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Do You Explain Why You Say “ N o” ? : . Teaching Young America to Save. THE PHOTO BE LO W : Formerly assistant secretary of war, Dwight Davis, has been appointed secretary of war, succeeding John Weeks, re signed. Mr. Davis is a world war veteran and is the donor of the Davis cup, international tennis trophy. “I\ & A.” Choit). https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ' II® THE N O R T H AY E S T E R N Northwestern National BANKER December, 1925 D IR E C T O R S F. A . C ham berlain........... P resid ent F irst N ational Bank E. W . D e ck e r------- P resident N orthw estern N ational Bank Life Insurance Com pany C. T. J a ffra y ............................ .......P resid ent “ S o o ” R ailw ay J. A. L atta-...V ice P resident N orthw estern N ational Bank MINNEAPOLIS, MINNESOTA E. L . C arpenter....P resident Shevlin-C arpenter-C larke Co. B. F. N elson ........................ .P resident H ennepin P aper Co. A. F. P ills b u r y ......... T reasurer P ills b u ry F lour M ills Co. T. F. W allace ..S e c’ y-T reas. Farm ers & M echs. Sav. Bank A PURELY MUTUAL, OLD-LINE, WESTERN COMPANY o u n d e d in 1857— 68 years a g o; and during this period through conservative, s u b s ta n tia l b a n k in g T H E F I R S T NATIONAL has rendered an unexcelled service to correspondent banks in the west. F Sixty-eight years afford ample test and supply conclusive proof of the stability of any institution— particularly that of a bank. F. H. D A V IS P resid ent O. J. A rn o ld ............ P resid ent N orthw estern N ational L ife representatives —to m ak e recom m en dation s on B o n d s, qu ote p rices, and su p p ly inform ation . C. T. KOTJNTZE V ice P res, and Chairman 1 Omaha 1 N a tio n a l lB a n k o f r I "'H E Des Moines business of Iowa banks is invited. These banks are th o ro u g h ly equipped in every department. Valley National Bank SIOUX C IT Y serves one o f America’s richest farming territories, and its commercial import ance in the West makes a good banking connection in this city highly valuable. W e invite correspondence regarding our service to banks and bankers. AND' Valley Savings Bank DES M O IN E S, IOW A V a lle y Bank B uildin g E s t a b li s h e d 1872 Combined Capital and Surplus $ 1, 100, 000.00 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis R . A . C R A W F O R D , P resid ent D. S. C H A M B E R L A IN , V ice President C. T. COLE, J R ., V ice P re s i dent W . E. B A R R E T T , Cashier JO H N H . G IN S B E R G , A sst. Cashier C. M. C O R N W E L L , A sst. Cashier CAPITAL ONE M ILLIO N DOLLARS THE December, 1925 NORTHWESTERN BANKER Where Your Money Buys Guaranteed Value HETHER you are spending your own money— or whether your clients arespending money borrowed from you— it is equally vital to your interests that that money should procure full value received. Particularly is this true in building loans where the intrinsic worth o f the in vestment must be considered from a potential as well as an actual standpoint. It is undoubtedly because of this twofold importance that many Corn Belt Bankers ad vocate to their clients investments in Gordon-Van Tine Buildings. Guaranteed Investments From the very beginning, Gordon-Van Tine have stood for highest quality at the lowest price possible commensurate with one small legitimate profit. That pol icy rigidly adhered to has brought an ever-increasing volume o f business, the sav ings from which have been turned back to the consumer in still further decreased costs. Yet never once, in all the years, has quality suffered. W e specify the quality and grades of everything we sell. Those specifications are written into the contract itself. For example, all contracts specify No. 1 fram ing lumber, clear siding, extra clear red cedar shingles. And rigidly and inexor ably those and other specifications are not only lived up to, but even bettered. Homes are guaranteed absolutely for 20 years! Yet our prices are the lowest in America tod a y! Get These Valuable Books I f you are not fa m ilia r w ith G ord on -V an Tine gu aran teed quality it w ill prove a rev e lation to you to investigate. Our F ree B ooks, G ord on -V a n Tine H om es, Barns and B u ild ing m aterials are in daily use b y hundreds o f bankers as m anuals on bu ild in g values and d e velopm en ts. W e w ill g la d ly send them to you on receip t o f the attach ed cou pon . M ail it tod a y ! G o rd o n -VanTine Co. ES TA BL IS HE D I86S Satisfaction Guaranteed or Money Back Resources Over $1,000,000.00 References: Any Bank In Davenport: Continental and Commercial National Bank, Chicago, III.; National City Bank, New York City. 644 Case Street https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Davenport, Iowa Gordon Van Tine Co., 644 Case Street, Davenport, Iowa. Please send me your free books on Home, Barns, and Building Materials. Name _ Address 3 4 THE N N O R TH W E ST E R N BANKER o r t h w e s t e r n December, 1925 Ba n k e r ■■ ■L DES M O I N E S The Oldest Financial Journal W est o f the Mississippi riiiriiiri,iriiiHiirii,n iiriiiH,irii,riiiriiiHiiiT r i iiriiiiTi"iiiFiiiFiiii"iiii"iiiFiiiFiiii"iiii"i,ii-iiiFiiiFi-Fiiii"iiiFi,Ti,iiT i-ii,H-TiiT iiiriMn MriiTii^ T h ir t ie t h Y ear C O N T E N T S FO R DECEM BER 1925 N Page Across from the Publisher............ By Clifford De Puy 8 Frontispiece......................................................... I. R. Alter 10 Automobile Financing............ By Arthur W . Newton 11 “ Did You Explain Your N o ” ......................................... 12 460 um ber Page Our Readers’ Page....................... 16 Letter To St. Peter................................ By R. B. Macy 17 The Unprofitable Account......................... 19 News and Yiew s.................... ........ .................. ................... 20 14 Legal Department .......................:....................................... 21 15 Nearing Million Mark......................................................... 22 Personal Paragraphs ......... .................................... 38 South Dakota News........ ........ .......................... . Bond Section .................................. .......................... 45 Nebraska N e w s ................... ......... .................. ........ 69 Farm Mortgage Section......................................... 54 Minnesota News ................. ............................. ....... 73 Insurance Section ......... ....... ................................ 57 North Dakota News............................ .................. . 77 64 Iowa News ............ ............................... .................. 81 Different vs. Indifferent Advertising............................ .....................................................By Eugene McGuire Teaching Young America............ ....... .......................... . Bankers and Their W ants..................... ............... . 65 DE P U Y P U B L IC A T IO N S A N D TH EIR T E R R IT O R Y T rans -M ississippi B anker N orthwestern B anker KANSAS DES M O IN E S CITY I nsurance M agazine M id-C ontinent B anker S A IN T LOUIS KANSAS CITY S outhwestern B ankers J ournal U nderwriters R eview FORT W O R TH DES M O IN E S I owa B a n k D irectory DES M O IN E S TH E N ORTH W ESTERN B AN K ER , P ublished by D eP uy P ublishing Co., I nc ., Capital S tock, $100,000.00 555 Seventh Street, Des Moines. C lifford D e P u y , Publisher ; G. A . S n id e r , A ssociate Publisher ; R. W . M o o rh ea d , E ditor. H. H. H a y n e s , A ssociate M anager ; R e x V . L e n t z , A ssociate M anager. M in n e a p o l is O f f i c e : Frank S. Lewis, 840 Lum ber E xchange Bldg., Phone M ain 3865. C h ic a g o O f f i c e : W m . H. Maas, 1221 F irst N ational Bank Bldg., Phone Central 3591. N e w Y o r k O f f i c e : Philip J. Syms, 150 Nassau St., Phone 4836 Beekman. S t . L o u is O f f i c e : Donald H. Clark, 408 Olive St., Phone M ain 1342. K a n s a s C it y O f f i c e : Glen D. Mathews, 405 R idge Bldg., P hone H arrison 5857. F ort W o r t h , T e x a s , O ffic e : H. Law son H etherw ick, 409 F. & M. Bank Bldg. S a n F r a n c is c o O f f i c e : George W ight, 600 B aldw in B ldg. Entered as second class matter at the Des Moines postoffice Subscription Rates, $ 3 .0 0 per year; 50 cents per copy Official P u b lica tio n o f TH E S O U TH D A K O T A B A N K E R S A S S O C IA T IO N TH E IO W A F A R M M O R T G A G E A S S O C IA T IO N T H E IO W A BOND D E A L E R S A S S O C IA T IO N = t r i l l Mll llM llllMIIIIBIIIIHIIIIHIIIIBIIIIMHIIBIIIIBIIIIBHII«IIIIBHIIBIIllBilliBilllBIIIIWHI|B|ll|«|ll|«|lll«l*ll«¡lliWHllWIHIW|l»|W|ll|W illi»HI|MHI|W |»«|W |M|W|ll|W|l»|BH»l«lM|W|ll|Wmi«H»l«l«l|«H«|W |lli=*= | M lllL lllL llllB 'llL llllB llllllllL llllB llllB lllL lllL llllM llllB llllB llllM lU lW lIllB lillB llllB llllB llllB lllla llllB llllB llllM lllla llllM lllllllllW lIllM llllM llllB llllM llllB llllM lllla lllla llllM lllT g g https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis THE December, 1925 NORTHWESTERN BANKER When You Hand Your Customer a Draft on This Bank— You notify him of your affiliation with Des Moines’ oldest banking institution, and make available to him, through your instrumentality, every modern banking facility, including — Helpful consideration o f rediscount requirements Up'tO'date investment information A broad real estate loan service Efficient foreign ex' change department W i t h capital, surplus and profits aggregating over O ne M illion Dollars Inquiries of Iowa bankers , whether customers or n o t , are given courteous and careful attention M em ber* F e d e r a l D e s M o i n e s ' O l d e s t R eserve B a n k i n g DES MOINES https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis S v s fern In s t i t u t i o n 6 THE N O R T H AV E S T E R N BANKER December, 1925 AVAILABLE NOW 1 26 POR Q ( "K A D D I C K S READY-REFERENCE ADVERTISING SYSTEM [ p a te n t a p p l ie d f o r ]) P U T S your advertising on the same permanent, businesslike basis as the other departments of your bank— starts with a budget— keeps accurate account of your advertising expenditures and results— furnishes copy, ideas, plans and suggestions on all phases o f your advertising for instant reference— copy prepared individually for your bank — the last word in bank advertising and a sound, sensible plan for your bank to adopt. Get the Facts on this New System before Your Annual Meeting DICK SERVICE 716 FOURTH AVENUE SO. MINNEAPOLIS y rRADDlCK SERVICE CRA Minneafol'5 More than two hundred bankers have given Craddick Service the highest possible endorsement by employing it continuously for five years or more—some for fifteen! https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis B ank I I I I L - Avertis- p\an for our our plan < “*’ we - Address Signed _ J Back of this service stands an un equalled record —not of tremendous profits—nor pompous ratings—but of conscientious, helpful service to hun dreds of progressive bankers for more than twenty years. Isn’t that what counts? THE December, 1925 NORTHWESTERN 7 BANKER A Conservative Bank for Conservative People Visiting or Living in F L O R ID A BEING A G R E E A B L E This bank avoids formality. W e be lieve we can be friendly, cordial and agreeable without losing our dignity. Y our Patronage Solicited Resources Over $ 1 3 ,0 0 0 ,0 0 0 ,0 0 FIRST-AMERICAN BA N K & TR U ST C O M P A N Y W E ST PALM BEACH , FLORIDA THE HANOVER NATIONAL* BANK OF THE CITY OFNEW YORK Established 1851 A BANK of the with a knowledge opportunities and obstacles faced by business, certainly is an asset to any company— especially if that bank has a reputation for be ing an all-weather friend. The Seaboard N ational Bank of the C ity of N ew Y ork M A IN O F F IC E B roa d and B e a v e r S tr eets M E R C A N T IL E B R A N C H 115 B r o a d w a y a t C e d a r S t r e e t UPTOW N BRANCH H E a s t ^ 5th S t r e e t n e a r M a d is o n A v e . Capital . . . Surplus and Profits https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis $5,000,000 25,000,000 8 THE N O R TH W E ST E R N BANKER December, 1925 ACROSS THE DESK FROM THE PUBLISHER JU D G E ELBERT H. GARY is 79 years old. He is head of the United States Steel Cor poration, which was the first billion-dollar company ever or ganized, and is today one of the foremost industrial organiza tions in the entire world. In a recent article in which he discussed rules for success, he placed the golden rule as the foundation upon which any young man or woman should build for the future if they wish to build successfully and substantially. “ The young man possessed of an ambition to get ahead in the world, never had a bet ter chance than exists today,” said Judge Gary. J has never known.” Judge Gary himself started as a country lawyer in Illinois and has climbed to one of the highest positions held in the business world today, and his advice to young men and young women is certainly sound. The young man who bases his actions upon the golden rule and then applies himself indus triously, will certainly climb much farther than the young man who does not follow the square deal, but uses tricky methods in order to accomplish his purpose. “ Here we are— the richest country in the world, having within our boundaries all of the natural re sources for the providing of necessities and luxuries of life. And the one who wants to succeed and fails of accomplishment has no one or no thing to blame but his or herself. I often think that sometimes we grow weary of being told that we are the greatest nation in the world and have the greatest opportunities at our own doorstep, but one moment’s reflection and analysis of other nations of the world can not help but convince us that the land in which we live does present the opportunities if we will only take advantage of them. “ This is indeed the golden age, and this is in deed the land of promise, the like of which the world Success can be obtained if you will work and fight for it. Reasons for Shortages J N A letter received by us from N. G. Olney, cash ier of the Citizens Bank of Marathon, Iowa, he said, “ In looking over the Republican-Press of A t water, Minn., I came across an article that appealed to me to be of more than ordinary interest to a man in the banking business. With this in mind I am sending the paper to you, thinking you might find the article of particular interest. I found many statements in the article which I felt were worthy for food for thought, especially among bankers. ’ ’ The article to which Mr. Olney refers was a state ment by Henry Stene, president of the First Na tional Bank of Atwater, Minn., which failed some months ago. The article of Mr. Stene’s is too long to publish here, but he takes up each item in his institution https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis and goes through it, showing each transaction and the final outcome of it. In some cases the losses were due to money being tied up in frozen loans. In other cases it was money loaned on elevators which were destroyed. In others it was direct losses on loans from customers who were unable to make payment on these sums. One example will suffice to indicate the character of many other items in this statement. “ We lost $5,000 on the failure of the P. E. Lundquist elevator in 1920, including a note for $2,000 delivered to the bank by P. E. Lundquist, purporting to have been executed by D. E. Nevelle, who denied the signature. He later failed ; nothing was recovered on the note.” In all of these various transactions nothing of a fraudulent character is shown as far as Mr. Stene is December, 1925 THE NOR T H W E S T E R N concerned, and in conclusion he says, ‘ ‘ As one situa tion after another has arisen, I have thought them out myself. I have made no personal profit. I in tended to make good. Everything I did was done in an effort to save these losses, keep open and try to pull through. I have devoted the best years of my life to it. I have worked hard, early and late. I am broken in health and spirit. I am sixty-three years old and have given the best years of my life to the stockholders and depositors of this bank and the community in which I live, but without success to them or myself. I am ready to take such punish ment as you think my actions warrant. ’ ’ No one can fead this paragraph and review the previous statements of Mr. Stene without having a BANKER feeling of sympathy and sadness for him because of his failure. The reason for shortages in many banks has been due to unscrupulous banking, fraudulent manipula tion of the books and other similar reasons, but in this case none of these reasons exist. The general public thinks that a banker has an easy time of it because he handles money and is pic tured as a man of wealth. Every banker has not only his own problems to solve but he must also find or assist in a solution of the problems of many other individuals and institutions in his community. In the case of Mr. Stene, pity rather than punish ment would be a more just reward for his endeavor to keep his bank going. Losing Ground is no doubt that, the. state guarantee of T HERE bank deposits, at least this year, has been losing ground. If the idea were fundamentally sound, it would long ago have been adopted by practically every state in the Union, but instead of that it has been disregarded by the states which first adopted the law and no new states are taking it up. In a recent survey made by the state bank division of the American Bankers Association, Frank W. Simmonds, secretary of this division, said, ‘ ‘ The question of state guarantee of state bank deposits appears this year to have passed into an eclipse so far as extension of the idea is concerned, notwith standing the fact that state guarantee laws were recognized by the governors of two states and bills were introduced in several of the states, all of which were defeated. 1‘ The general tendency so far as state guarantee of deposits laws are concerned, is distinctly the other way, the indications being that several states now having guarantee laws are trying to free them selves from this legislation. Oklahoma has aban doned the plan of state guarantee of deposits, and this year the South Dakota legislature has repealed the state guarantee law and has referred the repeal to the people at the next general election for ratifi cation. ’ ’ No law which places a premium on good bankingcan long exist. Guarantee of bank deposits by mak ing it easy for unscrupulous bankers to wreck their banks and then have the guarantee fund pay the bill, is unsound and unwise, and this report simply indi cates that the plan is losing ground, and will con tinue to do so because it is basically unsound. Reducing the Interest Rates ERE has been much discussion recently about T Hreducing interest rates on savings accounts and time deposits in banks throughout the middle west. Many banks have been paying as high as 5 per cent, and that rate of interest is entirely too high if these banks are to be successfully operated, espe cially in view of the general tendency throughout the nation to lower interest rates, caused partly by our large surplus of gold. In referring to this situation in Iowa, a very prominent banker said: ‘ 1Iowa banks cannot pay 5 per cent and live. A majority of the banks that have failed in Iowa paid 5 per cent on deposits. More examiners are needed in order to have more frequent examinations of banks.” https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis It may seem all very well for a bank to hope to increase its business by paying a high rate of inter est on its deposits. It may secure the business, but if it can not pay a profit on this business the bank will not long exist, and it is certainly much better for the community that a bank keep open and func tion as a semi-public institution and serve that com munity, even if it pays a smaller rate of interest on deposits, than to have the bank close, and by so do ing bring disaster and ruin in its wake. To our mind, under the conditions existing today in the money market of the country, 4 per centr_ should be the maximum paid by any bank in this territory on either time or savings deposits. 9 I. R. ALTER V ice P resid ent F irs t N ational Bank, Grand Isla n d P resid en t N ebraska B ankers A ssocia tion nets ueen wren tne r irst ¿National Bank ot Grand Island for 26 years, start ing in 1899 as janitor. Later he was the bank’s collector, with a salary of $25 weekly. Several promotions have come to him until he is now vice president. Mr. A lter has several hobbies, including dogs, hunting, fine saddle horses, golf, bowling and athletics. The principal plank in his presidential platform is to conduct a vigorous campaign to have in the Nebraska Bankers Associa tion one hundred per cent of all the banks of the state. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis me NORTHWESTERN BANKER rfieN ecessary ffm w /azt/o u rm / Autom obile Financing from the Banker's Standpoint HAVE been asked to speak on “ Au tomobile Financing from the Stand point of the Bank.” Any remarks I make on this subject represent the views o f the bank with which I am associated and are fairly indicative of those of many other banks, but as there are a number of them which are not favorable to finance companies, and as there are probably others which take a more indul gent view than we do towards those finance companies whose terms in the purchase of paper are in my opinion over liberal, I cannot pretend to speak for all o f them. However, I think my ideas sub stantially represent those of most of the larger banks of the country and many of the smaller. In my opinion, the so-called finance company is really a highly specialized commercial bank with special features for credit investigations, for the collec tion of installment notes and for the re possession of cars in case of default. I do not think that it interferes in any way with the business of the regular bank or trust company, as very few banks are equipped to handle this class of business with the same efficiency as does the finance company. The existence of finance companies does not preclude the bank from its share of retail automobile financ ing as it can make loans to the finance company on a profitable basis with a good account from the company and with the added security of its net worth to protect the bank on its loans on this kind of se curity. Experience has shown that the note of the well-conducted finance company con stitutes a most desirable risk. Like the bank, it has no merchandise or machin ery, its assets are all liquid, but unlike the bank it has no large single lines of credit, its risks being spread over a great number of loans, none of which are over a few hundred dollars each. I mention this as there are still many bankers who, accustomed to commercial statements, have the feeling that the finance company with an indebtedness of three or four times its capital is doing a reckless busi ness, the banker meanwhile forgetting I https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis F r o m an a d d r e s s d e liv e r e d b y A r t h u r W . N e w to n , V ic e P r e s id e n t o f th e F ir s t N a t io n a l B a n k o f C h ic a g o , b e f o r e a m e e t in g o f th e N a tio n a l A s s o c ia t io n o f F in a n c e C o m p a n ie s . tiiiiiiiiiiiiiiiiiiiiiiiiiiiiimiiiiiiiiiiiiiiiiiiiiimiiiiiiiiiiiiiiiiiiiiiiiiiiiimiiiiiiiiiiiiiiiiiimiiiiiiiiiimiiiiiiiiiiiiiiiiiii “ With proper organization the finance companies should be able to keep as strong control over their members as do the banks. What the banks can and un doubtedly will do is to exercise the same supervision over the individual finance company as they do over the firm or company in any other line of business!” that his own indebtedness usually aver ages a great deal higher ratio to his capi tal than does that of the finance company As the members of this association are aware, its organization was largely the result of certain activities of a consider able number of banks, representatives of which met with representatives of a num ber of finance companies, for the purpose of discussing the question of keeping the terms of automobile paper on a conserva tive basis. The fact that so many impor tant banks were willing to endorse the resolutions passed by the Association in December of last year, is evidence of the conservative sentiment held by a large number of banks, the more particularly as their ideas were privately approved by many banks wThich for various reasons did not care to have their names appear as approving them. Conversations I have had with a number of bankers would in dicate, as most of you know, that bank ers as a body feel just as conservative to day as they did a year ago. The question frequently arises, ‘ 1What constitutes a reasonable conservatism?” I shall not pretend that there is any partic ular magic in the standard of twelve months and I am of course aware that many companies are doing a successful business with a considerable volume of their paper running in excess of twelve months. The fact is, however, that there should be a standard to be kept in mind, even though it cannot always be strictly adhered to. The finance companies dur ing a period of years built up an enviable reputation and made small losses on a standard of twelve equal monthly pay ments. So far, therefore, as can be judged by the experience of finance companies a short experience, of course, as com pared with most lines of business, twelve months is a safe standard to operate on. From my viewpoint it is unsound for any concern to borrow from a bank at six months where the underlying collateral does not largely liquidate itself during the period of the loan, as, of course, paper with a maximum maturity of twelve months would do. Certainly the finance company which took only twelve-months paper, if asked to pay its notes as they matured could do so by stopping its pur chases, using its cash, and liquidating its surplus collateral, if shown a little in dulgence by its bankers. This it quite as certainly could not do, if its paper ran for as much as twenty months. Besides, if really bad times came to this country and defaults in payment became very heavy, the conservative company would be more likely to liquidate a large volume of its paper without undue loss than would the company which had accepted considerably longer terms. Then, too, the more severe the depression in business the more difficult it would be to sell re possessed cars. Many of us remember the bad times of 1893 and succeeding years. If such a period should again strike us, it would be very difficult, and perhaps impossible, to dispose of used cars, and it would go very hard with the company that had too many of them. Bankers, of course, constantly bear such a contingency in mind. They are aware that many of their customers cannot re member the times of 1893 and that others who do say that such times cannot come again in this country. I hope they can not, but if they do, I should like to think that the finance companies would make the excellent showing, as compared with most other lines of business, that they did in 1920 and 1921, and this they can do if their management will adhere to the terms which many of their own number and most bankers believe to be sound. The question of down payment is im- 12 THE portant, some think as much so as that of terms, some think more. It is certainly a fact, that unless you have a substan tial down payment, you are, on the one hand, taking from the purchaser notes that represent considerably more than the manufacturer’s price for the car, and, on the other hand, if you repossess the car soon after it has been sold, you stand no chance of selling it for what you have in it. The dealer who parts with a car on a small down payment and twenty or twenty-four monthly payments, may think he has sold a car, but if the finance company has recourse on him he is only renting one with an option to the buyer of ultimate purchase. Of course, if the dealer sells his paper without guarantee or endorsement, it is the finance company that has gone into the renting business. I am well aware that every finance com pany representative present at this meet ing knows more than I can ever tell him of the disadvantages of small down pay ments and long terms and I am not dis- Is there more than one kind of ‘“No" ? say Bankers of the northwest there “ Noes” page are many kinds of and the article on this deals with the kind of “ Noes” that are followed by, “ and this is the reason why” — . MOST CASES MERIT COURTEOUS EXPLANATION B y T. B. W A T T S Grand Junction, Iowa I have always thought of a bank as a reservoir for the accumulation of the surplus funds of a community for dis tribution for constructive purposes in the community, and, to function efficiently,' the institution must necessarily command sufficient confidence of the people for the accumulation of the funds, and the man agement be regarded by them as mature enough in their judgment to distribute them safely and constructively. With this thought in mind, it seems fair to conclude that a great many applications for loans carry with them a desire upon the part of the applicant to ascertain the bank’s opinion of the investment it self. Other applications are sufficiently speculative in their nature to make them impractical, even though the applicant may have some financial responsibility. Others might be considered substantial, possibly frozen and not constructive, and so we might go on indefinitely describing applications which might, in the mind of the applicant, have merit, and still be impractical loans for banks, and espe cially commercial banks. There are also https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis N O R TH W E ST E R N December, 1925 BANKER cussing them with the idea that I am giv ing you information, but merely to let you know that bankers generally under stand the situation and feel that they have good cause for their conservative views. I have on several occasions been told by friends of mine in the finance busi ness that as the banks prefer conserva tism of terms on the part of finance com panies, it is up to the banks to force all finance companies into line. I can only say that it is no part of the business of the banks to unite for such a purpose, even if it were feasible or legal for them to do so. But, in fact, such united action on the part of the banks is impossible. The banks have troubles enough in keep ing their own house in order, which as a rule they do very well, without attempt ing to dictate to other lines of business what they should do. The banks have their clearing houses, their clearing house committees and their bank examinations, which in Chicago, for example, have suc ceeded so well in keeping their members in line, that since 1906, when clearing house examinations were first established in this city, no depositor in any Chicago clearing house bank has ever lost a dollar or had to wait a day beyond the time agreed upon to collect his deposit or any part of it. In many cities, Chicago among them, the banks have a regular exchange tariff governing the charges on out-oftown checks which so far as I know has been rigidly adhered to. With proper organization t h e finance companies should be able to keep as strong control over their members as do the banks. What the banks can and undoubtedly will do is to exercise the same supervision over the individual finance company as they do over the firm or company in any other line of business. In other words, if a bank does not like a finance com pany’s statement, its management, or its methods of doing business, to the extent that it feels that its loans are in jeop(Continued on page 36) D o You Explain WHY » Y ou Say “N o 11? many applications which are so imprac tical that the trained mind might regard as so impossible as to merit no explana tion of the refusal, but the applicants frequently are not experienced enough to realize this lack of merit. So if we are to accept the timeworn statement that “ common courtesy al ways pays,” and if we are to discharge our duty to our fellow men by our co operation in giving them the benefit of our judgment in their investments, and do justice to our institutions by eliminat ing the impractical loans, and assist in the education of the applicant for the loan without merit, it would seem that your question would have to be answered in the affirmative, and that the applicant who is not entitled to an explanation, as to why he was refused, would be the de cided exception rather than the rule. I presume most banks share in the ex perience of having folks return after a time and express their appreciation at not having been granted loans which, at the time of the application, appealed to the applicant as being meritorious, but later proved about as forecasted by the bank at the time the unpleasant word “ n o” was spoken, and this in itself is some compensation for the time taken for the analysis and explanation. The thrill yet experienced from the courteous explanation of our parents, and later from our business associates, and financial advisors, in their courteous and intelligent explanation of their opinion in opposition to ours, as compared with the chill of the blunt, cold word “ no,” is an added evidence that it pays to ex plain why you said ‘ ‘ no. ’ ’ EXPLAINING YOUR “ NO” HOLDS FRIENDSHIP B y D. B. W ESSLIN G Lytton, Iowa I am never in favor of a bank stalling the prospective borrower along by pass ing the buck to some other officer of the bank when, eventually, the answer will be “ no.” I believe that when a banker has a real reason to say “ n o” and explains himself to the man, he is taking means of keeping his friendship at that time and holding his future business. Go into detail sincerely and tell him just why he is not entitled to the loan. I also think it is a real service to a customer even if I can’t loan him the money, to tell him “ no” and then help him formulate a financial program that will give him an opportunity to reshape December, 1925 THE his affairs so that later he will be entitled to a loan from our bank. While he is reshaping his affairs keep in touch with him and encourage him. The fact that you have gone into detail concerning your inability to make the loan will, nine times out of ten, make him feel better for his conversation. CAN’T AFFORD TO OMIT EXPLANATION B y A . G. SAM Sioux City, Iowa My personal opinion is that no banker can afford to turn down any prospective borrower, without giving some explana tion of why it is done. Comparative with the old saw that it takes a good general to make a successful retreat, the same is true with a banker turning down a borrower and leaving him feeling right and good about it. Of course, there is many a selfish, designing borrower Avho becomes peeved when he can not have his way, but any fair and open-minded man, and the kind that is an asset to a bank, whether in the borrowing class or in the depositors’ class, if a little time is taken will always appreciate why the bank turns him down. Many times it takes longer to turn a man down properly on a loan than it does to analyze his statement and accept the deal. NO SET RULE ON THIS PROBLEM B y B. B. M A C Y Lynnville, Iowa I do not believe the ordinary banker can pursue a set course in dealing with this problem. Probably the ideal situation would be that in which the customers had such unlimited confidence in the banker that he could merely say yes or no and the man across the counter would know that the decision was just, well considered, and for the best interest of everyone con cerned. Next best, possibly, would be the sit uation of the banker whose customers have such implicit confidence in his judg ment and high regard for his opinion that they will be glad to have him tell them frankly in each case why they are not entitled to a loan and what they can do to correct the defect. Note that in each of these alternatives the essential thing is the confidence of the customer in his banker’s judgment and fair-mindedness. That is the thing for us to work for and, when attained, will enable us to do our duty easily and ef fectively. Until then, I suppose we aver age bankers will have to continue to tell John Jones that times are hard and we haven’t the money to loan him, when if he didn’t have a rich brother-in-law we’d https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis N ORTH W ESTERN BANKER probably tell him he was a worthless scamp and not entitled to the loan of a leadpencil; or, on the other hand, pre tend to Henry Smith that we have plenty of money but don’t think the size of his account entitles him to an additional loan, when, as a matter of fact, we’d fall over ourselves to loan to fellows like Henry Smith if we didn’t already have so dog-goned much loaned permanentlv to John Jones. THIS ISSUE IS DEBATABLE B y I. R. A LTE R Grand Island, Nebraska The statement that “ the best banker is the one who always keeps his cus tomer ’s respect and good will by explain ing why he said n o” in my mind is de batable— the vast differences which exist in personalities would seem to confirm this. There is also a vast difference between the receptive inclination and the reflex of a young and rather inexperienced business man and those of the old school —set in their ways and with rather defi nite ideas of just what they are entitled to. From my experience of over twentyfive years I recall instances where the explanation was not only prudent but beneficial, while in some cases it has been just the opposite, so it would, therefore, appear that the advisability of explain ing or not explaining is purely contingent on the personality with whom you are dealing and I don’t believe that any ironclad rule is capable of adoption in the premises. CUSTOMER HAS RIGHT TO FAIR EXPLANATION B y B A N V. STEPHENS Fremont, Nebraska I think it decidedly pays to explain to your customer the reason for your actions in regard to anything that con cerns him. The average customer is not familiar with banking practices. He does not know why certain things should be done in a certain way and the banker, Avho merely says “ n o” and does not explain these things to him, subjects himself to many serious misunderstandings with his customers, whereas if he took plenty of time to explain to each one the reason for any particular action that seemed to the customer unreasonable, he would not only satisfy the customer but he would make out of that customer a strong sup porter of the bank. For example, one day an influential and well-to-do customer wanted to bor row $10,000.00. He was entitled to credit but, owing to the fact that he was not 13 borrowing on collateral, we required him to make a financial statement, which he had never before done. He got angry about it and after walking over the cash ier, he was presented to me. I took in finite pains in explaining to him, first, the fact that the law required it and, second, that sound business practices re quired it. I gave him an example of two or three well-to-do men, who had failed during the last unpleasantness and who had cost the banks of the town consider able money, all clearly traceable to the fact that none of the banks knew (in the one case) his financial status and, as a result of not knowing his financial status, they had encouraged him in enterprises that they would have discouraged him in had the facts been known to them. In fact, the man had wrecked himself for want of sound, practical advice from those who could have helped him. After going over this matter carefully with him he gladly made the financial statement and was proud of it after he had done so. Another example was that of a cus tomer calling and wanting a reduced in terest rate. He thought he was one of the best customers the bank had— one of the best risks— and therefore he otight to have a low rate of interest. He felt aggrieved, in fact, because he had heard of other men getting better rates of in terest. A half hour with him taught him more about banking business than he had ever known and a good bit about his own business. For instance, I took his ledger account in the bank and showed him that his average balance in our bank, notwithstanding the fact that an immense amount of checks had been handled, had not amounted to $100.00 a day, although he did $100,000.00 worth of business a year. I pointed out to him that we kept his books here; furnished him a great many dollars’ worth of sta tionery and labor in the course of the year, and got really nothing for the serv ice we were rendering him, and instead of his being entitled to a lower rate of interest on his small borrowings during the year, we should charge him a service fee. This I was enabled to make per fectly clear to him. The result of his conference was a much better and more profitable account with us, as he saw that his account did not entitle him to a lower rate of interest. One could multiply these examples cov ering every phase of the banking busi ness showing how advantageous it is for some one in the bank to be in a posi tion to explain every objection that a cus tomer offers to the methods that the bank is practicing. It never pays to permit a customer to feel that he is a victim of practices that are unfair and it is easy enough for any banker to justify every step that he takes in his daily inter course with his customers, provided he is doing a high-class banking business. 14 THE NORTHWESTERN BANKER D IFFE RE N T versus IN D IF F E R E N T A D V E R T IS IN G T H E N a dog bites a man, it’s a ^ V V / common occurrence, but if a man bites a dog, it’s news.” The foregoing motto is prominently dis played on the wall of the news department of a great metropolitan daily newspaper. It is just another way of saying that the unusual gets the spotlight. The story is told of a fledgling news paper reporter, who, assigned to “cover” a prominent society wedding, explained his failure to write up the affair by stat ing that the groom failed to appear. That reporter’s lack of a “nose for news” cost him his job. Like the successful reporter, the bank advertiser who makes it pay must have a “ nose for news.” He must also know how to serve up his news—he must be a headline writer, a typographer, and an in stinctive grasper of the attention of the calloused reader. And, having gained at tention, he must be able to hold it long enough to leave an impression that will re dound to his profit. Not that these qualifications for the suc cessful bank advertiser are technical, for midable requirements necessitating a long experience or the burning of the midnight oil. Rather are they intuitive, or, simpler still, they are the fruit of deliberative re flection by an ordinary bank advertiser on the nature and significance of his prob lems when he essays to advertise. ■ Rule 1 is, of course, to get one’s adver tising read. And this is where the great majority of advertisers assume too much, to their detriment, and to the eternal con demnation (in the minds of many would- be advertisers) of the whole fabric of ad vertising. If the advertisement contains in its text the million dollar idea, the pearl of great price, and the lost chord, combined, and is not read, it availeth naught. So, get it read at any cost. That is done by as many different methods as there are original ideas in the mind of the advertiser—no more, no less. A darky once started out to search for a long-lost mule. Succeeding readily in finding the mule, he was asked how he did it. Rastus’ reply was “ I just thought, where would I go if I was a mule—and I went—and there he was.” The advertiser who would gain the reader’s attention must write the kind of an ad that would get his attention if he were the reader, with the average reader’s highly developed powers of resisting advertising. Where* the aver age advertiser assumes too much is in tak ing it for granted that the reader will be as much interested in perusing his mes sage as he was in producing it—which is never the case. So the advertisement must be unusual in form and text. It must stand out among its surroundings, and be easy to read into. And, anomal ous as it seems, to make it so is not diffi cult at all. The main thing is to realize that it is essential. To be unusual in form, it must contrast sharply with the other columns of the pub lication, news and advertising. The ways in Avhich it can differ in form are myriad— hand lettering, drawings, unique cuts and borders, white space. But differ it must— else the eye o f the hardened reader will December, 1925 In ivhich Mr. McGuire tells tvhy the hank advertiser must be a headline writer, a typographer and an attention-grasper to make the calloused reader stop, look and listen. B y Eugene McGuire Manager Service Extension Department Iowa Loan and Trust Company Bank, Des Moines, Iowa skip merrily along, and another good ad has gone wrong. Most of the above has to do with the form of advertising. That is because the form is the primary requisite, the sine qua non of good advertising. The next step is to get some uniqueness into the first few words of the text—-which in most cases is not hard. A good rule is to make the heading incomplete—to have it say something that arouses the curiosity, but falls short of telling the story, necessi tating further perusal on the part of the reader. Coming down to the body of the ad, short, pithy sentences should prevail, giving the reader a message of real interest and worth. And where is there a greater opportunity to interest the average reader, and do it to his profit, than to talk to him of his financial progress? Of course, the ultimate purpose of the advertiser must be to serve the reader—to convince him that a commodity of value to him is being offered by an institution of character and responsibility. Stereotyped, perfunctory subject matter is worse than nothing. Each advertise ment should seem like an irrepressible out burst of the banker’s enthusiasm over what he has to offer his customer, in the way of service, safety, or counsel. Naturally, the banker is interested in long dissertations about himself and his bank, but he must ever bear in mind that the reader is not—that the reader is inter ested in himself and his advancement. So the banker must write his advertisements (Continued on page 40) -- The unusual and the interesting are both portrayed in this huge billboard advertisement of the Iowa Loan and Trust Company Bank on Ingersoll Avenue, Des Moines. It likewise has the element of brevity. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis THE December, 1925 N ORTH W ESTERN 15 BANKER T eaching Young America to Save Banks and teachers are combining to instruct school children in the lessons o f thrift Junior High School at Cedar Falls, Iowa A CCORDING to the report on school r " \ savings banking, for 1924-1925, just released by the American Bankers Association, ten cities in the northwest are placed on the honor roll, showing official records of at least 75 per cent pupil participation. Duluth, Minnesota, ranks first of 23 cities in the “ A ” Class, enrollment over 10,000, with Sioux City, Iowa, seventh. Cedar Rapids is fourth in Class “ B, ” enroll ment between five and ten thousand, with Council Bluffs twentieth. In Class “ C, ” enrollment between two and five thousand, Marshalltown, Iowa, and Eveleth, Minnesota, rank sixty-fifth and eightieth, respectively. In Class “ D, ” are Two Harbors, Minnesota, thirteenth; Ames, Iowa, sixteenth ; Cedar Falls, Iowa, one hundred eighth, and Betten dorf, Iowa, one hundred forty-first. Class “ D ” includes any city with en rollment under 2,000. Duluth Thrift Secretary, describes their plan in part, as follows : “ For several years the banking in Duluth was carried on by three different banks. The American Exchange Na tional had one large school in charge, the Western State in West Duluth had an other, and the First National Bank had the rest of the schools. As I understand it, in response to public demand, the school banking was opened up by the Board of Education to all the banks of Ihe city, giving the parents the privilege of choosing the bank, and still giving the children the privilege of banking through the school savings system. At this time, in January, 1920, all of the banks, working together, incorporated as the Duluth Bank School Thrift Asso ciation. At that time, there was on hand $50,743.54, which had been accumulated in these three banks, and there were 5,987 school depositors, or 34 per cent of the children enrolled. In June of this year, total deposits were $136,284.27. Duluth, with 99.8 of her pupils par ticipating in school savings, has made a great record. Lulu Adele Grogan, “ We also have an ‘ Honor R oll’ which is presented to elementary schools hav ing 80 per cent of their enrollment de positing weekly and to high and junior high schools having 75 per cent of their enrollment depositing weekly for the en tire year. These ‘ Honor Rolls’ are framed in black frames, and are dis played with great pride. No emphasis whatever is laid on the amount of money deposited, but children are encouraged to decide what they are saving for, and, if possible, how much they can save weekly, and urged to be very systematic in their saving, and work with a definite aim in view. We believe that it is the part of the parents to decide whether the money deposited at school shall be earned, saved out of an allowance, or given outright to the children by the parents. Our part is to make a safe school savings system and to teach the principles of true thrift to the children. “ Our system is somewhat unique, in that the association furnishes Thrift (Continued on page 37) DULUTH BANKS SCHOOL THRIFT ASSOCIATION 512 Torrey Bldg. - - Mel tost* 612 G Park State Bank of Morgan Park □ Citizens State Bank AUTHORIZED SIGNATURE FOR SAVINGS ACCOUNT G Duluth National Bank G Rank of Commerce and Savings SIGNATURE OF DEPOSITOR G First National Bank □ City National Bank ADDRESS OF DEPOSITOR U Home State Bank □ Proctor First National Bank □ Peoples State Bank □ Northern National Bank □ Central State Bank D Western State Bank BIRTHDAY i FATHER G American Exchange National SIGNATURE OF MOTHER Bank D Minnesota National Bank Parents or Guardians will please mark X in square BEFORE the name of the hank in which they want the account placed. •"A •interest will he paid on all School Savings Accounts. Take pass hooks to hank in January and July for interest. ' AGE OF DEPOSITOR □ Riverside State Bank tfoldthi* III 1811« Above are depicted, on left and right, the front and back of the signature cards used by pupils of Duluth schools. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Center, deposit book. THE 16 NORTHWESTERN BANKER December, 1925 Notes and Collections from Our Readers Don’t Sell Iowa “ Short” Waterloo, Iowa— To the Editor : “ I have read with much interest ‘ The Northwest on Trial’ in the October issue of The Northwest ern Banker . With all information at hand showing the ability of the state of Iowa to produce wealth, it seems unbe lievable that there are yet those having a pessimistic viewpoint as to its agricul ture. I have always been of the opinion that good Iowa land with fair improve ments will, over a ten-year period, re turn a satisfactory earning on a $200.00 valuation an acre. Too many errors of omission and commission have been charged against Iowa land, when the facts show that these excesses have been along other channels and, as Mr. Moor head so ably states, ‘ Had Iowa farmers taken the excess benefits from the farm products during the high commodity price period, there would have been suffi cient reserve to have wrung out all the water occasioned by the land speculation and there would have been left a large balance on the right side.’ When the agitation for the Haugen-McNary Bill was up two years ago, I was opposed to it both in theory and principle, but I have come to the opinion, be it right or wrong, that the agricultural production of the Middle West must have some sort of a stabilized influence as to price against production as is given to manu factured articles against foreign compe tition. Just what this remedy will be no one seems to, as yet, be able to clearly define, but I am confident that it will be worked out to the satisfaction of all con cerned within a comparatively short time. As it has been said before, ‘ The man who sells Iowa short will go broke,’ and I believe that statement was never more true than it is today.”— W ill A. Lane, Cashier, First National Bank. Dubuque Is Optimistic Dubuque, Iowa— To the Editor: “ The most favorable factor in business conditions in Dubuque and vicinity is the prevailing optimism. This is being supported in many cases by actual signs of prosperity. Most of the banks of northeastern IowTa which were compelled to close during the past six months have reopened and are ap parently operating with a restored con fidence. As soon as the epidemic of speculation which prevails in the East, from Maine to Florida, is checked, there should be a return of money for agricul tural investments which should materi ally improve conditions in the Northwest. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis iiuiiiiiimiiiiiiiiiimiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiimiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiimiiiiiiiiiinmiiit AN OPEN FORUM Is there some article in this issue on which you’d like to comment? Is there some banking problem on which you might help a fellow banker? Do you have any question which you would like answered by other bankers? This page is intended to answer the questions above. Write in to the editor your questions, or your comment and they will be published on this page. Any comment, any idea, any suggestion, can be expressed in this department, conducted for the benefit of the reader and in the interest of “ free speech.”— Editor’s Note. imiiiiiiiiiiiiiiiiimiiiiiumimiiiiiiiiiMiiiiiiiuiiiiiiiiiiiiiiiiiiiiiimiiiiiiiiitmiimiiitiiiiimiiiiiiimmtiiiiiimiitii “ All this is written in spite of the ‘ calamity’ article in a recent Chicago Tribune.”