Full text of The Northwestern Banker : April 1932, 37th Year, Number 537

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Federal Reserve Bank of St. Louis

DES

MOINES

April, 1 9 3 2
W hy W ork One-Day-Per-Week
for the Government?
By M elvin A . Traylor

(See Page 11)

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Federal Reserve Bank of St. Louis

The Real Basis
of Correspondent Service
The prompt and accurate handling o f
detail is the real basis o f correspondent
service. Such service is impossible without
a background o f experience with every
phase o f correspondent banking.
Central Hanover has proved satisfactory
as the N ew Y o rk correspondent o f hun
dreds o f the country’s leading
Many o f these connections

banks.

date

back

more than fifty years.

Ce n t r a l H a n o v e r
BANK

AND

TRUST

COMPANY

NEW YO R K

REPRESENTATIVES

LONDON,

PARIS,

BERLIN

AND

'N O SECURITIES FO R SALE”

BUENOS

AIRES

Northwestern Banker
Des Moines

The Oldest Financial Journal W est of the Mississippi
APRIL,

Number 537

1932

37th \ear

IN T H I S I SSUE
Across From the Publisher...............................................................................

Frontispiece, “ The Y ear’s at the Spring” ..................................................

Duties and Responsibilities of a Bank Director............................................ 9
B y F. G. Await
Bankers Praise Reconstruction Corporation Results..... ..............-............. 10
W hy Work One-Day-Per-Week fo r the Government?— ........................... 11
B y Melvin A. Traylor
The W orld’s Largest Banks............................................................................. 12
How My Directors Direct—.............................................................................. 13
National Bank History in Nebraska................................................. -.....----- 14
News and Views...................................... ............................. — ........................ 15
B y Clifford DePuy
Bonds and Investments..............

23-31

Looking at Our Investment Future............................................................... 23
B y Ray Thayer Sterling
Insurance.............................................................................................................. 33
Bankers W a n ts .................................................................................................... 38
South Dakota News............................................................................................ 41
Nebraska News.................................................................................................... 43
Minnesota News.................................................................................................. 45
North Dakota News..............................................................-...........-................ 47
Iowa News........................................................................................................
49
In the Directors’ Room............................-.............—........-...........-.....-.......— 59
Index to Advertisers...................-...........-........................................................... 60

C L IF F O R D D E P U Y
Publisher
G E R A L D A. S N ID E R
A ssocia te Publisher

• ONE OF T H E

•

DeRuy-Banking Publications

R. W . M O O R H E A D
E d itor

F R A N K P. S Y M S
V ic e P resident
19 W e st 44th Street
Suite 1608
N ew Y ork

J. A. S A R A Z E N
C irculation M anager

Member, Audit Bureau of Circulations
Member,
Financial Advertisers Association

W M . H. M A A S
V ic e President
1st N ational Bk. B ldg.
C hicago

O F F IC E S . _
OMAHA
MINNEA POL IS

DES\M(}IMES^
MILWAUKEE

CHICAGO
NEW'YORK

F . S. L E W I S
Special R epresentative
840 L br. E x. B ldg.
M inn eap olis, M inn.

Northwestern Banker, published monthly by the DePuy Publishing Company, Inc., at 555 7th Street, Des Moines, Iowa.
Subscription, 50c per copy, $3,00 per year. Entered as second-class matter at the Des Moines post office. Copyright, 1931.

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Federal Reserve Bank of St. Louis

Northwestern Banker

April 1932

Figures compiled by the TransAtlantic Conference show that a
grand total of 939,468 people trav
eled east and west across the
Atlantic in 19 31.
This year many thousands will
go to Europe from America for
pleasure, business, or other pur
poses. While the total number of
voyagers may be somewhat re
duced, the steamship lines have
shown their confidence by build
ing new ships which are going
into service this summer. Exchange
rates and other factors have re
duced the cost of foreign travel.
Americans in all walks of life now
swell the vast army that pours
across the Atlantic into the Old
World. International events, con
ferences, diplomatic visits, re
gattas, races, and a thousand and
one other attractions lurk in the
horizons of Europe to lure Am er
icans to taking Trans-Atlantic
vacations.
M oney will undoubtedly be
taken from banks and elsewhere
for the purchase of tickets, reser
vations, and for use as funds while
abroad. The bank, which is the
secure guardian of the funds of its
patrons at home, can still continue

THE
EVERCHANG
-ING
MARKET
• FOR •
TRAVELERS

CHEQUES

939,468
T ra v e le rs
crossed the
A tla n tic
In 1931

its trust by issuing to its deposi
tors American Express Travelers
Cheques instead of cash. These
“ international funds’ 1 have been
carried by travelers all over the
globe since they were originated
in 1891. They are as readily ac
cepted in hotels, tourist offices,
shops, and garages of Europe as in
America.
They furnish the traveler with
ironclad protection against loss or
theft, and also automatically in
troduce him to the helpful hand
of the American Express Service
in foreign lands. American Ex
press interpreters stationed at
ports, depots, and frontier points
abroad are eager and willing to
give advice regarding hotels, trans
portation, baggage arrangements
and useful local information.
In addition to safeguarding the
depositor’s best interest, the sale
of American Express Travelers
Cheques also presents many profit
able transactions for the bank.
•

•

Steamship tic\ets, hotel reservations, itineraries, cruises and tours planned and
booked to any part of the world by the
American Express Travel Service.

AMERICAN EXPRESS TRAVELERS CHEQUES
......................................................
........................
. .............................
.......................... :_____ _— — 1
i-----------------------------------------------------—
- —
----------------------------= ------------------------------------------------------------*

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Federal Reserve Bank of St. Louis

TRA VELERS C H E Q U E S
AND
j RAVEL S E R V IC E
April 1932

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Federal Reserve Bank of St. Louis

U Cedar Rapids Dank
f h

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l i f e

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i si il« « I iim iim m n

\ a > i . i I i i litui IMI H li
UHI li I |ì I5IIIHM'««
Mili ti S sì II !« Hil l*» *

Cedar Rapids

Servicing o4ll IoWa
E x p e r ie n c e
The greatest teacher of all is experience and
our

experience

in properly

handling

and

cooperating with our correspondent banks for
many years, assures you that your account
will be given every consideration and service.

M ERCHANTS
NATIONAL BANK
o

f f i c e

President, James E. Hamilton; Vice Presidents, H. N. Boyson, S. E.
Coquillette, Van Vechten Shaffer, Edwin H. Furrow, Roy C. Folsom, Marvin
R. Selden; Vice President and Cashier, Mark J. Myers; Vice President and
Trust Officer, George F. Miller; Assistant Cashiers, Fred W . Smith, R. W .
Manatt, L. W . Broulik, Peter Bailey, R. D. Brown, and O. A. Kearney.

Cedar Rapids

Iowa

Northwestern Banker

April 1932

cross

¿ A

2 )e

rom
the P ublisher

O nce A g a in — Shall The latest sohl"
W e Guarantee
tion p,T °sed for
Bank D eposits ?
fldenee and dimin.

total of $100,000,000 as may be necessary
against the deposits of member banks.
Frankly, I am, and have been, opposed to the
guarantee of bank deposits, first of all, because I
ishing the amount of money being hoarded has been think it places a good banker in a disadvantageous
proposed by Representative Steagall of Alabama, position by allowing the poor banker to do as he
who is suggesting that a fund of $500,000,000 be pleases because he knows full well that if his bank
established to guarantee deposits of all member does close that the guarantee fund will pay the
losses.
banks of the Federal Reserve System.
Another reason why I am opposed to the guar
His plan includes the following propositions:
1. A banking fund of $500,000,000 to guarantee antee of bank deposits is because in every state
deposits of all member banks of the Federal where it has been tried it has been found to be in
effective and has eventually been removed from
Reserve System.
the statute books of the state. The most recent
2. The establishment of a board of 5, headed
fiasco in this regard has taken place in Nebraska
by the secretary of treasury to administer the
where state banks have refused to pay assessments
fund and liquidate the obligations of all in
which they think confiscatory and the case has been
solvent banks by stated installments over a
in litigation for some time.
period of 20 months.
“ Advocates of protection for depositors do not
3. That no new national banks shall be chartered
seem able to get away from this idea of assessments,
with less than $50,000 capital and 10% sur
notwithstanding that it is the rock upon which the
plus.
guarantee systems in eight different states crashed, ’ ’
4. The right of member banks to impose reason
says a recent communication from the Nebraska
able charges for the remittance of checks.
Bankers Association. “ We make the prediction
5. One-half of the net earnings of the Federal that no system of guarantee of deposits can be
Reserve Banks would be distributed to mem made successful on this assessment principle be
ber banks.
cause it inevitably lowers the standards of banking,
6. Stockholders would be relieved of double lia despite the well meaning efforts of champions of
bility except as to banks that operate branches. the idea.
“ Our committee does not anticipate that there
7. The $500,000,000 guaranty fund would cost
the government nothing and would come from will be any division of opinion among Nebraska
bankers on the point that any proposal of a guar
the following sources:
A. The $187,000,000 fund held by the treas antee of deposits based upon the principle of as
ury representing franchise taxes paid by sessing the banks annually on their deposits will
receive our bitterest opposition.”
member banks.
Another point which Representative Steagall
B. A $200,000,000 fund contributed by
member banks in the form of assessments perhaps overlooks is the fact that if all of the mem
on the basis of their time and demand ber banks of the Federal Reserve System of which
there are 7,246 (6,368 National banks and 878
deposits.
state
banks), were under a guarantee of bank deC. An annual assessment of as much of a
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Federal Reserve Bank of St. Louis

April 1932

posits law, W H A T about the 21,122 state and sav
ings banks or non-member banks which would not
have such a law?
If the public was led to believe that member
banks were stronger and in a better position to
safeguard deposits because of the guarantee law,
this would certainly be unfair competition for non
member banks until such a time as the guarantee
of the deposits failed to function as it has in every
previous case where it has become a law.
Frankly, 1 do not think that the Steagall Guaran
tee of Bank Deposits Law should be passed and I
think that it will probably not be.
In these days when we hear
much about the “ balancing
of the budget,” I have been
interested in keeping a list of the various pamphlets
and booklets which have reached my desk in the
last thirty days from the different departments of
the government. This material seems to me to rep
resent an almost complete and total loss as far as
being of any real value to the branches of business
which they are supposed to serve.
Just to give you an idea of some of the subjects
covered by these various bulletins, I am listing the
follow ing:

U nnecessary
W a ste

Department of Commerce Bureau of Census
1. Shipments of Domestic Pumps and Water
Systems.
2. M en’s and B oys’ Clothing Cut.
3. Radio Merchandise.
4. Bathroom Accessories.
5. Box Board.
6. Galvanized Metal AVare.
7. Fabricated Structural Steel.
8. Commercial Steel Castings.
9. Methanol and Acetate of Lime.
10. Steel Barrels.
11. Domestic Water Softening Apparatus.
12. Babbitt Metal.
13. Malleable Castings.
14. Pulverizers.
15. Electric Hoists.
16. Superphosphates.
17. Work Clothing.
18. Edible Gelatin.
19. Paint, Varnish and Lacquer Products.
20. Glues of Animal Origin.
21. Plumbing Brass.
Department of Interior
1. Inventory of the Water Supply on the Snake
River Plains in Southeastern Idaho.
2. Revised Maps of Areas in Coal Regions of

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Federal Reserve Bank of St. Louis

AVest Virginia Showing Changes in Twenty
Years.
3. Map Shows Where Ice Sheet Stopped.
4. Typical Flood Plain Shown on New Map.
5. The Crookedest River in the United States.
Department of Agriculture
1. Farm Price Index Down Three Points.
2. Conflict in Shanghai Affects Delivery in
American Cotton.
3. Hyde Selects Men to Handle Farm Loans.
Bureau of Mines
Explosive Crushing of Minerals.
Motor Gasoline Survey.
Soapstone.
Geophysical Abstracts.
How to Prevent Death and Injury from Falls
of Roof in Coal Mines.
6. Economic Size of Metal-Mine Airways.
7. Sampling and Explorations by Means of
Hammer Drills.

1.
2.
3.
4.
5.

I am not saying that some of this information is
not helpful and valuable, but I know that with all
of the fine business, trade and technical publica
tions which we have in America that most of this
information has reached the various lines of in
dustry most vitally affected long before these bul
letins are sent out by the different departments of
our government.
Consequently, here is a large amount of waste,
much of which could and should be eliminated.

The Im portance
o f Railroads

r was greatly
pressed
witht the refj
importance of our rail

roads from an investment angle when studying
some figures recently which indicated that the total
amount of railroad bonds issued in the United
States amounts to $11,000,000,000 and that railroad
bonds held by corporations and individuals
amounted to $4,400,000,000 and bonds held by in
stitutions amounted to $6,600,000,000.
Of the bonds held by institutions I notice that
life insurance companies owned $2,600,00,000,
mutual savings banks, $1,700,000,000, commercial
banks, $1,016,000,000, and the balance was divided
among educational and philanthropic organizations.
Obviously our railroad systems must adjust
themselves to the new competition of buses, auto
mobiles, and airplanes, but at the same time only
sound legislation and a fair adjustment of rates
and taxes must be enacted if these great arteries of
commerce are to continue to pay a satisfactory rate
of return on their bonds and continue to function
as a part of our great economic system.

Northwestern Banker

April 1932

“ The Y ear’s At the S p rin g” is from an original painting by Chester K. V an N ortw ick. In this study
he has injected the very spirit o f this season o f seasons, a glimpsei o f the ideal springtim e setting.

Northwestern Banker

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Federal Reserve Bank of St. Louis

April 1932

The Duties and Responsibilities of a
Bank Director
HE experience o f the comptroller’s
office has shown conclusively that
many bank directors have little or no
conception o f their duties and responsi
bilities and that some directors ignore their
duties even when called to their attention.
It is fo r this reason that the comptroller’s
office feels that the subject under discus
sion is of great importance and that the
active officers of banks should make avail
able to their directors such information as
will enable them to better understand their
duties and responsibilities. Such a course
will not only make for better banks but
is one to wffiich the directors are entitled.
The economic policy commission o f the
American Bankers Association in a report
recognizes the importance o f the subject,
and much has been written in regard
thereto but the lack o f knowledge o f their
responsibilities still remains the cause of
many bank failures. I believe that the
American Bankers Association could do no
better thing to promote sound bank man
agement than to carry out a plan o f edu
cation o f bank directors in their duties and
responsibilities.

Nature of Trustee

By F. G. A W ALT

Not Figureheads

Deputy Com ptroller of the Currency

BVIO U SLY the law did not contem
plate that a director should be a
figurehead; that he should attend meetings
merely to get his directro’s fee! and in this
connection I was told recently by a presi
dent o f a bank that it was necessary to
increase the directors’ fee in order to get
some o f the directors o f that particular
bank to attend meetings— a procedure that
certainly should be unnecessary.

managed by not less than five directors
V

It is the director who is held responsible
fo r any violation o f the National Bank Act
when it provides:
“ Every director . . . shall be held
liable in his personal and individual eapae-

The final and inescapable responsi
bility of and for each bank rests upon
its board of directors.

In most cases

where banks have come through the
rigors of the depression each has had
the benefit of the combined wisdom
of a strong board.
The experience
that the weakness

of the past shows
of the individual

is overcome by the strength

of the

group; that impulses may be checked
by the steady scrutiny of several; that
invaluable information may be brought
into use and a detached viewpoint be
brought to bear upon the problems of
banking through the united coopera

H Y do we place such emphasis on
tive action of a board of directors.
the duties and responsibilities of bank
Many directors do not really com
directors as compared with other corpora
prehend the significance nor the im
tions? Directors o f private corporations,
portance of their positions. Manage
as a rule, have as their principal object the1
ment tends to drift and become cen
interest and protection o f what may be
tralized in the hands of either officers
termed their partners in business, stock
only or a close group of directors, so
holders, and also the bondholders. The
that action by the board as a whole
directors o f the banks, quasi public corpo
becomes more or less perfunctory.
rations, have their first duty to the deposi
tors o f these institutions and this duty
comes above their duty to the stockholders.
They are in the nature o f trustees.
ity fo r all damages which the association,
When the depositor places his money in its shareholders, or any other person shall
the hank he in effect says : “ In considera have sustained in consequence of such vio
tion o f receiving my money and any inter lation.”
It is the director of the member bank
est paid, you can have its use but only on
the condition that its use conforms to the who is held responsible for violations of
safeguards provided by law.” Such safe the Federal Reserve Act by the provisions
guards are not merely the mechanical safe of that act.
guards surrounding the proper custody of
The director is required by the National
funds but cover all the many phases of
Bank Act when elected or appointed to
banking, provided by statutory enactment
take an oath that he will, so far as the
or court decision. On whom does the re duty devolves on him, diligently and hon
sponsibility o f this contract fall ?— the estly administer the affairs of such asso
directors ?
ciation and will not knowingly violate, or
willingly permit to be violated any o f the
In most banking laws, and particularly
the national laAV, the whole structure is provisions o f the act.
built around the directors. It is upon the
I might say in this connection that there
directors that the national bank law places has been a recent decision, comparatively
the management o f national banks in spe recent, by the circuit court of appeals o f
cific language, when it provides:
the tenth circuit, United States Court,
“ The affairs o f each association shall be holding that a director’s oath is a contract.

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Since the duties and liabilities o f direc
tors are interwoven, the definition o f their
duties has in some measure been given in
suits to enforce liability, and while the
courts have used different language in de
fining the general duties o f directors, a
clear idea o f their scope- may be gained
from the- following excei'pts o f decisions:
“ The duty o f the board o f directors is
not discharged by merely selecting officers
o f good reputation fo r ability and integ
rity, and then leaving the affairs of thebank in their hands without any other
supervision or examination than mere in
quiry o f such officers, and relying upon
their statement until some cause fo r sus
picion attracts their attention. The board
is bound to maintain a supervision of the
bank’s affairs, to have a general knowl
edge o f the character o f the business and
the manner in which it is conducted, and
to know at least on what security its large
lines of credit are given.
“ Directors o f a national bank must exer
cise ordinary care- and prudence in the
administration of the affairs of a bank,
and this includes something more than
officiating as figureheads. They are en
titled under the law to commit the banking
business, as defined, to their duly author
ized officers; but this does not absolve them
from the duty o f reasonable supervision,
nor ought they to be permitted to be
shielded from liability because o f want of
knowledge o f wrong-doing, if that ignor
ance is the result o f gross inattention.
“ It is the duty o f directors of a national
bank to exercise reasonable control and
supervision over its affairs, and to use or
dinary care and diligence in ascertaining
the conditions o f its business, which is such
care as an ordinary prudent and diligent
man would exercise in view of all the cir
cumstances,
“ A board o f directors of a. banking cor
poration is elected primarily for the man
agement o f the corporate affairs; and
when the board delegates its authority to
the executive officers and through their
carelessness and mismanagement disaster
and loss to the stockholders and creditors

Northwestern Banker

April 1932

10
ensue, the individual members o f the board
cannot escape liability by showing that
they did not know o f the unfortunate
transactions and were ignorant o f the busi
ness o f the' corporation.”

Liability of Directors
HERE are two main divisions o f direc
tors’ liability— statutory and common
law. Under the statutory may be listed
such liabilities as loans in excess o f the
limit as fixed by law; injury or damage
to persons relying on false reports of con
dition o f a bank; dividends paid out of
other than net profits, after deducting
therefrom all losses and bad debts; pay
ment o f dividends or making o f loans when
reserves with the Federal Reserve Bank
are deficient ; unlawful, prohibited, or
ultra vires transactions and operations.

Under common law liability may be
listed the making of loans when the secur
ity taken is insufficient, certifying or per
mitting to be certified checks on insuffi
cient or overdrawn accounts; failure to
appoint a discount and loan committee, or
an examining committee o f the directors
when required by the by-laws an d /or the
volume o f the bank’s business, or a failure
to see that such committees function if

appointed; failure to audit or examine the
affairs and condition o f the bank periodi
cally, or to cause same to be audited or
examined; failure to use reasonable ef
forts to collect slow or doubtful assets.
The directors may also be liable fo r allow
ing overdrafts; fo r damages resulting
from a failure to charge off assets at the
direction o f the1examiner, or representing
such assets to be good after such notice;
fo r losses resulting from failure to require
proper bond from officers and employes
o f the bank.
The directors can not discharge the
dutie's incident to their office by holding
meetings at rare intervals and limiting the
business o f such meeting to such perfunc
tory matters as electing officers; and for
failure to attend meetings, even though
residing at a distance!, the directors may
be held liable, and they can not shield
themselves from liability by pleading ig
norance of transactions in which they did
not participate, when their ignorance is a
result o f their negligent attention.
The defense offered o f not attending
meetings is a common one. One example
o f this character is very vividly impressed
on my mind— that o f a distinguished
United States Senator and the director of
a failed national bank, now dead, whom I

admired and liked. When told by the
comptroller that he was to be sued on ac
count of director’s liability, he was as
tounded and took the position that since he
was attending to his duties in Washington
he could not attend meetings of the direc
tors, that he had had implicit confidence in
those who were running the bank and it
was not his fault. He was sincere in his
contention but by his own admissions made
out a case against himself. W e ventured
the opinion that unquestionably many peo
ple had deposited in the bank because he
was on the board and they had confidence1
in him, and he had violated that confidence
by paying no attention to the business.
He left the office with the remark that he
would not pay a cent. He never did, for
he died after the suit was filed, but his
estate paid.
It is the duty o f the comptroller’s office,
when a national bank has failed and there
is sufficient cause, to collect for the depos
itors on the directors’ liability. Often
failure of the bank means the financial
failure o f the directors and there is noth
ing to collect but it may be noted in the
last three years we have recovered for the
depositors o f failed banks from this source
over two million four hundred thousand
dollars.

Bankers Praise Reconstruction
Corporation Results
OTH the actual and moral effects o f
the newly created Reconstruction
Finance Corporation have been ex
cellent during the short time the corpora
tion has been actively functioning, accord
ing to representative bankers. The Iowa
committee, as well as the Minneapolis and
Omaha headquarters of the gigantic cor
poration, were hard at work last month,
actually approving loans and putting the
credit o f the government back o f needy
lines o f business.
One o f the most tangible results of the
work of the corporation, according to W.
H. Brenton, president of the Iowa-Des
Moines National Bank and Trust Com
pany, Des Moines, is the decrease in the
number of bank failures.
A campaign is now on to educate Iowa
bankers to use the corporation. All banks
which have not already done so are being
urged to contact the corporation.
Mr. Brenton said hanks should make use
o f loans to offset deposit declines ; to give
them strong reserves, and to allow them
to make legitimate loans.
“ W e are stressing to banks the neces
sity o f being able to make loans to good
customers on good security,” he said.

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Federal Reserve Bank of St. Louis

April 1932

“ We do not suggest loans be made for
long terms or fo r speculative purposes.
But we do urge that money be borrowed
fo r legitimate purposes, such as restock
ing farms, paying interest and paying
taxes.
“ There is plenty o f money available fo r
banks to borrow and to loan to their cus
tomers on good securities fo r short time
terms.”
The moral effect o f the Reconstruction
Finance Corporation is as important as
its actual transaction, in the opinion of
Grant McPherrin, president o f the Central
National Bank and Trust Company, Des
Moines, former treasurer o f the American
Bankers Association, who says:
“ The corporation was organized to dis
perse fear as much as fo r any other rea
son. He described how money is hoarded
in times o f depression through fear o f a
scarcity o f money.”
This holding o f money, he said, in turn
acts to make a scarcity. When something
functions to give confidence that money is
available, then money is not held, he said.
“ Our instructions,” he said, “ are to be
liberal. W e are to lend money on any
sound collateral.”

In a recent address on the work o f the
corporation, B. F. Kauffman, president of
the Bankers Trust Company, Des Moines,
said that permanent relief from our pres
ent financial trouble will come only when
people start spending instead o f hoarding.
Meanwhile, he said, the Reconstruction
Corporation is doing a great work.
Mr. Kauffman said:
“ It doesn’t make any difference what
you buy if you can afford it,” he declared.
“ Buy your girl a fur coat, buy a set of
dishes, buy anything, and throw them all
away if you want to, but buy.”
He said that more than $10,000,000 in
Reconstruction Finance Corporation funds
is ready to be loaned in Iowa. A pplica
tions for loans have been denied only two
banks, he declared.
The corporation was formed first to en
able banks to pay depositors, and second
and most important, to cause expansion
where expansion is advisable, Mr. Kauff
man said.
“ This is leading to inflation,” he said,
“ and that is one o f the very things we
are trying to create. Commodity prices
will rise only through inflation.”
(Turn to page 18, please)

W h y W o rk O ne-D ay-P er-W eek
W ON DER if it has ever occurred to you
that before the individual, the corpora
tion, industry, commerce, or any of the
other activities that make up the economic
structure o f this great country can earn
one dollar for those interested, they must
contribute approximately $33,000,000 per
day fo r each working day in the year for
the support of the state and local govern
ments, and approximately $13,000,000 per
day in addition fo r the support of the fed
eral government. Translated another way
and based upon the estimated total annual
income o f $70,000,000,000 fo r the United
States from all sources fo r 1930, approxi
mately twenty cents out o f each dollar, or
$14,000,000,000 o f this total annual in
come, is required solely to carry on the ma
chinery o f our multiple governing bodies ;
and further, the tax bill is approximately
$110 annually fo r every man, woman and
child in the United States proper.
Compare this tax bill o f $14,000,000,000
with certain m ajor items in our national
income. It exceeds by $2,000,000,000 the
gross farm value of all agricultural pro
duction— crops and live stock— in the
United States in 1929. It is only 7 per
cent less than the total salaries and wages
paid in 1929 to 10,178,000 officers and em
ployes o f over 210,000 manufacturing es
tablishments in the United States.

for the
Government?
By M ELVIN A . TR A Y LO R
President, First National Bank, Chicago

When we have completed our task, I be
lieve we shall discover that the question of
taxation, aside from the question of rev
enue fo r the payment o f existing debts, is
primarily one o f reducing future expendi
tures. This objective will not be accom
plished unless there is a drastic change in
the public attitude toward government responibility. In other words, we cannot
continue to demand o f our governmental
llllll(lllllllllllir a illlfillllllllllllllllllllll| I III III III IU I!illllllllllllllll!llillI I]illlllilllllllill!ll!lllllilllllllill!lin illlllli

Bureaucracy in government, pater
nalism,

increasing

What Is the Cause?

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Federal Reserve Bank of St. Louis

the

cation of government departments and
services— these
well as yours.

H A T brought about this condition,
and who is responsible? The condi
tion exists, I think, in a large measure, be
cause we, the people, permitted it, and we,
the people, are responsible; fo r after all,
government in this land o f ours, whatever
else we may say about it, is by and large
the shadow of public will, and the tax bur
den o f today is largely the result o f public
demand. W e have called upon our gov
ernments fo r this service and that, fo r this
luxury and the other— not counting the
cost and ignoring our ability to pay, until
new it is perfectly evident that during the
joyride o f the last decade our Pegasus o f
government has thrown a shoe and has
gone exceedingly lame. I do not know if
still “ Under the spreading chestnut tree
the village smithy stands.” Probably in
his place there is a gasoline filling station
or a garage, but there is no mistaking the
fact that we, the people, and our govern
ment horse need a. shoe— designated by
number it should be a big one, perhaps a
number twelve. However, a better desig
nation, I think, would be in quality, for
such a shoe should combine efficiency,
thrift and economy, three essentials which
should be practiced first in the home, then
progressively developed in our local and
state affairs and finally in the federal
treasury.

numbers

public pay roll, unjustifiable m ultipli
are

our

children

They are the outgrowth

of public demand as well as the objects
of legislative approval.

But, while the

public cannot shirk its responsibility
in this respect, I believe that those
who represent the management in the
business of government have not al
ways fearlessly used the facts which
they possess to educate the public on
the folly of those demands whose ulti
mate outcome has been an unbearable
tax burden.
lllll!III[!!IIIII!l!tlliltllIllIllltE I| III[llIlllllIIIIi11 tllljllllllllIIIII[!IIIlll!llllllllllII[I][lll]ll| IIlII| [llI[ll]i!!in illl]lllllll]

agencies that they perform fo r us the in
creasing number o f things we have been
requiring of them in the past— things we
should do ourselves, and at the same time
expect those responsible fo r government
to reduce the cost o f its administration.
The tendency of the states to request or
permit the assumption by the federal gov
ernment o f the exercise o f functions which
should be forever sacred to the states is
alarming in the extreme and has already
resulted in the building up of a bureau
cracy in Washington at once expensive and
inefficient, and calculated in the end to rob
the states o f the sovereignty which the
founders of our government intended they
should forever maintain. In a large way
this tendency cannot be laid at the door
o f the federal congress, but is directly

traceable to the abject surrender by state
administrations o f those rights and duties
which they should maintain, but which
they, and sadder still to relate, the! people,
shamelessly implore the federal adminis
tration to assume.
“

Federal” Aid

HE seductive fallacy of federal aid
seems to dull the senses and lull to sleep
the pi-ide in local self-government and the
jo y o f independence which characterized
our forefathers, and unless we are willing
to surrender to federal bureaucracy the
independence o f thought and action with
which we have governed ourselves for a
century and a half, we, the citizens, of the
states, must reverse our course and re
dedicate our efforts to the resurrection of
our self-respect and new confidence in our
ability and determination to manage our
own affairs.
In the meantime, however, almost every
governing body from the humblest school
district to the federal congress finds itself
faced with the dire necessity of increasing
revenue to meet treasury deficits and pre
serve its credit structure. My own state,
Illinois, and especially my adopted city,
can give you tragic examples of fiscal diffi
culties. In every instance, however, the
primary effort has been how to get more
revenue, not how to reduce expenses.
But let us not lose sight o f the funda
mentals in this problem o f taxation. The
immediate emergency is the fact that cer
tain units of our government are con
fronted with deficits in their operations.
Serious as these emergencies are in some
communities, the cold facts are that they
are only incidental to the fundamental
problem. The fundamental problem, whose
solution those charged with the adminis
tration o f government must not evade, is
the fact that government expenditures
have been increased to a point where the
burden has brought disaster to thousands
of taxpayers in every part of the country.
And what are the results? Today tax
levies equal the estimated equivalent o f one
day’s labor every week from every man,
woman and child in the United States.
On1y a short time ago, one out of every
twenty-two persons gainfully employed
was on the public pay roll ; today it is one
in every eleven ; and it is said that at the
present rate we shall in only a little over
twenty years have one person on the public
pay roll fo r every individual paying taxes.
One million acres of land in a middle
western state are taken over by the coun
ties o f that state fo r unpaid taxes. An
other state has an $18,000,000 deficit ; still
another state with $10,000,000 in signed
contracts fo r certain projects is unable to
raise a single dollar to carry on these pro-

Northwestern Banker

April 1932

12
jects. Delinquent taxes are at least twice
as great as in 1930, and the percentage is
as high as 60 per cent, 70 per cent and 80
per cent in certain communities. Schools
are closed, bond issues are in default, hun
dreds of communities are tax bankrupt.
Those are the basic facts which we cannot,
must not, dare not evade.
It is one thing to spend time in the coun
cil chambers and legislative halls o f this
country in discussing the advantages o f
certain types of new and supplementary
taxes. Do not misunderstand me. No
thoughtful student o f this subject can min
imize the great importance o f a thorough
re-examination o f our entire taxing sys
tem and machinery. But it is another
thing, and perhaps requires greater states
manship, to deal courageously with the
heart o f this whole problem, which is the
absolute necessity of reducing governmen
tal expenditures to a point where they
cease to be an unbearable burden on the
backs of American citizens. Let us not
lose sight of this fundamental fact— that
in the solution o f that part o f the problem
lies the very destiny of democratic gov
ernment itself.
Nor am I unmindful o f the difficulties
that confront honest and capable public
officials of our national and state legisla
tive bodies in accomplishing this objective
o f lowering government expenditures dras
tically. As I have said, I do not deny that
as citizens we have seemingly known no
limits in our demands upon government
for increased services and facilities— de

mauds, may I add, Avhose satisfaction it
has been almost impossible for men in pub
lic office to refuse and still retain their
offices— demands, whose fulfillment has ex
acted a tremendous toll in increased taxes.
I do not deny these facts; I regretfully
affirm them.

