Full text of The Northwestern Banker : April 1927, 32nd Year, Number 477

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NUMBER 477

THIRTY-SECOND YEAR

A P R IL , 1 9 2 7
It’s “ Clean House” — or Branch
Banks
That Honest Six Per Cent!

THE PHOTO BELOW:
E. D. Schumacher, of Richmond,
Va., who is this year president of
the Mortgage Bankers Association of
menea.

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Federal Reserve Bank of St. Louis

THE

NORTHWESTERN

in 1857— 68
years ago; and during
this period through
conservative, su b s ta n tia l
b a n k in g T H E F I R S T
NATIONAL has rendered
an unexcelled service to
correspondent banks in the
west.
ounded

Sixty-eight years afford ample test and
supply conclusive proof of the stability
of any institution—particularly that o f
a bank.

BANKER

April, 1927

Fa r m Lo a n s
REFINANCE YOUR LOANS N O W
WHILE RATES ARE CHEAP
WE ALSO MAKE CITY LOANS IN DES MOINES
DAVENPORT, CEDAR RAPIDS, IOWA CITY
CLINTON, BURLINGTON

M idland M ortgage C ompany
CEDAR RAPIDS, IOWA

F. H. D A V IS
P resid ent

C. T. K O U N T Z E
V ice P res, and Chairman

P lrs t National 1
IBankofOmaha 1
r |^HE Des Moines business of Iowa
banks is invited. These banks
are th o ro u g h ly
equipped in every
department.

Valley National Bank

D E S M O IN E S OFFIC E
555 Seventh Street, D es M oines, Io w a
C E N T R A L IO W A OFFIC E
C arroll, Io w a
F . C. W A P L E S , President
IN G R A M B I X L E R , Vice President
C L I F F O R D D E P U Y , Vice President
R. S. S IN C L A I R , Vice President
R. J . S O E N E R , Secretary Treasurer
R U S S E L L D. C O L E , Assistant Secretary
R. H . M E M E I E R , Assistant Secretary
P. T . W A P L E S , Manager Western Office

S IO U X C I T Y
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.
W e invite correspondence regarding
our service to banks and bankers.

AND

Valley Savings Bank
DES M O IN E S, IOW A

V a lley Eank B uildin g

Established 1872
Combined Capital and Surplus

$1 , 100 , 000.00

R . A . C R A W F O R D , P resid ent
D. S. C H A M B E R L A IN , V ice
President
C. T. COLE, JR ., V ice P re si
dent
W . E. B A R R E T T , Cashier
JO H N H . G IN S B E R G , A sst.
Cashier
C. M. C O R N W E L L , A sst.
Cashier

The Northwestern Banker is the oldest
banking publication west of the Missis
sippi river— and was the first in
America to join the Audit Bureau of
Circulations. It is the official publica
tion of the South Dakota Bankers Asso
ciation, the Iowa Farm Mortgage Bank
ers Association, and the Iowa Bond
Dealers Association. It must be used
to cover A m erica’s richest agricultural
territory.

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Federal Reserve Bank of St. Louis

£ lO U % Ç &
CAPITAL ONE MILLION DOLLARS

SERVICE
COOPERATION
READER CONFIDENCE
THE NORTHWESTERN BANKER
DES MOINES

IOWA

1927

THE

NORTHWESTERN

BANKER

Message
for those,
For Sound Securities
Consult U s or One
of Our Repre
sentatives
ST. PAUL

J. B urns A lle n
R ic h a r d D . E gan
360 Robert Street
Fifth Floor
Cedar 7860
ROCHESTER

H. H. B ishop
19y* Second St. S. W.
Dial 2118
DULUTH

C. B. B rew ster
5 10 Alworth Bldg.
Melrose 952 W

Who have
Purchased,
Bonds From Us
T is with a great deal o f satisfaction
that we find each year bringing to us
many hundreds o f new bond clients.
Some who are making their first bond invest
ment, newcomers who have found profitable
employment in the Northwest; and then
those who come to us as they gradually learn
o f the character o f service our institution is
equipped to render. Experience, facilities
and a desire to serve are the three qualities
which we believe should interest you, as an
investor, in selecting The Minnesota Loan
and Trust Company as your Investment
Banker.
W

il l ia m

D u r st

President
H e n r y

D .

T h r a l l

Vice-President

Affiliated with
Northwestern National Bank
Minneapolis

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The Minnesota Loan
and Trust Company"
405 MARQUETTE AVE.

MINNEAPOLIS, MINN.

T HE

N O R T H W E S T ERN

BANKER

Prescribe Modern
Farm Methods
T

April, 1927

¿Modern Farm ¿Machines
Work Such Wonders
as These:
A tractor and 2 or 3-bottom plow will
plow 8 to 12 acres a day as against 3
acres for a 3-horse team.

HE continued use o f old and out-of-date equipment is costing the
farmers o f the United States millions of dollars annually. Many
farmers are paying, over and over again, for improved equip
ment they do not own. The United States Department of Agriculture
says that over-repaired, inefficient machines and implements are
losing their owners more than the cost of new tools, through scant
yield and loss o f labor and time in preparing seed beds, planting,
cultivating, and harvesting the crops.

Three horses on a two-row cultivator
will do 90 per cent more than two horses
on a one-row cultivator, saving $50 in
labor in four cultivations of 40 acres.

Costly labor charges eat most deeply into farming profit and pros
perity, and here the recognized remedy is tractor power and broadscale tractor-operated drawbar and belt machines.

The modern harvester-thresher cuts,
threshes, and cleans wheat at 7 cents per
bushel compared with 27 cents a bushel
for harvesting and threshing in the usual
way.

A report o f the U. S. Department o f Agriculture covering 684
average farms shows that 66 days o f man labor are saved in a year’s
time, per farm, by the use o f the tractor. Such savings are possible
because the tractor speeds up every farming activity. It provides a
two-sided power available for both drawbar and belt machines.
It starts with plowing, goes through seed-bed preparation, seeding,
haying, grain and corn harvesting, threshing, silo filling, shredding,
hay baling, etc., and continues into winter belt work.
The farmer must learn what every successful manufacturer has
long ago learned, that the value o f a piece o f equipment should be
measured never by its price but by what it will do for him—by
what it will earn, and save, and make. It is the mission o f the farm
equipment dealer to convert his customers to this sound philosophy.
It may well be the mission o f the banker to work in the same direc
tion so that production costs may be lowered, profits be increased,
and the prosperity o f the community be continuously served.
do

The farmer’ s old-time formula was “ An
Acre a Day per H orse.” The slogan of
the average tractor farmer is ‘ ‘Ten Acres
a Day per M an.”

A spike-tooth harrow section attached to
one side of the tractor plow to catch the
furrow crowns will save 50 cents per
acre on harrowing expense.
A mechanical corn picker picks, husks,
and delivers into a wagon' five times as
much corn in a day as the hand husker.

A new corn planter will save from 100 to
200 bushels of corn on 40 acres over an
old planter which cracks or misses but
one kernel in 10.
New cream separators frequently save
$25 per month over inefficient machines
they replace.
Twenty years ago a hay loader saved
two men in the field, each getting $1.00 a
day. Today, a better loader saves the
same men, but each would be earning
$3.00 a day.
The Illinois farm worker uses $600 worth
of farm equipment compared with $115
worth used by the North Carolina farm
worker. The Illinois man cultivates 53
acres compared with 12 for the N . C.
man and has an income correspondingly
larger.

Wahoo, Neb.—A scene at the Nebraska State Corn Husker Contest last winter. The McCormick-Deering
Corn Picker and Tractor outfit was a center of attraction and it ought to be. The champion hand husker
did twice the work of the average man and the mechanical picker did three times as much as the champion !

I n t e r n a tio n a l H a r v e s t e r C o m pan y
606 So. Michigan Ave.

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Federal Reserve Bank of St. Louis

of America
[Incorporated}

Chicago, Illinois

April, 1927

THE

NORTHWESTERN

BANKER

Your Account
in Des M oines
A careful and studied attention to the require
ments of our correspondent banks and a sincere
desire to place at their disposal our broad facilities
— these are dominant ideas at the Des Moines Na
tional Bank.
W hen good fortune brings you to Des Moines ,
u e invite you to visit our institution. Whenever
you have business transactions in Des Moines , we
invite you to make use of our complete service.

OFFICERS

Des MoinesNational Bank

L O U IS C. K U R T Z , President
A N D R E W J. H U G L IN , Vice Pres.
H E R B E R T L. H O R T O N , Vice Pres.
G EO RG E D. T H O M P S O N , Cashier
C L A R E N C E A . D IE H L , Asst. V . P.
W A L T E R J. R O B E R TS , Asst. V . P.
R IC H A R D H . C O L L IN S , Asst. V . P.
E. F. B U C K L E Y , Asst. V . P.

Capital $1,000,000.00

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Federal Reserve Bank of St. Louis

O W E N P. M cD E R M O T T, Asst.Cash.
L E L A N D J. A N D E R E C K ,A sst.C a sh .
C L Y D E H . D O O L IT T L E , Tr. Officer

THE

NORTHWESTERN

April, 1927

BANKER

NORTH W ESTERN BANKER
DES M O I N E S
The Oldest Financial Journal W e s t o f the Mississippi
Member Audit Bureau of Circulations

T h ir t y - se c o n d Y e a r

CONTENTS FOR APRIL, 1927
Page

Across from the Publisher............ By Clifford DePuy

N umber 477
Page

‘ ‘ Clean House— or Branch Banks ’ ’......... ................ ....

The Economist and the Banker........... ....... ................ .
...................................................By Prof. C. Ward Macy

Frontispiece........................................... E. C. Davenport

“ In This Issue” .................... '........... ....... ...........................

‘ ‘ That Honest Six Per Cent ’ ’ .........................................
The Investment Trust.................By Col. B. F. Castle

Facts about the Bankers Lien..................................... .

News and Views.......................................... .........................

Banker-Farmer Short Course.......................... ................

Cedar Rapids Banks Merge.......... — ..... — ...... ......... ....

Nebraska News

........... ........ ................................

Bonds and Investments ......................... — .........

Minnesota News ........................................ ......... ....

Insurance ....................................................................

North Dakota News................................. ..............

Iowa News ..........................:.......................................

First Aid to Sales Clerks................... By Roscoe Macy
Personal Paragraphs

...................................—-

Bankers Wants ............. ......... --........ —-.........-----South Dakota News....................................... .

74
75

The Directors’ Room..................... ................... .... 106

DE PUY PUBLICATIONS A N D THEIR TERRITORY
T rans -M ississippi B anker

N orthwestern B anker
DES

K A N S A S C IT Y

M O IN E S

I nsurance M agazine

M id-C ontinent B anker
ST.

K A N S A S C IT Y

L O U IS

S outhwestern B ankers J ournal

U nderwriters R eview
DES

FORT

M O IN E S

L ife I nsurance S elling

I owa B a n k D irectory
DES

W ORTH

ST.

M O IN E S

L O U IS

THE N ORTH W ESTERN B A N K E R , P ublished by D eP uy P ublishing Co., I nc ., Capital Stock, $100,000.00
555 Seventh Street, Des Moines.
C l i f f o r d D e P u y , Publisher; G. A . S n i d e r , Associate Publisher; R . W . M o o r h e a d , Editor
R e x V . L e n t z , Advertising Director.
H . H . H a y n e s , Associate M anager.
M i n n e a p o l i s O f f i c e - Frank S. Lewis, 84 0 Lum ber Exchange Bldg., Phone M ain 3 8 6 5 .
C h ic a g o O f f i c e :
W m . H . M «as, 1221
First National B ank B1d°- Phone Central 3 5 9 1 . N e w Y o r k O f f i c e : Frank P . Syms, 25 W . 45th St.
S t . L o u is O f f i c e :
Donald H .
Clark, 4 08 Olive St., Phone Garfield 2 1 3 8 . K a n s a s C i t y O f f i c e :
Glen D. Mathews, 4 05 Ridge B ldg., Phone Harrison 5 857 .
F ort W o r t h , T e x a s, Of f ic e :
II. Lawson Hetherwick, 4 09 F. & M . B ank Bldg., Phone 2 -2 5 1 3 .
Entered as second class matter at the Des Moines postoffice

Subscription Rates, S 3 .0 0 per year; 50 cents per copy

Official P u b lica tion of
T H E S O U T H D A K O T A B A N K E R S A S S O C IA T IO N
T H E IO W A F A R M M O R T G A G E A S S O C IA T IO N
TH E IO W A BON D D E A L E R S A S S O C IA T IO N

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Federal Reserve Bank of St. Louis

THE

April, 1927

NORTHWESTERN

BANKER

Leading the W ay
to Better Business

< -~ v

■V."

W ith ample resources and abiding
confidence in Iowa, we are pre
pared to meet the financial demands
o f increasing business. Let’s put our
combined energy and intelligence
into a consistent drive for im
proved results.

V ac

¥#S#S

) CAPITAL ^ f« 3 0 0 0 0 0 0 V

OFFICERS
H om er A . M iller
Clyde E. B renton
Geo. E. Pearsall
A lb e rt J. R obertson
J. R . Capps
R. L . Chase, Jr.
Jam es F. H art
W m . M. B randon
J. B urson
Sherm an W . F ow ler
A. J. W arnke
W infield W . Scott
H a rry G. W ilson

P resident
V ic e P res.
V ic e P res.
V ice Pres.
Cashier
A sst. Cash.
A sst. Cash.
A sst. Cash.
A sst. Cash.
A sst. Cash.
A sst. Cash.
A sst. Cash.
A sst. Cash.

DIRECTORS
■S3

Geo. N. A yres
C lyde E. B renton
H ow a rd J. Clark
Gardner Cowles
J. H . Cownie
E. C. F inkbine
J. B. Green
W m . C. H arbach
F. H . Luthe

M. M andelbaum
H om er A. M iller
Geo. E. Pearsall
R alp h H . Plum b
M. Shloss
E. R. Stotts
O. P . Thom pson
G. M. V an Evera
Carl W eeks

Io w a Naiional Bank
D es M oines Savings Bank and Trust Co m pan y
Iowa’s Largest Bank. "Des Moines - Sixth and Walnut"

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Federal Reserve Bank of St. Louis

THE

NORTHWESTERN

BANKER

April, 1927

A cro s s the Desk
from

the Publisher

T AST month I was motoring from Ft. Worth to
Dallas, Texas, with a banker friend of mine,
and we came to a sign which said : ‘ ‘ Detour— a
Sign of Progress ! ’ ’
The more I thought about what that sign said the
more it impressed me. Usually in my motoring I
have hated to see a detour sign because it forced me
to go out of my way, and usually over poor and
bumpy roads, and I had never thought before that
while I was still being temporarily inconvenienced
because I had to detour, that this very fact indi
cated a spirit of progressiveness on the part of the
city, county or state which was improving the main
highway.
I thought of the men I knew in the banking busi
ness who were real successes, and I thought of the
detours they had made, every one of which was a
“ sign of progress” in the development of them
selves and their business.
Some of the detours they have made were in the
paths of economics, agriculture, business statistics,
business conditions and a better understanding of
the fundamental problems of banking so necessary
if a banker is to be a real success. These ‘ ‘ detours ’ ’
took them temporarily away from the main highway
of banking, but it always brought them back ‘with
a better understanding of the path ahead and the
goal to be reached.
Every ‘ ‘ detour ’ ’ that you can make along similar
lines will be a real sign of progress in the work you
are doing to make yourself a better banker, and
your bank a better institution.
As one author said : ‘ ‘ When the hopeful, help
ful feeling of progress leaves you, or leaves me,
success for us will be suffocated. Fresh ideas keep

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Federal Reserve Bank of St. Louis

our intellects fresh. Listen to every new idea. The
man who does not entertain the spirit of progress
will certainly entertain the ghost of failure.”

Distributing
Bonds
r T ''H E president of a well-known bond company
-L writes us as follow s: “ It was quite a shock to us
to note the article on page 80 of the Annual Invest
ment Edition of T he N orthwestern B anker , on
‘ The Bond Outlook in the Middle W est’ In this
article it said, ‘ We believe banks only should sell
bonds to its customers. The future to us looks very
good, only we think bonds should be marketed en
tirely through banks rather than salesmen.’ We
know you did not write this, but it is the statement
of some banker. We would modestly state that the
bond houses are, in our judgment, just as well
posted as any banks in the state on bonds. ’ ’
It is our belief that bonds will be distributed
more and more through banks. This means that
bond companies will be able to sell in larger quanti
ties and more quickly through banks than they
would otherwise be able to do. The banker whose
statement was quoted above apparently feels that
it is unfair to him to purchase bonds from a bond
house to sell to the bank’s customers, and then have
this same salesman sell the same bonds to the cus
tomers of his bank. This is a point which must be
given consideration by bond companies and by
banks. It is without doubt a debatable question
and has many interesting phases.
It seems to us, however, that banks and bond
companies, not only can, but should, work in the

April, 1927

THE

NORTHWESTERN

BANKER

closest harmony for the best interests of the ulti
mate purchaser of the bonds.
The point some bankers make is that if they are
to distribute a particular bond in their community,
and this especially applies to the smaller cities; they
in turn should not have competition from the sales
man of the 'bond company from whom they pur
chased the bonds.

claring an Emergency, ’ ’ which permitted insolvent
banks to be kept open and operated in the same
manner as solvent banks. Today there are 47 of
such insolvent banks being operated in Nebraska,
and no one can tell how many more will be added
to this list. Depositors of such insolvent banks are
not permitted to draw their money, only under cer
tain conditions, and then only a part of it.

Legalizing
Insolvent Banking

To do away with the menace of any guarantee of
bank deposits law, the Iowa Bankers’ Association
bill, introduced at this session of the legislature pro
vided among other things for ‘ £District Banking
Associations, ’ ’ and was a step in the right direction.

the present session of the Iowa legisla
D URING
ture four guaranty bank deposit bills were in
troduced in the House. Briefly, they covered the
following points:
H. F. No. 1. This bill provided that depositors, if
they wish to could contribute to a fund to in
sure their own deposits.
H. F. No. 175. This bill was patterned after the
Nebraska guarantee of bank deposits law and
placed the whole burden on the banks them
selves, and permitted insolvent hanking in the
same manner as the Nebraska guarantee law
does.
H. F. No. 437. This bill provided that the guaran
teeing of deposits should be done jointly by the
depositors and the banks. The banks were to
be assessed one-half of one per cent on average
daily deposits, and depositors were to be
charged 50c per month, or $6.00 a year payable
in advance on their checking accounts, and 1
per cent on average daily time and savings de
posits.
H. F. No. 460. This bill provided that depositors
in state and savings banks desiring to avail
themselves of the provisions of the act should
designate such a fact at the time of the making
of said deposit. At the end of each six months’
period the bank would report to the superin
tendent of banking the amount of money each
depositor had in his account, and credit to the
superintendent of banking 2 per cent upon the
average daily balances of said deposits both
checking and time deposits, which money
should be known as a guarantee fund.
All of these bills, while somewhat different in
their general provision, still make insolvent banking
legal by allowing banks to operate through money
secured from a guarantee fund, which in turn
places the burden of insolvent banking upon sol
vent banks.
In House File No. 175 this was particularly true,
as it was based upon the Nebraska guarantee law.
Insolvent banking has made it possible for the Ne
braska guarantee law to stand as long as it has. In
1923 the Nebraska legislature passed an act “ De

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Federal Reserve Bank of St. Louis

This bill, if it becomes a law, will provide:
1st. For still better banking examination.
2nd. For the establishment of preventive
measures against any bad banking practices and
possible bank embarrassments.
3rd. For raising banking ethics still higher.
4th. For creating credit bureaus on borrowers.
5th. For the all-around purpose of preserving
and strengthening confidence of the public still
more in the banking institutions of the state.

T w o Fundamentals of
Successful Banking
ALL the various analyses which have been
I Nmade
of bank failures in the past three or four
years most of them come back to two fundamental
causes, first, the assets of failed banks have not
been kept as liquid as they should have been, and
second, there have been too many banks in pro
portion to the population they serve.
The Federal Reserve Board in a recent report
said: “ Banks which have had a large proportion
of their assets in not only un-liquid, but in most
cases, worthless assets, have constituted the ma
jority of the banks that have become insolvent
in recent years.”
If a bank is to maintain a
strong liquid position it must have assets which
are easily convertible and readily marketable.
Banks, more and more, are learning this lesson,
and as a result are buying high-grade securities
for their secondary reserve.
If we take the population of the various states,
and divide this by the number of banks in those
states, we will find that the states that have had
the greatest number of bank failures have been the
states where the number of banks per thousand
has been the highest.

E. C. DAVENPORT
New President, Nebraska Bankers Association

E. C. Davenport, newly elected president of the Nebraska Bankers Asso
ciation, succeeding Clarence Bliss, who became Nebraska secretary of Trade
and Commerce, is president of the Nebraska State Bank of Valentine, which
was organized twelve years ago. He has been its president since organiza
tion. His bank now has*, deposits in excess of half a million dollars.
Mr. Davenport is well known in the affairs of the State Association. In
1925 he was elected a member of the Executive Council for a three-year
term. Last year he was elected president of Group Six.

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THE COVER PHOTO
Ernest Daniel Schumacher, whose photo
appears on this month’s cover page, is
president o f the Mortgage Bankers Asso
ciation o f America. He was born near
Anderson, Grimes county, Texas, on Feb
ruary 4, 1882. His father and grand
father were leaders in the south’s agricul
tural, banking and industrial development
the latter being a pioneer in the cotton
seed and cotton oil business. Through
close contact with these men and experi
ence derived from being raised on a large
plantation, he became deeply interested in
economic and agricultural problems and
acquired much knowledge which has been
o f inestimable value in giving insight into
his life work.
A fter graduating from the Navasota
high school he studied banking, business
administration and commercial law at
H ill’s Business College, in W aco, Texas.
Mr. Schumacher has been devoting his
time to city and farm mortgage business,
insurance and municipal bonds since
1904. From 1911-1914 he was with the
Colonial Trust Co., o f Hillsboro, Texas;
from 1914-1920 with the Old Dominion
Trust Co., o f Richmond, Va. In 1918 he
negotiated the purchase o f 4500 mort
gages, involving a consideration o f $7,500,000.00, from the British & American
Mortgage Co., o f Dundee, Scotland, and
sold these to insurance companies and
other investors. He is now president of
the Southern Bond & Mortgage Co. and
the Title Insurance Co. o f Richmond, Va.

“ THAT HONEST 6 PER CEN T!”
That’s the subject fo r one o f the head
liners in this issue, starting on the next
page, pages 12 and 13. The material is
gleaned from many letters and inter
views with leading bankers o f the middle
west.
Some bankers require financial
statements from all the borrowers, and
others don’t. The reader will be inter
ested to know exactly how others handle
this loan problem and there’s much o f in
terest on this subject in the article in
question. Be smre to read i t !

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Federal Reserve Bank of St. Louis

IN
THIS
ISSUE
BRANCH BANKING
Ever since the spectre o f the branch
bank first cast its shadow over the Ameri
can banking horizon, the subject has been
o f deepest interest to all financial men.
Having already gained a temporary fo o t
hold in parts o f the country, it is causing
bankers o f the middle west to stop and
think.
A South Dakota banker discusses this
subject in this cause, with particular em
phasis on the danger o f middle western
branch banking becoming a fact, unless
bankers in this section set about to
strengthen their position in the eyes of
the public.
“ It’s Clean House— or
Branch B anks!” is the title o f the article
and it’s on page 17. The author speaks
intimately o f the banking situation in
his home state, but his analysis is so
general that it can be applied with equal
ease to any other state in the middle
west. T h e N or th w ester n B an k er rec
ommends that the reader study this ar
ticle carefully.

Coming Conventions
May 1-7— A. B. A. Council. . . .
............................... Hot Springs
May 19-21— Reserve City Bank
ers Assn..................... Pittsburgh
June 8-10— M innesota.. . . St. Paul
June 14-15— North Dakota. .. .
.......... .........................Jamestown
June 20-22— I o w a ........ Des Moines
June 21-23— W isconsin. . .Madison
June 23-24— Illin ois.......... Danville
July 1-2— South Dakota. Dead wood
October 2-4— A. B. A ........Houston

IOWA GROUP MEETINGS
As this issue goes to press, the office
o f the secretary o f the Iowa Bankers A s
sociation announces that the Iowa group
meetings will be held as usual in May,
the Northern Group the second week of
the month, the Southern Group the
fourth week. Definite dates for each
group meeting have not been settled, but
the towns are as follows :
Group 1— Cherokee.
“
2— Twin Lakes (Manson)
“
3— Charles City.
“
4— Elkader.
“
5— Council Bluffs.
“
6— Boone.
“
7— Waverly (tentative)
“
8— Tipton.
“
9— Greenfield.
“ 10— Oskaloosa.
Why He Quit
A janitor o f a school threw up his job
the other day. When asked the trouble,
he sa id :
“ I ’m honest and I won’t stand being
slurred. I f I find a pencil or a hankerchief about the school when I ’m sweeping,
I hang or put it up. Every little while
the teacher or some one who is too cow
ardly to face me will give me a slur.
A little while ago I seen wrote on the
board, ‘Find the least common multiple.’
Well, I looked from cellar to garret for
that thing and wouldn’t know the thing if
I met it on the street. Last night in big
writing on the blackboard it said, ‘ Find
the greatest common divisor.’ ‘W ell,’ I
says to myself, ‘both o f them things are
lost now, and I ’ll be accused o f taking
them, so I ’ll quit.’ ”
Unappreciated Encore
The small boy was taking part in a local
concert. He was only 7 years old and re
cited so well that he was encored.
“ Well, Harry, and how did you get on ?”
asked his proud father when he reached
home.
“ Why, I thought I had done all right,”
replied Harry, “ but they made me do it
again.”

That Honest Six Per Cent!
OME one who knew quite a lot about
human nature and the world in gen
eral, has suggested that “ the hard
est thing for a business man to do is
make an honest dollar earn an honest 6
per cen t!”
Many bankers o f the middle west have
wrestled with the same problem, not al
ways with beneficent results, particu’ arly
in the matter o f their loans. Feeling that
possibly a round-table discussion of the
genera] problem o f making loans would
benefit its readers, T he Northwestern
Banker has sounded out a number of
prominent bankers o f the middle west with
some o f these questions in m ind:
“ What is the ordinary loan procedure
o f the average bank'?”
“ Do the managing officers o f the aver
age bank make loans personally or is each
loan referred to the bank’s board o f di
rectors ?”
“ What requirements are usually made
o f the debtor?”
“ Do most banks require financial state
ments and if so, how often are these re
viewed, and by whom ?”
In these times o f the middle west, when
the exact middle o f the road is by far the

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Federal Reserve Bank of St. Louis

safest place fo r bankers to. tread, charac
ter seems to remain the golden quality o f
the successful borrower. Intimate, first
hand knoAvledge o f the borrower’s habits
and needs, run a close second and are
nicely stressed by a veteran Iowa banker,
C. J. Wohlenberg o f Holstein, who has
this to say from his years o f loaning ex
perience :

Know Your Customers
“ In the matter o f loaning, our bank has
never been as strict as a great many others,
inasmuch as our men behind the counter
are as well versed with the financial con
ditions as some o f the head officers. We
have meetings with every one in our em
ploy every so often and go through our
note case and depositors ledger and often
times learn a lot from our younger em
ployees who know the habits and sur
roundings of the borrower’s and deposi
tors better than we do. F or that reason,
we have established credit limits to the
customers and if the clerk behind the
counter is dealing with some one and
knows our custom in handling this man’s
affairs he is at perfect liberty to loan
this party some money, which o f course

must be in the ordinary line o f conduct
ing his business.
“ All the new deals, matters of impor
tance, and large loans always come be
fore me, and if the deal does not alto
gether look favorable to me, I talk mat
ters over with our cashier and our
vice president. I do not like the ‘ One
Man Bank.’ A lot of the customers like
some o f the employees a ‘darn’ sight bet
ter than any o f the principal officers and
if they can arrange fo r a small loan with
them, it is a great deal more satisfactory
to the patrons.
“ In the matter o f requiring property
statements o f all loans o f $500 and over,
we have never lived up to this rule. I
have lived here for 44 years, have been in
business that long, have seen the most of
our customers grow up and either prosper
or fall down by the wayside, and know
their habits, have watched them, success
ful or otherwise, whether they saved, or
spent money foolishly, and the majority
o f our borrowers are old-time friends and
we understand each other to the last
penny, and why should we molest them
with property statements? It shows on our
part that we lost confidence in them and

April, 1927

TH E

in their ability to pay and make good. It
may happen once and in a great while
that our judgment in these men has been
wrong, and that, if by having taken a
financial statement from them would have
corrected our own opinion o f them, but
these cases have been very rare.
“ It is very seldom that we pester our
board o f directors with actions on appli
cations fo r loans. W e are three directors
in the bank and if we do call a meeting
o f the other four, all o f whom can be
gotten inside of five minutes phone calls,
they generally tell us that we know best
what to do about it and to use our own
judgment.
“ We have asked o f late o f every bor
rower, who is more or less a young cus
tomer and beginner, to give us property
statements and from these we generally
ask personal security or chattels or what
ever they are able to furnish. I f we see
the right sort o f timber in the young men
we are glad to help and assist them to
get along in life and build up and con
struct a substantial livelihood, whether it
be in the line o f farming or commerce.
Patrons Appreciate Help
“ As a banker I believe that it is as
much our duty to see to it that the cus
tomers receive aid and advice in making
headway so as to create better and more
comfortable homes as it is to look after
the stockholders dividends. No one ap
preciates the assistance given them in time
o f need better than those who would have
otherwise been down and out, and as long
as there has been any effort shown on part
of the borrowers to roll up their sleeves
and buck'e in and face the prevailing con
ditions we have always aided as long as
there are signs o f hope.
“ In the line o f statements, if bankers
stay closely to their customer friends, they
know if they are making or losing money,
and if making money, we are not so par
ticular about the renewals o f the state
ments, and if they are losing, new state
ments taken at annual intervals will be
the best evidence to show them that there
is something wrong. To get property
state'ments from some o f the older men,
who are absolutely honest, safe all around,
money makers, means teaching them some
thing new and a great many will look at
it as an insult in doubting their integrity
and soundness. A banker knows these
men and a statement from such men
should be waived. You can not make any
laws to fill all conditions and requirements
and this is the way I look upon the prop
erty statements o f all loans o f $500 or
over. I believe in good judgment and
common sense on part o f the bank officers
first and last and all, as they should know
best how to handle their own affairs.
“ In a talk with two Davenport bankers
where they are surrounded with similar
conditions as we are here, with these oldtime German citizens, they all agreed on

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Federal Reserve Bank of St. Louis

NORTHWESTERN

B A N K E R

IN T H IS A R T IC L E
In this article are the answers to some
of these questions: “ What is the ordi
nary loan procedure of the average
bank?”
“ Do the managing officers of the aver
age bank make loans personally or is
each loan referred to the bank’s board
of directors or loan committee?
“ What requirements are usually made
of the debtor?
“ Do most banks require financial
statements and if so, how often are they
reviewed and by w h om ?”

my stand on this matter. A fter all it is
the personal knowledge o f men and cus
tomers and their faith and confidence iu
you, and yours in them, which counts,
and all formal other matters are sec
ondary.”
Several angles must be considered in
making a loan, says T. R. Watts, Grand
Junction banker, who continues:
“ We try to analyze our loan applica
tions from several angles, namely: moral
hazard, inclination o f applicant to pay,
security offered, how borrowed funds are
to be invested, possibility o f investment
repaying the loan and whether the pro
posed investment looks
economically
sound.
“ We take financial statements from all
o f our borrowers o f any consequence, and
try to renew them at least once a year,
and with some customers more fre
quently.”
A national banker, from Nebraska says
this is the way loans are handled in his
institution :
Approved by Board
“ It is customary for any new loans
made by our bank to be approved by our
board o f directors.
The requirements
which we ordinarily ask of the debtor is
sufficient margin o f security to protect the
advance and also that he carry a reason
able balance with us. Our bank asks for
a financial statement from every borrower
Avho does not furnish us with chattel mort
gage security when the loan is in excess
o f $500, and oftentimes we take a prop
erty statement Avhen the loan is less than
that amount. Property statements which
we accept from people w7ho borrow money
from us are renewed every year, and the
old one kept in our files to show the prog
ress being made by the borrower.”

Clay W . Stafford, cashier of the Ames
National, Ames, Iowa, says o f his bank’s
loan policies:
“ Nearly all o f our loans are made upon
the approval o f the president and cashier.
Loans which the active officers feel are
questionab’ e or loans on which there may
be some doubt in our minds as to their

desirability are referred to our board of
directors for their approval.
“ We insist on a financial statement from
every borrower who borrows $500 or more
on an unsecured note and we aim to re
new these statements twice a year.”
One Iowa banker says:
“ All loans are handled by a few o f our
executive officers and in nearly all cases
referred to the officers in charge of his
particular branch o f our business.
“ With exceedingly few exceptions, the
customer must submit a statement or high
grade collateral. New statements are pro
cured at the end of each fiscal year un
less their business is o f such a nature that
they can make monthly reports, when they
are often obtained more frequently.
“ As to our bank correspondent busi
ness, we aim to get statements of their
various calls. Loans o f any size and if at
all irregular are always referred to our
loan committee. In short, we are in
clined to be quite technical along those
lines, feeling that is consistent with good
banking nowadays.”
Take Financial Statements
Another middle western banker says:
“ Loans by this bank are made by in
dividual officers unless on new credits or
those not made freely on the judgment of
the one officer. In that event several offi
cers confer. Loans are not referred to
board o f directors before made but read
at each monthly meeting. W e are taking
financial statements from borrowers. An
officer o f the bank visits the borrower for
observing his general condition, checking
statement and taking security where nec
essary. Statements are going to be taken
twice each year.”
In the average bank o f the middle west,
how many loans are secured by a reason
able amount o f collateral'? One Iowa
banker, in a town o f thirty thousand p op
ulation makes this comment:
“ During the past two years, we have
endeavored to secure collateral on a great
er portion o f our loans and discounts, and
a survey in December disclosed that bet
ter than 50 per cent o f our loans had
definite pledged collateral with sale val
ues in excess o f the amount o f the loans
(not including mortgage loans).
“ In connection with the unsecured loans,
our policy is to take a statement from
the customer and determine the greatest
amount o f credit he may desire at any
one time and then ask our discount com
mittee to grant an open line o f credit.
I f the committee does not see fit to grant
this full line, we aim to decline to make
the first loan.
“ We endeavor to procure a property
statement on all loans o f $500 or more,
and at least once each year, our board of
directors reviews statements and passes
on all o f the established lines o f credit.
“ In addition to this, individual lines
(Continued on page 61)

The Investment Trust Idea

F I were called upon to symbolize the
Investment Trust idea with a sketch,
I think I would draw a picture o f a
man unmistakably Scotch distributing
eggs in a number of baskets. Each basket
would be guarded by a sentinel. This
sketch I believe would emphasize the fact
that the Investment Trust principle is
based upon the simple old maxim which
says, “ don’t put all your eggs in one bas
ket” . On the other hand, the sketch, para
doxical as it may seem, would illustrate
what people of the opposite view mean
when they say, “ do put all your eggs in
one basket but watch the basket.” For
you see I would have drawn a number o f
baskets with one egg in each, but I also
would have suggested that an alert sentinel
was watching each o f the baskets. Thus
I think the drawing would express the
fundamental idea o f the Investment Trust
— diversification and alert supervision, in
other words, “ spreading the dollars” over
a number o f carefully chosen investments
and then watching each and every invest
ment.
The investment trust as you might
imagine was invented by a Scotchman. It
was born also o f necessity. It came to
life in the last quarter o f the 19th Century
because o f the desire o f English and
Scottish investors to take advantage o f
the obvious opportunities fo r profitable
investment in the foreign field.
F or a number o f years prior to 1879
both English and French investors had at
tempted to place their savings advan
tageously in foreign enterprises with
quite disastrous results. To mention only
one, I will refer to the South Sea bubble.
Naturally the dire results o f these attempts
to earn a high rate o f return on money
sent abroad were quite sufficient to cause
prudent business men to seek a vehicle
which would handle with safety and profit
the accumulated savings o f the English
people. The Investment Trust was the
answer to the question. The success of
these Trusts since their inception is not
surprising. Like most successful under
takings the underlying idea is simple.
Now why is it that the average investor
cannot in practice apply the same princi
ple to his investments? The answer is
very simple. In the first place the in
vestor o f small means finds difficulty in
splitting up his principle into from thirty
to fifty parts. In the second place, after
having done so he finds as a busy man that
he simply cannot watch the various invest
ments which he has thus secured. Possibly
this fact has given rise to the saying which
I mentioned above which is quite the con
trary from the diversification principle,
namely “ put your eggs in one basket and
watch the basket.” Sometimes it is possi
ble for the average business man to watch
14

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Federal Reserve Bank of St. Louis

B y CoL Benjamin F . Castle
Vice President and General Manager
F irst Federal Foreign Investment Trust
(From address broadcast over radio Station WJZ)

one basket but most assuredly he cannot
watch twenty-five or one hundred baskets.
The Investment Trust performs the fun
ction fo r him. And how does he obtain
the service o f the Investment Trust? He
becomes a partner. He buys the common
stock o f the Trust and the Trust im
mediately invests his money under the
most advantageous conditions.
A well established trust usually has re
presentatives in many lands. These repre
sentatives are selected because o f special

COL. B E N JA M IN F. CASTLE

qualifications. A trust has a statistical
staff capable o f analyzing investment op
portunities which are presented through
many channels. Naturally the managers
o f a trust are selected because o f parti
cular skill and experience in the invest
ment field and also because of technical
administrative skill. This last is import
ant because o f the fact that successful
trusts must be managed at low cost. The
history o f trusts show that this low cost
o f management has been achieved in most
cases. In fact the average business man
would be amazed at the small fraction of
gross income that the operating cost re
presents.
I have briefly sketched the facility
which is placed at the disposal o f the
smallest investor and I think you will see
how logical it is fo r the small medium and
even the large investor to give serious con
sideration to this interesting type o f finan
cial opportunity. He obtains diversifica
tion— spreading o f the dollars, geogra
phically as well as by industries, in the
character o f the securities, bonds, pre
ferred stock, some times commercial bills
— in the character o f the participations
which the Trust takes— he secures also
that sentinel-like watchfulness which no
individual investor actually engaged in

business can obtain if he handles his in
vestments alone. He secures safety of
income and a steadily increasing share of
the growing surplus which a Trust usually
finds it easy to accumulate.
The Investment Trust idea has been
growing in popularity in the United States
since the W orld War. This is entirely
logical on account o f our position now as
the world’s banker. This implies that we
are sending money abroad to the various
countries which are developing their latent
resources or, as in Europe, rebuilding an
tiquated plants. Someone has said that
the first railroads o f the United States
were ballasted with Dutch Guilders and
Pounds Sterling. So, in the next fifty
years we shall probably see the enterprises
o f foreign countries in many lands bol
stered up with American dollars. These
traveling American dollars if taken on
their tours o f the world by investment
trusts will return safely and bring rich
gifts.
In addition to what might be called the
standard form o f investment trust in the
United States we have another type which
seems to be original in this country and
which springs from the vision o f our best
financial minds who saw soon after the
W ar that there must be some means for
building up American trade and some
means fo r meeting competition of the long
term credits which it is the practice of
British and German banks to extend to
importers in foreign lands. Our com
mercial banks are limited to handling six
months paper as it is called in banking
parlance. In other words, they cannot
grant commercial credits for a period
longer than six months.
So Congress
added a section to the Federal Reserve
Act known as the Edge Law which pro
vided for the creation o f corporations
having a minimum capital o f two million
dollars. These can operate only in foreign
lands or we may say in foreign invest
ments. They are subject to the jurisdic
tion, supervision, and inspection o f the
Federal Reserve Board, in much the. same
manner as National banks are. National
banks are permitted to take an interest
by purchasing stock. Thus you see there
has been set up a vehicle which is helpful
to American investors, helpful to Ameri
can manufacturers, and helpful to the
nation.
These interesting corporations which are
authorized by the Federal Reserve Act
have all the characteristics o f an invest
ment trust but in addition have the powers
o f a bank even to the point o f accepting
deposits. Congress at the time o f passage
o f the law showed clearly its intent to
clothe these corporations with the prestige
which Federal incorporation gives and to
(Continued on page 61)

FIRST AID to
SALES CLERKS
B y Roscoe Macy

T IS a great pleasure this month to
announce the addition to the long list
o f boons for suffering bankers which
have been introduced through these col
umns from time to time, o f a new device
designed to render the life o f the poor
sales clerk a happier one. This invention,
which is known by the trade name
“ ClerKit,” consists of an outfit, enclosed
in a compact kit, which may be slung over
the shoulder and carried as the newsboy
carries his supply o f papers. Each o f the
articles comprising this outfit fulfills some
special need which is sure to be felt from
time to time by every clerk o f farm sales.
These articles have been slowly per
fected and thoroughly tested in our own
laboratories, before being accepted as
components o f the ClerKit.
The first device consists o f a flexible
rope, with a noose on the end, resembling
a lariat. It is found in a convenient posi
tion fo r withdrawing quickly from the
kit. As the auctioneer mounts upon the
hay-rack which has been piled high with
all the useless plunder that has a way of
accumulating on a farm, and finishes his
opening speech, he picks up an ax with a
broken, handle, or a pitchfork with an
important tine missing. “ What am I o f
fered for this useful and valuable instru
ment?” he inquires. “ What’s that? Did
you say ten cents, sir? SOLD, Mr. Clerk,
to that good-looking gentleman over
there. Your name to the clerk, please,”
and he passes immediately to the next bit
o f salable jewelry. The harried clerk,
meanwhile, anxiously scans the faces be
fore him in unsuccessful search fo r a
“ good-looking gentleman,” and finally suc
ceeds in locating the purchaser, a total
stranger, by his guilty manner and the

persistence with which he keeps his face Ì
averted from the clerk o f the sale.
“ Your name, please?” ventures the clerk,
timidly, but the stranger turns and en
gages his nearest neighbor in conversa
tion.
Realizing that there is no help for it,
Mr. Clerk, with a sigh, draws from his
ClerKit the braided lariat. With practiced
ease,'he swings it over his head and casts
the look over the neck o f the stranger.
A few strong tugs should suffice to con
vince the fellow that the clerk meant what
the auctioneer said, in his direction to
“ give the name to the clerk, please.” A fter
0 4 nW .
vl
two or three casts, the crowd will get the
idea, and no further trouble will be ex
perienced along this line until the next
the ear. The offender sinks to the ground
sale.
without a sound, and by mounting on the
Another Necessary Weapon
body, Mr. Clerk is able to enjoy a clear
view of the progress o f the sale until it
A fter cleaning up the hay-rack, the
auctioneer will lead the way down a long passes out o f hearing down the line. It
goes without saying that the milling mob
line o f machinery, and as he progresses
now clears a respectful path for Mr.
down the line, Mr. Clerk will be left
Clerk right up to the auctioneer’s elbow.
farther and farther in the rear, as he
Presently Henry Jones, from Spillville,
changes twenty-dollar bills and compro
over
on the other side o f the county, digs
mises disputed bids. Sooner or later, he
the clerk in the ribs and remarks, “ Say, I
will find himself with his back flush up
got to go home now, and it’s too cold to
against the sharp teeth o f a hay-rack, and
write a check. I ’ll be back in your town
at that exact moment, somebody’s 225two weeks from next Saturday, if the
pound hired man will plant one o f his
roads stay good, and I ’ll pay you then
Number Twelves on Mr. Clerk’s right foot,
for that mower I bought,” and he starts
jam a muscle-bound elbow into Mr.
away. Mr. Clerk’s hand comes forth this
Clerk’s stomach, and mash the patent
time grasping the handle of Device Num
sales-ledger up against a bystander in
ber Three, which consists of a curioussuch a way as to destroy $22.50 worth of
looking metal hook on the end of a tele
sales records. Calmly, Mr. Clerk reaches
scoping steel rod. Pressing a button on
into his ClerKit, takes therefrom the
the handle, the hook shoots out to the
hand-forged sixty-ounce hammer marked
full length o f the rod, at which time it
“ No. 2,*” and with a deft flick of his wrist,
resembles on a larger scale, one o f those
gives the hired man a sharp clip behind

„

* r i'

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Federal Reserve Bank of St. Louis

THE

contrivances which are used to catch
chickens in a pen. With the hook, Mr.
Clerk deftly trips up Henry Jones, of
Spillville, and drags him back.
“ That’ s all right, Mr. Jones,” he says,
“ but I was employed to clerk this sale
today— not two weeks from next Satur
day. I ’ve been writing all morning, in
spite o f the cold, and if I can fill out your
check and stub, I believe you should be
able to sign your name.”
Several other ingenious contrivances go
to make up the ClerKit. There is the
heavy belt, studded all around with sixinch spikes, which is worn to protect the
c’ erk from being smothered to death in
the crowd when the household goods are
sold. And there is a sharp hook hung on
the back o f the kit for filing garnishment
papers, with a neatly-lettered notice just

hen the

NORTHWESTERN

BANKER

above it: NOTICE TO THE S H E R IF F :
The Answer to the Interrogatories is
“ NO.”
File your papers on this hook
and don’t bother me.”
And then there is the neat case contain
ing tickets to the corn-measuring. Many
c’ erks, including the writer, are noted fo r
their fluency in measuring round cribs o f
corn, and I have known people to come
to saleg from miles around, just to hear
me measure a round corn-crib. Until re -'
cently, I have furnished this attraction
without any additional compensation, but
with the ClerKit we are now able to sell
tickets to the after-show, with the under
standing that if a sufficient number of
tickets are not sold, we will measure the
corn under our breath or in a low voice.
And lastly but not leastly, there is the
crowning achievement o f the inventors o f

April, 1927

the C lerK it: the Macerator. This instru
ment is operated by a coil spring. At
lunch time, it may be wound up and set
running, and the clerk’s lunch is then
dumped into the hopper. An attachment
resembling a sausage-grinder then disin
tegrates the various elements composing
the lunch, and drops the macerated prod
uct into a basin containing pepsin and
gastric juice. The lunch in this way is
masticated and digested without requiring
the slightest attention on the part o f the
clerk, so that he is left free to settle with
the many buyers who always leave imme
diately after lunch. The finished product
o f the Macerator is an excellent feed for
young chickens, and by munching a choc
olate bar while the hogs are being sold,
the clerk will be able to keep going until
evening.

P r e s i d e n t "Cut Up"
THE

C A S H IE R !
“ In the first place we operate a Toll of
honor bank.’ Dr. Junger came to this
town direct from school 25 years ago and
has practiced medicine here ever since.
He has made quite a name for himself in
medical circles as a surgeon. Owns his
own hospital here in town. Has made
all o f his money here. He is not active in
the bank, (also is well known among doc
tors as he attends every medical conven
tion that he can).

Photo on the left, Mr. Boe, cashier and Dr. Yunger, physician and president of
the bank, a few days following Mr. B oe’s operation. On the right, Miss Ruth
Christensen, his nurse, and Mr. Boe, following the operation.

T’ S NOT often that the president o f a
bank can cut up the cashier— and still
be within the law. But a case o f this
nature came to light recently at Soldier,
Iowa.
Harold 0 . Boe is cashier o f the Soldier
Valley Savings Bank o f that city. Inci
dentally it happens to be one o f Iowa’s
“ Honor Roll” banks, with surplus and un
divided profits exceeding its capital. Dr.
E. C. Junger, well-known physician o f the
same city, is president o f the bank.

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Federal Reserve Bank of St. Louis

Recently Harold suffered an acute at
tack o f appendicitis. What could be more
fitting then, that the president should be
in charge o f the operating ceremonies'?
Enter, Dr. Junger, banker-physician, and
his instruments.
The rest o f the story, Harold tells,
stating in the beginning, “ I hope Dr.
Junger doesn’t make the carving o f my
tummy too much o f a joke, but o f course,
it is rather unusual for a president to
operate on his cashier. Here are the facts:

“ I took sick very suddenly and had one
other attack just after I got out o f the
service and none other until this time.
I was operated on and feel fine now. I
am 27 years old, served during the war as
a sailor most o f the time on transports.
This year I am commander of our local
American Legion post; vice president of
the Monona County Bookkeepers Associa
tion and a member o f the Abu Bekr Tem
ple o f the Shrine at Sioux City.”
Dr. Junger is evidently very proud of
Harold, for he says : “ Harold is the old
est o f a family o f six boys. His father
is our local harness maker. Harold served
in the navy during the war and has hehl
a number o f other bank positions. He
was rather fortunate to have the good
judgment to allow me to operate on him
just in time. One o f his brothers is serv
ing in the navy hospital in Philadelphia,
one is a pharmacist, one is studying medi
cine at Iowa City, one is a student there
and the fifth is a senior in the local high
school.”

ITS “CLEAN HOUSE"-or
BRANCH BANKS
So Reads the Handwriting on the W a ll
W R IT T E N B Y

A SOUTH DAK O TA BAN KER
population o f 900, and it has been the
uniform experience o f bankers in this
state that at least half o f the depositors’
accounts have average balances under
$100 and are therefore a loss to the bank.
Thus there are only about 100 in a popula
tion o f 900 who can have accounts which
are profitab’ e fo r a bank
or approximately one in
S Z/ie
nine.
S & a n & on _
The minimum sized
W ir r u r e r / ?
bank should have three
(P a r t
employes; one bookkeep
er, one teller and one offi
t e n t
cer who takes care o f the
/
loans, and who also acts
as teller when necessary.
A bookkeeper can handle
HE old saying that “ competition is
400 active accounts and should have that
the life of trade” may be true, but many to keep busy. On this basis there
if it is too keen, competition results should be one bank for a popu’ ation o f
in “ death to the competitors.” That it
3,600. This is about the rate in eastern
states.
has resulted in death to a great many
competitors in the banking business in
Results of Over-Banking
South Dakota and other states o f the
The
evils
resulting from over-banking
middle west is history. The chief causes
are legion and fatally destructive. Ex
o f bank mortality in the last seven years
cessive competition caused the granting of
in the order of their importance are:
unsafe and excessive loans. It was the di
1. Over-banking.
rect cause o f giving countless free serv
2. Excessive loans.
ices by the bank to get and hold deposi
3. Poor banking personnel.
tors. In order to attract depositors, flat
4. Inefficient supervision.
tering interest rates were offered, some
5. Lack of diversification.
times as high as 6 per cent and often a
6. Free services.
bonus was given in addition. In order
7.
Criminal violations of banking laws.
to pay this high rate o f interest and to
Other causes which a” e sometimes given,
pay for the numerous free services, the
but which upon careful analysis are banker was compelled to loan out at a high
shown not to be contributary, are:
rate o f interest a large part o f his depos
1.
Lack o f sufficient capital invest its. He often loaned dangerously close
ment.
to the reserve limit. It is the sad experi
2.
The deposit o f reserves in South Da ence o f all people loaning money, that
kota banks.
when a high rate o f interest is secured on
3. Depositor’s guaranty law.
a loan, the safety o f the principal is im
4.
Inability to meet stockholders double paired proportionately.
liability.
Is it strange then, that when the period
o f deflation and depression came in 1920A great many suspensions undoubtedly
1921 that a great many o f these keen com
resulted from too much competition. At
petitors were caught with excessive, un
one time the state had an average o f one
safe and unsecured loans, with reserves
bank for every 900 people. When this is
impaired, and with a large amount o f sec
compared with one bank for 4,000 in some
ond mortgages on real estate, which later
o f the eastern states, the fact that we were
ripened into that “ frozen asset,” known
over banked is obvious. There cannot be
more than 200 deposit accounts among a in winter or summer as “ other real estate.”

