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Northwestern DES U M O IN E S Worth a Million to (P a g e 1 8 ) mm JO H N G. L O N S D A L E P re s id e n t, N a t io n a l B a n k o f C o m m e rce S t. L o u is . https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis DECEM BER 1 9 2 8 1920 1921 1922 1923 1924 1925 1926 1927 1928 / I / Æ __ /--___ 1/1 ---- ;1---f // * 1 1 l // l1 / i\ ___ l x i 1 / \ /t /\ i /1 / / / / : / ' L\ii ___ i / \ / l // [ U _ J \ i // X /\ / — V \/ , / 1 ! : ! / \ / N - __ ._ \ \i /* 1/ V // j i ____ ^ /\ \ \ i \i 1 \ 1 i 1 ____ ------71-- \ i / »/ s T \ / \ » i // ---- j/ ---t1// i / \ 1 I \ 1 ---/1----/ \ / \ l \ \/ ■ir\ ii ----- v\// \1 - n -----V cV Æ*\ Æ 1 / 1 1 1 New High Record /C O L L E C T IO N items handled by this bank through its ^ transit department reached the highest number on record in October of this year. Prom pt returns on grain drafts are always certain when you have the North Since 1 9 2 0 there has been an increase of nearly 80 per cent. The heavy black line in the above graph indicates the peak of activity western working f o r y o u reached in successive years and the dotted line shows at this e n d o f t h e l i n e . both the highest and lowest points. Send y o u r g r a in i t e m s h e re w h e re a h ig h ly This record of gain is strong proof of the satisfaction of s p e c i a l i z e d grain draft clients and the growing demand for Northwestern service. department handles this class o f items exclusively. Expanding volume has been matched by expanding fa cilities; we have the means, and most certainly the strong desire, to make your dealings here entirely satisfactory. Northwester dffiliatedwith the MINNESOTA LOAN AND TRUST CO. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ational Bank. plis Combined Resources ¿ 1 1 8 , 0 0 0 , 0 0 0 . ''- ' N orthw estern Banker Des Moines DECEMBER, 1928 N u m b e r 497 Just Between Us 33d Y e a r In This Issue “ Prom oting Better M anagem ent” “ A s one of the outstanding m a ga zines in its field your publication has a splendid opportunity to play a large part in prom oting better bank m anagem ent. T h e general makeup of your m agazine, its attractive ap pearance and editorial policy have alw ays impressed m e,” says Craig B. H a zlew o od , vice president of the U nion T ru st Co., Chicago, president of the A m erican Bankers A sso cia tion. Across from the Publisher 12 Frontispiece, “ The Night Before Christmas” 14 Figuring Interest and H O W 15 “ Bootleg Money” and Call Loans 16 By R. IV. Moorhead Worth a Million to His Home Town 18 W hat About the Service Charge? 19 Fifty Per Cent Profit Its First Year 20 By Robert Wait “ Incom parable” “ T h is bank has been a continuous subscriber to the N O R T H W E S T E R N B A N K E R for the past thirty years and the m on th ly visits of your m agazine are alw ays of great inter est to us. T h e articles appearing therein are not only interesting but of practical value. A s a m agazine for bankers of the middle w est the N O R T H W E S T E R N B A N K E R is incom parable.” . . . B. J. B au m gart ner, cashier, Citizens State Bank, E lg in , Iow a. Building a Bank on Security and Service 21 “ Secretary to the President” (A continued story) 22 By Par alee M. W infrow Advertise Your State Like You Owned It 25 By J. F. Traer How Safe Is Your Safe? 27 By A. M. DeVoursney Profits and Capital Values in Farming 29 By Henry V . McKibbin News and Views 32 By Clifford DePuy The Banker’s W ife Says A 25 Y ear Club M em ber “ T h ere is a special link betw een the N O R T H W E S T E R N BANK E R and our institution, the N o rth w estern State Bank, since the w ord ‘ N orth w estern ’ is a part of both nam es. T h is show s that a genera tion ago the founders of both insti tutions saw the boundless oppor tunities and m arvelous possibilities of this great northw est country and had a vision of its unparalleled grow th and developm en t; The N orthw estern State Bank w ishes the NORTH W ESTERN BANKER continued and grow in g success. W e feel proud to belong to your ‘ Q u arter-o f-a -C e n tu ry ’ Club and here’s hoping we m ay belong also to your ‘ H a lf-a -C e n tu r y ’ Club som e day.” . . . G. J. Slobe, Cashier. C L IF F O R D D E P U Y Publisher G E R A L D A. S N ID E R A ssocia te Publisher R. W . M O O R H E A D E d itor H. H. H A Y N E S A ssocia te M anager 34 By Lyda Collins Legal Department 48 Bonds and Investments 51 Insurance 81 Bankers Wants 86 South Dakota News 87 Nebraska News 91 Minnesota News 95 North Dakota News 99 Iowa News 101 In the Directors Room 115 Index to Advertisers 116 The Oldest Financial Journal West of the Mississippi M e m b e r , A u d it B u rea u o f C ircu la tion s Northwestern Banker, published m onthly by the D eP u y Publishing Company, Inc., at 555 7th street, Des Moines, Iow a. Subscription, 50c per copy, $3.00 per year. E ntered as second-class matter at the Des Moines post office. Copyrighted, 1928. W M . H. M A A S 1st N ational Bk. B ldg. C hicago V ic e President F . S. L E W I S 840 Lbr. E x. B ldg. M inn eap olis, M inn. S pecial R epresentative Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 192S 4 We have f o u n d " ; ; “ interest of our correspondent clients is to evidence our good will and interest in them, and this applies to our banking relations as well as our personal contacts. Our endeavor is to give the best service we know how to give, and to help you in every way we can with all your hanking problems. Feel free to bring your problems to us at any time. O F F IC E R S C H A R L E S E. P E R K I N S ....................... Chairman of Board L . T . P A N T H E R ...................................... Cashier E. S. P H E L P S ........................................ President J. G. W A L D S C H M I D T ......... V ice President R A Y H U M P H R E Y ............... Mgr. Bond Dept. C. T . S IM M O N S ...........................Vice President H . A. H E I L .........................................Trust Officer R. L . B U N C E ............................... Vice President S. R G R A N X .....................................A ss’ tCashier L. M . W I L S O N .................... Vice President L. P. B E C K M A N ..............................A ss’t Cashier E L M E R R A U E N B U E H L E R .. V ice President O T IS C. G E S L IN G ..................................Auditor F. J. N O R T O N ........................... Vice President G E O . S. B E U C K M A N ...............Bond Department Representative C A P I T A L $ 6 0 0 ,0 0 0 .0 0 Ìn r IOWASTATE1 TRUST&SAVINGSJ RSI BAINK BURLINGTON Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 esponsihiìity • <- dohe years of satisfactory service ren' deredby A7s[AKI7\(.............. d3he solidity and soundness . d3he unparalleled record o f past pen formance in saving 136 ban\s . . do he F IV E 'T E A R G U A R A N T E E . d5he assurance of future service, based upon past and present ability . t/u A m * - » — :» :» :» — h m jjii m » :» :» :» :» :» :» :» :» :» :» :» :0 :» :0 — 0— 0— 0 :0 . .0 :0 — »J The A N A K IN CO. 162 N. Franklin St. Chicago Please send us the “ Six Factors o f A N A K IN V alue,” without obligation. BURGLAR PROOF PROTECTIVE EQUIPMENT " A N A K IN LOCKS G AS” f o r s a f e s a n d v a u l t s 'VAULTESCAPE" v a u l t d o o r r e l e a s i n g d e v i c e "DALITE H O L D -U P ” -"P R O T E S T O R ” fam ous - • a - . » . . » . . a . . « . . a . . — :0 ——— :0— 0— :0 : GAS W E A P O N S & A M M U N IT IO N Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 6 N E bank out o f every six in the United States O is a correspondent o f the Continental. A n d after the Illinois Merchants and the Conti nental are consolidated as the Continental Illinois Bank and Trust Company, the united bank will have an even larger network o f correspondent connections— thus making avail able to each correspondent a greater system for transit and collection items and providing access to still wider sources o f credit information. Invested capital o f 150 million dollars and resources o f a billion and more, in themselves, indicate the strength the united bank will have. A s to foreign bank ing service— there will be direct banking contacts with every city o f business importance in the civilized world. Invest ment facilities will be enlarged by the formation o f an affiliated investment company with capitalization o f 20 million dollars. But the size o f the consolidated bank in no way will alter present relationships with correspondents. It will have a flexible official organization enabling corres pondents to continue to transact business with old friends C O N TIN EN TA L NATIONAL BANK. & TRUST COMPANY OF CHICAGO Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 o 4 Cedar Rapids Dank ïS S lffœ M-Uitk Ê'Jl «4iUii¡|. .1 i,« h il i a ai ninnili« « Servicing cAll lou a New methods banking facilities— but the same old ideals o f careful and personal correspondent service are still outstanding here at the Merchants National. The w orld moves rapidly, but there will never be any sub stitute for w ork well done. If there ever is, w e ll have that, too. M ERCHANTS N A T IO N A L C ed ar R apids B A N K Iow a Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 8 O R G A N IZED M EM BER FED ERAL RESERVE I 877 ^Ve c T V The Successful Handling of correspondent accounts by the Cedar Rapids National has been achieved by departure from beaten paths to take ad vantage of the many short-cuts which make for speed and efficiency. Every possible time-saving method is employed to make our service react to your best inter ests. Wishing You A Very Merry Christmas Glenn M. Averill, Tres. E. M. Scott, Vice Pres. C. C. Kuning. V. P. and Cashier Van Vechten Shaffer, Vice Pres. Geo. F. Miller. V. P. and