Fiscal difficulties are not, however, sim
ply the result o f the economic depression.
As early as 1927, similar problems were
receiving intensive study in Massachusetts,
one o f the oldest states of the union. In
that year a special tax commission fo r the
state submitted a short statement o f prin
ciples o f taxation which I have found very
Government Waste
interesting. The report said:
UREAU CRACY in government, pater
“ A person resident within the common
nalism, increasing numbers on the pub wealth should not escape taxation because
lic pay roll, unjustifiable multiplication of
all his property is located outside of the
government departments and services—■ commonwealth, nor should property within
these are our children as well as yours.
the commonwealth escape taxation because
They are the outgrowth o f public demand it is owned by a non-resident. A tax sys
as well as the objects of legislative ap tem, therefore, should have two principal
proval. But, while the public cannot shirk features: Taxes should be laid in part on
its responsibility in this respect, I believe persons because o f the benefits which ac
that those who represent the management crue to them from government irrespective
in the business o f government have not al of their ownership o f property, and in
ways fearlessly used the facts which they part on property, or more accurately upon
possess to educate the public on the? folly
the owners or users o f property, because
o f those demands whose ultimate outcome o f the benefits which accrue from govern
has been an unbearable tax burden.
ment to property as such or to the owners
The American public cannot deny its or users thereof by reason o f such owner
responsibility for the present tragic tax ship or use. Accordingly the resident of
situation in many communities. But that
the commonwealth who owns no property
does not excuse those who have in their located within the commonwealth should
hands the management o f government for
pay the tax laid on persons, but not the
lacking that degree o f leadership which tax laid on property; the non-resident who
would courageously have given the citizens owns property located within the common
o f this country the plain facts about the wealth should pay the tax laid on property,
course we were pursuing. That is the unbut not the tax on persons; and the resi
escapable duty of government, and when
dent o f the commonwealth who owns prop
the management o f government fails to
erty within the commonwealth should pay
function in that respect, it is unworthy of
both taxes.”
its leadership.
(Turn to page 18, please)

The W o rld ’s Largest Banks
HE largest banks in the English
speaking world from the standpoint of
deposit liabilities are The Midland
Bank, Ltd., London, with $1,753,144,449;
Barclays Bank, Ltd., London, with $1,633,027,773; Lloyds Bank, Ltd., London,
with $1,624,123,591; Chase National Bank,
New York, $1,459,114,880, and National
City Bank, New York, with $1,418,702,860.
This is the information contained in the
booklet “ Thei Deposit Liabilities of One
Hundred and F ifty o f the largest Ameri
can, British, Colonial and Dominion
Banks,” which fo r the sixth consecutive
year has been compiled by California Bank
o f Los Angeles, California, and which is
distributed internationally. The deposits
o f the: American banks are o f December
31, 1931, and o f the other banks from the
latest statements available.
The departure from the gold standard
has affected many of the British curren
cies, but in order to facilitate comparison
with previous years, California banks
deemed it advisable to convert at par of
exchange.

Northwestern Banker

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Federal Reserve Bank of St. Louis

April 1932

Deposits o f the 91 American banks are
$20,139,535,677 and o f the 59 British
banks $18,449,806,299. Nineteen Ameri
can banks have head offices in New York
with deposits totaling $9,080,227,469, while
22 British banks have head offices in Lon
don with deposits amounting to $10,960,942,655.
Listed in the brochure this year are the
following nine banks which did not appear
in the 1931 issue : Northern Trust Com
pany, Chicago, No. 110; Belfast Banking
Company, Belfast, No. 122; Mercantile
Bank o f India, London, No. 136 ; United
States Trust Company, New York, No.
142 ; Federal Reserve Bank, Atlanta, No.
144 ; Lincoln Alliance Bank, Rochester,
No. 145; Central Trust Company, Cincin
nati, No. 148 ; Union Trust Company of
Maryland, Baltimore, No. 149 ; Central
Bank o f India, Ltd., Bombay, No. 150.
Banks which made gains o f 20 places or
more were First Union Trust & Savings
Bank, Chicago ; Central Republic Bank &
Trust Company, Chicago; Guardian Na
tional Bank of Commerce, Detroit ; Ham-

bros Bank, Ltd., London; Girard Trust
Company, Philadelphia; Federal Reserve
Bank, St. Louis; First National Bank,
Pittsburgh.
In number of banks San Francisco with
nine banks in the list ranks second to New
York, followed by Chicago and Philadel
phia, each with seven; Cleveland with five;
Boston, Los Angeles, Pittsburgh and St.
Louis with four each and Baltimore and
Buffalo with three! each.
The British banks are domiciled or con
duct their principal business in all parts o f
the far-flung British E m pire; England,
nineteen; Scotland, eight; Canada, eight;
Australia, eight; Ireland, six; the Orient,
six ; South America, tw o ; South Africa,
one; New Zealand, one.
The brochure does not include deposits
o f purely savings institutions nor have de
posits o f subsidiaries or controlled com
panies been included. With some o f the
larger banks, the “ Big Five1” o f London,
fo r example, deposits o f affiliated institu
tions are o f substantial proportions.

S peaking at the recent B ette r Banking C o n fe re n c e o f the
W is c o n s in Bankers A s s o c ia tio n , H e n ry M u lb e rg e r, p re s i
d e n t o f the

Bank o f W a te r to w n , W is c o n s in ,

cites

the

c o -o p e ra tio n o f the governing b o d y o f his in s titu tio n i n - -

"H O W

♦

UR board o f directors consists o f
seven members, the president and
the cashier accounting fo r two of
them. The following- standing commit
tees are elected by the board at its an
nual meeting held in January:
Executive committee— 3 members
Discount committee— 3 members
Examination committee— 3 members

To the executive committee are referred
all matters not o f a routine nature and
upon its decision depends whether or not
the question submitted shall be referred
to the board for final consideration.

The Discount Committee
HE functions o f the discount commit
tee are just what its name implies. To
it are submitted applications fo r loans
above a stipulated amount and also the
purchase o f bonds, that are first approved
by the president, cashier and manager of
the bond department. W hile these last
named officers have authority to make in
dividual loans up to $5,000 and to pur
chase single issues o f bonds up to a sim
ilar amount, it is seldom this authority
is exercised without first submitting the
loan application or the bond purchase to
the discount committee fo r approval. It
is in a sense, an “ Unwritten L aw ” that
we confine our bond purchases to a maxi
mum o f $5,000 in any one issue. This,
o f course, does not apply to United States
government investments, and on very rare
occasions has this amount been exceeded
in the purchase o f W isconsin municipal
or county obligations when issued by
cities or counties in the southern half or
two-thirds o f the state.
Another so-called “ Unwirtten Law” of

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Federal Reserve Bank of St. Louis

D IR E C T O R S
D IR E C T "

the board of directors is the avoidance
o f establishing an open line o f credit for
a customer. We keep clear o f this en
tanglement by informing the customer
that we will consider his application on
the basis as is when the loan is required.
The applicant’s financial condition may
have undergone considerable distress be
twixt the time an open line was allocated
and the application was presented.
Our directors aim to refrain from sanc
tioning excessive loans to firms or indi
viduals, keeping the individual loans way
below the amount authorized by the stat
utes. As a matter o f fa ct the number o f
loans in our files o f $10,000 or over do
not exceed the number o f fingers on on e’ s
hand.
Due to unfortunate policy o f our state
administration denying its citizens the
protection o f a state constabulary, W is
consin is converted from the playground
o f the middle west to the stamping
grounds o f bandits. This compelled us
to carry our bonds in the vaults o f our
city correspondents. In connection with
this our directors promulgated a rule
that access to these boxes containing our
bonds is permitted only when two direc
tors are accompanied by an active officer.
A further requirement o f the board
calls fo r a satisfactory bonding o f the
officers and employes.

Three Examinations
HE examining committee makes one
semi-annual and two quarterly exam
inations. The law requires two semi-an
nual examinations, but accepts in lieu
o f one, an examination by a recognized
firm o f certified public accountants, so
that for some years past, one o f our semi

annual examinations was made by Peat,
Marwick, Mitchell & Company.
Avoiding recital o f the details o f an
examination by our committee, I cannot
refrain from mentioning two important
features— all notes are handled and scru
tinized by the members o f the committee,
and in case o f collateral notes the col
lateral is checked, as to whether it agrees
with the specification on the note,
whether properly recorded or assigned,
whether insurance is in proper amount,
etc.

Monthly Meetings
EGULAR monthly meetings are held
at which anything o f special import
or interest is first submitted; the remain
der o f the sessions devoted to the read
ing o f all expense items o f $5.00 or over,
the bond purchases since the previous
meeting, and the reading o f the liability
ledger. A t one session the loans up to
and including the letter “ M ” are read
and at the next session the remaining
loans, questions are answered and state
ments submitted.
The expenses, the bond purchases and
the loans are then submitted for ap
proval.
In conclusion I cannot refrain from
commenting on the unusually fortunate
situation in which our officers are as re
gards the functioning o f our directors.
W ith five members, o f our board o f
seven, either tenants o f ours in our bank
building or active officers, and one o f the
remaining directors an active local manu
facturer who practically calls at our office
daily, the accessibility to them is, as I
previously stated, unusual.

Northwestern Banker

April 1932

National Bank History in Nebraska
IN TRACIN G the history of recent naI tional bank failures in Nebraska, and
comparing their causes to the causes o f
national bank failures back in the period
o f 1890, several points o f difference stand
out prominently, according to an elaborate
survey o f “ National Bank Failures in Ne
braska” recently made by the committee
on business research o f the College of
Business Administration, University o f
Nebraska.
Commenting on these points of differ
ence the survey says:
“ In comparing these two main periods
o f national bank failures we find several
points of difference. One o f these is that
economic factors have been more promi
nent in the present period than in the 1890
period. There are several differences of a
fundamental nature between the two pe
riods that Avill explain this. Agricultural
depression in the first period was due to
crop failures while in the second period
it was the result o f economic conditions
accompanying and following a war. Farm
and commodity prices and land values
preceding the first period had not been in
flated, although there had been some spec
ulation. The second period o f failures
came with deflation following extreme in
flation, all prices, particularly those o f
farm properties and farm commodities,
having been much above the pre-war level.
This inflation was due to the exceedingly
heavy demand fo r food products by the
European nations during the war. This
demand did not fall off immediately after
the close of the war, and American farm
ers continued to produce fo r the European
market.
When the demand decreased,
agricultural prices very naturally fell rap
idly because o f the oversupply. Partly
because the production o f farm commod
ities has never become adjusted to this
small demand, the 1920 period of depres
sion has been much longer than the 1890
one. Hard times in the nineties lasted
about six years with one exceedingly good
year during the period, while the second
period has already extended through its
tenth year, none of which have been par
ticularly profitable to the farmer. A n
other reason for this continued farm de
pression has been the fact that the cost o f
producing farm commodities has not de
creased as rapidly as has the income from
the sale o f the final product. Even by the
close o f 1929 the purchasing power of
farm incomes was not yet on a par with
that of incomes from other sources. This
difference in the length o f the two periods
o f agricultural depression has resulted in
the 1920 period o f bank failures being
much longer than the 1890 period.
Another significant difference is the
fact that loans to relatives, excessive

Northwestern Banker

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Federal Reserve Bank of St. Louis

April 1932

loans, and the promotion of outside enter
prises have been less prominent in the re
cent failures than in those o f the 1890’s.
It is very likely that the more able and
rigid examining service has in part done
away with such conduct on the part of
bank officials. Frozen loans and loans on
farm lands, however, have figured more
prominently of late than was formerly the
case. In regard to loans on farm lands,
it must be borne in mind that before the
establishment o f the Federal Reserve Sys
tem, national banks were unable to make
such loans. When this power was given
them it o f course opened up a new possi
bility fo r loss as well as a new possibility
fo r profit. The proportion o f failures in
which fraud was involved has been practi
cally the same in both periods— between
20 and 25 per cent. This is significant
in view o f the many additional safeguards
and precautions that have been devised
since the 1890 period failures. Lack o f
attention on the part o f bank directors has
been less apparent than was formerly the

“ There is probably no way by which
bank failures can be entirely done
away with unless som e means were to
be devised to make sure that all bank
managements were sound.
Unfortu
nately bankers are human beings, actu
ated by the same m otives that inspire
humanity generally and subject to the
same temptations and ambitions.”

case, but it still operates as a cause of
bank failures.
“ From all this evidence, we believe that
it is in our banking system and in the two
main phases o f the business cycle— pros
perity and depression— that bank failures
have their origin. Our free banking sys
tem coupled with very liberal state charter
laws made fo r an overbanked condition.
In 1890 there was one bank in Nebraska
fo r every 1,631 persons; in 1900, one tor
every 2,333 persons; in 1910, one fo r every
1,322 persons; and in 1920, one fo r every
1,153 persons. While state laws do not
apply to national banks, the federal char
tered institutions cannot help but be a f
fected when they exist in the midst o f and
compete with state banks. During the
boom period it was absolutely impossible
to refuse state banking charters. At that
time the people of this state repudiated at
referendum a law giving the state banking
department the authority to refuse char
ters fo r good cause, and requiring the man
aging officers o f banks to secure a license
from the banking department certifying
the banker’s abi'itv and character. ‘ Sub
sequently, hundreds o f banks were char

tered for which there was no economic
use and men permited to operate them
who, fo r want o f ability and honesty,
have disgraced the business of banking.’
The comptroller also blames overbanking
for some o f the trouble. While unfavor
able agricultural conditions have contrib
uted in a large measure to the closing o f
a number o f these banks, still it must be
borne in mind that the greater number of
failures have occurred where the territories
have had too many banks per capita and
where too many bank charters were issued
during the boom period o f the war and
immediately after peace was declared.
Not only was there insufficient business
fo r the support o f these banks but their
organization resulted in hazardous and un
warranted competition. When such a con
dition exists, the competition is such that
banks lend large amounts on Avhat turns
out to be inflated values and when dis
tress comes bankers blame the ‘hard times’
rather than themselves. A t first they may
suppose the trouble to be entirely tempo
rary and some, fearing losses in their pri
vate enterprises, or in their banks, may
take remedial measures that Avould not
bear the light o f day, believing that they
will soon be able to right the situation.
“ There are many institutions which re
main perfectly sound during a time Avhen
banks all around are failing. I f they are
able to do so when they are affected by the
same economic conditions that confront the
failing banks, it must be because their
managements are superior. In support of
this position we have the statements o f the
comptroller o f the currency and Mr. A. C.
Schallenberger, chief examiner o f the Ne
braska Banking Investigation.
“ Concerning the failures o f the first
period the comptroller said :
The inevitable conclusion to be drawn
from a study of the causes resulting in
these failures is that in the great majority
of instances those directly responsible for
the management of the banks involved,
both directors and executive officers, have
been negligent of their duties and wanting
in insisting upon the employment of meth
ods of ordinary safety and prudence.

“ In 1927 the comptroller Avrote:
I believe that failures of many banks
could have and can be averted if the direc
tors would give closer attention to the a f
fairs of the bank.

“ Mr. Shallenberger says:
The World W ar inflated prices, both of
land and other property, to such an extent
that a business boom developed which
swept many bankers, business men and
even farmers into a maelstrom of specula
tion.
Standards of values and normal
bases of credit were completely lost sight
of and sound business principles were for
gotten. Banks were increased in numbers
until competition brought disaster because
there was not sufficient safe and profitable

(Turn to page 16, please)

EUGENE C. E PP L E Y , president o f the
Eppley Hotels Company, has taken over
the operation o f the Elms Hotel at Excel
sior Springs, Missouri.
J. F LE T C H E R FA R R E L L, vice presi
dent and treasurer o f the Sinclair Oil
Company, and chairman o f the board o f
directors o f the Elms Hotel Company, will
still continue his interest in the corpora
tion, and in a recent statement said :
“ It is a pleasure to announce that Eu
gene C. Eppley, president o f the Eppley
Hotels Company, has become associated
with us in the operation o f the Elms Hotel
properties. The Eppley Hotels Company
is recognized as one o f the most progres
sive, efficient and successful operating or
ganizations in the country. It has oper
ated upon a large scale and thus developed
sound methods and sales promotion which
are impossible o f achievement by anyone
operating a single hotel. Therefore, we
anticipate that the patronage and popular
ity o f the Elms as America’s outstanding
health and recreational resort will be
greatly enhanced under the new manage
ment.”
When C LIFFORD E D W A R D S of
Clinton, and his three associates from
Louisville, Kentucky, robbed the City Na
tional Bank o f Clinton last month of
$100,000, and then were captured shortly
afterwards, Edwards confessed that one
o f the reasons he robbed the bank was be
cause his former father-in-law, CLYDE
W IL L E T S, was janitor and he was mad at
him because o f family troubles and was
therefore taking revenge.
This will probably result in G. L. CUR
TIS, president; W . A. ANDERSON, vice

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Federal Reserve Bank of St. Louis

J. C. THOMSON, vice president and
general manager of the Northwest Bancorporation, has recently published a com
plete report of the corporation for the year
1931.
In this report he points out that the net
book value of the stock is $29.81, and in
discussing the operating earnings says:
“ Operating earnings applicable to stock
of Northwest Bancorp oration, after elimi
nating the proportion applicable to minor
ity interests in affiliated institutions, were
$5,741,625.70, or $3.43 per share, as com
pared with $3.87 per share in 1930. Divi
dends o f $1.80 per share were paid during
the year, amounting to $3,004,936.20.
Considered from another viewpoint, these
earnings were equal to 6.86 per cent on
the par value o f the capital stock of
Northwest Bancorporation outstanding, as
compared with 7.74 per cent fo r 1930.”
A. M. C H A F F E Y , chairman o f the
board of the California Bank at Los
Angeles, has sent out a booklet showing
the deposit liabilities of 150 of the largest
American, British, Colonial and Dominion
banks.
The Midland Bank, Ltd., o f London
heads the list with deposits o f $1,753,144,449.
The deposit liabilities o f the first 20
American-owned institutions, leaving out
deposits o f the Federal Reserve Banks, are
as follow s:
Chase N ational Bank, New Y o r k . . .$ 1 ,4 5 9 ,1 1 4 ,8 8 6
N ational City Bank, N ew Y o r k . . . . 1,418,702,860
Guaranty T rust Co., N ew Y o r k . . . . 1,070,021,916
Continental Illin ois B an k & Trust
Co., C h i c a g o ..........................
773,437,525
B ank of Am erica N ational Trust &
Sayings Assn., San F ra n cisco. . . 749,796,772
Central H anover B an k & Trust Co.,
New Y o r k ...............................
608,191,909
Bankers T rust Co., N ew Y o r k . . . . 558,086,407
First Peoples W ayne County Bank,
D etroit ................................................
483,910,638
Security-First N ational Bank, Los
A n g e le s ...................................
4 79 ,01 2 ,8 6 4
First National Bank, B o sto n
4 76,989,412
476,15 0 ,2 2 4
F irst National Bank, C h ica go.
Irv in g Trust Co., N ew Y o r k
4 42,091,091
First N ational Bank, New Y o rk . . . . 375,156,951
B ank of M anhattan Trust Co., New
Y o r k ........................................
375,131,667
Chemical B ank & Trust Co., New
Y o r k ........................................
298,878,599
M anufacturers T rust Co., New Y ork
269,540,907
N ew Y ork Trust Co., New Y o r k . . . 251,445,083
Philadelphia N ational Bank, P hila
delphia .................................................
250,368,432
Cleveland Trust Co., Cleveland. . . . 245,627,505
Corn Exchange B ank & Trust Co.,
N ew Y ork ..........................................
239,418,484
.

S. E. COQUILLETTE, vice president
o f the Merchants National Bank o f Cedar
Rapids, together with Mrs. Coquillette,
were in Florida last month where they
played golf, drank orange juice, and were
guests on a private yacht which took them
out beyond the twelve-mile limit (so I
was told).

president, and the rest of the officers of
the City National Bank, checking very
carefully into the- family, social and mari
tal relationships o f their janitors and their
son-in-laws hereafter.
In the meantime the four self-confessed
robbers have a “ lifetime” to think it over
behind the iron bars.

A N D R E W J. HUGLIN, former vice
president o f the Iowa-Des Moines National
Bank, and who, on April 1st assumed the
office o f vice president o f the Diamond
National Bank o f Pittsburgh, has recov
ered fully from his recent serious sickness
in Toledo, Ohio.
Mr. and Mrs. Iluglin are now living at
the Royal York Apartments at 3955 Bige
low boulevard, Pittsburgh.

D. B. BRANN, formerly associated ivith
the Central National Bank o f Des Moines,
and more recently with the Equitable Life
Assurance Society of the United States,
has accepted a position as assistant cash
ier of the Jasper County Savings Bank
of Newton, Iowa.
Mr. Brann’s boyhood home was in
Knoxville, Iowa, and after finishing his
schooling, he entered the banking business
at Centerville. For about eight years he
was connected with the Federal Reserve
Bank of Chicago and numbers among his
friends hundreds o f bankers throughout
the middle west.
O. A. AYE ST, for the past four years
assistant vice president of the National
Shawmut Bank o f Boston, has resigned
from that institution and is now connected
with the Reconstruction Finance Corpora
tion in AVashington.
Bert AVest, as he was known to his
friends and associates, was field repre
sentative fo r the Shawmut Bank in the
mid-west where he has a host of friends
and business associates.
SUBSTAN TIAL PROOF that there is
plenty o f money for sound investment in
attractive securities was amply proven
when the $900,000,000 o f United States
treasury certificates o f indebtedness dated
March 15, 1932, were subscribed for to the
extent o f more than $3,400,000,000.
AVliat finer evidence could you ask for
that we are rapidly turning the well known
business corner, than to have an over-sub
scription like this of $2,300,000,000.
H ERBERT R. BUETTNER, president
o f the Buettner Furniture and Carpet
Company of Burlington, Iowa, is a direc
tor o f the Farmers and Merchants Savings
Bank o f Burlington, and as such is receiv
ing a copy of the N o r t h w e s t e r n B a n k e r
and in a recent letter from him he says:
“ I am just in receipt o f your letter ad
vising that the N o r t h w e s t e r n B a n k e r
is being sent to me for one year with the
compliments o f the Farmers and Mer
chants Bank o f this city.
“ I am duly grateful for this considera
tion and wish to take this opportunity of
acknowledging that the N o r t h w e s t e r n
B a n k e r is exceedingly helpful and in my
opinion should be read by every bank di
rector. They will find food for thought in
many articles.”
Thank you very much, Mr. Buettner,
and may I add, that in this period of
changing conditions, that the wise director
is the one who keeps himself constantly in
formed on banking subjects of the day.
B L A IR P H IL L IPS , president o f AYhite,
Phillips & Company, investment bankers
o f Davenport, in a recent circular urges
the purchase of high grade municipal
bond's at the present very attractive prices
“ before the new banking legislation, which

Northwestern Banker

April 1932

16
promises to make them eligible fo r redis
count, forces prices higher.”
This in my opinion is certainly good
advice and a sound investment policy to
follow.
GEORGE P. E D W A R D S, well known
as a financial writer and publisher, is edi
tor and publisher o f Pacific Banker, which
is to be a comprehensive financial journal
and will cover the full field of finance, in
cluding banking and investments. He was
the founder, editor and publisher o f Coast
Banker and Coast Investor. The head
quarters o f the new publication are in the
Russ Building, San Francisco.
IP THE UNITED STATES SENATE,
which has appropriated $50,000 fo r inves
tigating the stock market, can bring back
the losses which customers have suffered
since 1929, they will be lucky. But, of
course, no investigation will accomplish
that.
The resolution carrying the appropria
tion provides for an investigation o f the
“ practices with respect to the buying and
selling and the borrowing and lending of
listed securities upon the various stock ex
changes, the values o f such securities, and
the effect o f such practices upon interstate
and foreign commerce, upon the operation
o f the national banking system and the
federal reserve system, and upon the mar
ket for securities o f the United States gov
ernment, and the desirability o f the exer
cise of the taxing power of the United
States with respect to any such securities.”
O f course, the main object o f this will
be the comprehensive investigation o f the
short selling as practiced by members of
the stock exchange.
“ NO SECU RITIES FOR SA L E ” has
become one of the outstanding slogans of
the CENTRAL H A N O VE R B A N K AND

TRUST COM PANY OF N E W Y O R K
and in one o f their recent advertisements
they amplified this position by saying:
“ When called upon to invest fo r clients,
we are free to choose securities from the
whole investment field. Only with this
freedom, we believe, can we choose the
securities that best suit the needs o f each
individual client.
“ That is the reason Central Hanover
has ‘no securities fo r sale.’ ”
R A L P H W . M OORH EAD, editor o f
the N o r t h w e s t e r n B a n k e r and affiliated
DePuy Publications, announced the arri
val o f his new daughter on March 5th in
the following clever manner :
M EM O RAND U M
(Department of domestic affairs,
Mr. and Mrs. R. W . Moorhead,
3704 Crocker St., Des Moines, Iowa)
RE: Increase in population, U. S.
When interviewed early today regarding
his new eight-pound sister, Janet, who ar
rived on the Stork Special on March 5th,
Jerry Moorhead, age two years and half a
day, gave out this statement to the report
ers:
‘ ‘ A W R IG H T ’ ’ . . .

The other night a friend o f mine was
showing me a book o f 700 pages writ
ten by LIENRY C L E W S , entitled
“ T W E N TY -E IG H T Y E A R S IN W A L L
STRE ET,” and published in 1888.
Among other interesting chapter sub
headings which I noticed were these:
“ Sons o f independent gentlemen make
very bad clerks— they become unpopular
with the other boys and must eventually
go.”
“ Night dancing and late suppers don’t
contribute to business success.”
“ A college course is not in general calcrdated to make a good business man.”
“ Practical business is the best college.”
“ Manufacturing bonds with the Erie

Paper Mill and Printing Press.”
“ Risks and panics inseparable from pio
neering enterprise.”
“ Bad reputation o f our railroad securi
ties caused by over-capitalization and stock
watering.”
“ Leland Stanford— first a lawyer in A l
bany and afterward a speculator on the
Pacific coast.”
“ How Wall Street bankers’ nerves are
tried.”
“ We are entering on an area o f seeming
impossibilities— yet the inconceivable will
be realized.’
In addition to these very interesting
cross sections o f the business problems o f
44 years ago— some o f which sound
strangely familiar today— I was also im
pressed by Mr. Clews’ “ Look into the fu
ture” and his comparison o f the growth of
New York City when he said “ All along
lower Broadway, the great business artery
o f the country four-story and five-story
buildings have been torn down and ninestory buildings put up in their place.”
1 wonder what he would think today if
he could return and see such buildings as
the Empire State and Chrysler piercing
the sky 100 stories above the ground.
H A R R Y L. LANE, who fo r some time
has been associated with Richardson &
Company o f Davenport, has been made a
member o f the firm which is now known as
Richardson, Lane & Company. Mr. Lane
is well and popularly known throughout
Iowa because o f his previous connections
in the investment business with such firms
as Geo. M. Bechtel & Company and Halsey
Stuart & Company.
The investment business o f this company
was started under the name of J. B. Rich
ardson Investments in 1912. In 1926, the
name was changed to Richardson & Com
pany and on March 8, 1932, to Richardson,
Lane & Company.

National Bank History
in Nebraska
(Continued from page 14)
business for all who were fighting for it.
Land speculation, a most dangerous eco
nomic disease for bankers to contract, be
came epidemic either through loans on
lands or by indirect purchases by bank
officers. The fall in value of farm property
has swept away supposed securities and
caused a serious destruction of credit. Fed
eral statistics show that agricultural values
shrunk eight billions in one year. Only
the strong, careful, and experienced banker
could weather this storm.

Northwestern Banker

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Federal Reserve Bank of St. Louis

April 1932

“ There is probably no way by which
bank failures can be entirely done away
with unless some means were to be de
vised to make sure that all bank manage
ments were sound. Unfortunately, bank
ers are human beings, actuated by the same
motives that inspire humanity generally,
and subject to the same temptations and
ambitions. It is not during hard times
that we need to be particularly on the

watch fo r the consequences o f these mo
tives and ambitions, but during periods of
prosperity, when everything seems to be
running smoothly and everyone is opti
mistic. It is in such times as these that
frozen assets and depreciated securities
have their origin and it is when danger
begins to loom on the horizon that fraud
ulent methods appeal most to the harried
and distraught banker.”

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Federal Reserve Bank of St. Louis

18
Bankers Praise Reconstruction
Corporation Results
(Continued from page 10)
He said that the corporation will loan
as high as 80 per cent of the collateral.
He described the type o f paper on which
the corporation will loan in the words of
a New York banker— “ unquestionably
good and damnably slow.”
The primary object of the corporation,
he said, is to establish a feeling o f confi
dence. He described what he said was
the attitude of most bankers, previous to
the erection o f the corporation and told
what attitude is being advised.
“ It used to be, and still is in many
places, that when you’d go into a bank,
the banker would look like he was scared
to death you were going to ask him for a
loan.

SA L M O N P. C H A S E , S ecreta ry o f the Treasury under L IN C O L N

THE

C hase N a t io n a l B a n k
of the City of New Yor\

Capital $148,000,000
Deposits

. . . .