“ Other real estate” and other frozen as
sets do not pay interest, not even when the
interest is added to the principal, and so
the average bank began to show expense
and interest paid in excess o f the profit
account. At first the surplus fund was
impaired and gradually the capital o f the
bank itself was encroached upon, and in
too many cases completely wiped out.
While it is conceded that the technical
definition of an excessive loan has a direct
relation to the capital and surplus o f the
particular bank, still, in a wide sense a
loan may be excessive even though it be
very small in size. Too often the banks
were guilty o f making capital loans when
all o f their deposits were virtually de
mand liabilities. The rule that a farmer’s
short term liabilities should not exceed
one-third o f his quick assets was too often
violated.
This policy o f making unwise loans,
poorly secured or entirely unsecured or
loans unsupported by financial state
ments properly checked, just because the
banks competitor was making them, cor
rupted many a banker’s note case, and the
result was disastrous.
The strong, correcting hand o f the su
pervising department was lacking. E x
aminations by the banking department
were often entirely superficial. It is ad
mitted that an examination occupying only
part o f one day or a day or two at
most, mpst be superficial. But excessive
loans can easily be detected. Cross lines
and duplicate lines in other banks could
and often were detected and sometimes
reported. But in such cases rarely, if
ever, anything much was done about it.
It is possible that the department thought
that given time and the opportunity, most
o f the banks Avould work out the situa
tion.
All o f the banks which have been closed
during this frightful period reported ex
cessive loans at the time o f closing. It
seems that the banking department could
have had a larger measure o f success in
combating this cause o f bank mortality.
Another contributary cause is one which
is not often mentioned, namely that o f
excessive overhead. Several elements en17

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Federal Reserve Bank of St. Louis

T HE

ter into the excessive overhead o f a bank.
The chief element is interest paid on de
posits. In a great many banks this item
represents more than half o f the expenses
o f the bank. The rate o f interest paid
by the bank was so high that time deposits
in large volume were attracted so that
often five-sixths o f a bank’s liabilities were
interest bearing.
Expensive banking
quarters were erected and maintained up
on which high taxes and insurance pre
miums were paid. In one case a banking
house with 12 tellers’ windows was erected
in a town o f 700 people. And this town
had another bank at the time!
Too Many Employes
Too much help was employed in in
stances so that some o f the officers had
plenty o f time to solicit life insurance
business for their own profit and make
land deals, which resulted in heavy second
mortgages on real estate which found theii
way into the assets o f the bank.
In granting a new charter for a bank
in a given community no thought was
given by the department to the question
whether the locality needed new banking

N0 RTHWESTERN

facilities, and what is still more important,
whether the applicant possessed the neces
sary qualifications to insure sound bank
ing. It was discovered too late that a
great many speculators, real estate agents,
promoters, and even criminals had received
charters and had operated banks. In
some cases a chain o f banks was acquired
through a system o f pyramiding liabili
ties.
Practically all the services at the dis
posal o f the bank were rendered free of
charge. Nothing was charged fo r writing
letters, remitting by draft, paying taxes,
making deeds, affidavits, bills of sale and
even sums o f money were loaned fo r short
periods free o f charge. When a deposi
tor opened a $5.00 checking account, he
received free o f charge, a check book and
pass book costing 40 cents. Out o f town
drafts and checks were cashed at par, col
lections effected fo r customers without
charge.
It was always expected that sometime
in the future in some mysterious way the
bank would make a lot o f money out o f
the customer who was getting t.he free
services. O f course the bank never did

An Illustrated Glossary o f Banking Terms

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Federal Reserve Bank of St. Louis

BANKER

April, 1927

make any money on the customer, although
in some cases he finally paid his bill when
the bank liquidated or reorganized.
Seven years ago it was the usual thing
for a bank to report no bonds or securities
and outside o f the bank building and fix
tures the only assets were the loans and
discounts made in the community in which
the bank was located. There was no di
versification, no secondary reserve, no
bonds which had a ready market. These
are words and phrases which the Awikers
o f South Dakota have learned only re
cently.
O f course there were rare instances o f
criminal violations of the banking laws
which wrecked some banks, but the ease
with which charters were obtained, the
guaranty o f deposits law, the laxity o f ex
aminations invited some criminals into the
banking system and they did their dam
age.
I f a bank’s assets were worth one hun
dred cents on the dollar, and if they were
collectable when due, the size o f the bank’s
capital stock or the stockholder’s addi
tional responsibility were immaterial. I f
(Continued on page 36)

----- A s Compiled by Frank Godwin

W h y Can't the Economist and
Banker Get Together?
N S P IT E uf the fact that the science of
B y C. Ward Macy
economics deals primarily with the
Assistant P rofessor o f Economics
basic principles and problems o f com
Coe College
mercial enterprise, the economist is re
in society for instance.
It is generally
luctant to air his ideas and opinions in
business magazines. Undoubtedly custom
believed, hoAvever, that the desire for ma
terial gain is the immediate goal in spite
partially accounts for this hesitancy on the
o f the existence o f other motives.
To
part o f economic writers. Such writers ex
press their views almost exclusively in
gain this objective the busines man must
various journals read for the most part by
have a working knoAvledge o f production,
distribution, exchange and consumption
fellow economists.
The paramount rea
son, however, seems to be due to a
of Avealth, the identical topics Avhich harass
hitherto lack o f understanding and sym
the economist. W h y then, one may ask,
pathy betAveen the business group and
since the subject matter is the same, do
the economists. To attempt to place the
economists and business men often dis
blame fo r this existing situation is beyond
agree so Avidely in their vieAA^points ?
the purport o f this ar
ticle.
One need not
search
extensively to
discover that economist
H Y is it that the skilled econo
Avho feels and exhibits
mist is reluctant to air his views
a sense o f aloofness and
in business magazines, and inr
superiority over his felstead, gives vent to his pent-up opinions
Ioav citizen, the business
and emotions in journals read almost
exclusively by fellow economists?
man. It is even easier
to find that merchant,
In like manner, why do most business
banker, or other enter
writers and bankers hesitate to step over
into the economic magazines, where
priser who stands ready
their views would be most welcome?
and willing to ridicule
W h y can’ t these two groups of thinkers
and criticize the theo
exchange thoughts, try to see economic
retical
economist
by
questions through the same microscope
— and get together on common problems?
branding his teachings
as impractical, radical,
Professor M acy , author of the inter
and sometimes social
esting article on this page, grapples with
this problem, saying he feels that “ no
istic.
G-ranting then
one group is wholly to blame and that
that there is an intoler
mutual benefit might be derived from
ant spirit oftentimes in
examining some of the causes of this
evidence and granting
divergence of opinion.”
further that no one
Incidentally, Prof. M a cy is a cousin of
group
is
Avholly
to
Roscoe M acy , Lynnville, Iowa, banker,
blame, it seems to the
whose m onthly articles are being read
widely by Northwestern Banker readers.
Avriter that mutual bene
C. W A R D
fit might be derived
from examining some of
the causes o f the diverg
ing opinions. The d if
ferences are not found in the subject mat
There seems to be but one logical anter and content involved but chiefly in
SAver; that is, the business man, with his
points o f vieAv and purposes.
OA\Tn resources and oftentimes his own
standing in his community at stake, views
Economics Defined
the phenomena strictly from an individual
Economics has been aptly defined as a
point o f vieAv and as applying to his par
study o f the wealth getting and Avealth
ticular work. The economist, on the other
using activities o f man.
One eminent
hand, being not vitally concerned with
economist has stated it more simply as a
the success or failure o f any one line of
science o f making and spending o f money.
business, is attempting to see the same
The business man, regardless o f his field
phenomena from a social point o f vieAv.
o f endeavor, is actively engaged in utiliz
He hopes to discover weaknesses the rem
ing his material resources and his services
edying o f which Avill cause the greatest
in an attempt to increase his existing sup
good to the greatest number. This article
ply o f wealth. To be sure there are driv
is in no Avay intended as a criticism of
ing forces other than the lure o f addi
the business man’s vieAv as it is perfectly
tional wealth that prompt a business man
natural for one’s thinking and actions to
to spend a lifetime in a certain vocation
be influenced by one’s direct interests.
-—-the aspiration to be a constructive unit
But the significance o f the vieAvs as set

forth above seems to warrant some con
sideration.
One example o f the individual as
against the social perspective is demon
strated in the age-old economic and po
litical problem o f the protective tariff.
How can we blame the American manu
facturer, who must compete Avith foreign
manufacturers, for desiring and seeking
legislation providing him Avith protection
and eliminating a great risk? And if the
tariff is advantageous to the manufac
turer, others in the community directly or
indirectly benefit and o f course favor
tariff legislation. Furthermore, how can
a fair minded person at the present time
criticise the mid-Avesterner for seeking legis
lation designed to re
lieve the farmer o f eco
nomic ills by placing
him on a more equal
footing with the indi
vidual in industry? For
purely
personal
and
perhaps selfish reasons
the captain o f industry
favors a tariff. For the
same reasons the farmer
and others dependent
upon agriculture want
legislation
embodying
similar principles. Noth
ing is more natural.
Economists,
however,
generally oppose pro
tective tariffs. This op
position is not due to
any failure on their
part to appreciate the
benefits derived to cer
tain groups, but is at
M ACY
tributed to the appar
ent impossibility o f ad
ministering a tariff pol
icy that Avili be fair to
all. In other Avords, from a social stand
point, a protective tariff policy does not
meet the requirements o f an economic
ideal. The same objections can and are
voiced against farm relief legislative
measures, although a feAv middle-Avestem
economists have supported the plans.
This support, hoAvever, has for the most
part been due to a desire to see the ad
vantages o f legislation more equally dis
tributed between east and Avest and not
to

inherent

projects.
against

economic

soundness o f

the

Some o f the objections voiced
farm

relief

coincide

Avith

the

economists’ convictions on the theory in
volved, but these objections at the same
time so rankle and stir one’s sense o f fair
play

that

even

economists

occasionally
19

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Federal Reserve Bank of St. Louis

T II B

become individualists and support such
proposals.
Another Point of Difference
Another point of difference between
the business man and the economist is
revealed in their varying concepts of
business costs. Again we see the prac
tical busines man studying the problem
from an individual and short run view.
Costs o f production to this person include

N O K T II W E S T E II N

April, 1927

BA NK ER

all sums actually paid out in the process
o f utility creation, which means produc
tion. Such items as Avages, interest on
borrowed capital, rent, insurance, taxes
and the like are listed as costs and right
fu lly so. I f at the end of the fiscal year
the accounting system reveals a credit
balance, or income greater than outlay,
it is generally assumed that that busi
ness has been temporarily profitable. To
have gained this the produced article or

service, as the case may have been, is
presumably sold “ above costs o f produc
tion.”
In regard to the same problem of costs,
the economist continues in his attempt
to see the problem from the social and
not the individual angle. To the actual
money outlay there should be added as
costs o f production sums to include such
implicit items as interest on invested
(Continued on page 38)

FACTS about the

BANKER’S LIEN"
Ordinarily the bank has the right to apply a deposit to
the satisfaction of a debt owing to it from a depositor,
and this right is known as a “ Banker’s Lien” or set-off.
But when the depositor is acting as either an agent or
trustee, complications arise. This article describes such
a case and what the Court said about it
FTENTIM ES, a bank is confronted
with a situation that requires them
to consider making a settlement of
some kind' with one o f their depositors
who has borrowed money from the bank.
They are unable to protect their interests
without applying the amount on deposit
to the credit o f the depositor to the
satisfaction o f a debt owning to the bank
from the depositor. The depositor’s obli
gation might be in the form o f a past
due promissory note or an overdraft.
Ordinarily, a bank has the right to ap
ply a deposit to the satisfaction o f a debt
owning to it from a depositor.
This
right is referred to as a “ Banker’s Lien,”
although it is more properly speaking, a
right o f setoff.

Becomes More Complicated
The question as to the bank’s right in
this respect becomes more complicated
when it appears the deposit made by the
depositor consists o f funds held by him
as an agent or a trustee, the bank having
no knowledge that any person other than
the depositor has an interest in the funds.
A firm e n g a g e d in im p o r t in g , c a rr ie d an
a c c o u n t, a n d borroAved m o n e y
from a
bank.
This im p o r t in g firm Avas a d j u d i
ca te d b a n k r u p t.

The bank had delivered to the bankrupt
documents representing title to three thou
sand bags of coffee in exchange for a
“ Trust Receipt,” a document, the char
acter and effect o f Avhich has been much
discussed in the courts.
The bankrupt
sold five hundred bags o f this coffee and
received therefor a check fo r five thou
sand dollars, which sum, together Avith
other items, the whole amounting to

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Federal Reserve Bank of St. Louis

$20,548.36, the bankrupts deposited to
their credit in a trust company. The his
tory o f that deposit account shoAvs that
on the date on which the receiver in bank
ruptcy Avas appointed, the balance remain
ing was $9,978.36.
The Trust Company was at that time
a very large creditor o f the bankrupt
firm for monies advanced to pay letters
o f credit fo r imports o f coffee.
The
Trust Company declined to honor a check
o f the bankrupt fo r $5,065.50. It offset
against its liability to the bankrupts un
der the general deposit account so much
o f its claims against bankrupt as wiped
out the balance.
The question now presented is:
Was the Trust Company legally entitled
to offset its claims against the proceeds
o f the check fo r five thousand dollars, or
Avas the bank entitled to collect that money
from the Trust company?
The Trust Company acknoAvledged the
receipt o f the five thousand dollars and
that this amount Avas part o f the balance
included in the amount remaining Avith the
Trust company at the time the receiver
took charge o f the bankrupt estate. The
Trust Company further conceded that the
bank retains its rights in the proceeds of
trust receipt property, Avhere they are
found in the hands o f a third party un
disposed of.

The maximum amount o f the trust fund
remaining undisposed o f was agreed by
the bank to be $2,338.53. This amount is
based on the view that subsequent depos
its restore a mingled and depleted trust
fund. It is further conceded that the
banker’s right over a general deposit is not

in strict essence a common law lien, since
a deposit is a mere debt, and there can not
be a lien against the property o f the
lienor.

Practically, the sole question for con
sideration is whether the bank can offset
the amount o f this check against its claim
against the bankrupts, without affirma
tive p roof that it has given some present
consideration or credit for the deposit
thereof, other than the mere credit upon
the general account o f the debtor.
Many Different Decisions
There are very many decisions, by no
means harmonizing, bearing upon this
question.
Although there is a conflict, the Aveight
o f authority is to the effect that, if funds
in Avhich third persons have an interest
are deposited in the individual name o f
the depositor in a bank which has neither
actual notice nor notice o f facts suffi
cient to put it on inquiry as to the true
character o f the deposit, it may apply the deposit to the payment o f the in
dividual debt o f the depositor to the
bank, and may do so whether or not it
made any advances or otherAvise changed
its position on the faith o f such deposit.
Ordinarily, the lien or right to offset at
taches in favor o f the bank upon the
securities and monies o f the customer
deposited in the usual course o f busi
ness, fo r advances which are supposed
to be made upon their credit.
It at
taches to such securities and funds, not
only against the depositor, but against
the unknown equities o f all others in
interest.

either make or break agriculture, the fact
remains that Iowans are intelligent enough
to get together, face their own problems
and work out their OAvn solution.”

Edgar L. Mattson, vice president of the
Midland National Bank & Trust Co. o f
Minneapolis, is being- urged by his many
friends to be a candidate for the second
vice presidency o f the American Bankers’
Association at the convention in Houston,
Oct. 24-29.
Mr. Mattson is ably qualified to fill the
position o f second vice president o f the
A. B. A., which position automatically
leads to the presidency o f the association.
He is a student of banking affairs, is a
successful banker, has been president of
the Minnesota Bankers’ Association, and
active in the national bank division o f the
A. B. A. He withdrew two years ago and
his friends believe that the Houston con
vention Avould honor itself and honor him
by placing him on the third round from
the top o f the A. B. A. ladder.
The Board of Governors of the Mort
gage Bankers’ Association o f America,
at a recent meeting, passed a resolution to
refuse membership to real estate bond
houses that do not place the proceeds of
bond issues with separate trustees. The
new regulation is designed specifically to
prevent confusion in the minds o f in
vestors as to the relative merits o f various
bond issues, based on buildings in the
course o f construction.
What effect this resolution may have on
real estate bond houses may only be con
jectured, but it at least emphasizes the
point that the Mortgage Bankers’ Asso
ciation is giving increased consideration
to placing the proper safeguards around
the issuing o f real estate bonds. The legit
imate real estate bond houses are now
complying with every requirement, which
means increased safety to them and to
their clients. With the tremendous in
crease in the amount o f bonds being sold
in the United States, additional regula
tions will be necessary, first, to protect the
bond-buyer, and second, to protect the
legitimate real estate bond houses from
having unscrupulous bond dealers enter
the field.
Percy J. Ebbott, vice president o f the
Seaboard National Bank, New York, tells
us that a prominent business man who is
a customer o f the Seaboard, and Avho has
steadfastly refused to sell goods on the
installment plan, is to be made the sub
ject o f Bruce Barton’s next book, “ The
Man Nobody Owes.”
Oscar Wells, past president o f the A.
B. A., is a candidate fo r membership on

the board o f directors o f the United States
Chamber o f Commerce, according to a
circular sent out by the Birmingham
Chamber o f Commerce.
Oscar Wells began his banking career
in Missouri. In 1905 he Avent to Texas as
cashier o f the Ft. Worth National Bank.
The next five years brought him rapid pro
motion until he became vice president o f
the First National Bank o f Houston. In
1915 he served as Governor Federal Re
serve Bank, Dallas, and as Class A Direc
tor o f that institution. For many years
he has been active in the Birmingham
Chamber o f Commerce, and today serves
as a director.
Governor Baker of Missouri has be
fore him a bill Avhich will tighten the
banking requirements o f state bank and
trust companies in his state. This bill is
in line with Avhat other states are doing
and makes the minimum requrement o f
capital stock for banks $15,000, instead of
$10,000, and requires that the capital
stock must be paid up in full. The previous
larv allowed banks to capitalize for $10,000 Avith only half o f the capital paid up.
The neAV bill applies only to banks in
toAAms o f 1,000 population or less.
Joseph S. McCoy, government actuary,
has estimated the total number o f holders
o f stocks and bonds in the United States
at only 3,000,000, whereas most o f the
leading economists have figured the num
ber in the neighborhood o f 15,000,000.
Mr. McCoy uses the report o f the In
ternal Revenue Bureau, covering statistics
o f income for 1924, as reported to the
government fo r tax purposes as the basis
fo r his estimate. Mr. McCoy estimates
that there Avere between 4,000,000 and
5,000,000 subscribers to each o f the lib
erty loan issues.
Perry J. Holden, farm organization ex
pert., believes that agriculture is vastly
bigger than legislation, and says that be
fore farmers can complain o f the lack
o f legislation that they should set their
own house in order. Speaking specifical
ly o f Iowa Mr. Holden said, “ The state
needs first o f all better roads. FolloAving
that the establishment o f traveling librar
ies in all rural communities, direction of
boys and girls work by civic organizations,
home OAvnership, and a study o f conditions
as they exist outside o f the state must
follOAV.
Mr. Holden further said : “ Although
Germany proved that legislation could

Frank Merrill, publicity director of
the NortliAvestern National Bank o f Min
neapolis, calls our attention to the folloAAdng “ Modern Business Letter,” but
does not state whether it produced the de
sired results— we assume it did.
“ Dear Sir:
“ Our records reA7eal that you have again
become delinquent in your orders to us.
l o u r past record has been only fair. You
have not been giving us 100 per cent of
your business. W e feel that we have been
very lenient Avith you in this matter. Youractions indicate a disposition to impose
upon our laxity.
“ Unless Ave have an order from you on
or before Easter day Ave will be forced to
place the matter entirely in the hands o f
our supersalesman, Mr. Go Getham, who
needs no introduction to you.
“ Hoping you Avill make such a drastic
step unnecessary, Ave remain
“ Very truly yours,
“ Jones Mercantile Company,
“ Per Johny Jones, Sales Mgr.”
Over thirty-five thousand stockholders
now OAvn the stock o f the Bank o f Italy,
which is a broader distribution of OAvnership than has any other bank in the
Lnited States. The bank now has 1,087,000 depositors and the accounts o f these
customers total $575,000,000. The bank
ranks second in the United States in the
amount o f invested capital, with capital,
surplus and undivided profits o f $105,000 ,000 .

George P. Edwards, publisher of the
Coast Banker, has been mentioned as
state corporation commissioner o f Califor
nia. Governor Young announced that he
Avould appoint a southern Californian, and
this might disqualify Mr. EdAvards, Avho
lives at Oakland and has his office in San
Francisco, although he also maintains an
office in Los Angeles. Mr. EdAvards’ long
experience Avith the banking conditions
o f his state, most admirably fits him for
such a position.

Craig B. Hazelwood, vice president of
the Union Trust Co., Chicago, Avho be
lieves very strongly in advertising in
financial journals, sent us a clever para
graph from the menu o f a leading restau
rant Avhere he frequently dines.
“ Day
before yesterday these beautiful oysters
Avere frolicking under the last rays o f sun
shine along the sandy bottoms o f DelaAvare
Bay.
Cruel fate, by the hand of man,
snatched them from their playground.
They Avere inspected, shucked and shipped
to us by express the same day, and here
they are to appease that craving so long
suppressed.”
21

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Minnesota Bankers Hear and Talk Farm
—----------- — — ------------- ^ Problems
now being done by trucks that would have
been done by railroad trains had the auto
mobiles and trucks not been available.
Discussing the “ State Outlook for Agri
culture,” Andrew Boss, vice director of the
university experiment station, said, in
part :
The Minnesota Outlook

A group of bankers and farmers studying the dairy cow at the short course held
last month at the university farm, St. Paul.

HE Banker-Farmer short course
given at the University Farm o f the
Minnesota State University at St.
Paul, March 15th and 16th, was a success
so far as the program was concerned, but
the percentage o f bankers in attendance
was so small that university authorities
will probably not repeat the course next
year. Several well known agricultural
authorities spoke at the business sessions.
Bankers and farmers were urged by F.
W . Peck, director o f the university’s agri
cultural extension service, to assist the
movement for the keeping o f farm records
and accounts by farmers generally. Rec
ords o f business transactions and o f the
results obtained from live stock and crop
production are of material help in plan
ning the operations o f the future, he said.
The extension division has organized a
state-wide project in farm management
and the keeping o f farm accounts and
offers the services o f a specialist, who is
in charge o f a correspondence course, in
presenting the lessons and checking the
year’s records kept by individual farmers
who join the class. The only cost to the
farmer is postage and a small sum for
two account books.
Mr. Peck also emphasized the impor
tance of planting only tested and virile
seeds— a need more obvious this year than
in many years past because o f the ear y
frosts and prolonged wet weather last
fall. All seed corn should be tested, he
said, as a means o f insurance against a
poor crop. In dairy feeding schools held
over the state by speciaHsts o f his divi
sion attention was being directed particu
larly to the need of proper feed combina

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tions to meet the scarcity of hay and oats
in many localities. Ways fo r more eco
nomical production by dairy herds and
poultry flocks, by means o f testing, culling
and feeding, were also being emphasized.
Will Push Club Work
Boys’ and girls’ club work, which showed
a 15 per cent increase in enrollments in
1926, is to be pushed again this year.
More work is to be done upon the live
stock projects and the number o f sum
mer camps will be increased.
William Boss, chief o f the division of
agricultural engineering, gave the opening
address the second day o f the short course,
speaking on the subject, “ The Engineer
ing Needs o f the Farmer and How They
Can be Met.”
Professor Boss took up in turn such
subjects as the operation o f machinery,
the clearing o f land by the use o f pyrotol,
land reclamation by drainage systems,
farm buildings, installation o f water sys
tems and the use o f self-oiling windmills,
and power farming.
Up to 1923, he said, the number of
horses on farms in Minnesota continued to
increase each year in spite o f the fact
that automobiles, tractors and trucks were
coming into increasing use. This was due
to the fact that the amount o f work to be
done also increased in the period men
tioned. In many cases the work done by
the automobiles and trucks is not work
that would have been done by the horses.
It would either have gone undone or it
would have been done by the railroad com
panies. Many trips are now being taken
by the automobile and much hauling is

“ Agriculture in Minnesota in 1926 ex
perienced low returns as a whole. In
some sections o f the state where crops were
good and where dairy products and hogs
were major enterprises the returns were
very satisfactory. In areas where crops
were the main source o f income and where
drouth conditions prevailed the incomes
were low. Conditions for the production
of crops the coming year appear to be
better than they were a year ago. There
is more moisture in the ground and spring
appears to be coming on earlier. Both
o f which are advantages in crop produc
tion. Live stock prices are at the present
time very satisfactory. The prospetcs are
that they will continue to be satisfactory
for beef cattle, dairy products and hogs,
the three largest factors in the live stock
income.
“ It is believed to be good policy to main
tain or reduce slightly the acreage in
crops. Flax may be excepted because the
United States produces only a little over
half o f the flaxseed needed. It is believed
that the acreage o f this crop could be
expanded 10 per cent without seriously
reducing the market price. More legumes
should be sown fo r pasture and hay and
live stock production should be increased
moderately. It is better agricultural pol
icy fo r the state to have a full supply of
feed crops on hand with a moderate pro
duction o f live stock than to have an over
production o f live stock and be short of
feed crops. Land sown to legumes will
be improving fo r crop production later
when needed.
“ Conservatism in expenditures, effi
ciency in production and lowered costs
of operation are the best insurance that
Minnesota farmers can write.”
Then the Hair Flew
“ It must be three years since I saw you
last. I hardly knew you— you have aged
so !”
“ Really! Well, I wou'dn’t have known
you except for that dress.” — Judge.
One on Every Corner
“ Is your husband fond o f home cook
ing?”
“ Oh, yes, we always dine at a restaurant
that makes a specialty o f it.”

Formal Opening of New Building March 21, 1927

“Forward—
w ith K eo k u k ’s L arg est B a n k !”
During its life of over half a century, Keokuk’s largest banking in
stitution has progressed conservatively and surely, and now its
present building becomes inadequate as its home.
The new bank structure erected immediately opposite the old loca
tion is now completed. It is an imposing building, yet practical, and
affords the State Central Savings Bank the opportunity of better
facilities for an even greater measure of service to its Iowa banking
friends.
Keokuk’s largest bank built on the firm foundation of Keokuk’s
steady growth— confidently expects to continue indefinitely “ build
ing for Keokuk and its recognized financial solidity.”

T h e S tate C en tral Savings B ank
Keokuk, Iowa
ACCOUNTS OF B A N K S AND B A N K E R S INVITED

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THE

NORTHWESTERN

BANKER

April, 1927

A U N I O N F OR
HE consolidation of the Cedar Rapids National
Bank and the Security Savings Bank is a
symbol o f the spirit of Cedar Rapids and Iowa.
Certain that the future progress o f this great city
and this great state can be furthered only by real evi
dence of business confidence— these institutions
have joined hands for “ greater service.”
The larger and stronger bank made possible by this
union will be known as the Cedar Rapids National
Bank with assets of $16,000,000 and deposits of
more than $14,000,000.
To you this merger means the continued opportunity

The CEDAR RAPIDS
OFFICERS
Ralph Van Vechten, Chairman of the Board
Glenn M. Averill, President
E. M. Scott, Vice President
C. C. Kuning, Vice President and Cashier

Van Vechten Shaffer, Vice President
Geo. F. Miller, Vice President and Trust Officer
Frank Filip, Vice President
Peter Bailey, Asst. Cashier

Total Assets $16,000,000.00

CED A R

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Federal Reserve Bank of St. Louis

T II E

April, 1927

THE

N O R T II W E S T E E N

BANKER

FUTURE

of maintaining banking relations with an institution
building for a greater Iowa.
Located as we are in the very heart of the richest
territory in the world— we look forward into the
business future with genuine faith and conviction.
The purpose of the union of these two banks is
apparent. W e realize that a city, state or nation
cannot advance ahead of its credit supply. Deter
mined to contribute in a large way to the future of
our city and state— we have created an enlarged
institution— with greater facilities for true service—
and a real desire to serve you.

NATIONAL BANK
OFFICERS
Marvin R. Selden, Asst. Cashier
Bertha M. W olf, Asst. Cashier
George W. Swab, Asst. Cashier
Maude W. Carpenter, Asst. Cashier

Walter Allison, Asst. Cashier
R. I). Brown, Asst. Cashier
O. K. Kearney, Asst. Cashier

Deposits Over $15,000,000.00

RAPIDS

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Banks Favor Newspaper Advertisin
H IR T Y per cent o f the banks in
South Dakota, including a b o u t
twenty banks in towns not served
by newspapers replied to the advertising
questionnaire early last month, and 61
per cent o f these placed newspaper ad
vertising first in importance. Twentythree per cent of the banks gave newspa
per advertising second place while only
8 per cent placed newspaper advertis
ing in third place. These figures are from
109 banks in newspaper towns.
Calendars ranged second with 21 per
cent o f the banks giving this type o f
advertising first place.
Thirty-six per
cent o f the banks give calendars second
place.
Circular letters or bulletins were given
third place, 16 per cent o f the banks p a c
ing this type o f publicity in first rank.
Movie advertising or miscellaneous each
received one vote fo r first place. Only
three banks placed novelties first.
One interesting item brought forth in
the survey is the expression of banks as
to whether they expect to increase or de
crease any o f the various forms o f ad
vertising. Relative to newspaper adver
tising, o f the 109 banks, 21 banks intend
to increase, 41 banks will continue about
the same while 28 banks expect to cut
down their newspaper appropriation. As
to calendars or novelties, 8 banks will
increase on this item, 14 will continue
their present policy while 54 will de
crease or cut out this item entirely. As
to bulletins or circular letters, 31 banks

B y Geo. A . Starring
Secretary South Dakota Bankers
Association

The material on this page is
the result of an extensive survey
recently made by Secretary Star
ring among South Dakota bank
ers, on their advertising.
It
should be of real interest, like
wise, to bankers in other states.
— Editor’s note.

plan to increase the expenditure fo r this
item, 13 will continue their present bud
get while 34 will decrease or eliminate
this item altogether.
Average Per Bank
The banks heard from spent in 1926
fo r all advertising, $47,887.95, or an
average o f $439.34 per bank. Pi’obably
$175,000.00 was spent fo r all kinds of
advertising last year by South Dakota
banks. The amount spent last year by
the banks which replied to the question
naire fo r newspaper advertising alone
amounted to $21,888.57 or an average of
$200.81, or 34 per cent o f the total adver
tising budget. Probably $80,000.00 was
spent by South Dakota banks last year in
newspaper advertising.
Calendars and novelties rank second
place in total expenditure Avhich was

$11,441,70 or an average o f $lf)4.97 per
bank. The amount spent for bulletins
or circulars was $4,424.63 or an average
o f $40.60. F or movie ads the expenditure
was $1,603.05, or an average o f $14.70 per
bank. For miscellaneous items, contri
butions and other items charged to ad
vertising the expenditure was $6,048.09.
Eliminating the banks in the larger
cities, we find that the total expenditure
per bank in the average South Dakota
town with weekly papers is $305.12 of
which $149.04 is spent for newspaper dis
play. The average amount spent for
newspaper advertising in the larger cities
with daily newspapers is $713.36 per
bank.
Concerning the amount appropriated
fo r advertising, 8 banks report that their
advertising budget is based upon a per
centage ranging from one-fifth o f 1 per
cent to 1 per cent. The proportion o f
operating expenses charged to advertis
ing ranges from one-tenth o f 1 p e rce n t
to 18 per cent— from 2 to 5 per cent being
most frequently mentioned.
Eighteen
per cent o f the banks replying have year
ly contracts with their newspapers.
Seven per cent o f the banks buy a com
mercial advertising service costing from
$10 to $360 per year with an average o f
about $100. The advertising services
most frequently mentioned are Craddick,
Wessling, Cretcher and U. B. Thrifty.
The size o f advertisements most fre
quently mentioned are 2 columns by 6
inches and 2 columns by 8 inches.

T w o Banks Merge at Cedar Rapids

T MEETINGS o f the boards o f di
rectors o f the Cedar Rapids Na
tio n a l Bank and the Security Sav
ings Bank held last month, it was unani
mously decided that a merger o f the two
institutions, operating as the Cedar Rap
ids National Bank, would be very bene
ficial to both banks, to their depositors,
and to their entire community. Agree
ments completing this action were ap
proved by both boards, and the business
o f the Security Savings Bank has been
moved to the Cedar Rapids National and
the two banks are operating as the Cedar
Rapids National Bank, in its present
banking room. The matter of combining
the two banks has been in the minds of
the directors of both institutions fo r
many years, but certain laws in the Na
tional Banking Act would not permit of
such combinations. However, at the last
session o f Congress, the McFadden bill
was passed making it possible to accom
plish what both banks have desired fo r
26

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Federal Reserve Bank of St. Louis

Cedar Rapids National
Officers
Chairman of the Board, Ralph Van
Yechten.
President, Glenn M. Averill.
Vice Presidents, E. M. Scott, Charles
C. Kuning, Van Vechten Shaffer,
George F. M iller, and Frank Filip.
Cashier, Charles C. Kuning.
Assistant Trust Officer, George W .
Swab.
Assistant Cashiers, P e t e r
Bailey,
Marvin R. Selden, Bertha M. W olf,
George W . Swab, Maude W . Car
penter, W alter Allison, R. D. Brown
and O. K . Kearney.

a good many years. This law provides
ways and means whereby banks may
merge without conflicting with either the
state laws or the National Banking Act
and it also places a National Bank in
position to give to customers all of the

facilities offered by a State Bank as well
as retaining all o f the facilities o f a na
tional institution. The combination will
operate as a National Bank under the
direct supervision o f the United States
government.
History of the Banks
The histQry o f the two banks has been
closely interwoven fo r many years. In
1877 G. F. Van Yechten reorganized the
old Union Bank and operated it fo r ten
years as a private bank, when it was in
corporated as the Cedar Rapids National
Bank, with A. T. Averill, president, and
Ralph Van Yechten, cashier. Only a
short time after the organization o f the
Cedar Rapids National Bank, G. F. Yan
Vechten organized a strictly savings in
stitution, taking in no commercial busi
ness and operating under the laws o f the
state o f Iowa as the Security Savings
Bank, this institution now being in the
fortieth year o f its service to the public.

April, 1927

T II E

During the years follow ing C. D. Van
Vechten and George B. Douglas were offi
cers and directors o f both banks and up
to the present time the Van Veehtens,
Averills and Douglas’s are largely inter
ested in both institutions, as are many
other o f the stockholders. It is interest
ing that on the fortieth anniversary of
both institutions they should be put to
gether and made the largest banking in
stitution in Cedar Rapids, both as to cap
ital and deposits. It is a singular cir
cumstance that in the year 1877 when
both banks were organized, E. M. Scott,
now president o f the Security Savings
Bank, was the first teller in the Cedar
Rapids National Bank. Mr. Scott will
assume the office o f vice president in the
combined institution, as will also Mr.
Frank Filip o f the Security Savings
bank. The other officers and clerks of
the Security Bank will be retained and
will have practically the same duties and
titles they now hold in the Security.
The officers o f the bank will be : Ralph
Van Vechten, chairman o f the board ;
Glenn M. Averill, president; E. M. Scott,
vice president; C. C. Kuning, vice presi
dent and cashier; Van Vechten Shaffer,
vice president; George F. Miller, vice
president and trust officer; Frank Filip,
vice president; Peter Bailey, assistant
cashier; Marvin R. Selden, assistant
cashier; Bertha M. W olfe, assistant cash
ier; George W . Swab, assistant cashier

N O R T H W E S T E R N

B A N K E R

and assistant trust officer; Maude W.
Carpenter, assistant cashier; W alter A l
lison, assistant cashier; R. D. Brown, as
sistant cashier; 0 . A. Kearney, assistant
cashier.
Sutherland C. Dows, John M. Ely and
E. M. Scott have been made directors of
the Cedar Rapids National.
For the present and until such time as
the necessary enlargements are made in
the banking rooms o f the Cedar Rapids
National, the safe deposit and steamship
business o f the Security Savnigs Bank
will be maintained in their present quar
ters. All the balance o f the Security
business will be transferred to the Ce
dar Rapids National Bank rooms, where
extensive alterations are under way to
give the public the best banking fa cili
ties to be had. The Security buildingwill continue to be operated as a high
class office building and in due course
alterations will be made in the present
banking room to fit it fo r general com
mercial purposes.
Combined Figures
The first statement published by the
Cedar Rapids National Bank was May
14, 1877, at which time it had a capital
o f $100,000, a surplus o f $2,000 and de
posit o f $210,000, Avhile the first state
ment o f the Security Bank showed a cap
ital o f $50,000, undivided profits of $112,

and deposit o f $1,055.60. The combined
bank will show a capital o f $600,000,
surplus and undivided profits o f approxi
mately $500,000, and added to this the
capital and surplus o f the Cedar Rapids
National company, owned and controlled
by the stockholders o f the bank, makes
the combined total o f capital, surplus and
undivided
profits
of
approximately
$1,225,000, with deposits o f approximate
ly $14,500,000, and circulation privileges
o f $600,000, making the total resources
approximately $16,000,000.
Both o f these banking institutions
have always maintained the idea o f sta
bility in all transactions and their growth
has been predicated on methods o f sound
financing, taking a prominent part in
making the name Cedar Rapids synony
mous with sound banking. The directors
o f the combined institution represent a
large percentage o f the leading industries
o f this city, men who have built the com
munity and who still continue to give
their time and money to further its inter
ests. There is no doubt that the com
bination will have the approval o f the
depositors o f both banks and the busi
ness interests o f Cedar Rapids, as well
as the public. It is another great step
forward in Cedar Rapids banking, and
gives greater facilities fo r the future
growth o f Cedar Rapids as a banking,
commercial and industrial center.

V U E H A V E specialized
on a personal type o f
correspondent bank serv
ice for many years at the
N ew York end.
W e offer you all o f our
services.

Member Federal Reserve System
Resources Over Fifty Million Dollars
In the Center of Things Financial

Fidelity Trust Company
120 Broadway

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Federal Reserve Bank of St. Louis

o f b[ewT!ir§i

Equitable Building

Advertising and Selling Trust Service

N D E ALIN G with our subject, as in
dealing with any other subject, we
must strive to discover and discern
the true or right idea o f it, if we wish to
make any progress in the right direction.
In both the advertising and the selling
o f trust services, we should deal with the
true and right idea o f trust services, or
else the money spent in advertising and
the effort put forth in selling are worse
than wasted.
In dealing with our subject, I shall en
deavor to treat it wholly from the view
point o f the true or right idea o f it.

B y Sam uel Witting
Assistant Secretary, Continental and
Commercial Trust and Savings
Bank, Chicago
Now why should we stress the right or
true idea? Because it is the only perma
nent thing about anything and every
thing. The idea that 2 x 2 = 4 is permanent
because it is true and right. There is
nothing permanent about the figures them
selves that we may use to illustrate the
science o f mathematics. There is nothing
eternal about the lead pencils or the

crayon that we may use in writing these
figures, nor is there anything enduring
about the paper or the blackboards upon
which these figures may be written, but
the idea that 2 x 2 = 4 is the same today as
it always has been, and it will always be
the same as it is now. Can anyone con
ceive o f a time when 2x2 did not make 4 ?
Is there anyone who can conceive of a
time when 2x2 will ever not make 4?
You may write on the blackboard
2 x 2 = 4 — erase it. Have you erased or
wiped out any part o f the science o f num
bers? Not a bit o f it. W hy? Because
the science o f numbers exists as an idea,
not as blackboards, paper, crayon or lead
pencils.
An idea, therefore, is indestructible,
permanent, enduring, eternal or, in Bib
lical language, “ from everlasting to ever
lasting.” Webster said that the only per
manent thing that a man can leave to
posterity is a good idea.
Must State Truth

"Again—Thank
Mutual confidence increases w ith each
n ew o p p o r tu n ity to se r v e , ste a d ily
strengthening the bond of friendship be
tween this Bank and the many fine in
stitutions for w hich it has acted as
Chicago correspondent throughout ten,
twenty, and even thirty years or longer.

1927

1869

Frederick H

R aw son

H ar ry A . W

Chairman of the Board

heeler

President

C raic B H azlew ood
V ice-President

UNION TRUST
COM PANY
C H IC A G O
Complete

Private W ire

HI
28

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Federal Reserve Bank of St. Louis

Service — D irect B /L

and

C ollection

Facilities

An advertisement o f trust services must
state a true or right idea o f trust services,
if it is to have any permanent value or
do any lasting good.
Now an idea, to be a real, true or right
idea, must be an idea o f the absolute
truth regarding the subject advertised.
It must be truthful. And being the full
truth o f the subject it cannot contain any
exaggeration. It does not strain at the
truth, it does not omit any essentials, and
therefore, it is not misleading.
A true or right idea is the only thing
that has power. When the idea that
2 x 2 = 4 began to unfold in your individual
consciousness you were absolutely helpless
to prevent its unfoldment, or offer re
sistance o f any kind, for the idea kept on
unfolding in your consciousness until you
understood it and could demonstrate it
and, when you understood the idea, you
were fo r it, because you saw that you
could use it and you have been using it
every day since that unfoldment took
place. Now why were you unable to re
sist that idea? Because the right idea
has all power, and blackboards and paper,
crayon and lead pencils, are helpless to
offer any opposition. The right idea is
a manifestation o f omnipotence. Does
anyone believe that another power will
ever rise that will be strong enough to
overthrow or destroy the science o f num
bers or the idea that 2 x 2 = 4 ? Do you
suppose that the statement that 2 x 2 = 3 ,
which sometimes presents itself, will ever
be powerful enough to overthroAV the
science of mathematics, or the idea that
2x2=4?
Never! W hy?
Because the
statement 2 x 2 = 3 is a false claim, a false
statement. Anything that is false can
not be understood, it can only be believed.

April, 1927

THE

You cannot understand or demonstrate
that the moon is made o f green cheese,
one can only believe that. The same is
true o f the tradition about Santa Claus.
A false belief, or falsity of any kind, does
not embody any poAver in itself. The
falsity that 2 x 2 = 3 has been presenting
itself from time immemorial, but you can
not point to any progress it has made in
destroying the right idea of mathematics.
It does not embody any power in itself
and every time that it raises its head it is
destroyed and annihilated by the right or
the true idea, \Adiich is everyAvhere.
Astronomy tells us that there are nebu
lae so far apart that light traveling at the
rate o f 16 billion miles a day would take
three millions o f years to traverse the dis
tance from one nebula to the other. When
you multiply this distance by the days
o f the year and again by the number o f
years, Ave find that it is a distance o f 17'
quintillion 520 quadrillion miles— a dis
tance inconceivable to the human mind,
and yet every inch o f that distance 2 and
2 would always be 4.
No Results Without Truth
The right or the true idea about every
thing is everywhere and has all poAver and
that is the sole reason why any statement,
not Avholly truthful or right, can do noth
ing in the right direction or accomplish
any lasting results.
Anything that is
false, or not Avholly true, is constantly
changing. Ten or fifteen years ago many
theories in economics, psychology, soci
ology, etc., Avere taught which today are
tabooed by college professors, and this
for the simple reason that those theories,
which Avere taught as truth, Avere not true
and, therefore, they have been discarded
for some that are thought to be true at
the present time. And so it will ever be,
until Ave arrive at the right or true idea
o f those subjects.
A true idea such as
2 x 2 = 4 does not change.
Do you not already see the importance
and advantage o f discovering or discern
ing the right or true idea o f trust services
in order really or properly to advertise
them? I f we state the true idea o f trust
services in our advertisements, it can be
understood by the people and, when under
stood by them, they Avill be for it, just as
you and I are for the idea that 2 x 2 = 4 ,
and they will use it as much as Ave use
the right idea o f the science o f mathe
matics.
In trust activities, hoAvever, Ave find as
many falsities clamoring for recognition
as Ave find in most every other field of
human endeavor, but it is only as Ave dis
cern the true idea about trust services,
Ave can begin to clear away the rubbish.

A salesman representing one o f the
large advertising firms came to us and
tried to sell us an insurance trust compaign. That campaign Avas based on sta
tistics which he claimed shoAved that all

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Federal Reserve Bank of St. Louis

NORTHWESTERN

BANKER

THE

proceeds o f life insurance paid in lump
sums to widows or children were entirely
dissipated and wasted within seven years.
When asked what method he, or the in
surance companies, had used by means o f
which they could follow a lump sum pay
ment o f ten, twenty-five, fifty, or one
hundred thousand dollars to a widow or
a child, and watch those proceeds so that

NORTHWESTERN

BANKER

they could honestly say at the end of seven
years that these assets were entirely
wasted, he threw up his hands and con
fessed he had none himself and knew o f
none that the insurance companies used.
However, he came back with the bravado
o f the so-called successful salesman and
said that the statement was based upon
statistics and proven by them. When he

April, 1927

was pressed as to what method was used
in compiling those statistics, he frankly
confessed his ignorance about the whole
matter and admitted it was most probable
that no method could be devised to deter
mine such a result. Insurance men, with
whom I have discussed this point, have
admitted that they did not know o f any
method used by insurance companies for
this purpose. But you will meet this
argument almost every day in the trust
field.
Inductive Reasoning

National Bank of Commerce
in NewYork
E sta b lis h e d 1839

Statement of Condition, December 31, 1926
RESOURCES
Loans and D iscou n ts.......................................... $368,631,960.22
United States Securities....................................
49,817,437.67
Other Bonds and Securities................................
16,115,825.45
Stock of Federal Reserve Bank..........................
1,950,000.00
Banking H o u se ...................................................
4,000,000.00
Cash in Vault and in Federal Reserve B ank...
60,999,148.27
Due from Banks and Bankers............................ 178,243,824.00
Interest Accrued.................................................
1,444,174.67
Customers’ Liability under Acceptances..........
35,912,273.13
$717,114,643.41
LIABILITIES
Capital................................................................. $25,000,000.00
Surplus................................................................ 40,000,000.00
Undivided Profits.............................................
2,479,320.07
Reg. Dividend payable Jan. 3,1927 $1,000,000
Extra
“
“
“
500,000
1,500,000.00
Deposits ...............................................................
563,356,022.65
Bills P ayable.......................................................
24,000,000.00
Reserved for Interest, Taxes and other Pur
poses .............................................................
6,579,882.85
Unearned Discount..............................................
984,154.27
Liability as Acceptor, Endorser or Maker on
Acceptances and Foreign Bills...............
53,215,263.57
$717,114,643.41

Chairman o f the Board

President
ST EV EN SO N E. W AR D

J A M E S S. A L E X A N D E R

D irectors
J A M E S S. A L E X A N D E R

V A L E N T I N E P. S N Y D E R

J O H N W . D A V IS

C H A R L E S E. D U N L A P

H A R R Y B. T H A Y E R

H E N R Y W . de F O R E S T

A N G U S D. M CD O N A LD

J A M E S T IM P S O N

J O H N T. D O R R A N C E

GEO RG E E. R O O S E V E L T

E D W A R D D. D U F F IE L D C H A R L E S B. SE G E R

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Federal Reserve Bank of St. Louis

ST E V E N S O N E. W A R D
T H O M A S W IL L IA M S

Here we have a good example o f in
ductive reasoning and the danger o f try
ing to draw a general conclusion from a
few particular cases. A few moments,
thought should convince us that such a
statement was well-nigh impossible to
prove and, at best, it is only a guess. Yet
I know some trust companies and banks
with trust departments that are waging
an insurance trust campaign based upon
that guess.
Do you suppose that anything perma
nent can be accomplished by such a cam
paign? Such a trust company probably
will find that it will have many insurance
trusts revoked, or that it will be com
pelled to sell its customers all over again
on a basis nearer the right idea. In either
case it is a bad investment o f time and
money.
This case shows that men can hypnotize
themselves into believing what they may
want to believe, or that which they find
convenient to believe. It is bad enough
when the one who does it is alone con
cerned,, but when an advertising man
does that it awlays costs his employer
some hard-earned money. This illustra
tion a1so shows that, when it comes to dis
torting the truth, nothing can do that
so well and with such seeming authority
as statistics. They do not ahvays em
body the true or right idea.
Some five years ago there unfolded to
us one o f these right and true ideas o f
trust services. W e had it set forth in an
advertisement and at the end o f the first
year we could trace directly to the idea
over $8,000,000 o f potential trust busi
ness secured as a result o f it. W e are
still securing trust business as a result
o f that advertisement and can trace many
millions more o f potential trust business
to that idea.
And right here appears the value of
the true or right idea in advertising and
selling trust services. A true idea, once
set in operation, will go right on unfold
ing in the individual consciousness o f man.
It knows no boundary and men are help
less to resist this unfoldment.
When
men understand that idea they will use it,
just as they use all ideas they understand.
And an advertising man may believe that
he needs an advertisement every two weeks
in the papers to keep the trust services o f
his company or bank before the public,

April, 1927

THE

but that does not apply in the realm of
ideas, or when we advertise the true idea
o f trust services.
W e do not see any advertisemnet that
2 x 2 = 4 to keep that idea in operation.
That idea has been set forth and put into
operation in the human economy and it is
keeping- right on unfolding itself and an
nihilating everything unlike itself. No
one now thinks o f opposing it.
So when we come to advertising trust
services, all we need to do is to set a true
idea in operation and it will keep on un
folding itself in the individual conscious
ness o f men until it is understood.
What Is the Right Idea?
Now what is the right idea of trust
services? Far be it from me to define
it for you. Each day I am striving to
discover more o f it and discern it more
clearly.
We all know that a trustee can do for
a man what a man can do fo r himse’ f,
except a few personal things such as get
ting married, voting, etc., and we all
know, too, that men, because o f shiftless
habits or press o f business, are neglectful
o f their own personal affairs or o f the
personal affairs o f others. The lawyer
who draws wills for others but fails to
draw his own will is a good example of
this.

NORTHWESTERN

dividual consciousness o f man and thus
prepare the soil fo r the harvest which
the trust salesman is to reap.
In selling trust services, the same rule
applies. The trust salesman must be hon
est, he should dedicate himself wholly to
this true idea o f trust services. In his
sales talks, letters, telephone calls and
interviews with customers, he should never
depart one iota from the true idea.
Five years ago it was my privilege
to talk with a certain man about trust
services. Three years later he came into
the bank and laid my card (which I had
left), on my desk and asked to have our
trust company take care o f his personal
affairs. I f that interview had not con
tained something o f the true idea o f trust
services, it could never have produced
such results. I f it had been based upon
falsity and misrepresentation, it would
have been as changeable as all false
things are.

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Federal Reserve Bank of St. Louis

I f the trust advertising man advertises
the true idea, and the trust salesman de
parts from it in any degree, it is more
or less like black rust getting into a field
o f wheat; instead o f reaping a harvest of
plump kernels, they will be shriveled up.
I f the trust advertising man does not
advertise the true idea, then no matter
how honestly the trust salesman may deal
with the true idea, the harvest will not be
as full and rich as it should be, because
the dictum o f the Scriptures is “ As ye
sow so shall ye reap.”
The trust advertising man and trust
salesman should cooperate for another
reason. The salesman, in selling trust
services, meets with certain sales-resisting
forces— certain obstacles. Just as a gen
eral, during a war, will meet an obstacle,
such as a fort, that opposes his advance
across the country.
As the general sends forth shell toward
the fort to remove the obstacle, so the

R o y a l U nion L ife
In

su r a n c e

o m p a n y

DES MOINES, IOWA

The true fundamental idea o f trust serv
ices must, therefore, be discoverable in
the ability o f a trustee to relieve a man
o f the personal cares and responsibilities
regarding his own affairs or the personal
affairs o f others.

This is what I would call the generic
idea o f trust services, or the one funda
mental idea that covers all the services o f
a trust company. This generic idea is
made up and embodies all the right ideas
o f all the individual trust services which
a trust company can render. These ideas
are inexhaustible, attractive, and enduring,
and can be and will be used when under
stood. These ideas make the most valu
able material that there is fo r adver
tising trust services and they can be stated
in a most interesting and attractive man
ner. The true idea is always attractive
and nothing else should be attractive to us.
Trusts are based upon faith and con
fidence. No one has any faith or con
fidence in the false statement that 2 x 2 = 3 ,
but note the unbounded confidence that
we all have in the right idea that 2 x 2 = 4 .
Therefore, in the proportion that a trust
advertisement embodies the true or right
idea, in that proportion does it have the
power and ability to inspire the faith and
confidence o f mankind.
Advertising the true idea o f trust serv
ices prepares the way fo r the salesman to
sell trust services. The advertising man
should, through his advertisements, send
forth the true idea into the, so-called,
realm o f human thinking, which will im
mediately begin to unfold itself in the in

BANKER

Offers

unexcelled

line of policy contracts.

Our

Juvenile

policies,

written on children as
young as one day old, go
in full benefit auto
matically at age five
without re-examination.

Our special low r a t e
policies to business and
professional m e n a r e
fast sellers.
Royal Union Life Building, Cor. 7th and
Grand Avenue, Des Moines, Iowa

We w r i t e

women on

equal basis with men.
Special agency openings are now available. Write
W illiam Koch, Vice President and Field Manager.

Royal Union Life Insurance Company
Des Moines, Iowa
A. C. TUCKER, President

THE

N 0 R T II W E S T E R N

T o H ave Lived L o n g

is
T o H ave Served W e ll

Over one hundred years ago, in the
days of experiment, speculation, and
uncertainty, two of the outstanding
banks of the city were the Philadel
phia Bank and the Bank of Stephen
Girard.
W ith lit t le b a n k in g p reced en t to
guide them, less banking law, and no
su p e rv isio n w h atever, on ly those
institutions could survive the times
whose management was in the hands
of directors and officers who needed
neither law nor supervision.
T o d a y t h is , th e le a d in g ban k in
Philadelphia,enjoys the same careful,
experienced, unbroken succession of
able management as characterized
the Philadelphia and Girard Banks
as separate institutions.