— J. K. D eming, President, Consolidated National Bank. Farm Prices Too Low Lytton, Iowa— To the Editor: “ The officials of this bank, I believe, maintain about the most optimistic spirit of any in the country. One can be optimistic and yet be that way in a general way so that you don’t need to commit yourself to anything defi nite which might induce an argument. “ Personally, I feel there can be no better times for Iowa’s agricultural dis tricts unless we have better prices for farm products. No other plan can be devised for better times which can be brought about through increased incomes, and a certain policy that I have adopted in bringing about better times in this community is simply this: To make re adjustments by having the men of wealth absorb the property of those who are burdened with debts. The only way this can be brought about is by being gener ally optimistic with the men of wealth. Personally, I do not believe that it means dollars and cents in his pocket at the present time, but doing this by striking a certain level between these two classes of people will in the future yield him good rates on the general prosperity that can be brought about. As soon as this average is established it will put every thing on a basis whereby the man who is a laborer without any property can be paid a fair and equitable wage that will enable him to maintain his home and his family comfortably. “ Although newspapers should con tinue to harp better times I cannot see where this is going to be brought about in the near future unless grain prices are brought up to a level that will give the producer a profit, and it is surely a long way from it at the present time. Just the other day I sold some oats that I had on a farm for 30 cents a bushel, some barley for 41 cents a bushel, and contracted some corn for 56 cents a bushel. “ Now, if anyone can figure out where there is any money to be made on a man’s investment on those prices he can do more than I .” — A. R. W olf, Vice Presi dent, Lytton Savings Bank. Business Outlook Good Chicago, 111.— To the Editor: “ My opinion of the business outlook is that business seems to be moving along in a very satisfactory volume and with reasonable profits. There are, of course, a few lines of in dustry that are not doing as well as others, but on the whole conditions have been very good. The bank and credit sit uation is splendid, and there does not seem to be any large stock of goods upon the shelves. Almost everyone with whom I have talked feels that we will have very good business for some time to come, and I can see no reason why pros perity should not continue. Railroads are doing very well; labor is improving; and building seems to continue in sub stantial volume. In fact, everything seems to point toward an increased vol ume of business. ’ ’— George M. Reynolds, President, Continental & Commercial National Bank. Florida Development Enormous Daytona, Florida— To the Editor: “ I have just returned from a trip through Florida covering more than six hundred miles, and I am utterly astonished at the enormous amount of actual development that is in progress everywhere throughout the state. Hundreds and thousands of buildings are going up in Florida today, and people are coming here in such num bers as to be rather beyond one’s wildest imagination. For example, a friend came from Iowa last night and he was over eight hours on the train between Jacksonville and Daytona, and during that time they were sidetracked while eight passenger trains from the South went by them. “ I do not know what the outcome will be, but the people down here refuse to call it a boom, and claim it is simply a natural development that Florida has been entitled to and has heretofore missed.” — Senator Leslie E. F rancis (Formerly of Des Moines). . December, 1925 THE NORTHWESTERN BANKER 17 A n Open Letter to St. Peter from Zane E. Addlepate, Cashier In w hich Cashier Addlepate has much to say regarding the daily chores o f the country banker Saint Peter, Esq., Number 1 Golden Street, Eternal City, Paradise. E steemed Sir : Please reserve for the undersigned the following paraphernalia, to be called for in person in the near fu ture : One (1) ticket, good for first-class pas sage across the River Styx. One (1) pass-key to pearly gates. One pair (1 pr.) low-speed wings, lift ing power, 127 pounds. One (1) robe, pepper-and-salt mixture. One (1) halo, size 6%. One pair (1 pr.) sandals, size 9y2, with cushion insoles and arch-supporters. One (1) harp, muted strings, with copy of “ Easy Lessons for Beginners.” Before this order can be wrapped up and set aside for me, it will no doubt be necessary to look up my credit in the Book of Life, and it may be rather diffi cult to find the entry, as I have never cut any great dash here below. In order to be of all possible assistance in the matter, I would suggest that you look for an ob scure paragraph near the foot of an un important page, which will probably run something like this: “ Z. E. Addlepate, country banker. Char acter, very little. Personality, subdued, indeterminate. Accomplishments, no data. Meekness, title to large inheritance (real estate) entered in probate records. Pa tience, see Job.” That first item is admittedly rather in definite. In order to clarify your infor mation on this point, it should be said that I do not sit behind a mahogany table in the directors’ room of a palatial bank in a large city which happens to be located in an agricultural region— and thereby lay claim to the title “country banker.” On the contrary, I belong to that rarely-heard class of country bankers who bank in the country. The other qualifications are as accurately listed above as is possible in a case of this indeterminate sort. Here, also, I may be able to supply more specific in formation, and I know of no better way than to record the schedule of my day’s doings up to the present hour, the same being a fair average of my daily activities. 7 :43 A.M. Arrived at bank; passed on to basement to start furnace fire. Split middling-sized heap of kindling and ignit ed same. Added coal. Furnace draft be ing chronically defective, addition of coal was fatal, extinguishing fire. Removed coal, and split more kindling, which I ig nited, and paused to allow it to get a good start. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis B y Roscoe Macy Cashier, First State Bank, Lynnville, Iowa (R eprinted by perm ission fro m the October issue, B urroughs C learing H ouse, D etroit) iiiiiiiiimiiiinimiiiiMiimiiiiiiiiiiiiiiitiiiiimiimiiiiiimiiiiiiiiitiiiiiiiimimiiiiiiiimiiiiiiiimiiiimiiiiiiiiiimm BIG R E W A R D $1000 (One Thousand Dollars) One thousand dollars in cash will be paid by The Northwestern Banker to any country banker who hasn’t, at some time in his banking career, had one or all of the experiences described by Mr. Macy on this and following pages. It’s writ ten in the lighter vein, but every banker can read between the lines the story of the country banker’s daily routine. titiiiiiiiiiiiitiiiiiiiitiiiiiiiiiitiiiiiiiiittiiiiiiiitiiuuiiiitiiiiiiiiiiiiiiiiiiiiiiiiiiimiiimiiiiiimiiiHiiiiiiiiiiiiiiiimiiiii 7 :58 A.M. Heavy knocking on front door. Considered ignoring same, but feared it might be director or good custo mer, so vaulted up the stairs and admitted barber, who desired change for dollar. Opened vault and obtained same. 8 :05 A.M. Returned to basement, to find kindling all burned away. Split additional supply— also left thumb, which bled pro fusely. Got fire started without much fur ther trouble, by adding kerosene and singe ing eyebrows. 8 :13 A.M. Armed self with broom and set out to sweep counting-house. Was in terrupted to draw up deed for customer who was leaving for county seat on early train. Does not trust county seat lawyers, who charge for drawing up deeds. 8 :38 A.M. Resumed sweeping. Custo mer entered with remark, “ Well, this is a great time to be sweeping out! Why don’t you get up before breakfast?” Laughed heartily at daily joke, though injured thumb was rather painful, and cashed small check for customer. Resumed sweep ing. 8 :44 A.M. Lady entered. Wished to open account with deposit of $3.50, having given cheek for that amount for magazine subscription. She explained that she had no money in house at time, and knew bank advertised for accounts, however small. Courteously told of expense and incon venience to bank, involved in transaction, going into considerable detail to avoid any misunderstanding. Lady not very atten tive, being interested in bleeding thumb. Not certain she understood, so accepted deposit without further parley. Resumed sweeping. Assistant cashier arrived. 9 :00 A.M. Bank opened for business. Still sweeping, at intervals. 9 :04 A.M. Finished sweeping. Went to postoffice after morning mail. Answered divers written requests for credit ratings, one of which had fifteen cents postage at tached. Some of the others had stamped envelope enclosed. Sorted checks re ceived in mail, finding eleven which repre sented overdrafts. Consulted list of mak ers’ blood relations and connections by marriage, to determine whether bank could safely refuse payment without los ing good accounts. 9:50 A.M. Gave attention to following letter, received in morning’s post: “ Farmers State Bank, Grassville, Kansaska. Deer Sir: I am riting you to fine out a bout Jerry Conner. He wants to merry me and says at he is an ole shoulder and get a penshun frum the govment. Forty dolers a munth. I am a loan widdo witch taiks in washings but I doant want to jump out of the fring pan in to the fire. What wood you do was you in my plaice ? From your frend, Mrs. Mert Banks.” Answered letter to best of my ability, suggesting that she had best follow guid ance of heart in matter, but admitting she was probably too young to play with fire. 10:05 A.M. Prepared note notices for mailing. Made out 39 notices on notes about to become due, 16 for notes due or a trifle overdue, and 9 notices demanding im mediate attention. Eleven past due notes have notations indicating that three or more “ immediate attention” notices had already been mailed, were laid aside for further consideration. Have found it use less to insist on immediate attention of a debtor if he does not feel disposed to give it. While engaged with these notices, was interrupted at various times to perform the following duties: 1. Make out two (2) applications for dog licenses. 2. Insure one (1) bull. 3. Write ad for real estate agent offer ing farm for sale. 4. License three (3) Fords. 5. Figure number of bushels contained in round corn crib (one dimension miss ing). 6. Discuss with customer relative advan tages of sowing alfalfa or sweet clover on his west “ 40.” 7. Conduct symposium with lady de positor on reasons why bank could not pay interest on certificate of deposit which had run only five months. Amount at stake, 83 cents. 8. Handle various checks and deposits. 18 THE 11:43 A.M. Due at home for lunch at 11:45, so began to gather newspapers and wife’s mail. Stopped at door by parties who wished me to draw up contract for sale of land. Three-cornered deal, taking considerable time. Lost consciousness mo mentarily when purchaser, a stranger to these parts, offered to pay me for work. 12 :10 P.M. Started out for lunch again. Met outside by Sam Dempster, who asked me to go with him to acknowledge papers in matter of guardianship of his mother, an invalid. Did so, thinking perhaps might be appointed guardian. Business did not take long, as papers were already prepared. Sam was appointed guardian. Mrs. Sam suggested Sam might have trou ble keeping books straight, whereupon Sam inquired, “ What’s your banker for, anyway ?” Same being myself. 12:32 P.M. Went home for lunch. Calmed wife. Ate hastily. 1 :08 P.M. Returned to bank, 23 minutes late. Several customers waiting to see me, most of whom remarked, “ You must have a lot to eat up at your house, to be getting back at this time o’day.” Despite indiges tion, laughed heartily, as at a joke which never grows old. Not to be outdone in jocularity, assumed attitude of barber at chair, and called, “ Next, gentlemen!” laughing heartily. Whereupon first custo mer in line suggested that we get down to business. Complied with suggestion. 1 :43 P.M. Wrote letter for customer, asking railroad division superintendent to have fence repaired between railroad and customer’s farm. Also, letter to commis sion firm, complimenting them on sale of cattle for depositor. Letter dictated by latter. Three pages long. 2 :15 P.M. School teacher desired to know why we refused to pay her check when she had lots of money in bank. Ex plained reasons bank could not permit checking on savings accounts. Explana tion satisfactory. Withdrew savings ac count. 2 :28 P.M. Merchant appeared to meet sight draft payment. Draft drawn “ with exchange;” added 15 cents to cover. Mer chant objected strenuously, so accepted face amount. . Merchant and wholesaler both satisfied. 2 :45 P.M. Discussed with Ed Spoonbill whether better to send his son to univer sity or agricultural school. Son now four years old. Ed left at 3 :30; question still undecided. 2 :33 P.M. Map salesman. Bit. 3 :40 P.M. Local character wanted rec ommendation as driver of patent medicine wagon. Considering it as well for him to live on medicine company as on county, did my best. Letter very indefinite. 4:00 P.M. Bank closed for day. Tried to balance cash. Forty cents long; took books to back room to work it out. 4:53 P.M. Furious hammering on front door. Considered ignoring it, but feared it might be director or good customer. Ad https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NORTHWESTERN BANKER mitted barber who wished to change a dol lar. Money locked up but happened to have change in pocket. Three other per sons, seeing barber obtain admittance, came in when I opened door to let him out. Last one was Lige Doane; asked if I would leave the door open for a few min utes longer. “ I saw the barber come in just now,” he said, “ and hurried right down. I’m making that $8,000 loan on my cousin’s farm, and we thought you had closed up, so we went to Abe Bedlow’s to get the mortgage and notes made out.” (Abe is our local justice of the peace.) “ Now, Abe will prob’ly want a dollar for making out the papers, and there’s no use in that. What’s a bank for, anyway? I’ll get Herbert and we’ll be right down. We may be a few minutes getting back, as we have not settled all the terms yet. By the way, Cousin Herbert may think we ought to pay you something, so suppose I offer to pay you, and then when you refuse to take it, he will get a good opinion of your bank’s service. And that, Esteemed Sir, brings us down to date. I have not found the 40 cents discrepancy, but we’ll let that go for this time. The point is that ever since eating lunch so hastily, a strange depressed sen sation which I have often before noticed on such days has recurred with a greatly exaggerated intensity. I had a strange December, 1925 emotion of displeasure during my conver sation with Lige Doane a few moments ago— a feeling of injury, which I find it difficult to define. Perhaps I am suffering from a species of heriditary insanity. All my ancestors that I have ever heard of were perfectly sane, but the fact remains that I have determined upon a course of action which will, I am sure, strike the customers of the Farmers Savings Bank as rather inexplicable. I shall draw up the mortgage and notes for Lige Doane. His cousin will sign them, and I shall attach my signature and1 seal as notary public. Lige will then ask me the momentous question, doubtless in a genial tone, “ Well, how much do we owe you?” At that moment, I shall pick up my metal nortarial seal, which weighs some twelve pounds, and with it I shall crown Lige Doane. Let the law take its course. There will no doubt be a public execution, and my old neighbors will shake their heads and remark wond^ringly, “ Funny about the way old Zane cracked „ up, ain’t it? He was always a good pro vider, too.” And yet, I have a feeling down in my heart that there will be a seat reserved for me in the choir up there. A place near the front in the soprano section will be much appreciated by Yours respectfully, Zane E. A ddivepate, Cashier. How Florida Looks to the Outsider B y Sidney A . Foster Des Moines, Iowa ROM reports floating about in this part of the North, based on stories told by those who have paid visits in Florida, usually for a brief period, that whole state must be in much the same commotion as the West experienced at the time of the opening of the U. S. Land Office and at the time of the entry of people under the homestead rights almost equal to the well-remembered “ Oklahoma rush.” Instead of automobiles, busses and steam cars as are in Florida, in the Oklahoma invasion, the thousands await ing the hour were armed with plows, teams, seeds and such weapons necessary to use for sod, beast or man; in Florida, according to reports, the invaders are armed with automobiles and cash or some substitute. Florida is larger than Iowa. It is a peninsula, with a total waterfront of almost 1,200 miles, without counting islands. The water wash is about equal on the east and west sides. It must be the coasts that now are the great attrac tion, being the ideal El Dorado for winter homes. It has an advantage as to accessi bility by comparison with California. The only questions are the comparative bene fit and reliability as between the two places: California or Florida. F iiiiiiiiiiiiimiiiMiMiiiiiiiMiiiiiiiiimiiiiiiiiiiiimiiiiiiimimimiiiiiiiiiiiiiiiimiiiiiiiiiiiiiiiiiiiiiiimiiiiiiiiiiiiiii» Almost every banker is interested in the development of Florida and wants real facts about that state. Realizing the demand there is among its readers for authentic data on Florida, The Northwestern Banker has arranged for a series of special articles on the state by Sidney A. Foster, veteran finan cier, and writer. Mr. Foster will go to Florida this month on an indefinite visit, and his first article dealing with Florida development, investment and banking growth, will be published in our January issue. The article on this page is an intro ductory one, merely giving a few basic facts about the state.—Editor’s Note. ........................................ The central part of the state contains a large number of lakes, approximated at 30,000; many of the lakes are aggre gates of great springs. The last census enumerated 54,000 farms, with a total acreage of 6,046,691, of which 2,227,271 acres were improved, producing corn, cot ton, potatoes, tobacco; hay was produced on 126,000 to the extent of 139,000 tons; oats, 481,000 bushels on 37,000 acres of ground; sorghum, sweet potatoes. Pea nuts were grown on 72,000 acres for a (Continued on page 97) THE December, 1925 Rendering NORTHWESTERN A N A L Y i ¡1 S O F N .m . E X C E L S IO R 3 ✓ ? * ✓ 3 / / cP c2 / s / r7 3 ’ -------- 7 — -3 / 7 / O O «2 o yjV O O 2 ? «3 / / <¿ ^ 3 3 3 r? / s3 ¿a 3 y £ o o O 8 3 7 A / 7 / -------- 10 ¿i a 3 8 ' ¿ 13 «a V a o y 14 15 y / v'T o ¿X / / / g ■g'g y «a o 3 B y Dale Graham HE Customer is Always Right ’ ’ is a slogan adopted by a number of hotels and various other business organizations. While they do not always adhere to this principle in practice, gen erally speaking the customer, under the competitive conditions of the present day, is treated with great respect— almost rev erence. Yet, I doubt if there is any other branch of business that stands in such awe of the customer as do the banks, particularly the smaller institutions. In many cases, anything short of clos ing the bank is considered more desirable than offending a customer, no matter how worthless his business may be. Somehow, it is felt to be better to carry an account at a loss than even to intimate to its owner the true state of affairs. Whether this feeling is justified or not, it exists in a great many banks. No doubt it is engendered by a reluctance to per mit the customer to get to a bank across the street, or by a realization that a suc cessful bank must stand high in popular esteem and that no irate customer should be turned loose upon the public, or by a knowledge that there exists a general lack of understanding of banking prin ciples and a fear that the bank’s position could not be made clear. But are we not unduly afraid of those customers of ours ? We know the banks are afflicted with a disease—unprofitable accounts. They cannot be remedied without bringing the customer into the negotiations. Can we do it safely, or is it best to leave con ditions rest as they are? In the case of a disease of the human body, a physician first diagnoses the case and then determines what remedy, if any, may be employed. He studies the disease T https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis / ✓ o ^ si o o S <P cP / ^ 3 - $ ----------------------- • g si / ¿ / / <2 / 3 «=3 25 S 1 $ Float One-day Basis \ * A ---------- ------^ ^ ^ MPT b a l a n c e NET O V E R D R A F T .* * * bm S O I4 o , r - ___ ~.°!o Reserve» / v v » .rtiil .................................* . . * • • - NCE a . _ / 3 _ * • * * ----- . 3 A - 8 s i- -- 3 o <a .. «■¡■r ¿7 / a (or month at “ % .................................. A* f » - *r •? ? ______$ ........ .. 3 7 •*~y 0 3 +y q ¿> 3 G s ...... ~ - * y .................. x ' 7 8 ................. .. y o. 7 J* s — & • A V E R A G E D A IL Y F L O A T .....................‘ $ — a g __ ^ 7 <=2 3 / ¿ vT Adv. Mgr. Miss. Valley Tr. Co. St. Louis . 4 X I* our-day Item» <=* y / / ¿ <=P 3 21 23 2 X 1 wo-day Item» 3 o A 18 19 7 5 ----- A V E R A G E D A IL Y B A L A N C E <? ' ¿ _______ 16 17 20 / / +y ex 3 3 / 8 7 A cP 11 A ccou n t / g ✓ 3 6 lU 3 /R Total of Daily B alance« O / 9 7 19*1 SUMMARY ; *y -s *r / o g (e / o o <i 28 29 „ 26 S e f“ " ber S i look Balance. 4 D ay. g ¿> / O 4 Unprofitable ^ U A M U T A C W B IlK L -C Q llE A lil 2 D ays 26 31 to the A C C O U N T Momh One D a y “F IR S T A I D 19 BANKER / itself and the conditions that contribute to it. He studies the possible offeets, both good and bad, of the medicine he plans to administer. Would we not help ourselves by adopt ing the physicians’s scientific method? Should we not make an X-ray, if you please, of the customers with whom we are dealing? Should we not determine why unprofitable accounts exist and what, if anything, can be done about them ? Let us make this X-ray picture of the average customer and look at him as he really is. If we were to make up a report of our findings, it probably would be something like this: The customer is an ordinary human being with ordinary intelligence, but Avith very little understanding of banks and banking principles. He probably is a church goer and believes in the Golden Rule. He wants to play fair. He does not like to be swindled or overcharged, but wants to pay a fair price for every thing he gets. He has considerable self respect, and wants to be well thought of, not only by his neighbors, but also by his bank. He would not want his friends to think that his account was not highly re garded by the bank. He is not unreason able and in no sense of the Avord is he a hard-boiled egg. This analysis would indicate that the customer might not be so unapproachable on matters relating to his account as is often presumed. These are the things that remain to be done: 1. Educate the customer to understand the fundamental principles of the bank ing business. 2. Determine that the account is un ...................................................................... ......................... profitable and devise a simple analysis that will prove it to the owner. 3. Try to remedy the situation. There is a woeful lack of understand ing on the part of the public not only on the subject of how banks operate, but also Avhy they exist and the important place they fill in the community. Often they are thought of as insidious parasites that sap the life blood of industry, and of labor in particular. They are called the tools of Wall Street. They are thought to become unconscionably rich at the expense of the people. The average person does not realize that our complicated system o f civilization could not function without banks. They do not comprehend Iioa v these financial institutions gather together from many depositors various sums, large and small, and form a reservoir of credit for financ ing manufacturers, crop movements, pub lic improvements, and literally thousands o f constructiA7e enterprises. But they could be made to understand by a simple explanation, if the banker Avould just take time to give it to them. T avo minutes of conversation like this, for instance, should be sufficient to con vince the most radical person that ever stepped into a banker’s office. “ Let us suppose, Mr. Blank, that Ave were in a community where there are no banks. “ Supose there were thousands o f peo ple AA7ho had more money than they needed for the m on th ’s requirements. They wanted it to be safe, and, if it was a sizable sum, to be productive. But they did n ’t knoAV where to lend it. So each had to start out to find a borroAver (Continued on page 27) 20 THE NORTHWESTERN BANKER December, 1925 ber between French vowels or be roused to energy by German gutturals. An other nice feature about traveling in Venice is that the streets are never dusty. To students of the business and finan cial situation at this time, the following paragraph from the Harvard Economic Service, concerning the money market, will be of interest: “ The outlook in the money market continues satisfactory. It is not likely that within the next few months business men will find their ac tivities impeded by any drastic contrac tion of credits. This conclusion is an in ference from two facts; first, the ap pearance, under seasonable influences, of an easier tone in the market; and second, the absence of any new factors in the situation, such as might call for a change of policy on the part of the Federal Re serve Bank. One thing which would almost certainly bring about a prompt advance of rediscount rates, would be a rapid expansion of business activity, ac companied by a marked upward move ment of commodity prices.77 As a further indication that we are coming into a better business cycle, George E. Roberts, in a recent state ment said: “ I am impressed that we are not likely to have another period of deflation without first having a period of inflation. In other words, the next movement is more likely to be one of rising than falling prices, but if the present conservative sentiment is main tained in the business community, we may have a long period of good business with only moderate-priced fluctuation. The stability of prices and of commercial loans shows a healthy state of business.77 With these statements before us from such good authorities, we need have little worry about the business situation as we approach the close of 1925 and pre pare for 1926. John G. Lonsdale, president of the Na tional Bank of Commerce, in St. Louis, has been appointed chairman of a special committee on the railroad consolidation situation. This committee will function under the Commerce and Marine committee of the American Bankers Association. The other members of the committee are, Robert F. Maddox, chairman of the board of the Atlanta & Lowry National Bank of Atlanta, Georgia, and John McHugh, president of the Mechanics & Metals National Bank of New York City. Mr. Lonsdale is a director of the Mis souri Pacific and is remembered the country over for his famous “ Gateway Dinner77 of railroad executives which was held in St. Louis last January. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 0. F. Schee, vice president of the Chi cago Joint Stock Land Bank, believes in paying his fines promptly when he is fined, especially if it is for auto park ing. Mr. Schee left Des Moines recently for Dallas, Texas, and when he went down to get in his car found that he had been fined for parking overtime, so when he reached Dallas he sent back a check for $5.00 to the city traffic offi cials in Des Moines and said, “ I f this isn’t enough I ’ll gladly send the addi tional amount of the fine.77 It is under stood that the officials were so over come by the prompt attention to their summons that they credited Mr. Schee 7s account in full. H. H. Wilkinson, vice president of the Continental National Bank of Ft. Worth, sends out special reports to the cashiers of the banks in Texas, in which he out lines the general business situation at the time, as he sees it. In a recent letter on the cotton situa tion, he said: “ In paying for cotton be certain you know something about the grade of the cotton you are paying for. Second, do not permit the accumulation of heavy lines, but demand of your buy ers that they sell daily and keep their cotton moving.77 This is good, sound advice, and should prevent country buyers from holding up on cotton, and thus create a heavy line of credit with the banks dependent upon the sale of cotton. If you think that the pie belt is lo cated only in the New England states, you should have read the annouficement sent out by the Chicago Athletic Asso ciation for their Thanksgiving dinner. The announcement said that “ Thanks giving pies will be baked to order upon receipt of the enclosed application by Mr. Felix Doerner, our pastry chef for over twenty-five years. Extra deep mince pies, $3.00; extra deep pumpkin pies, $2.50. Pies must be called fo r.77 Certainly pies as deep as those and as delicious and expensive were called for in private limousines and were not en trusted to the keeping of chauffeurs. Now that the radio bug seems to have reached most every country in the world, it is interesting to read that they have been installed on the gondolas in Venice and that for a moderate sum you may have a receiving set tuned to any lan guage. You may now be rowed up to the Grand Canal and be lulled to slum In these days when $2,000 invested in Florida real estate frequently increases to $100,000, it is interesting to read that Peter Hahn, of St. Louis, 25 years ago took some stock in payment for a loan of $2,700 to a well-known adding machine company. This stock was recently sold for $700,000, all of which proves that the well-known industries of the United States are frequently ex ceedingly good dividend-producers. F. M. Staker, manager of the publicity department of the Commerce Trust Co., of Kansas City, in his very excellent address on “ Building an Advertising Budget,” delivered before the Financial Advertisers Association, said: “ Here is a pretty safe rule—get all you can and spend all you get. But let me add, spend it for advertising, not as a slush fund. I believe that the advertising manager is justified in insisting that he alone shall debit to the advertising account. I f the executives of the bank want to make a subscription to the Chamber of Commerce or the Labor Temple News or the convention fund of the National Association of Ex-Bartenders, that is not advertising.77 No sounder advice on a bank’s ad vertising budget was ever given than that. Legitimate advertising mediums, and legitimate advertising expense, fre quently suffer because a bank has charged every sort of gift to charity or otherwise to the advertising account. Evry banker who knows the value of ad vertising at all knows that it is a legiti mate investment which builds good will and increases the business of his institu tion, and that a sufficiently large appro priation should be made to accomplish the results desired. Making a success of the banking busi ness is not always an easy task. There are those, however, who think that the banker’s life is one sweet dream. One writer puts it this way, 1‘ I f banking had no obstacles, Grandma could run it. Anything worth while putting over is worth a lot of pushing and patience.77 Lucius Teter, president of the Chicago Trust Company, and former president of the Chicago Association of Commerce, made a very interesting report recently about the amount of money ■which Chi cago places in bonds for permanent in vestment. In 1919 the sum of $37,000,000 represented practically the total amount of all bonds and stocks owned by Chicago banks. In 1924 the figure (Continued on page 41) December, 1925 THE Questions of interest to bankers are discussed in this department and any subscriber has the privilege of writing for information and advice on legal sub jects. If the inquiry can be definitely answered without the preparation of a brief, the answer will be given by our attorney free of charge. If, however, the inquiry involves ex tensive research in a Law Library, and the preparation of a complete brief, The Northwestern Banker will so notify the subscriber and upon his instruction, we will ask our attorney to prepare a brief of the case at a cost to the subscriber of only $10. The preparation of a brief is entirely optional with the subscriber. In writing for information, kindly en close a 2-cent stamp for reply and ad dress, “ Legal Department,” care The Northwestern Banker, 555 Seventh St., Des Moines, Iowa. B y the Legal Department OW many depositors of a bank read and take notice of the conditions and provisions printed, generally in small type, in the passbook which is given by the bank upon the opening of an account? It is the agreement and con tract between the bank and the depositor. It often does not come to the attention o f a depositor until checks or other ne gotiable instruments are not turned into cash by the bank as expected in the usual transactions between the bank and the de positor. Oftentimes, a depositor brings an ac tion in court against a bank alleging the bank’s failure to properly handle a cer tain transaction. A transaction involving a bank check will now be considered. A depositor, hereafter referred to as Royce, was a cattle buyer in a western city. He opened an account with a bank herein re ferred to as the Drovers’ National Bank, on October 29, 1923, and made a deposit and received a passbook. On November 3, 1923, he wrote to the bank as follows: “ Inclosed you will find draft for $1,063.42, and one check for $1,025.00, mak ing a total of $2,088.42; kindly send me credit slip for same. I do not care to buy drafts on this bank any more.” The check mentioned was drawn by one Allen Bilger upon the Farmers National Bank of Luray. The material portion of the Drovers Bank’s reply, dated Novem ber 5th, reads thus: “W e are today in receipt of your re mittance of $2,088.42. We are crediting your account with the Chicago check of $1,063.42, and are entering the check of Allen Bilger for $1,024.00, drawn on the Farmers National Bank of Luray, for col lection, and as soon as this is collected, we will credit your account with same and advise you.” On November 13th, Royce wrote: “ If the $1,025.00 check given by Allen Bilger went through O. K., kindly send credit slip for the two cheeks I sent you last. Amount $2,088.42.” H https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NORTHWESTERN BANKER 21 IT S UP TO THE DEPOSITOR to read the notice in his p ass boo\ The Drovers National Bank sent the Bilger check to the State Bank of Luray for collection. The check was paid, and on November 10th, the State Bank issued its draft on its Chicago bank for $1,024.50 and sent it to the Drovers National Bank. It was received on November 13th, and credited to Royce’s account. The draft was put in the usual channel for collec tion and presented to the Chicago bank on November 14th, but payment was re fused for wrant of funds, and the draft went to protest. On November 15th, the Drovers National Bank charged the draft back to Royce, and on November 27th sent it by mail to the attorney for Royce, and legal action was started. The bank was not charged with negli gence by Royce in selecting the State Bank of Luray as an agent to collect the check. It claimed the Drovers Bank had accepted the check for collection and had made the colletion and given Royce credit for the amount it received, and then wrongfully charged it back to Royce, and refused to pay it. The bank answered and pleaded a notice in the passbook which reads thus: “ All items not payable in Omaha, re ceived by this bank for credit or collec tion, are taken at the owner’s risk. This bank, as agent for the owner, will forward same to collecting agents out of this city, but should such collecting agents convert the proceeds, or remit in checks or drafts which are thereafter dishonored, the amount for which credit has been given will be charged back and the dishonored paper delivered to the owner. This bank assumes no responsibility for neglect or default of collecting agents.” The bank also claimed that Royce be came a depositor under the conditions stated in the notice and that it was the custom o f banks in Omaha, in taking for eign checks for collection, to send them to another bank in the town where the drawee bank was located, and that in handling the Bilger check the usual cus tom was followed. Royce filed a reply in court alleging that he had no knowledge of the notice in the passbook. At the trial, Royce offered to prove that he did not see the notice in his passbook before he sent the Bilger check to the bank and did not know that the book contained such a notice; but the court would not permit evidence of this to be offered. There is a divergence of opinion among the courts as to the responsibility of a bank to a depositor for whom it under takes to collect commercial paper. One rule is: “ A bank with which a customer has left for collection his draft upon a party residing at a distant point is liable for the failure and default of a corre spondent to whom it forwarded the draft for collection.” The principle which runs through the cases is this: If an agent employs a sub agent for his principal, by authority of the principal, express or implied, the sub agent is the agent of the principal. In such a case the agent is not liable for the negligence of the subagent, unless he failed to use due care in the selection of the subagent. If, however, the agent undertook to do the business for his prin cipal and employed a subagent on his own account, he is responsible to the principal for the manner in which the business was done, whether by himself or by the subagent, upon the theory that the agent stands in the position of an independent contractor at liberty to perform his under taking by agencies of his own selection. To determine whether a particular case is in the one class or the other, a court must know the terms of the contract be tween the principal and the agent. In the present case, the bank relies on an ex press contract, the terms of which are set out in the notice printed in the passbook. I f the lower court was right in holding that by accepting the passbook, Royce assented to and became bound by the pro visions contained in the notice, and there was no special contract, Royce cannot recover. If Royce had placed his signature be neath the notice, or if his attention had been called to it, there could be no doubt about the result. The weight of authority is to the effect that if a depositor in a savings bank accepts and retains a pass book containing printed rules of the bank, he is deemed to have consented that the rules should become a part of the con tract between him and the bank. It may be that the depositor in such a bank does 22 THE not occupy the same position as a deposi tor in a commercial bank, but the prin ciple is the same and is recognized in other business transactions in which the terms under which the parties deal with NORTHWESTERN BANKER each other are expressed in an instru ment delivered by one to the other. The law is : If a document in a common form is delivered by one of two contract ing parties to and accepted without ob December, 1925 jection by the other, it is binding upon him whether he informs himself of its con tents or not. The court held that Royce is bound by the provisions of the printed notice contained in his passbook. Resources Nearing One Million AMERICAN BANK & TRUST COMPANY OFFICERS A M E R IC A N B A N K A N D TRUST C O M PAN Y Top row, left to right: James Luther, Vice President; H. G. Putnam, Vice President; H. G. Skiles, President; John R. Hill, Executive Vice President; G. H. Wood, Cashier. Bottom row, left to right: A. T. Miller, Assistant Cashier; W . J. Gardiner, Trust Officer. The handsome home of the bank is also shown above. HE American Bank and Trust Com pany, of Daytona, Fla., although only a year and a half old, is one of the strongest banks on the Florida East Coast. The bank started on May 12,1924, and moved into its fine home early in 1925. On the opening day the bank’s resources amounted to $194,161. Six months later they had $503,548; at the end of the first year they had grown to $718,756, and today they are close to $1,000,000. President H. G. Skiles has been actively engaged in the banking business for the past twenty years. He went to Daytona in 1923 from Louisville. James Luther is vice president and di T https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis rector of the institution. He is a retired with the Barnett National Bank of Jack banker of Terre Haute, Ind., where he sonville for fourteen years. was also engaged in the coal business and George H. Wood is cashier of the bank. he has been a resident of the Halifax He was born in Volusia county, Florida, country for the past eight years. Mr. and was connected with the Volusia Luther is also vice president of the Peo County Bank and Trust Company for ples Building and Loan Association and nine years and with the Merchants Bank a director of the Volusia County Bond & and Trust Company for six years. Mortgage Company. H. G. Putnam is another vice president A. T. Miller, assistant cashier, was for and director. He is a state senator from merly cashier of the Okolona State Bank the Halifax district and one of the larg of Louisville, Ky. est growers of citrus fruits in Florida. W. J. Gardiner, of the legal firm of John R. Hill is executive vice president Gardiner and Brass, is trust officer of the and director of the bank. He is a sound institution. He is a graduate of Stetson and capable banker and was connected University at DeLand. December, 1925 THE NORTHWESTERN BANKER "W ho isTour Chicago “ For many years we have worked with the Union Trust Company, one of Chicago’s oldest commercial banks. Its resourcefulness and the spirit of helpful ness it has shown in handling our requirements have been remarkable.” W e invite bankers to become better acquainted with our specialized services to correspondent banks. FREDERICK H. RA W SO N HARRY A. WHEELER Chairman o f the Board President UNION TRUST COMPANY C H IC A G O COMPLETE PRIVATE WIRE SERVICE — DIRECT B/L AND COLLECTION FACILITIES https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 24 THE NORTHWESTERN BANKER December, 1925 Looking in from the Outside HINGS are happening in Lytton, Iowa—not the banging and sputter ing activity of business enter prises selling real estate or a constant in flux of individuals who are quick to grasp what they think is an obvious and easy way to get rich quick— but a steady sure-fire progress that has put the town of Lytton squarely and surely on the map of every banker’s mind for miles and miles around this part of the United States. Yes—it was just eleven months and twelve days ago we visited the “ home office” of the Wessling Services. It was with another of our organization that our first journey to the town of Lytton was completed, much to our delight and pleasure. The friendliness and sincerity of D. R. Wessling and A. R. W olf on our visit to their plant gave us an insight in an “ idea factory” for the first time, and was to us a genuine surprise considering the many things we discovered could be ac complished in a town of three hundred souls. Saturday, the day after the proverbial Friday the thirteenth, marked the day of our second migration to Lytton to again view at first hand the tremendous growth and progress this organization had made within a short period of eleven months. We arrived in Lytton at eight ten in the morning to find the entire force busily at work. There were many “ programs” to be mailed out that very day for parts far removed from the immediate trade territory of Lytton. To those who are not acquainted with Lytton, Iowa, and Messrs. Wessling and Wolf, we might elucidate more explicitly by saying that Lytton is a town literally T D. R. W E SSLIN G https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis B y Rex V. Lentz Associate Manager, N orthw estern Banker put on the map by the activities of two farmer boys who grew up together, later to enter the banking business and then conceived the splendid idea of giving to their fellow bankers throughout Iowa and the surrounding territory a bank adver tising service that has become known in many states as ‘ 1The Modern Country Bank Service” from Iowa at Lytton. At first glance Lytton is unassuming. But that is before one investigates thor oughly. At the Lytton Savings Bank, which is the headquarters of the town, we found friend Wessling and W olf con sulting together on the business of the bank, which exemplifies up to date banker methods in its manner of meeting and greeting all—whether customers or not—with that same sincere interest which makes all of us want to come back for more. We had just hung up our coats and hats when Mr. W olf took us in charge and escorted us through the adjoining building to the bank which is occupied by the Wessling Services. It was inter esting to see the many new innovations in bank advertising ideas these two livewire men had created since our last trip through their plant a year ago. Later, Mr. Wessling came in and told us of his recent trip to the state of North Dakota. This was only one of some twenty states that he has visited the past year, accumulating facts with which to build programs for their vari ous connections. Together with Mr. Wessling and Mr. W olf, we reviewed the mechanism of the “ idea factory” as it is today. Type writers were busily humming out per sonal letters to bankers all over the United States and a big press was merrily rolling out a beautiful two-color job for a large bank down in Missouri. Busi ness—you could readily see—was good and the reason was not difficult to guess after you had personally encountered the sincere interest that goes into every piece of literature mailed out of the Wessling Services plant. “ Cultivating Lasting Friendship” was the title of one extraordinarily interest ing pamphlet being prepared for use by a large bank back in Ohio. A phrase or two of that particular phase of their advertising service for banks will serve as a concrete example of the true spirit carried out in all of the Wessling material. “ We hope that an ever richer friend ship may be cultivated and maintained between our bank and you. May the mutual pleasure of banking here be passed on from generation to generation, from father to son, and from mother to daughter. ’ ’ And in another exceedingly practical bank advertising “ Follow up” entitled “ Broadcasting Prosperity” we read with pleasure: “ We bring the sound business experi ence of many years to the service of this community. Is it advice about an invest ment that a customer seeks'? Is it guid ance in drawing up a will? Is it more insurance? Whatever it is, we are ear nestly concerned in answering in words and deeds that will mean prosperity. We are never too optimistic— it is not fair to rouse empty hopes. But, day after day, we try to broadcast by our hand shakes and our conversations the ether waves which will inspire our customers with more self-confidence. We do this for two reasons: “1. We sincerely enjoy doing it, what ever the result. “ 2. The more our customers prosper the more we prosper.” Some of the ideals carried out by the two energetic Lytton bankers are so laudable and well worth mention that we must set them down here for the benefit of those who have already experienced the usefulness of the Wessling Services around a bank. From boys they regarded the banker in their community as the big factor in the town’s success. Perhaps they did not know that some day they were destined to become leading bankers. Yet they did— and in the course of their building a real bank of personal service and stability, dreams of certain banking ideals gradually shaped themselves into a realization. Creating the desire for all people to A. R. W OLF THE December, 1925 NORTHWESTERN 25 BANKER Is Your Bank Different ? T h ere is a difference in banks. Y o u notice it in the expression on the faces o f those going in and coining out. Y o u feel it w hen you first step inside — in the atm osphere that prevails— in the glance you get fro m the m an behind the desk or in the cage. In som e banks the custom ers act as if it were no pleasure for them to be there. T h e y hu rried ly transact their business and get out. T here is a cool ness in the air— officials are courte ous, and m ean to be frien d ly , but T h e n step into another institution. H o w d iffe re n t! T h ose in charge radi ate good w ill. T h e y are glad to see everyone. F rien d ly chats are held w ith custom ers. A n d the custom ers are glad to be there. Persomi Infere/f 100% W h y the difference? P ersonal Interest 1 0 0 % — plus W esslin g Services. W h a t are W e sslin g Services? T h a t’ s the reason. T h e y are personal letters, pam ph lets, circulars and com plete program s, created to m eet the needs of in d ivid u al banks your bank to help y o u gain m ore custom ers, and keep them . W e sslin g Services start w orking for you b efore the custom er has ever set foot in your in stitution . T h e y let h im know that y o u , throu gh youi bank, are thinking about h im , are interested in his w elfare T h e y appeal to h im personally.^ W ess ling Services are k now n as “ T h e B ank Service w ith the P ersonal T o u c h .“ They create confidence in your bank, and build for your present and future business. Let Wessling Services help your bank. Complete details will be furnished gladly. FROM IOWA AX LYTTON W D.R.WESSLING, PRESIDENT AR .W 0LF VICE PRESIDENT Planners and Creators o f OricfinalBank S ervices Bank A rt -W indow and L obby D is plays -C lassified Program s https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 26 THE come in to the bank and get acquainted. An honest-to-goodness air of personal interest. The encouragement of the younger folks to make good. The planning with older people to con serve their property. N O R TH W E ST E R N BANKER So right there, in Lytton, these ideals were successfully worked out. Deposits were increased tremendously, a feeling of warmth was created throughout the town and farming community, which has made it possible for the Lytton Savings Bank to become known throughout Iowa One-sixth of Milwaukee’s popu lation are customers of the First Wisconsin and two-tliirds of W isconsin’s banks arc its correspondents. This is a sig nificant indication of the sound ness and completeness of our service. So it was our second visit to Lytton ended much to our complete satisfaction. A scarcity o f pessimism and a super abundance of optimism substantiated by practical experience explains a good many things about Messrs. Wesslin0, and Wolf. We were glad to make the trip. It was delightfully interesting. We pre dict an even greater boom for Lytton and friend Wessling and W olf during the coming year— and, yes we are plan ning on seeing them more often hereafter. To facilitate the efficient trans action of your business you are invited to take advantage of our dominant financial position in this territory. FIR ST XVISCOTISIFI T H E S T A T E C E N T R A L S A V IN G S B A N K KEOKUK, IOWA ...v;v, :-vv..:-i............................................. $ 200,000.00 Surplus and Undivided Profits ........................................................ 329,574.16 Deposits .............................................................................................. 2,803,196.77 W I L L I A M L O G A N , P r e s id e n t L . J. M O N T G O M E R Y , V ic e P r e s id e n t A S A P H B U C K , V ic e P r e s id e n t C. J . B O D E , C a sh ie r A L V I N K R A F T , A s s i s t a n t C a s h ie r L . J , W O L F , A s s i s t a n t C a s h ie r ACCOUNTS OF BANKS https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AND BANKERS banking circles as one of the BIG little banks. All of this was effective, of course, in the success of the bank. One day Mr. Wessling awakened to the fact that here was an idea which could be incorporated in a bank advertising service and be of real material benefit to many more bank ers throughout Iowa in helping them in crease their bank business. In their third year success is rolling “ Lytton way’’ more abundantly than ever before. We know it is, because we saw the evidence with our own eyes. Two men with the “human banking ele ment ’ ’ idea, a real live town and an up-todate plant, together with their sincere desire to help other bankers is signifi cant of the ‘ ‘ Wessling Services” head quarters. Not only resourceful, energetic busi ness men, you see, but just two hard working conscientious bankers, who in fol lowing out the dictates of their ideals in their own business, have conceived and made it possible for hundreds of bankers throughout the United States to enjoy a practical “ human interest” advertising service of unparalleled help—and at a small cost. The more business a bank does, tlie more lines of business i t ’s bound to touch. This wide diversity of activity is reflected in the service which is given to its depositors. :: December, 1925 INVITED :: Book on ‘ ‘Inheritance Taxes” The Matthew Bender & Co., Albany, New York, have published a new fourth edition, 1925, of “ Gleason & Otis on In heritance Taxation.” It is one of the most important leads upon new business for life insurance is life insurance covering inheritance taxes. During the last few years it has become one of the strongest reasons for taking on additional life insurance. “ Gleason & Otis on Inheritance Taxa tion,” fourth edition, 1925, is not only the latest work on this subject, but is now recognized as a standard authority. It gives the amendments of 1922 and 1925 adopted in thirty-eight states, and the new federal act of 1925—the only up-todate publication on the subject. He who, when he hath the power, doeth not good, when he loses the means will suffer distress. There is not a more un fortunate wretch than the oppressor; for in the day of adversity nobody is his friend.