Surplus $124,000,000
$1,459,000,000

(December 31, 1931)

A lbert H .

iggin

Chairman Governing Board

C harles

John M cH ugh

S. M cCa in

inthrop

Chairman
Board of Directors

Chairman
Executive Committee

A ldrich

President

“ Talk It”
T THE banker would appear to be full
o f confidence with all the money in the
world in his vaults, the situation would
change.
“ Have confidence and talk confidence.
Not long ago I asked a woman proprietor
o f a Davenport filling station if she didn’t
think conditions were improving.”
“ She said that she thought they were.
I f I ’d ask her if she didn’t think business
rotten she’d have said, ‘Yes, terribly rot
ten.’
“ Banks must be the instigators of con
fidence. How can anyone else have con
fidence if the bank doesn’t? ”

Why

Work
One-Day-Per-Week
For the Government?
(Continued from page 12)

The Great Difficulty
H IS statement seems to me to embrace
in a general way these principles that
should guide us in the preparation of our
tax programs. The great difficulty, how
ever, is that most o f our taxing systems
have, more or less, like Topsy, “ just grown
up,” and represent something o f the “ cut
and try” rale which prevailed when I was
wrestling with problems in Ray’s old Third
Book Arithmetic.
W e have tried one
scheme here and another there, only to
abandon each and attempt what seemed a
more feasible plan, with the result that by
addition and subtraction there exists in
most o f our important political subdivi
sions, a hodge-podge that at best is almost
too complicated fo r operation, and that in
times such as these, partially or completely
breaks down.
In many o f our states also the limita
tions o f revenue provisions o f ancient con
stitutions restrain the application of more
modern and scientific systems. In Illinois,
fo r instance, the constitution of 1870 pro
vides in substance fo r the uniform assess
ment of all classes o f property at its fair

The Chase National Bank invites the
accounts of banks, bankers, corporations,
firms and individuals.
General Banking

Trust Department

Foreign Department

Affiliations
C hase Securities C orporation
C hase H arris F orbes Corporation
A merican E xpress Company
T he C hase Safe D eposit Company
T h e C h a se B a n k
T he E quitable T rust Company
T he C hase N ational E xecutors

Northwestern Banker

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Federal Reserve Bank of St. Louis

April 1932

and

N ew Y ork

T rustees C orporation, L td ., ( London )

1932

1891

Growth Based on Conservatism
and Helpful, Personal Service
From Iowa’s youngest and smallest investment house in April, 1891,
to the oldest and largest bond house in the State in April, 1932—
this is the record of Geo. M. Bechtel & Company, a record of steady
growth based on conservatism and helpful personal service.
Throughout ibis whole period, we have specialized in high-grade
Iowa securities. Banks in every county in Iowa and in many counties
of neighboring states have bought bonds from us, and many of these
banks have been our customers during the entire forty-one years.
We shall be glad to answer any inquiries regarding Iowa municipal
bonds. Please address our Davenport office.

Geo. M. Bechtel & Co., Inc.
Established 1891

Bechtel Building, Davenport, Iowa.
First Iowa Trust Bldg.
Burlington

I O W A ’ S

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Federal Reserve Bank of St. Louis

O L D E S T

Equitable Building
Des Moines

A N D

L A R G E S T

Grand Opera House Bldg.
Dubuque

B O N D

H O U S E

Northwestern Banker

April 1932

‘

‘Free Wheeling
Free Wheeling is only “ free” for a short time— it must have the
driving force and momentum of a powerful engine behind it.
With banks and investment houses, financial advertising is that
engine— and

the

institutions

that

use

continuously

and

consistently get the most “ mileage” and the most “ free wheeling“
— but they don't let the engine “ d ie !"
Charles H. McMahon, president of the Financial Advertisers
Association, and vice president of the First National Bank of
Detroit, puts it this way—
“ Banks,
which

trust
have

companies,
been

free

and

investment

wheeling

through

houses
1931,

propelled by the force of advertising done previously,
have discovered THERE IS NO SUBSTITUTE FOR
CONTINUOUS, PERSISTENT

ADVERTISING.

“ Many of them are logically increasing their adver
tising

appropriations

for

1932.

INTELLIGENT,

WELL-DIRECTED FIN AN CIAL AD VERTISIN G IS
TH E

NEED

THE

H OUR.

Governmental

committees, commissions and other outside agencies
can help but they cannot take the place of individual
advertising
TIME

FOR

SHIFT INTO

each

BAN K S
TH E

financial
TO

institution.

LO O K

A H E AD

ADVERTISING

Place your advertising in the N O R TH W E STE R N

AND

G E AR .”

B A N K E R which made an

increase of 25 per cent in circulation during 1 931, and enjoy the momentum and
driving force of this powerful, popular and personal publication.

orthw estern

B anker

Clifford De Puy, Publisher
DES M O IN ES

Northwestern Banker

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Federal Reserve Bank of St. Louis

April 1932

21
market value. Needless to say, there prob
ably has not been a strictly constitution
ally legal assessment of property in that
state since the constitution was adopted
and yet repeated attempts to amend the
revenue provisions of the constitution have
met with defeat, almost solely because of
the selfish attitude of various groups who
profess a fear that we cannot trust our
legislature with the less restricted privilege
o f tax legislation, but which in reality per
haps is a fear on the part o f those who
have not been contributing their fair share
toward the support o f the government,
that under a more scientific system they
will be called upon to do their share. I
would not imply that other states have
groups which are opposed to tax reform,
but 1 believe that until voters everywhere
are! willing to have an equitable and fairly
representative system of taxation the chaos
and confusion which now characterize
most o f our taxing units will continue.
The tax dodger wTho declines to assume
his fair proportion of the cost o f govern
ment, and the tax striker who refuses to
pay taxes levied and assessed against him,
constitute the greatest menace to American
governments today; and the defaults that
have! already occurred in municipal obli
gations are merely the lightning before the
storm, threatening the general collapse of
municipal credit, which rests solely upon
the confidence o f the investor in the will
ingness o f the citizen to pay, and the abil
ity o f the government to enforce the col
lection of revenue sufficient for its needs.
When, however, we reach the question of
suggestions and methods o f taxation, we
encounter human nature in its most vul
nerable spot. W e all believe that govern
ments should be supported, that taxes
should be paid— but by the other fellow.
Thus, personal property hides, real estate
shrinks in value, incomes disappear and
revenue declines. W e are not dishonest—
we just do not like to pay taxes. When
ever attempts are made to reach us, rea
sons multiply as to the injustice of the
attempt, yet we applaud appropriations
for more and better roads, large public
buildings, better educational facilities and
the dozen and one things we desire for our
comfort and personal pleasure. Such in
consistency will not balance budgets, will
not prevent defaults, will not' maintain
credit— nay, cannot avoid disaster. Again
I say we must contribute our fair share
toward the cost o f government and must
demand less o f government, to the end that
we may justly require better government
for less money.

Discusses “ Business Standards’ '
“ Business Standards” was the subject
o f a very interesting and practical talk
delivered by Edwin Van Horne, president
o f the Nebraska Bankers Association, be
fore the members o f the Kiwanis Club at
Fairbury, Nebraska, recently.
“ More changes have taken place in the

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Federal Reserve Bank of St. Louis

conduct of business during the past 25
years than in any century in the past,”
stated Mr. Van Horne. “ Changes in trans
portation and machinery have revolution
ized business methods and standards of
living.
Mr. Van Horne! discussed the value of
concentrating purchases, the proper reten
tion o f profit in various enterprises; dan
ger o f lax credit methods, and new era
o f installment buying.
The speaker stressed the! importance of
good credit methods. “ The average busi
ness man has been too free in the exten
sion o f credit and should insist upon sea
sonable! liquidations.”
“ Merchants have led in this evolution

o f business. Stores are better looking,
competition is keener and the merchants
are more wide awake and alert to keep in
line with the ever changing methods of
merchandising.
“ Business is stimulated by effective ad
vertising, we must look things in the face
and be! able to let the public know what we
have to offer.
Mr. Van Horne would make no predic
tions as to the future but believes that
business has been improving since October
and that it will continue slowly. The elim
ination o f many weak and unnecessary
banking institutions gave the speaker rea
sons to believe that “ most of our banking
troubles have gone over the dam.”

1868— 1932

A conservative
policy o f helpful
service through
all th e c y c l e s
o f business for
three generations

THE STOCKYARDSNATIONALBANK
TH E STOCK YA R D S TRUST & SAVINGS B A N K
q /~ C H I C A G O

Northwestern Banker

April 1932

22
A Banking Family

'"There are two things that never
stop— taxes and compound interest.”
This time-tried old

saying goes

right to the basic reason why Iowa
county and municipal bonds are the
finest of all investments for these
times and ALL times. Backed by the
strongest form of security known—
TAXES —
assurance
of

their

they also provide the
of

unfailing

annual

and

regularity

semi-annual

interest.

Webster county, Nebraska, has two
banks, established in pioneer days, each of
which have been under the control o f the
same family during the entire time.
The Bank o f Guide Rock, established
in 1885 by W . T. Auld, is now in its fortyseventh year, while the State Bank o f Red
Cloud, established by Mr. Auld in Febru
ary, 1892, is just beginning its forty-first
year. Both are now owned by J. W . Auld,
a nephew of the founder.
Coming from Iowa 30 years ago, shortly
after leaving school, the present owner
received much o f his training and knowl
edge o f the business from the older man,
then in charge, and his eventual ownership
was preceded by nearly 20 years’ employ
ment as cashier here. He bought controll
ing interest o f the Guide Rock Bank in
1916.
The establishing o f the local bank in
1892 by W . T. Auld is recalled by many
old-timers, who compare the present times
somewhat with conditions prevailing then.
The rise of “ Tom Auld” was from a mod
est start as a country school teacher near
Knoxville, Iowa, at $40 a month. From
money saved teaching school, he was able,
when 35, to establish the business at Guide
Rock, and seven years later to open the
bank. His gifts to this community in
clude a $30,000 public library. A similar
institution was given to Guide Rock.

Joins Advertising Agency
Ralph L. Harley, formerly advertising
salesman fo r the Register and Tribune
Company, has joined the sales staff of
Fairall & Company, Des Moines, adver
tising agency. He will take over the mar
keting and promotional department o f the
firm.

You can buy county and munic
ipal bonds today on an exceptionally
attractive basis. Write or call for
detailed

circulars

our

special

offerings to Iowa hanks.

Carleton D. Beh Co.
Investment Securities
12tli Floor, Des Moines Building

DES M O IN E S, IO W A
Dial 4-8156

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April 1932

Chicago General Manager
Clinton D. Lasher, state agent fo r The
Home o f New York in Indiana has been
appointed general manager at Chicago
succeeding the late J. K. Lesch. He will
assume his new duties on April 4, 1932.
In this capacity Mr. Lasher will have
complete charge o f all the activities of The
Home Fleet in Illinois including the Cook
county, Farm, Service, Marine and Illi
nois State Agency Departments.
Mr. Lasher is well equipped for his new
position as he is recognized as one of the
leading fieldmen in the county today. For
1928 he was awarded the Chandler trophy,
a silver loving cup, which is presented
annually to the individual who has con
tributed most during the year to the
general good o f the insurance business in
the state of Indiana. Mr. Lasher is one
o f the company’s 25 year veterans, having
been presented with a silver medal in
October, 1929. While his many friends
in Indiana will miss him, they rejoice in
his advancement.

Bonds and Investments

L ooking
HEN successive standards of in
vestment safety have been swept
away until all are apparently ex
hausted, where shall confidence be placed ?
Middle western investors have, I think,
a particularly strong1 series o f reasons fo r
asking this question. There are but few
fortunes among us comparing in age with
those found in the east; we, as investors,
are still learning in the costly school o f
experience. Our real development started
after the Civil War, along with the bull
market in farm lands. Our slowly accu
mulating capital bought more land, and
the investment was sound because prices
o f land were always rising. Not wishing
to till more soil, we bought correspond
ingly sound mortgages on farms at fat
interest rates. Then the W orld W ar, with
its call upon our patriotism, taught us to
buy liberty bonds, with coupons to clip ;
bonds were something we knew little about
until then. Our liberty bonds sold down
around 85 in 1920, and we wondered if
they were as good as our old first mort
gages, but we could not safely go back to
these, for the declining market in farm
lands started in 1920-21. W e found that
there were other bonds than libertys,
bonds as nicely printed with coupons and
all, but bearing the same 6 per cent inter
est or more that we had obtained from our
mortgages.
This seemed a happy compromise, and
we bought them— not from responsible in
vestment dealers, but from exploiters who
precede legitimate business in new fields.
W e were stung badly and took our losse;s.
By then the stock market was making
everyone rich, on paper, and offered a Avay
out. W e took it, and later were taken.
We put in our bank what we had left, just
in time to participate in an epidemic of
bank failures, which our accumulated dis
trust aggravated to an almost fatal mag
nitude. Now our surplus capital is in gold
or currency buried in the basement, not
entirely safe, and utterly useless. Disre
garding causes and exceptions, these are
about the things that have overtaken the
average small middle western investor,
whose combined buying power is the foun
dation o f our commercial credit.

Future

Confidence Must Return
ISING commodity prices must, and will,
preface permanent improvement, but
first comes the re-establishment of confi
dence. Nationally, locally and individu
ally, we are all working toward that end.
W e bought stocks in 1928-29 far above
true worth because we thought they were

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

O ur Investment
By

R A Y T H A Y E R STERLING
President, Sterling, Barron & Co., Chicago

going higher fo r no particular reason, and
they did— fo r a tim e; now we refuse to
buy even the usual amount of things we
need because we are afraid they will go
lower, and so they have— for a time.
Neither trend can continue forever. Much
has been intelligently written about vari
ous phases o f our current situation, per
taining to specific problems; seldom has
an attempt been made to paint clearly the

“ Select your investment adviser as
you do your doctor, with an eye toward
his qualifications, reputation and in
terest in your personal situation; place
your

primary

investments

those

enterprises with whose field of opera
tion you are most familiar hy experi
ence; rely on your counselor to pro
tect you marketwise and risk is largely
removed

from

the

employment

capital.”

entire picture. Perhaps it is too broad for
one canvas. Or perhaps Ave are some of
us too close to the trees to see the forest.
I might speak with reasonable accuracy of
the problems o f municipalities, or of land
banks, or o f federal financing, but these
are merely segments of the Avhole. Even
to attempt getting a clear conception of
the Avhole, we must back far aAvay from
all special situations. I f Ave are to search
for values in AAdiich to place confidence,
they must be broad values based on tomorroAV, not today.
This depression is essentially our OAvn
Frankenstein. Future historians will prob
ably say that Europe never really recov
ered from the depression of 1920, which
Avas caused by the ending o f the W orld
W a r, and resulted in the collapse of so
many national currencies. Our own farm
ers certainly never fully recovered from
that depression and, Avith nearly half of
our people entirely, or largely depending
on the soil for a living, it is plain that they
shared in our great American boom mostly
by proxy. The rest o f us had a period of
industrial prosperity that Avas lop-sided
and eventually sprawled in the dust, ag

gravating the distress in Europe, which
had been depending on us fo r her credit.
But there is nothing neAV about depres
sions ; we have them regularly about every
nine years. Many have been Avorse, com
paratively, than this one. In the past 375
years, the world has gone into a blue funk
some 43 times, and it has always recov
ered ! More than half of these crises have
been international in scope, and some have
lasted as long as sixteen years, although
the average has been around two. E n g
land is a veteran of nearly all of them;
America began her participation in 1809,
and over-speculation in 1836 paralyzed us
for seven years, along Avith England,
France and Belgium. Countries have re
covered from worse situations in less time,
but the important fact is that they have
always recovered, and will doubtless do so
again.
Supposing the most pessimistic
were right, and America did not come out
of this, then what? Admittedly, we are
the strongest nation in the world today
from the standpoint o f financial and raAV
material reserves.
I f we collapse, every
other nation must precede us, and all val
ues be destroyed, in which case hoarded
gold and currency, which is scarcely more
than government bonds Avithout coupons,
would be Avorthless anyway. The tide of
bank failures may have been the crowning
catastrophe that robbed us o f mental bal
ance, but the failure o f our former demi
gods o f finance to protect themselves and
ns in the crisis has been said to be the
thing that really destroyed our confidence,
and I think that is consciously or uncon
sciously true. N bav leaders will arise, but
in the meantime A v e will have learned to
do our OAA’n thinking again.

Banks C ant Be Blamed
I E B AN K S are tight Avith credit, it is
I because we have made them so Avith our
blind scramble for cash. There is a whole
story in that situation, nor is the blame
entirely on the side o f unsound banking.
Deplete the assets o f any institution 70 per
cent, as was done by withdrawals from
some banks, and see hoAV long it lasts. The
banks remaining open today, backed by
available federal credit if they need it, are
safer than most things in this life. Banks
are the reservoir fo r capital accumulation
wherein small, impotent amounts become,
collectively, a poAverful instrument fo r our
economic and social advancement. I f we
withdraw our bit o f cash from deposit, the
banker fears others will folloAV suit, and
dares not extend loans, direct or in the
form o f bond purchases. The manufac
turer goes to him fo r a loan fo r raAV mate-

Northwestern Banker

April 1932

rials and is refused because o f this situa
tion, so lie is forced to reduce his working
force and we lose our job. W e think we
are clever to have withdrawn our money,
but that very act, multiplied by thousands
o f similar ones, was what cut off our source
o f income! The sooner we reverse the
circle, the sooner we return to work. Local
loans are made direct by commercial bank
ers, but the larger, more far-reaching loans
are made by investment bankers through
bond issues. Cities, states, industries and
the nation must have money on which to
run; a market must be maintained for
their bonds at reasonable credit levels.
Otherwise all activity ceases and anarchy
results. Thei stimulation o f investment
buying is personally and vitally important
to us all.

Conditions Must Improve
F W E admit that conditions must even
tually improve, we can safely search for
investment values, since the time element
is o f secondary importance. True values
do not change nearly as much as deflation
and inflation distort them. W e will con
tinue to have railroads, and electricity, and
automobiles, and steel mills fo r years to
come. We must have farmers to feed us,
and cities in which to gather for industrial
and trade purposes. These and other es
sential branches o f our economic system
have bonds now outstanding* and to be
issued, at prices unthought of three years
ago. This, not because o f increased sup
ply which is really less than usual, but
because o f disappearance o f demand. The
law o f supply and demand has never been
repealed. Buying must materialize soon
fo r the protection o f everyone, hence the
conclusion that current sound yields will
not always be available. Deposits o f more
than four hundred millions above normal
in postal savings banks will, alone, carry
prices upward when they again seek a re
turn o f better than 2 per cent.

MARKET

/nvestment Essentials
HE mechanics o f investment selection
are really comparatively simple. Spec
ulation has its important place. Every
established business was a speculation at
one time, and a certain amount o f money
must be available to finance such enter
prises or we cease to progress. Leave that
fo r those who can afford to lose what they
risk. The cry today is fo r safety at any
price, a natural reaction, and a senseless
one. Safety can be bargained fo r like any
thing else. Fundamentally, the essentials
o f investment are: 1. Security. 2. Mar
ketability. 3. Yield, in just that order of
importance. A ny yield above prevailing
levels indicates a sacrifice o f some part of
security or marketability, or both. These
facts are so simple that many of us must
have overlooked them, or their order of
importance would not have been reversed
so often and to our sorrow. Today, many
sound bonds will be found returning as
high as 6 per cent or more, but these are
not ordinary times. Five per cent is nor
mally a safe dividing line between con
servative investment and chance, but like
all generalities, this is subject to variation.
However, no one ever lost much money by
asking “ W hy ?” when an investment return
o f over 5 per cent was offered him.
Look first toward the safety o f principal
always. Then, if your situation does not
demand a highly liquid position, you can
reasonably expect a better yield in return
fo r somewhat slower marketability. This
is a matter fo r an investment specialist to
decide. Any intelligent dealer or broker
knows he prospers longest with prosperous
clients. Select your investment adviser as
you do your doctor, with an eye toward his
qualifications, reputation and interest in
your personal situation; place your pri
mary investments in those enterprises with
whose field o f operation you are most fa
miliar by experience; rely on your coun
selor to protect you marketwise, and risk

Q U O TA TIO N S

Our Trading Department is in active communication
with New York, Chicago and other financial centers in
all parts of the country.
We are constantly executing buying and selling orders
for Iowa banks and invite your inquiry on any listed or
unlisted bonds.

QUAIL L

C U N jy y .

-ç Y

IJV q

American Bank Bldg.
Northwestern Banker

Municipal Financing
Taxpayers o f many municipalities want
to eat their cake and still have it, accord
ing to 0. W . Erringer, municipal financ
ing expert, speaking at a meeting* in New
York City. “ Although cities, in the march
o f progress, have built schools and hos
pitals, paved streets and laid sewers, the
taxpayers now very frequently complain
about the higher taxes needed to pay for
these improvements. But theoretically,”
said Mr. Erringer, “ the mounting tax rate
is more than offset by enhanced property
values. While it is frequently pointed out
that the tax rate is three times the rate
paid twenty years ago— likewise has the
value of property trebled in the last twenty
years. The ratio o f taxes to property
values remains very much the same.
“ It is in times o f depression when com
munities face their greatest problems, for
seldom is it possible to make a downward
adjustment in the tax rate in keeping with
a temporary collapse in values o f real es
tate. Citizens then demand a lower tax
rate and lower assessments while the city’s
expenses remain on about the same level.
The situation becomes critical as tax de
linquencies become more numerous, reve
nues decrease and unempolyment grows
acute. Trouble is brewing. Charges o f
waste, extravagance and corruption are
lodged against the city government. City
employes are ousted out o f their positions,
drastic cuts in wages must be taken by
those who remain. The efforts of the city
authorities to work out of the crisis are
met with abuse and further demands for
retrenchment. Tax sales can only inten
sify the misery; home owners are cast out
o f their houses owing to their inability to
pay delinquent taxes— all in a feverish
effort to realize a possible reduction o f a
feAv mills in the tax rate or to collect a few
thousand dollars o f past due taxes. No
city can benefit by such a short sighted
policy as this.

State Distributor for
NORTH AMERICAN
TRUST SHARES

PO LK-PETERSO N
CO RPO RA TIO N
INVESTMENT SECURITIES
M em ber Distributors Group, Iuc.

Investment Securities

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

is largely removed from the employment
of your capital. Idle dollars are slackers,
and traitors in this crisis. We need un
employment relief fo r money.

April 1932

Davenport, Iowa

Des Moines Building
DES M OINES
T elephone 3-3245

WHY THESE

STOCKS?

Deposited Stocks in Each Unit of 100,000

NORTH AMERICAN TRUST
SHARES, 1955
MAXIMUM

CUM ULATIO N TYPE

today for long-term participation in the earnings o f American

( A s o f O ctober 17, 1931)
C H E M I C A L 15%
E. I. duPont de Nemours & C o m p a n y ................... 200
Eastman Kodak C o m p a n y ..........................................100
The Procter & Gamble C om pany...............................100
Union Carbide & Carbon C o r p o r a tio n ................... 300
E L E C T R I C A L E Q U I P M E N T 6%
General Electric C om p a n y..........................................400
Westinghouse Electric & Manufacturing Co. . . .
S T E E L 3%
United States Steel C o r p o r a t io n ...............................100
F O O D 11%
The Borden C o m p a n y ............................................... 200
Corn Products Refining C o m p a n y ......................... 100
General Foods C o r p o r a t i o n .................................... 100
National Biscuit C om pany..........................................200
Standard Brands I n c o r p o r a t e d ...............................200
R E T A I L M E R C H A N D I S I N G 9%
Drug I n c o r p o r a te d ..................................................... 100
Sears, Roebuck & C o..................................................... 200
F. W . W oolworth C o................................................... 200
M A C H I N E R Y 6%
American Can Company
. .
American Radiator & Standard Sanitary Corp.
. .
Otis Elevator C om p any............................................... 200
F A R M M A C H I N E R Y 1%
International Harvester C o m p a n y ......................... 100
T O B A C C O 6%
The American Tobacco-Company " B ” ................... 100
R. J. Reynolds Tobacco Company " B ”
. . . .
A U T O M O B I L E 2%
General Motors C o r p o r a t io n .................................... 200
P E T R O L E U M 4%
Standard Oil Company (N ew J e r s e y ) ................... 300
R A I L R O A D S 12%
The Atchison, Topeka & Santa Fe Railway Co. . .
The New York Central Railroad Company
. . .
The Pennsylvania Railroad C o m p a n y ................... 100
Union Pacific Railroad C o m p a n y ......................... lo o
U T I L I T I E S 25%
American Telephone & Telegraph Company . . .
Columbia Gas & Electric C o r p o r a t io n ................... 400
Consolidated Gas Company of New York . . . .
The North American C o m p a n y ...............................200
Pacific Gas & Electric C o m p a n y .............................. 200
Public Service Corporation of New Jersey. . . .
The United Gas Improvement Company . . . .

H ow should the investor in common stocks apportion his money
industry? It is not wise to risk all his capital in one or a few
stocks. Should he, however, rely for diversification on a group
o f stocks chosen merely because they are high grade?”
The individual high quality o f the 34 common stocks in the

100

portfolio o f

N O R T H A M E R IC A N

TRUST

SH ARES,

1955 and 1956,

was only one o f the factors that influenced their selection. Each
stock was chosen because it fitted logically into an investment
plan, constructed after months o f painstaking research, and based
on a scientific principle o f investment selection evolved to bal
ance the apportionment o f capital invested under present con
100
300

ditions.
These trust shares give the investor not only an investment
but a plan which provides: ( T ) Balanced dollar diversification;
£ 2 ) Maintenance o f investment quality under the direction o f a

200

Research Department; Qd~) N o substitution; ('4') The conve
nience and safety o f trust administration provided by a large
bank acting as Trustee; ( 5 ) Marketability. The 34 stocks com

100
100

prising the portfolio o f

n o r t h

m e r ic a n

tr u st

sh ar es

1955

and 1956, a new type o f fixed investment trust, are all listed
on the N ew York Stock Exchange. M ore than 1600 investment

100
200
100
300

As of October 17, 1931, the date of execution of the Trust Agree
ment, a stock unit consisted of the shares listed above. Per
centages (approximate) of total investment by industries are
based on market prices of that date.
The deposited stocks in each unit of 4,000 n o r t h A m e r i c a n
t r u s t s h a r e s , 1956 (Maximum Distribution Type) consisted
on October 17. 1931, of l/2 5 th of the number of shares of the
common stocks listed above.

houses and banks are now recommending these shares.

T he offering price o f n o r t h A m e r i c a n t r u s t s h a r e s is based upon
and varies with the actual N e w Y o rk Stock Exchange 100-share lot
transaction prices o f the underlying stocks during market hours. (C o m
plete details o f the method o f calculating this offering price are contained
in the Offering Circular.)

A BOOKLET FOR BANKERS
H o ld e rs o f N O RTH A M E R IC A N TRUST SHARES ( O r ig
inal Issue) who have not been in fo rm e d c once rnin g an
offer, w hich auth o rize d d ea lers are m aking, to exchange
th e ir shares on a p re fe re n tia l basis fo r shares o f tw o new
trusts, NO RTH A M E R IC A N TRUST SHARES, 1955 and
1955, may o b ta in c o m p le te in fo rm a tio n fro m any a u th o r
ized d e a le r.

How these 34 stocks were chosen is described in detail
in a booklet, "Building the Portfolio’ ’ , which will be
sent without charge on request to any bank officer. A d
dress your request to Distributors Group, Incorporated,
63 W all Street, New York City, Dept. D.

DISTRIBUTORS GROUP,
INCORPORATED
Ow ned b y a N a tion w id e Group o i In v estm en t H ou ses
63 W A L L S T R E E T , N E W Y O R K
C H IC A G O

ATLANTA

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

P IT T S B U R G H

P H IL A D E L P H IA

LO S AN G ELES

Northwestern Banker

April 1932

26
“ A nationwide survey o f municipal tax
rates discloses that fo r the most part pre
vailing levies are directly in line with the
value of city improvements/’ continued
Mr. Erringer.
“ While tax rates have
mounted considerably in recent years, in
trinsic property values have kept pace.
Simply because our cities are finding it
difficult to finance themselves through the
usual channels there is no justifiable rea
son for heaping abuse upon city officials
or in condemning municipal policies in
general. Cities, unlike private businesses,
are not permitted to store up large cash
balances or surpluses in order to tide them
over a period o f depression. They must
depend upon the municipal bond market to
supply what funds they need. A sudden
collapse o f this market brings a deluge of
resentment down upon tlie heads of the
city government.
Under these circum
stances why should they be held account
able for the city’s plight?

A Sound Policy
I F CITIZENS will cooperate more closely
I with their city government, they will
find that there are ways to be found that
will permit a city to systematically reduce
its indebtedness in an orderly manner,” ad
vised Mr. Erringer. “ Cities must aban
don their hand-to-mouth policy o f main
taining large floating indebtedness at high
interest rates. These short term obliga
tions must be funded at lower rates into
long-term issues. Bonds o f tins kind can
always be sold locally, regardless o f con
ditions in the municipal bond market, at a
savings in interest that will more than off
set the nominal amounts slashed from the
budget through an ill-conceived policy of
throwing people out o f employment and
in reducing wages.”

John Elliott Dies in East
John A. Elliott, 51, former Des Moines
banker, died at his home in New York
City last month from complications fo l
lowing a three weeks’ illness.
He left Des Moines in August, 1930, and
had been vice president and branch man
ager o f the Underwriters Trust Company,
Fifty-fourth street and Sixth avenue, New
York. He is survived by his wife, the
former Mildred Hager, and a daughter,
Jeanette.
A brother, Ralph Elliott, and a sisterin-law, Mrs. Manning Martin, live in Des
Moines. Webb Elliott, another brother,
lives in Decatur, Illinois.

1931 Corporation Profits
Aggregate earnings fo r 1931 of 379 rep
resentative industrial corporations were
78.09 per cent less than for the peak year
1929, but in 1921 as compared with 1920,
the decline shown by the same companies
was 91.64 per cent, according to compila
tions from published reports, announced
by Ernst & Ernst, public accountants.
The study includes all industrial corpo
rations whose figures are available for
1929 and 1931 and also fo r 1920 and 1921
— 379 in all, classified into seventeen indus
trial lines and miscellaneous.
The deflation o f the 1920-1921 depres
sion period, it is pointed out, took place
principally in the year 1921, although in
certain cases at least a portion o f it was
in 1920. Approximate adjustments for
these and other factors, it is said, indi
cate that the study represents a conserva
tive statement o f the aggregate shrinkage
in corporation earnings fo r the 1920-1921
depression.
Another compilation by Ernst & Ernst
covering the earnings of 1,188 industrial

corporations shows a decline o f 78.24 per
cent fo r 1931 as compared with 1929, and
a decline o f 74.14 per cent, 1931 compared
with 1928. Of the 1,188 companies, 146
or 12.3 per cent improved their earnings
in 1931 over 1929, while 200 or 16.8 per
cent did better than in 1928.
For comparison o f 1931 with 1930, pub
lished figures are available from 1,389 in
dustrials, whose aggregate earnings fo r
1931 were $628,341,000, a decrease of
61.17 per cent from the aggregate o f
$1,618,025,000 reported by the same com
panies fo r 1930. Better operating results
in 1931 than 1930 are shown by 359 o f
these companies or 25.8 per cent. Operat
ing profits were made in 1931 by 846 or
61 per cent, while 543 or 39 per cent
showed losses. A similar compilation cov
ering the companies whose figures are
available fo r the year 1921 discloses that
the proportion o f companies showing
profit or loss is approximately the same.
Net operating income o f 171 railroads
fo r 1931 was 39.98 per cent under 1930;
operating income o f 104 telephone com
panies fo r eleven months, 1931, was 1.04
per cent better than fo r eleven months,
1930; profits o f 199 other public utilities,
1931, were 8.78 per cent less than for 1930.
Aggregate profits for all groups, 1,863
companies, 1931, compared with 1930,
were 38.91 per cent less.
In dealing with actual earnings figures
over a considerable period of years, it is,
of course, impossible, the statement says,
to make adjustments which adequately re
flect certain changes brought about through
mergers, consolidations, etc. The result
ing comparison, however, can reasonably
be assumed to reflect trends correctly, it is
declared, though the factor o f mergers
may magnify or lessen the extent o f the
trends.