THE

PHILADELPHIA - GIRARD
N ATIO N AL BANK
PHILADELPHIA, PA.

Capital, Surplus and Profits . . . $28,500,000

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Federal Reserve Bank of St. Louis

BANKER

April, 1927

trust advertising man and trust salesman
should work out the right idea to be sent
forth in a trust advertisement to remove
the sales obstacle. This right idea will
unfold in the individual consciousness o f
man and thus clear the ground for the
trust salesman.
What better example could be cited of
the eternality o f the right idea, and words
expressing that right idea, than that of
Christ Jesus, who said, “ Heaven and
earth shall pass away, but my words shall
not pass away until all be fulfilled.” And
His words have not passed away, but are
being read and studied at the present time
more than ever before.
When we analyze the four gospels, we
find that all that the good Master did was
state, elucidate and demonstrate the right
idea o f truth, which He declared would
make all mankind free. His words have
stood the test o f twenty centuries o f time.
Is this not a standard worth while for
us all to keep before us and strive to
emulate ?
The right or true idea should challenge
our best efforts to the utmost and it is
the fundamental and real bedrock for all
permanent work in the advertising and
selling o f trust services.
Called at 105
The W hite-Phillips Investment Com
pany o f Davenport, Iowa, announce that
the Red River Valley Power Company
First Mortgage O^s and General M ort
gage 7s have been called at 105.
The Red River Power Company, lo
cated at Crookston, Minnesota, operating
in that city and supplying the surround
ing territory, was originally financed by
the White-Phillips Company. In May,
1924, they brought out a $700,000 issue
First Mortgage 6 ^ s due May 1, 1944,
and $150,000 General Mortgage 7s due
January 1, 1930. Both issues have now
been called at 105.
The Interstate Power Company, lo
cated at Chicago and New York, have
bought the Red River Valley Power prop
erties and merged them with their or
ganization. This latter company has re
issued the Red River Valley issues mak
ing a $20,000,000 First Mortgage issue
o f the Interstate Power Company prop
erties.
Try Anything Once
A blear-eyed man entered a savings
bank and hurried up to the teller’s win
dow. “ Lemme have two cases right away,”
he said, pushing a $50 bill through the
grating.
“ What do you mean? Two cases of
what?”
“ Hanged if I know what name you give
it,” was the reply, “ but I saw a sign out
side that said ‘4 per cent,’ and I ’ll drink it
whatever it is.”

April, 1927

T li E

N O 11 T II W E S T E R N

BANKER

A Constructive Piece of Legislation
B y Clifford DePuy
Publisher, Northwestern Banker

NE o f the most constructive pieces
of bank legislation presented to any
bank legislature this year was the
bill prepared by the legislative committee
o f the Iowa Bankers’ Association, relating
to the banking situation in this state.

This bill contains 31 sections covering
every important point connected with the
banking business, but in this article we
wish to call especial attention to Section
29 relating to “ District Banking Associa
tions.” 'The state o f Iowa is to be divided
into not less than 11 districts, and each
district will include not more than 80
banks available as members. National
and private banks are permitted to join
if they conform to the rules and regula
tions prescribed by the District Banking
Association and the superintendent of
banking and state banking board.
The members o f each District Banking
Association shall select from their mem
bers a board o f directors, the number and
manner o f selection to be prescribed by
the superintendent o f banking and the
state banking board. The presidents of
the several county bankers’ associations of
the counties located in each district shall
constitute the district advisory committee.
The chairmen o f the district banking as
sociations shall constitute a state advisory
committee.
Each district banking association shall
provide a scale o f assessment for its mem
ber banks, sufficient to cover all operating
and examining expenses.
A special insignia or emblem may be
prescribed by the superintendent of bank
ing and the state banking board, which
insignia may be used on letterheads and
in advertising and other publicity.
The District Banking Association shall
have authority under the direction and ad
vice o f the superintendent o f banking and
state banking board :
1. To carry on any and all work not in
consistent with law that shall aid
them in making their banking insti
tutions still stronger and still more
efficiently managed.
2. To safeguard each other if and when
any emergency may arise.
3. To establish any practical means of
printing checks and drafts and such
transit items fo r their own district
and for other districts.
4. To establish district credit bureaus
and disseminate credit information
on borrowers to the members o f their
own district, and to the members of
the several districts if and when re
quested.
5. To set up a system of district bank
examinations by resident examiners,

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Federal Reserve Bank of St. Louis

7.
8.

provided said examiners shall be re
quired to meet the same qualifications
as bank examiners employed by the
state banking department. Nothing
herein shall prohibit the superin
tendent o f banking accepting the ex
amination of the district examiner in
place of that o f a regular state bank
examiner if the superintendent of
banking shall so desire.
To institute better and more uniform
bookkeeping systems.
To hold district meetings.
To do any and all things not in
consistent with law that shall aid
them in carrying on the purposes of
this act.
To dismiss or penalize members not
conforming to rules and regulations,
under authority from the superin
tendent and state banking board.

Members o f the District Bankers’ Asso
ciations will be required to put up a bond
with the superintendent o f banking and
the state banking board, to insure pay
ment o f all penalties that may be assessed
against them.
In the statement o f fact issued by the
Iowa Bankers’ Association, it says: “ It
is confidently believed that the people of
this state are more interested in knowing
that the worthless paper is out o f our
banks than they are in the passage o f
some Utopion scheme to keep open in
solvent banks, because the people are too
intelligent not to know that when the bad
paper is out of the banks that those banks
are just as sound and secure as they can
be made, and they are too intelligent not
to know that any state law that is passed,
compelling banks to pay the losses o f other
banks can be in great economic disasters
like we have gone through, the very thing
that would make it absolutely impossible
for the stockholders, directors and officers
to take the bad paper out of their own in
stitutions.”
I f th is b ill b e co m e s a la w , as Ave h o p e
it w ill, i t w ill be a d istin c t s te p f o r w a r d
toAvards b e tte r b a n k in g a n d b e tte r b u sin e ss
in

IoAva.

Banks

fa il

b e ca u se

th e y

n o t collect th e m o n e y d ue th e m .

can

Bonds
and A Bank’s Loan
Structure

HE source o f a bank’s in
come as well as its ability
to meet its deposit and other
liabilities rests fundamentally
in the bank’s lending operations.
L o a n s , o f w h a te v e r t y p e , p o s
se ss in v a r y i n g d e g r e e a n d c o m
p o s ite su c h q u a litie s as c e r t a i n t y
o f p a y m e n t , r a te o f in c o m e a n d
c o n v e r tib ility in to ca sh , a n d the
b a n k e r Avho Avould o b ta in m a x i
m u m r e s u lts , m a in ta in s such a r e
la tio n s h ip b e tw e e n lo a n s , r e s e rv e s
and

d e p o s its

c o m p o s ite s

the

s o lv e n c y

banks

c o m p o s ite s

and

lo a n

q u a litie s

b ili t ie s

and

earn

th e

m a x i

m u m r e tu r n on th e s t o c k h o ld e r s ’
in v e s t m e n t .

And, to accomplish this, such
a banker, in building the bank’s
loan structure, uses as materials
not only local loans and dis
counts but also commercial pa
per, bank acceptances, bonds and
mortgages, all o f which he co
ordinates from the standpoints
o f certainty o f payment, rate of
income, convertibility into cash,
and diAmrsification with respect
to type, maturity, industry and
geographical location.
Eternal vigilance is the price
o f maximum results and we in
vite you to send a list o f your
bonds to our Analytical Depart
ment fo r analysis from the stand
points o f certainty of payment,
convertibility into cash, and di
versification.

c lose r

w ill

• •

g r e a tly in cre a se d .

A Fair Question

F ir s t I l l i n o i s C o m p a n y

The teacher Avas giving the class a lec
ture on “ gravity.”
“N

oav,

c h ild r e n ,”

she

sa id ,

“ it

the

laAv o f g r a v it y th a t k e e p s u s on th is e a r t h .”

“ But,
s m a ll

p le a s e ,

ch ild ,

te a c h e r ,”

“ how

d id

th e laAv Avas p a s s e d ? ”

Ave

in q u ir e d
stick

one

b e fo re

e n a b le s th e b a n k to m e e t it s l i a

e x a m in a tio n is m a d e o f th e lo a n s to b o r
ro w e rs ,

selects lo a n s w ith su ch d e g r e e an d

BONDS FOR INVESTMENT
CHICAGO

M ILW AU K EE

ST. LOUIS

AURORA

DAVENPORT
Union Savings Bank Bldg.

T HE

34 ,

NORTHWESTERN

BANKER

A p r il, 1927

Personal Paragraphs
George E. Roberts, vice president o f
the National City Bank o f New York, has
been elected one o f three members-atlarge o f the Engineering Foundation, to
succeed Elmer A. Sperry, and will serve
fo r three years.

A Specialized
Service

Cornelius F. Kelly, president o f the
Anaconda Mining Company, was one of
the principal speakers at a recent dinner
o f the Investment Division o f the Ameri
can Bankers Association held in New
York City.

for Banks and Bankers
which is the result of more
than sixty years of experi
ence is offered hy

George M. Reynolds o f the Continental
& Commercial Bank, Chicago, reports
from California regarding business con
ditions in the west that the situation
there has continued sound, with business
progressing at a satisfactory pace.

THE FIRST
NATIONAL
B A N K OF
CHICAGO

Melvin A. Traylor, president o f the
First National Bank, Chicago, is on a
trip through the south. Among other
stops, he spent two weeks near Biloxi.
Mississippi.

and

THE FIRST
TRUST and
SAVING S
BANK
Complete facilities are pro
vided for active and inac
tive accounts, collections,
bills of lading, investments
and foreign e x c h a n g e
transactions
F R A N K O. W E T M O R E , Chairman
M E L V IN A . T R A V L O R , P resid en t

William L. Jacoby, vice president of
the A. G. Becker & Company, Chicago,
has resigned to become president o f the
Kellogg Switchboard & Supply Com
pany, succeeding J. B. Edwards, who has
retired.
Watson F. Blair, a director o f the Illi

nois Merchants Trust Company, has re
turned to his home in Chicago. Mr. Blair
recently underwent an operation in New
York.
John W . O’Leary, vice president o f the
Chicago Trust Company and president o f
the Chamber o f Commerce o f the United
States has returned from Cuba. The
February meeting o f the board o f direc
tors o f the chamber was held at Havana
on the 17th and 18th. On February 18,
Honorable Dr. Gerardo Machado, presi
dent o f Cuba and his cabinet were hosts
to the members o f the chamber board and
their wives. Prior to leaving fo r Cuba,
Mr. and Mrs. O’Leary were among the
guests at the dinner, given by Dr. Hu
bert S. W ork, secretary o f the interior
in honor o f the President and Mrs.
Coolidge. Because o f the presence o f
Henry Ford, Harvey S. Firestone, A n
drew Mellon and Simon Guggenheim, the
eastern papers referred to this dinner as
the five billion dollar banquet.
Mr. Lucius Teter, president o f the Chi
cago Trust Company, enjoyed a spring
vacation “ riding the hounds” at Pinehurst, N. C. He returned to Chicago
March 12th.
George P. Edwards, publisher o f the
Coast Banker, San Francisco, is a candi
date fo r state corporation commissioner

The Basis of Prosperity
(.Little Talks on Tiling, No. 25)

P R O F IT on his business is
the main incentive urging a
man, or an industry, to work at
his highest capacity. Without
that incentive he soon “ lays
down.” When his product is a
basic raw material, all industry
dependent on its suffers from his
let down. Most of our industries
are built upon, or around, farm

products or farm consumption.
Therefore, when agriculture is
not prosperous and producing at
full capacity the whole nation
suffers ; when it is prosperous,
so is the whole nation. That is
why the far-visioned banker ex
ercises his utmost ability to make
farming prosperous in his trade
territory.

Tile Drainage Lowers Production Costs
and Increases Agricultural Profits

Combined Resources
Exceed $450,000,000

M a s o n City B rick a n d T ile C o.
312 Denison Bldg.

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Federal Reserve Bank of St. Louis

Mason City, Iowa

Aprii, 1927

T HE

o f California. I f Governor Young sees
fit to give the honor o f the commission to
Mr. Edwards, he would be appointing one
o f California’s best boosters.
John Hogan, form er president of the
Des Moines National Bank, and now vice
president o f the Continental & Commer
cial National, Chicago, visited recently in
Des Moines. Mr. Hogan, who left the
Des Moines National several months ago,
was the third official from that institution
to go to the Continental & Commercial in
recent years.
Fred J. Figge, president o f the Ossian
Iowa, State Bank, and Mrs. Figge, have
been spending part o f the winter vaca
tioning in New Orleans. Mr. Figge re
ports a wonderful time and wonderful
weather.
W . J. Murray, one time Superintendent
of Banking for Iowa, and more recently
a vice president o f the Des Moines Na
tional Bank, and who is now located with
the California Bank at Van Nuys, Califor
nia, was recently elected vice president o f
the San Fernando Valley Bankers Asso
ciation.
The officers and directors of the State
Central Savings Bank o f Keokuk, Iowa,
were hosts recently at the formal opening
o f their new bank and office building.
The W . D. Hanna & Company, o f Bur
lington, Iowa, announce the recent ap
pointment o f L. E. Gardner as the mana
ger o f their Analytical Department. Mr.
Gardner comes to W . D. Hanna from A.
G. Becker & Company o f Chicago. He
is thoroughly fam iliar with bonds o f
every type, and will devote his time to
analyzing securities fo r banks and in
dividuals, checking the latest earning
reports, making surveys, etc.
Everett L. Harris, form erly with Lee,
Higginson & Company, has recently be
come associated with Lackner, Butz &
Company, o f Chicago, as vice president
and director o f sales.
Charles H. James has retired as vice
president o f the First National bank o f
Philadelphia after a service covering a
period o f forty-tw o years.
He entered the bank in a clerical ca
pacity in 1885, w7as elected assistant
cashier in 1892 and vice president in 1920.
Mr. James’ special hobby is to travel
in foreign countries. In recent years he
has devoted considerable time to two
ti’ips around the world, from east to west
and from north to south, visiting prac
tically all the Nations o f the world, as
far north as North Cape, and as fa r south
as Australia and New Zealand. A t the

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Federal Reserve Bank of St. Louis

NORTHWESTERN

BANKER

present time he is in the Hawaiian Is
lands.
H. E. Henderson, form erly president of
the Stanley-Henderson Company of
Cedar Falls, who disposed o f his inter
ests in that firm the first o f this year, has
announced his intentions o f continuing in
the farm loan business in eastern Iowa
and has opened his office in the Iligley
Building, Cedar Rapids.
He is well
known to Iowa bankers through his years
o f connection with the farm loan busi
ness. The name o f the new firm is “ H.
E. Henderson Farm Loans.”

Company o f Boston, accepted nearly $5,000,000 o f farm and city loans. The
actual amount was $4,713,543, divided as
fo llo w s: $3,167,305 on 479 farms, $1,546,238 on 118 city properties o f which 98
were dwelling houses and 16 apartment
buildings, housing 279 separate families.
The loans on this class of property in
January amounted to $4,375,000 making
nearly $9,100,000 on this class of loans
thus far in 1927.
Norman J. Ford, vice president of the
Illinois Merchants Trust Company, Chi
cago, will leave in May for an extended
vacation trip to Europe.

Farm and City Loans
During the month o f February the
John Hancock Mutual L ife Insurance

Fred A. Crandall, vice president of
the National Bank o f the Republic, Chi-

THE
FOREMAN
BANKS
FOUNDED 1862

W e in v ite y o u r business
on a 65-year record of con
tin u o u s g ro w th . W e are
fully equipped to serve you
in every banking function.

The Foreman National Bank
The Foreman Trust and Savings Bank
La Salle and Washington Sts.
Chicago

Resources Exceed 100 Million Dollars

THE

NORTHWESTERN

BANKER

April, 1927

cago, is planning a trip to California,
with the first stop at Pasadena. Golf
will take up considerable of his time,
among other vacation pursuits.
W. C. Cook, vice president o f the Cen
tral Trust Company, Chicago, and Mrs.
Cook have left fo r Los Angeles and other
points in California.
Chester D. Masters, vice president of
the Chicago Trust Company, Chicago, in
charge o f the banking department, re
cently addressed the Master Printers A s
sociation o f Chicago on the subject of
“ Hand-to-Mouth Buying as Viewed by a
Banker.”
State Official Dies
E. S. Delaney, 37 years old, manager
o f the Bismarck district in the office of
L. R. Baird, state bank receiver of North
Dakota, died o f heart disease recently in
the Asbury hospital. He left Bismarck
on a business trip and became suddenly
ill while attending a show in Minne
apolis. He was taken to the General hos
pital and later transferred to the Asbury
hospital, where his condition appeared to
improve. He is survived by his wife
and eight children in Bismarck. He went
to Bismarck in 1923 from Minot, N. D.
Prior to his residence in Minot he had
lived at Havelock, N. D.

HE Wessling program of
original publicity stands
upon the solid rock foun
dation of actual banking ex
perience. The simple, unique
Wessling way to the patron's
heart brings measurable returns
which are both prompt and
lasting.

T h e files o f W e ss lin g S ervices c o n
tain
a
p riceless
m in e o f in fo rm a
tion
abou t
every
state in the U n io n .
M r . D . R . W e sslin g
and his co-w o rk ers
are con stan tly in
creasing th eir store
o f facts b y
p er
sonal
in terview s
w ith thousands of
bankers
and
la y
m e n in e v e r y part
o f the co u n try.

PLANNERS
BECAME NATION WIDE
IN FIVE YEABS

« Ik J L d *

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

“ It is the best service for a
hank, regardless of price,’' one
banker wrote recently. “ We
have renewed our contract sole
ly on the results of the service."
This is the verdict of hundreds
of bankers in small towns and
large cities.

AN D

CREATORS

W ESSLIN G
L Y T T O N .

O R IG IN A L

BANK

S E R VIC E S

S E R V IC E S
IO W A

IT’S “CLEAN HOUSE”— OR BRANCH
B A N K S!
(Continued from page 18)
the assets were “ frozen,” then in most
cases the stockholder’s and director’s lia
bilities were insufficient, regardless o f the
capitalization, to pay the depositors in
full.
Eew Making Money
Neither did the fact that the country
banks deposited their surplus funds with
South Dakota depositaries have any bear
ing on the matter except in so far as they
put “ all o f their eggs in one basket.”
There were at all times good, sound banks
in the larger cities o f the state, and if
the country banker was at all proficient
in reading bank statements, he could tell
which banks were safe to hold his reserve
funds.
From reliable information it appears
that very few banks in the state are even
now making money. O f course a great
many are still charging off “ frozen assets.”
But unless the bankers o f the state adopt
a new system o f banking, and show the
I f the individual banker would survive,
he must be able to render the services re
quired o f a bank, at a reasonable profit.
He cannot do this if (a) the community is
over banked ; (b) he does not possess the
necessary qualifications o f a good banker;
(c) there is inadequate or infrequent su
pervision; (d) there is a lack of diversi
fication; (e) he renders any free services;

April, 1927

THE

( f ) he grants excessive loans, or loans not
supported by adequate security and finan
cial statements; (g) he cannot cooperate
with his competitor; (h) he pays exces
sive rates o f interest on savings or time
deposits; (i) or does not keep down the
overhead.
As set forth at the beginning, a com
munity is overbanked if it does not have
400 depositors, the size o f whose average
deposits warrant an account in the bank.
This would eliminate banks in the towns
o f the state with population o f less than
400 and there would be but one bank in
cities up to 2 ,0 0 0 with two or three banks
in each o f the larger cities.
To be successful in the future the banks
must be manned by officers possessing the
necessary qualifications. The speculator,
real estate agent, or life insurance sales
man must he discharged. The man who
takes his place must be able to analyize
costs, determine the departments and serv
ices in the bank Avhich are operated at a
loss, and have the courage to discontinue
them or put them on a paying basis. He
must be able to make conservative loans
and diversify the banks investments. He
must not play favorites, grant excessive
loans, or render free services to anyone
or any class and he must be able to say
“ no.” He must be qualified to keep down
the overhead o f his bank and make a rea
sonable profit for his stockholders.
Then, too, there must be real super
vision. The most efficient bank examiner,
though he accomplish much, has not the
time or the power to render the super
vision and make the examinations with
the desired effectiveness. There must be
some supervising agency, similar to the
traveling auditor o f a chain industry, with
power to discharge the officers o f the
bank. The auditing should be done fre
quently and daily reports o f the activities
o f the bank should be sent in to the audit
ing department. Irregularities must be
checked at the outset before an opportu
nity is given to dissipate the assets o f the
bank. The auditing done by the directors
o f the bank has failed o f its purpose.
What o f the future? Individual bank
ing in the northwest is fighting fo r its life.
The public has lost confidence in the
individual banker, his bank and his sys
tem. I f he does nothing or fails to inspire
confidence soon, the day o f individualism
is over. Branch banking will inevitably
follow in some form because banking fa?
cilities are a necessity. Large corpora
tions, chain stores, and branch banking
are all steps forward in the evolution of
the present industrial and financial sys
tem. Where individualism and competi
tion have broken down, cooperation and
large corporations with chains and
branches have been successful.
Let us
hope the individual banker learns his les
son before an aroused public brushes him
aside.

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

NORTHWESTERN

BANKER

THE

NORTHWESTERN

BANKER

April, 1927

W H Y CAN’T THE ECONOMIST AND
BANKER GET TOGETHER?
(Continued from page 20)

ESTABLISHED
1879

The Human Element in
Banking Transactions
As the clientele of this institution
increased in si^e and our business
developed year after year, we have
endeavored to conserve the per
sonal element in our contact with
every customer. The importance
o f this factor is appreciated by
bankers, especially in handling
transactions entrusted to us by
out-of-town banks.
The new State Bank o f Chicago building
— n ow bein g er e c te d a t L a S alle and
M onroe Streets — will provide increased
facilities for out-of-town customers.

H enry A . H augan
Chairman Board o f Directors

R alph V an V echten

Leroy A . G oddard

President

Chairman Executive Committee

O scar H. H augan
Vice Chairman o f the Board

S ta te B a n k
o f C h ic a g o
A Tr u s t C o mp a n y
La Sal l e and W a s h i n g t o n St r e e t s

Member Federal Reserve System

C apital, Surplus <Sl U ndivided

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

Profits over $10,000,000

capital, wages fo r the effort and ability
of the enterpriser, and a fair compensa
tion fo r business risks which must be as
sumed but which cannot be covered by
actual payments in the form o f insurance
premiums. It is at once admitted that
some business concerns do regard one or
all o f the above additions as costs, but
general observation would probably show
more o f them failing to recognize these
items as regular and certain costs. The
economist in treating the cost problem
furthermore considers long run rather
than short run effects. Temporarily an
article may be selling for a price high
enough to merely cover costs o f produc
tion as these costs are commonly re
garded, but quite obviously over a period
o f time those other items o f interest on
invested capital, wages o f management
and payment for risk must be accounted
for if the business is to be permanently
successful.
Otherwise the enterpreneur
would profit by loaning his capital and
selling his services to some other enter
priser, as his financial returns would be
greater. An individual business man is in
terested in his own undertaking. I f his in
come is greater than his outgo he tends to
be satisfied, and the more so as that pro
portion increases. The economist, see
ing the industry as a whole with no par
ticular attention to any unit, often times
can see an economic loss socially speak
ing because proper account has not been
made of all costs o f production. There
may be a net social loss and still each in
dividual business involved may show a
positive gain which, however, is not suffi
cient to cover the economic concepts o f
costs.
Other instances might be cited to show
the differences that exist between the
business man, educated in the field of
practical experience, and the theoretical
economist who has obtained his knowl
edge in an altogether different way. The
same prevailing point o f difference,
namely, that one is individual and the
other social in his outlook, w7ould con
tinue to be evident. It might be here
restated fo r the sake o f emphasis that no
criticism is intended for the one who is
individualistic. Perhaps the economist,
if he were fortunate enough to have
funds to invest and should become, we
will say, a manufacturer, would also in
stantly become a protectionist. He would
then shape his entire business policy with
his thoughts and actions centered upon
his own personal affairs with little or no
regard to the industry as a whole. Noth
ing is more ordinary than fo r man to be
guided by the instinct o f acquisitiveness,
especially when his success and station in
life are dependent upon the wealth which
he acquires.

April, 1927

THE

NORTHWESTERN

BANKER

Probable Effects of the
McFadden Act
A N ADDITIO N of $1,181,000,000 may
/ " A be calculated as made to the funds
of national banks legally loanable
on real estate by provisoin o f Section 15
o f the new McFadden Banking Act. What
ever further increase may be made by the
act in volume o f funds released for loan
ing on real estate security through the
provisions o f Section 2 (b ), permitting
the buying and selling o f marketable in
vestment securities, is as yet impossible
to appraise, according to the concensus
o f opinion o f leading banking economists
given in answer to an inquiry by the
National Association of Real Estate
Boards.
Heads o f Federal Reserve banks are as
yet loath to predict the extent to which
national banks will avail themselves o f
the new mortgage loan provision, the as
sociation’s inquiry indicates.
J. W . McIntosh, comptroller o f the cur
rency, confirms the general interpreta
tion o f the new act as affecting the pow
ers o f national banks not only with refer
ence to long-term first mortgage city real
estate loans but also Avith reference to
the purchase o f bonds fo r investment. It
will be the province o f the comptroller o f
the currency, under the act, to define
A\That investment securities may be con
sidered eligible fo r national bank pur
chase and sale.
While bankers and economists vary
widely in their views as to the degree to
which the effect o f the new provisions
may come to be felt, those replying are
united in foreseeing changes in banking
practice the total effect o f which may be
expected to be measured primarily by
the degree to Avhich the individual real
estate investment meets the loan appe
tite o f the individual banking institution.

Expect Increase to Be Gradual
“ As the provisions o f the new banking
law are better understood, doubtless a
gradual increase in the amount of mort
gage loans in the portfolios o f national
banks will be noted,” E. R. Fancher, gov
ernor o f the Federal Resertm Bank of
Cleveland, predicts.
The effect of the new act is going to be
largely a matter o f the policy o f each
individual bank, Mr. Fancher points out,
and it is as yet impossible to make any
accurate evaluation o f results.
“ The McFadden bill will increase the
power o f national banks to lend money
on real estate mortgages and Avill un
doubtedly result in considerable expan
sion of such investments,” Charles J.
Bullock, director of the Harvard Eco
nomic Service and chairman o f the Com
mittee on Economic Research of Harvard
University states.
“ I have an opinion from Federal Re
serve authorities that time deposits can

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

R e lia b ility !

“ We have purchased securities from this
company for a number of years and have
never had any default in the payment of
interest or principal of any bonds pur
chased from them, and we have always
found that any statement they have made
regarding investments coidd be relied
upon.”
The White-Phillips Co. takes great pride
in such letters from satisfied customers.

Id V V K S T M K N T T
° B A N K E R S °---------------^

D U B U Q U E , IO W A

DAVENPORT, IO W A

B. & I. Building

First Nat’l Bank Bldg.

OM AHA,

NEBRASKA

Bankers Reserve Life Bldg.

D E S M O IN E S , IO W A

C H IC A G O , IL L IN O IS

219 Securities Bldg.

137 S. La Salle St.

THE

NORTHWESTERN

BANKER

Investing with an
Iowa Bond House

I O W A H Y D R O -E L E C T R IC P L A N T
U N D E R C O N S T R U C T IO N

(Financed by Priester-Quail & Candy, Inc.)

W e offer to our clients a com plete selec
tion of electric light and power Bonds and
short term Notes.
Also Bonds listed on the N ew York Stock
Exchange and nationwide market Bonds of

Railroads
Equipment Trusts
Industrials
Foreign Governments

QUAIL €
w
BONDS FOR INVESTMENT

First National Bank Bldg.
DAVENPORT, IOWA

29 South La Salle Si.
CHICAGO

“ Specializing in Power and Light Financing”

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

April, 1927

be invested in mortgages under the con
ditions stated by the law ; but that a con
siderable proportion of the so-called ‘time
deposits’ are not really savings deposits
and that well managed banks will not
treat them so. Moreover, Federal Re
serve authorities may discourage exces
sive investment o f time deposit money in
real estate mortgages.
“ The so-called ‘time deposits’ o f mem
ber banks undoubtedly include some
money that can fairly be considered sav
ings, and can be invested in real estate
loans as safely by member banks as the
savings deposits o f ordinary savings
banks can be similarly invested. Upon
the other hand, a considerable and in
creasing proportion o f the time deposit
represents money which formerly was
carried as commercial deposits, and can
not safely be treated as real savings
deposits.”
A computation o f the volume o f funds
in national banks released fo r real estate
loans as made by R. G. Rodkey o f the
University o f Michigan, School o f Busi
ness Administration, is as follows :
“ Section 24 of the Federal Reserve Act
provided that fo r national banks not lo
cated in central reserve cities loans on
farm lands might be made with maturi
ties not exceeding five years and loans
on improved urban real estate with ma
turities not exceeding one year. The to
tal o f all such loans could not exceed
twenty-five per cent of the capital and
surplus or to one-third o f the aggregate
time deposits,” Mr. Rodkey points out.
“ Section 15 o f the new act does not ex
clude banks located in central reserve
cities and increases the total amount
which can be loaned to twenty-five per
cent o f capital and surplus or to one-half
the time deposits.
“ On June 30, 1926, total time deposits
o f national banks amounted to about
$6,300,000,000. Prior to the passage of
this new act one-third o f this, or $2 ,1 0 0 ,0 0 0 ,0 0 0 could be loaned legally on real
estate. The new act increases this to onehalf, or $3,150,000,000. This makes an in
crease o f approximately $1,050,000,000.
To this should be added about $131,000,000 fo r central reserve city banks, mak
ing a total o f $1,181,000,000 additional
funds now legally loanable on real estate
security.
“ The effect o f Section 2 (b) is impos
sible to appraise until the comptroller o f
the currency defines the meaning o f the
term ‘marketability.’ The act provides
that national banks may buy and sell ‘mar
ketable’ investment securities.
I f the
comptroller rules that the ordinary issues
o f bonds secured by office buildings, ho
tels, apartment houses, etc., are ‘market
able’ there would appear to be no legal
limit fo r national banks in purchasing
such securities except that the bonds o f
no one issuer shall be held in an amount
exceeding twenty-five per cent o f the

THE

April, 1927

NORTHWESTERN

bank’s capital and surplus. Under the
law as it previously existed such bonds
were considered real estate loans, but the
new act provides that nothing shall be con
sidered as a real estate loan except where
a single bank holds the entire obligation.”
Installment Buying
Four rules fo r Americans to follow
in buying on the partial payment plan
a re :
1. Don’t buy anything on credit to
suit a quick whim.
2. Don’t buy anything on credit unless
you know its true value.
3. Don’t buy anything on credit that
will wear out and lose its value before
you have finished paying fo r it.
4. Don’t buy anything on credit that
you do not desire greatly enough to be
willing to undergo sacrifice in some other
direction.
These rules are set out in a recent
article in Collier’s W eekly by William
G. Shepherd, entitled, “ They Turn Your
Promises into Cash,” an interview with
John J. Raskob, chairman o f the finance
committee o f the General Motors Cor
poration. The writer says that Mr. Ras
kob is “ father o f the General Motors
Acceptance Corporation and that more
than one and a half million families have
been enabled to buy new or used motor
cars by means o f Mr. Raskob’s install
ment system.”
Mr. Raskob is quoted: “ Since seventyfive per cent o f motor cars are bought
on the installment plan it is perfectly
clear what an enormous difference would
have been made had no cars been sold ex
cept to persons who were able to pay
cash down. W e have found that con
sumers’ incomes have been able to meet
payments. Four-fifths o f all the cars
used today are fu lly paid for.
A t this moment more than 600,000 ac
counts are in our hands; the average is
$350. W e know from experience that
these debts will be paid. The loss will
not equal one-fifth o f one per cent.”
Mr. Raskob says that unsound install
ment buying o f the fly-by-night kind
must be wiped out. Consumers’ credit
must be placed on a sound banking basis.
The first essential is that the merchant
who sells on the installment plan must
be accountable fo r the buyers’ debt.
“ Bankers help to protect producers
against themselves; against using too
great credit,” said Mr. Raskob. “ They
help to protect distributors against them
selves.”

j i n

“ Rastus, what’s an alibi?”
“ Dat’s provin’ you wuz at a prayer
meetin’ whar you wasn’t, in order to show
dat yo’ wasn’t at the crap game whar you
wuz.” — Montreal Star.

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

Guaranteed Mortgage
Company
Minneapolis
has arranged with

L a n e , P i p e r & Ja f f r a y , I n c .
Minneapolis — St. Paul
and

Lan e, R

oloson

& C o m p a n y , In c .

Chicago
for the wholesale and retail distribution of
GUARANTEED MORTGAGE COMPANY
First Mortgage Collateral Trust Gold Bonds,
in Minnesota, Wisconsin, Iowa, Illinois, North
Dakota, South Dakota, Montana and Upper
Michigan.

UARANTEED MORTGAGE COMPANY First
Mortgage Collateral Trust Gold Bonds are secured
by carefully selected first mortgages on Completed,
Income-Producing properties of moderate size, largely
Owner-Occupied Homes, independently appraised, which
mortgages are made for not more than 60% of a con
servative certified appraisal.

The bonds are the direct obligation of the Guaranteed
Mortgage Company and the mortgages securing these
bonds are unconditionally guaranteed by the United
States Fidelity and Guaranty Company. The assets of
both Companies constitute a guaranty fund of more
than $53,000,000 for the protection of the bondholders.

h it e

-P

r ic e

-C

o m pan

Baker Building, Minneapolis
DIRECTORS o f

Clear Enough

BANKER

GUARANTEED

S. H. Bowman, Jr.
W. P. Christian
Frank G. Jewett
Henry C. Mackall

MORTGAGE COMPANY
Edward H. Norblom
E. R. Price
E. C. Warner
H. W. White

TH E

N O R T H W E S T E R N

B A N K E R

April, 1927

C U R R E N T Q U O T A T IO N S
On a representative list of HIGH GRADE RAILROAD, PUBLIC UTILITY,
INDUSTRIAL, CANADIAN and FOREIGN BONDS
Security
Bid Asked
Abitibi Pr. & Pap. Co., 6 s, 1928......... 100% 100%
,
Adirondack Elec. Pr. Co., 5s, 1 9 5 6 .. 100
100%
Alabam a Pr. Co., 5s, 1951....................... 99%
99%
Alberta, (C a n a d a ), 4 % s , 1 956 ,............ 9 4 %
95%
A m er. A g r. Chem. Co., 5s, 1928......... 100% 100%
A m er. Chain Co., 6 s, 1933....................... 102% 102%
Am er. Roll. Mills Co., 6 s, 1938............. 103% 104
Am er. Smelt. & R ef. Co., 5s, 1 9 4 7 ..1 0 1 % 102
A m er. Sugar R ef. Co., 6 s, 1937............. 104% 105
Am er. Tel. & Tel. Co., 5s, 1960............. 102% 102%
A m er. Thread Co., 6 s, 1928...................... 102% 103
A m er. Tobacco Co., 4s, 1951................. 89%
90%
Anaconda Cop. M in. Co., 6 s, 1953. . . .1 0 4 % IO4 3 4
A n glo Am er. Oil Co., Ltd., 4y 2 s, 1929 99%
99%
Appalachian Pr. Co., 5s, 1941............101% 101%
Argentine, 6 s, 1958..................................... 9 9 %
99%
Arm our & Co., 4 % s , 1939..................... 92%
92%
Associated Oil Co., 6 s, 1935...................102 % 103
A te., Top. & S. Fe R y „ 4 % s , 1 9 6 2 .. 96y8 97%
A tl. Coast Line R . R ., 4 % s , 1 9 2 9 . . . . 99%
99%
A tl. Coast Line R. R ., 4s, 1952............ 95%
95%
A tl. Ref. Co.,
4 % s , 1 § 2 8 .............. 99% 100
Austrian, 7s,
1943.........................103% 103%
Bald. Loco. W k s., 5s, 1940....................... 107% 107%
B. & O. R. R., 5s, 20 0 0 .............................. 102
102%
B. & O. R. R. Eq., 6 s, 1934................... 5.00
4.90
Batavian Pet. Co., 4 % s , 1942.............. 96
94%
Bavaria, Germany, 6 % s , 1945.............. 99% 100
Belgium,
6 s,
1955..................
96%
96%
Bell Tel.
Co.,
Canada,5s, 1955.1 01% 101%
Bell Tel Co.. Penn., 5s, 1948....................103% 104
Berlin (Germ any) 6 % , 1950 ................. 9 9 % 100
Berlin E. E . & Und. Rys., 6 % s , 1956 9 7 %
98
Beth. Steel Corp., 5s, 1936..................... 9 9 %
99%
Brazil, 6 % s , 1957.......................................... 9 3
93%
Bremen (Germ any), 7s, 1935..................104% 104 %
Brier H ill Steel, 5y 2 s, 1942.....................104
104%
British Columbia, 4 % s , 1951.........
94%
95%
Brooklyn Edison, 5s,“ 1949.................. ' ! . 1 0 4 % IO4 3 4
Brooklyn U nion Gas, 6 s, 1947. . .
114% 114%
Buenos Aires, 6 % s , 1955........................... 1 0 0 % 1 0 0 %
Buenos Aires, Prov., 7s, 1 9 5 2 ..
95%
95%
Buffalo Gen. Elee. Co., 5s, 1939......... ’ l0 4 %
105
Calif. G. & E. Co., 5s, 1 9 3 7 . . . .
101% 1013,4
C alif Pet. Corp., 5 % s , 1938............
' 100% 100%
Canada 4 % s , 1936........................................ 9 8 %
98%
Canad. N at. Ry. Co., 4 % s , 1930......... 99-%
99 3¿
C anaT N at. Ry. Co., Eq., 4 % s , 1939 4.80
4.75
Car Clinch. & O. R y., Eq., 6 s, 1930 4.90
4.80
Cent, of Ga. R y., 5s, 1945...........................103*% 104
Cent. 111. Lt. Co., 5s, 1943............
100% 101
Cent. Pacific R y., 5s, 1960..........
’ 'l0 2 % 102%
C. & O. R y., 5s, 1929..............
" ' 'lo i
101%
C. & O. Ry. Co. Equip. 5s, 1930____ 4.70
4.60
C., B. & Q. R. R ., 4S( 1949....................... 9614
96%
£•* CA & SD
t- L ‘ R ' ®->6s- 1 9 2 9 ................... 1 0 2 % 102%
Ch. Gas & Coke, 5s, 1937........................... 101% 102
Chgo. Mem & Gulf R. R., 5s, 194 0.' ' 96%
97
C. & N or. W es. R y., 4 % s , 2037........... 9 4 %
95
C R. I & P. R. R., 5s, 1929................... 100% 101%
Chgo. Union Stat,, 4 % s , 1963............ 98%
98%
Childs Company, 5 s, 1930. . . .
9 9 .% 100
Chile, 6 s, 1960.................................
9 2 s/
92%
Chile Copper Co., 5s, 1947.
9 5 74
95%
Chile, M tge. Bank of, 6 % s , 1 9 5 7 .7 9 4 %, 94%
Chippewa Pr. Co., 6 s, 1947
105% 106%
Cincinn. G. & E. Co., 5s, 1956.
101% 104%
C C. C & SL L. R. R.. 5s, 1963. . .1 0 4 % 104%
Clev. U nion Term ., 5s, 1973................ 104
104%
Cologne, Germany, 6 % s , 1 9 5 0 ... 7 ' 99%
99%
Colombia, 6 % s , 1927.....................
1003/
100%
Colorado Pr. Co., 5s, 1953 ....................... 9 9 % 100%
Columbia G. & E. Co., 5s, 1928......... 100
100%
Col. R y., Pr. & L. P. Co., 5s, 1940. . . . 9 9 3 / 100%
Commonwealth Ed. Co., 4 % s , 1 9 5 6 .. 9 5 %
96
Cons. Gas Bait., 4 % s , 1 9 5 4 ...
99%
99%
Cons. Gas N . Y „ 5 % , 1945...................105% 106
Consumers Pr. Co., 5s, 1 9 3 6 .........
102% 103%
Cont. G. & El. Corp., 5s, 1927.............. 100
100%
Copenhagen (D enm ark), 5 % s , 1944 1 0 0 % 100%
Corn Prod. R ef. Co., 5s, 1 9 3 4 ............. 100% 101%
Cuba Railroad, 5s, 1952............................ 9 5 %
95%
Cudahy Pack. Co., 5s, 1946..................... 9 9 %
99%
Czechoslovak, 7 % s , 1945 ........................... 105% 106
Dallas Pr. & Lt. Co., 5s, 1952............ 9 9 % 100%
Danish Con. Mun. Loan, 5 % s , 1955. . . 9 9 %
99%
Dayton Gas Co., 5s, 1 9 3 0 .7 .....................lO l” 101%
Dayton Ltg. Co., 5s, 1937........................... 102% 104
Denmark, 5 % s , 1955 ..................................100% 100%
Denver G. & E. Lt. Co., 5s, 1951. . . . 98
98%
Det. City Gas Co., 5s, 1 9 4 7 . . ................ 9 9 %
99%

Security
Bid Asked
Security
Bid
Asked
Detroit Edison Co., 5s, 1949...................1 02% 102%
Nor. States Pr. Co., 5s, 1941.................. 100% 100%
Dominican Republic, 5 % s , 1942............. 99
9 9 % Norw ay, Kingdom of, 5 % s , 1 9 6 5 ... 100% 100%
Dutch East Indies, 6s, 1947..................... 102% 103
Ogden Gas Co., 5s, 1 9 4 5 .7 ....................... 100% 100%
Edison Elec. 111. Co., 4 % s , 1928............ 9 9 % 100
Ohio Power Co., 5s, 1952........................... 9 8 % 9 8 %
Edmonton (Canada), 5s, 1934.............. 9 7 %
98%
Ohio Riv. Edison Co., 5s, 1951............. 9 8 % 98%
Elec. Pr. Corp., 6 % s 1950....................... 9 8 %
98%
Ontario, Prov. of,
4 % s , 1931........... 9 8 % 9 9 %
Plquitable Gas Lt. Co., 5s, 1929......... 100% 100%
O ntario Power Co., 5s, 1943....................1 01% 101%
5.00 Oregon & Cali. R y., 5s, 1927....................100% 100%
Erie R. R. Eq., 6s, 1932............................ 5.10
Field (M arshall) & Co., 4 % s , 1928-46. 5.10
5.00 Oregon Sht. Line R . R., 4s, 1929. . . . 9 8 %
99
FI. Pr. & Lt. Co., 5s, 1954...................... 94
94%
Oslo, N orw ay, 5 % s , 1946......................... 9 9 % 99%
Florida W est Shore R y., 5s, 1 9 3 4 . . . . 9 6 %
97
Pacif. Coast Pr. Co., 5s, 1940.................100% 100%
France, 7s, 1949 ........................................... 102% 102% Pacif. Fruit Exp. Eq., 7s, 1929............. 4.70 4.60
General A sphalt Co., 6s, 1939.............. 107% 108
Pacif. Gas & Elec. Co., 5s, 1955......... 9 9 %
99%
General Elec. Co., 3 % s , 1942................ 9 2 %
92%
Pacif. Pr. & Lt, Co., 5s, 1930..............100% 1 0 0 %
I Gen. Motors Acc. Corp., 5s, 1 9 2 8 . . . . 99% 100% Pacif. Tel, & Tel. Co., 5s, 1952........... 101% 102
General Pet. Corp., 5s, 1940..................... 101
101% Panam a, 5 % s , 1953..................................... 102% 102%
Geo. & Alabam a Ry., 5s, 1945............ 9 9 %
99% Penn. R. R. Co., 5s, 1964..................... 103% 103%
Georgia P. Co., 5s, 1967.......................... 9 6 %
97
98
Penney, J. C., 5 % , 1945............................ 9 7 %
Georgia Ry. & P. Co., 5s, 1954............104V2 105
Penn. R. R „ Eq., 6s, 1931...................... 4.95 4.85
German, 7s, 1 9 4 9 ..........................................1 07% 107% Penn., Ohio & Det. R. R., 4 % s , 1977. 96%
96%
German Cen. A g r. Bk., 7s, 1950..........103 ” 103%
Peoples Gas Lt. & Coke, 5s, 1 9 4 7 . . . . 101% 102
German
Con. Mun. Loan, 7s,
1 9 4 7 ... 101% 101% Pere Marquette Ry., 5s, 1956............... 104% 104%
German
Gen. Elec. Co., 6 % s ,
1 9 4 0 ... 114% 114% Peru, 7 % s , 1956............................................ 9 9 %
99%
Goodyear T. & R. Co., 8s, 1941.............. 121
121%
Phila. Elec. Co., (P a .), 4s, 19 6 6 ......... 8 9 %
90%
Grand Trunk W est. R y., 4s, 1 9 5 0 . . . . 8 6 %
87%
Pillsbury Fir. Mills Co., 6s, 1943____103% 104
99%
Grt. Cons. Elec. P. Co., 7s, 1944......... 99%
Pressed Steel Car Co., 5s, 1933............ 96
96%
Great Falls Pr. Co., 5s, 1940............... 1 03% 103%
Prussia (Germ any), 6 % s , 1951......... 9 9 %
99%
Grt. N or. Ry. Co., 4 % s , 1976................ 953,4 96
Pub. Serv. Co., Okla., 5s, 1961.............. 96
96%
Grt, Nor. Ry., Canada, 4s, 1934.......... 9 1 %
92%
Pub. Serv. Elec. Pr. Co., 6s, 1 9 4 8 ....1 0 7 % 107%
Great W estern Pr. Co., 5s, 1946.......... 9 9 % 100% Rio Grande Do. Sul, 7s, 1966................ 9 6 %
97
G ulf Oil Corp., P a., 5s, 1947................... 100 ‘ 100% Rio De Janeiro, 8s, 1947...........................103% 103%
H aiti, Republic, 6s, 1952.......................... 9 9 % 100
Rockford Elec. Co., 5s, 1939................ 101% 102%
Ham burg, Germany, 6s, 1946.................. 99
99% Rotterdam, Holland, 6s, 1964................ 104
104%
Hershey Choc. Co., 5 % s , 1940.............. 102% 103
St. L. Ir. M t. & So. R y., 5s, 1931____100
100%
Hock. Val. R y.,
Eq., 6s,
1935.............. 5.00 4.90
St. L. & San Fran. R. R., 6s, 1928___ 101% 101%
Hum ble Oil & Ref. Co., 5 % s , 1 9 3 2 ...1 0 2 % 102% St. Paul U n. Stk. Yds. Co., 5s, 1946. . 9 9 % 100%
H ungary, Kingdom, 7 % s , 1944............103% 103%
Salvador, 8s, 1948.......................................... 107% 108
111. Bell Tel. Co., 5s, 1956....................... 103% 103%
San Antonio G. & E. Co., 5s, 1 9 4 9 .. 9 9 %
99%
Illinois Cen. R y., 4 % s , 1966.................. 9 8 %
98% San Paulo, City, 8s, 1952....................... 105% 105%
111. Cent. R. R. Equip., 5s, 1934......... 4.70
4.60 San Paulo, State, 8s, 1936.....................105
105%
111. Steel Co., 4 % s , 1940.......................... 98% 98% Saskatchewan, Prov., 5s, 1943............101% 102%
Ind. Pr.
& L t. Co., 5s, 1957................... 97
97% Saxon Public W k s., 7s, 1945................ 102% 103
Ingersoll-Rand Co., 5s, 1935..................100% 100% Seaboard A ir Line Eq., 4 % s , 1 9 3 6 .. 4.95
4.85
Inland Steel Co., 5 % s , 1945.................. 1023,4 103
Sherman Hotel Co., 5 % s , 1930............ 9 9 % 100
Internat. Paper Co., 5s, 1947.............. 97%
98
Siemens & Halske, 7s 1935..................... 102% 102%
Internat. Silver Co., 6s, 1948................ 107% 108
Sine. Crd. Oil Pur. Co., 6s, 1928____100% 100%
Interstate Pr. Co., 5s, 1957................... 9 7 %
97% Sioux City Stkyds. Co., 5s, 1 9 3 0 . . . . 99% 100%
Italy, 7s, 1951................................................. 95%
95% 61 Broadway Bldg., 5 % s , 1950............ 99% 100%
101
101% So. Car. & Ga. R y., 5 % s , 1929............101
Japan, 6 % s , 1954.........
101%
Jones & Laugh.
Steel, 5s, 1939.103% 103% Southern Calif. Edison Co., 5s, 1951 98%
99
K. C. Pr. & L t.
Co., 5s,
1952..............104104%So. Pac. Ry. Eq., 5s, 1932..................... 4.65
4.60
K. C. Southern R y., 5s, 1950................. 100
100% So. Pac. R y., 4s, 1929.............................. 98%
99
Kansas Elec. Pr. Co., 5s, 1951.............. 96%
96% Southern Pr. Co., 5s, 1930...................... 101% 102%
Laclede Gas Lt. Co., 5s, 1934.............. 100 % 101
Southern Ry. Eq., 6s, 1935................. 5.00
4.90
La Salle Hotel Co., 5 % s , 19 3 0 .............. 9 9 % 100
Southwest. Bell Tel., 5s, 1954............103% 103%
Lehigh Valley R. R., 4 % s , 20 0 3 ............ 9 8 %
99
Spring Riv. Pr. Co., 5s, 1930................ 99% 100%
Ligg. & Myers Tob. Co., 5s, 1 9 5 1 . . . . 103% 104
Standard Oil Co., N . Y ., 4 % s , 1 9 5 1 .. 9 5 %
95%
Long Island R. R. E q ., 6s, 1 9 3 2 . . . . 4.85
4.75 Stand. M illing Co., 5s, 1930................ 100% 101
L. & N . R. R. Co., 4s, 1940 ................ 97
97% Sun Oil Co., 5 % s , 1939............................ 9 9 % 100
L. & N . R. R. Eq., 6 % s , 1933............ 4.75
4.65 Swedish, 5 % s , 1954...................................... 103% 103%
Louisville G. & E. Co., 5s, 1952_____100% 100% Sw ift & Co., 5s, 1932............................... 9 9 % 100
Maine Cent. R. R., 4 % s , 1935............... 96% 96% Swiss, 5 % s , 1946 ..................................... 1 03% 103%
Mark M fg. Co., 6s, 1927-39.......................102% 102% Syracuse L tg. Co., 5s, 1951..................... 103
103%
Mass. Gas Co., 4 % s , 1931..................... 983/g 99
Thyssen (A u g .), 7s, 1930........................1 02% 102%
Mich. Cent. R. R ., 5s, 1931.......................100% 100% Tokyo Elec. Lt. Co., 6s, 1828................ 9 8 %
99
Mid. Steel & Ord. Co., 5s, 1936............ 98%
98% Toronto (Canada), 5s, 1934....................1 00% 101%
M inn. St. P. & S. S. M . R y., 4s, 1938 8 7 %
88
U nion Elec. Lt. & Pr. Co., 5s, 1 9 3 2 ..1 0 1 % 101%
Miss. Riv. Pr. Co., 5s, 1951........................101
101% Union Oil Co., C alif., 5s, 1935............ 9 8 %
99
Mo., K as. & Tex. R. R ., 4s, 1990............ 8 7 %
88% Union Pac. R. R ., 4s, 1947..................... 9 6 %
96%
Mo. Pac. R. R. Eq., 5s, 1 9 36 -40............... 475
4.65 U nion Tank Car Co., 4 % s , 1931............ 9 8 %
99
Mo. Pac. R. R, 5s, 1977............................. 9 9 % 100
United Drug Co., 6s, 1944....................... 1 07% 107%
Mobile Elec Co., 5s, 1946.......................... 9 9 % 100% United Lead Co., 5s, 1943.......................... 9 7 %
98
M ontana Pr. Co., 5s, 1943....................... 101% 101%
U . S. Steel Corp., 5s, 1963.....................106% 107
Montgomery W ard , 5s, 1946................... 9 7 %
98
Uruguay, 6s, 1960 ..................................... 9 5 %
95%
Montevideo (U ruguay) 7s, 1952........... 101% 101% U nit. Steel W ks. Corp., 6 % s , 1 9 5 1 .. 104% 104%
Montreal (Canada) 4 % s , 1946.............. 9 6 %
9 7 % Utah L. & Pr. Co., 4s, 1930................ 98%
98%
Morris & Co., 4 % s , 1939............................ 8 8 %
8 8 % Victoria, (C anada)
6s, 1928................. 100% 101%
N ational Press Bldg., 6s, 1959..............100% 101
Virgin ian Ry. Co., 5s, 1962................. 106
106%
N ational Tube Co., 5s, 1952.....................103% 104
Virgin ian Pr. Co.,
5s, 1942................. 101
101%
Netherlands, 6s, 1954 ............................... 103% 103% W ashington W a t. Pr. Co., 5s, 1 9 5 6 ..1 0 2 % 103%
New Brunswick (C a n .), 4 % s , 1 9 3 6 ... 9 9 % 100
W estern Elec. Co., 5s, 1944...................... 102% 102%
New Eng. Tel. & Tel. Co., 4 % s , 1961 9 6 %
96%
W estern Pac. R. R. Eq., 5 % s , 1 9 3 3 .. 5.00
4.90
101%
Newfoundland, 5 % s , 1942......................... 102% 103% W est Penn Pr. Co., 5s, 1963................. 101
99%
N . Orleans Term . Co., 4s, 1953......... 8 8 %
8 8 % W estern Pac. R. R ., 5s, 1946............ 9 9 %
N . Y . Cent. Eq., 4 % s , 1929..................... 4.60
4.50 W estern U n. Tel. Co., 4 % s , 1 9 5 0 . . . . 98%
98%
N . Y . Cent. Lines, 4 % s , 20 1 3 ....................101
101% W estnhse. El. & M fg. Co., 5s, 1 9 4 4 .. 102% 102%
96%
N Y ., Chgo. & St. L. Eq., 5s, 1931____ 4.75
4.65 W innepeg, (C a n a d a ), 4 % s , 1946......... 95%
N . Y . Tel Co, 4 % s , 1939............................ 9 9 %
9 9 % W ise. Gas & Elec. Co., 5s, 1952.............101% 101%
N iagara Falls Pr. Co., 5s, 1932............101% 101%
W ürttem berg, (G e rm an y), 7s, 1 9 4 5 ..1 0 1
101%
95%
Nor. Ind. G. & E. Co., 5s, 1929......... 9 9 % 100% Yokoham a, (J a p a n ), 6s, 1961............... 95%
Young. Sh. & Tub. Co., 6s, 1 9 4 3 .. .. 1 0 4 % 104%
N or. Pac. Ry. Co., 4s, 1997................... 93
93%

The above list of bonds are all active issues and markets are subject to change.
However, you are free to WIRE US AT OUR EXPENSE for quotations on issues listed
above or any other in which YOU M AY BE INTERESTED.