—Saadi. December, 1925 THE “ FIRST AID” TO THE UNPROFIT ABLE ACCOUNT (Continued from page 19) who needed just the amount he had to lend. ‘ ‘ Surely, the lenders would have to give up their jobs and devote their en tire time to finding responsible borrowers. And, very often, they would be incapable of determining which were responsible borrowers. “ No, that would not be practical. “ On the other hand, suppose there were borrowers—merchants who needed temporary funds to carry over seasonable stocks, manufacturers who needed money to buy raw material, farmers who had to harvest their crops. The lender wouldn’t know who these people were, neither would they know who the lenders were. So they would have to start out on an equally ridiculous search for people who were willing to let them have money. ‘ 1Some of them—-the manufacturers, for instance— would need more money than any one or two lenders (yes, perhaps ten lenders) would be able to furnish them. This would complicate their prob lem exceedingly. “ So that would not be practical, either. “ Suppose there came a man who got some moneyed people together and started a bank. The institution was sub jected to laws and regulations and was a safe and convenient place for each of the thousand lenders to keep his money. Furthermore, it was an easy place for the merchant, the manufacturer, and the farmer to go when they needed funds. But they could get money only if they deserved it. And the banker, having made a study of credits, could form quick and accurate decisions. “ Now, Mr. Blank, don’t you see that banks amass idle money, guarantee its safety for its customers, and lend it to enterprises that build up communities? Don’t you see that if you should take banks and bank credits from the nation, industries would stop, men would be thrown out of work and soon laiv and order would fail ? ’ ’ At the end of a simple explanation like this the radical thinker would almost be forced to admit that banks do not break communities, but, rather, make them. Some of the prejudice that may exist against banks is based on an idea that they are owned exclusively by the rich. Of course we know this to be erroneous. Almost any banker can point out that his institution is owned by many stock holders, some in very moderate circum stances. He can point out that when a customer deals with a bank he deals with an institution owned in part by some of his own neighbors and friends. A great many small customers have it in for their banks because they have been https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NORTH W ESTERN 27 BANKER Mud Turtle Finance BSOLETE, a time-worn de lusion, is the habit of bury ing one’s treasure under a shell of imaginary protec tion and isolation. O The United States Dollar has emi grated for increased prosperity, it has become a world-wide power. Twenty-one Billions of United States Dollars are working in for eign countries. Such an investment requires the security of such international pro tection as is afforded by the League of Nations and the W orld Court. —And Yet— “ All the great affairs of the world, its politics, its trade and its p roj ects of social betterment are trans acted in a forum where we have no standing.” JUSTICE JOHN H. C L A R K E Formerly Associate Justice of the Supreme Court of the United States who resigned from that high tribunal to devote his life to the cause of the entry of the United States into the League of Nations. How long must turtle-like politics be prodded to keep pace with United States brains and finances? What does the Treaty of Locarno mean financially to the United States? It was no mere coincidence that on the same day the press reported the initialing of the nine treaties at Locarno, financial columns in the United States were headed: “ Day’s Stock Trading Climbs to New Peak of 2,684,907 Shares.” LEARN THE FACTS. The November issue of the League of Nations News has important, unbiased information on the Locarno Treaty and the BulgarianGreek situation. A copy will be forwarded free of charge. JOH N H . C L A R K E , P resid ent GE OR GE W . W IC K E R S H A M , P resid en t B oard o f D irectors M R S . C A R R IE C H A P M A N C A T T , V ice P resid en t B oard o f D irectors C H A R L E S H . STRO N G , V ic e P resid ent B oard o f D irectors H A M IL T O N H O L T , Chairman F inance Com m ittee C H A R L E S C. B A U E R , E xecu tive D irector Kindly forward Nations News. October issue League of Name ___________________________________________ A d d ress_________________________________________ The League of Nations Non-Partisan Association, Inc. 6 East 39th Street, New York, N. Y . THE 28 N O R T H AV E S T E R N BANKER You Will Get the Same Good Service as at Home American Bank & Trust Company D aytona B each, F lorida Next Door to the Post Office O F F IC E R S H. G. S K IL E S , President J A M E S L U T H E R , V ice President H. G. P U T N A M , V ice President JO H N R. H IL L , E xecutive V ice President G. H. W OOD , Cashier A . T. M IL L E R , A ss’t Cashier W . J. G A R D IN E R , Trust Officer “ Florida’s finest beach— in the heart of Sunnyland In St. Augustine send your customers to the FIRST NATIONAL BANK of St. Augustine FLO R ID A ’S OLDEST N A TIO N A L B A N K C A P I T A L ___________________________ $130,000.00 SURPLUS AND UNDIVIDED P R O F I T S _______________________ $83,000.00 RESOURCES O V E R ______________ $4,533,000.00 JOH N T. D IS M U K E S , Chairman o f the B oard J. D. P U L L E R , P resid ent R E G IN A L D W H IT E , V ic e P res, and Cashier W . H . N O B LE S, V ic e P resid ent A. O. M A C D O N E L L , A ssistant Cashier “If you like Florida you will love St. Augustine" Safe 8?t Bonds Representatives Wanted Liberal Commissions Paid AVe endorse each bond, guaranteeing interest and principal, which we collect and pay promptly. Bonds are secured by first mortgages on centrally located office buildings in Florida worth twice amount of loan. Many insurance and trust companies purchase our securities. Our company, established several years ago, specializes in first mortgage loans. Booklet NB gives full particulars. P a lm B e a ch G u a ra n ty Com pany Guaranty Building, West Palm Beach, Florida Net Assets in Excess of $1,250,000 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December, 1925 unable to obtain all the loans they desire. AVhat they need is education in banking fundamentals. The customer should know that the banker’s primary responsibility is to his depositors— that bank deposits are de mand deposits subject to immediate with drawal. He should know that it is the banker’s duty to keep the assets of the institution quickly available, or in liquid form and that in determining whether a loan shall or shall not be granted, he must consider not only the borrower’s ultimate ability to pay, but his ability to pay quickly. Applicants for loans might have unquestionable assets, yet, if they were such as could not be turned into money immediately or on short notice, the bank might be placed in a serious position be fore collections could be made. To commercial borrowers, it should be explained why liquidity is essential— why a good ratio of quick assets to current liabilities must be maintained in order to make a bank loan acceptable. The small customer can be shown that his failure to keep accurate books and render satis factory statements handicaps his ability to borrow. Another thing that perplexes a good many customers is the fact that dis crimination is often made in the matter of interest rates. But it is easy to ex plain that a large customer frequently commands a better rate for two reasons: First, he maintains better deposit bal ances and a bank makes a profit from his business; second, he furnishes a cleancut audited financial statement and the administrative expense of lending a large sum is less than that of lending the same amount of money to fifty various individ uals or concerns, each requiring full in vestigation by the officers and credit department. The first reason explains why banks often require a deposit balance of a certain percentage of the customer’s bor rowings. A bank is a service institution. It has heavy demands of loans, and nat urally must favor its deposit customers. He who would be a borrower must natu rally expect to be a depositor. Perhaps the customers who need the most education are those Avho check against float and those who maintain very small balances. City banks have very elaborate systems o f analysis, not only to determine fo r themselves that accounts are profitable or unprofitable, but to have something to show the cus tomer him self in explanation. Even the smallest bank can nse the simple analysis shown on another page, to determine whether a customer is check ing against float, and may use that analysis to educate him to see the injus tice of such a practice and to convince him that he should carry a better balance. Most small customers do not realize that their accounts are not profitable, December, 1925 THE and, if the banks do not tell them, they cannot be blamed for maintaining bal ances that do not compensate for the ex pense of handling. The public doesn’t have the clear con ception of how a bank makes money. Many people imagine a bank has magic ways of earning—almost coining it. Some how, people think that a hundred dollars deposited on Monday means about a hun dred dollars profit for the bank, even if the money is withdrawn on Friday. Yet, if they stop to think about it, they would realize that all a bank re ceives is the interest on the loanable funds remaining after the necessary legal and cash reserves are deducted. But any one with a pencil and a scrap of paper could figure out this analysis: Amount of deposit.................. $100.00 Legal and Cash Reserves........ 15.00 Loanable F u n ds..................... 85.00 Income for one month at 6% . .42 Thus, it can be shown that a bank earns only 42 cents gross per month on each hundred dollars deposited, if no in terest is allowed the customer. Even this amount is dependent upon the income of 6 per cent from loans, which is higher than the normal average rate of return. Out of these 42 cents income per hun dred dollars of deposits, the bank must pay overhead expenses such as salaries of officers, clerks, tellers, bookkeepers, and for machinery, light, power, building, expense, rent, ledgers, check books, state ments, pass books and many other serv ices. Few people realize all of the work that is involved in handling checking accounts, or the responsibility that a bank must as sume for forgeries, alterations, post-date checks, stop-payments and the like. They don’t realize how unfair it is to overdraw their accounts and how much embarrass ment it is likely to cause both them and the bank. They probably never stopped to consider that there is no other institu tion that offers so much service for so slight a return. A bank affords complete service to the $100 checking account de positor as well as the $100,000 customer. The small depositor’s money is safe in the bank’s vaults; he is protected from the possibility of loss by burglary or robbery; he may mail checks for his bills and use them when cancelled, as receipts; he is given a pass-book as a permanent record of his deposits; he is furnished monthly statements that are neat and ac curate records of his financial transac tions. I think we can depend upon our X-ray of the average bank customer and assume that he is an ordinary human being and wants to do what is fair. That he is quick to see the injustice of the small ac count has been proved in nearly one hun dred cities that have adopted service charges. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NORTHWESTERN 29 BANKER Alexander National Bank St. Petersburg, Fla. Capital ------------------------------------------------------------------------$ 200,000 S u r p lu s_______________________________________________ 50,000 Deposits_______________________________________________ 2,143,000 R esou rces____________________________________________ 2,740,000 Send your friends to us when they visit the west coast. J. F. A lexander, P resid en t M. H . K irb y , A ssistant Cashier W . B . R op er, E xec. V ic e P resid en t H. W . W hitm an, A s s ’ t Cashier and T rust C. S. H inds, Cashier Officer Jules H . Griffin, A ssistant Cashier United States Government Depository Authorized to exercise trust powers Send Your Customers and Friends TO THE MERCHANTS BANK & TRU ST COM PANY D aytona, Florida W e invite you to make use o f our Complete banking service based on thirty years experience. F. N. C ON RAD, P resid ent F. J. N I V E R .................. V ice P resid en t A. N. O T IS ..................................Cashier S. A . W O O D .................. V ice P resid en t R . E. C R A F T ...................A sst. Cashier C. M. B IN G H A M ........ V ic e P resid en t H . R . Z IM M E R M A N .A sst. Cashier W . D. C AM ERON , M gr. B ond Dept. RESOU RCES OVER E IG H T M IL L IO N D O LLARS 30 THE NORTHWESTERN BANKER December, 1925 T he Federal Reserve—N ot Perfect, But the Best Plan Yet OT long ago I ran across an essay B y J . C. Bonesteel called “ Criticism of our Bank Vice President, Security National Bank ing System, ’ ’ which I wrote while Sioux City, Iowa still in school. Of course very little of the content of that paper was original; From an address before Sioux C ity Kiwanis Club rather, it reflected what certain author 2. That we then had in the United ities were saying at that time (more than States approximately 25,000 banks which fifteen years ago), and for a number of years before then. Hence I make bold were independent, unrelated and with no unification. to mention it now. In that “ masterpiece” I pointed out: 3. That the reserve requirements of 1. That national bank notes and other banks fostered speculation, particularly currency were lacking in the element on the New York stock exchange. Why? of elasticity; that is, the money in cir Because the country banks kept a con culation would not vary in accordance siderable part of their reserves with with the volume of business. banks in Reserve Cities and the Reserve N City banks kept a large part of their reserves in Central Reserve cities— St. Louis, Chicago and New York. The re sult was that in dull times the idle funds of the country gravitated toward Central Reserve cities and particularly to New York where the banks loaned at low rates on call. That paper was written before the Federal Reserve Act was passed and my object today is to show you to what extent this comparatively new law has remedied these difficulties and to review briefly present business conditions. This subject assigned to me was not of my own choosing and yet I do not apologize for addressing you on a theme perhaps a little technical, for banking is very AT YOUR SERVICE The South Florida Mortgage Company of Miami, is at your service to assist you or your customers in every possible way. This Company renders the follow ing services: 1. Makes mortgage loans on resi dential property. 2. M a k e s appraisements fo r loaning or investment on property in southeast Florida. 3. Buys and sells real estate on a brokerage basis and handles rentals, property management and insurance. We are at your service in this rapidly growing city which has a building program placing it in seventh place among the cities of the United States. Write us today South Florida Mortgage Company Capital $50,000.00 J. V. Carpenter, President L. G. W ild, Vice President John R. Pearson, V ice President S. G rover M orrow , Vice President H arry A . Brattin, Secretary 150 S. East First St. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis M iami, Florida Y. C. BONESTEEL directly related to all businesses. Banks bear a twofold relation to the com munity as a whole: First, the supply ing of a means of exchange and the safe keeping of funds; second, guiding the expansion or contraction of credit so that economic fluctuations are permitted to develop steadily and without shock; and yet it must be remembered that banks do not create conditions but merely adjust themselves to meet changes or cycles. The Federal Reserve Act was passed December 23, 1913, but the Federal Re serve banks did not formally open until November 16, 1914, just after the World War broke out. The country was di- THE December, 1925 vided into twelve Federal Reserve dis tricts with a Federal Reserve bank in each district. We are in the seventh or Chicago District. Understand, please, that the Federal Reserve banks are bankers’ banks and do not deal directly with individuals. The capital stock of each of the twelve Federal Reserve banks was subscribed by the member banks of the respective districts. National banks must be member banks and state banks and trust companies may be. Each member bank subscribes to stock amounting to 6 per cent of its own capital and surplus. Only one-half of the subscription has been called, how ever, as the Federal Reserve banks have had ample capital. Therefore, on any national bank statement and on some state bank statements you will find in the assets an item “ Stock in F. R. Bank,” which amounts to 3 per cent of its capital and surplus. NORTHWESTERN The first criticism of our banking and currency system to which I referred was that national bank notes and other cur rency were not elastic. Our national banking system grew out of the urgent necessity for the Government during the Civil War to find a market for its bonds. The act was passed in 1863 and almost entirely revised in 1864. Each national bank at first was required to buy government bonds to an amount not less than $30,000 or one-third of its capital stock. When such bonds had been deposited with the treasurer of the United States, the national bank would be entitled to receive notes up to 90 per cent of par or market, whichever was lower. The chief motive in the mind of Secretary of Treasury Chase, however, in recommending passage of the Act, was to establish a uniform currency. On January 1, 1862, there were in the United States 1,496 banks issuing about 7,000 FLORIDA INVESTMENTS When you make them, always buy locations whether in country or city. Six years’ experience has educated me. Can I be of service to you? South Florida lands and Lakeland high-class properties are my spe- j cialties. Opposite Post Office w TUCKER, Realtor Lakeland, Florida 31 BANKER Box 472 FLORIDA The following Florida banks now advertising in th e N o e t h w e s t e e n are known person ally to the publishers of this magazine. ' These banks will be pleased to give you or your custom ers full information about their cities and sections of the state or about Florida in general and Florida in vestments. If any of your customers are going to Florida we suggest that yon recom mend these banks and give them letters of introduc tion to any of the officers listed.— The Editor. B anker D A Y T O N A BEACH American Bank & Trust Company H. G. Skiles, President G. H. Wood, Cashier Merchants Bank & Trust Company F. N. Conrad, President A . N. Otis, Cashier COMPLETE COLLECTION SERVICE The Citizens and Peoples National Bank of Pensacola, Florida RESOU RCES Loans and D iscoun ts ...........................................-................................ $ 9 18,478.31 O verdrafts ...................................... -........................................................... 979.70 U. S. B onds to secure C ircu la tion ..................................................... 130 ,00 0 .0 0 U. S. C ertificates o f Ind ebtedn ess and L ib erty B on d s.............. 9 12,022.26 Other B onds and S ecu rities................................................................. 1 ,2 93,731.28 R eal Estate and B ank B u ild in g ....................................................... 109,200.00 F urnitu re and F ixtu res ........................................................................ 1.00 650,11 6 .1 4 T O T A L ................................................................ $4,014,528.69 L IA B IL IT IE S C apital S tock ............................................................................................$ Surplus and P rofits .............................................................................. R eserve fo r Interest and T a x es........................................................ C irculation O utstanding ........................................................................ D ividen ds U npaid and Other L ia b ilitie s.................. ........... ......... D E P O S IT S : In d ivid u a l ............................................................ $ 3,2 68 ,9 1 0 .8 5 Bank ........................................................................ 144,99 0 .7 7 U nited States ....................................................... 70,2 16 .2 4 U. S. P osta l S avin gs.......................................... 4 1,4 23 .0 3 — 2 00,000.00 1 31,447.99 12,9 05 .0 4 1 30,000.00 14,634.77 3 ,5 25,540.89 T O T A L ................................................................$4,014,528.69 W rite us fo r in form a tion about P en sa cola and W est F lorid a . https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A. P. Anthony, President L. P. McCord, Cashier M IA M I Bank of Bay Biscayne ST A T E M E N T — JUNE 30, 1925 CASH : I n vault and due from F ederal R eserve Bank, B anks and U . S. T reasurer .......................................................... JAC K SO N VILLE Peoples Bank J. H. Gilman, President J. E. Lind, Cashier PEN SACOLA Citizens & Peoples National Bank J. S. Reese, President J. W . Dorr, Cashier ST. AU G U STIN E First National Bank J. D. Puller, President Reginald White, Cashier ST. PETERSBURG Alexander National Bank J. P. Alexander, President W . B. Roper, Vice President W E ST P A L M BEACH First American Bank & Trust Co. E. M. Brelsford, President F. E. Decker, Vice President 32 THE NORTHWESTERN BANKER LITHOGRAPHING TRADE M ARK ‘f o u n d e d GEORGE by H. R A G S D A L E E D W I N G. R A G S D A L E SE C R ET T A R V m i LJt>fcni>KJL>»LK>»OC>^ MW JlH O iW K m iVW Xw t r w HWHW K HOI. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December, 1925 different kinds of circulating notes based on a great variety of securities. So the National Bank Act accomplished these two things—it created a market for government bonds and it unified to a large extent our currency. There were many amendments to the National Bank Act, but for fifty years the whole plan remained substantially the same. Cer tainly our currency was inelastic. Be sides national bank notes, it consisted principally of silver and gold certificates issued to take the place of coins actually held in the United States Treasury and a fixed amount of “ greenbacks” —$346,681,016. When specie payment was re sumed in 1879, Secretary o f Treasury was ordered to redeem them in gold on demand, but he was denied the power to retire them. Therefore, when green backs are presented for redemption they are immdiately replaced and the amount outstanding remains fixed at approxi mately $346,000,000. Now, has the Federal Reserve System resulted in furnishing a currency more responsive to the volume of business? You understand, of course, that we still have the currency I have just mentioned except that national bank note circula tion has been somewhat reduced. To these are added Federal Reserve Bank notes and Federal Reserve notes. I should have an hour in which to ex plain this phase of my subject and I can only touch on the working of the plan. When a member bank finds that its cash reserve is getting low it endorses some of its eligible bills receivable and sends them to the Federal Reserve Bank. I f the Federal Reserve Bank accepts the paper, it turns it over to the Federal Reserve Agent and receives currency for its member bank which sold the paper. Circulation of Federal Reserve notes in creases as more paper is rediscounted. On January 23, 1920, there was $2,844,000,000 of this currency outstanding and on December 23, 1920, the amount was $3,404,000,000. During that time, as I will show later, when I refer to prices, the paper of member banks held by Federal Reserve banks increased prac tically proportionately. As this paper is taken up, currency is surrendered to the Federal Reserve agent and the volume is reduced. Or when a country bank has more currency on hand than needed, it ships to the Federal Reserve Bank or to a city correspondent and it finds its way back to the Federal Re serve agent. That, theoretically, is the way the contraction and expansion works. I f I were to go into detail it could be shown that the expansion fea ture is more successful than the contrac tion; but, practically speaking, the Fed eral Reserve system has done much to remedy this criticism that formerly our currency was inelastic. December, 1925 THE N O R T H WE S T E RN 33 BANKER The second criticism made before we had the System was that our 25,000 banks were unrelated, each fo r itself and with too much decentralization. Outside o f clearing house organizations, banks lacked the means o f effective co operation in times o f stress. The Na tional Monetary Commission created by the Aldrich-Vreeland A ct had its origin in the financial panic o f 1907. This commission, with Senator Aldrich as chairman, favored a central bank to be owned and controlled by the banks o f the country with due representation o f the government on its official board. But I think most bankers now agree that our Federal Reserve System with twelve banks and a few branches is better fo r our country than one central bank with many branches. In Europe, several coun tries have the central bank plan; but the area o f United States is consider ably greater than all o f Europe, exclu sive o f Russia, and there is a big differ ence in business enterprises and customs in various sections o f our country. Although there are more banks out side o f the Federal Reserve System than in it, you must agree that our banks are closer together and there is greater as surance o f help now than prior to 1914. A nonmember can borrow o f its city correspondent, which is usually a na tional bank, and then the city bank can get help from the Federal Reserve bank. In every crisis before that o f 1920-1921 — in other words, in 1837, 1857, 1873, 1893 and 1907— when we had come to the end o f a period o f credit inflation, the most serious factor was that each bank stood alone. The reason that a number o f banks have failed recently is not that credit is not available but that the assets o f so many country banks were “ frozen ’ ’ and not the kind that can be pledged as collateral. The city correspondent could not make a prac tice o f loaning to country correspond ents on paper secured only by farm machinery and horses (capital that they must use in their business), or on paper o f a farmer who is “ land poor” — or, be fore long, we would all be loaded up with nonliquid assets. There is plenty o f credit available fo r the proper kind o f loans. So now we can say that we have great er centralization and cooperation than before, but we have not gone so far that there can be no ground fo r the cry that we are dominated by the money trust or by W all Street. From the bare view point o f efficiency and economy, one cen tral bank would have been preferable, but that idea had to be subordinated to other considerations. The third criticsim was that specula tion was fostered by the pyramiding of reserves. A t the time o f the panic o f 1907 over $465,000,000 o f the $1,000,- https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis HE bank that avails itself o f the facilities and cooperation o f this institution is in a posi tion to render a superior service to its customers. <TheCONTINENTAL m d COMMERCIAL B A N K S C H IC A G O Invested Capital Over $60,000,000 Total Resources Over $550,000,000 34 THE NORTHWESTERN G IR A R D A N D TH E F U T U R E T E P H E N G IR A R D ’S con cern fo r his fe llo w m en and his interest in th eir prob lem s and needs did n ot die w ith him. He painstakingly arran ged th at the b en ev olen ces w h ich had claim ed his interest in life sh ou ld not suffer interruption b y his passing. A m o n g oth er bequests, his w ill p ro v id e d fo r a substantial sum to be ex p en d ed annually fo r the im provem en t o f the river fron t and port o f P h ila d elph ia , a p r o je ct w hich had alw ays been close to his heart. S G ir a r d N a t io n a l P H ILA D E LPH IA December, 1925 000,000 (or 46Y2 per cent) o f deposits of the national banks o f New York City were the reserves o f other banks o f the country. In other words, the funds of interior banks would pile up in New York during dull seasons and the New York banks would loan to brokers and speculators on call in order to have the money quickly available should the in terior banks start drawing against their balances. There are three central Re serve cities— New York, Chicago and St. Louis— and the banks in those cities must keep with the Federal Reserve Bank a reserve equal to 13 per cent o f their de mand deposits and 3 per cent o f their time deposits. There are about seventy Reserve cities, of which Sioux City is one, and the banks in those cities are required to keep on deposit with the Federal Re serve Bank 10 per cent o f their demand deposits and 3 per cent o f their time de posits. Banks not in Reserve or Central Reserve cities must have with the Federal Reserve Bank a reserve o f 7 per cent of their demand deposits and 3 per cent o f their time deposits. This division into twelve districts with compulsory reserve requirements of member banks means that there is less pyramiding o f bank re serves than formerly, and yet it is ques tionable whether the Federal Reserve System has been responsible for lessening the amount o f speculation. I believe, on the other hand, that when the System was inaugurated in November, 1914, bor rowing was unduly encouraged. The at titude o f the Rederal Reserve officials ap peared to be, “ W e’re here to carry your paper. Use us.” It was often suggested that it was considered a badge o f honor to show bills payable and rediscounts on a bank statement. But on this point it is safe to say that the situation is no worse than it used to be. In several other ways the Federal Reserve System has brought us improve-ment. It is not a panacea for all our banking and economic ills and yet it ap pears to be the plan best adopted for this country. A kin dred spirit anim ates this bank. T ra n scen d in g the span o f individual lives, it has con tin ued w ith ou t inter ruption since G ira rd ’s day to serve the la rger n eeds o f its fe llo w men, a re co rd o f perm an en ce w orth con sid ering w h en you select a P h ilad elph ia correspon d en t. T he BANKER You have heard it said that the policy o f the Federal Reserve Banks was re sponsible fo r the break in agricultural prices in 1920 and 1921. The charge is false. Let me give you a few figures which show how corn prices fell and you tell me whether forced collection o f paper was the cause. Bank Average monthly price o f corn : January,.1920 ......................................$1.40 July ...................................................... 1.86 August .................................................. 1.64 September ........................................... 1.56 October .................. 1.21 N o v e m b e r................................................... 87 December ................................................... 68 January, 1 9 2 1 ........................................... 67 There was a decline o f 64 per cent in six months. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December, 1925 THE NORTHWESTERN 35 BANKER The total amount o f paper held by the twelve Federal Reserve Banks: January 1, 1920..... $2,215,305,000 January 1, 1921..... 2,687,393,000 You might reply that those figures are for the entire country and that we should consider rather the Federal Reserve dis trict in which the member banks carry the corn farmers’ paper. All right, here is the amount o f paper held by the Federal Reserve Bank o f Chicago : January 1, 1920.....................$267,639,000 January 1, 1921.................... 475,563,000 The truth is that falling prices made inevitable, sooner or later, a deflation o f credits and not the deflation o f credits the fall in prices. There were world-wide causes fo r the big slump in prices in 1920. You recall the break in the silk market in March o f that year and the financial crisis which followed in Japan. Then there was the break in the wool market and in the sugar market. No, the Fed eral Reserve Banks did not pull down prices. I repeat that banks do not create conditions— they adjust themselves to meet changes. W e in Sioux City are very much inter ested in the farmer’s purchasing power. According to a calculation made in Au gust at the South Dakota State College, the purchasing power o f the farmer was 96% per cent o f what it was in 1914. In June, 1924, it was only 70 per cent. But during the past few weeks, there has been a little setback. In the paper Mon day evening it was reported that the ad ministration at Washington was worried over the situation in Iowa. O f course, that made enjoyable reading fo r the pessi mist; but Cal doesn’t need to lose any sleep about us. W e anticipated that the corn price would decline, although the carryover was small, because the total crop in the United Sates is about 22 per cent larger than last year’s. But remem ber that about 80 per cent o f the Iowa corn is fed. The pig crop in the corn belt this year was about 10 per cent less than last year and there are fewer cattle in the country than last year, all o f which means fair returns to the farmer from live stock. Furthermore, speaking o f corn, the Iowa crop is 51 per cent larger than last year and the quality is better. Unfortunately there are some parts o f the Sioux City territory which had very poor crops. Conditions are spotted, but, generally speaking, the outlook is better than it was last year. Is not music the food o f love?— Sher idan. Southern California Banks Correspondence invited from Bankers desiring to buy control in California. S A N D E R S - M c C U L L O C H C O ., B an k B rok ers, 1 0 0 5 , S t o r y B l d g ., L o s A n g e l e s . S u it e https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Superior Manufacturing Facilities Create Better Ban\ Fixtures The Fisher Company’s skill,, thought, and re sources have been centered on the development of “ Better Bank Fixtures” to such high efficiency that they have become recognized as the “ Durable and Attractive Bank Fixture.” This is one reason why, almost invariably, The Fisher Company is selected again by friends of bank ers who have experienced The Fisher Company service. % % Thoughtful Ban\ers Consult the Fisher Company | ^ THE 36 AUTOMOBILE FINANCING (Continued from page 12) ardy, the bank will very properly either curtail the finance com pany’s line o f credit or withdraw it entirely, just as it would do with any other kind o f bor rower. Naturally banks inquire o f one another as to their experience with this or that finance company, but I have never yet had any bank suggest to me that it and we should agree to try to compel any finance company to do business, in any particular way, nor should I care to en ter into any such agreement. The movement o f conservatism was started by banks primarily in the inter ests o f themselves and the finance com panies, though the banks felt it was a NORTHWESTERN matter of a good deal o f interest to the manufacturers and the dealers. Some manufacturers showed considerable sym pathy in the matters, others were less favorable, which to me was unexpected, as I think that eventually it will be real ized that reasonable terms are at least as much to the m anufacturer’s interest as they are to the finance companies, and a great deal more than they are to the bankers. I think it will be admitted that no such volume o f cars could have been sold, as have been fo r a number o f years past, if there had not been a large num ber o f finance companies to handle the time payments. I f terms grew so extrav agant that bankers and finance companies felt that there was an undue risk in han National Bank of Commerce in New York E s t a b l i s h e d 1839 STATEM EN T OF CO N D ITIO N , SEPTEM BER 28, 1925 RESOURCES LIA B ILITIE S Loans and Discounts $313,707,501.37 C apital Paid u p ...... $25,000,000.00 Overdrafts, secured S u r p lu s ...................... 25,000,000.00 and unsecured....... 124,614.33 United States Securi U ndivided P ro fits ... 15,021,736.77 ties ............................ 57,964,787.38 Dividend payable Oc Other Bonds and Se tober 1, 1925........... 1,000,000.00 8,770,111.38 curities ................... Stock of Federal Re Dividends unpaid.... 14,479.50 1.500.000. 00 serve Bank.............. Deposits ..................... 437,585,909.60 Banking H ouse.......... 4.000. 000.00 Cash in Vault and due Bills Payable with from Federal Re F e d e r a l Reserve 51,936,795.09 serve Bank.............. Bank ........................ 28,000.000.00 Due from Banks and Reserved for Interest. 12,857,958.80 Bankers .................. Taxes and other Exchanges for Clear Purposes ................ 5,272,569.83 96,222,018.30 ing House............... Unearned Discount.. 1,446,231.80 Checks and other Cash Items.............. 2,723,743.30 Interest Accrued. . . . 1,021,529.33 Acceptances executed for Customers....... 28,274,298.16 27,233,958.82 Acceptances sold with our Endorsement.. 11.447.792.44 Customers’ Liability under Acceptances. $578,063,018.10 $578,063,018.10 CHAIRMAN O F THE BOARO P R ESIDENT J AM ES S. A L E X A N D E R S T E V E N S O N E. WARD VICE- PRESIDENTS J. H O W A R D A R D R EY T H O M A S W. BOWERS J OS EP H A. BR ODERICK E L M O R E F. HIGGINS ROY H. PASSMORE DAVID H. G. P ENN Y S E CO N D H A R R Y P. BARRANO OSCAR L. CO X E M A N U E L C. GE R S T E N J OH N E. ROVEN SK Y FARIS R. RUSSELL H E N R Y C. S T E V E N S VI CE- PRESIDENTS E V E R E T T E. RISLEY C. ALISON S CU L LY J O H N T . W A L K E R , JR. A R C H IB A L D F. M A X W E L L FRAN Z M E Y E R E U G E N E M. P R E N T I C E E D W AR D H. RAWLS CASHIER AUDITOR JUL IU S PAUL PAUL B. H O LM E S DIRECTORS JA M E S S. A L E X A N D E R J O H N W . D A V IS H E N R Y W . de F O R E S T JO H N T . D O R R A N C E E D W A R D D. D U F F IE L D https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BANKER C H A R L E S E. D U N L A P G E O R G E E. R O O S E V E L T C H A R L E S B. S E G E R JO H N G. S H E D D V A L E N T IN E P. S N Y D E R H A R R Y B. T H A Y E R JA M E S T IM P S G N S T E V E N S O N E. W A R D T H O M A S W IL L IA M S December, 1925 dling automobile paper, it would, I think result in curtailments o f credit by bank ers, and perhaps withdrawal from busi ness by finance companies, which, of course, would enhance the difficulties of caring fo r the present enormous volume o f time payments. Even if no such de velopment took place, I still think that unduly liberal terms would react on the manufacturers. The tendency o f liberal terms is no doubt, at first, to stimulate sales, particularly when times are good; but such stimulation in sales might not be an unmixed blessing. I have always understood that the object o f every man ufacturer is, as fa r as possible, to have a uniform production. He is, o f course, prepared to find that his volume is not so large in dull times as it is in good, but if extravagant terms in good times have re sulted in bringing an abnormal number o f used cars on to the market in poor times, his volume o f sales during the dull period will, o f course, be even less than they would have been. It seems to me. therefore, that the manufacturer will find that it is greatly to his interest that a car bought in good times should stay sold in bad times. I think it may be taken as certain that this announcement would have been made only after careful investigations and weighing o f past experience, and I should say that all manufacturers would find it just as desirable to have their cars stay sold as do the Ford Company. I f this policy became general among the manu facturers, its influence would be at least as strong fo r conservatism as anything the bankers as a body have done or could do. A t the meeting held last December dur ing which the National Association of Finance Companies was formed, there was a considerable discussion as to whether or not the finance company should in case o f default have recourse upon the dealer. Opinion amongst finance companies was divided, some feeling very strongly one way and some feeling the other way. I need not recite the various arguments fo r and against recourse, as you all know them better than I do. As I stated at the December meeting there is a diversity o f opinion on the subjecteven among bankers. I recognize that there are merits to both contentions and I am not prepared to take sides, but I do think that if the dealer had to take up such defaulted paper as he had nego tiated with the finance company, he would scrutinize his -credits more care fully and he would be more sympathetic with conservative terms o f sale. I understand that one o f the objects of this meeting is to reach common ground upon which automobile financing may be safely done. I can only hope that if any resolutions are passed you will have a strong determination to adhere to them, and that sufficient new members will join December, 1925 THE the National Association to make the task an easier one to the present membership. The organization o f this association was a great constructive work, to the success o f which the directors have given the most arduous efforts. These efforts are deserving o f the most whole-hearted support o f every branch o f the automo bile industry, as well as o f the banking fraternity. The benefits that can be con ferred bjr such an association as this are so great that it is to the interest o f every finance company to belong to it. W ith such support, the able and experienced men who are now directing it will see to it that success to the finance business as a whole is inevitable. TEACHING YOUNG AMERICA TO SAVE (Continued from page 15) Secretaries who do all of the collecting and clerical work, leaving the teacher free to devote all of her time to the edu cational part of the program. “ In most cases the children come per sonally to bank in the elementary schools, but in our high and junior high schools we use a system wdiich we worked out especially fo r high and junior high school people, called ‘ The Envelope Plan. ’ ‘ ‘ The splendid cooperation between banks, school officials, superintendents, principals, teachers, parents and children is, o f course, in a large degree respon sible fo r the large number o f partici pants, and the high average o f weekly depositors. ‘ ‘ The officers o f the association at the present time are: H. C. Matzke, City National Bank, president; Lewis G. Castle, Northern National Bank, secre tary; L. A. Barnes, Western State Bank, treasurer.” Cedar Falls, Iowa, where 81.9 per cent o f the pupils are participating in the school savings plan, carries out the work as follows, according to F. L. Mahannah, superintendent o f schools: “ I believe,” writes Mr. Mahannah, “ that the public schools, when properly functioning, should stress many things not provided for in our curricula. W ith out enumerating the entire list, which I have in mind, I shall mention ethics and thrift as the two extra-curricular sub jects which in my mind are entitled to much more than passing consideration. While I insist on our teachers stressing both, inasmuch as the results o f our thrift teaching are more tangible, the fruits o f our efforts devoted to this w ork; can better be measured. “ The system o f school savings in use here in Cedar Falls is known as Thrift Incorporated. The offices o f this in corporation are in Chicago. “ One or more banks may be desig nated as the receiving bank. I f more https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NORTHWESTERN BANKER than one, a clearing house is necessary. Deposits are received each week at a regular stated time o f day. W e use Tuesday. The teacher acts as banker and enters the deposit in the pupils’ pass book. Duplicate slips showing the deposits o f the several pupils in the room, along with their money, are placed in an envelop furnished by the receiv ing bank. All envelopes from any par ticular building are collected by the principal and sent in a padlocked bag to the receiving bank. “ The receiving bank record commonly kept positors, differing only the depositor does not in person. 37 the consent teacher. of the parent and “ A weekly report is rendered by the receiving bank to the principal o f each building. This report for Tuesday, November 3d, fo llo w s: Lincoln .................... . . 620 Humbert .................. . . 50 Manual A r t s ........... . . 70 Training School . . . . . 284 Miner ......................... . . 80 C. F. High School. . . . 225 T. C. High School. . . . 98 Total keeps the same for savings de in the fact that go to the bank .................... . .1,329 461 34 55 160 69 210 91 $ 69.46 3.77 4.63 40.03 8.79 23.88 23.52 1,080 $174.18 “ As in all other phases o f public school work, in school banking the teacher is the most important factor. Her attitude towards the matter has everything to do with the results. Our principals and teachers all believe in thrift and see that it receives the a t tention it deserves. “ In the high schools a pupil acts as banker, thus relieving the teacher o f this duty. ‘ ‘ Withdrawals can be made only with The Royal Union Life Insurance Company Des Moines, Iowa S tro n g and P ro g ressiv e Ì. Paid to Policyholders Over $19,000,000.00 Insurance in Force Over $138,000,000.00 I A. C. Tucker, President D. C. Costello, Secy. the W m . Koch, Vice Pres. 38 THE NORTHWESTERN BANKER December, 1925 Personal Paragraphs Charles B. Mills, president, Midland National Bank and Trust Company o f Minneapolis, was elected to the presi dency of the Citizens State Bank o f Osseo, Minnesota last month. S. J. Mealey was elected vice president. Cook County Bankers Association, was recently given a farewell dinner by the association. He was paid many fine com pliments fo r his energetic and efficient work, especially along the lines o f elimi nating, dead or alive, the bank bandits. D. P. Hogan, president o f the Federal Land Bank at Omaha, recently attended The American Bankers Association —$— A Specialized Service for Banks and Bankers which is the result of more than sixty years of experi ence is offered by a meeting in Washington, D. C., o f presi dents o f these various institutions. A n drew Kopperud, vice president o f the In termediate Credit Bank, was also called to Washington to attend a meeting of the Federal Farm Bank board. —$— John Hogan, president o f the Des Moines National Bank, and 0 . H. Per kins, manager o f the Ford plant, recently visited in Detroit, where they were shown through the various Ford plants in that city. —$— T H E F IR S T N A T IO N A L B A N K OF CHICAGO and T H E F IR S T T R U S T and SAVIN GS BANK Complete facilities are pro vided for active and inac tive accounts, collections, bills of lading, investments and foreign e x c h a n g e transactions F E A N K O. W E T M O K E , Chairman M E L V IN A . T E A Y L O E , P resid en t C om bin ed R esources Exceed $400,000,000 H. G-. P. Deans, executive vice presi dent o f the Illinois Merchants Trust Company, has just been elected a mem ber o f the board o f directors o f the J. Henry Schroder Banking Corporation o f New York City. —$— Joseph E. Otis, president o f the Cen tral Trust Company o f Illinois, has re signed from the protective committee fo r bondholders o f the Chicago, Milwaukee & St. Paul. An announcement was made recently o f the dissolution o f the President’s A g ricultural Conference. It was considered by those in charge that the conference was no longer necessary, inasmuch as most o f its recommendations have been put into effect, and many o f the farmers ’ problems satisfactorily solved. —$— Theodore Francis Green was elected president, and Howard E. Gladding sec retary-treasurer at the recent convention o f the Morris Plan Bankers’ Association, held at W est Baden, Indiana. The guest o f honor at the annual banquet was United States Senator Simon D. Fess o f Ohio. —$— D. C. Wills, chairman o f the board of the Fourth Federal Reserve Bank, died recently at his home in Cleveland, Ohio. Mr. W ills had been president fo r six years o f the Cleveland Better Business Bureau, and was the originator o f the phrase, “ Before You Invest— Investi gate.” —$— E. N. Baty, who recently resigned as executive manager o f the Chicago and https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis will hold its 1926 convention in Los Angeles, October 4th to 7th. Convention headquarters will be at the Biltmore Hotel, and the various sessions o f the convention will be held in the Philhar monic Auditorium. —$— A new member o f the American com mittee o f the International Chamber o f Commerce is Owen D. Young, who has been appointed to succeed the late A. C. B edford as chairman. —$— R. B. Mellon, president o f the Mellon National Bank o f Pittsburgh, has been elected a director o f the Guaranty Trust Company o f New York. Eugene Meyer, managing director o f the W ar Finance Corporation, visited Des Moines recently fo r a conference with Grant McPherrin, Iowa chairman o f the corporation. Mr. Meyer came to Des Moines from Minneapolis. ■—$— Gilbert E. Jones, vice president o f the Guaranty Trust Company o f New York, died recently, follow ing an operation for appendicitis. Mr. Jones came to the Guar anty Trust in 1917 as head o f the trad ing division o f the bond department. He had been vice president since 1920. One Million Gold Shipment One million dollars in gold from the Bank o f England was recently shipped on the W hite Star steamer “ H om eric” consigned to the Illinois Merchants Trust Company at Chicago. The shipment, which was in the form of standard gold bars, was the first o f a number o f gold shipments fo r which ar rangements were made by H. G. P. Deans, executive vice president o f the bank and in direct charge o f its foreign banking business, who has recently returned from Europe. These importations represent a part o f the bank’s credit balance abroad, arising from the payment o f foreign commercial loans made early in the year, and are something o f an innovation in C hicago’s foreign banking operations. The total amount o f gold to be im ported to Mr. Deans, will be governed by interest and exchange rates. December, 1925 THE NORTHWESTERN BANKER 39 Bank Resources Increase Comptroller o f the Currency M cIn tosh, in a recent bulletin issued from Washington, calls attention to the fact that the resources o f national banks are approaching the 25 billion dollar mark. Loans and discounts amounted to $13,134.461.000 and showed an increase since June o f $460,394,000 and an increase in the year o f $924,313,000. Investments in Government securities o f $2,512,025,000 were reduced since June, by $24,742,000 and showed a reduction in the year o f $67,165,000, and other miscellaneous bonds and securities o f $3,242,620,000 exceeded the amount in June by $48,943,000, and showed an increase in the year o f $345,580,000. Balances due from correspondent banks and bankers, including lawful re serve and items in process o f collection with Federal reserve banks o f $1,780,992.000, totaled $3,295,786,000, and showed an increase since June o f $2,001,000 and a reduction in the year o f $287,902.000, Cash in vault amounted to $362,341,000 and was $2,736,000 greater than in June, and $2,240,000 more than a year ago. Paid in capital stock o f $1,375,009,000 was $5,574,000 in excess o f the amount in June, and exceeded the amount in October, 1924, by $42,482,000. Surplus and undivided profits amounted to $1,669.059.000 and were $68,420,000 more than in June and $37,999,000 more than a year ago. Deposit liabilities aggregated $19,930,062.000, exceeding by $20,393,000 the amount in June, and showed an increase in the year o f $821,264,000. In the classification o f deposits, balances due to correspondent banks and bankers o f $3,333.047.000, showed a reduction o f $113,609.000 since June, and a reduction in the year o f $331,096,000; demand deposits, including United States deposits, totaled $10,602,641,000, exceeding the amount in June by $64,286,000 and showed an in crease in the year o f $618,663,000 and time deposits, including postal savings, amounted to $5,994,374,000, and showed an increase since June o f $69,716,000, and an increase in the year o f $533,697.000, The percentage o f loans and discounts to total deposits, September 28th, was 65.90, compared with 63.66 in June and 63.90 in October, 1924. I will kill thee a hundred and fifty ways. Shakespeare. A Billion Dollar OrganizationThe Federal Land Bank System A unit because of the mutual underwriting Total assets on Sept.30th,$1,059,486,378.11 I N LESS T H A N eight years o f actual operation, the twelve Federal Land Banks have grown into a billion dollar organization! Since the Bonds issued by each Bank are underwritten by all the other Federal Land Banks, the entire system may be regarded as a single unit — the largest Farm Mortgage organization in the world. The statement o f September 30th (forwarded on request) shows 370,876 mortgages averaging $3,073 each, held on improved farms in all parts o f the country. The Total Assets were $1,059,486,378.11; the Total Capital, $52,783,832.50; Reserve, $7,650,528.23; Undivided Profits, $5,262,239.00. The monthly earnings are now substantially in excess o f $700,000. These figures represent a conservative valuation. Every piece of land acquired through foreclosure has been charged off; no such item is carried as an admitted asset. Likewise, every installment payment over 90 days past due is charged off until collected, and it does not appear as an admitted asset. Fe d e r a l L a n d Ban k Bonds “ A S ta n d a rd F o r m o f In v e s tm e n t” so stabilized as to find a ready market with as little fluctuation in prices as Government Bonds These Bonds, issued in denominations of $10,000, $5,000, $1,000, $500, $100 and $40, are safeguarded by 1. The small size and wide distribu tion of the individual risks with an average security exceeding 200%. 