The Most Practical Method

V
2 1 , 0 0 0 . 0 0

Walnut, Iowa
6% Electric Light Plant Pledge Orders
Dated— February 1, 1932

Due— 1932 to 1937 inclusive

W A L N U T , IO W A (P op u la tion 9 0 0 ) loca ted in P ottaw attam ie County,
has su ccessfu lly operated its light plant fo r a num ber o f years.
Last
year net earnings w ere $7,892.
In 1924 a $ 14,000 D iesel generating
unit was installed and in 1925 another $10,000 unit added. B oth were
paid en tirely from plant earnings, besides extensive rem odeling.
T H E SE O R D E R S are issued to p ay a part o f the cost o f the insta lla
tion of m odern D iesel generating equipm ent, at a cost o f $27,000.
The
balance was paid in cash b y the Town.

FREE F R O M F E D E R A L IN C O M E T A X A N D A L L T A X A T IO N
IN T H E ST A T E OF IO W A
P ric e— Par to y ield 6 p er cen t

1114-1120 Commonwealth Bldg.

Northwestern Banker

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

April 1932

DES M O IN E S

That the opinions of even the most out
standing economists are not, in themselves,
sufficiently sound bases for the diversifica
tion o f funds in a fixed investment trust
is the opinion expressed in a pamphlet
just prepared by Lawrence W . Schmidt,
chief statistician o f Administrative and
Research Corporation, New York, spon
sors o f Corporate' Trust Shares.
“ I f ten economists,” says Mr. Schmidt,
“ were asked to distribute $100,000 over 30
carefully selected common stocks, making
the investment in each on a basis of rela
tive attractiveness, each of the 10 would
assign varying degrees of importance to
each o f the companies. Personal opinion
and prejudice would be the determining
factor. There are four general methods
by which the investment fund may be dis
tributed among the portfolio companies:
(1) deliberately assigning different de
grees o f importance or attractiveness to
different stocks, and placing larger or
smaller parts o f the investment in those
stocks which are arbitrarily choseti as best;

(2) allocating amount o f investment on
statistical factors; (3) deliberately placing
an equal dollar amount in each company
in the portfolio or in each company in an
industry; (4) taking an equal number of
shares o f each company.”
According to Mr. Schmidt’s conclusions
the fourth method is most practical be
cause it is based on the assumption that
the! stock in each o f the 30 companies is
inherently sound and secure from a long
term investment point o f view; it does
not attempt to say that one company is
sounder than another or will become more
attractive in the future; it does not lead
the investor to believe that his investment
is scientifically balanced according to some
purely theoretical statistical method.

president o f the National Financial A d
vertisers Association, has been appointed
program chairman fo r the association’s
annual convention, to be held September
12th to 15tli in Chicago, the city where! the
organization was created 17 years ago.
Sperling is also in charge o f the associa
tion’s research work and handled the pro
gram fo r the Atlanta convention in 1929.
He has been actively engaged in bank mer
chandising and publicity work with the
Cleveland Plain Dealer. Prog-ram plans
as now contemplated are to be built around
the theme, “ Looking Ahead with Finance,”
and discussions will de:al with the part
Is Program Chairman
financial advertising and selling will play
I.
I. Sperling, assistant vice president in the period o f business recovery now be
lieved to be just ahead.
of the Cleveland Trust Company, and vice

seven issues of consols, Panama Canal,
conversion and postal savings bonds.
Accompanying information includes the
amount o f each obligation outstanding,
dates of issue, maturity and interest pay
ment, Avhen callable, when books close! on
registered bonds and whether or not the
obligations are receivable at par fo r in
heritance taxes. The brochure containing
these details also includes charts showing
the course o f the government’s gross public
debt since 1910 and the yield on long-time
government bonds since 1922.

Becomes Sales Manager
Announcement has been made recently
o f the appointment o f Earl Newsom as
sales manager of Distributors Group, Inc.,
sponsors o f North American Trust Shares,
a fixed investment trust. Mr. Newsom for
over a year was director o f advertising
and jmblic relations for the group. Prior
to joining Distributors Group, Inc., he
was vice president o f the John Day Pub
lishing Company.
Fred L. Palmer has been appointed di
rector o f advertising and public relations
to succeed Mr. Newsom. Mr. Palmer
makes his headquarters at 63 W all street,
New York. Mr. Palmer who was with
the group about a year ago, was formerly
connected with the promotion department
o f the New York Times, and prior to that
he was with Ames & Norr.

The Voice of the
Nation speaks on

Incorporates Advertising Agency
Henry P. Knight, for many years well
known in La Salle street and W all street,
has formed a general advertising agency,
incorporated under the name o f IT. P.
Knight & Co. with offices at 208 South
La Salle street, Chicago.

Lists U. S. Obligations
The National City Company has com
piled a list o f 31 United States Govern
ment obligations at present in the hands of
the public and bearing interest. The total
amount outstanding as of February 29th,
except the treasury bills which are taken
as o f March 2d, is $17,459,156,290. The
first series o f 2 per cent treasury certifi
cates known as the baby bonds are also
listed.
The obligations outstanding with which
are given their principal features, includ
ing the tax exemption provisions o f each,
as applied to individuals and corporations,
are $13,517,370,200 in 13 issues of lib
erty and treasury bonds; $2,032,977,500 in
six issues o f treasury certificates of in
debtedness; $600,446,200 in one issue of
treasury notes; $518,795,000 in seven is
sues o f treasury bills, and $789,567,390 in

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

It is reassuring to investors in

sums for construction, keeping

American T elephone and T e le

the plant at maximum efficiency,

graph stock that through recent

adequate for new business.

troubled

times

the

telephone

Forward-looking policies like

98 %

this are linked in the Bell System

o f the total number of its sub

with a healthy conservatism in

scribers at the height o f the boom .

administration.

system has kept more than

has established

O n e result is that American

itself as a necessity of business

T eleph one and Telegraph C om

and social life.

pany stock

The

telephone

Recognizing this fact, the Bell
System is going ahead with its
program of service improvement.
Every working day it spends large

has paid dividends

regularly through more than half
a century.
M a y we send you a copy o f our
booklet, “ Some Financial Facts” ?

BELL TELEPH O N E
S E C U R I T I E S CO. Inc.
X95 Broadway, New York City

Northwestern Banker

April 1932

Bankers O ppose Glass Bill
HE position of the American Bankers
Association on the Glass hanking- bill
was presented at the opening day of
the hearing on the measure before the
banking and currency committee o f the
senate by President Harry J. Hass as fo l
lows :
W e have carefully analyzed the pro
visions o f S. 4115, section by section, and
after due deliberation the interim com
mittee o f the American Bankers Associa

tion has, by resolution, registered its op
position to the bill.
W e are o f the opinion that it would be
a serious mistake to pass a bill at this
time having so many provisions o f a de
flationary and regulatory nature which
would, in our opinion, cause the with
drawal o f a considerable number of mem
bers o f the federal reserve system. We
believe that its effect would be injurious
not only to the member banks, but to the

Sound and Marketable
common stock collateral
The Portfolio of the
new A c c u m u la tiv e
Series is comprised
of s to c k s o f th ese

30
Corporate Trust Shares are readily
marketable through a nation-wide
organization of banks and invest
ment houses. Moreover, the Trust
Agreement provides that they may
be converted directly through the
trustee into the underlying secur
ities or cash.
These shares offer the security of
high grade common stocks plus the
security of wide diversification.

orporate
TRUST

Accumulative Series*
S M I T H , B U R R IS & C O .,

Central Syndicate Managers

120 SOUTH L A S A L L E STREET, CH ICAGO
Detroit

•

New Orleans

•

S E R IE S

Corporate Trust Shares

m ay, if they desire, exchange for either of the new
series— on a preferential basis. G et details from any
authorized distributor.

Northwestern Banker

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Federal Reserve Bank of St. Louis

April 1932

in equal share
amounts
IN D U S T R IA L S
Allied Chemical
American Can
Am. Radiator & S. S.
American Smelting
American Tobacco
Borden
du Pont
Eastman Kodak
General Electric
International Harvester
National Biscuit
Otis Elevator
Procter & Gamble
Union Carbide
United States Steel
Westinghouse
W ool worth

U T IL IT IE S
Amer. Tel. & Tel.
Columbia Gas & Elect.
Consolidated Gas of N .Y .
Electric Bond and Share
North American
United Gas Improvement

R A IL S
Omaha

*AIso available in distributive type known as Series A A .

Holders of O L D

COM PANIES

Atchison T o p .& Santa Fe
New Y ork Central
Pennsylvania Railroad
Union Pacific

O ILS
Standard Oil (Indiana)
Standard Oil (N ew Jersey)
Texas Corporation

business interest of the entire country.
There are certain provisions o f this bill
which directly affect the interests o f par
ticular classes o f bankers who are mem
bers of our association. These special
matters will be presented later by repre
sentative bankers who will show how cer
tain provisions o f this bill affect them. I
wish in my presentation to indicate to you
some of the broader aspects o f the bill
which will affect all bankers and also the
general public. And I will, therefore,
submit the effects o f the bill on the fo l
lowing :
1. Federal reserve system.
2. The treasury o f the United States.
3. The member banks.
4. The securities markets.
5. General business.

Federal Reserve System
NE o f the fundamental principles o f
the federal reserve act was the re
jection of the European plan of central
banking and the adoption o f the American
policy of regional or local banking. The
act did not set up a single central bank
but, instead, 12 banks and so gave full
recognition to the principle o f local inde
pendence and decentralization.
The proposed bill in various sections
(see sections 12A, 8, 11 and 12g) departs
from this regional principle by centraliz
ing powers in the federal reserve board
and by impairing the autonomy which
each o f the twelve federal reserve banks
have so fa r possessed.
The treasury of the United States : The
federal reserve act wisely provided that
the reserve system should act as fiscal
agent fo r the government and should fa
cilitate the marketing o f United States ob
ligations. In the coming years the volume
o f such federal financing is bound to be
heavy.
The proposed bill wTould seriously in
terfere with such treasury financing by
checking the ready marketing o f United
States issues. In section 11 the proposed
bill places a penalty on the holding of such
securities by member banks which are the
most important buyers o f United States
bonds.
Member banks: We, as bankers, fully
realize that our business is quasi-public
in nature and therefore government super
vision is necessary. F or this reason, con
gress in the past has developed the na
tional bank act and the federal reserve
act with its numerous amendments, but all
this legislation has accepted the funda
mental principle that final responsibility
fo r bank management and bank policy
rests with the individual banker himself.

29
Tlie proposed bill transfers some o f
this responsibility to the federal reserve
board at Washington. W e are o f the
opinion that such banking powers were
not intended, under the federal reserve
act, to be conferred on the federal reserve
board, but that the board was intended to
be an organization to exercise supervisory
powers and not to control banking opera
tions.
Securities market:
There have been
fou r outstanding national movements in
augurated by a nonpartisan movement
which were intended to arrest the prog
ress o f extreme deflation and to stabilize
conditions. W e refer to the organization
o f the national credit corporation and the
citizen’s reconstruction organization. Also
the passage by congress of the reconstruc
tion finance corporation bill and the GlassSteagall bill. W e are fearful that the p ro
posed bill will, to a large extent, nullify
these efforts by causing a further liquida
tion o f securities which would decrease
their market value at a time when the
owners are not able to stand further losses.
The reconstruction finance corporation
seeks to enable banks to carry investments
which are sound but temporarily unmar
ketable except at a substantial loss. The
proposed hill would require banks to
throw these securities on a market which
is yet too weak to absorb them.
General business:
Recent national
movements have recognized that business
recovery cannot come about through de
creasing the value of investments and
commodities, but rather by stabilizing the
prices o f investments and commodities at
somewhere near their real values. This
desired condition cannot be brought
about by reducing the volume o f credit
but rather by increasing the amount of
available credit.
The Glass-Steaga.il hill very wisely pro
vided fo r the release o f approximately
$700,000,000 in gold to secure federal re
serve notes. The enactment o f this hill
would have just the opposite effect and
cause an increase o f approximately $227,500,000 in gold reserve through the in
crease in reserve requirements against
time deposits.
It is quite possible that under the pro
visions o f this bill commercial business
not entitled to bank credit in its single
name note might not be able to get accom
modation on good marketable securities if
its depositor bank had already reached the
limit o f collateral loans as provided by the
bill.
W e believe that the groundwork has
been laid fo r improvement in business.
Many large business concerns have
mapped out plans fo r the expenditure o f
large sums in the employment of labor
and the purchase o f materials, but we
sincerely believe that their plans will be
interrupted or held in abeyance should

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Federal Reserve Bank of St. Louis

A Market for

Io w a M

u n ic ip a l s

We are alw ays in the m arket to bu y Iowa
county bonds or city and school bonds of
the larger municipalities. If you have any
securities which you wish to liquidate,
send us complete information and we will
forward an immediate cash bid.
W rite for our current list of attractive
offerings. B an k ers’ concessions.

J A C K L E Y - W l E D M A N 6? C O M P A N Y
REGISTER AN D TRIBU N E BU ILD IN G

DES MOINES

O U R O F F E R IN G

L IS T W IL L

3-5181

P hone

BE M A IL E D R E G U L A R L Y

GMAC N

UPON

REQUEST

otes

are a standard medium for short term investment.
Based on highly liquid assets, they provide a
sound instrument for the temporary employment
of surplus funds. G M A C obligations are in country-wide demand for the security portfolios of
individuals, institutions and thousands of banks.
available in convenient maturities and
denominations at current discount rates

G
A

eneral

cceptance
O F F IC E S

Executive Office

M otors
C o r p o r a t io n

P R I N C I P A L

BROADW AY a t 5 7 T H STREET

CAPITAL AND SURPLUS

CITIES

K[ew T or\ City

S EV E N TY M ILLIO N DOLLARS

Northwestern Banker

April 1932

30
they be fearful of legislation affecting
their business adversely.
We believe that the enactment o f this
bill making sweeping changes in the na
tional bank act ; the federal reserve act ;
concentrating additional powers in the
federal reserve board; and in the federal
reserve banks, and the control provided
fo r the administration o f member banks,
would be most harmful to the federal re
serve system, member banks and to busi
ness in general.

Valuation and Technical Progress
The effect upon the valuation o f public
utility property of technical changes in
the industry constitutes an important
problem of major interest both to con
sumers and to owners o f utility securities.
Substitution o f natural for manufactured
gas in whole or in part, fo r example, may

make part o f the investment o f a gas
company no longer absolutely necessary
fo r its service o f the public. Discovery
o f new natural gas fields in the vicinity
of centers o f consumption may make long
distance pipe lines to the same places no
longer indispensable. This raises a, com
plex question as to what extent investment
in facilities which tend to be displaced
by new developments and new discoveries
should be protected by regulatory com
missions and the courts in rate cases.
The experience o f the past shows that
it is a truism that when economic or tech
nical progress occurs at too rapid a pace
to permit gradual adjustment to new con
ditions the result may be, at least fo r a
time, considerably more harm than good.
Insistence by the commissions and the
courts that utilities utilize newer and
cheaper methods and sources o f supply as
far as feasible, and write off the invest

IO W A MUNICIPAL
BONDS
W e maintain active markets on all
Iowa

M unicipal Bonds and w ill

appreciate your

inquiries

either

ment in the older and displaced facilities,
may prove dangerous to the future wel
fare o f the industry. The basis of public
utility regulation in this country is that
private investment in facilities devoted
to the public service shall earn a “ fair”
return that should in practice be high
enough to attract additional investment.
I f new technical developments are allowed
to severely impair the value of such in
vestments, however, new capital may
easily be discouraged from entering the
industry.
A t the same time, however, serious ob
jection may arise in many cases against
permitting utilities to include in valua
tions large investments in old and obsolete
facilities along with new capital expendi
tures on modern and efficient properties
which replace the old. The way out is to
adopt depreciation accounting practices
which will take account of technical
changes and allow fo r them on a gradual
basis. Through careful cooperation be
tween companies and commissions, this
should be possible on a reasonable basis,
without having to resort to litigation which
will subject the matter to the hard and
fast rules o f legal precedents.
The place of partly displaced property
in valuation is, o f course, determined to
a. considerable extent by whether or not
any use at all is being made o f such facili
ties. I f property is wholly abandoned,
without any likelihood that it will be util
ized again, rapid depreciation or com
plete writing off is desirable. Where it
is used to only a minor extent, or per
haps is retained only as a stand-by facil
ity in case o f special need, depreciation
may well be less rapid. Where facilities
continue to be largely used, however, the
fact that cheaper processes or sources o f
supply are available should not lead to
insistence by the commission on any rapid
writing down of valuations, if the prin
ciple o f attracting new capital to the
utility industry by reasonable returns is
to be maintained.— From New York

“ Journal of

C om m erce

for the purchase or sale of any of
the issues in which you or your

Liquidation Overestimated

customers are interested.

W .D.]fauna and Company
IN V ESTM EN T

B A N K ER S

BURLINGTON, IO W A
W ATER LO O

Northwestern Banker

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Federal Reserve Bank of St. Louis

CEDAR RAPIDS

April 1932

KEOKUK

A comparative analysis o f investment
trust portfolies hardly supports the con
tention that investment trust liquidation
was an important factor in the stock mar
ket decline o f 1931, according to Frazier
Jelke & Company. A t the end o f 1931 the
ownership o f a group o f investment com
panies in 162 selected stocks aggregated
10,487,855 shares compared with 11,583,959 shares at the end o f 1930. At the
close o f last year combined holdings o f
the same companies in 29 different stocks
aggregated more than 100,000 shares com
pared with 31 stocks in the 100,000 share
group at the end o f 1930. Combined own
ership aggregated 50,000 shares in 64

31
issues against 74 issues at the close o f
1930.
Probably fixed trust liquidation in
stocks on which dividends were omitted
was substantial, the Jelke Investment
Survey points out, but there are no sta
tistics to show its probable extent.
Consolidated Gas o f New York has re
placed American Telephone as the favor
ite stock o f investment trust managers,
but the latter maintains second place,
with General Motors and National Dairy
Products tied for third choice. Other is
sues favored by at least 25 o f the 85
companies are American Gas & Electric,
Public Service o f New Jersey, General
Electric, Pacific Gas & Electric, Southern
California Edison, United Gas Improve
ment, Electric Bond and Share, American
Can, Borden Company, Drug, Inc., Elec
tric Power & Light, United Corporation
and United Light & Power A.
The survey reveals (1) an unexpectedly
small decrease in the number o f common
shares held; (2) a prejudice o f invest
ment trust managements against railroad,
mining, oil and bank shares; (3) an in
creased demand fo r investment y ie ld ; (4)
less interest in more speculative stocks;
and (5) a large amount o f switching dur
ing the past year from issue to issue and
group to group.
‘ ‘ Union Pacific has replaced New York
Central as the most popular rail, and
Consolidated Gas is substituted for
American Telephone & Telegraph as the
most frequently held public utility; Gen
eral Electric regains its 1929 standing as
the loading industrial, a distinction tem
porarily taken from it in 1930 by United
States Steel. In the metal group Inter
national Nickel has become more popu
lar than American Smelting, while among
food stocks National Dairy Products is
now more widely held than Borden.
Safeway Stores is owned by more invest
ment trusts than W oolworth. L oew ’s,
Inc., quite logically takes the place of
Paramount-Publix as the first choice o f
trust managements in the amusement
field, ” says Frazier Jelke & Company.
‘ ‘ The follow ing stocks are among those
owned by more trusts at the end o f 1931
than in 1930: American Light & Trac
tion, Chrysler, Drug, Inc., First National
Stores, General Poods, Guaranty Trust,
National Dairy Products and United Gas
Improvement.
‘ ‘ There is a rather important decrease
in the number o f investment trusts own
ing the follow ing stock s: Aluminum
Company, American Power & Light,
American Radiator & Standard Sanitary,
American Smelting, American Telephone
& Telegraph, Anaconda, Atchison, Balti
more & Ohio, Chase Bank, du Pont, East
man Kodak, Electric Bond and Share,
Electric Power & Light, First National
Bank o f New York, General American
Tank Car, International Telephone, Kennecott Copper, Kresge, Kreuger & Toll,

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Federal Reserve Bank of St. Louis

Liggett & Myers, New York Central,
Procter & Gamble, Radio Corporation,
Southern Pacific, Southern Railway,
Texas
Corporation,
Union
Carbide,
United States Steel, Western Union and
Westinghouse Electric.
‘ ‘ The largest proportionate decreases
in the number o f shares held by the 162
companies occurred in American Radia
tor & Standard Sanitary, International
Harvester, Kreuger & Toll, Proctor &
Gamble, International Telephone, Union
C a r b i d e , Westinghouse, W oolworth,
Aluminum Company, Kresge, Kroger
Grocery, Studebaker and General M o
tors. The aggregate number o f shares o f
oil companies, rails and banks is mate
rially reduced. On the other hand, in
vestment trusts in 1931 accumulated a
larger number o f shares o f American
Machine & Foundry, Commercial Sol
vents, Continental Can, Deere & Com
pany, Delaware & Hudson, Drug, Inc.,
First National Stores, United Corpora
tion, Southern California Edison, Pacific
Gas & Electric, North American Com
pany, American Power & Light, Ameri
can Gas & Electric, General Foods, Gil
lette Safety Razor, International Busi
ness Machines, L oew ’ s, Inc., National
Power & Light, Mathieson Alkali, J. C.
Penney and American Ice.
“ Most o f the investment trusts, espe
cially the larger companies, now maintain
extensive research organizations and an
alyze securities and situations carefully
before buying or selling. The prefer
ences indicated show a well defined trend
in the investment thought o f an impor
tant group o f experts.”

Western Union Dividend
The board o f directors o f the Western
Union Telegraph Co. last month voted a
quarterly dividend o f $1 on the common
stock, placing that issue on a $4 annual
basis.
Three months ago the company voted
a payment of $1.50, compared with $2
previous to that date. Last month’s dec
laration is payable April 15th to stock
o f record March 18th.

Quotations for Air Passengers
For the first time in the history o f the
brokerage business, passengers on regular
air transport planes will be supplied with
up-to-the-minute market quotations while
en route. This will be made possible by
an arrangement between the brokerage
firm o f Fenner, Beane & Ungerleider and
the Eastern A ir Transport System.
Fenner, Beane & Ungerleider operate
one o f the largest wire services in the
country.

A La Joyce Kilmer

IOWA
M unicipal Bonds
Safety of principal
Reasonable net return
Ready marketability

Bonds on Iowa municipalities
contain

these

essential ele

ments of a sound investment
Write for our list of
high grade Iowa bonds

The White-Phillips Co., Inc.
Investment Bankers
D A V E N P O R T , IO W A

OFFICES IN
51 CITIES

Extra
Protection
extra protec
tion is provided by a special
Certificate Reserve over and above
our legal liability, set aside on a
scientific actuarial basis as added
assurance and as a guaranty of the
payment of Investors Syndicate In
stallment Investment Certificates as
they come due. This reserve now
exceeds $6,000,000,and increases
as outstanding Certificate obliga
tions increase.

u b s t a n t ia l

A s s e ts O v e r $46 ,00 0 ,00 0

Investors
Syndicate
FOUNDEDI894
M IN N E A P O L IS

BOSTON LOS ANGELES
MONTREAL

Jokes are made proletarians,
But only God can make Rotarians.

—Penn State Froth.
Northwestern Banker

April 1932

★ ★ ★ ★ ★ ★ ★ ★

Great
Salesmen
of
History
A master salesman was Moses, the great leader of the
Israelites!

Among the heroes of the world few exhibit

such a combination of strength and spiritual nobility.
Every schoolboy knows the story— how Moses, born in
bondage, was found by Pharaoh’ s daughter and brought up
in great wisdom and learning in the Egyptian courts.
But his people were to have a Deliverer, and, later, for
forty years, with prophetic faith and fervor, Moses inspired
and comforted his followers.
Promised Land.

He did not live to see the

Nevertheless, through his Decalogue, the

ideals Moses upheld became the moral laws for
the Jews and today form the basis for the ethical
standard of the world.

ROYAL UNION
LIFE INSURANCE
COM PANY
D
A. C. TUCKER
Chairman of the Board

Northwestern Banker

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Federal Reserve Bank of St. Louis

April 1932

e s

M
I o w

o i n e s
a

J. J. SHAMBAUGH
President

Insurance

Business Convulsions— and Life
Insurance
E H A V E been living, as we all
know, in two hectic years called a
business depression. I don’t like
that word “ depression.” I prefer to call
it a “ business convulsion.’

These convulsions have taken place at
more or less regular intervals for cen
turies. And I believe that for many, many
years to come—probably for all time to
come— as long as we have credit and as
long as the human being remains a specu
lative animal, Ave shall have this terrible
phenomenon known as the business con
vulsion.
The fundamental cause is the same in all
of them and was the cause in 1929. That
cause, briefly stated, is excessive specula
tion backed up with foolish credit.
The accumulation o f an estate over a
long period o f time through systematic
labor, patience and compound interest
does not appeal to many.

A man does not merely speculate in
stock. He speculates in real estate, in
manufacturing, in mining, in wholesaling,
in retailing. He borrows money beyond
his capacity in a high state of hope. The
banker himself, being a human being, is
just about as speculative as the other
fellow.

The Explosion Conies
IN A L L Y , however, the explosion comes,
as it came in 1929, and following that
explosion in the stock market, business
begins to let up.
As time goes on, the situation gets worse
and Avorse, the vicious cycle has started,
economy is being practiced by everybody
because they all feel poorer.

Things gravitate finally from the blue
to the jet black. And when they get into
the jet black, that is a good sign because
the future must be better.
I doubt whether there is any individual
who can answer the question, “ When will
it end V But I will make a statement, and
I am not afraid to make it because I know
I am right, and that is that the stock mar
ket will tell us when this business depres
sion ends. There will come a time, I hope
soon, Avhen the stock market will begin to
rise, probably when we least expect it.
That market will begin to go up little by
little, but it Avill keep going up.

A lot of shrewd business men, who Avatch
the stock market as a mercury, indicative
of the tendencies of the future, will say, “ I

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Federal Reserve Bank of St. Louis

A Painful Thing

By DR. S. S. HUEBNER
guess I shall begin to buy. I am not going
to buy just for immediate delivery, but I
shall buy for the long pull. I shall buy
futures for a whole year ahead. It is Avisdom to get as much as possible and obtain
it as cheaply as possible.”
Commodity prices will begin to rise be
cause of this demand and the wheels of
production will begin to turn. And that
stock market will keep going higher and
higher. And then in about seven or eight
years it will have reached dizzy heights
again, and business Avill be trailing after.
Then finally the stock market will stop.
Now the cycle is completed, and this thing
happens over and over and over again.

“ The stock market will tell us when
the

business

depression

ends.

There

will come a time, I hope soon, when the
stock market will begin its rise, prob
ably when we least expect it.

That mar

ket will begin to go up, little by little,
but it will keep going up.”

To understand the significance of insur
ance I ought to tell you a little about the
havoc which is played in these cycles. I
think I am conservative when I say that at
least one-fifth of all American estates have
been Aviped out altogether during the last
two years. One-fifth wiped out, one-half
of all estates clipped in two, and at least
three-quarters of all estates clipped to the
extent of one-quarter. Comparatively feAV
only are spared.
An estate consists of three types of as
sets. The first type consists of real estate,
fixed capital. I think it is approximately
correct to say that at least one-half of the
dollar valuation of real estate in the
United States, as it existed in 1928 and
1929, has been wiped out during these last
two years.
The second type of asset that makes up
American estates we call securities; stocks,
bonds and mortgages. What the tremen
dous panic of October and November of
1929 did Avas merely to wipe out the huge
rise that took place in the valuation of
stocks during 1929 and on top of it
$3,000,000,000 more.

O W EVER, the really painful thing
happened afterAvards. Within a. tAVOyear period there has been wiped out in
dollar valuation o f all the stocks listed on
the NeAv York Stock Exchange a total o f
$33,000,000,000. HoAvever, AA7e have many
other exchanges, and any number o f un
listed securities, and I think I am not far
-wrong when I say that the dollar valuation
of stocks in this country has declined
$70,000,000,000 to $75,000,000,000 within
the last tAvo years.

Now7 Ave come to bonds. With respect
to all the bonds listed on the New' York
Stock Exchange the depreciation during
19 3 1 has been $12,000,000,000.
Mortgages have fared better, but if Ave
are correctly informed there were about
$5,000,000,000 of real estate mortgages in
default at the close of 19 3 1.
Thirdly, American estates, consist of
basic commodities used in industry; com
modities used in manufacturing, wholesal
ing, retailing. What a slaughter of value
there has been in those commodities.
Fortunate Avas the man in 1929 Avho Avas
poor in goods. Unfortunate Avas the man
wdio was rich in goods. The richer he was
in goods in September, 1929, the bigger is
the mess in which he finds himself today.
These troubles called “ business convul
sions” cure themselves. They burn out, so
to speak. As a rule, we begin to propose
all kinds of remedies Avhen the thing is
about over, and whether something is done
or not, Ave will be a great rich nation and
will pass into the next period of prosperity
just the same.
W e knoAv that these convulsions come
more or less regularly, at short intervals.
W hy should Ave always emphasize in life
insurance the one emergency called death?
A human being can die only once in a life
time. W hy should we always emphasize
that once?