Trust Officer Frank Filip, Vice Pres. Assistant Cashiers Peter Hailey Marvin It. Seldon Bertha M. W olf Geo. W. Swab Maud W. Carpenter Walter Allison 1 R. D. Brown r _ *n O. A. Kearney r — C edar T^apids National Bank C e d a r T^ajoids, Io^)at Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 9 Wehere doors are open w ide RECEN T news dispatch from Department o f the First National Washington made public the fact Bank and First Minneapolis Trust that today over four million people Company may be depended on for are investors, and, according to the sound and helpful investment coun U. S. Treasury Department, sel. Our doors are always open to the holdings of "millionaires” amount those seeking help in planning a to less than 1% o f the total in constructive investment program. vested. An increasing percentage The broad experience of our of individuals o f moderate wealth Investment Department with the are relying on sound requirements of hundreds of cases, bonds to produce a portion of their income. and the spirit o f helpful friend Thousands o f investors have liness actuating this entire organi learned that however large or small zation, assure an investment program their means may be, the Investment that suits your individual needs. FIRST NATIONAL THE OLDEST BANK IN Minneapolis Symphony Orchestra SU N D A Y EV EN IN G S, OVER M 'C t O BAN R MIN NEAPOLIS — O RG A N IZ ED 1864 F IR S T M I N N E A P O L I S T R U S T C O M P A N Y ORGANIZED 1888 FIRST NATIONAL GROUP FIRST NATIONAL BANK cResources Over $150,000,000 Marquette A ve. at 5th St. WEST BROADWAY OFFICE West Broadway at Emerson ST. AN TH ON Y FALLS OFFICE East Hennepin at 4th FIRST MINNEAPOLIS TRUST COMPANY 511 Marquette A v e .— 115 So. 5th Sr NORTH SIDE OFFICE Washington at West Broadway MINNEHAHA NATIONAL BANK 27th A ve. So. at Lake BLOOMINGTON-LAKE NATIONAL BANK Bloomington at Lake PRODUCE STATE BANK First A ve. North at 7th St. Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 10 POWER on the Farm! Mechanical Power — It Has Already Done Wonders in Agriculture. The Future W ill See Far Greater Things! H E National City Bank of N ew York, one of the great banks of the country, in commenting on the tremendous changes that have been wrought in farm methods, goes on to say: Above: The McCormick-Deering 15-30 and feed grinder. Fall and winter is the season of belt power. T “There is reason to believe that the real significance is in the change from horse-power to motor-power. The first use of the tractor was simply as a substitute for horses, draw ing the same type of farm machinery, but now all farm machinery is being adapted to tractor power, with the result that the capacity of man-power is greatly increased.” The greatest change since the invention of the reaper has been brought about by the tractor. Nearly a million tractors are now working in the land, speeding up operations and cutting the costs of production. T he up-and-coming farmer has it in his hands to combine reliable power and reliable farm equipment to his own profitable advantage, and in the best interests of the community. National and state depart ments of agriculture, agricultural schools, the far-seeing banks, and all other agencies interested in the advance of agriculture, are strongly sponsoring the new age of power. I nternational H arvester C ompany »0» So.Michigan Ave. Chicago, 111. <R? M cCorm ick-Deering trac tors are made by the makers of farm equipment for every season and for every crop. Their great success is due to a very special advantage— they are designed and built to work with field and belt m a c h in e s . D e e r in g M c C o r m ic k m a c h in e s and M c C o r m ic k -D e e r in g trac tors belong to each other. Neither is complete by itself — together they build agri cultural wealth. <R? Below: The all-purpose Farmall operating a McCormickDeering corn picker. McCormick-Deering Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 11 FO RW A RD ! W ith confidence in the future, and ample resources to meet legitimate demands, w e seek opportunities for broadening our service to the bankers o f Iowa. S E E US W H E N Y O U A R E IN DES M O IN ES OFFICERS Clyde E. B renton Geo. E. P earsall A lb ert J. R obertson J. R . Capps R. L. Chase, Jr. Jam es F . H a rt J. B urson Sherm an W . F ow ler A . J. W arnke W infield W . S cott H a rry G. W ilson P resident V ice P res. V ice P res. Cashier A sst. Cash. A sst. Cash. A sst. Cash. A sst. Cash. A sst. Cash. A sst. Cash. A sst. Cash. DIRECTORS Geo. N. A yres Clyde E. B renton H ow ard J. Clark G ardner C owles J. H . Cownie E. C. F inkbine J. B . Green W m . C. H arbach F. C. H u bbell F. H . Luthe M. M andelbaum H om er A. M iller Geo. E. P earsall A lb ert J. R obertson M. Shloss E. R . S totts O. P . T hom pson Carl W eeks I o w a Na t io n a l b a n k D es M oines Savings Bank and Trust Co m pan y Des Moines Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 12 D o W & N e e d The natu ra l answer M o r e Intelligent t0 the question> “ Do Bankers ? W e Need M ore In telli- N ow let us a p p ly this th eory to finance and banking. There are 30,000 banks in the cou n try, and about is 82,375 bankers and bank officials. Thus the average “ y e s .” I f y on w o u ld a p p ly this qu estion to la w yers, or m erchants, or m an u factu rers, y ou w ou ld still say “ y e s .” is 2.7 bankers and bank officials p er bank, as M r. P itk in has p oin ted out in C hapter 7, on “ O p p o rtu nities in F in a n ce and B a n k in g .” A c c o r d in g to the statistics in this chapter, the num ber o f m etropolitan banks ru n som ewhere be gent B an k ers? , H ow ever, W a lte r B. P itk in, in his recent book “ The T w ilig h t o f the A m erica n M in d ” disagrees w ith this statem ent entirely. H e believes that, “ Scientists are so tra n sform in g A m erica that even to d a y there is not enough u sefu l and suitable w ork fo r all h ig h ly in telligent people. A cu ltu ral crisis o f the first m agnitude im p e n d s.” I m ight say before g oin g fu rth e r that W a lter B. P itk in is a C olum bia U n iversity p rofessor and associate editor o f the E n cy clo p e d ia B ritan n ica. B efore another gen eration shall have come and gone it is quite certain, a ccord in g to M r. P itkin, that fu lly nine-tenths o f the su p erior brains o f A m erica w ill ow n or otherw ise con trol about ninetenths o f the con tin en t— its cash and its credit, its governm ents and their institutions, its lands and all the factories thereon. tw een 470 and 500, and ad d in g to these the 1,356 banks in cities betw een 10,000 and 100,000 p o p u la tion, we have “ a total o f not m ore than 1,800 to 1,900 banks the ch aracter and volum e o f whose business dem ands su p erior m anagem ent, or a sort that even suggests a Best M in d .” I f m ach in ery in banks, like m ach in ery in other organizations, is red u cin g the clerica l w ork to a m echanical prop osition , then it w ill be true in the fu tu re that we w ill need fe w e r B est M inds in the b a n k in g business. In a d d itio n to this, w ith co n s o li dations taking place alm ost daily, w ith chain ban k ing loom in g up in the b a ck grou n d as an eventual possibility in the next fifty years, w ill there be less and less need o f the B est M inds in b a n k in g ? W ill we need few er in telligent bankers? H e then brin gs us squ arely u p to the p rop osition W e can not help but pause as we consider these o f w hat shall be done w ith the Best M inds them selves. “ Shall we g rea tly increase their n u m b e r ? ” statements and realize that this nation th rou gh its 30,000 banks has been bu ilt b y men who have at least given to their in d iv id u a l institutions a degree o f intelligence, o f en ergy, o f enthusiasm , and o f asks M r. P itk in, “ and if so, w hat shall we give them to do as our new social ord er p ro g re s s e s?” A s we con stan tly im prove ou r m ethods o f doin g business b y im p roved m achinery, we find that the best m inds w ill be needed less and less. in tellectu al a b ilitie s,” “ F o r the loy a lty , w hich has m ade those banks a success in their respective com m unities, and as a consequence helped to achieve our present position o f p rosp erity says M r. P itk in, “ w ill be and p ow er w hich the U n ited States e n joy s to a used less and less often in the econom ic in du strial greater degree than an y other n ation in the w orld . system as it progresses, while there is no conceivable w ay o f a p p ly in g the ab ility o f the fa c to r y w orker ban kin g as we do to the Best M inds in an y other and m anager in the realm o f cu ltu r e .” walks o f life. Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 192S Let us take off our hats to the B est M inds in B u t let us rem em ber that, while 13 arm ies n eed th eir G enerals, those G enerals w o u ld attain n oth in g i f th ey d id not have u nder their had a m oral resp on sib ility fo r the debt— bu t they have no such m oral respon sibility. T hey fo u g h t the com m and loyal, efficient and d iscip lin ed soldiers to enactm ent o f this legislation fro m the v e ry b eg in ca rry out th eir ord ers o f the day. ning. There were a fe w bankers no dou bt who su p So in banking, let us rem em ber that it is the loya l p orted it, but the bankers as a class fo u g h t it to and efficient em ployes w ho, a fter all, add th eir real the last ditch in the Suprem e C ourt o f the United p art to the success o f any financial institution, States, and th ey acquiesced on ly as law -abiding w h ich m ay have as its head one o f the B est M inds citizens in the p aym en t o f the tax. ’ ’ in the ban kin g business. It is to be h o p e d th at the last o f these e x p e ri m ents in g u a ra n te e in g o f d ep osits w ill be effa ced j\ S in k in g ” A ft e r seventeen years o f trial, the Nebraska B ank G uaranty fr o m the statutes o f N ebrask a. L ik e a sinking ship, we trust that it w ill go dow n L aw is m aking its last stand. w ith as small a loss as possible, but in its place we trust that a better, m ore p ow erfu l, m ore efficient A s ou tlin ed b y D an V . Stephens, president o f the F rem on t State B ank, F rem on t, Nebraska, the status and m ore se a g o in g vessel w ill be bu ilt on a fo u n d a o f the bank gu a ra n ty law in Nebraska at this tim e tion o f p ro p e r b a n k in g law s, w h ich w ill m ore ad e is about as fo llo w s : q u a te ly and sa tisfa c to r ily p r o te c t the d ep ositors 1. One h u n d red tw enty-three banks are in the hands o f the G u aran ty F u n d Com m ission, w ith total liabilities o f $27,000,000. 