll^ lllllllllllllll^ lllllllllllllll^ lllllllllllllll» r a illllllllllllll» ^ |||||||||||||||» ^ ||||||||||||||^ ||||||||||||||^ ||||||||||||||K ^ Editor’s Note:—Realising that even the hanker is not always familiar with the fundamental terms and details of bonds and investments, the N o r th w ester n B a n k er is starting on this gage, a series of “ Questions and Answers” under the heading, “ The Bond Schoolroom.” I f the hanker reader has some particular question in mind concerning any specific phase of the bond and investment business, this magazine will answer it in these columns to the best of its ability. Question : What is ‘ ‘ Collateral Trust ? ’ ’ Answer: Individuals often borrow money by pledging stocks or bonds as col lateral or security, rather than by mort gaging real estate or other property. The same thing is often done by a corpora tion, pledging with a trustee, certain stocks or bonds of their own or other companies to secure a bond issue. These bonds are called collateral trust bonds or notes. Question: What are “ Listed Bonds?” Answer: Listed bonds are those bonds bought and sold on a Stock Exchange. Yet the value of listing a bond is often exaggerated in the mind of the investor, for probably not one per cent of all bond issues are listed bonds and of these, many are not actively traded in. The greatest market for bonds is between the bond houses and their customers, “ Over the counter, ’ ’ in other words. Question: What is a “ Junior Lien?” Answer: When a bond issue is not se cured by a first mortgage on the property, it is “ junior” to the first mortgage bonds of the company and is known as a “ jun io r” lien. The company’s stock is also “ junior” to its bonds, because bonds have a prior claim on the company’s in come. Question: What is the meaning of the term, “ In escrow?” Answer: Bonds are often issued, held or sold subject to future delivery when certain terms and conditions have been complied with. In the meantime they are deposited with a trustee or depository. Such bonds are said to be “ in escrow.” Question: What is a General Morteaere Bond? Answer: The name in this instance is somewhat deceptive. The name origi nated with the subsequent issuance of railroad bonds during the early period when their growth was very rapid. The term is found much in evidence of late among Industrial and Public Utility is sues. It is in reality a second mortgage, the word “ General” being used in place of “ Second” to relieve the second mort gage bonds of a stigma which they would otherwise enjoy. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Question: The word “ bond” means one thing in court, another in finance, an other in insurance, etc., etc., but the fun damental meaning is the same in all cases —what ? Answer: The word “ bond” without qualifications may have various defi nitions, but all “ bonds” —regardless of their individual purposes—are contracts or agreements to perform certain specific obligations, the performance of which is assured by being either directly or col laterally secured by the maker of the bonds. For instance: The bond required by Court is to guar antee appearance. This bond or contract may be issued by financially responsible individuals or by a creditable insurance company. A bond is usually required of a con tractor to insure specific performance of his contract. This bond, in most cases, is issued by an insurance company. A bond issued by an industrial or pub lic service corporation is issued for money advanced and provides for repay ment of funds on a specific date. This bond is usually secured by a mortgage or lien upon property or a specific pledge of general credit or secured by acceptable collateral of various descriptions. A bond issued by a municipality is evi dence of money advanced to the munici pality; has a fixed maturity and is se cured by certain prescribed taxing powers. Bonds as defined in finance also differ April, 1926 from the rest in that they are negotiable and bear a definite rate of interest. Bonds, to use the common interpreta tion of the term, all obligate the maker to perform a specific service, which may or may not include the payment of money. The different titles that bonds bear are employed simply to indicate at sight, in so far as possible, the nature and pur pose of the contract. Question: Wherein does the original definition of a Debenture Bond differ from the now popular interpretation? Answer: A debenture was regarded as a contract for the payment of principal and interest at a given maturity and upon each interest payment, or at regular in tervals, the interest and a certain per centage of the principal was paid, so that upon the arrival of the final maturity date the last fractional payment liqui dated the indebtedness. The coupons in cluded interest and that part of the prin cipal to be serially paid so the face value of the debenture depended upon the exinterest value of the coupons yet to ma ture. The general definition of the word debenture bond today is a note or promise to pay—without a direct pledge of secur ity. Question: What is the meaning of “ Trustee” ? Answer: When property is mortgaged to secure a bond issue, it is pledged to a third party—usually a Trust Company— as Trustee. The Trustee certifies the bonds, is empowered to see that the mort gage provisions are complied with (such payment of insurance, issuance of addi tional bonds, maintenance of depreciation and sinking funds, etc.) and exercises a general supervision over the bond issue. The Trustee in no way guarantees the safety of the bonds. However, it does assume responsibility for the perform ance of the mortgage provisions, and acts strictly in accordance with its require ments as set forth in the mortgage, or Trust Deed. Iowa Bond Dealers Association l'lie N o r t h w e s t e r n B a n k e r is t h e O ff ic ia l P u b l i c a t i o n o f th e I o w a B o n d D e a le r s A s s o c ia tio n O FFIC ERS P r e s i d e n t ................................... ......... W a r r e n H. F e r g u s o n O ttum w a V i c e P r e s i d e n t ..................... ............................F r a n k W e l c h Cedar R ap id s W . H. F E R G U S O N P re sid en t S ecretary-T reasurer . . . . ......................... H. C. P r i e s t e r D avenport H. C. P R I E S T E R Secretary-T reasurer THE April, 1926 K itc H e NORTHWESTERN !f I L L I N O I S J 'l u tc fiin M E R C H A N T S 31 BANKER s B A N K C P C o ? B U I L D I N G |_ llAyL^Ci?Cj(y Investm ent houses are m ost tru ly appraised by the char acter and lo y a lty of th eir c lie n te le — by th eir b a n k in g and in vestm en t affiliations — and by th e resp o n sib ility of the individuals m aking up the firm ..........It is know n that M itch ell H u tch in s numbers am ong its clients m any o f th e m ost substantial banks and investm ent houses in this territory, . . . . The b an k in g affiliations o f M itch e ll H utchins encourage confidence— the Illinois Merchants Trust Com pany, the C on tin en tal and C o m m e rc ia l N a tional Bank and the Forem an Trust and Savings Bank........ D irect private wire connections with Messrs. K idder, P ea b o d y and C o . o f N ew Y ork and B o sto n g ive this house a valuable contact with investment affairs in the E ast........ T h e personnel of the firm com prises these officers and directors— L ester A rm o u r, Robert A . G ardner, James C . H u tch in s, C h a u n c e y K e e p , C h a rles G . K in g , W illia m H. M itch ell, W. E d w in S tan ley and H a ro ld C . S t r o t z ....... B an ks seek in g an in v estm en t co n n ectio n w h ich will be personal in its n ature, and th o ro u g h ly d ep en d ab le in ch aracter, are in vited to co n fe r with o u r officers. M it c h e ll H u t c h in s offers a w id e ra n g e o f s e le c tio n in b o n d s a n d o th e r issues o f ra ilw a y s, in d u s tria ls a n d p u b lic u tilitie s , a n d in m u n ic ip a l a n d g o v e r n m e n t s e c u ritie s . https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis y 32 THE NORTHWESTERN BANKER April, 1926 New Investment Company in Davenport ARNOLD J. BOLDT A R T H U R R. B A IL IE H E R B E R T M. JA C O B S M IS S A N N E I. F E R R Y A NNOUNCEMENT has been made recently of the organization of a new investment bond corporation, the A. J. Boldt & Company, with head quarters in Davenport, Iowa. The com pany will deal in high grade investment securities, and will have its offices at 401 Putnam Building, Davenport. Heading the new company are four ex perienced bond merchants, all well known in the Tri-cities and eastern Iowa. They are A. J. Boldt, A. R. Bailie, H. M. Jacobs, Glenn L. Peebler and Miss Ann I. Ferry. Mr. Boldt has been with Priester, Quail & Cundy, a Davenport bond house, since its organization, and before that was con nected with Litten & Roberts, a bond house in Rock Island, Illinois. He is a native of Davenport. Mr. Bailie is also an experienced bond man, who for the past several years has been with Priester, Quail & Cundy, of Davenport. Mr. Jacobs has also been a member of the Priester, Quail and Cundy organiza tion, where he was engaged in the pur chase and sale of high grade investment bonds. All three of the men are grad uates of the University of Wisconsin. Miss Ferry has been with Litten & Roberts for the past seven years, and is well versed in the bond business. She will be the office manager of the new firm. Glenn L. Peebler, who was formerly connected with the First National bank of Davenport, and prior to that time as sistant cashier of the First National of Fairfield, will divide his time betwTeen Davenport, Rock Island and Moline and eastern Iowa bank business. Building a “ Financial Structure’’ No well-defined financial program is complete without a carefully conceived plan of accumulation, says A. E. Bryson, vice president of Halsey, Stuart and Co., investment bankers of Chicago, in a re cent radio address over the Chicago Daily News broadcasting station. Speaking specifically of bonds, he said in p a r t: In most cases, such a program will lead the investor to the choice of sound, interest-bearing bonds, as the most logi cal materials for building the financial structure that he is endeavoring to rear. He will go further than merely to decide on bonds, however; he will, with the help of his investment banker, evolve a sound investment policy which will protect him fu rth er; he will diversify his invest ments, minimizing the slight risk that must always prevail even among the soundest securities, by carefully balanc ing the type of bonds, maturity, geo graphical distribution, management, mar ketability, and yield. He will, moreover, choose bonds which will suit his individu al requirements as to taxable status and salability. He will have his holdings re viewed periodically to assure that their original security remains unimpaired. Above all, he will choose his investment banker most carefully, and, having so chosen, he will make of him a confidant, realizing that it is only with full knowl edge of his situation, his ambition, his responsibilities, and his various invest ment holdings, that really intelligent and professional investment counsel can be given and expected. With these three things-—a financial goal in life, a plan of attaining it, and a well-defined investment policy governing the selection of individual issues—the guess-work in life’s financial journey is largely eliminated. You can know where you are going, why you are headed in that direction, and just how and when you will arrive. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis To form the complete poet, neither the heart only, nor head only, is sufficient; the complete poet must have a heart in his brain, or a brain in his heart.—Darley. A pril, 1926 PIONEERS IN PUBLIC SERVICE Service to the Investor Backed by Intimate Experience NG and successful experience in the deLOJ velopm ent and financing o f utility properties qualifies the Byllesby organization as an author ity in public utility securities. In addition to the securities o f Byllesby man aged companies, serving a m illion customers in eighteen states, we offer to investors other utility issues, also government, municipal, railroad and industrial securities. W e are equipped to furnish prompt service in handling customers’ orders for listed and un listed securities, through direct wires connecting our principal Eastern and W estern offices. Our Investors Service Department furnishes dependable information, upon request, on gen eral and specific subjects relating to investment securities. It also conducts an investment-bymail service of wide extent. “Scope and Service”, our new booklet on the Byllesby organization, and a copy of the Byllesby Monthly News will be sent upon request. Ask for booklet AU-342. H. M. Byllesby 8i Co. Inyestment Securities 231 South La Salle Street, Chicago NEW YORK DETROIT BOSTON MINNEAPOLIS PHILADELPHIA ST. PAUL PROVIDENCE KANSAS CITY Investments Backed by Successful Engineering-Management https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis THE NORTHWESTERN BANKER April, 1926 IN TH E O PIN IO N OF C O U N SEL T H E SE BO N D S A R E E X E M P T FROM TH E O PER A TIO N OF TH E B L U E SK Y LA W IN TH E STA TE OF IO W A $ 750,000 T h e B artles-M aguire Oil C om pany MILWAUKEE, WIS. First (Closed) M ortgage Sinking Fund 61%Gold Bonds D ated M a rc h 1, 1926 D ue M a rc h 1, 1936 A uthorized and o utstan ding $ 750 ,0 0 0 . R edeem able as a w hole or in part at 105 on any in te r est date on 30 d a y s’ notice. P rin cip al and in terest (M arch 1st and Septem ber 1st) payable at the Chicago T rust Company, Chicago, T rustee. D enom in ations: $1,000, $500 and $100. IN T E R E ST PA Y A B LE W ITH O UT DEDU C TIO N FOR NORMAL FE D E R A L INCOME TAX, NOT IN E X C E SS OF 2 % The inform ation given below is talcen from a letter from Mr. A . G. Maguire, President H IS T O R Y A N D B U S I N E S S : The B a rtle s-M a g u ire Oil Com pany w as in co rp o ra te d in 1909 to deal in petro leu m p ro d u c ts a n d to acquire, own a n d c ontrol re al e sta te in cid e n t to such business. T he sales o f th e com pany have shown a n orm al increase each y e a r since o rg an izatio n , ru n n in g fro m $111,000 in 1909 to ap p ro x im ate ly $1,900,000 in 1925. T he o rig in a l and only c a p ita l p a id in to th e business w as $10,000 in 1909, fro m w hich c a p ita l th e p re sen t business has been b u ilt. D ividends have been p a id re g u la rly on th e P re fe rre d S tock since 1912 a n d upon th e Common S tock since 1921. S E C U R IT Y : T hese first m o rtg a g e bonds a re a d ire c t o b lig atio n o f th e com pany, secured by m o rtg a g e upon a ll th e fixed assets o f th e com pany, in clu d in g valuable re al e sta te holdings, d is trib u tin g equipm ent a n d m odern refinery. E A R N IN G S : E a rn in g s availab le fo r in te re s t charges a f te r d e p rec ia tio n an d a ll taxes, except incom e taxes, a n d including c e r ta in n o n -rec u rrin g charges, have av erag ed fo r th e p a s t fo u r y e ars $135,165 per year. I t is conservatively estim a te d th a t e arn in g s w ill be a t le a st doubled due to a cq u isitio n of refinery. I n no y ear since 1910 has th e com pany fa ile d to show su b s ta n tia l n e t earn in g s. ASSETS: N e t c u rre n t assets as of D ecem ber 31, 1925, as in d ic a te d by balance sheet, w ere $333,809 an d n e t tan g ib le assets applicab le to these bonds w ere $1,637,835. N e t ta n g ib le a sse ts a re $2,183 per th o u sa n d dollar bond. C u rren t a ssets m ust a t all tim es be n o t less th a n 200% of c u rre n t lia b ilitie s, in c lu d in g as a c u rre n t lia b ility , th e n e x t s in k in g f u n d p a y m e n t a n d in s ta llm e n t o f in te re s t. S I N K I N G F U N D : The com pany w ill p a y a n n u ally to th e tru stee , e ith e r in cash or p a r value o f bonds, a n am ount equal to 20% o f th e n et e arn in g s fo r th e p receding year, except th a t th e m inim um pay m en ts shall be as fo llo w s: M arch 1st, 1927— $30,000 M arch 1st, 1928— 35,000 M arch 1st, 1929— 35,000 M arch 1st, 1930— $10,000 M arch 1st, 1931— 40,000 M arch 1st, 1932— 45,000 M arch 1st, 1933— $45,000 M arch 1st, 1934— 50,000 M arch 1st, 1935— 50,000 Sinking fu n d paym ents if in cash shall be used by th e tru s te e to purchase bonds in th e open m a rk e t a t n o t exceeding the call price, or if n o t so o b tain a b le , to call th e sam e by lo t in a m an n er sa tis fa c to ry to th e tru stee . L egal proceedings in connection w ith th is issu e to he approved by M essrs. C assels, P otter & B entley, Chicago, for th e B ankers, and M essrs. F ish, M arshutz & H offman, M ilw aukee, for th e Company. A pprais als by Am erican A ppraisal Company. A udit b y Cherry, C heyne & Company, Certified P u b lic A ccountants. T hese bonds are offered when, as and if issu ed and received by us, subject to th e approval by Counsel. Price 100 and Accrued Interest, to Yield 6%% Send fo r Illustrated Circular Ba r tlett & G ordon INCORPORATED First W isconsin N at’l Bank Bldg. MILWAUKEE First National Bank Bldg. CHICAGO The statements herein made are summarized from reports and other information we believe to be entirely reliable, being the data upon which we have acted in purchasing these securities for our own account. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis April, 1926 THE M r. Hastings describes in this article some of the ways the correspondent bank can aid the country banker in his investment problems. By E. T. Hastings N ational Republic Company, Chicago HE investment of bank funds in bonds is a subject which is being widely discussed today. Banks are formulating investment policies govern ing the investment of secondary reserve funds at attractive rates in securities which do not imperil the liquid condi tion of these institutions. In general, the fundamentals incorporated in any invest ment policy are safety, rate and market ability. Assuming these are present, it remains to determine from whom securi ties are to be purchased. In the bank investment field 'there is a realization that bond purchases for the investment of bank funds should be made absolutely upon an investment basis. This precludes the purchase of bonds upon “ friendship” or “ personality” basis. The house, not the salesmen—the bank, not the representative, is re sponsible for the advice and counsel in which absolute confidence and reliance are placed. The bank which has carried its account with the same reserve city bank for a number of years has evidenced its confi dence in, and reliance upon, that institu tion’s integrity and financial wisdom. It is acquainted with that institution’s business methods and policies and can rely upon its reserve city bank’s recom mendations for the investment of bank funds. Confidence has been established, asociation has warranted reliance in that institution’s judgment, and the bank is fully cognizant of its reserve city bank’s ability to work intelligently with it on investment problems. There was a time when the large bank ing institutions of the country did not maintain bond departments to take care of the investment requirements of their correspondent banks. More recently the services of city banks have been extended, and practically without exception, de partments to handle investment securities are operated. These institutions are pre pared and able to give an investment service comparable with any to be found. Usually they are constantly in the mar ket for investment bonds for their own funds, so, from their own experience and broad knowledge of bank investment re quirements, they are qualified to offer an intelligent and comprehensive investment service. T https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NORTHWESTERN BANKER 35 Your Correspondent’s Bond D epartm ent —Its Functions and Importance the firm belief that conscientious service insures steady earning power. “A b a n k ’s b o n d hold in g s are a p ro While no bank guarantees the securi tectio n against the unexpected, they are ties which it recommends a moral re a secondary lin e of defense, hence sponsibility constantly requires such in every m eans of selecting sou n d in v est stitutions to keep informed concerning m ents deserves em ploym ent. T he re serve city b a n k has m en of a b ility at the financial standing of the company th e service of its co rresp o n d en ts, a p o l whose securities it has recommended. icy of the greatest service fo r th e g reat Changes in conditions affect the credit est n u m b e r of years governs its in v est standing of the business and a security m en t re co m m e n d a tio n s; facilities fo r checking a b o n d ’s re al value are a v ail entitled to a high rating today may to able an d a tru e in te re st in th e b a n k ’s morrow suffer a loss of credit rating and investm ent hold in g s influence all trad e market value. To keep advised concern suggestions.” ing the credit standing of these com panies requires the constant maintenance IUlllllllllllllllllllllllltllllUlilllllllllllimilllimiltlllllltllli|ii|i||imi|ii|i||i|ii|imitiiMMiiiilM|i|i||ii..iii..|. of expensive facilities. Many banks Consideration should be given to the cannot afford such facilities, but they fact that these organizations are main should have them at their command. An tained directly under the control of the institution offering this service with its leading investment specialists of the investment recommendations deserves country. The size of these institutions, careful consideration from the bank pur the volume of business turnover and the chasing bonds. Here is a safeguard steady earning power of these banks en which can be thrown about the bank’s ables them to pay highly trained men investment holdings at no additional cost. This leads logically to the subject of their price for their services. The cor respondent bank thus receives the advice trades, that is, the exchange of present of men whom it could not afford to retain. security holdings for other securities The service is free and the suggestions which are now attractive from a security, are unbiased and unprejudiced. The rate or market standpoint. Too often opinions of men of this caliber represent the practice of trading in securities is the accumulated knowledge of specialists abused. In any rising market high grade brought to bear upon the value of the issues constantly tend to sell at higher prices and to yield lower returns, bringing investment under question. Primarily the reserve city bank is a the temptation to obtain higher rates banking institution established and oper often only obtainable by making trades ated as is any other bank for the pur at the sacrifice of security. This practice pose of earning dividends upon its stock. may gradually convert the A1 bonds in The value of its stock partially depends a bank’s account into bonds which pay upon the constant earning record of the better rates but are deficient in security. institution. Therefore, it is more essen Unless the trading in a bank’s account tial to have bank accounts paying satis is handled, first, by men, who know se factory profits month in and month out, curity values, and secondly by men who over a period of years, than it is to sell have at heart the interest of the ac investment securities which pay a larger count, a bank may find that its security commission immediately, but which hold list, once made up of issues a bank can such risks and speculative hazards as safely hold, has become a list of issues will undermine the confidence of corre which eventually causes grief. spondent banks. From a dollars-andCoupled with this must be an under cents standpoint reserve city banks can standing of the peculiar conditions ob not afford to recommend securities of a taining in any particular community. speculative nature if through one sale of The banks in one section of the country securities is lost the business of a bank frequently' have a heavy local demand which has for years paid a steady profit for money, due to local conditions, which on its account. These institutions render forces them to liquidate a portion of an investment service which emphasizes their secondary reserve. The banks ip the necessity for sound investment ad another section of the country may have vice at the sacrifice of profits today in (Continued on page 55) iimiiiiiimiiiiiiiiiiiiiiiiiiiiiiiiiifmiiiiiiiiiiiiiiiiiiiiiimiiiiiiiiiiMiiiMtiiiiiiiiimiimiiiiiiiiiiiiiiiiliitllliliiuiiiiili T II E 3G NORTHWESTERN April, 1926 BANKER How Much Do You Know A bout the Bond Business? D o you know how a Bond House buys the bonds which it afterw ards sells to you? —how it investigates these bonds—and why? —w h a t i t does to p r o te c t its ow n funds—and yours? O ' —how long it takes to prepare a bond issue b e fo re p re s e n tin g i t to th e Public? loqo »SW'»'' if4« T I! »I'/ —how the Bond House m akes its profits? These questions, an d m any others, are answered in our booklet, “ T h e Inside W orkings of a Bond, H o u se” —a plain, understandable story of our purchase of a typical bond issue. f n' I t is, as its nam e implies, a “ close-up” of th e bond business, a view “ behind th e scenes” into th e m ost im p o rtan t (b u t least known) d ep artm en t of a bond house—the B uying D epartm ent. A copy o f this booklet will be sent you on request fo r Booklet T-4 ,k :m Sr f? £ '/ if L T h o m p s o n R o s s & C o .im . E S T A B L I S H E D 1912 INVESTMENT SECURITIES Bank Floor NEWYORK BOSTON https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis * 29 South L a Salle S treet C H I C A G O Telephone Randolph 6030 DES MOINES SAN FRANCISCO April, 1926 THE NORTHWESTERN BANKER 37 Railroad Equipment Trust Obligations Their advantages to the railroads and to the investors By R . E. Prochnow President, B. E. Prochnow “ T T O W do Equipment Trust obliga- t tions differ from other obliga tions of the railroads?” ‘1What advantages, if any, do they offer to the railroads?” “ Wherein lies their attractiveness to the investor?”’ T h e q u e s tio n s a r e o f t e n a s k e d a n d in o r d e r to a n s w e r th e s e q u e s tio n s i n t e l l i g e n tly , i t is n e c e s s a r y to go b a c k a b i t i n to th e h i s t o r y o f t h is p a r t i c u l a r ty p e o f fin a n c in g . T h e E q u ip m e n t T r u s t p la n Avas firs t a d o p te d s h o r t l y a f t e r th e C iv il W a r b y s e v e ra l o f t h e r a il r o a d s , w ho, fin d in g th e m se lv e s in a w e a k e n e d fin a n c ia l p o s i t io n a n d u n a b le to m e e t th e d e m a n d s m a d e u p o n t h e i r r e s o u rc e s to c o p e w ith th e r a p i d e x p a n s io n d u e to post-A var c o n d itio n s , u s e d t h is m e th o d o f a c q u ir in g a d d i ti o n a l r o l li n g s to c k . T h e ir o rig in a l c a p i t a l iz a ti o n h a d b e e n la r g e ly c o n v e rte d in to t e r m i n a l p r o p e r t i e s , r o a d c o n s tr u c tio n a n d o t h e r p e r m a n e n t f a c i li t ie s , a g a i n s t w h ic h lo n g -te rm lo a n s h a d b e e n c o n tr a c te d . A s th e m o re p e r is h a b le r o ll in g s to c k w o re o u t, a n d i ts r e p la c e m e n t b e c a m e n e c e s s a ry , th e r o a d s Avere c o n f r o n t e d w ith th e p ro b le m o f fin a n c in g th e p u r c h a s e o f n e w e q u ip m e n t. T h e re w e re th r e e p o s s ib le Avays o p e n to t h e m : F i r s t , u s in g c u r r e n t f u n d s ; se c o n d , b u y in g t h is e q u ip m e n t o u t o f c u r r e n t e a r n in g s , a n d t h ir d , b u y in g i t f r o m th e p ro c e e d s o f a neAv lo a n . T h e tAA7o f o r m e r e x p e d ie n ts a p p e a r e d u n d e s ir a b le a n d u n p r a c tic a b le , a n d y e t th e r a il r o a d s w e re r e l u c t a n t to in c r e a s e t h e i r r e g u la r f u n d e d in d e b te d n e s s . So t h e y m a d e a r r a n g e m e n ts Avith th e c a r b u ild e r s to p a y th e m u p o n d e liv e ry o f th e r o llin g s to c k f r o m 10 p e r c e n t to 25 p e r c e n t in cash a n d th e b a la n c e in th e f o r m o f n o te s u s u a lly m a t u r i n g s e r ia lly o v e r a p e r io d o f y e ars. e v e ry r a il r o a d re c o g n iz e s th e a d v a n ta g e o f t h is p la n . F r o m th e i n v e s t o r ’s s t a n d p o in t , r a i l ro a d e q u ip m e n t o r c a r - t r u s t c e rtific a te s , a s t h e y a r e f r e q u e n t ly c a lle d , o ffe r s p e c ia l a t t r a c t i o n s . N o fo rm o f ra ilro a d b o n d s, o r d i n a r i l y s p e a k in g , r a n k s so h ig h . C e r ta in ly m o rtg a g e b o n d s do n o t. S in c e e q u ip m e n t p a y m e n ts a r e t a k e n f r o m o p e r a t i n g in c o m e a h e a d o f b o n d c h a rg e s , e q u ip m e n t t r u s t o b lig a tio n s r a n k h ig h e r in q u a lity t h a n a r o a d ’s b e st m o rtg a g e issu e . A r a il r o a d c o m p a n y ’s lo c o m o tiv e a n d c a r s o b v io u s ly a r e in d is p e n s a b le to o p e r a tio n , a n d i t is th is Avhich g iv e s g ilte d g e r a t i n g s to e q u ip m e n ts , e v e n w h e n b a c k e d b y r o a d s s c a rc e ly e a r n in g t h e i r fixed c h a rg e s . E q u ip m e n t t r u s t s d iffe r f r o m m o r t g a g e s in f u n d a m e n ta l c h a r a c t e r , f o r t i t l e to e q u ip m e n t p u r c h a s e d Avith b o rro w e d f u n d s d o e s n o t p a s s to th e r a il r o a d u n t il th e l a s t s e rie s o f a n o b lig a tio n h a s b e e n p a id . I n o t h e r Avords, i n v e s to r s , th r o u g h t h e i r t r u s t e e , s im p ly sell e n g in e s a n d c a r s to th e r o a d c o n d itio n a lly . T h e p r o p e r t y is u s e d b y th e r a i l r o a d in th e m e a n tim e , o f c o u rs e , b u t c a r e f u l re c o r d is k e p t o f e a c h p ie c e o f e q u ip m e n t b y th e tr u s t e e , a n d s in c e f u l l le g a l t i t l e is v e s te d in th e t r u s t e e f o r th e b e n e fit o f th e b o n d h o ld e rs , th e r o a d m u s t c o m p ly r ig id ly to v a r io u s c o n d itio n s g o v e r n in g c a re a n d u p k e e p . I n th e eA^ent o f d e f a u lt in in te r e s t o r p r i n c i p a l p a y m e n ts , th e t r u s t e e m a y r e ta k e th e e q u ip m e n t a n d se ll i t to som e https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis other railro ad fo r the benefit of the bond holders. From an actual agreem ent let me quote p artially to shoAv you how tig h t these leases are draAvn: “ In case such re ta k ing is had . . . . the railro ad com pany Avill, a t its OAvn expense, fo rth w ith and in the usual m anner and a t the usual speed of fre ig h t train s, draw the said cars to such points on its railro ad as shall reasonably be designated by the lessor, and Avill th ere deliver the same to the lessor.” Notice, the trustee in fulfilling his tru st is not obliged to search the coun try fo r the equipm ent, b u t he sim ply de mands its being a t a certain point, and the burden is the ra ilro a d ’s to see th a t it gets there. T h a t th e d e s i r a b i l it y o f e q u ip m e n t t r u s t s e c u ritie s a s a f o r m o f in v e s tm e n t is firm ly g ro u n d e d , is b e s t e v id e n c e d b y m o v e m e n ts o n f o o t b y v a r io u s s t a te s to m a k e t h is f o r m o f s e c u r ity le g a l in v e s t m e n t f o r s a v in g s b a n k s , a n d a ls o in s t a te s Avhere e q u ip m e n t t r u s t c e rtific a te s a re a lr e a d y le g a l to p e r m i t s u c h i n s t it u t io n s to in v e s t e v e n a g r e a t e r p e r c e n ta g e o f t h e i r f u n d s in t h is ty p e o f s e c u rity . In reading a trust agreement of the present day one immediately comes to the conclusion that it is very exacting in its requirements for the protection of bond holders. The development of this docu ment of legal and financial principle of safety has been remarkable. H oav well the tru s t deed has served its J K Safe Bonds for Banks W e ll-in fo rm e d a n d f a r-s e e in g m a n a g e rs o f r a il r o a d s Avere q u ic k to se iz e t h is p la n a s a lin e o f c r e d i t f o r i n c r e a s in g t h e i r r o a d ’s c a r r y i n g c a p a c ity . It appealed to them because, under this plan and distribution of maturities, the principal and interest payments could be made out of actual earnings from operations of the equipment purchased and the equipment would practically pay for itself. In this manner the railroads discharged the debt during the life of the equipment. The idea grew rapidly in popularity and favor. And, today, Co., Inc., Chicago yesterday — today — tomorrow H a n n a - Sh r e v e s Co . B onds fo r In v e stm e n t B u rlin g to n ^ M uscatine W aterloo <r THE 38 NORTHWESTERN BANKER Security— Sales Service T h e reco m m e n d a tio n of th e W h ite -P h illip s Co. is ta k e n by h u n d re d s of b an k s an d b a n k ers as d e p e n d a b le evidence of th e Safety oi a B o n d Issue. In th e case of all issues recom m ended th e S E C U R IT Y o f th e in terests of o u r clients com es first. O u r second fu n c tio n is d is trib u tio n — SALES — th e process of issuing B onds to investors w ho w ish to b u y th em . T h e th ir d fu n ctio n is SE R V IC E to o u r clients — a n d th is m eans co n stan t a tte n tio n to th e in d iv id u a l in v esto r’s need s— th e giving freely of th e in v estm en t ex p erien ce of th is o rg an ization. It is th is th ir d item — S E R V IC E —we believe, th a t accounts fo r o u r grow ing list of b a n k clients. O urs is th e ty p e of service th a t w ill p lease y o u also. • A rep resen ta tive w ill gladly e x p la in our service w ith o u t obligation A n In vestm en t B anking H ouse o f Service DUBUQUE, IOWA DES MOINES, IOWA B. & I. Building 219 Securities Bldg. DAVENPORT, IOWA First N a t’l Bank Bldg. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis OMAHA, NEBRASKA Bankers Reserve L ife Bldg. CHICAGO 137 S. La Salle St. April, 1926 purpose even in the days when not so carefully drawn as at present, is evi denced by the history of equipment trust obligations when put to the test of re ceiverships and reorganizations. In 1886, the Denver & Rio Grande re organization after foreclosure, owed $3,476,000 in 6 per cent and 7 per cent equip ments. It was in adjudication of these bonds that Judge Hallett in the United States Circuit Court rendered this deci sion: lie held that “car trusts, prin cipal and interest, are preferred securi ties to all mortgage claims and must be paid out of the revenue of the property, the same as wages and labor.” Under the agreement with the car trust holders, $600,000 of the bonds were paid in full and the remainder exchanged for con solidated mortgage bonds and preferred stock that later were worth about 40 per cent cent more than the equipment obli gations originally owned. During the receivership of the Denver & Rio Grande, no other issues received interest, and it is also interesting to know that this is one of the very few, if not the only case in which cash in full was not paid in receivership on maturing principal and interest of equipments, and in all cases of exception to the general rule, it is to be remembered that the con sent of a majority of the bondholders was, of necessity, first obtained. Here is another: In 1895, the Atchi son, Topeka & Santa Fe was reorganized after foreclosure. During receivership, the court authorized payments of inter est and maturing principal on over $2,000,000 of equipment obligations. In terest was defaulted on the mortgage bonds. Practically all other securities were reduced in rate or refunded at less amount. Of equipments the reorganiza tion plan says : ‘ ‘ These constitute charges upon the revenues of the company prior to the general mortgage bonds, the inter est and installments on the same having been paid under the order of the court by the receivers.” There are many such instances, but the foregoing will convey my point to you. Courts, both state and Federal, have in receivership usually authorized the issu ance of receivers’ certificates or other wise have provided for the prompt pay ment of interest and maturing principal on a virtual parity with the payment of wages and the purchase of necessary ma terials and supplies. We all know that the finest railway right-of-way, the most advantageously located stations, the best developed terri tory for traffic, is of absolutely no avail without cars and locomotives to earn revenue. A railroad must meet its equip ment bond obligations. Imagination is the essential thing; with out it poetry is as sounding brass or a tinkling cymbal.—Stedman. THE A p ril, 1926 N O R T H W E S T E R N BANKER 39 JVhat Financial Advertising Does for the Investor Financial advertising points out the straight and marked path to wealth for Mr. Average Man 4t~|—FINANCIAL advertising,” it has I ’ been said, ‘ ‘ is the signpost point ing out the pathway to successful investment.” Occasionally an investor may find a quicker path to wealth, but for Mr. Average Man, the straight and well-marked road is usually the best. Speaking over the radio, C. J. Keller, Chicago manager for Doremus & Com pany, has the following to say, in part, regarding “ What financial advertising is doing for the investor: ’’ 1‘ Financial advertising is the sign post pointing out the way. The road itself (and there are good roads and bad roads), is the investment house. In the main these are legitimate companies whose business is the buying and sell ing of bonds, stocks, mortgages and other securities. This business follows the principles underlying any other business. For example, it is exactly like the buying and selling of groceries—and the invest ment house is subject to very much the same hazards. The reputable investment houses try to satisfy and protect their customers and to keep them. They do this by a conscientious effort to carry reliable securities, and to give out re liable information regarding these securi ties. They advertise—they point out the way. The wise investor reads the signs —and studies the roads. It is really sur prising how safely and comfortably an inexperienced investor can get along if he keeps his eyes open, uses a little com mon sense, and is not lured into putting his money into some get-rich-quick scheme. About $500,000,000 a year is the price gullible Americans pay for a dream of wealth-—and a dream only. Think of it, $500,000,000 every year—wasted—gone, and most of this money comes from the little fellow who works hard for a salary of less than $5,000 a year. “ Here is where the signpost—financial advertising—plays the part of a trust worthy guide. It points out the way to investments rather than speculation. ‘ (Let me tell you what financial adver tising really is, so that you will recog nize it, and perhaps read it. “ All the first-class, reputable news papers and most of the better-grade magazines carry this kind of advertising. You will find in your morning or evening papers in the section where bank clear ings, market reports and transactions of the stock exchange and board of trade are printed, notices reading something like this: ‘New Issue, $17,500,000 Mar https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis shall Field & Company, 4y2 per cent De is not only on financial advertising. You benture Gold Bonds. ’ Then follows a are all familiar with the steps taken dur description in detail of the history and ing the past few years to cut out fake business of Marshall Field & Company, patent medicines, quack doctors, and security, earnings, assets, purpose of is other skin-em-alive propositions. This sue, etc., showing also the name of the insistence for truth in advertising is one company or several companies offering duty of the press, because the press is a public service enterprise, and must take these securities. “ This is an announcement of what the a responsible attitude and not permit any particular investment house has to sell— but legitimate financial advertising to ap quite like your grocer’s price list—butter pear in print. 40 cents a pound—apples 30 cents a bas “ All this works out directly for the ket. The difference lies, of course, in the public benefit in this way. The publie fact that the grocer sells his goods for cannot be expected to show the same consumption. The investment house discrimination in the purchase of securi really sells in its goods a working or earn ties that it shows in the purchase of any ing arrangement for the investor’s household commodity, like a table cloth money. This type of financial advertis or a bucket. When I speak of the public, ing is just a plain statement of the nature I mean the average investor—-the man of the goods, or securities, the investment whose business is not finance. In short, the everyday American from the corner house offers to the public. ‘1There is another type of financial ad storekeeper to the big executive. These vertising easily recognizable which reads people cannot shop around for their in very much like this : 1The Confidence of vestments like the man looking for a Investors Won Through Fifty Years’ good used car, or the woman running Experience, E tc.’ This kind of advertis down a bargain in dress goods. Buying ing is a publicity effort of the investment securities to the average investor is just house to point out to the public some of the purchase of pieces of engraved paper. the characteristics and experience that What this paper actually represents, its have helped build up a successful busi real value, reliability, and condition, is a ness. It is an expression of pride, of study in itself. service and of good will. It is a sign post “ This study and knowledge rightfully that points out not only the way, but says belong to every investor, but often con also something about the character of the ditions prevent the investor from devot road. Advertising of this kind, whether ing the time and application necessary financial or grocery, tells you something to complete understanding. What hap about the people you are dealing with— pens ? The investor depends upon his in which is just as important, and perhaps vestment banker. From reading finan more so, than the goods you buy. This cial advertising and from experience, the type of financial advertising therefore is investor learns the names of reputable well worth the attention of the investor houses. A few minutes spent on the in order to familiarize himself with the financial pages, and he absorbs an idea of name and character of the reputable in the worth and prestige of these houses. vestment houses. He also reads the current offerings. Even “ Advertising, of course, like word of tually he learns that he can trust the mouth, is subject to some of the common recommendations and judgments of cer everyday human shortcomings. It some tain companies. As a result, he wisely times exaggerates, sometimes fails to tell invests some of his money. It works for the wdiole story, often is tiresome. But him; produces an income. He creates an the tendency nowadays is to get dowm to estate. His earnings increase. A glow brass tacks, to cut out the flourishes, to of satisfaction infuses the investor—the make a statement of fact, direct, simple satisfaction that comes from seeing safely and understandable. In the main, ad invested money grow—the satisfaction vertising is truthful for purely business that comes from providing carefully for reasons. The best newspapers can do better living conditions—for the chil more through intelligent censorship of dren’s education—for old age. It is a financial advertising and through their duty of every man to provide for him news and editorials, to prevent the sale self and his dependents. The road to of fraudulent securities than all the blue- this goal is careful investment of money. sky laws put together. This censorship There is no other satisfactory way to on the part of newspapers and magazines gain the same end. 40 THE NORTHWESTERN B onds for In v e s t m e n t G o v e r n m e n t R a il r o a d R M I P u r l ic E e a l s t a t e u n ic ip a l n d u s t r ia l U t il it y r|ïic Commercial R ational (ompany INVESTMENT SECUHITIES W A T E R L O O , IO W A A ff i li a t e d w i t h t h e C O M M E R C I A L N A T I O N A L B A N K https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BANKER April, 1926 “ Furthermore, regular reading of financial advertising protects the investor in this way. Millions of dollars are lost annually because of neglect to take ad vantage of the conversion privileges of certain bonds. If these investors had watched financial advertisements they would have seen the announcements of the date of expiration privileges, and would have protected themselves accord ingly. For example : on May 1st this year holders of approximately $12 ,000,000 New York Central Railroad convert ible debenture bonds had failed to ex change them for stock of the road before expiration of the conversion privilege on that date. Failure to take advantage of this conversion privilege represented a loss of more than $800,000 which the hold ers of these bonds should have secured by converting or selling their bonds be fore the expiration of the privilege. “ Investment holdings are now spread widely throughout the country, wliile before the war the number of investors was comparatively small. Americans as a nation are the greatest body of bond owners in thé world, numbering approxi mately 4,000,000 people. Naturally di rect personal contact between the invest ment houses and all these people is physi cally impossible. Financial advertising then becomes not only a sign post point ing the way to the investor and a guide to him, but it serves also as a news con tact. The investor should respect his own investments enough to maintain his end of this contact. “ A few minutes each day spent in glancing over the financial pages keeps the investor informed of developments in the financial world. This knowledge will help him as much in business activities as in his personal investments. It is a duty every man owes to the dollars put out to work for him. We watch the men we hire—we are quick to make a change if we find one of our woi'kmen loafing on the job. An easy way to keep a watch ful eye on our precious dollars, which work so diligently for us when well di rected, and which loaf miserably or dis appear if we neglect them, is to form the habit of reading financial news and ad vertising. ’ ’ Of Value to Merchants A book of great value to merchants and retailers in almost any line of busi ness has just been published by Ernst & Ernst, certified public accountants with offices in all the principal cities. The book is entitled ‘ ‘ The Retail Inventory Method and Store Budget Control,” pre pared and published in the interest of better business. The retail inventory method is described as the simplest, soundest and most satisfactory system of accounting for retail stores, and the book explains this method in detail. A pril, 1926 THE With First Illinois Company George Powell, until recently affiliated with II. M. Byllesby & Company, is now associated with the First Illinois Com pany, underwriters and participating dis tributors of investment securities, as Chi cago city sales manager. The company lias offices in Chicago, Aurora and Springfield, Illinois, and in St. Louis, Missouri. Bonds Hold Steady During fluctuations of the common stock of a company what happens to its bonds? ‘‘Bond Briefs,” issued by the Northern Trust Company, of Chicago, answers this question as follows: “ Although it is of course widely recog nized that common stock prices, as a rule, fluctuate much more widely than bond prices, this contrast is seldom brought out so strikingly as during the past few weeks. It is interesting to note that from February 23d to March 3d the stock of one of the leading companies of the world declined over 80 points, while its bonds fluctuated within a range of less than 1 point. Of course, stock fluctua tion is often up instead of down, but ex amples such as this serve as a reminder that bonds as a class provide a much higher degree of market stability than stocks.” A Fundamental of Stability ‘ ‘ Other factors being equal, commodi ties which are sold for immediate con sumption usually give a basis for more stable earnings than commodities which are used over a long period. That is be cause it is easier to postpone the pur chase of commodities which are used up slowly than commodities more quickly consumed. For example, in hard times the owner of an automobile may attempt to prolong its life over a long period so as to avoid buying a new car, but he can not drive even his old car without con suming gasoline. As a result, the demand for gasoline is more stable than for auto mobiles. ‘ ‘ The same general principle holds in other lines. It is the factor which con tributes to make the demand for shoes more stable than for overcoats, and for matches more stable than for kitchen stoves. ‘ ‘ To review what has been pointed out in former articles, the fundamental basis of bond security is stability of earnings. Relative importance, low price, and im mediate consumption of a commodity, are all factors which tend to make the de mand for it stable.” —From “ Bond Briefs,” Northern Trust Co., Chicago. A Book of Bond Ads Thompson, Ross & Company, Inc., dealers in bonds and investment securi ties with headquarters in Chicago, have produced, in book form, a series of ad vertisements which they have run from https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NORTHWESTERN BANKER 41 42 THE NORTHWESTERN BANKER Iowa Southern Utilities Company First & Refunding Mortgage 5V2% Bonds A strongly secured bond issue of a well known utility company w hich for sound and consistent growth has few equals. C urrent net earnings on a basis of approxim ately 2XA times interest on entire mortgage debt including this issue. These bonds due July 1,1950. Price 97 and interest to yield about 5-70%. C ircular on request. H oagland , A llum 6? ( b . Established 1909— Incorporated 14 S. La Salle St. C H IC A G O 34 Pine St. NEW YORK time to time in the Chicago Tribune. The copy deals with the many and varied uses for electricity, and was used to stimulate among investment dealers and investors a greater interest in this type of security. Tells of “Inside Workings” A recent booklet of great interest to bankers and investors, is “The Inside Workings of a Bond House,” published by Thompson, Ross & Co., Inc., of Chi cago. The booklet starts out by telling of a typical issue, under the imaginary name of the Western Power and Light Com pany. The first step in the investigation of the issue, is described when the presi dent of the company goes to the Thomp son Ross office, and expresses a desire to borrow funds through the medium of a bond issue. The later steps including the investi gation of the Western Power and Light Company by an engineering firm, the legal work of the bond company’s corps of expert lawyers, the report of the cer tified public accountants, and finally, the analysis of the buying department of Thompson Ross, are described simply, but in detail, in the booklet. The book let closes with this comment about the great business of investment: “We believe we are entirely within the bounds of the strictest truth when we say OUR OPEN DOOR POLICY Just as Banks must be equipped to assist their customers, we have equipped ourselves to be of assistance to Bankers. LO N G TIM E F IN A N C IN G for Corporations calls for expert knowledge of market conditions and years of experience in guiding large Corporations in their financing and refinancing problems. We have th a t \now ledge and experience available fo r B a n \s and their customers COFFIN, FORMAN & CO. In c o rp o ra te d 39 South La Salle Street CHICAGO https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis April, 1926 A p ril, 1926 THE there is no other investment in the world which is protected in so many ways and to such an extent as a good bond issue. When you purchase a bond of us, it is delivered to you as a finished product. It is as simple as an old-fashioned mortgage —often more safe, and practically always much more quickly and easily converted into cash, if you Avisli to sell it. And yet it has behind it, in addition to its intrinsic safety, such safeguards as we have de scribed above. It is not an investment which some one individual thinks is safe, but an investment on which many skilled organizations have worked to make it safe.7’ Remnants of the Day’s Work Events in Florida are justifying the seemingly Avild predictions of tAVO years ago. The northern states east of the Mis sissippi have found a neAV and A7ast winter playground on the Atlantic and Gulf coasts of the state, and stupendous prepa rations have been made and are in the making to provide entertainment for mil lions in the years to come. Not only wealth and fashion are behind the move ment, but men of moderate means are oc cupying the shores and the interior. Most of them come from states Avhere snoAV falls. It is not unlikely that twenty years will see Florida, from Jacksonville doAvn, the greatest Avinter pleasure and health resort the world has ever known.—From Chicago “Journal of Commerce.” Poetry is not like reasoning, a poAver to be exerted according to the determina tion of the will. A man cannot say, “I will compose poetry.” The greatest poet even cannot say i t ; for the mind in crea tion is as a fading coal, which some in visible influence, like an inconstant wind, awakens to transitory brightness. This power arises from within, like the co'or of a flower which fades and changes as it is developed, and the conscious portions of our natures are unprophetic either of its approach or its departure.—Shelley. Moves to Equitable Building Harry M. Harris, loAva representative for the Continental and Commercial Na tional Banks of Chicago, announces that the bank’s IoAva bond and investment busi ness has developed to such an extent that new offices are necessary, and the neAV location Avill be on the second floor of the Equitable Building, Des Moines. Former offices were located at 215 Fifth Street. Poetry ought not to take its course through the frigid region of memory; it ought never to convert learning into its interpreter, nor private interest its advo cate Avith the popular mind. It ought to go straight to the heart, because it has come from the heart; and aim at the man in the citizen, not the citizen in the man.— Schiller. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NORTHWESTERN BANKER 43 THE 44 N O R T H W E S T E R N BANKER How to Judge the Safety o f a Bond T IS a quasi-public function of the bond house to provide the banker with reliable information concerning the safety of a bond, say middle western bankers, commenting on the subject, “ How to judge the safety of a bond.” F. R. Sage, president of the Washing ton, Iowa, Loan and Trust Company, brings out this point, as follows: I “ We realize that we must rely upon the originating house, and our primary concern is to know that we are dealing with a well-established bond house, with a reputation to sustain; a house that has been in business long enough to have demonstrated a real interest in its bond issues after they are taken over by the ultimate investor. We depend upon the A Serial Presentation o f Fundamental Principles SUCCESSFUL MANAGEMENT OF AN INVESTMENT FUND ‘Ko. Diversify Adequately /r> O NE o f th e forem ost educational S'Y in stitu tio n s o f th e c o u n try , w h ic h possesses a n e n d o w m e n t fu n d o f o v er $ 4 5 ,000,000 a n d enjoys financial m anagem ent o f th e highest order, has its b o n d holdings diversified as fo llo w s : P ublic U tility 3 7 .4 % R ailro ad 36 .6 % In d u stria l 19 4 % G o v ern m en t 6 .6 % In o u r opinion th is ex h ib it provides a convincing argum ent in favor o f diversification. I t definitely estab lishes th e v alu e a tta ch e d to d iv e r sification b y m en o f o u tsta n d in g experience in th e in v estm en t field. W e regard adequate diversification as indis pensable to the continued success o f every investment policy and we emphasize its im portance in the counsel we render clients 07 BROKAW AND COMPANY 105 South La Salle Street, Chicago Telephone Randolph 4560 A copy o f our booklet, "The Successful M anagement o f An Investment Fund,’ will be m ailed on request. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A p ril, 1926 proven ability of the originating house for the fundamental soundness of the issue, and also take into consideration the class of bond, the maturity, and probable marketability. “ We endeavor to determine whether the bond is a logical one for our own in vestment or for the investment of our local clientele. We want it to be pro tected by a first lien on tangible property, and also by a record of net earnings over a term of years equal to at least twice bond interest and amortization payments. “ We also take into consideration the business of the issuing company, and how it is affected by changing conditions and whether its product is a staple article which is a necessity both in good times and bad times. “ There are other considerations which influence us in purchasing bonds, but I would put first and foremost, confidence in the originating house, or houses.” “ The bond salesman must fit the bond to the investor’s need,” says I. R. Alter, of Grand Island, Nebraska, president of the Nebraska Bankers Association. He continues: “ I don’t know that I am in a position to suggest anything on the advisability and the propriety in properly placing bond offerings. It is a fact that highpowered bond salesmen are careless about that and also a fact that they are not in a position to know just what class of bonds should appeal to their prospect, as they are not familiar with the likes and dislikes, standing, inclinations and knowledge of the prospect. It has always been my impression that certain bonds should appeal to certain classes of in vestors, of which there are four or five. The same applies to the purchase of stocks, preferred or common. One may be suitable for one class of investor, but not at all suitable for another. I t ’s a pity that the rank and file of investors outside of financial institutions, which, of course should, and as a rule do, post themselves, do not come in contact with these financial articles and are guided in investments more by advertisements and arguments of those who have a pecuniary interest only. This is a further oppor tunity for the thrift committees of the different state associations.” After the banker has reached a defi nite conclusion as to the type of bond he should buy, there are just three fac tors that should guide him in judging the safety of the issue, says C. S. Howard, vice president of the Iowa Loan and Trust Company Bank of Des Moines. Mr. Howard continixes: “There are many different grades of bonds but three important factors and only three should be borne in mind with all investments; first, security; second, income, and third, marketability. With these three in mind, it is perfectly natu ral that if larger demands are made upon April, 1926 THE NORTHWESTERN 45 BANKER one of these three, the other two must be sacrificed to a greater or less degree and as to the proper balances of these three factors, each individual investor’s case should be weighed and balanced. “Too much attention cannot be paid in finding out the reputation, integrity and experience of the offering house and, in these days of various issues being put out by many concerns, greater import ance should be attached to the selection of the house after having decided the character and class of bonds one should buy.” BANKERS SEE BONDS AND INVESTMENTS GROWING (Continued from page 27) needing some ready exchange or our de mand is heavy we sell sufficient bonds to tide over, then buy more when the money returns. “ For our customers, we buy all kinds of bonds you have listed. We have some patrons who are heavy buyers of bonds, and the small-time depositor is more and more inclined (from hearing others talk of the wonderful security of bonds and not too much general strength of banks) to become a small bondholder. Our patrons have bought (during and since the war) and still own approxi mately $250,000.00 of bonds. Nearly, if not all, of these bonds have been pur chased through us, and nearly all are left with us for safekeeping. “ Up to the present time we can notice little effect on our deposits. Our time C. D. ’s and savings are much heavier than those of our neighbors who sell or own no bonds, but we are wondering what will be the ultimate results. “ We are not urging bond buying, but do not in the least discourage it. How ever, we have acquired quite a reputa tion for handling bonds. ‘1Our deposits keep well over the halfmillion mark, so we are naturally inter ested in what the effect will be on these deposits if we are right in assuming that there is a general growing tendency to turn to the buying of bonds. Is this the general tendency or are we an isolated case?” I appeal to the greatest poets of the present day, whether it is not an error to assert that the finest passages of poetry are produced by labor and study. The toil and delay recommended by critics can be justly interpreted to mean no more than a careful observation of the inspired moments, and an artificial connection of the spaces between their suggestions by the intermixture of conventional expressions -—a necessity only imposed by the limited ness of the poetical faculty itself.— Shelley. Poetry is the natural language of all worship.—de Stael. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ■ B ank In v estm en t Securities STOCKS and BONDS OF T H E CITIES SERVICE COMPANY and SUBSIDIARIES S e c u ritie s H enry D e p a rtm e n t L . D o l i e r ^ & C o m p a n y N \ j) N e w York. /' \J J PRINCIPALCJTIE}, GO Wall St. BRANCHES l(S IO W A D IV IS IO N A L O F F IC E S D es M oines 318 L ib e rty B u ild in g S ioux C ity 507 F ra n c is B u ild in g C edar R a p id s 708 H ig le y B u ild in g j T II E 46 “ Looking Ahead Financially’’ A man wholly dependent upon personal earnings, particularly the man ac customed to a substantial income, is in an uncertain, even precarious, position. This is one of the themes in an interest ing and unusual booklet, “ Looking Ahead Financially, ” which has just been pub lished by Halsey, Stuart & Co., of Chi cago. Such a man, the book goes on to ex plain, has built up an elaborate stand ard of living, retrenchment from which, if necessary, would be difficult, certainly embarrassing. Yet with out a financial reserve, no other alternative is open to him in these N O R T H W E S T E R N emergencies in life which are a part of life itself. “ As self-evident as these truths are,” Halsey, Stuart & Co. state in connec tion with the book, “ it is surprising how few men take them seriously—or, at least, take steps to meet them, while they are still in a position to do so. “ This is distinctly an American trait, resulting, no doubt, from the prosperity which we, as a people, have so con sistently enjoyed. It is a characteristic, perhaps not altogether unwarranted, considering the astonishing strides of all classes in improved standards of living within recent years, to believe that to morrow will find each of us better oft In 21 Years, Never the Loss of a Penny to Any Investor W e Are Here to Serve YouIn order to give each client the best service possible, a knowledge and experience gained by years of close application to a specialized business is essential. In order to properly specialize, it is necessary to limit such study to one field only. For twenty-seven years the Brown Crummer Company has been spe cializing in Municipal Securities with results markedly satisfactory to every client. We are now equipped, better than ever before, to give our Iowa clients personal service. Represented in Iowa by Mr. L. H. Davis 526 Liberty Bldg., Des Moines T he Br oWwIC HnIT-Ag BAN K E R er Co m p a n y KANSAS A p ril, 1926 than today. It is, nevertheless, a danger ous belief to bank on too confidently. “ Perhaps nowhere is this prevailing optimism more prevalent than among well-paid executives and salaried men in the prime of their earning capacity. Alert, keen-minded, buoyant, these men often see little need for immediate con cern about their future. They live well, often expensively; they play freely; they confidently look forward to next year and in the years to follow to an ever-increas ing income. They are aware that they are not setting aside what they should, but are frequently but mildly concerned about it because of their feeling that there will be time enough in their later years of expanding income to meet the problem. “ One need only look about in his own circle, or consult statistics showing what happens in later years to an average group of men, to determine the fallacy of that belief. “ The very fact that these successful men are successful is the strongest pos sible argument why they should face as early in life as possible the problem of protecting their positions. They have more to lose by reverses in fortune than the man who has been accustomed to lose. The man who never earns much in excess of bare living requirements learns the necessity of conserving and providing for future years. He is, in short, more con scious of his financial insecurity than the man who enjoys abundant earning power during his years of vigor. Yet, without such planning, where the family standard of living is dependent upon the personal earning capacity of the provider—no matter how large his earnings—their situation is constantly in jeopardy.” Priester New Secretary Frank Ward, bond department man ager for the Iowa Loan and Trust Com pany Bank of Des Moines, has resigned as secretary of the Iowa Bond Dealers’ Association and is succeeded as secretary by H. C. Priester, of Priester-Quail & Cundy, Davenport. Mr. Ward continues, however, as a member of the Board of Governors of the Iowa Bond Dealers. With First Illinois Company Milton 0. Johnson, formerly manager of the analytical department of Henry C. Quarles & Company, Milwaukee, and instructor in economics in the Univer sity of Wisconsin, is now manager of the analytical department of the First Illinois Company, underwriters and par ticipating distributors of investment se curities with offices in Chicago, Aurora and Springfield, 111., and St. Louis, Mo. The poet is a creator, not an iconoclast, and never will tamely endeavor to say in prose what can only be expressed in song.—Stedman. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A pril, 1926 THE NORTHWESTERN BANKER 47 Safeguarding the Investor By S. D. Rider W . B . F o sh a y Co., M in n ea p o lis used immediately to retire or pay off a HE average investor seldom has an cient cash capital investment to enable it opportunity to become thoroughly to temporarily carry on the business which part of the securities outstanding, thus familiar with the safeguards that has been taken over, if it should become increasing the underlying security or se curities left, reducing the obligation of are thrown around first mortgage bonds necessary to do so. the company and giving them an oppor In addition to the contracts providing and other securities that are from time for the control of the business, it is also tunity to rebuild their organization and to time brought to his attention. carry on successfully. It is also usually The reliable investment banker or se customary that the men who occupy execu provided that no sale of the business on tive positions carry sufficient life insur curity dealer is extremely jealous of his the stock control can be made without the reputation. He knows that the only way ance so that if they should be taken away (Continued on page 50.) a trustee will receive a sum that can be to build up the right kind of a reputation and to insure the continuous patronage of the investor is by being able at all times to deliver returns to the investor exactly as promised, There must be no delay in paying interest or dividends. Maturities when due must be cared for promptly, and G y p su m ! A m a g ic in every way the interests of the investor must be looked after. This can be accom w o rd in th e v o cab u plished only when the banker or security lary o f b u sin ess! A dealer exercises diligent care in purchas ing or taking on new issues. In many ro m an ce o f m o d e rn in d u stry ! Base fo r instances the state commissions that are stucco, c o m p o n e n t o f stre e t p a v e m e n ts, created for the purpose of safeguarding the investors’ money have the authority aid to grow ing crops, in su la to r against h e a t to regulate the amount and kind of se curities that can be issued by different a n d cold, m ate ria l fo r b u ild in g b lo ck s a n d companies or corporations, but even they h o llo w tile, fire-p ro o f w all b o a rd w h ic h are unable to foretell what may happen in the future. It, therefore, becomes neces can b e n ailed a n d saw ed lik e w ood. ^ In sary to provide through contracts and 1899, 300,000 to n s w ere p ro d u c e d — in agreements every possible safeguard so that if the business back of the security 1924, o v e r 5,000,000 to n s. T h e in d u stria l does not operate as successfully in the w o rld accepted gypsum a n d th o u g h t n o th future as it has in the past, then the in vestment hpuse originating the issue may ing new could be k n o w n a b o u t it. U n til one step in, assume control and protect the investors’ money. gypsum com pany, th e U n iv e rsa l, in a d d i Some investment bankers and security tio n to its G y psolite w all b o a rd a n d o th e r houses not only insist on ample security p ro d u cts, d ev elo p ed “ In su le x ”— gypsum at the time the issue is brought out but in addition enter into contracts whereby the raised like a lo a f o f b re a d . A light, cellu men who have been responsible for the successful operation of the business of lar m ass, filled w ith m illio n s o f tin y dead the past are obliged to place their evidence air cells— h a ile d by b u ild e rs as th e m o st of ownership in escrow with a trustee with the understanding that if at any time re v o lu tio n a ry a n d usefu l m a te ria l o f m o d they do not in every way live up to all of e rn tim es. ^ W e h a n d le U n iv e rsa l G yp the agreements in their contract, then the investment house putting out the security su m C o m p a n y securities. can immediately step in and assume con trol of the property without any further legal procedure. This arrangement in effect causes the management to be un usually conservative. They are not de sirous of turning over the management of their business to parties who are di rectly interested in seeing that the senior $ I NV E S T ME NT BONDS securities, such as first mortgage bonds and preferred stocks, are protected and paid 231 S. L A S A L L E ST. CHICAGO P H O N E, C E N T R A L 6556 off before any return accrues to the com mon stock or the owner of the business. BOSTON MkY// CEDAR RAPIDS m An investment house in order to fur w nish the fullest degree of protection to the investor must also be one Avith a suffi- T Something New U nder the Sun tlR U E - W E B B E R &CÖ1 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 48 THE N O R T H AV E S T E R N BANKER Protecting the Utility Investor's Dollar Extracts from a talk by W. H. Hodge, manager, advertising department, H. M. Byllesby and Company, over the Chicago Tribune’s Badio Station WGN. OMETHING more than seven million citizens are interested in “ How Utility Investments Are Protected,” because that many individuals' are esti mated to have money invested in the se curities of electric power and light, gas, S telephone and electric transportation companies. These industries are collectively the third largest industrial group in the United States, agriculture ranking first and the rai 1roads second. April, 1926 When I speak of seven million public utility investors, I mean people who own bonds, debentures and stocks of these companies. I do not include the insur ance companies, banks and other institu tions which own many millions of dollars of such securities. Indirectly the great majority of all the owners of life insur ance policies, savings accounts and many other investments are financially inter ested in the utilities. It is not the common stocks, but the bonds, debentures and preferred stocks of utility companies that are of direct Broadway Motors Building Corporation (New Y o rk C ity) A F irst M ortgage L ea seh o ld 6 p er cent B onds D ue 1948 G en eral M otors C o rp o ra tio n has leased th e 13 u p p e r floors of th e 25-story b u ild in g fo r a p e rio d b ey o n d th e m a tu rity of th e bonds and th e b u ild ing w ill be know n as General M otors Building T h e bo n d s are secu red b y a first m ortgage on a leaseh o ld estate an d b u ild in g b eing erected th e re on, w h ich have b een in d e p e n d e n tly a p p ra ise d at a value, u p o n co m p letio n , in excess of $10,390,000. T h e o u tsta n d in g bo n d s to ta l $6,000,000, m ak in g th is issue less th a n a 58% m ortgage. T h e incom e fro m space a lread y occupied p lu s th a t to be received fro m th e G en eral M otors C o rp o ra tio n lease, is in excess of $1,000,000 and is alone sufficient to p a y all o p e ra tin g and m ain ten an ce ch arg e of space so leased, ground re n t, taxes and in te re st on th is issue of bonds. T o tal n e t incom e is estim ated at over tw o tim es in te re st on these bonds. P rice 99^2 to y ie ld over 6 % P.W. CHAPMAN & CQ,INC 116 S. La S a lle St. CHICAGO https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4 2 C ed a r S tr e e t NEW YORK W . H. H O D G E interest to the great multitude of con servative investors. The owners of such securities are not interested or alarmed by the gyrations of the speculative market, like that which made front page news recently. These bonds, debentures and preferred stocks, as a class are not only among the soundest and best pro tected of American investments, but among the most stable, and it is my purpose to tell you briefly from the in vestor’s point of view, some of the prin cipal ways in which they are protected. In the first place, they are issued by industries rendering services, not only vital and indispensable to modern life, but services that save the user money, time and inconvenience, stimulate pro duction and promote domestic and com munity prosperity, comfort and happi ness. In other words, they are based on public necessity; they conserve and do not waste; they build up and do not destroy. Second, such investment securities are backed by tremendous physical plants and distribution systems, staked to and imbedded in the soil. Modern, enduring A p ril, 1926 T H E N 0 R T H AV E S T E R N 49 BA N K ER mortgage guarantee companies organized Commends Insured Bonds and useful physical properties, with demonstrated earning power, have been AAralter M. Toole, Iowa manager for by law for the purpose, and which are constructed with the dollars of the in George M. For*eman & Company, under under state supervision; which have suffi vestor. writers of insured first mortgage real cient capital to make good their guaran Third, present day operation of elec estate bonds, calls attention to an tees, and which are known to be managed tric, gas and telephone systems conforms article on investments by AValter Stabler, by men skilled in their work and success to the recognized principles of good comptroller of the Metropolitan Life In ful in their operations, and whose loans economics. They produce and distribute surance Company, New York, published are conservative. ‘1Or he should buy from companies at the lowest costs and sell service at the in the American Bankers Association Mr. that distinctly guarantee the payment lowest reasonable rates, because they Journal, February, 1926 issue. of principal and interest although not operate without direct competition, mass Stabler says in p a r t: ‘ ‘ My recommendations, therefore, are : organized as mortgage guarantee com production in large plants in order to “ That the unskilled investor, who de panies, but which are willing to state achieve efficiency, distribute over wide markets by interconnected or “ super” sires to buy real estate bonds, should under oath, and after examination by transmission and distributing systems, be satisfied with a slightly lower interest public acountants, the amounts of their and handle their product from plant to rate and obtain the guarantee of the pay assets and liabilities and what they con consumer without intermediaries or ment of principal and interest from the sist of, and who produce sworn appraisals middlemen. This is why the utility com panies have held down rates during the past ten years, while the costs of every thing entering into the expenses of pro viding service have advanced greatly; why the government finds the average selling cost of electricity lower today than it was back in 1914. Fourth, utility investments are pro tected by a well-established system of state and municipal regulation of these industries. All of their business affairs are known to representatives of the public; all of their acts are carried out in conformity with the approval of authoritative public bodies. In exchange for the limitation of earnings, to 7 or 8 per cent on the value of the properties, ------- and short term well managed companies are protected notes of conservative against rates and conditions which character to meet the would take away their earnings entirely, or be unfair to the investor. needs of banks, insti Fifth, utility investments are protected tutions and private by the character and quality of engi investors. List of cur neering and management received by the larger and well established utility organ rent offerin gs sent izations. upon request. During the past twenty years there has been a remarkable development of utility operation under the group plan. The Byllesby organization, for example, is responsible for utility companies serv ing upwards of a thousand communities in eighteen states—a total population of more than 3,350,000. These concerns usually group their properties into what are known as invest ment-management, or holding companies, which mass engineering ability, operating experience, purchasing power, and credit and financing strength, to the advantage of each operated property, the consuming public and the investor whose money makes utility development possible. e olf o m p a n y in c Sixth, and last, the distribution of In vestm en t B onds • E stablished 1 8 8 9 utility securities among seven million people means a wide, active and stable CHICAGO MILWAUKEE market. This is of the greatest impor tance to the investor in case he wishes to convert his holdings into cash. BONDS D W One merit of poetry few persons will deny; it says more and in fewer words than prose.-—-Voltaire. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis & C , . 50 THE of expert appraisal committees for all bond issues offered. “ Or if he is willing1 to invest in un guaranteed mortgages, the property on which the bonds are based should be ap praised by a competent board of apprais ers, appointed by the real estate boards in the cities where such boards exist, and the statement should be made that the bond issues do not exceed two-thirds of the appraised value of the property. Companies which advertise that their bonds áre legal investments for trust funds should be obliged to produce evi dence beyond question that such is the case, and some state authority should have the power to force statement of values or prevent such advertising being printed. “ Some of the bond houses have ar ranged with strong surety companies to NORTHWESTERN BANKER guarantee the payment of principal and interest of their issues, and next to buy ing from the regular mortgage guaran tee companies, I suggest this method as a safe one to follow, for the reason that the surety companies will not guarantee loans of all the issuing houses, and, when they do guarantee such issues, it is only after careful investigation made by these surety companies through skilled examin ers. I consider their guarantees as abundantly good for anything they under take.” The Basis of SecurityIn bond investment, stability of earn ings is undoubtedly the fundamental basis of security. Even property value depends entirely on this factor; for the value of any property—real estate, railroad or G eneral M otors Acceptance Corporation Executive Offices: April, 1926 power station—is based on the earnings it can produce. It is interesting to note the difference between the position of bonds and stocks in this respect. The stockholder is in the position of risking loss on the chance of a greater profit. He is willing to forego dividends this year for a bigger return next. The bondholder, on the other hand, is only interested in the maintenance of earnings sufficient to cover interest charges. In consequence, a bond on which charges are barely covered may have a very high investment rating provided this return can be counted on without fail. This situation occurs in the securities of terminals that are leased by strong rail roads at a rental only sufficient to cover interest charges. In appreciation of the regularity of earnings they produce, certain types of businesses are recognized as being par ticularly desirable for bond investment. This includes most railroad and public utility companies and certain types of in dustrials. In the following issues of Bond Briefs the various qualities which tend to produce regularity of earnings will be analyzed to show why it is that some classes of business afford a much more satisfactory basis for bond investment than others.—From Bond Briefs, North ern Trust Company, Chicago. 250 West 57th Street, N e w Y o r k City Z fH E obligations of this institution are select ed as appropriate and sound mediums for short term investment by a large banking clientele. They may be obtained in convenient denomina tions and suitable maturities. DIRECTORS Alfred H. Swayne,. .Chairman — Vice President, General Motors Corporation Curtis C. Cooper.. . President Albert L. Deane. . . Vice President Pierre S. duPont. . .Chairman, General Motors Corporation and E. I. duPont de Nemours & Co. Lammot duPont. . . Finance Committee, General Motors Corporation. 0. H. P. LaFarge. .General Motors Corporation Seward Prosser. . . .Chairman, Bankers Trust Company New York JohnJ. Raskob. . . .C hairm an, Finance Committee, General Motors Corporation Alfred P. Sloan, Jr. President, General Motors Corporation John J.Schumann, Jr. Vice President Donald M. Spaidal. Vice President https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SAFEGUARDING THE INVESTOR (Continued from page*47.) consent of the investment house as long as any securities are outstanding. The day is past when it is necessary for the investor to feel that he must depend entirely upon his own judgment in se lecting a security, and that he must not only be familiar with the security under lying his investment but also be able to pass judgment on the future possibilities of the business. There are investment houses today who assume this responsi bility. These houses are backed by suffi cient capital and experience that enables them, like the life insurance companies, to foresee and forestall any possible ces sation of payments in order to fully pro tect the investors’ money. The Reckless Age “ I suppose old Jim Tucker is as stingy as ever,” remarked the former resident on a flying visit to Dinkyville. ‘ ‘ Gosh, no! ” exclaimed the native. “ Jim ’s gettin’ to be a reg’lar spend thrift. Why, he even gets his hair cut at the barber shop now!” “A happy nature is sometimes a gift, but it is also a grace, and can, therefore, be cultivated and acquired; and it should be a definite aim with those who are train* ing a child.”—Lucy Soulsby. A p ril, 1926 THE N O R T H W E S T E R N 51 BA N K ER The Growth of Real Estate Bonds By G. A . Golder D is tr ic t M a n a g e r, C hicago, F id e lity B o n d & M o rtg a g e Co. ELDOM is there found an investor, be lie a banker or tradesman, who is not fully familiar with the record of the several prominent first mortgage bond organizations whose investments, insofar at least as the investor is con cerned, have been universally good, with interest and principal being paid promptly at their respective maturities. These organizations have established large followings by this carefully con structed record and cannot do that which would jeopardize its maintenance. It must be emphasized in all fairness to the class of investment known as first mortgage real estate bonds that 266 bond houses have sold from 1900 to 1924, according to an investigation conducted by Geo. R. Hemingway, a volume aggre gating $1,119,452,000. Out of this vast amount a loss of but $38,925 was found, which is less than one-hundred-thou sandth of one per cent. A number of writers have stated that Avell selected first mortgage real estate bonds secured by high-grade, income-pro ducing properties are safer than any other form of bond investment excepting possibly United States Government obli gations. The safety of first mortgage real estate bonds is further evidenced by 29 Chicago mortgage bankers having loaned $734,700,000 without a loss to an investor. In 1923, 48.5 per cent, or practically one-half of the residential, business and industrial buildings were financed by in surance companies. Over 40 life insur ance companies increased their mortgage investments during the last two years. For instance, the New York Life Insur ance Company reported as of December 31, 1925, that during the year 1925 the finance committee invested in securities that demanded discrimination and judg ment $151,371,950.10, of which vast sum, $93,534,753.22 was invested in real estate mortgages, or 161.7 per cent of all other classes of investments, which included municipal, railroad and public utility bonds. According to the Com pany’s balance sheet, dated January 1, 1926, it has invested in real estate securi ties $353,627,202.42, which is a greater amount by more than $28,500,000 over the next largest investment and at an average yield of about 17 per cent more than the average yield of all other securi ties purchased in 1925. According to a survey made by the National Association of Real Estate Boards, of 201 life insurance companies the average advantage of real estate in vestments over the investment in other S https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis bonds and stocks was 1.49 per cent, which actually means a 25 per cent advantage in favor of real estate securities. On July 25, 1923, the Penn Mutual Life Insurance Company of Philadelphia reported an increase in assets of $10 ,000,000, all of which was invested in first mortgages on improved real estate. The Metropolitan Life Insurance Com pany of New York at the end of 1923, reported an investment of $464,000,000 in mortgages on city properties, from Avhich they collected $23,600,000 in inter est. A mortgage is overdue and in de fault when it is 30 days or more past due, according to their rating. At the end of 1923, the Metropolitan Life In surance Company shoAved overdue inter est of $11,611 out of $23,600,000, and of this amount $9,100 Avas paid on Janu ary 2, 1924, thus having $2,511 of un paid interest out of $23,600,000 interest earned during 1923. From a recent report of the municipal bond committee of the Investment Bank ers Association, holding its convention in St. Petersburgh, Fla., says a situation “ unparalleled in this country during the last quarter of a century” now exists in the state of Washington. That 17 cities and towns with $3,757,671 of bonds outstanding have $1,439,710 in default. Suite 214 Equitable Life Building has been opened as the new D E S M O IN E S O F F IC E °f HARRY M. HARRIS ' DAVID B. MITCHELL] Local Representatives of èBond ^department C on tin en tal and C om m ercial Trust and Savings Bank CHICAGO «X* CONTINENTAL ¿»/COMMERCIAL TRUST and SAVINGS BANK GEORGE M. REY N OLDS A R T H U R REYNOLDS Chairman o f the ‘Board ‘President 52 T II E This Washington situation was the out come of the state laws, that, to begin with, did not furnish adequate protec tion to bondholders. The attorney general of New York indicated in a recent article that losses in the state of New York, through fraudu lent stock transactions, approximated $500,000,000 a year and through practical experiments gained through the opera tions of the Bureau for the Prevention of Fraud reveals that a large percentage NORTHWESTERN of stock frauds can be eliminated if the public will observe the ordinary precau tions which govern their every day busi ness and household transactions. The best indication of the soundness of first mortgage real estate bonds is the steady growth of the popularity of this class of security. Year after year has gone by without a loss to an investor. First mortgages are not an experiment, but on the contrary, they form the oldest A Record of Safe Investments A Successful R ecord is the finest recommenda tio n a business organization or an individual can have. T h is is especially tru e in the investm ent field. N ow here does th e past indicate so clearly an d accurately w h at th e fu tu re w ill be. E xperi ence, financial standing, good faith and integrity can all be determ ined to a very large ex ten t by an exam ination of the record. Send for our latest book, “A R ecord of Safe Investm ents.” AmericanBond &Mortgage€q E s t a b lis h e d 1 9 0 4 C A P IT A L A N D S U R P L U S O V E R * 7 , 5 0 0 , 0 0 0 In co rp o ra ted Iow a H eadquarters, F irst N a t’l B a n k B ldg., D avenport C H IC A G O O v e r th ir ty o th e r cities. NEW YORK Industrial Acceptance >oration New York Capital & Surplus Over $7,000,000 ? COLLATERAL TRUST GOLD NOTES (The N ational C ity Bank o f N. Y., Trustee) The Notes o f this Corporation are regarded by a nation-wide banking clientele as appropriate and attractive investment fo r short term funds. They may be obtained under customary option in varying maturities between 2 and 12 months. Com plete information available on request to any o f our offices. Commercial Paper Offices CHICAGO NEW YORK 105 So. La Salle Street BANKER 100 East 42nd Street SAN FRANCISCO 225 Bush Street Financing exclusively dealers o f THE ST U D E B A K E R C O R P O R A T I O N OF AMERICA known security, dating back to the Baby lonians about 2250 B. C. First mortgage real estate bonds are a suitable investment for savings and strong-box securities, yielding the maxi mum rate of interest consistent with safety; easily convertible into cash when the necessity arises and are in denomina tions of $100, $500 and $1,000. Most first mortgage real estate bond houses maintain a partial payment plan which is fair and equitable to the investor. Our Labor Too Prosperous Arthur Henderson, an outstanding fig ure in the British Labor Party, is an honest observer. Returning to England from a stay of several weeks in this country, he reports on the unfavorable outlook for a Labor Party in the United States. The basic reason he emphasized in his speeches on this side of the Atlantic. The American workingman is too well off; to be discontented. Thus Mr. Henderson disassociates him self from an ancient legend which still has currency in the circles of American socialism and among not a few bourgeois liberals and radicals. One still encounters in the Socialist press the cartoon of the vintage of 1890, in which enormously bejowled and bejeweled capitalists trample over the pros trate bodies of starving workers. The accompanying comment is the old verbiage about industrial satraps and in dustrial serfs. It is a creed and a lingo now aban doned by the more intelligent leaders of socialism. The emphasis has shifted from the “ misery” of the working classes to the injustice which they still suffer. It is no longer maintained that they are sinking deeper and deeper into desti tution according to the requirements of the Marxian formula. But it is con tended that such increase in well-being as the American workingman has achieved is not in honest ratio to the in crease in national prosperity as a whole. —New York Times. The Charges Against Judge English Judge English of the federal court of the eastern district of Illinois should not be permitted to remain on the bench if the charges against him, indorsed by the house judiciary committee by a vote of fifteen to six are well founded. The sooner a judge guilty of misconduct is removed the better. His case should not drag along, but be promptly heard and brought to a final judgment by the senate. Public confidence in the judiciary must be strengthened by the spectacle of an im peachment trial. One judge may have gone wrong, but if he can be removed the judiciary as a whole will not suffer in public esteem.