A fter all, life insurance is an estate
proposition, and every human being in the
course of a normal lifetime passes through
at least five or six of these business convul
sions before he reaches the age of retire
ment. Why shouldn’t he insure himself
with respect to the six emergencies, and
not be thinking only of the one called
death ?
One purpose of life insurance is to
insure against a financial death. Phys
ical death is important, and we need

Northwestern Banker

April 1932

NWNL
Accompl ishments

in 1931
N WN L c lo se d 1 9 3 1 w it h n o
b o n d , in i t s lo n g lis t o f b o n d
h o ld in g s , in d e f a u lt a s to p r in
c ip a l o r i n t e r e s t .
T h e m a r k e t v a lu e o f it s
b o n d h o ld i n g s (d e t e r m in e d a s
p r e s c r ib e d
by
th e N a tio n a l
C o n v e n tio n o f I n s u r a n c e C o m
m is s io n e r s )
w as
n e a r ly
l/ 2
M illio n D o lla r s g r e a t e r t h a n
t h e a m o r t iz e d b o o k v a lu e a t
w h ic h t h e y w e r e c a r r ie d in
th e C o m p a n y ’ s s ta te m e n t fo r
D ecem ber 31, 1931.
I t e n jo y e d t h e l a r g e s t i n
c o m e ( o v e r 12l/ 2 M illio n D o l
la r s )
of
any
year
in
its
h is to r y .
I t s c a s h f u n d s a v a ila b le f o r
n e w i n v e s t m e n t d u r in g t h e
y e a r exceed ed th e cash d is
b u rse m e n ts b y m o re th a n 7 %
M illio n
D o lla r s .
Of
th ese
fu n d s, o v e r 2 x
/ 2 M illio n D o l
la r s
w as
lo a n e d
to
p o li c y
h o ld e r s , on t h e s o le s e c u r i t y
o f t h e ir p o lic ie s a n d w it h o u t
d e la y .
In a d d it io n to p o lic y lo a n s ,
it m a d e o t h e r n e w
in v e st
m e n t s in h ig h g r a d e s e c u r i t ie s
o f a p p r o x i m a t e ly
5
M illio n
D o lla r s .
E x c lu s i v e o f p o lic y
lo a n s , t o t a l c a s h f u n d s a v a i l
a b le f o r i n v e s t m e n t d u r in g t h e
y e a r w e r e e q u a l to 4 2 % o f t h e
c a s h r e c e ip t s .
T h e C o m p a n y in c r e a s e d i t s
a sse ts
d u r in g
th e
y e a r by
$ 3 ,9 0 0 , 0 0 0 .
It
in c r e a s e d
its
reserve
f u n d s b y o v e r $ 3 ,8 0 0 , 0 0 0 .
It d ecreased
its m a n a g e
m e n t e x p e n s e s a n d in c r e a s e d
i t s s u r p lu s , b o th s u b s t a n t i a l l y .
I t in c r e a s e d
(b y a p p r o x i
m a t e l y 1 0 M illio n D o ll a r s ) i t s
to ta l
p a i d -f o r
in su ra n c e
in
fo r c e , a n d c lo se d t h e y e a r w it h
o v e r 3 6 0 M illio n D o lla r s i n
su ra n ce o u ts ta n d in g .

Northwestern National
L I F E IN SU R A N C E C O M P A N Y
O.J. ARNOLD,

President

S T R O N G ^ Minneapolis.Minn - L I B E R A L

Northwestern Ranker

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

April 1932

life insurance to insure against that. But
a human being has a fine chance to die at
least half a dozen times financially before
he is consigned to the casket, and he needs
life insurance to protect him against each
successive bump to which he is subject as
he passes through these various business
convulsions.
When we have a situation so serious as
this, and which is known to be so certain to
happen, I think we ought to get ready
and whenever we have a risk the only
institution we can turn to is insurance. In
surance is called in our colleges “ risk and
risk-bearing.”
I have in mind the one and one-half
million partners in co-partnerships. I have
in mind the one and one-half to two mil
lion stockholders in comparatively small
closed corporations. There are only about
two thousand corporations in the United
States large enough to be listed on an ex
change. There are about five hundred
thousand corporations, however, in exist
ence in this country.
I have in mind also the millions upon
millions of sole proprietorships in this
country, the professional men—the teach
ers, the doctors, the dentists, the lawyers,
the engineers. They are all in business.
There are millions and millions of peo
ple who are vitally affected whenever one
of these business convulsions arrives.
And, here is where life insurance comes
forward to serve as an emergency fund.
What are the attributes of an emergency
fund? They are five in number. Let me
give them to you and let me say in advance
that life insurance meets every one of
them, 100 per cent.
In the first place, an emergency fund
must be absolutely emergency-proof it
self. The life insurance investment, the
cash value, is absolutely emergency-proof.
Secondly, an emergency fund should
grow as rapidly as possible through the
workings of compound interest. The re
turn on the life insurance investment
ranges from four and three-quarters to
five per cent in legal reserve companies.
Thirdly, an emergency fund must be
made fool-proof against the folly of the
accumulator. And life insurance does that.
The insured hasn’t any selection of invest
ments to make. He doesn’t have to give
any thought to the spread of risk. The life
insurance company takes each one of his
premiums and spreads it out over an enor
mous number of investments. He hasn’t
any reinvestment problems to attend to.
He hasn’t any management to exercise. He
hasn’t any coupons to clip. He hasn’t a
single thing to do except to earn the money
and hand it over, and from that moment
on it is protected against any emergency
arising out of his own personal folly.
Fourthly, an emergency fund must be
unshrinkable. Little good does it do a man
to say, “ I am going to accumulate a fund
for emergency purposes,” and then when
the emergency arises to find that that fund

has depreciated by 25, 30, 40 or more per
cent,
Your life insurance emergency fund is
unshrinkable. In dollars it remains a con
stant. Not one of the millions upon mil
lions of life insurance emergency funds
has shrunk one single dollar.
Lastly, an emergency fund to be an
emergency fund must be immediately
available. That is where a lot of people
have become very wise in these last two
years. They couldn’t get their money
when they wanted it. But the life insur
ance emergency fund was available, and
fo r many people it was the only money
which was available.
So, from the standpoint of availability,
unshrinkability, freedom from all mana
gerial care, rapidity of growth through
compound interest, and absolute solvency
of the fund itself, life insurance is 100 per
cent of an emergency fund.
Someone will ask this question, “ Do I
understand that you advocate borrowing
on life insurance ?” I am the last fellow in
the world to advocate the borrowing of life
insurance moneys. No, sir! That is the
last thing that should be borrowed. But, I
am also the last fellow in the world who
will say that life insurance money should
not be borrowed when the acid test of an
emergency has actually arisen.
I love my life insurance for three rea
sons. First, I know that should I live long
enough to create an investment estate my
self, I shall have one handed to me. Sec
ondly, I love it because I know that if I
do live I shall have a decent estate when
the age of sixty-five is reached because I
am using my life insurance to protect me
against all my many weaknesses in the
field of thrift and investment.
But, thirdly, I love my life insurance,
because I know that at any time, should I
be seriously ill, should I ever be out of
work for any long period of time, should I
ever have the bottom taken from under my
life’s work, there is a sum of available
money when the acid test comes. I don’t
want it unless there is the acid test. But
when the acid test has arisen, one of the
fundamental purposes of my life insurance
is to make available a goodly sum of money
which can be obtained.

Becomes State Manager
H. T. Zuzak of Boonville, Missouri, re
cently signed a state manager’s contract
with the Guarantee Mutual Life Company
of Omaha, covering nine counties in cen
tral Missouri.
Mr. Zuzak’s organization will be known
as the “ Heart of Missouri” agency and
headquarters will be maintained in Boon
ville for the present.

Shake for a Living
“ What do you do for a living?”
“ I work in a burlesque show.”
“ Shake !” — P en n S ta te F r o th .

Takes Over General Mutual
T H E Farm ers Mutual Hail Insurance
association of Des Moines has pur
chased the General Mutual Insur
ance association, W. A. Rutledge, secre
tary of the former firm, announced
last month.
The sale will involve the reinsuring of
all business which the General Mutual has
in force by the Farmers Mutual, Mr. Rut
ledge said.
The company sold was organized in
1903 and incorporated to operate in Iowa
in 1923. It has an annual gross income
from premiums and assessments of ap
proximately $226,000, according to the
state insurance department.

A n n o u n c in g .......
TH E P U R C H A SE OF TH E

GENERAL M UTUAL
IN SU R A N C E ASSOCIATION
B Y TH E

$100,000,000 Insurance

T HE

General Mutual has approxi
mately $ 10 0 ,000,000 worth of insur
ance in force, including its automobile
business.
The Farmers Mutual has
$400,000,000 worth of insurance in force,
including reinsurance and automobile in
surance.
The Farmers Mutual, which is the big
gest hail insurance company in the United
States, was founded in 1893. Its ledger
assets are more than $ 1 ,10 0 ,000 , according
to the state insurance department.
It operates in Iowa, North and South
Dakota, Missouri, Illinois and Indiana.
Perry Rutledge, Storm Lake, is vice presi
dent; E . B. Rutledge, Fort Dodge, treas
urer; and W. A. Rutledge, Des Moines,
secretary.
The Farm ers Mutual, during the past
39 years, has paid out in losses more than
ten million dollars. Its cash surplus, ac
cording to its December 3 1, 19 3 1, state
ment, was $1,226,861. It has almost ten
dollars in assets for each dollar of lia
bility.

New Disability Feature
A new feature has been announced by
the Northwestern National Life of Min
neapolis in bringing out new disability
provisions. The new feature is a clause
providing monthly benefits, $10 per $ 1,000
of insurance for total and permanent dis
ability resulting from accident only. It
also provides for waiver of premiums in
event of disability resulting from either
accident or illness, and double the face of
the policy in event of accidental death.
In addition to the accident clause the
company also announced a revised waiver
of premium and a revised total disability
clause— all to be effective March 15th.
The company’s revised disability clause
provides for waiver of premiums and bene
fits of $5 a month for each $1,000 of in
surance, disability to bei considered
permanent if it continues for six months,
payments to accrue from the end of the
fifth month. Disability must occur prior
to age 55 if the insured is a man or 50 if
a woman.

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Federal Reserve Bank of St. Louis

FARMERS M UTUAL
Hail Insurance Association
of Iowa
W e are pleased to announce the acquisition of this out
standing auto liability insurance organization and wish to
assure all present General Mutual policy-holders of the
same splendid service and prompt equitable settlement of
claims as have characterized this organization in the past.
Effective M arch 2nd, all business of the General Mutual
organization w ill be transacted at the offices of Farm ers
M utual H ail at 722 6th Avenue, Des Moines.
F u ll coverage automobile liability, hail, wind, tornado and
town dwelling house Ere insurance is written by Farm ers
M utual H ail, bringing to the people of all Iowa protection
at a m inim um cost.

E. B. R U T L E D G E , T re a su re r

W . A . R U T L E D G E , S ecreta ry

DES M O IN E S , IO W A
Northwestern Banker

April 1932

In the accident disability clause, dis
ability is also considered permanent if it
continues six months with benefits accru
ing from the end of the fifth month. How
ever, the clause is more liberal in that any
disability occurring before age 60 is cov
ered, and women are insured on the same
basis and at the! same rate as men.
In the waiver of premiums clause the
definition of disability and the waiting
period are the same as in the others. Dis
ability must occur prior to age 60 if the
insured is a man and age 55 if a woman.

Directory of County Bankers
A directory of county key bankers and
agricultural committees of the state bank
ers associations, cooperating with the ex
tension service of the colleges of agricul-

ture and agricultural commission of the'
American Bankers Association, has been
published by the commission.
A plan is outlined in the directory which
is efficient, avoids duplication of effort, and
ties closely the two organizations best
fitted to cooperate with and encourage
farmers, namely, bankers and extension
personnel of the state colleges of agricul
ture. A brief summary of banker-farmer
activities reported for one year shows that
$106,000 was expended by banks fo r agri
cultural improvement. A s many as 38,558
bankers attended and participated in agri
cultural meetings, where bankers and
farmers became acquainted and learned
each other’s problems. As a result of the
effective plan as outlined in the directory,
8,000 farm folk were enlisted in a better
farming program.

A Banking Career
An estimate of banking as a career, by
Reeve Schley, vice president of the Chase
National Bank, will be issued again when
Doubleday Doran republishes “ An Out
line of Careers,” a practical guide to
achievement, edited by Edward L. Bernays, the distinguished public relations
counsel, who also contributes the chapter
on public relations.
This symposium, bringing a fresh atti
tude for young men faced with mapping
out their careers, is opportune, according
to Mr. Bernays, because it comes at a
time when general business conditions
have tended to deaden ambition. Such a
survey of the possibilities in the various
vocations, it is felt, will provide an impetus
to the enthusiasm of these young men
which may help them in recapturing a nor
mal approach to work, achievement and
possible success.
Mr. Schley has been vice president and
director of the Chase National Bank of
New York since 19 17 . He is a member of
the New York State Chamber of Com
merce and president of the AmericanRussian Chamber of Commerce. He was
United States fuel administrator for New'
York county from 19 17 to 1919.
In his chapter on banking in this book
he states:

TABILITY
T

H E mighty oak sinks its roots far into the
protecting earth. Hurricanes cannot uproot
or destroy it while vibrant with life and
growth. In droughts, it goes deeper for the sus
tenance it needs to attain beauty and usefulness.

Life Insurance, too, has withstood the winds
of adverse conditions many times, its roots
deep in the fundamental solidarity of the na
tion. Financial droughts have increased its
benefits and value.
Central Life has passed through a number
of economic depressions in its thirty-six years
of existence. Today, its financial foundations
are more stable than ever and its opportunities
more certain.

Central
Life
Assurance Society
( M u tu a l )

DES MOINES

Northwestern Banker

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Federal Reserve Bank of St. Louis

April 1932

IO W A

“ Three years’ hard work in an appren
ticeship in a bank with the background of
a college education will give a man at the
end of those three years a fa r more prac
tical education than the time spent in the
study of the technique of banking in some
other institution.”
“ A young man must come to a bank with
the expectation that, however good his edu
cation may be, he must expect to learn the
practical details by actually doing them
and by watching older men do them,” he
adds.
Other chapters in the book were written
by: A. C. Ernst, of Ernst & Ernst, on
Accountancy; Stanley Resor, president of
the J . Walter Thompson Company, on Ad
vertising; Nelson A. Crawford, former
director of information, United States De
partment of Agriculture, now editor-inchief, H o u seh o ld Magazine, on Agricul
ture; Joseph H. Schaffner, of Hart, Schaffner & Marx, on Clothing and Allied In
dustries; John Hays Hammond, on Engi
neering; the late F . Edson White, form
erly president of Armour & Company, on
Foodstuffs; Roy W. Howard, chairman of
the board, Scripps-Howard Newspapers,
on Journalism ; Jesse L. Lasky, vice presi
dent of Paramount Public Corporation, on
Motion Pictures; Edward L. Bernays,
public relations counsel, on Public Rela
tions; R. R. Deupree, president of the
Procter & Gamble Company, on Salesman
ship ; the late C. H. Markham, formerly
president of the Illinois Central Railroad,
on Transportation.

37
Lottery for Charity
One hesitates to use the word “ amus
ing” when discussing any one phase of
the very serious economic depression
which has the entire world in its grip.
Yet amusing indeed is a British proposal
to raise money by lottery for charity, and
fo r scientific and artistic purposes. A
bill to legalize the lottery passed the house
of commons on its first reading by a vote
of 176 to 123. The vote means little,
except that a lottery similar to the Irish
Sweepstakes might be established; there
is, however, no evidence of probability.
The lottery is no new' thing; it was
thoroughly recognized in years past both
in Europe and in the early days of the
American colonies. The New York Sun
quotes a diary entry made in June, 1758,
by the Rev. Samuel Seabury, father of
the first Protestant Episcopal bishop in
the United States and great-great-grand
father of the sponsor of the present Seaburv investigation:
“ The ticket No. 5,866, by the blessing of
God, in the Light-house and Public Lottery
of New York, appointed by law . . .
drew in my favor £500, of which I re
ceived £425, which the deduction of 15
per cent makes £500, for which I now
record to my posterity my thanks and
praise to Almighty God, the giver of all
good gifts. Am en!”
Had this lottery result been published
in an American newspaper of the present
time and the paper sent through the mails,
the person guilty of the offense would be
liable to a fine of $ 1,000 and two years
in prison or both. Yet the S un notes that
the Virginia, colony was assisted by a
lottery, that after the fire of 17 6 1, Faneuil
Hall was rebuilt from the proceeds of a
lottery, the Continental Congress tried to
raise money by lottery in 1777, Yale used
the lottery system in 1750 to raise build
ing funds, and in 1772-1794 and 1806
Harvard obtained permission to hold a
drawing to improve the state of its treas
ury.— From Chicago “ J ou rn a l o f C om
m erce

of the Chemical Bank on March 1, 1882,
at the age of sixteen, Mr. Pascal has
served during the past fifty years in va
rious clerical positions and is now vault
officer at the bank’s main office, 165
Broadway.

Lower Net Income
Lower gross and net income was re
ported by a group of large public utility
holding companies, operating chiefly in
the electric power and light field. Com
panies include Standard Gas & Electric,
Stone & Webster and American Water
Works & Electric.
Consolidated net income of the Stand
ard Gas & Electric Co., fo r the year ended
December 31, 19 3 1, amounted to $15,272,436, equivalent after interest, taxes
and preferred dividends to $4.02 a share
on 2,162,607 shares of common stock, ac
cording to John J . O’Brien, president.
This compares with $19,490,584, or $6.04
a share, at the close of 1930.
This large utility system recorded a
slight decline in gross revenues in 19 3 1,
when they were $145,528,803, against
$153,678,302 in 1930.

Cash Near $18,000,000
The balance sheet as of the end of last
year shows current assets substantially in
excess of current liabilities, according to
Mr. O’Brien. Cash on hand for the sys
tem totaled close to $18,000,000 while
hank indebtedness amounted to $6,500,000,
of which $5,500,000 is the obligation of

Commercial failures in the United States
during February totaled 2,732, a decline
of 2 1 per cent from the total for January.
The February total, however, was 6.6 per
cent higher than the February, 19 3 1, total
of 2,563, and established a new February
high.

Chemical Honors Employe
Eugene I. Pascal, upon the completion
of fifty years of service in the employ of
the Chemical Bank & Trust Company, was
presented by Percy H. Johnston, presi
dent, to the board of directors at a regular
meeting recently and presented with an
appropriate gift. Entering the service

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Federal Reserve Bank of St. Louis

Increase in Stock Tax
The 100 per cent increase stock transfer
tax in New York state became effective
March 1st. The tax was increased from
2 cents to 4 cents per share.

New Jersey Commissioner
Colonel William H. K elly of East
Orange has assumed his post of Commis
sioner of Banking and Insurance fo r New
Jersey, succeeding Frank H. Smith. One
of Colonel K elly’s first official acts was
to appoint Vernon D. Peer as Deputy
Commissioner.
Mr. Peer succeeds G.
Hayes Markeley, who resigned to become
comptroller of the Howard Savings Insti
tution of Newark.

MOST CENTRALLY
LO CATED

"M O D ER N D IN IN G R O O M "
-P O P U LA R PRICED C O F F E E SH O P

FRANK G.WARDEN President
C.H.HARTNAGLE Manager

A ROOM with a BATH
Æ iiiw iiiffliiiiii^ i ^

[

Commercial Failure Less

the parent, Standard Gas & Electric.
None of the affiliated companies in the en
tire system has any bank indebtedness.
Net income of Stone & Webster, Inc.,
and subsidiaries fo r the year ended De
cember 3 1, 19 3 1, amounted to $3,291,784,
after interest, taxes, write-offs, preferred
dividends, etc., equal to $1.56 a share on
2,104,500 common shares outstanding.
This income is before losses of $1,270,304
on sales of certain securities acquired
prior to 19 3 1. This compares with in
come of $6,430,322, or $3.82 on the aver
age shares outstanding during 1930.
Gross revenues were $59,522,087 in
19 3 1, against $52,509,294 in the preceding
year.

'1 1 j\

u n

A DOLLAR and aHALF
O T H E R ROOM S

$ 2 .- $

2 . 50

O th er

W ARDEN
HOTELS
THE O TTU M W A
O ttu m w a , Io w a
THE EAD M AR
Mason City. Iowa
THE JEFFERSON
Iow a City. Iowa
THE W A R D EN
N e w a rk, O h io

DES MOINES
IO W A

Northwestern Banker

April 1932

‘38

a ankers (~Wants
This department of THE NORTHWESTERN BA N K ER is to
assist subscribers in obtaining goods or service hard to find.
It is free to subscribers. To non-subscribers the charge is
five cents per word. Hse it. A SK US, as we can tell you
where to buy anything you need in your bank or for your
bank. T E LL US, as your “ want” will be published under
the above heading free of charge. In answering classified
advertisements which have key numbers please enclose a
two-cent stamp. This is used to forward your letter.
Position W anted —Teller or bookkeeper.
Seven years’ general experience country
and city banks. Capable. Best of refer
ences. Good appearance. Address the
Northwestern Banker No. 3182. 4.

Securities Salesmen — We are expand
ing our sales organization. Men with
banking experience preferred. A ttrac
tive listed issues. Sales training, if de
sired. Future opportunity. Liberal com-

The Prosperity Poster
Available
for dis
tribution
in Y O U R
community.
Identifies
YOUR
BANK
with every
forward
movement
looking to
the return
of prosper
ity through
increased
faith and
confidence.

pensation. Address L. L. Harr & Co., 515
Merchants National Bank Bldg., Cedar
Rapids. Iowa. 4.
Position W anted — Lady stenographer,
high school and business college grad
uate, age 23. Some office experience.
Open for bank position. Address the
Northwestern Banker No. 3188. 4-5.
Position W anted — Cashier.
Now em
ployed as cashier but desires position in
town where there are better school and
church facilities. Protestant. Can fu r
nish best of references. Address the
Northwestern Banker No. 3186. 4-5-6.
Position W anted —Five years’ book
keeping and teller experience in city
bank. Also experience in handling notes
and legal papers, being a Notary Public.
Can furnish good references. Address
the Northwestern Banker No. 3185.
4.
Agricultural Service— Secure a well
trained and experienced farm manage
ment specialist to service your Central
Iowa farm s. Ten years farm ing, three
years State College Staff, three years
county agent. Best of references. C lar
ence Pickard, 3201 Leado, Des Moines,
Iowa. Phone 5-4098.
Position W anted — Assistant cashier.
Nearly two years’ experience as assistant
cashier in small country bank. Married.
Age 25. Protestant. Can give best of
references. Address the Northwestern
Banker No. 3183. 3-4-5.

A most
constructive
advertising
campaign.
TH REE
S IZ E S

27 X 43
15 x 23
354 X 654

K I M >WeiJIR FEETttrfeCM W ND
k W | F A « ™ ^ W C > lJI R § liI .IF

TOUJIRCOUNTm«"¿MUMANITY
ENDORSED 8 Y

THE CERLACH-BARKLOW COMPANY

W R IT E

JOUÎT ILLINOIS

T O D A Y FOR
D E T A IL S

TH E G E R L A C H -B A R K L O W C O M P A N Y
Creators of Good W ill Advertising

A cco u n ta n ts

JO L IE T , IL L IN O IS

Oldest firm in Des M oines
Call us for certified work

(Prices and Samples On Request On Bank Letterhead)

M U E H L E , BO YD & M c C L A IN

Northwestern Banker

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Federal Reserve Bank of St. Louis

April 1932

1106 C o m m o n w e a lth B u ild in g

39
Position Wanted—-One year and a half
general banking experience as machine
bookkeeper and stenographer.
Single.
Age 25.
Address the Northwestern
Banker No. 3179. 2-3 4.
Position Wanted—Fifteen years’ gen
eral banking experience. One year as
Assistant Cashier and fourteen years as
Cashier of the same bank. Good reason
for wanting another position. Married,
age 43. Good reference. No preference
as to town. Address the Northwestern
Banker No. 3 18 1. 2-3-4.
Position Wanted — Eighteen years’
banking experience in country banks
from bookkeeper to cashier in sole charge.
Married, age 38. Protestant. Best of
references furnished. Will accept small
salary to start in order to get chance to
prove worth to employer. Address the
Northwestern Banker No. 3180. 2-3-4.

7 of the 8
leading banks supply their
customers with checks made
on La Monte Safety Paper
. . Here, as in all financial
and industrial centers the
country over, La Monte is the
IN P IT T S B U R G H

On $3 Dividend Basis

U. S. Treasurer Turns Author

The board of directors of The Chase
National Bank recently declared a quar
terly dividend of 75 cents a share on the
7,400,000 shares of the bank, payable
A pril 1s t to stockholders of record at the
close! of business March 11th . This repre
sents an annual rate of $3 per share, and
as the shares are of $20 par value, repre
sents a 15 per cent annual dividend rate
on the stock.

How are government bills paid 1 How
does Uncle Sam keep track of the vast
sums of money pouring into his treasury ?
How much paper currency is in circula
tion ? How much gold and silver ? What
is the difference between gold and silver
certificates, United States bank notes, na
tional bank notes and federal reserve
notes'? How do federal reserve banks as
sist the treasury, and how is the nation
financed ?

This action of the Chase directors re
stores the dividend to the rate paid by the
bank prior to Ju ly 1s t last. On that date
the bank assumed the 25-cent quarterly
dividend previously paid by Chase Se
curities Corporation.
That additional
dividend has now been omitted from the
disbursement, pending the return of con
ditions in the security markets which will
ju stify a resumption of dividends by the
securities affiliates.

Annual Convention
The thirteenth annual convention of
Morris Plan Banks and Companies will
be held at the Shoreham Hotel in Wash
ington, D. C., September 29th, 30th and
October 1st, according to an announcement
by J . Rodney Ball, president of The Morris
Plan Bankers Association, recently.
Mr. Ball stated that Bertram Chesterman, president of The Morris Plan Bank
of Washington, had been appointed gen
eral convention chairman, and Wallace D.
McLean, executive vice president of The
Morris Plan Company of New York, chair
man of the program.
Other committees will be announced at
an early date and plans perfected to bring
a large delegation of bankers and directors
from these! institutions in 32 states.

preferred check paper, ac
cepted, used, and appreci
ated for its safety, durability,for the distinction it lends to
every transaction.
George La Monte & Son,
6 i B ro ad w ay, New York
City. Also branch offices in
Chicago, Cleveland, Kansas
City, St. Louis, Atlanta, Dallas,
San Francisco and Baltimore.
LA MONTE SAFETY PAPER FOR
CHECKS
•
N A T I O N A L S AF E TY
PAPER . . . B AN K E R S SAFETY PAPER . . .
SAFETY CHECK PAPER... A N C H O R SAFETY
PAPER . . . E X C H A N G E SAFETY PAPER
— A LL LA M O N T E PAPERS — ALL S A F E

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Federal Reserve Bank of St. Louis

These and many related questions are
answered by United States Treasurer
W alter O. Woods in “ The Story of Uncle
S am ’s M oney,” just published by the
Gregg Publishing Company.
Major
Woods for the first time explains the
United States fiscal system and the oper
ations of the treasury department in
language that the man of the street can
grasp without first studying a course in
finance and banking. A t a time when the
small salaried man and the wage earner
are as vitally affected by government
finance as W all Street and the nation’s
giant financial, commercial and industrial
interests, M ajor Woods presents a picture
of the operations of the treasury depart
ment in plain, every day language, clear
ing up many points that have baffled
everybody except experts in high finance
and students of economics.
That millions of dollars of income
taxes collected this year will probably be
refunded to taxpayers is indicated by
M ajor W ood’s statement that many tax
payers overpay their income taxes, and
thousands of returns “ disclose a lack of
understanding of the requirements ’ ’ with
resulting inadvertant voluntary overpay
ments.
Hope for the bewildered taxpayer who
pays more income tax than the law re-

r
W h at?
What are you doing to build confidence?
What are you doing to prevent further hoarding?
What are you doing to bring out dollars now in hiding?
Master Thrift System service consists of a common-sense explanation on “ H O W
A B A N K F U N C T IO N S ” and the important part your Bank plays in the
prosperity of a community.
W ork is done by competent and experienced men through direct
contact. No charge except on permanent accounts secured.

personal

M A desk statue o f George W ashington will be sent to h
^ those asking fo r details. No obligation, o f course. W

M aster

T l i r i i l

System , I n c .

740 N. Plankington Avenue — Milwaukee, Wisconsin
FIFTE E N Y E A R S ’ E X P E R IE N C E — O U R CLIEN TS A R E O U R REFERENCES

Northwestern Ranker

April 1932

40
quires is held out by M ajor Woods in the
statement that thousands of refunds are
made without any claim being first made
by the overgenerous taxpayer.
M ajor Woods reveals an interesting
slant on the popular prejudice that ill
luck is liable to come to the possessor of
a two-dollar bill. Many superstitious
people, believing that the “ curse’ ’ is re
moved by tearing oft the corner of a twodollar note, so mutilate these bills that
great numbers of them have to he retired
on presentation—an unlucky and expen
sive superstitution for Uncle Sam, or in
the final analysis, the taxpayer.
Despite the unpopularity of these notes,
they are kept in circulation because,

M ajor Woods explains, “ it is economical
for them to be kept in circulation.
Clearly, a two-dollar note in use saves the
use of one one-dollar note. It takes the
place of and does the work of two
“ ones,” an obvious saving of the cost of
one note. As it costs about a penny to
manufacture a note, it is good manage
ment for twos to be in circulation.
The same reasoning, states M ajor
Woods, is applied to $10,000 certificates,
used by banks, clearing houses and in
certain large real estate transactions.
These large denomination bills are time
savers fo r banks when presenting a great
package of checks to the banks on which
the checks are drawn, to be paid the large

To Correspondents

W E OFFER
I — Our Experience — We have been in

the banking business in Sioux C ity
for more than thirty-five years.
2 — Our L o cation — T his bank is located

‘ ‘ at the Y a r d s .”
various de
partm ents of this bank are geared to
handle your livestock transactions
prom ptly and efficiently.

3 — Our

Facilities — T he

sum with a few large bills instead of
many small bills.

Rules on Conversion
The conversion of investment trust cer
tificates of interest into the underlying
securities making up the trust, pursuant
to the trust provisions, does not give rise
to gain or loss for income tax purposes,
under an important ruling just announced
by the general counsel to the Bureau of
Internal Revenue, according to J . S. Seid
man, tax expert of Seidman & Seidman,
certified accountants.
“ This ruling settles a point about which
there has been considerable doubt,” Mr.
Seidman explains. “ It was believed by
many that the conversion would be tax
able on the theory that it was like the
redemption by a corporation of its own
stock, which is treated under the tax law
as a sale by the stockholder of his shares,
and hence taxable to the stockholder. The
general counsel points out, however, that
when the holder of the trust certificate
exercises his option to make the conver
sion, he sells nothing to the trust but mere
ly terminates the trust relationship and
receives the legal title to the securities
to which he theretofore had equitable
title.
“ The stockholder, on the other hand,
has no such right to terminate individually
his relationship as stockholder by present
ing his certificate fo r redemption. Nor
does the stockholder acquire the right
to any specific assets of the corporation,
as does the beneficiary of the trust.
“ The general counsel regards the bene
ficiary as being no richer nor poorer after
exercising his right to demand and re
ceive the underlying securities, than he
was before, and therefore concludes that
uo gain or loss results fo r income tax
purposes.
“ The effect of the ruling will undoubt
edly be to promote these conversions,” Mr.
Seidman added, “ as in many cases the
market value of the underlying securities
is greater than the price at which the trust
certificates are selling.”