CAMP, THORNE & CO., Inc., 29 S. LaSalle St., Chicago
M IN N E A P O L IS

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Federal Reserve Bank of St. Louis

ST.

LO U IS

DES M O IN E S

DAVENPORT

LASALLE

J A N E S V IL L E

M IL W A U K E E

SAN

F R A N C ISC O

‘¡Modern
POWER

and

LIGHT FINANCING

The electric power and light company must grow to meet
the increasing demands upon it as a monopoly type of
service and the financial structure as well as the engineer
ing structure must be so constructed that it can grow

COMMON approach to the problem
of financing o f the electric light
and power industry is to call at
tention to the huge investment in the in
dustry— now estimated to be something
over eight billion dollars— and to point
to the serious wrork involved in providing
money for the very large growth that we
know to be ahead o f the industry. Eight
billion dollars now— and the industry in
the next ten years will require another
seven or eight billion dollars o f newly
invested money and may have to refi
nance as much as from a third to a half
o f its present investment.
W ith such a huge sum o f money in
vested, and with a turnover, to use com
mercial phraseology, o f only once in five
years, it is immediately apparent that the
administration o f this money, as such, is
o f relatively greater importance com
pared to the administration o f the plant
and to the commercial side of the in
dustry than is the administration o f
money in almost any other business. In
a manufacturing business in which the
investment in plant is, say, one million
dollars to do a million dollars’ worth of
business annually and in which skilled
labor is the principle item o f expense,
the engineer can appreciate that the
efficiency o f the machinery and the ad
ministration o f the labor in that plant
are the most vital elements from the
standpoint of executive administration
and business success. This given manu
facturing industry is also doubtless in
intense commercial competition with
other manufacturing establishments in

B y Van H. Cartmell
Bonbright & Co.
the same line, and commercial methods
and administration are likewise of ex
treme importance. This is not to say
that the financing and the handling of
the money represented by the investment
in the plant are not of high importance,
but rather to emphasize that engineering
construction and operation o f equipment
and commercial sales are relatively more
important factors in the success o f the
business than the item of interest on
bonds, expense o f selling securities and
other similar problems on the financial
side of the company.
Take the even
more exaggerated case o f a mercantile
establishment in which the investment
is turned over eight to ten times a year,
in other words, in which, on an invest
ment of $1 0 0 ,0 0 0 , a million dollars’ worth
o f business is done annually. In this
case the expense o f the original financing
o f the plant to the extent o f $1 0 0,00 0
is of comparatively minor importance.
On the other hand, in the electric
power and light industry, where it takes
a five million dollar plant to do a million
dollars’ Avorth o f business annually, the
handling and administration o f this five
million dollars is o f itself so vital a fa c
tor that good handling may mean success
of the company and bad handling may
mean failure. This does not minimize
the responsibility o f the engineer toward
his original plant and toward its opera
tion, nor does it minimize the necessity

o f intelligent commercial, development of
the industry.
Yet in ail electric light and power
company organizations finance is one of
the major, if not the major executive
interest. Cooperating with the executive
or executives responsible fo r the finance
of the company is the investment banker,
who acts in the dual capacity, first, o f
“ consulting engineer” on financial struc
ture, and, second, o f “ merchandiser” of
the money, that is, of the securities which
the company sells. The second role may
be more important to the investment
banker, fo r he makes his money by being
a seller or merchandiser o f money. His
institution is not a depository, nor does
he individually buy for retention the
millions o f dollars of both bonds and
stocks. Rather, he buys on Monday and
sells on Tuesday. But, in the first role,
as consultant, he acts in cooperation with
the executives of the company, first, to
decide when money is needed and how
much is desirable; second, what particu
lar kind o f security to issue; and, third,
when is the most advantageous time to
market the security— all with the prob
lem in mind o f maintaining the financial
structure in a sufficiently strong and yet
flexible position to be extended as the
company’s demands upon it grow.
There is also this other vital difference
between the public utility problem and
that o f most other businesses. W ith the
latter, growth is a matter of inclination,
o f business judgment. No shoe manufac
turer or dry goods merchant is forced
to expand or add more capital to his busi43

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Federal Reserve Bank of St. Louis

THE

ness. But the electric light and power
company must grow to meet the increasing
demands upon it, as a monopoly type of
service, and the financial structure, as
well as the engineering structure, must
be so constructed that it can grow.
The construction, maintenance and
operation of this financial structure might
well be likened to the construction, main
tenance and operation o f an engineering
structure. It might be said to be the
supporting skeleton framework o f The
electric light and power business entity.
The correct proportioning o f the structure
as between bonds, debentures, preferred
stock, common stock and their variations

N O R T H AV E S T E R N

BANKER

is just as important as the correct pro
portioning o f the actual physical ele
ments o f an engineering structure. And,
just as in engineering there may be several
alternative designs all fo r the same pur
pose, so may there be in the financial end
o f the business. In each ease provision
must be made for future additions to the
structure, and the amount and accuracy
o f provision to provide for various pos
sible emergencies and conditions of growth
is naturally most important.
In the details o f the structure itself the
specifications o f the individual parts of
the structure are also o f primary impor
tance. In other words, the exact pro vis

Canadian Department-Stores
L IM IT E D

First Mortgage, Sinking Fund
(Closed Mortgage)

Gold

Bonds

Due March 1 , 1947
Canadian Department-Stores, Limited, the third
largest department store organization in the Province
o f Ontario, is a consolidation o f 22 long established
and successful department stores operating in prin
cipal cities o f the Province and in Montreal. The
individual department stores have a record o f suc
cessful operation averaging over forty-four years.
These bonds will be secured, in the opinion o f coun
sel, by closed first mortgage on the land and build
ings o f 19 store properties owned in fee, on two lease'
hold properties and on other fixed assets o f the Ca
nadian Department-Stores, Limited.
Interest requirements on these bonds were earned
on the average o f over 4-3 times during the past ten
years. Net tangible assets amount to approximately
$3,512 for each $1,000 bond outstanding.
The management o f the company will remain in the
hands o f men long associated with the successsful
operation o f Canadian department stores.
Price: 9 9 V2 and Interest
To Yield 6 .5 5 %

231 S. LA SALLE ST.

BOSTON

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Federal Reserve Bank of St. Louis

CHICAGO

PHONE, CENTRAL 6556

CEDAR RAPIDS

A p r il, 1927

ions o f bond issues, o f debentures and of
preferred stock are o f primary impor
tance. It is being found today, for ex
ample, that many component members of
the financial structures o f some companies
were built under such specifications that
today these members are not able to hold
the load that it is desired to place upon
them, and before the company can have
any further growth these members must
be replaced.
It is not necessary to carry out the
simile into any greater detail, but it is
worth while pointing out that there has
been advance in our knowledge both of
how to proportion the structure and of
how to write specifications for the indi
vidual members, just as there has been
advance in our knowledge o f similar fac
tors in engineering. One o f the greatest
changes, and one frequently remarked
upon, has been the bond specifications.
Today practically all bonds are “ open
end” as against the earlier “ closed” mort
gages. It used to be that a bond mortgage
limited the total sum that could ever be
borrowed under the first mortgage. To
day it is required only that a certain
ratio between property value and bonds
outstanding, or a certain ratio between
earnings and bonds outstanding be main
tained, or not exceeded, the total allowable
sum being unlimited. This makes growth
easier.
An example or two may indicate what
is actually done by the financial executive
and his investment banker, adviser and
merchant in the reconstruction o f financial
structures. In the case o f the Common
wealth Power Corporation, which is a
holding company, a financial reconstruc
tion three or four years ago has had a
very important effect on the success of
the company and its subsidiaries. As a
commercial business each o f the various
subsidiaries was doing a good job. For
example, the Consumers Powder Company
o f Michigan is one o f the subsidiaries
and it is well known fo r its excellent
engineering and commercial development.
But the intercorporate relationships of
the Commonwealth Corporation and its
subsidiaries, and the various security
issues throughout the structure were such
that money was costing too much and
general credit position was not as high
as desirable, and the company was hamp
ered in its development only on account
o f that situation. The first move was to
dissociate most o f the railways into a
separate corporation. This made no d if
ference with reference to the parent com
pany earnings— it was merely a corporate
shifting.
But the electrical properties
were the ones in which necessity for
growth lay, and this corporate change
freed them o f the previous negative effect
on the securities occasioned by their close
tie with the railways. For we cannot
neglect to recognize that the public has

THE

April, 1927

not as great a desire fo r securities in which
railway properties are included as it has
fo r those which are purely electrical. In
each o f the subsidiary companies a modern
mortgage with its open-end feature was
created and the bonds which had been
issued under the old closed mortgage were
called and retired. Customer ownership
campaigns were instituted to provide not
only the excellent public relations which
always result from customer ownership,
but also that equity in preferred stock
owned in the community which has so
great an influence on strengthening the
position o f the bonds o f the company.
As a result o f these two moves and corol
lary to them was the creation o f sufficient
working capital and provision for a
strong cash position to free the subsidiary
companies from having constantly to bor
row from the parent concern, which, in
turn had been weakening its financial
position. As a result o f all this, both
the subsidiary companies and the parent
company had larger amounts o f cash on
hand, which meant larger bank deposits
and better credit position. The specifi
cations o f the various new bond issues
were such that they lent themselves to
expansion and growth o f the company,
allowing the company at all times to take
advantage o f the market situation as it
may exist at any time to obtain money
for necessary growth on most advan
tageous terms.
There was, o f course, an endless amount
o f detail just as in building any engineer
ing structure, but perhaps this illustrates
in a few words what is meant by recasting
o f a financial structure to meet modern
conditions. Just as the engineering o f
plants built in 1900 was excellent as
measured by the engineering standards o f
the time, so was the financing o f these
companies done in what was a modern
way at the time it was done. But just as
an obsolete generating station is replaced
by the product o f modem engineering,
so does it frequently happen that the fi
nancial structure can to advantage be
replaced by one built under modern con
ditions.
Elected Cashier
The Security Trust & Savings Bank of
Ryan, Iowa, has secured as their cashier,
U. S. Baxter. Louis Reilly, who has had
the responsibility since the death o f fo r
mer Cashier Frank Foley, will act as
assistant cashier.
Heads Finance Company
Ben Stern, fo r 10 years identified with
the financing o f motor vehicles in the
middle western states, has established a
finance company at 219 Liberty Building,
Des Moines. The name o f his new com
pany is the Stern Finance Company. Its
officers are Ben Stern, president; Vincent

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Federal Reserve Bank of St. Louis

NORTHWESTERN

BANKER

Starzinger, vice president ; and Byron A.
Jacobs, secretary and treasurer.
A t the present time the operations of
the company will be confined to the pur
chase o f automobile paper in the state of
Iowa, purchasing paper on all classes of
cars, trucks and tractors. Eventually
they plan on going into the surrounding
states and begin to do business in sev
eral other middles western states.
Mr. Stern states that he has made a
close study o f the conditions in Iowa,
and looks fo r a large improvement in
business conditions during the year 1927.
Collections on automobile notes receiv
able have been very satisfactory and
there is a feeling o f optimism among

many dealers that he has talked with.
Mr. Stern feels that over any span of
years, Iowa will produce as good a class
o f finance paper as any state in the
union, and that is his reason fo r locating
in the state o f Iowa.
Increase Dividend Rate
Directors o f the National bank of the
Republic o f Chicago at their regular
monthly meeting March 17th., voted to
increase the annual dividend rate from
8 per cent to 10 per cent, the disburse
ment fo r the present quarter being pay
able April 1st to stockholders o f record
March 24th.

The Securities o f
the Bell Telephone
System are based
on Service
c fe ?

cR s?

cR f

T HE physical properties o f the
System have a book value o f
more than $2,800,000,000, but be
sides that there is a scientific and
technical force o f 5,000 people
engaged solely in seeking to fur
ther develop the science o f tel
ephony and to improve methods
for making the service better. The
activities o f this force furnish de
pendable assurance o f continued
improvement in the plant o f the
System and its service to the
public.
The stock o f A . T. & T ., parent company
of the Bell System, can he bought in the
open market to yield a good return. Write
for booklet, “ Some Financial Facts.”

ELL TELEPHONE
SECURITIES CO. l„c
D. F. Houston, President
iQ5 Broadway
NEW YORK

“ The People’s
Messenger”

©.

THE
Money Rates and Securities

Regarding money rates and investment
securities, a recent bulletin o f the Na
tional Bank o f Commerce, New York City,
has this to sa y :
Basic influences continue to operate on
the side of easy money. Gold continues to
flow toward us and commercial demand is
moderate. Were it not fo r seasonal fac
tors it is doubtful whether rates would
have been maintained at current levels
during the last thirty days. While it is
true that because o f the limited supply o f
United States certificates o f indebtedness
and the specialized character o f the de
mand for them the rates on the new issues
dated March 15 can not be considered as
an accurate measure o f the market as a
whole, they are nevertheless a striking in
dication o f the underlying ease Avhich pre

NORTHWESTERN

BANKER

vails in money. Purely temporary factors,
such as the customary seasonal demand
for funds or a burst o f speculative activ
ity, may at times result in a firmer tone
fo r a little while, but the outlook continues
to be fo r moderate rates.
Investment Securities
The course o f the investment market
and the operations o f the United States
Treasury as o f March 15th have brought
clearly home to American investors the
rapidly shrinking supply of Government
securities and the downward trend o f
yields on all classes o f investments. We
have repeatedly called attention to the
inevitable long-time trend toward lower
yields in the American investment mar
ket. Those special influences which made
returns abnormally high at the close of

The Value of a
Good Name
"DRESTIGE, a good name, reputation for responsibility and integrity are not earned in a month or
a year. These are the rewards of long years of con
stant vigilance, honest, straightforward dealings and
sound, conservative judgment.
The reputation of Wollenberger & Co. has stood the
test of time. For forty-two years the name Wollen
berger has been associated with sound banking and
conservative investment—synonymous with safety
and reliability. Every Wollenberger bond has been
paid promptly at maturity; every interest coupon has
been cashed without a day’s delay.
Today Wollenberger & Co. First Mortgage Real Es
tate Gold Bonds, with this unblemished record of
safety, yield the attractive return of 6J^%. They are
available in denominations of $1000, $500 and $100,
and mature in three to twelve years.
Bankers, business men and private investors are in
vited to send for our literature and become familiar
with the conservative offerings of this House.
Ask for Booklet 810.

April, 1927

the W orld W ar are no longer operative.
Capital is being accumulated in the United
States at an unprecedented rate because
production is far in excess o f consumption.
Some idea o f what is going on can be
gathered from consideration of such evi
dences o f our accumulation o f capital
goods as our enormous and sustained
building activity, our huge expenditures
fo r improved mechanical equipment and
our excess o f exports over imports at a
time when we are not borrowers but lend
ers abroad. Capital accumulation is also
going on at a healthy rate in a number o f
European countries.
The only logical conclusion is that
prices o f investment securities will ad
vance over a period until yields are as
low as they were before the W orld W ar or
lower. The return on United States Gov
ernment securities then and now is not
comparable because o f their importance as
a basis fo r national bank circulation prior
to the establishment o f the Federal re
serve system, but yields on prime railroad
bonds are fairly comparable. According
to computations by Professor W . C.
Mitchell in his “ Business Cycle,” the aver
age yield on ten American railroad bonds
for the five years 1901 to 1905 was about
3.85 per cent. Then American securities
were the favorite medium o f British and
Continental investors fo r the employment
o f funds which they could not profitably
place at home. Today the United States
is the major source o f the world’s capi
tal.
Enlarges Department
In order to be o f the greatest possible
assistance to its investors and customers,
True, W ebber & Company, dealers in in
vestment bonds in Chicago, have in
creased the personnel o f their Mail Service
Department.
The Mail Service Depai’tment is in
tended to supplement the service o f com
pany representatives, and to render the
greatest possible service to investors
upon whom it is impossible fo r their re
presentatives to call.
Through their Mail Service, True,
W ebber & Company will furnish markets
on bonds, give an analysis o f bonds al
ready owned, or analyize bonds which
may be contemplated as a purchase. This
department offers a very broad service,
and is equipped to give intelligent an
swers to any investment problem.
Farms Sell for Cash

WOLLENBERGER&CO.
•¡rfrf
O

In v estm en t B a n K ers
105 S o . L a S a lle S t r e e t

W
4 2

Y e a r s

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Federal Reserve Bank of St. Louis

C H IC A G O
o f

I n v e s t m e n t

jrfnT

^
B a n k i n g

The investment department o f the Mer
chants L ife Insurance Company, Des
Moines, under the direction o f T. A. Mur
phy, has compiled a list showing the sale
o f 450 farms between September 1, 1926,
and March 1, this year. It is significant
to note that o f the 450 sales made, all
but 87 were made fo r cash, these few
changing hands through trade or auction.

W h y W e Need N ew Foreign Markets

HE unabated prosperity o f the
United States, with the continued im
provement and stabilization o f the
economic and political conditions o f Eu
rope during 1926 point towards new
peaks o f progress and prosperity for
1927; nevertheless the tendency towards
the creation o f an adverse trade balance
and the ever increasing productive power
and efficiency o f Europe impose on us the
necessity o f creating new and wider
spheres o f influence in world markets dur
ing the coming year if our present high
standards and prosperity are to be main
tained. The rapid acquisition by Europe
o f new working capital, the expansion of
its investments in trade producing chan
nels and the tendency o f London’s return
toward world financial leadership, and
our dependence on foreign markets as a
stabilizing factor insuring our prosperity
are facts which are dangerous if ignored.
Growth of National Wealth
The rapid growth o f our national
wealth is one o f the amazing develop
ments o f the past decade; beginning with
1912 our national wealth was estimated
at $1,950 per capita; this advanced to
$2,918 by 1922 and is now estimated at
$3,786, representing a growth o f almost
100 per cent within 14 years. During the
same period our per capita debt under
went considerable fluctuation; beginning
with $12.48 in 1912 it increased to
$209.25 by 1922 and through efficient
fiscal administration and prosperity it
was reduced to $179.80 at the end of
1925.
The rapidity of our national growth
before the war necessitated our borrow
ing over $5,000,000,000 from Europe fo r
development purposes, and ample em
ployment was found at home fo r all
available capital. The spirit o f adven
ture inspired by the results of the open
ing o f our great west had invested over
seas by 1914 approximately $1,500,000,000 in the acquisition of proprietary in
terests in the construction and develop
ment o f railways, public utilities, mines,
sugar plantations, etc., in Canada, Latin
America and the O rient; these invest
ments represented important trade pro
ducing factors.
During the period from 1909 to 1913,
an average of $1,767,340,000 was invested
annually in new domestic corporate de
velopment.

B y Paul Klopstock
President Foreign Trade Securities Co.,
New York
New Domestic Corporation
financing ..........................$3,039,772,000
Municipal loans ................. 1,212,847,000
Farm loans .........................
224,163,000
Foreign ...............................
666,040,000
173,897,000
Canada .................................
Total ..................................$5,316,669,000
An examination o f our foreign invest-

EUROPE
Is “Coming Bac k”
The fact that the League of Nations is
doing much to promote cooperation be
tween European countries along commer
cial lines is significant to the investor, and
particularly to the buyer of foreign bonds.
Europe’s rehabilitation means greater
security of principal, and assures continued
service of the loans already in investors’
hands. Constructive developments now
taking place on a large scale are creating
further demands for American capital, as
is also the revival of trade on a pre-war
basis.
In other words, foreign bonds are becom
ing a better investment every day.
W e solicit your orders or
inquiries with regard to any
type of foreign investment

BAKER, KELLOGG & CO., Inc.
A Specialized Service in Foreign Securities for
B A N K S and D EALERS

Post-war Investments
The great accumulation o f wealth since
the war is best evidenced by the fact that
new capital investments during the past
five years have averaged $5,316,669,000
annually; as follows:

ments during the past five years demon
strates that while we have loaned money
to stimulate the return o f normal social
conditions, and fo r the growth and efficency o f our foreign competitors, little
has been done in the direction o f perma
nent trade and financial penetration
through which our foreign influence can
be permanently assured. The fact re
mains that the repayment o f our foreign
loans has the tendency o f rapidly reducing
our influence on world markets.
The changing and more conservative

1 1 1 West Monroe Street
CHICAGO
L O N D O N **

Telephone Randolph 0415

BUENOS* APRES

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Federal Reserve Bank of St. Louis

TH E

character o f our outlook towards the em
ployment o f our captal overseas indicates
a serious weakening o f the pioneer spirit
which established our foreign markets and
developed our country. It is obvious that
if our present prosperity is to be main
tained an imperative necessity exists to
insure a stable outlet fo r our recently in
creased productive capacity, as the nat
ural growth o f our population is insuffi
cient to consume the full limit o f our
present production.
The increasing competitive capacity of
Europe, the tariff: barriers, question relat
ing to war debts, our social reforms, and
the increasing competition o f neAvly cre
ated industries now supplying their do

N O R T H W E S T E R N

B A N K E R

mestic markets, necessitate the employ
ment o f more energetic steps as well as
our capital resources in trade producing
channels if our trade position is to be
continued.
To insure the continuation o f our pros
perity, it is imperative that the same vis
ion and courage demonstrated in the de
velopment o f our country be directed in
the development o f the natural resources
o f Latin America, Eastern Europe, Africa
and the Orient, so that the potential pur
chasing power o f their people will be
greatly stimulated. American capital and
effort directed into these channels is the
greatest insurance policy fo r a continua
tion o f our present standards, and it is the

Even the Humble Flatiron
Adds to Your Income
Drudgery eliminated.........hours saved ••••• health
improved......... work bettered...........Life is made
easier for millions of women by simple household
helpers, brought into the home by Electricity.

So common and intimate have become the
uses of electricity, that people take it as a mere
matter of course. But to the Electric Power
and Light Companies every use, no matter how
humble, is a matter of added incom e— to in
vestors in their bonds, a matter of added safety.

You’» find much of interert
inour booklet,“ Theldeal In.
vestment,” which tells why
Electric Power and Light
Bonds are so much in favor
among careful investors.
AskforBookletT-26, please

Th o m p s o n R o s s & C o T n c .
ESTABLISHED 19 12

INVESTMENT
Bank Floor
N E W YO RK

SECURITIES

29 South La Salle Street

CHICAGO
Telephone Randolph 6380

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Federal Reserve Bank of St. Louis

SAN FRANCISCO

BOSTON

A p r il, 1927

duty o f the leaders o f American finance to
lead the way and again demonstrate that
our foresight and courage did not die with
the development o f our own resources.

Will Distribute Guaranteed
Mortgage Co. Bonds

IN ANCIAL interests o f the north
west were last month interested in
the announcement that Lane, Piper
and Jaffray, Inc., have completed ar
rangements with the Guaranteed Mort
gage Company o f Minneapolis, to handle
the wholesale and retail distribution of
Guaranteed Mortgage Company bonds in
Minnesota, Iowa, Wisconsin, Illinois,
North Dakota, South Dakota, Montana
and Upper Michigan. Lane, Piper and
Jaffray have associated with them the
firm o f Lane, Roloson, Inc., o f Chicago.
The Guaranteed Mortgage Company
bonds are the direct obligation of the com
pany and the mortgages are guaranteed
by the United State Fidelity and Guaran
ty Company. Titles are insured by the
New York Title and Mortgage Company
and the Minneapolis Trust Company act
as trustees fo r the mortgages. The com
pany numbers among its officers and di
rectors a group o f prominent Minneapo
lis business men.
Commenting on the new arrangement,
Lane, Piper and Jaffray, say:
“ W e are very glad to take over the
distribution o f Guaranteed Mortgage
Company bonds throughout this territory.
With our main office at Minneapolis, and
branches at St. Paul, Rochester, Man
kato and Fargo, together with Lane, Rolo
son, Inc., Chicago, we are well equipped
to handle a large volume of these bonds in
the Northwest. Our company has found
that there is a strong demand for securi
ties o f this type, and a notable interest in
Guaranteed Mortgage bonds. In arrang
ing fo r the distribution o f these bonds,
we are confident that we are offering in
vestors the highest type o f guaranteed in
vestment.”
Move to New Building
Announcement is made o f the removal
o f the Chicago offices o f D eW olf & Com
pany, investment bankers, on February
28th, to the new building at 100 West
Monroe street.
D eW olf & Company will occupy a large
part o f the second or “ bank floor.” Their
offices are said to be among the hand
somest and most efficiently arranged of
their kind. The office entrance is o f black
and gold carved marble with plate glass
doors and an ornamental bronze grill.
The interior is completedy paneled in
walnut from floor to ceiling. Cork tile
floors are used throughout, and the ceil
ings are o f special acoustical Celotex to
distribute and deaden both office and
street noises, reducing them to a mini
mum.

Bonds in Bank Investments
From, address'of Lawrence H. Sloan, Managing Editor Standard Statistics
Company, New York City, before Central Regional Savings Con
ference, Savings Bank Division, American Bankers Association,
Cleveland, Ohio, March 24, 1927.

HE main trend o f high grade bond
yields has been downward, without
important interruption, since the
middle o f 1920. Whereas sixty high-grade
issues yielded something better than 6 per
cent in mid-1920, at today’s prices they
return only a shade above 4 % per cent.
The direction o f this movement is typi
cal of the trend o f bond yields in general
— both in other high grade issues and in
what are usually referred to as second
grade, or unseasoned, issues.
It need not be pointed out that the
rate paid by savings and commercial
banks on time deposits has not shown a
corresponding decline. Precise data in
this respect are not available, but sample
data suggest that, since bond yields
reached their peak in 1920, the number of
banks that have increased their rates has
been larger than those that have lowered
rates.
The generally upward movement of
bond prices which has been in progress
during the past seven years has been
steeper and longer than any other up
swing which has occurred thus far during
the twentieth century. Our index o f high
grade bond prices has arisen from 78.2
in July, 1920, to about 98 flat at the
present time-—an increase o f more than 25
per cent.
Think what this protracted and unre
mitting up-swing o f prices has meant to
the professional reputations o f the bond
purchasers for various banks, insurance
companies and other financial institutions!
During the last seven years it has been
humanly possible, o f course, to make grave
mistakes in the bond market. Indeed,
there has been hardly any basic line o f in
dustry which has not had its spectacular
defaults. But these have been the very
exceptional cases. A ny bond buyer who
had intelligently diversified his purchases,
and who had made it a rule to eschew the
dubious and highly speculative issues,
would have been obliged to sit up nights
figuring out a way to show anything but
a consistent profit on his operations dur
ing the past seven years. To report that
average bond prices have been rising dur
ing that period is merely to report that
the prices o f the majority o f individual
issues have been rising.
It is somewhere toward the top o f such
a long rise as this that the lotus-flowers
begin to dull our senses to the actualities
and realities o f the situation, to its inher
ent hazards and uncertainties. They give
us what may prove to be a false sense of
security, a false appraisal o f our own
wisdom. It might be, o f course, that the
long rise in bond prices, the long record o f

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Federal Reserve Bank of St. Louis

glittering success achieved by bond buyers,
involve no hazards or uncertainties. Per
haps this business and financial structure
o f ours has freed itself permanently from
all adverse influences, and perhaps bond
prices will continue to rise, without im
portant interruption, fo r seven more
years. The only thing that we securely
know is that bond prices never had con
tinued to rise over such a protracted pe
riod o f time.
Prices Ever Changing
It might be that prices, after rising

somewhat further, will flatten out and
hold relatively stable for seven, or twice
or thrice times seven years. But our ex
perience teaches that bond quotations
never have made a seven year straight line.
Like speculative stocks, bond prices have
been, in the past, always going some
where— only going there more leisurely
than stock prices ordinarily go. They have
always been in a state of flux, both the di
rection o f their movement and their level
at any given time conforming with a re
markable degree o f fidelity to the changes

•k

Necessary?
R IV A T E W IR E — over 11,000
miles of it — connects our offices in
over fifty principal cities of the country
and brings our banker-customers every
where in almost instant touch with the
great investment centers.
P

These facilities are yours to command
when you want quick action on a bond
offering or seek market quotations or
other investment information.

T h e N ational C ity Company
National City Bank Building, New York
Offices in more than 50 leading cities throughout the world

BONDS

SHORT

TERM NOTES

ACCEPTANCES

THE

in, and the level of, interest rates and
purchasing power of the dollar.
Those who have refused to taste o f the
dangerous bond market lotus flowers hold
that none o f the underlying forces which
determine the long-term trend o f bond
prices has been nullified; that the most
important sustaining force in the market
is an abundance o f credit facilities and
that this sustaining force will function as
long as, and only as long as, easy money
endures.
When our season o f money
plethora comes to an end, there is scant
doubt that we will witness another down
ward swing o f bond prices, such as oc
curred in 1917-1920, 1909-1915, during
1907 and 1902-1903.

N O R T H W E S T E R N

B A N K E R

When such a movement begins, it will
be characterized by a considerable amount
o f bank liquidation o f bonds, and will to
no small extent be occasioned by bank
liquidation. That is why point has here
been made o f the fact that the character
istic long term behavior o f the bond market
is that o f cynical fluctuation, and that the
present might be an opportune time to take
stock o f inventory— while everything in
the bond market is rosy, and while aver
age prices are at a level higher than at
any previous time in the past decade. Nat
urally, in any financial situation which
dictates bond liquidation, it will be the
second grade issues that will decline most
violently in price.

April, 1927

Emphatically, it should be made clear
that there is nothing in the foregoing
which is intended as an alarmist’s cry.
So far as the short term is concerned—
say the next six to twelve months— the
studios o f the Standard Statistics Com
pany have developed nothing whatsoever
to indicate a sharp decline in bond val
ues. Indeed, our conclusions are precisely
the contrary. W e regard the present level
o f bond prices as justified by prevailing
financial conditions and as tenable for
some time to come, and we should not be
the slightest surprised to see the trend of
prices continue mainly upward for a num
ber o f months— although at a slackening
pace. In raising the question of the bond
market’s outlook at all at this time, we
are merely looking ahead into the long
term future, and are guiding our expecta
tions, to no small extent, by the lessons
that economic history has taught.
Nor are we greatly worried about the
character o f bank investments, on the
average. W e see a good many bank bond
lists, and find the majority o f them in a
gratifying condition. But unhappily, not
all o f them are in that condition. As
usual, it is chiefly the smaller banks in
rural communities, located somewhat off
those main channels through which the
tide o f market sophistication flow more
swiftly, that are nearer the border line.
Doubtless one o f the greatest services that
you can render to your smaller correspon
dents at the present time is that o f sug
gesting— indeed, perhaps insisting upon—
the desirability o f a careful study of in
vestment holdings.
Any banker, I take it, can safeguard the
interests o f his clients to the nth degree
by placing all o f the bank’s surplus funds
in Liberties, Atchison 4s, City of Detroit
4}4s, etc. But that program might, over
a period o f time, prove as serious an error
as though the bulk o f the funds had been
placed in highly speculative issues.
Viewed both from the standpoint o f the
bank as an institution organized for profit
and from the standpoint o f the bank’s
clientele, one may assume that the best
banking investment policy comprehends
something o f a compromise with the ulti
mate o f safety— a compromise which does
not omit to keep in the portfolio a portly
backlog o f highest grade issues, but one
which, at the same time, has the courage
to carry a certain amount o f lower grade
issues, and the wisdom to chose such sec
ond grade bonds as will, in the fullness
o f time, themselves become high grade.
The only warning that is implied here is
against too much of a compromise with
the ultimate o f conservatism. A wise and
carefully computed compromise, yes; a
radical, reckless, or careless compromise,
no.
Baby’s Complexion
“ Madam, what is the complexion of
your new baby, dark or fa ir ? ”
“ To tell the truth, he is a little yeller.”

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Federal Reserve Bank of St. Louis

April, 1927

THE

NORTHWESTERN

Lower Money Seen for
Current Year

HE announcement last month by
the treasury department that it will
exchange new five year 3
per cent
for the Second Liberty Loan 4^4 per cent
bonds, and will offer new short term cer
tificates bearing interest only at three and
one-eighth and three and one-quarter, and
running only six and twelve months, was
one o f the interesting events o f the month,
in the investment field. Commenting on
it, the Bache Review says that incidentally
“ it strengthened the credit o f the govern
ment making Liberty Bonds more desir
able for certain purposes and also in the
case o f certificates emphasized the treas
ury’s opinion o f the future of money. The
effect o f the secretary’s announcement was
to establish a new high level record for
all time in several United States Securi
ties.”

discount from par, seem reluctant to ac
cept an obligation no matter how giltedged, which nets only 3y2 per cent re
turn on its principal. These, o f course,
are not the very large holders, who are
almost compelled to keep a large part of
their holdings in Governments. Many of
the comparatively smaller holders are di
verting their funds into gilt-edged rail
road and industrial bonds which yield be
tween 4.25 per cent and 4.75 per cent.

The Review comments further:
“ The low rate o f the certificates is not
the lowest on record, as in March and
June o f 1925 certificates o f this character
were placed at 3 per cent, and in June
and September o f 1924 at the record low
rate o f 2% per cent. The 3% rate, how
ever, is lower than any fo r a year and a
half, and the significance lies in the fact
that heretofore when these very low rates
were offered, it turned out to be an indica
tion o f the treasury’s judgment that low
rates in money would prevail fo r a year
or thereabout. They did so in the former
cases, and the inference is drawn now that
they will do so again.
“ These reasonings and indications have
already shown their effect on the bond
market. A large part o f the present is
sues o f Government bonds have drifted, as
the years have gone by, into the hands o f
strong institutions like banks and insur
ance companies, and into the safety boxes
o f very large estates. Such institutions
are loath to part with securities which are
almost akin to so much cash and still
draw a reasonable rate o f interest.
“ The supply o f Governments is decreas
ing and the demand fo r them increases
every year. Calling in a large block nat
urally further diminishes the supply, and
this fact is realized by large owners,
among whom the popularity o f them has
been steadily growing. The net result
o f the Treasury’s March 15th Certificate
funding operation will be the withdrawal
from the market o f about $2 0 0 ,0 0 0,00 0
more short-term paper than is created
through the two new issues.
“ A ll Second 4^4s which are not ex
changed fo r these new bonds will un
doubtedly be called fo r redemption this
year at par and interest.
“ Many present holders o f Second 4^4s,
who bought their bonds at a considerable

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Federal Reserve Bank of St. Louis

B A N K E R

Others are selecting Municipal bonds,
which show a greater return on account
o f their tax-exempt features. F or in
stance, State o f New York bonds are sell
ing at a price to return 3.80 per cent, and
New York City bonds 4.10 per cent. The
securities o f various other Municipalities
are selling at prices which reflect esti
mates o f their value in the open market—
that is, the higher the yield the lower the
range in the average o f safety.
“ W e believe this new buying will create
a very much stronger tone in the bond
market, which has become top-heavy due
to the huge amount o f offerings which
have been made since the first o f the year

We solicit inquiries for buying or selling
orders in the following securities:
Y IE L D

Appalachian Elec. Power Co.,
1st & Ref. Mtg. 5s, May, 1956

Birmingham Water Works Co.,

5.25%
5.15%

1st Mtg. Sy2s, October. 1954

Gulf, Mobile & No. R. R. Co.,
4.90%

1st Mtg. 5s, October, 1950

Michigan Home Tel. Co.,

5.80%

1st Mtg. 6s, November, 1946

Minnesota Power & Light Co.,

5.02%

1st & Ref. Mtg. 5s, June. 1955

New Rochelle Water Co.,

5.38%

1st Mtg. 5 % s , November, 1951

Puget Sound Pr. & Lt. Co.,
1st & Ref. Mtg. 5

5.47%

s, June, 1949

St. Louis County Water Co.,

5.25%

1st Mtg. 5 % s , December, 1945

Southwestern Pub. Ser. Co..

5.88%

1st Mtg. 6s, July, 1945

Our trading department maintains an active
market in a large number of high grade
public utility and rail issues, such as the
above list.
The yields indicated above are subject to
change in accordance with the market.
■
■

P. W . C H A P M A N
ii

& CO., IN C

170 W. Monroe Street, Chicago
Telephone Franklin 6001

Mortgage Bankers State Position on
Real Estate Bonds
the Mortgage Bankers’ Association of
America in meeting assembled do and
have always looked with disfavor upon the
practice followed by some companies of
offering to the public bond issues secured
by mortgages on real estate fo r construc
tion purposes where the funds fo r such
construction are not segregated and de
posited with a disinterested corporate
trustee; now therefore,
“ Be it Resolved, that this Board o f Gov
ernors declines to accept for membership
mortgage bond firms unless such firms

A T THE close o f a meeting o f the
r A Board of Governors o f the Mort
gage
Bankers’
Association
of
America, held in Chicago recently, it was
announced that a resolution had been
adopted providing that the board in the
future will refuse membership in the asso
ciation to real estate bond houses that do
not place with separate trustees the funds
realized from sales o f bonds issued against
buildings in course o f construction. The
resolution follows :
“ Whereas, the Board of Governors of

e l e c t e d

b y b a n k s

n a t io n

-w

id e

fo r P R I M E S H O R T - T E R M I N V E S T M E N T
M a tu r itie s 2 to 12 m onths.
C ustom ary i o -d ay O ption .
C heckings in any F in a n cia l C en ter.
C om plete C red it D a ta on R eq u est.
A L W A Y S

M O S T

C O N S E R V A T IV E

Industrial
A cce p ta n c e
Corporation

subscribe to a rule of practice that when
ever a loan is made for construction pur
poses, the funds fo r such purpose arising
from the sale o f bonds to the public, shall
be segregated and kept apart as a separ
ate entity from the funds derived from
the sale o f bonds o f other issues and de
posited with a bank or trust company
(with capital and surplus commensurate
with the amount o f such deposit), to be
used only upon the enterprise for which
such bonds are sold.”
President Makes Statement
The president o f the Mortgage Bank
ers’ Association, Mr. E. D. Schumacher,
who is president o f the Southern Bond &
Mortgage Company o f Richmond, V ir
ginia, has issued the following statement
concerning the action o f his board in its
Chicago meeting:
“ For thousands o f years people have
borrowed money, pledging as security
therefor their lands and dwellings. The
‘mortgage’ is undoubtedly the world’s old
est financial device. It has come to be
considered as the one most safe and con
servative investment for those o f small
means who are not in position to assume
the risks o f speculation.
“ The mortgage business has long been
recognized as a reliable branch o f finan
cial commerce. The mortgage banker un
questionably has played a major part in
inducing the large investors to lend their
funds on farms, residences and business
property. No agency, not even the Joint
Stock Land Banks or Federal Land Banks
has provided more funds and given greater
assistance to our American citizens in

DEALERS EXCLUSIVELY

FINANCING STUDEBAKER

Col l at eral T r u s t
Go l d N o t e s

For your own funds or
for those of clients, you
can rely upon
F id e lit y F i r s t M o r t g a g e

(THE NATIONAL CITY BANK OF NEW YORK, Trustee)

6j%

Bonds

Denominations $100, $500 and $1000

W rite for list o f issues

E xecutive Offices
TOO

EAST

42 N D

STREET,

NEW

YORK

Commercial Paper Offices
NEW YORK

ST. LOUIS

DALLAS

Fi d e l i t y

.j.U
1 .MBOND
^MORTGAGE
CO Ji
ENTEER.Prpsi*nf
INCORPORATED1913
SAN FRANCISCO

C H IC A G O r 105 South La Salle Street
M IN N E A P O L IS r First National Soo Line Building

1182 New

York Life Bldg., Chicago

St. Louis

Denver

F idelity Guarantees Every B ond
K877

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Federal Reserve Bank of St. Louis

THE

April, 1927

owning their homes, farm and city, than
the members o f the Mortgage Bankers’
Association of America. A great part of
the two billion dollars farm mortgages
and three billion dollars residence and
business loans now held by American in
surance companies has been
loaned
through our members.
“ Now it happens that in the last few
years a very important factor in real
estate financing has come into existence
known as the real estate first mortgage
bond. The bond is merely a device to
split up a mortgage so it can be distrib
uted among many people. Conservatively
issued, real estate bonds are in no sense
speculative but have investment security
with a very high factor o f safety. With
out the real estate bond it would be d if
ficult to finance many o f our largest and
most needed buildings.
“ In 1926 a large eastern bond house,
not a member o f our association, failed
for about fifty million dollars. This was
only a drop in the bucket compared with
thousands o f mortgage and bond firms
that continued solvent and handled mil
lions o f dollars daily without loss to any
one; but the man in the street, startled by
the well-merited publicity attendant upon
this sensational failure, began at once to
assume that the first mortgage investment
was open to suspicion after enjoying cen
turies o f good repute. How much actual
harm this failure has caused among banks
and mortgage companies is debatable.
Some feel that the example to the public,
painful as it was, improved conditions for
the responsible companies. Certain it is,
however, that every danger signal in any
business must be closely heeded; so the
Mortgage Bankers’ Association has stud
ied very carefully the general situation
in the real estate bond field— not only
with the interests o f the members at

N0 RTHW E STERN

BANKE R

heart but also with a view to the welfare
o f investors large and small who look to us
fo r guidance and on whose good will and
confidence our success depends.

Public Wants Reassurance
“ The public looks upon our association
as having within it financial houses of
acknowledged responsibility producing
first mortgages on real estate (farm or
city) and selling these securities in such
a manner that the investor comes into
possession o f a first lien on real property
as soon as he writes out his check. In the
case o f city property, if the building is
already constructed and being used it is
plain to see that the investor has bought

something very definite.
If, however,
the building is only in process o f construc
tion he will wisely inquire if his money is
to be placed in trust with a separate, dis
interested, corporate trustee and be paid
out only on the enterprise fo r which bonds
have been sold. Unless this precaution is
taken, it is self-evident that until a build
ing is completed the security behind a real
estate bond is not the building but the
credit o f the bond house.
“ I f a real estate bond house switches an
investor’s funds from one building project
to another at will no harmful result can
be expected as long as the bond house
remains solvent; but once difficulties are
encountered the investor is apt to find that

BROKAW
AND

COMPANY

1 0 5 ' South La Salle Street, Ch ic ag o
Direct Wire to Edward B. Smith & Co.
New York • Philadelphia

General Trading Department
Specializing in Packing House,
Canadian, Equipment Trust
and Pacific Coast Securities.

Special B ond Service to Banks

Emery,
Peck 8C Rockwood
Investment Securities

Continental and Commercial
Bank Building - C H I C A G O

M ilw aukee

* R ailway

*■■■■Mil ......... I—

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Federal Reserve Bank of St. Louis

Exch. Bldg.

IOWA REPRESENTATIVES:
Edward J. Kelly and Maurice F. Leahy

THE

TERM

BANKER

America would be called upon to give an
account o f itself and in order that the
public might know our position we have
seen fit to announce our membership pol
icy as stated in the resolution.
“ It is hopeless to expect that any non
governmental body such as ours can dic
tate business practices to individual firms
-—especially if they are outside our Asso
ciation. But we can and do exercise the
right to select our members judiciously;
and in so doing we thus offer the investing
public a certain standard o f measurement
which would not otherwise be available.”

years o f litigation are necessary before
he can get back any part o f his principal.
The advantages o f separate trusteeship
thus becomes evident.
The investor’s
funds, if deposited at once with a bank or
trust company and reserved fo r a partic
ular building project are safely removed
from the vicissitudes which may be at
tendant upon the bond house’s other build
ing projects.
“ Much o f the comment following the
failure o f the large Eastern house has been
along the lines o f trusteeship. As stated
in the resolution our association has al
ways looked with disfavor upon the prac
tice followed by some companies o f not
depositing investors’ funds with disin
terested corporate trustees, where a build
ing is still under construction. Before
the Mortgage Bankers’ Association of

SHORT

NORTHWESTERN

New Work Program
The Trust Development Division o f the
Financial Advertisers Association, at its
meeting in New York City last month in
augurated a comprehensive plan o f work

INVESTMENTS

FOR

BANKS

U R shorts term
obligations

havebeenpur

chased by more than-: y ooo
banks in the United States.

April, 1927

covering the subject o f new business for
trust departments.
The committeemen
were guests o f the Equitable Trust Com
pany o f New York, in whose uptown o f
fice the meetings were held.
The single, broad object o f this Di
vision o f the o f the F. A. A. is to assist
its members in securing fo r their respec
tive institutions an increased volume of
profitable trust business in the most eco
nomical manner and the new division
is desirous of cooperating with existing
bank and trust company organizations
who are engaged in advancing the Trust
idea.
The Division will seek to attain its ob
jectives through the collection and dis
semination o f information concerning
materials and methods used and the ex
periences encountered by the various
trust companies o f the country in the
development o f their trust business; and
by the study o f the problems peculiar
to those personally engaged in trust de
velopment work.
As a concrete means o f attaining these
objectives, it was determined to allocate
different portions o f the research work
and the program to various sub-com
mittees as fo llo w s:
(a) The trust development represen
tative, his qualifications, training,
and function.
(b) Successful methods o f securing the
cooperation o f directors, officers,
employees and stockholders.
(c) Effective means for obtaining the
cooperation o f organized bodies
such as schools and clubs.
Honored by Directors
Carroll Ragan, who was president o f the
Financial Advertisers Association in
1925-26, was the recipient o f a beautiful
watch, the gift o f the board o f directors
o f the association. Fred W . Ellsworth,
Vice president o f the Hibernia Bank and
Trust Company, New Orleans, made the
presentation during the mid-year gather
ing o f the Financial Advertisers Associa
tion in New Orleans, March 10, 11 and 12.
Issue “Prosperity” Booklets

G
A

eneral

cceptance

otors

C o r p o r a t io n

Executive Office y 2.5 O WEST 57™ ST- / New York City
Capital, Surplus & Undivided
Profits
• $ 3 6 , 4 x 8 ,0 0 0 .0 0

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Federal Reserve Bank of St. Louis

A fiscal program fo r depositors which
guarantees financial success if followed
and promises to revolutionize bank pro
motion methods is announced by the State
Bank o f Chicago.
The bank is distributing sixteen text
books, each meeting a definite need. One
“ How to Become a Financial Success/'
lays down a simple set o f rules by which a
person can become independent.
The series ranges from “ How to Make
the Family Income Go Farther” and
“'How to Own a Home,” to “ How to Build
Your Credit” and “ How to Use Your
Bank fo r Profit.”
These prosperity handbooks cover every
phase o f individual financial education.

April, 1927

THE

NORTHWESTERN

BANKER

Broadcasts Investment Talk
Three fundamental principles which
should govern in the investment o f funds
are to buy securities only from a reliable
house, to put safety o f principal ahead of
rate o f return and to diversify the pur
chases, C. Palmer Jaffray, o f Minneap
olis, vice president o f Lane, Piper &
Jaffray, Inc., investment bankers, told
radio listeners in an address over WCCO
recently. Analyzing the subject, “ How
to Invest,” Mr. Jaffray outlined prac
tical solutions o f the problems which
confront persons seeking safety plus a
fair rate o f interest on their investment
funds.
“ The problem o f the individual investor
is more difficult than that o f the banker,
who is supposed to have specialized
knowledge o f finance,” Mr. Jaffray said.
“ Generally speaking, investments o f per
sons o f limited means should be confined
to high-grade first mortgages or bonds.
Because of the tax-exempt feature, the
yield on municipal bonds is too low for
the small investor, but good bonds yield
ing 6 per cent are available, whose ele
ment o f risk is very small.”

Earn Their
Own Way
T N addition to earning their way as
a part of yonr regular reserves—
— good bonds are equivalent to cash
in the event of emergencies. They
can be converted without delay, and
are equally acceptable as security for
a loan up to virtually their full face
value.

Divided California

California, with its 158,297 square
miles o f territory, extends north and south
for 1 ,0 0 0 miles along the waters o f the
Pacific.
Three-quarters o f a century ago the
upper part o f the state began to develop,
with the gold rush o f 1849 as the open
ing wedge. San Francisco became, and
remains, a city touched with romance. It
is the commercial and social metropolis
o f the old California, wherein the third
generation o f descendants from the A rgo
nauts and their kind mold affairs.
Not until near 1880 did the southern
third o f the state begin its ascent. A
salubrious climate and previously unde
veloped agricultural and mineral wealth
made their appeal. The result has been a
tremendous expansion in population, the
rise o f Los Angeles as one o f the leading
American cities, and the accentuation o f
differing temperaments between the north
and the south o f California.
The social makeup o f the north extends
its roots to the states east o f the Missis
sippi almost wholly. Not so the south of
California. While the latter has gathered
unto itself settlers from all parts o f the
country, the states west o f the Mississippi
more than those east have supplied the
determining currents in the population
drift.
Thus there is a considerable cleavage
between the two sections, reflected in con
trasting mental attitudes. That extends
to the views frequently taken on public
questions.
The conflict is perennial, and explains
why talk again is heard fo r and against
making two states out o f the one.— Indian
apolis News.

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

We are assisting a constantly grow
ing number of banks in building a
sound reserve of such marketable
bonds. We invite you to take ad
vantage of our special experience in
this field. Our latest offerings for
banks will be mailed to you without
obligation, upon request.

H .P o

r r y
i

Co .

N C O R P O R A T E D

Investment Securities

Equitable Bldg.

Des Moines
Phone Walnut 55, 56, 57

Common Sense and Foreign Securities

HE PU R CH A SE by American in
vestors o f billions o f dollars worth
o f foreign securities the past few
years, has placed a new responsibility on
the investment bankers o f the country,
says a recent bulletin o f the Foreign Trade
Securities Co., entitled, “ Common Sense
and Foreign Securities,” the bulletin goes
on to say :
“ Dealers are frequently called upon to
assume the responsibility o f recommend
ing such securities to their customers, and
to consider them in every phase o f their
customer’s daily needs. In many parts of
the country dealers have not yet realized
that the sale o f such securities has become
a necessary part o f their everyday busi
ness, and in many cases their recommenda-

tion is either frowned upon or made under
great reserve.
“ This organization has recently con
cluded a survey o f the foregoing situation,
and has come to the conclusion that the
chief hindrances to a general confidence in
foreign securities lie in the following
causes :
“ 1. An absence o f complete confidence
in the political stability o f Europe.
“ 2. The failure to appreciate the possi
bilities which foreign securities afford in
the field o f diversification, and increase of
average yield o f income, also that dealers
have not equipped themselves with proper
service machinery and a general knowl
edge o f fundamental foreign economic and
political conditions through which their

RESERVES
For the investment ot
certain funds included
in the bank’s secondary
reserves, safe bonds of
proper maturities are
highly desirable. We
carry a diversified list of
sound investment issues.