—Springfield, Massachusetts Republican. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis April, 1926 A p ril, 1926 THE Bond Future Appears to Be Sound T IT H relatively little new domestic financing in immediate prospect, and a sustained de mand, which will, no doubt, be somewhat augmented by the disappointed recruits from the stock market, now rendered more cautious by their recent experience with speculative securities, the outlook remains reassuring for the bond buyer. ’’ In brief, such is the opinion of Halsey, Stuart & Co. as to the outlook for the bond market as expressed in their quar terly review, which was issued recently. Commenting on the general business situation, the review says: ‘ ‘Despite some ripples on the surface of things, the underlying situation in busi ness and industry is one justifying con fidence in their future. The speculative trend, until recently apparent in some other fields, has been noticeably absent in the conduct of business generally— supply, for the most part, has been gauged to demand; inventories have been kept low; and efficiency in operation, in cluding a satisfactory labor situation, has generally prevailed. “ While the stocks of some companies have tumbled from the unwarranted heights to which they were carried by the over-optimism of the stock market, this can hardly be interpreted as a reflection of conditions in the business and indus trial situation which gives promise of continuing sound and active.” It goes on to review the action of the bond market during the first two and a half months of the year and then the situation with regard to the various classes of bonds, saying: “ The strength and activity that have characterized the bond market over a considerable period continued unabated into the new year, carrying the price level during the latter part of February to the highest point since 1917. Despite some liquidation attending the long expected break in the speculative market, the un dertone in bonds remains distinctly strong. “ With careful discrimination, some of the best bargains of today are to be found among the foreign bonds. New of ferings of such securities, especially cor porate issues, have continued in large volume since the first of the year, and for the most part have been well received. Considering the educational process that attends the distribution of successive is sues of foreign bonds, the large amount of capital available for investment, and the uncertain supply of new domestic is sues, there is good reason to believe that the present wide disparity in yield be tween foreign and domestic issues will narrow. “ But in view of the fact that Ameri can investors are still relatively inexperi- N O R T H W E S T E R N / \ “ 'T 'V https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 53 BANKER Serving Iowa’s Investment Needs for 18 Years Circular Listing Desirable Bond Offerings for Banks on Request H a r r y H .P o l k & C o . In vestm en t Securities Equitable Bldg. D es M oines / \ A series of six ads, each giving one reason for the superiority of Fidelity First Mortgage Real Estate Gold Bonds. The others are: Experience, Appraisals, Safeguards, Security, Guarantee. ! Investigation Not one issue of Fidelity First Mortgage Real Estate Gold Bonds is prepared until a searching investigation has been completed. First, is there a real need for the proposed building? For the type of building to be erected, is the location superior to other sites? Will the building produce sufficient income to safeguard investments? Can the integrity of the borrower be proved beyond all doubt? These and many other questions must be answered satisfactorily before the Fidelity Bond and Mortgage Co. puts its name and resources back of an issue. So closely do we adhere to the spirit, as well as to the letter of our policy of safe investments, that to every request for construc tion financing that is accepted, ten are vetoed. Such cautiousness and conservatism has its result in a con stantly increasing number of banks who both buy Fidelity Bonds for their own investments and recommend them to their clients. Shall we send you a list of Fidelity Issues? F id e l it y JL BOND¿»MORTGAGE CO.JL I n c o rp o ra te d 1913 • Room 1182 New York Life Bldg. Chicago, 111. “F ID E L IT Y SU PE R -SA FE BO N D S. St. Louis— D enver F id e lity G u a ra n te e s E very B o n d JR 8 2 2 THE 54 eneed in the foreign field and often lack complete information regarding foreign corporations—and even governments and municipalities, more than ordinary care should be used in selecting such issues. “ While new offerings of public utility bonds have continued in large volume since the first of the year, some recession in the output seems not improbable, con sidering the present well financed condi tion in the industry. With supply there fore somewhat uncertain and demand steadily expanding—much of it coming from institutions which previously have accorded first choice to high grade rails —it seems probable that the price level of utilities will be well maintained. “ The quick absorption by investors of the $15,000,000 Commonwealth Edison NORTHWESTERN Company 4y2 per cent bonds, recently of fered, is a striking indication of the high favor in which first-class utilities are held. This is the first 4% per cent coupon bond issued by a public utility since the war. “ Fairly consistent activity has char acterized the market for tax-exempt bonds during the opening months of 1926, and the demand for the obligations of the states and larger cities, has, in general, tended to exceed the supply of new offer ings. ‘ ‘ The reduction in Federal Income Tax rates was apparently discounted by in vestors well in advance of the adoption of the new Revenue Act. The new rates, being gauged more closely to minimum Governmental requirements, promise a T h e first lo n g d is ta n c e c a ll H E first “ long d ista n c e ” co n v ersatio n to o k place b etw een B o sto n a n d Salem —a distan ce o f sixteen m iles — ju st fifty years ago, eight m o n th s after th e telep h o n e h a d tra n sm itte d its first sentence. T In 1889 B o sto n h e a rd N ew Y o rk fo r th e first tim e. In 1892 N ew Y o rk a n d C hicago w ere co nnected. P ersisten t research a n d d e v elo p m en t solved o n e dif ficult p ro b lem after a n o th e r an d gradually pu sh ed back th e fro n tie rs o f speech by w ires, an d in 1915 th e sp o k en w o rd sped fro m co ast to coast. T o d ay th ese “ long lin es” o f th e Bell System com prise o ver 5,600,000 m iles o f w ires, exclusive o f 39,800,000 m iles o f exchange w ire. T h o u sa n d s o f tim es daily, over distances un im ag in ed as possible a h a lf-c e n tu ry ago, long lines speed th e n a tio n ’s social an d business messages. T his p la n t a n d service, developed to keep pace w ith th e n a tio n ’s needs, u n derlie th e securities o f th e Bell System. T he dividend rate o f the stock o f A . T . & T . — parent company o f the Bell System—is 9 % . T his investment stock can be bought in the open m arket to yield a good return. W rite for booklet, Some Financial Facts.” ELL TELEPHONE SECURITIES CO. he D.F. Houston, President NEW YORK 195 Broadway " T h e People’s Messenger” https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BANKER April, 1926 greater degree of permanency than the high rates previously prevailing, and therefore, constitute a sounder basis upon which to capitalize the value of taxexemption in a long-term investment. “ Indications, therefore, are that cur rent price levels will be well sustained. Bonds of many smaller political sub divisions, and of various joint stock land banks, are still priced at relatively at tractive figures.” American Savings Twenty-three Billions Twenty-three billion dollars, a gain of nearly two billion in a year, represent the total savings account of the American people, according to figures compiled and made public today by W. Espey Albig in charge of the Savings Bank Division of the American Bankers Association. The tabulations, which comprise savings deposits of all classes in the banks and trust companies of the country on June 30th of this year, indicate per capita sav ings of $204, which is a gain over 1924 at the rate of $15 for each inhabitant. As indicating the advance in national thrift, Mr. Albig points out that the gain in ag gregate savings during the year of $1 ,945,000,000 is $500,000,000 greater than the increase which took place the year before. The figures also show that the total sav ings of $23,134,050,000 are owned by 43,850,127 depositors. This represents a net gain of 2,566,000 depositors over com parable figures for 1924. A regional analysis of the progress in the savings habit shows that the New Eng land states have the highest amount of sav ings per capita, with $473. The regional figures are as follows: Total Savings Per Capita New England..$ 3,750,191,000 $473 Middle Atlantic. 9,290,268,000 355 Southern ......... 1,761,734,000 57 Eastern Central. 5,507,931,000 173 Western Central 829,865,000 92 Pacific ............. 1,994,063,000 255 For U. S........... $23,134,052,000 $204 The above groupings are as follows: New England—Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut; Middle Atlantic—New York, New Jersey, Pennsylvania, District of Co lumbia, Delaware, Maryland; Southern— Virginia, West Virginia, North Carolina, South Carolina, Georgia, Florida, Ala bama, Mississippi, Louisiana, Texas, Ar kansas, Kentucky, Tennessee; Eastern Central—Ohio, Indiana, Illinois, Michi gan, Wisconsin, Minnesota, Iowa, Mis souri; Western Central—North Dakota, South Dakota, Nebraska, Kansas, Mon tana, Wyoming, Colorado, New Mexico, Oklahoma; Pacific—Washington, Oregon, California, Idaho, Utah, Nevada, Arizona. Poetry is the music of the soul; and, above all, of great and feeling souls.— Voltaire. THE April, 1926 YOUR CORRESPONDENT BANK’S BOND DEPARTMENT (Continued from page 35) local business conditions which very sel dom, if ever, require them to touch their secondary reserve. All of these factors must be borne in mind by the institution that is recommending securities for a bank’s investment or exchange in bank holdings. Such knowledge is possessed by the reserve city bank. Frequently the reserve city bank is asked to pass upon or check bond issues in which its correspondents are inter ested. There is satisfaction in the knowl edge that many times losses have been averted, unsound investments forestalled and investment worries prevented. A bank’s bond holdings are a protec tion against the unexpected, they are a secondary line of defense, hence every means of selecting sound investments de serves employment. The reserve city bank has men of ability at the service of its correspondents, a policy of the greatest service for the greatest number of years governs its investment recom mendations ; facilities for checking a bond’s real value are available and a true interest in the bank’s investment holdings influences all trade suggestions. A bank can additionally safeguard its investments by using these services and by purchasing securities from its reserve city correspondent. NORTHWESTERN BANKER 55 SH O R TTER M INVESTMENTS $10,000 G en eral M otors A cceptance C orp. 5s of 1929_______________________ 99.31 5.25% 5.000 E lectrical E n g in eers E q u ip m e n t Co. 6s of 1929_________________________100 6.00% 2.000 Joyce W atk in s Co. 7s of 1927_________________________1 0 iy 2 6.00% 2.000 M cD ougall T e rm in a l W arehouse Co. F irst Mtg. 7s of 1928___________ .__101 6.60% I Chicago Trust Company Bond Departm ent CHICAGO Southeast Corner Monroe and Clark Insured Mortgage Bonds ------------ A National Security----------- - 6% A re larg ely secured b y F irs t M ortgages on O w ner-O ccupied H om es in A m erican C ities; G u a ra n te e d b y th e M ortgage S ecurity C o rp o ra tio n of A m e ric a ; an d — In su re d P rin c ip a l an d in te re st fro m date of issue to d ate of m a tu rity b y th e National Surety Company o f NEW Y O R K th e w o rld ’s larg est su rety com pany. B o o k le t m a iled on req u est W h ite -P r ic e Com pany A Tribute to Forty-one Years of Sound Financing The fact that both principal and interest of Forman First Mortgage Real Estate Bonds will be unconditionally guaranteed by one of Ameri ca’s foremost insurance companies is a high tribute to the safeguards developed by fortyone years of sound financing. Investors everywhere have been quick to ap preciate this new measure of investment pro tection—safety so unqualified that it can be guaranteed. An unusually profitable affiliation is afforded the many local banks who act as distributors for these time-tested securities. Inquiries are invited from interested bankers. George M.Forman & C o m pan y P H O E N IX B LD G ., M IN N E A P O L IS , M IN N . In v e stm e n t B onds Since 1885 EQUITABLE BLD G ., DES M OINES, IOWA In q u irie s so licited fr o m b anks a n d dealers https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Chicago N ew York Springfield P ittsb u rgh M inneapolis Peoria 56 THE N O R T H W E S T E R N BANKER C o n serv ative Securities O ur b a n k e r c lie n ts find t h a t th e y a re a b le to o b ta in fro m th is o rg a n iz a tio n a com plete in v e s tm e n t se rv ice t h a t is p a r tic u la r ly fitte d to giv e p ro m p t, in te llig e n t, a n d effe c tiv e a tte n tio n to b a n k re q u ire m en ts. T h a t ’s w h a t you need — i s n ’t it? W e w ill be h a p p y fo r a n o p p o rtu n ity to te ll you m ore a b o u t th is sp e c ia liz ed se rv ice . J u s t d ro p a lin e to e ith e r a d d re ss g iv e n below te llin g us you are in te re s te d . No o b lig a tio n s, o f course. Incorporated F irst N atio n a l B ank Bldg. Chicago A Complete Investment Service C om m ercial P aper an d B onds Clients of this firm are able to obtain from one source the type of security best suited to their current condition and need. 209 S o u th La S alle S tre et, C h icago LANE, PIPER & JA FFR AY, Inc. S t. P a u l R o c h e ste r M a n k a to F arg o SOUND BONDS FO R BANK INVESTMENT The First National Company of Iowa Hanford MacNider, President MASON CITY Security Building Cedar Rapids https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis a b a n k w ill depend upon its city correspond en t fo r in fo rm a tio n an d advice. A s volum e increases the b a n k will w an t to p u rch ase securities a t wholesale prices, b u t it will n o t be possible to do so u n til it has shown a b ility to d istrib u te . O f course wholesale bonds can alw ays be o btained, b u t in issues th a t a re n o t alw ays first class. F a r be i t fro m us to tr y an d give any g re a t am ount o f a d vice to a b a n k th a t contem plates th e sale o f securities, fo r we a re lea rn in g m ore an d m ore every day an d a re alw ays anxious to receive advice fro m our good frien d s. W e do feel th a t th e officer in ch arg e o f th e bond d e p a rtm e n t m ay profit by re ad in g and stu d y in g m ark e t quo tatio n s and th e very valuable a rtic le s th a t a re published in p u b lications such as T h e N o rth w ester n B a n k er an d o ther m agazines. In v e stm e n ts should be sold to m eet th e requirem ents of the in v esto r ju s t th e sam e as a rticle s o f clothing a re sold to fit his or her physical needs. ’ ’ “ Entirely an additional accommoda tion to our customers, ’ ’ declares L. J. Sharp, manager of the bond and trust department of the Security National Bank of Sioux Falls. He says : LA N E, ROLOSON & CO., Inc. M in n e a p o lis A Pound of Corn Sugar Emphasizing the spirit of cooperation that it has always maintained in the com munity, and at the same time helping to solve the problem as to how to get an in creased price for corn, the First National Bank of Dayton, Iowa, has advertised that it will give to every family in the vicinity of Dayton, one pound of corn sugar, free. All that is necessary is that they come and get it. The bank hopes in this way to encourage and stimulate a greater demand for corn products, thereby creating a better mar ket for corn. HOW OUR BOND DEPARTMENT HELPS (Continued f r o m p a g e 29) BARTLETT & GORDON F ir st W isconsin N atio n a l B ank B ldg. M ilw aukee A p ril, 1926 Valley National Bank Building Des Moines “ I t is our belief th a t a bond d e p artm e n t in a ban k th e size o f ours— having slig h tly over $5,000,000 deposits— should be o p erated e n tirely as an a d d itio n a l accom m odation to our custom ers. W e serve a b o u t tw e n ty of our custom ers a t th e p re sen t tim e. “ W e do n o t th in k th a t a b a n k o f our size should push its bond d e p a rtm e n t too m uch. I f th ey do i t w ill in ju re th e ir de posits an d other b a n k business to some e x te n t, b u t above a ll th ey are liable to sell a bond w hich m ig h t prove to be u ndesirable a n d th en they w ill have dissatisfied bank custom ers. ‘ ‘ T he p rim a ry purpose of a ban k outside of ta k in g care o f com m ercial business an d o th er leg itim a te e nterprises, is to encourage t h r if t a n d saving. A fte r th e ir savings have reached five h u n d re d or a th o u san d dollars, th e n if the custom er is in te re s te d in secur in g a h igher re tu rn on his m oney w ith ad e quate sa fe ty , it is tim e to sell him bonds. W e do n o t encourage the selling of bonds in $100 denom ination. ‘ ‘ Thus, to sum it all up, th is b a n k fa v o rs th e o p eratio n of a bond d e p artm e n t in so f a r as i t is used as an a d d itio n a l accom m oda tio n to its custom ers and in c o n junction w ith our tru s t d e p a rtm e n t.” A p ril, 1926 T HE Buys Three New Properties Three transactions involving $3,500,000 in hydro-electric properties in the Red River Valley, north central and central Minnesota, were announced in Minne apolis recently by IT. H. Henley, vice president of the W. B. Foshay Company. The Foshay Company, with offices in Minneapolis, controls the Minnesota Electric Distributing Company, the Peo ple’s Light & Power Company, the TriState Utilities Company and the Inter national Public Service Corporation. The properties purchased are the Red River Valley Power Company, Crooksto n ; the Minnesota Electric Light & Power Company, Bemidji, and the Waconia Light & Power Co., Waconia. The deal for the Red River Valley and Bemidji properties was made through the Minnesota Electric Distributing Company and the Waconia plant was purchased by the People’s Light & Power Company. These properties will be interconnected by transmission lines with other power plants controlled by the Foshay Company and will give the three points involved service from all other points on the circuit. Mr. Henley announced that the work of interconnecting the latest acquisitions would start soon and improvements totaling $300,000 would be made. The efficiency of the hydro-electric plants from Bemidji to Crookston will be greatly increased by the interconnection. The amount paid for the respective plants was not made public. THE ROMANCE OF A BOND ISSUE (Continued from page 28) assume that the “originating house” pur chases the bonds at 92 and the “buying group” buys them at 94. This group in turn creates a “distribution syndicate,” which consists of a larger number of houses with relatively small commitments. This group buys the bonds at, say 96y2, and the bonds are then retailed to the investors at par (100 ). The originating house participates with and is a part of the “buying group,” and all the members of the “buying group” including, of course, the originating house, participate with and are a part of the “distribution syndicate.” The size of the “buying group” and of the “distribution syndicate” depends, of course, upon the size of the issue, and are organized before the bonds are advertised to the public. The “distribution syndicate” is created to provide a wide distribution to the public, thus creating a satisfactory after market. It costs more to sell bonds now than it did before the war. At that time, the average retail bond sale was between $7,000 and $8,000. Today this average has been loAvered to between $2,000 and $2,500, while the number of investors has increased in direct ratio. This transi https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis N O R T H W E S T E R N 57 BA N K ER tion, from fewer large sales to many more smaller sales, has made the “distribution syndicate” a necessity and has caused the mechanism in selling* securities to be come more and more complex. This in crease in distribution has naturally and in direct ratio, increased the cost of bond selling. An advertising date has been set and on that morning, large advertisements her alded to the world that American Manu facturing Company, 6 per cent, first mort gage, twenty-year bonds have been cre ated, while hundreds of high-strung sales men, who have been champing at the bit for several days, spring into action. Within forty-eight hours from the re lease date, every probable prospect has been interviewed, either personally or by telephone, while the mails carry thousands of circulars to investors, describing the American Manufacturing Company, its prospects and its issue of bonds. In a few days, the entire issue has been sold, but in the meantime the new busi ness department has gone on to other fields, there to start over again, the in teresting, absorbing process of creating issues of securities. From an infinitesimally small g*erm of an idea, a nation has been effected. The American Manufacturing Company is now in a position to carry on its program of expansion; its name is known to in vestors and there are practically a thou sand new partners in the company, all because something has been created. American Manufacturing sixes are a reality—they will go on and on for twenty years—surely there is romance here. G OOD BONDS F o r Y o u r B a n k 's I n v e s tm e n t Inquiries Solicited from Banks and Bankers on GOVERNMENT PUBLIC UTILITY INDUSTRIAL MUNICIPAL jBONDS CHARLES (Chick) EVANS, Jr. Investment Securities Sixteen years experience in bond business 11 S. La Salle Street CHICAGO Long Distance Phone State 6892 Sales M anager A New York Stock Exchange House of thirty years standing desires the services, in its Chicago office, of an experienced Bond Salesman to take charge of its out of town business. This is an exceptional oppor tunity for the right man. While out of town experi ence is not necessary it is desirable. Applicant must be capable of handling men and of expanding suc cessfully a well established clientele. C o n fid e n tia l in te r v ie w s m a y b e a r ra n g e d th ro u g h A L B E R T F R A N K & C O MP A N Y Advertising 134 So. La Salle St., Chicago 58 THE N O R T H W E S T E R N BANKER A 300 Per Cent Gain Deposits in th e Peoples Bank o f Jacksonville h ave increased more than 300 per cent during th e past year. T h e Peoples Bank is keeping pace w ith th e tremendous grow th in Florida and in Jacksonville. Banks and business men having dealings in any part o f Florida w ill find complete satis' faction in th e service and facilities o f the Peoples Bank. M a n y o f your valued clients are planning a visit to Florida, and you w ill w an t to be o f service to them. I f w e can assist yo u in rendering th at service w e w ill be glad to h ave you refer them to us. T he Peoples Bank of Jacksonville Jacksonville, Florida OFFICERS A. P. A N T H O N Y , P resid en t L. P. McCORD, V ice P resid en t P A U L M. PO PE, V ice P resid en t T H U R ST O N ROBERTS, V ice P resid en t C. C. ED M U N D SO N , Cashier R. L. F IS H E R , A ssista n t Cashier https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A p ril, 1926 TH E A p ril, 1926 N O R T H W E S T E R N 59 BANKER Sp e c ia l F l o r id a Se c t io n Florida Continues Her “Onward March” By J. J. Wengerí R e p re se n ta tiv e , D e P u y P u b lica tio n s OME one once said, “A great deal has been said about the weather but noth ing has ever been done about it.” That was a long time ago; long before the eyes of the world had focused on Florida, and before people, everywhere, had started talking about Florida and its tremendous growth. The same statement would not hold true today. In Florida, the weather, in a broad sense, has been capitalized. Ever since Juan Ponce de Leon discovered the state and set out to find the magic waters of eternal youth, it has been known as a land of paradise-—a place of favored climate and ideal weather conditions—a land of flowers and sunshine. For years it has been a favorite playground, but only re cently has Florida started to grow—to de velop. How it all came about is a widely dis cussed topic. People have many different ideas on that subject—nevertheless, the fact remains, Florida did hit its stride some time ago and since then its progress has amazed the world. People everywhere started to talk “Florida”—and thousands of them rushed to this “last frontier state” to find out what it was all about. Many who came were “northern skep tics.” Now they are true Floridians, loud in their praises and enthusiastic in their prophecies. Visiting northerners listen at first with a “fish-story” attitude—but only for a while, for it seems that no one can escape the atmosphere of enthusiasm that fairly pervades the very atmosphere. It has been said that the man who sets out to lie about the wonders of Florida can never lie fast enough to keep up with the truth—and the statement seems logical, S SCENE AT DAYTONA BEACH S tatem en t o f C ondition of The Citizens Bank of W est P alm B each , F lorid a D ecem b er 31, 1925 (Comptroller’s Call) RESOURCES Loans and Discounts................................................... $2,548,653.39 United States Bonds..................................................... 659,200.00 County and Municipal Bonds..................................... 223,646.72 Other Marketable Bonds.............................................. 1,303,321.59 County Warrants ...................................................... 35,000.00 Premium on Bonds...................................................... 8,492.58 Furniture and Fixtures............................................... 43,924.90 13,847.25 Other Real Estate........................................................ Other Resources .......................................................... 5,627.95 A r e Y ou Insuring Y o u r Capital and Incom e? T h ere are Five P oints of T ru e D iv er sity w hich, if follow ed, give you th is In su ran ce. O P E N L E T T E R N U M B E R ONE has been p re p a re d by our In v est m en t D e p a rtm en t to serve those ex pressing in te rest in these fu n d a m e n tals. T his and fu tu re L etters are available u p o n req u est w ith no o b li gation to you. Cash and due from B a n k s....................................................... 1,176,771.19 $6,018,485.57 LIABILITIES Capital Stock ............................................................. $ 100,000.00 Surplus and Undivided Profits.................................. 143,127.86 5,445.00 Dividends Unpaid .........................'............................ Other Liabilities .................... 1,481.27 D e p o s its .................................................. 5,768,431.44 $6,018,485.57 OFFICERS B. A. Maxfield, President C. J. Ohmer, Vice-Pres. S. T. Lainhart, Vice-Pres. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis E. C. Rumsey, Cashier J. W. Dovell, Asst. Cashier J. C. Berry, Asst. Cashier K-95 Baldwin Mortgage Company In v e stm e n t D ep a rtm en t CONGRESS BUILDING M IAM I, FLORIDA Coral Gables Orlando West Palm Beach W e R e n d e r T w o K in d s o f In terest P E R S O N A L A N D E IG H T P E R C E N T (B usiness E sta b lish ed fo r 11 Y e a rs) 60 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis THE N O R T H W E S T E R N BANKER A p ril, 1926 THE A p ril, 1926 NORTHWESTERN BANKER for the entire state is witnessing a growth are being erected and an ever-increasing number of acres are going under develop that is truely remarkable. Cities have doubled and tripled in popu ment for agricultural purposes. Every lation so fast that telephone companies where in the state they are building for and other public utilities have worked day Florida’s future—and the only surprising and night to keep even within hailing dis thing about it all is that it didn’t get under tance of the flying comet of progress. way long ago. Bank deposits, bank clearings, building All of this is indicative of Florida’s permits and other indicating factors have permanent growth and prosperity, but shown a similar amazing growth. Real es other factors must be taken into considera tate has changed hands at prices that have tion. One can’t deny the enthusiasm and made skeptics wail. optimism of the Floridian. Thousands of It wasn’t at all unusual, for a while last people came to the state to see what it was year, to have a piece of property change all about and they are now determined hands several times in the same day—at that nothing will ever make them leave. a big profit to each seller. Binder money They are delighted with the climate and poured into the state and the boom was the industrial and agricultural possibili on in earnest. Its bang and general noise ties of the state. They have decided to was sufficiently loud to attract every semi- east their lot with Florida. foot-loose real estate man to the fray. You will find them in the parks, at band Naturally enough, such a real estate concerts. People from Montana, Minne boom had to reach a point where prices sota, the Dakotas, Michigan, Illinois, Ohio, became sufficiently high to make the buyer Iowa—everywhere! “When did you come cautious. Prices on real estate became down V’ and “When are you going- back ?” too high in many instances; sales slowed are typical questions that may be over down for a while; the binder money went heard at any time—and “Last summer,” home to roost, and Florida settled down to and “Never!” are equally typical answers. a steady growth that is going forward Banks in Florida are excellent examples with clock-like precision. of the stability of the state. Deposits have The growth is statewide. Harbors are increased so fast that banks have outgrown being developed. Factories are locating their quarters several times in the same in large cities. Millions of dollars are year—and they have grown in a conserva being spent in civic improvements. The tive way! It isn’t at all unusual to pick big development companies are going for up a statement for a Florida bank and ward with their work. Giant skyscrapers find that it has deposits of $20,000,000 or more with loans of $7,000,000 or less. Bank clearing's for the United States in creased approximately 15 per cent during the period from 1919 to 1923. During the same period of time, four Florida cities, Jacksonville, Miami, Tampa and Orlando, showed an increase of 500%. But that isn’t all. The state has agri cultural possibilities, too. There are ap proximately 20,000,000 acres of Florida land available to cultivation, and of this amount, less than 3,000,000 acres are under cultivation at the present time. Two hundred and fifty varieties of fruits, nuts and crops grow well in Florida and, in most parts of the state, several crops can be raised in one year on the same piece of ground. Long tables of fig ures could be cited showing how Florida’s citrus and vegetable exports are increasing by leaps and bounds every year, but the important fact wouldn’t be brought out. Agricultural production is far short of capacity, but it is growing—and increased railroad facilities that are now under way, will greatly facilitate this progress. The prophets paint the future golden with promise—so golden, in fact, that a skeptic must be more hard-boiled than a top-sergeant to escape without having the crust of his skepticism at least badly cracked! Meanwhile, Florida continues to grow. People come and they decide to stay. It happens often to even the most rabid of skeptics. AT THE CLOSE OF B U SIN E SS, DECEMBER 31, 1925 ORLANDO of the “T h e C ity B e a u tifu l” S tatem en t o f C ondition Bank of Orange and Trust Co. O rlando, F lorida RESOURCES Loans and D is counts .................$2,356,077.96 O verdrafts ........... 426.17 Stocks and Bonds. 555,697.70 Stock in Federal R eserve B a n k .. 7,550.00 Furniture and F ix tures .................... 39,387.79 Real E sta te ........... 16,386.78 Cash and due from Banks .................. 1,135,733.99 LIABILITIES Capital S to ck .........$ 200,000.00 Surplus and Profits 71,348.83 D E PO SITS ........... 3,839,911.56 $4,111,260.39 $4,111,260.39 D ep o sits, D ecem b er 31, 1925, $ 3 ,8 3 9 ,9 1 1 .5 6 D ep o sits, D ecem b er 31, 1924, 1 ,3 7 0 ,2 9 9 .7 4 In crease in one y e a r _________ $ 2 ,4 6 9 ,6 1 1 .8 2 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 61 IT U A T E D in th e geographi cal c en ter of F lo rid a , serv ing a p ro sp ero u s com m unity, we have u nexcelled facilities fo r h a n d lin g all classes of b u si ness in th is section of the state. S O rlando B ank & T ru s t Co. ORLANDO, FLORIDA Resources Over Eight Million Dollars 62 THE N O R T H AV E S T E R N BANKER April, 1926 W hy Florida Repealed the Inheritance Tax F ro m A d d re ss B e fo re In v e s tm e n t B a n k e rs A sso c ia tio n C o n ven tio n , S t. P e te rsb u rg , F la . SAW, some weeks ago, in some litera ture floating around this country containing propaganda detrimental to Florida, that some real estate agent in Miami had induced the state of Florida to repeal the inheritance tax. That statement, of course, is false. With all due respect to the many friends I have in the real estate business, I do not think any real estate man ever had sense enough to think about that. (Laughter.) We have no taxes of the sort I have I H . G. S k iles, P r e s id e n t Ja m e s L u th e r, Y ic e-P re s. H . G. P u tn a m , Y ic e-P re s. J o h n R. H ill, 'E x e cu tiv e V iceP re s . By Hon. Peter O. Knight T a m p a , F lo rid a mentioned. We never have had, and we have not had for several reasons. In the first place, Florida does not need them. We have more paved highways, more pub lic improvements per capita, and you gen tlemen will find that statement to be abso lutely true when you float around this state for a week or so, than any other state in the union, and yet, Florida to G. H . A. T. J. W. W. J . T. W . W ood, C ash ie r M iller, A sst. C ash ie r G ayle, A sst. C ash ie r G a rd in e r, T r u s t Officer B ates, A sst. T r u s t Officer A m e r ic a n B a n \ and Thrust Company Volusia Avenue Daytona Beach, Florida Capital $100,000.00 Surplus and Undivided Profits $40,000.00 “A grow ing bank, alive to p resen t d a y needs a n d o p p o rtu n itie s.” Give Your Custom ers a L etter to U s. W e’ll see th at th ey g e t the same frien d ly banking service th at th ey have been accustom ed to at hom e. day has no bonded indebtedness. It does not owe one single, solitary cent, and it has seven million dollars in its treasury. While the only manner in which we can raise taxation for state purposes is by an occupational tax and an ad valorem tax upon real and personal property, and while the value of the property of the state of Florida exceeds six billion dol lars for assessment purposes, all of the property in the state of Florida—real, personal, mixed, railroads, utilities, de posits in the banks, everything—is as sessed in the insignificant amount of five hundred and fifty million dollars, less than ten per cent of its value, and I chal lenge any state in this union to produce its counterpart. That we have had no graft or no scan dal in our public affairs, and that the administration of our public affairs has been economical and honest, is only too well illustrated by that statement. In the next place, we have no inherit ance tax, because we think it is wrong. We think an inheritance tax is socialis tic, bolshevistic, communistic, and an archistic. AVe agree with President Coolidge that it is legalized robbery. I want to say right here, by way of parenthesis, if my time can be extended for a few moments, that while I am a democrat and never voted anything but the democratic ticket in my life, upon the question of taxation and state rights, Coolidge and Mellon are good enough democrats for me. (Ap plause and cheers.) I want to say something else: AVith all due respect to that great man who is gone now, who will go down in history as one of the world’s greatest characters, Cal vin Coolidge is making the best president this United States has had since drover Cleveland. And Andrew Mellon is mak ing the best secretary of the treasury this country has ever had. We marvel at the bolshevists in Russia who take private property at the point of a gun. We shudder at the bandit in Mex ico who takes private property at the point of a pistol. Oh, we discourse learn edly in our magazines and journals at the stupidity of the French who are about to make a capital levy, but we do worse in this country. We make it unlawful for the man who has worked hard and acquired an estate to give it in his life time to his family, so that he shall be compelled to keep it, so when he dies the government can take it away from him. Money is the god of our time, and Rothschild is his prophet.—Heine. Our poets are men of talents who sing, and not the children of music.—Emerson. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A p ril, 1926 THE N O R T H W E S T E R N 63 BANKER W hy Florida Bond Issues Are Conservative A S A RESULT of intensive investigation many of the largest bond houses of the country are now featuring various Florida bond issues as conservative and safe. In many cases the underlying safety of a bond issue in this state is far greater than would be expected in any other state. Take for example, first mortgage real estate collateral trust bonds. Most companies issuing these bonds have loaned money on the mortgages at no greater than 50 per cent of a very con servative appraisal. This appraisal is arrived at by location, income produc tion, character of the owner of property and all other mortgage safeguards. Then, mortgages in amount equaling 125 per cent of the bonds are placed as collateral in trust with a reliable bank, the bonding company guaranteeing unconditionally the prompt payment of both interest and principal. Safety is the first principle of in vestments. Safety is determined by ability to pay. What would determine the degree of safety or spread of risk in one locality, one city or one part of a state, varies as much in Florida as it does in Illinois, Louisiana, Pennsylvania or any other state. Hence, one cannot judge all securities by any one offering or the securities as a whole in any one state as against the securities as a whole in any other state. Florida banks and other financial in stitutions are here to stay. They are building for permanency. They are es tablishing a record for future years and every banking safeguard is being utilized for safety and stability. Therefore, we have no hesitancy in commending the purchase of Florida bonds from reliable sources. The man who criticizes buying Florida 8 per cent bonds because of the higher yield as compared with other states, is the man who has either never been in the state, or who may have a knowledge of only a small portion of the state and passes judgment accordingly. I have heard men pass judgment on New York state who have merely a visi tor’s knowledge of some small town or possibly one or two downtown streets of New York City. The fellow who tells you all about Ohio, and who has never been in any town except Portsmouth, is not sufficiently informed to tell you about the rest of Ohio, yet many listen and pass his story on to the next man. By the same reasoning what man is capable of judging anything in Florida whose judgment is limited to the east coast or the west coast, or more strictly, as is frequently the case, who has briefly visited in only one community? y \ https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis progress of the state is soundly estab lished, the rapidity of development has gone beyond the scope of local capital and the enlistment of outside finances has been necessary. To attract capital a higher rate of interest is necessary. Hence, 8 per cent is the legal and pre vailing rate of interest in Florida and a careful analysis of the underlying foun dation for this rate reveals a safety and conservatism that is wholly comparable with the safety and conservatism of in vestments yielding but 6 per cent in most other states. By Chas. G. McKinley P u b lic ity M a n a g er, T h e F r a n k lin M o rtg a g e Co., S t. P e te rsb u rg , F lo rid a Florida is a large state. As a state it leads in the percentage gains in popula tion, bank deposits, railroad construc tion, cultivation of acreage, building con struction and other sound investments. Millions upon millions of dollars are constantly pouring into the state for construction purposes, for permanent de velopment and stability. While the 18 96 i 9 26 For thirty years the Merchants Bank and Trust Company . . D a yto n a Beach Florida has been identified w ith th e progress of all th is section of the E ast Coast. It places a t y o u r com m and— an d at th a t of y o u r custom ers who m ay p lan a so u th ern trip , seasoned facilities, and a service w hich you, an d they, w ill approve. t OFFICERS P . N. CONRAD P resid en t W. D. C A M ERON Vice P resid en t an d T ru st Officer S. A. W OOD Vice P resid en t H . R. ZIM M ER M A N A ssistan t Cashier C. M. B IN G H A M Vice P resid en t R . E. C R A FT A ssistan t C ashier F . J. N IV E R Executive Vice P resid en t H . G. P O E L IT Z A ssistan t Cashier A. N. OTIS Vice P resid en t and C ashier M. B. CO NKDIN A ssistan t T rust Officer M ERCH AN TS BAN K A N D TRU ST COM PANY DAYTONA BEACH. FLORIDA 64 THE N O R T H W E S T E R N BANKER A p ril, 1926 St. Petersburg—the Sunshine City T. PETERSBURG—a gem that spar By F. F. Branan, Jr. kles in eternal sunshine on the west coast of the “Sunshine State”—a city that sunshine made famous—a city the quiet, peaceful dignity of the tourist city—St. Petersburg is a spirit of commer that typifies the spirit of Florida. To the tourist making his first visit, St. cial enterprise that is unexcelled. Petersburg is alluring with its warm sun It seems to the visitor that everyone is shine, beautiful homes, hotels that re prosperous. Beautiful tall buildings, mag semble palaces, wide streets, wide side nificent homes, paved boulevards, parks, walks lined with inviting green benches, graceful yachts riding lazily at their moor with its gorgeous vistas of blue water on ings along the water front—all bespeak all sides and silver beaches; but, to the prosperity. What brought all this about ? man who comes for business St. Peters Enterprise! burg offers every opportunity. Beneath St. Petersburgians reflect the cheerful Located in VYCiam $ rl^H E Commercial Bank and Trust Company is adequately fitted to serve you in fast growing Southern Florida. Should you visit our city, we shall be pleased to have you call upon us ; and your friends sent to our institution will receive every consideration that will make their stay here pleasant. t Commercial Bank and Trust Company M IA M I, F L O R ID A R esources O ver T e n M illio n D ollars https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ness of the St. Petersburg climate. You say upon your first visit when your host shows you hundreds of persons idling in the sunshine on green benches that line the sidewalks of the business districts, “Why everyone looks half asleep.” You forget to take in the roaring traffic which is unheeded by those on the green benches. Your host has not yet introduced to you the business men of the town in front of whose offices and stores those green benches are placed. Those people came to St. Petersburg to “sleep,” and St. Petersburg is giving them what they came for. For those who came to the city for en tertainment there is plenty. Dog racing, horse racing, theaters, yachting, tennis, golf, lawn bowling, roque, shuffle board, and for the older folk domino and checker clubs are organized in the parks. Within easy reach of the city are some of the most unique inviting night clubs and sup per clubs in the country, operated in true metropolitan fashion. St. Petersburg has taken into considera tion its natural advantages as to climate and location and has capitalized upon them. The enterprise that has transferred St. Petersburg in a very short time from a village of a few hundred to a bustling city of more than 35,000 is manifest in one of its leading citizens, John N. Thorne, president of the Alexander National Bank. Mr. Thorne came to St. Petersburg in 1905. It was a tiny little village lolling in the sunshine. Mr. Thorne liked it. Great achievements are always preceded by great visions—foresight—and John N. Thorne pictured a great city where then was a tiny village. He bought all the property he could secure and held on. Holding on, though, didn’t mean lying idle. He began to build. He built the Central Hotel, then the largest in the city. He leased it to other interests in 1924 and with his friend, Jacob F. Alexander, another pioneer to the Sunshine City, bought a half block of Central avenue property. Central ave nue is the hub of the business district. This property was leased to other parties last year for 99 years at a considerable profit. Then Mr. Alexander and Mr. Thorne founded the Alexander National Bank. As an example of enterprise, consider the record achievement of this institution in one year. The bank started with $180,000.00 in deposits on January 12, 1925. At the close of business December 31st, its deposits totaled $3,237,785.00—an av erage daily increase in deposits of more than $10,000.00 per banking day. During its first year of business the Alexander National Bank issued $200,000.00 in bank notes, accrued a capital THE April, 1926 surplus of $50,000.00 and has $22,000.00 in undivided profits. Loans and discounts amounted at the end of 1925 to $1,411,437.00. W. B. Roper, executive vice president, is largely responsible for this phenomenal progress. During the recent illness and subsequent death of Mr. Alexander, the full burden of responsibility for the bank fell upon the shoulders of Mr. Roper. Since Mr. Alexander’s death Mr. Thorne has been elected president and takes an active interest in the bank. The study of the bank clearings of St. Petersburg is genuinely astounding. In ten years the total clearings have in creased from $1,153,106.00 in the month of January to $29,183,625.00 for the month of January this year. This repre sents a gain of more than two thousand per cent in clearings for the month of January. Paralleling this showing are the deposits. Clearings for 1924 doubled those of 1923 and 1925 doubled 1924. There is every indication that the clearings this year will again double those of last. This growth of business during the sum mer months attests to the popularity of St. Petersburg during the summer. It justifies the claim of St. Petersburgians that this is an ideal year ’round city. The weather record covering a period of ten years will support St. Petersburg’s claim. St. Petersburg has the only newspaper in the world that gives away its entire circulation any day that the sun fails to shine before the paper goes to press. The Evening Independent has only been called upon to make good this proposition 85 times in the past 15 years—less than 6 sunshineless days a year! The city is alive with construction ac tivity. Hammers and saws ring out musi cally everywhere. The rapid-fire hangbang-bang of the riveting machine is heard FRANKLIN 8% First Mortgage Real Estate Collateral Trust BONDS C om plete detailed inform ation gladly furnished on request. Refer ence: Any bank in St. Petersburg, Florida. The Franklin Mortgage Company Franklin Building https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Sf. Petersburg, Fla. NORTHWESTERN 65 BANKER on all sides. Networks of steel are reach ing toward the skies. The peak of this building is reached during the summer months. Building permits in 1923 were over $7,124,000. In 1924 they were over $9,557,000, and in 1925 over $23,303,000. This present year bids fair to eclipse all previous years in building activity as figures for the first two months of January and February indicate. St. Petersburg is known far and wide as a city of churches. Represented are churches of all denominations serving huge congregations housed in great auditoriums. The city’s schools are among the best equipped in the country. Every recrea tional facility is provided for the summer or winter visitor; in short, the Sunshine City in the Sunshine State is planned to become an industrial center, a hub of Florida West Coast commerce, a favorite winter and summer resort and an ideal place to live and work in any season of the year. FLORIDA SPELLS FORTUNE To the young of ability with a little money, ambition and pluck; to the elders, it spells health, comfort and more years added to life. The country is new where small beginnings will develop into big business. Money wisely spent will bring large reward. For information, write J. W. TUCKER, Realtor Opposite Post Office Lakeland, Florida Box 472 IN M I A M I The South Florida Mortgage Company of Miami, is at your service to assist you or your customers in every possible way. This Company renders the follow ing services: 1. Makes mortgage loans on resi dential property. 