Leaves Commercial Field

L ive Stock National Bank
S I O U X C I T Y , IO W A
A ffiliated w ith
N O R TH W EST

BAN C O R P O R A T I O N

George H. B un ’ & Co., investment bank
ers and dealers in commercial paper, with
offices in New York, Chicago and Boston,
announce the discontinuance of the com
mercial paper department of their busi
ness.

Scotch Baby’s Birthday
“ Ach, Sandy, the baby’s swallowed a
penny!”
“ Weell, let him ha’e it—tomorrow’s his
birthday .” — N o r th w e ster n P u r p le P a r ro t.

Northwestern Banker

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Federal Reserve Bank of St. Louis

April 1932

41
Defends Land Bank

jt
1(tek
k. * m:m
^ ., I
J. W . B R Y A N T
President

South Dakota
Bank News
Officers South Dakota Bankers
Association
P resid en t......................... J. W . B ryant
Mitchell
V ice P resid ent.............T. M. Brisbine
W oonsocket
T reasurer......................... Russell Bard
M iller
Executive M anager.G eo. A . Starring
Huron

%
S* ^ ||iÈ
§¡8S
H I
A »-.

GEORGE A . ST A R R IN G
E xecutive M anager

Surveys Association Work

County Treasurer Ruling

Secretary George Starring of the South
Dakota Bankers Association, recently sent
out to all member banks a questionnaire
asking them to indicate what association
activities they deemed most valuable.
Summarizing the results of the survey,
Secretary Starring reported:
“ Our members have checked over the
various activities of the association and
have indicated what they deem most im
portant for the coming fiscal year as fol
lows :
“ F irst place goes to in fo rm a tio n s e r v
ice.
This includes various special bulle
tins, S u nshine B a n k er, legal bulletins, etc.
“ Second place was tied by p r o te c tiv e
service and legisla tive service.
“ Third place was given to rew a rd for
capture of bank bandits.
“ Fourth place was taken by f e e d and,
seed loan activities.
“ F ifth place was awarded to ta xa tion
studies.
“ Sixth place was a triple tie shared by
legal service; promotion of b e tter banking
practices, including service charges, analy
sis of accounts, etc., and in su ran ce. Legal
service in many cases was marked higher
and included as a part of information serv
ice; in fact legal got six firsts. Many
bankers said ordinarily they would give
promotion of b e tter ba nk ing first place but
fo r next year they think other items more
pressing.

A county treasurer would not be person
ally liable fo r making deposits of public
funds in a bank in excess of 100 per cent
of the bank’s capital and surplus if the
county commissioners, by resolution, au
thorized such deposits, the attorney gen
eral’s office has informed J . L. Hannett,
state’s attorney at Winner, South Dakota.
The treasurer, however, “ might become
personally liable” by making deposits in
excess of the amount of securities pledged
by the bank as collateral, the attorney gen
eral’s opinion said.
The 1927 legislature provided a special
act by which county commissioners could
authorize the deposit of public funds in
excess of 100 per cent of a bank’s capital
and surplus.

“ P u b lic rela tion s, a d v ertisin g serv ices,
agricu ltu ra l work and other activities

trailed the list as desired activities for next
year.”

At Whitewood
Maurice Briggs, formerly with the First
National Bank of Deadwood, South Da
kota, became assistant cashier of the
Whitewood Banking Company last month,
succeeding J . W. Davis, who has held the
position for the past three years.
Mr. Briggs left Deadwood to accept a
position with the Evans Tractor Company
in Rapid City and the past Avinter has
spent some time in the Battle Mountain
Sanitarium, Hot Springs.
His family have been residing in Deadwood.

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Federal Reserve Bank of St. Louis

Conditions in Canada
The measures adopted by the United
States Congress to liquify frozen assets,
release hoarded currency, expand credit
and enlarge note circulation are expected
to stimulate trade in that country and
have favorable reaction upon conditions
in Canada, according to the current busi
ness summary of the Bank of Montreal.
“ The adoption by the Parliament of
Great Britain of a comprehensive tariff
upon imports, with preferences to prod
ucts of British countries,” the summary
also points out, “ can hardly fail to in
crease the commerce of Canada Avith the
United Kingdom and, above all, trust is
reposed in the Empire Economic Confer
ence, meeting in OttaAva in Ju ly, to evolve
a plan of preferences within the Empire
that will redound to the advantage of all
British countries in matters of trade.”
The bank finds encouragement in the
fact that the Canadian people out of their
savings have readily absorbed bonds is
sued in recent weeks by federal and pro
vincial governments. Of a total issue of
$1,246,954,000 bonds by Canadian govern
ments and corporations in 19 3 1, not less
than nearly 90 per cent were placed within
the Dominion.

There is considerable misunderstanding
concerning uses to be made of the $125,000,000 recently appropriated by congress
for strengthening the federal land bank
system, according to Dennis P. Hogan,
president of the Omaha Federal Land
Bank.
Only $25,000,000 of the total is fo r use
in taking care of loan extensions and tax
payments, Hogan said. The $100,000,000
balance was appropriated expressly for
the purpose of strengthening the capital
structure of the land banks, he said.
It is being used to improve the charac
ter of security of federal land bonds by
some of the banks. None of it yet has
been given to the Omaha bank, Avhich is in
the best financial condition of any of the
twelve federal land banks of the country,
he said.
The Omaha bank’s share of the $25,000,000 fo r extensions is something over
$3,000,000, which is being used in the five
states in the Omaha district.
“ I f all of the banks were in as good con
dition as ours the appropriation would
have been unnecessary,” Hogan said.
“ We haven’t as yet received any of the
$ 10 0 ,000,000 to help the sale of our bonds
because it was felt that we did not need
this assistance. We can have our share at
any time, however.’

Farm Board Policy
I f congress desires to curb the activities
o f the farm board, there is only one
proper Avay in Avhich to achieve this pur
pose^— that is, by redefining the board’s
duties and amending the law which es
tablished it. To give aAvay the board’s
stored wheat pledged against bank loans,
to consider singling out members of the
board fo r special salary cuts and to whit
tle away appropriations in disregard o f
consequences is a form o f legislative irre
sponsibility deserving o f severe condem
nation by foes as well as friends o f the
farm board.
Congress legislated the farm board into
existence and congress has imposed upon
it certain duties Avhose execution requires
the expenditure o f vast sums o f public
money. I f congress has at last repented
o f its OAvn rashness and reached the con
clusion that the farm board is a useless
and overexpensive luxury, it should
frankly admit its change o f heart by either
repealing or radically modifying the
terms o f the farm board act. So long as
that law remains upon the statute books
in its present form, however, congress is
obligated to provide the board Avith the
resources with which to carry on. In any
case, contracts and commitments already
entered into should not be ruthlessly dis
turbed.— From NeAv York “ J ou rn a l of
C om m erce.”

Northwestern Banker

April 1932

42
With St. Louis Office
Harold H. McLucas, vice president of
the First National Bank of Fairbury, and
for 25 years in the banking business at
Fairbury, Nebraska, has been honored by
appointment as manager of the St. Louis
regional office of the crop production divi
sion of the U. S. Department of Agricul
ture.
Mr. McLucas has resigned his position
with the Fairbury bank and left last
month for St. Louis to take up his new
duties, having charge of placing $ 10 ,000 ,000 for crop production loans to the farm
ers of seven states.
Born and reared in Fairbury, Mr. Mc

Lucas has been with the Harbine Bank of
Fairbury for 23 years, rising to the vice
presidency of that institution, and has
been a vice president of the First Na
tional at Fairbury since the consolidation
several years ago.
The object of the new crop production
division of the Department of Agriculture
is to aid the worthy poor people in the
farming sections of the United States, es
pecially where banks have failed and no
funds are obtainable for planting 1932
crops.
The crop production loans will be made
from a $50,000,000 revolving fund allo
cated to the Department of Agriculture

MEASURE

VALUE

of a C ITY C O R R E S P O N D E N T
is its ability and desire to serve.
The facilities of this bank are com
plete for the prom pt handling of
any business.
W e w o u ld like to prove both

by the Reconstruction Finance Corpora
tion, in accordance with the! act of con
gress of January 22, 1932. Secretary
Hyde has named Henry S. Clarke of Chi
cago as national director, and appointed
Spokane, Washington; Minneapolis, Min
nesota; St. Louis, Missouri; Dallas, Texas,
and Memphis, Tennessee.
Mr. McLucas will have jurisdiction over
the states of Kentucky, Illinois, Indiana,
Missouri, Kansas, Oklahoma and eastern
Colorado. Nebraska comes under the Min
neapolis office.

Lancaster County Meeting
Officers of the Lancaster County Bank
ers Association elected last month at Lin
coln, Nebraska, include: Henry Pothast,
Prairie Home, president; J . C. Ruigh,
Firth, vice president, and W. H. Dick,
Waverly, secretary. Fred Carsten of Hallam is the retiring president.
Two addresses were given at the meeting
which was attended by the thirty-five bank
ers of Lincoln and vicinity. George Woods,
state banking commissioner, discussed gen
eral banking conditions in the county and
state and P. R. Easterday explained the
reconstruction finance corporation.
In the opinion of Mr. Easterday, the
reconstruction plan will benefit western
bankers and business just as much as large
eastern banking interests. He pointed out
that business morale will be boosted with
the extension of the federal loans. Mr.
Easterday also suggested that federal re
serve banks will be relieved by loans and
a more stable business foundation estab
lished.

o u r a b ility and desire to serve
you in Sioux C ity.

Wins Slogan Contest
First prize of $ 15 offered by the Doug
las County Democratic Club, Douglas
county, Nebraska, for a campaign slogan
goes to Octave Le Blanc, Hastings, Ne
braska, assistant receiver of the Elba
State Bank, whose: suggestion is a pic
ture of the Liberty bell, carrying the cap
tion, “ Liberty Bell— It’s Time to Ring
Again.”

Will Not Reorganize Bank

IRST N A T IO N A L B A N | ^
in

sioux cu y

A . S. Hanford, President

An attempt to reorganize the First Na
tional Bank of Hastings, Nebraska, has
been discontinued.
Mayor William Madgett headed the re
organization group, and said business con
ditions in general had made it inadvisable
to continue their efforts. The plan was to
raise ne:w capital and surplus of $150,000.
Thirty thousand dollars was pledged. The
bank closed several weeks ago.

High-Hat

Frederick R. Jones, V ice Pres.
Fritz Fritzson, Cashier

“ Have you any distant relatives ?”
“ Yes—two brothers who have had col
lege educations.” — D a rtm ou th J a ck o’
L a n tern .

Northwestern Banker

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

April 1932

43
State Banks

*'
w

JlNr

^
^

E. N. V A N H O R N E
P resid en t

A directory of state charted banks pub
lished by the Nebraska Department of
Trade and Commerce and distributed last
month showed 562 of these institutions
were in operation June 30, 19 3 1. In De
cember, 1928, there were a few more than
1,000 state banks in Nebraska.

Nebraska
Bank News
P resid en t...................E. N. V an H orne
L incoln
Chairman, E xecu tive C ouncil..
..................................W . H . M cD onald
N orth Platte
T r e a s u r e r ........................ .........Ca r l We il
L incoln
S ecreta ry.........

..... W m . B. H ughes
0m aha

A New Savings Plan
The Continental National Bank of Lin
coln, Nebraska, has installed a new sav
ings account plan, known as the monthly
statement savings plan, which is working
out in excellent fashion, according to R.
C. Johnson, assistant vice president. Since
it appeals prim arily to teachers, lawyers,
doctors, etc., it has resulted in securing
more good savings accounts for the bank
than any similar plan ever used.
In joining the monthly statement sav
ings plan club, if the member already
has a checking account with the bank, he
agrees to authorize the bank to deduct on
the tenth of each month, an amount such
as five, ten, fifteen, twenty, or more dol
lars from his checking account and place
it in his savings account. I f the member
does not have an account with the Conti
nental National, he signs an agreement
with the bank asking that the bank send
him each month a statement for the
monthly deposit which he has agreed to
make'. The bank pays 3 per cent on the
savings accounts, each January and Ju ly.
The statement form which the bank
sends out each month, in addition to stat
ing the monthly deposit due, gives the
depositor the total of previous deposits
which he has made. The! regular savings
pass book is used, with the words “ Monthly
Statement Savings Plan” stamped across
it.
The Continental National, affiliated with
the Northwest Bancorporation, has assets
and liabilities of $6,062,523. Deposits are
in excess of five an one-half million dol
lars. It is capitalized at $200,000 and has
a surplus of like amount, in addition to
undivided profits and reserves of $88,830.
Officers include: Edwin N. Y an Horne,
president; T. B. Strain, vice president;
Edward A. Becker, cashier; R. C. John
son, assistant vice president and C. W.
Battey, assistant cashier.

Dividend Payments
W M . B. H U G H E S
Secretary

A total of $476,939.26 was paid out
to depositors of twenty failed Nebraska
state banks during February as dividends
from liquidation of bank assets, the state
department of trade and commerce! said
last month.

cussion was carried on at the Fanners
State Bank of B ig Springs.
E very bank in the two counties, includ
ing Lisco, Oshkosh, Lewellen, Chappell
and B ig Springs was represented, thir
teen bankers being present.

Payments were as follows :
Farmers State Bank, Ansley, 1.8 per
cent, $3,285.19; Custer State Bank,
Broken Bow, 5 per cent, $7,343.46; Farm
ers State Bank, Crofton, 5 per cent, $16,312.9 2; Commercial Exchange Bank,
Doniphan, 2.85 per cent, $3,232.68; Bank
of Gretna, 20 per rent, $37,859.90; Cedar
County State Bank of Hartington, 15 per
cent, $25,903.73; Inman State Bank, 7 per
cent, $7,025.70; Madrid Exchange Bank,
9 per cent, $10 ,12 3.39 ; German Bank of
Millard, 10 per cent, $14,029.37; Ponca
Valley State Bank, Monowi, 6 per cent,
$4,898.42; Antelope County Bank, Oak
dale, 5 per cent, $6,209.17; State Bank of
Omaha, 10 per cent, $204,509; Citizens
State Bank, Orchard, 15 per cent, $16,254.59; State! Bank of Ravenna, 10 per
cent, $17,620; First State Bank, St. E d
ward, 15 per cent, $15,228.78; Shelby
State Bank, 25 per cent, $27,070.78; Verdigre State Bank, 10 per cent, $14,752.30;
Vesta State Bank, 5 per cent, $4,731.84;
Citizens State Bank, Wahoo, 10 per cent,
$30,335.07; Farmers State Bank, Wynot,
10 per cent, $ 10 ,2 12 .68 .

Leaves Bank at Pawnee City
Henry W. Blume, cashier of the Farm
ers State Bank of Pawnee City, Nebraska,
severed his connection with that institu
tion last month.
Mr. Blume', who had previously been en
gaged in the banking business at Elk
Creek, came to Pawnee City as assistant
cashier of the Farmers State Bank in 1914.
In 1920 he was elected cashier of the bank,
in which position he has served ever since.
Mr. Blume is leaving the banking pro
fession, and has accepted the position of
sales manager fo r the Merritt non-corro
sive battery connectors, with Nebraska,
Kansas and Missouri as his territory.

At Wood Lake
The Citizens State! Bank at Wood Lake,
Nebraska, has announced a change in their
board of directors, J . A. Morris becoming
vice president and E. G. Morris becoming
a director.

ffy y y

Courage and Conservative Judgment
W IN
w

Quarterly Meeting
The quarterly meeting of the Garden and
Deuel counties bankers association was
held last month at B ig Springs, Nebraska.
A t 7 :30 a bountiful turkey dinner was en
joyed at the Klindt Cafe, after which dis

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Federal Reserve Bank of St. Louis

LIVE STOCK N A T IO N A L B A N K
U N IO N STOCK YARDS

OMAHA

Northwestern Banker

April 1932

44
Talk Banking in Schools

T ak e care of the
H o u r s and t h e
D a y s w ill t a ke
care of themselves
■

Interest on bank transactions is
figured in terms o f days, but
Post O ffice and Railroad sched
ules are based on minutes.
T h u s a draft or other collection
item that is permitted to lie idle
for even an hour m ay be penal
ized a full d a y ’s interest.
T o keep you r m o n ey w orkin g
it is necessary to keep you r ou to f-to w n items m oving.
O u r C o l l e c t i o n and T r a n s it
Departm ents are in continuous
2 4 -h o u r-d a ily operation.
A ll item s received at par.

The Omaha chapter of the American In
stitute of Banking announces that as part
of its educational program, members of its
public speaking class are giving short talks
on banking in public grade schools of
Omaha and Council Bluffs. Raymond A.
Nelson, educational director, says these
have been prepared by the national asso
ciation and have the approvel of school
authorities.

535 Own Bank Stock
At the close of 19 3 1, 535 Nebraskans
owned 73,649 shares of stock in the North
west Bancorporation, with which the
United States National Bank and Stock
Yards National Bank of Omaha are affili
ated. There were 275 Nebraska stock
holders at the close of 1930. Total num
ber of stockholders is now 17,605, of whom
94 per cent live in communities served by
the corporation.

Will Recommend Charter
Grant of a new charter fo r the failed
First National Bank of Alliance, Nebraska,
will be recommended to the comptroller of
currency at Washington, D. C., it was an
nounced recently by W. H. Donahue, na
tional bank examiner from Kansas City.
The announcement was made following
completion of a survey of accounts re
ceivable and other assets of the defunct
bank. The survey was made on petition of
business men and ranchers who are inter
ested in the reopeliing of the banking in
stitution.

A Roman Display
Citizens of Rome carried their loose
change in small banks in the pocket of
their togas. To procure their coins it was
necessary to break the bank.
A replica of the; Roman banks was last
month on display in the windows of the
Council Bluffs Savings Bank. A Roman
artist’s conception of the ruling emperor
is carved on the bank to serve as a constant
reminder that Rome ruled and demanded
tribute from patrician, plebeian and con
quered nation.

Meet at Auburn

PHILADELPHIA
N ATIO N AL B A N K
O R G A N IZ E D 1803

PH IL A D E LP H IA , P A .

Northwestern Banker

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

April 1932

About fifty bankers gathered at the
Auburn hotel in Auburn, Nebraska, re
cently, to attend the Regional Clearing
House meeting.
The district includes
Nemaha, Richardson, Pawnee and Johnson
countie's and the towns represented w ere:
Auburn, Brock, Peru, Johnson, Howe,
Falls City, Humboldt, Dawson, Pawnee
City, Teeumseh and Dubois. A splendid
dinner was served after which the Auburn
high school quartet and male quartet sang.
Addresses were delivered by M. Weil,
president of the National Bank of Com
merce, Lincoln, and Wm. Ryons, vice
president of the First National Bank of
Lincoln.

45
tomily of Golden Valley, North Dakota.
Thè directors met and elected the folloAving officers : P. J . Them, president ;
P. A. Sanderson and M. S. Carl, vice
presidents, and H. G. Rostomily, cashier.
Mr. Rostomily comes from Golden V al
ley, North Dakota, AAffiere he has been in
the banking business. He also served as
bank examiner in North Dakota.

Minnesota
Hank News

Officers Minnesota Bankers
Association

J. R. C H A P P E L L
President

P resid en t..............................J. R. Chappell
W inona
V ice P resid en t...............M artin F . Ernst
St. Paul
T rea su rer....................... W alter L. Brooks
Bem idji
Secretary ...........................George Susens
M inneapolis

Heads County Association
C. J . Talle, Kenyon, was elected presi
dent of the Goodhue County Bankers
Association at the annual meeting in Red
Wing, Minnesota. Forty members of the
organization were in attendance. Other
officers named were J . H. Diercks, Pine
Island, vice president ; J . C. Johnson, Red
Wing, secretary-treasurer, and C. J . Sar
gent, S. H. Lockin and H. M. Griffith,
members of the executive committee.
The meeting opened with a business ses
sion at the Chamber of Commerce rooms,
followed by the annual bowling tourna
ment. B. Rippie, Zumbrota, mowed down
a count of 22 1 to Avin in the out-of-RedWing class, while Dick Drew, Avith 238,
was high for the local trundlers.
A banquet and program concluded the
session, with Nels Lien, retiring president,
officiating.

With Reconstruction Corporation
Lawrence J . Paulson, veteran Albert
Lea, Minnesota, banker, has accepted an
appointment under Secretary of Agricul
ture Hyde in the Minneapolis administra
tive offices of the Reconstruction Finance
Corporation.

Annual Meeting
A t the annual meeting of the Wayzata
State Bank, Wazata, Minnesota, officers
were elected as follow's: P. W. Tibbetts,
president; A. C. Frick, former cashier,
vice president, and W. A. Zastrow, former
assistant cashier, cashier. The regular 6
per cent dividend was declared.

New Bank at Winsted
Winsted, Minnesota, Avili again have a
bank as the state security commission
granted a new charter to the Citizens State
Bank of Winsted at a hearing held in St.
Paul last month.
Sufficient stock to capitalize the institu
tion has been sold to Winfield business
men and citizens, and Avith the charter to
operate now granted, the bank Avili prob
ably be established shortly after the first
of April.
J . J . Sterner and John Maetzold of
Lester Prairie and Marcel Ochu of Win
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Federal Reserve Bank of St. Louis

At Dillon
GEORGE SUSENS
Secretary

sted represented the neAv bank at the hear
ing.

Frazee Banker Dead
Frank J . Kennedy, 58, president of the
First National Bank of Frazee, Minnesota,
died unexpectedly at his home last month.
Mr. Kennedy was born in Minneapolis.
Before coming to Frazee in 19 19 he had
been connected with the First National
Bank at Paynesville, Minnesota, for 15
years. A widow and five children survive.

At Moose Lake
R. J . LeAvis, president, and E. M. Peter
son, cashier, of the First National Bank of
Moose Lake, Minnesota, have disposed of
their holdings in the bank to Y . J . Michaelson, W. I. Korpela, 0. A. Schultz and
associates.
Under this arrangement the new officers
of the local bank will be : Y . J . Michaelson, president ; F . A. Schweiger, vice
president ; W. I. Korpela, vice presi
dent, and 0. A. Schultz, cashier. These
officers, together with C. J . Dodge and L.
H. Blaeklock, Avili constitute the board of
directors.
V. J . Michaelson was formerly of
Cloquet. He was one of the assistant at
torneys who handled the fire claims in
1919-23 ; former Carlton county attorney
and now assistant attorney general of the
state. W. I. Korpela has had long pre
vious banking experience, having served as
cashier of a bank on the range for eight
years, and the last five years has served in
the same capacity in the Kettle River
Bank. 0. A. Schultz has served as cashier
of the State Bank of Mahtowa for the past
fourteen years. He will retain his interest
in and continue to manage the State Bank
of Mahtowa. This bank Avili be operated
as an affiliated institution.

Is Elected President
P. J . Them has been elected president of
the reorganized Clara City State Bank at
Clara City, Minnesota.
At the stockholders meeting the follow
ing directors Avere elected: C. A. Fosnes
of Montevido, Dr. H. T. Foshager, P. J .
Them, P. A. Sanderson and H. G. Ros-

The F irst National Bank of Dillon, Min
nesota, has elected officers as folloAvs: J .
H. Gilbert, president ; G. D. Combes and
W. W. Hawkins, vice presidents, and J . W.
Rees, cashier.

At Roseau
The stockholders of the Citizens State
Bank of Roseau, Minnesota, held their an
nual meeting recently and the folloAving
officers were elected : J . R. Chappell,
president ; Olaf Holdahl, vice president ;
J . L. Delmore, vice president ; C. B. Dahlquist, cashier, and Margaret Rice, assist
ant cashier.
Directors elected Avere : Olaf Holdahl,
J . L. Delmore, M. J . Hegland, Knudt Lee,
Carl Listug, J . R. Chappell and C. D.
Tearse.

Elected Vice President
E. E. Bailey has been elected vice presi
dent of the Bank of Barney, succeeding
H. L. Cole, resigned. Mr. Cole is still a
director of the hank.

Bancorporation Report
Northwest Bancorporation with its 138
affiliates ranks sixteenth in size in aggre
gate deposits among financial institutions
in the United States, the annual report
says. Deposits of the Northwest Bancor
poration group make it seventh in size
outside New York City.
F o r the year ending December 3 1, 19 3 1,
the! corporation made gross earnings of
$24,191,509.39, compared with $26,306,864.74. Reduction in expenses from $19,532,857.15 to $18,177,340.91 left operating
earnings $6,014,168.48 compared with $ 6 ,774,007.59 for the previous year.
The report says, “ It has been the con
tinued policy of the corporation to main
tain the highest standards of banking
operation and to face facts as they appear,
charging off determined losses and setting
up adequate reserves to meet possible con
tingencies.
“ In line' with this policy the assets other
than stocks of affiliated institutions have
been written down to market, wherever
prices were available, and, in other cases,
to estimated realizable values of December
3 1, 19 3 1. This resulted in setting up re
serves of $3,152,905, Avhich amount has
been deducted from the corporation’s sur
plus. In addition, the corporation’s in
vestments in stocks of affiliated instituA Northwestern

Banker

April 1932

46
tions, which has be:en carried at cost, has
been adjusted by the net reduction in the
book value of the net tangible assets of
the respective companies between the! dates
of acquisition and December 3 1, 19 3 1.
“ The directors have charged oft $6,100,759.90 in the year on loans and invest
ments, substantially in excess of the
amount set up by the national and state
authorities who examined the banks.
“ A fter making these charge-offs and set
ting up reserves, eliminating non-ledger
assets and all good will value, the Bancorporation and its affiliated institutions have
capital, surplus and undivided profits of
$52,465,657.29. Of this amount $2,611,293.58 represents the interest of minority
stockholders . . . and $49,854,363.71 rep
resents the corporation’s interest in these
institutions and its investments in other
assets.
“ It is equal to $29.81 a share— or 60 per

cent more than the current market price of
Baneorporation stock.”
The corporation had at the close of the
year 17,605 stockholders, compared with
12,757 on the corresponding date in 1930,
who held 1,679,501 shares, compared with
1,673,912 a year ago. Of these 11,039
were Minnesota stockholders, holding
998,875 shares. Ninety-five per cent of all
the stockholders live in the states where
Northwest Baneorporation banks are lo
cated. E very officer and employee is a
stockholder.
Operating earnings applicable to stock,
the report said, were $3.43 a share! as com
pared with $3.87 a share in 1930. Divi
dends amounting to $1.80 a share were
paid in the year, amounting to $3,004,936.20. The earnings were equal to 6.86
per cent on the par value! of the capital
stock.

Rochester Banker Dead
Henry M. Nowell, Rochester banker for
48 years, died unexpectedly at his home
last month in Rochester, Minnesota.
He had served as cashier, vice president
and president of the Rochester National
Bank until 1924, when the bank was sold
to the E irst National Bank of Rochester.
His widow, one daughter and one son
survive.

Bradstreet’ s Reports
There were 625 business defaults re
ported fo r the week ending March 3d, an
increase of 9.1 per cent over the previous
week, as against a normal expected gain
of 4.8 per cent. Bradstreet’s adjusted
index of weekly failures now stands at
160.2, as against 153.8 in the preceding
week and 169.0 two weeks ago, and 117 .3
fo r the corresponding week of 19 3 1.

Chrysler Exhibit

Complete
Commercial Banking
Facilities

Six of the leading architects of the
United States will submit designs fo r
Chrysler Corporation’s building and
exhibit at the Century of Progress Inter
national Exposition to be held at Chicago
next year. Announcement was made that
with the sanction of the American Insti
tute of Architects, the corporation is now
conducting a competition among a selected
group of eminent architects with a view to
developing a. design fo r an exhibit of its
own that will be of outstanding public
interest among the world’s fa ir attractions.

If you are interested in a
conservative bank to act as your
correspondent — one equipped
with every modern facility to
promptly meet your needs— and
one that will take a personal
interest
in the business
transacted for you, appoint The
Northern Trust Company your
Chicago correspondent.

The two-day session of the Western Re
gional Savings Conference to be held in
St. Louis on A pril 21st and 22d will be
the final savings convention fo r the year,
and preparations are now in full swing
to make it an outstanding one. Attend
ance at the conference is expected to be
swelled due to the fact that no meeting
will be held this year on the Pacific coast,
delegates from this region and all the
midAvestern and southern states being
invited to St. Louis.

Inquiries regarding our
facilities are invited.

THE NORTHERN
TRUST COMPANY
Northwest Corner LaSalle and Monroe Streets
CHICAGO
More than forty-tivo years in the service of Chicago

Northwestern Banker

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

April 1932

Western Savings Conference

Municipal Dealers Group
An organization to be known as the St.
Louis Municipal Dealers Group was
formed at a meeting held recently at the
Missouri Athletic Association in St. Louis.
Membership will include investment
houses in St. Louis interested in the or
ganization of municipal bond issues, and
the trust departments of affiliated institu
tions. The following officers Avere elected
for a term of one year: Chairman, I. A.
Long, Mercantile-Commerce Company ;
vice chairman, H. Fred Hageman, Boat
men’s National Company ; secretary, J . A.
Nordman, St. Louis Union Trust Com
pany; treasurer, Kelton E. White, G. H.
Walker & Company.

North Dakota Bank News
Officers North Dakota Bankers Association

Paul T. K retschm ar

President
V enturia

T. A. T ollefson

V ic e P resid ent
D ick in son

P A U L T. K R E T S C H M A R
President

Secretary

McFadden Retires
The recent retirement of Wm. C. Macfadden as secretary of the North Dakota
Bankers Association marked the end of
29 years of service which this veteran sec
retary has rendered his organization. He
is succeeded by C. C. Wattam, of Fargo,
partner of the association attorney, George
W. Thorp.
In a recent issue of T h e N o rth D a k o ta
B a n k er, Mr. Macfadden expresses this
note of farew ell:
“ This issue of the B a n k er marks the
end of my services as editor and secretary
of our association, and I cannot turn away
from these duties without a word of fare
well to my many friends whose assistance,
encouragement and many evidences of ap
preciation and friendship during the
nearly 25 years I have been in your serv
ice, have made the work so interesting and
pleasant.
“ The fine letters I have received from
those of you who have written me since it
became known that I was to be relieved,
are thoroughly appreciated.
“ I regret the breaking of the very pleas
ant relations with members, officers of
other associations and of the American
Bankers Association that go along with
work of this character.
“ The many friendships that have re
sulted I hope will always last.
“ I will continue to be interested in the
welfare of the association and very glad to
contribute to its success and value in any
way I can.
“ I thank you all and hope the sunshine
of prosperity will soon dispel the clouds
that have darkened the financial horizon
and bring you the peace of mind you so
well deserve.
W m . C. M a c f a d d e n .”