D e W olf & C ompany , inc.
Established 1889

100 West Monroe Street
C H IC A G O

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Federal Reserve Bank of St. Louis

Investment Securities

97 Wisconsin Street
MILWAUKEE

sales organization may overcome ordinary
sales-resistance, and
“ 3. The frequent market depression,
following the public issue o f new securi
ties.
“ An examination o f these facts may aid
in arriving at a clearer conception o f the
situation, and we respectfully submit the
following fo r your consideration:
“ 1. The Absence of Confidence in the
Present Political Structure o f Europe is
the most persistent difficulty to be over
come before Foreign Securities can occupy
their logical position in the field of invest
ments. The intensified form in which this
question remains in the public mind seems
to be due— not so much to recollections of
the war as it does— to impressions left on
the public mind by the French occupation
o f the Ruhr and the several remaining p o
litical questions, which are the subject of
continued agitation and propaganda. This,
and the vivid recollections o f the financial
debacle of Europe during the period of
currency inflaton, seem to be the main
factors to be overcome before Foreign Se
curities are accepted without reserve.
“ There remains an absence of realiza
tion o f the tremendous strides which Eu
rope has made towards economic recon
struction since the stabilization o f its re
spective currencies, as is best evidenced
by the general movement and negotiations
now pending fo r the refunding o f the
European debts to the government o f the
United States, the balancing of their
budgets and the equalization o f their fo r
eign trade. Credit is not given to the
profound movement, on the part o f the
European masses, their statesmen and
politicians, towards securing an era of
peace, which is best evidenced by the de
termined and satisfactory character o f the
present negotiations fo r a security pact,
which, when consummated, will effectively
mean an “ insurance policy” for the peace
of Europe fo r many years to come.
“ 2. A Careful Comparison o f the Se
curities Sold by the Leading European
Countries in our market during the last
few years shows that the securities of
many o f these countries were selling on
an approximately 3 % to 4 per cent basis
before the war, and at that time over five
billion dollars o f American Securities were
held abroad, and were yielding at an
average rate o f approximately 5^ per
cent. So that Europe then demanded,
and received, an increase o f approxi
mately 1^/2 per cent from its American in
vestments.
“ One o f the results o f the war has
been the tremendous growth o f an in
vestment class amongst which is found
a large percentage of people who are de
pendent on their income from invest
ments. To such people, and the invest-

April, 1927

T II E

ment public in general, the field offered by
Foreign Securities fo r the diversification
o f investments and the increase o f their
average yield becomes a matter o f great
importance.
“ The present purchasing power o f the
dollar, compared to that o f 1914, is ap
proximately 65 per cent. While it might
be argued that the general increase in in
come since that time compensates fo r the
loss in purchasing power o f the dollar,
the fact remains that present interest rates
are substantially the same as they were
in 1914. This fact, coupled with the in
crease in the standard o f living, brings
forward the everpresent question o f higher
yields on invested funds, and the invest
ment house is continuously called upon for
advice as to how this problem can be
solved.
“ Considering the fact that no Euro
pean Government or Municipality, whose
securities are now quoted on the New
York Stock Exchange, has defaulted on
their foreign obligations, and as the avail
able yield from these securities cannot
be equaled amongst domestic investments,
and as the economic and political develop
ments in Europe during the past 18
months indicate that Europe can count on
a long period o f economic and political
improvement, we feel that a carefully se
lected list o f foreign securities can be
purchased with safety.
“ The refunding operations, conducted
in this market during the past few months
by the Scandinavian countries and Swit
zerland indicate a rapid readjustment of
interest rates, as the 8 per cent securities
o f these countries have been refunded
with a 5 V2 per cent coupon. AVe believe
that the conditions in the Continental
countries, when compared to the so-called
Neutral countries, does not justify an ad
vance o f from 2 to 2 y2 points on the
coupon rate and that, within the next few
years, Foreign Governments’ Securities
will readjust their interest rates and be
much nearer in line with our own.
“ 3. The frequent depression following
the dissolution o f the syndicates interested
in new issues has had a depressing influ
ence on dealers, and the public has fre
quently been led to believe that securities
could be purchased cheaper at such times
than at the time of issue. This has been
largely brought about by the fact that
dealers have underestimated selling re
sistance and made underwriting commit
ments in excess o f their selling capacity,
so that the dissolution o f the syndicate is
usually the signal fo r a forced selling
movement during which the security price
must suffer. The unpreparedness o f deal
ers to give their clients an intelligent and
organized service in guiding their foreign
investments is one o f the leading causes
for the public’s failure to appreciate the
possibilities for profit and higher yield
in this field o f investment, and it seems
to us that, if dealers are to succeed in

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Federal Reserve Bank of St. Louis

N 0 R T H AV E S T E R N

B A NK E R

Not at Home

this line, they will have to prepare them
selves more fully to understand the prob
lems o f the issuing groups and the under
lying conditions affecting the value o f the
securities offered to them.”

Jakie: “ Fadder, the man you owe five
hundred dollars to is on de ’phone.”
Jakie’s Fadder: “ Tell him ve had de
’phone tooken out.”

Purpose directs energy and purpose
makes energy.— Parkhurst,

The future is purchased by the present.
— Johnson.

Sound Bonds
for Bank
Investments
W rite fo r our list of
Iowa Municipal Issues

a r l e t o ä t

I). B

e h

I n v e s t m e n t S e c u r itie s

Liberty Bldg.

Des Moines, Iowa

Xhe D etroit Company
(Correspondent: of

D etroit Trust C om p an y
HIGH GRADE
MUNICIPAL
AND
CORPORATION
BONDS

137 South LaSalle Street
C HICAGO

THE

NORTHWESTERN

BANKER

April, 1927

Predict Bond Prices W ill
Continue Steady

NTEREST
rates
and
commodity
prices— the two primary factors in
fixing bond prices— are distinctly
favorable, both showing continued easing
tendencies, thus promising well fo r an
extension o f existing price levels in the
bond market.”
Briefly, that is the opinion o f Halsey,
Stuart & Co. on the present outlook for
the bond market, as expressed in its
quarterly review, which was issued last
month. It also points out that while new
offerings since the first o f the year have
continued large, prices have remained
firm and tlie issues fo r the most part
have been readily absorbed. Industrial
conditions also remain good, the review
indicates, saying:

Sound
Short Term Notes
Maturity

General Necessities Corp.
Serial 6 s ........................... July, 1928
Associates Investment Co.
6 s......................................... Feb. 1929
Consolidated Public Service Co.
5 s........................................ Mar. 1928
General Furniture Co.
Coll. Trust 6^s . . . . Aug. 1931

Yield

5-75%
6.20%
6.00%
6.50%

Outlook for 1926 Good

Circulars on Request

o a g l a n d

, A

l l u m

& (o .

Established 1909 — Incorporated

14 S. La Salle St.
CH ICA G O

34 Pine St.
N E W YORK

A Complete Investment Service
Commercial Paper and Bonds
^ V .V .V A V .V .V .V .V .V .V .V .V V / . 1

Clients o f this firm are able to
obtain from one source the type
of security best suited to their
current condition and need.
V .V A W A V V A V .V .'.V .V .V .V .V .V

L A N E ,

R O L O S O N

C O .,

Inc.

209 South La Salle Street, Chicago
LANE, PIPER & JAFFRAY, Inc.
M in n e a p o l is

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Federal Reserve Bank of St. Louis

S t. P a u l

R och ester

M a n k a to

F a rgo

“ Despite some hesitancy since the first
o f the year, sentiment now appears
agreed that industry can look forward
with considerable confidence to a year
o f good business, perhaps not in such ab
normal volume as 1926, but good, never
theless measured by ordinary standards.
“ Production efficiency, careful buying,
sound labor conditions, and an excellent
credit and money situation are all factors
favorable to the expectation that 1927 will
be a good year in industry. Considering
the well-entrenched position o f most in
dustrial organizations following last
year's profitable operations, and the fun
damentally sound outlook for the present
year, the prices o f good industrial bonds
present some o f the best opportunities in
today’s markets.”
The strong position foreign bonds have
now reached, and interesting facts about
some o f the other bond fields, are then
considered. The review says:
“ Foreign bonds have made noteworthy
advances in recent weeks— a tardy recog
nition o f the investment values to be
found in this field. While it is true that
this movement grows in large part out o f
the lowering yields among domestic bonds,
an important contributing factor has been,
o f course, the greater familiarity with
foreign bonds on the part o f American
investors and the resulting awakened ap
preciation o f their merits. There has been
a material decline in financing coming out
o f Europe, particularly from Germany,
which last year was the largest foreign
borrower here. Indications point toward
a continued smaller volume o f foreign
financing which, together with the large
demand now prevailing, should maintain,
if not further strengthen, the existing
level o f prices.
“ Many investors in public utility bonds,
whose first experience with this type of
investment was gained during the era o f
high yield, find it difficult to become ac-

April, 1927

THE

customed to the existing price level among
this type of securities. Aside from the
general advance in all bond prices, such
investors need to be reminded of the ma
terially strengthened position of utility
bonds in the intervening period. Vast
sums of junior money have been put back
of their bonds, thus improving the equity.
Much favorable legislation has been
enacted, clarifying the position and forti
fying the earnings of these companies.
Consolidations have been effected, and op
erating technique improved. All this has
had the effect of enormously popularizing
public utility bonds, which is in itself a
strong market factor.
“ Despite existing price levels, it is prob
able that in investment value the buyer
of utility bonds obtains more for his
money today than at an earlier period
when yields were higher.
Building Operations Lag

“ Building operations, though continu
ing in large volume, have shown some ten
dencies toward slowing down in recent
months. This, together with considerable
agitation and suggested legislation look
ing toward the correction of certain bad
practices which grew up in the real estate
bond field during its period of remark
able development following the war, has
been reflected in a slight reduction over
the past several months in the output
of real estate bonds. The fact remains,
however, that real estate bonds issued un
der proper restrictions and sponsored by
reputable houses are among the safest
forms of investment. It is our feeling,
therefore, that with careful selection, ex
cellent investment values may be found
among real estate bonds, for while it is
increasingly difficult to obtain a 5% to 6
per cent yield among other domestic is
sues, these rates still prevail in the real
estate bond field.
“ While demand in the tax exempt field
has recently not been so active as in other
c’ assifications, municipal bond prices re
main firm. The market for farm loan
bonds has shown some hesitancy because
of legislation suggested in the closing
session of Congress and continued over
into the next session. In our opinion,
there is, however, nothing in this situation
to cause apprehension among holders or
buyers of bonds of well-located and wellmanaged banks. Offerings of both mu
nicipal and farm loan bonds were in re
duced volume during the last few weeks.
This tendency, which gives promise of
continuing, together with the firmness of
the market generally, indicates the prob
able maintenance of at least existing price
levels among tax exempts.”
People have prejudices against a nation
in which they have no acquaintance.—
Hamerton.

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Federal Reserve Bank of St. Louis

NORTHWESTERN

BANKER

A .J .B old t

&
Comp

PUTNAM BUILDING

DAVENPORT

I
BONDS FOR
CONSERVATIVE
INVESTMENT

Character

Jam es A. Cummins & Co.
Investment Securities

505 Equitable Bldg.

Des Moines, Iowa

T HE

NORTHWESTERN

BANKER

April, 1927

Lower Interest Rates on
Time Deposits?

W e are pleased to announce that

W . H . Jo h n s o n . J r.

Buffalo. N. Y.

M r.

L eon

G ardner

formerly with A. G. Becker and
Company, Chicago, has become
associated with us as manager
of our analytical department.

W. D.Haiina and Company
(successors TO HANNA-SHREVES CO)
B O N D S

FO R

I N V E S T M E N T

Burlington, Iowa
Waterloo

Lincoln

Muscatine

W e have just published
a new list of

Municipal Securities
especially adapted to the requirements
of Banks and Bankers-suitable for in
vestment of the funds of institutions or
individuals.
This list fully describes issues
originated in Texas, Arkansas,
Florida, Oklahoma and Tennes
see for various County, Town
ship, District and City purposes
— priced to yield 4.30% to 5.75%.

It Will Interest You—Mailed on Request

T h e Br o w n -

W ICH ITA

Co m pan y

KANSAS

L. H. DAVIS, Resident Manager
526 Liberty Bldg., Des Moines
Telephone Market 315
Chicago
Kansas City
A m arillo

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Federal Reserve Bank of St. Louis

Detroit
Omaha
El Dorado

Dallas
Topeka
Orlando

St. Paul
Los Angeles
Des Moines

HE question o f reducing interest
rates on time deposits is primarily
a problem facing the commercial
banks rather than the savings banks. The
situation that confronts us is a diminish
ing return on loans and investments on
the one hand and an apparently fixed rate
on the price we must pay for money on
the other— the result being a smaller mar
gin o f profit.
Is it practicable to lower the interest
rates on time deposits? Speaking as a
commercial banker to commercial bankers
with savings departments, I believe it is.
I come from a high rate town, Buffalo,
where both commercial banks and mutual
savings banks pay 4 per cent on time de
posits. I am talking naturally to those
o f you Avho are similarly situated so far
as rates are concerned.
While an outsider might assume that
a bank can invest the dollar o f one deposi
tor to bring in just as much as the dollar
o f another depositor, we know that such is
not the case. Some deposits are invested
in 5i/ 2 per cent mortgages and on the other
hand, other deposits are invested in Lib
erty Bonds or equally liquid securities.
The difference in the way in which de
posits must be invested is what causes us
all to differentiate in the rate paid on
checking accounts and the rate paid on
time deposit accounts.
Encouraged by the competition between
banks, the public has a wrong conception
o f what constitute legitimate time deposits
and the commercial banks are suffering
accordingly. Based upon the permanence
of the account and the amount o f service
the depositor expects, I believe a just dis
tinction may be made in the amount o f in
terest the present so-called time deposits
o f a commercial bank are entitled to re
ceive. I believe there is a distinction
which warrants a.reduction by commercial
banks in interest rate to 3 per cent on
certain o f this business. Let us look at a
classification of time deposit accounts.
The Genuine Savings Account
First, consider the genuine savings ac
count which is virtually an investment, re
maining the same over long periods o f
time.
In this first group are the accounts of
people skeptical o f investments. In our
own bank, for example, accounts of thrifty
old country folks, widows, etc. No service
is demanded and no expense incurred in
handling this business. This class o f ac
count I therefore believe is justly entitled
to the maximum rate o f say 4 per cent.
Should a single commercial bank or all
o f the commercial banks in one community
arbitrarily reduce interest rates on time
deposits, they might well expect to lose

April, 1927

THE

this class o f business to the mutual sav
ings banks.
Second, there is the thrift account, gen
erally o f modest size, with frequent de
posits, occasional withdrawals, possibly
“ supporting” a mediocre active checking
account.
With reference to Group Two, in which
is the great number o f accounts, I believe
these would remain with a commercial
bank, in spite o f an interest reduction
from 4 per cent to perhaps 3 per cent,
for several reasons. It is the accumulation
of principal and not the interest rate
which attracts this type o f business; an
indication of this is the fact that Christ
mas clubs operate just about as well with
out interest as they do if interest is o f
fered. Again, this type o f account is held
to a great extent by the service o f a com
mercial bank; by that I mean the conveni
ence of a branch around the corner from
the customer’s home or place o f business,
the convenience o f Saturday evening
banking hours, the fact that in the same
bank he may have his checking account, a
safe deposit box, etc., facilities which,
without disparaging the savings bank, he
finds and appreciates in the commercial
bank.
Third, there is the temporary “ special
interest” account, proceeds from sale of
property or from life insurance awaiting
investment, building funds, etc.
Fourth, there is the reserve account of
corporations in an easy cash position, per
haps very indirectly supporting a line of
credit.
Groups three and four contain types of
accounts which by no rhyme or reason can
be honestly considered as savings accounts
or genuine time deposits because they are
temporary in character, fo r only a few
months perhaps. The commercial bank
with big accounts o f this character doesn’t
dare invest this money where it will safely
yield even 3 per cent or better in mort
gages, for example. The banker must put
it into commercial loans, commercial pa
per, Government securities, etc., yielding
on an average these days not much over
4 per cent. Generally speaking, such de
posits are made by business men accus
tomed and desirous o f dealing with a com
mercial bank. In their hearts they un
derstand that the law o f supply and de
mand applies Avith reference to the worth
of money. Naturally, if their business
bank will pay 4 per cent on such deposits,
they will take 4 per cent. They would
be foolish if they did not. The big point
here, as I see it, is that our customers as
a rule feel the necessity of carrying these
reserves as cash and they will likely take
the best going rate they can get. They
do not Avant to put the amount into in
vestments.
But suppose you do not Avant to risk
losing even a portion o f your deposits,
that portion comprised in the account
classified in group one because you feel

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Federal Reserve Bank of St. Louis

NOR T H W E S T E R N

BANKER

well justified in paying 4 per cent for
money that is with you over long periods
o f time. W ould it not be possible and fair
to establish the folloAAung policy?
Pay interest on time deposits at 3 per
cent per annum figured on loAvest quar
terly balances, crediting % o f 1 per cent
interest April, July, October and January
1st. A t the end of each year, pay an ex
tra 1 per cent on the loAvest annual bal
ance. Such a proposition Avould be fair
to the customer Avhose money is Avith you
as an investment— Avhose money you in
turn may put out Avith safety at a sorneAvhat higher rate, and I believe this sug
gestion is workable.
Always, however, into the question of
the practicability o f reducing interest
rates there enters the inevitable problem
for your bank— Avhat Avill your competi
tors do and there is the hitch. You would
like to do it but you think your competi
tors Avill not play along. But, after all,
isn’t it a common problem, just as serious
for the other felloAV as it is for you ? This
price competition as it exists today is the
most unsatisfactory form o f competition.
Little by little, hoAvever, banks are getting
together in minor matters such as the
elimination o f donation advertising, the
establishment o f uniform service charges,
etc., and are shoAving a tendency to cooper
ate which as it deArelops should enable us
to solve this most important problem—
the fair reduction of the too high price
now paid by us for money.

THE INVESTMENT TRUST IDEA
(Continued from page 14)
confer broad powers, powers sufficient to
make them real constructive factors in the
foreign trade o f the United States.
Fortunate for us it is that our law
makers saAV the necessity fo r these cor
porations and placed ready to hand a type
o f financial organization Avhich can be of
great service to American investors.

American investors may iioav profit by op
portunities in foreign lands knoAving that
the old principle o f “ the eggs in many bas
kets” holds good and that above all in
vestments fa r aAvay from home must be
subject to rigid scrutiny thereafter and
must be carefully supervised. W e have
the experience o f the Scottish-British
trusts to draAV from, Ave have American
ingenuity and energy to provide driving
poAver and Ave have a steadily mounting
surplus o f funds to invest constructively.

The Investment Trust under Federal
supervision comes as a profitable solution
o f the problem Avhich has caused many
investors to hold back on foreign invest
ments.
THAT HONEST SIX PER CENT
(Continued from page 13)
may come up fo r discussion at the sug
gestion of any officer, or director, at any
weekly meeting during the year.
“ Of course, there are times AA7hen it is
necessary for one of the executives to
make a loan Avithout first getting the
authorization of the loan committee, but
loans so made are ones that there can be
no question about and the matter is care
fully presented to the loan committee at
the first opportunity.

“ We find that the practice of estab
lishing a definite line of credit for all
customers Avho may have occasion to borroAv from time to time has several ad
vantages. A customer knows just A\7hat
he may expect from his bank and the offi
cer is relieved from the necessity of con
sidering each request so long as the loan
does not exceed the limit granted. This
affects considerable time savings Avith the
officers and in many cases saves the un
pleasant experience of saying “ No” to an
established customer. On the Avhole, cus
tomers appreciate this policy and in prae
tieally all cases furnish the desired in
formation voluntarily each year.”

Illinois 6%
Street Improvement
Bonds
FOR BANK INVESTMENT

Central Bond Company
H. I. FOSKETT, Manager

7 0 2 Equitable Bldg., Des M oines, Iowa

The Trend o f Utility Development
H A T the year 1926 witnessed an
era o f consolidation surpassing
anything in previous history o f the
industry, is pointed out in the March 15
issue o f “ Bond B riefs” , by the Northern
Trust Co. of Chicago, which goes on to
compare that trend with the days when
the trunk line railroad systems were be
ing formed by merging numerous small
roads.

merely to secure monopolies, that the new
companies were overcapitalized, and that
the public interest was likely to suffer.
Considered as a whole, the railroads have,
by consolidation, served the public far
better than could the original separate
lines. Capitalization today is low com
pared with the value o f physical proper
ties and railroad managements have
learned that only by serving the public
interest do they permanently serve their
own.
“ The origin o f the early public utility
operating companies is very similar to

“ A t that time,” says the article, “ when
railroad consolidation was a feature of
the financial news there was much com
ment to the effect that the movement was

Organization

fo r
Investment Service

Metcalf, Cowgill & Co.
Investment Securities

DES M OIN ES
DES MOINES
Equitable Building
Market 275

SIOUX CITY
Davidson Building
Auto. 57488

Law rence Stern and C om pany
231 South LaSalle Street • Chicago

BOARD OF DIRECTORS
JOHN HERTZ, Chairman of the Board of

W I L L IA M W R IG L E Y , JR., Chairman of
the Board of W illia m W rigley Jr. Company

Yellow Truck & Coach Manufacturing Co.

J O H N R . T H O M P S O N , Chairman o f the

HERBERT L. STERN, President of

Board of John R . Thom pson Company

Balaban & Katz Corporation

A L B E R T D . L A S K E R , Chairman of the
Board of Lord & Thom as and Logan

STUYVESANT

PEABODY,

ALFRED ETTLINGER, Vice President
President

JOSEPH J. RICE, Vice President

o f Peabody Coal Company

C H A R L E S A . M c C U L L O C H , President

LAW R EN C E STERN, President

of T he Parmelee Company

This com pany conducts a general securities business, originating
and participating in high-grade investment issues and devoting
special attention to first mortgage real estate bonds

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Federal Reserve Bank of St. Louis

that o f the railroads. The first power and
light companies were organized to serve
small territories, usually by a group of
business men desirous o f bringing their
town up to date. The best equipment to
be had was inefficient and soon obsolete,
and the costly electricity produced was
somewhat intermittently supplied to a
restricted community. W ith the develop
ment o f the technical side o f the industry
and an increased demand for power,
larger generating stations and wider dis
tribution facilities were built.
These
called fo r greater capital, and consolida
tion commenced on a small scale.
“ When two systems serving adjacent
towns joined an actual merger was com
paratively simple. However, as the sys
tems grew state lines were crossed and
the problem o f contradictory state com
mission rulings was met. The best so
lution seemed to lie in the holding com
pany which owned the stocks o f two or
more companies operating in different
states.
W ith increased demand for
power, however, still larger generating
plants and longer transmission lines were
needed and it became advantageous to
operate as a unit several companies which
themselves had subsidiaries. The terms
o f bond indentures or provisions govern
ing preferred stocks frequently made dis
solution o f subsidiaries and merging of
the actual properties so difficult as to be
impractical. This left holding companies
owning stocks o f other holding companies
as the only feasible method o f unifying
control. As important as unified con
trol was a simplified debt structure.
Holding company debentures were re
sorted to but as the parent companies’
earnings came from the dividends upon
subsidiaries’ stocks these debentures
were somewhat removed in their lien
upon the earnings o f the operating prop
erties. To overcome this disadvantage,
the parent companies have in a number
of cases issued collateral mortgage bonds
secured by the pledge o f bonds which
were a direct lien on the properties.
Old Operating Methods Give W ay to New
“ During 1926 several recapitalizations
were put through to simplify both the
operating and the financial structures of
some o f the most extensive electric power
systems o f the country. The public has
been benefited in both decreased cost of
power and improved service. Bor in
stance, a city o f 15,000 population main
taining a generating plant and men to
operate it frequently finds that a hightension line from a large low-cost plant
in a nearby city can provide, at half cost,
a more dependable service. The local
plant becomes a reserve station in the
larger system and the superpower con-

THE

April, 1927

nections o f the latter insure the com
munity against a cessation o f service.
Or perhaps one company secures a water
power site capable o f developing more
electricity than its own customers can
use. A distribution system serving a
great many communities can bring this
surplus cheap power o f the hydro-electric
plant into every hamlet. The superior
credit facilities available to the large
company offer another opportunity fo r
economy.

NORTHWESTERN

BANKER

o f the firm, is going to Chicago soon to
assume charge o f the expansion activi
ties. Ralph W . Stansbury, who has been
in charge o f the Chicago office the past

What Is Overcapitalization?
“ No one today would advocate a return
to the chaotic conditions in transporta
tion which existed prior to the creation
o f the present great railroad systems.
The original consolidations in this field
may have included properties later dis
carded. In fact, it is stated that only a
small proportion o f the Pennsylvania
Railroad’s main track from New York
to Chicago is, today, located on the ori
ginal right-of-way. This does not prove,
however, that the parts discarded were
not needed in the system when first con
solidated.”
To Sell Mortgage Bonds
Announcement is made by the WhitePrice Company o f Minneapolis that the
first mortgage collateral trust bonds of
the Guaranteed Mortgage Company will
be distributed, both fo r retail and whole
sale, by Lane, Piper & Jaffray, Inc. The
bonds are a direct obligation o f the Guar
anteed Mortgage Company and are guar
anteed by the United States Fidelity and
Guaranty Company.

STANLEY C. EATON

year, will continue as manager o f that
office, working with Mr. Eaton.
Mr. Eaton has been in the investment
business fo r 25 years, in New York and
Philadelphia. He served on the Mexican
border in 1916 with the Pennsylvania
National Guard, and was a captain in
the 79th division during the world war.

Plan Expansion
Cleanse the fountain if you would puri
F.
J. Lisman & Co., investment bank fy the stream.— Alcott.
ers o f New York City, are planning an
Prejudice is the child of ignorance.—
expansion o f their activities in the mid
Hazlitt.
dle west and Stanley C. Eaton, a partner

Parallel
Growth
The rapid growth of
Mid-West business re
quires an equal growth
in institutions supply
ing the necessary bank
ing service. In four
years, this bank’s de
posits have doubled.
Proof of customer-con
fidence and of ability
to serve.

Authorized Capital $300,000.00

Prompt Closing
W e are better equipped than ever
before to negotiate your loans—
promptly and efficiently.

STANLEY-HENDERSON CO., Inc.
I. C. S T A N L E Y , P resident

Farm Mortgage Bankers

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Federal Reserve Bank of St. Louis

CEDAR RAPIDS

ChicagoTmjst
Company
Lucius Téter

JohnW O'Leary

President

Vice-President

CHICAGO

THE

NORTHWESTERN

April, 1927

BANKER

LIFE INSURANCE AND BANKING
COOPERATION
The two mighty businesses of banking and life insurance drew visibly closer
together in their cooperative service of the people during 1926. Each became
better informed regarding the nature and the details of the service rendered by the
other, and consequently became better able to work together for the benefit of
their patrons. The Penn Mutual Life Insurance Company, of Philadelphia, is fully
cognizant of the value of this clearer understanding and of the growth of the spirit
of cooperation between these two public service institutions. Our representatives
throughout the country are cooperating with banks and with trust companies, espe
cially in cases in which the protection to be given is essentially of a trust and dis
cretionary nature.

Penn Mutual Life Insurance Company
of Philadelphia, Pa.
Organized 1847

SEVENTY-NIN TH A N N U A L STA TE M E N T
Year Ending Dec. 31, 1926
R E C E IP T S D U R IN G 1926
For Premiums and A n n u ities.......................................................$52,292,341.94
For interest, adjustm ent o f values, etc............................... 20,832,366.50
Total ...................................................................................................$73,124,708.44
D IS B U R S E M E N T S
Death
Claims
(including
Double Indem nity for
Accidental Death) and interest................................................$14,732,274.71
Matured Endowments, Annuities, etc.....................................
2,685,641.59
Disability for W aiver of Premiums, and Monthly
Annuity Payments ........................................................................
198,434.17
Surrender Values ...............................................................................
7,620,277.37
Dividends to Policyholders ....................
11,620,454.03
Accumulations
paid
under
deferred
distribution
policies ..................................................................................................
849,362.06
Total Paid Policyholders......................................................... $37,706,443.93
Instalm ent
payments
under
supplementary
con
tracts, etc. ...........................................................................................$ 1,945,754.48
Federal and State Taxes, Licenses and Department
F e e s .........................................................................................................
1,275,654.54
Rent and Real Estate Taxes, Expenses, etc.......................
547,907.07
Commissions, Medical Fees and A gency Expenses. . . . 6,984,838.37
Salaries and Adm inistrative Expen ses...................................
1,702,821.14
Advertising, Printing and Supplies,Postage, etc............
338,655.38
Added to reserves ..............................
22,622,633.53
Total

$73,124,708.44

ASSETS
Liberty Bonds ....................................................................................$ 13,520,000.00
State, Municipal, Railroad and other
81,517,721.00
Bonds
\
at M arket Values
i .............................
88,150.00
Stocks
I
p ............................
167,340,804.30
Mortgages and Ground Rents, 1st L ien s............................
Loans on Policies and Premium N otes within Re
56,412,874.59
serve V a l u e s .................................................................................
933,498.73
Loans on Bonds, Stocks, etc.....................................................
2,759,444.42
Home Office and other Real E sta te ........................................
2,456,114.65
Cash on Deposit and in Com pany’s office.......................
6,056,096.23
Interest and Rents Due and Accrued, etc..................
N et Deferred and Unreported Prem iu m s..........................
8,160,664.90
$339,245,368.82

Total, Dec. 31, 1926
L IA B IL IT IE S

Reserves to M ature Policy C ontracts....................................$280,478,889.74
Policy Claims in process of settlem ent.................................
1,831,911.49
Premiums Paid in Advance, Unearned Interest, e t c ...
4,328,207.84
Dividends left w ith the Company to accumulate at
interest, subject to the order of the owners of
the policies ......................................................................................
11,924,830.47
Accum ulations upon Deferred Distribution P o lic ie s ...
211,727.61
Dividends to Policyholders fo r 1927.....................................
13,300,000.00
( fo r M ortality F lu c tu a tio n ...
12,695,487.00
Surplus Reserves
for Asset Fluctuation and
1

other contingencies ............

Total, Dec. 31, 1926

New Business paid for in 1926, 43,653 Policies fo r...... ...................$215,174,510.00
Increase over 1925....... .............................................. -.............................
8,804,209.00
Insurance Outstanding December 31, 1926, 412,038 Policies fo r..$1,584,288,506.00
W ILLIAM A. LAW , President

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Federal Reserve Bank of St. Louis

14,474,314.67
$339,245,368.82

Income Insurance Helps Mental Attitude

E ALL get into a rut occasionally
and that is to be expected. The
wise man, however, takes stock of
himself and climbs out o f the rut as soon
as possible; and bear in mind that the man
in the rut must get out himself, as no one
else can do that fo r him.
Getting into a rut in most cases is due
to wrong thinking. An agent gets into a
rut largely because he is disheartened for
some reason or other. When he takes
stock o f himself he oftentimes finds that it
was not so bad as he had thought it was.
In many cases he finds that he did not have
the proper mental attitude. Maybe he had
in a measure lost sight of the real value
o f his merchandise. Any agent that does
not know that his policy is worth a hun
dred cents on the dollar is doomed to fail
ure. Any agent that does not know that
he is rendering valuable service to his
clients is also doomed to failure. Confi
dence in your policy and in your own
ability to serve your clients in a capable
manner is most important to your success.
It is human to err, and the time comes
when every life insurance agent slips from
that high pedestal that lie has built for
himself. He begins to wonder whether

Becomes General Agent
Lloyd E. Douglass has been appointed
general agent in Detroit fo r the Register
L ife o f Davenport, Iowa. He has been in
the life insurance business a number o f
years, receiving his early training in
Newark, New Jersey, and went to Daven
port office fo r the Equitable o f Iowa.
Speaks at Davenport
Chester 0 . Fischer, general agent at
St. Louis for the Massachusetts Mutual
L ife and vice president of the National
Association o f L ife Underwriters, was
the speaker at the March meeting o f the
Davenport, Iowa, Association. Members
o f that organization also discussed plans
fo r their one-day sales congress to be
held there May 21st.
Meeting at W aterloo
A meeting o f Des Moines Life and
Annuity general agents was recently held
at Hotel Russell-Lamson, W aterloo, Iowa.
The conference was attended by agents
from northeast Iowa, and their wives.
Dinner was served at seven o’clock. Bar

By A. E. Littig
Secretary-Treasurer R egister L ife
or not he has the one outstanding best
company in the whole world. He wonders
if he was really cut out to be a life insur
ance man, and pretty soon he begins to
wonder what’s wrong with the world in
general. He begins to doubt our form o f
government and about that time he strikes
the bottom o f the rut.
Entitled to “Mental Spree”
So far, he is all right. He is entitled to
this mental spree. I f he has the right kind
o f stuff in him, he will begin to do some
intelligent thinking about this time. When
he does, he will find that the world is not
much worse than it ever was. He will find
that his company is just as good as it ever
was. Then he will find himself in a better
mood and will be a better life insurance
man because he will know that all that is
necessary is the right mental attitude. The
right mental attitude is nothing more or
less than a desire to fight for what he
knows is right.
Income insurance is a wonderful tonic
when a fellow begins to feel himself

slipping. An agent cannot canvass a man
for an income policy without becoming en
thused about life insurance. It is logically
right. It provides the necessities o f life
for the prospect’s widow and his orphans.
It accomplishes most o f the essential
things that the man himself would provide
had he lived. It permits a mother to care
for the children in place o f having to earn
a living fo r them. It is the only known
means on earth whereby a man can be ab
solutely assured of these things. It is the
agent’s greatest asset, as no other policy
and no other means have ever been de
vised whereby a man can be assured o f the
financial future o f his family.
With these facts in mind it certainly
stands to reason that no agent can be in a
rut when he is talking this most excellent
form o f protection.
Much has been said and much has been
written about human needs and the ability
o f the agent to fit the policy to the pros
pect’s needs; and all that I have heard and
all that I have read is very fine. However,
it does not take a highly educated agent
with a magnifying glass to discover in
most families the great need for more in
come insurance.

ney Pearson, St. Louis insurance expert,
made the principal address.
Others in attendance were H. B. Bossert, Des Moines agency supervisor, and
E. R. McCormick, Waterloo.

March. It is “ Bring Home the Bacon.”
And it means what it says, because for
every $1000 application written during
the month, each salesman gets one pound
o f bacon, and ten pounds o f bacon will
mean one ham. Mr. Whitfield tells his
Recovering from Illness
men not to be afraid o f getting too many
I.
M. Lieser, form er well known Des bacons and hams, as the neighbors will
help them eat if they win more than they
Moines insurance man, and now United
can use themselves.
States marshal o f the Panama Canal
The Iowa agency o f the International
Zone, has improved from his recent se
L ife had a big month in February, and
rious illness sufficiently to remain there
if March comes up to expectations, there
until his vacation next June.
will certainly be a shortage o f smoked
meat in Iowa within the next thirty days.
W ith Merchants Life
LaMonte Loucks has become associated
with his father, Elmer Loucks, Des
Moines agency manager fo r the Mer
chants L ife home office. LaMonte is a
graduate o f Iowa State College and has
been with the Western Electric Co. of
Chicago fo r the past few years.
Hog Prices Going Up
C. S. Whitfield, state manager fo r Iowa
fo r the International Life o f St. Louis,
has announced his agency slogan for

F o r S afety’s Sake
There are still many men who think
$5,000 life insurance a large amount. The
trouble is they have thought “ $5,000” all
the time. Not once have they gotten
down to hard-pan figuring and seen how
much their families would get each week
after they have passed away.
Five thousand dollars does sound like
a big amount— in a lump sum— but the
average insured would not place that
65

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Federal Reserve Bank of St. Louis

THE

Back of
NORTHWESTERN
Na t io n a l
A StrongBoard
of Directors
THEODORE WOLD
, vice
president of the Northwest
ern National Bank of Minne
apolis, and a member o f the
Advisory Council of the Federal
Reserve Board at Washington,
was elected to membership on
the Board o f Directors and the
executive
committee
of
the
Northwestern National Life in
August, 1926, to fill the vacancy
created by the death o f James
A. Latta.
Mr. Wold came to the vice
presidency o f the Northwestern
National Bank in 1919, after
making a conspicuous record as
the first governor o f the Federal
Reserve Bank for the Ninth Dis
trict. He entered the banking
business at the age o f 21, at
Elbow Lake, Minnesota, and was
afterwards successively assistant
cashier, First National Bank of
Little Falls, cashier, Merchants
State Bank o f Winona, and presi d e n t , Scandinavian-American
National Bank (now Midland
National) of Minneapolis, direct
ing its affairs until 1914, when
he became governor o f the Fed
eral Reserve Bank.

heodore

w o l d

This is one of a series of
advertisements on the Board
of Directors of Northwest
ern National Life. Each
member has been eminently
successful in business and
each is in close touch with
the affairs of the Company
taking an active part in its
management.

NORTHWESTERN

April, 1927

BANKER

amount in his w ife’s lap and depend upon
her to keep it intact.
It is strange how practically every
man who has life insurance rests easy in
the belief that his widow is going to
safely guard against loss o f every dollar
he may leave her. She will, according
to the best o f her knowledge, and it is
remarkable that a number o f women,
without instruction along financial lines,
have through hard work and earnest
study, been able to keep almost intact the
money left to them. But it has meant
some sleepless nights to avoid the dis
appointment o f unwise investments.
A man with $5,000 believes the sum
should last a long time. When you en
counter such a prospect, write down
$5,000 and cross off the three zeros. When
he asks “ W hat’s the idea?” tell him that
if the whole $5,000 was left fo r the widow
and invested at a safe return, the $5 re
maining would represent her income per
week. I f she had to dip into the $5,000
to pay his burial expenses, she would re
ceive much less.
Do you believe $5,000 will seem a large
amount to him after you have illustrated
it in this way? Now is your opportunity
to speak of monthly income and the need
o f a monthly check fo r a certain amount
fo r his widow and children— a stated sum
o f money to carry the home and pay for
real necessities.
Ask any widow o f your acquaintance
as to whether a monthly income o f $100
fo r five, ten or more years would have
been o f much assistance to her when she
was left to grapple with mountainous
problems. She will give you facts of
wonderful value fo r your canvass.
Get your prospect to think in bigger
terms fo r his own and his fam ily’s sake.
—-(General Selling Arguments)— Pruden
tial W eekly Becord.
Honor D. W . Corley
Celebrating the termination o f a sixtyday sales contest in honor o f their agency
organizer, D. W . Corley o f the Des
Moines branch of the New York L ife In
surance Company, agents and their wives
and the cashier’s office force, to the num
ber o f eighty, participated in a banquet
last month at the new Younker tea room,
Des Moines.
Robert E. W hitney o f Chicago, inspec
tor o f agencies, acted as toastmaster,
and the address o f the evening was de
livered by Charles F. Adams, agency or
ganizer o f Des Moines, whose subject
was “ Power o f Vision.”

Charles H. Sharrick, formerly with
the Mutual L ife o f Baltimore, will be in
charge o f this department. Mr. Sharrick
is one o f the most widely known and suc
cessful life insurance men in the Middle
West. His experience has been in the
office as well as in the field, where he has
served in the capacity o f salesman, assis
tant superintendent, superintendent and
manager. Mr. Sharrick has written both
ordinary and industrial business. As
manager of the new monthly premium de
partment, Mr. Sharrick will, however, de
vote his entire time to the industrial type
o f business.
The dollar monthly premium policy
originated with the National Savings
Life, November, 1926.
The policy is
written on the whole life basis, the only
difference between it and the other whole
life policies written by the ordinary de
partment being that the premiums are
payable monthly and that the premiums
are constant while the amount o f protec
tion is variable. That is, regardless of
age, the premium is $1 per month for
each unit o f protection. Anyone between
the ages o f one month and sixty years is
eligible fo r one o f these policies, and
they are written on the nonmedical plan
up to $1,000 o f protection.
Shows Increase for Y ear
The American Old Line Insurance
Company o f Omaha, Nebraska, from its
statement at the close o f business on De
cember 31, 1926, shows an increase in
admitted assets fo r the year o f $179,401,
with a surplus to policyholders o f 151,319. The company has total assets of
$579,654, and insurance in force of $13,827,257.
Under resources the American Old
Line carries $291,400 in first mortgage
loans, $115,161 in municipal and other
bonds, and cash in banks o f $95,346.
Addresses Printers Association
Chester D. Masters, vice president in
charge o f the Banking Department, Chi
cago Trust Company, addressed the Mas
ter Printers Association o f Chicago, at
their monthly meeting on March 17th. He
took fo r his subject, “ Hand to Mouth as
Viewed by a Banker.”
Thinking Backwards
Some drivers seem to think that the
sign on the road crossing: “ Stop, Look
and Listen,” was put there to warn the
locomotive engineers.
Understanding

N O RTH W ESTERN
N A TIO N A L L IF E
INSURANCE CO.
O .J.ArnoJd.Pres.

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Federal Reserve Bank of St. Louis

Opens Premium Department
The National Savings L ife Insurance
Company o f Wichita, Kansas, will open
a monthly premium department in con
nection with their Dallas branch office
at Dallas, Texas.

Automobilist: “ I come here to make
a fair settlement and you ask $500 just
because I ran over your foot— good gosh,
man, I ’m not a millionaire.”
Injured party: “ I ’ll have you under
stand I ’m no centipede, either.”

A p r il, 1927

TH E

N O R T H W E S T E R N

Agents in Three States Make
April “Auto” Month
UNIQUE insurance movement is on
foot in Illinois, Indiana and M ichi
gan, which has fo r its purpose the
underwriting o f as much automobile li
ability insurance during April as possible.
The campaign is explained quite concisely
in a recent editorial in the Chicago Journal
o f Commerce, which says in p a rt:
“ The insurance business is planning a
unique method o f forestalling an attack
by state governments. Faced by the possi
ble passage o f compulsory automobile li
ability insurance laws, the insurance busi
ness is planning a tremendous campaign
to induce motorists to purchase insurance
voluntarily.
“ F or this purpose a test area has been
designated.
The area consists o f the
neighboring states o f Illinois, Indiana and
Michigan. The time fo r the test is all o f
next month. During that period motor
ists in the three states will be constantly
told:
‘A pril is automobile insurance
month. Insurance in A pril.’
“ The average man will want to know
what is back o f all this. W hy do the in
surance companies object to a law re
quiring motorists to take out insurance
and thus pay premiums to the companies 1
W hy this paradoxical rebellion on the part
o f the insurance business ? And what
does the business hope to gain by in
creasing the number o f policyholders
without compulsion ?

“ Thus the state would get into the in
surance business.
“ The insurance companies do not
want the state as a competitor, any more
than the shoe companies, the shirt com
panies, or the automobile manufacturing
companies want the state as a competitor.
“ The resistance o f the insurance com
panies to compulsory automobile liability
insurance laws is thus a resistance to state
insurance.
“ Such is the motive o f the insurance
business in its resistance.
A Twofold Motive
“ What about its motive in its new drive
to increase the number o f voluntarily in

Ro ya l
In

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Federal Reserve Bank of St. Louis

sured motorists ? That motive is twofold.
In part it is the desire fo r more business,
which will be welcome in April, just as it
would be welcome in May, June, July, or
any other month. But the overshadowing
motive fo r the April drive is the desire to
insure as many motorists as possible, so as
to weaken the principal argument o f those
who favor compulsory insurance.
That argument is that the injured and
their dependents are now often deprived
o f compensation, in view o f the fact that
motorists who commit injuries are not in
sured and have no money to pay damages.
“ I f the insurance business now succeeds
in insuring a large percentage o f unin
sured motorists, the foregoing arguments
will be materially weakened.”
A single grateful thought towards
heaven is the most complete prayer —
Lessing.

U n io n

su r a n c e

L if e

o m p a n y

DES MOINES, IOWA

Offers a n unexcelled
line of policy contracts.
Our Juvenile policies,
written on children as
young as one day old, go
in full benefit auto
matically at age five
without re-examination.

“ The answers are simple.
“ The insurance business wants policy
holders, but it wants to select them on a
basis o f personal responsibility. I f you
go out now and buy automobile liability
insurance, you get a price which is held
down by reason o f the character and the
intelligence o f your fellow policyholders.
I f the companies accepted every Tom,
Dick or Harry who asked fo r insurance,
you would have to pay a much higher
premium on your policy.
“ Now, then, suppose compulsory auto
mobile liability insurance laws were en
acted in the forty or so states in which
bills to that effect are now pending. The
companies would have to accept every
motorist. The result would be either that
all rates would go up, or that the com
panies would be compelled to adopt a
sliding scale o f rates, based upon the
character o f the individual applicant. The
state governments would vigorously fight
such a move. The companies would be
denounced as extortionists.
Insurance
rates would become a political issue. I f
the companies won their fight in the courts,
various politicans would instantly rival
each other in clamoring fo r protection of
the poor, downtrodden motorist by means
o f state insurance.

B A N K E R

Our special low r a t e
policies to business and
professional m e n a r e
fast sellers.
Royal Union Life Building, Cor. 7th and
Grand Avenue, D es Moines, Iowa

We w r i t e women on
equal basis with men.

Special agency openings are now available.

Write

W illiam Koch, Vice President and Field Manager.

Royal Union Life Insurance Company
Des Moines Iowa
A. C. TUCKER, President

TIIE

Bankers Approve
Compensable Rates
That banking sentiment is overwhelm
ingly in favor o f the principle o f com
pensable rates in forgery insurance is in
dicated by an analysis made public re
cently by the Metropolitan Casualty In
surance Company. The analysis is a sum
mary o f opinion expressed by bankers
throughout the country on the system in
augurated by the company, whereby p ref
erential rates are granted those o f their
assured who adopt approved means to re
duce loss hazards in forgery insurance.
O f 520 letters received from 260 of
the representative banks o f 48 states in
the country, nearly 99 per cent approved
the principle operative in the Metro
politan’s merit rating plan whereby dis
counts from the base insurance rates are
granted fo r the use o f mechanical check

NORTHWESTERN

protection, the discounts being graded ac
cording to the scheduled rating o f the
protection used.
More than 90 per cent of those indors
ing the principle unqualifiedly approved
the application o f the discounts scheduled.
O f those who approved the principle
o f compensable rates, less than 9 per cent
questioned the size o f the discounts. Twothirds o f those dissenting on the scheduled
rates believed that they might safely be
reduced, while the remainder expressed the
opinion that the discounts either on the
check writer, on the paper, or on both,
should be increased.
The interest o f bankers in the plan was
shown by the large proportion o f letters
in which the standards fixed for compens
able rates were examined and discussed in
detail. The letters which thus treated the
subject more than perfunctorily ranged
from a discussion o f the relative merits

Planning Ahead
The man with initiative, the man who plans ahead
and does things while others are thinking of them,
is the man who makes the biggest success in the
Life Insurance world. That is just what Des
Moines Life and Annuity Cooperation is doing for
its hanker agents, and will gladly do for you. It
would help you analyze your field and determine
its possibilities and then assist in the plans for
producing business.
Such is the kind of service we render willingly and
gladly to all of our banker agents.
J. J. Shambaugh, Pres.

Des Moines Life and Annuity Company
Des Moines, Iowa

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Federal Reserve Bank of St. Louis

BANKER

April, 1927

o f brands o f machines and check papers
to the objection o f one writer that he
could not see why people should be re
warded with discounts for saving them
selves money.
Of all the letters that discussed the
classification formulated by the plan,
nearly 68 per cent were in complete ac
cord with its standards. About 65 per
cent o f those who mentioned the make of
machine used by them named a brand in
Class A o f the plan.
In the discussion o f safety paper, there
was a sharp difference of opinion devel
oped as to the virtue o f the hidden warn
ing in such paper, but the majority
seemed to believe that this device is ad
vantageous.
Losses Blamed on Depositors
Bank depositors, rather than the banks,
are responsible in many cases for losses
caused by check frauds, according to a
digest of recent court decisions made
public by James E. Ryan, manager of
the forgery bond department o f the Met
ropolitan Casualty Insurance Company
o f New York. The digest was prepared
from a mass o f decisions in seventeen
states in which the court rulings now
stand as law.
Five major cases in which losses from
forgery, alteration and other frauds may
be incurred through the negligent acts
o f the depositor are cited in the digest.
They a re : By the depositor prior to sign
ing the check; in the act o f signing and
drawing the check; with respect to
maker’s custody o f the check, but prior
to its delivery by him to the first holder ;
with respect to the act o f delivery to
the first holder, and with respect to mak
er’s examination o f his cancelled checks
after their return to him.
Analysis o f decisions holding the
maker o f a check liable fo r losses gives
the follow ing summary o f reasons fo r
reaching the several decisions:
The check was carelessly drawn; it was
handed to an unknown person, contrary
to the rule fo r due diligence; the maker
was negligent in leaving his check book
lying around; checks were signed in
blank and left in charge o f an employe;
due diligence was not observed to see
that the check was sent to the proper
person; the check alteration was so well
done as not to be detected with the naked
eye; forged signature was so well done
as to correspond with specimen signa
ture in bank’s possession; the criminal
who cashed the check had previously es
tablished his identity with the bank; the
bank showed due diligence in telephon
ing maker’s office to verify check, and a
confederate answered the call and veri
fied it; the maker was negligent in not
checking over his cancelled checks imme
diately upon their receipt from the bank.

THE

A p r il, 1927

Fire News
The Iowa senate has passed the Model
Arson bill, substantially as recommended
by the National Association o f Fire Mar
shals o f North America. It reduces ma
terially the penalties fo r certain types of
arson, thereby making it easier fo r state
officials to obtain full confessions on
doubtful cases.
The E . R. McDonnell insurance agency
o f Council Bluffs, Iowa, has purchased
the business o f the H. B. Jennings, Jr.,
insurance agency o f that city.
The first of a series of regional meet
ings o f the Western Hail and Adjustment
Association, was held recently in Des
Moines. A number o f field men and ad
justers attended the session. L. G. W ar
der, o f the H artford Fire, Chicago, and
James B. Cullison, Jr., o f the Insurance
Company o f North America, were in at
tendance, and addressed the meeting.
The subjects discussed by the adjusters
and field men w ere: (1) The application
and policy with a view of uniform under
standing as to intent and purpose; (2)
practical methods o f determining losses;
(3) need for uniform blanks fo r hand
ling losses, and (4) cooperation among
the adjusters.

NORTHWESTERN

in New York state. The statement, which
Frank E. Frazier, assistant vice presi
is narrative in form, is being distributed
dent (new).
throughout the country among bankers,
Egbert Y. Nelson, formerly assistant
legislators and other influential men as
trust officer, now trust officer.
Willard
Schenck, assistant cashier
part o f the committee’s nation-wide cam
paign to promote the adaptation in other
(new).
G.
Kellogg Rose, Jr., assistant cashier states o f New York’s successful methods
o f suppressing crime. Last year, the com
(new).
mittee strongly commended the Baumes
W yllys P. Ames, assistant cashier
laws and has repeatedly called attention
(new).
Charles C. Fagg, assistant cashier to the need o f greater celerity and more
drastic punishment fo r criminal offenders,
(new).
the strengthening o f the local and state
The following were also appointed as
sistant managers o f the foreign depart police and constabulary forces and other
principles o f crime control as embodied in
ment: P. McGovern, H. R. Robinson, A.
C. Stousland, John R. Lynch.
the Baumes law.
Issue Statem ent on the Baumes Laws
The protective committee o f the Ameri
can Bankers Association has issued a
statement describing the effective way in
which the Baumes laws have curbed crime

Let me say amen betimes, lest the devil
cross my prayers.— Shakespeare.
No man ever prayed heartily without
learning something.— Emerson.

Do You Live in One of
These Four Towns?

The Southern Surety Company officials
announced they will start at once to raze
the building next to the Southern Surety
building, which they already own, and
will erect a new twelve story building
adjoining the Southern Surety building.
During the past few years, the company
has outgrown its old quarters in the
Register and Tribune building and vari
ous departments have been quartered in
several buildings over the city. When
the proposed new twelve-story structure
is completed, the company will occupy
six floors o f it.
The general insurance department of
Bum s Brothers Company, Des Moines, in
surance and real estate, has been pur
chased by the M. L. Dudley local agency.
The Burns Brothers insurance business
has been under the management of E. R.
Holland, vice president o f the company.
The M. L. Dudley agency is one o f the
oldest local agencies, and has offices in
the Insurance Exchange building. M. L.
Dudley is president and M. L. Cremer,
secretary.

BANKER

CLINTON
COUNCIL BLUFFS
DUBUQUE
FORT DODGE
W e have an interesting District
Agency proposition we would like to
make to you.
Insurance experience
essential. W e will also train and help
you.