2. I f these assets are sold fo r 50 p er cent o f the total liabilities there w ill be an a p p r o x i mate loss o f $13,500,000 to be carged against the guarantee fu n d , and there is no m oney at present tim e w ith w hich to p a y this debt. 3. The bankers o f Nebraska have p a id to d e positors in fa ile d banks fro m the b egin n in g o f the op eration o f the A ct, an aggregate net sum o f m ore than $15,000,000, and still w ill owe a p p rox im a tely $13,500,000. 4. The State banks are now alm ost u n a n i m ou sly o f the op in ion that it is p h y sica lly im possible fo r them to p a y this debt and m aintain th eir solven cy at the same time. 5. In view o f this alm ost unanim ous belief, p ra ctica lly all o f the la rger banks have ex pressed their determ in ation to contest the righ t o f the State to collect this con fiscatory debt fro m them. It is their purpose, th ere fore, to th row the entire m atter in to the courts, in ord er that they m ay have an im m ediate decision on the subject. H ere we have in b r ie f the situation con cern in g the B ank G u aran ty L aw in Nebraska, the last state to con tin u e this exp erim en t in the gu aranteein g o f bank deposits. The basis o f the present legal contest is u p on the th eory that ‘ ‘ T he assessment o f on e-h alf o f one per cent against the shareholder can not be collected fro m the corp ora tion , and that it cannot be c o l lected fro m the shareholder, fo r the reason that the sh a reh old er’s interest can not be assessed fo r the benefit o f a dep ositor in an y other bank than his own, as it w ou ld be u ncon stitu tion al as to the shareholder. ” A s M r. Stephens fu rth e r p oin ts out, “ The ban k ers o f N ebraska w ou ld never contest the case i f they in N ebrask a. A T io n l dí * H m V T IU C harles H . M cN ider, fo rm e r P resi M ason ih e First. N ation al B ank of C ity, Iow a, whose sudden passing aw ay was rep orted on page N ovem ber issue o f the N o r t h w e s t e r n the B anker, was a real frie n d to not on ly the custom ers o f his bank, bu t to m any others w ith w hom he came in con tact in his w ide sphere o f a ctivity. M an y tim es d u rin g the sixteen years that I knew him he offered me k in d ly w ords o f encouragem ent, and was alw ays read y w ith con stru ctive suggestions w hich he th ou ght w ou ld im prove the N o r t h w e s t ern B anker, It is th erefore p erh aps not out o f place to re p ro duce here the last letter w hich we received from M r. M cN ider, w h ich is ju st another in d ica tion o f his th ou ghtfu ln ess o f others, an d his desire to en cou rage them in any w orth w hile endeavor w hich they m ight be undertakin g. Mason City, Iowa, Mr. Clifford DePuy, September Fifteenth, Northwestern Banker, 1928. Des Moines, Iowa. My Dear Mr. DePuy: I want to say to you that ever since your paper was first published in Des Moines many years ago, the writer has been a subscriber. We were very much interested in your father and in his work and as the years have gone on, we have been decidedly in terested in your success. Your paper compared today with what it was 32 years ago is decidedly improved, and I know of no journal in the whole banking circle that we look to with so much interest as we do to the N o r t h w e s t e r n B a n k e r when it comes to our desk. I want to congratulate you on the success and development of your paper and the prestige which you have given the publication and which the paper has given the profession. With my best wishes for your success, I am CHM Very truly yours, KL C. H. MeNIDEB. Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 95 o f December 1928 14 “ T H E N IG H T BEFORE C H R IS T M A S ” The Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 C opyrighted by Thos. D. M urphy C om pany Red Oak, Iowa 15 Left, how the hanker would feel if he had to use in his own bank all the interest figuring m e t h o d s known to the bank ing fraternity. from first o f month in which withdrawal is made. Compounded semiannually. — ($53.72.) 6. Deposits go on inter est from first o f each month on all sums on deposit for at least one calendar month preceding interest date. In terest computed on lowest balance fo r each interest date. On withdrawals interest quarter, except when balance fo r second ceases from first o f month preceding that quarter is lower, then the lowest balance in which withdrawal is made. Com fo r one-half year is used. Compounded pounded semiannually.— ($37.07.) semiannually.— ($23.72.) 5. Deposits go on interest from first of 7. Interest is calculated by calendar each month on all sums on deposit for at months on the amount o f credit shown least one calendar month preceding inter est date. On withdrawals interest ceases by the account on the first day of the pre ceding month. Compounded semiannually.— ($55.27.) ACCOUNT NO. 1 8. Deposits go on interest from first of each month on Principal all sums on deposit for at least Interest one calendar month preceding Withdrawals Deposits Balance Debit Credit Balance Date interest date. Interest is cal culated by calendar months $2 ,205 on the amount of credit shown 1 Jan. on the first day of the current 2,283 5 78 6 month. Compounded semi 2,343 60 11 annually.— ($39.70.) 2,408 65 Feb. 16 9. Deposits go on interest 2,428 20 24 from first o f each month on 2,448 20 28 all sums on deposit for at least 2,468 one calendar month preceding 20 Mar. 15 interest date. Interest is fig 2,488 20 26 ured monthly on lowest bal 2,551 63 April 4 ance carried each month dur 15 2,566 13 ing six months period. In 4,266 1,700 18 case o f withdrawals through 4,216 5 50 25 out the six months which cause the balance to be lower at any 4.116 too 25 time during the six months 6.116 2,000 26 then the interest is figured on 5,966 150 29 that balance fo r the entire pe 5 ,866 100 May 3 riod. Compounded semian 5,716 150 7 nually.— ($23.72.) 5,686 30 10. Deposits go on interest 7 the first o f each month on all 1,186 4,500 June 1 sums on deposit for at least one calendar month preceding Above, Account No. 1, a typical account, which is used as the interest date. Interest is cal basis for figuring the interest rates by the ten methods shown culated on minimum monthly on this page. Answers are given in brackets at the end of each (Turn to page 85, please) method listed. 'H E well known Heinz company, with its 58 varieties, has nothing on the interest figuring habits o f hankers o f Amer ica, according to an exhaus tive survey made by the Committee on Bank Facili ties and Service, Savings Bank Division of the A. B. A. Exactly fifty-two methods are explained in a re cent folder gotten out by the committee, which forms the basis fo r the article on this page, although hut ten methods are given herewith. First o f all, a typical ac count, account No. 1 is shown in the box on this page. The ten methods in question, are given as follows, together with the interest computed on this account, at the end o f each method, in brackets. T The ten methods follow : 1. Deposits go on interest from first o f each month, on all sums on deposit for at least one calendar month preceding interest date. Withdrawals de ducted from latest deposits. No interest on withdrawals be tween interest periods. Compounded semiannually.— ($23.72.) 2. Deposits go on interest from first o f each month on all sums on deposit fo r at least one calendar month preceding interest date. Withdrawals de ducted from first deposits (be ginning o f six months p eriod ). No interest on withdrawals be tween interest periods. Compounded semiannually.— ($7.90.) 3. Interest from date o f de posit to date o f withdrawal. Compounded semiannually.— ($60.86.) 4. Deposits go on interest from first o f each month on all sums on deposit for at least one calendar month preceding Figuring Interest and H OW! Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 16 80 85 90 95 00 05 IO 15 20 25 28 Charts courtesy Cleveland Trust Co. Above, the twelve bull markets of the past fifty years. None, however, can compare with the present one, in any respect. Gn MONEY and the HE call loan market lias for years been looked upon as extremely safe and liquid for temporary investment. As a consequence, the present protracted “ bull” market has not lacked financial support nor have bankers throughout the country expressed much concern over the millions o f dollars on call in Wall street, from thousands o f banks, big and little, in forty-eight states o f the union. Yet, here and there, a banker asks: “ Are such loans liquid? Are they safe?” Occasionally is heard the argument that there is a new element o f risk creeping into brokers’ loans, due to the increasing volume o f outside money, termed “ boot leg” money, loaned by individuals and in stitutions which have no responsibility for the stability o f the money market and con sequently might be subject to sudden with drawal, in ease o f a crisis. There is no denying the fact that great changes in the interests represented in the call loan market have taken place the past two years. In January, 1926, nearly 75 per cent o f all loans to brokers were being made by New York banks fo r them selves and correspondents. At the present time, New York banks and their corre spondents now account fo r less than half the total loans to brokers. T Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Does the credit situation con tain factors that lessen the safety and liquidity of the call loan market? B y R. W . M OORHEAD Editor Looking first at the dark side o f the picture, some financial students see in this trend a desire on the part o f New York banks to “ get out from under,” that is, an unwillingness on the part o f the banks to stay involved in a credit situation over which they do not have control. A pessi mistic view o f the situation is taken by E. C. Harwood, in a recent issue o f the “Analyst,” who concludes that “ with the relative decline in loans made by New York banks, has come a definite decrease in responsibility. Formerly these institu tions must perforce pull everyone’s ‘chest nuts out o f the fire’ in order to save their own. This is no longer the case. In the absence o f a concentration o f responsi bility, everybody’s job is anybody’s job. Unless some czar o f finance be appointed on the eve o f any financial trouble, it is quite unlikely that concerted action for December 1928 the best interests o f all concerned will result.” The majority o f bankers and students o f finance, however, do not see cause for alarm in the situation. The short-run sta bility o f loans fo r “ account o f others” is commented upon by Benjamin M. Ander son, Jr., economist fo r the Chase Na tional Bank o f New York, in a recent address in which he said in p a rt: “ Fear has been expressed that this large volume o f outside money, loaned by indi viduals and institutions which have no responsibility for the safety and stability o f the money market or o f the securities market, may be subject to sudden and capricious withdrawal. I do not share this fear. I f it should be withdrawn suddenly, it is quite clear that money rates would have to rise to very high figures indeed as the Stock Exchange and the banks re adjusted their position. At a price, it could be done. But sudden and capricious withdrawal o f large blocks o f money by these private lenders would make real difficulties. “ I do not, however, believe that there will or can be sudden and capricious with drawals o f vast amounts. Any one lender can, o f course, make a sudden withdrawal and need feel no particular responsibility. 17 Take Y our Choice ! 1— Leonard P. Ayres, Cleveland banker, thinks stock prices are far above what their earnings, past or prospective, warrant. 2— Jules S. Bache, New York broker, does not believe brokers loans are excessive or that they have caused stock price inflation. 3 — Hon. Reginald McKenna, London banker, says A m er ica faces a period of unparal leled prosperity and a busi ness collapse is almost im possible. 4— Prof. Irving Fisher says there is no reason to believe that inevitable readjustments in some stock prices will result in a financial smashup. As Spencer, of the Omaha World-Herald, sees the old adage, “ What goes up must come down.” AFETY of CALL LOAN But the lenders are very numerous, and their interests are very diversified. The one thing that would make a concerted sudden withdrawal would be a sharp drop in rates o f interest, lasting fo r anyhow several days. Withdrawals on a great scale would then come. But on the other hand the bidding up o f rates o f interest which would have to follow such withdrawals would bring the money back again. But such a situation usually means that rates will be kept high enough all the time to prevent large concerted withdrawals. The outside money, so far as short periods o f time are concerned, is available at a price, but not at such a price as would constitute an easy money market.” “ Greater Margins Required ” Although admitting that by holding a minority instead o f a majority o f the call loan volume, banks thus do not hold the same responsibility fo r stabilizing the market, Walter W . Head, president o f the Omaha National Bank, former presi dent o f the A. B. A., points out that call loans are safer today because banks are demanding greater margins than before. He says: ‘‘There can be no doubt but that the great increase in call loans ‘fo r the ac count o f others’ tends, theoretically, to re duce the safety and the liquidity o f such loans. Practically, New York City banks have offset this theoretical weakness to a very considerable degree by requiring larger margins on call loans which they make fo r their own account or for the account o f customer banks. The actual net result o f these conflicting factors prob ably will never be known until there is a real test, the result o f an attempt toward rapid liquidation of call loans either by banks or by nonbank lenders. “ Unquestionably, when the bulk o f call loans are fo r the account o f banks, the resources o f lending banks may be and are used to prevent a sudden drastic re duction in the value o f their collateral. This forms a cushion in time o f financial storm and stress. When call loans made by banks are a minority o f the total the incentive to protect and market still exists, but not in the same degree. The responsi bility fo r unwarranted advances and for unjustified declines is widely scattered and, therefore, is not as effective. “ Most banks which make call loans to day now demand greater margins than was formerly customary. In addition, they frequently fix an arbitrary ‘loan value’ upon stocks used as collateral which is considerably below the immediate market. This tends to protect them and to protect their bank customers, but it does not to the same degree protect the general market.” A bank may with safety loan a reason able portion o f its funds to stock exchange houses, secured by stock exchange col lateral with the usual margin, is the view o f R. R. Brubacher, vice president and cashier o f the Toy National Bank o f Sioux City, who says : “ I base my conclusion on several fac tors, giving due consideration to the fact that banks in the middle west find it in convenient to make loans direct, necessi tating their placing such loans through their correspondent banks, either as direct loans to the various stock exchange houses, or through participations in loans nego tiated by such correspondents. Through this method, then, it appears that the out o f town banks must rely upon their cor respondent banks, through which they place their loans and be satisfied that such correspondents will give these loans the same care and attention that they give to loans made fo r their own account. “ Assuming that the call loans are placed through an old established, responsible bank which does not hesitate to loan its own funds to stock exchange firms and Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 18 against securities dealt in on the exchange, where must we look fo r the factor o f safety ? “ 1st. To the everlasting vigilance of the loan department o f the correspondent, which will insist that at all times a margin o f at least 25 per cent in listed securities be maintained, and in cases o f the more volatile stocks, that the margin be more liberal. I feel that a correspondent bank may be selected whose experience with such loans is very good, and which can be relied upon to give loans for out o f town banks the very best o f attention. H IS is the story o f a man who was o n c e appraised by an editor in his city as “ a man worth more than a million-dollar plant to his city.” A p r o m in e n t St. Louisan recently was discussing the question o f a future career with his young son, who had shown an inclination for banking. “ Sup pose,” he advised, “ that you pick out some live-wire banker and study his life ; p ref erably a man who has battled his way to outstanding success against great odds. I have in mind such a person in John G. Lonsdale, now president o f The National Bank o f Commerce in St. Louis.” What this proud father urged his am bitious son to do could be done with profit by hundreds o f other youths, not only in St. Louis, but throughout the nation as well, for Lonsdale being essentially a selfmade man, no finer model for success could be offered the younger generation fo r in spiration and guidance. T W ‘ ‘2nd. To the fact that the safety o f the call loan lies also in its liquid char acter and the breadth o f the market, brought about by the advertising given listed securities in newspapers, and on the tape, resulting in the attracting of thousands o f investors to this form of investment. “ 3rd. Also to the rules o f the Stock Exchange, requiring that the stock cer tificates are readily negotiable in the event liquidation becomes necessary, and to the fact that no firm or individual is allowed a seat on the Exchange, without orth a M full investigation as to character and responsibility.” “ The high rates have attracted a large amount o f outside money into the call loan market, and the question has arisen whether this money loaned by individuals and corporations having no interest in the stability o f the market, will be subject to sudden withdrawal. “ Inasmuch as the outside money is a t tracted to the market by high rates, it seems that probably the only cause for extended withdrawal would be lower in(Turn to page 99, please) success, but has kept them all as he con tinued to acquire new ones. The people won by his warm smile and hearty handshake in the early days at Hot Springs are