C. C. W attam
P argo

operate under the name of the State Bank
of Reynolds in the building occupied by
the state bank.
The consolidation was effected at a joint
directors’ meeting with J . K . Nesvik,
Grand Forks, deputy examiner in the state
banking department present.
Deposit liabilities of the national bank,
totaling $34,085.22, were taken over by
the state bank, together with assets to off
set the liabilities, bank officers reported.

Dickinson Banker Dead

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Federal Reserve Bank of St. Louis

E . E. P E C K has been elected a director
of the First State Bank of Burnstad, to
succeed Mr. J . H. Wishek, Sr.
P A U L J . W IS H E K succeeds his father,
J . H. Wishek, Sr., as vice president and
director of the Farmers State Bank, Dan
zig.
M A X A. W IS H E K has been elected
president and director of the F irst State
Bank of Wishek, succe'eding his father,
Mr. J . H. Wishek, Sr.
C. L. JO H N SO N, Paul Skarstad and
Ralph Boe have been elected directors of
the Security State Bank, Adams, to suc
ceed T. J . Smith, F . L. Goodman and
Hugh Reid, who have resigned. Mr. John
son succeeds Mr. Smith as president, and
Mr. Boe succeeds Mr. Goodman as vice
president.

H. C. Christensen, 81, rancher and
former president of the Dakota National
Bank, Dickinson, North Dakota, died at
his home near Croff.

C. E . C H R IS T E R S O N has been elected
a director of the State Bank of Souris, to
succeed H. T. Nordsletten, who has re
signed.

Lankin Bank Elects

A. J . W IT A S E K and J . W. M ATEJ C E K have been elected directors of the
Citizens State Bank of Lankin, succeed
ing Fred L. Goodman and T. J . Smith,
who have resigned. J . H. Yorachek, form
erly vice president, has been elected presi
dent to succeed Mr. Smith, and J . A.
AYitasek has been elected vice president.

A ll officers and the board of directors of
the Citizens State Bank of Lankin, North
Dakota, are local men, it was announced
following election of officers. The officers
elected are J . II. Vorachek, president; J .
A. Witasek is vice president, and 0. A.
Bygland continues as cashier. The board
of directors includes the president and vice
president and R. J . Witasek and J . W.
Witasek. The bank was organized in
1905 and is capitalized at $25,000 with a
surplus of $5,000.

G. IT. LA M B has been elected director
of Lamb’s Bank of Michigan City, to suc
ceed J . M. Lamb who passed away re
cently, and J . S. Lamb, formerly cashier,
succeeds him as president. John P. Lamb
has been elected cashier.

North Dakota News
T H E S T A T E B A N K OF R E Y N O LD S
has assumed the deposit liabilities of the
F irst National Bank of Reynolds, and the
last named bank has discontinued business
and gone into voluntary liquidation.
T. E. M cCLIN TO CK has been elected
a director of the Merchants Bank, Rugby,
to succeed E . R. Reitsch.

Merger at Reynolds
Consolidation of the F irst National
Bank of Reynolds, North Dakota, with the
State Bank of Reynolds, the latter institu
tion taking over the deposit liabilities of
the former, was announced recently fol
lowing a joint meeting of the directors of
the two banks.
The national bank went into voluntary
liquidation and the combined firm will

JO H N H. W IS H E K , Jr ., has been
elected president and director of the Ash
ley State Bank, succeeding his father, J .
H. Wishek, who passed away recently.
Max A. Wishek has been elected vice presi
dent, and W. L. Johnson also remains a
vice president of the bank.

O LA F B U R R E SO N has been elected a
director of the Peoples State Bank of
Aneta, succeeding C. C. Simonson.
S T E L L A M. H A R A LD SO N has ac
cepted a position as teller and bookkeeper
of the Peoples State Bank of Aneta, to
succeed her brother, Wesley C. Haraldson, who has resigned.

How to Reopen Loans
Two questions regarding the matter of
loans from the reconstruction finance cor
poration which have been bothering bank
ers in the northwest, and which have been
referred to commercial west by a number
of banks, were answered recently by J o
seph Chapman, manager of the Minne
apolis Loan Agency which is serving the
ninth federal reserve district.
F irst of these is : How shall a bank
report the loan on its statement'?
That is a matter that has not been fully
determined. Until instructions are re
ceived from Washington, however, Mr.
Chapman states that the practice here thus
fa r has been to mark them : “ Due to Re
construction Finance Corporation.”

Northwestern Banker

April 1932

48
L. L. Madland, national bank examiner
for this district, advises commercial Avest
that complete instructions with regard to
the matter will be forwarded to national
banks by comptroller J . W. Pole, with the
forthcoming spring call blanks.
At the office of J . N. Peyton, Minne
sota bank commissioner, Chief Deputy
SAvanson agrees with Mr. Chapman as to
the designation. No instructions have
been issued by the state bank commis
sioner’s office.
The second question relates to the mat
ter of interest. Mr. Chapman states that
the rate is 5 y 2 per cent.
A special meeting of the advisory com

mittee for the northwest of the finance re
construction finance corporation Avas held
in Minneapolis recently to consider an
important matter in connection Avith
loans.

Washington and the Cherry
Surplus
(S t. L ou is D isp a tc h .)

In this bicentennial year, the yarn about
Washington and the cherry tree is cata
logued as a flight of Parson Weems’ fer
tile imagination, though long accepted as
sober fact. It took Washington’s repu
tation 126 years to live down that Little

Rollo story (it first appeared in print in
1806). It Avould be far more difficult,
however, to debunk such a legend should
it gain currency today. Such a report
from a Virginia farm in 1932 would be
meat, drink and dessert to the farm board
wiseacres who specialize in solving the
cotton problem by advice to plow under
every third row and Avho grapple with the
dairy situation by suggesting extermina
tion o f every tenth coav. These economic
wizards would at once hail the little Washington boy as a patriot seeking to end the
cherry surplus by using their methods.
It Avould be simple to proAre that a cherry
surplus exists, what Avith the abundance
o f cherry queens in the orchard states, the
vast number o f cherry pies presented to
the White House, and the radio crooners’
unanimous mumbling that life is just a
bowl o f cherries. A neAV American myth,
with farm board backing, would spring
into existence, and the nation ring Avith
the young hero’s exploit, despite his pro
testations that he was merely trying out
a new hatchet, or that it didn’t happen at
all.

Niagara Falls
W h a t th ey w ould s a y —

Dorothy Parker: I ’ll take vanilla.
0. 0. M cIntyre: Milkman’s paradise.
Peggy Hopkins-Joyce : Men may come
and men may go, but I go on forever.
Groueho M arx : River beds ? Ixnay.
Will R ogers: It must have rained here
last Aveek.
Roger Babson: What goes up must
come down.
Calvin Coolidge: It is large. It is vast.
It is the people’s.
Irving B erlin : Ju st a cottage small, by
a Avaterfall . . .
Ben B em ie: I hope I like it.
Aimee McPherson : Heavens !
Lloyd M ayer: It leaves me all of a
twitter, I mean it actually does.
Jimmie W alker: Water, Avater every
where, and not a drop to drink!
— Illin ois S iren.

Glossary of Terms
G rad u ation is that process o f getting rid

o f undesirable seniors in an honorable
Avay by the process o f—
C om m en cem en t , a boring function devised
to test the stamina o f—
S en iors, gents that have spent four un
eventful years at some college or other
in a feeble attempt to get some—
K n o w le d g e , an illusive muse Avho cannot
be secured by just a little—
W o r k , what the graduates are about to do
at last after they finish with such things
as—S en io r S in gin g, an outdoor form o f vocal
exercise.

Northwestern Banker

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

April 1932

1 0

SECTION
Officers Iowa Bankers
Association
P resid en t............ Ivan O. H asbrouck
Jefferson
V ice P resid ent. . . .C . J. W eiser, Sr.
Decorah.
T rea su rer...........................Jos. J. B rus
Davenport
S ecreta ry.................... Prank
Des M oines

Plan Trust Conference
The trust committee of the Iowa
Bankers Association, under the chairman
ship of E. A. Hoffman, vice president and
trust officer of the Toy National Bank,
Sioux City, are proceeding with dispatch
in consummating arrangements for hold
ing the T h ird A n n u a l T ru st C o n fe r e n c e o f
th e I o w a B a n k ers A ss o cia tio n , which will
he held this year at Council Bluffs on
Thursday, A pril 7, 1932. Mr. Hoffman’s
committee has sent out a questionnaire to
all the banks of the state asking for sug
gestions on (1 ) “ round table” topics, ( 2 )
speakers, and (3) also making inquiry as
to the number who will attend the trust
conference from each bank. The question
naire also contains a statement by Mr. Ivan
0. Hasbrouck, president of the Iowa
Bankers Association. The proceedings of
the trust conference will he reported and
later printed in a pamphlet and made
available for distribution to the member
hanks.
The Iowa Bankers Association in hold
ing its annual trust conference cooperates
with the trust division of the American
Bankers Association.

Farmers State, Jessup
The last statement of the Farmers State
Bank of Jessup, Iowa, shoves capital of
$25,000, surplus of $35,000, undivided
profits and reserve of $28,566. Deposits
are $665,000 and hills payable, none.

Is Elected Cashier
J . M. Gemmel has been elected cashier
of the Buchanan County National Bank of
Independence, Iowra, succeeding L. V.
Overholtzer. Mr. Gemmell has been in
the banking business in Independence for
the past twenty years and for four years
has been assistant cashier of the Buchanan
County National.

Iowa Bankers Radio
The Iowa Bankers Association police
radio station is to be known as the “ Iowa
Police Radio Station.” Its call letters are
K G P V . President Ivan Hasbrouck and
the administrative committee have said
nothing about the construction of this sta

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Federal Reserve Bank of St. Louis

W arner

tion until it should be completed, which
was consummated this past month w7hen it
was put on the air. The station is to be
dedicated to law enforcement in this state,
for the free use of sheriffs, police depart
ments and vigilantes. There will be a
police hour in the morning and one in the
afternoon, during which police informa
tion on major crimes will he broadcast.
The attorney general will direct all sher
iffs and police departments to have some
one in their respective offices to take dowm
crime information being broadcast during
those hours. The state legislature joined
with the Iowa Bankers Association in mak
ing this statewide low wave police radio
system possible by passing a bill initiated
by the Iowa Bankers Association and the
attorney general’s office, which requires
boards of supervisors in the 99 counties to
put one stationary receiving set in the
office of each county sheriff and to put in
one auto set in at least one of the sheriff’s
cars, and also requiring that all city coun
cils in Iow7a shall put in a stationary set in
the office of the police departments; all of
these sets to be “ locked in” with the Iowa
Bankers Association broadcasting station.
It will take not less than 308 sets to cover
all of the counties and cities. In addition
to this, gas stations on the main highways
are being asked to put in the same receiv
ing sets, as well as hanks and merchants,
etc., all of whom will be given the same
low price as is being obtained for the coun
ties and cities.
The Iowa Bankers Association has been
investigating this plan fo r more than a
year, and initiated it because they felt that
a more rapid means of communicating
with the peace officers of the state is abso
lutely necessary, because good roads and
high-powered cars have made the older and
former methods of communication all the
more antiquated. In setting up this new
system Iowa is pioneering in a way that is
entirely different from that in Michigan or
Massachusetts, where one high-powered
broadcasting station has been set up by
those respective states.
The Iowa Bankers Association has been
interested in law enforcement for more
than forty years. Its officers have been
leaders in developing new ideas from time
to time throughout that period. This

“ Iowa Police Radio Station” will be oper
ated by remote control from the State Bu
reau of Criminal Investigation under the
attorney general’s office in the state house.
This remote control equipment has been
installed. The system will also permit the
attorney general to talk to the law-enforc
ing officials, and direct to the county at
torneys of the state at any time he may
desire on any phase of law enforcement.
It will permit the mobilization of all the
law-enforcing officials of the state, whether
marshals, regular reputy sheriffs, sheriffs,
police, and last but not least, the more than
2,000 vigilantes in Iowa. The officers of
the Iowa Bankers Association are deter
mined to leave no stones unturned that
will help to prevent and reduce bank rob
bery and bank burglary and thus reduce
the bank insurance rates.
The administrative committee in charge
of the details of setting up the station
were:
1. Ivan O. Hasbrouck, president, cash
ier, Iowa State Bank, Jefferson.
2. Jos. J . Brus, treasurer, vice president,
Union Savings Bank & Trust Company,
Davenport.
3. Roscoe C. Macy, chairman, Group 6 ,
Iowa Bankers Association, First State
Bank, Lynnville.
4. Frank Warner, secretary, Iowa Bank
ers Association, 430 Liberty Building.

Cashier Resigns
J . P. Sloan, for several years past cash
ier of the Delaware County State Bank,
Manchester, Iowa, has tendered his resig
nation. He has been succeeded by Ralph
H. Griffin, heretofore an assistant cashier
of the institution.

Tliayer Banker Cleared
A ju ry of nine men and three women
last month found William S. Gripp, 28,
cashier of the Trayer Savings Bank,
Thayer, Iowa, not guilty of embezzlement.
The bank was robbed in 19 3 1 of all its
records. Gripp was charged with embez
zling of some of the school money of the
Thayer consolidated school in 19 3 1.
The state attempted to prove that Grip
embezzled $14,000 from the bank by ma
nipulating his personal account, his ac
count as school treasurer and the account
of his father, D. D. Gripp, of Thayer, and
that discrepancies in records of the bank
show this.
The defense claimed there had been no
direct or definite evidence that Gripp prof
ited in any way from the alleged discrep
ancies shown by the books, that there is no
proof that Gripp was implicated in the
robbery of the bank, that the bank was
insolvent and so known to be by the direc
tors before the robbery.

Goes to Clarence
J.
C. Coonrod has accepted a position as
cashier of the Clarence Savings Bank, at
Clarence, Iowa.

Northwestern Banker

April 1932

50
Mr. Coonrod has been connected with
the Winfield State Bank, Winfield, Iowa,
for 20 years. Everett Nordstrom will suc
ceed Mr. Coonrod as cashier.

With Yeomen Mutual Life
Ray Yenter, former insurance commis
sioner of the state of Iowa, and chairman
of the executive committee of the National
Convention of Insurance Commissioners
at the time he resigned from that office,
has become connected with the Yeomen,
Des Moines insurance company. The Yeo
men is now called the Yeomen Mutual
Life, having recently changed from a fra
ternal to an old line life company. Mr.
Yenter is doing departmental work with
the company. He resigned as commis
sioner to become president of the Federal
Surety Company of Davenport.

Opens at Iowa City
The new First Capital State Bank of
Iowa City opened March 28th, with much
rejoicing on the part of the community
and the first day brought in deposits of
more than $150,000. Deposits ranged all
the way from single dollars to $25,000.
Messages of congratulation were received
from banks throughout Iowa and from
Chicago and other reserve cities.
The hoard of directors of the new bank
entertained a group of out-of-town vis

itors at an evening banquet. Among those
present w ere:
L. A. Andrew, Iowa bank superintend
ent; Frank Warner, secretary o f the
Iowa Bankers Association; W. H. Brenton, president, the Iowa-Des Moines Na
tional Bank and Trust C o.; Charles W.
Wnyart, vice president, the Valley Na
tional Bank, Des Moines; Herbert L.
Horton, vice president, and Roy Cappis,
vice president, Iowa-Des Moines National
Bank and Trust C o.; George Schaller,
Storm Lake, director, Federal Reserve
Bank of Chicago; Ed Furrow, vice presi
dent, Merchants National Bank, Cedar
Rapids; John Burianek, president and
Paul Huston, vice president, Peoples
Savings Bank, Cedar Rapids; John
Frankl, director, Iowa State Bank,
Algona.
The correspondents for the new bank
are the Iowa-Des Moines National Bank
and Trust Company and the Harris Trust
and Savings Bank of Chicago.
Lee Nagle, of Iowa City is president of
the new bank and Frank D. Williams, of
Algona, Iowa, is vice president and
cashier.

New Iowa City Bank
A t a meeting of the board of directors
of the newly formed F irst Capital State
Bank of Iowa City, Iowa, held immediately

after their election by the stockholders,
Lee Nagle, local lumber dealer, was named
president and Frank D. Williams, former
president of the Iowa State Bank at A l
gona, was elected vice president and cash
ier.
Mr. Nagle has served as chairman of the
Chamber of Commerce new bank com
mittee since its formation. This committee
took upon itself full responsibility for
the organization of new banking facilities
fo r Iowa City to replace the five defunct
institutions.
Mr. Nagle has been active in business all
his life. Born in Milton, lie began his
career there working for a lumber firm.
He also worked for a short time in a Milton
bank. A fter leaving Milton, he spent 20
years in Red Oak in the lumber and mill
ing business and was also associated with
the F irst National Bank there. He has
served two terms in the state legislature,
once from Van Buren county and once
from Johnson county. He has been a
resident of Iowa City for 10 years.
Mr. Williams has spent his entire busi
ness life in the banking business. He has
served in three banks. His early banking
experience was gained in Hampton; he
was for four years cashier of the First
National Bank of Sheffield; and for the
last five years has been president of the
Iowa State Bank of Algona. He is a
graduate of the University of Iowa.

Bank Asks Charter
//

Goodwill

One writer lias said:
“ Good will is the answer to
good service, just as truly as
poor service is the creator of
ill will.”
This bank has always placed
“ good will” among its list of
assets and has backed it with
“ good service” at all times.

O F F IC E R S
L e o n a rd R . M a n le y ................................. P re s id e n t
C . C . J a c o b s e n ..............................V ic e P re s id e n t
C. R . G o s s e tt................................ V ic e P re s id e n t
R . E a rl B r o w n ........................................ C a shie r
D e lk o B lo e m .................. A ss’ t . V ic e P re s id e n t
A lb e r t C. E c k e r t ............................A ss’t C a shie r
D a n ie l B . S e ve rso n ................... A ss’t C a shie r
E lm e r O . S m e b y .......................... A ss’t C a shie r

That is why today so many
correspondent banks enjoy and
appreciate the “ good wiH” of
the Security National.

CN ATC
U
R
ITV
TIO N AL B A N K
of SiouNCity
■ ▼ ''T ▼

Northwestern Banker

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Federal Reserve Bank of St. Louis

April 1932

Articles incorporating the Parkersburg
State Bank, Parkersburg, Iowa, were filed
with the secretary of state last month. The
hank wall be capitalized at $25,000. R. E.
Cox was named president ; A. J . Froming,
vice president, and O. A. Bailey, cashier.

Goes to Algona
R. H. Miller, examiner in charge of the
F irst Iowa State Trust and Savings Bank
at Burlington, Iowa, will leave Burlington
April 1st, to become president of the Iowa
State Bank at Algona.
Although a native of Estherville, Mr.
Miller had been engaged in receivership
work in Algona and nearby communities
for several years and now maintains his
home there. He has been with the state
banking department for six years. The
Iowa State Bank of Algona, of which he
wall become president, has been established
for four years.

New Bank at Solon
Last month marked the formal opening
of the new Solon State Bank with capital
of $25,000 and surplus of $5,000, at Solon,
Iowa.
Officers a re : President, Dr. Joseph
Netolicky; vice president, Richard Adams;

51
cashier, 0. E. M arkytan; directors, W il
liam Apitz, John Novy, William McLaugh
lin, James K asper and William Unick.
The bank is situated in the former Farm
ers State Bank building.
The Farmers State Bank and the Ulch
Brothers State Bank, which closed their
doors October 10th, made their first pay
ment of 10 per cent to their depositors last
month.

Walker D. Hanna Honored
Walker D. Hanna, president of W. I).
Hanna & Company, investment bankers
of Burlington, was recently elected com-

of the four, William Engler, Edward
Wilhite, John Lugar and Wincel Urban.
The Iowa statute provides an indeter
minate prison term not exceeding 15 years
for those found guilty of possession of
burglar tools.

Dies in California
Mrs. Arthur S. Hanford, Sr., wife of
the F irst National Bank president of
Sioux City, Iowa, died last month in Los
Angeles, California, after a long illness.
She had been an invalid several years
and spent her winters in California. Her
husband, founder of the Hanford Cream
ery Company, was at her bedside.
Survivors include a daughter, Mrs. John

H. Kelly, and a son, Arthur S. Hanford,
both of Sioux City, and two sisters, Mrs.
S. E . Chapin of Vinton, and Mrs. Emily
McKee of Chicago.
Mrs. Hanford was born in England.
She spent part of her childhood at Dubu
que.

Addresses Des Moines A. I. B.
Frank Warner, secretary of the Iowa
Bankers Association, spoke before the Des
Moines chapter of the American Institute
of Banking last month.

Andrew Given Loan Authority
L. A. Andrew, Iowa state superintend
ent of banking, as statutory receiver for

Be Constructive
g E

W A L K E R D. H A N N A

mander of the Burlington American Le
gion Post, succeeding Homer D. Banta
who resigned when elected department
vice-commander for Iowa. Mr. Hanna
was formerly vice-commander of the B ur
lington Post and was a member of the
American Expeditionary Forces in France.

Office At Huxley
The Union Story Trust and Savings
Bank of Ames, Iowa, has opened an office
in Huxley.
A petition signed by 150 residents of the
Huxley community was submitted to the
bank recently.
J . E . Bennett, assistant cashier of the
bank and for many years assistant cashier
of the Story County Trust and Savings
Bank, will be in charge of the new office.

constructive”— that one
phrase best describes the
spirit in which we must face
the business problems of 1932.
Many Iowa bankers already
k n o w the a d v a n t a g e of
connections with the Bankers
Trust at Des Moines
a bank
that believes in finding the
constructive w ay to handle
any business situation.

Found Guilty
Four St. Louis men were found guilty
of possession of burglar tools after a dis
trict court ju ry deliberated an hour and a
half last month in Des Moines.
Charges grew out of a purported at
tempt to rob the Capital City State Bank
vault.
The tools were seized in a building just
west of the bank December 12th.
In a previous trial for entering a bank
with intent to rob, the men, who wrere ar
rested near the bank, were acquitted by
directed verdict.
A separate verdict was returned for each

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Federal Reserve Bank of St. Louis

BANKERS TRUST CO.
BAN K
Cor. 6th and L ocu st Sts., D es M oines
Capital $1 ,000,000.00

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

Northwestern Banker

April 1932

52
insolvent banks and trust companies, has
the right to obtain loans to pay depositors
and creditors of the institutions, Attorney
General John Fletcher held last month.
The attorney general found that And
rew “ with the approval of the district
court of the county wherein the subject
bank is located” can borrow the money
pledging the assets of the institution in his
hands as a guarantee.
In the opinion, the attorney general
stated that the banking superintendent was
not “ bound by the ordinary statutes gov
erning common law receivers” and was not
subject to the limitations placed on the
latter class.

Is New President
Roy R. Bradbury was elected president
of the Fidelity Savings Bank of Marshall
town, Iowa, following the annual stock
holders meeting. Mr. Bradbury, Avho has
been first vice president of the bank, suc
ceeds the late H. J . Howe, dean of Mar
shall county bankers, wTho died last month.
The stockholders re-elected the entire
board of directors with the exception of
Mr. Howe and for the present the board
will consist of one less director than form
erly. The list of directors follows: A. A.
Moore, E. N. Färber, Roy R. Bradbury,
C. H. E. Boardman, A. T. Davis, M. C.

Berkley, Dr. Royal F. French and John
W. Rank.
M. C. Berkley, who has been second vice
president, is now the only vice president
of the bank and other officers elected by
the directors are: A. T. Davis, cashier; E.
H. Nyce and E. J . Paul, assistant cashiers.

Page County Meeting
J . H. Peterman, vice president of the
Page County State Bank of Clarinda,
Iowa, was elected president of the Page
County Bankers Association at the annual
meeting last month at Clarinda.
R. H. Sawyer, assistant cashier of the
Shenandoah National Bank, was re-elected
secretary of the association and C. J . Liljedahl cashier of the First National Bank of
Essex was re-elected treasurer. H. E.
Ross, president of the Shenandoah Na
tional Bank, is the retiring president.

Remember Employes
Associates of the late Henry J . Howe in
the Fidelity Savings Bank of Marshall
town, Iowa, are remembered in the Howe
will and codicil filed for probate with the
clerk of the district court.
Laurence Belknap, an employe of the
bank and Mr. Howe’s nephew, is to re
ceive fifty shares of bank stock, the Howe
homestead, and another piece of Marshall
town real estate, according to the terms of
the will. Ten shares of bank stock are
bequeathed to each of the following: R.
R. Bradbury, Asa T. Davis, E. H. Nyce,
Earl Paul, H arry Speers and Mrs. Mabel
Ahrens.

Explains Crop Loans
An important conference was held
March 12th to complete a statewide or
ganization for the handling of the “ 1932
crop production loans” work in Iowa. At
that conference were :
R. K . Bliss, director of extension divi
sion, Iowa State College, Ames, and state
director of the “ 1932 crop production
loans” work in Iowa under the secretary
of the United States Department of A gri
culture; W. H. Brenton, president, IowaDes Moines National Bank & Trust Com
pany, Des Moines, chairman of the Iowa
loan committee of the Reconstruction
Finance Corporation; Carl Kennedy, as
sistant secretary, Iowa State Department
o f Agriculture, Des Moines; C. W. Enyart,
executive vice president, Valley National
Bank, Des Moines, member of Iowa loan
committee of Reconstruction Finance Cor
poration; A. F . Beck, member Iowa loan
committee of Reconstruction Finance Cor
poration, Ottumwa; W. A. Regan, secre
tary, Reconstruction Finance Corporation
work in Iowa, Des Moines ; B. F . K auff
man, president, Bankers Trust Company,
Des Moines, chairman; Frank Warner,
secretary, Iowa Bankers Association, Des
Moines.
Plans were completed at that conference
by which the “ Iowa credit committee” of

Northwestern Banker

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Federal Reserve Bank of St. Louis

April 1932

the Iowa Bankers Association called on
the officers of all the county bankers asso
ciations in Iowa to call special meeting’s of
their members before March 20, 1932, and
invite their county agents, the officers of
all county farm organizations, and any
and all other parties interested, and at
that conference complete county plans for
taking any and all applications for “ 1932
crop production loans.” R. K . Bliss, di
rector of the extension division of Iowa
State College, Ames, sent a special letter
to all of the county agents urging them
likewise to get in touch with the officers of
their local county bankers association and
cooperate in the plans for these county
meetings. Director Bliss and the United
States Division Seed Loan Office at Min
neapolis are supplying the Iowa Bankers
Association with sufficient explanatory
pamphlets so that copies of those pamph
lets could be sent to each bank in the state
in a special bulletin to each bank from the
Iowa credit committee of the Iowa Bank
ers Association.

Fifty Per Cent Dividend
A plan whereby $1,620,000 of Peoples
Trust and Savings Bank funds at Clinton,
Iowa, will be made available to depositors
was approved in Clinton county district
court last month.
B y the court’s approval of this plan, a
50 per cent dividend will be credited to all
depositors of record.
The plan includes an agreement with the
City National Bank of Clinton whereby
that hank will take over assets equal to the
amount of deposits and liabilities as
sumed. The transfer of these assets is

effective at once. Remaining assets of the
receivership will be in the hands of trus
tees, who will liquidate them as rapidly
and as advantageously as possible.

Will Create Public Confidence
In order to create public confidence in
the work of the Reconstruction Finance
Corporation, the Iowa Bankers Associa
tion has started a campaign to reach every
county in the state, explaining the purpose
and results of the corporation’s function
ing. County meetings at which bankers,
county agents, newspaper men and busi
ness men, civic club meetings, newspaper

C. C. Jacobsen Returns
C. C. Jacobsen, vice president of the
Security National Bank of Sioux City,
last year president of the Iowa Bankers
Association, is back at his desk following
several months vacation and his many
friends throughout the state will be de
lighted to learn that he is again in excel-

jfAt NATH

■BANK

W COMPA

Set«« «i».

I I II VM«JI I kllM VJV/V/I

C. C. JACO BSEN
lent health. During his vacation he and
his fam ily covered more than 11,0 0 0 miles
on a trip that took them through Texas,
Louisiana, Mississippi, Florida arid into
Mexico.

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Federal Reserve Bank of St. Louis

You'll F in d G o o d Banking Service
a n d a F rie n d ly Welcome

C e n t r a l Na t io n a l
and
f if t h

DES

t r u

s t

bank
n

A V E , - B e -tw e e n
WALNUT and LO C U S T
M O I N E S ----------------------------------------------------I O W /V.

Northwestern Banker

April 1932

54
editorials and all sources of carrying this
information to the public, are being util
ized.
In a bulletin last month from the office
of Secretary Frank Warner of the Iowa
Bankers Association, the special committee
on banking and agricultural credit facili
ties, headed by B. F. Kauffman, Des
Moines, chairman, made this p lea :
“ E very business man and banker will
know best how that can be done. Let us
do everything we all can to restore confi
dence in ourselves and each other. Let us
start today. Let us join in putting in the
strongest possible blows backed in intense
energy toward building up a new mass
psychology on the business future of our
state. Let us not let things drift any
longer and carry us along in their current
of indecision, non-leadership with all of its
despondent and discouraging results. Let
us by a mass movement take hold of this
common problem to rejuvenate every line
of business and join as a man to lead and
guide the way out of this perplexing and
confusing economic situation. We have it
within our power to say what the mass
psychology toward general business will be
in the future. Our unlimited national re
sources and unexcelled ability as a people,
if put vigorously to work will give an
accounting of themselves that will be grati
fying to us without measure. So let us do
something individually and together and
let us start today !”

Des Moines A. I. B. Contest
F . C. Atkins of the Bankers Trust Com
pany was crowned speed king of Des
Moines bank employes when he won the
check totaling contest held by the Des
Moines chapter of the American Institute
of Banking last month.
It was the third successive victory for
Atkins who “ ran” 150 checks on a handoperated machine in two minutes, eleven

seconds, and led three other Bankers
Trust entries in what was nearly a grand
slam of prize winning.
Elwood Compton of the same bank fin
ished second just four seconds behind A t
kins, and A rt Erickson, another Bankers
Trust entry, Avas third in 2 :16.
Ray Games of the Iowa-Des Moines
National Bank and Trust Company, broke
into the select group with a time of 2 :2 1
for fourth place, and Harold Dean of the
Bankers Trust Company took fifth in 2 :22.
East Des Moines banks took both places
in the money counting contest. Guy Lines
of the Capital City State Bank counted
$287.75 in bids and coin in tAvo minutes,
thirty-seven seconds. Allen Evans of the
Home SaA-ings Bank was right on his heels
in 2 :38.
Mrs. Charles Williams, Jr., Avife of a
Bankers Trust Company employe, took
the prize in the money guessing contest
when she came Avithin $ 1 of estimating
the amount of money in a glass jar.