M issouri State Life
IN S U R A N C E C O M P A N Y
M . E. Singleton, President

Life

Accident

Home Office, St. Louis

Health

Group

Seaboard National
A t the annual election o f officers o f the
Seaboard National Bank o f the City o f
New York, the following changes in the
official personnel were made:
John A. Burns, formerly vice president
and trust officer, now a vice president.
William A. B. Ditto, formerly assistant
cashier, now assistant vice president.

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Federal Reserve Bank of St. Louis

M AIL
COUPON
TODAY

B. C. Thurman, Manager, Des Moines Branch,
618 Insurance Exchange,
Des Moines, Iowa.
Please send me information regarding your proposition
for District Agency.
Name
Address

. . ...........................................................................
............................................................................

H ow Life Insurance Companies A re
Investine Their Funds

P E A K IN G on the subject, “ Insur
ing Economic Life Through Life In
surance Investments,” at the twen
tieth annual convention o f the Associa
tion o f Life Insurance Presidents recently
in New York City, Frederick H. Ecker,
vice president o f the Metropolitan Life,
made some interesting comment on the in
vestment history o f the various big life
companies.
Mr. Ecker had this to say relative to
the distribution o f total investments, as
illustrated by the chart on this page:
“ Taking, first, the subject o f mortgage
loans, let us briefly review the situation
relating to farm mortgages. From 1906
to 1920, agricultural production and ag
ricultural wealth were on a generally in
creasing scale year after year, which was
rapidly accelerated by the influences aris
ing out o f the W orld war. With the de
pression which began in 1920, there was
a marked decline in agricultural values.
In 1921, the total farm indebtedness o f
the country was approximately $13,000,000,000, and this had declined in 1926 to
$12,250,000,000.
This figure relates to
the farm indebtedness as a whole and not

merely to the indebtedness represented
by real estate mortgages on farms. Never
theless, while the farm indebtedness was
thus reduced $750,000,000, farm mort
gage loans from life insurance companies
increased by $638,000,000.
F or the
twenty-year period, the farm mortgages
o f the life insurance companies increased
from $268,000,000 to $1,960,000,000. Thus
the life insurance companies furnish
nearly one-sixth of the sum necessary to
carry the farm indebtedness o f the United
States. O f the entire admitted assets o f
the companies, 9.3 per cent was devoted
to farm mortgages in 1906 and 16.5 in
1926.
City Property Mortgages
“ The other branch o f the mortgage loan
business o f the companies, loans on city
properties, furnishes a striking illustra
tion o f the way in which life insurance
funds keep pace with the necessities o f
the investing public so as to respond, so
far as possible, to the greatest need. In
1906, mortgage loans on city properties
amounted to $552,000,000 or 19.2 per cent
o f the admitted assets, whereas in 1926

such loans amounted to $3,123,000,000 or
26.3 per cent o f the admitted assets. The
tremendous increase in building from
1921 to 1926 is reflected in the increase in
city loans from $1,252,000,000, to $3,123,-

000,000.
“ It may be well at this point to em
phasize the extent to which life insur
ance funds are sought to be invested so
as to be o f the greatest benefit to the
whole public. Loans fo r agriculture are
not only o f direct benefit to the indi
vidual borrower, but are o f immeasurable
benefit to the country as a whole. Loans
fo r housing and business purposes in the
cities are not only a necessity, but also
furnish the means by which labor may
be employed and, indirectly, the means
by which a market may be furnished for
the products o f the agricultural com
munity.
“ In the field o f bond investments, one
naturally thinks first o f loans fo r govern
mental purposes. Prior to the issue of
United States government securities in
connection with the W orld war, the life
insurance companies held bonds o f the na
tional government to the extent of less

Iow a bankers should do business w ith this strong Iow a
com pan y, w hich has gain ed a country-w ide reputation
as a “ N ation al Institution o f S erv ice.”
T h e Federal Surety C om p an y is m an aged b y experi
enced underw riters, and has fro m its conception built
fo r S T R E N G T H rather than size.
B ack ed b y F ederal Service, these lines are w ritten—
A c c id e n t

and

H ealth ,

A u to m o b ile,

B urglary,

Plate

G lass, Public L iab ility and W o r k m e n ’ s C om pensation
Insurance, and Surety Bonds.

FEDERAL

SURETY

CASUALTY INSURANCE

COM PANY
SURETY BONDS

W. L. TAYLOR, Vice President and General Manager

HOME OFFICE
70

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Federal Reserve Bank of St. Louis

DAVENPORT, IOWA

April, 1927

TH E

than one-tenth o f one per cent o f their
total assets. In 1919 the ratio was 11.5
per cent, illustrating, again, the response
o f the life insurance business to the most
important demands from time to time. As
new financing on the part o f the govern
ment diminished, life insurance funds
flowed into other channels and, in 1926,
the companies held such securities to the
extent o f about 4 per cent o f their total
assets.
“ Investment in state, county and mu
nicipal bonds increased during the twentyyear period from $104,000,000 to $344,000,000. This form o f security, however,
is more readily absorbed by other classes
o f the investing public, by reason o f tax
exemptions and so, as is to be expected,
the portion o f total admitted assets o f life
insurance companies, invested in such se
curities, has decreased from 3.6 per cent
to 2.9 per cent.

NORTHWESTERN

C o n f i d e n c e ...
Confidence is the keystone around
which the success of this company
has been built. The people of
Iowa have confidence in the Iowa
National Fire because of the
service it has given them in the
past.

“ With respect to investment in foreign
government securities, it is significant
that, whereas the investments o f the com
panies in securities o f countries other
than Canada increased from $65,000,000,
or 2.3 per cent o f the assets in 1906 to
$139,000,000 or 2.6 per cent o f the assets
in 1916, they have, since the war, decreased
to $24,000,000, or to one-fifth o f 1 per
cent of the assets. On the other hand, dur
ing the twenty-year period, investments in
Canadaian government securities increased
from $22,000,000 or eight-tenths o f 1
per cent o f the assets, to $261,000,000 or
2.2 per cent o f the assets.

FIRE INSURANCE
C O M P A N Y '
DES M O IN E S, I A .

sv. , .

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Federal Reserve Bank of St. Louis

Fire
Lightning
T ornado
and
Automobile
Insurance

NATIONAL

' s• 7 •

| ,v

''"'/T'-

¡■ ¡¡ M i

Railroad Securities
“ Investments in railroad securities have
increased, during the twenty-year period,
from $1,002,000,000 to $2,435,000,000.
This increase o f 143 per cent represents,
nevertheless, a decrease in ratio o f rail
road securities to total assets from 34.8
per cent in 1906 to 20.5 per cent. The
total funded indebtedness o f the railroads
during the period increased 85 per cent
so that while the life insurance companies
now hold a smaller proportion o f railroad
investments, as compared with total assets,
than was the case twenty years ago, they
have met the demand for funds on the
part o f the railroads to a greater propor
tional extent than at the beginning o f
such period.
“ A superficial consideration leads many
to believe that life insurance investments
in railroad securities do not afford such
benefit to the public as do investments in
farm and city mortgages, but this view
overlooks the general economic and social
welfare o f the people as a whole. Ample
and efficient transportation facilities are,
as has many times been demonstrated, a
vital necessity in the interrelations o f the
people under our modern civilization.
Great cities depend upon transportation
for the daily food supplies. I f the trans
portation machine is thrown out o f gear
tragic results are to be anticipated. The

BANKER

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i i m

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H o tels of H ospitality
Hotel Fontenelle
Hotel Chieftain
Hotel Lincoln
Hotel Rome
Hotel Montrose

Omaha, Neb.
Council Bluffs, Iowa
Lincoln, Neh.
Omaha, Neb.
Cedar Rapids, Iowa

Hotel Capital

Lincoln, Neb.

Hotel Martin

Sioux City, Iowa

Hotel Norfolk.

Norfolk, Neh.

“ Unchanging
Rates
are Posted
in Every
Eppley Room ”

Hotel Carnenter
Hotel Cataract

Sioux Falls, S. D.

Hotel West

Sioux City, Iowa

Hotel Magnus.
Hotel Evans

Cedar Rapids, Iowa
Columbus, Neb.

Operated by Eppley Hotels Company

THE

recently increased efficiency o f our rail
roads has demonstrated their beneficial in
fluence upon the commercial life o f the
nation and has lately been the subject o f
much favorable comment.
“ Investments in public utility securities
have increased tremendously during the
twenty-year period. In 1906, the com
panies had so invested $134,000,000 and
they now have $819,000,000, representing
an increase from 4.7 per cent to 6.9 per
cent o f total admitted assets. In 1906,
the major portion o f public utility in
vestment was in street railways, whereas
today by far the larger portion is invested
in connection with companies supplying

NORTHWESTERN

BANKER

light, power, heat, telephone and other
similar service fo r home and business uses.
As an illustration o f how these investments
tend to benefit individual citizens, it is
reported that 17,000 new customers were
added to rural electric lines in Pennsyl
vania during 1925 and that, throughout
the United States, more than 1,000 farms
per month are being added to the service
lines o f the different electric light and
power companies. Life insurance com
panies, owning, as they probably do, more
public utility bonds than any other class
of investors, are thus directing their funds
into a channel of distinct service to the
community.

A p r il, 1927
The Policy Loan

“ One form o f investment perfectly se
cured but not to be encouraged in the in
terest o f policyholders, is the policy loan.
The amount o f such loans which a com
pany is obliged to make by reason o f legal
and contractual requirements, is not con
trollable under any form o f investment
policy on the part o f company officials.
Demands for policy loans are seen to fol
low closely the swing o f business condi
tions. In times o f general stress, policy
loans increase, but the companies use every
means to impress upon policyholders and
beneficiaries the well-known fact that
policy loans really tend to defeat the ob
ject fo r which the life insurance was orig
inally procured. It is doubtful whether
much o f the money loaned on life insur
ance policies really finds its way into pro
ductive channels. At the beginning o f the
twenty-year period under consideration,
the life insurance companies which have
furnished data, had policy loans and pre
mium notes to the amount o f $255,000,000
which was 8.9 per cent o f their assets.
This ratio increased to 14 per cent in 1916,
but has now declined to 12.1 per cent.
“ Real estate, as such, is not a proper
subject fo r the investment o f the funds
o f life insurance companies. Real estate
holdings o f such companies are practically
confined to home office buildings. The
amount o f assets invested in real estate
increased from $156,000,000 in 1906 to
$214,000,000 in 1926. It is significant,
however, that the ratio of real estate assets
to total assets decreased during that period
from 5.4 per cent to 1.8 per cent.
“ A novel bit o f legislation may well
be noted at this point. During the recent
period, when there was such a scarcity
o f housing facilities, the legislature of
the state o f New York authorized life in
surance companies, under certain limita
tions, to invest funds in housing projects.
One company responded to the demand
in this direction by the investment o f some
seven millions o f dollars in a housing
project within the corporate limits o f the
city o f New York. This investment served
not only to relieve the existing shortage
in shelter accommodations fo r those mod
erately circumstanced, but also as a demon
stration that buildings fo r such purposes
could actually be constructed o f attractive
design and under healthful conditions,
with all outside rooms, steam heat and
modern improvements, to rent fo r not
more than $9 per month per room. This
demonstration, it may be said in passing,
was in every way successful and, from a
financial standpoint, yields a net return o f
8.8 per cent, under Avhich the company
credits 6 per cent to interest income and

2.8 per cent to amortization o f the cost
o f the improvements.
“ A particularly good illustration o f the
constant effort on the part o f life insur
ance companies to utilize most produc
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Federal Reserve Bank of St. Louis

A p r il, 1927

TH E

tively funds o f their policyholders in di
rections which are conducive to the best
interest of the public, may be found by
comparing the amounts o f cash held, as
related to total assets in 1906 and to 1926.
In 1906, 2.3 per cent o f the total assets
o f the companies were represented by
cash on hand, whereas this proportion has
now been reduced to .9 per cent.

N O R T H W E S T E R N
♦

An Exceptional Sales Opportunity

A Business Statesman
The account o f the elder J. P. Morgan,
as given by Judge Gary in the Saturday
Evening Post, is probably the best analy
sis o f that great man’s character ever writ
ten. Morgan’s brilliance, his energy, his
firmness, his fair-mindedness, his utter
trustworthiness, are finely portrayed.
“ In my opinion his was the most con
structive mind we have had in the whole
business history o f our country,” says
Judge Gary. “ He is ranked by all as a
great financier, but he was more than
that. I f ever there was a business states
man it was J. P. Morgan.”
One evidence o f Morgan’s business
statesmanship that is not stressed by
Judge Gary was his perception o f the
need fo r better organization in business.
Morgan saw, as few men did, that the
business organization o f the world was in
a kindergarten state. Even today the
world is marvelously unorganized. Tre
mendous economic wastes are taken fo r
granted because it is assumed that mod
ern industrial organization is in an ad
vanced state. It is not. Far more organ
ization is coming. Business statemanship will promote it.— From Chicago
Journal o f Commerce.

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

We are licensed in the following
twenty-five states and have top
contracts available in many dis
tricts.

A n Ideal Policy—
Specimen Rate at Age 35
per $1,000.00

You must coniine yourself within the
modest limits o f order.— Shakespeare.
New Housing Loan Rcords
The Metropolitan Life Insurance Com
pany in 1926 broke all its previous hous
ing loan records by authorizing 22,150
loans for a total o f $141,682,337 which
exceeds the 1925 figure by approximately
$40,000,000.
Authorization o f the loans was made
principally fo r the purpose o f construct
ing one and two-family dwellings and
moderate priced apartment houses. The
housing provided accommodations for
33,947 families, as compared with 25,400
in the preceding year. The greatest num
ber o f loans were made outside o f greater
New York, the total number o f dwellings
being 21,228 and 390 apartments, for a
total o f $111,817,687, accommodating
28,659 families.
A t the end o f 1926 the Metropolitan
Life had completed seven years in which
it has followed the policy o f loaning on
apartment houses and one and two-family
dwellings, and, in the period since Janu
ary 1, 1920, the total number o f housing
loans has been 74,048 aggregating $485,469,156 to accommodate 129,941 families.

B A N K E R

$17

Alabama
A r iz o n a

Arkansas
California
Colorado
B’lorida

.6 0

With Paid-Up and Extended Insur
ance Values, Also Optional Cash
Benefit at Age 70.

G eorg ia

Idaho

North Dakota
Illinois
Oklahoma
Indiana
Pennsylvania
Iowa
South Dakota
Kansas
Tennessee
Kentucky
Texas
Michigan
Washington
Missouri
Wyoming
Nebraska
New Mexico

For full particulars address
Agency Department

N ational Life A sso cia tio n
H o m e O ffic e :

Des Moines, Iowa

♦

Added Protection
for the
Real Estate Investor

Concealed Risks
Safeguarded hy

Title Insurance
There are many advantages in owning
Title Insurance. It eliminates waste,
reduces cost, time, and worry. But the
protection against HIDDEN DEFECTS
in a Real Estate Title is the important
saving. The one premium protects for
life. Be sure the Title to Real Estate
holdings carries Title Insurance.

| « F ID E L IT Y
I t ACCIDENT ^
■t PLATE GLASS
AUTOMOBILE
BURGLARY

Title Insurance Department

Southern Surety
Company
201 Youngerman Building

DES MOINES

IOWA

For Bankers and Their Wants
This department of THE NORTHWESTERN BANKER is to
assist SUBSCRIBERS in obtaining goods or service hard to
find. It is free to subscribers. Use it. ASK US, as we can
tell you where to buy anything you need in your bank or for
your bank. TELL US, as your “ want” will be published
under the above heading free of charge. In answering
classified advertisements which have key numbers please en
close a two-cent stamp. This is used to forward your letter.

Position W anted: By young man as
bookkeeper, teller or assistant cashier,
where there is chance for advancement.
Now employed in bank. Good reason for
change. Can furnish best of references.
Available a t once. Also will consider po
sition with C. P. A. Hold diploma of
C. P. A. training course. Address K. A.
Coates, Chapin, Iowa— 4-5.
W anted: Position of assistant cashier
in a good progressive bank with future.
30 years of age, married. Ten years of
banking experience in Iowa and Nebraska
banks. Available on short notice. The
very best of reference can be furnished.
Address No. 2969, The Northwestern
Banker.— 4.
Wanted Connection in Good Iowa Bank.
Experienced. Good education and best
of references. Address No. 2972, the
Northwestern Banker— Indef.
Cashier, having 13 years, banking ex
perience, desires change. Eigh t years
with present employers. Married. Age
33. Experienced in all branches of coun
try banking.
Address No. 2968, The
Northwestern Banker— 3-4.
Position wanted as assistant cashier:
Young man with University education,
also banking and business experience.
Excellent references can be furnished.
Address No. 2967, The Northwestern
Banker— Indef.
Assistant Cashier now employed de
sires change where there is good oppor
tunity for advancement. Ten years’ gen
eral banking in state banks of Nebraska.
Know all departments. Best of recom
mendations. Available March 1st to 15th.
Address No. 2955, The Northwestern
Banker— 2-3.

W anted: To buy about 350 two key
lock safety deposit boxes. Address No.
2964, The Northwestern Banker— 3-4.

Research work on banking subjects,
and speech writing to specifications. Ed
ward W est, 500 Fifth avenue, New York.

Banking position wanted by man of
several years banking experience in Colo
rado and Illinois. Age 38. Protestant.
Married. Address No. 2965, The North
western Banker— 3.

We have plenty of money for loans on
Canada land th at is under cultivation.
W rite Box 1038, Cedar Rapids, Iowa— 3-4.

Married Man 33 Y ears Old, now em
ployed in a bank, would like to make a
change. I am fam iliar with country bank
work and would prefer work in such a
bank as assistant cashier. I can give the
best of references, also my present em
ployer as reference. I can also take some
stock in a good bank. Available after
June 21 or sooner. Address Northwest
ern Banker, No. 2971— 4.
Bankers, Investment and Insurance
M anagers: Married man over 12 years’
successful banking experience, desires
connection offering future.
Fam iliar
every country bank department including
foreign exchange, real estate, insurance,
state and federal corporation and indi
vidual income tax, sales clerk, purchasing
commercial paper and bonds, legal forms,
cost and revenue analysis important de
partments of bank, stenography, etc.
Seven years’ experience loans and dis
counts, collections. A tireless worker in
prime of life and willing to prove my
worth.
Will consider auditor country
banks, representative, assistant or secre
tary to executive or manager and other
responsible positions. Interview feasible.
W hat have you to offer? Address No.
2966, The Northwestern Banker— 3-4.
Executive Bank Position W anted:
With 20 years’ successful banking ex
perience, both state and national banks
in executive capacity. Married. Good
reputation for ability and genial aggres
sive personality. Protestant and lodge
affiliations. Consider any desirable point,
middle west, east or south modern con
veniences. Satisfactory references fu r
nished. Address EBC, The Northwestern
Banker— Indef.
High-class Set of Marble and Oak Bank
Fixtures for $450: 47 feet of marble
fixtures with top of oak, also marble
railing for officers’ section. Counter is
21 feet long and has three windows.
This is a real opportunity for the banker
who wants to dress up his banking room
a t a nominal cost. Price is f . o. b.
Neligh, Nebraska. Photos on request.
Security State Bank, Neligh, Nebr.— 4.

W anted: Vault doors, safe, check and
deposit files with or without cabinet and
safe deposit boxes. Give prices with de
scriptions. Address No. 2962, The North
western Banker— 3-4.
Position Wanted as cashier or assistant
cashier by young man now employed as
assistant cashier. Ten years banking ex
perience. Clean record and can furnish
A -l reference.
Address Northwestern
Banker, No. 2970— 4.
Senator W alsh’s Service *
There was a Herculean task under
taken by Senator Walsh o f Montana
when he set out to discover and expose
the corruption o f the oil lease. His labors
have now come into full fruition by the
unanimous judgment o f the United
States supreme court.
The charges he made against the un
holy alliance between Doheny and Fall
are confirmed with an authority and fi
nality from which there can never be an
appeal. The Augean stables are cleansed.
It was more than an investigation. It
was in the nature o f a crusade. Here he
was, a lonely figure, attacking the citadel
of vast wealth and highest official pres
tige, with their incalculable resources,
material and moral. The task called for
resolution, fortitude and patriotic pas
sion o f the highest character.
A top o f all this was the fine deport
ment o f the man. There was never an
indication o f personal vindictiveness or
partisan rancor in his work.
Senator Walsh has rendered an inval
uable public service. W e are all his
debtors.— St. Louis Post-Dispatch.

There can hardly, I believe, be imag
ined a more desirable pleasure than that
o f praise unmixed with any possibility
o f flattery.— Steele.

Steel and Cooper Engraved
S T A T IO N E R Y , B U S IN E S S
ANNOUNCEM ENTS AND CARDS

For quality work address
The

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Federal Reserve Bank of St. Louis

H o m e ste a d

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1166-68-70 Sixth Ave., Des Moines.
Printers, Binders, Mfg. Stationers.

TH E

A p r il, 1927

N O R T H W E S T E R N

B A N K E R

uary 10; Security Bank & Trust Co.,
Webster, January 10; Alcester State
bank, January 15; Beresford State bank,
reopened to be consolidated with Secur
ity State bank, Beresford, January 17;
Volin State bank, January 24; First
State bank, Hetland February 1 ; B ry
ant State bank, Bryant, February 9;
Farmers State bank, Lesterville, Febru
ary 10; Bank o f Alpena, Alpena, Febru
ary 15; Farmers State Bank, Elk Point,
February 16.

SouthDakota
Bank News
Officers South Dakota Bankers
Association
President............................ Einer Johnson
Volin
Vice

EINER JOHNSON
President

President........Harry M.
Gettysburg

Griffith

Secretary....................... Geo. A. Starring
Huron
Treasurer...............Geo. C. Fullenweider
Huron

GEO. A. STARRING
Secretary

ers’ State Bank and the Community State
E.
W . Radeke, o f Alexandria, South bank o f Lesterville.
The capital stock o f the reorganized
Dakota, has been elected president o f the
institution
is $25,000 with a surplus fund
Hanson County Bankers’ association for
the coming year. Other new officers a re : o f $5,000.
The officers o f the Farmers’ State Bank
vice president, C. T. Coyne, Em ery; sec
are: president, J. A. W eiland; vice pres
retary, Julius Bertsch, Fulton; treasurer,
ident, John R ipple; cashier, A. J. W ieRichard Fluth, Emery. Following the
land; and assistant cashier, H. J. Auch.
election the bankers and their wives were
The directory consists o f the officers
guests at a banquet given by wives o f
named and F. J. Koblas.
bank officers at Fulton.
County Bankers E lect

Banks Merge
Consolidation o f the Putney State
Bank o f Putney with the First State
Bank o f Claremont, South Dakota, has
been completed. The business will be
conducted at Claremont.
Hold Annual Meeting
The annual meeting o f the stockhold
ers and directors o f the Citizens State
Bank, Mobridge, South Dakota, was held
recently at which time all the officers and
directors were reelected. M. E. Beckley
o f Minneapolis and Oscar A. Olson of
Timber Lake attended the meeting. The
directors reelected are W . F. Mailand,
F. M. Regan, M. E. Beckley, W . P. Jones,
and Oscar A. Olson. The officers are as
follow s: W . F. Mailand, president; M.
F. Beckley, vice president; F. M. Regan,
vice president; W . P. Jones, cashier.
The bank had a very satisfactory year
during 1926 and all the officers and direc
tors look forw ard to much better condi
tions the coming year.
New Building
Among the important building projects
in Britton, South Dakota, this spring will
be the erection o f a two-story structure
to replace the Farmers and Merchants
bank building which was destroyed by
fire. The greater part or all o f the
ground floor will be occupied by the bank.
Bank Opens
The Farmers’ State Bank o f Lesterville, South Dakota, opened its doors to
the public recently. The bank is the
result o f the consolidation o f the Farm

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Federal Reserve Bank of St. Louis

Reorganized
A t a meeting o f the stockholders o f the
Citizens State Bank o f Arlington, South
Dakota, the follow ing officers were
named: president, G. H. Glendenning;
vice president, Martin Peterson and C.
W . Quinn; cashier, C. P. Swift and as
sistant cashier, C. P. Stanwood.
The directors o f the new bank are Mar
tin Peterson, W . W . Brown, G. H. Glen
denning, John Bonde, Edward C. Paul
son, C. W . Quinn and C. P. Swift.
The new institution is capitalized at
$25,000 with a surplus o f $2,500, making
the capital and surplus $27,500.
Bank Clearings
Sioux Falls, South Dakota, bank clear
ings fo r February, 1927, exceed the same
month o f last year by $2,557,117.45. The
figure fo r February, 1927, is $6,704,230.79, whereas the figure fo r the same
month o f last year is $5,147,013.34.
The total amount fo r the two preced
ing months was greater than the amount
o f last month. In the month o f Decem
ber, 1926, the total bank clearings fo r the
city o f Sioux Falls aggregated $7,161,331.42.
The total o f the bank clearings in Jan
uary was $7,391,493.63.
Fifteen Banks Opened
Fifteen banks have reopened in South
Dakota since the first o f the year. Those
which reopened, with the date fo r each
are as fo llo w s:
Bank o f Aurora, January 3; Bank of
Centerville, January 3; First State bank,
Wesley, January 3; First State bank,
Onida, January 8; Bank o f Bruce, Jan

Amend Guaranty Law
In passing Senate Bill 104, which con
tains amendments to the original Guar
anty Law, the South Dakota legislature
took a decided step in strengthening the
going banks o f the state, and also rec
ognized the voice o f the people regarding
the repeal o f the law which was ex
pressed at the election last November.
Thomas O’Brien, chairman o f the Legis
lative Committee fo r the South Dakota
Bankers Association, comments on the
action o f the legislature as follow s:
“ It was apparent from the result o f
that election that the majority o f those
who voted felt that the legislature should
not permit the state banks o f the present
to escape the payment of one-fourth of
one per cent o f their average daily de
posits into a fund fo r the protection of
the depositors. The legislature therefore
has passed Senate Bill 104 by the terms
o f which every state bank now in ex
istence or every state bank to be organ
ized must continue paying into a guar
anty fund the same rate which the law
previously required them to pay.
“ The legislature recognized, however,
that the income to the guaranty fund is
entirely inadequate to meet its liabilities,
and that the distribution o f the fund
which would be obtained by continuing
the guaranty fund to the creditors of
banks already closed would be almost an
impossible task, since the annual distri
bution o f the fund to about two-thirds of
the creditors would necessitate the issu
ance o f a thousand checks averaging less
than ten cents each. Therefore, with this
apparent helpless position o f the old
guaranty fund before it, the legislature
has provided in this new act that assess
ments to be collected in the future should
be appropriated fo r a use that would be
o f some benefit to the creditors o f going
banks. The legislature felt that the de
positors o f open banks are entitled to
protection in as much as the losses in the
banks that had closed in the past were
not losses that could be attributed to the
banks that are now open. Therefore it
provided that the guaranty fund assess
ment to be collected in the future should
be maintained as a fund with the state
treasurer fo r providing protection to the
depositors o f each individual bank by
whom the assessment is paid.
“ A third important feature o f the new

T II E

act is the wider scope of the duties and
powers o f the Guaranty Fund Commis
sion in regulating the banks. Strictor
supervision over applications to engage
in the banking business are provided,
and the commission has the final word
as to the fitness o f all officers appointed
by the directors o f any bank. The com
mission will also have the full power at
all times to inquire into the business and
affairs of all banks under its supervision,
and the directors o f every state bank
must within five days after the election
o f any officer o f such bank forward to
the Guaranty Fund Commission the
names o f such officer together with such
other information as may be required.”
New Director
Election o f Clifford Peck, vice presi
dent and secretary o f the Brown Drug
Co., and manager o f the Peck properties,
as a new director o f the Citizen’s Na
tional bank, Sioux Falls, South Dakota,
was announced recently by W . E. Stev
ens, president o f the bank. Mr. Peck is
also a new member o f the board of direc
tors o f the Sioux Falls agricultural credit
corporation.
Consolidated
The Bryant State bank and the Mer
chants State bank o f Bryant, South Da
kota, have been reorganized as a consoli
dated bank under the name o f Bryant
State bank, and have reopened fo r busi
ness according to the state banking de
partment.
Meet in Aberdeen
Gathering at the Chamber o f Com
merce building in Aberdeen, South Da
kota, for their annual meeting, mem
bers o f the Brown County, South Da
kota, Bankers’ association convened to
elect new officers to handle the affairs
o f the organization during 1927, and to

N O R T H W E S T E R N

B A N K E R

take up other business matters. Repre
sentatives o f 15 Brown county banks
were present, and a very successful con
ference was reported.
An Aberdeen banker, S. L. Allen, was
chosen as president fo r the ensuing year.
John H. Kissinger, Hecla, will take over
the duties o f vice president, and W . M.
Russell will act as secretary-treasurer.
The officers who are retiring after be
ing active during 1926 are Don W . DeVey,
Westport, who was president, and Earl
Wiekland Stratford, who held the Sec
retary-treasurer’s office. S. L. Allen last
year was vice president.
Preparations were laid fo r the group
meetings which will be held this spring,
and fo r the state meeting which will fo l
low.
The group meetings are held
throughout the state, at which time the
issues which are to arise at the state con
vention are discussed.
Granted New Charter
The Belvidere State Bank, Belvidere,
South Dakota, has received a renewal o f
its charter having passed the twenty
years fo r which the charter was original
ly granted. The old charter was dated
March 2, 1907, and at that time the rail
road was not completed to Rapid City.
The homesteaders were just coming to
the country at that time and the town of
Belvidere had just been established a
short time before.

Hold Midwest Savings
Conference
The Midwest Regional Savings confer
ence was held in St. Louis, March 29 and
30, under auspices o f the American Bank
ers Association.
A well-balanced but busy two-day pro
gram was scheduled fo r the representa
tives who came from banks in fifteen
states, including North and South Dakota,

OUR SERVICE
to banks in S iou x City territory is unexcelled in three respects—
1. We provide immediate credit of proceeds from sale of livestock. Why
should commission checks travel from Sioux City to your town, be deposited in
your bank and travel back again for collection? W e can save you many dollars
each year in interest and labor.
2. We have exceptional facilities for handling grain and hay drafts and
especially drafts on livestock commission firms. Items to or from points in
Iowa, Minnesota, Nebraska and South Dakota are handled promptly and safely.
3. For over twenty-five years we have specialized in handling feeder loans
and are equipped to be of material assistance to our correspondent banks.

THE LIVE STOCK NATIONAL BANK
Located at the Stock Yards

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Federal Reserve Bank of St. Louis

SIOUX CITY, IOWA

A p ril, 1927

Nebraska, Kansas, Oklahoma, Texas,
Minnesota, Wisconsin, Alabama, Iowa,
Missouri, Louisiana, Mississippi, A r
kansas, Tennessee and Illinois. This was
the third regional conference o f the year,
one being scheduled at Oakland, Califor
nia, on March 17 and 18 and the other at
Cleveland, March 24 and 25. A fourth
one will be conducted at Washington, D.
C., April 7 and 8.
The program fo r the St. Louis meeting
included speeches from leaders in the sav
ings bank field and a number o f round
table discussions, where everyday prob
lems were threshed out. The speakers and
their subjects on March 29 were:
Address o f welcome, John G. Lonsdale,
president o f the National Bank o f Com
merce in St. Louis and head o f the St.
Louis Clearing House.
Address by W . R. Morehouse, president
o f the Savings Bank Division o f the Amer
ican Bankers Association and vice presi
dent o f the Security Trust and Savings
Bank, Los Angeles.
“ Competition fo r the Savings o f the
Peoples,” by Rome C. Stephenson, presi
dent, St. Joseph Loan and Trust Com
pany, South Bend, Ind.
“ Methods o f Procuring New Business,”
John W . Rubecamp, assistant cashier, Illinois-Merehants Trust Company, Chicago.
“ Building Savings Balances,” Gaylord
F. Morse, assistant cashier, State Bank,
Chicago.
Address by Noble R. Jones, savings
manager, First National Bank o f St.
Louis.
“ Organizing and Building a Savings
Department,” Arthur R. Cooney, assistant
vice president, Texarkana (Texas) Na
tional Bank.
“ The Value o f Savings to the Commu
nity,” C. B. Mudd, cashier, First National
Bank, St. Charles, Mo.
“ The Dilemma o f Thrift,” F. S. W ettack, cashier, First National Bank, C offeyville, Kan.
A banquet was held on the evening o f
March 29, at which Walter B. Weisenburger, vice president of the National
Bank o f Commerce in St. Louis was toast
master. Speakers at this gathering were
Fred N. Shepherd, executive manager o f
the American Bankers Association, and
Eugene Angert, a St. Louis attorney.
The program on March 30th, the clos
ing day, was as fo llo w s:
“ Savings Bank Taxation and Other
Handicaps,” W . S. Webb, president, Mis
souri Savings Association Bank, Kansas
City, Mo.
“ Printed Figures Versus Pen and Ink,”
Stephen C. Thorning, manager savings de
partment, First National Bank, Kansas
City, Mo.
“ School Savings,” Paul S. Abt, vice
president, Southern Illinois National
Bank, East St. Louis, 111.
“ Fashions Have Changed in Savings,”
Mrs. L. D. Sultzer, manager, savings de-

TH E

April, 1927

partment, Mercantile Trust Company, St.
Louis.
“ Developing the Bank’s Personnel,”
Fred W . Ellsworth, vice president, H i
bernia Bank and Trust Company, New
Orleans.
Canadian News
Mr. Cecil Harmsworth, head o f the
board o f directors o f the London Daily
Mail, has been telling the Ottawa press
how scarce he finds English news in the
Canadian papers.
There are times when we wish we could
get more English news on the moment.
But if the whole truth must be told, it is
that the balance o f quantity is tremen
dously in favor o f our own papers, when
it comes to a comparison between English
news in Canada and Canadian news in
England.
There are o f course many factors opera
tive on both sides o f the Atlantic affecting
the quantity o f news published from vari
ous sources.
England is, for news purposes, part and
parcel o f all Europe.
She is also the
news center o f the civilized world. Can
ada similarly is part and parcel o f the
North American continent. But there is
no reason why a local eruption in, say,
Latvia, should receive more space in the
British press than important develop
ments in Canadian expansion. Yet that is
often the case.

N O R T H W E S T E R N

The man in the street in England is far
less intimately acquainted with Canadian
affairs than he is Avith those of, say, P o
land, so far as the British newspapers are
concerned. Yet Canada is o f infinitely
greater importance to him than Poland.
Canadian newspapers do their very best
to keep their public fully acquainted with
all matters o f moment in the old country,
and they largely succeed. It would be a
fa r stretch o f the imagination to say the
same about the British press.— Montreal
Star.
H it the Spot
A Texas plantation owner had given
one of his old darkeys a cigar that he
had kept in his pocket fo r quite some
time. On seeing the darkey later he in
quired, “ Well, Rastus, how did you like
that cigar?”
“ It was just right, Colonel, just right.”
“ What do you mean by just right?”
“ Well, Colonel, i f it was any better’n
’twas you’se wouldn’t give it to me, and
i f it was any Avorser I ’se wouldn’t smoke
it. It Avas just right.” — Forbes.
Realize Their Responsibilities
The responsibility o f a public utility to
the community in which it is located A\7as
dwelt upon recently in New York by
Henry M. Brundage, president of the
Empire State Gas & Electric Associa

THE

HANOVER
NATIONAL.
BANK

OF THE CITY OF NEW YORK
Established 1851

Capital
.
.
.
$5,000,000
Surplus and Profits . $26,000,000

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Federal Reserve Bank of St. Louis

B A N K E R

tion. Mr. Brundage is a vice president
o f the Consolidated Gas Company o f New
York.
“ Public utilities feel and acknowledge
a heavy responsibility to the communities
they serve,” Mr. Brundage said. “ The
very nature o f their place in the scehme
o f things imposes it— a far weightier re
sponsibility than rests on most classes of
business. When a gas or electric com
pany assumes the obligation o f furnish
ing service, it binds itself to do something
AAThich vitally affects the comfort, hap
piness material Avelfare and, under certain
circumstances, the safety o f life o f the
people o f the community.”
Mr. Brundage further sa id : “ Rates are
established for the various classes o f
users o f service which will produce rev
enue sufficient to pay the cost o f the busi
ness. These costs include taxes and a
fa ir return on the Arnlue of the property
used in furnishing the service. The fair
return on the investment is the wages
paid to capital, and must cover interest
on bonds and dividends on stocks, if the
company is able, by capable and efficient
management to earn such dividends. The
law allows this return, which commissions
and courts have interpreted as meaning
not to exceed 8 per cent on the value of
the property.”
Modesty is the only one sure bait Avhen
you angle fo r praise.— Lord Chesterfield.

THE

NORTHWESTERN

BANKER

C entral Trust
C O M P A N Y O F IL L IN O IS
125 W. Monroe Street at La Salle
C H IC A G O

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Federal Reserve Bank of St. Louis

April, 1927

TH E

A p r il, 1927

N O R T H W E S T E R N

N eb rask a
Bank News
Officers Nebraska Bankers
Association

E. C. DAVENPORT
President

President......................JE. 0. Davenport
Valentine
Chairman of the Executive
Council.....................A. R. Thompson
Hastings
Secretary.......................... W. B. Hughes
Omaha
Treasurer
.................J. B. Owen
Omaha
General Counsel............ — J. P. Palmer
Omaha

B A N K E R

WM. B. HUGHES
Secretary

shareholders have bought all o f the inter
ests in the institution o f Mr. and Mrs.
Clarence Bickel, now o f Lincoln. New
officers have been elected as follow s: Geo.
T. Ovenden, president; Jacob Sprecht,
vice president; Ernest Frisch, cashier;
Miss Louise Brehm, assistant cashier ;
members o f board of directors, George T.
Ovenden, Jacob Sprecht, Ernest Frisch,
R. W . Sennen, H. H. Schacht, C. P.
Brehm and H. W . Holtgrewe. The bank
has a capital stock o f $25,000. Mr.
Bickel was formerly cashier o f the insti
tution.
Changes to State Bank

Changes to State Bank

President Resigns

The First National Bank o f Bassett,
Nebraska, has been converted to a state
bank under the name o f the Bassett State
Bank with an authorized capital o f $50,000, and a paid up capital o f $25,000 and
$5,000 surplus. A charter to the state
bank has been issued by Secretary Bliss
o f the department o f trade and com
merce. The officers o f the bank remain
the same, J. M. Flannigan o f Stuart, pres
ident; M. J. Lipman, vice president; V.
A. Stockwell, cashier and E. A. Flanni
gan, assistant cashier. In converting a na
tional bank to a state bank the law re
quires payment o f a premium o f one per
cent o f deposits to be paid to the guaranty
fund. This has been collected. The new
bank will further pay the regular assess
ment o f the guaranty fund as levied upon
state banks in the future.

On account o f the serious and continued
illness o f E. K . Kimmerly, who several
months ago became president o f the
Seven Valleys State Bank, Calloway, Ne
braska, he has resigned that position. His
stock in the bank has been purchased by
S. C. Waldron, and Mr. Waldron has
been elected president o f the Seven Val
leys State. The remaining officers o f the
bank will continue as for some time past.
Dr. R. D. Bryson being vice president, J.
I. Christansen, cashier, and Hoyt Lower,
assistant cashier.

Sells Interest
C. W . Tiabert, who has had controlling
interest in the State Bank o f Ellis, Ne
braska, for the past several years, has
disposed o f his interests in the bank to
the other two directors and will locate in
Chicago. Charles Bonham o f Beatrice,
former employe o f the bank, has again
assumed control.
W ith Commercial Bank
Charles L. Lear o f Ainsworth has ac
cepted a position with the Commercial
Bank at Bassett, Nebraska. Mr. Lear has
had nine years of banking experience in
Nebraska and South Dakota banks.
Declare Usual Dividend
A t the annual meeting o f the directors
o f the Obert, Nebraska, State Bank, held
recently the usual dividend was declared.
Directors were elected as follow s: W . S.
Weston, C. A. Pederson, O. 0 . Gilbertson,
L. Nedergaard, and E. F. Robinson o f
Orlando, Fla., who was elected to take
the place o f his father, the late J. C.
Robinson. The officers elected are: W .
S. Weston, president; C. A. Pederson, vice
president, and L. Nedergaard, cashier.

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Federal Reserve Bank of St. Louis

S ta rt New Building
The building program in Aurora, Ne
braska, started recently when the First
National Bank let the contract fo r its new
bank building on a prominent corner and
workmen began the tearing down o f the
old building. The new building will be
one story in height and occupy a space
o f 50 by 44 feet. It will be modern
in every way and will be on a corner
well located near the postoffice.
The old building being torn down to
permit the construction o f the new one
is one o f the historic business places of
the town and many years ago was occu
pied by a bank which was the predecessor
o f the First National. F or a good many
years the First National Bank has owned
this location, intending some time to build.
The officers o f the First National Bank
now are F. C. Mather, president; G. W .
Sandin, vice president; L. C. Opper, cash
ier; Arnold Isaacson, assistant cashier.,
Assistant Cashier
R.
S. Hutchinson has been installed
the First National Bank o f Albion, Ne
braska, as assistant cashier, taking the
position made vacant by the resignation
o f Lee Hallstead. Mr. Hutchinson has
been with the Bull-Howell Motor company
fo r the past four or five years and pre
vious to his services there, served two
terms (six years) as county treasurer.
Reorganized
The Cook State Bank o f Cook, Neb.,
has been reorganized.
Thirty-six new

The First National Bank o f Bassett,
Neb., has been changed to a state bank,
with the name o f Basset State Bank, an
authorized capital stock o f $50,000.00, and
a paid up capital o f $25,000.00. Surplus
is $5,000.00.
J.
M. Flanagan, former president o f
the Nebraska State Bankers association,
is president o f the new bank. The other
officers are James Lipman, vice presi
dent; V . A. Stockwell, cashier; A. E.
Flanagan, assistant cashier.
The conversion was announced by C.
G. Bliss, secretary o f trade and com
merce. A premium o f one per cent on
all deposits must be paid the state guar
anty fund, in changing a national to a
state bank.
Resigns Position
Earl Horner, assistant cashier o f the
Citizens Bank, Beaver Crossing, Nebras
ka, fo r the past seven years, has resigned
his position. He has made no permanent
plans although he has several positions
under consideration.
Sells Out
W . F. Ruzicka, vice president o f the
First State Bank at North Bend, Ne
braska, resigned after selling his stock.
He announced that he would engage in the
banking business in some other Nebraska
town.
Agricultural Advisor
Russell Kendall, who recently com
pleted his course at the state agricultural
college, has joined the personnel o f the
in Packers’ National Bank at Omaha, Ne
braska, in the capacity o f farm advisor.
He will cooperate with live stock feeders
and farmers in various lines o f develop
ment. At present he is helping to or
ganize pig, calf and com clubs in Sarpy
county. Mr. Kendall was a farmer before
starting to college, was a member o f the
meat judging team that took first honors
at the international stock show in Chicago
last fall and had charge o f the college
hogs that were shown at the Denver and
Kansas City shows.

TH E
Annual Meeting

The Farmers State Bank o f Nicker
son, Nebraska, held their annual stock
holders’ meeting recently and reports
showed a successful year. The following
are the officers and directors at the present
time: H. W . Moeller, president; Wm.
Lallman, vice president; Herbert Koyen,
cashier; Ed F. Langhorst, Ed Clough and
George Ruff, directors.

N O R T H AV E S T E R N

B A N K E R

Nebraska, fo r the past nine years, has
severed his connections with that institu
tion. He returned from Omaha recently
where he completed a deal whereby he
becomes associated with the Standard Oil
Co. He takes the position o f superin
tendent o f the agents in the Laurel district
and will maintain his headquarters in
Laurel.
Remodeling

Goes to South America
George H. Stevenson o f Nebraska and
formerly in the farm loan business, has
been engaged to advise the Peruvian gov
ernment in the establishment o f a system
o f rural credit banks.
Since May, 1923, he has been associated
with the Federal Farm Loan bureau.
Mr. Stevenson is former president of
the Baltimore Federal Land Bank. He
also served as examiner fo r the federal
land banks in Nebraska and other western
states, and as an expert in agricultural ex
tension fo r the department o f agriculture.
Appointed Cashier
Louis Wittenberger has been appointed
cashier o f the Commercial Bank o f Grant,
Nebraska, to fill the place vacated by the
resignation o f D. A. Sawyer.
Mr. Sawyer will move with his family
to Kearney within a short time.
He
plans to give his time to the development
o f Kearney property and his wheat farm
ing interests in Colorado. He may also
promote some exchanges on irrigated land
around Kearney.
Mr. Wittenberger, who takes Mr. Saw
yer’s place as cashier o f the bank, has
been assistant cashier o f that institution
for some time past.
Cashier Resigns
E. 0. Waite, who has been connected
with the Laurel National Bank o f Laurel,

The Platte Valley State Bank of
Scottsbluff, Nebraska, is remodeling the
Oit block, which they have recently ac
quired. The building will present an en
tirely new appearance. A new front is to
be put in, a different and more conven
ient arrangement fo r the stairway to the
second floor; the first floor will be lowered
to correspond with the street grade, and
a large archway cut through the brick
wall, that separates the two rooms fo r
merly making up the first floor.
Hold Annual Meeting
The annual meeting o f the First Na
tional Bank o f Peetz, Nebraska, was held
recently. T. J. Hansen o f Omaha, presi
dent o f the institution, attended the meet
ing.
Officials were chosen as follows: Di
rectors, C. C. Hansen, T. J. Hansen, E. T.
Hall, Harvey J. Weeth and D. F. Enevoldsen; president, T. J. Hansen; vice presi
dent, Harvey J. W eeth; cashier, D. F.
Enevoldsen; assistant cashier, Anna I.
Knifer.
Banker Dead
L. E. Southwick o f Lincoln, fo r many
years engaged in the banking business at
Friend, Nebraska, and who was well
known to residents o f the south part o f
Seward county, left an estate valued at
about $700,000, according to figures given
out at Lincoln where the estate is being

A p r il, 1927

probated.
Homer J. Southwick and
Philip O. Southwick, sons, have been ap
pointed special administrators.
Establish Precedent for Conventions
Beginning with its 1927 convention, the
Financial Advertisers Association will
hold independent and self-supporting con
ventions. This action was unanimously
taken by the board o f directors at their
mid-year conference in New Orleans,
March 10, 11, and 12, and it is the first
instance o f an association o f advertisers
to do this.
Under this departure the first conven
tion will be held at West Baden, Indiana,
September 12 to 15, 1927. West Baden
was selected by the directors as a place
well suited to the association’s new pur
pose.
The business program will be carried
out with no interference by entertainment
provided by local members, but ample
time will be set aside for entertainment
by the association itself.
Banker Dies
Otto H. Schurman, former Fremont,
Nebraska, banker and fo r the last three
years a resident o f Omaha, died at his
home, 305 North Fifty-fourth street re
cently. He had been in ill health fo r sev
eral years, having been forced to retire
from active business seven years ago. He
was 57 years old.
Cashier Resigns
W . F. Ruzicka, who has been connected
with the First State Bank in North Bend,
Nebraska, fo r the past several years, first
as cashier and later as vice president, has
resigned his position. He has not fully
decided on his plans for the future. Jack
Kelly, who resigned his position as cashier
o f the bank a year ago to engage in farm
ing, is back again, and Bernard Pabian o f
Morse Bluff is also assisting with the work
in the bank, in addition to the regular
force.
N E B R A SK A N EW S

W e Can Serve You
By placing at your disposal the benefit o f our years of
practical experience in your locality;
By financing your live stock loans;
By collecting your live stock proceeds;
By taking care of your other Omaha business.
A LL CORRESPONDENCE GIVEN PROMPT ATTENTION

Live S tock N ational B ank
Union Stock Yards — Omaha
W. P. Adkins, President
Alvin E. Johnson, Vice President
Howard O. Wilson, Cashier

R. H. Kroeger, Asst.Cashier
L. V. Pulliam, Asst.Cashier
V/. S. Hogue, Asst.Cashier

The bankers of the North Platte valley,
especially Scottsbluff, Gering, Miniatare,
Bayard, Mitchell and Morrill, Nebraska,
have been aiding the Cooperative Bett
Growers association in the current de
liberations on the contract price for
sugar beets to be raised in 1927.
The farmers, facing an open rupture
with the Great Western Sugar company,
felt that the financial condition o f the
valley is so closely tied up with large
beet production, that the bankers should
be invited to advise in the negotiations.
Mass meetings were held in a number of
communities, the bankers acting as a sort
o f neutral intermediary between the
sugar company and the growers.
The death of Benjamin Smith at the

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Federal Reserve Bank of St. Louis

A p r il, 1927

T II E

age o f 96 in Boston, Mass., in mid-March,
marked the passing o f one who had been
a powerful figure in early day finances
in Nebraska and Iowa. Mr. Smith was
also the first president o f the United
States National bank, o f which his grand
son, Clifford W olfe Smith, is now a di
rector. The Smith estate is reported to
have approximately two hundred thou
sand dollars o f the capital stock in the
institution.
Leslie Kountze, the son o f the late
Augustus F. Kountze o f New York City,
who has been associated with the bond
department o f the First Trust company
and the First National bank o f Omaha,
eloped to Council Bluffs, Iowa, and was
married to Miss Alvertina Colina o f
Omaha, in the week before his father
died, unexpectedly at Atlantic City,
March 14. Augustus Kountze was a
brother o f Charles T. Kountze, vice presi
dent and chairman of the board o f the
First National Bank o f Omaha. Mr. C.
T. Kountze had sailed fo r Italy a few
days before his brother’s death. Funeral
services fo r Augustus Kountze were held
in New York City March 16th. He was
a member o f the banking firm o f Kountze
Brothers, 141 Broadway.
Mrs. Ed. Lemkuhl, wife of the presi
dent o f the First National bank, Wahoo,
Neb., died at her home March 8th.
Reiji Tochinai, representative o f Nip
pon Kwango Grinko, Ltd., o f Tokyo, the
land bank o f Japan, spent several days
in Omaha in March, studying local bank
ing and the operation o f the Federal
Land bank o f Omaha. Mr. Tochinai is
on a world tour to study land banking
in various countries. W hile in Omaha
he expressed the belief that war between
the United States and Japan is extremely
unlikely. He said he feared the pros
perity o f the United States was not good
fo r the “ second generation,” but said
that the most wonderful thing in the
country, to him, was the opportunity it
afforded fo r young men to achieve suc
cess.
The claim of the Wellman S tate bank,
Wellman, Iowa, to $8,000 against the
guaranty fund o f the state o f Nebraska,
for deposits in the First Bank o f Nicker
son, Nebraska, was affirmed by the su
preme court o f Nebraska, upholding the
judgment secured in the district court
o f Dodge county. The state had resisted
the claim on the ground that the money
placed by the Wellman bank in the
Nickerson bank had not been a deposit,
but had been given in exchange fo r notes.
District Judge Button found that the
notes had nothing to do with the deposits,
the ruling o f the supreme court support
ing this view.

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Federal Reserve Bank of St. Louis

N O R T H W E S T E R N

B A N K E R

THE

The will of the late Frank W . Sloan,
former Geneva, Neb., banker, has been
filed fo r probate in the county court at
Geneva, revealing the disposition o f stock
holdings in a number o f Nebraska banks.
Twenty-five shares in the Grafton State
bank were bequeathed to Thomas N.
Burke; twenty-five shares in the Farmers
State bank o f Fairmont, to Francis
Pulitz, with the right to purchase all the
other Sloan holdings in this bank;
twenty-five shares in the Geneva State
bank to E. H. Wilkins, cashier, with the
right to purchase the rest o f the Sloan
stock. Mr. Wilkins was made executor
o f Mr. Sloan’s estate.
W . F . Ruzicka, president o f the First
State bank, North Bend, Neb., has re
signed and disposed o f his stock inter
ests. He has spent the past eleven years
at North Bend, after being in the bank
ing business at Blair and Newport, Neb.