never fo r gotten, from the hum blest white man to the Negro, and when he returns to the scenes o f his boyhood fo r one o f his frequent visits, he usually manages to get around to greet all his friends. il l io n HOME TOWN — the story of a banker ivho placed service to humanity above banking — and made outstanding success of both. A “ Friendly ” Man This deep regard fo r his fellowmen was instantly reflected in the policies of The (See Cover Page Photo) National Bank o f Commerce in St. Louis cation, used to remark admiringly that he when Lonsdale was called in to assume the managed to keep two jumps ahead of them presidency back in 1915. He made him in school and he has done it ever since. self accessible at all times to old friends Which is another way o f saying that Lons and customers as well as to prospective dale had the happy faculty o f being alert patrons o f the bank, dispensing with the and meeting the future more than half way. custom o f having callers pass through a And so while he went about his duties line o f secretaries and office boys before helping his uncle in the real estate busi reaching him. His desk is out in the open, ness at Hot Springs, Lonsdale cultivated within sight o f one o f the main entrances other splendid traits, such as making last of the bank and he waves a cheery greet A n Orphan Lad ing friendships and learning to master ing to scores o f passing customers daily Left an orphan in 1878 at the age o f 6, seemingly trivial details of business, im in addition to those who come to his desk. when his parents fell prey to the scourge portant things which any young man as Never too busy to see an old friend or any o f yellow fever that hit body looking for infor Memphis, Lonsdale had mation is his motto, and to shoulder the responsi Meeting the Future More than Half Way many times he inter bility o f hewing out his rupts dictation in the "M any of his schoolmates at H ot Springs, were young Lons own destiny. Although middle o f a sentence to dale acquired his education, used to remark admiringly that he he went to live with an extend a hearty welcome uncle near Hot Springs, managed to keep two jumps ahead of them in school and he has to a caller. Ark., and had the benefit And yet Lonsdale did done it ever since. W hich is another way of saying that he had o f his kindly advice, it not deliberately set out the happy faculty of being alert and meeting the future more than was chiefly up to young to become a banker. It half way.” John G. Lonsdale to do was fate that took him his own thinking and to St. Louis to fill a need, planning fo r whatever he hoped to ac piring to the banking business should seek just as other events in his life came about complish. to conquer. For the man who masters because he undertook to do some o f the How well he has managed to do this is details is enabled to understand funda things that others seemingly could or attested by the brilliant successes that have mental principles more clearly. would not do. crowned his efforts in whatever direction Perhaps one o f the finest things that For instance, before he was yet 20 years he has chosen to direct them. can be said about Lonsdale is that through o f age, he built a railroad between Hot Many o f his schoolmates at Hot all the years o f his business activity he Springs and Little Rock after more maSprings, Avhere Lonsdale acquired his eduhas not sacrificed any o f his old friends for (Turn to page 72, please) Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 19 Classification P e rc e n t o f Total Accts. *l°°toC2 5 °° 3 4 0 7 $ flQ P to¿5 0 0 ° 4 9 .0 8 # 6 3 .9 2 # A v e ra g e Per A c c e . Per Cent Of Total Deposits # 7 .0 8 1. 0 6 # 1 4 .4 2 3 . 11# 2 3 .5 0 DISTRIBUTION OF EXPENSE ACCORDING DIVISIONS OF B A N K j Expense Accounts 4 1 .2 5 13.8 5 # *l°S>tof300°° 8 1 .9 0 # 5 9 .4 8 2143# SavingAccts. Loans Í Mise. Ctfs. of Dep. Investments Division 47 3SO 150 543 1880 275 943 125 342 103 480 4 0 1 15 7873 197 460 8 3813 172 1006 120 2.1 O M iscellaneous 31 5 0 5 16 8 10 93 700 900 2 3 13 22.4- T o ta ls 14,280 6137 1982 5694 467 B u ild in g in su ra n ce , Etc. S a la rie s S tationery, Etc. T axes • Checking Accounts 5-47 a d v e rtis in g 6 .6 1 # 7 5 .3 5 # Totals TO (Chart No. 1) 15 37 3 (Chart No. 2) Above, Chart No. 1 (left)— Results of the survey made by the Illinois Bankers Association, answering the question, “ Why should there be a service charge, anyway?” Chart No. 2 (right)— This is a hypothetical bank with 650 checking accounts. All of the items closely conform to the proportions that would be found in a bank of this size. Experience has shown that these same ratios hold true in the average commercial bank, regardless of size. H A T are the basic f a c t o r s that cause banks to adopt the service charge ? What plans and materials are most effectively em ployed in adopting such a charge? What tan gible results do such banks actually se cure ? In an attempt to conclusively answer these important questions, Devlin and Bennett, Inc., o f Chicago, sales and ad vertising counsel to financial institu tions, recently made an extensive sur vey o f several hundred banks through out the country, with some very interest ing results. These have been presented in the form of an eight page booklet, illustrated by charts, some o f which are shown on this page. W First o f all, answering the question, “ W hy should there be a service charge, anyway?” Chart No. 1, is exhibited. This chart was originally compiled by the Illinois Bankers Association. It in cluded more than three million indi vidual accounts in eight hundred banks in five hundred different cities, towns and villages. The Devlin and Bennett sur vey ad d s: “ Since the original compila tion the figures have been checked against nearly 1,500 other banks in vari ous parts o f the country as fa r east as Massachusetts— as far west as the Da kotas. They have held true within a very narrow bracket wherever an analysis has been made. A good many bankers have refused to believe that this condi tion existed in their banks, but when they check up, they find it true. “ These charts and methods follow the approved practice o f bank accounting ex perts everywhere. Their function is to break down the activities o f a bank to determine what operations are profitable or unprofitable, why they are so, and What About the How the experiences of other hankers are solving the problems incidental to the installation and operation of service charges. Iliili;il!ll!llllllllll!ll]||l!l!lllllllllllll!llill[|ll what can be done to improve the condi tion.” In commenting on the figures shown in Chart No. 4, “ Account Analysis,” the survey sa y s: “ These figures have been found very conservative fo r most banks. In the first place, the average balance fo r the low group is less than $25 and so assuming the $50 average show up a somewhat better condition than actually exists. However, that is serious enough to gain immediate attention. Certainly such business is not desirable in its pres ent condition. And when you consider that 65 per cent o f all checking accounts come into the classification the prob lem becomes more complicated. True, these deposits could be ‘let out’ and told that their patronage is no longer de sirable even though it had originally been solicited and welcome to the bank. That would improve matters on paper, but no institution dependent upon public good will, can deliberately go out o f its way to stir up bad feeling. So to get at the cure, the banks determined to know the real causes o f their condition.” The survey then points out fou r mis conceptions among depositors about cheeking account service. They include: Those who do not appreciate or know all the values o f checking account serv ice, those who do not realize the value o f an adequate balance, those who believe all check ing accounts are profi table to banks, regard less o f size, and those who feel they are con ferring a f a v o r on banks by having a checking account. “ The four general wrong ideas about banking service were found to be almost universal among the low-balance de positors,” says the survey. The survey lists seven reasons why everybody wants to use a checking ac count and some o f the advantages that would accrue by carrying a larger bal ance. They a re : 1— P roof o f payment. 2— Saves time. 3— Valuable counsel. 4— Expense control. 5— Creates prestige. 6— Cash reserve. 7— Money loss avoided. The survey ad d s: “ Any banker can, in a few minutes, call to mind specific examples illustrat ing each o f the above points where many, many times the amount o f several years o f service charge has been and is being saved to the customer by virtue o f his connection with the bank. The service is undoubtedly worth a dollar or two per month o f anybody’s money or a com pensating balance. “ In the matter o f convenience and the cash value o f time saved, a checking ac count is well worth any price that a bank would be likely to ask fo r it. “ It is certain that very, very few people would return to the old method o f paying in cash even if they did have to pay a little more fo r the convenience. “ The legal receipt feature o f checking service saves thousands o f dollars every year to bank patrons. Often the amount for a single depositor runs into many years’ payment o f a service charge. “ Bankers can enlarge in detail on these points fo r themselves. It suffices fo r the present purpose to prove that Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 20 ACCOUNT ANALYSIS account o f William Sherwood i. i. 3. 