2 . M akes appraisements fo r loaning or investment on property in southeast Florida. 3. Buys and sells real estate on a brokerage basis and handles rentals, property management and insurance. We are at your service in this rapidly growing city which has a building program placing it in seventh place among the cities of the United States. W rite us to d a y South Florida Mortgage Company C ap ital $ 1 0 0 ,0 0 0 .0 0 J. V. Carpenter, President O. M. Fowler, Vice President S. Grover Morrow, Vice President Harry A. Brattin, Secretary 150 S. E ast F irst S t. M iam i, F lorida 66 THE NORTHWESTERN BANKER April, 1926 Aeroplane View of St. Petersburg, Fla. A bove is pictured the heart o f the business section o f St. P etersburg, F lorida, as seen by the air cameram an. S ta tem en t o f th e C ondition o f th e American Bank and Trust Company St. P etersb u rg, F lorid a a t clo se o f b usin ess D ecem b er 3 1 , 1925 (Condensed from statement to the Comptroller) RESO U RCES Loans and D iscou n ts............................................. $5,630,993.14 U. S. Treasury C ertificates.............................. 826.00 Bonds ........................................................................... 904,125.85 B an k in g H ouse, Furniture and F ix tu re s...... 140,744.87 O verdrafts .................................................................. 1,123.65 Claim s and Other R esources............................. 2,000.00 Cash on H and and in B an k s............................... 2,318,462.62 In Florida—West Florida—Under Florida’s pro gressive laws.................... A temperate climate the year ’round—no snow, no slush, but fine, bracing days late fall and winter: In summer the cool ing breezes from the Gulf of Mexico. . . . The finest water to drink, to bathe in—fresh, semi-salt and salt—and a harbor capable of giving safe an chorage to the navies of the world. . . . Con nected with the east and north by the L. & N., “The Old Reliable,” and now with the middle west, the northwest and west by the great “Frisco” System. . . . Connected by both with the great coal, iron and steel fields of Alabama. . . . Sit uated in the heart of the American Riviera— “Satsumaland,”—commercial possibilities untold; That’s PENSACO LA $8,998,276.13 L IA B IL IT IE S C apital Stock ...........................................................$ 200,000.00 Surplus ........................................................................ 200,000.00 U n divided P rofits................................................ 193,705.60 D ivid en d s U n paid................................................. 20,160.00 D eposits ...................................................................... 8,384,410.53 T h e C a p ita l of th e S o u th fr o n t C o u n try $8,998,276.13 D eposits D ecem ber 31, 1925............................... $8,384,410.53 D eposits Decem ber 31, 1924........ ...................... 5,483,728.94 EDGAR R. MALONE, President CHAS. W. LAMAR, Vice President JAMES W. ANDREWS, Cashier Increase ..................................................................$2,900,681.50 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ADDRESS US, OR MENTION OUR NAME TO YOUR CUSTOMERS American National Bank of Pensacola Capital and Surplus, One Million Dollars April, 1926 THE NORTHWESTERN BANKER 67 Facts About Banks in Florida The recent statement of condition of the American Bank & Trust company of St. Petersburg, Florida, shows that the hank has resources of approximately $9,000,000, with deposits of $8,384,410.53, as of December 31, 1925. The increase in deposits between December 31, 1924, and December 31, 1925, was approximately $3,000,000. The bank is capitalized at $200,000 and has surplus and profits of $393,705.60. Officers of the bank a re : A. P. Avery, president; D. E. Beach, first vice presi dent; 0. G. Hiestand, second vice presi dent; Carlos W. Tyler, cashier; C. E. Brickett, assistant cashier; E. A. Doty, assistant cashier, and P. H. Battaile, as sistant cashier. l it h o g r a p h in g / ^ c |0 - 0 A recent statement of condition of the Merchants .Bank and Trust company of Daytona Beach, Florida, shows total re sources and liabilities of over $8,000,000. Deposits are $8,036,672.97. In 1922 the deposits were $2,850,000 and in 1924 they were slightly over $4,100,000. Deposits increased practically 50 per cent in 1925. Officers of the bank a re : F. N. Con rad, president; S. A. Wood, vice presi dent ; C. M. Bingham, vice president; F. J. Niver, executive vice president; A. N. Otis, vice president and cashier; W. D. Cameron, vice president and trust officer; H. R. Zimmerman, R. E. Craft and H. G. Pollitz, assistant cashiers, and M. B. Conklin, assistant trust officer. The March 6, 1926, statement of condi tion of the First American Bank and Trust company of West Palm Beach, Florida, shows total resources of over $12,347,713. Deposits are $11,645,595.10. The bank has a capital stock of $300,000 and surplus and profits of more than $402,000. Officers include E. M. Brelsford, presi dent; F. E. Decker, vice president; S. C. Kearley, vice president; H. L. Donald, vice president; J. W. Smith, vice presi dent and trust officer; J. C. McNiel, as sistant vice president; C. Z. Walker, cashier, and J. W. Harwell, J. K. Wilson and E. W. Castleberry, assistant cashiers. The First National Bank of Miami, Florida, has total resources of $57,965,022.71 with deposits of $55,255,861.54. Capital stock is $1,200,000 and surplus and profits are more than $1,400,000. Poetry can be for man what love is for the hero. It can neither counsel him, nor strike for him, nor do anything for him, in short; but it can form a hero in him, call him to great deeds, and arm him with a strength to be all that he ought to be.—Schiller. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis cf b u n d e d by G EORG E H. R A G S D A L E EDWIN G. R A G S D A L E SE C R E T A R V KW )()4(HW HMKS+ULl 68 THE NORTHWESTERN BANKER Facts About Florida Towns and Cities Jacksonville The population of Jacksonville in 1900 was 28,429. The 1925 figures are given as 136,663. Bank clearings in 1900 amounted to something over twelve mil lion dollars. In 1925, bank clearings reached the $1,400,000,000 mark. Jacksonville is recognized as the lum ber capital of the South, and each year handles enough lumber to build an eightfoot board walk around the world at the equator. The shipments consist chiefly of southern pine, gulf red cypress and southern hardwoods. Of $25,000,000 worth of naval stores annually exported from the United States, $10,000,000 worth leave from Port Jacksonville. Jacksonville is primarily an industrial and commercial center. It has 430 manu facturing plants with 127 classifications. The annual value of manufactured prod ucts is over $100,000,000 and the manu facturing payroll of the city is estimated at $20,000,000. St. Augustine In 1920 the total bank deposits in St. Augustine amounted to something over $3,633,196. In 1925, they passed the $10,000,000 mark. Population increased The Royal Union Life Insurance Company D es M oines, Iow a S tro n g and P ro g ressive I Paid to Policyholders— Over $21,000,000.00 Insurance in Force— Over $148,000,000.00 I A. C. Tucker, President D. C. Costello, Secy. Wm. Koch, Vice Pres. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis April, 1926 from 8,000 to 18,000 in the same period of time. St. Augustine, known as the “Mother City of America,” is one of America’s most interesting cities. Under Spanish, English and American sovereignty, it has played an important part in the historical episodes enacted on the western hemis phere during the past 400 years, and to day, its old charm in its surrounding of dignified landmarks which speak of medi eval times, is one of its chief appeals to the visitor. Fort Marion, started in 1638 and completed in 1756, the City Gates, the Catholic Cathedral and the Spanish governor’s mansion, now post office, erected in 1598, are among the places of historical interest. Daytona Beach Daytona Beach is now Florida’s seventh city. The population has increased from 6,245 in 1920 to 21,500 permanent resi dents in 1925. Building permits for two months last year exceeded ’the entire building permits for 1924. In 1920, bank deposits in Daytona Beach amounted to something over $2,868,000. On October 20, 1925, bank deposits were approxi mately $19,000,000. The beach at Daytona Beach is the wonder beach of the world. It is five hundred feet wide at low tide, smooth as a table and twenty-three miles long. On this famous speedway, world-famed auto mobile drivers, time and again, have broken world records. The average yearly temperature is 71 degrees. The chief industries are agri culture, lumber manufacturing, fruit pre serving and textile manufacturing. Other industries include roofing and tile plants, tent and awning manufactories and mat tress factories. Greater Palm Beach The population of Greater Palm Beach increased from 2,000 in 1910 to 30,000 in 1925. Approximately $40,000,000 was spent for hotels, homes and business buildings in 1925. Seven banking insti tutions in Greater Palm Beach have com bined deposits of $50,000,000. West Palm Beach has been made a seaport by federal government designation and more than $1,035,000 has been spent in improving the harbor. The value of fruits grown in Palm Beach county was approximately $2,000,000 in 1924. Municipal improvements of the Palm Beaches in 1925 amounted to $6,480,000. Building permits in 1925 amounted to more than $31,000,000. Miami Miami is known popularly as the “Wonder City.” Residents, however, call it the “Neighbor of the World.” The population of Miami in 1920 was less than 2,000. Today it is well over 200,000 and everyone predicts 1,000,000 popula tion by 1935. Bank deposits in Miami in April, 1926 THE 1913 amounted to $3,277,149. In 1925, bank deposits climbed to more than $173,000,000. Bank clearings in 1924 were something over $200,000,000. In 1925 they were over $1,000,000,000. Building permits in Miami in 1925 were approximately $60,000,000 as compared with approximately $4,000,000 in 1920. The average yearly temperature is 75 de grees. It is the proud boast of Miamians that it is the liveliest resort in America. The climate is adapted to outdoor living and every sport may be indulged in every day in the year. Tampa Tampa, on the west coast of Florida, combines the attractions of a resort with the advantages of a great manufacturing and shipping center. It has a great wealth-producing back country and there are approximately five hundred different kinds of business carried on in and near the city. Deposits in Tampa banks in 1920 amounted to approximately $24,000,000. In 1925 they climbed to approximately $100,000,000. Bank clearings during the same period of time increased about 400 per cent. Tampa is a great manufacturing city. More hand made Havana cigars are made in Tampa than in any other city in the world. Tampa’s great port makes it an important shipping center. Phosphate, lumber and manufactured articles are sent out in exchange for tobacco, hard woods and tropical fruits. Orlando Orlando is located in the lake region of Florida and is surrounded by one of the richest agricultural sections of the state. Large quantities of lettuce, cu cumbers, cabbage, tomatoes, celery, beans, peppers, strawberries, grapes and melons are grown in Orange county and three or four crops are grown in one year. Orlando is referred to as the City Beautiful and it rightly deserves the name for there is indeed rare beauty in her setting of lakes and hills. There are fifteen hundred lakes within the borders of Orange county and twenty-nine beau tiful lakes within the limits of Orlando alone. The population of Orlando increased from 4,000 in 1910 to more than 31,000 at the end of 1925. Building permits during the same period increased from about $2,000,000 to more than $9,000,000. The total resources of Orlando banks exceed $26,000,000. Pensacola Pensacola, located in the extreme west part of the state on the Gulf of Mexico, seems more properly a part of the gulf coast country. The scenery in and around Pensacola offers everything from the shimmering waters of her streams and the blueness of the bays and the Gulf of https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NORTHWESTERN 69 BANKER Place Y ou r Philadelphia A cco u n t w ith this Strong W ell-E quipped Institution T he P h ila d e lp h ia N atio n al B ank, organized in 1803, an d T he G ira rd N a tio n a l B ank, fo u n d ed in 1832, two of th e largest and m ost in flu e n tial N atio n al B anks in the City of P h ila d e lp h ia , by action of th e B o ard of D irectors have consolidated as THE P h il a d e l ph ia N a t io n a l -G ir a r d Bank th e cap ital being $8,000,000 and su rp lu s $17,000,000. M r. Levi L. R ue, fo rm e r P re sid e n t of T he P h ila d e lp h ia N atio n al B an k , is C hairm an of the B o ard of D irectors an d C hairm an of the E xecutive C om m ittee, an d as such heads th e organization. M r. Jo se p h W ayne, J r., fo rm e r P re sid e n t of T h e G ira rd N atio n al B an k , is P re sid e n t of th e B an k an d C hief E xecutive Officer, h a v ing charge an d d irectio n of its affairs. T he e n tire official an d clerical staff of b oth in stitu tio n s has been re ta in e d , w hich not only in su res to o u r co rresp o n d en ts the m ain ten an ce of th e same lib e ra l and effi cient service an d th e perso n al a tte n tio n to th e ir needs w hich has characterized the service of each B an k in th e past, b u t very m ate ria lly increases th e facilities w hich we have to offer. 70 THE Mexico to the bright green of the wooded shores that rise in a gentle slope beyond the city. Pensacola claims the distinction of be ing the oldest city in the United States. It also claims to be the newest city in opportunity. This latter claim is backed with one of the finest harbors in the south and a great agricultural back coun try, often referred to as “Satsumaland.” NORTHWESTERN The country surrounding Pensacola is in the heart of the Satsuma Orange belt Pigs, persimmons, kumquats, pears, grapes and berries of all kinds are grown in abundance. Melons, potatoes and pea nuts are also important crops. Pensacola’s harbor is one of its chief assets. The entrance to Pensacola Bay is three-quarters of a mile wide and there is a well-marked channel 31 feet deep and National Bank of Commerce in NewYork Established 1839 STATEMENT OF CONDITION, DECEMBER 31, 1925 RESOURCES Loans and Discounts $329,099,966.19 Overdrafts, secured and unsecured....... 11,708.86 United States Securi ties ....................... 53,314,209.89 Other Bonds and Se curities ................. 9,548,700.29 Stock of Federal Re serve B ank.......... 1,500,000.00 Banking House.. . . . . 4,000,000.00 Cash in Vault and hue from Federal Re serve B ank.......... 60,890,000.22 Due from Banks and Bankers............... 11,251,049.23 Exchanges for Clear ing H ouse............ 161,987,953.30 Checks and other Cash Item s.......... 3,735,719.27 Interest Accrued__ 1,749,326.23 Customers’ Liability under Acceptances. 42,739,328.30 LIABILITIES Capital Paid up......$25,000,000.00 Surplus.................... 25,000,000.00 Undivided Profits... 15,935,290.52 D iv id e n d payable January 2, 1926... 1,000,000.00 Dividends unpaid.... 14,207.50 Deposits................... 543,699,069.67 Reserved for Interest, Taxes and other Purposes.............. 4,826,684.02 Unearned Discount.. 962,835.43 Acceptances executed for Customers...... 43,468,474.79 Acceptances sold with our Endorsement.. 19,921,399.85 $679,827,961.78 $679,827,961.78 C H A IR M A N OH THE BOARO P R E S ID E N T JA M E S S. A L E X A N D E R S T E V E N S O N E. W A R D VIC E-PR E S I D ENTS J. H O W A R D A R D R E Y T H O M A S W . BOW ERS E L M O R E F. H IG G IN S ROY H . PASSM O RE JO H N E. R O V E N S K Y SECOND E M A N U E L C . G E R S TE N E U G E N E M . P R E N T IC E FARIS R. R U S S E LL H E N R Y C. S T E V E N S V IC E -P R E S ID E N T S E D W A R D H . R A W LS E V E R E T T E. R IS LE Y JO H N T . W A L K E R , JR . C A S H IE R AUDITOR J U L IU S P AU L P A U L B. H O L M E S FOREIGN DEPARTMENT V IC E -P R E S ID E N T S SECOND JO S E P H A . B R O D E R IC K D A V ID H . G. PEN N Y V IC E -P R E S ID E N T S H A R R Y P. B A R R A N D FRANZ M EYER TRUST DEPARTMENT S E C O N D V IC E -P R E S ID E N T AN D T R U S T O F FIC E R C . A LIS O N A S S IS T A N T TR U S T O F F IC E R S B E V E R L E Y DUER M E L V IL L E W . T E R R Y SC U LLY D IR EC TO R S JAM ES S. A LEXA ND ER J O H N W . D A V IS H EN R Y W . de FO REST JO H N T . D O R R A N C E E D W A R D D . D U F F IE L D https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BANKER C H A R L E S E. D U N L A P V A L E N T IN E P . S N Y D E R G E O R G E E. R O O S E V E L T H A R R Y B . T H A Y E R C H A R L E S B. S E G E R J A M E S T IM P S O N JO HN G. S H E D D S T E V E N S O N E. W A R D T H O M A S W IL L IA M S April, 1926 500 feet, wide which extends to the docks. The accessibility of the coal docks at Pensacola, the facilities afforded and the fact that ships go to sea at any time of the day or night without the assistance of tugboats, is making Pensacola the great bunkering coal port of the gulf coast. Over Twenty Million Autos in United States More than twenty million motor ve hicles were in use on the highways of the United States in 1925, according to the Bureau of Public Roads of the United States Department of Agriculture. The total registration reported was 19,954,347, but there were in addition 96,929 state and federal government-owned ve hicles not included in this figure. The increase in registrations during the year amounted to 2,360,670 or 13.4 per cent. Florida reports an increase of 46.8 per cent, while Utah, Mississippi, Alabama, Arkansas, North Dakota and Texas all report increases of more than 20 per cent. Truck registration in creased 14.5 per cent for the entire country. New York leads in total registrations Avith 1,625,583 followed by California, Ohio, Pennsylvania and Illinois in the order named, all Avith registrations of OATer a million. There is now one motor vehicle for each 5.8 persons in the United States. California has only 2.9 persons for each motor vehicle, AAdiile Io A v a has 3.6; Ne vada, 3.7; Kansas, 4.0, and Oregon, 4.0. At the other end of the list is Alabama with 12.0 persons per vehicle, but rank ing among the highest in increase during the year. The total revenue from registration fees, permits, etc., amounted to $260,619,621, of which $177,706,587 Avas made available for state highways, $19,124,014 for state road bonds and $48,396,471 for local roads. The to ta l m otor ATehicle reg istra tio n by states not including official state and fed eral cars and elim inating, so fa r as pos sible, re-registrations and nonresident reg istratio n s, Avas as folloAVS: Alabama .. . Arizona . . . Arkansas . . California . Colorado .. . Connecticut DelaAvare . . Florida Georgia Idaho ........ Illinois Indiana Io w a .......... Kansas Kentucky .. 194,580 68,029 183,589 1,440,541 240,097 250,669 40,140 286,388 248,093 81,506 1,263,177 725,410 659,202 457,033 261,647 April, 1926 THE L o uisiana.................................. 207,000 140,499 M a in e ........................................ M ary lan d .................................. 234,247 Massachusetts ......................... 646,153 M ichigan................................... 989,010 Minnesota ................................. 569,694 M ississippi................................ 177,262 Missouri ................................... 604,166 Montana ................................... 94,656 N e b rask a................................... 338,719 Nevada ..................................... 21,169 New Hampshire....................... 81,498 New Jersey................................. 580,554 New Mexico................................. 49,111 New York.................................. 1,625,583 North Carolina........................... 340,287 North Dakota............................. 144,972 Ohio ........................................... 1,346,400 Oklahoma ................................. 424,345 O reg o n ....................................... 216,553 Pennsylvania ........................... 1,330,433 Rhode I s la n d .......................... 101,756 168,496 South Carolina......................... South Dakota................ 168,028 Tennessee ................................. 244,626 Texas ......................................... 975,083 U t a h .......................................... 90,500 69,576 V erm ont.................................... Virginia .................................... 282,650 W ashington.............................. 328,442 West Virginia........................... 217,589 Wisconsin ................................. 594,386 W yom ing.................................. 47,711 District of Columbia................ 103,092 NORTHWESTERN Appreciate These 12 Advantages of A B A S n Cheques “TRAVEL MONEY” 1. Safer than currency to carry on the person while traveling. 2. Cashable day or night, business day or holiday, the world over. 3. Accepted in foreign countries at current rates of exchange. 4. Helpful in avoiding embarrassment and annoying delays. 5. Trouble-saving through doing away w ith the neces sity for changing currencies when crossing interna tional frontiers. Total.....................................19,954,347 LEGAL DEPARTMENT (Continued from page 22) was due a few days later; that Yutes de livered the note sued on herein for $2,000.00 to the bank in payment of the $1,500.00 note; that the bank paid Yutes the difference. The cashier also testified that neither he nor the bank had any notice or knowl edge whatever concerning the nature of the transaction leading to the execution and delivery of the note by May and Day to Yutes. This evidence of the cashier is uncontradicted by positive evidence. Under the “Negotiable Instruments Law,” the holder of a promissory note may recover against any or all of the makers or endorsers. The following rule of law has been accepted by the court many tim es: ‘ ‘ Suspicion of defect of title, or knowl edge of circumstances which would ex cite such suspicion in the mind of a pru dent man, or of circumstances sufficient to put him upon inquiry, will not defeat the rights of one claiming to be a bona fide holder. That result can be pro duced only by bad faith on his p art.” The evidence of the bank’s witness was uncontradicted and not inherently improbable, when taken in connection with circumstances surrounding the transaction. There were no circumstances or facts https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BANKER 6. Self-identifying through the bearer’s signature. 7. Provided in com pact wallets; handy to carry, easy to use. 8. Convenient denominations— $10, $20, $50, $100. 9. Crisp, clean and handsome as new bank-notes— features which especially appeal to women customers. 10. So well made and so well protected that they have never been successfully counterfeited. 11. Accepted by the U. S. Government in paym ent of customs duties. 12. The O FFIC IA L travelers’ cheques of the American Bankers Association. W r ite us fo r lite r a tu r e and f u r th e r in fo rm a tio n T h e A g e n t fo r th e M e m b e r B a n k s fo r th e p a y m e n t o f a ll A m e r ic a n B A N K E R S A s s o c ia tio n T r a v e le r s ’ C h eq u e s is Bankers T ru st C ompany NEW YORK PARIS LONDON 72 THE NORTHWESTERN BANKER C l a r it y April, 1926 in connection with the purchase of the note that would impute knowledge by the bank that the note was defective. The evidence was uncontradicted and conclusive. The court found that the evidence was uncontradictory and conclusive, and that the bank was an innocent purchaser of the note for value. BEGINS A T HOME Who Pays for the Credit Frauds? A clear dem o n stratio n of facts concerning th e League of N ations is having strong influence against m isrep re sen ta tio n an d po litical bias. T he A m erican people now realize th a t foreign policies are today hom e problem s. The question often arises as to who pays the cost of commercial frauds that result from concealment of assets, fake bankruptcies and bankrupt fires. It is a question that cannot be answered in a few words. However, in general it can be said that the manufacturer and whole saler pay the cost of frauds out of their profits. As the losses through commercial frauds are not evenly distributed throughout business, they do not repre sent a fixed charge like a tax or overhead expense that can be passed on to the consumer. Fraud losses vary greatly be tween business concerns so that where business is operating on a strictly com petitive basis the loser cannot attempt to pass the loss on to the consumer in the price of his goods which would then be higher than the prices quoted by his com petitors. There are some exceptions to this gen eral rule, however. In businesses that operate in such a manner that they can charge a monopoly price, which may be what the traffic will bear or a low price which in the long run creates a larger profit than a high price, the fraud loss, in most instances, can be passed on to the consumer by an increase in price. This would be true in businesses which control patents or produce a highly spe cialized line of goods that are not made of equal quality by any other concern. It is also possible to pass fraud costs along to the consumer in those businesses which are limited to a few fields and not highly competitive. There are, for in stance, concerns manufacturing a line of goods for which there is limited demand and which vary in quality or style among the few manufacturers in this particular field. It is often the case that in this kind of business the prices vary considerably and these prices do not influence each other to any appreci able degree. This would be another in stance where the losses of commercial fraud could be distributed through the sale of merchandise to the consumer. Another type of business which would be comparable with the foregoing in stance would be those concerns which operate on a highly productive or effi cient basis, and which, therefore, could increase the price of their products by T h e Ita lia n d e b t is one issue to pro v e how w ell in form ed th e p u b lic has b e come on the b ro a d effect of in te rn a tio n a l finance. D em ands p o u re d in on R e p u b lic a n an d D em ocratic Senators fo r p ro m p t settle m ent. These dem ands em phasize th e need of stabiliz ing E u ro p e to re n d e r these countries b e tte r able to p u r chase A m erican e x p o r t stocks; to enable th em to h a n d le p ro d u cts o f m ining, autom obile m a n u f a c t u r e , ag ric u ltu re an d cotton. P R O F . M A N L E Y O. H U D S O N , B e m is P r o fe s so r o f I n te r n a tio n a l L a w , H a r v a r d U n iv e r sity “ T he L e a g u e ’s m e th o d h a s w o r k e d , a n d a w o rld in ivh ich su d d e n fla res o f w a r are s till iiossible ca n ill a ffo rd to he w ith o u t it.” U n d e rsta n d in g an d p ro te c tio n are d em anded today by all countries a n d th e League of N ations is steadily expanding to m eet in te rn a tio n a l problem s. L e a rn th e f a c ts ! T he A p ril issue of the L eague of N ations News w ill re p o rt the activities of th e League d u rin g these days of in te rn a tio n a l controversies. JOHN H. CLARKE President GEORGE W. WICKERSHAM President Board of Directors MRS. CARRIE CHAPMAN CATT Vice President Board of Directors CHARLES H. STRONG Vice President Board of Directors HAMILTON HOLT Chairman Finance Committee CHARLES C. BAUER Executive Director K indly forward, free, April issue League of Nations News. N a m e ____________________________ A d d r e s s __________________________ C ity --------------------------------------------State __________ __________________ The League of Nations Non-Partisan Association, Inc. 6 East 39th Street, New York, N. Y. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A p ril, 1926 THE small amounts to pay for fraud losses without endangering sales. Other con cerns in the same line as these highly pro ductive plants, however, could not do this for their prices would already be high and the addition of a few cents to the wholesale price would endanger their amount of sales. Even where credit insurance may be resorted to, the cost cannot be entirely escaped, for the losses that would result to policyholders would be paid by all the insured; and the premiums that would pay the losses would as indicated before come from the merchants’ profits. One can get an idea of another cost that is attached to fraud by learning that in seven years the credit protection de partment of the National Association of Credit Men spent nearly a half million dollars in investigating credit books and bringing evidence before federal and dis trict attorneys. Besides this, some of the 140 local associations that are affiliated with the national association spent con siderable sums in similar independent work. Six cases handled by the association that were chosen at random indicate that the fraud cost of investigation averages about $600 for each case. We must bear in mind also that creditors’ committees under their own initiative conduct simi lar work from time to time which runs into large sums of money. The Board of Trade of San Francisco has done this sort of work from time to time and has, in fact, set aside a sum of money for prosecutions in San Francisco and its environs. These costs which I have just recounted roughly all come out of the profits of business and they are spent, of course, in the hope that assets may be recovered to reduce the loss to business. There are also adjustments in bank ruptcies which are costly and sometimes occur in fraudulent failures. In legiti mate failures these are a necessary bur den on business, it appears from experi ence, but these adjustments and compro mise settlements, it is regrettable to say, are made often with business burglars or dishonest bankrupts. The retailer is also a loser through un fair competition that is created by bank ruptcy sales, and in the unscientific dis tribution of distress merchandise, not to overlook stolen goods, that often result from fraudulent bankruptcies. Adds to Surplus The State Bank of Lonsdale, Minne sota, last month paid a five per cent divi dend and added $1,000 to its surplus, ac cording to Cashier T. C. Skluzacek. The bank is also installing a new set of fix tures. The poet who does not revere his art, and believe in its sovereignty, is not born to wear the purple.—Stedman. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis N O R T H W E S T E R N BA N K ER 73 74 THE NORTHWESTERN BANKER April, 1926 P ersonal P aragraphs ' John J. Mitchell, president of the Illinois Merchants Trust, Chicago, and Mrs. Mitchell, have reached Cairo, Egypt, in their cruise of the Mediterranean Sea. A S p ecia lized S e rvic e fo r B anks a n d B an k ers w hich is the resu lt of m ore th an sixty years of e x p e ri ence is offered by THE FIRST N A T IO N A L B A N K OF CHICAGO and THE FIR ST T R U S T and SAVING S BANK C om plete facilities are p ro vided fo r active and inac tive accounts, collections, bills of lading, investm ents an d foreign e x c h a n g e tran sactio n s FRANK O. WETMORE, Chairman MELVIN A. TRAYLOR, President Combined Resources Exceed $400,000,000 Edwin G. Foreman, vice president of the Foreman Trust & Savings Bank, Chi cago, has recently returned from a twoweeks trip through Texas and Mexico. He reports business conditions in Mexico much better than he had expected to find them. John Romersa, secretary of the Mon tana Bankers Association, has become vice president of the Bank of Commerce, Kalispell, Montana. He will continue his duties as secretary of the Associa tion, but will conduct the affairs from Kalispell instead of Helena. —$— John Burgess, vice president of the Metropolitan National Bank of Minne apolis, lias been reappointed chairman of the committee on conventions and pub licity for the Minneapolis Civic and Com merce Association. —$— R. DeLancey Davis, well-known invest ment banker of Minneapolis, has recently associated with the Minneapolis office of P. W. Chapman & Company. Mr. Davis will devote his time especially to the banks in southern Minnesota. —$— E. W. Decker, president of the Northwestern National Bank of Minneapolis, has recently returned from a business trip to New York, Philadelphia, and Wash ington. He reports that from the trend in the East, business conditions should George B. Irick has been appointed manager of the bond department of the First National Bank of Davenport, Iowa. Mr. Irick brings to his new position twenty-seven years of experience in bank ing, gathered in Illinois and Iowa, as a state bank examiner, and with bond and investment companies. Homer A. Miller, president of the Iowa National Bank, Des Moines, and Mrs. Miller, are in Los Angeles visiting their son and, daughter. They made the trip from New York by steamship, and re port a very enjoyable journey. They plan to return to Des Moines about the middle of April. —$— W. F. Keyser, Missouri; William B. Hughes, Nebraska; and Eugene P. Gum, REAL SERVICE To serve our clients to their entire satisfaction is our constant aim and ambition. I S tan ley -H end ers on Com pan y Farm Mortgage Bankers 207-214 H igley Bldg. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis continue good throughout the year. While in Washington, Mr. Decker at tended a meeting of the advisory council of the Federal Reserve Board. —$— Lucious A. Andrew, son of L. A. An drew, Iowa State Superintendent of Banking, who is attending the Wharton School of Commerce at the University of Pennsylvania, was recently elected to the Psi Upsilon fraternity. —$— Charles B. Mills, president of the Mid land National Bank & Trust Company of Minneapolis, announces the election of Samuel L. Sewall as a member of the board of directors of that institution. Mr. Sewall is vice president and treas urer of the Minneapolis Iron Store Company. C edar R apids, Iow a April, 1926 THE Oklahoma, and W. C. McFadden, North Dakota, led discussions on bank manage ment at the fifteenth annual conference of the Mid-west Bankers Association, held recently at Topeka, Kansas. Rep resentatives from fourteen states were in attendance. —$— Carl Nyquist, vice president, secretary and treasurer of the Chicago, Rock Island and Pacific Railway Co., has been elected a director of the Foreman National Bank and the Foreman Trust & Savings Bank, Chicago. Lentz Made Advertising Director Announcement is made of the appoint ment of Rex V. Lentz, as advertising di rector of T h e N orth western B anker and the Iowa Bank Direc tory, by Clifford DePuy, publisher. The appointment of Mr. Lentz to this posi tion has met with con gratulations from his associates and m a n y friends in banking and REX V. LENTZ financial circles. Mr. Lentz joined the DePuy organization three and one-half years ago in the capacity of special representative. He was later made associate manager. Prior to his connec tion with T he N orthwestern B anker he was engaged in newspaper work in Fairfield and Centerville, Iowa. The new advertising director has youth, personality, determination and ability—a winning combination in the field of finan cial journalism, as elsewhere. B ig B a n k M e rg e r Subject to the approval of the stock holders of the respective banks, The Philadelphia National Bank, organized in 1803, and The Girard National Bank, founded in 1832, two of the largest and most influential National Banks in the city of Philadelphia, by action of their Boards of Directors have agreed to con solidate as The Philadelphia-Girard Na tional Bank. This will be the most important con solidation of great banking institutions in the history of Philadelphia, and will add greatly to the financial prestige of the city and state. After consolidation, the capital will be $8,000,000 and the surplus and undivided profits $19,600.000, making the total capi tal employed approximately $27,600,000. The aggregate deposits and resources will be larger than any other bank in the state of Pennsylvania. The reports to the Comptroller of the Currency, dated December 31, 1925, showing combined de posits of approximately $200,000,000, and total assets of upwards of $250,000,000, indicate the bank will rank among the https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NORTHWESTERN 75 BANKER largest and most influential in the country. The board of directors of the consoli dated bank will include the full member ship of both boards, and arrangements will be made for an executive personnel and staff which will insure the continuity of existing sound policies and service under the unified management. Levi L. Rue, president of the Phila delphia National Bank will be the chair man of the board of directors and chair man of the executive committee and as such will head the organization. Joseph Wayne, Jr., president of the Girard National Bank, will be the presi dent of the bank and chief executive officer, having charge and direction of its affairs. It is expected that the merger will be effected about April 1st. Mind and Matter Limericks are sometimes very searching in the light they shed. For instance, the following, in a recent book of limericks: There was a faith healer of Deal, Who said: “Although pain isn’t real, If I sit on a pin And it punctures my skin, I dislike what I fancy I feel.” A poet is a painter of the soul. T HE FOREM AN BANKS F O U N D E D 1862 W e seek your business on the basis of the service we can render you. A service we have perfected through 64 years of consistent growth. W hen Chicago was an outpost of eastern commerce- the transcontinental railroad an ideal ises dream-— we were doing business here. Today our representatives will serve you in more than fifty countries. T he F orem an N ation al B an k The F o r e m a n T r u s t a n d S a vin g s B a n k La Salle and Washington Sts. Chicago C o m b in e d C a p ita l, S u r p lu s a n d U n d iv id e d P ro fits e x ce ed $ 10,000,000 76 THE NORTHWESTERN BANKER Planning the Vacation Springtime is here. And with it . comes anticipation of the annual vaca tion, to which bankers are not immune. Bankers employing Wessling Serv ices can take advantage of this needed recreation and freely enjoy themselves. They know that this Service is an able secretary which has firmly intrenched within the minds of the people the sub stantiality of their institution. And that even in the temporary ab sence of the executive officials, trust and confidence will continue to be inspired through that sincere personal contact for which Wessling Services are noted. FROM IOWAATLYTTON D.R.WESSLING. PRESIDENT V Wa N D W W A-RWOLF VICE PRESIDENT April, 1926 Endowment Policy in Business E. S. Andrews of the Prudential In surance Company says the advantages of endowment policies for retiring bonds are becoming more apparent to business men. Thus, if bonds are issued for re tirement at the end of twenty years, an endowment policy on the life of the president of the company is taken out to mature at the same time. The yearly premium paid to the insur ance company is in the nature of a sink ing fund, having the great advantage, however, over the ordinary sinking fund in that, instead of the disorganization and difficulty which ordinarily would ac company the death of the chief execu tive, the entire sinking fund is thereby promptly provided. Dealing with the proposition further, Mr. Andrews says: “ More and more the men in small businesses of their own are coming to realize the importance of insuring their lives for the benefit of their estates. I refer to those men who are conducting what is essentially a oneman business, in contrast with more elaborately organized undertakings in the business world. “ In the event of the death of a man in such a position, adequate insurance enables the quick discharge of current obligations and the settlement of the business for the benefit of his family and the satisfaction of his creditors. The man whose business should be expanded will usually gain the support and en couragement of his bank when it is known that life insurance is carried for the express purpose of protecting credit.” “NEWS AND VIEWS” (Continued from page 21) folder is, “What is the financial situation now in Nebraska?” This question is answered as follows: “It tvas never sounder or better than at the present moment. Deposits in banks are increas ing at a very rapid rate, indicating that the people are accumulating a surplus and gradually paying their debts. The banks never have been in such a sound position as they are now, and there has never been a time when there was more available credit for business and indus try than at the present.” Dale Brown, manager of the Cleveland Better Business Bureau, in a discussion on promoters and the methods they use, points out this very significant fact : “A Planners and Creators o f Original Bank Services Bank A rt-W indow and L obby D isplays -C lassified Programs Southern California Banks C o rresp o n d en c e in v ited fro m B a n k e rs d e s i r i n g to b u y c o n t r o l in C a l i f o r n i a . SANDERS-McCULLOCH CO., B a n k B rokers, S u i t e 1005, S t o r y B l d g . , L o s A n g e l e s . https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A pril, 1926 THE promoter who is organizing a new com pany always endeavors to get a banker to serve on his board, or to act as one of his officers. In many cases this is not so much because he values the bank er’s judgment as it is because he wants to use the banker’s name as a selling point. It gives the promoter’s proposi tion the appearance, of a conservative enterprise. Certainly bankers should not allow themselves to be named officers or directors of new companies without giv ing these companies thorough examina tion. If there is any question as to their soundness, bankers should unhesitatingly say ‘no’ to such requests.” The Morris Plan Banks and their affili ated companies had, on January 1st of this year, resources of $130,000,000. They also had more than 3,500,000 loans amounting to $725,000,000. In addition to this, the public owned over $44,935,000 in Morris Plan certificates. The Morris Plan Bank has come to be a very interest ing and helpful part of American bank ing, and serves in many instances where other banks cannot. The average Morris Plan loan is ap proximately $260.00. The Department of Agriculture points out in its Farm Outlook Report, issued recently, that although the farming in dustry is now in the best general posi tion since 1920, that any general expan sion in production this year would tend to place farmers in a less favorable eco nomic position than at present. Evidently, the Department of Agricul ture does not desire to have any more discussion about surplus crops and ex port corporations. R. C. Schaffner, vice president of A. G. Becker & Co., in discussing German in vestment opportunities in the Mid-Conti nent Banker for March, said, “Germany today has a population of 63,000,000 with a national income from their productive efforts of about $12,500,000,000. It has a national wealth of more than $50,000,000,000 with interest obligations on ac count of public and private indebtedness far below normal. Its budget is balanced, its currency is sound, and its balance of trade is favorable. Its people, with their characteristic intensity are combing the world for commercial obligations and find ing them.” “In my opinion these are definite and unmistakable signs of recuperation in Germany.” This is certainly a fine picture of the present situation in Germany, and one Avhich American investors will welcome, because of the large sums of money which have been invested in German bonds and securities. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis N O R T H W E S T E R N BANKER 77 In the Modern Bank T oday, in th e m o d e rn b a n k youTl find th e d e m a n d is fo r u p -to-date b a n k eq u ip m en t. F o r th e b a n k e r w ho is still in th e “ one-hossshay” class th e old fash io n ed ty p e of b a n k fix tu re s m ay suffice—b u t to d ay u p an d com ing b an k ers realize an d in sist u p o n som ething b etter. T h e F ish e r Co.— fifty years o ld in ex p eri ence w ith b o th th e old an d new types of in te rio r b a n k fixture w ork, are recognized by h u n d re d s of b an k s an d b an k ers th ro u g h o u t th e n o rth w est as th e a u th o rity on th e p ro p e r k in d of b a n k fixtures. F ish e r Co. ex p erts— can easily and quickly arran g e to refit y o u r b ank. W h e th e r it is fo r th e e n tire b a n k or fo r ju st a p o rtio n — th e q u a lity of th e w ork w ill b e ju st th e sam e. Y ou w ill find th e F ish e r C om pany co m petent, as h u n d re d s of b an k ers w ill testify. % % Thoughtful Bankers Consult the Fisher Company % % 78 THE HOW THE VIGILANTES SOLD THEMSELVES TO CLINTON COUNTY (Continued from page 19) capture just described, only the prompt action of the leader of the Clinton county vigilantes averted the killing of one of the bandits after the capture had been made. In the excitement of the time one of the citizens with little more provoca tion would have shot one of the bandits. Immediately upon capture, the leader of the vigilante should assume full charge, making sure that the prisoners are safe and that there will be no more hostilities from prisoners or vigilantes. The vigilantes of eastern Iowa and western Illinois have nobly contributed to proving that the vigilante idea is prac tical and efficient; that it will function not only in the capture of bank robbers but in the capture of any criminals or T H E B A N K E R S ’ N 0 R T II AV E S T E R N B A N K E R fugitives. The people of this vicinity now realize that the county bankers’ as sociations are responsible for creating an effective arm of the law. In relating the story of the capture one of the Chadwick vigilantes said, ‘ ‘ We simply did our duty and now we are asking that the courts of the state of Iowa do theirs. ’ ’ And I may add that the courts of Iowa are doing their duty in this case. Fairfield and Sawyer, the two payroll bandits who were sentenced on the morning of their at tempted escape, are now serving thirtyyear terms in Fort Madison. One who aided in the escape is dead; another who was badly wounded by a shot from the Clinton jailer before the chase started has begun a five-year term in Fort Madison and the leader of the gang, the man who waited on the courthouse lawn, is still in the Clinton county jail awaiting trial. S E R V I C E S T A T I O N ” Beyond the Usual services ordinarily ren dered by a city correspondent, the “Republic” has de veloped a broad list of “unusual” services, each one of which is designed to create a definite ad vantage for your bank. Note what the two following banks have to say about them: from from Montana Illinois “ W e wish to thank you for the exceptional way in which your bank is handling our account. D uring the f o u r w eeks we have used your good bank as correspondent we have had m ore offers o f service th a n we ever had in “I am not overlooking the fact that you folks are sending out to your correspondent banks a broad list o f w on derful su g g estio n s and we are “ falling” for nearly all o f them . Your Bank M oney O r d e r P la n is especially attractive.” fo u r y e a r s îto m any other.” oAn inqu iry w ill brin g f u ll details by return m a il 0k ft V_T The N ation al B a n k o f the R E • • P O F U B L C H I C A G O I C • • J O H N A . L Y N C H , C hairm an o f the B o a rd D A V I D R . F O R G A N , V ice-C hairm an G E O R G E W O O D R U F F , V ice-C hairm an H . E . O T T E , President ______________________________________ C o p y rig h ted N . B . R . 1926 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis April, 1926 KORRECT ETIKETTE FOR KOUNTRY BANKERS (Continued from page 18) and I was probably a trifle nervous in my greeting. I didn’t know at the time that the English are not in the habit of shak ing hands promiscuously with strangers, so I stuck my paw under the grating in the approved supine fashion, and stam mered effusively, “ Pleased to meet up with you, Duke. Make yourself right to home.” There was a perceptible glint of sur prise in the duke’s eye for a moment, there being nothing in his coat of arms about a Teller, Rampant, or Teller’s Hand, Supine—but his British composure was not to be permanently ruffled. He thrust his hand in his waistcoat pocket, and with a rumbled, “ Thenks, my good man, ’ ’ he left a new two-bit piece in my hand supine! I intended to keep the quarter in my estate, as Lincoln did the first dollar he earned, but the very next day I had to bust it in order to buy cigars for the ex amining committee, and almost before I knew it, I had spent the other twenty cents, also. The Arertical handshake is the most natural, but also the most dangerous of the three. By it the hand is thrust be neath the grating, and then the wrist is turned so that the palm of the hand is vertical. Customers will ordinarily have no hesitation in accepting the hand thus presented, but difficulty often arises when it is time to withdraw the member. As has been pointed out, the space be tween the counter and the bottom of the grating is usually limited, and the banker often has an anxious moment when he proceeds to retract his hand, and notes just how limited the space really is. A bank in our neighborhood used to have an oversized teller named Abner, who was addicted to the vertical handshake, until one day he found his hand caught and held fast by the treacherous bars of the wicket. This bank was a conserva tively managed institution, in which the cashier had no authority to incur any ex traordinary expenditures without the consent of the board of directors. Ab ner got stuck soon after the bank opened in the morning and it was after noon be fore a quorum could be obtained at a spe cial meeting of the board. All the car penters and contractors in town were re quired to submit sealed bids for the per formance of the work necessary to free the unfortunate teller, and when these were opened, they were all found, by a majority vote, to be exorbitant. A doc tor on the board moved amputation, and considerable time was used up in the dis cussion of this motion, so that night found Abner still imprisoned. A pistol was therefore placed where he could reach it with his left hand, and the night watchman was given the night off. A pril, 1926 THE Early the next morning, Abner was surprised and delighted to find that he could easily withdraw his hand. Very fortunately no member of the force had had the authority to purchase food for him during his incarceration, and the emaciation produced by the lack of sus tenance had affected his release. It is clear, then, that no one of these three methods will be found uniformly satisfactory. As a result of a deep study of this problem, the writer has perfected an appliance which fills this crying need of the handshaking banker, meeting all the difficulties thus far found by occu pants of tellers’ cages. In consists of a stuffed rubber glove on the end of a stick, the fingers of which may be manipulated by means of elastic bands attached to the ends of the fingers and led back through a series of agate guides to the other end of the stick. The most ingen ious feature of this appliance, hcnvever, is a system of electric wiring, whereby the artificial hand may be heated by pressure on a button, with the residt that it im parts to its handshake a warmth that is almost human—much more nearly so than is the case with that of the ordinary banker. THE DANGER BACK OF LETTER OF RECOMMENDATION (Continued from page 16) knows it to be false or not, or even where he may believe it to be true, if he acts recklessly in making it. “It is held that where a person makes a positive statement that something is a fact his very statement that the matter is a fact implies that it is a fact to his own knowledge, and if he does not know it to be true that in itself is a false statement which will render him liable, even though he may have believed it to be true. “On the other hand, a person is not liable for mere statements of opinion or belief if the matter is expressed to be merely one of opinion and belief, even though the opinion or belief may be false. “In short, I think the safe rule to follow in this matter of making statements as to financial worth or credit standing may be said to be not to make any statements which you do not know to be true of your own knowledge, or if you do not know them to be true then to state expressly that the information given is merely a matter of opinion or belief and should not be acted upon without verification.” Gullible The gullibility of a large percentage of the public is made vivid by a casual glance at a few of the fraud orders issued by the postoffice department. One of the latest of these orders has barred the postal facili ties to one gold-mine promoter who, al though representing in his circulars that “values are definitely established” and that https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NORTHWESTERN BANKER “there is no risk of loss,” nevertheless has admitted to a postoffice inspector that in the period of about twenty-four years in which he has handled this property, he has obtained more than a million and a half dollars from investors and has obtained only $150 in gold from his mine. So far as the postoffice can do so, it is tripping up such fellows. But, after all, the success of the frauds is based upon gullibility. As long as some people are easy dupes by nature, it will be impossible to protect them completely.—From Chi cago “Journal of Commerce.” Moonlight is sculpture.—Hawthorne. 79 Oh, You Can’t, Eh? “ You can’t put an old head on young shoulders, ’ ’ “ No? Take a slant at one of these heavy sugar daddies in a taxi with a flap per .”-—American Legion Weekly. To write fine poetry requires intellec tual faculties of the highest order, and among these not the least important is the faculty of reason.—Bryant. Poets are the hierophants of an unap prehended inspiration; the mirrors of the gigantic shadows which futurity casts upon the present.—Shelley. OVER 100 YEARS OF COMMERCIAL BANKING Length of Years and Breadth of Service T N ITS one hundred and fourteenth year, Chatham Phenix believes that it is more advantageously situ' ated than ever before to render correspondent banks the type of service they require. The world is its banking field. Both in resources and in connections it is amply qualified to give the fullest degree of cooperation. In this belief, we cordially invite your correspondence. M A I N O F F IC E 1 4 9 B ro a d w a y , C o r n e r L ib e rty S tre e t N e w Y o rk C ity R E S O U R C E S OV E R A Q U A R T E R B I L L I O N D O L L A R S THE 80 NORTHWESTERN April, 1926 BANKER INTERNATIONAL / Y Y T I F E B U IL D IN G ' A klgfeblii Of Course We Want Banker Agents ittilliiiSK iifiifiüii L g T ; • J ls S ^ S E E e j Ö J H il c sG £ E £ £ S iS U j i S j s s s p e PEC SLC .!? 3 , 7 3 $ ; n ^ 9 , ' ' . T ! L S B E B C C ^ ^ O — b u t we w an t them to join th e In ternational Life organization on a basis th a t will pay them as well as ourselves. A lthough unlisted in our financial statem ent, we value th e good will of our B anker agency force about as highly as anything we possess. They find this com pany read y “to go th e second m ile” in th e ir effort to ren d er service th a t will build a continually grow ing business. Confi dence in your com pany m akes fo r more efficient w ork and g reater production. - Our plan of B anker cooperation calls for A d irect profit to e lig ib le bank s from th e d ep osit p la ced in th e bank. 2. A p rofitab le com m ission con tract. 3. A co m p lete and u p -to-d ate lin e o f life insu ran ce con tracts, b oth stan d ard and sub-standard. 1. W. K. WHITFIELD President Vice President W. F. GRANTGES Vice President and General Manager Agents This plan is fu rth e r strengthened by “helpful cooperation” from a com pany of proven stren g th and stability. W rite fo r inform ation. International Life Insurance Company ST. LOUIS, MISSOURI Loyal, enthusiastic agents have made possible the sound, healthy growth indicated by th is, our six th an n u al statement AS OF DECEMBER 31, 1925 L IA B IL IT IE S ASSETS Cash ................................... -.... $ 356,580.69 Government Bonds ............... 168,824.22 Mortgage Loans on Real Estate ....... 951,230.00 Cash in hands of Agents....... 454,984.26 Due from U. S., States, Coun ties, etc................................. 237,916.47 Due from Reinsuring Com panies ................. -...... -....... 42,060.68 Accrued Interest .......... 27,026.16 Real Estate .......... 16,192.05 Miscellaneous Assets ............. 93,257.40 $2,348,071.93 Less Assets not admitted (Agents delinquent pre miums) ........................ ...... 100,454.54 ------------------ CAPITAL FULLY PAID....... Surplus—Reserves For Taxes .................... .......... $ 24,000.00 For Losses ................... 282,690.82 For Commissions .................. 53,181.24 For Unearned Premiums...... 499,446.54 Surplus (net) ......................... 182,317.61 $1,158,555.00 Total Surplus and Re serves ......................... WE OWE For Reinsurance .... For current accounts ........ All other Liabilities.............. . $2,247,617.39 1,041,636.21 30,176.18 3,500.00 13,750.00 47,426.18 $2,247,617.39 FEDERAL SURETY CO M PA N Y C A S U A L T Y IN S U R A N C E SU R E T Y BONDS W. L. TAYLOR, Vice President and General Manager HOME OFFICE https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis DAVENPORT, IOWA April, 1926 THE NORTHWESTERN 81 BANKER INSURANCE SECTION Reminiscences of a Hail Insurance Man By W . A. Rutledge Secretary, Farmers Mutual Hail Insurance Association Des Moines P hoto at the righ t: An orchard near P le a sa n tv ille, Iow a, en tirely stripped o f its fr u it and n early stripped o f its fo lia g e b y a hailstorm . A t the le ft: A residence near P le a sa n tv ille, Iow a, show ing the effect of a terrific hailstorm in Ju ly , 1899. N o te the effect o f the h ail on the w ind ow shutters. A S A BOY of fourteen years the y \ writer of this article traveled from Calamus, a small village in Clinton county, to Carroll county. This was fifty years ago and the railroads of that day were mere playthings compared to the railroads of today; nevertheless it was a brave people who dared assume the re sponsibility of building a railroad into the then unsettled west. It was an all-day trip and took from early morning until late in the evening. No one who has not seen the virgin prairie with its rolling landscape and its streams can have any conception of the beauty of it nor the thrill that comes to the youthful heart as it adventures into the unknown. At that time the buffalo had only re cently departed and the wild deer was still to be found on our prairies. The prairie wolf sang you to sleep at nights and you were awakened in the morning by that peculiar booming sound made by the prairie cock as he strutted up and down the hillside in the midst of his harem and threw defiance at his rivals. The blue stem, that most magnificent of all the wild grasses, the very aristocrat of the prairie which furnished for the pioneer roofs for his barns, fodder for his stock and firewood for his comfort, covered both hill and valley. Never will its like he seen again, and the boy of our prairies will re member its passing with a sigh and a tear. At that time thousands of settlers were flocking to the west and the newly turned sod planted to wheat was bringing forth millions of bushels of this most precious of the cereals. In the summer of 1874 a hailstorm had passed across Carroll county, which Avas so severe that the pop lar and cottonwood groves, which were, some of them, three and four years old https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis and from one to four inches in diameter, Avere literally killed by having the bark all peeled off the side toAvards the storm. In 1877 another storm passed to the southeast from the northw est, a little fu rth e r Avest, Avhich mowed doAvn the p ra i rie grass and left the ground almost like it had been ploAved. In the spring of 1884 in cutting ditches Avith a large ploAV cut ting three feet Avide at the top and fo u r teen inches at the bottom, tAventy inches deep, startin g at E x ira in Audubon and traveling fo r six Aveeks in a nortliAvesterly direction to Storm Lake, IoAva, Ave Avere unable to get corn fit to feed our cattle, because a severe hailstorm had passed over th a t section the year before, ju st in harvest time, and the ears of corn had from one or tAvo to a dozen rotten spots caused by hailstones. In the last thirty-three years my busi ness has been the protection of farm ers from loss to groAving crops by hailstorms, and my experiences have been m any and varied. In 1896 near Le Mars, Iowa, pigs, chickens and calves Avere killed by hailstones, and in some instances the hail Avent through the roofs of houses. On Ju ly 6, 1899, a hailstorm laid Avaste the crops near Pleasantville, IoAva. N ot a single tin roof in -the toAvn would shed w ater a fte r the storm. The trees along the road Avere as bare of leaves as in Ja n u ary . The fru it trees Avere stripped clean of their fru it. On a neAV house of T. R. Brown, one of the county super visors, the shutters were broken by the hail as effectively as it could have been done by a hammer. Even the fence rails Avere all spotted up where they had been pounded by the hail. E very year some place in IoAva and in deed over nearly or quite all of the agri- cultural section of North America between the Allegheny and Rocky Mountains, many hailstorms occur. In 1925 there Avas scarcely more than three days at one time betAveen June 14th Avhen a most dis astrous storm occurred reaching from northAvest of Omaha to Creston in Union county, Iowa, until the 18th day of Au gust, when a terrible storm, beginning in PoAveshiek county, Iowa, near Grinnell, Avent off to the southeast, crossed the Mis sissippi and finished someAvhere in Ken tucky, when some hailstorm did not occur somewhere in IoAva. In this later storm near Deep River and North English in Keokuk county, and on to the southeast, there was not a single building in the heart of the storm Avhich did not require a neAV roof and many of them new siding on the west side. The destruction to crops Avas appalling and the farmer who did not have hail insurance Avas in most cases left a bankrupt. On some farms every green thing left on a quarter sec tion of land could have been carried off in one load on a man’s back. Hailstorms come at a time Avhen the crops are green and tender. There is no Avay of preventing either the storm or the loss and the farmers have banded them selves together into a Mutual Insurance Association to protect themselves. It Avas their only hope. It is also the banker’s surety. Is Enjoying Tour A communication received last month at the home office of the Inter-State Busi ness Men’s Accident Association of Des Moines, from its secretary-treasurer, Ernest W. Brown, states that he and Mrs. BroAvn thoroughly enjoyed their ocean trip to the Bahamas, West Indies, Panama Canal Zone and points in South America. They are aboard the White Star liner “S. S. Megantic,” Avhich sailed February 27th from NeAV York City. They plan to return to the States about April 1st. Poetry is a jealous mistress; she de mands life, worship, tact, the devotion of our highest faculties; and he aaJ io refuses all of this and more, never can be, first and above his other attributes, an eminent or in any sense a true and consecrated poet. —Stedman. 82 THE Why the Banker Should Sell Insurance By W m . B oyken , Vice President Titonka Savings Bank, Titonka, Iowa As a banker knows the financial needs and circumstances of the people of his community he is the one person who is best qualified to supply these people with the insurance protection best fitted to their particular needs. Their banker is interested in their progress and welfare and will supply the proper insurance from a standpoint of service. Many “ insurance agents” will look only at the profit to themselves and will often supply people with policies of too large an amount or of the wrong kind, particularly is this true in the life insur ance field. A banker not only knows the financial circumstances of his customers and N 0 R T H AV E S T E R N B A N K E R others in the com munity, b ut th e sm all town banker also knows the Aveaknesses and habits and even fam ily troubles of his people so he can see b etter th a n they A\7h a t th e ir fu tu re likely will be. A borrow er a t a bank who is a good m oral risk but Aveak financially will strength en his credit by being supplied Avith the rig h t kind of protection fo r his p ro p erty and life. Then th ere are the people Ave all knoAv Avho cannot save money except through the insurance p re miums Avhich come as reg u lar as taxes and which, over a period of years, not only means a snug sum sa\Ted b ut has often tra n sfe rre d a spender into the class of savers. The banker and supply it standpoint of thing for his see immediate who will study insurance to his customers from a service is doing a good community. He may not results but over a period The Royal Union Life Insurance Company D es M oines, Iow a S tro n g and P ro g ressive I Paid to Policyholders— Over $21,000,000.00 Insurance in Force— Over $148,000,000.00 I A. C. Tucker, President D. C. Costello, Secy. Wm. Koch, Vice Pres. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis April, 1926 of years he will find that he has been a benefactor to many. Kansas City Branch Convenes Members of the Kansas City branch office of the Royal Union, held a tAvo-day convention in Des Moines recently. In cluded in the banquet Avhich closed the meeting were A. P. Osborne, manager of the branch office for the past eighteen years; Jack P. Miller, Avho has produced continuous business for the Royal Union every month for twenty years; Guy W. Peabody of Sedalia, Mo., Avho Avrote 117 applications in one day last September, and Earl G. Mercer, cashier of the branch, Avho is also president of the Kansas City UnderAvriters Association. Speakers accorded high praise to the Kansas City organization which led all other Royal Union agencies in 1925, with a production of $3,500,000. Van Houten Elected President A. AV. Van Houten, special representa tive of the Mutual Life of Nerv York, at Davenport, IoAva, has been elected first president of the newly organized Iowa State Association of Life UnderAvriters; P. AAA Darling of Cedar Rapids was elected vice president and A. H. Peter son of AVaterloo, secretary and treasurer. The chief w ork of the association fo r the coming y ear will be to organize as sociations in tow ns Avhere th e underAA7rite rs are not noAV organized. Honor Oldest Agent A. M. Dodge Avas recently given a din ner at Enterprise, IoAva, by the officers of the Equitable Life of Iowa, in honor of his eightieth birthday and being the oldest licensed agent in the company, being Avith the company forty-four years. A draft for $1,000 Avas presented to Mr. Dodge, being the face of a policy taken out many years ago, Avhich Avas to be presented to him if he lived to see his eightieth birthday. Shambaugh Reelected President J. J. Shambaugh Avas reelected presi dent at the annual election of officers of the Des Moines Life and Annuity, held recently. The other officers a re : George Cosson, vice president; S. J. Houston, vice president; G. AV. Anderson, vice president; E. J. McCormick, vice presi dent; E. L. Shinnick, secretary; R. J. Bannister, counsel; L. M. Barkw, treas urer, and Dr. Prank Chase, medical di rector. Becomes District Manager Charles L. Duffy has been appointed district manager for the Royal Union Life in Buchanan county, IoAva, and Avill have temporary headquarters at Pairbank. He has been Avith that company the past five years as special agent Avorking out of their AAUiterloo office. April, 1926 How to THE NORTHWESTERN BANKER 83 Choose an Insurance Company By r . B. Claxton, Cashier, State Bank of Fayette, Iowa In choosing a life insurance company to represent, not as a high-pressure agent looking first at cash returns, but as a banker with ideals of service to a pub lic whom he daily meets, there are cer tain features which must be taken into consideration. In view of the hundreds of companies operating around us, of varying propor tions, one of the first questions that arises is that of size. This I consider not of prime importance since our in surance laws today are such that the pol icyholder must in every case be amply protected against actual monetary loss. Yet I would choose that company which, by at least a reasonable number of years in operation, had proven itself equal to any unexpected demands that may have been made upon it. The growth of the company should be taken into consideration, a healthy in crease in desirable business being more acceptable than purely mushroom growth through stress on volume of production regardless of quality. I would look always to the matter of surplus for the protection of policy holders and the class of the company’s heaviest investments, and I would want a company which writes all the standard forms, including policies for women and children and with the disability and double indemnity provisions if desired. Beyond all these considerations I look to the personnel of the company—their attitude toward the agent and the policy holder, the service which they stand ready to perform after the business is once on the books of the company. I would look to their record of litigation, if any, to their policy in the matter of claim settlements, to their willingness to extend policy loans where necessary. I would also want a company which would be willing to rewrite or reduce policy amounts where necessity demanded, for by the company which I keep shall I be known to my customers. Above all I would want to represent a company whose agents are not schooled in high-pressure, who are schooled to sell the policy which fills its particular need, and who may remain in their respective communities not merely as collectors of commissions but as real servants to their fellow men. Charles E. Miller Dies Charles E. Miller, general agent in Des Moines for the Pacific Mutual, for the past eighteen years, died recently in Rochester, Minn., where he underwent an operation. He was fifty-six years of age at the time of his death. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Your Company Is Your Partner Choosing a life in su ra n c e com pany should be like selecting a business p a rtn e r. T he first th in g an agent looks fo r is “ agency service a n d cooperation.*’ T he Des M oines L ife an d A n n u ity C om pany m eets th is req u isite by m ain ta in in g a definite, solidly-backed policy of agency service— hence th is com pany’s well know n re p u ta tio n as “ T he C om pany of C o o p eratio n .” As a p a rt of th a t service an d rela te d always to an agent’s ideas, ideals an d am bitions, we offer a com p a n y strong, stable— a n d one w hose steady grow th is constantly b ro ad e n in g th e o p p o rtu n itie s o f Des M oines L ife a n d A n n u ity agents. W e offer a w orking p a rtn e rs h ip agents. to am bitious J. J. S h a m b a u g h , Pres. Des Moines Life and Annuity Company Des M oin es, Iowa = iiiii*iiiiiiiiiniim =üiiiiiitnii> n m HUM ««M«Hniiiiiiniinm 444UH 4iitnm 44 iiiiiimiminjiinntninmiiiimiiimiiiiimiiiimiinniiniiiiiiintiiiniiinnim 4H«ntiininniiiiiniiiiiiniiiii 444444444444444i What the 63rd Annual Statem ent Show s A s s e t s o f $368,818,073. P o l i c y h o l d e r s ’ r e s e r v e ( M a s s a c h u s e t t s s t a n d a r d ) o f $316,383,808. O t h e r l i a b i l i t i e s $21,922,459, in c lu d in g - p o l i c y h o l d e r s ’ d i v i d e n d s 250,000 p a y a b l e i n 1926. o f $11,- S u r p l u s A s s e t s $30,511,805; 9.6 p e r c e n t o f t h e g e n e r a l p o l i c y r e s e r v e . T h e J o h n H a n c o c k M u t u a l w r i t e s a l l f o r m s o f L if e , E n d o w m e n t a n d T e r m policies fo r B u s in e ss a n d P e r s o n a l P ro te c tio n , J o i n t L ife c o n tra c ts , T o ta l D isa b ility a n d D ouble In d em n ity , all th e new fo rm s of Group, W h o lesale an d S a la r y D ed u ctio n , a s w ell as A n n u ity c o n tr a c ts in v a r io u s form s. O u r o r g a n i z a t i o n is p r e p a r e d to a r r a n g e life i n s u r a n c e p r o te c tio n to m e e t a n y n e e d a n d s p e c i a l i z e s in th e r e q u ire m e n ts of p a r t i c u l a r conditions an d in h e rita n c e taxes. L if e I n s u r a n c e C o m p a n y ' o r Bo s t o n . M a s s a c h u s e t t s H A R R Y S. H A SK IN S, S tate A gent 417-21 Southern Surety Building, Des Moines, Iowa 84 THE New Des Moines Company A corporation charter has been granted to the Union Mutual Life Insurance Com pany of Des Moines. Officers of the company are William Schultz, Jr., president and general man ager; C. T. Schultz, vice president and secretary; H. R. Schultz, treasurer; Howard D. Gray and George Hans, mem bers of the board of directors. Will Convene in Davenport Davenport, Iowa, has been selected as the 1927 meeting place of the annual con vention of the Iowa Agents Association of the Northwestern Mutual Life Insur ance Co. N 0 R T H AV E S T E R N B A N K E R There were eighty of the Northwestern representatives present at the 1926 an nual meeting which recently closed at Davenport. Enter New States The Royal Union Life has been licensed to do business in the states of Mississippi and Alabama, in addition to the states in which it now operates. Deniss H. Murphree, former lieutenant governor of Mississippi, located at Jackson, has been appointed state manager for that state. Insurance Through Women’s Clubs Iowa Life Underwriters are very much interested in the work being done by the April, 1926 insurance committee of the American home department of the Iowa Federa tion of Women’s Clubs, as repoited by Mrs. W. S. Pritchard of Garner, Iowa, chairman. Since Mrs. Pritchard’s election a year ago, it is estimated that the message of life insurance has reached 2,000 women in the state. The following men have spoken before meetings of associated clubs during the year: L. S. Moorehead of Mason City; A^aughn Griffith of Mason City; J. R. Bunyan of AVaterloo; A\Talter Ferrell of Des Moines; W. D. Morton of Sioux City, and E. C. Ford of Iowa Falls. In the talks insurance was approached from the “home” angle, without mention of com pany affiliations. Mrs. Pritchard has spoken before a dozen or more of the clubs, her message being especially interesting since she is the mother of eight children. Much literature has been distributed and two clubs have used lesson material. Seventy-five letters have been received and answered, and the playlet, “The Heart of the Estate” has been staged by two clubs. Goes with Merchants Life Elmer Loucks, formerly president and general manager of the National Trav elers Casualty Association of Des Moines, has joined the Merchants Life of Des Moines as city manager of agencies. Mr. Loucks has been a well known member of the Health and Accident Un derwriters Conference for many years. He organized the National Travelers Casualty in 1907 and retired from that organization three years ago when a new organization was placed in charge following several months of litigation. Will Hold Agency School A ten-day school of instruction, start ing March 29th, will be held in Des Moines for Aetna Life agents of Iowa under the direction of state managers McClung and Deaton. It is expected that thirty-five Iowa agents, with pos sibly some from the Lincoln and Omaha agencies, will attend. E. O. Schriver, home office instructor, will be in charge. Freeman Appointed Advertising Manager ■ Ernest Sturm, chairman of the board of directors of the American Fore Com panies, has announced the appointment of Charles E. Freeman as manager of advertising and publicity. Mr. Freeman for the past three years has been associated with the America Fore Insurance Companies as assistant manager of the department he now heads. He is a talented advertising executive who hails from the West, having been a native of Illinois. Northwestern Univer sity is his alma mater. After leaving https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis April, 1926 THE NORTHWESTERN 85 BANKER the university he was associated for a time with D. F. Killer & Company, print ers and designers, of Chicago, Illinois. The new advertising manager is a wellknown member of the Insurance Adver tising Conference. His hobby is “ prize winning.” Organize a guessing contest and you can count on Charles E. Free man for first prize. We congratulate him on winning this new and well-de served prize. New Iowa Insurance Commissioner The Hon. W. R. C. Kendrick recently announced his resignation as Iowa in surance commissioner. He is succeeded by Ray Yenter, IoAva City attorney and chairman of the house insurance com mittee in the last session of the Iowa legislature. Commissioner Yenter has already assumed the duties of his new position and is nicely installed in his new office at the Iowa state house. Mr. Kendrick leaves a position which he had held for three years and one month, during which time he made a host of friends throughout the country. He secured deserved recognition for his ability last year when he was elected president of the insurance commissioners convention at their Texas convention. Previous to his appointment as com missioner, Mr. Kendrick had been as sistant attorney general for a number of years. He has not yet announced his plans, stating that within the next few weeks he will probably make a connec tion with some insurance company either in the state of Iowa or in the east. Commissioner Yenter, a man of pleas ing personality, and a good background of insurance experience, has already made a number of friends in the insur ance fraternity. He has announced that the personnel of the office will be retained completely. Members of the staff include Don H ar low, deputy commissioner, Ralph Kennon, actuary; J. W. Dailey, security clerk; E. W. Sweeney, fee clerk; Esther Crawford, general clerk; J. W. Cook, complaint clerk; W. S. Dulaney, policy examiner; R. W. Brockett, chief exam iner, and force of clerks, examiners and stenographers. The new commissioner is thirty-nine years old and has practiced law in Iowa City for the last seven years, during which time he has paid particular at tention to insurance matters. He repre sented Johnson county in the house of the Iowa legislature during the Thirtyninth, Fortieth, Fortieth extra and Fortyfirst Sessions, having been a member of the house insurance committee in each session and chairman of the committee last year. Nature tells every secret once. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis This Association leads— others follow. If you w ant the best, and nothing less should satisfy you, p u t your tru st in— The Farmers Mutual Hail Insurance Association of Iowa Home Office, Des Moines, Iowa j ---------— ---- —— "“V I5ITLE I n s u r a n c e = = ^ — “O W N E R S H I P ” = P R O T E C T IO N — — = ^ — T itle S earch and G u aran tee is th e ac cep ted p ro c e d u re in all p ro p e rty tran sfers. No one to d ay questions th e value an d d esir a b ility of it any m ore th a n th e y w ould q u es tio n th e value of life or fire insurance. In fact, title g u aran tee is “o w n ersh ip ” insurance, p u rch ased w ith one sm all p rem iu m . Lei a represen tative of Southern Surety C om pany call and fu lly explain T itle In surance to you r clients. Setid for special book let on T itle Insurance. TITLE DEPARTMENT SOUTHERN SU RETY COMPANY 201 YOUNGERM AN BUILDING A \ ___DES MOINES, IOWA___ r r THE 86 NORTHWESTERN More than 97 per cent of the inspec tions made during the two-day fire pre vention survey in Mason City, Iowa, re cently, revealed that hazards existed. The fire prevention officers recommended changes in several school buildings, and the removal of 446 of the 469 places ex amined. James F. Joseph of Chicago, sponsor of the fire prevention movement, and J. A. Tracy, state fire marshal, declared that the city should have a larger fire de partment. The fire marshal added that Mason City has had a number of fires, the origin of which has never been ex plained. to have a business of your own ? If you are a man of proven ability (not necessarily in sales work) and are am bitious to have a business of your own which will bring you an income of from $2,000 to $20,000, it will pay you to communicate with us at this time. You will have the supervision and counsel of successful men who have been “through the mill,” and the back ing of a well-established Company with assets over 15 millions. The only investment you make is your time and energy. Harry E. Tallett, engaged in the in surance business in Clinton, Iowa, for a number of years, has purchased the for mer F. A. Upton insurance agency of that city, through D. L. Gardiner, who was appointed acting chairman of the office by the various insurance companies. S E N D FOR Y O U R COPY OF Hom e th e F a c t s ” M UTUAL T R U ST L ife In s u ra n c e C om pany B. B. King, recently of Chicago, where he was examiner for the Continental, has purchased a substantial interest in the McKinney-Lantz agency of Des Moines and will have the title of vice president, specializing in fire and cas ualty lines. Mr. King was at one time connected with the Minneapolis Rating Bureau. The agency also announces that it has established a life insurance department under the management of Frank E. Johnston, and will be general agent for the Continental Assurance of Chicago. The agency has for some time written health and accident business for the Continental through Charles Christy, agent here for the latter company. Carl A. Peterson, Vice President A. E. Wilder, Director of Agencies T H E C H IC A G O T E M P L E B L D G ., C H IC A G O /ÆniiiiiHiiiiüiiiiiïïK^^iTïïïïïïTïïiîTïïiïïiïïï: IN C E D A R R A P I D S 300 R oom s—250 w ith B a th HOTEL MONTROSE F ireproof Rates $2.00 to $4.00 I DINING ROOMS and COFFEE SHOP https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis April, 1926 Fire Insurance News Are You Am bitious “D riv in g BANKER 1 A. W. Greene, founder of Greenville, Iowa, and one of the organizers of the Farmers Mutual Fire and Lightning In surance Association of Spencer, Iowa, re cently died at Whittier, Calif. Mr. Greene was also an organizer of the Iowa Mercantile Mutual Fire Insurance As sociation of Spencer, and was the first president of the company. Early Days in Iowa C. Y. Svoboda, secretary and general manager of the Cedar Rapids Life, will this year celebrate his twentieth anni versary of service with the company. Writing a few memoirs of the past two decades, Mr. Svoboda describes some, of his early experiences in the state of Iowa in part as follows, in a recent issue of Builders, the Cedar Rapids Life house organ: “It will be twenty years next summer since I accepted an invitation to come to Cedar Rapids and represent the newly April, 1926 THE organized company. I was then living at Chicago engaged in the life insurance business and I confess never crossing the Mississippi River before. “It Avas painted to me very rosy. The big eastern companies were under fire of investigation (1906). I was repre senting one of them. Their business was disrupted. I was told that the West had lost confidence in the East; that the West Avas “aching” to have its own companies; that it was ready to quit “patronizing Wall Street.” What a great opportunity there Avas—particularly for me, they said, Avho could talk at that time tA\To or three other languages besides English; that es pecially the Bohemian and German ele ment in the good state of Iowa would re ceive me with open arms, etc. “Well, I came; was given a nice little ratebook with only two nonparticipating policies (ordinary life and twenty pay ment life ); all the rest of them were par ticipating; although I never sold a divi dend contract before in my life. I Avas given wide open territory anywhere in Iowa from Keokuk to Lyon county and from Allamakee across the state down to Fremont county. I could go at my own expense and write business anywhere! I Avas shown the policy register and I have seen thirty-three policies in force. I have written No. 37 myself. We are finishing noAV the seventeenth thousand in number. “My original policy had all kinds of restric tio n s—trav e l and occupation. It h ad no w aiver of prem ium or to ta l dis ab ility or double indem nity benefit. It did not have any of the m odern fea tu re s Avhich are now in your policy. I had h ard pulling, bu t I am the only survivor of the original agency force. “I am not saying all this about m yself fo r any other reason th a n to em phasize th e co n tra st betw een the conditions under which my com pany and I sta rte d and betw een the o pportunities you have w orking now fo r your com pany. A ll the disappointm ents I experienced Avere the disappointm ents of your com pany. They did not receive us Avith open arm s. They k ep t up sending money east as before and they found every excuse and every reason why they should not do business w ith us. “The organizers were sincere in their desire to give Iowa a good, safe, honestlymanaged company, and it Avas only the idealism and hard Avork of the original board of directors and officers of the com pany which ultimately won. I did not become associated with the office until a year after—-in 1907. I have seen men come and go. I Avas working under two different secretaries. I have seen several superintendents of agents; I have seen the changing of the president, but the good old company survived. A satirical poet is a check of the lay men on bad priests.—Drvden. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NORTHWESTERN BANKER “A quarter of a century of uninterrupted service is a decent warrant of sta b ility for any business co n c ern ”— Benjam in Franklin. In su ra n c e in force, o v er___________________ $91,500,000.00 S u rp lu s over all liab ilities, m ore th a n ---------- 2,680,000.00 In crease in su rp lu s d u rin g y e a r------------------- 414,480.39 Securities deposited w ith Iow a In su ra n c e D e p a rtm en t, D ecem ber 31, 1925 ------------- 2,833,400.00 (Over four and one-half times the amount of the reserve required by law.) National Life A ssociation Des Moines, Iowa Bankers in the United States and Canada over 18 and under 55 years of age are eligible for ACCIDENT INSURANCE AT COST with the Iowa State Traveling Men’s Association DES MOINES, IOWA Principal sum .................................................... $5,000.00 Weekly indemnity ............................................ $ 25.00 Annual Cost Never Exceeded $9 We Have No Agents. Write for Application Blank. First, After the Fire T h e financial resp o n sib ility of y o u r custom ers is stren g th en ed by th e p ro te c tio n an d g u aran tee of & p ro m p t claim settlem en t th a t is fu rn ish e d by th e Ik Iow a N atio n al F ire. i T h e first check is th e m ost im p o rta n t. Fire, L ightning, Tornado and A u to m o b ile Insurance FIRE INSURANCE COMPANY DES MOINES, I0WÀ 88 THE NORTHWESTERN BANKER April, 1926 For B ankers and T h e ir W an ts This departm ent o f TH E N O R T H W E ST E R N B A N K E R is to a ssist SU B SC R IB E R S in ob tain in g goods or service hard to find. I t is free to subscribers. U se it. A S K US, as w e can te ll you where to bu y an yth in g you need in your bank or for your bank. T ELL US, as your “ w a n t” w ill be published under th e above headin g free o f charge. In answ ering classified ad vertisem en ts w h ich h a v e k ey num bers please en close a tw o-cen t stamp. This is used to forw ard your letter. Wanted employment in a bank for a pe riod of two months beginning July 1, 1926, by a man twenty-seven years of age. A college graduate with business experience. A good bookkeeper and at present employed in the commercial de partment of a large school system. Can give good bank references. Address No. 2875, The Northwestern Banker—3, 4, 5, 6. Position Wanted as manager or as sistant in a bank, by married man of middle age and well educated. Can ar range to make connection at any time. Good references. Address No. 2876, The Northwestern Banker—4. Position Wanted.