2. The steadily increasing capital, re serve and net earning capacity of the twelve Federal Land Banks. 3. The constant p u rgin g of assets through the writing off o f fore closed mortgages and past due in stallments. 4. Careful management in which the Government participates without assuming financial obligation, fur ther safeguarded by strict Govern ment supervision. Congress has declared that these Bonds are “ instrumentalities o f the Govern ment of the United States” . As such the Bonds and the interest received from them are exempt from all “ Federal, State, Municipal and local taxation”, including personal and corporate in come taxes. This provision has been affirmed by the U. S. Supreme Court. Federal Land Bank Bonds are eligible for the investment o f all fiduciary and trust funds under Federal administra tion. They are also acceptable at par as security for all public deposits includ ing Postal Savings. Bank earnings can often be increased by utilizing Federal Land Bank Bonds as security for Postal and public deposits. Federal Land Banks are located at S p rin g fie ld , M ass. N e w O rle a n s , L a. W ic h it a , K a n . St. L o u is , M o . B e r k e le y , C a lif. O m aha, N ebr. L o u is v ille , K y . St. P a u l, M in n . B a ltim o re , M d . C o lu m b ia , S. C . H o u sto n , T exa s S pok ane, W a sh . W r i t e to d a y f o r F e d e r a l F a rm L o a n B o a rd C ircu la r N o . 16 d e s crip tiv e o f th ese B on d s, a d d ressin g n e a rest F e d e r a l L a n d B a n k or Chas. E. Lobdell, F isca l A g e n t F ederal L a n d B Thank you, Mr. Adams. “ Your magazine is a wonderful paper and I certainly will continue to be one o f its readers.” — C. J. Adams, cashier, American Sav ings Bank, Stacyville, Iowa. anks, Washington, D. C. Ì...L https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 40 THE N O R T H W E S T E R N B A N K E R Time to Pay Up! Horse Sense I f you owe money, you have a lot of company. During these good times, when interest rates are low and money plentiful where there is safe collateral back o f it, people are borrowing heavily. Hence a little advice along this line now is perti nent. Don’t borrow unless it is positively necessary to do. Good credit has ruined many a good man. No credit o f conse quence has made many a good man. Play safe. Reduce your loans as fast as possi ble. This is just the opposite o f the ad vice we gave you about a year ago. Then we told you to borrow money and go to it. Now we tell you to pay off what you owe, or if you can’t do that, then don’t get in any deeper. Everybody’s doing it. Don’t follow the crowd for you are sure to get hurt.— The Mound-Up. Many men, lovers o f horses, regard them as superior to all other brute crea tion in intelligence. Because o f their use fulness to man they rank above superior breeds o f dogs, although the affection o f a dog fo r his master, and his fidelity to him, rank above that o f a horse in popular es timation. Now comes a story o f a horse that sug gests a possible attribute o f the animal comparable to divination. A horse at tached to a milk wagon, the wheel o f which was hobbled by a chain to prevent the horse from moving away while the milk man was making collections in apartments near by, stood fo r an hour while a high wind rushed through the street. Finally he dragged the wagon, hobbled as it was, clear across the street to the opposite curb, Proof That Folks LikeThem P R O B A B L Y one o f the most valuable services ever devel oped by the “ Republic” for its correspondents is the “ R e p u b lic ” Bank Money Or der Service. One o f our correspon dents up in Michigan re ce ntl y adopted it. They were not sure it would appeal to their customers, but they were willing to find out. A t the end o f two weeks they found they were issuing 90 Bank M on ey Orders a day, against 10 Bank Drafts. In line with the experience o f other correspondents, this is a g o o d response, though not an unusual one, for “ Republic” Money Orders com bine every advantage o f a bank draft, P. O . and Express m oney orders — customer’s receipt, remitter’s name on face and all. The answer is, folks like them, and this service will help to bring new customers into your bank. Why not write for samples and full details ? Many o f our correspondents also find the follow ing R ep u b lic” services particularly valuable 1. 2. 3. 4* 5. The Business In dicator Service. The Com m ercial Paper Rating Service. The R apid Transit Service. Special Live S tock C redit Service. B rokers Collateral Call Loan Service. A The National B an k o f the A it R |f v jy " T H E E • • P O P U C B A N K E R S ’ H B I C L I C A G O S E R V I C E • * J o h n A . L y n c h , Chairman o f the B oard D a v i d R . F o r g a n , Vice-C hairm an G e o r g e W o o d r u f f , Vice-Chairm an H u g o E. O t t e , Presid en t Copyrighted N. B. R. 1925 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis \J s S T A T I O N ” December, 1925 and stood there. In five minutes some thing happened. The whole top of the tree under which the horse had been standing, was blown off; and fell with a crash on the spot so recently vacated. Did horse sense warn the animal that he was in danger? or had he inherited a knowledge that it was dangerous to stand under a tree in a windstorm? His long vigil awaiting the return o f his master was not broken fo r an hour, but it may be that he heard some premonitory sound which told him the tree was about to fall. At any rate he moved, contrary to the training o f the hobble, after making signs o f restlessness, and was in a safe place when the crash came. An observer noted that incident as either a remarkable in stance o f horse instinct, or o f unsuspected psychological influence.— From Chicago Journal o f Commerce. The spirit o f God works everywhere alike, where there is no eye to see, cover ing all lonely places with an equal glory, using the same pencil and outpouring the same splendor in the caves o f the waters where the seasnakes swim and in the des ert where the satyrs dance, among the firtrees o f the stork and the rocks o f the conies, as among those higher creatures whom he has made capable witnesses of his working.— Mushin. DIFFERENT VS. INDIFFERENT ADVERTISING (Continued from page 14) from the outside in, rather than from the inside out. O f late, there has been a popular ten dency to condemn the “ fear” type o f sav ings advertising, the kind that pictures the woes o f improvidence, and advocates provision against the proverbial rainy day. W e are told that we should keep our sav ings advertising “ affirmative” — that we should depict rather the attractive things that money will buy as a stimulus to sav ers. It has been the writer’s observation that the merchants have been taking pretty good care o f the latter function. They have succeeded fairly well in keeping their attractive wares heralded. Isn’t there a slight possibility that this “ affirmative” idea in savings advertising has been pro moted somewhat with a view to broaden ing the field o f activity o f the ubiquitous purveyor o f bank advertising literature? I f the savings advertiser will confine himself largely to encouraging the accumu lation o f money to have and to hold, for a protection and a safeguard, he will prob ably find that it pays best in the long run. Few bank advertisements offering a spe cific article or service to be called fo r on a certain day, pan out, and they should not be expected to. The thing that such ad vertising accomplishes as a net result is to persuade the reader that that bank makes a practice o f offering profitable services which are available to the customer when December, 1925 TH E he needs them. The main function o f a hank advertisement is to help build a repu tation, and isn’t that a large function ? Much bank advertising could be signed by the name o f any institution in the lo cality, and it would be all the same. The successful advertiser will pick out the ways in which his institution is unique (all banks have distinctive features) and give publicity to those features. He will sell his bank’s individuality. In this under taking an outstanding signature cut and a specific slogan, persistently used, are pow erful helps. A slogan like “ Jonesville’s Oldest Bank” or “ Six Departments” or “ The Largest Bank in Blank County,” are worth a hundred such bromides as “ The Bank o f Service,” or “ Your Favorite Bank.” Millions o f dollars are wasted every year in careless advertising, hut many mor3 millions are made through the intelli gent kind. And the judicious banker wants to be in the latter class. He can get in it principally by giving the subject the necessary thought (whether he writes his own advertising or hires it written) to get his message read and heeded amid the maze o f matter that clamors fo r the pres ent-day reader’s attention. “ NEWS AND VIEW S’ ’ (Continued from page 20) was around $364,000,000. This is a most substantial indication o f the tremendous increase in the sale o f bonds during the last four years in the second largest city in America. It is being suggested that the presi dent o f the American Bankers Associa tion have an “ assistant to the presi dent,” who will work with him in his own hank and save the president from making so many trips to New York and to other points. There certainly is no reason .why the head o f such a great organization as the American Bankers Association, should not have a private secretary and an as sistant also to help him in his multi farious duties. Incidentally, it would be a fine job for some young fellow who wanted to keep in touch with the banking affairs of the association and it should put him in line fo r something higher in that very fine organization. Fred O. Foxcrcft, cashier o f the Na tional Park Bank o f New York, has been appointed on the A. B. A. executive council from his state, to serve in the place o f C. Howard Marfield, who has moved to Chicago. Mr. F oxcroft is a very prominent and well-known official o f the big Park Bank and will serve until the next annual meeting o f the New \rork Association in July. The excellent record which he will no doubt make fo r himself between https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis N O R T H W E S T E R N B A N K E R now and July will undoubtedly result in his re-election fo r the ensuing term. His Own Valuation The widow o f a man killed by a train sued the railroad company fo r $15,000, states Detroit Life Bulletin, quoting from a newspaper, “ and when she was on the stand in court the attorney fo r the road asked her if she felt that her husband’s economic value was $15,000. To this, the widow made an affirmative answer. ‘ How much life insurance did your hus band carry at the time o f his death?’ asked the attorney. ‘$2,000,’ she stated. The attorney argued: ‘I f the deceased placed his own value upon his life at only $2,000, this court has no reason to place any higher valuation at this time.’ What the attorney said isn’t flawless logic— to say the least— as it is prac tically impossible fo r the average man to insure his own life fo r his full “ economic value;” but the story points a truth— that both husband and wife depend upon the husband’s “ economic value” and that it is good business and a duty o f love to guard and conserve it as far as may be. Life insurance is fo r the average man the only way by which such value can be well guarded from the start of saving.— (Life Values) — Mutual L ife “ Points.” TH E N A T IO N A L PARK B AN K o f NEW YORK Established 1856 214 B roadw ay Uptown Offices P ark A venue and 46th S treet Seventh A venue and 32nd Street DIRECTORS Charles Scribner Richard Delafield Francis R. Appleton Cornelius Vanderbilt Gilbert G. Thorne Thomas F. Vietor John G. Milburn William Vincent Astor 41 Joseph D. Oliver Lewis Cass Ledyard, Jr. David M. Goodrich Eugenius H. Outerbridge Kenneth P. Buad John H. Fulton Frank L. Polk Clarence Dillion Banking in all its branches Commercial and Travelers’ Credit issued; Correspondents in all principal Cities in the W orld. Foreign Exchange bought and sold. Corporate and Personal Trusts; Safekeeping o f Securities; Collection o f Income. Investment Service for Custom ers. Safes in our Safe-Deposit Vaults at moderate rental. Capital, Surplus and Undivided Profits, $33,700,000 42 THE N O R T H W E S T E R N B A N K E R December, 1925 Denies Consolidations Are Menace to Business Let’s G row Together Directed by men who have had long experience in the life insurance business, the Guaranty Life has grown steadily and consistently— and its banker agents have grown with it. Every official of the Guaranty Life Insurance Company considers it a pleasure to work with bankers, and the com pany has become connected with hundreds of bankers who are anxious that their insurance department show a real profit. The Guaranty Life is ready to serve you. The Guaranty L ife Insurance Company Davenport, Iowa L. J . DOUGHERTY, Secretary and M anager In Planning 1 9 2 6 You are invited to make this your correspondent, w h ere close relationships are possible and where your business w ill receive the most careful, indi' vidua 1 treatment at all times. TH E N O R T H E R N TRU ST C O M P A N Y Capital, Surplus and Undivided Profits Over $7,000,000 Northwest Corner La Salle and Monroe Streets CHICAGO https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Bank o f America in New York, which has jnst completed a study o f busi ness consolidations, takes issue with P ro fessor Ripley o f Harvard who recently severely criticized centralized control of industry before the Academy o f Political Science. Professor Ripley predicted an extension o f government supervision over the conduct o f private business and urged the enlargement o f the powers o f the Federal Trade Commission. He argued that the divorce o f management from ownership o f great industrial organi zations, which is practically necessary in every large corporate organization, might leads to irresponsible acts on the part of controlling groups in these corporations. But The Bank o f America declares, .as a result o f its study, that recent develop ments in the field o f industrial consoli dation and changes in the methods o f regulation by the Federal Government tend to show that this fear is not shared by the public generally. ‘ ‘ A veritable revolution in the attitude o f the American public toward business combination has taken place in recent years,” says The Bank o f America. ‘ ‘ Thirty-five years ago, the agitation against so-called ‘ big business’ which had been slowly developing ever since the Civil W ar, finally culminated in the pas sage o f the Sherman Anti-Trust Law, forbidding all combinations and mon opolies as being in restraint o f trade. The American judiciary, in interpreting this statute, held that all combinations in restraint o f trade were illegal, regard less o f how well they conducted their a f fairs and how conducive they were to public welfare. In 1911, however, the Supreme Court handed down its decision ordering the dissolution o f the old Stand ard Oil combination and Chief Justice White stated fo r the first time, the prin ciple that the ‘ rule o f reason’ should ap ply, and that only combinations which unreasonably restrained trade were to be dissolved. This important change in ju dicial policy gave a legal basis to the great economies in cost o f production and marketing which could be accomplished by a so-called ‘ good trust.’ “ Today, after mature consideration of the combination question, the public mind has come generally to approve and en dorse lai’ge-scale methods in business as typical o f the modern era o f economic organization. ‘ Big business,’ it is now realized, is no longer synonymous with ‘ bad business.’ “ One factor which has tended to allay public distrust o f large business organi zations is the existence o f a regulative body to protect the public interest in this matter. In 1914 Congress passed the Federal Trade Commission Law, estab lishing a body to regulate industry some- December, 1925 THE what as the Interstate Commerce Com mission supervises transportation. The Commission’s work has divided itself into five groups o f activities. O f these, its studies and reports on American busi ness practices have been perhaps the most successful. It has tried to curtail unfair trade practices as fa r as possible. It also handled the price-fixing problem during the war period. In the stand ardization o f accounting practice, it has been helpful in making more complete and rigid the accounting methods in American industry generally. “ The recent policy o f the government in permitting integration o f industrial processes under one control is well shown by the suspension o f the decree entered by the government against the great Chi cago meat-packing concerns. A fter many years, the government allowed the sus pension o f this dissolution decree on the claim o f the packer that it would mean large financial loss and increase their costs o f operation substantially. A n other indication o f the new government policy towards business is the withdrawal o f government opposition to the merger o f the Armour and Morris packing organi zation. It was shown by the two com panies involved that a joining o f forces would effect a saving o f $10,000,000 an nually. ‘ 1Since the government has withdrawn its opposition to business combination, many new industries have decided to ob tain the benefits o f large-scale operation and combination o f plants under one con trol. A conspicuous example is the fo r mation o f the General Baking Corpor ation, with a capitalization o f several hundred million dollars. “ But the greatest evidence o f the change in the government’ s attitude is found in the field o f railroad consolidation. The whole public agitation against combi nation began originally in the railroad field, as far back as the granger agitation of farmers against the mid-western rail lines in the early 70’s. N oav the govern ment actually threatens to compel the railroads to join their lines together, even against their wishes, so that the public may benefit from the economies o f largescale operation in the form o f lower rates and of better service. President Coolidge has indicated that he favors the grouping o f the roads into a few strong, large systems as early as possible.” I would be loath to cast away my speech; for, besides that it is excellently well penn’d, I have taken great pains to con it.— Shakespeare. In New Home The beautiful new home of the Boundbrook Trust Company, located at East Main Street, Boundbrook, New Jersey, was form ally opened to the public re cently. About 2,000 persons from Bound- https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis N O R T H AY E S T E R N 43 BANKER brook and vicinity took advantage o f the occasion. The president, W . H. Whiting, and the entire directorate and staff were on hand to greet the guests. Floral gifts were received from the Chase National Bank, New Y ork ; the First National Bank, Philadelphia; the National Park Bank, New Y ork ; the Irv ing Bank-Columbia Trust Company, New Y ork ; Brown Brothers and Company o f New York, and the First National Bank o f Boundbrook. The officers o f the Boundbrook Trust Company are as fo llo w s : President, AY. H. W hiting; vice presidents, R. H. Brokaw, AYilliam Schure, L. N. W ood ; secre tary-treasurer, F. I. Collins; assistant treasurer, E. B. Durham. Resigns at Madrid D. J. Christenson, fo r five years vice president o f the Farmers Savings Bank o f Madrid, Iowa, has recently resigned his position and is now cashier o f the Farmers State Bank o f Dayton. G. C. Carlson, at present cashier o f the Farm ers Savings Bank o f Madrid, will be come vice president and W alter Ander son will be promoted to the position o f cashier. I crowned their patience.— a K em pis. THE FO REM A N BANKS FOUNDED 18 62 I W h e n Lincoln was president this bank was founded. It has always preserved a Lincoln-like simplic ity in its dealings. W e invite your business on our 6 3 -year record. t The Foreman National Bank The Foreman Trust and Savings Bank La Salle and Washington Sts. Chicago Combined Capital, Surplus and Undivided Profits exceed $ 1 0 ,0 0 0 ,0 0 0 44 THE NORTHWESTERN BANKER December, 1925 The Two-Fold Accomplishment of Joint Stock Land Banks -M M £ 7 ^ H E primary purpose for which the Joint Stock Land Banks were established and which they are fulfilling so successfully, is that o f offering the farmer cash for borrow ing purposes at a stable, reasonable rate. The need o f agriculture for some stand ardized system o f credit had, for years; been recognized as a weak point in the economic structure o f the nation. Other industries had ample credit facilities at their disposal They could borrow at reasonable interest rates, because, being organized, and in direct contact with friendly banking inter ests they could secure advantageous terms. What the Farmer Faced The farmer, on the other hand, was in no such strong position. He had to borrow wherever he could— from local banks, in surance companies or private individuals— although his security (productive farm land) was the best in the world. The whole banking and financial structure o f the nation had been developed to sup ply the needs of every industry but his. The entire farm mortgage business, representing an annual turnover o f a billion dollars, was conducted almost wholly without supervi sion and without definite plans. The farmer was forced to pay whatever rates the lender chose to demand, and to sign an obligation on terms he could not hope to meet. It is significant that American farming was able to maintain itself in the face o f ob stacles which had been removed from the path o f the other great American industries for over a generation. The Government’s Remedy The Government finally recognized this situation and passed the Federal Farm Loan Act. It created the Joint Stock Land Bank System. These banks were designed solely to provide an equitable credit system for agriculture— with practical and assured pro tection both for the borrowing farmer and the lending investor. One Accomplishment For the farmers, these banks provide a source o f stabilized credit under strictest government supervision. They provide long term credit, for the first time easily and readily available, and the opportunity to liquidate such obligations through serial repayments— much as the funded debts o f other industries are liquidated. The Other For investors, these Banks created market able obligations, Joint Stock Land Bank Bonds secured by Government-supervised loans, declared to be instrumentalities o f the Federal Government and, by law, as com pletely tax exempt as the First Liberty Loan Bonds. Thus, the Joint Stock Land Banks have accomplished a double purpose. They have permanently strengthened the farmer’s financial position, and, through Joint Stock Land Bank Bonds, they have opened a new and attractive field for invest ment to the general public. That this field has a strong appeal to intelligent, conserva tive investors is evidenced by the premiums at which many o f these issues are now being marketed. -o*, The Guy Huston Organization— a complete organization o f financial, land and bank specialists— affords Joint Stock Land Banks a broad, basic and helpful service. The facilities o f this Organization are extended not only to Joint Stock Land Banks, but to Invest ment Bankers and institutions desiring information or reports cover ing any phase o f Joint Stock Land Bank operations or securities. VJ- -ÖC? GUY HUSTON ORGANIZATION 61 BROADWAY New York https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 208 SO. LA SALLE ST. Chicago December, 1925 THE NORTHWESTERN BANKER Iowa B on d D e a le r s S ection T h e N o r t h w e s t e r n B a n k e r is t h e O ffic ia l P u b l i c a t i o n o f th e I o w a B o n d D e a le r s A s s o c ia tio n t OFFICERS P r e s i d e n t . . . ............................. .......... W a r r e n H . F e r g u s o n O ttu m w a V i c e P r e s i d e n t ...................... ...................... .F r a n k W e lc h C ed a r R a p id s W . H. F E R G U S O N S e c r e ta r y -T r e a s u r e r . . . . ...................... F r a n k N. W a r d D e s M o in e s P r e s id e n t F R A N K N. W A R D S e c r e ta r y -T r e a s u r e r The Banker’s Best Friend Is His Bond Account By R. G. Cundy Vice President, Priester, Quail I F IT is true that ‘ ‘ a m an’s best friend is his bank account, ’ ’ it is also true that “ a banker’s best friend is his bond account.” The banker’s bond account is a group o f responsible borrowers who pay an av erage rate o f interest, who willingly sub mit to having their loans called at any time, and who pay promptly. The bank er’s bond account is a secondary reserve, second only to “ cash on hand and in banks.” While providing liquid assets, immediately convertible into cash without forcing payment from customers or bor rowing from other banks, the bond ac count pays from 4y2 to 6y2 per cent as compared to the average cash reserve rate o f from 1 to 2 per cent. What a beautiful business banking would be if it consisted merely o f taking in the depositor’s money, paying an aver age interest rate from 1x/2 to 3 per cent depending on the proportion o f demand and time deposits, loaning it on secured paper payable on demand at from 4x/2 to 6y2 per cent, reasonably sure that the bank examiner or discount committee would not criticize the loans and if the “ bugbear” of the banker’s otherwise peaceful and happy existence, the collect ing o f slow paper, could be avoided. Banking is probably more systematic and better organized in the New England states than in any other section o f the country and it is a safe assertion that this is largely due to the fact that New England banks have for years been large bondholders. Few’ New England banks have closed during recent years and this can probably be credited to their foresight https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Cundy, Inc., Davenport, Iowa in reducing possible “ frozen credits” to a minimum through the creation and main tenance o f a bond account as a secondary reserve. This practice o f safeguarding a bank er’s peace o f mind and his customer’s de posits began its westward trend only a few years ago and has spread with great rapidity. Formerly, Iowa bankers con sidered it an almost sacred duty to loan all o f their deposits at home, and some even rediscounted, fo r the purpose ° f developing their community. The fallacy o f this has been proven so forcibly and tragically in the last three years that practically every banker today recognizes that a community developed by working and saving is much more permanent and desirable than one bought and paid for Avith borrowed money. No community is stronger than its banks and the strength and perpetuation o f the banks is the real and lasting community development. Practically all bankers today believe that many o f their loans are unprofitable fo r the borrower, and, to keep their funds working, place a certain percentage of deposits into safe bonds and in the selec tion o f these bonds particular considera tion is given to six important factors, v iz .: Security, marketability, the bond house, diversification, maturity and in come. The selection o f the bond house is one o f the most important adjuncts to a sat isfactory bond account. Experience has jiroven that the most successful results are obtained by limiting the purchase o f in vestments to one or two bond houses which, from experience, are able to in 45 telligently advise and recommend bonds that specifically fit certain requirements. The bond house knows its suggestions must be fundamentally sound to continue business relations and consequently a bond is recommended only -after every assur ance that it is the best suited bond for that particular bond account. The banker then has the benefit of accurate and inter ested knowledge which should be readily reflected in his bond account. I f a deposi tor divides his banking business among five or six institutions no one would have more than a casual interest in his affairs, while, if that same depositor did all his business with one bank he would be cer tain o f better banking service through the banker taking a real interest in his affairs. This is true in the banking business and just as true in the bond business. Through the limiting o f the purchase o f bonds as before mentioned, better investment re sults will be obtained. A fter the selection o f the bond house, it should always be consulted on matters relating to the bank’s bond account. The bond house has in its files complete sta tistical data and is furnished monthly statements regarding the progress, earn ings and financial conditions o f the com panies whose bonds it has sold. Such data is important to the investor and many times is not public information nor broad cast. Opinions passed without complete knowledge of a situation or ill advice due to inexperience in the bond business, can, if taken seriously, result unprofitably for the investor. This is true in the banking business, the bond business, or any other business. The investment adviser should be as carefully selected as the doctor, the lawyer, or any other professional man. In loaning money certain proportions between the amount of the loan and the security must be respected. In loaning on personal notes without security, the per sonal element is the guarantee o f pay ment. In first mortgage farm loans a ratio o f from 50 to 70 per cent o f the value o f the mortgaged property is considered reason able. In public utility properties the cus tomary practice is to loan from 50 to 75 per cent o f the depreciated value of physi cal property without intangible values and this percentage is considered reasonable, due to the fact that a public utility p rop erty is in reality a quasi municipal insti tution, enjoys a natural monopoly, does a strictly cash business, carries practically no inventories and operates without com petition. Industrial corporations are a little dif ferent and the underwriter o f such a bond issue usually requires that bonds be se cured by a mortgage on physical property, including real estate, buildings and tools, conservatively appraised at twice the amount o f the bonds issued and further protects the bonds by providing in the 46 THE mortgage that the current assets o f the company consisting o f cash, inventory, ac counts and notes receivable after deduct ing all liabilities o f the company except the bonds, shall at least equal the amount o f bonds outstanding. Payment fo r the bonds is therefore assured from two sources, namely, the physical property and the net current assets. Corporation bonds also enjoy the security o f the equity pro vided by preferred and common stocks. Bondholders are creditors while stock holders are partners to whom the bond holder looks for payment. That a banker’s bond account may have the proper degree o f marketability there is one uppermost feature which is, that the only thing that creates marketability in a bond is the demand fo r it. Market ability comprises probably twenty differ ent factors rather than any one o f twenty N O R T H AV E S T E R N BANKER which could be mentioned. I f a bond is kept active in the minds o f investors it should enjoy marketability whether or not it is listed on the New York Stock E x change or the curb, whether it is a large issue or a small issue, or whether the issu ing concern be one of renown or not. A small bond issue well distributed and kept before the investing public might have a higher degree o f marketability than a large issue listed on the Exchange if such bonds did not have a nation-wide distri bution and the market kept active by the sponsoring bond house. It is said there are approximately 20,000 bond issues listed on the New York Stock Exchange and there are daily transactions in only about 400 o f these. Many bankers insist on personal knowledge and wish to keep in close touch with the issuing corpora tion. This is, o f course, impossible in the | | | | | ^TpHE obligations of this institution A are se le cte d as a p p r o p r ia te and sound mediums for short term investm ent by a large banking clientele. T h ey may be obtained in convenient denom inations and suitable maturities. 1 | | | | F ull in fo rm a tio n m ay be secured through usual banking channels, or by addressing Financial Sales Department, at any of our offices. | 1 | | 1 | G eneral A cceptance M otors C o r p o r a t io n | 1 1 1 1 | | = Executive Offices: §! ee 250 W est 57th Street, N e w Y o rk City I Branch Offices: = = Atlanta Boston Buffalo Charlotte Chicago Cincinnati Cleveland Dallas Dayton Denver Detroit Kansas City Los Angeles Memphis Minneapolis New York Omaha Philadelphia Pittsburgh Portland, Ore. St. Louis San Francisco Washington London, England Toronto, Canada j December, 1925 larger corporations. For marketability, many bankers choose among Liberty bonds, Federal Land Bank Bonds, Joint Stock Land Bank Bonds, short-term pub lic utility and industrial issues. The bonds o f our larger cities and communi ties also enjoy a good market. Every banker in his bond account should seek a well-balanced list differentiating between the types o f bonds held, the loca tion o f the security, the enterprise, the maturity o f the bond, and many other factors that tend to diversify his list. One well-known man once advised “ keep ing all your eggs in one basket.” In a bank’s bond account such a policy should no more be considered than the loaning o f all o f its funds to any one customer. In the opinion o f many successful bank ers holding bonds fo r a secondary re serve, maturity is one o f the important factors to be considered. Many refuse absolutely to purchase bonds having a maturity longer than twenty years and consider their list should have a certain proportion maturing each year. The bond market is closely identified to the money market o f the nation and the world and the loaning rate in financial centers is re flected in the market quotations. Bankers realize the widest fluctuations in price usually occur in the longest-maturity bonds and the shorter the maturity the smaller the fluctuation. This has helped towards creating an enormous demand for bonds maturing within five or ten years and such bonds generally command a sub stantial premium on the general market due, o f course, largely to the smaller chance fo r fluctuation. The bond account need not be limited to the investment o f surplus funds but can be a jjrofitable department o f the bank through distributing bonds it has pur chased among its customers. A deposi tor’s account may start as a small one but through thrift and saving may easily grow until the customer divides his business. Many bankers in Iowa and other states, especially in New England, have built up profitable bond accounts and have helped rather than hindered their savings depart ments. I f a banker will educate his cus tomers towards saving fo r the purpose of investing, a double purpose will be served fo r the benefit o f the bank as well as the customer. Practically all city banks have bond departments which yield satisfactory profits and at the same time hold savings accounts which otherwise might go to banks maintaining bond departments. Bonds yield higher interest return than savings banks pay and this is an incentive to save fo r the purpose o f investing in bonds. Investing, whether it be in real estate, education, business, profession or bonds is closely allied to saving and saving, not spending, is the strongest rock in the foundation o f good government. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December, 1925 THE NORTHWESTERN Real Estate Values B y G. A. Colder District Manager, Fidelity Bond Mortgage Co., Chicago BANKER 47 may invest his funds, be it $100 or several thousand dollars. Usually these investments by an indi vidual represent his savings and as such should be carefully protected. This is what companies such as the Fidelity Bond & Mortgage Company do through their offerings to the public. This company un conditionally guarantees the prompt pay ment o f principal and interest o f each bond by written endorsement on the same. point where to make an adequate return IT IE S are built at strategic points on an investment, buildings o f larger pro to form a defense against an enemy, portions are erected and equipped with all fo r commerce, manufacture, or by modern conveniences fo r the comfort o f political or social forces. Originally cities the tenants. These buildings are usually were formed principally as a defense o f such a size as to require financial as against enemies o f the people or tribe in The merit of originality is not novelty; sistance from outside sources and o f habiting a particular country or locality. it is sincerity. The believing man is the larger proportions than the individual can Later they were developed fo r commerce original man; whatsoever he believes, he assume, thus the individual mortgage has that followed along certain trade routes believes it fo r himself, not for another.— been replaced by a first mortgage real which were located according to natural Carlyle. estate bond issue, whereby the individual topographical conditions o f the country and these usually followed routes easily traveled. Later they were developed where raw materials could be easily ob tained, or because o f cheap power, labor supply, home markets and cheap trans portation. The growth o f cities is quite largely cov ered by external or natural conditions, the usual starting point being along a water front or along intersecting turnpikes or trails, or away from the station o f a railroad. The growth is also influenced by the location o f public and prominent build ings. Transportation has a very material influence on the growth o f cities. All these conditions have their bearing on the corporations whose values and from these values is determined the rental value o f properties. securities we have offered Economic rents are the basis o f values the num ber showing a sub and are determined by deducting from stantially im proved financial the gross rent o f land and building, all position is very gratifying to charges fo r services, such as light, heat, elevators, janitors, agents commission for us, and should be som e indi renting and collection o f rents and other cation to investors o f the care charges o f a similar nature; second, taxes, insurance, repairs, decorating and finally and judgm ent used in select interest charges on capital invested. The ing these offerings. interest on the cost o f the property must exceed the average interest rate by an amount equal to or greater than the an Current Investment List Sent on Request nual depreciation o f the building, thus providing a sinking fund sufficient to re place the building at the end o f its life. To make a correct showing, the building must be suited to the location and managed with ordinary ability or the apparent economic rent will have little or no bear ing on the value o f the land. IN V E S T M E N T S The basis o f agricultural land value has Telephone Illinois Merchants been established since the time o f Ricardo. State i7oo Bank Building r Value o f urban land, as in agricultural, is the resultant o f economic or ground Correspondents, Kidder, Veabody & Co.,'Boston &Newidrk. rent capitalized. The first theory o f agri cultural ground rent emphasizes fertility o f the soil as a source o f rent but it was later noted that it was not the most fer tile lands that were first occupied but those nearest settlements. C A n In d ic a tio n jUikfieltJfidcfiin & Chicago The city’s economic rents are based on superiority by location, as the sole func tion o f city land is to furnish area on which to erect buildings. In the larger centers land values have increased to a https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 48 TH E N O R T H W E S T E R N B A N K E R December, 1925 Mr. Wood’s New $100,000 W h e r e S ou n d B onds are S o ld Look for These Issues The following bonds distributed by our Wholesale Depart ment are in the hands of many good banks and responsible investment houses, at the disposal of discriminating in vestors. 61 Broadway B uilding 5.50’s Due 1950 T o Y ie ld . . . 5 .5 0 % Roanoke W ater W ork s Co. 5’s Due 1950 To Y ie ld . . . 5 .6 5 % A llerton F ifty -F ifth St. Corp. 5.50’s D ue 1945 T o Y ie ld . . . 5 .6 5 % Peoria W ater W ork s Co. 5’s Due 1950 T o Y ield . . . 5 .7 7 % T yler B uildin g 6’s Due 1953 T o Y ie ld . . . 6.00% W adsw orth B uildin g 6’s Due 1953 T o Y ie ld . . . 6.00% H arrim an B uilding 6’s Due 1958 To Y ie ld . . . 6 .0 0 % Loew ’s New Broad Properties 6’s Due 1945 To Y ie ld . . . 6.00% Plankinton B uilding 6.50’s 5.50 to Due 1926 to 1947 T o Y ie ld 6 .3 0 % Southwestern Pub. Service Co. 6’s Due 1945 T o Y ie ld . . . 6 .0 5 % United Masonic T em p le Bldg. 6.50’s Due 1949 T o Y ie ld . . . 6 .3 0 % T h e A llerton Corp. Notes 5’s Due 1928 To Y ield . . . 6 .4 5 % A llerton Cleveland Bldg. 6.50’s Due 1945 T o Y ie ld . . . 6 .5 0 % Transportation B uilding 6.50’s Due 1941 To Y ie ld . . . 6 .5 0 % Stevens & Thom pson Paper Co. 6’s Due 1942 To Y ie ld . . . 6 .6 0 % A n Issue which w e strongly recommend L o e w ’s N ew -B roa d P roperties 6’s due 1945 Because the loan is on the basis of less than 60% of the conservation valuation of the properties. Because net earnings are at the rate of over 3% times interest charges. Because only $380,000 out of a total valuation of over $4,000,000 is leasehold prop erty. Because the b o n d s are guaranteed b o t h principal and interest by a corpora tion with assets of over $51,000,000. Because the earnings of the guarantor for the year 1924 exceed the total principal amount of this issue. T o Y ield 6% ------— A - -------If there is any information you desire, or if you prefer to deal direct with us, write, call or phone our local office. P.W. CHAPMAN & CO.,INC. 116 S. La Salle St. C H IC A G O SPECIALISTS in t h e s e l e c t i o n o f o u t s t a n d in g - a n d s e a s o n e d in v e s t m e n t s e c u r it ie s f o r th e fu n d s o f b a n k s , in d iv id u a ls a n d e s t a t e s . U n b i a s e d o p i n i o n o f s p e c i fi c is s u e s of in v e s tm e n t b o n d s and sto ck s. R e c o m m e n d a tio n s c a r e fu lly m a d e f o r th e p u r p o s e o f g iv in g h ig h c la s s in v e s t m e n t s e r v ic e . W r it e fo r in fo r m a tio n . L. B. F E R G U S O N & CO. C onservative In vestm en t S ecurities 209 South La Salle Street C hicago https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 42 C edar S treet N E W YORK Unknown and Missing Heirs— Searched for L a w y e r s , b a n k e r s a n d t r u s t o ffic e r s h a v e n o t t h e t im e , o r t h e f a c i l i t i e s fo r s e a r ch e s f o r a b s e n t h e ir s ; o w n ers o f d orm a n t b an k a ccou n ts, te r m in a t e d t r u s t b a l a n c e s , e t c . Our in t e r n a t io n a l o r g a n iz a t io n s p e c ia l i z e s in s e r v i c e o f t h i s c h a r a c t e r . W e a d v a n c e a ll e x p e n se s , e n g a g e le g a l s e r v ic e s w h e n r e q u ir e d an d c o o p e r a t e u p o n e t h ic a l lin e s w it h t r u s tees a n d le g a l r e p r e s e n t a tiv e s . B o o k le t re o u r w o r ld -w id e a c t iv i t ie s s e n t t o l a w y e r s , b a n k e r s a n d t r u s t o ffic e r s on r e q u e s t. W . C. C O X & C O M P A N Y F e d e r a l R e s e r v e B a n k B l d g ., C h i c a g o From New York is broadcast the news that former Lieutenant Osborne C. Wood, who accumulated half a million dollars or more in W all Street speculations conduct ed from the Philippines two or three years ago, has made $100,000 in Florida real estate. He is said to have lost his original winnings in European gambling resorts, and is now being extensively advertised as on the way back to larg’e prosperity. What may happen to Mr. W ood finan cially in the future is o f little concern to the public or to this column, but as an example fo r young men who are very keen to acquire wealth rapidly, it is worthy of note that he is again playing chances. That is no safe way for a man to build endur ing prosperity. There are unavoidable hazards in all business which may well be given entire and most careful thought. When men enter the field o f pure specula tion and gambling they are on shifting sands. The wealth o f the country and of individuals is solidly based only on indus trious production or service, in which p ro f its are small in the beginning, and thrift essential to enduring success. Thus far Mr. M ood has not publicly given any in dication o f entering the safe path to busi ness stability. There are in every city young business men who try to emulate men o f great re sources. They hear o f large deals and large profits made by them in various mar kets. They forget, or do not know, that their success is the result o f accurate knowledge o f market conditions, of supply and demand, o f earnings and o f resources. They are babes in the woods, straying among the wolves o f ignorance, avarice and speculation, and in the great majority o f instances are stripped to financial na kedness.— Chicago Journal o f Commerce. Opportunity for Young Men Great events o f the past quarter cen tury, which lead some young men to com plain that all the big things have been done, leaving no opportunity for them, as a matter o f fact only go to show that even greater opportunity today lies ahead o f them, F. N. Shepherd, executive man ager, American Bankers Association, re cently told the Bankers Forum o f the American Institute o f Banking o f New York. A fte r reviewing the outstanding accomplishments in science, industry and finance during the last twenty-five years, Mr. Shepherd emphasized the reward given men o f achievement in America, especially in the financial field. “ Do not imagine that all the great work has been done,” Mr. Shepherd said. “ The achievements o f the past are the groundwork fo r the opportuni ties o f today and tomorrow. There never was a time when so great were the po tentialities o f the individual. The world was never so ready and able to pay well fo r what it wants. F or superior service December, 1925 THE to society under competitive conditions, whether through invention or production or organization or distribution— no re ward is begrudged, particularly here in America. That a single individual in the period o f twenty years amasses without resentment a fortune o f six hundred mil lions o f dollars by manufacturing and distributing a useful article to five mil lion people shows the public does not be grudge paying well fo r being well served. ‘ ‘ Adding to human com fort and human needs, these things make life finer and better. The world has shared— but it is in America that they have reached their highest development and utilization. The American spirit o f useful enterprise, however, does not confine itself within our own borders. It permeates the en tire world and renders great service to peoples other than our own. “ Let us pass over A m erica’s service to humanity in the war and consider what is being done now. Largely to re build the economic life o f a world shat tered by the war and its devastating after-effects, America has, since the war, loaned other peoples over ten billion dol lars. Last year alone, a billion and a half in foreign financing was consummated in the United States. American financial genius has so far readjusted our banking machinery to meet enlarged international obligations that stupendous foreign loans, such as the $100,000,000 Dawes plan credit to Germany, are concluded and the books closed after being open to public subscription only a few min utes. “ Within our new-world viewpoints, we in America have many great things to do. England, stalwart among the greatest na tions in history, determined to place her economic system once more on a firm gold basis. To America she frankly said, ‘ I need your help.’ And, without hesita tion, we placed a $300,000,000 credit at her disposal, to help make sure that no embarrassment should harass Britain in her return to the gold standard. This is no small thing to do. It is typical o f the broadminded world viewpoint of American finance— it shows the vision necessary to the men who guide our busi ness affairs today. Certainly there is an inspiration in this and the great oppor tunities which await us. ’ ’ NORTHWESTERN 49 BANKER Joins Lee, Higginson Organization Everett L. Harris, after eight years with the Federal Reserve Bank o f Chi cago, has recently joined the organization o f Lee, Higginson & Company. Mr. Harris, through his connection with the Federal Reserve and his service on the special committee fo r analysis o f bank operations fo r the Illinois Bankers Asso ciation, has had an excellent opportunity to study the banker’s viewpoint with re lation to general bank operation and his experience will be very valuable in his present connection. one accomplishes in a given time, the shorter does the retrospect appear. PACKERS SECURITIES SPECIALISTS Information—Quotations 2 31 S O U T H LA S A L L E S T . CH ICA GO T E L E P H O N E C EN TR A L 6556 It is a characteristic o f old age to find the progress o f time accelerated. The less B RO KA W A N D 105 Sout h C O M P A N Y La Salle S t r e e t , C h i c a g o G eneral T rad in g D epartm ent Specializing in P acking H ou se, Canadian, E quipm ent T ru st and Pacific C oast Securities. Direct W ire to Edward B. Sm ith & Co. New Y ork • P h ila delph ia IO W A R EPR E SE N TA TIV E S: Edward J. K elly and M au rice F. Leahy To Take Agriculture Course The largest agricultural short course school fo r bankers ever conducted in the United States will get under way in Illi nois next August with enrolment privi leges extended to every banker in the Seventh Federal Reserve District. This announcement was made in con nection with the agricultural conference at the university, sponsored by the Illi nois Bankers Association. God grant us patience.— Shakespeare. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 50 THE NORTHWESTERN BANKER D ecem ber, 1925 The Economics of Public Utilities I N the promotion o f economic and social welfare,, and material wealth and well being in America during the last fifty or seventy-five years, probably the most important single factor has been the corpo ration, which is a comparatively recent de velopment. Seventy-five years ago it was practically unknown outside o f a few great public enterprises. But today all large businesses, most medium-sized businesses, and many small businesses have the cor porate form o f organization and owner ship ; in other words, are corporations. And, what is a corporation? A cor poration is simply a form o f association under which we— several o f us, a dozen o f us, a hundred or thousand o f us, as the case may be— associate ourselves fo r the same common business undertaking. This form o f organization— the corporation— may be likened to a great engine which draws or pumps together from hundreds o f thousands o f sources the savings or accumulations o f money o f hundreds o f thousands o f small savers and investors, and pumps it all into a common reservoir which is available fo r the undertaking of some common business enterprise. It con veys to each o f the investors the protection o f limited liability; it relieves each in- By Dr. Ralph E. Heilman Dean, School of Commerce, Northwestern University iiiiiiiiiiiiiiiiliiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiitiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiniiiii) The article on this page, based on an address recently delivered by Dr. Heil man, while not directly pertaining to the bond business, is one of the best concep tions of public utilities and their eco nomics that could possibly be worked out. It is well worth the serious study of every banker and bond dealer.