NORTHWESTERN

BANKER

Mr. Ruzicka said he intended to reenter
the banking in some other Nebraska
town, if he found a favorable oppor
tunity.
The Omaha Clearing House association
has invited the banks o f Council Bluffs,
Iowa, to join, to expedite the handling
o f business between the banks o f the two
cities, separated only by the Missouri
river, and one in community interest.
The invitation follow ed a protest o f
some o f the Council Bluffs banks, to the
recent charge o f 2y2 cents on out o f town
banks, enforced by the Omaha institu
tions, being applied to checks drawn on
Council Bluffs banks.
The Omaha banks generally have found
little opposition to the check-handling
charge, which was made effective April
1. Gwyer Yates, vice president o f the
United States National bank, said that

April, 1927

o f 75 hundred checking accounts, not
more than 300 were affected by the
charge. E. L. Droste, vice president of
the First National bank, said, “ Yes, we
have complaints, but not half as many
as we were prepared for. Most o f our
customers understand why the charge is
made after we explain the matter to
them. Guy C. Kiddoo, vice president o f
the Omaha National bank, said officials
are more often asked to explain the
charge, than to answer complaints.
Dan V. Stephens, president o f the Fre
mont, Neb., State bank, recently, in a
public statement to his community, advo
cated the creation o f a new city post,
that o f tree trimmer.
“ Trees are the most important factor
in beautifying a city,” he said. “ There
should be an official tree trimmer in this
town and not a single tree should be
touched until he passess judgment on it
and decides how it should be trimmed.”
Jam es S. Alexander, chairman o f the
board o f the National Bank o f Commerce
o f New York City, and J. Howard A rdery, vice president o f the bank, were
guests o f W alter W . Head, president o f
the Omaha National bank, in Omaha
Saturday, March 5th. Mr. Alexander and
Mr. Ardery were returning from a trip
o f inspection over the entire South Paci
fic system, o f which Mr. Alexander is a
director.

^ | ^HE best evidence of the satisfaction our banker custom

In Omaha Mr. Alexander expressed
confidence in the business and farm out
look, declaring that throughout the
region he had traversed, bountiful crops
were expected. He hoped, he said, that
some measure o f agricultural relief could
be found that would make the people of
the middle west realize that those o f the
east were concerned in their prosperity.

ers derive from their connection
with us lies in the steady growth
of the accounts they keep with us.
You, too, can profit through a
connection with this strong, pro
gressive institution.

THE STOCKYARDS NATIONALBANK
THE STOCK YARDS TRUST&SAVINGS B A N K

The Federal Intermediate Credit bank
o f Omaha, through A. Kopperud, mana
ger, has announced that the federal farm
loan board has approved the acceptance
o f the bank o f county seed loan bonds
and warrants from banks in discount
corporations in the district comprising
the states o f Iowa, Nebraska, W yoming
and South Dakota. The seed loan bonds
or warrants are to have the prepayment
privilege after six months, and the rate
o f interest will be 4 % per cent. Congress
at the recent session passed a law pro
viding approximately eight million dol
lars fo r seed loans to be used in the north
western and southeastern states, but
on account o f the filibuster during the
last days o f the session no appropriation
was made.

of CHICAGO
David Cole, long a resident o f Omaha
and a director o f the First National bank,
died in March.

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Federal Reserve Bank of St. Louis

TH E

A p r il, 1927

N O R T H W E S T E R N

B A N K E R

“Transit”is a larger item
in the business of every
bank than ever before.
More checks are being
used. The “dollars and
cents” volume increases
each year.
Quick, accurate and intel
ligent handling of these
items reduces the “over
head” and increases the
profits of our correspond
ent banks.

T he Omaha National Bank
WALTER W. HEAD, President
OM AHA, NEBRASKA

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Federal Reserve Bank of St. Louis

T II E

N O R T H AV E S T E R N

BANKER

Farmers Seeking New Loans
P. HOGAN, president o f the
Federal Land Bank o f Omaha,
recently discussed the confidence
that farmers in Nebraska and Iowa and
neighboring states, and bankers o f the
regions, have in the Federal Land Bank,
which recently celebrated its tenth anni
versary.

“ Thousands o f farmers in the eighth
federal land bank district, covering
Nebraska, Iowa, South Dakota and
Wyoming, are taking advantage o f the
low interest rates now prevailing to pro
cure long-term loans on their farms,” he
said. “ The bank has never had so many
applications fo r loans as it is now re
ceiving. I attribute this largely to the
fact that the federal land banks have
been able to sell their bonds to advantage

®hv

and so we are able to make loans at this
time bearing 5 per cent interest. A n
other big factor is the confidence farm
ers have in this institution because o f its
ten years o f successful operation and the
fact that now it can point to very sub
stantial savings on the part o f the farm
ers borrowing from it. The first loans
made a decade ago still have about 23
years to run.
“ AVe find that borrowers use most of
the money which they obtain from the
federal land bank fo r the purpose o f pay
ing off short term loans. In fact out of
about one hundred thirty-seven million
dollars which we have loaned since the
bank was organized, about one hundred
million dollars has been used fo r this
purpose, and it is evident that a large

;KationnI ÍBank
of

(ííig of putu Dork
57 BROADWAY

Capital

$ 40,000,000.00

Surplus and Profits .

38,204,473.58

Deposits (Dec. 31, 1926) 852,456,114.24
O F F IC E R S

ALBERT H. WIGGIN
Chairman of the Board
GATES W. McGARRAH
Chairman of the Executive
Committee

JOHN McHTIGH
President

ROBERT L. CLARKSON
Vice Chairman of the Board

Vice Presidents
SAMUEL H. MILLER
CARL J. SOHMIDLAPP
REEVE SCHLEY
SHERRILL SMITH
HENRY OLLESHEIMER

ALFRED C. ANDREWS
ROBERT I. BARR
GEORGE E. WARREN
GEORGE D. GRAVES

FRANK O. ROE
HARRY H. POND
SAMUEL S. CAMPBELL
WILLIAM E. LAKE
M. G. B. WHELPLEY

Vice President and Cashier
WILLIAM P. HOLLY

Second Vice Presidents
FREDERICK W. GEHLE
GEORGE W. SIMMONS
EDWIN A. LEE
WILLIAM E. PURDY
GEORGE H. SAYLOR

M. HADDEN HOWELL
ALFRED W. HUDSON
JAMES L. MILLER
JOSEPH C. ROVENSKY

BENJAMIN E. SMYTHE
JOSEPH PULVERMACHER
LEON H. JOHNSTON
FRANKLIN H. GATES
ARTHUR M. AIKEN

Comptroller
THOMAS RITCHIE

Foreign and Trust Department Facilities

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Federal Reserve Bank of St. Louis

April, 1927

number o f farmers are taking advantage
o f this opportunity afforded by this bank
to fund their first farm mortgage in
debtedness over a long period o f years
so that they may repay their loans grad
ually and systematically by annual in
stallments. This type o f loan is best
adapted to agriculture, for it permits the
farm er to pay off from the income de
rived from his farm. The large dividends
which this bank has been able to pay on
the stock held by the borrowers tends to
reduce the interest rate even below 5 per
cent.
“ AVe are constantly in touch with the
borrowers through meetings held with
the associations, our correspondence and
periodical reports, and feel there never
has been a time when the activities of
the federal land banks were better under
stood by the borrowers and the public
in general.”
A Changing Opinion
It has been stated repeatedly in these
columns as an axiom o f common sense
that the principal cause o f automobile
accidents is not speeding, but reckless
ness.
Steadily the force o f this contention is
being recognized. Not long ago, public
officials seemed to be aware o f only one
sin o f motorists— speeding. Now more
and more official voices are raised in be
half o f the truth that the chief sin is
recklessness.
The latest voice is that o f J. T. Donaghey, state highway engineer o f AVisconsin. Mr. Donahey says the country is
emerging from the condition in which
it “ appeared the duty o f each officer to
bring in as many victims as possible each
day,” and in which “ little attention was
given to whether or not the victim was
driving recklessly, but if he drove a trifle
faster than the legal limit he was haled
into court and fined, if possible.”
Experienced motorists will concur in
Mr. Donahey’s statement that a good
driver is often safer on a road at from
forty to fifty miles an hour than a poor
driver is at thirty. Not speed, but reck
lessness, is the cause o f most accidents.
At some places a high speed may be reck
less; at other places, it may not. Mr.
Donahey finds that a man driving slowly
may sometimes be more reckless than an
other man driving fast.
F or purposes o f convenience and
safety, traffic on busy highways must be
speeded up. Mr. Donahey declares “ the
time will come when there will be no
maximum speed limit on any state or
rural highway.”
The congestion o f our highways is one
reason fo r the increasing recognition that
speed is not always harmful. Too long
has speed been denounced indiscrim
inately. Too long has it been a bugaboo.
To cut down motor accidents, what we
need is not less speed but better drivers.
■
— Chicago Journal of Commerce.

TH E

April, 1927

N O R T H W E S T E R N

B A N K E R

Ruled Illegal

Minnesota
BankNews
Officers Minnesota Bankers
Association
President..............R. E. Maegregor
Minneapolis
Y ice President............ A. G. Wedge
Park Rapids
Treasurer............. ....A, M. Schaefer
Jordan
R. E. MACGREGOR
President

Secretary......................P. P. Fellows
St. Paul

F. P. FELLOWS
Secretary

The states o f Minnesota and Wisconsin
were defeated recently in proceedings
before the United States supreme court,
involving their methods o f taxing stock
holders in national banks. The ruling
in respect to Minnesota was handed down
in a case brought against the state by the
First National bank o f St. Paul, which
contended that the state tax on bank
capital is unconstitutional in that it sets
up a higher rate o f levy than that on
money or capital invested in other se
curities or properties.
New Morris Plan

Not for Minnesota
Nebraska’s much-praised bank guar
anty law still is undergoing a severe test,
and cannot yet be called a success, in the
opinion o f Minnesota legislators who vis
ited that state as an unofficial committee
to report on the system. The committee
report, members o f both houses believe,
has definitely closed the door on any possi
bility o f a bank guaranty law at this ses
sion o f the Minnesota legislature.
Whether Nebraska’s plan will work out
or not, the committee found Nebraska
bankers and officials agreed it could not
be applied to Minnesota at this time. The
committee report concludes that the Ne
braska law “ is unfeasible and inapplicable
to banking conditions as they now exist
in Minnesota, and might be a dangerous
step to take at this time.”
The judgment o f the best informed men
in Nebraska, the committee reports, is that
the only Avay Minnesota today could put
in a guaranty system would be fo r the
state itself to get behind the fund and
guarantee the losses, something no state
ever has tried to do.
Costain Resigns
Announcement o f his withdrawal from
the banking business in Clay county has
been made by A. H. Costain, who has
been identified with the First National
Bank o f Moorhead, Minnesota, fo r over
30 years. Mr. Costain has served the bank
in various capacities having assumed the
vice presidency and active management
upon the death o f former president L. A.
Huntoon in 1913.
During this time Mr. Costain was instru
mental in organizing banks at Averill,
Rustad and Kragness, the latter having
been recently absorbed by the First Na
tional o f Moorhead. He was also active
as an officer and director in banks at
Sabin, Baker and Comstock and for many
years carried the active management and
direction o f these smaller banks.

Enlarges Quarters
Plans to increase facilities o f the North
ern National Bank, Duluth, Minnesota,
by enlarging the working and counter
spaces are now being carried out, it was

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Federal Reserve Bank of St. Louis

announced recently by R. L. Griggs, vice
president o f the bank.
The space at the back o f the corridor
o f the main floor o f the Alworth build
ing, which was formerly used as a direc
tors room, is being made larger by cutting
off a portion of the corridor. This will
be joined to the rear portion o f the bank
to be used fo r bookkeeping and secretarial
work. In addition counters for banking
clients will be extended partly around
the west side o f the banking lobby, Mr.
Griggs stated.
The alterations are taking place as a
result o f the recent enlarging o f the quar
ters o f the Northern Trust company,
which is affiliated with the bank. The
present board o f directors’ room for both
institutions is now located in the Lonsdale
building. Following the change o f ar
rangements the entire interior o f the bank
will be redecorated.
Hold Open House
The directors and officers o f the Central
State Bank o f Minneapolis were hosts to
the people o f the district and o f the city
recently, at an open house celebration
marking the completion o f the bank’s new
building at 2329-31 Central avenue, across
the street from the present banking quar
ters.
The new building, completed at a cost
o f about $100,000, is regarded as one of
the finest and most modern banking struc
tures in the northwest. Larger quarters
have been made necessary by the steady
growth o f the institution. The Central
State Bank increased its paid-up capital
from $50,000 to $100,000. It was char
tered in 1907, with capital o f $25,000. In
1916 deposits had grown to $450,000 and
the capital was doubled. Deposits now
total about $1,500,000 with resources o f
$1,700,000.
Officers o f the bank are : J ohn W . Bar
ton, chairman o f the board; John Schmidler, president; E. L. Forsythe, vice presi
dent; G. M. Christoferson, cashier, and
T. W . Larson, assistant cashier. Directors
are J. J. Allen, S. E. Forest, D. E. Dillman, John Schmidler, J. W . Barton, I. F.
Cotton, E. L. Forsythe, L. A. Egler and
G. M. Christoferson.

The Morris plan bank will open offices
in St. Paul about May 1st. This an
nouncement was made by directors o f the
St. Paul branch o f the institution who are
completing organization of the bank.
This bank will be part o f a chain of
similar institutions which have been or
ganized chiefly to lend money to the
class o f people desirous of making small
and short time loans. The location o f the
bank offices have not yet been decided.

Bankers Elect
At the closing business session o f the
Goodhue County, Minnesota, Bankers’
association the following officers were
chosen: President, F. Sawyer, Goodhue;
vice president, Samuel H. Lockin, Red
W in g; secretary and treasurer, A. F.
Hemlem, Red W in g; executive commit
tee, F. Sawyer, Goodhue; Samuel H.
Lockin and A. F. Hernlem, Red W in g;
A. H. Borlaug, K enyon; Otto G. Olson,
Zumbrota.

National Bank Resources
Combined resources o f 7,912 reporting
national banks in the United States,
Alaska and Hawaii amounted to $25,683,849,000 at the close o f business Decem
ber 31, 1926.
The figure, made public recently by the
comptroller o f the currency, represented a
decrease o f $168,563,000 from combined
resources o f 8,054 national banks report-

M id l a n d
N a t i o n a l Ba n k
and

T rust C o m p a n y
t

Resources $22,000,000.00
t
MINNEAPOLIS

THE

ing at the end o f 1925, and an increase o f
$364,425,000 over 1926 resources o f 7,978
national banks reporting June 30, 1926.
Investments in government securities
amounted to $2,282,571,000, a reduction
o f $240,239,000 since December 31, 1925,
and o f $186,697,000 since June 30. Other
bonds and securities held amounted to
$3,507,821,000, an increase o f $134,836,000 since June and an increase in the year
o f $255,805,000.
There was a decrease o f $37,407,000 in
cash held in banks compared to Decem
ber 31, 1925, the total at the end o f 1926
being $352,709,000. This also was a de
crease o f $7,242,000 since June 30.
Total deposits, including amounts due
to bankers, cashiers and certified checks
outstanding were $20,863,999,000, an in
crease o f $221,827,000 since June, and a
decrease o f $216,669,000 since December
31, 1925.

NORTHWESTERN

BANKER

Heads County Bankers
T. F. Franke o f Eyota, Minnesota, is
the newly elected president o f the Olm
sted County Bankers association and J. F.
Guzinski, also o f Eyota, is vice president.
H. C. Doty is secretary and R. W . Chad
wick, treasurer.

Annual Meeting
The annual meeting o f the Merchants
& Farmers State Bank o f Grove City,
Minnesota, was held recently.
Aaron
Liedholm, who had been cashier of the
bank the past 31 years, resigned on ac
count o f his health. N. A. Christenson
was elected cashier and Hannah E. Nel
son, assistant cashier. B. Bresden, presi
dent, resigned, and J. J. Grimsgard was
elected to take his place. Carl Nelson and
Aaron Liedholm, directors, resigned, and
Nels M. Nelson and C. W . Ecklund were
elected in their places. The bank has

April, 192?

had a very successful year and now de
clared a dividend o f eight per cent.—
Grove City Item in Litchfield Review.

Cashier Resigns
Erwin W . Nelson, who fo r the past
few years, has been cashier o f the Green
Lake State Bank, at Spicer, Minnesota,
has resigned his position and will enter
business in Detroit Lakes.
E. J. Rykken, who has been assistant
cashier o f the bank, has been chosen cash
ier, and will assume his duties March
first. Miss Minnie Rykken will be book
keeper and stenographer.

Banker Dead
C. E. Dinehart, 81, who organized the
State Bank at Slayton, Minn., in 1884,
and continued as president, is dead after
a long illness. He was father of the late
C. C. Dinehart, former state treasurer.

Declare Dividend

Correspondent banks find
us dependable and expe
rienced in the transaction
of their business.
Conveniently Located
Firmly Established
Thoroughly Experienced

The annual meeting of the Ellendale
State Bank, Ellendale, Minnesota, was
held recently and the stockholders voiced
their approval o f the present management
by returning all the old officials to their
posts, namely: A. M. Lerberg, president;
M. P. Miller, vice president; S. J. Sande,
cashier, M ilford Lageson, assistant cash
ier; L. J. Brynestad and James L. Soren
son, directors. The annual report showed
that the past year has been a good one
fo r the bank. The customary 6 per cent
dividend was declared and $1,000 was
added to the surplus fund.

More Consolidations
The tendency in modern banking is to
ward consolidation which are giving
greater safety fo r depositors.
This was the statement o f Bernard
Moore, deputy governor, 9th district Fed
eral Reserve Bank, talking before Ham
line university men students recently.
The individual banker no longer counts
in the banking business, he said. Through
centralized control, larger capital and
larger units, the safety o f bank deposits
is being improved.

Banks Better Managed

THE NORTHERN
TRUST COMPANY
C a p ita l, S u r p lu s a n d U n d iv id e d
P r o fits , o v e r $ 7 ,5 0 0 ,0 0 0

Northwest Corner La Salle and Monroe Streets

CH IC AG O

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Increasing efficiency o f bank manage
ment has strengthened the financial situ
ation o f the northwest, as well as added to

April, 1927

THE

the operating profits o f northwest bank
ing institutions, according to a recent
monthly business review o f the North
western National Bank o f Minneapolis.
In net profits per $100 o f capital funds,
the banks in the Minneapolis area regis
tered a greater gain than those in any
other section o f the United States, with
the exception o f the Atlanta district.
‘‘Bank management in the northwest
is improving steadily,” the bank review
states. “ An analysis o f costs and earnings
o f member banks o f the reserve system,
published in January by the federal re
serve board and covering the months from
June 30, 1925, to July 1, 1926, shows the
improvement, in definite figures.
“ In net profits per $100 o f capital
funds, a greater gain was made during
that 12-month period than elsewhere in
the country, except for the Atlanta dis
trict. The relative position o f northwest
banks, it is true, was low in 1925 and
there still is a marked spread between the
rate o f return in the agricultural west and
the industrial east.
“ On each $100 o f capital funds, includ
ing capital, surplus and undivided profits,
banks in the ninth reserve district made a
net profit last year o f $5.46 or about
per cent. In the preceding year, the net
profit was $3.08 or about 3 per cent. For
the calendar year o f 1924, as shown in a
previous report o f the federal reserve
board, the net profit was $2.19 and in
1923 it was $1.88.
“ This indicates a steady recovery from
the depression o f a few years ago. In
1925, the rate o f return in the Minneapo
lis territory was the lowest o f all the re
serve districts. Progress during the past
year has enabled the northwest to pull
itself out o f the bottom position.”
Elected Vice President
The National Bank o f Commerce o f
Mankato, Minnesota, announces the elec
tion and appointment o f R. D. Collins as
vice president and general manager o f the
bank. Mr. Collins will fill the vacancy o f
Emil A. Boie, who resigned recently to
accept a position on the staff o f the Min
neapolis Tribune. Mr. Collins comes to
the National Bank o f Commerce as an ex
ceptionally capable and efficient banking
executive, his diversified experience in the
banking business giving him qualificatons
for his present position that are invalu
able to the interests o f the local institution
in its future progress.
The present personnel o f the bank will
now be as follow s: Otto Lamm, presi
dent; R. D. Collins, vice president and
general manager; Otto Bremer, vice presi
dent; Joseph H. Thro, cashier; D. C.
Stockman, assistant cashier; A. A. Larson,
assistant cashier.

NORTHWESTERN

BANKER

tional Bank o f Moorhead, Minnesota,
which opened recently in temporary
quarters in the Moorhead National Bank
building. The new bank wrns formed by
a merger o f the First National Bank of
Moorhead and the Moorhead National
Bank, the only national banks in the city.
Officers and directors o f the new insti
tution were elected and plans perfected
for the opening upon receipt o f final ap
proval of the merger from J. W . M cIn
Merger in Moorhead
tosh, national comptroller o f the cur
H.
E. Roberts, president o f the M oor rency.
Ole Martinson, vice president of the
head National Bank, was elected presi
Moorhead National and chairman o f its
dent o f the new First and Moorhead Na

who has been associated with the DillonRead & Co. at offices in Rochester, N. Y.,
fo r the past several months, returns to
Duluth to become associated with the
Minnesota National Bank, according to B.
Murray Peyton, president o f the bank.
Mr. Peyton was graduated from Princeton
university in June, 1926, and became con
nected with Dillon, Read & Co., last Sep
tember.

MIDLAND BANK
LIMITED

Chairman :
T H E RIGH T HON. R. M cKENN A

Joint Managing Directors :
FR E D E R IC K H YD E

E D G A R W. W O O L LE Y

Statement of Condition
December 31st, 1926
RESOURCES

$5 = £l

Cash In hand and Due from Banks . . $356,082,679-77
Money at Call and Short Notice
..
113,934,258-15
Investments
•• ••
••
•• 194,267,910*75
Bills Discounted
..
••
••
•• 233,721,560-10
Advances ..
•• ••
••
•• 1,002,299,963*73
Liabilities of Customers for Acceptances
and Engagements
..
..
•• 185,327,225-96
Bank Premises
.. . .
..
..
34,682,873*21
Investments in Affiliations
..
..
32,469,045*75
2,152,785,517*42

LIABILITIES
Capital Paid up
•• ••
••
.•
63,328,990*00
Surplus
.................................................
63,328,990*00
Deposits
••
..
..
..
. . 1,840,800,311*46
Acceptances and Engagements . .
••
185,327.225*96
2.152,785.517-42
Together with its affiliations the Midland Bank operates 2360
branches in Great Britain and Northern Ireland, and has offices in
the Atlantic Liners Aquitania, Berengaria and M auretania. 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, ENGLAND

BANK ENVELOPES
W e specialize on high grade Kraft and Leatheroid en
velopes for Banks and Investment Houses.
W e invite your inquiries for envelopes of all kinds, includ
ing everything from small passbook jackets to the larger size
envelopes for mailing or filing.

Q U A L IT Y P ARK ENVELOPE C O M P A N Y
Joins Bank Staff
Stuart Peyton, o f Duluth, Minnesota,

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Federal Reserve Bank of St. Louis

M ID W A Y

ST. PAUL, MINN.

THE

board o f directors, and George M. Com
stock, cashier o f the First National, were
elected vice presidents o f the new bank.
0 . B. Rusness, cashier o f the Moorhead
National, has the same position in the new
bank. E. S. Peterson, assistant cashier of
the First National, and P. V. Dwyer, as
sistant cashier o f the Moorhead National,
hold similar posts in the new bank.
The new board o f directors, which in
cludes nearly all the directors o f the two
former banks, has the following members:
S. G. Comstock, chairman; Ole Martinson,
W . H. Davy, E. E. Sharp, W . R. Costain,
J. T. Lamb, E. S. Peterson, George Com
stock, H. E. Roberts and 0 . B. Rusness,

NORTHWESTERN

BANKER

all o f Moorhead, E. F. Krabbenhoft, Sa
bin and 0 . M. Lamb, Dilworth.
Makes Huge Loans
The Merchants National Bank o f St.
Paul is handling adjusted service certifi
cate loans on a large scale. Offices have
been opened throughout the middle west,
the east and the south. A new one has
been opened in New Orleans and one has
been established in New York in addition
to the others.
Because o f the large number o f appli
cations fo r loans received a special depart
ment has been established at the bank
by Frank Delaney, assistant cashier.

THE NATIONAL PARK BANK
of NEW YORK
Established 1856

214

B roadw ay

Uptown Offices
P a r k A v e n u e and 46 th S tr e et
S e v e n t h A v e n u e and 32nd S tr e et

DIRECTORS

Banking
In All Its Branches

Charles Scribner
Richard Delafield

Commercial and Travelers ’ Cred

Francis R. Appleton
Gilbert G. Thorne

principal Cities in the World.

Thomas F. Victor

Foreign Exchange bought and
sold.

Corporate and Personal

William Vincent Astor
Joseph D. Oliver

Trusts; Safekeeping of Securi
ties ; Collection of Income, Invest

Eugenius H. Outerbridge

ment

Kenneth P. Budd

Service

for

Customers.

Safes in our Safe-Deposit Vaults
at moderate rental.

David M. Goodrich

John H. Fulton
Frank L. Polk

193,411

162,129

Benjamin Joy
George M. Moffett

Capital, Surplus and Undivided Profits, $34,000,000
! I

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Federal Reserve Bank of St. Louis

Clearings Decline
Debits in individual accounts o f banks
in 17 clearing cities o f the ninth reserve
district, indicative o f the value o f general
northwest business, amounted to $162,014.000 during the week ending March
9, a decline o f $31,397,000 from the $193,411.000 o f the previous week and $25,000
from the $162,129,000 o f the correspond
ing week o f 1926. The figures are shown
in the weekly statement o f the Federal
Reserve Bank o f Minneapolis. The table
follows (000’s om itted):
March 9 March 2 March 10
1927
1927
1926
Aberdeen ..... - 1,550
1,534
1,457
Billings ....... .. 2,065
1,820
1,632
Dickinson .....
392
281
431
Duluth ......... .. 14,623
16,539
15,020
Fargo ........... .. 3,435
3,613
3,840
Grand Forks .. 1,845
1,902
1,763
Helena ......... .. 1,838
3,031
1,751
Jamestown ...
491
447
602
La C rosse..... .. 2,561
3,251
2,418
Minneapolis .... 74,388
93,089
79,816
Minot ........... .. 1,195
1,091
1,327
Red W in g .....
566
680
671
St. Paul ....... .. 41,137
49,487
36,015
Sioux Falls .... 4,902
4,914
4,663
So. St. Paul.. .. 7,543
8,005
7,695
Superior ....... .. 1,814
2,142
1,698
Winona ......... .. 1,669
1,801
1,114

North Dakota Consolidations
Consolidation o f the First State Bank
with the Carson State Bank, Carson, N.
D., under the latter name, is reported,
making one bank in Carson, with $30,000
capital and surplus. W . A. Hart, cashier
o f the Carson State, is to be president.
Oliver Tollefson, cashier o f the First
State, is cashier o f the consolidated bank,
which is to be in the Carson State build
ing. Senator Fred Pathman and Peter
Botten are vice presidents.

John G. Milburn

Lewis Cass Ledyard, Jr.

In addition to requiring a steady force
o f 15 persons it has been necessary to
construct a special vault fo r depositing
the certificates. They are piled up in
the vault like cord wood.
The largest number o f applications to
be received on one day was when 2,700
arrived at the bank offices.
It is expected these loans, which are
being made in all parts o f the country by
the St. Paul bank, will reach the $10,000,000 figure before the end o f the year.

Totals ....... ..162,014

Cornelius Vanderbilt

it issued; Correspondents in all

April, 1927

The Live Stock National Bank, Hettin
ger, N. D., has been merged with the
Adams County State Bank under the lat
ter name in the National Bank’s quarters.
Resources are $600,000 and deposits
$565,000. Officers o f the State Bank
bought the stock holdings o f Paul M.
Brown, majority owner and president
M. Brown, majority owner and president
o f the National. Dr. John G. Johns is
new president; G. N. Burnson vice presi
dent, and J. O. W igen cashier.

THE

April, 1927

NORTHWESTERN

States only 4,500,000 are organized, the
labor unions have raised living standards
fo r every worker. The speaker traced
the growth o f organized labor from 1850
when the Typographical union, the first
labor union, was founded, to the present
time.

North Dakota
Bank News
Officers North Dakota Bankers
Association
President...............................H. T. Graves

N o rth D akota New s

Vice President and Chairman Execu
tive Council............... George H. Leick
Hebron
Treasurer......... ..............
Goodrich
H. T. GRAVES
President

J. E. Davis

Secretary............. ....... W. C. Macfadden
Pargo

BANKER

W. C. MACFADDEN
Secretary

O. W oolfrey has been appointed as
sistant cashier of the First & Security
State Bank o f Crosby, succeeding C. L.
Eckmann.
A. A. Forsberg has been elected assist
ant cashier o f the McGregor State Bank.

Finance Grain Purchases
A total o f $1,500,000 will be loaned to
North Dakota and South Dakota, counties,
to finance grain seed purchases fo r their
farmers, by the four Minneapolis banks
participating in the movement to aid
northwest agriculture by discounting seed
warrants and bonds fo r boards o f county
commissioners. The four institutions are
the Northwestern National bank, First Na
tional bank, Minneapolis Trust Co. and
Minnesota Loan & Trust Co.
Letters received by the banks in re
sponse to their joint offer to finance seed
purchases by Dakota counties, indicate
that a great many counties are planning
to accept the offer o f the Minneapolis in
stitutions. The messages, sent by corre
spondents o f the Minneapolis banks in
county seat towns o f Dakota, show that
the amounts to be advanced range from
$20,000 in some counties to $200,000 in
others. The average is estimated at $60,000 each.
Replying to the message received from
the fou r Minneapolis institutions, cor
respondent banks in county seat towns of
North and South Dakota were unanimous
in expressing appreciation o f the efforts
o f Minneapolis to help solve one o f the
pressing problems o f formers in many
parts of the northwest grain belt.
One Dakota banker w rote: “ Your ac
tion is very commendable and will be o f
material benefit to farmers o f many
counties.”
Another letter said: “ We
deeply appreciate this offer o f assistance
from Minneapolis banks.” A third let
ter declared that the offer “ clears the
way fo r quick action and will be an in
centive for our county commissioners to
act promptly toward relieving the seed
grain situation.” A banker character
ized the offer of seed loans as “ very gen
erous and timely,” while still another
said that “ it is very fine o f Minneapolis
banks to offer to finance seed warrants.”
Don’t Need Help
North Dakotans are not in any need
o f outside aid fo r seed loans, there being
ample funds in the banks o f the state
to finance any county bonds or warrants

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Federal Reserve Bank of St. Louis

in the opinion of the North Dakota Bank
ers’ association.
This was the assertion o f W . C. McFadden, secretary o f the association, in
speaking fo r the officials o f that organi
zation regarding the situation.
“ W e believe, in the first place, that
the need for seed loans in North Dakota
has been greatly exaggerated,” he said:
“ There are a very few places in the state
where such loans are critically needed,
and with the splendid security, that, un
der our laws would be issued by counties
that desire seed loans, we believe that
there are ample funds here in North Da
kota to finance them all.
“ North Dakota is not in bad shape fin
ancially. In fact, it is doubtful if any
agricultural state, especially o f the north
west, is in any better condition, finan
cially, than North Dakota. It is not do
ing North Dakota justice to advertise
widely to the world that bankers from
other states must come to our aid, when
such is not the case.”
Elected Cashier
A t a meeting o f the board of directors
o f the National Bank in Wahpeton,
North Dakota, Oscar J. Olson, present
register o f deeds o f Richland county, was
elected as cashier of the bank. His resig
nation as register o f deeds will be handed
to the county board at its next meeting.
A t a meeting o f the stockholders, pre
ceding the board meeting, the resignation
o f Louis V. Jurgens as a member o f the
board o f directors was accepted, and D.
H. Reimers, one of the vice presidents,
was elected to membership on the board
to succeed him.
Talks Before Bankers
Present day working conditions in the
United States and the effects various
working conditions have on employes
were explained by J. W . Schannach, pres
ident o f the Fargo, North Dakota Typo
graphical union at a recent meeting of
the Fargo chapter o f American Institute
o f Bankers. The meeting was held in
the Merchants National Bank.
Mr. Schannach declared that while out
o f 40,000,000 laborers in the United

P erry B. Anderson has been appointed
assistant cashier o f the Lincoln State
Bank o f Glenburn.
The F irs t State Bank of Granville has
renewed the term o f its corporate exist
ence to April 5th, 1937.
A t the annual meeting o f the Security
State Bank o f Bowdon, J. C. Reinertson
was elected cashier o f the institution and
Floyd Engbrecht was appointed assist
ant cashier.
J . J . Connolly has been appointed as
sistant cashier o f the Northwestern State
Bank o f Coleharbor.
Mary Brudevold has been appointed
assistant cashier o f the Amenia State
Bank.
A. J . Becker has been elected assistant
cashier o f the L efor State bank.
George W ischer has been appointed
assistant cashier o f the Security State
Bank o f Lawton.
J . O. Engesather has been elected pres
ident o f the Farmers State Bank of
Petersburg, succeeding Robert Waag.
O. E . Johnson has been appointed aspointed assistant cashier o f the DeLamere State Bank.
Lawrence Larson has been appointed
bookkeeper o f the Farmers & Merchants
State Bank o f Dickey.
Arleo Novleske has been appointed
bookkeeper o f the Carson State Bank.
Ada Gessner has been appointed book
keeper o f the Bank o f Hansboro.
L. D. Sem has been appointed teller of
the Pioneer Bank o f Bottineau, succeed
ing L. D. Watson.
E . N. Kittelson has resigned as cashier
o f the Bank o f Berthold.

THE

Berger J . Rogelstad has been ap
pointed assistant cashier o f the State
Bank o f Heimdal.
Melva L. W hite has been elected to the
office o f cashier o f the Farmers State
Bank o f Colgan, succeeding Otto Fiskum. She was form erly assistant cash
ier of this institution.
C. H. Hunstad has been elected assist
ant cashier o f the First International
Bank o f Landa.
John Leraas has been elected cashier
of the First International Bank o f Minot,
succeeding E. R. Becivar.

NORTHWESTERN

BANKER

Changes Name
A business transaction took place at
Hope, North Dakota, recently when the
Hope National Bank, after 21 years of
active operation, ceased its existence in
favor o f the Security National a new or
ganization.
The new institution is headed by John
S. Palfrey, president, and F. W . W ilmert, vice president. C. W . Moores goes
on as cashier and T. Thorsland and R. A.
Lathrop will complete the board o f di
rectors.
The Hope State Bank was organized
in 1900 by G. A. Warner and L. B. Hanna
and the present building was built at that
time. In 1905 a charter was secured un

S H A D O W

April, 1927

der the National banking system and the
bank then became the Hope National
bank. Several years ago, Mr. Warner
retired as cashier and his place was
taken by C. W . Moores. Mr. Hanna dis
posed o f his interests and Ole Aregaard,
o f Hillsboro, became president, succeed
ing J. E. Lasham.
Bank to Move
A. I. Hunter o f Grand Forks, N. D., is
to be president o f the First State bank
o f Gilby, N. D., formed from the Honeyford State bank, removed from Honeyford, N. D. Sale o f the property o f the
State Bank o f Gilby to the Honeyford
bank owners has been announced.

BOXING

W ith th e B o n d Q u e s tio n
S H A D O W boxing may have its place in the hurly-burly
N O W IS T H E T IM E to g e t p re p a re d f o r
F o r e ig n E x c h a n g e a n d T r a v e le r s C h e ck b u s i
ness. F u ll in fo r m a t io n w ill g la d ly be g iv e n
u p on requ est. A ll m a te ria ls f o r th e issu an ce
o f T r a v e le r s C h eck s an d F o r e ig n E x ch a n g e
o v e r y o u r o w n c o u n te r s m a y be a r r a n g e d
f o r n o w . W r it e f o r in fo r m a t io n .

M E E T T H E D R O V E R S F IE L D R E P R E
S E N T A T I V E . H e w a n ts to k n o w a b o u t y o u r
p ro b le m s , an d w hen he c a lls u p o n you he
has s o m e th in g to sa y o f in te re s t. H e w ill
te ll y ou , also, n o t so m u ch a bou t D ro v e rs
S e r v ic e , as h o w you c a n p r o fit b y u sin g
D ro v e r s S e r v ic e . T h e re ’ s a b ig d iffe re n ce .

A S A D V E R T I S E D . D ro v e r s A d v e r tis in g S e r v
ice is p u b lish ed m o n th ly . It is filled w ith liv e ,
tim e ly a d v e r tis in g an d n e w b u sin ess ideas f o r
the p r o g r e s s iv e b a n k . A c o p y o f th e latest
issu e w ill be se n t g la d ly u p o n re q u e st.

training of a pugilist, but there is no place for it in
business and banking. Hitting at nothing in the commer
cial field is synonymous with waste. Every bank seeks
to avoid it.
*

Until recent years bond
sales were confined largely
to people of wealth. But
this is not so today. The
interest of hundreds in
every community has been
stimulated by bond ad
vertising and the profit to
be obtained through bond
investment. P e o p l e in
every walk of life are buy
ing bonds.
This situation has brought

many progressive banks
into the bond selling field
and in addition to bond
sales they have attracted
much business to them
selves in other depart
ments.
Drovers Investment Serv
ice makes it easy for bank
ers to sell sound securities
and obtain their rightful
share of the bond business
in their communities.

W e will be glad to send our Investment
Recommendations and our Advertising
Service to any banker upon request.

rovers

N A T IO N A L B A N K
TRII5T6JSYVIiVG5 BANK

Union Stock Yards

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Federal Reserve Bank of St. Louis

•>

Chicago

April, 1927

TH E

N O R T H W E S T E R N

B A N K E R
Becomes Vice President

E. G. Fardal was elected vice president
o f the First National Bank at Webster
City, Iowa, at their meeting recently. Mr.
Fardal has operated the Stanhope State
Bank for a number o f years.

IOW A
SEGTION
Officers Iowa Bankers
Association

To Enlarge Quarters

President..........................A. C. Smith
Clinton
Vice President...................John Sieh
Spencer

A. C. SMITH
President

Treasurer..................... F. A. Schuetz
Lawler
Secretary.................... Frank Warner
Des Moines

FRANK WARNER
Secretary

Jennings, cashier o f the Iowa Savings
T.
W . Hawkinson, president o f the E xBank, Marshalltown, secretary.
change State Bank at Walker, Iowa, was
Assistant Cashier Resigns
elected president o f the Linn County
C. E. Webb, who has been assistant
Bankers’ Association at its annual meeting
cashier o f the First National Bank o f
held recently at Hotel Montrose in Cedar
Rapids. The other new officers are as Montour, Iowa, fo r the past seven years,
follow s: Vice president, J. L. Krall of
has severed his connections with that in
Fairfax ; secretary, Merl Holloway o f Ce
stitution. Hubert Kubicek o f Tama has
dar Rapids; treasurer, A. J. Basehnagel
been elected assistant cashier o f the bank.
o f Ely.
Meet in Cedar Rapids

The speaker o f the evening was J. R.
Leaves Farm ers Savings
Quinlan, state law enforcement agent o f
Edgar Nelson, who fo r some time has
Des Moines. “ One o f the biggest assets
been employed in a clerical capacity in
to a community in the way o f protection
the Farmers Savings Bank, Atlantic,
is the vigilante organization.
By all
Iowa, will enter the credit department o f
means keep vigilantes in your town,” said
Reed-Murdock & Company, in Chicago.
Mr. Quinlan.
His place at the Farmers Bank is taken
Records show there are fewer night
by Everett Saemisch, son o f Mr. and Mrs.
robberies and more daylight holdups than
F. C. Saemisch, who has been a student at
formerly and in towns where vigilante
Drake university, Des Moines, and has
committees are organized there are fewer
given up his duties temporarily to take
crimes than in towns where there are no
the new position.
civic bodies united fo r the protection o f
their communities.
Bankers Short Course
“ It is up to every individual to help
The seventh annual bankers institute
the state after it has convicted a man o f
will be held at the University o f Iowa
a felony to keep that man from being a during the week o f A pril 18th to 22d. M.
burden on society by being released be
E. Tate o f Keokuk, chairman o f the edu
fore he has served his sentence.”
cational committee o f the Iowa Bankers’
J.
F. Stauffer o f Center Point, presi Association, announces.
dent o f the association fo r the last year,
This is a short course designed espe
presided at the meeting.
cially fo r young men and women employed
Hold Annual Meeting
Thirty-six members o f the Marshall
County Bankers’ Association met recently
at a dinner at the Y. M. C. A. club room
in Marshalltown, Iowa, fifteen o f the
eighteen banks in the county being repre
sented. Representatives o f three banks
were unable to attend because o f the in
clement weather. Following the dinner the
officers o f the association were reelected
to serve another year. The executive com
mittee is comprised o f the following offi
cers:
C. W . Bachman, cashier o f the Cen
tral State Bank, State Center, president;
L. B. Tucker, cashier o f the Liscomb State
Savings Bank, vice president; John A.
Small, president o f the Farmers State
Bank o f Gilman, treasurer, and Harry

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in Iowa banks. The plan was worked out
by Dean Chester A. Phillips, head o f the
banking department, Avorking with Ed
ward H. Lauer, head o f the extension
division o f the university.
The university will give the following
courses at the institute o f banking this
year: Principles and problems o f eco
nomics, given by Prof. Frank H.
K n ight; principles o f accounting by Prof.
Harold B. Eversole; theory and history
o f banking by Dean Phillips, and com
mercial law by associate professor, Elmer
W . Hills.
A diploma will be given to each person
completing the short course which covers
two years. One week o f residence work
at the university is required each year,
with correspondence courses at home dur
ing the rest o f the year.

Quarters o f the Cedar Rapids National
Bank, Cedar Rapids, Iowa, will be en
larged this spring, according to tenta
tive plans being considered by the bank.
The bank has given the Camera Shop
thirty days’ notice to vacate the rooms
it occupies, and it is apparent the ex
pansion will be in that direction. Charles
C. Kuning, cashier o f the bank, said defi
nite plans fo r the proposed improvement
have not been made.
Banks W in
The finances o f Des Moines and Polk
county suffered a setback which even
tually may amount to $1,475,000, when
United States Judge Walter H. Sanborn
ruled that the banks in Polk county need
pay only approximately one-sixth o f the
taxes assessed against them from 1919
to 1922.
Judge Sanborn’s decision announced in
the circuit court o f appeals in St. Louis,
in affirmation o f a decision previously
made by United States Judge Martin J.
Wade, will be the equivalent o f $7 for
each man, woman and child in the county,
in tax refunds and cancellations.
Three banks were the victorious plain
tiffs in this case, closely watched by a
seore o f other banks with large sums at
stake.
County Bankers Meet
L. W . Ross, vice president o f the Citi
zens State Bank o f Oakland, Iowa, was
elected president o f the Pottawattamie
County Bankers’ Association at its an
nual meeting at Neola.
Other officers elected were: Vice presi
dent, Rudolph Stender, cashier o f the
Avoca State Bank; secretary, John W .
Nichols, assistant cashier o f the Walnut
State Bank; treasurer, A. C. Meitzen,
president o f the Citizens Savings Bank o f
Avoca.
More than fifty bankers were at the
meeting. A fish dinner was served by
Neola bankers and their Avives. The meet
ing was held in the Masonic hall. Matters
o f interest to bankers Avere discussed in
formally.
One matter that was voted
upon and agreed to definitely was a uni
form charge fo r several services that here
tofore have been performed free by the
banks at considerable trouble.
The meetings o f the association usually
are held quarterly or upon call. The time
and place o f the next meeting is to be
announced later.

THE

NORTHWESTERN

BANKER

April, 1927

New Banking Home Completed

Banks
are built
upon
Confidence
Architectural beauty as adapted to banking efficiency is an outstanding feature of the
interior of the new building of the State Central Savings Bank at Keokuk.
TANDING as a tribute to the sound
banking principles o f its offcers and
directors, and the culmination o f a
dream long cherished by Judge William
Logan, its president, the new building o f
the State Central Savings Bank o f K eo
kuk opened its doors on Monday, March
21st.
Dignity and good taste in construction
and decoration are outstanding features.
A neat plain vestibule greets the person
entering the building. A t the left is a
stairway and an elevator leading to the
upper floors.
Straight ahead through
swinging doors is the bank. Entering the
bank lobby to the left is the woman’s
rest room, while on the opposite side is
the consultation room, leading into the
private office o f Judge William Logan.
The floor o f the bank lobby is made of
American Tennessee marble. The other
marble in the lobby is Italian, Bottocino
marble, with Belgian black deal plates.
Down the center o f this lobby are two
check desks fitted with bronze calendar
racks, stationery holders and the like.
Between these two desks o f marble is a
bench, or ornamental seat, also o f marble.

Chas. H. McNider,
President
Willis 6. C. Bagley,
Vice President
Carl A. Parker,
Vice President
Fred E. Keeler,
Vice President
Hanford MacNider,
Vice President
Robert P. Smith,
Cashier
Harold V. Bull,
Assistant Cashier
Harry C. Fisher,
Assistant Cashier
William W. Boyd,
Assistant Cashier
Roy B. Johnson,
Assistant Cashier

Resources ***10,000.000.00
F ir s t
N A T IO N A L
BANK

MASON CITY, IA.

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The wainscoting and furniture are in
American black walnut and the white
ornamental plaster with this dark com
bination o f woodwork makes a restful
contrast. There is nothing to obstruct
the vision. Ceiling rises from the floor
nearly thirty feet. Huge windows on the
east side o f the building shed ample light
fo r most days, skylights shed additional

light, and there are the eight ornamental
bronze light fixtures.
Cream-colored marble rises from the
floor to form the counters or shelves of
the cages with more marble rising from
these to form the partitions.
Green
enameled partitions are used inside the
railings, and when the cages are active,
small doors are swung back, so that there
are no obstructions between the customer
and the teller. These doors are made to
form an ornamental brass wicket when
closed.
At the rear o f the bank lobby is the
money vault with the thickest door o f
any bank in the state. The door alone
weighs sixteen tons, and has been sub
jected to the most severe tests. It is
equipped throughout with automatic
alarms, as is the entire bank structure.
The big vault is divided into three com
partments, one for the safety deposit
boxes, one for the cash and one fo r stor
age.
On the mezzanine floor is the directors’
room. There is here, also a rest room
and retiring room fo r the women em
ployes o f the bank. There is an orna
mental grill around the balcony on this
mezzanine floor, and in ornamental plas
ter frame is installed an eight day clock.
Venetian blinds are used at the big
windows to regulate the light. Cork car
pet and black and white linoleum is used
in covering the floors o f the cages and in
the various rooms. Bronze light fixtures
are suspended from the ceiling o f the

THE

April, 1927

bank lobby. There are eight o f these
light clusters in the lobby.
Officers o f the State Central Savings
are Judge W illiam Logan, president; L.
J. Montgomery and W . A. Logan, vice
presidents; C. J. Bode, cashier; L. J.
W olf, Geo. Duerkop and E. A. Ebersole,
assistant cashiers.
The directorate is made up o f Judge
W illiam Logan, W . A. Logan, L. J. Mont
gomery, C. J. Bode, H. W . Huiskamp,
James Huiskamp, W . N. Sage, and James
Cameron.
Reelected President
D.
Y . Jackson was reelected president
o f the First Trust and Savings Bank,
Muscatine, Iowa, at the annual business
meeting here recently.
Other officers elected are: S. G. Stein,
first vice president; W . F. Bishop, sec
ond vice president; E. E. Bloom, cashier,
and R. J. Diercks, assistant cashier. With
the exception o f Mr. Bishop these officers
are all the same as heretofore.
Directors reelected at the meeting in
clude D. V. Jackson, S. G. Stein, J. R.
Reuling, W . F. Bishop, T. F. Beveridge,
E. J. Zeidler and A. J. W ood. R. S.
Jackson and J. C. Bishop were elected to
the board.
A. I. B. in Davenport
Bank employes o f Davenport, la., mem
bers o f the tri-city chapter o f the Ameri
can Bankers Institute, met in their weekly
class session recently and studied drafts
and acceptances. The development o f the
use o f trade acceptances and bank accept
ances in the United States was stressed.
Instruction was in charge o f I. J. Green,
cashier o f the First National Bank.

NORTHWESTERN

BANKER

the plans fo r the new structure, was on
hand fo r the opening o f the bids.
Bank Exam iner
Carlos Y . Dawes, nephew o f Vice Pres
ident Charles G. Dawes, who some time
ago was assigned to assist E. B. Wilson,
national bank examiner in the Council
Bluffs, Iowa, district, has been given the
permanent assignment and probably will
make Council Bluffs his home in the fu
ture. The permanent assignment bears
date o f March 1st.
D. C. Bradley Retires
D. C. Bradley, banker, retired recently

from his business activities and turned
over the major portion o f his estates and
affairs to his son, William Bradley, and
sold his stock in the First National Bank
o f Centerville, Iowa, to his brother, J. A
Bradley.
Rifle Club Meets
The Rifle and Vigilante club, composed
o f Councill Bluffs, Iowa, bankers, which
was organized about a year ago by the
sheriff as a precaution against bank rob
bers, elected new officers recently.
Ed Hubbard, cashier o f the State Sav
ings Bank, was elected president. He suc
ceeds Walter Hough, cashier in the same

'T 'H E progressive policies
followed by this bank
in the handling of corre
spondent Iowa bank ac
counts are inspired by en
during faith in the whole
some future of Iowa and its
people, and our belief that
the fundamental value of
Iowa real estate is sounder
now than ever before.

Demand Bond
The Lyon county, Iowa, chapter o f the
American Red Cross has decided to re
quire banking houses o f the county who
have Red Cross money on deposit to fur
nish bonds meeting the approval o f the
executive committee o f the Lyon county
chapter. It was further agreed to con
tinue the practice of depositing Red Cross
funds in the banking instituions o f the
communities in which the funds were
raised.
Bids Accepted
Bids were opened recently on the new
14-story skyscraper o f the American Com
mercial and Savings Bank, Davenport,
Iowa, to be erected on the southwest cor
ner o f Third and Main streets. A large
number o f the largest contracting firms
in the country, including two Davenport
concerns, are bidding on the big build
ing.
E. F. W eary o f the firm o f W eary &
A lford o f Chicago, noted bank architects,
who with Clausen, Kruse & Klein drew

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BANKERS TRUST CO.
BAN K.
Cor. 6th and L o cu st Sts., Des Moines
Capital $ 1 ,0 0 0 ,0 0 0 .0 0

Surplus $ 2 0 0 ,0 0 0 .0 0

"MEMBEFT
FEDERAL RESERVE^
'
J 5YSTEN

THE

NORTHWESTERN

BANKER

bank. Lee Hough, son o f the outgoing
president, was elected vice president;
Harry Hattenhauer, secretary and treas
urer, and Dwight Hesse executive officer.
Plans for rifle practice every Sunday, with
a contest on Labor day, were made.

vision has been gradually growing worse
for about eight months, and he has been
unable to read fo r some time.
Attending doctors believe that with
the draining o f the antrum Mr. Casady’s
condition will be much improved.

Takes Over Bank

Discuss Bank Legislation

The First National Bank o f Blockton,
Iowa, has purchased the fixtures and
“ good will” o f the Blockton State Sav
ings Bank. The president o f the latter
bank, C. B. Ware, is quitting active busi
ness because o f ill health. Depositors will
be paid in full.

Members o f the Pottawatamie County
Bankers’ Association met in the Beaux
Arts room o f the Hotel Chieftain at Coun
cil Bluffs, Iowa, recently.
The meeting was intended primarily for
the purpose o f discussing bank legisla
t i o n . There were twenty-five bankers in
attendance.

Eye Operation
In an effort to gain relief from an
antrum disorder, Simon Casady, chair
man o f the board o f directors o f the
Central State Bank, Des Moines, under
went an operation at Omaha recently. His

Make Service Charge
The Northwestern State Bank and the
Orange City National Bank, both o f
Orange City, Iowa, announce that they,
with other banks in Sioux county will

l8 7 6

1 9 2 7

—
en

is the only thing a wise man
will buy. W ith fifty years of
banking in Iowa as a back
ground, the Consolidated
National Bank can offer a
service to correspondents well
seasoned with experience.
“ An u n b r o k e n r e c o r d o f f i f t y
y e a r s is a g u a r a n te e o f s a fe
an d sa tisfa c to r y se r v ic e ”

Consolidated National Bank
UNITED STATES DEPOSITORY

DUBUQUE, IOWA

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Federal Reserve Bank of St. Louis

April, 1927

begin the custom o f making a service
charge o f 50 cents per month to all de
positors who are carrying checking ac
counts that are less than $50 fo r any
seven days in the month.
The bankers state that the expense in
connection with cashing every check
amounts to practically fou r cents. This
expense, o f course, includes the cost o f
check book, leather cover, pass books,
deposit slips, statement and ledger sheets
and posting machine as well as postage,
and the salaries o f bookkeepers.
From the standpoint o f bookkeeping
alone, the service fee o f 50 cents per
month would be well spent fo r those
who keep no other books than check
books and the monthly statement put out
by the banks regarding their bank ac
count. The check furnishes a record o f
the transaction and the statement gives a
complete record of the account.
The service charge is not made to force
the small depositor out o f the bank, nor
to be in the form o f a fine but only to
help to pay a part of the cost required
to earry the small checking account. I f
the depositor keeps a $50.00 checking
account, no fee is charged but to all those
who do not care to keep their balance up
to $50, they may still retain the account
at the cost o f 50 cents per month.
Talks to Kiwanis
Guy C. Van Dever, cashier o f the
W averly Savings Bank, Waverly, Iowa,
was the principal speaker at a recent
noon day meeting o f the Kiwanis club at
the Hotel Russell-Lamson, W aterloo. Mr.
Van Dever spoke on “ Banking Problems
in Iowa.”
Heads Clearing House
J.