—Young man 25 years of age. Five years’ general bank ing. College graduate. Best of refer ences. At present employed. Desires po sition with a city bank or with a growing country institution where there is a pos sibility of advancement. Salary reason able. Can handle some stock. Address No. 2877, The Northwestern Banker—4. Position Wanted by man thirty-three years of .age. High school graduate. Bookkeeper or assistant cashiership. Eight years’ general banking experience. Best of references. Address No. 2878, The Northwestern Banker—4. Wanted: One cash vault door with timer. One safety vault door. One roll top, one large and two small flat top desks, with chairs. One tvpewriter, desk and chair. Six chairs. Falls bookkeep ing desk. One hundred safety boxes. Must be in excellent condition. Furni ture, mahogany. Address No. 2879, The Northwestern Banker—4. Banking Position Wanted by married man twenty-five years of age. Two years’ college education. Four years’ experience with bank where now employed. Well ex perienced in collections. Can make change because of merger. Want posi tion offering opportunity for initiative and ability. Address No. 2880, The Northwestern Banker—4. Steel and Copper Engraved STATIOVEIIV, BUSIN ESS ANNOUNCEMENTS AM) CARDS F o r q u a lit y w ork a d d re ss The Homestead Company, Des Moines. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Position Wanted with bank or corpo ration as cashier, or other work where ability to meet the public is needed along financial lines. Have had several years’ experience. Can invest. Address No. 2882, The Northwestern Banker—4. Wanted a Bond Representative for Iowa who has acquaintance over the state, selling experience and ability, coupled with personality. Splendid opportunity for the right man. Write full particulars of qualifications in addressing No. 2881, The Northwestern Banker—4. He Landed a Job! We are pleased to give herewith in full a letter just received from one of our valued subscribers, in which we know you will be inter ested : ‘ ‘ Just to let you know that you will need not run my ad in your magazine any more, at least for the present, as I have located as assistant cashier of t h e --------- -—bank. ‘ ‘ I really d o n ’t know how to thank you enough for the service you have given me, and I only hope that I shall be able to return the favor to you some d a y .” T h e N orthwestern B anker is proud of the service it has been able to give in the “ For Bankers and Their W ants” department, because it has placed good men in good positions, sold fixtures, bought fix tures—all without inconvenience or embarrassment to advertisers through use of key numbers or ‘ ‘ personal ’ ’ correspondence. We are ready and anxious to serve you at any time. F L O W E R S A N D S E R V IC E ALIMI \ FLOUAI. COMPANY Phone Walnut 3112 J. S. WILSON FI.OHAL CO. Drake 5N-| DES MOINES Another Freak Proposal Congressman Howard of Columbus, Neb., a shining light of the unterrified Democracy of that state, has a mission in the next session of congress. It is to put through a resolution calling for the free distribution of the Congres sional Record to every public school in the country. It would require only 25,000,000 additional copies to be printed and mailed daily during the sessions of congress—a trivial expense compared with the educational benefits to good government which Avould follow, in How ard ’s seasoned opinion. This is no time or place to discuss the educational value of the official rec ord of congress. We might refer to it bitterly as a blight upon the reputation and memory of those who fill its pages. Nor would we be disposed to deny the Howard proposition merely because it would clog the mails for several months every year and impose almost intolerable burdens on rural and city route carriers. Nor, again, does the expense involved excite our opposition, large as it would be. Congress would spend the money for possibly worse things if not for this. It is our love for the pupils in the schools of America which impels us to side against the resolution. Presumably they would be compelled to read at least a part of the record every day, or to hear it read—an affliction we would not will ingly assist in imposing upon them. We have to read the record frequently, and most emphatically we declare that no proper task for happy, innocent and patriotic youth, because it would, if they had understanding, cover all their ideals of the republic with a thick fog of bunk. •—Chicago Journal of Commerce. So ld in Io w a by J. H. WELCH PRINTING CO. 1166-68-70 S ix t h Ave., D e s M o in e s. P r in te rs. B in d e rs. M n fg . S ta tio n e rs. April, 1926 T IIE NORTHWESTERN BANKER Andes; Otto Baarsch, Clark; Anthony Fischer, Fort Pierre; C. E. Byrum, Onida; I . B. Gaytze, Mitchell; Lee Stover, Watertown; Henry Ivlatt, Jr., Tripp; W. B. Penfold, Beliefourche; J. O. Van Nice, McLaughlin. The first three named are merchants, the next three farmers and the remaining three bankers. South Dakota Bank News Officers South D ak ota Bankers A ssociation DEAN H . L IG H T N E R President President.................Dean H. Lightner Aberdeen Vice President.........Arthur Chambers Hudson Secretary................. Geo. A. Starring Huron Treasurer.......................... John Barton Sioux Palls GEO. A. STARRING Secretary for convenience, roominess and beauty, would measure up to the homes of much larger banks. The public appeared greatly interested in the vault and vault equipment, realiz ing that the officers had spent consider able time and thought to provide a place of safety and convenience for handling the business intrusted to them. The vault is of reinforced concrete, with steel bars linked together every four inches, making it burglar-proof. The door is of chrome steel, hardened so that it is im possible for a drill to penetrate it. This door weighs six thousand pounds. The bank was forced to build because of rapidly growing business and inade quate quarters. It represents the opti mistic feeling that the officers and di rectors feel concerning the condition of the country, and shows an unbounded Bankers Committee Meets faith in the future of Redfield and Spink Group Three of the agricultural com county. mittee of the South Dakota Bankers As sociation recently held a meeting at Bank Clearing Jump Mitchell. R. H. Seydel, cashier of the Reflecting the prosperous condition Menno State Bank and chairman of the now existing in South Dakota, the bank committee, had charge of the meeting and clearing in Sioux Falls during the month program. of February made a gain of approxi Announce Convention Dates The annual convention of the South Dakota Bankers Association will lie held in Watertown, South Dakota, on June 15th and 16th. Headquarters will be in the Lincoln Hotel and the sessions will be held in the Metropolitan Theatre in the same building. The program has not yet been com pleted but we are informed at this time that addresses will be given by Fred W. Sargent, president of the Chicago & Northwestern Railway Company, on “ The Need of the Middle W est,” and by Harry D. Baker of St. Croix Falls, Wis consin, a member of the Educational Committee of the Wisconsin Bankers As sociation, on ‘ ‘ The Importance of Stand ardized Forms. ’ ’ In New Building The Redfield National Bank of Redfield, South Dakota, threw open the doors of its new building recently in a recep tion to the public. The officers and di rectors, assisted by their wives and daughters, met and greeted about two thousand people during the afternoon and evening. The guests were presented with cigars, candy and roses, and then escorted on a tour of the bank’s new home. The exterior of the building is stately, with a dignity worthy of a banking edi fice, but it is the interior that wins the admiration of all. The lobby, with its marble floor and wainscoting, mahogany steel fixtures and ivory panelled ceiling, commands instant attention. As none of the old fixtures were owned by the bank, it was necessary to purchase a complete new outfit. All work counters, desks and fixtures are of steel, and combine good looks with wearing quality and safety in case of fire. Buff walls, a skylight of golden stained glass and appropriate lighting fixtures complete a lobby that https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 89 mately $1,347,000. January, also, re corded a nice gain, and it is expected that March will show an improvement pro portionately. Buys Controlling Interest Harmon Kopperud, vice president of the Security Bank & Trust Company of Webster, South Dakota, has bought the controlling interest in the Community State Bank, a newly-organized institu tion at Lake Preston. The bank is capitalized for $25,000, and has deposits of $250,000. Mr. Kopperud takes charge in the capacity of managing officer and vice president. Selects Banking Committee The Legislature of South Dakota, in its session last winter, asked that a com mittee be appointed for the purpose of examining banking conditions in order to determine whether the depositors in closed banks can be reimbursed. Governor Gunderson has chosen the committee as follows : G. F. Buche, Lake Demonstrate Strength The banks of Brown county, South Dakota, who are carrying county funds on deposit, recently demonstrated their strength when they practically all posted, Liberty bonds or other collateral just as good, with the county treasurer. In Brown county, the county deposits are limited to the amount of security on de posit with the county or an approved depository. The following banks are among those who have had their bonds approved: First State Bank of Claremont, $6,000 Liberty bonds. Putney State Bank, $6,000 Liberty bonds. First State Bank of Frederick, $10,000 Liberty bonds. Farmers & Merchants Bank of Colum bia, $5,000 Liberty bonds. First State Bank of Aberdeen, $25,000 Liberty bonds. First State Bank of Groton, $5,000 Liberty bonds. Brown County Bank of Groton, $15,000 State Rural Credit bonds. Farmers State Bank of Westport, $6,000 Liberty bonds. Bank of Houghton, $5,000 Liberty bonds. Farmers State Bank of Stratford, $7,000 Liberty bonds; $3,000 Treasury Certificates. Establishes a Record What is believed to be a' record for gain in deposits has been established by the Citizens National Bank of Sioux Falls, South Dakota. In the first twentysix business days following its opening, the bank received in deposits more than $500,000. W. E. Stevens, president of the bank, said that the officers and di rectors were very much pleased at the showing made, and were of the opinion that a large part of these deposits came from safe deposit boxes and from hiding places. Change Building Name The old Sioux Falls National Bank building will hereafter be known as the Citizens National Bank Building. The Citizens National now has complete pos session of the banking rooms and has purchased all the movable fixtures. Nothing is more certain than that great poets are no sudden prodigies, but slow results.—Lowell. 90 THE SOUTH DAKOTA NEWS C. N. Tontecou, of Howard, has made application to the state banking depart ment to organize the First National Bank of Howard. The capital stock is placed at $50,000. The Bank of Kingsburg has been reor ganized, and is now open for business. Officers are L. O. Gingerich, president; 0. C. Bochman, vice president and T. C. Pier, cashier. -—$— Through a reorganization, C. H. Lien, cashier of the Summit Bank of Summit, South Dakota, has become president of NORTHWESTERN the First National Bank of Milbank. Enoch Lindquist was elected cashier of the same institution. — $— E. B. Dinsmore is the president of a new bank organized at Wessington. The bank is capitalized at $30,000. —$— J. A. Hardesty, assistant cashier of the Holabird State Bank, has resigned to en gage in other lines of activity. —$— John Krebs is the new president of the recently reorganized Shindler State Bank. Julius Egge and Ole Iverson were elected directors of the institution. TH E N A T IO N A L PARK BANK o f NEW YORK Established 1856 214 B roadway U ptow n Offices P ark A venue and 46th S treet S eventh A venue and 32nd S treet DIRECTORS Charles Scribner Richard Delafield Francis R. Appleton Cornelius Vanderbilt Gilbert G. Thorne Thomas F. Vietor John G. Milbum William Vincent Astor Joseph D. Oliver Lewis Cass Ledyard, Jr. David M. Goodrich Eugenius H. Outerbridge Kenneth P. Budd John H. Fulton Frank L. Polk Benjamin Joy 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; Collection of Income. Investment Service for Custom ers. Safes in our Safe-Deposit Vaults at moderate rental. Capital, Surplus and Undivided Profits, $33,700,000 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BANKER April, 1926 The Farmers & Merchants Bank of Huron has reopened for business, with James D. McNair, president; George M. Townsend, vice-president; and Harold E. Himmel, cashier. BY THY LOANS THEY SHALL KNOW THEE (Continued from page 14) that the old soldier and the stockman, on the contrary, have brought us more new depositors than all of our directors and stockholders put together. These two gentlemen are calling to the attention of the people of this community and leavthem with the impression firmly imprinted on their minds that a fellow unworthy of credit need never hope to see their note in the bank’s note pouch. The first week of the stockman’s “adver tising” brought us in over $8,000 in new deposits, which we can directly credit to his talks with farmers in the vicinity. Many of these depositors carried in cur rency which they had kept down in their cellars for many years and they told us that they were glad to know how we handled our loans. About six months later, the stockman came to us and asked if he could reopen his account, informing us confidentially, at the same time, that he was a little scared of the bank that he had been deal ing with, even though they had loaned him money off and on. Although the stock buyer’s account is not the most valuable one on our books, he manages to keep a substantial balance on hand and never asks for a loan. Your loans are the heart of your insti tution and the “Mystery in Banking” in the public’s eyes today. Nearly every one of your depositors can read your bank’s statement of condition and understand it thoroughly, but when they come to the item designated as “Loans and Discounts” there is a question of doubt in their minds as to what percentage of these items are bad. In order to re-establish confidence, it is necessary that you make known to the dear public your attitude toward se curity and loans. When the next party, who hasn’t the security to offer you or is unworthy of credit comes in, please don’t take him into the back room, close the door and whisper to him that time-worn excuse that you are sorry that you are unable to grant him the loan just now because the farmers have not been selling their grain on account of the low prices. When the fel low comes in and gives you his song and dance meet him on the open field of battle (preferably in the lobby) and if there are only a few customers around, engage him in conversation and cross-examine him until you have a fair sized audience. The customers already in the bank will be sure to stay to see the outcome of the skirmish and all you need do is to wait for a few more, for the larger the audience the more effective the advertising. When the stage A pril, 1926 THE is set, gaze your victim in the eyes, sound your ‘ ‘r ’s ” and inform him in plain Eng lish language, the attitude of your bank toward loans of the class which he is of fering and inform him that his chances of floating a loan on the security offered is comparatively as slim as a snow man in Hades hoping to see the Resurrection. Your bank may be connected with the most expensive advertising concerns in the country and you may spend hundreds of dollars in telling your customers through the newspapers of your wonder ful services, strength and stability. But what do you suppose enters the mind of the depositor in your lobby when he sees some deadbeat come out of the back room with a smile on his face and a duplicate deposit ticket in his hand? The depositor cannot tell by reading your bank statement or your newspaper ad, just what attitude your bank is taking toward the poorer class of borrowers, and the only means of bringing it home to them is through in direct advertising conducted by such peo ple as our Civil War veteran and the stock buyer. Our bank has never advertised through the newspapers our attitude toward loans and security, but nearly every man in the community knows that we take nothing short of three-to-one security and that un less a man is worthy of credit we do not take the loan. We let dissappointed would-be borrowers give us this indirect advertising—they generally have lots of time and nothing more important to do. Not long ago, a party living in a nearby town called and made application for a loan and we spent a quarter of an hour in going over the matter with him and in making out his financial statement. He showed a very nice statement without any liabilities, and I informed him that we would be pleased indeed to make the loan for him, providing, however, he furnished the necessary security to cover the amount of the loan. He spent nearly half an hour using every conceivable method in forcing us to waive security and I finally left him in despair, telling him that I did not think he wanted to borrow any money. And, queer to state, such happened to be the case, for instead of loaning him money, we wrote him a large C. D. and today he is one of our heaviest depositors. He knows our attitude toward loans and never hesitates to tell his friends of the little hoax he tried to pull on us. He is another of our customers, advertising our attitude with regard to loans. It is far better to be a living coward than a dead hero, and it is far better for the people of your community to refer to you as a “Hard Boiled, Cold Storage Devil,” than “That Nice, Easy Going Banker That Helps Them All Out,” espe cially in these days. Try to pick out some of the old “hard boiled” bankers in your community, who have really lived up to their name and used ordinary common https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NORTHWESTERN BANKER Will Your Customers Feed Their Corn? If so— hav e you sufficient o u tle t fo r Y O U R FE E D ER P A P E R ? The Live Stock National Bank L ocated at th e S tock Y ards Sioux C ity, Iow a Is esp ecially w ell e q u ip p e d to h a n d le Live Stock L oans Y O U R A C C O U N T IS IN V IT E D WORLD -WIDE SERVICE fo r CORRESPONDENT BANKS THE NORTHERN TRUST COMPANY Capital, Surplus and Undivided Profits, Over $7,500,000.00 CHICAGO 91 THE 92 sense, I dare say that every one of their banks are in good shape, have large cash reserves and have nothing to worry about. It is far more agreeable to be considered hard boiled with some enemies, who have been disappointed in being unable to float a loan with you, than to be classed with that enumerable multitude of ex-bankers, “who used to run a bank, but it closed,” and count back to the olden days when you USED TO HAVE every man in the community as your friend and customer. Speaks at Convention W. S. Gilford, president of the Ameri can Telephone and Telegraph Company, in an address at the Investment Bankers As sociation convention, held in St. Peters- N ORT HW ESTE RN BANKER burg, Fla., took as his subject, “Some Significant Pacts in Our Economic Prog ress.” He spoke of the development made during the past few years in all lines of industry, and of how necessary it has become to maintain the highest efficiency even in regard to the smallest details. He said in p a rt: “The American Telephone and Tele graph Company, as the parent company of the Bell System, owns, in most cases, all of the voting stock; in some cases the majority, and in a few cases the minority, of the voting stock of what are called the associated operating telephone companies. These, as you know, are the Bell Tele phone Companies such as the New York Telephone Company, the Southwestern Bell Telephone Company, the Pacific Tele phone and Telegraph Company, etc., and they, with their connections, cover the whole United States. These companies have been organized because of state laws and state regulation and they are respon- sible for handling the telephone business within their respective territories. . . “The Bell System illustrates the size of modern business undertakings. There are interconnected in the Bell Telephone Sys tem over 16,000,000 telephones. This means, theoretically, that any one of these millions of telephones can be put into com munication with any other one anywhere in the United States any time of day or night. I say theoretically, because as a practical matter there are a relatively few instances where such interconnection would not give satisfactory results; such as a long distance communication where one or both of the telephones are located on a rural party line. In order to make that intercommunication possible the Bell System owns property and other assets— that is, switchboards, buildings, pole lines, conduits, etc.—that have cost over $2,800,000,000. Including the employees of the manufacturing company, it employs over 320,000 men and women.” P earson H otel O n th e n ear N o rth Side CHICAGO A T TH IS bank, the com.Z V p le te mechanism of a world-wide banking service is kept a living, human thing by the personal relationships existing between our officers and our customers. HE pleasure of your Chicago visit will be heightened if The Pearson is selected as your stopping place. It is located just outside of the business, the atrical and shopping district, yet within pleasant walking distance; its moderate rates, unexcelled equipment and service, notably good and reasonably priced food, all make it a perfect base for opera, concert, theatre and shop ping expeditions. A 300-car fire proof garage is close by. T :« Every Banking Service C e n t r a l T r u st COMPANY OF ILLINOIS SEND T O D A Y FOR ILLUSTRATED FOLDER The Pearson is a block east of the intersection of Pearson Street and North Michigan Boulevard. Rates for one person are from S3.50 to $5.00 a day; for two $5.00 to $7.00; tworoom suites $10.00 to $14.00. Every room and suite with private bath. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1 April, 1926 125 Qj\i.untuc o u cct ut LaSalle CHICAGO April, 1926 THE NOR T il W E S T E R N N eb rask a Bank News Officers N ebrask a B ankers A ssociation I. R. A L T E R P re sid en t P r e s i d e n t .............................. I. R. A l t e r G rand Island C h a ir m a n of th e E x e c u tiv e C o u n c i l .....................P . L. H a l l , J r . G reenw ood S e c r e t a r y ..................... W . B. H u g h e s O m aha T r e a s u r e r .................... F . W . T h o m a s Om aha G e n e r a l C o u n s e l ...........J. P. P a l m e r O m aha Announce Group Meetings The Nebraska Bankers Association, through its secretary, W. B. Hughes, has announced the following cities in which Group Meetings will be held this spring: Group Two at Columbus, April 22d ; Group Three at Norfolk, April 22d ; Group Four at McCook; Group Five at Lexington; Group Six at Hay Springs, and Group Seven at Chappell. Neither the town nor date has as j7et been announced for the meeting of Group One. At the time T h e N orth western B anker goes to press, dates of meetings have only been set for Group Two and Group Three. Others will be announced later. Farmers State Open The Farmers State Bank, a new insti tution recently organized at Lynch, Nebraska, is now open and doing business. Among those behind the new bank are G. B. Ira, Dan Melsha, and C. F. Roe. The quarters are located in the old Se curity State building. Becomes Director A recent addition to the stockholders and directors of the First National Bank of Elgin, Nebraska, is Charles H. Stockdale. Mr. Stockdale was at one time publisher of the Elgin Review. The First National is the only national bank in Antelope county. W. R. Cain Resigns Identified -with the Security National Bank of Randolph, Nebraska, for more than fifteen years, W. R. Cain has re signed from that institution, intending to devote all of his time to personal busines. He leaves the Security National in excellent condition. Organized at Randolph The Farmers & Merchants State Bank is a newly organized institution in Ran dolph, Nebraska. The officers which have been elected so far are Stephen F. Browne, president; Peter M. Bermel, vice president. The new bank starts with a paid-up capital stock of $25,000. It is planned to start the immediate construc tion of a new concrete vault, which will https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 93 BANKER W M , B. H U G H E S S ecretary include safety deposit boxes in the cus tomers’ department of the vault. Resigns at Wolbach C. E. Wilson, who, until recently, has been in charge of the Farmers Bank of Wolbach, Nebraska, has resigned his position to enter the wholesale business at Crawford. P. Wilson, his father, will take his place in the bank. Closed Saturday Night Although urged by the directors of the South Omaha Nebraska Merchants As sociation to remain open on Saturday evenings, that the stockyards employees might be able to cash their weekly paychecks, the five South Omaha banks re fused to grant the request. They gave as their reasons that it was against the rules of the Clearing House Association ; that none of the other industrial banks in the city remained open, and that they would lay themselves liable to the risk of robbery and possible killing. Hold County Meeting The Deuel-Garden County Bankers As sociation recently held its quarterly meet ing at Chappell, Nebraska. A dinner was served at the Wier Cafe, after which the meeting adjourned to the di rectors rooms of the Chappell State Bank, where the regular session was held. Officers chosen for the coming year were as follows : Floyd Farrel, Oshkosh, president ; Mr. Olson, Lisco, vice presi dent, and Andreas Kjeldgaard, Big Springs, secretary-treasurer. Havelock Banks Consolidate Following the consolidation of the Commercial State Bank and the Farm ers & Mechanics Bank of Havelock, Ne braska, J. V. Charvat, formerly presi dent of the Farmers & Mechanics, be comes vice president under the new or ganization. He will also retain his place on the board of directors. G. A. Frampton, former cashier of the Commercial State Bank, becomes president and P. K. H. Bauer, former assistant cashier of the Commercial State Bank, becomes assist ant cashier of the new bank which now has combined deposits of $350,000. Seek Credit Protection The Omaha Association of Credit Men, comprising wholesalers, retailers, na tional and state bankers, is organizing for the purpose of raising $20,000 to ward a two-million dollar fund for cred it protection. The Omaha, Nebraska, organization will be a part of the Na tional Association of Credit men. The local committee appointed is made up of the following m en: B. A. Wilcox, vice president Omaha National Bank, general chairman local organization; G. P. Horn, executive manager Omaha Asso ciation of Credit Men, secretary; T. C. Byrne, president Byrne-Hannner Dry Goods Company, national honorary com mittee; Ford Hovey, president Stock Yards National Bank, national honorary committee; E. B. Anderson, treasurer In terstate Machinery & Supply Co., chair man of personnel committee; C. F. Brinkman, assistant vice president United States National Bank, large subscribers; Walt Jones, credit manager Pennsylvania Rubber Company, chairman on publicity; J. T. Cunningham, credit manager Pio neer Glass & Paint Go., chairman on meetings; J. H. Bexton, cashier First Na tional Bank, chairman on lists; H. W. Christensen, credit manager Pittsburgh Plate Glass Company, chairman of co operation. Establish Branch at Omaha A branch of the new Federal Agricul tural Bank, organized at Wichita, Kansas, was opened in Omaha, March 15th. It is planned to establish other branches at Kansas City, Oklahoma City, El Paso, Fort Worth, and Denver. Resigns from Omaha N ational J. Y. Refregier, assistant cashier of the Omaha National Bank at Omaha, Nebraska, and who has been connected with the institution for more than twenty years, has recently resigned his position with that institution. Mr. Refregier ex pects to make his future home in California. Dedicates New Building Installed in its fine, new, banking quar ters, the State Bank of Champion, Neb., recently dedicated its new home. Kirk Griggs, secretary of the Nebraska depart ment of Trade and Commerce, was the speaker of the occasion. He praised the aggressiveness which prompted the erec tion of so fine a building, and predicted a prosperous future for the institution. Resigns at Scottsbluff F. L. Pelton has resigned his position with the First National Bank of Scotts bluff, Nebraska, to take up other lines of work. H. O. Eastman will take Mr. Pelton’s place in the bank. 94 THE NORTHWESTERN BANKER Omaha and South Omaha Business of Nebraska and Iowa Banks INVITED Live Stock National Bank (M e m b e rs o f O m a h a C le a r in g H o u s e A s sn .) Union Stock Yards, Omaha, Nebraska WRITE US You Are Interested In the quickest possible handling of your custom ers’ Live Stock Credits. Because of our location, and because we strive to give the m ost careful attention to all business entrusted to us, we are better able to transmit Live Stock P ro ceeds promptly. We shall be glad of an opportunity to demonstrate that an account with us w ill be profitable to you. S tock Y ards N a tio n a l B ank o f S outh O m aha OFFICERS Ford E. Hovey, President Jas. E. Owen, Vice President W. L. Pier, Vice President J. S. King, Vice President W. H. Dressier, Cashier F. J. Enerson, Vice President L. K. Moore, Asst, to Pres. H. C. Miller, Assistant Cashier C. L. Owen, Assistant Cashier T. G. Boggs, Auditor Wewill organize your letter writing .-Asurvey to study y o u r needs is confidential. Service gratis.\ THOS. HARRIS, Distributor 116 Eleventh St. Des Moines, Iowa Phone Walnut 908 E d is o n ’s New D ic t a t in g M a c h in e https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis April, 1926 Cashier Sells Interest James A. Boyd, cashier of the Farmers State Bank at Kearney, Neb., has re signed his position and has disposed of his stock in the bank. His place as cash ier is being taken by John D. Wolf. Mr. Boyd has been with the bank ever since it was organized thirty-six years ago. Home Investment as a Selling Point The agent who sells insurance fre quently meets the objection, “ Oh, I have all the insurance I can possibly afford to carry.” A dramatic and impressive way of meeting this statement of a prospect has been worked out by one of the big insurance companies. It consists in call ing attention to the vast difference be tween “ capital,” the money a man leaves through insurance, and “ income,” the sum produced by that money when it is invested. The salesman asks the prospect to write down on a slip of paper the total amount of insurance he is carrying. It is not necessary for the salesman to know what the amount is. He then requests the prospect to strike off the last three ciphers and calls at tention to the fact that the remaining figures represent the amount of weekly income that his family would receive, when the total amount of the policy is invested so that it is earning 5 per cent. For instance, $10,000 invested at 5 per cent produces $500 a year, or a little less than $10 a week. Figured in terms of “ income” the protection thus estab lished becomes pathetically inadequate to meet the needs of almost any family nowadays, no matter how small. Un questionably it is good selling practice to get the prospect away from thought of the $10,000, which seems a large amount, and concentrate his thought on the $10 a week, which is something alto gether different. The novelty of this idea gives the pros pect something to think about; and it certainly has the effect of destroying any idea he might have that $10,000 now adays amounts to very much, when you reduce it down to its weekly or monthly value as a money earner. The point will also make clear the difference between money to pay bills and money to support the family, two entirely different things. — ( Objections, Meeting)— New York Life Bulletin. There are few delights in any life so high and rare as the subtle and strong delight of sovereign art and poetry; there are none more pure and more sublime. To have read the greatest work of any great poet, to have beheld or heard greatest works of any great painter or musician, is a possession added to the best things of life.—Swin burne. April. 1926 THE NORTHWESTERN BANKER Commercial Paper Shows Low Loss Percentage OSSES on direct loans and discounts more concise and accurate outside as of national banks are fifteen times sistance is available for checking open as great as the percentage loss on market names than any other form of commercial paper, according to a recent offering. During the first eight months of the survey made by the National Credit of fice (ffi New York City. There appear to year, 2,487 business enterprises in all be four basic reasons why losses on com sections of the country sold their notes mercial paper are negligible compared in the open market. This is by far the with losses on direct loans and discounts: greatest number of concerns to be active 1. The loaning official of the bank in in the first eight months of any recent purchasing open market paper is not sub year. At the same time, however, the amount ject to the influence encountered in di of paper sold was considerably below the rect contact with a depositor. His judg ment is not affected by balances or other volume for the corresponding period for each of the two preceding years. That mitigating factors. is, the average open market borrower ob 2. The purchasing bank has a selection tained $918,000 of credit from outside of names from which it may choose those banks, during the first eight months of in any industry in any section of the 1923; $755,000 in the first eight months country. of 1924, and only $615,000 in the same 3. The buyer may always confirm, with period of this year. in the option period, whether the paper The following table visualizes the grad offered has already withstood the criti ual growth in the number of active bor cism of the best credit analysis in the rowers and the recent reduction in volume country while the assurance from the of paper sold: broker negotiating the sale, of the sound Active Concerns Paper Sold ness of the note, is very important in Jan. to Aug. Jan. to Aug. many instances. 1922 1923 $1,508,000,000 4. As commercial paper offerings are 1923 1821 1,672,000,000 subject to intensive credit study and 1924 2247 1,698,000,000 broad exchange of opinion and comment, 1925 2487 1,531,000,000 L This phenomenon is attributed largely to two primary facts (1) a greater num ber of the representative business enter prises are realizing the distinct advan tages in obtaining part of their credit on the open market, while (2) the low rates carried by commercial paper during the first six months of this year, ranging from 3Y2 per cent to 4^4 per cent and averaging about 3% per cent, retarded the usual purchases of the outlying banks. The Union Trust Company of Pitts burgh has increased its surplus from $44,000,000 to $47,000,000, making it the largest surplus of any trust company in the world. The capital and surplus of the company is now $48,500,000. Reg ular quarterly dividends of 25 per cent are paid on the stock. You’re a wonderful girl Miss Suzanny, You play tennis and maybe pianny. Give Helen a chance To play with you in France But cling close to your nanny, Suzanny. Money, Paul, can do anything—Dick ens. All that is best in the great poets of all countries is not what is national in them, but what is universal.—Longfel low. The Omaha National Bank T H E O M A H A N A T IO N A L B A N K https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 95 96 THE NORTHWESTERN BANKER The Minnesota Banker’s “Code of Ethics” N THE Code of Banking Ethics of the Minnesota Bankers Association, ap proved and adopted at the 1925 con vention of the Association, four points are considered. They are: Public Rela tion, The Banker’s Obligations to his Bank, the Profit Motive, and the Banker’s Obligation to the Profession. The Code has been printed in the form of a printed broadside and sent out to all member banks of the Association by C. A. Chapman, chairman of the Committee on Banking Practice and Ethics. The Code follows : I. Public Relations 1. Banks and bankers should obey all the laws of Nation and State. 2. What is best for the community and the bank’s clientele is usually best for the bank’s operating staff and proprie tors. Community service, trust and sta bility must be first and bank profits sec ondary or incidental. 3. The banker should so regulate his conduct and practices as to render un necessary the imposition of legal restric tions. Instead it should be his endeavor to earn and deserve the public confidence. 4. The bank’s corporation records and operating books of account should con stitute a complete, exact and truthful record of all its transactions. Reports therefrom or exhibit of the same upon lawful request of those properly con I The Royal Union Life Insurance Company D es M oines, Iow a S tro n g and P ro g ressive I Paid to Policyholders— Over $21,000,000.00 Insurance in Force— Over $148,000,000.00 I A. C. Tucker, President D. C. Costello, Secy. Wm. Koch, Vice Pres. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis April, 1926 cerned should be scrupulously exact and truthful. 5. The deposits of the community should, after setting aside suitable first and secondary reserves, be used for the benefit of that community. They should not be exported for the purpose of ob taining higher rates of interest or sub jected to greater than local credit haz ards. 6. The public’s confidence in the banker forbids his issuing letters of in troduction, recommendation or endorse ment or the heading of subscription or solicitation lists, the doing of which will by such employment of his own or the bank’s prestige influence any one to a de cision which will involve injury. 7. Communications between banker and client are confidential and privileged and must be held inviolate. Informa tion gained through such relationship should not be exploited by the banker for gain, nor unfair advantage taken of its possession. 8. The account of a depositor or bor rower should be accepted only after care ful consideration, and it should be re fused if he be a confirmed violator of the law, unethical in his practices, a fraudulent bankrupt or contemptuous of his credit or reputation. II. The Banker’s Obligation to His Bank 9. A bank executive or employee must be an individual of good moral character, reputation and unimpaired personal credit. He should have the best educa tion, training and experience which he can attain. 10. A banker should never permit per sonal profit or advantage to influence him in any of the bank’s transactions. 11. The positions of lender and bor rower are inherently incompatible; a banker cannot occupy both positions in the bank which employs him. 12. A bank officer or employee should not, directly or indirectly, use or borrow for personal profit or advantage, any of the funds of his bank, nor permit their being borrowed or used by any enter prise in which he is substantially inter ested as stockholder, partner or propri etor. He ought not become a partner or stockholder in concerns which will be substantial borrowers from his bank. 13. The time and abilities of a bank officer or employee belong to the bank which employs him. His fees, commis sions and other earnings attributable to or derived from his position, belong to the bank, unless by formal action of the bank’s board, a general or special excep tion shall be made. 14. A bank is a trust before being the personal money-making enterprise of its shareholders or operatives; they must not, aside from authorized salaries, divi(Continued on page 100) April, 1926 T H E N O R T H W E S T E R N 97 B A N K E R A Drive for New Business M in n e s o ta Bank N ews Officers Minnesota Bankers Association J . J. M A L O N E Y P r e sid e n t P r e s i d e n t .......................J. J. M a lo n e y H eron L ake V ic e P r e s i d e n t . . .R . E . M a c g r e g o r M in n e a p o lis T r e a s u r e r .........................J. K . M a r tin L ittle P a lls S e c r e t a r y ..........................P . P . F e l l o w s St. Paul P. P. FE L L O W S S e c r e ta r y west, B ern ard B. Moore, deputy governor J. J. M aloney, presid en t of the M in of the F ed eral Reserve B ank a t M inne nesota B ankers A ssociation, has issued a apolis, in speaking before the M inne le tte r to all m ember banks, calling th e ir apolis Business A ssociation a t a recent a tte n tio n to recent changes and provi luncheon, said as fo llo w s: “ I t m ight in te rest people who ques sions relativ e to policies w ritte n fo r hail insurance, and suggesting th a t to avoid tion the p ro sp erity of the northw est to fu tu re difficulties it would be well fo r know th a t in the banks of the N in th F e d the agent to call to the purchasers a t eral Reserve D istric t there is $1,700,000,000 in liquid money, and enough in good ten tio n these changes before signing him bonds to b rin g the to ta l sound assets up up. A p a r t of his le tte r fo llo w s: “ The application fo r hail insurance, to $2,500,000,000.” The ag ricu ltu ral land which is a p a rt of the policy, contains alone is valued a t $6,000,000,000, and there is $1,000,000,000 w orth of buildings these restric tio n s: “1. T hat if corn is covered hereunder on th is land. “ W hile alarm ists have claim ed th a t the insurance on corn shall not take effect un til a t least 75 per cent of the plants farm ers were leaving th e n orthw est by have form ed the second jo in t above the the hundreds, th ere has actu ally been an increase of land u n d er cultivation ground and said second jo in t is clearly visible from an outside inspection, and between 1920 and 1925.” this com pany shall not be liable fo r loss Elected Director or damage to corn stalks a n d /o r leaves unless such loss or damage shall affect the Samuel L. SeAvall, vice presid en t and grain product thereof, and then only to tre a su re r of the M inneapolis Iro n Store the extent th at said product has been Company, has been elected a director of affected. the M idland N ational B ank & T ru st Co. “2. T hat if this policy covers on grain of M inneapolis. crops other than corn no liability attaches un til the plants have jointed and a t least 75 per cent of the plants have attained Group Meetings a height of ten (10) inches above the S ecretary F . P. Fellow s, of the ground, measured from the ground to the M innesota Bankers Association, an tip o f the longest leaf. That, if this policy nounces th e follow ing dates and covers on flax, no liability attaches here places fo r th e 1926 M innesota under until at least six (6 ) leaves ( in ad Group M eetings : dition to the original two leaves) have Group 7— Tuesday, M ay 11th, been borne by at least 75 per cent o f the L itchfield; plants. Group 2— T hursday and F rid ay , “ In the past, banks have not w ritten M ay 13th and 14th, L uverne; hail insurance as a m oney-m aking propo Group 1— M onday and Tuesday, sition, but rath e r from an economic stand M ay 17th and 18th, W inona; point to provide their farm er customers Group 3—W ednesday, M ay 19th, w ith protection. S tillw a ter; “ Should a bank w rite hail insurance Group 10— T hursday, M ay 20th, h ereafter without thoroughly explaining L indstrom ; to its customers the new provisions o f the G roup 8— S atu rd ay , M ay 22d, policy, considerable confusion will be Biw abik ; caused and customers will be antagonized G roups 6 and 9—M onday and in the event of a loss n o t covered under Tuesday, M ay 24th and 25th, Bethe policy.” m idji. The sta te convention dates are Northwest Is Prosperous Ju n e 9th, 10th, 11th, a t M inne Condemning persons who had been apolis. spreading propaganda regarding the un desirable economic sta te of the N o rth Hail Insurance Restrictions https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D uring the m onths of A pril, M ay and Ju n e, the M idland N ational B ank & T ru st Com pany of M inneapolis is planning an intensive drive fo r new business, which will include checking accounts, savings accounts, certificates of deposit, wills, liv ing tru sts, life insurance tru sts, and safe deposit boxes. All the directors, officers and employes, and even the custom ers them selves, will p articip a te. Team cap tain s have been selected, and a quota set fo r each team . A m onster score board will be erected in the bank which will give the to tals as th e drive progresses. Custom ers who join the team s will be given cash bonuses in th e same m anner as the employes of the bank. The to ta l fo r all quotas set is $1,000,000. Minneapolis Banker Dead F ra n k H . P eterson, presid en t of the U nion S tate B ank of M inneapolis, M in nesota, and a leader in the business activ ities of the city fo r more th a n fifty years, died there recen tly a t th e age of sixtynine years. D eath was caused by h ea rt disease. D uring th e early p a r t of his career, Mr. P eterso n was engaged in th e f u rn i tu re business, b u t about ten years ago he purchased a large in te rest in th e Union S tate B ank and became its p resid en t and executive m anager. Since his connection w ith th e bank it has enjoyed a steady grow th in business and deposits. Mr. P eterso n was not m arried, b u t is su r vived by a b ro th er and two sisters. Consolidates with Northwestern On M arch 1st the business of the M er cantile S tate B ank of M inneapolis was consolidated w ith the Lincoln office of the N orthw estern N atio n al B ank. D irectors of the M ercantile B ank have been added to the advisory board of the Lincoln office and its officers and staff have joined the Lincoln office m anagem ent. The old q u arte rs a t H ennepin Avenue and Sixth S tre et have been vacated. The M ercan tile S tate a t the tim e of consolidation had deposits of alm ost $2,000,000. Crosby Bank Sold W. L. M errick, who has held co n tro l ling in te rest in the F irs t S tate B ank of Crosby, Minn., has sold his holdings to A. P. M um ford, Mons M ahlum, P. L. H alenbaek, E dw ard K ru eg er and R. A. M aahs. Mons M ahlum will be the new presid en t of the bank and A. P. M um ford th e cashier. Institute School Savings The city schools of O w atonna, M inne sota, u nder the T h rift, In co rp o rated plan, have recently in au g u rated a system of school savings. In d ica tin g th a t the stu dents were tak in g a real in te rest in the 98 THE plan, alm ost $300 was deposited the first week. Of 1,267 pupils p resent on the day the deposits were called for, 800 opened a savings account. A num ber of contests w ill be cai'ried on, in an endeavor to have each grade m ake 100 per cent. NORTHWESTERN BANKER Increases Capital Stock A t a recent special m eeting of the stockholders of the com pany the au th o r ized cap ital stock of the W. B. Foshay Company, of M inneapolis, was increased from $2,000,000 to $4,000,000. APRIL SHOWERS It is said that April showers bring May flowers. The great north west is hopeful that the m onth’s showers will be followed by an abundant crop. To produce, harvest and market the same this strong bank tenders its facilities so far as they can be effectively utilized. THE FIRST NATIONAL BANK, Duluth, Minn. Capital $2,000,000.00 Surplus and Profits $2,250,000.00 WE EXECUTE FUTURE TRADES PROMPTLY ON MINNEAPOLIS EXCHANGE F o r q u i c k e x e c u tio n s e n d m a r g in s b y te le g r a p h , e x p r e s s , m o n e y o r d e r o r c a s h ie r ’s c h e c k . MIDLAND GRAIN CO. Minneapolis MIDLAND BANK LIMITED Established 1836 C hairm an : T H E RIGHT HON. R. M cK ENNA Joint Managing Directors : FREDERICK H Y D E E D G A R W. W OOLLEY Statement of Condition December 31st, 1 9 2 5 RESOURCES Cash in hand and Due from Banks . . Money at Call and Short Notice Investments Bills Discounted .. .. .. .. Advances . . Liabilities of Customers for Acceptances and Engagements Bank Premises Investments in Affiliations LIABILITIES Capital Paid up .. Surplus Deposits Acceptances and Engagements .. $5 = £1 $353,083,306 00 93,396,746-73 173,956,378-69 .. 