The $ 1 Avinners in order of their time
w ere:
Philip Gibson, Bankers T ru st; W ard
McCauley, Iowa-Des Moines; Francis
Haag, Bankers Trust; R. L. Carson,
Iowa-Des Moines; Paul Sinskey, IoAvaDes Moines; Helmer Johnson, IoAva-Des
Moines; Bob Boudewyns, Bankers Trust;
L. T). Champion, A7alley National.
Noel Robinson, Iowa-Des Moines ; S. G.
Barnard, Bankers Trust; Rose Schneider,

19 3 2

PROGRESS
Just as progress is being made by our govern
ment to re-establish confidence and stability, so
has this bank made progress since 1 8 7 6 in
improving its service to its correspondent
customers.

C o n so lid ated National B a n k
J. K. Deming, President
Geo. W. Myers, Vice President

April 1932

The candidacy of Air. Fred J . Figge,
president, Ossian State Bank, Ossian, for
the presidency of the Iowa Bankers Asso-

FRED J . FIGGE
ciation is meeting with wide acceptance.
F o r years Air. Figge has served the
bankers of his county and state through
both his county association and state asso
ciation, respectively. He has been a mem
ber of the legislative committee of the
IoAva Bankers Association for a number
of years and during a period when
some of the most important bank legis
lation ever enacted in Iowa was passed;
for one year he served as chairman of
that committee.
Air. Figge and his two sons are inter
ested in three banks, the Osian State Bank,
Ossian, where Mr. Fred J . Figge resides ;
the Iowa State Bank, Calmar, Avhere Air.
R. B. Figge is cashier; and the IoAva State
Bank, West Bend, where Mr. A". 0. Figge
is vice president.

Brann at Newton

D U B U Q U E , IO W A

Northwestern Banker

Is Presidential Candidate

George Jorgensen, president of the
chapter, announced that there Avere 59 en
tries in the check adding contest— the
largest number since the annual contest
was started more than 10 years ago.
Cash prizes Avere awarded the Avinners
by James Robertson, manager here for
the Burroughs Adding Machine Company.
Robertson presented $1 prizes to the 26
other contestants who finished the check
adding under three minutes.

18 7 6

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Federal Reserve Bank of St. Louis

Valley National; Lloyd Roe, Iowa-Des
Moines; Dave Savage, Bankers Trust;
Myrtle Rude, Valley National; G. Phillips,
Bankers Trust ; Ray Ellison, Home SaA7ings.
Dave Phillips, Iowa-Des Moines; Frank
Tamse, Capital City State ; Bert Poepping, Iowa-Des Moines; H. AV Haines,
Bankers Trust; James R. Brown, IowaDes Moines; Eddie Bliques, Central Na
tional; K . L. De Bolt, Bankers Trust;
William Ellison, Bankers Trust; Wallace
Miller, IoAva-Des Moines; Ray Miller,
Capital City State.

Jos. W. Meyer, Cashier

The Jasp er County Savings Bank of
Newton, Iowa, has added a new assistant
cashier to its bank force in the person of
D. B. Brann of Des Moines.

55
Mr. Braun’s boyhood home was at K nox
ville, Iowa. A fter going1 through the pub
lic schools at Knoxville, he became inter
ested in the banking business and was for
several years engaged in his profession in
Centerville, Iowa, where he was employed
in the old Governor Drake Bank. Later
he was with the Federal Reserve Bank of
Chicago for about eight years and was
for some time associated with the Central
National Bank at Des Moines. He has had
16 years’ banking experience.

Carlton B. Toy Dead
Carleton B. Toy, one of Sioux City’s
most prominent bankers, president of the
Toy National Bank, vice president of the
Farmers Loan and Trust Company and
a1 so vice president of the Iowa Joint Stock
Land Bank, all of Sioux City, died last
month at Tucson, Ariz., following a linger
ing sickness.
Mr. Toy was born at Storm Lake, la.,
Ju ly 28, 1886, and later moved with his
parents to Sioux City. A fter attending
the public schools there, he attended the
Mercersburg, Pa., and Morgan Park
academies. He and Miss Florence Lang,
of Sioux City, were married in 1910.
Associated with his father, Jam es F.
Toy, in the banking business for more
than 23 years, Mr. Toy, at the time of
his death, was president of the Toy Na
tional Bank and of the F irst Trust and
Savings Bank at Anthon. He also was
an officer of the Farmers Loan and Trust
Company and of the Iowa Joint Stock
Land Bank, of this city. During 19 3 1, he
was president of the Sioux City Clearing
House association.
Active in Sioux City social and civic
circles, Mr. Toy was a member of the
Sioux City Boat club, the Country club,
the Chamber of Commerce and the Greater
Sioux City committee.

G. L. CURTIS
President

J. H. NISSEN
Cashier & Assistant
Trust Officer

MILO J. GABRIEL
Vice President

EMIL
JOHANNSEN
Assistant Cashier

W. A. ANDERSON
Vice President

H. M. OLNEY
Assistant Cashier

O. P. PETTY
Vice President and
Trust Officer

F. E. CONOVER
Assistant Cashier

H. G. KRAMER
Vice President

F. H. IIAMANN
Assistant Cashier

A. R. THURN
Vice President

C lin ton Cm inty’s Largest Bank

ALL'S W ELL

Last month some 'uninvited guests"
withdrew $100,000 from our bank— it
was redeposited within 5 hours---the
"guests" are now serving life terms.
But they did not, nor could not, rob
us of
1. Our good name.
2 . 0 ur record of service or
3. O ur satisfied correspondents.
M a y W e Serve Y o u ?

Will Remodel
The American Savings Bank of B ur
lington, IoAva, has let the contract for
$15,000 worth of remodeling to C. M.
Hohlen, Burlington contractor, it was an
nounced last month.

T H E

City N a t io n a l Bank
C L IN T O N , IO W A

John C. Bryant Dead
John C. Bryant, 63, cashier of the Red
Oak Trust and Savings Bank, Red Oak,
Iowa, since its inception nearly 26 years
ago, died at the Red Oak hospital last
month. Before he came to Red Oak in
1898 he was for six years engaged in the
banking business at Griswold. It was
there that he received his first training for
a banking career.
A fter coming to Red Oak in 1898 he
joined the Red Oak National Bank and at
the turn of the century was employed at
that institution. In i906 the Red Oak
Trust and Savings Bank was organized.
Mr. Bryant was made cashier.
F or the last 25 years this institution had

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Federal Reserve Bank of St. Louis

Assets Over $ 9,000,000.00
D IRE C TO RS

W. A. ANDERSON
Vice President
C. A. ARMSTRONG
President C. F. Curtis
Company. Inc.
A. A. BENTLEY
President
Fidelity Life Association
A. P. BRYANT
Manager of Operations
Clinton Com Syrup
Refining Co.
O. D. COLLIS.
President The Collis Co.

E. J. CURTIS.
E. L. MILLER
Vice President Curtis Bros.
Attorney
& Co.
J.
PETERSON.
G. L. CURTIS.
President
O. P. PETTY.
President Curtis Companies.
Vice President
Inc.
G. W. DULANY, JR.
H. W. SEAMAN
President Eclipse Lumber
Co.
J. O. SHAFF.
Chairman Climax Engineer
Farmer and Live Stock
ing Co.
Dealer
MILO J. GABRIEL.
Vice President
F. H. VAN ALLEN,
President Gabriel Lumber
President J. D. Van Allen
& Fuel Co.
& Son, Inc.
B. M. JACOBSEN.
Congressman Second Iowa
G. E. WILSON
District
Pres. Clinton Bridge Works

Northwestern Banker

April 1932

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Northwestern Banker

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

Third Annual Trust

Conference
The official program fo r the Third
Annual Trust Conference of the Iowa
Bankers Association, to lie held Thurs
day, A pril 7th, at the Cliieftan Hotel,
Council Bluffs, has just been released.
The program starts at 9 :15 a. m. and
adjourns at five in the afternoon.
Speakers and subjects are as follows:
FORENO ON SESSIO N
9 :1 5 A. M.
(1 ) M eeting Called to Order.-..E. A. H offm an
V ice Pres, and T rust Officer, T o y N a
tional Bank, S iou x C it y ; Chairman,
Com m ittee on T rust B usiness o f the
I. B. A.
(2 ) R em arks_________Chairman E. A. H offm an
(S ’) A W ord of W e lco m e ............. . ...H . L. T inley
P resident, C ouncil B luffs Clearing H ouse
A s s ’ n . ; Cashier, State Savings Bank,
C ouncil Bluffs.
(4 ) R esponse to the A ddress of
W elcom e ............. ............................ C. F. H arris
Cashier, State Bank, G ladbrook,
(5 ) A ppoin tm ent o f C om m ittees..... .............
.................. - ......... Chairm an E. A. H offm an
(a ) R esolu tion s C om m ittee.
(6 ) A W o rd from the I. B. A . P re s i
dent ____ ____..1__________ Ivan O. H asbrou ck
Cashier, Iow a State Bank, J efferson ;
P resident, Iow a B ankers A ssocia tion .
9 :4 5 A . M.
(1 ) R ep ort of M id -W in ter T ru st C onference
o f A. B. A .......................... Clyde H . D oolittle
Trust Officer, lo w a -D e s M oines N ational
B ank & T rust Company, Des M oines.
1 0 :3 0 A. M.
(2 ) Some T hings to R em em ber in C losing
an E state.-.................................. E. R. Jackson
Trust Officer, C ouncil B lu ffs Savings
Bank, C ouncil B luffs.
1 1 :1 5 A . M.
(3 ) L ife Insurance Trusts.
LU N CH E O N
1 2 :0 0 N oon
(4 ) A djournm ent fo r L un cheon •
— B allroom ,
M ezzanine F loor.
1 :0 0 to 1 :3 0 P. M.
(5 ) O ddities in W ills ........ W illiam PI. L aw rence
A ttorn ey and A ssistant T rust Officer,
M ercantile-C om m erce B ank & T rust Co.,
St. Louis, M issouri.

|7//ììmAiìéM!;^

ROOM

been Mr. Bryant’s “ child,” his hobby and
his business. He babied the business in its
early days, took delight in moulding it
into a strong bank and in watching it
stretch out its influence over a county in
which he had abundant faith. A t its
twenty-fifth anniversary in May last year,
Mr. Bryant and B. B. Clark were the only
two remaining members of the original
board.

April 1932

A F T E R N O O N S E S SIO N — 2 P. M.
PART I
“ C orn R o o m ,’ ’ M ezzanine F loor
2 :0 0 to 3 :1 5 P. M .— T rust Investm ents.
P resid in g Officer— L. B. B artholom ew ,
V ice P resident, B ankers T rust Company,
Des M oines.
(1 ) A uthorized S ecurities U nder Iow a Law.
(a ) F ederal Bonds.
( b ) F ederal Land B ank B onds.
( c ) State B onds.
( d ) M u n icip al B onds.
(e ) R eal E state M ortgage B onds.
( f ) C orporate M ortgages.
( g ) R ailroa d B onds.
(h ) B onds guaranteed b y railroads.
( i ) P u b lic U tility B onds.
(2 ) Insufficiency of P resent Iow a L aw C over
ing T rust Investm ents.
PART II
“ Beau A r t s ’ ’ R oom , M ezzanine F loor
2 :0 0 to 3 :1 5 P. M .— Insurance T rusts.
P resid in g Officer— Geo. D. H arris,
M anager, T ru st D epartm ent, Com m ercial
N ational Bank, W aterloo.
(1 ) P ersonal L ife Insurance Trusts.
(a ) A dvantages to the insured and his
fam ily.
(b ) Benefits to L ife U nderw riters.
( c ) B enefits to the T rustee.

(2 )

B usiness Insurance T rusts.
(a ) A dvantages to the insured, his busi
ness and his fam ily.
(b ) Benefits to L ife U nderw riters.
(c.) B enefits to the Trustee.
( 3 ) C ooperation B etw een Trust D epartm ents
and L ife U nderw riters.
(4 ) P ro p e rty W ills and L ife W ills Com pared.

PART III
“ Corn R o o m ,’ ’ M ezzanine F loor
3 :1 5 to 4 :3 0 P. M.— A d m inistration o f E states.
P resid in g Officer— J. M. H utchinson,
Trust Officer, Cedar R apids Savings Bank
& T rust Company, Cedar R apids.
( 1 ) T rust R e co rd Form .
(2 ) R e sp o n sib ility of the T rustees and E x e c
utors.
(3 ) D iscussion o f all form s o f taxes.
( 4 ) P ra ctice of Law .
( 5 ) H a n d lin g real estate ow ned in other
States.
(6 ) The m ost nov el and in terestin g trust I
ever handled.
( 7 ) A n y other questions on this to p ic that m ay
o ccu r to those in the audience.
PA R T IV
B allroom , M ezzanine F loor
4 :3 0 P. M.— R eassem bling in the M ain C on fer
ence R oom (T h e B allroom )
F o llow in g the individual “ su b -co n fe re n ce s’ ’
all are asked to reassem ble in the m ain m eet
ing room f o r :
(1 ) R ep ort of the R esolutions Com m ittee.
( 2 ) General Sum m ary o f the D a y ’ s
C o n fe r e n c e ........................ ........E. A. H offm an
Chairman of the “ C om m ittee on Trust
B u sin e ss’ ’ o f the I. B. A.
(3 ) A n y N ew B usiness.
( 4 ) U nfinished B usiness.
5 :0 0 P . M.— A d journm ent.

Bureaucrat, 1767 Style
When Columbia University in 1930
bought the library of economics owned by
Professor Edwin R. A. Seligman it en
riched the rare books department of the
university library. That department has
drawn from the Seligman collection the
material for a display of 150 books on
“ Depressions the World Has Lived
Through.” The volumes cover eight dis
tinct periods of economic trouble which
have afflicted Europe and the United
States since 1700. Miss Wilcox, in charge
of the Seligman library, reports that these
books on past depressions “ are practically
all the same.” Those published since the
development of industry nearly all blame
technological unemployment. For the past
two centuries, as the exhibition shows,
economists have declared “ theirs is the
worst depession that ever happened— and
they all offer the same panaceas.”
But is is with noticeable pleasure that
the librarian describes one original remedy
for national debt: “ An annonymous wag
of 1767 advocated that all marriages in
the British Empire be dissolved and that
coup’ es desiring to remarry be obliged
to pay a considerable license fee to the
government.” He proposed to repeat the
process annually. According to his theory,
the innovation would increase the number
of marriages, “ since all young bachelors
wary of matrimony . . . would be
glad to risk it when it meant bondage for
only one year.”
Although the author of this scheme is
unknown, it is highly probable that he
was a government employe, a dyed-in-thewool bureaucrat of 1767. Doubtless if the
idea had been accepted he would have
bobbed up with an earnest plea to be put

57
in charge of the new government depart
ment necessary to handle the results of
such a measure.
He knew that his
“ Scheme to Pay Off the National Debt by
Repeal of the Marriage Act” would create
a large staff to investigate applications
for licenses and to consume the fees, an
outlook likely to make any bureaucrat
happy.— New York Sun.

Pointing out the new uses for steel
which were developed in recent years and
declaring that further development is to
be expected, Mr. Taylor says with regard
to his own company:
“Our company has never made pro
vision for a poorer and weaker America.
We have always planned for a richer and
stronger America. Thus far we have not
been wrong. We are not making any pro
vision for being wrong in the future. We
have, within a few years, spent $250,000 ,000 , the better to fit ourselves for
future business.”

Grudges which the new tariff bill may
arouse have not had time, of course, to
register on the books. Yet this is a re
markable record for a nation which so
short a time ago was feeling bleak. No
little part of the quick recuperation is
due to the tremendous flow7 of gold from
India, where it had been hoarded in orna
ments and the like in the palaces of the
great for generations.— From Chicago
J ou rn a l o f C om m erce.

Record Off Gold
It will probably be as much a surprise
to the Communist who wrote the London
M o rn in g P o s t a short time ago giving
explicit plans for turning his country over
to a Soviet regime as it is to us that, after
less than six months off the gold standard,
Britain has won her battle, that she will
balance her budget at the end of the fiscal
year, and that she may even show a sur
plus in the treasury. Yet Britain is not
satisfied with these accomplishments in the
few short months; there is a movement in
parliament to continue off gold for another
year, for further bolstering. The original
suspension measure, adopted September
21st last year, will expire on March 21st.
The extension bill has already passed first
reading in the commons.
It may be recalled that when the stand
ard was abandoned last fall it was after
an apparently lost fight for balance when
loans from the United States and France
totaling $650,000,000 had failed to do any
good. The treasury has spent $400,000,000
of foreign credits and the Bank of E ng
land $250,000,000 in the vain battle to re
tain the traditional standard. At that time
the outlook for all of the major powers
was one streak of black and ingrowing
gloom. A total of $750,000,000 of Ameri
can gold was quickly withdrawn by na
tions which had lost all faith in all cur
rencies.
Off gold, Britain began to look about.
Since the domestic prices were kept down
by the decline in sterling, exports were
speeded. The premium commanded by
gold in terms of the pound and other
British currencies set the metal pouring
into London, but it did not rest there;
sales on the British bullion market to
France and the United States built up
foreign balances for Britain. Part of the
British foreign debt was ready for pay
ment as early as October; more came last
month; and now the treasury sees its w7ay
clear to pay off $ 200 ,000,000 of the
$400,000,000 borrowed from French and
American bankers. And these sums are
not yet due.
B y the middle of February the deficit in
the British treasury for the fiscal year had
been brought down to about $250,000,000
from $350,000,000 the previous year.
Ordinary revenues had increased about
$31,000,000 fo r the period, and total ex
penditures including sinking fund had
dropped about $52,000,000.

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

New Uses for Steel
The discovery of new7 uses for steel
which will bring back the ready absorp
tion of large sca’ e production is predicted
by Myron C. Taylor, chairman of the
finance committee of the United States
Steel Corporation in a book published
containing the views of twenty-one busi
ness leaders.
The volume which is called “ A Basis
for Stability” was written by Samuel
Crowther in collaboration witli the heads
of large industrial companies.

Sees Shorter Working Week
Taking up the possibility that plants
will not he worked at capacity rates, he
makes the following observations on meth
ods for reducing labor.
“ I f it be true that the national plant
capacity of industry is not destined al
ways to work at capacity, it may be w7ell
that short work days are not the solution,
but that, on the contrary, the plant will
function best if it is operated continuously

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Northwestern Banker

April 1932

58
and the work week, not the work day,
shortened.”
A lfred P. Sloan, president of General
Motors Corporation, declares that the
financial machinery of the country failed
to increase in efficiency with the improve
ment in industrial production. The diffi
culty has been, he says, the failure of pur
chasing- power to increase in correspond
ence with the increased productive capac
ity of business.

S i x t y Ye a r s of
K n ow in g How

The simple fact that this institution
has cooperated with Iowa banks as
Des Moines correspondent for over
60 years indicates the type of service

New Business Campaign Effective
The Master Thrift System, of Milwau
kee, which specializes in personal solici
tation of new bank accounts and is work
ing' in conjunction with a number of
banks in the middle west, reports fine
progress in the matter of building hank
deposits for individual banks, and in
combatting the evils of hoarding.
One of the progressive banks of Min
nesota, the Austin State Bank, has re
cently conducted such a campaign, work
ing with representatives of the Master
Thrift System, and A. V. A. Peterson,
president, is very enthusiastic over the
results. Speaking of the campaign, Mr.
Peterson sa y s:
“ The high manner in which this was
conducted, which naturally we watched
carefully, is commendable, and we know
of no one who was misinformed. Per
sonally I have not the slightest hesitancy
in recommending it to banks that desire
to increase their savings deposits, and one
feature that was noticeable, was the fact
that the amount of cash received, shows
that we touched the hidden sources of
money rather than affecting our competi
tor in any way.”

we are able to render to your bank.

VALLEY

NATIONAL BANK
DES M O IN E S
OFFICERS
J o h n C ownie «, P residen t

R. A . Crawford , Chairm an o f Board

Announces Committees
Bert N. Mills, president of the Insur
ance Advertising Conference, announces
the personnel of two committees serving
the general organization.
Standards of Practice: Henry Putnam
of the John Hancock Life, chairman;
L. J . Evans, Register L ife ; Artnur H.
Reddall, Equitable L ife ; F. Sidney Holt,
Aetna Insurance Company; E . C. Smith,
Western & Southern Indemnity Co.
Publicity Committee: Harold E. Taylor,
The American Group, chairman; Chauncey S. S. Miller, North British and Mer
cantile; Frank Price, The Prudential;
Stanley Witne, Aetna Casualty and
Surety Co.

Go Up One!
Teacher: “ Anonymous means without
a name. Now give me a sentence using
this word.”
P u pil: “ Our new baby is anonymous.”

Northwestern Banker

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

April 1932

Case of Necessity
A stout woman wedged into a crowded
street car had difficulty getting into her
tightly buttoned jacket pocket to extract
her fare.
“ Madam,” said the man next to her,
during her fruitless struggles, “ let me pay
your fare.”
She protested rather indignantly.
“ My only reason for wishing to do so,”
he said, “ is that you’ve unbuttoned my sus
penders three times trying to get into your
pocket.” —N. 0. T. and L. N ew s.

With Reservations
Little Bobbie: “ Mother, have 1 been a
good boy lately?”
Mother: “ Yes, dear, a very good boy.”
Bobbie:
“ And do you trust me,
Mother ?
M other: “ Why of course, Mother trusts
you, son.”
Bobbie: “ Then why do you go on hid
ing the jam ?” — Progressive Grocer.

Yes, Indeed!
A druggist recently sent a shipment of
ice cream by parcel post with the' inscrip
tion :
“ I f not delivered in five days, never
mind.”

No Laughing Matter
“ What is the matter, darling?” asked
Mrs. Smith, Avhen her small son came to
her in tears.
“ Papa was hanging a picture and it fell
on his toe,” responded the child between
sobs.
“ But that is nothing to cry about,” re
plied Mrs. Smith cheerily, “ you should
have laughed at that.”
“ I did,” said the boy.— Selected.

ground,” the victim bellowed back.
afraid you fellows will drop i t !”

“ I ’m

A Modern Tip
A lion met a tiger
A s they drank beside a pool.
Said the tiger, “ Tell me why
You’re roaring like a fool.”
“ I ’m not foolish,” said the lion,
With a twinkle in his eyes.
“ They call me K in g of Beasts
Because; I advertise.”
A rabbit heard them talking
And ran home like a streak.
He thought he’d try the lion’s plan,
But his roar was just a squeak.
A fox came to investigate,
Had luncheon in the woods.
So when you advertise, my friends,
Be sure; you’ve got the goods.

One Pair
First Old Maid: “ Would a stocking
hold all you want for Christmas?”
Second Old M aid: “ No, but a pair of
socks would.’ ’

Scotch
A Lesson in Salesmanship: “ The guy
who sold the lady a two-pants suit in which
to bury her husband.”

Volsted
Prohibition may have removed one rail
from the old-time saloon, but it placed one
more on the political fence.

It Sure Does
F r e d : “ They say if there’s anything
in a man, travel will bring it out.”
Ted: “ Yes, I found that out the first
day at sea.”

All Wet
Professor: “ Bridget, do you knoAV any
thing concerning my wife’s whereabouts ?”
Bridget: “ Yes, sir; I put them in the
wash.”

No More Baths
Mother: “ Willie, never do anything
Avhich you would be ashamed for the whole
world to see.”
W illie: “ Hooray! Then I Avon’t have
to take any more baths!”

All Washed Up
Nurse: “ The patient in Room 204 is
very good looking, doctor.”
Doctor : “ Yes, but never mind washing
his face. Four other nurses have done it
already.”

So Do W e!
Doctor: “ Ever have any trouble; Avith
dyspepsia?”
P atien t: “ Only Avhen I try to spell it.”

“ On the Level”
No man can do his level best unless he
is on the level.

Back Seat Driving
A utoist: “ Have you that kind of gas
that stops knocking?”
Attendant : “ Yes, we sure have.”
Autoist : “ Theft give some to my Avife
in the back seat.”

Aye, Aye!
Taking No Chances
The hotel was burning, and the fire
roared nearer and nearer to the; guest
marooned on the window ledge on the six
teenth floor. Below him a dozen firemen
were holding a large canvass for him to
jump into, but their shouts and signals
were in vain. Finally, on the twentieth
try, one managed to make himself heard
just as the walls were on the point of
falling.
“ Jum p !” he screamed, “ Why don’t you
jump ?”
“ Not till you lay that sheet down on the

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

That’s That!
W illie: “ Pa, if the; baby ate some tad
poles Avould it give him a big, bass voice
like a fro g?”
P ap a: “ Gracious, no! It would kill
him !”
W illie: “ Well, it didn’t.”

A fool there was and he saved his rocks,
Even as you and I.
But he took them out of the old strong box
When a slicker called with some wildcat
stocks,
And the fool lost all but his shirt and socks,
Even as you and I.

Just Imagination

The Minister

Insurance M an : “ Lady, any insanity in
your fam ily?”
Lady of the House: “ No, only my hus
band often imagines he’s the head of the
house.”

The; parson received as a Christmas
present a ja r of brandied peaches. His
acknowledgment read :
“ Thank you, not alone for the peaches,
but for the spirit in which they Avere sent.”

Northwestern Banker

April Í932

Atnèex Go ¿Advertisers
N
A m erican

Express

G e n e r a l M o t o r s A c c e p t a n c e C o r p . . . . 29
T h e G e r l a c h - B a r k l o w C o ...................... 38

Co.

N o r t h e r n T r u s t C o .................................... 46
N o r t h w e s t e r n B a n k e r ........................... 20
N o r t h w e s t e r n N a t i o n a l L i f e Ins. Co. 34

It
B a l l a r d - H a s s e t t C o ....................................
B a n k e r s T r u s t C o ......................................
B a n k e r s ’ W a n t s ...................................... •
Geo. M. B e c h t e l & C o m p a n y ................
C a r l e t o n D. B e h C o m p a n y ....................
B e l l T e l e p h o n e S e c u r i t i e s ....................

26
51 W . D.
38 H o t e l
19 H o t e l
22 H o t e l
27 H o t e l

H a n n a C o ..................
C h a m b e r l a i n .........
F o n t e n e l l e .............
Francis D ra k e. . . .
G o v e r n o r Clinton.

30
37

Omaha

N a t i o n a l B a n k ........................... 52

P hilad elp hia N ational B a n k .
P o l k - P e t e r s o n C o r p ....................
P r ie s t e r , Q u ail & C un dy , Inc.

C
C e n t r a l H a n o v e r B a n k & T r u s t Co.
Central Life A ssu ra n ce S o c i e t y . . . .
C e n t r a l N a t i o n a l B a n k & T r u s t Co.
C e n t r a l R e p u b l i c B a n k & T r u s t Co.. .
C h a se N a t i o n a l B a n k .............................
C ity N a t i o n a l B a n k ..................................
C o n s o l i d a t e d N a t i o n a l B a n k ................
C o n t i n e n t a l I l l i n o i s C o m p a n y ...........

2 I n v e s t o r s S y n d i c a t e .........................
36 I o w a - D e s M o in e s N a t i o n a l B a n k .
53
17
18
55
54
J a c k l e y - W i e d m a n & Co.
61

R o y a l U n io n L i f e I n s u r a n c e Co.

S e c u r i t y N a t i o n a l B a n k ......................... 50
Smith, B u r r i s & C o .................................... 28
S t o c k Y a r d s N a t i o n a l B a n k ................ 21
D i s t r i b u t o r s G r o u p ...............................
D r o v e r s N a t i o n a l B a n k ........................

25
48

F arm ers M utual Hail Insurance
A s s ’ n .......................................................... 35
F i r s t N a t i o n a l B a n k , S i o u x C i t y . . . . 42
T h e F i s h e r C o m p a n y ............................. 57

Geo. L a M o n t e & S o n .............................
Live s t o c k N ational Bank, Om aha.
L i v e s t o c k N a t i o n a l B a n k , S io u x
C ity
..........................................................

1
M a s t e r T h r i f t S y stem , Inc.
M erchants N ational B an k .
M ueh le, B o y d & M c C l a i n . .

40
V a lley N ational B an k .

T h e W h i t e - P h i l l i p s Co., I n c .................

TH E N O R TH W ESTE R N B A N K E R AND THE T E R R IT O R Y IT COVERS
P ublished

D e P u y P ublishing Company

555 Seventh Street, Des Moines

C L IF F O R D D E P U Y
Publisher

R. W . M O O R H E A D
E d itor

G E R A L D A. S N ID E R
A ssocia te Publisher

W M . H. M A A S
V ic e President

F R A N K P. S Y M S
V ic e President

J. A. S A R A Z E N
C irculation M anager

C hicago O ffice: W m . H. Maas, 1221 F irst N ational Bank B ld g ., Phone Central 3591
N ew Y ork O ffice: Frank P. Sym s, 19 W e s t 44th St., Suite 412
M ilw aukee O ffice: 110 E. W isco n sin A ve., Phone D a ly 6154
M in n eap olis O ffice: Frank S. L ew is, 840 Lum ber E xch an ge, Phone A tla n tic 6458

O fficial 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 I O W A F A R M M O R T G A G E A S S O C IA T IO N
T H E IO W A I N V E S T M E N T B A N K E R S A S S O C IA T IO N

Northwestern Banker

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

April 1932

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

Investment Securities

C o n t in e n t a l I l l in o is
Co m pan y
C H IC A G O

NEW YORK
S A N F R A N C IS C O

IO W A

■Where W ise Planting
Iow a’s prosperity are of many
Assures Rich Harvests

H E seeds o f
species.
i he $700,000,000,000 annual harvest o f agri
cultural wealth comes from an ever-widening variety
of crops and farm products— oats, harley, poultry,
truck-gardening, and dairy products as well as corn,
cattle and hogs.
The $800,000,000 annual harvest of industrial
wealth is produced by an equally diversified group of
activities ranging from meat packing and vegetable
canning to the manufacture of wearing apparel,
cement and plaster, milling machinery and automo
tive equipment.
Commerce, moving the products of farm and
factory rapidly and economically to consuming mar-

kets, aided by unsurpassed communication and trans
portation facilities including nearly 4,000 miles of
paved highways and a vast network of well-main
tained railroads— reflects the stabilizing efifect of
Iow a’s diversified agriculture and industry.
This Bank has kept pace with the rapid growth
of this progressive State for more than 57 years.
New opportunities have always found it ready with
adequate resources and increased facilities. Those
who choose this Bank as their Des Moines corre
spondent share in the confidence inspired by this
spirit of leadership.

Through its affiliation with the Northwest Bancorporation and with other nation-wide contacts, this centrally
located Bank — the largest in Iowa — can give you
unusually prompt service on collections and other cor
respondent matters.

Iowa - Des Moines national
sr Trust C ompany

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

Njffiliated with

NORTHWEST BANCORPORATION

bank

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

Full text of The Northwestern Banker : April 1932, 37th Year, Number 537

FRASER