4, 5. AVERAGE B A L A N C E LE S S R E S E R V E ( 15%) LOANABLE B A L A N C E INTEREST I N C O M E (@ 6 ° f ) EXPENSE C O S T A -N um b er of Accounts Cost B -A c tiv ity (15 Ite m s @ ) c - O v e r h e a d . (eso Accom « ) Net Losst6°ê ¿50.00 7.50 4-2.50 2.55 1.77 4 .5 0 a .0.6 * TOTAL DISTRIBUTION OF EXPENSE1 Humber of D IS T R IB U T IO N OF E X P E N S E OF CHECKING ACCT. DEPT Expense Accounts Mo. of Activity Over Totals Accts of Accts. head. d d w tis /n q 350 Baildmq, Etc 2a ctiv ity o f accounts Cost 275 25 75 175 Insurance, Etc. 943 112 278 553 Salaries 3. Overhead 3150 690 2060 400 Stationery, Etc. 516 217 191 Axes 810 93 108 200 13 200 40 4-IO 40 6137 1148 2870 2119 a ccou n ts C o st Cost Miscellaneous 49S3 T otals (Chart No. 3) This is a sample analysis of an individual account showing the application of various basic factors that have been worked out above (Chart No. 4) This chart shows distribution of Expense within the checking department. The number of accounts cost covers that portion, chargeable to all checking accounts without regard to activity. It is obtained by pro rata allocation of the total amount to each account on the ledger, regardless of in or out items. ‘ ‘ Activity of Accounts ’ ’ charges cover costs of handling in and out items, cost of department supplies, tellers, etc. It furnishes the basis for computing item cost. ‘ ‘ Overhead ’ ’ is the indirect charge against all checking accounts not covered by direct costs of the department. these groups agree with the service charge in principle and practice. checking* service is not only valuable but well nigh indispensable.” The conclusions reached by the sur veys are that the banker’s problem is to convince three groups o f people that the values o f the service ju stify a fair compensation. These three groups are : Your bank personnel; your depositors; and your general public. Commenting on this the survey says : “ It is necessary to have all three o f 350 “ The bank’s personnel have the most frequent contact with customers. Upon their ability to present the reasons fo r the service charge, depends much o f the venture’s success. “ Certainly your depositors must be taken into your confidence. You have spent money to secure them. They have additional business you can get. You therefore want to retain every one who possibly can be made profitable. “ Careful investigation has shown that proper educational work with depositors and employes pays enormous dividends. The effect o f this work transcends the mere increased income derived from the service charge or increased balances and stimulates better feeling, both inside and outside the bank.” Fifty Per Cent Profit Its First Year HERE is a little town in Arkansas called Marion. A fter the first bank failed and the reorganized bank failed, the little community was left without any banking service at all. I should like to say right here that the people o f any community never realize the value o f banking service until they have lost it, and after they have lost it they are willing to pay almost anything to have a restoration of banking service. That was the case in this little town o f Marion. For about two months the mer chants and others tried to get along with out a bank. They found it hard sledding to go way into Memphis or into the other county. From report of Secretary Robert Wait of the Arkansas State Bankers Associa tion made before the state secretaries section of the A. B. A. T A Makeshift Banker I had a friend there who was liquidat ing the failed bank. He found that a merchant down the street had a safe and had gotten together quite a sum o f money, and he was letting it be known that he would cash all checks o f the com munity if they would bring them to him. You can take it from me, whenever he cashed a check, he always took a good slice off o f it. Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis , My friend said to him, “ This town is without banking facilities. W hy don’t you get together $15,000 and $1,500 fo r your surplus, and I think you can get a charter from the State Banking De partment.” He said, “ W hat’s the use? Nobody has any confidence in banks. Nobody will put his money in here.” My friend said, “ Well, just forget all about deposits. Just open a little bank fo r service and charge fo r everything that you do. I think deposits will take care o f themselves.” They did get together $15,000 fo r the capital and $1,500 fo r the surplus, and they opened the Bank o f Marion. Eleven months after that, here is the statement o f the Bank o f Marion, organ ized fo r service, and built entirely on service. It started out with a capital stock o f $15,000, surplus $1,500, and the earnings fo r eleven months in 1927, from service charges alone, were $7,833.37, or December 1928 over 50 per cent o f the capital and surplus. You will say they must- have had some other method o f earning that money out side of service charges, so I turn over on the other side and find they had over drafts, $38.44, they had county and school warrants, $3,860.83, they had $4,000 in bonds, and they had at the end o f that time $23,934 in loans. I think you will admit that the ordinary interest from those investments would not bring in $7,833.37. Predictions Come True My friend’s prediction came true. They had accumulated in that time $155,451.81 in deposits, and to show they were play ing entirely safe (that fellow had been through two failures and he wanted to sleep at night) they had cash and sight exchange, $147,981.27. I thought that might have been a flurry or just a spurt, so I asked three months later for the cashier to continue his statement. Three months later, or on A pril 30, cash and sight exchange had grown to $298,742.68, bonds had increased only to $8,455, and ( Turn to page 56, please) 21 One of a series of character sketches of heads of America’s biggest banks. J OSEPH F R A N C IS SA R T O R I was born in Cedar Falls, Iowa, on December 25, 1858. His father was Joseph Sartori, who emigrated from Freiburg, Baden, Germany, following the Revolution o f 1848. His mother w a s Theresa Wangler Sartori, daugh ter o f the burgomaster o f Freiburg. Although born in Germany, the elder Sartori was of Italian descent, o f sev eral generations back, however, for the church yard at Freiburg reveals that nu merous S art o r is lie buried there. In Cedar Falls, Iowa, there stands today a fine, free hospital and n u r s e s ’ ho m e erected by J. F. (C Sartori as a me. morial to his par^ ents. A more fit ting tribute to their helpful lives is not conceivable, for during her years in her adopted city the mother was a ministering angel to the sick and distressed of that region. Young Sartori received his early educa tion in the grade schools o f Cedar Rapids and then entered Cornell College at Mt. Vernon, Iowa, in 1874. In 1876 he went to Germany for one year to attend the Uni versity o f Freiburg, situated in his father’s native town. He returned to Cornell in 1877, graduated in 1879, and then entered the University o f Michigan Law School, where he received the degree o f Bachelor o f Laws in 1881. He began his career as an attorney in J. B. SARTORI fornia, where he was ac tive in subdividing land and establishing t h e First National Bank o f Monrovia. He served as cashier o f that institu tion from the time of its founding until 1889 and from that date was vice president o f this bank until it was merged with the Security Trust & Savings Bank in 1924. His home was one o f the early residences built there. Moving to Los Ange les in 1889 he organized the Security Sav ings Bank, which has s i n c e taken the name o f the Security Trust & S a v i n g s Bank. He was cashier o f this institution un til 1894. In 1895 he became presi dent and a mem ber o f the Board o f Directors. He has been the head o f this institution ever since. The initial capital o f the bank Avas only $29,000, but the small group o f men aaI io organized the institution brought to the infant enterprise qualities more potent than capital. They had vision and faith in the future o f Los Angeles. Their enthusiasm Avas tempered by the keen in sight and sound judgment o f the young lawyer-banker, J. F. Sartori. Building a Bank S ecu r it y and the law offices o f Leslie M. Shaw, former Secretary o f the Treasury of the United States, who was then practicing in Deni son, Iowa. Years later when Shaw assumed the guidance o f the government’s finances he invited the young banker, by that time already established in Los A n geles, to accept the post o f Assistant Sec retary o f the Treasury, an honor which was declined. From 1882 to 1887 Mr. Sartori practiced law in Le Mars, Iowa, in partnership with I. S. Struble, a well-known attorney and member o f the United States House of Representatives. In 1887 he moved to Monrovia, Cali Sound principles o f banking Avere the foundation upon which they builded. The management believed then, as it believes now, that a bank, as a semipublic insti tution, held a tAAyo-fold responsibility: (Turn to page 78, please) Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 22 ECRETARY to the PRESIDENT” (In three parts) Part I B y PARALEE M. W IN F R O W LOUD and tyrannical meeting was being held in the directors’ room— one that will never go down in the records o f the Farmers & Traders Bank o f Mayfield. I was, as usual, tied up with a batch o f letters. I was using Mary Young’s typewriter, mine being out o f commission, and being so close to the door o f the directors’ room I could not help but hear what went on— the “ moves” and “ seconds” being in such emphatic tones. A “ Papa” Millar, an affectionate behindhis-back term o f mine fo r the cashier, Mr. C. J. Millar, who is also the man fo r whom I am stenographer and general advisor, was rampaging in his most forceful language, which sounds fo r the world like swearing, but isn’t. His great fist was thumping the directors’ table and I gathered it