M. Dinwiddie was elected president
of the Cedar Rapids, Iowa, Clearing
House association at its annual meeting
at the Hotel Montrose, recently. The
other officers elected are William Rinderknecht, vice president ; C. C. Kuning, vice
president; S. E. Coquillette, treasurer,
and L. J. Derflinger, secretary and man
ager. The members o f the clearing house
committee elected are F. C. Welch, James
Hamilton and George F. Miller.
Mr. Dinwiddie is one o f the original
committee that organized the association
in 1903. He was the first president, and
served during the years 1903, 1904, 1905
and 1906. Mr. Dinwiddie has served al
most continuously fo r more than twenty
years on various committees o f the clear
ing house section o f the American Bank
ers Association.
The reports o f the officers indicated
that considerable progress had been made
during the year in clearing house mat
ters. It was gratifying to the members
to learn that Cedar Rapids is the only
city in the state where total clearings
had shown a gain fo r the year 1926.

THE

April, 1927

NORTHWESTERN

BANKER

Banker Injured
Dayre Williams, assistant cashier of
the Tabor State Bank, Tabor, Iowa, was
severely bruised in an accident recently,
when returning home from a basket
ball tournament. Dayre was playing the
part o f the good Samaritan, be having
stopped to help a motorist who was hav
ing trouble. As he stepped from the car
a passing automobile struck him, knock
ing him to the ground but fortunately his
injuries were not serious.

Capital, Surplus and Undivided Profits Over $1,200,000.00
Established 1874

The feeling of

Increase V ault Space
The contract has been let fo r an addi
tion to be constructed on the rear o f the
Farmer’s bank building, Nevada, Iowa,
to provide further vault room and a work
room. The vault will be one o f the best
to be found in a bank in a town o f the
size o f Nevada in the state. The door,
which weighs over 5 tons, has been pur
chased at a cost o f $2,500 and the other
parts o f the vault will be o f equal qual
ity. Besides the vault it will provide a
workroom about 14x15, which is now
much needed since the increased business
has necessitated increased help.

good will with
which the
bankers of Iowa
regard our
institution is not
merely a spirit of
friendlijiess. It is
an appreciation
of value received.
It is a service
recognized. You,

Sells for Cash
N. P. Black, cashier o f the Dallas
County Savings Bank of Minburn, Iowa,
reports the follow ing land sales which
took place through his bank on the first
day o f M arch : 120 acres at $200 per
acre; 80 acres at $225 per a cre; 80 acres
at $150 per acre (poor improvements and
badly cut up) ; 80 acres at $250 per acre;
and 80 acres at $225 per acre.
Mr. Black says this land lies within
four miles o f Minburn, and every acre
mentioned sold fo r cash.
Some Real Publicity
The First National Bank and the First
State Bank, both o f Elkader, Iowa, have
recently issued a folder in which is con
tained some very interesting facts rela
tive to the banking and commercial re
sources o f Clayton County.
Clayton County is located in the
“ Switzerland o f America in Northeastern
Iowa,” and the casual visitor, in driving
through that scenic part o f Iowa, as it
was the editor’s privilege to do several
years ago, cannot help but wonder from
what source, in that up-and-down coun
try, the residents derive their livelihood.
The above-mentioned folder explains
it all. Poultry, swine, and dairy cattle,
and the greatest o f these is dairy cattle.
The butter produced in Clayton County
during 1926 was sold fo r $2,467,283, an
increase o f approximately $450,000 over
the previous year. The largest whole
milk creamery in the world is located in
Clayton County. The average monthly
income to Clayton County farmers, from
all sources, last year amounted to $205,606. There are 3,063 farms in the coun
ty. Figure it out fo r yourself.

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Federal Reserve Bank of St. Louis

can enjoy
with us a
correspondent
connection which
places at your
disposal every
banking facility.
foo,

O F F IC E R S

CHARLES E. PERKINS, Chairman of Board
E. WEBBLES, President
J. G. WALDSCHMIDT, Vice President
C. T. SIMMONS, Vice President
R. L. BUNCE, Vice President
L. M. WILSON, Vice President
ELMER RAUENBUEHLER, Vice President
F. J. NORTON, Vice President
L. T. PANTHER, Cashier
S. R. GRANT, Assistant Cashier
L. P. BECKMAN, Assistant Cashier
J. S. STUBBLEFIELD, Assistant Cashier
RAY HUMPHREY, Manager Bond Department
H. A. HEIL, Trust Officer
T. H. WILSON, Auditor

FIRSTtoSA Ü BANK
1 7

MEMBER

FEDERAL RESERVE SY ST E M BURLINGTON IA.

THE

1856

NORTHWESTERN

BANKER

April, 1927

The inside o f the folder is devoted to a
combined statement fo r all the banks in
the county, which number twenty-six.
The combined capital o f these institu
tions equals $910,000, and the combined
deposits total $13,759,689.
The First National Bank and the Elkader State Bank are to be congrautlated,
both fo r the clear presentation o f some
vital facts, and fo r the favorable pub
licity which such presentation will bring.

Then

Is Presidential Candidate

and

Now

As the time for the State Convention
o f the Iowa Bankers association draws
near interest manifests itself in the Pres
idency o f the association. Immediately
following the adjournment o f the last
convention friends o f Mr. George J.
Schaller o f Storm Lake began making
plans fo r his candidacy for the Presidency
at the 1927 convention.
Mr. Schaller has been a “ wheelhorse” in
the association’s affairs for many years

-19 2 7
“S E R V I C E

GEOEGE J. SCH ALLEE
and has served as chairman o f its legis
lative committee fo r several years and has
served the member banks in that difficult
capacity with credit. He is chairman of
the legislative cammittee this year and
his candidacy announced following the
last convention has developed increasing
momentum.
Discuss Unprofitable Account
W . E. Devlin Vice President o f Devlin,
Merrill, Price & Bennett, Inc., Chicago,
Illinois, delivered an address on the sub
ject o f the Unprofitable Checking A c
count problem before the annual meeting
o f the Vermilion County Bankers asso
ciation at the Hotel W olford, Danville,
Illinois. Mr. Devlin pointed out the fact

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Federal Reserve Bank of St. Louis

April, 1927

THE

NORTHWESTERN

that when the low balance checking1 ac
count depositors realize the value o f
checking account service and the value
o f making an adequate balance, then the
banks could make a reasonable service
charge without incurring any ill will.

BANKER

MEETING YO U R
REQUIREM ENTS

Elected Cashier
Miss Nina Hjelm was elected cashier
o f the Home State Bank o f Royal, Iowa,
at the annual meeting o f the board o f di
rectors. Miss Hjelm started with the
bank as bookkeeper several years ago,
and was more recently assistant cashier.
Winfield Bailey became associated with
the Home State as bookkeeper several
months ago.

Whether your needs are local,
national or worldwide, the
C e n t r a l S t a t e , through its
experienced organisation and
well established connections,
is eminently qualified to
serve you.

Dunlap Savings
The Dunlap Savings Bank o f Dunlap,
Iowa, after one year o f operation, shows
from its recent statement deposits of
$620,974, and total resources o f $735,762.
Under liquid assets, carried as bonds,
call paper and cash, the bank has a total
o f $345,440.
M. C. Dally is president o f the Dunlap
Savings, and H. W . Van Horn, cashier,
Live Stock Sells High
Drowning out the raucous cries o f the
calamity howlers that Iowa has gone to
the dogs, comes the news from Buena
Vista County that at a recent sale held
near Sioux Rapids horses sold fo r $308,
cows averaged around $90, brood sows
$40, and yearling steers sold as high as
$75 each.

SIMON CASADY
C hairm an of the Board

GRANT M cPHERRIN
President

T H E O L D RELIABLE

Central State Bank
OF DES MOINES

Eight Per Cent Dividend

Banking, Trusts and Investments
Safe Deposit Vaults

Stockholders o f the Sperry Savings
Bank, Sperry, Iowa, held their annual
meeting recently, reelecting the present
board o f directors. The personnel o f the
board is:
A. F. Andersen, Arthur McDonald, Ed
ward Riepe, W . W . Meyers, Frank Mc
Donald, John Schulte, Theo W . Beck
man, Frank H. Riepe, and T. R. Richard
son.
The directors also reelected the follow
ing officers : A. F. Andersen, president;
John Schulte, vice president; Frank H.
Riepe, cashier; Steve Beckman, assistant
cashier.
Following the hearing o f reports which
showed the bank to be in a prosperous
condition, an eight per cent cash dividend
was declared.

Member

System

is m

nuM m

am o

A b ility - D epend ability
Quality * Sendee

%
\

A ..

wrYkS'i

om sm m M

-= = = = = = = = = = = = = ^

■ >• •

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Federal Reserve Bank of St. Louis

Reserve

Consolidate
Announcement was made recently o f the
consolidation o f the People’s Savings
Bank and the Farmers’ Savings Bank at
Garrison, Iowa. Letters carrying this information were sent to the patrons o f the
two institutions. The consolidated bank
will be continued under the charter o f the

Federal

Four great principles
on which we stand

THE

NORTHWESTERN

MERCHANTS
N A T IO N A L B A N K
C E D A R

R A P I D S ,

BANKER

April, 1927

People’s Savings Bank, with a capital
stock o f $25,000.
For the present the new bank is doing
business in the People’s Savings Bank
building, while the Farmers’ Savings Bank
building is being remodeled to house the
consolidated bank.
0 . Wenner was president o f the
Farmers’ Savings Bank, with H. J. Rozema as cashier. Former Senator Harry
C. White was president o f the People’s
Savings Bank, with A. J. Donald cashier.
The name under which the new bank will
operate will be announced later.

I O W A
Appointed Assistant Cashier

T o Help Y ou
The officers in charge of the Merchants National
Bank are men who know the needs and require
ments of country banks and bankers. They have
studied their problem s and are fam iliar with them.
They are fam iliar with the kind of service a
country bank should receive from its city co r
respondents.

C. W . Frederickson has been appointed
by the board o f directors of the Com
mercial National Bank, Essex, Iowa, to
fill the position o f assistant cashier. Mr.
Frederickson, who has recently returned
from an extended visit in California, has
already taken up his new duties. Prior
to his resignation a year ago, Mr. Freder
ickson was assistant cashier.
Joseph
Lindburg, former cashier o f the bank, has
accepted a position in a loan company in
Davenport.
Cashier Resigns

They know how to be helpful to country banks
and to assist them in solving their problems.
Our directors were chosen because of their busi
ness ability that enabled them to succeed in their
own business. They are men who know the busi
ness problems of the day and are doing their part
to solve them.
The officers of this bank are at your service.
They invite you to make the M erchants National
Bank your Cedar Rapids correspondent.

Resources . $15,000,000
J a m e s E . H a m i l t o n ,rP r e s id e n t

P. C. Frick
V ice President

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Federal Reserve Bank of St. Louis

The board o f directors o f the First Na
tional Bank o f Independence, Iowa, have
accepted, at W . G. Stevenson’s request, his
resignation as cashier o f that institution.
A t the annual meeting o f the board in
January Mr. Stevenson has signified his
intention o f retiring, as he desired to be
relieved o f his official duties to enjoy a
letup from his work, which he felt due
himself, he and Mrs. Stevenson having
planned an extended western trip.
Rifle Club Meets
At a meeting o f the Council Bluffs,
Iowa, Bankers’ Rifle Club recently, an ex
tensive program o f shooting was arranged
fo r the season o f 1927.
The members will engage in .22-caliber
rifle practice each Thursday afternoon at
5 o’clock, on the fifty-foot and seventyfive foot range arranged by Watler Hough
at the rear o f his residence.
On the first and third Sundays o f each
month the riflemen will shoot the .30caliber Springfield army service rifles on
the national guard range.
A Pottawattamie county shoot of all
the county vigilantes will be held in the
fall, possibly on Labor day, with a picnic
as part o f the program. At this shoot
prizes will be given fo r winners o f vari
ous events.
The shooters will use the
military rifle and the revolver.
Membership o f the club at present is
as follow s: B. A. Gronstal, John M. Hassett, Percy A. Lainson, Edwin F. Hub
bard, Walter B. Hough, John M. Jurgens,
Harry C. Hattenhauer, C. W . Hough, C.
C. Hough, Elmer P. Juel, Dwight E.
Hesse, T. A. Anderson, Edwin H. Spet-

April, 1927

TH E

man, Lee Hough, Roy Maxfield, Charles
W . Langmade, Philip Watte, W ard Ed
wards, John Fox, Lawrence Christensen,
Joseph M. Gronstal, Leo Alberti, John
Kelson Rudolph Walter.
Clearings Gain
Building permits, postal receipts, bank
clearings and freight traffic to and from
Des Moines were steady throughout Feb
ruary.
Each o f the first two months o f 1927
show a gain over the corresponding pe
riod in 1926. Sixty-eight permits were
issued in February with a volume o f $201,135 representing new construction and
improvements.
In January fifty-nine
permits, totaling $201,640 were issued by
V. 0 . Marriott, building commissioner.
Bank clearings for February aggre
gated $37,064,267 which is slightly less
than February o f the previous year.
Clearings in January, 1927, totaled $39,908,498 and in January, 1926, $40,665,079.
Postal and freight receipts have not
yet been prepared but officials o f both the
postoffice and the railroads declared that
the situation had improved generally over
the preceding month and year.
Visits in A lta
C. B. Toy, vice president o f the Toy
National Bank o f Sioux City and direc
tor o f the First Trust and Savings Bank
o f Alta, Iowa, was in Alta recently in
specting the two bank buildings, o f which
they may purchase one. Both buildings
together with fixtures are for sale, and
the First Trust & Savings Bank plan to
purchase some building fo r a permanent
location in the near future. Mr. Toy was
accompanied by H. J. Crouse, also o f the
Toy National Bank o f Sioux City.

N O R T H W E S T E R N

bers o f the board o f directors o f the State
Bank o f Swea City, Iowa, by the stock
holders in their annual meeting. They
are R. H. Walker, J. E. Erickson, T. F.
Johnson and H. W . Larson. The other
three are R. N. Bruer o f Bancroft and
C. T. Chubb and L. E. Linnan o f Algona.
The board elected R. N. Bruer president
and R. H. Walker vice president. H. L.
Dalton was continued as cashier and Earl
Griffith as assistant cashier.
Opens in Elma
The Peoples Savings Bank is the name
o f the new institution recently opened in
Elma, Iowa. It starts with $25,000 capi
tal stock and $10,000 surplus, all paid up
and all subscribed by people o f Elma
and vicinity, there being 125 stockholders.
The officers a re: President, W . D. En'oe; vice president, Louis Diekmann; cash
ier, R. A. Moore. Board of directors, F.
N. Stute, Reed Elwood, W . B. Gardner,
Bennie Basteson and Wm. Jinderlee.
Heads Clearing House
Simon Casady, chairman of the board
o f the Central State Bank, resigned as
president o f the Des Moines Clearing
House Association, and C. H. Martin,
president o f the Peoples Savings Bank,
was named to succeed him. The office of
vice president o f the clearing house, re
linquished by Martin, was filled by the

Becomes Federal Exam iner
Frank S. Nelson, cashier o f the First
National Bank o f Winterset, Iowa, has
resigned his position as cashier to take a
position with the federal banking depart
ment as examiner o f national banks.
Mr. Nelson will be succeeded by Frank
Hamilton and W . L. Cochran, now with
the Madison County State Bank, becomes
assistant cashier.
Recently Opened
The Ute State Bank, organized fo r the
purpose o f taking over the assets and
business o f the Farmers Savings Bank of
Ute, Iowa, was opened recently. All the
depositors o f the Farmers Savings Bank
will be paid in full. Officers o f the new
bank are M. J. Riddle, president; W . C.
Hitchens, vice president; E. A. Gaukel,
cashier, and G. F. Krog, assistant cash
ier.
Hold Election
Four Swea City men were elected mem
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Federal Reserve Bank of St. Louis

B A N K E R

election o f A. O. Hauge, president o f the
Iowa Trust and Savings Bank.
Sells Stock
Sale o f sixty-one shares o f stock in the
Liscomb State Savings Bank, Liscomb,
Iowa, owned by L. B. Tucker, cashier
of the bank, and his wife, has resulted
in the retirement o f Mr. Tucker, and the
succession o f E. E. Proehaska as cashier.
The Tucker interest in the bank was pur
chased by Mr. Proehaska, who for the past
six years has been assistant cashier.
Business Good
“ Business conditions are picking up,”
says George Mornin, president of the Se
curity Trust and Savings Bank, o f Cedar
Falls, Iowa. “ The banks are in good
shape,” he continued, “ and there is no rea
son why the spring business should not
be better than it has been for several
years in the past. The general outlook
fo r spring should be good, for there is an
abundance o f ready money in this locality.
The people o f Cedar Falls never have
been given to speculation, always making
conservative investments, and with plenty
o f money and low rates of interest pre
vailing, merchants should enjoy a good
business.”
Active Vice President
The board o f directors o f the Craw-

OM MON sense and in
itiative— both necessary
to the success of any organ
ization.

Combine common

sense with initiative, and you
have a banking service hard
to beat.
C H A S. S H U L E R , P resident
F R A N K B. Y E T T E R , V ic e P res.
W M . H . G E H R M A N N , V ice P res.
L O U IS G. B E IN , Cashier
H E R M A N S T A A K , A sst. Cashier

It is such a combina

tion that the Iowa National
offers to its correspondents,
backed up with efficiency.

Iowa National Bank
Davenport, Iowa

100

THE

NORTHWESTERN

BANKER

ford County Trust and Savings Bank,
Dennison, Iowa, which opened recently,
has elected H. E. Qualheim of Dedham
as vice president o f the institution. Mr.
Qualheim will be one o f the active mem
bers o f the new institution.

A Real
Honest't<>Goodness

SERVICE

Install Safety Boxes

When you bank at the “Security State” you are assured Service
given with a Smile.
Our banking equipment is the most modern, and our organization
alert and efficient to serve your every banking requirement.
NOTHING is too much trouble to please YOU.

SEC U RITY STATE BANK
“ W here Banking Is a Pleasure”

IOWA

OFFICERS

Business is never a;ood
business

until

makes a friend.

The

First

National

has

many,

many friends

The Delta Savings Bank, Delta, Iowa,
has installed 180 safety deposit boxes in
the vault which will be rented to patrons
desiring this service. These boxes were
purchased from the Citizens Savings
Bank at Sigourney.
Group Eleven Meets

Try the “ Security”

KEOKUK

April, 1927

A .F . D A W S O N ,
JO E R .L A N E ,
IRVIN J .G R E E N ,
C .F .S C H M ID T ,
P .A .TO R N Q U IS T,

P rc x id o n T
V.President
C a s h ie r
Asst Cashier
Asst Cashier

among the bankers of
Iowa.

We W ill Consider It a
Genuine Pleasure to
Serve You

R. L. Bunce, vice president o f the First
Iowa State Trust & Savings Bank of
Burlington, Iowa, was named as chair
man o f the group 11 Bankers at their
annual session held recently in Burling
ton. Mr. Bunce was elected for a twoyear term to the chairmanship o f the or
ganization which includes approximately
100 banks in its membership. F. E. Skola
o f Kalona, Iowa, was made secretary.
Three hundred and twenty-five bank
ers, representing nearly 140 banks of
Iowa, Illinois, Nebraska and more distant
states attended the meetings, which were
climaxed by a banquet and a meeting
which was followed by several hours of
dancing.
Outstanding among the subjects dis
cussed by the financial leaders in their
meetings was that o f the revised traffic on
the upper Mississippi and the subsequent
proposal fo r dock facilities at Burlington
and at other points on the river. Presi
dent A. C. Smith o f the Iowa Bankers’
Association made frequent reference to
the proposition and a resolution was
drawn up endorsing docks for Burlington.
The bankers were also much pleased by
the action o f Group 11 in indorsing the
candidacy o f Emil Webbies, president of
the First Iowa State Trust & Savnigs
Bank, as an Iowa member on the execu
tive council o f the American Bankers’ A s
sociation to succeed T. R. Watts o f Grand
Junction. This vacancy will be filled at
the next state convention.
Eloyd Bankers Meet

F IR ST
NATIO NAL BANK
DAVENPORT, IOW A

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Federal Reserve Bank of St. Louis

The annual meeting o f the Floyd
County Bankers Association was held in
Charles City, Iowa, recently, in the main
dining room of Hotel Hildreth, with forty
bankers present. At the conclusion o f the
dinner a short business session was held
during which business conditions were
discussed and all o f the old officers re
elected as follows :
President, George Gates, Marble Rock ;
vice president, H. M. Walleser, Charles
City; secretary, O. G. Satterlee, Charles
City, and treasurer, J. A. Cutler, Nora
Springs.
In the evening the members attended

April, 1927

TH E

NORTHWESTERN

101

BANKER

the Izaac Walton League pictures at the
Hildreth theater.
Montana Convention
The Montana Bankers Association will
hold its twenty-fourth annual convention
at Helena, Montana on Thursday, F ri
day and Saturday, July 21, 22 and 23.
Helena was chosen as the place o f meet
ing at the invitation o f Helena banks and
the Helena Commercial Club and the date
was fixed at a meeting o f the executive
council o f the association held at Butte,
Montana, March 12th. Those present at
the meeting o f the executive council
w ere: J. K. Heslet, president; E. H.
Westbrook, vice president; John Romersa, secretary-treasurer; J. E. Monroe,
president state bank section and councilmen Douglas Parker, A. J. Brower, P. B.
Murphy, S. Brown, and D. V. Higbie.
Preparations already have been made
by president J. K. Heslet and secretary
John Romersa to have at this meeting
outstanding speakers o f national repute
and novel entertaining features are to be
introduced which will make this meeting
an outstanding date in the history o f the
association.

~Assets
Seven Million ‘Dollars
I

Instruction to Land Appraisers
How to judge more accurately the
money value and soil producing power
o f farm lands will be the theme o f a twoday short course to be given at Iowa
State College, Ames, Iowa, April 20th
and 21st. The eourse this year will be the
third annual one o f its kind given at
Iow a’s state agricultural college fo r the
benefit o f land appraisers.
A year ago 110 registered fo r the land
valuation course. Many o f these were
from out o f state. The fee fo r the course
is $1.00. Any who are interested in know
ing more about soil types and how to
judge farm values are elegible fo r the
course, which is given under the direc
tion o f the Soils Department of the col
lege.
One o f the noted speakers scheduled
to address the land appraisers this year
is A. P. Cardon, chief reviewing ap
praiser of the United States Treasury
Department. Another is M ajor Howard
Greene, Northwestern Mutual L ife In
surance Co., Milwaukee, Wis.
One o f the features o f the course this
year will be a farm visit where those at
tending the eourse will do some actual
appraising work. A fter the farm has
been inspected and each man has com
pleted his estimates, those in charge of
the work will consider the farm and dis
cuss its various features which relate to
valuation.
Complete programs and information
concerning the soil and land value short
course may be obtained by writing to Dr.
W . H. Stevenson, head o f the Soils De
partment, Iowa State College, Ames,
Iowa.

$7,017,936.03
LIA B IL IT IE S
Capital .................................... $ 300,000.00
Surplus .................................... 350,000.00
Undivided Profits................
145,968.76
Reserve for Interest and
Taxes ....................................
90,000.00
Circulation ..............................
300,000.00
Deposits ..........
5,831,967.27

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

STATEMENT OF CONDITION

THE CITY NATIONAL
BANK
OF CLINTON, IOWA
M arch 23, 1927
RESOURCES
Time and Demand Loans........$5,410,863.29
United States Bonds.............
382,599.38
Stock in Federal Reserve
Bank ....................................
19,500.00
92,611.73
Real Estate and Fixtures.....
Cash and Due from Banks
and United States............... 1,112,361.63

DIR EC TO RS AND
O F FI C ER S

A L F R E D G. SM ITH ,
Chairman
A L F R E D C. SM ITH ,
President
G. L. C U R TIS.
Vice President
President, Curtis
Companies, Inc.
G. W . D U L A N Y , JR .,
President, Eclipse
Lumber Co.
President, Climax
Engineering Co.
. H. W . SE AM AN ,
Inland Waterways Advisory
Committee
M. J. G A B R IE L ,
President Gabriel
Lumber & Fuel Co.
J. P E TE R SO N ,
J. O. S H A F F ,
Farmer and Live Stock
Dealer
B. M. JA CO BSE N ,
E. J. CU R TIS,
Vice President Curtis
Bros. & Co.
C. A. AR M STR O N G .
Pres. C. F. Curtis
Company, Inc.
W. R. SM ITH ,
General Manager
Clinton Com Syrup
Refining Co.
A. P. B R Y A N T ,
Manager o f Operations
Clinton Corn Syrup
Refining Co.
F. H. V A N A L LE N .
V. P. and S ec’y.
J. D. Van Allen & Son
Inc.
H. S. TO W LE ,
V. P. and Treas.
Towle & Hypes Co.
O. P. P E T T Y , Cashier

J. H. NISSEN,
Assistant Cashier
H. G. K R A M E R ,
Assistant Cashier

$7,017,936.03

City National Bank
CLINTON IOWA

THE

102

Burlington Meeting
About three hundred bankers and bank
employes attended the thirtieth annual
convention of Group 11 o f the Iowa
Bankers Association, held February 22d,
on Washington’s birthday at Burlington.
Banking Superintendent L. A. Andrew,
President A. C. Smith and Secretary

N O R T II AV E S T E R N

BANKER

Frank Warner o f the Association, and
Prof. E. H. Lauer o f the University o f
Iowa were the principal speakers.
Resolutions adopted approved of the
$25,000 advertising campaign in behalf
of Iow a; expressed commendation fo r the
work o f State Banking Superintendent
Andrew; opposition to branch banking in

Unusual
Cooperation with
Correspondents
The wide experience of fiftyeight years in p r o m o t i n g
friendly correspondent relation
ship throughout the middle west
has given this bank a position of
preeminence.
Being the oldest and largest
savings bank in Iowa it is well
fitted to serve your best inter
ests, rapidly, efficiently.

AM ERICAN COMMERCIAL
SAVINGS BANK o/ ’ D a v e n p o r t , I o w a

✓

iiiiiiiiiimiimiumg
Tmimmtimmmummrimiir

A t your service
in E a s t e r n I o w a
and

W e s t e r n Illin o is

PEOPLES
T RUST &
SAVINGS
BANK

Peopleslrusl:4Sayin^aTili
CLIN TO N , IO W A .

Remember it this v/ay-"PEOPLES TRUST
T h e State C en tral S a v in g s B a n k
.

Keokuk, Iowa

Capital ..........................................................................................................-............5 200,000.00
Surplus and Undivided Profits.-............. ..................................... ....................
334,115.53
Deposits .................................................................................................................... 3,102,651.48
W IL L IA M LOGAN, P resident
L. J. M O N TG O M E R Y, V ice P resident
W . A. LOGAN, V ice President
C. J. BODE, Cashier
A L V IN K R A F T , A sst. Cashier
L. J. W O L F E , A sst. Cashier
G. N. D U E R K O P , A sst. Cashier
E. A. E B E R SO L E , A sst. Cashier

ACCOUNTS OF B A N K S AN D B AN K ER S IN V IT E D

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Federal Reserve Bank of St. Louis

April, 1927

Iowa and defense o f the Federal Reserve
banks’ operation; expressed hope that
the McNary-Haugen bill will become a
law and announced a belief in the future
o f inland waterways.
Alfred C. Smith o f Clinton, president
of the state association, said he was for
the McNary-Haugen bill unless an alter
native constructive relief measure can be
enacted, and his talk to the bankers bad
much to do with legislative matters. Mr.
Smith read a telegram which he sent
to President Coolidge, as fo llo w s:
“ Urge that you sign McNary-Haugen
bill unless you can suggest alternative
constructive relief which can be enacted
into law. Middle west agriculture in
critical condition and must have sup
porting legislation.”
“ Iowa Bankers Association,
“ By A. C. Smith, president.”
“ Let us hope,” stated Mr. Smith, “ that
the farm problem will soon pass into his
tory and that properly directed toil and
business methods will have solved the
problem and farming will again take its
place as the principal industry o f the
country.”
Frank Warner o f Des Moines, secre
tary of the association, conducted a
round table discussion and in the after
noon discussed general topics o f interest
to the bankers, reviewing association ac
tivities and general legislative matters.
L. A. Andrew, state superintendent of
banking, urged optimism for Iowa busi
ness men in his address. “ Blue talk,”
said Mr. Andrew, “ is having a bad
psychological effect upon the people of
the state.”
Superintendent Andrew told the bank
ers that conditions were showing a steady
improvement and that there had been
but one bank failure in the past four
weeks. Bankers, he said, were reporting
collections good and cash reserves in
creasing in all parts of the state.
Favor Newspaper Advertising
Geo. A. Starring, secretary o f the
South Dakota Bankers association re
cently mailed a questionnaire to each of
the banks in the state, asking them which
o f the many advertising mediums avail
able to the country banker, they regarded
as being the most productive from a
business standpoint. Of the banks lo
cated in towns served by a newspaper, 61
percent placed newspaper advertising
first in importance.
Calendars ranked second with 21 per
cent of the banks giving this type o f ad
vertising first place. Thirty-six per cent
of the banks gave calendars second place.
Circular letters or bulletins were given
third place, 16 per cent of the banks plac
ing this type o f publicity in first rank.
Movie advertising or miscellaneous each
received one vote fo r first place. Only
three banks placed novelties first.

T HE

April, 1927

NORTHWESTERN

103

BANKER

HOTEL
SAVERY
OES M O IN E S ,
IO W A
Right in the heart of the shop
ping and business district. Se"
lected as headquarters for
many conventions. You’ll t
find a real welcome here.
Rooms $2.50 and up.
T. H. HOFFMAN. Mgr.,

HOTEL HANFORD
2 5 0 ROOMS
2 00 BATHS

“ The pride of northern
Iowa.”
Hotel service
equal to a n y in th e
larger cities. You will
enjoy staying at Hotel
Hanford. Rates, $2 up.
F. C. G AYLORD, Mgr.

H o te l s
Pearson
M adison
Hotel and L enox
On

DAVENPORT, IOWA
You are proud to tell friends
that you stay at the “ Black
Hawk” when in Davenport.
It’s economical, too. 350 rooms
350 baths. Rooms $2.50 up.
W. R. KANE.
Manager

the near North Side

CHICAGO

MASON CITY. IOWA

These three and two more splendid hotels
(the Fort Des Moines at Des Moines, and the
Davenport at Davenport) owned and operated by

D ETR O IT

THE M ILL ER HOTEL COMPA NY

Madison Ave., Near Grand Circus Park

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.

SEND T O D A Y FOR
ILLUSTRATED FOLDER
The Pearson is a b lock east
o f the in tersection o f P earson
Street
and
N orth
M ichigan
B oulevard . R ates fo r one p e r
son are from $3.50 to $5.00 a
d a y ; fo r tw o $5.00 to $ 7 .0 0 ;
tw o-room
suites
$10.00
to
$ 12.00. E very room and suite
w ith p rivate bath.

When in CHICAGO

N TH E heart of the
downtown d i s t r i c t ,
near all public buildings,
department stores and
theatres, yet away from
the noise of the city.

Enjoy your stay—at the new

M O RRISO N
H O TEL

These twin hotels, so con
veniently located, offer
you accommodations of
n o t a b l e excellence at
prices most reasonable.

Tallest in the World
46 Stories High
Closest in the city to offices, theatres,
stores and railroad stations

Delicious foods of choice
quality prepared by home
cooks.

1944 O u t s id e

R oom s

Each with bath, running
ice water and servidor

Am ple parking space.
Good transportation to
all parts o f Detroit.

L o w e st R a te s
W rite o r w ire f o r reserv a tio n s

There is nothing stronger than human
prejudice.— Phillips.

F IR S T N A T IO N A L
D IR E C T O R S
B. F. S W IS H E R
Pickett, Swisher & Farweli
R. J. H O X IE
Secretary W aterloo Fruit &
Commission Oo.
A. M. PL A C E
Vice President
E. E. P E E K
V ice President W aterloo Bldg
& Loan Association.
H. W . G RO U T
Real Estate
C. A. M ARSH
President

C/d.ari‘toi~oi<3 /â<SS

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

BAN K,

T H E First National Bank of W aterloo U
I equipped to give you the highest degree of
SERVICE, and do it prom ptly and efficiently
at all timea.
Fifty-eight years of steady con
servative growth enables this bank to extend
such service.
O F F IC E R S
C. A. M AR SH , President
A. M. PL A C E , Vice President
W IL L A. LAN E, Cashier
P W. EIG H M E Y, Assistant Cashier
O. L. M O R R IS , Assistant Cashier

Total

Resources Over $ 2 ,9 0 0 ,0 0 0 .0 0 .

owa

D IR E C T O R S
W. W. M ARSH
President Iowa Dairy Sépara
tor Co., President Associated
Mfg. Co.
J. T. SU LLIV AN
Lawyer.
J O. TR U M B A U E R
Vice President Farmers Loan
and Trust Co.
H. A. M AINE
President H. A. Maine A Oo.
W IL L A. L A N E
Cashier

104

T IIE

One interesting item brought forth in
the survey is the expression o f banks as
to whether they expect to increase any
of the various forms o f advertising. Rel
ative to newspaper advertising, o f the
109 banks, 21 banks intend to increase,
41. banks will continue about the same,
while 28 banks expect to cut down their
newspaper appropriation. As to calen
dars or novelties, 8 banks will increase
on this item, 14 will continue their pres
ent policy while 54 will decrease or cut
out this item entirely. As to bulletins or
circular letters, 31 banks plan to increase
the expenditure fo r this item, 13 will con
tinue their present budget while 34 will
decrease or eliminate this item alto
gether.
The banks heard from spent in 1926
fo r all advertising, $47,887.95, or an av
erage o f $439.34 per bank.
Probably
$175,000.00 was spent for all kinds of
advertising last year by South Dakota
banks. The amount spent last year by
the banks which replied to the question
naire fo r newspaper advertising alone
amounted to $21,888.57 or an average o f
$200.81, or 45 per cent o f the total ad
vertising budget.
Probably $80,000.00
was spent by South Dakota banks last
year in newspaper advertising.
Calendars and novelties rank recond
place in total expenditure which was
$11,441.70 or an average o f $104.97 per
bank. The amount spent fo r bulletins
or circulars was $4,424.63 or an average
o f $40.60. For movie ads the expenditure
was $1603.05, or an average o f $14.70 per

NORTHWESTERN

BANKER

bank. F or miscellaneous items, contri
butions and other items charged to ad
vertising the expenditure was $6048.009,
Eliminating the banks in the larger
cities, we find that the total expenditure
per bank in the average South Dakota
town with weekly papers is $305.12 o f
which $149.04 is spent for newspaper
display. The average amount spent fo r
newspaper advertising in the larger cities
with daily newspapers is $713.36 per
bank.
No Precedent
The recent agreement o f the American
and French governments fo r payment by
France this year o f $10,000,000, “ with
out prejudice to the unratified debt set
tlement,” has led to the suspicion that
perhaps Premier Poincare has paved the
pay fo r a permanent policy o f French
payment to the United States o f such
amounts as France pleases. It is sug
gested that France, having succeeded in
this first move, will prefer not to ratify
the Mellon-Berenger debt agreement nor
any other possible agreement, but will
choose, instead, to pay amounts that suit
her convenience, and to pay them at
times convenient to her.
Those expressing this suspicion seem
to overlook the significant fact that the
amount paid by France this year, which
the United States accepts, is the precise
amount which France would pay under
the Mellon-Berenger agreement, if that
agreement were ratified.

April, 1927

F or the United States to accept from
France this year the amount which the
United States has expressed herself in
the Mellon-Berenger agreement as will
ing to accept, is entirely different than it
would be if the United States were to
accept from France this year a smaller
sum than is provided fo r 1927 payment
under the Mellon-Berenger agreement.
To accept the smaller sum would in
deed seem to establish a precedent where
by France might hand us anything, with
assurance that we would accept. But no
such precedent is implied when the
amount we accept is the amount which
France would pay if the Mellon-Berenger
agreement were ratified.— From Chicago
Journal of Commerce.
On Time
A salesman who had been traveling on
a certain railroad fo r a number o f years
was complaining about the trains always
being late, when, to his surprise, the
train came in on time.
He immediately went to the conductor
and said, “ Here’s a cigar, I want to con
gratulate you. I have traveled this road
for 15 years and this is the first time I
have caught a train on time.”
“ Keep the cigar,” said the conductor,
“ this is yesterday’s train.” — Forbes E pi
grams.
“ Have you named the baby yet?”
“ We think we’ll call him Oscar, although
his Uncle Jake has lots o f money, too.”

“ROLL OF HONOR” BANKS
It is an honor to be listed among the Honor Roll Banks. It indicates that the bank has Surplus and Undivided
Profits equal to or greater than its capital.
Such distinction is accorded to the banks listed on this page. By careful management and sound banking they
have achieved this enviable position.
These banks will be especially glad to handle
any collections, special credit reports or other
business in their communities which you may
entrust to them.
Correspondence is invited.
IOWA

Town

Davenport
Ft. Madison
Lake Mills
Little Rock

Bank

Union Sav. Bk. &
Tr. Co.
Lee County Sav.
Farmers State
First National

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

Capital

Surplus
and
Profits

$1,250,000 $1,250,000
50,000
56,000
38,000
25,000
25,000
26,000

Town

Monticello
Soldier
Wallingford
Waterloo

Bank

Monticello State
Soldier Val. Sav.
Farmers Sav.
Pioneer National

Capital

Surplus
and
Profits

$ 200,000 $ 225,000
20,000
28,991
15,000
35,000
210,000
200,000

T IIE

April, 1927

NORTHWESTERN

105

BANKER

INDEX TO ADVERTISERS
A

Page
American Commercial & Savings Bank,
Davenport.......................................... 102 .

Page
First National Bank, Sioux City.......... 2
First National Bank, Waterloo..............103
Fisher Co................................................ 37
Foreman Banks....... ........................... 35

B
Baker Kellogg & Co.............................
Bankers Trust Co.................................
Bartlett & Gordon.................................
Beh, Carleton D. Co...............................
Bell Telephone Securities......................
Boldt, A. J. & Co...................................
Brokaw & Co..........................................
Brown-Crummer Co...............................

47
93
50
57
45
59
53
60

Camp-Thorne ...................................... 42
Cedar Rapids Nat. Bank................... 24-25
Central Bond Co................................... 61
Central State Bank............................... 97
Central Trust Co.................................... 92
Chapman, P. W. & Co........................... 51
Chase Nat. Bank................................... 84
Chicago Trust Co................................... 63
City Nat. Bank, Clinton.........................101
Consolidated National Bank................ 94
Continental & Commercial Banks..... 29
Cummins, J. A........................................ 59

General Motors Acceptance Corp......... 54

Omaha National Bank............................ 102
P

H
Hanna, W. D. & Co............................... 60
Hanover Nat. Bank............................... 77
Hoagland, Allum & Co......................... 58
Homestead Co................
74
Hotels Madison and Lenox. . . .............. 103

Kuck, John C.,

E
Eagle Pencil Co.................................... 74
53
Emery, Peck & Rockwood..........
Eppley Hotels Co................................... 71
F

Federal Surety Co......... : ...................... 70
Fidelity Bond & Mortgage Co............... 52
Fidelity Trust Co................................... 27
First Illinois Co.................................... 33
First Iowa State Trust & Savings Bank 95
First National Bank, Chicago............... 34
First National Bank, Davenport..........100
First National Bank, Mason City......... 92
First National Bank, Omaha............... 2

Co............................. 77

Lane, Roloson & Co., Inc...................... 58
Live Stock National Bank, Omaha. . . . 80
Live Stock Nat. Bank, Sioux City......... 76

Roll of Honor Banks.............................. 104
Royal Union Life Insurance Co.......... 31-67

Security State Bank.............................. 100
Stanley-Henderson Co.......................... 63
State Bank of Chicago. . , .................... 38
State Central Savings Bank............23-102
Stern, Lawrence & Co........................... 62
Stock Yards Nat. Bank, Chicago......... 82
Southern Surety Co............................... 73
T

M
McClintock Co............................
86
Mason City Brick & Tile Co................ 34
Merchants National Bank.................... 98
Metcalf, Cowgill & Co........................... 62
Midland Bank, Ltd............................. 87
Midland Mortgage Co...................
2
Midland National Bank...................... 85
Miller Hotels Co..................................... 103
Minnesota Loan & Trust Co................. 3
Missouri State Life Insurance Co......... 69
Morrison Hotel .................................... 103

Thompson, Ross & Co........................... 48
Todd Co................................................... 107
True-Webber & Co............................... 44
U

Union Trust Co..................................... 28
V

Valley National Bank...........................

JV
National Bank of Commerce............
National City Co...................................
National Life Association.....................
National Park Bank.............................

a
Quality Park Envelope Co.................... 87

L
68
5
57
56
61
90

Peoples Trust & Savings Bank, Clinton.102
Pearson Hotel ..................................... 103
Penn. Mutual Life Ins. Co.................... 64
Philadelphia-Girard National Bank. . . . 32
Pioneer Nat’l Bank............................. 96
Polk, H. H. Co................
55
Priester-Quail & Sundy, Inc.................. 40

Illinois Merchants Trust Co................... 108
Industrial Acceptance Corp.................. 52
4
International Harvester Co..............
Iowa Lithographing........................... 81
Iowa Nat. Bank, Davenport................ 99
Iowa National Bank, Des Moines............... 7
Iowa National Fire Ins. Co.................. 71

I»

Des Moines Life & Annuity Co.............
Des Moines National Bank..................
Detroit Co...............................................
De WTolf & Co., Inc.................................
Doherty, Henry L. Co...........................
Drovers National Bank..........................

Page
North American Nat. Life.................... 72
Northern Bank Note Co........................ 97
Northern Trust Co................................. 86
Northwestern National Life Ins. Co. . . 66

30
49
73
88

Welch Printing Co....................
Wessling Services..............
White-Phillips Co......... .........................
White-Price Co......................................
Wollenberger & Co................

74
36
39
41
46

“ A C A S H I E R 'S C H E C K ” for $3.00 is all that is required to secure the
A the banking fraternity and sumhit same for publication. You do not have
monthly visits of the Northwestern Banker for an entire year.
Each issue
\ to agree with us, or with anyone else. We learn things by an interchange
contains from 108 to 200 pages of mighty interesting matter pertaining
ideas, and people with whom we disagree often prove valuable teachers,
banks and banking interests in the territory covere dby the magazine.
We shall be glad to hear from you.
“ O U R C O R R E S P O N D E N T S .”
Every bank in the northwest is in“ N O P R O T E S T ” has ever been offered to the statement that the
vited to a place on this list. Send us items of local interest, tell us
coverd by the Northwestern Banker is the money-producing
about your bank and its growth, prospects, etc., also any other
section of the American continent, rich in hogs, cattle, corn, etc.,
financial news of interest to bankers in your section. We are
RjjjjKSn and dotted with thousands of prosperous banks, all doing a good
always glad to head from our friends.
;i~E¡SíS¡$S»íi
business, and the majority of them are readers of “ The Nortb“ S I G H T D R A F T S . ” We always carry a large “ Reserve” of good 1*.ffllSéIéÜÍmi i u
L L *1 western.”
will and additional service, and will promptly honor drafts made
n flB ggp
“ S U R P L U S A N D U N D I V I D E D P R O F I T S ” increase very rapupon same by any bank.
This department is for your special
idly with those banks whose advertisements appear regularly in
benefit. It may be made of very great benefit to your bank. Do /
\ the columns of this magazine. Full information as to rates
not fail to avail yourself of its privileges.
/
\ and our anecia! service will he nromntiv furnished on armli“ A C L E A R IN G H O U S E ."
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cation. Your business solicited and appreciated. The “ Bankfor all our readers.
Express your view on any topic of interest to
eT” has been twenty-nine years in its present field.

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Federal Reserve Bank of St. Louis

106

THE

NORTHWESTERN

BANKER

April, 1927

Wanted Her Notified

His P a rt

Take Your Choice

Johnnie— Mother, didn’t you say it was
wrong to strike anyone smallei than
yourself ?

“ Sam,” said the canvasser to his colored
friend, “ we’re collecting donations fo r the
support of the public library. Can’t we
count on you for a small one ?”

Lady (to small boy accompanied by two
dogs) : “ Have you licenses on both those
dogs ?”

Mother— Yes, dear.
pened ?

What

has

hap

Johnnie— Well, write to my teacher.
don’t think she knows about it.

A Little Mixed
Visitor— A fter all these years I miss
so many o f the old faces with which I
used to shake hands.
No Nerve
Harry— I ’m afraid I ’m smoking
much.

too

“ Well, suh,” replied the darkey, “ to tell
you de truf, suh, Ah Aggers dat when Ah
goes over dah to read de papers every day
Ah’s about doin’ mah part.” — Legion
W eekly.
Cut Rate
A Scotchman went into a hardware
store and asked fo r 20 cents worth of
p ’ aster of Paris.
The clerk inquired what he wanted it
for.

Harry— I would, but I ’m afraid I might
find something else the matter with me.
Poetry and Prose
He (poet lover) : “ My fair one, you
reign supreme in my heart. Without you
all would be dark and dreary. When the
clouds gather and the snow and hail beat
upon me, then I think o f you. Then
comes the warm southern winds— the
storm breaks, and through the dying show
ers I see your love shining bright and
clear. My rainbow!”
She (factory girl) : “ Hey, is this a
weather report or a proposal?”

H e: “ I come to bring warmth and light
into the bleakness of your home.”

id ea !

That

was

Coming to Himself

Only Grandma Knows

Perfectly Evident

Little Joan: “ Mummy, what’s this fun
ny thing I ’ve found ?”

“ How do you know your daughter trusts
God?”

Mother: “ That’s called a hairpin, dear.
I f you take it to grandma, she’ll show you
how it was used.”

“ By the company she keeps.” — Caro
lina Buccaneer.

Fighting for Business

“ Pardon me, did you drop your hand
kerchief during the last dance?”

Thoroughly in E arnest

“ Oh, you dear— ”

He. “ Nix on the love stuff, old lady.
I ’m the installation man for the gas com
pany.”

Second Salesman: “ Rotten. Every time
I handed any one my card he thought I
wanted to fight a duel.”

Either In or Out

Taking No Chances

Down south the past winter a colored
caddy approached a well known doctor as
he was about to enter the locker room and
remarked: “ Doctor, ain’t you got some
shoes up yonder in yo’ locker you don’t
want?”
“ What

“ I dunno sah, ’cause I never bought
none dat’er way. I either kin get in ’em
or I can’t.”

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Federal Reserve Bank of St. Louis

S h e: “ The
father.”

“ Did you— utterly without warning— as
sault this poor wholesale salesman and
throw him into the street,” demanded the
district attorney.
“ Yes,” replied the retailer.
“ Three
times.”

First Salesman: “ So you went through
France with your samples? How did you
make it?”

“ Maybe so,” replied the doctor.
size do you wear?”

H e : “ Didn’t I see you taking a tramp
tlu'ough the woods yesterday?”

This Might Happen

Misunderstood

Romantic Spinster:

Tough on Dad

The negro minister was trying to im
press his hearers with the shame and re
morse felt by the prodigal son, and with
his desire to cast away his wicked doings :
“ Dis young man got to thinking about
his meanness and his misery, and he tuk
off his coat and frowed it away7. And
den he tuk off his vest and frow ed dat
away. And den he tuk off his shirt and
frowed dat away, too. And den he come
to himself.” — Financial Times.

The Scotchman replied, “ F or 15 cents.”

Jerry—-Why don’t you stop?

Smad B oy: “ No’m. The big one’s all
right, but the little one’s just full o f ’em.”
— Vassar Vagabond.

“ Would you marry a man who lied to
you ?” he asked.
“ You don’t suppose I want to be an old
maid, do you ?” she answered sarcastically.
Logical Deduction
Skeptical L a d y : “ Can you wear this
coat out in the rain without hurting it? ”
Fur Salesman: “ Madam, have you
ever seen a skunk carrying an umbrella?”

“ Oh, I was never so embarrassed in my
life. That wasn’t my handkerchief, that
was my dress.” — Wesleyan Wasp.
Mary Pickford’s long yellow hair has
never been bobbed, and probabty never
will be. She would look like a flapper with
a shingled head, and if there is an ounce
o f flapper blood in her it has never come
to the surface.— From Chicago Journal of
Commerce.
“ How come, brudder,” asked the
preacher, “ dat when I talks about water
melon stealing, y o’ all snaps yo’ fingers ?”
“ Nothin’ ’tall, pahson, nothin’ ’ta ll; I
just happen to ’member where I left mah
knife.”

April, 1927

THE

N O R T H AY E S T E R N

BANKER

107

seven years . . .

$ 500,000
were devoted to perfecting the
Todd Super-Speed Protectograph
Yet, this is but one example of how The Todd Company
accomplishes its aim to simplify and improve banking practice
T he first working model o f the Super-Speed was
completed seven years ago. From that time until
the announcement o f the T odd Super-Speed five
months ago, the work o f improving . . .
o f per
fecting went steadily on. Countless changes in de
sign and materials were considered. M any were
incorporated— many were found impractical.
Then ten machines were shipped to banks, manu
facturers and merchants who demanded speed and
reliability. For six months they were used to make
sure they would stand up in actual commercial work.

The result o f all this experimenting, testing and
im proving is that The T odd Company can now offer
the Super-Speed to the banking world with the guar
antee that it is not only the fastest, but the most per
fect piece o f mechanism made in our history.
Such is the story o f the T od d Super-Speed. It
is but typical o f the precision and care we have
exercised in the manufacture o f all T odd Protectographs. N ot one has been offered American busi
ness until it could carry the T odd guarantee. And
every model is actively filling a need in business or
private life. Even in homes today you w ill find a
Protectograph— The Personal, which bankers ap
preciate so highly because its use reduces the num
ber o f hand-written checks their employees have to
handle.
T oday ninety per cent o f the banks o f this country
use one or more o f the T odd products, including
T odd Greenbac Checks and Super-Safety Checks
unequaled in alteration-defying qualities and beauty.
The number o f individuals and businesses can be
counted in hundreds o f thousands. T odd service is
available in every important city in the United
States and in many foreign countries. This service
is rendered by experts— men who have been schooled
in the T odd business.
At your request a T odd expert will come and show
you how the T odd System o f Check Protection can
facilitate the routine o f your bank. Be sure to ask
him to demonstrate the new T odd Super-Speed
which writes the amount line on checks at the rate
o f 1200 an hour. The T odd Company, Protecto
graph Division. (E st. 1899.) 1149 University Avenue,
Rochester, N. Y . Sole makers o f the Protectograph,
S uper-S afety Checks and Todd Greenbac Checks.

TODD SYSTEM OF CHECK PROTECTION
The P r o t e c t o g r a p h

eliminates a large per
centage of all check
frauds by preventing
raised amounts.
The
Protectograph is made
in a variety of stand
ard models, one for
every type of business,
priced from 137.50 up.
Only Todd can make
a Protectograph.

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

Todd Greenbac Checks

with their patented
self-canceling features,
eliminate another
major source of possi
ble check losses by preventing c h a n g e o f

p a y e e ’ s na me , dat e
and
number
and
“ c o u n t e r f e i t i n g The

instant the forger’s
acid is dropped on the
paper the word “void”
appears.

Standard

Forgery

Bonds cover the re
maining check-fraud
possibilities, namely,
forgery of signature
and forgery of en
dorsement. Qualified
Todd users receive
policies at the most
advantageous discounts
from the Metropolitan
Casualty Insurance
Company, New York.

World-wide Banking Service
Through more than fifty years of
constant growth and thousands
of direct business connections
established both here and abroad,
the Illinois Merchants Trust
Company has built a service for
importers, exporters, banks, trav
elers, and investors, which is
truly world-wide in character.

The resources of this bank are
large; its organization is well
developed; its facilities highly
specialized and its board of direc
tors composed of leaders in every
branch of commerce and industry.
Inquiries about our services and
our ability to meet your banking
needs are cordially invited.

I llin o is M e r c h a n t s T r u st C o m p a n y
Capital & Surplus

S A L L E

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

J A C K S O N ,

C L A R K

AND

¿Million Dollars

Q U I N C Y

S T R E E T S

» C H I C A G O

Full text of The Northwestern Banker : April 1927, 32nd Year, Number 477

FRASER