— Editor’s Note. uiiimuiiiiiiiiiiiiiiiiiiiiiiiiiiitu111111111111muiiiminiiiitiutiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii miiiiiiiiiiiiiiiiiiiiiik vestor from participation in the manage ment o f the undertaking and insures each investor a fair share o f the profits. So important and far-reaching has been this form o f organization, so ramifying have been its results in the promotion o f human wealth, that one writer on econom ics has referred to it as “ the most impor tant economic invention which has sprung from the mind o f men.” It has become the basis o f our modern industrial and social system. Therefore, it is important that you keep these facts in mind when you hear poli ticians and demagogues arguing against corporations and all o f those interested in them, and consider if they are exercising an evil or pernicious influence upon Amer ican public life. Section o f cable, showing arrange ment o f wires N E W YORK. The W orld’s Longest Telephone Cable T H E N ew Y ork-C h icago telephone cable is n ow in service. It is 861 miles long and cost $25,000,000. It provides m ore than 250 telephone circuits, and more than 500 telegraph messages can be sent simultane ously with the telephone messages. This new cable is an important addition to the tele phone facilities o f the country ow ned by the Bell System, which include over 42,000,000 miles o f wires, 16,000,000 poles, 1,900 buildings, and station and central office equipment costing over $874,000,000. This n ation -w id e plant, with a book cost o f over $2,400,000,000, and its n ation -w ide service, underlie Bell System securities. The stock of the A. T. & T., parent company of the Bell System, can be bought in the open market to yield a good return. Write for information. ELL TELEPHONE ft, SECURITIES CO. he 195 D.F. Houston, President Broadway NEW YORK “ The People’s Messenger” https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A few months ago, one Sunday morning in Boston, I attended church and heard a noted divine. He criticized all corpora tions, and said, “ Imagine Abraham Lin coln, i f you can, as a corporation at torney !” Later, I met the divine. It hap pened that I had made a careful study o f documents o f the life o f Lincoln, and I told him that it required no stretch o f im agination to conceive o f Abraham Lincoln as a corporation attorney, for, as a matter o f fact, Lincoln represented two impor tant public utility corporations o f the state o f Illinois— the Rock Island Railroad Cor poration and the Illinois Central Railroad Corporation— before the Supreme Court o f Illinois and the Supreme Court o f the United States, and, apparently, neither he nor his constituency considered it a dis grace fo r him to have done so. All business corporations are o f two kinds— either private ones, engaged in manufacturing, wholesaling, retailing, etc., or public corporations, which supply our communities with light, heat, power, trans portation and communication. You are familiar with the private -corporations which supply you with food, clothing, furniture, etc. But public corporations are not engaged in supplying a commod ity : they furnish a personal service which is consumed and ivhich cannot be boxed, crated, shipped or stored. It is service December, 1925 T II E which is used up the moment it is deliv ered. This rendering o f service leads me to make an observation— public utility cor porations, by harnessing the powers o f na ture, by bringing them into our homes, by devising uses to which they may be put, have gone far to reduce the drudgery and burdens o f life and to raise the standard o f life’s comforts and conveniences to which the rank and file o f the population are accustomed. Of these two groups of businesses— public and private— we all recognize that it is desirable and justifiable that public businesses have a larger share o f govern mental regulation and control than private businesses, for they are natural monopo lies. Public businesses have received a special privilege or franchise which cannot be con ferred upon a private enterprise, and in recognition o f this, they have a larger share o f governmental regulation and con trol. Most o f the states have established special machinery fo r exercising this regu lation. In this state it is the Illinois Com merce Commission, a body vested with wide power o f regulation, control over rates, standards o f service, equipment fa cilities, finance and everything which per tains directly to the operation o f public utilities. Probably the most important phase of this regulation is the control o f rates, or price charged for services. I f I think that my grocer has over-charged me, I may transfer my patronage to another grocer. The state or municipality cannot tell my grocer what prices he shall charge, because this would be a violation and abridgment o f the fundamental right of freedom of contract which every person is guaranteed under our Constitution. When I am dis satisfied with my grocer my only alterna tive is to trade elsewhere. It is different with the public utilities. The state intervenes. The utilities com mission specifies in detail what may be charged fo r electric service, telephone serv ice, gas, electric railway fares, etc. In the public utility business there is no such thing as freedom o f contract with regard to rates or prices which may be charged. This differentiation is important, be cause it is one o f the chief distinctions be tween public and private businesses. The public business is responsible to the state commission and is regulated by it. ■A public utility is entitled to only a fair and reasonable rate o f return upon its property, the theory being that more than this would be unnecessary and that less would be confiscatory. There are just two things in regulation o f public utilities in which the customer is interested: one is a rate which he considers reasonable, and the other is good, reliable, satisfactory service. Here the state inter venes again and specifies in detail the serv ice which the public business must render. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis N O R T li W E S T E R N 51 BA N KER This is not true o f private businesses. Suppose you are engaged in the operation o f a hotel, restaurant or private boarding house. The state does not regulate the character o f service; does not tell yon when to change the table linen, nor the kind o f linen to use. But, if you are engaged in the operation o f a public business, the public, through its governmental instrument, specifies the character o f service you must render to your customers. The courts and the laws have built up this principle so that all who engage in a public business must fulfill a four-fold obligation. The first obligation placed upon a public business (but not upon a private one) is to provide adequate service, which means that the service, the facilities, the equip ment and property must be adequate to meet the demand upon the business. The second obligation is that the public utility must serve all customers. This, too, is not true o f a private enterprise. I f one of yon is engaged in the millinery business you may sell to whom you choose. I f you have an objectionable customer and do not like her race, nationality or relig ion, or fo r any caprice or fancy, you can refuse to sell. But this is not so with a public utility. It must serve all— all cus tomers who desire its service. The third obligation is. to serve without discrimination between users. I f I am en gaged in a private business— say the furni ture business— and you come into my store I can quote you one price, and when the next man enters my store I can quote him a lower price because he has more purchas ing power than you have. I do not have to sell the same thing at the same price, and the state cannot compel me to do so, ..t e Are your security holdings organized into an investment structure fitting the require ments o f your bank? rANY a bank’s bond holdings are thoroughly sound so far as the security values are con cerned and yet, an analysis made with regard to the bank’s requirements, might show a lack of thorough diversification, o f the right proportion of marketability, or of well distributed maturities. Often the taxable status may be improved. Another factor is the average yield, which is an especially important consideration in view o f the increasing cost o f bank operation. Very often there is opportunity to improve the yield o f a bank’s bond investments without weakening the security. The more a bond house knows about a bank’s bond hold ings, the character o f the business, local'conditions, and the like, the more helpful it can be. Without such knowledge it cannot give maximum service. Our aim is to make it definitely advantageous for a bank to become a client o f our house, rather than a casual purchaser o f its offerings. That establishes a relationship o f reciprocal, last ing benefit. You are invited to make a concrete test o f our service in connection with any bond investment problem, with out obligation. Our representative will call if you wish, or we wifi serve you capably through correspondence. J ;® iifisy ig « < ;! ! i:!!!1¡I'!::::1 jiffJjYSjs ti: ¡¡'•¡¡¡¡¡.«"¡di t e ¡¡‘"'¡¡¡jr:1 it *11»,»»•A.iil « "ii 1¡<"1, i«||Jf fall Send fo r this Bond Analysis Chart Ask fo r A nalysis Chart N B-Z5 HALSEY, T5 A N K S have a very o b v io u s need for so m e m ethod o f an alysis which will ou tlin e the structure o f their bon d h o ld in g s —sh o w how w ell they are balanced as to diversification, m aturities, etc. W e have prepared a chart based on the m ethod we fo llo w in m aking a com p lete analysis o f bon d h o ld in g s—which we d o periodically fo r m any banks and in stitu tion s. W e sh all be g la d to send a copy o f this chart to any bank u po n request, and w ith o u t o b lig atio n . Write to our nearest office STUART IN C O R P O R A T E D C H IC A G O N EW YO RK 201 So u th L a Salle St. 14 W all S t. S T . L O U IS 319 N o rth 4 th S t. P H I L A D E L P H IA 111 So u th 15 th St. BO STO N 82 D ev o n sh ire St. & CO. . D E T R O IT 601 G risw o ld St. M IL W A U K E E 425 East W ater S t. CLEVELA N D 925 Eu clid Ave. M IN N E A P O L IS 6 1 0 Secon d A v e., S. J '¡«¡¡' ¡¡«M d 'll' I Nil 1 THE 52 NORTHWESTERN BANKER SOUND BONDS FOR B A N K I N V E S T M E N T T he First National Com pany o f Iowa Hanford MacNider, President M ASON C IT Y Security Building Cedar Rapids Valley National Bank Building Des Moines 149 Broadw ay N E W Y O R K C IT Y A Nation-W ide Service For more than a century this Bank has constantly widened its facilities and extended its hanking connec tions. Beyond the mere question of growth, however, has been the tradition of an individual attention to the re quirements of its cor respondents. Correspondence cordially invited Resources Over a Quarter Billion Dollars https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D ecem ber, 1925 fo r it would violate my constitutional right o f freedom o f contract. Profes sional men— doctors, lawyers and others— are accustomed to regulate their charges in accordance with the wealth or payingability o f their clients. But, it is not so in a public utility business. It must serve all without discrimination; it cannot charge you one price and charge me a d if ferent p rice : it must serve all on precisely the same terms. A fair and reasonable price is the fourth obligation. The state has gone much far ther and specifies in detail just what the charge fo r utility services shall be through out a community. It has provided an open door fo r com plaints. I f any customer, any municipal government, any Chamber o f Commerce or any other group o f customers is dissat isfied with rates charged fo r utility serv ice, or with character or quality o f service rendered, he, or they, need but file a com plaint with the state commission which will find out if the complaint is wellfounded, and if so bring about a satisfac tory settlement. W e have seen what the state does. Every public business in Illinois is regulated by, or subject to the regulation o f utility com mission, which represents us in our rela tionships to these corporations. But the state goes much farther. It pre scribes, in detail, accounting procedure fo r all public businesses. I f I am in the shoe business, I can keep my accounts as I choose— perhaps I keep none at all. But, if I am in the public utility business, all records o f receipts and expenditures must be kept precisely as ordered by the state commission that it— the regulating body— may have a basis fo r intelligent regulation. The state even controls the issuance and sale o f all public utility securities—-stocks, bonds and other evidences o f indebtedness. I f you are engaged in a private business— say the manufacturing business— the state does not regulate issuance o f stock in your enterprise, except in a very general man ner. In the public utility business, before stocks, bonds, securities o f any kind can be offered for sale, the approval and sanc tion o f the state commission must be ob tained first. You will notice in newspapers that often when stocks, bonds or other securities are offered fo r sale by utility corporations, the advertisement will have a statement some thing like this: “ Authorized and approved by the Illinois Commerce Commission.” Before this approval is given, the Com merce Commission has conducted first a careful investigation to assure itself that the purposes fo r which the securities were to be issued, and the amount which would be offered, were legitimate and proper. The result o f this control has been to make a sort o f preferred type o f invest ment o f public utility securities, making it easier fo r these businesses to raise new capital on attractive terms. Although it December, 1925 THE NORTHWESTERN is true that the state’s sanction o f these securities does not guarantee the investor a return on them, it does convey the assur ance that these securities have been issued fo r a proper purpose and fo r only a proper amount, and that, in the opinion o f the Commission, there is a reasonable chance o f business success fo r the venture. What is the result? It has brought a great stimulus to the business, which is known as “ customer ownership” and which has fo r its purpose the widespread distri bution o f public utility securities among users o f public utility service in every hamlet, village, town and city. Conservative Securities Banks of the country avoid the devious way of immature counsel, when they look to us for information in all matters per taining to bonds. Conservatism is characteristic of our policy and insures dependable service. In Illinois alone the number o f owners o f local public utility securities— stocks and bonds— has increased to six hundred thousand individuals. You will agree with me that this move ment o f customer-ownership has a tre mendous significance— that it goes far to promote and encourage thrift, accumula tion and investment, and that it gives to customers a voice in the management o f the public utility corporation which serves them, and thus establishes a cordial and wholesome relation between the utilities and users o f their services. 53 BANKER BARTLETT & GORDON IN C O R P O R A T E D First National Bank Building CHICAGO J V Perils of American Society An Illinois dental association is propos ing sterilization o f morons to the end that society may be relieved o f a great burden. There must be better education before the mass o f loyal American citizens can appre ciate the dangers which cloud the future owing to immigration o f inferior peoples and their admission to full political rights. The dangerous stocks are most prolific, es pecially the feebleminded, while superior individuals, though not decreasing in number, are not keeping pace with in feriors. Dean Inge, noting fear in Amer ica o f the fecundity o f the Negro, warns us that we have more reason to be disturbed over the ultimate results o f our enormous inferior population from European immi gration. He declares that everywhere “ the tendency is fo r the superior stock to dwin dle,” and that “ Americans o f British descent are threatened with this fate.” He declares : “ Pride and a high standard o f living are not biological virtues. The man who needs and spends little is the ultimate inheritor o f the earth. I know o f no instance in history in which a ruling race has not ulti mately been ousted or absorbed by its sub jects.” Let us stop the breeding o f morons, but not forget the danger o f the admission of inferior peoples to citizenship. W e must educate or perish.— From Chicago Journal M G ift to T ourself That Means C om fort fo r A ll T im e” Such a statement to a client who places his saving's into R eal Estate w ou ld be g u id in g him w ell w hen advising him to secure his investm ents by Title Insurance the m odern trouble, time, and loss saver. T oo, it is a g ift fo r the fa m ily or estate as title insurance protects fo re v e r. Let a representative o f the Southern Surety Company call and fully explain Title Insurance to your clients. Send for our literature. TITLE DEPARTMENT SOUTH ERN o f Commerce. Oratory may be symbolized by a war rior’s eye, flashing from under a philoso pher’s brow. But why a warrior’s eye rather than a poet’s? Because in oratory the will must predominate.-—Hare. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SURETY COMPANY 201 Y O U N G E R M A N BUILD IN G N ___________ DES MOINES, IOWA___________ C n ____ r 54 TH E N O R T H AV E S T E R N B A N K E R Iowa Farm M ortgage Section Officers Iowa Farm Mortgage Association P r e s id e n t ......................H . I. F o s k e t t S henandoah V i c e P r e s i d e n t ...............F r e d F i s h e r C e d a r R a p id s S e c r e t a r y ..................I n g r a m B i x l e r C e d a r R a p id s T r e a s u r e r .................R a y m o n d T i t u s M u s ca tin e IN G R A M B IX L E R H . I. F O S K E T T S ecreta ry P r e s id e n t The Northwestern Banker is the official publication of the Iowa Farm Mortgage Association. How Bankers Can Best Help Agriculture By Frank Lowden Ex-Governor of Illinois From November “ Banker-Farmer” T HE banker, by the confidence he usually enjoys in the community and by his intimate contact with the business o f his customers, can wield a mighty influence upon the agriculture of the country, which may be the determin ing factor in the struggle which agricul ture is now making to maintain itself. For though farm conditions are somewhat better than they have been in recent years, they by no means assure the future of that great industry. The farm problem is not solved. It will be 'well for us if we recognize this fact. In the Monthly Supplement, “ Crops and Markets,” for July, published by the Department o f Agriculture, appears the statement that the farmer’s net income for the year 1924-1925 had increased somewhat over the preceding few years. This has been heralded as p ro o f that the situation upon the farm was righting it self. Nothing could be farther from the truth. As the Department points out, this increased income nets the farmers but 3.6 per cent upon his capital invest ment, after a wage allowance for the farmer’s labor which is less than common labor receives in industry. And this does not allow for depreciation and depletion. I f these were deducted, as they well might, the farmer’s returns upon his investment must almost have disappeared. It is true that this is an improvement over the preceding four years, when the highest net return was 1.7 per cent and the lowest a loss o f over 5 per cent. But it would hardly be regarded as an evi dence o f health in any other industry. And this increase, the Department says, is due almost wholly to the higher grain and meat animal prices, particularly of wheat and hogs. The high price o f wheat https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis was the result largely o f a short crop in other wheat producing countries, and the high price o f hogs was caused in part, at least, by our own inferior corn crop of the year. AVhen the prosperity o f the American farmer depends upon the failure of a crop either at home or abroad it hangs by a very slender thread. Other figures in the same report show a continuous decrease in the farmer’s capital over a period o f five years. In 1919-1920, it is stated, the farmers’ com bined capital was $47,000,000,000, which continued to shrink until last year it was about $32,000,000,000. This decline in values is startling enough in itself. But if all o f the property o f the six and a half million farmers o f America was capitalized upon the basis o f the earn ings o f the United States Steel Corpora tion, for instance, one o f the ablest man aged as well as the largest corporation in the world, the $32,000,000,000 would further shrink to about $12,000,000,000. Another error we are likely to fall into is to assume that agriculture was receiv ing very large rewards in the years be fore the war. It is true that from the beginning o f this century till the out break o f the world war agriculture in America enjoyed a prosperity greater than in preceding years, due largely to increased land values. However, the ac tual returns on the current values o f the farms did not exceed 3 per cent. Also, the public has grossly overestimated the returns to the farmers even during war times and immediately after. In 19191920, a peak year in farm profits, the rate earned on the farmer’s net capital was but 6.1 per cent, according to the Department o f Commerce, while upon the capital borrowed, in the form o f mortgage and other indebtedness, he paid 6.7 per cent. That is to say, in a D ecem ber, 1925 year o f great prosperity the farmer ac tually earned upon his own capital less than he paid for such capital as he had borrowed. AVe hear much these days o f the ineffi ciency o f the American farmer. How far this is from the truth let the figures attest. The Year Book o f the United States Department o f Agriculture for 1921 is authority fo r the statement that in America are found less than 4 per cent o f the farmers and farm laborers o f the world. And yet the American farmers produce nearly 70 per cent of the world’s corn, 60 per cent o f the world’s cotton, 50 per cent o f the world’s tobacco, 25 per cent o f the world’s oats and hay, 20 per cent o f the world’s wheat and flaxseed, 13 per cent o f the world’s barley, and 7 per cent o f the world’s p o tatoes. The average production o f cere als per person engaged in agriculture in the United States is 12 tons, while for the rest o f the world it is about 1.4 tons. This has largely been possible by what we call commercializing agriculture, and this in turn has made possible the phe nomenal industrial growth o f our coun try. It is clear that without commercial ized agriculture, the whole mighty fabric o f our industrial and national life would fall. In the simpler age, cost of production did not concern the farmer much. AVhen he produced enough to feed and clothe his family, he had accomplished his main purpose. Today the farmer is a business man bound by the laws which operate in other business fields. He is a producer no longer fo r himself mainly, but to sup ply the needs o f this industrial age. The surplus which he produces is now the im portant thing. Cost o f production, there fore, has become as vital a question with the farmer as with the manufacturer. And yet when he complains that he is not receiving the cost of production for the things he sells he is derided by the economist and told by the business world that cost o f production has noth ing to do with the prices o f farm prod ucts, but only the law o f supply and de mand. It must be conceded, though, that no one, farmer or manufacturer, can go on producing indefinitely in this com mercial world at less than cost o f produc tion. Does it not follow that some way must be found, if we are to insure future adequate supply o f food and clothing, by which the producers o f these prime neces sities o f life must secure at least the cost to them o f producing those necessities? Under present conditions we have this anomaly : the farmer is not nearly so likely to suffer from a short crop as from a bumper crop. As Professors Ely and Morehouse say, “ A general good season may bring a bumper crop, a fact that is heralded by the metropolitan press as a sign o f the prosperity o f the farmer and o f the nation. As a matter o f fact, a December, 1925 THE bumper crop usually brings ruinously low prices.” Two years ago there was a bumper crop o f corn. As a result, the price de clined so low that it was cheaper in some parts o f the Dakotas and Nebraska, and even Iowa, to burn corn fo r fuel rather than to buy coal. Last year, owing to a cold wet summer, the corn crop was small in yield and inferior in quality. The government estimated the crop at 20 per cent less than the bumper crop of the year before. As a result, according to the government’s figures, the smaller crop o f defective corn was worth more in the market by $350,000,000 than the crop o f the year before. The cold, wet summer which so seriously injured the corn crop was very favorable for the growth o f grass in the pastures, and so dairy products slightly increased as com pared with the year before. This increase resulted in the dairy farmers receiving many million dollars less fo r their prod uct than they had received the previous year. And yet, during this whole period there was not a sufficient surplus o f dairy products on hand at any one time to supply the needs o f the people o f the United States fo r a single month. It is often urged that the farmer should avoid producing a surplus and should limit his production to the actual needs o f the current year. This cannot be done with any assurance o f a suffi cient supply fo r future years. The farmer cannot know in advance whether there will be too much or too little heat, and if he attempted always to produce .just enough to meet the demand, there would be years in which our people would go hungry or import their food. If, therefore, we would be a self-sufficing nation, we must at times produce a sur plus o f the staple crops. This is fo r the common good. Under existing condi tions, however, as I have pointed out, this surplus becomes a heavy burden to the farmer. Some economists see nothing illogical or evil in such a situation. They say that it is an inevitable result— the result o f the law o f supply and demand. I cannot quite accede to this proposition. It answers itself. For, under that law, if the world will pay a larger price for ten bushels o f wheat than it will pay for fifteen, it must be because it prefers ten bushels to fifteen, and the supply, there fore, will adjust itself to that demand. This means a constantly increasing cost to the consumer. I find comfort in the view o f Professor Tubwell, o f Columbia University, who says: “ As time goes on the fallacy o f assum ing the universal validity o f economic law becomes more and more plain; and especially when the concept economic law is taken to mean some inescapable trend o f development. The most useful result (Continued on page 89) https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NORTHWESTERN 55 BANKER BONDS INSURED against LOSS o f both INTEREST AND PRINCIPAL the same as your home and household goods are insured against loss by Fire and Lightning. HIGH CLASS REAL ESTATE INSURED BONDS LeCLERE & C O M P A N Y 428 Granby Bldg. Cedar Rapids :: Iowa “ BONDS T H A T NEVER LO ST A D O L L A R ” For M arch C lo s i n g s The Stanley-Henderson Company has a large amount of money available for loans for March first closings, at this time. The lowest possible rate prevails, terms and options can be arranged most liberally. Excellent and prompt service is the foundation upon which the Stanley-Henderson Company has built such a large busi ness in Iowa. Stanley-H enderson Com pany Farm Mortgage Bankers 2 0 7 -2 1 4 H igley B ldg. Cedar R apids, Iowa 5% F a r m L o a n s 5% R E F IN A N C E Y O U R LO A N S N O W W H IL E R A TE S A R E C H EA P W E A L S O M A K E C I T Y L O A N S IN D ES M O IN E S D A V E N P O R T , C E D A R R A P ID S , IO W A C I T Y C L IN T O N , B U R L IN G T O N M id l a n d M o r t g a g e C o m p a n y D E S M O IN E S O F F IC E 555 SEVE N TH ST R E E T DES M O IN E S, IOW A 220 T H I R D AVE. C E D A R R A P ID S , IO W A F. C . W A P L E S P r e s id e n t C L I F F O R D D E P U Y , V ic e P r e s i d e n t R . S S I N C L A I R , , V ic e P r e s i d e n t I N G R A M B I X L E R , V ice P r e s id e n t CENTRAL IO W A O F F IC E CARROLL IO W A R . J . S O E N E R S ecretary T reasurer R U S S E L L D . C O L E A S S IS T A N T S E C Y . R . H . M E M E l E R , A S S IS T A N T S E C Y . P . T . W A P L E S , M g r . W e s t e r n O f f ic e 56 THE Classifies Club Members A survey made by the Northwestern Mutual L ife o f the agency club year end ing July 1st, reveals some interesting facts. It gives the follow ing as a result o f the survey: “ Classifying all agents who paid fo r $25,000 or more o f insurance, it was dis covered that 52.36 per cent o f the num ber o f agents fell in classes paying fo r $100,000 or more o f insurance, while 37.10 per cent were in classes paying fo r $150,000 and over. “ It is equally significant that the re spective percentages o f total lives upon whom insurance was placed by agents o f the various classes reveal a marked inconsistency with the percentages o f agents in the groups. F or example, in the $250,000 to $500,000 class, 14.10 per cent o f the total agents paid fo r business on 23.46 per cent o f the total lives. “ The percentages o f the total amount paid fo r by the respective classes indi cate a further lack o f agreement with numbers and lives. F or example, in the $250,000 to $500,000 class, 14.10 per cent o f the total agents paid fo r 29.80 per cent o f the total insurance and 23.46 per cent o f the total lives. ‘ ‘ The large table herewith indicates these comparative percentages by classi fied groups. Perhaps a better way to show the meaning o f these percentages, NORTHWESTERN BANKER and at the same time enable each agent to compare his own record with the aver age fo r his group, is to list the average amounts fo r each life paid fo r by the classes o f agents. The table is : Class o f $ 1,0 00 ,0 0 0 500 .00 0 250 .00 0 1 50.000 100 .00 0 50.000 25.000 P er Cent of T otal A gents A gents and ov e r........................ 58 to $ 1 ,0 0 0 ,0 0 0 .... 3.45 to 5 00 ,00 0 .... 14.10 to 2 5 0 ,0 0 0 .... 18.97 to . 1 50 ,00 0 .... 15.26 to 1 00 ,00 0 .... 26.65 to 5 0,0 00 .... 20.99 Per P er cent Cent of of T otal T otal L ives A m t. 1.46 5.01 6.90 13.64 23.46 29.80 25.21 22.54 15.8 7 12.03 18.63 12.15 8.47 4.83 100.00 100.00 100.00 Class o f $ 1,000,000 500.000 250.000 150.000 100 .00 0 50.000 25.000 A ver. A m t. F or A gents E ach L ife and o v e r...... ....................................$18,448 to $ 1,0 0 0 ,0 0 0 ................................. 10,632 to 5 00 ,00 0 ................................. 6,831 to 2 50 ,00 0 ...... 4,809 4,078 to 1 5 0 ,0 0 0 ................................. to 1 0 0 ,0 0 0 ............... 3,505 to 5 0 ,0 0 0 ................................. 3,068 “ I f your own record shows that, in order to qualify fo r your class, you had to pay fo r twice as many lives— that is, half as much average amount fo r each life— as the agents o f your group, you are not selling large enough policies The $1,000 policy o f yesterday is scarcely equal to the $2,000 policy o f today; where a $2,000 policy sufficed formerly, now takes $4,000. “ An agent came into our office re cently and said that he rarely prepaid a case, and that it was a set habit with him not to do so. He did not mention December, 1925 the extra effort, the numerous ‘ second’ sales efforts with the prospects to whom he had to deliver those policies. He also did not mention his percentage o f not taken business. W atch your habits. Get settlement, and don ’t sell $5,000 where $10,000 is the proper amount.” W hy Sales Are Increasing L ife insurance sales continue to grow, among the contributing factors to this growth are the follow ing: New forms of insurance, such as substand ard and group, which make an increasing population acceptable risks. The growth of urban population and the increased proportion of the population work ing for wages or salaries, which has com pelled a vast number to provide for the future of their families through life insurance. Such persons, if they had remained on the farm, as their ancestors had, would have less worry over the dependency of their families, as they would be able to care for themselves. The broadening of the life insurance field for business, charitable, and other purposes aside from personal protection. The growth of the number of companies, and their wide distribution over the entire country. The increase of wealth and purchasing power. The entrance of women into business. Oratory is the power o f beating down your adversary’s arguments, and putting better in their place.— Johnson. C O N F ID E N C E p K ccS ? m m ñi “ff ü t S s s s . ¡Buiul :eBPG*ECi£CC EÉECCEEEE HKfi ISSEE n Fastest Growing Company in the Mississippi Valley W . K . W H IT F IE L D P resid en t p V LRY International Life man, is a confiJ dent salesman. He knows that he is sell ing the best life insurance coverage, and he is confident that he can fit the case with one of the many contracts with which the Interna tional Life has equipped him. I Confidence means much in selling. It means the difference between success and failure. Another “ W h y ” of International Life Success D A V ID W . H I L L V ice P resid en t W . F. G R A N TG E S V ic e P resid en t and General M anager A gents International Life Insurance Co. ST. LOUIS, MISSOURI https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Decem ber, 1925 T HE NOE T H W E S T E R N BANKER 57 IN SU RAN CE SECTION A Banker's V ie w of Life Insurance B E L IE V IN G firmly that bankers owe it to their institutions to see that their customers carry suitable life insur ance, the Marshall & Illsley Bank of Mil waukee, recently staged a broad adver tising campaign embracing home owner ship, life insurance and Savings accounts. Joseph C. Moser, assistant cashier o f the bank, described the plan at a meeting o f the Milwaukee L ife Underwriters A s sociation, in part as fo llo w s : “ A series o f newspaper ads was pre pared to interest the public in life in surance. These insurance ads were in serted in the Milwaukee newspapers each month. The ads were in reality selling talks. Not until the closing par agraph was the bank brought into the ad. 11A fter the ads had appeared they were reproduced and mailed to the licensed life solicitors in Milwaukee with a let ter explaining our plan. Many insur ance men complimented us fo r adver tising their business, opening accounts to show their appreciation. They usu ally carried with them copies o f our ads to show to prospective purchasers o f life insurance. “ The advertising value o f this plan was felt by the bank through the many new accounts opened because o f the mis sionary work o f the insurance solicitors. A fter six ads had appeared the series was printed on a sheet and mailed to all insurance solicitors in Milwaukee as well as to all the banks in the state. The banks were given permission to use any or all o f the material if they so desired. Banks in a number o f cities follow ed the plan. Racine did so on a large scale. “ A fter about 15 ads had appeared, a booklet was published showing the ads in miniature form. This booklet, printed in pocket size, was mailed to the insurance solicitors and to the home offices o f the companies. “ The insurance companies also in serted ads in the newspapers reproducing our copy as a part o f their advertise ments. One fu ll page ad o f an insurance company was headed “ W hat Milwau k ee’s Oldest Bankers Say About L ife Insurance,” and then quoted one o f our ads. “ Although the campaign to promote the sale o f life insurance was started over five years ago, interest is still evidenced in our life insurance ads, which appear from time to time in the Milwaukee newspapers. W e have spent approxi mately $10,000 on insurance advertising and we believe it is money well spent. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis iimiiiiimiMiiimiiiMiiiiiiiiiiiiimiimiiiuiiiiiiiiiiiiiiiiiiiiiiiiiiMiitiiiiiiiiiiiiiiiiiiiiiiitiiiiiiiiiiiiiiiiiiiiiiiiHiiiHH W HAT LIFE INSURANCE MEANS TO PEOPLE Life insurance improves the mental and moral condition in the material cir cumstances of any citizen. It raises the condition of the com munity. It teaches thrift. It fosters good habits. It improves health. It increases credit. It creates an estate. It lengthens life. It comforts old age. It pays off the mortgage. It provides for dependents. It educates children. It keeps the family together. — Joseph C. Moser. ............. “ The insurance man now approaches his prospect with a definite savings plan in mind and points out to him how easy it is to provide fo r the premiums through the savings o f small sums. He advocates a savings account in the bank— quite naturally the bank that is recommending to the public the great value and need o f adequate life insur ance. “ Banking and insurance are continu ally drawing closer together, and plans similar to ours are being used in many sections o f this country. “ A ny agency which improves the men tal or moral conditions or material cir cumstances o f any citizen, raises the condition o f the community o f which he is a member, and thus benefits the community. One such agency is life insurance. It teaches thrift. It fosters good habits. It improves health. It in creases credit. It creates an estate. It lengthens life. It comforts old age. It pays off the mortgage. It provides fo r dependents. It educates children. It keeps the fam ily together. “ N o m a n ev er sig n e d an a p p lic a tio n f o r in su ra n ce o r p a id a p re m iu m w h o d id n o t fe e l an in cre a s e in s e lf-r e s p e c t, w h ose a ffe ctio n f o r h is f a m ily an d th e g o o d in h im w ere n o t s tim u la ted . T h e m ora l e ffe ct o f b e in g in su red , Avith th e co n fi d en ce a n d c e r t a in t y th a t it b rin g s , is w o rth m o re th a n th e in su ra n ce costs. O ne o f th e g re a te st e n d orsem en ts o f lif e in su ra n ce is th e ch a ra cte r o f th e p e o p le Avho p a tr o n iz e it. I n q u ir y w ill shoAV th a t m o st s u c c e s s fu l m en are g o o d p a tro n s o f lif e in su ra n ce. “ Insurance is protection. When Ave c o n s id e r th a t th e first d o m in a n t im p u lse o f a ll li f e is th a t o f p r o te c t io n , it seem s s tra n g e th a t in su ra n c e s h o u ld haATe b een so lo n g p o s tp o n e d in its d e v e lo p m e n t. “ T h e m o st s tr ik in g in sta n ce in th e w o rld ’ s h istory o f the im p o rta n ce o f life in su ra n ce Avas w h en th e U n ite d S ta tes g o v e r n m e n t Avas r e a d y to in su re e v e ry e n lis te d m a n f o r an a m o u n t n o t e x c e e d T h is act in in g $10,000 on each life . d ic a te d th e g o v e r n m e n t’ s o p in io n o f th e m in im u m Avortli o f a li f e in o u r co u n tr y , a nd I Avill deduce th e re fro m th at the g o v e r n m e n t in te n d e d to s a y th a t n o m an Avith d ep e n d e n ts s h o u ld c a r r y less th an $10,000 o f li f e in su ra n ce . ‘ ‘ T h ere is a n o th e r fe a t u r e o f li f e in s u r ance aside fr o m d u ty to Avife a n d ch il d ren , on e th a t b rin g s b a n k in g a n d li f e in su ra n ce in to clo s e re la tio n s h ip , an d th a t is, th e credit, ben efits o f lif e in s u r a n ce. N o b a n k e r Avould c o n s id e r a lo a n based on m erch an dise Avithout a ssu rin g h im s e lf th a t it Avas a m p ly p r o te c t e d b y fire in su ra n ce, in m a n y ca ses r e q u irin g th a t th e p o lic y b e m a d e p a y a b le to the ban k. LikeAvise to d a y m o re a n d m ore b a n k ers in p a s s in g on lo a n s a re ta k in g in to co n s id e r a tio n th e a m o u n t a n d c h a r a cte r o f th e borroAVer’ s li f e in su ra n ce. In fa c t , m o st fin a n cia l sta te m e n t b la n k s ca rry the q uestion, “ H o w m u ch lif e in su ra n ce d o y o u c a r r y a n d to w h o m is it p a y a b le .” N o t th a t th e b a n k is lo o k in g to th e li f e in su ra n ce p o li c y f o r th e p a y m ent o f the debt, b u t th e r e p ly gives v a lu a b le s id e lig h t o n th e ch a r a c te r o f the b o r r o w e r . T h e q u a lity o f m in d Avhich in d u ces m en to ta k e o u t lif e in su ra n ce is th e q u a lity o f m in d th a t b e st in su res su ccess in b u sin ess. “ I t is v e r y stra n g e th a t m en sh ou ld be c a r e fu l to in su re th e ir h om es, th e ir fa c t o r ie s , th e ir m e rch a n d ise , a n d y e t n e g le ct to in su re th e ir liv e s , su re ly th e m ost im p o rta n t o f all to th eir fa m ilies an d to th e ir b u sin ess, a nd m o re s u b je c t to loss. “ B u sin ess in su ra n ce is a p r o d u c t o f th e g r o w th o f A m e r ic a n in d u strie s w h ich p la ce s a m o n e y v a lu e on a m a n ’ s a b ility . C o rp o ra tio n s a n d p a rtn e r s h ip s h av e an in su ra b le in te re s t in th e liv e s o f th ose Avho are re s p o n s ib le f o r th e s u c c e s s fu l m a n a gem en t o f th e ir a ffa irs, th ose m en o f cr e a tiv e gen u is o r e x e cu tiv e a b ility w h ose d ea th Avould r e p re se n t an a ctu a l fin a n cia l lo s s to th e co n ce rn a n d w h ose p la ce s it Avould ta k e tim e a n d tr a in in g to fill. L i f e in su ra n ce is as e sse n tia l to th e c r e d it o f an in s titu tio n as is fire in su ra n ce. 58 TH E ‘ ‘ When a valued member o f a concern dies, all he knows o f the business dies with him and is an absolute loss, unless protected by business insurance. The success o f many firms rests largely on the life and health o f one man. In granting credit the bank feels much more secure, and considers loans more favorable if the strong man in the busi ness is insured for the benefit o f the business. Is it any wonder that the statements which are furnished to banks by those who wish to borrow should contain information as to the amount of insurance carried and to whom it is payable? The banker o f today not only inquires regarding the amount o f life N O R T II W E S T E R N B A N K E R insurance being carried, but at times demands it in protection o f credit ex tended. ‘ ‘ The business o f the world today is dependent almost entirely upon the maintenance o f credit relations among men. A ccording to statistics, about 92i/2% o f the business o f this country is done on credit. This will give you a fair idea o f the value o f credit. Credit is based on the four C ’s— character, ca pacity, capital and collateral. When wealth comes, character and capacity ceases to support credit— capital and col lateral alone remain. Is it not simply prudence and forethought to strengthen capital and collateral by availing o n e ’s Decem ber, 1925 self o f the protection that life insurance offers and placing an adequate amount o f insurance on the life o f the man who in a large measure is responsible for the success o f the business? Business in surance on the life of such a person is indemnity insurance. “ W ith the heavy burdens of taxation which today prevail, the man who with life insurance protects his estate from the severe drain o f inheritance taxes shows prudence and forethought, quali ties that strengthen his credit and com mend him to his banker. “ Elihu Root made the follow ing state ment : “ ‘ I have come to the distinct conchision that by far the best and indeed al most the only practical way o f guarding against the possible ruinous loss o f a forced sale o f securities for the pur pose o f paying the various estate and in heritance taxes Avhich are being imposed nowadays, both by the national and states’ governments, is by means o f life insurance, which, fo r a moderate annual payment, will insure the sum necessary to pay such taxes without the sacrifice o f the securities.’ “ Here is sound advice from a man who had had a large field o f experience to draw from. ^ “ It is surprising how the business world gradually adapts itself to changes in forms and practices. Many remember the time, not so many years ago, when the borrower was first asked to make a financial statement. In many cases he felt insulted. This condition has changed and the borrower now expects to make a financial statement fo r he knows that intelligent credit giving must be based on actual knowledge. Banks are quasipublic institutions and the bank exam iners, be they state, national or federal reserve examiners, demand statements o f the large borrowers in the course of their examinations, and the banker must ju stify the loans, which the bank has made. W ithout the customer’s finan cial statements this would be impossible. “ Not only is the banker getting finan cial statements signed by those who regularly borrow, but the practice of presenting to the banker a statement prepared by a certified public accountant which gives an unprejudiced and disin terested opinion o f the standing o f the credit seeker is growing very rapidly. “ Business life insurance is becoming more and more a recognized factor in the stability o f credit, and the perpetuation o f business, and I firmly believe that before very long it will become as common to carry insurance on the life o f the head o f the firm or the partners in the business to protect the business, as it now is to insure on e’s self for the benefit o f the dependent family. ’ ’ https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Decem ber, 1925 THE NORTHWESTERN over the entire working period o f life, is the surest and most business-like method fo r amortizing the natural depreciation o f the human life value. Insurance and Savings By Dr. S. S. Huebner Professor of Insurance and Commerce, Wharton School of Finance, University of Pennsylvania F ROM all economic standpoint, the home should be organized and oper ated in accordance with business prin ciples. Just like any other business enter prise, it should be safeguarded against fi nancial impairment or bankruptcy through the loss o f the source o f the current earn ing capacity. • From an economic stand point, the family is a business partner ship, and the principles now so generally applied to the organization o f business enterprises are equally applicable to the family relationship. To permit the starting o f the family partnership, the cornerstone o f society, when the only con tributed capital is the personal ability, good will and current earning capacity o f the bread winner, is little short o f a crime unless adequate provision has been made for a guaranteed potential estate through the medium o f life insurance. Moreover, when the family voyage is under way, it needs to be protected against the shortcomings o f its pilot, whose efforts at accumulation through saving are usually little more than resolu tions easily defeated by the temptations to live well in the present and to forget the financial responsibilities o f the future. When starting the family business, the potential estate is the vital thing and ade quate life insurance must come in for first consideration, before savings are placed in any of the other customary channels o f investments. Every family needs to be budgeted just like any other business enterprise. An examination o f numerous family budgets shows that insurance and sav ings are almost invariably set under separate items. F or the overwhelming mass o f families these two items ought to be combined under the one heading o f life insurance, since it represents a judicious combination o f protection with saving and investment. For the great majority o f families— the 98 per cent—• life insurance should be the only method o f saving and investment during the formative years o f pecuniary develop ment. It enables the family head to avoid the dangers that are so apt to defeat his resolution to save on the one hand, and his efforts to keep safely invested that which he may have succeeded in saving. A well ordered family budget should recognize the use o f the sinking fund method with respect to future financial obligations which depend upon the con tinued life o f the family head. Many o f the most important family obligations re late to the future and the present should be utilized by accumulating systematic ally out o f current income, just as is https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 59 BANKER Strudell to St. Louis done in business enterprises, the fund necessary to meet the particular future obligation at its due date. With respect to such obligations, mention should be made especially of the adequate educa tion o f the children, the creation o f an emergency fund against the contingency o f unemployment or serious illness o f the family head during the working period o f life, and the accumulation o f an ade quate fund fo r old age support. Insur ance against the hazard o f premature death only is not sufficient. Protection against old age dependency is also essen tial. High premium life insurance, with its accumulating sinking fund extending Fred D. Strudell, vice president o f the American L ife Reinsurance Company, Dallas, Texas, has moved from Dallas to St. Louis but remains actuary o f his present company. St. Louis is the home o f the parents o f both Mr. and Mrs. Strudell. Mr. Strudell will engage in consulting actuarial work in his new office in 216 International Life Bldg., St. Louis. Why, now I see there’s mettle in thee, and even, from this instant, do build on thee a better opinion than ever before.— Shakespeare. The Royal Union Life Insurance Company Des Moines, Iowa S tr o n g and P ro g ressiv e I Paid to Policyholders— Over $19,000,000.00 Insurance in Force— Over $138,000,000.00 I A. C. Tucker, President D. C. Costello, Secy. W m . Koch, Vice Pres. 60 TH E N O R T H W E S T E R N B A N K E R Getting Casualty Business by Direct Mail B A N K E R agents, many o f them, are building up large clienteles through the use o f direct-mail letters, to aug ment personal salesmanship. “ What kind o f letters will help my business?” is the question they frequently ask. C. M. Durham, secretary o f the John ston Abstract and Loan Company, o f Claremore, Oklahoma, sends in a number o f original letters that have proved beneficial to his agency and a half dozen o f them are as follows : The Menace of Fire “ Dear S ir:— Fire, when controlled, is the most useful servant o f mankind, when uncontrolled becomes the greatest menace. “ Do not think that you only have to become perfect in the care o f your prop erty to avoid fire. The fire may start next door— or in the next block— or some greater distance away, and the uncon trollable natural elements are always to be feared. “ Safe at home. Are you? A man’s TheDesMoines LlFEW taN U lrf GompanV ' The Company of Co- operation ’ Planning Ahead The man with initiative, the man who plans ahead and does things while others are thinking o f them, is the man who makes the biggest success in the Life Insurance world. That is just what Des Moines Life and Annuity Cooperation is doing for its banker agents, and will gladly do for you. It would help you analyze your field and determine its possibilities and then assist in the plans for producing business. Such is the kind o f service we render will ingly and gladly to all o f our banker agents. J. J. SHAMBAUGH, President Decem ber, 1925 home may be his castle, but if his moat is dry and his drawbridge won’t work, he is at the mercy o f his enemies. “ The enemies o f the modern home and castle are fire, windstorm, burglars, ex plosion— the moat and drawbridge are insurance and more insurance. “ Is your moat full and your draw bridge working? “ W e offer you ‘insurance that insures.’ Call on us or phone 80. “ Yours very truly, “ M oore & D u r h a m , Agents.” Stopping “ Old Man Tornado’ ’ “ Dear S ir:— You cannot seal up your home in a jar nor lock it in a safety de posit vault. All the chemical apparatus in the world can’t stop ‘ Old Man Tornado’ when he goes on a tear. “ About all a fellow can do is to grab the wife, the kids and the Sears, Roebuck catalog, beat it fo r the cellar and thank the Lord everything is covered with a good reliable windstorm policy. “ I f your property is worth insuring for fire, then it’s worth just as much if de stroyed by wind. About the only thing you can collect after a tornado, is your insurance. “ I f you are not protected, call us. Our number is 80. “ Yours truly, “ M oore & D u r h a m , Agents.” The Unfortunate 95 Per Cent “ Dear S ir:— Did you have any friends in the big storm in Illinois? I did. Illi nois has been fortunate in having such few tornadoes. The ‘old-timers’ around Benton often said Illinois was immune. “ Men can prevent fires and accidents by being careful, but no amount o f pre caution has any effect on a tornado. “ In every case Avhere a city has been destroyed or seriously damaged by a tornado, it developed that 95 per cent of the property was uninsured. “ Are you among those who may be a part o f the unfortunate 95 per cent? I f so, let us show you that your property can be insured at a very small cost. “ Call us at 80, we’ve got the figures. “ Yours truly, “ M oore & D u r h a m , Agents.” No Place Tornado-Proof! O IN E S L IF E AND A n n u it y Co m p a n y © ES MOINES https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis “ Dear S ir:— A windstorm is like a con flagration or a flood. It is a sweeping destroyer, affecting a whole community. There is no way o f stopping it, no way o f fighting it. Fire hazards can be re duced— fire fighting is a science. But with a tornado— well, you have to let it have its own way. “ A tornado could demolish your home in a few seconds— the savings o f a life time, perhaps, gone while you look on, helpless. The cost o f protection from the ‘wind demon’ is so low as to be al- TH E D ecem ber, 1925 N O R T H W E S T E R N 61 B A N K E R most negligible. You will be surprised, when you learn the rate fo r windstorm insurance. “ The tornado forming south o f Claremore Saturday, is evidence that we are not Tornado-proof.’ W e were fortunate, indeed. “ W e will be glad to give you further information about this valuable insur ance. Call us. Our number is 80. “ Yours truly, M oore & D u r h a m , Agents.” Auto Insurance Essential This Is a Good Company “ Dear S ir :— The average car owner feels reasonably safe in spite o f the dan gers surrounding him. Its officers are all experienced men in Life Insurance and its technicalities. “ He considers himself careful and thinks that he is more or less immune from serious accidents. But is he? The fact is, no one is immune, but everyone can protect himself from financial loss. They know how to help yon realize greater profit from your Bank’s Insurance Depart ment. Buy Life Insurance from a Good Company Sell Life Insurance for a Good Company “ A t home or on the road, automobile insurance is indispensable. Every motor ist needs insurance before venturing on a drive. Automobile liability, property damage and collision insurance takes the sting out o f accidents. “ Let us show you how to save time and trouble by obtaining all your insur ance protection from one dependable source. “ Yours very truly, M oore & D u r h a m , Agents.” TOM M. A. NATION, President UNIVERSAL LIFE INSURANCE D U B U Q U E SAW YER WAS CO. IO W A D IS A P P O IN T E D OM SAWYER was greatly disappointed when he got his first glimpse of the famous Senator Benton— because he had expected to see a man at least T twenty-five feet high. Tom felt cheated. To build a reputation an insurance company must give real service to start with— to maintain it, a company must constantly improve its service or lose pub lic favor. The Federal Surety has never failed to satisfy “ twenty-five feet high” ex pectations. This kind of a record has marked the Federal Surety Company’s progress from the start. T H E P R O G R E S S IV E C O M P A N Y Writing Casualty Insurance Executing Fidelity and Surety Bonds FEDERAL SURETY COM PANY W. L. TAYLOR, Vice President and General Manager Des Moines Branch Office, Insurance Exchange Building https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Home Office, Davenport, Iowa 62 THE NORTHWESTERN BANKER December, 1925 Life Insurance and Trusts An Opportunity for Bankers in Minnesota, Nebraska, Kansas and Alabama Th(3 M edical L ife Insurance C om pany has ju st re ce n tly entered K ansas and N ebraska and has appoin ted new state agents in A labam a and M innesota. In , , each one o f these states a thorou gh and aggressive cam paign w ill he con du cted or business, w ith especially attra ctive p rop osition s fo r ban ker agents. T his com p any has alrea dy gained a rep utation as one o f the m ost p rog ressive com panies o f the M iddle W est. W ith the M edical L ife the w hole fa m ily is a p rosp ect, you n g or old, p h y sica lly p e rfe ct or p h y sica lly im paired— th ereb y m akin g good its slogan “ L ife Insurance fo r E v e ry o n e .’ ’ F o r fu ll inform ation w r ite : M r. Chas. F. F ries, 401 F irst N ational Soo L in e B ld g., M inn eapolis M in n .; M r. E. H . B lissard , 2906 L eaven w orth St., Omaha, N eb ra sk a ; M r. C. E. Gleeson, B oom 9 Storm ont B ld g., T opeka, K a n sa s; M r. D. E. C ook, A ndalu sia, A labam a. ¿M edical u f e IN S U R A N C E COMPANY OF A M E R I C A W ATER LO O IO W A I. G. L O N D E R G A N , V ic e P resid en t and General M anager T h e Second-String Men A f e w s ta r p la y e r s d o n o t m a k e a c h a m p io n s h ip f o o t b a l l tea m . A cJe p e n d a b le s q u a d o f s e c o n d - s t r i n g - m e n is n e c e s s a r y . T hey w i l l b e c a l l e d i n t o p l a y t im e a n d a g a i n b e f o r e t h e s e a s o n is o v e r . S ta r s a l e s m e n a r e n o t s u ffi c i e n t f o r a s a l e s o r g a n i z a t i o n . T h e r e m u s t b e th e d e p e n d a b le s e c o n d - s t r in g m en . T h e ir p o lic ie s m a y b e s m a lle r a n d th e ir c lie n t s le s s n u m e r o u s , b u t th e y b u ild s u b s ta n t ia lly a n d w e ll. T h e H o m e O ffice e n e r g i e s o f T h e L i n c o l n N a t i o n a l L i f e a r e n o t a l l t h r o w n i n t o b o o s t i n g i t s s t a r s a l e s m e n . A n e a r n e s t e f f o r t is m a d e t o t r a in e v e r y b e g i n n e r a n d i f h e p r o v e s t o b e o n e o f t h o s e s e c o n d -s t r in g m en he c o n tin u e s to g e t th e sa m e c a r e fu l a tte n tio n a n d h e lp fu l c o o p e r a t io n a c c o r d e d th e b i g w r it e r . fclW KU P fjfrw i™ Tm ^ÜH COüj The Lincoln National Life Insurance Company “Its Name Indicates Its Character” Lincoln Life Building Moves to New Home The Iowa State Insurance Company of Keokuk, Iowa, has moved into its new home office building, making the opening occasion an open house affair, to which many agents and business friends were invited. Construction o f the new build ing was begun last February. Judge William Logan is president of the Iowa State; W . N. Sage, vice president; J. I. Annable, secretary, and J. M. Skinner, assistant secretary. Fort Wayne, Indiana More Than $375,000,000 in Force https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Walter C. Schelker, assistant secretary o f the Equitable Life o f New York, has a contribution in “ Trust Companies,” in which he takes up the subject o f insur ance and trusts. Mr. Schelker said in p a rt; “ Nowadays policyholders do not plan merely to insure their lives, but seek to insure a permanent income for those de pendent upon them. Formerly men seemed to give little thought to this part o f the transaction. Policies for liberal amounts were made payable in lump sums to wives and children or other depen dents, or often to the estates o f the in sured. They seemed to think that having insured their lives all responsibility was ended and that a kind Providence would guide their loved ones in the wise invest ment and care o f the insurance money. “ In these days, however, policyholders are making liberal use o f the means afforded by life insurance companies and by banks and trust companies to guaran tee a certain income fo r their depend ents without exposure to the many risks which waylay inexperienced investors. “ And it may not be amiss to suggest at this particular time when these two im portant branches o f public service—the life insurance company and the trust com pany— are being brought into so close a relationship, that careful study be given to the task o f making this service so effective and so attractive that it •will appeal to the greatest number possible.” In commenting on this the Equitable Life states that a large part o f its insur ance is fo r family protection. Most of this insurance is still made payable in lump sums. It says that sensible people ought to follow one o f three courses. (1) Select in the beginning the life income form, or the guaranteed invest ment form instead o f having the insur ance paid in a lump sum; or, (2) Restrict the beneficiary to an in come settlement in accordance with one o f the optional methods of settlement; or, (3) In cases where neither of the fore going plans fulfill the requirements of the insured, provide fo r placing the money in trust for the protection o f the beneficiary. There is no true orator who is not a hero.— Emerson. D ecem ber, 1925 THE NORTHWESTERN 63 BANKER Fire News Charles R. Detrick insurance commis sioner fo r California, has recently passed a ruling that surety companies may not guarantee mortgages or bonds on property in San Francisco. Such business, he holds, is properly within the sphere o f mortgage insurance com panies, according to California law. J. 0. A. Preus, form er governor, auditor and insurance commissioner of Minnesota, expects to go to Chicago in the near future as vice president o f W. A. Alexander & Company. Officials o f the company have been after Mr. Preus fo r some time, in an effort to persuade him to make this new connection. His ability and past experience will be of considerable importance to the firm. A recent canvass o f insurance activi ties shows that there are fifty-five home offices located in Des Moines. Figures in the state insurance commissioner’s office show that the fire companies alone have a capital stock o f $8,549,550, with total assets o f $16,308,000 and $287,000,000 insurance in force. In life company assets, Des Moines has a record o f $147,213,071. The Iowa State Fire Prevention Asso ciation held its annual meeting in Des Moines last month. The meeting was in the form o f a dinner, at which Richard E. Vernor, manager o f the fire prevention department, Western Actua rial Bureau, Chicago, was the principal speaker. The State Where the Tall Corn Grows T h e te r r ito r y d ir e c tly s e rv e d b y t h e H o m e O ffice a t D e s M o i n e s is o n e o f th e l a r g e s t a n d m o s t p r o g r e s s iv e s e c t io n s o f r u r a l A m e r ic a , w h o s e p e r c a p i t a w e a l t h is $4,274.00 a n d g e n e r a l c o n d it io n s m o s t fa v o r a b le . In th is s ta te a re w o n d e r f u l s a le s o p p o r t u n it ie s f o r e n t e r p r is in g s a le s m e n w h o w is h to in c r e a s e t h e ir e a r n in g a b ilit y a n d ca n e a s ily d o so w ith th e N a tio n a l L i f e ’s p o p u la r fo r m o f l o w c o s t p o l i c i e s , w h i c h e n a b l e t h e m t o s e ll m o r e i n s u r a n c e t o m o r e p e o p le . W r i t e f o r fu r t h e r p a r t ic u la r s . National Life Association Des M oines, Iowa "TH ER E IS O N L Y O N E ASSO C IA TIO N ! Get Closer to Your Customers To recommend and sell the Iowa National Fire policy to your customers will create a closer and more intimate relationship that will be well worth while in future transactions. Hundreds of Iowa bankers know the Iowa National Fire, its officers and the popularity it enjoys among not only business men but the entire state. C. M. SPENOER Vice President and Secretary P R A N K Li. M IN E R President C. S. VANCE Vice Pres. & Underwriting Mgr. Iowa National Fire Insurance Company DES MOINES, IOWA E. S. Phelps, veteran Burlington, Iowa, insurance man, recently celebrated the fortieth anniversary o f his connection with the E. S. Phelps agency at Burling ton. He purchased his agency in 1885 from the Geo. Duncan & Co. in which he had previously worked three years. Mr. Phelps still has in his agency all except one o f the companies he started with in 1885, including the National Union, the Fidelity-Phenix, North American and others. Mr. Phelps is a past president o f the Northwest Fire Underwriters’ Association. NA TIO N A L LIFE Salary Continuance Policy O FFICERS E. M. SE A R L E , Jr. President H. E. W O R R E L L Sec.-Treas. O. W. Follett has been made Iowa state agent fo r the London Assurance Co. He was for fifteen years Iowa state agent fo r the National Union Fire, which has closed its Des Moines office and consolidated it with the office in Omaha. Pays fifty dollars, one hundred dollars, one hundred fifty dollars, or two hun dred dollars a month (first payment im mediately upon receipt of proofs of the death of the insured) and continues the payment of like amount for stated periods of from six months up to twenty years. Ask us more about it. O M A H A LIFE IN S U R A N C E C O M P A N Y Great men should think o f opportunity and not o f time. Time is the excuse of feeble and puzzled spirits.— Disraeli. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis OMAHA N EBRASKA 64 THE NORTHWESTERN BANKER D ecem ber. 1925 For Bankers and Their Wants This department of TH E N O R TH W ESTE R N B A N K E R is to assist SUBSCRIBERS in obtaining goods or service hard to find. It is free to subscribers. Use it. A S K US, as we can tell you where to buy anything you need in your bank or for your bank. TELL US, as your “ want” will be published under the above heading free of charge. In answering classified advertisements which have key numbers please en close a two-cent stamp. This is used to forward your letter. Position Wanted by married man 36 years old. A t present employed as cashier. Seven years’ experience in gen eral banking in country bank. Familiar with farm loans and insurance. Best of references on request. Ready to start the first of the new year. Address No. 2841, The Northwestern Banker— 12. Position Wanted by young married man. Nine years’ banking experience, including six years as cashier o f coun try bank. Understand farm loans and insurance. Address No. 2842, The Northwestern Banker— 12. Position Wanted by man 45 years old. University graduate. Fourteen years’ banking experience, most of which was as executive officer. Experienced in real estate, farm loan and insurance business. Three years’ experience in practice of law. Prefer city of 10,000 or more inhabitants in the middle west. Best of references. Address No. 2843, The Northwestern Banker— 12-1. Position Wanted in Country Bank. Experienced and competent. Address No. 2844, The Northwestern Banker— 12. Cashier Wanted for small country bank near Des Moines. Want married man with bank experience. Small in vestment. Position available at once. Address No. 2845, The Northwestern Banker— 12. For Sale: Complete furnishings for small bank. Counters, roll-top desk, large oak table, chairs, vault door, Victor M. S. round safe, deposit boxes, adding machine and other equipment. Must be sold. Priced right. Address A. J. Rec tor, Greeley, Iowa. Position Wanted in bank with oppor tunity for advancement. Prefer coun try bank where town has good bank. Can play alto horn. One year’s experi ence _ as bookkeeper running posting machine and counter work. Single. Age 24. Protestant. Can give A l refer ences. Address No. 2846, The North western Banker— 12. Steel and Copper Engraved S T A T I O N E R Y , B U S IN E S S ANNOUNCEM ENTS AND CARDS For The q u a lity H o m e ste a d w ork ad d ress C o m p a n y , D e s M o in e s , https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Position Wanted in bank by young man. College graduate with business experience. Good references. Address No. 2847, The Northwestern Banker— 12. Position Wanted as manager or assis tant cashier o f bank in Iowa or adjoin ing state. Can come any time. Good references given. Will accept temporary or permanent position. Address No. 2848, The Northwestern Banker— 12. For Sale Cheap: one set o f bank fix tures, marble-faced counters and about 60 feet oak wainscoting with marble baseboards. An ornament to any bank. Address W. Sperry, Hamburg, Iowa— 12- 1- 2 . Stocks o f corn on farms November 1st were estimated to be about 2 per cent, compared with 3.4 per cent, one year ago. The average yield per acre o f pota toes is placed at 97 bushels, or a total production o f 26,384,000 bushels, com pared with 44,352,000 bushels harvested in 1924 and the five-year (1920-1924) average o f 38,524,000 bushels. The yield per acre this year is the same as the 10year average. The crop in early commercial districts was fairly good as well as in the Hollandale district and most o f the northern November Crop Report and eastern counties, excepting some tributary to the Twin Cities. Yields o f M innesota’s corn crop is estimated at Ohios in the Red River Valley were 154.296.000 bushels, or 27,960,000 bushels somewhat disappointing, but other var above last y ea r’s production and 15,845.000 bushels above the five-year ieties were heavier. Yields in the agri cultural sections in the southern half of (1920-1924) average, while potatoes are the state generally were poor, especially 18,000,000 bushels lower than a year ago and flax about 700,000 bushels less than in the southwestern part. A special in last y ea r’ s production, according to the vestigation relative to how yields were report o f Paul H. Kirk, Federal statisti reported indicated that in reporting average yields the abandonment and cian fo r the Minnesota Cooperative Crop other factors were taken into considera Reporting Service. tion. So, while the production is based The yield per acre o f corn this year is placed at 36 bushels, or a crop o f 154,- on the original acreage planted, this 296.000 bushels, based on the total acre abandonment really has been taken into consideration in the yield figure. age, compared with 126,336,000 bushels and the five-year average o f 138,451,000 Based on previous carlot movement bushels. The crop is somewhat spotted figures, it would appear that the total as to yield this year, the poor crop being carlot movement o f this y ear’ s crop will in the southeastern portion o f the state be close to 20,000 cars. This, o f course, bordering on South Dakota, which expe will be affected somewhat by prices, rienced a severe drought. The crop in amount sold locally, trucking and keep the southeastern and most o f the central ing qualities o f potatoes now in storage. parts o f the state was exceptionally good. The quality o f this year’s crop is 88 per The quality o f the crop is estimated to cent o f normal and it is estimated that 58 be 80 per cent o f normal, compared with per cent o f all potatoes planted are grown only 37 per cent last year. fo r market. FLO W ERS AN D SERVICE ALPH A FLO RAL COM PANY P h o n e W a ln u t 362 J . S. W I L S O N F L O R A L D ra k e 584 D E S M O IN E S CO. W M â S l 7 \ \ L O O S E -L E A F -D E V IC E S -A N D id“ YA a C C O U N T I N O - S Y S T E M » S o ld in I o w a b y J. H . W E L C H P R IN T IN G C O . 1 1 6 6 -6 8 -7 0 S ix th A v e ., D e s M o in e s . P r i n t e r s , B i n d e r s , M nfgr. S t a t i o n e r s . THE December, 1925 NORTHWESTERN South Dakota Bank News Officers South Dakota Bankers Association P resid en t.......................Dean H . L igh tn er A berdeen V ic e P resid en t........... A rthur Cham bers H udson S ecreta ry...................... Geo. A . S tarring H uron D E A N H . L IG H T N E R P resid en t T rea su rer........... ......................John B arton S iou x Palls South Dakota Bankers Have New Secretary. I). II. Lightner, president o f the South Dakota Bankers Association, announces the recent appointment o f George Star ring, o f Brookings, as secretary o f the Association. Mr. Starring, whose por trait appears at the top o f this page, succeeds L. J. Welch, who has gone to LaSalle, Illinois, to become manager of the Marquette Portland Cement Com pany. Mr. Starring assumes his new du ties December 1st, with headquarters at Huron. F or the past two years Mr. Starring has been connected with the State Col lege in its Extension Department. He has specialized in rural community or ganization and has established 350 farm ers’ clubs in 40 counties. Mr. Starring is well known in business and farm circles throughout the state of South Dakota. He was fo r nine years head o f the Department o f Journalism o f the South Dakota State College. In 1920 he was assistant manager o f the Agricultural Publishers Association in Chicago. His past experience makes him well fitted for his new position. New Bank Prospers The Security National Bank recently opened in Brookings, S. D., and enjoyed business in excess o f the anticipation o f its officers. Horace Fishback, Sr., is president and Van Fishback the cashier. The Bank Guaranty Problem Speaking o f the bank guaranty prob lem, Governor Gunderson o f South Da kota, says in a recent interview that ‘ ‘ the three or four propositions offered to take care o f the deficit in the guaranty fund are simply m akeshifts; that, finally, after all is said and done, the only way deposi tors in closed state banks will ever be able to fu lly realize on their losses is through a tax lev y .” In his message to the last session o f the legislature, the governor mentioned that in dealing with the banking situa tion there is placed a moral, if not a legal, obligation on the state, inasmuch as the form er banking department, and in some https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 65 BANKER GEO. A . S T A R R IN G Secretary cases the bankers themselves, through their advertising and otherwise, misled the people into the belief that the state was actually guaranteeing deposits. Consider Reorganization Stockholders and depositors o f the First State Bank o f Sioux Falls, South Dakota, are seriously considering plans fo r reorganization o f that institution. John C. Mundt, a form er directors o f the institution, is assured by the state de partment that the fullest cooperation will be furnished by that body. Changes at Conde The Conde State Bank o f Conde, South Dakota, has increased the capital stock from $25,000 to $30,000, giving it a capi tal and surplus now o f $40,000. Total resources are $500,000. A t the same time, W . H. Langworthy was elected cashier and a director to succeed A. E. M cM il lan, who resigned. Mr. McMillan had been actively connected with the bank for over 18 years. Mr. Langworthy is well and favorably known in the Conde local ity. Charlotte M. Foster was also elected to the position o f assistant cashier. Wayne W . W oodard, who bought the con trolling interest in this bank in 1919, is the active vice president, with B. L. Smith active president. Mr. Smith has been Avith the bank since its organization in 1899. that he is a sort o f 1money bags’ whose favorite author is, ‘ To Have and to H old ,’ and many bankers live up to that reputation; but the best type of banker-—and large numbers of bankers now are o f that type— takes an active interest and uses his ability and his money in promoting everything which will make his community and his state a better place in which to live. “ However, one o f the things even a modern and community-helping banker ought to forget is that most o f the money in his institution doesn’t belong to the institution, but to people who ex pect to get it back when they want it. It is all right and proper fo r a banker to be a town builder and a community saver, within limits. Yet the true func tion o f a bank is to afford sanctuary for the community’ s fluid wealth. Many bankers overimpressed with the sup posed obligation to be constructive, get the bank into an overloaded condition. Every bank ought to do its share, but when the local banker assumes to take upon his bank the principal burden o f his locality he undertakes more than his pro rata o f community responsibility. A fter all is said and done, it isn ’t cer tain that the tightwad banker who con serves isn ’ t more valuable to the town than the too-liberal one who finances speculative expansion. No bank should be constituted a reservoir from which the needy may dip simply because they are thirsty. In other words, any bank which makes itself a wet nurse fo r those who have nothing but love and affection to put up as collateral may sooner or later expect to go d ry.” Holds Chapter Meeting The Minnesota Chapter o f the Ameri can Institute o f Accountants met last month at the Minneapolis Athletic Club, and entertained as their guests a number o f Minneapolis bankers. Edgar L. Matt son, vice president o f the Midland Na tional Bank and Trust Company, and R. W . Manuel, president o f the Marquette National Bank, were the principal speak ers, and discussed relations between bank Goes to Menno E. W. Aisenbrey has resigned his posicredit departments and public account ants. They especially urged the impor tion with the state banking department, tance o f cooperation and understanding and expects to enter the banking business between bankers and public accountants. in Menno, South Dakota. He was fo r Arch M. Wagner o f Haskins and Sells merly connected with the Exchange State Bank o f that city, and returns as an offi spoke fo r the accountants and Herman C. J. Peisch presided. cer in that institution. ‘ ‘Bankery” Big Business The follow ing editorial was taken from the Hearne, Texas, Democrat, and Avas mailed to a number o f bank cashiers in Texas by H. H. Wilkinson, vice presi dent o f the Continental National Bank o f Fort W orth. Mr. Wilkinson says it contains the best “ horse sense” he has read in some time. It reads as follows : ‘ 1The popular idea o f a banker is One-fourth o f one per cent or only 1,026 o f the over 400,000 corporations doing business in the United States in 1923, made 63 per cent o f the total net profits o f all corporations doing business in the United States in 1923. This total was $4,000,000,000 o f the total fo r all corporations, o f approximately six and one-third billion dollars. 66 THE Dhe Checking Account —the Check NORTHWESTERN BANKER December, 1925 W o rld ’s R ecord'D ay Policies Delivered by Aeroplane Every month 20,000,000 peo ple are shown the great value of checking service. They are told about a new type bank check that is helping banks se cure new business. VE R 10,000 American banks have found two ways to help solve the un profitable checking account. First, they are benefiting in their localities from the effect of a tremendous national advertis ing campaign. New depositors are being cre ated. Old accounts are increasing in size and becoming several times more valuable. O Second, they are turning the check from an expense into a business-building tool by a new type check, called Super-Safety. The tremendous value of Super-Safety bank cheeks protected against fraudulent alteration is pointed out in Bankers Sup ply Co. advert i s i n g . To know how val uable a busi ness - getting tool this proves to be, simply r e a d the l e t t e r s from banks who have featured this ex tra point of service. For instance, one bank opened 12,000 new accounts in 15 days. Others have received results equally amazing. So that banks may get the maximum bene fit from this tremendous program actual ad vertisements have been prepared which banks may now use in their own local papers. They are the work of some of the best known ad vertising brains in America. With them come various tested plans which have helped others build business. Let us send you information showing what they will accomplish for your bank. You will want to file this data for permanent ref erence. Write now. c,\jpE.KSAF£-7->, ^ N K CH£C* This eagle design identifies SuperSafety Checks— safest supplied by any bank. Look fo r i t ! B A N K E R S SU PPLY CO M PAN Y, Division T H E TODD C O M P A N Y 5957 So. State Street, Chicago Business-Building Merchandise fo r Banks N ew Y ork Rochester C H ICAGO Denver Dallas Super-Safety Bank Checks protect depositors against check fraud. They are made of the safest check paper supplied by any bank. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Left to right: Karl Zander, President Life Underwriters Association of Sedalia, Missouri: Earl G. Mercer, President Life Underwriters Association of Kansas City, Missouri; Fred Sandfort, Frank Wright, Floyd Ripley, Royal Union agents, and Guy W . Peabody, Royal Union agent, who, on September 29th, broke the world’s record for number of applications written in a single day. Record Day Policies The insurance policies written by Guy W . Peabody, agent fo r the Royal Union Life o f Sedalia, Missouri, who, on Sep tember 29th, shattered the world’s record fo r number o f applications written in one day by writing 115 policies and a beau tiful silver loving cup presented by the company in recognition o f Mr. Peabody’s achievement, were delivered at Sedalia recently by airplane, with Earl Mercer, president o f Life Underwriters Associa tion o f Kansas City, Missouri, who pre sented the policies and trophy to Mr. Peabody. The plane, piloted by Byron Truitt, of Sedalia, left Kansas City at 2 :15 in the afternoon. Pilot Truitt and Mr. Mercer said that they had a nice trip, regardless o f the fact that their flying time was slowed a little because o f having to fly against a wind all o f the way and that they encountered rain at La Monte. At the flying field west of Sedalia to greet the plane was a party composed o f Mr. and Mrs. Peabody, Karl Zander, president o f the Life Underwriters Asso ciation o f Sedalia; P. F. Combs, Dr. K . R. Barnum, Dr. A. L. Walters and Royal Union agents, Messrs. Fred Sandfort, Frank Wright and Floyd Ripley. Upon arriving in Sedalia the plane circled around the city, and, upon land ing, a photograph was taken o f the party and airplane. The silver trophy and insurance policies were placed in the window o f Meuschke’s Dry Goods Company on South Ohio street, Saturday morning and were on ex hibit over the week end. The policies were encased in a special jacket on which appeared this inscription: “ R O Y A L UNION LIFE INSU RANCE COMPANY Des Moines, Iowa M ISSOU RI SAID “ SH O W M E” AND SE D A L IA D I D ! This is one o f 115 policies applied for September 29, 1925, to Guy W. Peabody, district agent for the Royal Union Life Insurance Company, which won fo r him the world’s record fo r applications in one day, and delivered by aeroplane.” The silver loving cup, which is about twelve inches high, bears the following inscription: “ Presented to Guy W. Peabody by the Royal Union Life Insurance Company, in recognition o f his achievement o f Sep tember 29, 1925, when he broke the world’s record by Avriting 115 applica tions in a single day.” 8 Point Cut Lines to Come— A syndicate o f South Dakota banks has purchased $500,000 worth o f hail war rants ordered issued by State Treasurer J. L. Driscoll, in order that the farmers may be paid their hail losses o f the past season instead o f having to wait until the taxes come in next spring. Order is man’s greatest need, and his true well-being— Amiel. December, 1925 THE Deaths from Alcoholism While the general health record o f the industrial population o f the United States and Canada is improving, homi cides, death by accident and deaths from cyrrhosis o f the liver (closely associated with alcoholism) are increasing, accord ing to an analysis o f the death rate for the first six months o f 1925 o f the more than 16,000,000 policyholders o f the Met ropolitan Life. “ Alcoholism, aside from poisoning by wood and denatured alcohol, was the reported cause o f 230 deaths during the first six months o f the current year, with a death rate o f 2.5 per 100,000,” says the com pany’ s latest statistical bul letin. “ This may be compared with 236 deaths fo r the same period o f 1924, with a death rate o f 2.3 per 100,000. Deaths from wood and denatured alcohol poi soning, however, increased to fifteen, as compared with eight during the first half o f 1924. Those from cirrhosis o f the liver rose from 475 last year to 548 this year. ‘ ‘ The homicide rate shows a sharp in crease, while the death rate for suicides has declined. ‘ Automobile fatalities continue to show a rising death rate, indicating that despite the renewed efforts o f various agencies interested in public safety, no impression is being made on the unfa vorable record fo r these casualties.” The Federal Inheritance Tax It has been suggested that the federal inheritance tax may be removed or re duced. Either would cause relief. Life insurance funds thus released could pro vide cash to meet the various state taxes and to avoid penalties imposed, to pro vide liquid funds to prevent forced sale o f securities, to back up bequests against depreciation o f securities and to make it possible to administer an estate to best advantage and carry the estate’s bene ficiaries during settlement without re source upon the body o f the estate. It is to be remembered that many o f the states exempt life insurance proceeds from taxation when made payable to designated beneficiaries. The federal inheritance tax as it stands makes a need for life insurance, and yet its removal or decrease would not neces sarily lessen the desirability o f life insur ance in specific cases. Such removal or decrease would eliminate the greatest single pressure and make it possible to provide better protection against the re quirements in many cases. The need for estate protection would probably remain the same throughout the states, and the possibilities o f suits, fluctuations and de preciation would still be present. Relief from federal inheritance taxation would allow men to give protection to their es tates ample to meet all known taxations and contingencies. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NORTHWESTERN BANKER The argument for life insurance fo r estate protection and conservation is stronger now because o f these possibili ties, and would be even stronger if the tax were in truth removed or decreased. — George T. Dexter, Second Vice Presi dent, The Mutual Life Insurance Company o f New York— (Inheritance Taxes). The Business Side of Agriculture A survey o f agricultural activities of chambers o f commerce made by the Agricultural Service o f the United States discloses a rapidly broadening concep tion of the common interest between agriculture and other industries. This may be described as the business side of agriculture or, conversely, the agricul tural side o f business. The survey shows that out o f three hundred chambers o f commerce from which information was received, 224 en gage in agricultural activities o f some character. ^ ^ xC^ f(â S IO U X iio m FALLS, lJ 67 Reviewing the results o f the survey the Agricultural Service o f the National 'Chamber says : ‘ ‘ These reports indicate a rapidly developing conception o f the function o f the commercial organization in aiding the agricultural interests o f its trade area. In few instances is it at tempting to tell the farmer how to farm ; it is discovering that not all agricultural problems are traceable to production methods. Chambers o f commerce gener ally are formulating their agricultural programs through joint action with their farmers. “ Since the development o f these con ceptions, chambers o f commerce have been devoting more o f their energies and funds to aid in carrying out the agri cultural programs already adopted by agricultural college extension services and other established agencies have given much thought to phases o f farm economies other than production prob lems. They are visualizing clearly the J fè L n .m tjo m p a n ú r f(iœ SOUTH D A K O T A . M r. B a n k er: Money sent away from home never builds your community : : : : Make a connection with a HOME LIFE INSURANCE m 'L l J j COMPANY— that deposits the Premiums in your bank « O r M C th o |r* G uy C. Barton or invests in mortgages in your territory. PR E S ID E N T (Old Line Legal Reserve) S.H W itm e r VICE-PPES. M&R A&ENTS H.O Chapman secretary ‘A SOUTH DAKOTA COMPANY’ TREASURER Will Your Customers Feed Their Corn? If so— have you sufficient outlet fo r YOUR FEEDER PAPER? The Live Stock National Bank Located at the Stock Yards Sioux City, Iowa Is esp ecia lly w ell eq u ip p ed to handle Live Stock Loans YOUR ACCOUNT IS INVITED 68 THE NORTHWESTERN BANKER place o f farming in the whole industrial scheme, seeking particularly to reduce waste in distributing agricultural prod ucts and to aid farmers in the market ing o f their crops.” The Chase National Bank of the City of New York 57 B R O A D W A Y C apital . . . Surplus and Profits The High Cost o f Fire It has been estimated that the fire waste o f the United States it $1,044 a minute. Staggering as it may be it is not all o f the story. A t the last meeting o f the National Fire Waste Council, which is cooperat ing with the Chamber o f Commerce of the United States to cut down the fire toll, Ira H. Woolson, New York engineer, made the follow ing estimate: ‘ ‘ The best census figures available in dicate a total urban population in the United States fo r cities having a popu lation in excess o f 8,000 as approxi mately 50,000,000. Assessing the aver age cost per capita o f $2.70, as calcu lated in twenty-three cities, upon this population would indicate a cost fo r fire department service o f $135,000,000, or a total annual fire loss to the country o f $670,000,000, exclusive o f water supply. Such figures are staggering and they are believed to be conservative. The end is not reached. Flow long can we stand such terrific waste ? The burden is needlessly heavy, because much o f it can be eliminated by judicious legislation.” Upon this basis o f calculation the cost o f fire would be approximately $1,275 a minute. The reason fo r this condition Mr. W oolson attributes largely to our habits of frail combustible construction. “ Coupled with this,” he concludes, “ is our excessive carelessness and wasteful ness. These two national character istics have reciprocal relations, each stimulating the other and both creative o f fire hazard.” $ 2 0 ,0 0 0 ,0 0 0 .0 0 . 2 6 ,8 9 5 ,7 6 7 .7 3 D eposits (S ep t. 3 0 , 1 9 2 5 ) December, 1925 4 7 8 ,0 3 1 ,8 8 8 .5 7 A L B E R T H . W IG G IN Chairman of the Board and President DIRECTORS Henry W . Cannon Carl J. Schmidlapp Albert H. Wiggin Gerhard M. Dahl John J. Mitchell Andrew Fletcher Guy E. Tripp Reeve Schley James N. Hill H. Wendell Endicott Daniel C. Jackling Jeremiah Milbank Charles M. Schwab Henry Ollesheimer Samuel H. Miller Arthur G. Hoffman Edward R. Tinker F. Edson White Edward T. Nichols Alfred P. Sloan, Jr. Newcomb Carlton Elisha Walker Frederick H. Ecker Malcolm G. Chace Eugene V. R. Thayer Thomas N. McCarter Robert L. Clarkson W E IN V IT E A CC O U N TS of Banks, Bankers, Corporations, Firm s or In di viduals on favorable terms, and shall be pleased to meet or correspond with those who contemplate m aking changes or opening new accounts. Foreign and Trust Department Facilities In Sioux City F or m ore th an 4 1 years the Security N a tio n a l, strong and d ep en d ab le, has given u n su r passed service to its m any /f correspondents. CECURITV N A T IO N A L B A N K ! Capital and Surplus $550,000 A . B . D A R L IN G , P r e s id e n t V . C. B O N E S T E E L , V ic e P r e s id e n t Selling Golf Insurance / Ig y p L . R . M A N L E Y , C a s h ie r R . E . B R O W N , A s s is t a n t C a s h ie r AT HOME IN OTHER CITIES Y ou ’ ll Be at Home in any Eppley Hotel H otel Fontenelle O m aha, N ebr. H otel Lincoln Lincoln, Nebr. H otel Carpenter Sioux Falls, S. D . H otel M ontrose, Cedar R apids, la. H otel Evans C olum bus, N ebr. H otel M artin Sioux C ity, la. EPPLEY H O T E L S C O M P A N Y https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1 “ Dear S ir:— Being a member o f the Clare more Country Club, you, no doubt, joined fo r the express purpose o f enjoy ing the game of golf. “ In driving the ball, there is danger o f someone being hit. You know, it takes an awfully close friendship to stand be ing ‘beaned’ by the other fellow. “ W e have a remedy that takes care of any possible damage suit filed against you. “ A golfer’s policy for the term o f one year will cost only $3.30, the limits be ing $5,000 fo r one person and $10,000 for one accident. The limits can be doubled for an additional sum of 63 cents. “ Let us know when, and we will call and explain the golfer’s policy. Yours truly, “ J o h n s t o n A b s t r a c t & L o a n Co. Come, give us a taste of your quality. — Shakespeare. THE December, 1925 NORTHWESTERN 69 BANKER State Treasurer’s Report N ebrask a Bank News Officers Nebraska Bankers Association I. R . A L T E R P r e s id e n t P r e s i d e n t ................................I. R . A l t e r G ra n d I s la n d C h a ir m a n o f t h e E x e c u t i v e C o u n c i l ......................... P . L . H a ll , J r. G reenw ood S e c r e t a r y ......................... W . B . H u g h e s O m aha T r e a s u r e r ....................... F . W . T h o m a s O m aha G e n e r a l C o u n s e l ............J. P . P a l m e r Om aha Sells Interests at Dodge A. J. Miller, until recently cashier o f the Dodge State Bank at Dodge, Ne braska, has sold his stock in the institu tion to Rudolph Suchan. Mr. Suchan has taken Mr. M iller’s place as cashier. Mr. Miller has not announced his plans fo r the future. Moves to New Quarters The Nebraska State Bank o f Broken Bow, Nebraska, recently moved into its new quarters. The new building is equipped with the latest in safety de vices and fixtures. Severin Arp, o f Ma son City, Nebraska, is assistant cashier. Mr. Arp was form erly assistant cashier o f the American State Bank o f Loup City, Nebraska. W M . B. H U G H E S S ecreta ry new office building. It is an attractive brick structure, located in the residence part o f the city, and is so arranged as to offer better facilities fo r the plan ning and production o f this com pany’s advertising service. Ben Smith, president o f the organiza tion, announces the connection of C. E. Morrill as vice president in charge of sales. Mr. M orrill was form erly with the Omaha Bee, and is an experienced advertising man. E. H. Dessaur has also made a connec tion with the Western Advertisers Asso ciation. He specializes on bank adver tising, and has had many years’ experience along that line. Lincoln Trust Statement The Lincoln Trust Company, o f Lin Sells Stock at Wynot coln, Neb., in their last report to the F. A. Kindwell, fo r 17 years connected State Department o f Trade and Com with the management o f the First Na merce, give their trust funds as $4,811,tional Bank at W ynot, Nebraska, has 669.63, bonds and warrants $305,081.92, disposed o f his interest in that institu real estate mortgages $367,373.41, and tion to a number o f other stockholders. cash and due from banks and due from E. A. Miller continues as cashier and in insurance companies on accepted loans active management o f the bank. Mr. $569,459.96. Kindwell has not as yet announced his The Lincoln Trust Company is cap plans fo r the future. italized at $600,000. Its officers are C. C. Carlsen, president; J. A. Reichenbach, May Raise Checking Charge vice president; H. A. Penner, vice presi Banks in Omaha, Nebraska, are seri dent; Howard Hadley, secretary, and R. ously considering the raising o f carrying F. Campbell, treasurer. charges on open checking accounts. The rate now is 50 cents fo r a monthly aver Hold Reception age o f $100 on open account and the plan The lobby o f the U. S. National Bank, is to raise this charge to $1.00 per month. Omaha, was recently converted into a dance floor, when 150 officers and em Change at Peru ployes o f the institution got together A recent bank merger at Peru, Ne there fo r a good time. Austin Vickery, braska, is that o f the Peru State Bank vice president, was master o f ceremonies. and the Citizens State Bank, the latter taking over the deposits, building and Retires at Callaway fixtures and approximately $19,000 of notes and property held by the first in F. M. McGrew, form erly cashier o f the stitution. The Citizens State is one o f Seven Valleys State Bank o f Callaway, the strong banks o f the county, and offi Nebraska, has sold his interest in the cials say that the absorption will involve bank to Mrs. Agnes L. Norbury, and has no change in the management o f the retired from the management o f the in Citizens. stitution. He is succeeded by Thomas W . Norbury, who was form erly assistant cashier. Mr. Norbury has been with the Western Advertisers in New Home bank fo r a number o f years, and has The Western Advertisers Association, shown himself to be an able executive. o f Omaha, have recently moved into their https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis State Treasurer C. D. Robinson’s statement of receipts and disbursements o f the Nebraska State Treasury for October shows a net total in all current revenue funds o f $2,338,773.48. There is an overdraft in the general fund of $690,043.27; receipts to the general fund fo r October totaled $541,482 and dis bursements totaled $800,081. A gain of over $77,000 in temporary trust funds increased the total to $518,130. Re ceipts to permanent trust funds for October show an increase over disburse ments o f approximately $57,000, making the total in this group, $90,425.22. The state has trust funds invested in bonds o f $13,480,297.67. Meet in Omaha Several hundred implement dealers of Nebraska and Iowa met in Omaha last month, to attend the seventeenth annual convention o f the Midwest Implement Dealers Association, sessions o f which were held at the Castle Hotel. Dave E. Darrah, advertising manager o f the Hart-Parr Company, o f Charles City, Iowa, addressed the convention at one session. His topic was “ Visualizing Your Business.” Hamilton County Meeting The follow ing officers were elected at the monthly meeting and banquet o f the Hamilton County Bankers Association held at Aurora, Nebraska: Fred Burr, Giltner, president; George Miles, Stockham, vice president; Carl Swanson, Aurora, secretary-treasurer. County Agent J. P. Ross gave a talk on the history o f the Hamilton County Calf Club, the first o f its kind to be organized in the state. Sells Interest at Ashland J. L. W inter has disposed o f his in terest in the Ashland State Bank at Ash land, Nebraska, to C. N. Walton, cashier. Mr. W inter also retires as president and as a member o f the board o f directors. Jeff Smith, the present vice president, will act as president until the time o f the annual meeting. Special Poultry Train to New York A special train o f forty cars over the Rock Island lines contained poultry, and dairy products, valued at more than $500,000, shipped under the auspices o f W ill W . Blackman, President, Ne braska Poultry, Butter and Egg Associa tion, left Omaha last month for Chicago and New York, bearing the following banners: “ Chicago and New Y o rk ’ s Dinner, Ordered from Nebraska, Is on This Train,” and ‘ 1This Train Carries a $500,000 Break fast fo r Chicago and New York, Ordered from Nebraska.” THE 70 NORTHWESTERN BANKER For quick and efficient service have your Stock Yards and all Omaha business handled through us. Live Stock National Bank ( M e m b e r s o f O m a h a C le a r in g : H o u s e A s s n .) Union Stock Yards, Omaha, Nebraska O F F IC E R S R . L . V A N Z A N D T , P r e s id e n t E . C. F I N L A Y , C a s h ie r A L V IN J O H N S O N , V ic e P r e s id e n t R . H . K R O E G E R , A s s t . C a s h ie r L. V . P U L L I A M , A s s t . C a s h ie r This ban\ provides the facilities and personnel for the efficient and satisfactory handling o f your account. NATIONAL BANK U . S . TRUST COMPANY Established 1856 O M A H A December, 1925 This train was the first o f its kind ever sent out o f the middle west for an east ern metropolis. A part o f the ship ment was consigned to Chicago. The train was handled in de luxe fashion, having three special cars for the ac commodation o f the representatives o f the Nebraska Poultry, Butter and Egg Association, representatives o f agricul tural organizations and Rock Island offi cials. President Blackman, o f the Ne braska Poultry, Butter and Egg Asso ciation, carried with him a special mes sage o f greeting from Governor Mc Mullen, o f Nebraska, to Mayor Hylan, o f New York City, which read as fo l lows : “ I beg to introduce the bearer, Mr. W ill W . Blackman, President o f the Ne braska Poultry, Butter and Egg Associa tion, o f Fremont, Nebraska. “ This association is going to the great est city in the world, o f which you are Mayor, by special train loaded with these products o f the farms. Nebraska’s great surplus o f these necessaries o f life help to supply the enormous demand o f the cities. Nebraska’s 605,000 cows produce 150,000,000 gallons o f milk, 3,000,000 gallons o f cream, and 36,000,000 pounds o f butter, valued at $24,000,000. Ne braska raises 14,000,000 chickens which pi’oduce 46,000,000 eggs, chickens and eggs valued at $27,000,000. ‘ 1These dairy and poultry products are produced under the most healthful con ditions and are fit fo r palates o f the most exacting. You will find, Mr. Mayor, the gentlemen in charge o f this special train are business men o f capacity and in tegrity and worthy o f any courtesy you may show them. As Governor o f this progressive state, whose interest and in clination is to be on the most friendly terms with the great metropolis, I com mend them to your good offices. (Signed) A d am M cM u l l e n , Governor. ’ ’ Merger at Cowles The Cowles Bank o f Cowles, Nebraska, has consolidated with the Farmers State Bank o f Cowles and will be known here after as the Cowles State Bank. The capital stock o f the consolidated bank is $30,000 and the surplus $6,000. The deposits total $217,000 and the officers o f the new bank a re : President, E. T. F oe; vice president, C. F. Gund; cashier, James McBride, and assistant cashier, Mrs. Jessie Foe. The directors include officers o f both banks. A Banking House of sta bility, with just the proper degree of conservatism. This is what you require in the selection of a corre spondent, and upon this we pride ourselves. Limit Interest Rate Stock Yards National Bank of South Omaha Jas. B. Owen, V ice P resid en t J. S. K ing, V ice P resid en t F. J. E nerson, V ice P resid en t https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis O FF IC E R S F ord E. H ovey, P resid ent W . L. P ier, V ice P resid en t W . H . D ressier, Cashier L. K . M oore, A sst, to Pres. H. C. M iller, A ssistant Cashier C. L. Owen, A ssistant Cashier T. G. B oggs, A u d itor Thirteen state and national banks in the northwestern part o f Nebraska at Gordon, Harrison, Chadron, Rushville and Hay Springs have agreed that they will not pay over 4 per cent interest on ordinary deposits and time deposits for less than six months. These banks December, 1925 THE NORTHWESTERN 71 BANKER have taken this forward step with the recent law by the legislature fixing the maximum rate on interest at 4 per cent, this law becoming effective April 1st, next year. Bureau o f Canadian Inform ation Philippine Facts Nearly one-half o f the w orld ’s popula tion is contained within a semi-circle with a radius o f only 3,500 miles with Manila as its center. There are 662 miles o f railways on the island o f Luzon, 72 miles on Panay and 60 miles on Cebu. The railways o f Luzon are owned and operated by the Philip pine government; those on Panay and Cebu are owned and operated by a private corporation. The Canadian Pacific Railway through its Bureau of Canadian Information, will furnish you with the lat est reliable information on every phase of industrial and agricultural development in Canada. In the Reference Libraries maintained at Chicago, New York and Montreal are complete data on natural resources, climate, labor, transportation, business openings, etc., in Canada. Additional data is con stantly being added. Development Branch Practically all o f the hemp consumed in the world is produced in the Philip pines. If you are interested in the m ining wealth and ever-increasing m ining industry o f Canada or in the developm ent or supply o f the very great variety o f industrial raw materials available from re sources along the Canadian Pacific Railway, you are invited to consult this Branch. A n expert staff is m aintained to acquire and investigate inform ation relative to these resources and to make exam inations o f deposits in the field. Practical inform ation as to special opportunities fo r developm ent, use o f by-products and markets, industrial crops, prospectin g and m ining given on a p plication. During the season o f 1924-1925 there were 29 sugar centrals operating in the Philippines, with a total daily cane capacity o f 26,840 ton s; yet the first cen tral for the manufacture o f centrifugal sugar was not operating fo r export until 1914. No charge or obligation attached to the above services. men and organizations are invited to make use of it. C A N A D IA N The Philippine Islands lead all other countries in coconut production. Onethird o f the w orld ’s supply o f cocoanut products conies from these islands.— From, the 1924 Year Book. Published by the Manila Harbor Board. P A C IFIC Business R A ILW A Y Department o f Colonization and Development W in d sor Station M ontreal, Can. C. P . R. B uildin g M adison A ve. at 44th St. N ew Y o r k 165 E. Ontario St. Chicago I f Jt ÎRmffiu'ii: time o f N ew Year's resolution is at hand— the time o f reviewing the exper iences o f the past year— the time o f making sure that the organisation is being operated on themost efficient and satisfactory basis possible. In that connection — have you a satisfactory Omaha correspondent? T he O m a h a N a t io n a l W A L T E R W. HEAD, President https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Ba n k THE 72 NORTHWESTERN BANKER December, 1925 Dawson Banker Dead I tp^T) M III! o w n 1 A Complete Banking Service The Midland Bank offers exceptional facilities for the transaction o f banking business of every description. Together with its affiliations it operates 2,250 branches in Great Britain and Northern Ireland, and has agents and correspondents in all parts of the world. The Bank has offices in the Atlantic Liners Aquitania, Berengaria and Mauretania, and a foreign branch office at 196 Piccadilly, London, specially equipped for the use and convenience of visitors in London. M IDLAND BANK L IM IT E D HEAD O F F IC E : 5 TH READNEEDLE S T R E E T , L O N D O N , E .C . 2 Affiliated Banks: Belfast Banking Co. Ltd., Northern Ireland; The Clydesdale Bank Ltd., and North of Scotland Bank Ltd., Scotland. Hammond Quality Bank Supplies W H E N Y O U B U Y Y O U R S U P P L IE S FR O M H A M M O N D Y O U C A N B E A S S U R E D OF T H E S E T H IN G S — Quality, Fair Price, Prompt Shipping Service O R D E R FR O M T H E F O L L O W IN G W e are glad to subm it p rices P ostin g M achine L ed ger Sheets P ostin g M achine Statem ents B ank D rafts and Sight D rafts C ertificates o f D eposit C ustom ers’ Checks P ock et Checks Notes and N ote N otices C ashiers’ Checks L etter H eads, E m bossed and L ithograp hed Statem ent Folders L oose L e a f L edgers P ostin g T rays L ed ger Sheets, Pen or P ostin g M achine R em ittan ce Sheets, P en cil or T yp ew riter C ollection L etters Pass B ooks B ank R egisters L oose L e a f D raft and C. D. R egisters D a ily Statem ent B ooks L eather P ock et Check Covers M ailin g Cards D ep osit T ickets C ounter Checks P ilin g C abinet Supplies Card Cabinet Supplies L ia b ility L edgers R u b ber Stam ps Office A ppliances Send fo r C atalog HAMMOND PRINTING COMPANY FR E M O N T , N E B R A S K A OMAHA PRINTING CO P R IN T ER S -LIT H O G R A P H ER S OFFICE OFFICE gUPPLIES Fu r m i t u r e DESKS TAB LES CHAI RS LOOSE LEAF FILING DEVICES DEVICES s t e e l FARNAM AT 13 TU https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis £ WOOD PHONE O M DOUGLAS 2793 Peter Bergh, cashier o f the First Na tional Bank, o f Dawson, Minnesota, died recently at his home in that city. Mr. Bergh was 60 years old at the time o f his death, and had always been a leader in community activities. Mr. Bergh had been connected with this bank and held the position as cashier fo r the past nine teen years. New Deposit Boxes The Midland National Bank & Trust Company, Minneapolis, is now installing new safety deposit boxes and vault in the basement o f its building. The door to this neW vault weighs fifteen tons, and it was necessary to cut a hole through the sidewalk in order to lower it into the basement. About fifty tons o f steel lining plates are being used in the vault. Advocates River Traffic Minneapolis, situated as it is in one o f the largest trade territories tributary to any city o f the United States, is the cen ter o f a large food-producing area, with many basic supplies near at hand, has every opportunity for growth and expan sion along manufacturing and industrial lines. This is what Harry G. Benton, secretary o f the Minneapolis Real Estate Board told members o f the St. Anthony Commercial Club at a recent luncheon. “ Minneapolis is a city because of the Mississippi river,” said Mr. Benton. ‘ ‘ She must be awake to her opportunities, or fall behind. W ater communication between Minneapolis and New Orleans will permit Minneapolis to ship by water to all ports o f the world. Illinois has authorized the expenditure o f $30,000,000 to complete a canal to extend from Chi cago to the Mississippi. New Orleans hag invested $100,000,000 in the construc tion o f a port. And now the government has authorized construction of a six-foot channel from St. Louis to Minneapolis.” Minneapolis Bank Reorganizes The South Side office o f the Northwest ern National Bank, Minneapolis, has been reorganized as the Fourth North western State Bank. The officers will re main the same as before the reorganiza tion. They a re : President, A. A. M c Rae; vice presidents, O. O. Erling and F. E. Kenaston; cashier, S. T. Throbeck. Fleischmann Increases Holdings The Fleischmann Company, large man ufacturers o f yeast, have recently pur chased the North Star Malting plant in Minneapolis, and have also acquired the malting house o f the Minneapolis Brew ing Company. W ith a concrete tank grain storage ca pacity o f 1,800,000, the acquisition o f the Minneapolis Brewing Company’s plant brings the grain carrying capacity o f the Fleischmann Company to around 2,000,000 bushels over its form er holdings. THE December, 1925 NORTHWESTERN 73 BANKER Have Silver Anniversary The silver anniversary o f the Security State Bank o f Ellendale, Minnesota, was recently celebrated by that institution. F. G. Sloan, first president o f the bank, still occupies that position. M in n e s o ta Bank N ews Officers Minnesota Bankers Association J . J. M A L O N E Y P r e s id e n t P r e s i d e n t ...................... J. J. M a l o n e y H eron L ak e V i c e P r e s i d e n t . . .R . E . M a c g r e g o r M in n e a p o lis T r e a s u r e r ........................ J. K . M a r t in L it t le F a lls S e c r e t a r y ................. . . .F . P . F e l l o w s St. P a u l Nominated As Class “ A ” Director Paul J. Leeman, vice president o f the First National Bank o f Minneapolis, is the nominee o f the class “ A ” banks to succeed Theodore W old, vice president o f the Northwestern National Bank, as di rector o f the Federal Reserve Bank. Mr. W old, after eleven years’ service, de clined the nomination. Mr. W old was the first governor o f the Federal Reserve Bank, serving fo r five years after itsaorganization in 1914. He resigned in 1919 to become a member o f the executive staff o f the Northwest ern National Bank and in that same year was elected to the reserve bank board. Class “ A ” directors must be chosen from banker members o f the ninth reserve dis trict. The new directors will assume office January 1st. Paul N. Myers, o f St. Paul, is the candi date to succeed F. R. Bigelow, also o f St. Paul, class “ B ” director chosen from business men other than bankers. Mr. Bigelow declined reelection. The only contest in the 1925 balloting has devel oped in the choice o f a successor to Frank P. Hixon, lumber manufacturer, who has moved to Lake Forest, 111. Candidates to succeed Mr. Hixon, whose term ex pires January 1, 1927, are John S. Owen, o f Eau Claire, and Sam A. Rask, of Blooming Prairie, Minn. Mr. Hixon was a class ‘ ‘ B ’ ’ director, representing busi ness interests o f the district. Is Now Cashier B. M. Boxrud, form erly assistant cash ier of the Goodhue County National Bank at Red Wing, Minn., was recently elected cashier to fill the vacancy left by the death o f the late F. S. O ’Neill. N. C. Lien, second assistant cashier fo r a number o f years, has been advanced to the position o f first assistant cashier. H. J. Croke was elected second assistant cashier. Merges with Metropolitan National The Bankers 'National Bank, which has been located in the Lumber Exchange Building, Minneapolis, was recently merged with the Metropolitan National, using the name o f the latter institution. The consolidation adds $1,800,000 in de https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Minnesota Bank News William C. Otto has resigned his posi F. P. F E L L O W S S ecreta ry posits to the Metropolitan National Bank, giving it resources o f more than $12,000,000. A. L. Warner, formerly president o f the Bankers National, becomes fourth vice president o f the Metropolitan. Un der the terms o f consolidation, all em ployes o f the Bankers National are pro vided fo r in the combined institution. Hold Vigilante Conference An important conference was held re cently at Albert Lea, Minn., when the sheriffs o f all o f the Southern Minnesota counties and those o f the Northern Iowa counties held a joint conference. Minne sota is at this time creating Vigilance Committees throughout the state. It is interesting to know that the sheriffs o f Southern Minnesota and Northern Iowa are now form ing an association known as the “ Northern Iowa and Southern Minnesota Sheriffs ’ Protective* Associa tion .” W . S. Carver, sheriff at Fair mont, Minn., is president. The Iowa Bankers Association was invited to send a representative. Don Davis, state chief o f the Vigilantes and State Agent from the Attorney General’s office, cooperat ing with the Iowa Bankers Association, attended the conference. In calling the meeting word was sent out that “ the sheriffs o f Northern Iowa and Southern Minnesota are making an earnest en deavor to cooperate in the prevention of crime and the apprehension o f criminals and anything which you may offer along these lines or along the line o f vigilant forces will be o f interest at this tim e.” Most o f the robberies o f the past year and one-half in Iowa have occurred along the Minnesota line and it is believed that by developing the respective Vigilance Committees to a still greater degree, that bank robbers will eventually be eradi cated from that territory. tion as assistant cashier of the Belling ham State Bank, at Bellingham. — $— In the reorganization o f the Citizens State Bank o f Franklin, Edward John son becomes president of the institution, succeeding R. J. Neunsinger, who has re resigned. — $— The State Bank of Morton has recently reopened with a capital o f $25,000. James Clancy is president o f the bank and F. J. Kathlaw is the cashier. — $— John Palmer, form erly a superinten dent o f schools, has recently been elected president o f the First National Bank of Clinton, filling the vacancy caused by the death o f J. L. Erickson. — $— Claude Wilcox, until recently assistant cashier o f the State Bank o f Littlefork, has been appointed cashier o f the Warba State Bank, at Warba. — $— Formerly an accountant for the North western Bell Telephone Company in Min neapolis, A. C. Howard has been elected assistant cashier o f the Grant County State Bank, at Herman. — $— Arthur Hirman has recently been ap pointed assistant cashier o f the Hanover State Bank, at Hanover. — $— The Clay County and Minnesota Bank ers Association, with headquarters at Moorhead, Minnesota, have announced a standing reward o f from $1,000 to $5,000 fo r the capture o f bank bandits, dead or alive. Organization is now under way fo r fifteen units o f a Clay county ranger system. M id la n d N a t io n a l Ba n k and T rust C o m p a n y New Firm at Willmar t The Farmers Security State Bank of Willmar, Minnesota, was authorized re cently by the stockholders to make appli cation fo r charter as a trust company. The new institution will be known as the Union Bank & Trust Company. A. E. Nelson o f Minneapolis is the president. Resources $22,000,000.00 t M IN N EAPO LIS 74 THE N O R T H W E S T E R N B A N K E R December, 1925 Morton Bank Reopens The State Bank o f Morton, Minnesota, reopened recently. The bank in its re organization gives its capital stock as $25,000, surplus $10,000. James Clancy is president and J. L. Kathlan, cashier. Farmers State Reopens The Farmers State Bank o f Jasper, Minnesota, has reopened. Capital and surplus are $36,000. The depositors signed to 65 per cent reduction agree ment. Officers are : August Studt, presi dent; A. M. Kendahl, vice president; E. U. Iverson, cashier; J. C. Hellie, as sistant cashier. J. C. Hellie was the special deputy examiner who had charge o f the reorganization work and will be with the bank as assistant cashier. First National, Minneapolis Resources and liabilities o f the First National Bank of Minneapolis now total $105,813,448.04, according to a recent statement o f condition. Deposits are $90,320,930.41. This institution is capitalized at five and a half million. Visits Iowa A T THIS bank, the com.¿A,plete mechanism of a world-wide banking service is kept a living, human thing by the personal relationships existing between our officers and our customers. Every Banking Service C entral T rust C om p a n y o f I l l i noi s 125 ¿Monroe Street at LaSalle CHICAGO -?f? https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis H. A. Gaede, formerly connected with the Citizens Savings Bank o f Dakota, Iowa, in which he is still a stockholder, who is now cashier o f the Renville State Bank, Renville, Minnesota, spent several days in Iowa last month on business. Mr. Gaede reports farm and business con ditions in his community quite prosperous, saying Minnesota farmers are fortunate in that they were not compelled to bor row so much during the after-war days as the farmers in other states, and con sequently have made a quicker recovery from business depression. Dairying, he reports, has also served to pull the Min nesota farmer through in good shape. New Farmers’ Account Book W ith plans in view to give more at tention to farm accounting, the A gricul tural Extension Division of the Minne sota Farm School have completely re vised their former farm account book. This book has been published for a number o f years, and is very popular with banks fo r distribution among their farmer customers. The revised edition is now ready fo r distribution. In addition to this book, the Extension Division is preparing a course in farm accounting, which will be given by mail. Information relative to the course can be secured fo r the Agricultural Extension Division, University Farm School, St. Paul. Banks are strongly in favor o f farm ac counting, as the farmer who keeps a proper record o f his business is a more desirable customer than the one who never knows where he stands. December, 1925 THE NORTHWESTERN BANKER F ir st N a t io n a l Ba n k Minneapolis, Minn. S t a t e m e n t o f c o n d i t i o n a t t h e c lo s e o f b u s in e s s M o n d a y , S e p t e m b e r 28, 1925 RESOURCES Loans and D i s c o u n t s ........................................................ $53,949,808.68 Overdrafts ................................................................... 6,118.89 U. S. Government S ecu rities......................................... 16,272,117.81 Other Bonds and S e c u r it ie s ......................................... 5,763,299.18 Bank Buildings and Other Real E s t a t e ..................... 1,232,486.45 Customers’ Liability Accounts, Letters of Credit and A c c e p t a n c e s ..................... 1,234,896.03 Bankers Acceptances P u r c h a s e d ............................... 716,938.46 Interest Earned but Not C o lle c te d ............................... 429,185.85 Cash on hand and due from B a n k s ............................... 26 208,596.69 $105,813,448.04 LIABILITIES Capital S t o c k ...................................................................$ 5,500,000.00 Surplus ........................................................................ 5,000,000.00 Undivided P r o f i t s ......................................................... 557,575.98 Reserved for Interest, Expenses and Taxes . . . . 545,428.61 Interest Collected but Not E a r n e d ............................... 253,353.01 Bills P a y a b le ................................................................... 900,000.00 Circulation .................................................................... 1,612,400.00 Letters of Credit and A c c e p t a n c e s ............................... 1,123,760.03 Deposits ........................................................................ 90,320,930.41 $105,813,448.04 OFFICERS F. M. P R IN C E , Chairman B oard of D irectors F. A. C H A M B E R L A IN , P resid ent J. S. PO M E R O Y , V ice President P. J. L E E M A N , V ic e P resid ent GEO. A. LY O N , V ice P resid ent J. G. B Y A M , V ice P resid ent E. E. B L A C K L E Y , V ice P resident F R E D S P A F F O R D , V ice P resid ent S T A N L E Y H. B E Z O IE R , Cashier JOHN G. M A C LEA N , A ssistant Cashier W A L T E R A. M E A C H A M , A ssistant Cashier C. B. B RO M B A C H , A ssistant Cashier J. A. M U R P H Y , A ssistant Cashier J. C L A Y T O N , A ssistant Cashier G. W O O D S S M IT H , A ssistant Cashier W . A. V O L K M A N N , A ssistant Cashier L Y L E W . SCH O LES, A ssistant Cashier A. G. B JE R K E N , A ssistant Cashier G. W . B U F F IN G T O N , V ice P resid ent and General Counsel K . M. M O R R ISO N , C om ptroller M. O. G R A N G A A R D , A ssistant V ice P resident Combined Deposits of First National Bank, Minneapolis Trust Company and Hennepin County Savings Bank $114,939,370.69 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 75 76 THE NORTHWESTERN BANKER December, 1925 Adopt New Collection Plan The Old and the New Year To our many friends and patrons we extend the season’s greetings, and hope that 1926 may prove a more prosperous year than the one now coming to a close. Incidentially we will esteem it a pleasure to serve as your banker during 1926 and succeeding years. TH E FIRST N A T IO N A L B A N K , Duluth, Minn. Capital $2,000,000.00 Surplus and Profits $2,250,000.00 The Morrison County, Minnesota, Bankers Association recently adopted the follow ing resolution relative to the col lection o f certain item s: Whereas, A number o f produce buyers and catalog houses make it a practice to draw checks and coupons, payable on their own firm or payable on themselves, sometimes with bills o f lading attached, and sometimes without, and Whereas, Such papers are in reality nothing else than a receipt for the prod uce delivered; now, therefore, be it Resolved, That we, the bankers o f the Morrison County Association accept such items fo r collection only, and That a copy o f this resolution be spread upon the minutes o f this meeting, and That a copy thereof be sent to the State Assoviation, with the request that the secretary o f the State Association circularize the banks o f the state, calling their attention to this resolution, and the state secretary suggest to these banks that they establish the practice o f han dling all such items on this basis. Boosts Ranger Plan Co-operation Accepting accounts from bankers is an easy and delightful piece of business. Paying for these accounts in service rendered is an entirely different business. The Stock Yards National Bank de sires accounts from bankers and has developed ways and means of serving these bankers in exceptional ways, which make them permanent customers. TH E STOCK YARDS NATIONAL BANK THE STOCK YARDS TRUST firSAVINGS BANK C H IC A G O SYMBOLS OF SECURITY In the financial world, RAND McNAL.LT banking publications all represent undisputed reliability and accuracy in the providing of every kind of banking information. The Blue Book is published in March and September. Let us tell you more of its value. Write us. . Rand M9Nally & Company Dept. Z-29, 536 S. Clark Street, Chicago Largest Publishers of Banking Publications In the World. Established 1856. Official Num bering Agent, American Bankers Association. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis In an effort to secure a hundred per cent ranger organization among banks o f the association, Fred P. Fellows, secre tary of the Minnesota Bankers Associa tion, recently sent out a letter to member banks in which he said in p a rt: ‘ ‘ The fact that 40 counties have adopt ed the ranger plan and several are now completely organized should justify the remaining counties in adopting the plan at once. Iowa, Illinois and Kansas are completely organized; Indiana and W is consin are actively at work organizing. I f we are not prepared, the bandits driv en from these states will come to Minne sota to operate. “ Two objections present themselves to one first considering the plan. First, the cost, and second, the liability incurred by the individual bank or the county asso ciation. As to the first objection, it is not necessary to buy new guns for the squads. In practically every county so far organized it has been found that the men available fo r county rangers have either shotguns or rifles, and if they do not have suitable guns there are plenty available in the community. Practically the only expense is the premium on the bond to the sheriff and the accident pol icy, costing $4.50 per man, and the badge, 40 cents. As to the liability, the men are deputy sheriffs— police officers—-and there is no liability upon the part of the banks either to the rangers themselves or to the public. “ I f your county has not adopted the plan, get in touch with the county officers at once and urge them to call a meeting. I f the plan has been adopted, assist in getting the organization completed and ready to g o .” December, 1925 THE NORTHWESTERN 77 BANKER North Dakota News Jacob Mack has been employed as North Dakota B a n k News bookkeeper o f the Farmers State Bank o f Dickinson. A. H. Helgeson has been employed by the Michigan City Bank in the capacity o f assistant cashier. Officers North Dakota Bankers Association P resid en t.........................................E d P ie rce Sheldon Agnes L. Brown and Maynard N. Red ding are now with the Northern State Bank o f Grand Forks as bookkeeper and V ice P resid en t and Chairman E x e cu tiv e C ou n cil......................H . T . Graves Jam estow n T rea su rer............................... J. E . D avis G ood rich E D P IE R C E P r e s id e n t S ecreta ry....................... W . C. M acfad d en F argo W . C. M A C F A D D E N S ecreta ry Bankers to A id Increased Farm Profits By H. H. Haynes Associate Manager, Northwestern Banker B arouse the different state bankers asso A N K E RS o f North Dakota, through ciations to take up a definite, practical their agricultural committee, which program o f work whereby the bankers met in Fargo recently, intend to put may assist the farmers in their big move over an aggressive campaign to acceler ment away from one-crop systems and ate the diversified farming movement in into more diversified and profitable types every county o f the state. The presenta o f farming. W e have been meeting with tion o f a definite amortization plan for financing the sale o f land in North Da good success everywhere, but North Da kota is proving to be one o f the leading kota was one o f the outstanding features states in this work. ’ ’ o f the conference. Mr. Otis said that farmers o f North The committee decided on two courses Dakota should be well pleased at the o f action : First, the appointment in progress made toward diversified farm every county o f a “ key man,’ ’ who would ing, and urged every banker in the state be selected with regard to his fitness and to get in touch with the practical work experience, and also in proportion to his past activities in the development of the being done by the agricultural college and the extension department. movement. Second, the committee will attempt to John W . Haw, development agent o f finance a series o f farm institutes to put the Northern Pacific, related the progress into effect the projects which the Bank made in the raising o f sheep during the ers Association has adopted. It will be past few years. He gave figures to show up to the “ key m an” to organize the that if past years are indicative, sheep institutes, and also to keep the county will not reach their peak price until 1926 bankers’ organization on its toes. or 1927, which would make them a profit The North Dakota program o f farm de able investment for the next two or three velopment is divided into eight units, as years, at least. fo llo w s: A lfa lfa on every farm, boys and J. E. Eastgate, owner and operator o f g irls’ club work, farm accounting, corn Eastgate Farm, near Larimore, North production, sweet clover, clean seed, Dakota, gave some interesting results pure-bred sires and weed control. from his farming operations. He raises The amortization plan was presented diversified crops on his 600-acre farm, by W . C. McFadden, secretary o f the such as wheat, oats, barley, corn and po North Dakota Bankers Association. It tatoes. He has 300 acres in pasture, trees provides fo r selling land on an 18-year and buildings. Mr. Eastgate said that he amortization system, with an eight per had never burned. a strawstack in 25 cent annual payment, four per cent be years, and that during the past 13 years ing the interest rate charged, with the 7,300 loads o f manure had been spread. other four per cent to be applied on the About 100 bankers were in attendance principal. at the sessions. This conference was one D. H. Otis, director o f this work fo r o f a series being held throughout the the American Bankers Association, who Northwest in which the agricultural com met with the committee, was very enthu mission o f the Bankers Association, in siastic over the progress made in North cooperation with the agricultural com Dakota. In this connection he sa id : mittees from the various state associa “ The American Bankers Association tions, are working out plans to help the hah been attempting fo r several years to farmer make more money. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis teller. Daniel Leek, form erly teller, has resigned. The Secretary of State’s office has issued certificates o f change o f corporate name to the Farmers State Bank of Buttzville. This bank is now the Farmers State Bank o f Lisbon. The Farmer’s Purchasing Power Much has been written and said o f late concerning the purchasing power of the American farmer. The W ells-Dickey Company o f Minneapolis in a recent mar ket letter comments on that thought in part as fo llo w s: “ Relative to the purchasing power o f the farmer, there have been many disap pointments in the last few months. W ith a splendid crop in view early in the sum mer and with prices at a point which would quickly put the farmer back on his feet after several years of acute hard times, the farmer had every reason to look to the future hopefully. Then un favorable weather intervened and even now unseasonable cold and snow have obstructed the harvest in western states. Yet the prices o f most farm products have increased, so that the farmers are now receiving relatively the highest prices fo r their products o f any time since 1921. “ The farmer’s condition is always a relative one, and that relation is deter mined by the amounts which the products he raises will buy o f other products. “ Consequently, with the recent ad vance in prices, the farm er’s products, according to one eminent authority, Mr. K. G. Ell, now have the power to pur chase other commodities 91 per cent as great as before the war; the highest it has been since 1920. Comparing prices o f the past month with those of a year ago, the general level has increased 7y2 per cent, while farm products have in creased 121/2 per cent. In view o f this situation the farmer should he greatly encouraged. Up until last spring he was weighted down with a surplus o f prod ucts which has been gradually worked off. This year he faces the prospect o f a fair income, income that has already be gun to make a dent in some o f his long standing debts. W ith this, scarcely per ceptible as yet, but perceptible neverthe less, is an interest in the purchase o f good farm lands. The movement which 78 THE NORTHWESTERN BANKER December, 1925 fo r several years has been away from the land would seem to have been halted and attention has been turned in the other di rection. Small wonder, when the best farm land in the world, without buyers fo r years, can be purchased at ridiculous values and on terms unheard o f for a quarter o f a century. ’ ’ Issue Preliminary Report A Distinctive Service for Your N e w York Business TH E M e c h a n ic s & M etals Na t io n a l Ba n k O F TH E C IT Y O F N EW Y O R K D eposits, Sept. 2 8 , 1 9 2 5 , $ 2 7 1 ,0 0 0 ,0 0 0 G . W . M cG A R R A H C hairm an of the Board JOHN M cH U G H President HE Evanshire in Evanston is closer to Chicago’s business, shopping and amusement center than are many Chicago hotels. Surface, elevated and steam trans portation lines, a block distant, make fast time to Chicago’s ‘ ‘ Loop. ’ ’ Thus at the Evanshire you can have the convenience of location of a Chicago hotel in the en vironment of Chicago’s wealthiest and most beautiful suburb. And charges throughout, including the restaurant, are notably moderate, although in equip ment, service, environment and class of patronage the Evanshire holds high rank. T The E vanshire is at Main and H inm an streets in E va n ston, only a few block s from gloriou s old Lake M ichigan. E uropean plan. R ates are $3.00 a day and up fo r a room fo r one person and $5.00 and up fo r tw o p er sons, all with p rivate bath. W rite tod ay fo r d escrip tive fold er. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The following preliminary summary o f agricultural and financial conditions has been prepared by the Federal Re serve Bank o f M inneapolis: “ Business conditions in October in the Ninth Federal Reserve District were dominated by weather conditions. The month was the coldest October in more than forty years. This retarded haul ing o f grains to market, suspended threshing operations in the northern counties o f Montana and North Dakota, and froze potatoes and sugar beets in the ground. The short crop and delayed marketing caused potato prices to soar to a price o f $4.00 per hundredweight as compared with 90 cents last year at this time; and the marketing o f the grains slumped to less than one-half o f the volume o f October a year ago. Depart ment store sales also increased, pri marily due to the earlier than custom ary purchases o f winter clothing. This, coupled with five Saturdays in the month o f October this year, helped to increase retail trade by one-fourth over a year ago. “ Cash grain prices are all consider ably lower than a year ago except bread wheat and flax, which advanced slightly in their median prices; the declines be ing greatest fo r the feed grains, which is good news fro those able and willing to care for livestock. That such feeding operations are on the increase is shown by the advance o f the prices o f feeder and stocker cattle during October as compared with September when all other kinds o f cattle declined in median cash prices, due to the pressure o f heavy marketings which in October were double the September totals. “ Livestock marketing in October scored noteworthy advances both in volume and in prices as compared with last year. It is hoped that the purchas ing power created by this livestock move ment will offset the declines shown in our total crop production in 1925 and declines in the prices o f feed and ex port grains, such as rye and durum. “ The shipments o f linseed products, flour, and iron ore, and coal receipts at the head-of-the-lakes in October were larger than a year ago; and all these were larger in October than in September except iron ore shipments, which de clined slightly. “ Carloadings in the Northwestern dis trict during the four weeks ending Oc tober 24th, were substantially unchanged Decem ber, 1925 THE from those in a similar period in the preceding year. The declines in grain products were counterbalanced by gains in ore and livestock. Carloadings in the miscellaneous classification increased 1 per cent. “ Debits to individual accounts were 6 per cent larger in October than in Sep tember, but 14 per cent below October last year. The latter decline was due to the slump at the terminal grain hand ling cities o f Minneapolis and DuluthSuperior.” The Automobile and Economy To those who consider the automobile a luxury which through its appeal to the millions threatens to nip national thrift in the bud and turn us back toward extravagant ways, the addition during the year o f 4,000,000 new cars brings fresh doubts as to our sanity and fears fo r our well-being. A ll o f the criticisms levelled at the automobile by those who look upon it as economically destructive is not disin terested but some o f it is; a good part o f it is plain unreasoned and uninformed opinion which is without substantial basis in logic or fact. In the first place, while it might have been so considered when it was younger, the automobile can no longer be regarded, strictly speaking, as a luxury. The luxury use o f the auto mobile o f today is largely secondary; it is primarily an instrument o f utility, whether in the service of the delicatessen keeper who uses his sedan as a truck or o f the housewife who uses it as a ve hicle for bundles gathered on shopping tours or in the service o f the farmer who uses it to cut distances, save time and generally to support a condition o f life which before the coming o f the automo bile was generally reputed to be wellnigh insupportable. The automobiles which you see clus tered about industrial plants, around rising building structures, and along the roadside where new construction is under way, do not belong to the plant execu tives, the boss contractors or the road superintendents; they belong to the men in the blue denim shirts, the mechanics and day laborers. They are there be cause they are the means o f transporta tion which the workers have elected to utilize; rightly or wrongly, extrava gantly or wisely, they are being utilized. But aside from its use value, the auto mobile has come to be a factor o f the first importance in support o f the gen eral economic structure. Instead of being the competitor fo r purchasing power which producers o f other goods believe it to be, the automobile is act ually a creator o f purchasing power, a maker o f business for all producers. Common observation teaches us the trade-building value o f new enterprise, o f new building, o f new railroad or high https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NORTHWESTERN BANKER way construction. Similarly, we speak o f buying o f new equipment by the rail roads and increased exports as the “ backlogs” o f trade. When there is a lull in any o f these fields, we feel it in general trade; when there is no activity in any o f them, there is no trade any where. The difference between good times and hard times is the difference between full employment o f labor and minimum employment o f labor. Times are good when there is a job fo r every man and a man for every job. They are bad when there are more men than jobs. Any industry which gives employment to hundreds o f thousands o f workers by that fact alone takes a front position in the order o f economic importance. The direct ramifications o f the auto- mobile trade touch nearly every impor tant basic industry, they reach to the steel maker, the cotton grower, the lum berman, the rubber planter, the oil pro ducer, the cattleman, the paint manufac turer, the glass blower, the coal miner, and the transportation services. The automobile adds to real estate values, increasing the demand fo r floor space for show rooms, garages, hotels, restau rants, filling stations and roadside lunch stands. It builds bank balances, adds to insurance funds and has raised up an entirely new system o f financing. Think o f the thousands o f people whose em ployment is directly dependent upon the automobile. The purchasing power o f these people, which but for the automo bile would not exist at all, more than Bankers in the United States and Canada over 18 and under 55 years of age are eligible for ACCIDENT INSURANCE A T COST with the Iowa State Traveling Men’s Association DES MOINES, IOWA Principal sum ...................................................... $5,000.00 W eekly indemnity ........................................ ...... $ 25.00 Annual Cost Never Exceeded $9 We Have No Agents. Write for Application Blank. Stabilizing Agriculture (L it t l e T a lk s o n T ilin g , N o . 14) HE records o f the Cerro Gordo Corn Contest cover three years, with w idely varyin g clim a tic conditions. These records show the tile drained lands not only give higher yields, but also more dependable and uni form yields. This means that, they give larger profits and more dependable profits. The in come and the purchasing power of the farm er whose lands are tiled are more stable than those o f the man with untiled land. H ow much better it w ould be fo r you r business if all wet, or cold, or tight, or slow lands in your trade territory were th oroughly tiled ! Tile Drainage Stabilizes Individual Incomes and Agriculture in General M ason C ity Brick and T ile C om p an y 312 D enison Bldg. 79 M ason City, Iowa 80 THE N O R T H AV E S T E R N BANKER December, 1925 makes up fo r any loss o f business to other caterers to the public as a result o f the personal economies o f individual owners of automobiles. I f the automobile really upset or tended to discourage habits o f thrift, with the effect of pauperizing any con siderable number o f persons in their old age, it would be open to condemna tion regardless o f its value as a prop to the general economic structure. But it is doubtful if the automobile is open to that charge— in the final analysis the charge against the automobile under this head is that extravagantly inclined peo ple are spending their money fo r auto mobiles instead o f fo r other things.— The American Exchange - Pacific Na tional Bank o f New York. C h r is tm a s : S p i n ! * '“P H E R E is an irresistible appeal to this sea son, and the mellow feel ing of good will which it brings is all the more welcome when it reflects a year of satisfactory p ro g re ss and general prosperity. Absorbs First National The Farmers State Bank o f Perham, Minnesota, recently absorbed the First National Bank o f that city. H. F. Thoelke is president and A. G-. Schwarzrock cashier o f the combined institution. There is every reason to believe that this should be one of the happiest Christmas seasons among our patrons because the success of the Drovers certainly indicates that the year’s activities have been productive for you. A n d so in hoping that the holiday season w ill be only a climax to a p r o s p e r o u s year, the Drovers are expressing their a p p r e c i a t i o n of your patronage. Changes Bank’s Name The secretary o f state has granted the Farmers State Bank o f Falsen permis sion to change its name to the Farmers State Bank o f Verendyre, North Da kota. The change was made necessary by the change in name o f the town. Remodeling Building The work o f remodeling the building occupied by the Bank o f North Dakota is rapidly nearing completion, and it is expected that all o f the state depart ments which will have offices therein will be in operation in the building by the first o f the year. Lieut.-Cov. to Write Insurance rovers N A T IO N A L B A N K __ D TRUST# SAVINGS BANK U nion Stock Yards, Chicago ¡t Lieut.-Gov. Dennis Murphree has been appointed state manager o f the Universal Life Insurance Company o f Dubuque, Iowa, fo r the state o f Mississippi. Governor Murphree has arranged for offices in the new Mississippi Fire In surance Company building at Jackson. W . C. McCarten, agency supervisor, from the home office, is now in Missis sippi where he will remain for several months to assist Governor Murphree in developing an organization in that state. The Universal Life is indeed to be congratulated on securing the services o f so able a representative. A Jackson, Mississippi, newspaper comments on the appointment as follow s: “ Governor Murphree is one o f the best known men in the state, he knows how to do things, and he will very quickly take rank as one o f the leading life in surance men in the state.” No craven-hearted man was ever fit to be a citizen. Courage is the source o f pa triotism.— Beecher. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis THE Decem ber, 1925 NORTHWESTERN Iowa, the Two Billion Dollar State IOWA SEGTION * B y G. A . G older Chicago Manager, F idelity Bond and M ortgage Company Officers Iowa Bankers Association President................. Emil Webbies Burlington Vice President........ C. C. Jacobsen Mapleton Treasurer................. A. E. Hindorff Newton Secretary................. Prank Warner Des Moines EMIL W EBBLES President CROP A N D L IV E STO CK PRANK W ARNER Secretary C O N D IT IO N S IN S IO U X C IT Y T E R R IT O R Y SOUTH DAKOTA Corn Small Grain Pig County Oats ) Hutchinson... 12-25 30 25 35 25 20-40 30-40 40 20-25 20 30 30 40 40 15 30-45 35-50 40-60 50 40 20 35 50 40 30-50 50-75 30 25 20 30-45 30-40 20 Wheat 3- 8 10 Barley 20 Quality Yield Pastures Feeding Crop Fair........... 50 to 75%.. 10-20 8-10 13 10-15 15 10 9 14 10 10 8 12-20 10 10 10 15-40 15-27 9 9 5 15 30-50......... 25-40 25 20-30 20-30 25 20 25 25 20 25 20 20 30 35 25 20 35 35-50 30 25 25-35 35-40 G o o d .... 75%........... Average___ 15-40......... 25.............. 5-15 12............... 10.............. 10.............. G ood.. . . 10-35......... Poor....... Average.. . . 10.............. G ood.. . . 10-40......... 25............... 25............... 10.............. 18.............. Good.......... 20-25......... 25............... 25............... Good. . . . 30............... 20............... 10............... 10-35......... Good.......... 25-45......... .25............... Good.......... 25 ............. Fair........... Spotted. . . . 20% Very little 8. ! " ........... Some—60% of norm. NORTHWEST IOWA Ida................ Woodbury . . . 50-60 45 40-65 35-40 40 40 30-60 40-80 40 25-40 50 ............. 35-45......... 45.............. 30-50......... Good.......... 40.............. 45.............. Good.......... 20-40......... 35-50......... Good.......... 40.............. Good—spots 35-40......... Above avge. Average. Good.......... 20 Poor....... Below avge. Average NORTHEAST NEBRASKA H olt.'........... 25 30 40 20 30 35 30 25-45 15 Good.......... 15-40......... 15............... 25............... 15.............. 20............... 75%........... 25. " ........... Good.“ ........ G o o d .... Good___ Average___ SOUTHWESTERN MINNESOTA Rock........... 50 30 40-50 30 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Good.......... Good.......... Fair........... 20............... 20............... 20.............. 50%-30___ G o o d .... Poor The article in the October issue o f T h e B a n k e r entitled “ The Northwest on Trial— and ‘ The Verdict— Better Tim es’ ” is well worth anyone’s reading, particular those interested in the great Northwest territory. There are, however, some outstanding facts re garding the Northwest territory and Iowa in particular with which many o f your readers are fully familiar and this in re gard to present or 1925 crops and other new wealth commodities. The corn crop fo r the state o f Iowa is in excess of 477,000,000 bushels and at prevailing prices at this writing o f 63 cents at the elevators creates a corn crop wealth in excess of $300,000,000. I f to this we add all other crops, such as wheat, oats, flax, barley, etc., live stock, dairy products, poultry, industry and coal is creative o f approxi mately $2,000,000,000. N o r th w ester n The figures given below were submitted to the T h e N o r t h w e s t e r n B a n k e r by C. L. Fredricksen, cashier o f the Live Stock National Bank at Sioux City, Iowa. They are the result o f a recent crop survey made by that institution in parts o f the states o f Iowa, South Dakota, Nebraska and Minnesota. , 81 BANKER Average___ Little These figures perhaps do not mean very much to many readers, but it would cre ate a sum o f about $75 per capital for every man, woman and child in the great city o f Chicago. In some quarters there has been a great hullabaloo linking the present corn price with the failure o f several small banks in IoAva, which is pretty well shown up for what it is worth by two statements re cently in one day. One statement is is sued by the commission, Robert A. Cooper, o f the farm loan board, who had completed a cross-country journey over the state of Iowa during which time he in spected the twelve land banks. The other statement was issued in a report form by the Brookmire Economic Service. Neither o f these authorities approved of the radi cal statements made that the corn situa tion is so extremely unfortunate as has been contended by those who link the present corn prices to the Iowa bank failures. In Iowa, like in a number o f other states, most of the corn is sold on hoof. That is, it is fed to hogs, cattle and sheep and the net return from stock will be greater this year than last, according to the Brookmire report. Alarmists find Iowa the chief cause for pessimism, that in Iowa the Brookmire surveys revealed that farmers will receive this year from $75,000,000 to $80,000,000 from the sale of corn as against $62,000,000 last y ea r; from cattle $150,000,000 as against $143,000,000 last year and from hogs $260,000,000 as against $250,000,000 o f last year. About 85 per cent o f corn is fed. The remaining 15 per cent is about half ac counted fo r by seed, waste and export 82 THE N O R TH W E ST E R N BANKER ----- December, 1925 and the remainder is used for commercial use. The contention o f alarmists is that be cause the price per bushel on corn is low the slump is responsible for the failure o f Iowa banks. This view, however, is not in accordance with competent author ities who know the conditions existing in that state. There was a time, and not long ago, when a large number of Iowa banks were under very close supervision and this was because they seemed to be on the edge of failure, but by sensible cooperation on the part o f the banking department and other officials, these banks have been en abled to work out their own salvation and the number o f failures very largely re duced. Those banks who have failed did not do so because o f present conditions, but because o f slowly accumulating weak nesses which they have not been able to overcome and thus have not been able to keep themselves from sliding over onto the rocks. W ith this year ’s crop condition as re ports indicate the Iowa farmer will funds to purchase new equipment and other needed farming facilities. « This Is Poverty B. A. P h illips, V ice President Knowledge o f Bond Financing “ The rock foundation of every success ful organization is capable knowledge.” W hile an institu tion is the lengthened shadow o f the men who d irect its b u s i ness policies— it is also o f equal im portance, p a rticu larly in the bond business, that its officials be com p letely capable in the know ldege o f bond finance fu n dam entals. These tw o things, if p erfected to the highest degree of efficiency, react fa v o r a bly in its ultim ate progress. The am ount o f confidence banks and individuals place in the W h ite-P h illip s Com pany today adequ ately reflects the high standing of an institution know n in m any states fo r its in tegrity and thorou gh know ledge of bond financing. M r. B. A. P h illips, vice presiden t of the W h ite-P h illip s Com pany, has devoted years of thought and w ork to every detail of bond financing. H is su ccessfu l r e c ord, together w ith his fa m ilia rity con cern in g all financial problem s gained b y actual experience, cou pled w ith a p ra ctica l and techn ical acquaintance, has been a fa cto r in the unprecedented grow th o f the W h ite-P h illip s organization. M r. P h illip s is recogn ized in Iow a and surrou nding states as a man who understands the bond business and one w hose insight has added greatly to the success of the W h ite-P h illip s Com panv— truly an organ ization built on “ the rock foun dation o f capable k n ow led g e.’ ’ A n Investment Ban\ing House o f Service ^ p N V- \v> Ÿ ï ï i T E - P h i l i p IN V E S T M E N T p 1 ^---------—o RAATTÍFT?« B A N K E R S o o-----------— W D U B U Q U E , IO W A D ES M O IN E S , IO W A OM AH A, NEBR ASK A B. & I. Building 219 Securities Bldg. Bankers Reserve L ife Bldg. Benjamin Starr of New York City, un able to work during the winter season, committed a theft in a Broadway store, was arrested, taken to court and sentenced to the Welfare Island penifcentiay for an indeterminate sentence. When sentence was pronounced, says a news item, “ a broad smile spread over his face” as he bowed to the judge. But that’s only a part o f the man’s story, who is now 81 years old. F or fif teen years, every fall since he was 66, the cold o f New York, coupled with the fact that he is a homeless man, has been too much fo r him to stand, and he has com mitted fifteen annual petty thefts for the sole purpose o f securing warmth and food in jail. It is a sad state for a homeless and friendless old man to be in, when the bleak walls o f a jail are sought as a refuge from poverty. In spring and summer he has been able to exist, thanks to the nourish ment and warmth yielded by a jail sen tence during the fall and winter. Of all the travelers along the thoroughfares o f life, the poverty-stricken old man or old woman is the most pitiable. This man has found food and shelter from the weather in jail. But Stone walls do not a prison make, Nor iron bars a cage when they bring food and warmth to a cold, hungry and helpless old man.— From Chicago Journal o f Commerce. DAVENPORT, IOWA First N at’l Bank Bldg. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The art o f painting does not proceed so much by intelligence as by sight and feel ing and invention.— Hamerton. t December, 1925 TH E N O R T H W E S T E R N 83 B A N K E R Credit Bureau Endorses “ Hold Your Corn” Movement. At a recent meeting o f the Pocahontas County Credit Bureau at Plover, Iowa, C. A. Carlson, cashier o f the State Bank o f Laurens, introduced the following reso lution, which was passed unanimously: Whereas, The membership o f the Poca hontas County Credit Bureau includes a large number o f representative profes sional men and business concerns o f every town in the county, and Whereas, A representative meeting o f said association was this day held at P lo ver, and Whereas, W e as citizens o f one o f the most fertile and productive sections o f the great agricultural state o f Iowa fully real ize and gladly recognize our deep interest in and dependence upon agriculture, and are also well aware o f its pre-eminent im portance to the material welfare and ad vancement o f our entire nation, and Whereas, It is a thoroughly established proven fact that fo r a number o f years the average agriculturist, particularly of the corn belt, has received for the prod ucts o f his labor a net return which is far below the amount necessary to maintain a decent American standard o f living, and Whereas, Group organization and con trol has in recent years developed in this country to a surprising, if not an alarm ing degree, and, inasmuch as it is the es tablished order o f procedure and attain ment whereby a measure o f stability is successfully maintained through highly organized control, and Whereas, The agricultural area known as the corn belt, in the very heart o f the United States, has thus far failed to take advantage o f similar group organization, and Whereas, We firmly believe that from an economic standpoint a strong nonpo litical organization o f the agricultural and business interests o f the corn belt is a necessity and can be a powerful influence for the common good, and Whereas, W e feel that an important step in this direction is being taken at the present time in the promotion of the Na tional Com Growers’ Association; be it therefore Resolve.d, That we pledge our full sup port and cooperation to the efforts being made in our own and adjoining states to create without delay an organization large enough to be o f constructive and perma nent benefit to the corn belt o f the United States. Assistant Cashier Retires G. A. Shifflet recently retired as as sistant cashier o f the Tingley State Sav ings Bank after a number o f years of service. He is succeeded by Isaac Kiburz. There is no friendship, no love, like that o f the parent for the child.-—Beecher. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis To the Banker W ithout Connections in Des Moines W hen you have busi ness that requires the attention and coopera tion o f a D es M oines bank, we will be glad to take care o f it for you. T he fact that we are regularly serving a number o f out-of-tow n banks is evidence that you can depend on us to handle such matters to your com plete satis faction. BANKERS TRUST CO. B A N K Cor. 6th and Locust Sts., Des Moines Capital $1 ,000,000.00 Surplus $ 2 0 0 ,0 0 0 .0 0 84 T II E N 0 II T II W E S T E R N B A N K E R D ecem ber, 1925 “ Corn Producers and Iowa Bankers” In order to let their community know their reaction on the “ Hold Your Corn” movement, the Farmers Savings Bank of Manson, Iowa, recently issued a hand bill calling their customers’ attention to the fact that the Farmers Savings was still doing business at the old stand, and stood ready to help them in any way pos sible. A copy o f the broadside is given below. CORN PRODUCERS AND IO W A BAN K ER S L et U s Sit T ogether in M utual Counsel in Order to D etermine W HERE W e Stand Christmas Time ^ ^ ^ ^ O M I N G to the su rfa ce n ow are th e,frien d ly i f i l l i i thoughts o f service and g o o d w ill w hich spur us on th rou gh ou t the year in our daily task o f serving you. A s w e a p p roa ch the close o f 1925, w e wish to a ck n o w le d g e to our m any frien d s our a p p recia tion o f th eir confident g o o d w ill and gen erous patron age. W e anticipate the begin n in g n ow o f the m ost prosperou s era in the econ om ic history o f the State o f Iow a . Our orga n iza tion is equ ip p ed to m eet the w idest range o f you r financial needs. If the C edar R apids N ational Bank, th rou gh its m any service departm ents, can h elp to brin g to you r institution you r share o f this prosperity, it w ill be m ore than h a p p y to serve you. It is our earnest wish that at this Christm as tim e you and you r institution m ay have an abundance o f jo y and g o o d cheer. 'This Bank Was Not Built in a Day T5he Cedar Rapids National Bank -O F F IC E R SR alph V an V echten Chairman o f the B oard Glenn M. A verill P resid ent Geo. P. M iller V ice-P resid en t https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis M artin N ew com er V ice-P resid en t Chas. C. K uning Cashier Peter B ailey A ssistant Cashier M arvin R . Selden A ssistant Cashier Geo. W . Swab A ssistant Cashier V an V echten Shaffer A ssistant Cashier B ertha M. W o lf A ssista n t Cashier We have already waited too long for the discovery of a MOSES to pilot us across the Jordan into the promised land. I f this MOSES has arisen, he has not been accepted by the majority of the Corn Producers of the CORN BELT, therefore, the FARMERS SAVIN GS B A N K of Manson, Iowa, begs privilege to offer a few suggestions for con sideration. Students of the ‘ ‘ cost of production ’ ’ publish estimates all the way from 62 to 75 cents per bushel to market corn. A strenuous campaign has been waged to “ Hold your CORN.’ ’ This bank does not pose as a market chart maker. Every farmer in Iowa has the same privilege to guess on future markets as we have, therefore, the object of this publica tion is along other lines for consideration and upon a subject on which we are better educated. As far back as November 1, 1921, this bank published a circular on the subject of “ Home Consumption” or “ Eat More Corn ’ ’ and we still hold fast to the rule of ‘ ‘ Supply and Demand, ’ ’ therefore, now use just a line to suggest an organized effort to encourage an established number of family CORN meals each week. Suggestive: Breakfast— Corn flakes, corn cakes, bread, corn syrup. Dinner—-Cornmeal mush, canned hominy, corn muffins, ‘ ‘ hoe cake. ’ ’ Supper— Fried mush, fritters with syrup, cornstarch pudding. For other methods of cooking, we you to the “ Ladies Aid Cook Book.” corn corn, corn refer Make your own estimate of the increased consumption which the adoption of such an increased use of CORN will produce. What about financing “ Hold Your Corn” doctrine ? This puts us on a subject upon which we are better posted, and avoiding any advice about ‘ ‘ holding ” or “ orderly marketing ’ ’ we can announce to our patrons, that we are prepared to furnish a reasonable amount of credit for any legitimate purpose, barring speculation and in most cases, new invest ments. You ask, on what plan we offer loans? Our reply is, take your choice of our bank’s new original plan of using a duplicate chat tel mortgage note, all in one instrument or the State ‘ ‘ Intermediate Credit ’ ’ plan which can be organized for benefit, or another plan of offering warehouse receipts as authorized by the Fortieth General A s sembly of Iowa. This is too lengthy a subject to discuss in detail, except to copy briefly from a late letter from the “ Intermediate Credit Bank of Omaha, ’ ’ which says: ‘ ‘ The best method of obtaining advances on this season’s crop is through the local bank, which may qualify as an endorser by filing with this bank, its Decem ber, 1925 THE NORTHWESTERN 85 BANKER application for rediscount privilege and having the same approved. ’ ’ This bank will then loan to the Ideal bank 75 per cent of the estimated value of the pledged grain. Thus, you see, that the local bank must be the intermediate channel and any loss falls upon your own bank and the Intermediate Credit Bank takes no chances, as long as your local bank is good. Or, in other words, your local bank guarantees your note to the Federal Intermediate Credit Bank. The same condition and requirements are true if your local" bank seeks advances from its own city correspondent or the Fed eral Reserve Bank of Chicago. CUSTOMERS AND FRIEND S of the FARMERS SAVIN G S B A N K of Manson, Iowa: We have been offering you our serv ices for many years. We are still ready to furnish you our very BEST SERVICE. Your confidence in this bank makes us able to offer you help when you need it and when you need the bank. Yours for Reciprocity and Service, FARM ERS SAVIN G S B A N K . M. W . Fitz, President. F. B. Davis and M. J. Foley, Vice Presi dents. J. D. Kolp, Cashier. Ralph Kenning, Assistant Cashier. Isa B. Fitz, Director. May Have Clearing House The bankers o f Ames, Iowa, have for some time felt the need o f a clearing house organization. Recently a committee was appointed to draft articles and by-laws, and at a meeting last month, held by the directors selected by the various banks in Ames to have charge o f the Clearing House A s sociation, the follow ing officers were elected: H. W . Stafford, president; F. H. Schleiter, vice president, and S. A. Knapp, secretary-treasurer and also man ager. There has been an endeavor to work out this organization fo r the past year. Ames bankers want to extend this or ganization to the extent that they may have an examiner fo r a certain territory. However, the latter is only imaginary at the present. Form Rifle Associations The Iowa Bankers Association is rec ommending that the Vigilance Commit tees throughout the state form National Rifle Associations under the organization recommended by the W ar Department. Any 10 vigilantes banding themselves to gether into an association are furnished free rifles and free ammunition, targets and target holders by the government. One o f the latest associations to form is that one in Buena Vista county, where Mr. G. B. Eginton, secretary o f the Buena Vista County Bankers Association, re ports that this has been done. In Storm Lake, nine out o f ten men in the rifle club belong to the local Vigilance Com mittee. Mr. C. W . Liercke, a member o f that association, won sixth prize in the rifle contest in the third annual state shoot. Opportunity is more poAverful even than conquerors and prophets.