was going to be a gloomy reception for the president’s favorite grandson, namely, William Archibald, who was being called names such as “ col lege boob,” “ stripling,” “ mere child,” and many others I wouldn’t repeat. “ This bank will go flooey with a young scamp like him sitting above us all. What does he know about investments ? All he knows about is football, jazz and g olf,” said Papa. Papa pronounced it “ gu lf” with a terrible, threatening stress and I knew that golf was the one o f Archie’s three deadly sins that would turn every one o f the officers into “ reds” overnight. In Mayfield, those who play g olf belong to the country club and those who belong to the country club are the elite and the elite are truly four hundred in all, and not one o f the four hundred is an officer o f the Farmers Bank. Of course, Judge Hamilton could buy the country club and its rolling, velvety course if he wanted to, but the judge was an old, old man with a bad heart and he had never played golf. T hey Do Grow Up N. G. McDonald, manager o f the sav ings department, raised his steady, au thentic v o ice : “ The judge certainly wouldn’t do us that way, Charlie; why, he’s scarcely twenty-one. I can remember when he was here just a few years back — well, when the judge had that back at tack— and he was just a kid, riding Northwestern Ranker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 around in a pony cart and playing B uf falo Bill.” “ Nathan,” went on Papa in a waver ing, angry voice, “ the judge as good as told me that when he brought Archie back with him he was going to step out and let Archie take his place.” “ W ell— after all our years, from the ground up, if he does— you know,” very secretly, in a voice that promised the very limit o f things, o f being driven to the utmost, “ I can step out. I had a splendid offer last year, but— ” Yes, indeed, every one o f them could do as well, if not better, some place else. They would stand just so much, and if this young “ dodo” turned out as they were quite sure he would they would walk out, and what would the judge do then? Well, one would never suspect a man o f such intelligence as the judge possessed to do a rash thing like that in the first place. Come then what w ould! Mr. Hale, vice president, and the peak o f authority in our institution when the judge is away, came out o f his office with a stock certificate in his hand. He looked about and then asked, “ W here’s C. J. ?” just as the directors’ room door opened and the plotters filed out, menac ing clouds on the usually tranquil faces and looking fo r all as if they had just finished a hanging. The V. P. sternly surveyed the march, and then turned to Papa in silent inquiry. Papa responded, at first a little reluctantly. “ The boys have got hold o f the rumor that Archie is to come in above us all. Of course, they’re a bit worked up. They naturally resent it.” Papa tipped back and forth on heel and toe, seemingly getting on firmer ground. “ Of course, it seems as though the judge would give ei— you the natural privilege o f senior ity.” I Listen In I slowed down and then wrote, “ Re spectively yours,” instead o f “ Respect fully yours.” I always do that unless I pin my mind right down. Hale twisted his mouth in an expres sion o f amusement. “ W ell— ” he drawled, as if much o f weight was to follow, “ I doubt if he’ll be willing to start at the bottom, but I know he won’t start at the top.” Hale had made his statement and dropped the subject by asking Papa to sell some stock for him. Mr. Hale is a very positive bachelor. No one ever knows how long it takes him to make his mind up, but we all know he never has been known to waste any time chang ing it. A few days later, the judge wrote Papa a long, happy letter in his own hand, which one could see was quite an effort for so old and sick a man as Judge Hamilton. “ It’s all over and Archie was splen did,” referring to Archie’s graduation from the University o f California. “ He has a room o f trophies— junior champion o f golf, 1926; western coast champion, 1926-27; eight sportsman’s cups, bronze and gold medals fo r track. He is an ex traordinary swimmer. W e were plan- ning to get away shortly after the grad uation, but there have been so many par ties, and Archie wants them all to be here so that I can see and hear them part o f the time. Archie is such a fine musi cian— he has a banjo and a ukulele and that boy would rather dance than any thing else in the world. I am so proud o f him. I hope he will like my office. Have that pile o f rubbish cleared out. “ Yours very truly, “W m. H a m ilt o n . “ P. S.— Has Adamson taken up his $50,000.00 note y e t?” 23 I came by the contents o f this letter honestly, and not like some stenogra phers. Whenever Papa is worried, he grows confidential with me and after he had read the judge’s letter, he handed it over to me and said a cid ly : “ As though this Adamson business is o f after is very unsettled. In addition to being fat, Pajia is conservative. Whenever a new boy is taken in, the first thing Papa tells him is that when he was a boy in the bank he made $20 a month and saved half of it. The old colored janitor, John, is a faithful colleague o f Papa’s in this The janitor got ready to scrub down the pictures in the directors ’ room, . . . important personages in the bank’s history . . . financial kings who looked exactly like an All Star team from the House of David. thought importance! Yes, it has been renewed and all interest paid up, but it’s me that’s done the worrying and hag gling to get it taken care of. You know how I ’ve had to keep after them. The judge loaned that $50,000.00 five years ago and because Adamson is a son-inlaw o f Sam Clink, an old friend o f the judge, he didn’t require a dime’s worth o f security. Then he jumped all over me because I let a woman have $50.00 on a $50.00 government bond. Always hollering about margin and then doing a fool thing like that himself. Judge is getting queer. And now with this Archie coming in to run things!” Papa shook his bald pate in a very disturbed manner. A good stenographer is never supposed to answer when she is spoken to by her employer in a manner like this, but I am not a good stenographer. “ I think we should do a little cleaning up around here. It would please the judge to have Archie pleased with us, and the furni ture in the directors’ room is anything but sumptuous.” Papa glared at me very suddenly and scowled a deep purple, which is his way o f telling wise people that the weather matter o f thrift. Whenever he finds envelopes that could be used fo r memo pads, in the waste baskets, he carries them to Papa and enjoys hearing Papa give it to the stenographers. Of course, this trait o f Papa’s is a good thing for the stockholders, because the expense ac count is kept in precise bounds. I have drawn up and typed the statements semiannually for the past five years, and the expense account rarely varies more than a dollar or two and furniture and fixtures have not changed at all. I don’t have to refer to the books for that item ; its permanent. So you will understand why Papa gave me such an unpleasant, incredulous stare, and you will be as surprised as I at what actually followed. The very next day painters came to the side door o f the bank and demanded en trance, and the janitor was instructed to scrub down the pictures which hung in the directors’ room, a very rare col lection o f life-size photographs o f fa mous personages in the bank’s history, financial kings, really, but they looked exactly like the House o f David AllStars. One o f these pictures was of Archie Hamilton, Sr., Archie’s father, who had died when Archie was just three. They said that Archie was the very image o f his father. So while the janitor was putting new wire on the back o f it, we girls tried to figure out what he must have looked like by putting our hands over his chinfull o f whiskers and using our imaginations. The eyes were the kindest, most sympathetic eyes I had ever seen. While the ages o f girls in our office range from seventeen to fifty-five and we are therefore old enough to know that the only place a handsome “ boss” falls in love with his stenographer is in cur rent magazines, yet being normal young women and unattached, we were not above a few daring “ just supposes.” W e Girls Talk It Over W hile the news that Archie was to succeed his grandfather and become president o f our worthy institution was never officially announced, all the girls seemed to know why the cobwebs were being done away with and new cane seats put in the dozen straight chairs around the directors’ table. This is no wonder o f the world, though, it would have shown us up as especially dumb if we hadn’t known all about it, being women. And being women, nothing about him was said among us for some time. At a club lunch in a restaurant downtown on a rainy day, it came out. Janet Clark, the newest girl, the one who is seventeen, started the ball going. It would naturally be Janet. She is so young, she knows no fear and is really quite guileless. I wouldn’t be surprised but that she had just heard it that morn ing, as she said. “ And where in the world do you suppose he will get a stenographer?” she wondered excitedly. She had hit the nail on the head. I wouldn’t try to guess how long that very question had been on all o f our minds. Of course, he must have a stenographer. All men o f importance do and if being a bank president wasn’t important, well, then we’d bite. “ Do you suppose he’ll take one o f us or advertise?” further spoke Janet in behalf o f us all. “ I f lie’s awfully handsome, he shan’t have to advertise. The girls will prob ably swamp him. W ouldn’t be surprised if the ‘Avenue’ girls take up shorthand