209,440,111-23 178,738,950-52 33,185,847-18 31,839,753-89 May Have New Bank The U nion In v estm en t Company, of M inneapolis, M innesota, through its au d i tor, A. G ulbransen, has been in v estig at ing conditions in W arren , M innesota, w ith a view to establishing a bank in that, city. The U nion Investm ent Company is in terested in more th a n th irty banks lo cated in the sm aller tow ns in the north west. T heir organization plan is to in te re st a large portion of local capital, and finance the balance themselves. Becomes Cashier Charles W . Boyle, of DeGraff, M inne sota, has purchased a large block of stock in the F arm ers S tate Bank, of Rosemount, M innesota, and has assum ed the cashiership of the in stitu tio n . He suc ceeds J. E. B eschta, who has entered other lines of work. Changes at Crosby E. V. A nderson, who fo r the p ast six years has been cashier of the F irs t S tate B ank a t Cuyuna, M innesota, has gone to M inneapolis w here he becomes vice p resi dent of the P enn S tate B ank. Charles J. H een, cashier of the F irs t N ational at Crosby, M innesota, has gone to Cuyuna to assume a like position. R ay A. B utts, assista n t cashier of the F irs t N ational a t Crosby, is tem p o rarily filling the cash iership vacancy le ft by M r. Heen. L. H . Powell and D r. F . D. G ray have purchased a controlling in te rest in the Lyon County N ational B ank of M arshall, M innesota, and M r. Powell has been elected p resid en t of the in stitu tio n . No other changes were m ade in the officers. Mr. Powell and D r. G ray have been di rectors of the Lyon County N ational fo r the p a st ten years. Minnesota Bankers Convention .. 63,326,920-00 .. 63,326,920-00 . . 1,752,036,042-93 178,738,950-52 Together with its affiliations the Midland Bank operates 2,300 branches in Great Britain and Northern Ireland, and has offices in the Atlantic Liners A q u i t a n i a , B e r e n g a r i a and M a u r e t a n i a . The Foreign Branch Office at 196 Piccadilly, London, is specially equipped for the use and convenience of American visitors in London. HEAD OFFICE : 5 THREADNEEDLE STREET, LONDON, E.C. 2 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis One m illion of this increase is 7 p er cent p referre d stock and $250,000 is be ing offered fo r public subscription a t par. Proceeds from the sale of th is stock will be used fo r the acquiring of ad d i tional public u tility properties. The earnings of the com pany in 1925 were $311,858.51, of which $82,000 was paid out in dividends to stockholders. Buy Controlling Interest .. .. April, 1926 The annual convention of the M inne sota B ankers A ssociation will be held THE April, 1926 th is y ea r in M inneapolis, Ju n e 9, 10, and 11. The N icollet H otel w ill be conven tion h eadquarters. I t is planned to hold a num ber of the sessions on the campus of the F a rm School a t the u n iversity of M innesota. O ther bankers conventions to be held in th is im m ediate te rrito ry this year are Iow a, Sioux City, Ju n e 21, 22 and 23; South D akota, W atertow n, Ju n e 15 and 16; Illinois, Springfield, Ju n e 17 and 18; N ebraska, Omaha, O ctober 21 and 22; and the A. B. A., O ctober 4, 5, 6, and 7, a t Los Angeles. Cashier Resigns A rch 0 . Jensen, form erly cashier of the N ational E xchange B ank of St. P aul, has resigned from th a t in stitu tio n to de vote all his tim e to p riv ate interests. H is position in the bank will be filled by Clarence T. Dedon, who is also vice p resi dent of the C entral T ru st Company. Mr. Dedon has been w ith the N ational E x change in stitu tio n since 1910. H is first job was th a t of m essenger boy. Safe Deposit Vault Ready The M idland N ational B ank & T ru st Com pany, of M inneapolis, have a n nounced th a t the neAV safe deposit vau lt recently installed is now ready fo r use. The new v au lt is much larger th a n the one form erly in use, and is equipped w ith th e la te s t and m ost m odern sa fe ty ap p li NORTHWESTERN ances. Convenience fo r custom ers has been em phasized in its construction. The boxes cover a wide range of sizes, and the re n ta l is m oderate. Adopt Protection Plan The bankers of Douglas county, M in nesota, a t th e ir recen t sem i-annual m eet ing, held a t A lexandria, voted to estab lish a force of county ran g ers fo r the protection of banks in the county. W hile there have been no b ank robberies in the county, it was th ought well to be p re pared. A body of rangers will be sw orn in as deputy sheriffs, and will be ready a t all tim es to arm them selves in case of an invasion by robbers. The com m ittee in charge of the or ganization plans are J . B. Hove, Carlos, c h a irm a n ; County A tto rn ey C onstant Larson, Sheriff E m il Lnndeen, George Strom lund, Nelson, and Nels Evenson, Osakis. Finance Corporation Shows Gains The annual rep o rt of In d u stria l F i nance Corporation, ju s t m ade public, shows net earnings of $587,092, and ac crued earnings in companies in which th e corporation has holdings, of $551,327, or a to ta l n et and accrued earnings fo r the y ear of $1,138,419. A fte r paying divi dends of $304,021 on its debenture and p referre d stocks, the n et value of th e co rp o ratio n ’s assets in excess of liab il The Chase National Bank o f the C ity o f N e w Y o r k 57 B R O A D W A Y Capital . . . $ 20,000,000.00 Surplus and Profits . 27,178,043.06 Deposits (Dec. 31, 1925) 564,608,785.07 ALBERT H. WIGGIN C h a ir m a n o f th e B o a r d a n d P r e s id e n t 99 BANKER ities increased by $834,398 or over 66 2/3 p er cent of the common stock o u tstan d ing. The com pany controls In d u stria l A c ceptance Corporation, which has an ex clusive co n tract fo r the financing of S tudebaker dealers in th is co untry and abroad, and is also holding com pany of the M orris P lan C o rp o ratio n ; in addition it has large stock holdings in M orris P lan B anks and com panies th ro u g h o u t the country, m any of which it controls th ro u g h stock ownership. Of these com panies P re sid en t A rth u r J. M orris say s: “ M orris P la n B anks and companies continue to show a steady and su b stan tia l grow th y ear a fte r year. The to ta l volume of th e ir loans in 1925 was $141,000,000, as com pared w ith $122,000,000 in th e preceding year, and the to ta l n et earnings of all com panies rose from $2,472,154 in 1924 to $2,842,317 in 1925.” S peaking of the progress of th e cor poration, Mr. M orris say s: “ Three years ago the assets of In d u stria l F i nance C orporation in excess of liab ilities produced a balance of $372,427 fo r th e common stock. The p resen t rep o rt shows a value of $3,012,744 fo r the $1,198,000 of common stock outstanding, an increase fo r th e th ree years in th e value of the stockholders ’ equity of $2,640,317. ’ ’ Money m akes a m an laugh.— Seiden. THE HANOVER N A T IO N A L BA N K OF THE CITY OF NEW YORK E stab lish e d 1851 DIRECTORS Henry W. Cannon Gerhard M. Dahl Albert H. Wiggin Reeve Schley John J. Mitchell H. Wendell Endicott Guy E. Tripp Jeremiah Milbank James N. Hill Henry Ollesheimer Daniel C. Jackling Arthur G. Hoffman Charles M. Schwab F. Edson White Samuel H. Miller Alfred P. Sloan, Jr. Edward R. Tinker Elisha Walker Edward T. Nichols Malcolm G. Chace Newcomb Carlton Thomas N. McCarter Frederick H. Ecker Robert L. Clarkson Eugene V. R. Thayer Amos L. Beaty Carl J. Schmidlapp William H. Woodin W E IN V IT E A CCO U N TS of B anks, B an k ers, C o rp o ratio n s, F irm s o r In d i v id u als on fav o rab le term s, an d sh all be p leased to m eet o r co rre sp o n d w ith th o se w ho c o n te m p la te m a k in g changes o r o p e n in g new accounts. F oreign a n d T ru s t D e p a rtm e n t F acilities https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Capital . . . Surplus and Profits $5,000,000 25,000,000 THE 100 THE MINNESOTA BANKER’S “CODE OF ETHICS” (C ontinued from page 96) dends and law ful com pensation, profit fro m the use of its funds, cred it or p res tige. III. The Profit Motive 15. A bank should not by any expedi en t exact more th a n the legal contract ra te of in terest. I t should not p erm it a higher ra te of in te re st to become the inducem ent fo r the purchase or discount of pap er otherw ise objectionable, or grow ing out of a subject m a tte r fo r which it would not have approved a loan in the first instance. 16. A bank should not so f a r em bark in m erchandising of securities as to in volve recom m endation or sale of invest m ents which it Avould not approve fo r its own account or whose ch a racter involves excessive risk or speculation. NORTHWESTERN BANKER 17. In ad ju stin g com pensation fo r its service ban k in g will in the fu tu re tend to elim ination of g ratu ito u s service, de pend less upon th e spread in in te rest rates, and m ore upon m easured service com pensated a t all points. IV. The Banker’s Obligation to the Profession 18. The soundness of each bank in a com m unity is of v ita l concern to all the banks in th a t com m unity an d dem ands m utual help, in terchange of essential in form ation, w arnings and counsel p re fe r ably through organized clearing houses or other suitable associations. 19. B usiness so licitatio n and publicity fo r the individual b ank will be m ost p ro ductive fo r th a t bank w hen it aim s a t building public fa ith in ban k in g as a whole, inspires confidence in all the com m unity ’s banks and n eith er derogates any A CONSTANTLY growing list of customers is evidence of the widespread knowledge and appreciation of the facilities of this institution among bankers in the Central West. We invite ac counts from those institutions seek ing a Chicago connection of strength and dependability. A p ril, 1926 of them , n o r makes u n fa ir com parisons or u n ju st claims. 20. Others engaged w ith us in banking are to be regarded not as com batants in a game of strife b u t as associates in a noble profession of service, w ith a need fo r fra te rn a l solidarity, u n ifo rm ity of practice, m u tu ality of in te rest and a com mon discipline of m orals to be sanctioned through various form s of ban k ers’ asso ciations. 21. The education of subordinates should be th e grave concern of every banker. H e should have a personal in te re st in th e ir w elfare and th e ir advance m ent in p ractice and ethics. F ailu re to make suitable progress should cause dis m issal fo r the good of the profession. For Executive Council W illiam B. T hurston, J r., assista n t secretary and tre a su re r of the B altim ore T ru st Company, has been entered by the B altim ore C hapter, A m erican In stitu te of B anking, as its candidate fo r mem b ersh ip on th e E xecutive Council of the In stitu te . The election w ill be held a t the D allas convention in Ju ly . M r. T hurston, an In stitu te C ertificate holder, joined the in stitu te when he be came a ru n n er fo r th e M erchants N a tional B ank of B altim ore 20 years ago as a youth of nineteen. H e worked his way u p in various capacities, u n til now, as assista n t secretary and tre a su re r of the B altim ore T ru st Company, he is con sidered one of the ablest ju n io r officers in B altim ore. . D u rin g all th a t tim e he has been closely and pro m in en tly identified w ith in stitu te work. H e has held the chairm anship of every com m ittee of the B altim ore chap ter, acq u ittin g him self well, and was p resid en t fo r the term 1919-1920. Plan for Group Meetings The p resid en ts and secretaries of the various groups of the M innesota B ankers A ssociation m et recently in M inneapolis to m ake th e ir plans fo r th e Group M eet ings to be held th is year. M any new ideas were suggested a t the m eeting. M idland N ational Bank and T rust C ompany THE STOCK YARDS NATIONAL BANK % THE STOCK YARDS TRUST&SAVINGS BANK o f CHICAGO Resources $22,000,000.00 MINNEAPOLIS https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis April, 1926 THE NORTHWESTERN BANKER F o rtu n a , N. D. A. T. Johnson, form erly cashier of th e A lkabo B ank, becomes cashier of the F irs t In te rn a tio n a l a t F o r tuna. North Dakota B an k News Sells Interest Officers North Dakota Bankers Association P resid en t..........................................Ed P ierce Sheldon V ice P resid en t and Chairman E xecu tiv e C ouncil...................... H. T. Graves Jam estow n T reasurer.................................J. E. D avis Goodrich ED PIE R C E P resid en t Secretary........................ W . C. M acfadden Pargo Moved to Wimbleton The business of the F arm ers and M er ch ants B ank of Clem entsville w ill in the fu tu re be conducted a t W im bleton, N. D., and th e organization w ill be know n as the F arm ers and M erchants B ank of W im bleton. The bank is located in the old F irs t N ational building a t W im bleton. Officers and directors a r e : F re d C arr, p re sid e n t; M. T. Chase, vice p resi d e n t; R. R. W olfer, vice p resid e n t; M yron A ckerm an, Sr., vice p resid e n t; G. B. Arveson, cashier. D irectors are F re d C arr, G. B. Arveson, R. R. W olfer, M. T. Chase, L. B. N eim eyer, Geo. W . S cott and M yron A ckerm an, Sr. Consolidations Encouraged The m any consolidations of various N o rth D akota banks in accordance w ith a resolution adopted by the N o rth D a k o ta B ankers A ssociation is rap id ly help ing to place the sta te on a b e tte r finan cial basis. R ecent m ergers reflect an hon est effort to stabilize banking conditions in those counties w here the situ atio n was crowded. I n m any cases, also, banks have been moved from tow ns w here busi ness was not profitable, and moved to others w here conditions were b e tte r and * b anking facilities needed. Resigns at Williston C arl H . E rickson, form erly cashier of th e Commercial S tate B ank of W illiston, N o rth D akota, has been elected secretary and tre a su re r of the C. 0 . K n ig h t Com pany, and has assum ed his new duties. The Com mercial S tate B ank changed ow nership recently. Plan Consolidation * D irectors of the F arm ers N ational B ank and the C itizens S tate B ank, both of B arnesville, N o rth D akota, m et re cently to discuss plans fo r the consolida tion of the two in stitu tio n s. M eetings of the stockholders of both banks had already been held, and favorable rep o rts relativ e to consolidation w ere returned. 101 W . C. M A C F A D D E N S e c re ta ry W. G. Connors, of Roseglen, presid en t of of the in stitu tio n , to succeed J . R. Carley of G rand F orks. Mr. Connors has a ivide acquaintance in the v icinity of M inot, and is well up on conditions in th a t te rrito ry , having been engaged in banking a t Roseglen, n ea r M inot. The follow ing constitutes the officers and directors of the b a n k : P resid en t, W. G. Connors; vice p resi dent, O tto Brem er, St. P a u l; vice p resi dent, C. H . P ark er, M inot; cashier, E. R. Becwar, M inot. The directors a r e : O tto B rem er of St. P au l, chairm an of the board of directors of th e A m erican N a tional B ank of G rand F o rk s; G. S. Wooledge, M inot, a tto rn e y -a t-la w ; C. E. D anielson, M inot, p ro p rie to r of G rand H o tel; C. H . P ark er, M inot, p ro p rie to r of L elan d -P ark er H o tel; W . G. Connors, p resid e n t; and E. R. Becwar, cashier. Citizens Bank Elects A t the recent annual m eeting of the stockholders of the C itizens B ank of D rayton, N o rth D akota, the follow ing officers and directors were elected to serve th e in stitu tio n fo r the coming y ear : president, Dr. H . M. W ald ro n ; vice p resi dent, B. E. H erseth ; cashier, Ole Lovik; assista n t cashier, F . B. Sullivan. D irectors elected were : Dr. H . M. W aldren, B. E. H erseth, L. E. Johnson, F . W. B ellam y and A. C. Teien. These men are all pioneers in th is lo cality, and are well fitted to have charge of the affairs of the bank. Buy Carrington Bank G. S. N ew berry and F . E. Tucker, both of whom have been in terested fo r a num ber of years in th e F irs t N atio n al B ank of C arrington, N. D., have bought the controlling in te rest in th e in stitu tio n . The officers are : P resid en t, G. S. New b e rry ; Vice presid en t, F . E. T u ck er; cashier, R. W . H a rg ra v e ; assista n t cash ier, G. A. M urphy. George C arlson has sold his stock in the D eLam ere S tate B ank of D eLam ere, N. D., of w hich he was the cashier, to B. A. T rangsrud, and th e la tte r will take Mr. C arlson’s position w ith th e bank. The oth er officers w ill rem ain the same. The directors of th e bank are C. H . Nygaard, A lvin E rickson, Chas. M artinsen, J . C. O stern, J. 0 . Foley, and B. A. T rangsrud. NORTH DAKOTA NEWS W. H. Rausch, form erly cashier, has been elected p resid en t of the Selfridge S tate Bank. A. C. Rausch, form erly as sista n t cashier, succeeds to th e office of cashier. C. F . G ilbertson has been a p pointed assista n t cashier. — $— B. A. Trangsrud has been elected cash ier of the DeLam ere S tate B ank, succeed ing George Carlson. J . 0 . F oley is now assista n t cashier of th is in stitu tio n . ■— $— C. W. Aunger, form erly cashier of th e F irs t In te rn a tio n a l B ank of F o rtu n a , suc ceeds A. 0 . F uglie as cashier of the Peoples S tate B ank of P arsh all. — $— A. T. Johnson, fo rm erly cashier of the F ir s t S tate B ank of A lkabo, tak es the place of C. W. A unger as cashier of the F irs t In te rn a tio n a l B ank of F o rtu n a . — $— The First State Bank of Alkabo has been tak en over by the F ir s t In te rn a tional B ank of F o rtu n a . — $— The First State Bank of Zahl has been tak en over by the S tate B ank of Zahl. — $— F. N. May, fo rm erly vice president, succeeds H . C. H jerlid as p resid en t of the B ank of Scranton. E. H . and Chas. K eln er have been elected vice presidents. — $— The First State Bank of New Salem has increased its cap ital stock from $15,000 to $20,000. — $— P. A. Paulson, fo rm erly cashier of the Citizens S tate B ank of L an sfo rd , has ac cepted th e position of cashier of the M ichigan City B ank a t M ichigan. The P rince of W ales is reducing. P e r haps he w ants to respond to th a t call of tru e fellowship— “ Oh Skinnay!” First International Elects Bank Merger I f the galley-slave of old ever sang at his work, it m ust have been th a t touching refrain , “L ife’s Dream is O ar.” The F irs t In te rn a tio n a l B ank of M inot, N o rth D akota, a t its recent annual m eet ing of the board of directors, elected The business of th e F ir s t S tate B ank of A lkabo, N. D., has been m erged w ith th a t of th e F irs t In te rn a tio n a l B ank of W herever they are, it’s a safe bet th at the Stillm ans are still at sea. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis THE 102 Making of a Movie Star Young women of physical pulchritude, w ith expressive eyes and a full apprecia tion of their charms, are wont to believe they can step from their home towns into the galaxy of the movies. They are mis taken if we may accept the word of an ex perienced motion picture producer, Mr. Cecil B. de Mille, as broadcast over the radio the other night. He said th a t very few stars of the screen are classically b e a u tifu l; and th at while beauty has its place in the selection of movie actresses, it does not ran k with p er sonality and hard work as a determ ining element. W hat is personality? I t is “th a t which constitutes distinction of p e r NORTHWESTERN April, 1926 BANKER son,” says the dictionary. N ot a very illum inating definition fo r a girl in a high school. Mr. de Mille defines it more poet ically as “th at mystic elusive thing th at shines in the eyes, th a t is recognized in the clothes, th a t you can see from in back (whatever th at may m ean), th at you can’t bottle up, aud th at is stronger than drink.” All rig h t fo r young women, but hardly applies to Daniel W ebster or W alt W h it man. Gloria Swanson was selected fo r sta r dom “because of the way she leaned against a door” in a Mack Sennett comedy. She registered a woman in distress “with her soul expressed in the pose of her body.” That was personality. She was good fo r ju st five seconds, and “very, very bad fo r the rest of the film.” B ut she got her chance and won fame by her hard work, plus the “elusive thing.”— Chicago “Jo u r nal o f Commerce These fellows th a t are forever “on the vaifit” had better file an entry in our Track Meet. Poetry is the record of the best and h appiest moments of the happiest and best minds.— Shelley. A poem is the very image of life ex pressed in its eternal tru th .— Shelley. When Mayor Henley Changed His H at ^ fu st before each of the three daily trains pulled into his town, J Mayor Henley changed his hat. Then he became the Railroad Station Agent. In addition to these duties, he published a weekly newspaper every Thursday, which he himself edited. In between times he served as an active director of a progressive bank. s & a I n a w o rd , M a y o r H e n le y w as a u s e fu l, e n e rg e tic c itiz e n o f th e to w n in w h ic h h e liv e d . S c a rc e ly a s in g le s o u l i n t h e w h o le c o u n tr y s id e b u t k n e w a n d lik e d h im . G ifte d w ith a r e m a r k a b l e a b i l i t y to g e t th in g s d o n e , h e f o u n d h is serv ices o f te n in d e m a n d . M e e tin g p e o p le i n so m a n y d iffe re n t w a y s g a v e h i m e x p e rie n c e a n d w is d o m to a n u n u s u a l d e g re e . A n d e a c h y e a r f o u n d th e sco p e o f h is a c tiv itie s in c re a s e d a n d th e p e o p le h e s e rv e d m o r e n u m e r o u s . I f y o u w ill m a g n ify M a y o r H e n le y ’s a b ilitie s to a p o in t w h e re a sin g le p e r s o n c o u ld n o t p o s s ib ly p o ssess th e m a sa all, th e n a g ro u p o f in d iv id u a ls m u s t serv e. A n d th r o u g h p r o p e r o r g a n i z a tio n t h e s a m e q u a litie s o f a b ility a n d g o o d se rv ic e m a y b e re ta in e d . T h is is tr u e o f th e DROVERS BA N K S. T h e v a rie ty o f serv ices w h ic h th e y p e r f o r m e m in e n tly sa tisfy n e a r ly o n e th o u s a n d C o r r e s p o n d e n t B a n k s a n d m a n y m o r e in d iv id u a ls a n d firm s, w h o m a k e in n u m e r a b le calls u p o n th e m . Y o u r B a n k w o u ld b e n e fit b y th is so rt o f serv ice. I f it is n o t a lre a d y a C o rre s p o n d e n t o f th e DR O V ER S, w h y n o t s ta rt n e g o tia tio n s to d a y ? ROVERS NATIONAL BANK TIUJ51is SAVINLS BANK U n io n https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis S to c k Y a rd s, C h ic a g o THE April, 1926 NORTHWESTERN IOWA SEGTION Officers Iowa Bankers Association P r e s i d e n t .......................E m i l W e b b i e s B u rlin g to n V i c e P r e s i d e n t .......... C. C. J a c o b s e n M ap leto n T r e a s u r e r .....................A. E . H i n d o r f f N ew ton E M IL , W E B B L E S P resid en t S e c r e t a r y .................... P r a n k W a r n e r D e s M oines FRANK W ARNER S ecretary Davenport Merger Effective April 1st The recent consolidation of the U nion T ru st and Savings B ank and the Scott C ounty Savings B ank of D avenport, Iowa, effective A pril 1st, gives to the Iow a banking f ra te rn ity one of the la rg est and strongest bank and tr u s t com panies of the middle west. In capital, su rp lu s and profits the new institu tio n , which will be know n as the U nion Sav ings B ank and T ru st Company, will be th e la rg est bank and tr u s t com pany in e ith e r Iow a or Illinois, outside of Chicago. The capital, surplus and profits of the new in stitu tio n will be $2,500,000, w ith to ta l resources of more th a n tw enty m il lion. E ach of the consolidating banks has been in existence fo r more th a n half a century. The new bank will have an exception ally strong line-up of officers. 103 BANKER boards of directors w ill also be consoli dated. The p resen t site of the U nion-D aven p o rt will be th e fu tu re home of the m erged banks, and arrangem ents have already been made fo r the occupancy of the v acated S cott County Savings. The directors of both in stitu tio n s feel th a t the consolidation w ill offer g rea tly in creased banking facilities fo r the rap id ly expanding in d u stries of D avenport, and a t th e same tim e keep th e overhead to a minimum. The officers and members of the board of directors of th e combined bank are as fo llo w s: P re sid en t—W illiam H euer. Vice p resid en ts— J. H. H ass, O tto H ill, Clustav Stueben and Joseph J. Brus. (C ontinued on next page) W illiam H euer, president of the UnionD avenport Savings, will be the presid en t of the new in stitu tio n , and J. II. H ass, J . H . H A S S , V ice P re s id e n t p resid en t of the S cott County Savings, will be the vice president. The present officers of the two banks will become offi cers in the combined in stitu tio n s, and the OTTO H IL L , V ice P re s id e n t I o w a G r o u p M e e t in g s The Iow a group m eeting schedub fo r th is y ear as announced recently by E m il W ebbies, p resid en t of the Iow a B ankers A ssociation, is as fo llo w s: SO U TH ER N GROUP M E E T IN G S G roup 6— M arshalltow n ........................................................ M onday, M ay 10 Group 3— E ld o ra ..................................................................... Tuesday, M ay 11 Group 10— C e n te rv ille ....................................................... W ednesday, M ay 12 G roup 9—H u m e s to n ...................................................................T hursday, M ay 13 Group 8—M onticello .................................................................F rid a y , M ay 14 Group G roup Group Group G roup WM. HEUER P re s id e n t https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis N O R T H ER N GROUP M EE T IN G S 2— Storm L a k e ...................................................................M onday, 5— C a r r o ll........................................................................... Tuesday, 1— Sioux C i t y .............................................................. W ednesday, 7— W a te r lo o ..................................................................... T hursday, 4— N a s h u a ..............................................................................F rid a y , M ay 24 M ay 25 M ay 26 M ay 27 M ay 28 104 THE Agricultural Committees Organized I. J . Green of D avenport, chairm an of the A g ricu ltu ral Com mittee, and Em il W ebbies, p resident of the Iow a B ankers A ssociation, have jo in tly com pleted a statew ide organization of bankers, se lecting a banker in each county to serve as chairm an of the ag ric u ltu ral w ork in his p a rtic u la r county. The chairm an will rep resen t his County B ankers A ssocia tion and the Iow a B ankers A ssociation in ag ric u ltu ral w ork w ith his county F arm B ureau, County A gent and other fa rm organizations in his county and S tate A gricultural College a t Ames. This ag ricu ltu ral w ork will also be carried on NORTHWESTERN BANKER co-jointly wdth th e A g ricu ltu ral Commis sion of the A m erican B ankers A ssocia tion. W. A. D exter, ag ricu ltu ral ch air m an fo r Tam a county, was one of the first to rep o rt to the sta te h ead q u arters of the Iow a B ankers A ssociation, sta tin g : “ I tak e pleasure in saying th a t our County A ssociation is actively cooperat ing w ith the F arm B ureau in th is county, having provided a cup fo r the w inner of the Seed Corn G rowers Contest, and cups fo r the boys and girls pig clu b s.” April, 1926 DAVENPORT MERGER (C ontinued from page 104} Cashier— Sm ith Blackm an. A ssistant vice presidents—F re d W. Zabel, A lbert J. Ja n sen and A. H . Bierkamp. A ssistan t cashiers—H en ry H . True, Leon H. H ass, R o y K rabbenhoeft, George L. H am ann and C hester U. Schaefer. W ashington says th a t the m urders p e r petrated by Sieillians in Chicago presents a grave situation. P erfectly killing, that. Over 62 Years o f Service to Iowa Bankers Broad Service The broad service offered by the First National provides everything you need in a Davenport correspondent. Every de tail of modern banking is covered by an efficient staff, long experienced in the suc cessful handling of your banking prob lems. G U S T A V S T U E B E N , V ice P re s id e n t B oard of d irectors— W illiam H euer, J. H . H ass, F . H . B artem eyer, G. A. K oester, Theodore K rab b en h o eft, I. L. Sears, H. J. Zeuch, W. R, W eir, W . H. G ehrm ann Chris D. K uehl, J . H . Schaefer, Dr. R. E. Peck, W illiam R ichter, G ustav Stueben, J . B. Richardson, J. C. H all, And also, there is a friendly feeling that puts earnest, intelligent effort into everything that touches your welfare. Let us demonstrate to you how the First National can serve you. First National Bank JO S E P H J . BRITS, V ice P re s id e n t K E E P Y O U R O F F IC E R S in closer touch with your savings and checking accounts by the use of our expert mailing service. Our specialty: Duplicating Letters, Addressing, Matching, Folding and Mailing. D E S M OINES D U PL IC A T IN G CO. 91 7-919 W EST GRAND AV E. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D E S M OINES, IOW A Joseph Deutsch, Alex Naeckel, J . W. W atzek, George W hite, Dick R. Lane, Sm ith Blackm an, E. P. A dler, W illiam H. Voss Louis H annssen, Dr. D. J . Mc C arthy, Joseph J. Brus, Charles Grilk, George Dempsey, B ert Dow, R. H. H arn ed and A. H. Stoltenberg. THE April, 1926 Elect Officers A t the recent annual m eeting of the board of directors of the A lta S tate B ank of A lta, Iow a, E. J. E dw ards was elected p resid e n t fo r the coming year. Samuel P a rk e r, the form er president, was elected chairm an of the board. C. E. Cameron and G. P . Tincknell continue in th e ir capacities of vice president. H. F. R eeder was newly elected as cashier of th e in stitu tio n . Helps to Increase Business H . E. H enderson, president, and I. C. S tanley, vice presid en t of the S tanleyH enderson Company, Cedar R apids, Iow a, announce th a t H. H . Sanders, land inspector fo r th e ir organization, has ma- NORTHWESTERN 105 BANKER form erly lived. H e was a fte rw a rd con nected w ith the S tate B anking D ep a rt m ent as a bank exam iner. George R eifsteck, who was form erly cashier, has been elected vice presid en t and R ay H . Mugge assista n t cashier, and these gentlem en, w ith Mr. F ischer, are active in th e conduct of the b a n k ’s busi ness. The bank has a cap ital of $50,000 and surplus of $20,000. Reorganized and Consolidated Reorganized and consolidated w ith the F irs t N ational B ank, the D unlap Savings Bank, of D unlap, Iowa, is now open fo r business, w ith a cap ital stock of $80,000, a surplus of $20,000 and deposits of $525,000. The new o rganization bought the F irs t N atio n al B ank building, and is conducting its business in its new home. The officers a re : p resident, M. C. D ally ; vice presid en t, H . W . M illard ; cashier, H . W . V an H orn. Banker’s Wife Dies M rs. A nna B. Howe, w ife of H en ry J. Howe, p resid en t of th e F id elity Savings B ank of M arshalltow n, Iow a, died r e cently a t h er home. M rs. How e was a prom inent club woman, and had alw ays ta k en an active p a rt in the social and civic en terp rises in M arshalltow n. She was also in stru m en tal in organizing the local D. A. R. chapter. I f Y o u Have 'No Connection in Des M o in es You! can always call on us to handle any item | of business that requires the attention and cooperation of a Des Moines bank. H. H. SA U N D ERS And you can depend on us to handle it to your complete satisfaction. te rially assisted them in p u ttin g on th e ir books, during 1925, the larg est volume of business the com pany has ever experi enced. Mr. S anders was born and raised in F loyd county, and has alw ays been active in the land and fa rm m ortgage business. F o r m any years he represented the F arm ers S tate B ank a t Rudd, Icnva, and has alw ays been m ost careful and effi cient in his work. Accepts State Position P . C. H artm a n , form erly cashier of th e W aukee Savings B ank of W aukee, Iow a, has accepted a position w ith the S tate B anking D epartm ent, and has en tered upon his new duties. The W aukee Savings has recently merged w ith the B ank of W aukee. Buys Interest at Calumet P au l J . F isch er has purchased an in te re st in the Calum et S tate Bank, Calu m et, Iow a, and becomes cashier of th a t in stitu tio n . M r. F ischer obtained his first banking experience in the F irs t N a tional B ank of H artley , Iowa, w here he https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BANKERS TRUST CO. B A N K. Cor. 6th and Locust Sts., Des Moines Capital $1,000,000.00 Surplus $200,000.00 106 THE NORTHWESTERN BANKER April, 1926 Cashier of New Bank T w o Bank Customers (.Little Talks on Tiling, No. 16) C ARL OLSON raised 108.95 bushels of corn to the acre on tiled land in the 1925 Cerro Gordo Corn Contest. At 56 cents a bushel he made a profit of $36.00 an acre. An other man raised only 33.9 bushels an acre on his best field and lost $6.50 on each acre be cause his land was untiled. HICH of these two men would make the most profitable customer for your bank? If all farmers in your territory were Carl Olsons your community would be more pros perous and your bank business would be more profitable. The power to make Carl Olsons out of many of your farm custom ers lies with you. W Tile Drainage Will Make Carl Olsons Out of Many of Your Farm Customers Mason City Brick and Tile Company 312 Denison Bldg. Mason City, Iowa S ^ ^ ^ O IN G steadily for' L sItJ w ard, serving th e people o f Des M oines and th e bankers o f Iow a, as w e p H h ave done for over 50 years. B g l & f p 1 -Bjhjy l t More Than 35,000 Customers I Jr o w a N a i i o n a l B THE STATE CENTRAL SAVINGS BANK K E O K U K , IO W A Capital .....................................................................................................$ 200,000.00 Surplus and Undivided Profits ........................................................... 329,574.16 Deposits ...................................................................................................2,803,196.77 W I I j I jI A M L O G A N , P r e s i d e n t L . J. M O N T G O M E R Y , V i c e P r e s i d e n t A S A P H R U C K . V ice President C. J. R O D E , C a s h i e r A L V I N K R A E T , A s sista n t C ashier !.. J , W O L F , A s s i s t a n t C a s h i e r https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BANKERS In New Quarters Two years of ra p id grow th have culm i n ated in the m oving of the C ontinental T ru st & Savings Bank, of Des Moines, into new and la rg er q u arte rs in the Royal U nion L ife B uilding a t the southw est corner of Seventh and G rand Avenue. The rooms have been com pletely re modeled and new m ahogany fixtures in stalled. Two fireproof v au lts are a t the re a r of the room and m odern safety de posit equipm ent has been b uilt in. On the opening day flowers were given to lady visitors and special favors were presented to those who opened new ac counts. The officers and directors of the bank held open house to th e ir frien d s and visitors the en tire day. The banking room is fifty-eight feet in length and has a lobby entrance from the Royal U nion L ife B uilding, also a Seventh S tre et entrance. The room a t the re a r is th irty -tw o feet in w idth, m ak ing suitable space fo r th e m ortgage de p artm en t of the bank. The C ontinental T ru st & Savings B ank was organized two years ago and is operated as a savings bank. W hile check ing accounts are handled by the bank, all loans are made stric tly on a secured basis. The p ast y ear checking deposits m ade a th irty per cent gain. This rap id increase in business has made it neces sary to secure larg er q u arte rs fo r the bank. The officers and directors of the bank a re : M arion D. Woods, p resid e n t; A. H. B lank, vice p resid e n t; A. L. E dw ards, c a sh ie r; L. F . C lam pitt, assista n t c a sh ie r; R obert J. B an n ister, W. H. B oettcher, Le Roy C. D unn, D w ight N. Lewis, and P au l W . W ilderson, directors. a n k D e s M o in e s S a v in g s Ba n k a n d Tr u st Co m p a n y Iowa’s L a te s t Bank - D e s M o in e s - Sixth and Walnut ACCOUNTS OF BANKS AND Iv an 0 . H asbrouck, u n til recen tly vice presid en t of the C entral S tate B ank, Des Moines, lias resigned from th a t in stitu tion to assume charge and cashiership of the newly organized Iow a S tate B ank of Jefferson, Iowa. Mr. H asbrouck has been connected w ith the C entral S tate fo r fo u r years, coming th ere from Ames w here he was Avith the Ames N ational. INVITED Increases Capital Stock Follow ing au th o rizatio n by the stock holders, the cap ital stock of the F irs t N ational B ank of M ason City, Iowa, has increased its cap ital stock by $250,000, m aking its new cap ital $500,000. The surplus and profits of the bank noAV stand a t $300,000, which gives the in stitu tio n a w orking cap ital of $800,000. C. H. M cNider, p resid en t of the F irs t N ational, sta te d th a t the bank needed the increased cap ital to tak e care of the p resen t busi ness, and also to m ake provision fo r fu tu re business. In speaking of the in crease, M r. M cNider s a y s : “ The F irs t N ational B ank has u n bounded fa ith in M ason City and N orth April, 1926 THE Iow a, and it is because we have th is fa ith th a t we are adding to o u r equipm ent in o rd er to be b e tte r able to serve the everin creasing dem ands of the community. ‘ ‘ Our p u ttin g this additional $250,000 in to the bank is b u t an exem plification th a t we do have the utm ost confidence in M ason C ity and Iow a fo r the fu tu re . “ W e believe th a t M ason C ity and Iow a a re entering a period of unprecedented p ro sp erity and expect the next decade to p u t M ason C ity to the fro n t as a lead ing com m ercial center in Iow a and the m iddle w est.” Bank Building Sold The bank building and fixtures of the Sac County S tate B ank, Sac City, Iowa, w ere sold recen tly to A. W . Jones, of P eterson, Iowa. The sum p aid was $24,250. Mr. Jones and his associates are p lan n in g to open a new bank in these q u arters, details of which they will a n nounce later. NORTHWESTERN I I I I 107 BANKER SHORT TERM NOTES 0f Electric Utility Companies Endorsed By j 1= I W . B. Foshay Company Are A Desirable Investment For Bankers Yield 5% To 6% According To Maturity 1 Full Details on Request I “ All Your M oney — All th e Tim e — On Time''' | | | 1= | Buy Waukee Bank A dding to th e ir already long list of holdings, the B rentons have purchased th e W aukee Savings B ank, and m erged it w ith the B ank of W aukee, Iowa, which they now own. The bank was bought o u trig h t, the depositors of the W aukee Savings sim ply tra n sfe rrin g th e ir ac counts to the B ank of W aukee. The de posits of the W aukee Savings am ounted to about $100,000. New Banks for Jefferson M erchants and business men of Jeffer son, Iowa, have two- new banks w ith which to conduct th e ir banking business, both recently organized and p u t into operation. They are the Jefferson S tate Bank, and the Iow a S tate Bank. The officers of the Iow a S tate Bank will be as fo llo w s: chairm an of the board, Simon Casady, Des M oines; president, G ran t M cPherrin, Des M oines; vice p resi dent, E. A. M illigan, Jefferson; cashier, Iv an O. H asbrouck. O thers in terested in the bank are E. B. W ilson and M. M. B runner, Jefferson, and D r. P ringle, of Bagley, Iowa. The officers of the Jefferson S tate Bank a r e : W . II. B renton, p re s id e n t; Clyde E. B renton, vice p re s id e n t; V. W. M iller, c a sh ie r; R alph H. M aloney, assista n t cashier. The directors a r e : Clyde E. B renton, C harles G. K elley, George B. A rnold, A lb ert J. Robertson, G. C. K elly and W . H . B renton. “G rea t responsibility is given to m en capable o f handling th at responsibility'''' Spoke at Bankers Club Jam es C. Davis, who is p racticin g law in Des Moines, and who was director gen eral of railro ad s during the w ar and the follow ing period of reconstruction, was the prin cip al speaker a t a m eeting of the Des Moines B ankers Club, held recently a t the G ran t Club. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Iowa National Bank Davenport, Iowa E | 108 THE NORTHWESTERN BANKER April, 1926 Consolidation Ratified Stockholders of the S cott County S av ings B ank and the U nion-D avenport T ru st & Savings B ank, both of D aven port, Iowa, have ratified the consolidation of the two in stitu tio n s w ithout a d issen t ing vote. The consolidation was voted upon and approved by th e directors of both banks about F eb ru ary 1st. The con solidated in stitu tio n w ill be called the U nion Savings B ank & T ru st Company. Cain in Deposits W. L. Spencer, p resid en t of the Oak land Savings B ank, O akland, Iowa, w rites th a t the deposits of th a t in s titu tion have now passed the $750,000 m ark, and still gaining. H e says th a t more th a n 40 per cent of the deposits of the bank are in cash or in secondary reserve, th a t people are paying off th e ir obliga tions in fine shape, and as a rule are quite optim istic of the fu tu re . Officers of the O akland Savings Bank are W . L. Spencer, p resid en t ; H. H. S palti, vice president, and M. H . Evans, cashier. Getting New Accounts C. J . Adams, recently-elected cashier of the F arm ers Savings B ank a t Holy Cross, Iowa, w rites th a t since the m iddle of J a n u a ry his bank hhs m ade a gain in deposits of $24,000, and has placed th irty fo u r new accounts on th e books. N ot a bad record fo r a relativ ely sm all com m unity. Cashier Dead A rnold F ischer, fo r a num ber of years cashier of th e D enm ark Savings Bank, of D enm ark, Iowa, died recently a t his home in th a t city. H is death is a loss keenly fe lt by the officers o f th e bank, and by his com munity. Bank President Dead Jo h n G. Vogt, a t one tim e president of the S tockton Savings Bank, of Stockton, Iowa, and a prom inent resid en t of both M uscatine and S cott counties, died re cently a t the M ercy hospital in D aven port. M r. V ogt was born and raised on a fa rm n ear Stockton, and was fo rty nine years old a t th e tim e of his death. Guthrie County Pioneer Dead D aniel W. Diehl, a fo rm er resid en t and m erchant of P an o ra, Iowa, died recently a t the age of 88 years. Mr. D iehl was born in P ennsylvania, and came to G uthrie county, Iowa, in 1861. H e is survived by th ree dau g h ters and sons, one of whom is C. A. Diehl, assistan t vice p resid en t of the Des M oines N ational Bank. Cashier Resigns H . D. A ykens, cashier of the A m erican S tate B ank of George, Iowa, has resigned his position w ith th a t in stitu tio n . Mr. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis THE A p ril, 1926 N O R T H W E S T E R N BA N K ER A ykens has been in the banking business fo r a num ber of years, and will be missed by the custom ers of the A m erican S tate. H e has not as y et announced his fu tu re plans. Attended Regional Conference R ay N yem aster, vice president of the A m erican Com mercial & Savings B ank of D avenport, Iow a, has recently r e tu rn ed from K ansas City. W hile there he represented the banking in terests of eastern Iow a a t the M id-W est regional conference on savings banks, a section of th e A m erican B ankers A ssociation. Elected Cashier The Com mercial N ational B ank of Essex, Iowa, announces V ictor F reed as th e new cashier of th a t in stitu tio n . Mr. F re ed has served th ree term s as county au ditor, and is a t th is tim e cashier of the Y orktow n Savings Bank, and is well equipped to handle the w ork in his p res en t position. Leaves Central State Iv an H asbrouck, fo rm erly vice p resi dent of the C entral S tate B ank, Des Moines, has resigned his position to take active charge of a new ly organized bank a t Jefferson, Iowa. G ran t M cPherrin, p resid en t of the C entral S tate, states th a t th e vacancy caused in the Des Moines in stitu tio n will not be filled a t the p resent tim e. “ On to Paris’’ The g rea test peace-tim e pilgrim age in th e history of the m odern w orld will take place d uring Septem ber, 1927, when 30,000 veterans of the W orld W ar, mem bers of the A m erican Legion, will re tu rn to the scene of th e ir conquests in F rance. The in sp ira tio n of this trem en dous m igration is the celebration of the te n th anniv ersary of the en try of A m er ica into the W orld W ar w ith the holding of the A m erican Legion convention in P aris. F o r two years the A m erican Legion has been planning to insure the successful accom plishm ent of this g rea t movement. One of the m ost im p o rta n t of the m any task s involved is the establishm ent of a savings plan which will insure the aver age veteran an adequate supply of funds w ith which to m ake the pilgrim age. To this end the Legion is now engaged in the organization of “ Paris-in-1927 Savings C lubs” through local banks in all p a rts of the country. The organization of these savings clubs will w ork to the m utual benefit of both th e v eterans them selves and the banks in which th e ir deposits are made. The ad vantages to the “ ex-doughboys” and “ g o b s” will be obvious, it was pointed out. Men of sm all earnings who do not now save regularly, or who save only sporadically, will be given an incentive to https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The H eads— TheHands and the H e a rts — T h e b a n k w ho offers re a l service to its c o rre sp o n d en ts is m ade up of th e h eads, th e han d s, an d th e h e a rts of th e in d iv id u als fo rm in g its o rg an iza tion. T h e h eads, th e officers and directo rs of th e C ed ar R ap id s N atio n al B ank, are m en of exp erien ce an d ju d g m e n t, cap ab le of disposing of y o u r c o rresp o n d e n t p ro b lem s p ro m p tly an d efficiently. T h e m any h a n d s of o u r v arious d e p a rtm e n ts are sk illed in th e q u ick and accu rate h a n d lin g of any d etail w hich you m ay ask us to p e rfo rm fo r you. A n d above all, th e h e a rt of every in d iv id u a l con nected w ith th e C edar R ap id s N atio n al B an k is in his w ork. H e likes his jo b . H e is try in g to m ake good service b e tte r— fo r you. L et th e C edar R ap id s N atio n al d em o n strate how th e h eads and th e h an d s and th e h e a rts of an in sti tu tio n can serve you. “This Bank Was Not Built in a Day99 15he Cedar Rapids National Bank -OFFICERSKalph V an Vechten Chairman of the Board Glenn M. Aver ill President Geo. F. Miller V ice-President Martin Newcomer V ice-President Chas. C. Kuning Cashier Peter B ailey A ssistant Cashier Marvin R. Selden A ssistan t Cashier Geo. W. Swab A ssistan t Cashier Van Vechten Shaffer A ssistan t Cashier Bertha M. W olf A ssistan t Cashier 110 T H E N O R T H W E S T E R N Recognition of our responsibility to customers and corre spondents covers not only the first consider ation of good banking —security—but also that close cooperation in their credit andbanking requirements nec essary to constructive business progress. In the establishment of business relationships we are ever mindful of these obligations. B A N K E R April, 1926 th r ift. T hrough the reg u lar weekly de posit of a few dollars they will be en abled to set aside a sum sufficient to realize an am bition of years. A t the p resen t tim e more th a n 360 banks have been designated by th e F ran ce T ravel Com mittee as official de positories, holding more th a n $1,500,000 fo r Legionnaires who will go to F rance. This sum is increasing rap id ly week by week as deposits are made. Scores of banks are being appointed each week as official depositories, according to Jo h n J. W icker, J r., of Richmond, Va., n a tional trav e l director, to whom ap p lica tions should be sent. Forms Trust Company The In te rn a tio n a l A cceptance B ank, Inc., announces th e organization of a tru s t com pany u n d er the laws of New York, th e nam e of which is In tern atio n al A cceptance Securities & T ru st Company. The new in stitu tio n commences business w ith a paid-in cap ital and surplus of $1,000,000. I ts offices are located in the building of the In tern atio n al A cceptance B ank a t 52 Cedar S treet, New Y ork City. This tru s t com pany has been form ed to ren d er banking and tru s t services sup plem entary to b u t outside the scope of the activities of the In te rn a tio n a l Ac ceptance B ank itself, and to tak e an ac tive p a rt in the field of investm ent secur ities. A ll of th e officers and directors of the tr u s t com pany are persons d irectly as sociated w ith the In te rn a tio n a l A ccept ance B ank. P au l M. W arburg, chairm an of the board of the In tern atio n al A c ceptance B ank, heads th e board of the tru s t company, and F . A bbot Goodhue, p resid en t of the In tern atio n al A ccept ance Bank, is also p resid en t of th e tru s t company. Ernst & Ernst Booklet E D M U N D W . M IL L E R P re s id e n t Jtie Commercial N ational Ba n k CAPITAL&5URPLUS-ONE HALF MILLION DOLLARS W A T E R L O O ,I O W A . “ The R etail In v en to ry M ethod and Store B udget Control,” is the nam e of a new booklet ju s t published by E rn s t & E rn s t which deals w ith th e im p o rtan t facto rs in progressive and profitable store m anagem ent and should be of g reat in te rest to every m ercantile executive. The booklet is w ritte n to give the laym an an easy and thorough u n d erstan d in g of the R etail In v en to ry M ethod of A ccount ing and the R elation of th is M ethod to S tore Budget control. I t is w ritte n in a very readable style, and is not com pli cated by argum ent or technical detail. B ankers who m ight wish to place th is in the hands of any of th e ir m erchant custom ers m ay ob tain copies th ereo f by w ritin g to th e E rn s t & E rn s t office a t D avenport, Iowa. Appoint Advertising Counsel The C ontinental and Commercial Banks, Chicago, have appointed E dw in B ird W ilson, Inc., advertising counsel https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis April, 1926 T H E N O R T H W E S T E R N 111 B A N K E R and agent fo r th e ir local as well as n a tio nal advertising. This banking group has to ta l resources of $626,000,000, “H a lf a B illion and a H u n d red M illion M ore.” Walter B. Lutz Dies in Motor Crash W alter B. Lutz, president of the Home Savings B ank of Des Moines, was in stantly killed last m onth when his m otor stalled on a railroad crossing in Des Moines, and was struck by a Rock Island passenger train. H e was on his way to church to join his fam ily a t the services. Mr. L utz was widely known in banking circles, having been a member of the State Association fo r years, a p ast president of the Des Moines B ankers Club, and a tru s tee of the Des Moines C learing House. A lthough born in Pennsylvania, he had lived in Iowa most of his lifetime. H e spent his boyhood in Oskaloosa and was graduated from the high school there. H e also was graduated from P enn college a t Oskaloosa. H e studied law a t the U niversity of Iow a and was adm itted to the bar. H e practiced law in A lbia fo r two years and then became president of the A lbia State Bank. W hile residing in A lbia he met Miss F ern B artram , whom he m arried in 1905. M oving to Des Moines in 1910, Mr. Lutz purchased the controlling interest in the Home Savings Bank from A. C. Miller and had acted as its president since 1910. The fam ily resided on the east side until fo u r years ago when they moved to their present home on T hirty-fourth street. Prom inently identified w ith social and fra te rn a l life of Des Moines, Mr. L utz was a director of W akonda Club, a mem ber of G rand View Club and of the Des Moines Club. H e was a consistory Mason and S hriner and was com pleting his last degrees in the Temple commandery. He was also an Elk. Interested in civic work of th e city, he was a form er director of the Chamber of Commerce, a member of the G reater Des Moines committee and a member of the E ast Des Moines Club. H e had been a member of the F irst P resbyterian church since coming to Des Moines and had taken an active p a rt in the charitable w ork of the church. Surviving him are his Avife, a daughter, Elizabeth, and a son, W alter B., J r . H is father, George L utz o f Donora, Pa., also survives as does a sister, Miss Ethel Lutz, now living in D onora, but who was a teacher at W est H igh school, Des Moines, u ntil six years ago. “Flu” Victims W . G. C. B agley, vice presid en t of the F ir s t N ational bank, M ason City, Iowa, and a m em ber of the A m erican B ankers A ssociation executive council, was con fined to his home a Aveek la st m onth w ith https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A Strong Organization A b a n k in g co nnection w ith th e C en tral S tate assures cor resp o n d en ts th ey w ill I’eceive th e benefits of a stro n g o rg an ization, w ith facilities cap ab le of m eetin g any b a n k in g re q u ire m ent. TH E O LD R E L I A B L E Cen tr a l St a t e Ba n k OF DES M O IN E S B an kin g, T r u sts and In v e stm e n ts ¡Safe D e p o sit V a u lts M e m b e r F e d e r a l R e s e r v e S y s t e m OFFICERS Simon Casady, Chairman of the Board Grant M cPherrin, President John W. Hawk, A ssistant Cashier Leland Windsor, Vice President Chas. W. Oxborrow, A sst. Cashier Lynn G. Fuller, Vice President Fred H. Quiner, A ssistant Cashier Frank C. Ash, Cashier Frank R. Warden, A ssistant Cashier Em m ett Johns, A ssistant Cashier T hat Something "More W e pro v id e m ore th a n ju st m oney and c re d it fo r o u r custom ers. F o r th ey find o u r counsel on business, b a n k in g an d c re d it p ro b lem s is based on a w ide an d co m prehensive experience. A n d in ad d itio n th e re is th e p e rso n a l a tte n tio n of o u r officers w ho are in te re ste d in p ro m o tin g th e grow th of custom ers’ business. SECURITY STATE BANK KEOKUK “W h ere B a n k in g Is a P leasure” IO W A THE 112 NORTHWESTERN BANKER April, 1926 the “flu.” This is also tru e of B. B. Vorse, vice p resid en t of th e B ankers T ru st com pany, Des Moines. CAPITAL AND SURPLUS OVER $1,000,000.00 E stablish ed 1874 A reputation founded on years and facts — a most certain guide to your banking satis" faction. s _Nl Ì, V T-1W BANK O F F IC E R S CHARLES E. PERKINS, Chairman of Board E. WEBBLES, President L. C. WALLBRIDGE, Vice Pres. J. G. WALDSCHMIDT, Vice Pres. W. C. KURRLE, Vice President C. T. SIMMONS, Vice President R. L. BUNCE, Vice President L. M. WILSON, Cashier ELMER RAUENBUEHLER, Assistant Cashier L. T. PANTHER, Assistant Cashier F. J. NORTON, Assistant Cashier RAT HUMPHREY, Manager Bond Department T. H. WILSON, Auditor D IR E C T O R S JOHN BLAUL, President John Blaul’g Sons Co. WILLIAM BONGERT. Treasurer Dehner Cigar Co. WILLIAM CARSON, President Boise Payette Lumber Co. H. W. CHITTENDEN, President Chittenden & Eastman Co. W. N. CHURCHILL, President Churchill Drug Co. J. R. COPELAND, President Clinton Copeland Company WALTER B. EATON, Vice Pres. Chittenden & Eastman Cct W. F. GILMAN. Secretary Burlington Lumber Co. HAROLD W. GRUPE, Vice Pres. Lagomarcino-Grupe Co. G. G. HIGBEE. President Murray Iron Works C. S. LEOPOLD, President Leopold Desk Co. C. H. MOHLAND, Attorney ROBERT MOIR, Capitalist C. E. PERKINS, Trustee E. S. PHELPS, Insurance H. S. RAND, President Rand Lumber Co. RAY REDFERN, Farmer HENRY RITTER, Retired J. J. SEERLEY, Attorney RALPH E. SCHRAMM, J. S. Schramm Co. E. WEBBLES. President i n C T I O W A ST A T E ! R J 1 TRUST & SAVINGS J FI j MEMBER BANK FEDERAL R E SE R V E S Y S T E M https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis B U R L I N G T O N IA . |j Iowa Group Meeting and Convention Date Announced Em il Webbies, president of the Iowa Bankers Association, announces th at the weeks set aside fo r the 10 G roup Iowa Meeting's in May are as follow s: The South Group Meetings to come d u r ing the week of M onday to F riday, May 10 to 14, 1926, inclusive. The N orth Group Meetings to come dur ing the week of Monday to F rid ay , May 24 to 28, 1926, inclusive. Among the first to make reservations fo r the coming Group T rain is W . J . M urray, m anager of the V an Nuys Branch of th e C alifo rn ia Bank, Los Angeles, Calif. Mr. M urray not only makes res ervation fo r himself, but also fo r Louis E. Bliss, vice president of the C alifornia Bank. P resident W ebbies also announces th a t the dates fo r the 40th A nnual Convention of the Iow a Bankers Association will be held at Sioux City on M onday, Tuesday and W ednesday, Ju n e 21, 22 and 23, 1926. The H otel M artin at Sioux City will be Convention H eadquarters. Geo. Sinclair, president of the Sioux City C learing House, and general chair man of the convention arrangem ents, has called a special meeting of the Clearing House, to begin active operations in con nection w ith the coming convention. The personnel o f the committees has already been designated as follow s: G eneral C hairm an — Geo. Sinclair, president Sioux City C learing House, Sioux City, Iowa. E ntertainm ent, Executive and Finance Committees—A. G. Sam, chairm an, p resi dent Live Stock N ational Bank, Sioux C ity; A. B. D arling, president Security N ational Bank, Sioux C ity ; J. L. Mitchell, president F irs t N ational Bank, Sioux City. H otel and H ousing Committee— Thos. P . Treynor, chairm an, vice president W oodbury County Savings Bank, Sioux C ity; L. H . H enry, vice president F irs t N ational Bank, Sioux C ity; V. C. Bonesteel, vice president Security N ational Bank, Sioux City. Chairm an Sinclair states as follows: “ Sioux City has not had the pleasure of entertaining the convention of the Iowa Bankers Association since 1908. W e are p lanning on the best convention th a t the Iow a Bankers Association has ever had when the Iow a bankers assemble in our city next Ju n e to hold their 40th annual m eeting.” I t is often easier, as well as more advan tageous, to conform ourselves to other men’s opinion, than to bring them over to ours.—-La Bruyere. April, 1926 THE N O R T H W E S T EEN BANKER Will Hold Bankers’ Short Course URIN G the week of M onday to F riday, A p ril 19 to 23, 1926, in clusive, the S tate U niversity of Iow a and the Iow a B ankers Association, co-jointly, will hold a t the U niversity, th e S eventh A nnual B ankers In s titu te Course. I t is a Short Course fo r bankers. I t provides an opportunity fo r the young men and young women in p articu la r of the Iow a banks to obtain from the B ank ing D epartm ent of the S tate U niversity of Iowa, a technical train in g in banking. The course extends over two years. To complete it, it is necessary th a t the stu dent attend the class room work a t the U niversity during the week annually designated. D uring the interim he car ries on the course by correspondence with the U niversity. W hile the course is di rectly under the auspices of Dr. E. H. Lauer, head of the Extension Division of the University, the actual work is under the direction of P rofessor C. A. Phillips, D ean of the College of Commerce and B anking of the University. Associated w ith Mr. P hillips in giving the banking are, of course, m any professors, both of th e L iberal A rts and Law Colleges of the University. U pon satisfactorily com plet ing the course, the student is aw arded a diplom a of graduation from the Banking Course of the S tate U niversity of Iowa. The committee o f the Iow a B ankers Asso ciation having direct charge of encourag ing attendance from among the bankers, is the E ducational Committee, consisting o f: A. C. Smith, chairm an, president City N ational Bank, Clinton; G. 0 . V an Derveer, cashier S tate B ank of W averly, W averly; E. S. V an Gorder, president F irs t N ational Bank, A udubon; Carl Mon roe, cashier Exchange N ational B ank, Leon; M. E. Tate, vice president Security S tate Bank, K eokuk; F ra n k Camp, cash ier F ay ette County N ational Bank, W est U nion; W atson N. E nyart, cashier Agency Savings Bank, A gency; M arshall Sweney, president Mitchell County Savings Bank, O sage; B. B. Yorse, vice president B ank ers T rust Co., Des M oines; Carl W ohlenberg, J r., vice president H olstein Savings B ank, H olstein; H . E. Smith, cashier Clarion Savings Bank, Clarion. D The above committee is a t this time w orking out plans w ith the officers of the 99 County B ankers Associations, under which plans a “delegate” or a “student” is selected by some com petitive method from am ong the bankers of the county to attend the Short Course as the re p re sentative of his p articu la r County Bankers Association. In addition Chairm an Sm ith’s com m ittee has com m unicated w ith ex ecutive officers of 114 banks in the larg er cities of the state, requesting those banks to select a representative fo r the course. F ifty-six young men and young women https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis In Iow a Des Moines Is the Logical Reserve Center and In Des Moines Iowa Loan & T rust Is the Logical Reserve Bank Since 1872 th is in s titu tio n h a s been serving Des M oines an d Iowa I o w Ç T a r u . s t C o m p a n y BANK M em ber F ed era l F ie se rv e S y s te m DES MOINES, IOWA 114 THE NORTHWESTERN M ER C H A N TS NATIONAL BANK C E D A R RA PIDS, IOWA “They Know the Country Banker’s Needs” BANKER April, 1926 took the course last year and it is antici pated th a t more than 100 will be en rolled in the coming course. P resident W ebbies of the Iow a B ankers Association is strong fo r the course and expresses himself by saying, “ I consider no work of the Association of more im portance than m aking it possible fo r the young men and young women of our banks to get the fundam ental train in g in bank ing, which the great S tate U niversity of Iow a so am ply provides. These young men and young women are sooner or later to have executive adm inistration of our banking institutions and they should be equipped w ith every possible advantage.” P resident W alter A. Jessup of the U ni versity is enthusiastic over the fu tu re of the course and is looking forw ard to the time when its enrollment may consist of several hundred. To Erect New Building K now ing th e c o u n try b a n k e r ’s needs is p rim e e sse n tia l o f a c ity c o rre sp o n d e n t. th e T he c o rre sp o n d e n t w ho w ro te th is l e t t e r b e lie v e s T he M e rc h a n ts N a tio n a l kn o w s th e c o u n try b a n k e r ’s needs. H e sa y s: ‘ ‘ O f a ll th e c o rre sp o n d e n ts w e h a v e h ad , we fo u n d none t h a t could com pare w ith th e se rv ice s re n d e re d to us b y th e M e rc h a n ts N a tio n a l B a n k o f C ed ar R a p id s, Io w a. ‘ ‘ T h e ir officers a re th e k in d o f b a n k e rs we n e ed m ore of, f o r th e y a re a lw a y s c o u rte o u s a n d re a d y a t a ll tim e s to do a n y th in g fo r one. T h ey a re m en w ho k n o w th e c o u n try b a n k e r ’s n eed s a n d a re a lw a y s re a d y to re n d e r a n y a ssista n c e a t a n y tim e. Y ou c a n ’t b e a t th e m fo r re a l service. “ W e hold th e h ig h e s t re g a rd fo r th is b a n k ’s officers, a n d h a v e in th e p a s t reco m m en d ed th is b a n k to som e o f o ur c o u n try b a n k e rs, and now th e y , too, c a rry th e ir la rg e s t a cc o u n t w ith th e M e rc h a n ts N a tio n a l B a n k .” F. R. Jones Goes with Closed National Banks James E. Hamilton President F . R. Jones, of Des Moines, has re signed as Chief E x am in er in charge of Closed B anks fo r the Iow a banking d ep artm en t to become supervisor of Closed N ational B anks fo r Iow a and a group of o th er neighboring states, ac cording to an announcem ent m ade la st m onth by Iow a B ank S u p erin ten d en t L. A. A ndrew . -He will be succeeded in the Iow a d ep artm en t by C. W . E n y a rt who has been an exam iner in the Closed B ank D ivision fo r the p a st two years, and well m erits th e prom otion. “F re d ” Jones, as he is known to b an k ers th ro u g h o u t the sta te of Iowa, has m ade a splendid record w ith the Iow a d epartm ent, and largely due to his b an k ing knowledge, his ta c t and diplomacy, th e w ork of the Closed B ank d epartm ent has been carried on w ith rem arkable effi ciency. H e has been w ith the Iow a de p artm en t since Septem ber, 1923, w hen the law providing fo r th e liquidation of closed banks through the state banking departm ent, w ent into effect. H is new Mark J. Myers V ice Pres. & Cash. E. E. Pinney V ice President S. E. Coquillette V ice President Edwin H. Furrow V ice President E. B. Zbanek Vice President H. N . Boyson V ice President L. W. Broulik A ssistan t Cashier Roy C. Folsom V ice President Fred W. Sm ith A ssistan t Cashier https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The poet m ust be alike polished by an in terco u rse w ith th e w orld as w ith the studies of ta s te ; one to whom lab o r is negligence, refinem ent a science, and a r t a n atu re.— D israeli. Resources $15,000,000 P. C. Frick Vice President i The F irs t T ru st & Savings B ank of Onawa, Iowa, is p lanning to erect a new building. The building they are now in Avill be to rn down, and a new, m odern stru ctu re erected in its place. The new building will occupy the en tire lot. The F irs t T ru st & Savings B ank is one of the oldest established banking businesses in the sta te of Iowa, having been estab lished way back in 1858 when N o rth w estern Iow a was b u t a p rairie. P . K. H olbrook is the p resid en t and C. C. H arsh b arg er, cashier. THE April, 1926 w ork w ill be on a la rg er plane, and conies as a fine and unsolicited rew ard fo r three years of splendid service fo r the state. P re sen t and form er sta te officials, in com m enting on the prom otion of Mr. Jones, are highly appreciative of his ex cellent service fo r the sta te of Iowa. Says B ank S uperin ten d en t A ndrew : “Mr. Jones has given very efficient and loyal service to the D epartm ent in his ad m in istratio n of the Closed B ank D i vision. H e had a very im p o rtan t job and has shown m arked ability in the conduct of his office. W e are very sorry indeed to lose him, but, of course, are glad to see NORTHWESTERN 115 BANKER D I R E C T O R S AN D O F F IC E R S 1 BUILT UPON CONFIDENCE Confidence is th e fo u n d a tio n upon w hich e v e ry su c c essfu l b a n k in g i n s t it u tio n h a s b e en b u ilt, a n d w ith o u t w h ich i t w ould cease to e x is t. Confidence in th e officers a n d d ire c to rs— f a it h in th e ir b u sin e ss a b ility a n d i n te g r i ty — b e lie f in th e c a re fu l a n d a c c u ra te m eth o d s used in th e h a n d lin g o f d e ta il— a ll th e s e are p rice le ss a sse ts to a n y b a n k in g i n s t it u tio n . A n d i t is upon th is firm fo u n d a tio n of th e lo n g -e s ta b lis h e d confidence o f its c u sto m e rs t h a t th e C ity N a tio n a l B a n k has progressed. O rganized fifty-five years ago w h e n Io w a w as y o u n g a n d ju s t b e g in n in g to re a liz e h e r p o ss ib ilitie s , th e C ity N a tio n a l played a n im p o rta n t p a rt in h e lp in g o u r g r e a t s ta te come in to h e r own. A n d now , as a lw ay s, th e C ity N a tio n a l sta n d s re a d y to serv e Io w a b a n k s ALFRED G. SMITH, Chairman ALFRED C. SMITH, President H. W. SEAMAN, Chairman. Clinton Wire Cloth Co. G. L. CURTIS, Vice President President, Curtis Companies, Inc. G. W. DULANY, JR., President, Eclipse Lumber Co. President, Climax Engineering Co. J. PETERSON, Treasurer, Daehler Motor Co. M. J. GABRIEL, President, Gabriel Lumber & Fuel Co. J. O. SHAFF, Farmer and Live Stock Dealer B. M. JACOBSEN E. J. CURTIS, Vice President, Curtis Bros. & Co. C. A. ARMSTRONG, President, C. F. Curtis Co., Inc. W. R. SMITH, General Manager, Clinton Corn Syrup Refining Co. A. P. BRYANT, Manager of Operations, Clinton Corn Syrup Refining Co. F. H. VAN ALLEN, Vice Pres, and Sec’y, J. D. Van Allen & Son. Inc. H. S. TOWLE, Vice Pres, and Treas., Towle & Hypes Co. O. P. PETTY, Cashier J. H. NISSEN, Assistant Cashier H. G. KRAMER, Assistant Cashier F . R. JO N E S the personnel of the B anking D epartm ent again recognized by having one of its members offered a large increase in salary in this field of endeavor. W e wish him the best of good luck and success in his new position.” F orm er S uperintendent of B anking, R obert L. Leach said : “In my experience as S u perintendent of B anking of the S tate of Iowa, I came in touch w ith m any valued public servants. I am f ra n k in saying th a t Mr. F . R. Jones was one of the m ost efficient and valuable public ser v ants w ith whom I came in touch. I owe him a debt of g ra titu d e personally fo r his w ork in connection w ith closed banks, and I believe the people of Iow a owe him a like debt.” A tto rn ey G eneral Ben J. Gibson, said : “ The Iow a plan fo r closing banks through the S tate B anking D epartm ent has now been adopted alm ost uniform ly through out the country. A t the tim e of its adop tion in th is state, Mr. Jones took charge of the work, and to him m ust go credit fo r the organization of a uniform and economical plan fo r the liquidation of https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Established 1870 City National Bank CLINTON IOWA 116 THE 5% NORTHWESTERN Farm Lo BANKER 5 ans R E F IN A N C E Y O U R LO A N S N O W W H IL E R A T E S A R E C H E A P W E A LS O M A K E C IT Y LO A N S IN D ES M O IN ES D A V EN PO R T, C E D A R R A P ID S , IOWA C IT Y C LIN T O N , B U R LIN G T O N M idland M o r t g a g e C o m p a n y D E S M O IN E S O F F IC E 555 SEV EN T H S T R E E T DES MO IN ES , IOWA 220 T H I R D A V E . C E N T R A L IOW A O F F IC E C E D A R R A PID S, IOWA ° Z LL F . C . W A P L E S P r e s id e n t C L I F F O R D D E P U Y , V ic e P r e s id e n t R . S . S I N C L A I R , , V ic e P r e s id e n t I N G R A M B I X L E R . V ic e P r e s id e n t R. J . S O E N E R S ecretary T rea su r er R U S S E L L D . C O L E A S S IS T A N T S E C Y . R . H . M E M E I E R , A S S IS T A N T S E C Y . P . T , W A P L E S . M g r W e s t e r n O f f ic e A t y o u r serv icein Eastern Iowa PEOPLES TRUST* SAVINGS BANK and W estern Illinois April, 1926 closed banks. In my judgm ent, Mr. Jones has rendered a very valuable service to the sta te in p u ttin g into successful o per ation this valuable sta tu te . H e has also rendered a very valuable service in con nection w ith the reorganization of m any closed banks. H is service to th e sta te entitles him, in my opinion, to th e g r a ti tude pf our people. I p red ict fo r him a successful career in th e n atio n al field, b u t I reg ret his leaving the sta te service.” FROM TEE TO TEE WITH “CHICK” EVANS (C ontinued from page 20) is going to w rite a series of golf articles in stru c tin g the banking fra te rn ity how to reduce th e ir overhead in strokes, and I w ant to co ngratulate you on som ething th a t is going to be a really p opular fe a tu re, as even in th e best reg u lated banks golf is occasionally discussed during w orking hours. “ In cidentally, as G ran t M cPherrin, of Des Moines, and Bill H euer, of D aven p o r t/w ill tell you, a few lessons m ight even not h u rt C. B. H azlew ood’s game, but he does n ot require any lessons in how to fix h an d icap s; in fac t, a b e tte r p re round golfer never lived. B ut, to get down to brass tacks— th ere are too m any bankers in all states, Iow a not excepted — who th in k th a t they are g ettin g the utm ost am usem ent out of golf by ju s t dubbing around in any old style and w ith any old clubs. I f they analyze th e ir feel ings and were really tru th fu l to them selves, they would wish to p lay b etter golf. They preach A. I. B. (A m erican In stitu te of B anking) fo r the b etterm en t of the ju n io r officers and employes, and never pass by an y th in g th a t m ight tend to make them b e tte r bankers. Yet, the moment they leave th e ir desks and get out on the golf courses, an y th in g is good enough. This is really absurd, and does not reflect the g rea test credit on those gentlem en who, luckily, are becoming few er every day. J u s t a little thought and practice along the rig h t lines will work wonders in the ab ility to p erfect a golf sw ing th a t becomes alm ost au to m atic and thereby increases the efficiency Peopleslrusi^Savin^anli C L IN T O N , IO W A . Remember i t this w a y - “PEOPLES TRUST OVER 30 YEARS OF SERVICE The Northwestern Banker FIRST NATIONAL BANK, W7ater)oo, Itowa D IR E C T O R S B. F. SWISHER Pickett, Swisher & Farweli R. J. HOXIE Secretary Waterloo Fruit & Commission Co. A. M. PLACE Vice President E. E. PEEK Vice President Waterloo Bldg. & Loan Association. H. W. GROUT Real Estate C. A. MARSH President /â S S https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 'THE First National Bank of Waterloo i» 1 -----"E, equipped to give you the highest degree of and 'do it " promptly ’ and- -efficiently - - SERVICI at all times. Fifty-eight years of steady con servative growth enables this bank to extend such service. O F F IC E R S C. A. MARSH, President A. M. PLACE, Vice President WILL A. LANE, Cashier P. W. EIOHMEY, Assistant Cashier O. L MORRIS, Assistant Cashier Total Resources Over $ 2 ,9 0 0 ,0 0 0 .0 0 . D IR E C T O R S W. W. MARSH President Iowa Dairy Separa tor Co., President Associated Mfg. Co. J. T. SULLIVAN Lawyer. J. O, TRUMBAUER Vice President Farmers Loan and Trust Co. H. A. MAINE President H. A. Maine & Co. WILL A. LANE Cashier April, 1926 THE of the golfer, producing resu lts th a t would be alm ost impossible except by the rig h t m ethod. “ I feel confident th a t ‘ C hick’ E vans will w rite in such sim ple language th a t it w ill be perfectly understandable to the v eriest tyro and of the g rea test in te rest to the hard -an d -fast, dyed-in-the-wool fan. “ I g ath er th a t the first article will be on the subject of equipm ent, and while on th a t topic I am w illing to bet th a t ‘ C h ick ’ asks us all to th in k of caddies as hum an beings and not ju st sim ply as b easts of burden. F ra n k W arner, your Iow a secretary, can p u t over anything N O R T H W E S T E R N 117 BA N K ER O u t s t a n d in g C h a r a c t e r is t ic s of “ American Commercial and Savings” service in look ing after collections in the Davenport district are AMERICAN COMMERCIAL & SAVINGS BANK s / ’ D A V E N P O R T , IO W A DISPATCH AND DEPENDABILITY Well over a half century’s experience, based upon inti mate knowledge of our field, is back of this service. 1876 I 926 Unusual Service A. K . O. C O C H R A N E th a t he sets his m ind to, so why not sug gest to him th a t he s ta rt a society fo r the protection of cru elty to caddies and have a w eight lim it set fo r every golf bag? “ I would like to m ake a suggestion th a t you give, say h alf a page, to ‘C h ick ’ fo r the purpose of answ ering questions from bankers on the subject of correction of personal ‘e r r a ta ’ calling it possibly the ‘D iagn o stician s’ C o rn er,’ and also th a t the dates of im p o rtan t tournam ents be p rin te d in your m aga zines so th a t officers ’ secretaries may know w here urg en t business affairs have taken th e m .” T h e p ro m p tn ess w ith w h ich th e C onsoli d ated N a tio n al h an d les th e D u b u q u e b u si ness of its c o rresp o n d en t b an k s has h e lp e d m any Iow a b an k ers give to th e ir p a tro n s u n u su al service. P ro m p tn ess is only one p a r t of o u r serv ice, how ever. In a d d itio n to com pletely o rganized facilities in every d e ta il of b a n k ing, th e re is also th a t p erso n al in te re st in th e w elfare of o u r custom ers th a t m akes doing business w ith th e C o n solidated N a tio n a l a re a l p leasu re. O u r experience and service are yours for th e asking. J. K. D em ing, P resid en t Geo. W . M yers, V ice P resid en t Jas. M. Burch, V ice P resid en t Herm an E schen, Secretary Jos. W . M eyer, Cashier Gives Radio Talk Miss M ay F ran cis, sta te su perintend ent of schools, gave the first of a series of radio talk s fo r the educational com m ittee of the Iow a B ankers A ssociation M onday afternoon, M arch 22, 1926. A. C. Sm ith of Clinton, Iowa, is chairm an of the educational com m ittee, and B. B. V orse of Des Moines is chairm an fo r Group 6, who arranged the talk. W h a t’s money without happiness?— B ulw er-Lytton. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Consolidated National Bank UNITED ST A T E S DEPOSITORY DUBUQUE, IOWA 118 THE NORTHWESTERN BANKER April, 1926 INDEX TO ADVERTISERS A Page A lex an d er N atio n al B an k .................. 60 A m e r i c a n B a n k a n d T r u s t Co., D a y t o n a .................................................................... 62 A m e r i c a n B a n k a n d T r u s t Co., S t. P e t e r s b u r g ..................................................... 66 A m e r i c a n N a t i o n a l B a n k , P e n s a c o l a 66 ■ "A m e r ic a n B o n d & M o r t g a g e C o ......... 52 A m erican C o m m ercial a n d Sav in g s B ank ...................................................................117 B ~~ B a l d w i n M o r t g a g e C o ................................... 59 B a n k o f O r a n g e .............................................. 6 B a n k e r s S u p p l y C o ........................................ 7 B a n k e r s T r u s t Co., D e s M o i n e s . . . . 1 0 5 B a n k e r s T r u s t Co., N e w Y o r k .......... 71 B a r t l e t t & G o r d o n , I n c ............. 34 a n d 56 B e l l T e l e p h o n e S e c u r i t i e s C o ................. 54 B o l d t , A. J ............................................................ 43 -----B r o k a w & C o ....................................................... 44 B r o w n - C r u m m e r C o ........................................ 46 B y l l e s b y , H . M. & C o ................................... 33 C C e d a r R a p i d s N a t i o n a l B a n k .............. 109 C e n t r a l S t a t e B a n k ....................................... I l l C e n t r a l T r u s t Co. o f I l l i n o i s ............. 92 C h a p m a n , P . W . & C o ................................... 48 C h a s e N a t i o n a l B a n k .............................. 98 C h ath am P h é n ix N atio n al B a n k & T r u s t C o ......................... 79 C h i c a g o T r u s t C o ............................................. 55 C i t i z e n s B a n k & T r u s t Co., W e s t P a l m B e a c h .................................................. 59 C i t y N a t i o n a l B a n k , C l i n t o n ................ 115 C offin , F o r m a n & C o ................................... 42 C o m m e r c i a l B a n k a n d T r u s t Co. . . . 64 C o m m ercial N a tio n a l B an k , W a t e r l o o ....................................................... 40 a n d 110 C o n s o l i d a t e d N a t i o n a l B a n k .................117 C o n tin en tal a n d C o m m ercial N a t i o n a l B a n k .................................................. 73 n D e s M o i n e s D u p l i c a t i n g C o ....................... 104 D e s M o i n e s R i f e & A n n u i t y C o ............ 83 D e s M o i n e s N a t i o n a l B a n k . . 4 1 a n d 119 D e W o l f & Co., I n c .......................................... 49 D r o v e r s N a t i o n a l B a n k ............................. 102 D o h e r t y , H e n r y L., C o ................................ 45 E E d i p h o n e Co. ..................................................... 74 E p p l e y H o t e l s C o ............................................. 86 E v a n s “C h i c k ” ................................................ 57 F F a rm e rs M utu al H ail In su ra n c e A s s o c i a t i o n .......................................................... 85 F e d e r a l S u r e t y C o ................. 80 F i d e l i t y B o n d & M o r t g a g e C o ................ 53 Page F ir s t Io w a S ta te T r u s t & Sav in g s B a n k ..................................................................... 112 F i r s t N a t i o n a l B a n k , C h i c a g o .......... 74 F ir s t N a tio n a l B an k , D a v e n p o rt ...1 0 4 F i r s t N a t i o n a l B a n k , D u l u t h ............. 98 2 F i r s t N a t i o n a l B a n k , O m a h a ............. F i r s t N a t i o n a l B a n k , St. A u g u s t i n e 46 F i r s t N a tio n a l B a n k , S io u x C ity . . . 2 F ir s t N atio n al B ank, W aterlo o ....1 1 6 F i r s t N a t i o n a l C o .................................. .. . . . 56 F i s h e r C o ................................................................ 77 F o r e m a n , G e o r g e M ...................................... 55 F o r e m a n N a t i o n a l B a n k s . . . . 5 a n d 75 F o s h a y , W . B., C o ............................................107 F r a n k , A l b e r t , a n d C o ................. 57 F r a n k l i n M o r t g a g e C o ................................ 65 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis O O m a h a N a t i o n a l B a n k ............................ 95 O r l a n d o B a n k a n d T r u s t C o .............. 51 P G G en eral M o to rs A ccep tan ce C o r p .... 50 II H a n n a - S h r e v e s ................................................ 37 H a n o v e r N a t i o n a l B a n k ......................... 98 H o a g l a n d , A l l u m & Co. ............................ 42 I I l l i n o i s - M e r c h a n t s B a n k .......................... 120 I n d u s t r i a l A c c e p t a n c e C o r p .................... 52 I n t e r n a t i o n a l L i f e I n s u r a n c e Co. . . . 80 I o w a L o a n a n d T r u s t C o ............................ 113 I o w a L i t h o g r a p h i n g C o .............................. 67 Io w a N atio n al B ank, D av en p o rt ...1 0 7 I o w a N a t i o n a l B a n k , D e s M o i n e s . . .1 0 6 I o w a N a t i o n a l F i r e I n s u r a n c e C o . . . 87 I o w a S t a t e T r a v e l i n g M e n ’s A s s o c i a t i o n ............................................................... 87 J Jo h n H a n co c k M u tu al L ife I n s u r a n c e C o .................................................. 83 L L a n e , R o l o s e n & Co., I n c ........................... 56 L e a g u e of N a tio n s N o n - P a r tis a n A s s o c i a t i o n .......................................................... 72 L e a v i t t & J o h n s o n N a t i o n a l B a n k . . 108 L i v e S t o c k N a t i o n a l B a n k , O m a h a . . 94 L i v e S t o c k N a t i o n a l B a n k , S i o u x C i t y 91 L y t l e C o ................................................................... 8 M M c C l i n t o c k , O. B „ C o ................................. 98 M a s o n C i t y B r i c k & T i l e C o ...................106 M e r c h a n t s B a n k & T r u s t Co. . . . . . . 63 M e r c h a n t s N a t i o n a l B a n k ........................ 114 M i d l a n d B a n k , L t d .......................................... 98 M i d l a n d G r a i n C o ............................................. 98 .1 16 M i d l a n d M o r t g a g e C o ........................ M i d l a n d N a t i o n a l B a n k ............................. 100 M i t c h e l l , H u t c h i n s & C o ........................... 31 M u t u a l T r u s t L i f e I n s u r a n c e Co. . . . 86 “ A C A S H I E R ’S C H E C K ” for $3.00 is all that is required to secure the monthly visits of the Northwestern Banker for an entire year. Each issue contains from 108 to 200 pages of mighty interesting matter pertaining to banks and banking interests in the territory covere dby the magazine. “ O U R C O R R E S P O N D E N T S .” Every hank in the northwest is invited to a place on this list. Send us items of local interest, tell us about your bank and its growth, prospects, etc., also any other financial news of interest to bankers in your section. We are always glad to head from our friends. “ S I G H T D R A F T S .” We always carry a large “Reserve” of good will and additional service, and will promptly honor drafts made upon same by any bank. T his. department is for your special benefit. It may be made of very great benefit to your bank. Do not fail to avail yourself of its privileges. “ A C L E A R IN G H O U S E .” Our columns are a clearing house for all our readers. Express your view on any topic of interest to N a t i o n a l B a n k o f C o m m e r c e ............. 70 N a t i o n a l B a n k o f t h e R e p u b l i c . . . . 78 N a t i o n a l C i t y C o ............................................. 2 N a t i o n a l L i f e A s s o c i a t i o n .................... 87 N a t i o n a l P a r k B a n k ................................... 90 N o rth A m e ric a n N a tio n a l L ife I n s u r a n c e C o .................................................... 84 N o r t h w e s t e r n T r u s t C o .......................... 91 N o r t h w e s t e r n N a t i o n a l B a n k ............. 3 N o rth w e s te r n N a tio n a l L ife I n s u r a n c e C o ............................................................ 2 P e a r s o n H o t e l ................................................ 92 P e o p l e s B a n k , J a c k s o n v i l l e .................. 58 P eo p les T ru s t & S av in g s B a n k ....1 1 6 P h i l a d e l p h i a - G i r a r d N a t i o n a l B a n k 69 P o l k , H a r r y H ., & C o ............................. 53 P r i e s t e r , Q u a i l & C u n d y , I n c ................24 R R a n d M c N a l l y C o ........................................ 9 R o y a l U n i o n L i f e I n s u r a n c e Co. . . . ............. .......................................... 68, 82 a n d 96 S S a n d e r s - M c C u l l o c h C o .............................. 76 S e c u r i t y S t a t e B a n k .................................. I l l S h a p k e r , S t u a r t & C o ................................ 79 S o u t h e r n S u r e t y C o ..................................... 85 S o u t h F l o r i d a M o r t g a g e Co. ............. * 65 S t a n l e y , H e n d e r s o n C o ............................. 74 S ta te C en tra l S av in g s B a n k . . . . . . . 1 0 6 S to c k Y a r d s N a t i o n a l B a n k , C hicagolO O S t o c k Y a r d s N a t i o n a l B a n k , O m a h a . 94 T T h o m p s o n R o s s & C o ................................... 36 T r u e , W e b b e r C o ............................................. 47 T u c k e r , J . W ....................................................... 65 U U n io n S a v in g s B a n k & T r u s t C o m p a n y , D a v e n p o r t ........................................... 6 U n i o n T r u s t C o .................................................. 23 V V alley N a tio n a l B a n k .............................. 2 W e s s l i n g S e r v i c e s ........................................ W h e r e t o B u y P a g e ................................... W h i t e - P r i c e C o ....................................... W h i t e - P h i l l i p s C o ........................................... 76 88 55 38 W the banking fraternity and sumbit same forpublication. You do not have to agreewith us, or with anyone else. We learn things by an interchange -j^of ideas, and people with whom we disagree often prove valuable teachers. ÍEjxfes. We shall be glad to hear from you. NO P R O T E S T ” has ever been offered to the statement that the field coverd by the Northwestern Banker is the money-producing section of the American continent, rich in hogs, cattle, corn, etc., and dotted with thousands of prosperous banks, all doing a good business, and the majority of them are readers of “The North western.” “S U R P L U S A N D U N D IV I D E D P R O F I T S ” increase very rap idly with those banks whose advertisements appear regularly in the columns of this magazine. Full information as to rates and our special service will be promptly furnished on appli cation. Your business solicited and appreciated. The “Bankhas been twenty-nine years in its present field. April, 1926 THE NORHTWESTBRN BANKER 119 In the Capital City W e believe that all Iowa banks can use to good advantage a correspondent connection in Iowa’s largest — and capital — city. Bankers who maintain contact with Des Moines find the Des Moines National Bank a reliable correspondent. During forty "four years of commercial and indus" trial banking in the state of Iowa, this institution has held an enviable reputation for prompt, depend" able service. Let an alert, friendly organization handle your correspondent needs. LOUIS C. KURTZ Chairman of the Board JOHN H. HOGAN President H. R. HOWELL Vice President H. E. RUMSEY Vice President ANDREW J. HUGLIN - - Vice President HERBERT L. HORTON - Cashier CLARENCE A. DIEHL - Asst. Vice Pres. WALTER J. ROBERTS - Asst. Vice Pres. R. H. COLLINS Asst. Cashier EDWIN F. BUCKLEY Asst. Cashier GEORGE D. THOMPSON - Asst. Cashier CLYDE H. DOOLITTLE Trust Officer TAMLIN S. HOLLAND, Manager Bond Dept. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Specializing in the Underwriting and Distribution o f Investment Securities In our Bond Department here in Chicago, more than a hundred peo ple are engaged exclusively in serv ing our investment customers. «Lin addition, local offices are maintained for resident district representatives in Milwaukee, Minneapolis, Daven port, and St. Louis. «Lin all, twelve out-of-town representatives are con Capital and Surplus • stantly serving the financial interests of eight central states. «LThrough our officers we are in personal touch, at all times, with investment affairs in all parts of the country, as well as abroad. «LAnd back of all is the banking institution itself with its great resources, its complete organi zation and long financial experience. Forty-Fire Million Dollars Illinois Merchants Trust Company qA LA SALLE, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis consolidation o f the Illinois Trust & Savings Bank, The éMerchants Loan & Trust Company and The Corn Exchange N ational Bank J A C K S O N , CLARK A N D Q U I N C Y S T R E E T S • C H I C A G O
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