— Disraeli. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis W aterloo’s Oldest Bank S h ou ld Be Y ou r Bank A frien dly atm osphere prevails here. Y o u have ou r assurance o f p rom p t, efficient and cou rteou s handling o f all financial matters. t IR A R O D A M A R , P resident C. E. P IC K E T T , V ice P resident J. O. T R U M B A U E R , V ic e P resid ent F R E D H . W R A Y , Cashier t C A PITA L . SURPLUS U N D IV ID E D PROFITS DEPOSITS - $200,000.00 $100,000.00 $110,000.00 $4,000,000.00 Leavitt fe? Johnson National Bank W a t e r lo o , Io w a 1 8 5 6 -— Over Two'thirds o f a Century — 1 9 2 5 86 THE NORTHWESTERN BANKER December, 1925 Knoxville Banker Dies Robert Nace, form erly assistant cash ier o f the Guaranty State Bank of K nox ville, Iowa, died recently at his home in that city. Mr. Nace had been ill for a number o f years. Many bankers find the service of this institu tion a valuable aid in their business. All the specialized bond information, with which a bank does not have time to bother, will be furnished for the asking. Perhaps you, too, would find this service use ful from time to time. We shall welcome an opportunity to serve you. I Over 62 Years o f Service to Iowa Bankers Better Business Just now Iow a ’s curve of “ better business” is going upward— steadily pressing forward— soundly, in all phases of agriculture and commercial ac tivities. It is only natural that the old-established, wellknown financial institutions should strengthen their positions more than ever before along with this increase of better business. Iowa and the First National Bank of Davenport progress together. Our service to Iowa banks and bankers is constantly affording greater opportuni ties for a broader cooperation between our new and old correspondent bank accounts. First National Bank DAVENPORT A . F. D A W SO N P resid ent FIRST NATIONAL * BANK 2 1 I. J. G R E EN Cashier R e a c h a $ 1 ,0 0 0 ,0 0 0 ,0 0 0 B u y in g P o w e r https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Sell Interest at Farlin The interest o f Charles G. and Park L. Cockerill, large stockholders in the Earlin Savings Bank, o f Farlin, Iowa, has been purchased by a number o f prominent farmers in that vicinity. New directors will be elected to fill the two vacancies. F. H. Osborn will remain as cashier o f the institution. Mr. Osborn tells us that “ business is g ood ” in that locality. Awarded Contracts The Fisher Company, o f Charles Cityr Iowa, manufacturers o f bank and office fixtures, has recently been awarded the contract fo r installation o f fixtures in the new building which the First Na tional Bank o f Gallion, Ohio, is erecting in that city. The fixtures will be o f quartered white oak and marble. To Establish County Clearing House IN THE UNITED STATES Use The Northwestern Banker Spring Meeting of A. B. A. The 1926 spring meeting o f the Execu tive Council, American Bankers Associa tion will be held at Pinehurst, North Carolina, May 3 to 6, 1926, it has been announced by E. N. Shepherd, executive manager o f the Association. The Execu tive Council is the ad interim governing body o f the Association between its gen eral meetings in annual convention in the fall, and is representative of all parts o f the country. The spring meeting is at tended by about 350 bankers and their guests. Mr. Shepherd also announced that the next meeting o f the Administrative Com mittee o f the Association will be held in St. Louis, Missouri, Thursday, December 10, 1925, the day preceding the American Bankers Association Fiduciary Confer ence, which will be held in that city De cember 11th to 12th. The Fiduciary Con ference will be a joint meeting o f trust companies and state and national banks engaged in trust activities. The meet ing o f the Administrative Committee is arranged so that the members can attend the conference. W ith an idea in view o f establishing a county clearing house in Polk county which would work in cooperation with the clearing house in Des Moines, a com mittee has been appointed composed o f L. O. Shaffer, Altoona; A. F. Miller, Polk City; Elmer Myhre, Ankeny; C. A. Far ris, Valley Junction; and W alter B. Skin ner, Runnells. This committee will study the proposition from various angles, and will report to the Polk County Bankers Association. December, 1925 THE NORTHWESTERN 87 BANKER Veteran Banker Dead George D. Hicks, 73 years old, and one o f the oldest bank employes in point o f service in Iowa, died recently at his home in Sioux City, Iowa. Mr. Hicks came to Sioux City in August, 1871, and immediately entered the employ o f the Weare and Allison Bank, which later became the First National Bank o f Sioux City. During his 54 years o f service he filled various positions in the banks, including that o f auditor, which position he held at the time o f his death. He is survived by his wife and two sons. c A s s e i s Looking into 1 9 2 6 Goes To Red Oak J. F. Reany, o f Columbus Junction, Iowa, recently made a connection with the Houghton Bank at Red Oak, and will be in charge o f the abstracting depart ment o f that institution. Tell of Travels A t a meeting in the lobby o f the Iowa Loan and Trust Company recently Nat Coffin and David M cKee, Jr., told o f their recent globe trotting experiences. Offi cers, directors and employes o f the bank were in attendance at the meeting. Merger at Cowles A recent consolidation at Cowles, Ne braska, is that o f the Cowles State Bank and the Farmers State Bank. The capital stock o f the consolidated banks is $30,000 and the surplus $6,000, and the de posits now total around $220,000. Offi cers o f the new institution are : President, E. T. F oe; vice president, C. F. Gund; cashier, James M cBride; assistant cash ier, Jessie M. Foe. D IR E C T O R S A N D O F F IC E R S OverSixMillion Dollars For the splendid patron age given us, and for the con fidence that inspired this patronage, we are deeply gratified. Nineteen Twentyfive, with its victories and its defeats, will soon be be hind us. Nineteen Twenty-six with its unlimited possibilities is looming up ahead of us. In extending to you the greetings of the season we want to pledge our hearty cooperation in making 1926 a year of greater prosperity for you than ever before. If our service will help you, we most heartily offer it for your consideration in your 1926 plans. ALFRED G. SMITH. Chairman ALFRED C. SMITH. President H. W. SEAMAN, Vice President Chairman, Clinton Wire Cloth Co. G. L. CURTIS. Vice President President, Curtis Companies, Inc. G. W. DULANY, JR.. President, Eclipse Lumber Co. President, Climax Engineering Co. J. PETERSON, Treasurer, Daehler Motor Co. M. J. GABRIEL, President, Gabriel Lumber & Fuel Co. J. O. SHAFF, Farmer and Lire Stock Dealer B. M. JACOBSEN E. J. CURTIS, Vice President, Curtis Bros. & Co. C. A. ARMSTRONG, President, C. F. Curtis Co., Inc. W. R. SMITH, General Manager, Clinton Corn Syrup Refining Co. A. P. BRYANT, Manager of Operations, Clinton Corn Syrup Refining Co. F. H. VAN ALLEN. Vice Pres, and Sec’y, J. D. Van Allen & Son, Inc. H. S. TOWLE, Vice Pres, and Treas., Towle & Hypes Co. O. P. PETTY, Cashier J. H. NISSEN, Assistant Cashier H. G. KRAMER, Assistant Cashier Lundien Resigns Announcement has been made o f the resignation o f E. M. Lundien as cashier o f the Farmers State Bank at Dayton, Iowa. This institution was organized in 1894 and Mr. Lundien has been cashier since its organization. He has planned to go out o f the banking business entirely and devote all his time to the selling of fire insurance. Established 1870 Buys Van Meter Bank Clyde E. Brenton, vice president o f the Iowa National Bank, Des Moines, recent ly purchased the Van Meter State Bank located at Van Meter, Iowa. Mr. Bren ton will operate the bank together with his nephew, W . H. Brenton, the latter having been made president. Robert Leach, president of the Adel State Bank and form erly State Superintendent o f Banking, and James E. Gore, credit man ager fo r W arfield-Pratt-Howell Co., and Clarence Dunn, cashier o f the bank, have been named as members o f the board o f directors. Plough deep while sluggards sleep.— Franklin. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis C ity National Bank C LIN TO N IOWA 88 THE N O R T H W E S T E R N B A N K E R December, 1925 Elected Cashier A lfred J. Hochberger, form erly assist ant cashier o f the First National Bank o f Hawkeye, Iowa, has recently been elected cashier o f the Alpha State Bank at Alpha. Arthur M. Vette Dies M ERCH AN TS N A T IO N A L B A N K CED A R RAPIDS, I OWA << We’re Strong for the Merchants yy T h e cashier o f a bank w h ich has been a corresp on d en t o f the M er chants N ational, sa ys: “ W e have fo u n d the M erchants N ational Bank one that w ill do any thing and everyth in g fo r its friend s that cou ld be rea son a b ly ex p ected . W e have been a ssociated w ith it fo r ten years, and during that tim e have never had cause fo r com p lain t o f their m anner o f h an dlin g our a c count, or o f any oth er m atters g oin g w ith our con n ection as a corresp on dent. “ W e have had the pleasure o f form in g the acqu ain tan ce o f som e o f the active officers and have the highest reg a rd fo r their personal h on or and business principles. “ W e ’re stron g fo r the M erchants N ational and th ey can have anything w e h a v e.” Resources $ 1 5 ,0 0 0 ,0 0 0 James E. Hamilton President Arthur M. Vette, president o f the Peo ples Savings Bank at Marengo, died re cently at his home. Mr. Vette was one of the organizers o f the bank and widely known in that section o f the state. With Winterset Bank J. Robert Cornell has recently accepted a position with the Citizens National Bank o f Winterset, Iowa. Mr. Cornell is an expert accountant and well qualified to fill his new position. Handles Insurance Department The Commercial Trust & Savings Bank o f Storm Lake has announced that in the future the life insurance department of the institution will be segregated and placed in charge o f LuVerne Sigmond of Sioux City. Mr. Sigmond has specialized along the lines o f fitting insurance to financial needs and has formerly been in charge of successful life insurance de partments o f various banks. Becomes Cashier A t a recent meeting o f the Board o f Directors o f the Jackson State Savings Bank at Maquoketa, Iowa, M. 0 . Sagers, who has been assistant cashier, wTas ap pointed cashier of that institution. Installs New Elevator The First Iowa Trust & Savings Bank o f Burlington has recently installed a new high speed elevator in their building. The elevator has a speed o f 500 feet a minute and will take the place o f one of the two elevators now in operation. Bank Changes Hands P. C. Frick V ice President Mark J. Myers V ice Pres. & Cash. E. E. Pinney V ice President S. E. Coquillette V ice President Edwin H. Furrow V ice President E. B. Zbanek V ice President H. N. Boyson V ice President L. W . Broulik A ssistant Cashier R oy C. Folsom V ice President Fred W . Smith A ssistant Cashier è https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Controlling interest in the Sioux Coun ty Savings Bank at Maurice, Iowa, has been purchased from James F. Toy by Henry G. DeBrost, Sr., and Otto Rowenhorst, Jr., o f Orange City. New officers are Henry DeGroot, president; P. N. Vos, vice president, and H. Rowenhorst, cash ier. Fred Seger, who, fo r the past six years, has operated his general insurance agency at W aterloo, Iowa, has purchased the general insurance agency o f Otis Higdon, Marsh-Place building, and will move his office to the Higdon location. Mr. Higdon, who is retiring from the business, has been an insurance agent in W aterloo for approximately forty years. The capital o f the orator is in the bank o f the highest sentimentalities and the purest enthusiasms.— Parker. December, 1925 T li E N O R T l i AV E S T E R N 89 BA NK ER H O W B A N K E R S CAN BEST HELP A G R IC U L T U R E (Continued from page 55) The Newest o f eighteenth and nineteenth century economic thinking seems to us now to have been the formation o f daws’ which men immediately set to work to circum vent— and d id !” Our agricultural colleges and our D e partment o f Agriculture have constantly urged larger production. They have as sumed, and naturally I think, that the more wheat and corn we raise the fewer hungry mouths there will be, and that the more cotton we produce the fewer people will be obliged to go naked or but half clothed. F or whatever economists may say as to surplus, we know that there really has never been too much o f food or too much of clothing fo r a needy world. And o f course it follows that the larger the production per unit, the creaper will the product be. But when larger production is used to drive prices down so as to make large production less profitable than small production, large production will not continue, and the world will therefore have to pay more for the necessaries o f life. No one, I think, who has observed the course o f events in the last few years will deny that agriculture is sadly out of gear with other parts o f the structure. I for one do not believe that it can re gain its rightful place in this highly or ganized world except through organiza tion o f itself. Organization is a most powerful fa c tor in human progress. The economists as long ago as Adam Smith found in organization the key to industrial growth. Organization means the differ ence between the mob and a highly or ganized progressive society. In the mod ern world, the farmer alone has been the last to realize the value o f organiza tion for its own sake. Accurate - Complete - Up-to-Date Exclusive - Patented, Copyrighted Agriculture has emerged from its primitive state. It must therefore con form to those practices which have been found necessary to the success of other great industries. In all other fields of commerce, unrestricted, free arid open competition in the marketing o f products has been gradually disappearing. AVith them, the marketing problem has been stressed for a generation. In the mar keting of farm products alone has the producer been content with the methods o f a century ago. In all other industries there has been a growing tendency to stabilize prices. This has been effected largely through the organization o f a few great corpora tions which have taken the place o f in numerable smaller independent units scattered over the land. Not only are there fewer manufacturers relative to production in every line, but they in turn are organized into a great national body which meets usually once a year and con- https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1927 Calendar For Farmers or for The Home “ The Kenyon Service Calendar” Just Off The Press * Sold To Only One Bank In Each Town Don’t Wait for Salesman We Close By Mail When Your Town Is Closed Will Be Too Late Write for Particulars Today THE KENYON COMPANY, INC. ESTABLISHED 1874 DES MOINES - IOWA The Mark of Individuality The cheerful, personal contact every “ Security” customer is always free to have with every “ Security” officer marks the Security State Bank as individual. Y ou’ll get a new appreciation of banking when you start to bank here— an appreciation you won’t get unless you do bank here. Security State Bank Keokuk, Iowa J. SCH O U TE N , President M . E. T A T E , Vice President and Cashier “ There Is No Substitute for ‘Security’ S e r v i c e ” At your service in Eastern Iowa PEOPLES and SAVINGS Western Illinois TRUSTS, B ANK s o p ie s ir a s CLINTON. IO W A “ Remember it this w ay »-“PEOPLES TRUST 90 THE NORTHWESTERN This ban\ of AMERICAN COMMERCIAL & 5 6years’ success S A V I N G S B A N K sf* provides the most com plete facilities for han dling banking transactions of any nature, which origi nate or terminate in D av enport and adjacent ter ritory. Send us your items for prompt D A V E N P O R T , IO W A SERVICE T h ro u gh 3 0 Y ears of B a n k in g S e r v ic e T5, 'hrough thirty years of active service we have kept our old friends because the C E N T R A L STATE has proven itself worthy of loyalty. And we have established an ever increasing number of new friendships because of our broad, courteous and helpful services rendered to banking customers. THE OLD RELIABLE C entral State Bank OF DES M O IN E S Banking, Trusts and Investments Safe Deposit V a u lts Member Federal Reserve System OFFICERS S I M O N C A S A D Y , Chairman of the Board G R A N T M c P H E R R I N , President F R A N K C. A S H , Cashier L E L A N D W I N D S O R . Vice President J. W . H A W K . Asst. Cash., Mgr. Sav. Dept. I V A N O. H A S B R O U C K , Vice President C H A S . W . O X B O R R O W . Assistant Cashier L. G. F U L L E R Vi e President F R E D H. Q U I N E R , Assistant Cashier F R A N K R. W A R D E N , Asst. Cashier, Mgr. Bond Dept. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BANKER December, 1925 siders questions o f world supply and de mand, prices, and other subjects of common interest to the industries. They no longer go ahead blindly running full capacity, putting their commodity upon the market at whatever price may be offered. In agriculture alone have the methods o f marketing made no improvement, ex cept as to the sale o f those products which are now being marketed through cooperative marketing associations. A g riculture finds itself with its millions o f members freely competing among them selves while it is obliged to sell its prod ucts in a highly organized industrial and commercial world. Now, if the farmers are to put themselves upon terms o f equality with the great industries o f the country they too must organize. It is not desirable that they should imitate the great industries, adopt the corporate form o f organization, and operate their farms through corporate management. It would weaken our whole social struc ture if our millions o f farmers were to surrender their individualism this way. Nor is it necessary. While much improved efficiency in pro duction is still possible, the farmers have made and are making constant progress in this respect. The problems which press hardest upon him today are concerned with the marketing o f his products at a price which will enable him to live and to go on producing. He must find some way to restore the proper re lationship between the prices he receives fo r his products and the prices he pays fo r other commodities. The devotee o f the laissez faire philosophy insists that in process o f time, under the operation o f economic laws alone, this relationship will be restored. Perhaps he is right. The report o f the Secretary o f Agricul ture fo r 1923 states that during that year 10 per cent o f the farms in Michi gan alone were abandoned and 13 per cent more only partially worked. In deed, I think I may safely say that there is not an agricultural state in the coun try in which there are not at the present time fallow fields. As things stand, this tendency will continue until farm pro duction will fall so low that there will be a real scarcity o f farm products and farm prices will rise to an even higher level than would be desirable. In the meantime, a large portion o f the farm population will go bankrupt. Certainly this is not a pleasing prospect from the standpoint o f either the producer or the consumer o f farm products. I f we would avoid this ruin, I see but one way out. The farmer too must organize for the purpose o f marketing his products. Cooperative farm marketing associa tions are no longer an experiment. In Denmark and Holland they have existed longest and perhaps have achieved their greatest success. In California the fruit D ecem b er, 1925 THE growers fo r many years have been suc cessfully marketing their product through cooperative associations. More recently the cotton growers o f the south and the tobacco growers o f America have made substantial progress. There are innumerable other instances. Wher ever cooperatives have been employed there you will find agriculture in its best estate. There are powerful interests of course, which oppose this movement. They are aggressive, for they think they see large profits disappearing if the farmers organize upon a modern busi ness basis. Their number is small com pared with the great army engaged in the production, distribution and mer chandising o f commodities. W ith a zeal, however, which self-interest always in spires, they are likely to impose their views upon chambers o f commerce and other like organizations. Even though the great majority o f these bodies have a feeling that agriculture must organize in order to fit into the modern business world, they are too likely to yield to the insistent and vocal minority which feels that its own interest is jeopardized. These organizations could give a mighty impetus to the movement if they would. Farmers cooperative marketing asso ciations, however, are making real prog ress. Some have failed. Doubtless, others still will fail. The mortality among them, however, has been no greater than among new business organizations o f any other kind o f which I know. W e have been gathering a large fund o f experience which will enable not only those already organized but new ones yet to be, to avoid largely the errors o f the past. I can foresee the day, though, I think, when everything produced upon the farm for the market will be marketed by the farmers themselves through an organization o f their own creation. I like to think o f the time when everthing I produce upon my farm I can deliver to my own association in full confidence that as much intelligence and as large a bargaining power shall be exhibited by those representing me in the sale as are already exhibited now on the part o f the buyer. I like to think o f the time when the representatives o f all these great farmers’ organizations shall meet in a congress once a year and shall there work out a program fo r the future, just as other industries now meet annually for the purpose of form ing an intelligent and cooperative program fo r the year. At such a meeting, if it shall appear that one branch o f agriculture is expanding more rapidly than conditions warrant, steps will be taken to restore the balance as between that and the other activities o f the farm. In this way we shall achieve a balanced agriculture. Even more desirable, however, we shall restore the proper balance between agriculture https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NORTHWESTERN BANKER ventions in the state o f Iowa during the past month, discussing matters that will be helpful to agriculture in the state o f Iowa. Our district meeting was held at Jefferson, Iowa, last week, and I had the privilege o f attending it to hear the problems on agriculture. ‘ 1The main issue was to devise some plan that would make better prices for the products which the farmers have to sell. I will try to relate this plan to you and hope that it will be helpful to some o f our customers. A great many o f the farmers are now on the right track and we want to try to get all of you on the same plan. W e think it will have a great deal to do with helping the farmers to some extent on their methods o f farming. “ First— From our own experience with a great many customers, we find that those who have chickens and milk cows and have their eggs and cream — the greatest o f all industries— and other business activities in this organ ized world in which we find ourselves. This is not the problem o f agriculture alone. It is the problem o f all. Because there can be no enduring prosperity un less all the principal industries which go to make up the commercial world, keep ing step with one another, shall march abreast. Ready to Cooperate R. E. Caslow, cashier o f the Yale Sav ings Bank, at Yale, Iowa, recently at tended one o f the district conventions called by the Iowa State Banking De partment, which was held in Jefferson, Iowa. Upon his return home he sent to all the customers o f his bank the follow ing letter : “ Dear Customer: The State Bank ing Department has held 25 district con The Royal Union Life Insurance Company Des Moines, Iowa Strong and Progressive I Paid to Policyholders— Over $19,000,000.00 Insurance in Force— Over $138,000,000.00 t A. C. Tucker, President D. C. Costello, Secy. 91 W m . Koch, Vice Pres. 92 T IIE N O R T H W E S T E R N B A N K E R CAPITAL AND SURPLUS OVER $1,000,000.00 Established 1874 The guiding principle of each member of our organization is helpful ness. W e extend to you the service that this spirit implies. I O FFICER S CHARLES E. PERKINS, Chairman of Board E. WEBBLES, President I. . C. W ALLBRIDGE, Vice Pres. J. G. WALDSCHMIDT, Vice Pres. W. C. KURRLE. Vice Pres. C. T. SIMMONS, Vice Pres. R. L. BUNCE, Cashier ELMER RAUENBUEHLER, Assistant Cashier L. M. WILSON, Ass’t Cashier L. T. PANTHER, Ass’t Cashier E. J. NORTON, Ass’t Cashier R AT HUMPHREY, Manager Bond Dept. T. II. WILSON, Auditor D IR E C TO R S JOHN BLAUL, President John Blaul’s Sons Co. W ILLIAM BONGERT, Treasurer Dehner Cigar Co. WILLIAM CARSON, President Boise Payette Lumber Co. H. W. CHITTENDEN, President Chittenden & Eastman Co. W. N. CHURCHILL. President Churchill Drug Co. W A L T E R B. EA TO N , Vice Pres. Chittenden & Eastman Co. W. F. GILMAN, Secretary Burlington Lumber Co. G. G. HIGBEE. President Murray Iron Works C. S. LEOPOLD, President Leopold Desk Co. ROBERT O. LORD, Vice Pres. Harris Trust & Savings Bank, Chicago C. H. MOHLAND, Attorney ROBERT MOIR, Capitalist C. E. PERKINS, Trustee E. S. PHELPS, Insurance H. S. RAND, President Rand Lumber Co. HENRY RITTER, Retired .T. J. SEERLEY. Attorney R A L P H E. SC H R AM M , J. S. Schramm Co. E. WEBBLES. President F I R S T S ^ I mngsb a n k MEMBER FEDERAL RESERVE SY ST E M BURLINGTON IA 3 December, 1925 checks coming in from day to clay are getting along fine and making money. They are saving their money and liqui dating their debts. “ Second— W e also want to urge that all o f you farmers raise a few hogs and also raise some corn to sell. You will have money coming in from the sale o f hogs and also corn; then you will find that this is going to be a help to your income and you will be surprised how you can pay debts. W e must all figure that the automobile has come to stay. We must, therefore, figure out some way so that our income will be greater to offset the expense on the auto, as we all know it is an expensive luxury. In other words, we think, as was also the opinion o f this meeting, that the farmer who has eggs, cream, hogs and corn to sell is the fellow who is making headway. The reason for this is that when one item is low on the market the other is usually up, so when you lose on one item the others will make up the difference and make you a profit fo r your year’s work. Also vaccinate your hogs before they get sick and do it in plenty o f time. “ This letter will not apply to all of the farmers o f this country, as a great many o f them have been on this plan fo r a number o f years. I f you do not think this plan is worth considering, go and talk to vo*ir neighbor, who is work ing on this plan and see what he has to say about it. Should you know o f some other plans that-will help agriculture, we would appreciate having you come in and discuss them with us, as we want to know them also. W e will have our views about these matters and it will do us all good to talk them over together. “ W e want you to know that this hank is back o f anything that will help the agricultural interests o f this community and we are sure that all o f the banks are back o f this great state o f Iowa. “ I have, during the past few days, talked with a few farmers in regard to the oats problem. W e all know that there is nothing in it fo r a farmer to sell his oats at the present prices. The other day I was talking to a certain farmer in our community and he told me about the way he handled the oats matter. He says that he usually feeds them to his hogs and gets much better results and he makes oats pay through feeding them and using some corn with them. Try this plan and see if you can’t get better results. “ We know that if we had said any thing helpful to your problems you will appreciate it. I f you have some good suggestions to make to us, come in and tell them to us, and together we will be able to do a lot to help agriculture right here at home. That is what we all want.” The orator is the mouth o f a nation.— Roux. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December, 1925 THE f f i f y t NORTHWESTERN 93 BANKER R e a s o n ’s! G reetin gs W ith the passing o f each year w e come to a fuller realisation o f our appreciation o f the long'established friendships w e have enjoyed w ith the bankers o f Iowa. M ay the coming year serve to strengthen old associations, and bring to each o f us many new ones. A Merry Christmas to all, w ith best wishes for your happiness and prosperity. O FFICER S Des Moines National Dank Capital *1,000.000 6th &Walnut Sts. £7 in e> https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis W h ite I) a n * ' LOUIS C. KURTZ Chairman of the Board JOHN H. HOGAN President H. R. HOWELL Vice President H. E. RUMSEY Vice President ANDREW J. HUGLIN - Vice President HERBERT L. HORTON - Cashier CLARENCE A. DIEHL - Asst. Vice Pres. WALTER J. ROBERTS - Asst. Vice Pres. R. H. COLLINS Asst. Cashier EDWIN F. BUCKLEY Asst. Cashier GEORGE D. THOMPSON Asst. Cashier TAMLIN S. HOLLAND, Manager Bond Dept 94 THE N O R T H AV E S T E R N BANKER Forecasts Continued Prosperity ESESä 1876 1925 Advice “ W h e n all is done, the h elp o f g ood counsel is that w hich setteth business straight.” — Bacon. T h e Consolidated National Bank, through its long experience, has dealt with practically every banking problem . It has been our pleasure to have h elped many bankers in the solution of their problem s— and we w ill be m ore than glad to help you. A s D u bu qu e’s leading bank, having com plete com m ercial banking departments at your serv ice, we are able to give you highly satisfactory service. A n d to our service we add a touch of friendly interest which you w ill appreciate. J. K . Deming, President Geo. W . Myers, Vice President Jas. M. Burch, Vice President Herman Eschen, Secretary Jos. W . Meyer, Cashier Consolidated National Bank U N IT E D December, 1925 S T A T E S D E P O S IT O R Y DUBUQUE, IOWA Service— Cooperation— Reader Confidence The Northwestern Banker The outstanding feature o f the busi ness situation o f the United States is the restoration o f normal price rela tions between agricultural and other products, correcting a condition that has been the main cause o f instability and seeming to afford the best basis fo r last ing prosperity that the country has had since the war, George E. Roberts, vice president o f the National City Bank o f New York says in the current issue of the American Bankers Association Journal. “ It is said by those who have mis givings as to the future that the general level o f prices still is very high, that the amount o f bank credit is greater even than at the height o f the boom in 1920, and that these facts are indicative o f an inflated situation,’ ’ Mr. Roberts says. “ It is suggested that the restoration of industry in Europe means the beginning o f intense competition, which is likely to put our price structure to a severe test, and may put such pressure upon our industries as to force both wages and prices down to lower levels. “ Many people are apprehensive, par ticularly o f German competition, but we should remember that Germany was a great figure in the world trade before the war. She was buying at least as much as she was selling, she was making as much business fo r other people as she was doing abroad herself, and therefore was doing as much to support prices as to depress them. “ I f there is nothing in the monetary or credit situation to force a general price movement to lower levels such a movement is not likely to occur . The general price level moves upward more easily than downward. Most people are willing to cooperate in a rising price movement, provided they can partici pate in it, but falling prices are un popular, and cannot go far in organized industry without meeting with resist ance. The present system o f prices is so firmly established and its various fa c tors so interlocked that there is no pros pect o f its being lowered materially, ex- F IR S T N A T IO N A L B A N K , ilËMl D IR E C T O R S B. F. SWISHER Pickett, Swisher & Farwell R. J. HOXIE Secretary Waterloo Fruit & Commission Co. A. M. PLACE Vice President E. E. PEEK Vice President Waterloo Bldg. & Loan Association. H. W. GROUT Real Estate C. A. MARSH President (A .a F t0 r '< ? c i / Ó S S https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis T H E First National Bank of Waterloo is >*■ pmiinrv.d erivo vnn ïio'Vuvat H pcttp« rtf equipped fn to give you fVi» the V highest degree of ~0E, and do it pro: SERVICI promptly and efficiently at all times. Fifty-eight _ht years of steady con servative growth enables tliis bank to extend such service. O F F IC E R S C. A. MARSH, President A. M. PLACE, Vice President W ILL A. LANE, Cashier P. W. EIGHMEY, Assistant Cashier O. L. MORRIS, Assistant Cashier Total Resources Over $2,900,000.00. V C ^ aterJooo, o , lI ot w a D IR E C T O R S W. W. MARSH President Iowa Dairy Separa tor Co., President Associated Mfg. Co. J. T. SULLIVAN Lawyer. J. O. TRUMBAUER Vice President Fanners Loan and Trust Co. H. A. MAINE President H. A. Main« A Co. WILL A. LANE Cashier Decem ber, 1925 THE NORTHWESTERN 95 BANKER O IN G steadily forward, serving the bankers of Iowa and 35,000 local customers courteously and conscientiously — as w e’ ve done for over fifty years. See us when you come to Des Moines I CAPITALtpS"*3,0000QOV O F F I C E R S Homer A. Miller Clyde E. Erenton H. T. Blackburn Geo. E. Pearsall Albert J. Robertson J. R. Capps Walter H . Miller R. L. Chase, Jr. James F. Hart J. Burson Sherman W . Fowler President Vice Pres. Vice Pres. Vice Pres. Vice Pres. Cashier Asst. Cash. Asst. Cash. Asst. Cash. Asst. Cash. Asst. Cash. D I R E C T O R S Geo. N. Ayres H . T. Blackburn Clyde E. Brenton Howard J. Clark Gardner Cowles J. H . Cownie E. C. Finkbine J. B. Green W m. C. Harbach F. H . Luthe M. Mandelbaum Homer A. Miller Geo. E. Pearsall Ralph H . Plumb M. Shloss E. R. Stotts O. H . Thompson G. M . Van Evera Io w a Na iio n a l Ba n k D e s M o in e s Sa v in g s Ba n k a n d Trust Co m p a n y i Iowa's Largest Bank - D es M o in e s - Sixth and Walnut https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 96 THE N O R T H W E S T E R N IO W A 1NATIONAL BANK DAVENPORT u It Is Gratifying to Report Says President Coolidge yy President Coolidge says: “ It is gratify ing to report that the progress of industry, the enormous increase in individual produc tivity through labor-saving devices, and the high rate of wages have all combined to fur nish our people in general with such an abun dance not only of the necessaries but of the conveniences of life, that we are by a natural evolution solving our problems of economical and social justice.” It is also gratifyin g to the officers o f the Iow a National Bank to know that their institu tion ’s p rod u ctivity of better service to Iow a banks and bankers has increased along with the N a tio n ’s business progress. Those Iowa bankers, who have had their ac count with the Iow a N ational fo r years, know that all problem s connected with their D avenport busi ness can be taken care o f very ably through the Iow a N ational Bank. Others are rapidly com ing to the same con clu sion. Can we serve you ? CHAS. SHULER, President FRA NK B. YETTER , Vice Pres. W M . H. GEHRMANN, Vice Pres. LOUIS G. BEIN, Cashier H ERM AN STAAK, Asst. Cashier B A N K E R Decem ber, 1925 cept by influence which would operate slowly over a long period o f time. The essential economic condition is that the equilibrium in industry and in price re lations be restored and apparently this is now in the way o f being accomplished at about the present price level. ‘ ‘ Commodity prices average about the same now as two years ago, and the in crease over a year ago is almost wholly in farm products, in which case it is significant o f increased stability in the business situation. The commodity sit uation is practically free from price in flation, reckoning prices with relation to production costs. Business policies have been cautious over so long a time that inventories as a rule are compara tively low, and there is reason to be lieve that the regular turnover o f trade is being handled with a smaller amount o f bank credit in proportion to the volume o f business than at any time heretofore. The general industrial and trade situation shows none of the signs o f a culminating period o f expansion. ‘ 1On the contrary, the signs are more like those o f an incipient period o f in flation. There is speculation in the stock market and in city and suburban real estate in many localities, and there are other indications of the influence of easy money around the edges o f the main business situation, but conservative sentiment still rules in regular trade and manufacturing circles. Cheap money is a great breeder o f inflation and extrava gance and we are not without symptoms that the speculative fever is abroad in the land. It has insidious ways of getting into the business situation, and over building at a level of costs is one o f them. W e are an optimistic people, and in times o f prosperity always in danger of discounting the future too freely. “ I am impressed that we are not likely to have another period o f deflation with out first having a period o f inflation. In other words, the next movement is more likely to be one o f rising than falling prices, but if the present conservative sentiment is maintained in the business community, we may have a long period o f good business with only moderate price fluctuations. The stability of prices and o f commercial loans shows a healthy state o f business.” New Mortgage Company DAVENPORT, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis IO W A The National Bank o f the Republic, Chicago, announces the organization o f a new subsidiary to be known as The National Republic Mortgage Company. This new company will confine its activi ties to the handling o f all forms o f real estate mortgage loans and real estate mortgage bonds. Adolph Radnitzer, form erly manager o f the Real Estate Loan Department o f the Union Trust Company and more recently vice presi- THE D ecem ber, 1925 NORTHWESTERN BANKER 97 RO LL OF H O N O R ” BAN KS It is an honor to be listed am ong the H on or Roll B anks. It indicates that the bank has Surplus and Undivided Profits equal to or greater than its capital. Such distinction is accorded to the banks listed on this page. B y careful m anagem ent and sound banking they have achieved this enviable position. These banks will be especially glad to handle any collections, special credit reports or other business in their com m unities which you m ay entrust to them . Correspondence is invited. IO W A Surplus Surplus T ow n B ank C apital Tow n and B ank Capital and Profits Profits 60,295 Agency A gency Savings $15,0 0 0 $ 2 0 ,0 0 0 M o n tezu m a First N ational 5 0,000 B agley First N ational 25,000 2 8,000 Oelwein First N ational 5 0,000 6 0,000 Bradford Bradford Savings 15,000 23,0 0 0 Olin Citizens Savings 20,000 3 1,790 Oskaloosa Oskaloosa N a t. 100,000 125,000 O ttum w a O ttum w a Savings 100,000 160,000 Brunsville B ank of Brunsville 7,500 18,000 Cedar R apids M erchan ts N a t. 5 0 0 ,0 0 0 600,0 0 0 D aven port U n io n -D a v . T r. & S. 8 0 0 ,0 0 0 8 8 0 ,0 0 0 Princeton Farmers Savings D es M oines Central State 250,000 341,025 Sioux C ity Security N ational 20,000 26,0 0 0 2 5 0,000 3 1 2 ,0 0 0 D es M oin es Iow a L o a n & T r .C o . 5 0 0 ,0 0 0 518,8 1 5 Slifer Slifer Savings 10,000 10,804 D es M oin es Peoples Savings 100,000 3 0 0 ,0 0 0 Soldier Soldier V alley Sav. 20,000 27,4 6 5 D yersville U nited States 50,0 0 0 70,0 0 0 Villisca First N ational 50,000 60,000 Estherville Iow a Savings 50,000 90,0 0 0 W allingford Farmers Savings 15,000 38,0 0 0 Independence Peoples N ational 75,000 115,000 W aterloo Lea. & Johns’n N a t. 200,000 2 0 5 ,0 0 0 K eoku k K eoku k Savings 100,000 228,8 3 8 W illiam s First N ational 2 5,000 2 8 ,8 5 2 K noxville M arion C o. N a t. 60,000 80,0 0 0 W infield B ank of W infield 25,000 102,447 Luxem burg Luxem burg Sav. 10,000 19,000 W inthrop W inthrop State 25,000 43,0 0 0 SOUTH Aberdeen First State Sav. $50,0 0 0 $67,765 Am herst Farmers State B k. 5 ,000 7 ,500 Conde Farmers & M erch. 10,000 17,570 dent of George M. Forman & Company, has been elected president of The Na tional Republic Mortgage Company. Walter L. Johnson, for many years asso ciated with The National Bank of the Republic, has been elected secretary and treasurer of the new company. It is anticipated that this company will be a very active factor in the real estate loan field in Chicago. The Board of Directors consists of John A. Lynch, D. R. Forgan, George Woodruff, II. E. Otte, Samuel W. White, Adolph Radnitzer and John T. Redmond. The new company will be located on the main banking floor of The National Republic Bank Building. Murder, like talent, seems occasionally to run in families.—Lewes. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis DAKOTA Hitchcock H itchcock State Ipswich B ank of Ipswich Lead First N ational $ 12,000 $ 16,538 2 5 ,0 0 0 101,393 100,000 153,000 HOW FLORIDA LOOKS TO THE OUTSIDER (Continued from page 18) crop of 44,928,000 pounds. This citation will give an idea, but there are many other production of various kind of sow ing and planting. In 1919 the straw berry crop was over one and a quarter million quarts, but it is said this has been multiplied very largely. This is but a scattering review of the census and is open to enlargement. In live stock, the U. S. Department of Agriculture valued all live stock in Florida on January 1, 1923, at $33,000,000, compared to a valua tion of $20,591,000 in 1910. while driving toward his home recently, had the misfortune to drive his car into the ditch, and receive a broken arm. The lights had ceased to function on the car, and he was trying to reach home with out them. Suffers Auto Mishap Lafe S. Collins, president of the Citi zens National Bank of Knoxville, Iowa, We mutually pledge to each other our lives, our fortunes, and our sacred honor. -—J efferson. New Bond Firm Announcement is made of the opening of a new investment house, Aylward & Company, 29 South La Salle Street, Chi cago, to underwrite, purchase and dis tribute investment securities. Asso ciated with E. J. Aylward are Philip Chance and E. Lenox Hopkins. 98 TH E N O R T H W E S T E R N B A N K E R D ecem ber, 1925 INDEX TO ADVERTISERS A Alexander National B ank..................... 29 American Bank & Trust Co................. 28 American Commercial & Savings B ank........................................................... 90 G B Bankers Supply Co.................................... Bankers Trust Co., Des Moines......... Bartlet & Gordon, In c............................ Bell Telephone Securities Co................. Brokaw & Co............................................ 66 83 53 50 49 C Canadian Pacific R ailw ay..................... Cedar Rapids National Bank................. Central State B ank.................................. Central Trust Co. of Illinois................. Chapman, P. W . & Co............................... Chase National B ank................................ Chatham & Phenix National B an k .. Citizens and Peoples National Bank. . City National Bank, Clinton............... Consolidated National B ank............... Continental & Commercial Banks. . . . Cox, W. C. & Co.......................................... Craddick Service .................................... Page First National Co., Mason C ity.......... 52 First Wisconsin National B ank......... 26 Fisher Co....................................................... 75 Foreman National B anks....................... 43 71 84 90 74 48 68 52 91 87 94 33 48 6 General Motors Acceptance Corp.. . . 46 Girard National B ank............................. 34 Gordon-Van Tine C o ............................. 3 Guarantee Life Insurance Co............ 42 ! H Halsey, Stuart & Co............................... 51 Hanover National B ank......................... 7 Holstein Savings B ank........ .................. 83 Huston, Guy Co., Inc................................ 44 I Illinois Merchants Trust Co................... 100 International Life Ins. Co................... 56 Iowa Lithographing Co......................... 32 Iowa Loan & Trust Co............................. 5 Iowa National Bank, Davenport........ 96 Iowa National Bank, Des Moines. . . . 95 Iowa Nat. Fire Ins. Co............................. 63 Iowa State Traveling Men’s A sso c... 79 National Bank of Commerce................. Nat. Bank of the Republic..................... National City Co...................................... National Life Association..................... National Park B ank................................ North American Nat. Life Ins. C o... Northern Trust Co. Bank..................... Northwestern Nat. Life Ins. Co.......... 36 40 2 63 41 58 42 2 O Omaha Life Ins. Co................................. 63 Omaha National B ank............................ 71 Omaha Printing Co.................................... 72 P Palm Beach Guaranty Co................... Peoples Trust & Savings Bank............. Policyholders National Life Ins. Co.. Polk, Corley, Wheelock & Co.............. 29 89 69 86 R Rand, McNally & Co............................... 76 Royal Union Life Insurance Co. .37-59-91 S J D Des Moines Duplicating Co...................83 Des Moines Life & Annuity Co............ 60 Des Moines National B ank................... 93 Drovers National Bank, Chicago......... 80 John Hancock Mut. Life Ins. Co........ 62 Joyce, W. B. & Co.................................... 74 I K Kenyon Printing Co.................................. 89 L E Eppley Hotels Co...................................... 68 Evanshire H otel........................................ 78 F Federal Land Banks................................ Federal Surety Co.................................... Ferguson, L. B. & Co............................... First American Bank & Trust Co.. .. First Iowa State Trust & Savings Bank........................................................... First National Bank, Chicago............. First National Bank, D a v e n p o rt.... First National Bank, Duluth............... First National Bank M inneapolis... First National Bank, Omaha............... First National Bank, St. A ugustine.. First National Bank, Sioux City........ First National Bank, W aterloo........... 39 61 48 7 92 38 86 76 75 2 28 2 94 League of Nations Non-Partisan A sso c ia tio n ........................................... Leavitt & Johnson Trust Co................. Lincoln Nat. Life Ins. Co....................... Live Stock Nat. Bank, Omaha............. Live Stock Nat. Bank, Sioux City. . . . Lytle Co......................................................... 35 7 68 89 53 30 55 55 76 70 T True-Webber & Co................................. 49 Tucker, J. W .............................................. 31 U M McClintock, O. B. Co............................... Mason City Brick & Tile Co.............. Mechanics & Metals Nat. B ank............. Medical Life Ins. Co. of America. . . . Merchants Bank & Trust Co................. Merchants National Bank ................... Midland Bank, Ltd.................................... Midland Mortgage Co............................. Midland National B ank....................... Mitchel-Hutchins & Co........................... “ A C A S H I E R ’S C H E C K ” for $3.00 is all that is required to secure the monthly visits of the Northwestern Banker for an entire year. Each issue contains from 108 to 200 pages of mighty interesting matter pertaining to banks and banking interests in the territory covere dby the magazine. “ O U R C O R R E S P O N D E N T S . ” Every bank in the northwest is in vited to a place on this list. Send us items of local interest, tell us about your bank and its growth, prospects, etc., also any other financial news of interest to bankers in your section. We are always glad to head from our friends. “ S I G H T D R A F T S . ” We always carry a large “ Reserve” of good will and additional service, and will promptly honor drafts made upon same by any bank. This department is for your special benefit. It may be made of very great benefit to your bank. Do not fail to avail yourself of its privileges. “ A C L E A R I N G H O U S E . ” Our columns are a clearing house for all our readers. Express your view on any topic of interest to https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 27 85 62 70 67 99 Sanders-McCulloch Co........................... Seaboard National B ank....................... Security National B ank......................... Security State B ank.................................. Southern Surety Co................................. South Florida Mortgage Co................... Stanley-Henderson Co............................. State Central Savings B ank................. Stock Yards National Bank, Chicago. Stock Yards National Bank, Omaha. 76 79 80 62 29 88 72 55 73 47 Union Trust Co............................................ 23 United States Nat. B ank....................... 70 Universal Life Insurance Co.............. 61 V Valley National Bank.............................. 2 W Wessling Services, Inc........................... 25 the banking fraternity and sumbit same for publication. You do not have to agreewith us, or with anyone else. We learn things by an interchange £ f ideas, and people with whom we disagree often prove valuable teachers. a shall be glad to hear from you. NO P R O T E S T ” has ever been offered to the statement that the field coverd by the Northwestern Banker is the money-producing section of the American continent, rich in hogs, cattle, corn, etc., and dotted with thousands of prosperous banks, all doing a good business, and the majority of them are readers of “ The North western.” “ S U R P L U S A N D U N D I V I D E D P R O F I T S ” increase very rap idly with those banks whose advertisements appear regularly in the columns of this magazine. Full information as to rates and our special service will be promptly furnished on appli cation. Your business solicited and appreciated. The “ Bankhas been twenty-nine years in its present field. D ecem ber, 1925 TH E N O R T H W E S T E R N 99 B A N K E R LYTLE Co 7/ie Capital Sortie o f R&tit. Bank B t Ban\ Structures in the 'Northwest A re “ LytÈe B u ilt” X LUC y CUI ô a § ° y ou first j ob finished fo r u s. your you got the contract because you had already built fo r some of m y best banker friends practical and attractive bank buildings. “ The n ext contract we gave to the L ytle Com pany because you did the first one right— your plans and prices were right. ’ ’ So writes a w ell-know n banker to J. A . Raven, President of the L y tle C om pany, Sioux City, Iow a. W h e n the L y tle C om pany does your building, y ou are dealing with an organization with years of successful experience. Y o u get an attractive design— a w ell-constructed bu ildin g— a practical building— at a price that is right. I f you are th in kin g of building, give the L y tle C om pany an opportunity to talk to you. Or bet ter yet, ask some of your banker friends about “ L y tle B an k C on stru ction .” J. A . R A V E N , President The Lytle Company Bank Architects and Building Sioux City, Iow a https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Engineers W ITH a clientele embracing every line ci business and a board of directors composed of leaders in every branch of commerce and industry, the Illinois M erchants Trust Company has an unusually intimate contact with modern American business. Our officers consequently have a wide experience and are peculiarly fitted to give effective and intelligent attention to the needs of our correspondent banks. Capital and Surplus • Forty-Fire Million Dollars Illinois Merchants Trust Company qA consolidation c f the Illinois Trust & Sayings ‘Hank, The i.Merchants Loan & Trust Company and The Corn Exchange c7JS[ationai cBank |LA SALLE, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis J A C K S O N , C L A R K A N D Q U I N C Y S T R E E T S C H I C A G O
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