instead o f bridge hands,” Marguerite Denom declared. “ It’s queer how the judge takes to him so much more than any o f the others,” remarked Marie, the middle-aged Titian who has more brains than any three men in our place. “ Yet, the rest of the boys are just nephews and I suppose it’s the name as much as anything. W . A. Ham ilton will look good to judge on letter heads, yet he must be a likeable chap with all his spoiledness fo r the judge to be so taken up with him.” I wondered Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 24 vaguely if Papa had shown Marie judge’s recent letter in which he raved so about Archie, but Evelyn, Avho is the filing clerk, said “ Yes,” and the judge seemed to have a bad case on when $50,000.00 notes didn’t worry him any more, and I understood. Evelyn had filed judge’s letter and Evelyn and Marie are close friends. I was a little irritated with Evelyn for insinuating anything that she might have bothered to read, for such things can cause no end o f trouble, so I tried to answer Janet’s inquiry. “ I don’t know any very good reason why he should have to go outside o f the office fo r a stenographer. There are stenographers enough now to go around, and as far as attractiveness goes— I woidd say Calista would fill the bill.” I knew I was responsible fo r hitting the second nail on the head. Calista is the kind o f a girl that invariably makes every other girl feel like a shadow on a cloudy day. She is so beautiful that the most catty o f girls can’t find a flaw Duties of a Stockholder (By a S o u th D a k o ta B anker) As I see it each stockholder has a duty. It is a stockholder s privi lege as well as duty. W hen you becom e a stockholder in a Bank you expect, and want to see that stock, be it one or more shares, to grow in value, and you also want, and think you ought to, to receive a dividend each year. Did you ever stop to consider what you could and should do to help bring the above results? First, consider this Bank yours. If you only have one share then do what you can to make your Bank grow. Do all your business through your own Bank. If you only have ten dol lars to leave in a Bank leave it in your own and try and never ask your Banker to cash an Over Draft for you. Every dollar left on deposit helps a Bank every day it is left there. Every time you help your Bank, you help your share to grow. Some stockholders have said to me, “ I have a share in this Bank. Don't see why they can’t pay us a dividend,” and this same share holder leaves his money in some other Bank— where he has no shares — but it is a bigger Bank and he helps them to grow still bigger. Some times he only has ten dollars on deposit, sometimes several thousand. Each time he deposits in any other Bank, except his own, he hurts his own Bank. Some will say, “ Now M r .---------------has a share i n ---------------Bank, but he doesn't do business with them, so guess I w on’ t.” Nothing can hurt a Bank more than a shareholder or an officer doing business with some other Bank. This is true o f a man who owns land and other property near or in a town. Every dollar you bring to your home Banker and town helps the value o f your land. Then when you need help, go to your home Banker and if he can (and is made o f the right stuff for the place) he will do all he can, and does do for you, and a little bit more than a Banker from some other place will, unless the other one is baiting you. If for any reason your home Banker cannot help you directly, from his and your own Bank, he can often help “ smug the deal ” for you through some other Bank. I think every Cashier should be com pelled to own shares the same as a director does. 1 think every Banker should read and study each issue o f his bank magazine. There is much to be gained by doing so. Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 with her looks and so charming that she turns us all green with envy the way she gets away with everything, and so brainy that it looks fishy, actually. Also, Calista is not a “ poor working girl” like the rest o f us and, naturally, she never could be quite “ one” o f us when she doesn’t have to be bothered with run ners and the price o f having coats re lined, and the like. I have longed hun grily fo r a pair o f slippers in a shop window and by the time payday came and the purchase could be made with no strings on it, Calista would have a pair o f like ones on her absurd little feet, kicking them around as carelessly as though they didn’t cost all o f a ten-spot. She always had a way o f getting the new fads first, because, o f course, she could afford them when they came out and when she decided she wanted them. A ll o f us had been wishing fervently that Calista would get married; getting a creature like Calista Green married and settled is a restful feeling to a feminine circle, but Calista didn’t choose to get married. One morning we heard that she had eloped with “ Bob,” her most steady, and we girls all clubbed in and Avere planning to buy her a set o f salad forks, real sterling, when she popped up at Avork, denying the whole story. She Avas overheard to say that she Avouldn’t ever marry a man like “ Bob,” and the girl who overheard it added that she sup posed he didn’t have enough money. Well, Archie Avas heir to one o f the neat est fortunes in the Middle West. “ But wliat if he shouldn’t prefer blondes!” Marguerite hoped. “ I f he doesn’ t, he will,” I said. Threefourths o f the frat pins that stud her blouse belong to men who “ have always admired the Spanish brunette type.” I had gone to school with Calista and knew Avhereof I spoke. “ You knoAV very Avell that Calista Green in that neAV heliotrope dress could make any man believe in Santa Claus.” The girls knew I was right and turned their faces to their plates sadly. If Ave could have removed Calista from the pic ture, the prospects would have been thrilling, but, to make matters more con vincing, she seemed to have played out with “ Bob” just at the time Archie Avas about to arrive from California and be gan driving her own little cream and red roadster and the frat pin collection be gan to get smaller and smaller. (To be Continued in January Issue.) There is always the possibility o f beauty AAdiere there is an unsealed human ey e ; o f music, where there is an un stopped human e a r ; and o f inspiration where there is a receptive human spirit, a spirit standing before.— Parkhurst. A man who does not love praise is not a full man.— Beecher. 25 Have Faith In IOWA COUNT YOUR BLESSINGS Have Faith In IOWA Have Faith In IOWA COUNT YOUR BLESSINGS IOWA Hogs ........... _$266,088,000 C attle __________________ _ 166,478,000 $*«ep ________________ 7,298.000 C o m ........................... - ............. 7-’ .391.000 O ats .................................... — ¿6,422,000 W h eat _____________________ 6,549,000 B a rle y .................................... 2.000,000 B u tte r _____________________ T20,713,000 Eggs ................ 28,773,000 p o u l t r y ____ _______ 15,193,000 T o ta l ........................................ $713,906,000 MORE PEOPLE can make a GOOD LIVING IN IOW A than in any other place on earth. MORE PEOPLE can make a GOOD LIVING IN IOWA than in any other place on earth. Why not own a farm in IOW A? We offer our people every banking service to enable We are prepared to offer every banking service. them to use our great resources. VINTON SAVINGS BANK J. E. Marietta, President J. F. Traer, Cashier We offer every banking service. VINTON SAVINGS BANK J. E. Marietta, President J. F. Traer, Cashier m > N j e ee » » VINTON SAVINGS BANK J. E . Marietta, President #****#e J. F. Traer, Cashier - - r r r r r r r r r » # r twtrr*rrrrrr r r r r - * " ■ Iowa’ s manufacturing resources and her share of the world’s blessings are depicted above in advertisements used by the Vinton Savings Bank. Advertise Your State As T hough You Owned Iti UR advertising has always been one o f my greatest problems. At one time I bought advertising services. I recall one year that I bought a service that seemed to me to be especially good. I used it a year and never had a customer mention it or say anything that would lead me to think that they had seen it. F or many years I used a small ad of my own writing at the end of each month calling attention to the fact that money deposited in savings accounts before the fifth day o f the month would draw interest from the first. This brought many people into the bank to talk it over and I got new business. I decided then to write our ads; that I new our people and their problems better than some one in the city ; that I would tell our people what we had to sell just as I would talk to them over the counter. I have written all o f our ads for a number o f years. I am a native o f Iowa and have always taken great pride in our state. Several trips to the South and West served to intensify my love for and my belief in the state. Something more than a year ago the Iowa Bankers Associa tion began to talk of a cam- O B y J. F. TRAER Cashier Vinton Savings Bank Vinnton, Ioiva J. F. TRAER paign to “ Sell Iowa to the W orld.” In the past few years Iowa has had much adverse advertising. Probably much of it was unintentional, nevertheless it was in jurious. We should not apologize for Iowa, Iowa does not need it. Iowa stands high among the states. Rather, we should take the advice which “ Eben Holden” gave the young fellow who was about getting up his courage to ask a lady fo r her company for the first time. “ Waltz up to her as though yon had just bought yourself and was proud o f your bargain.” I remembered that years ago California, Washing ton and Oregon fitted up cars with exhibits o f their products and toured the country, side tracking their cars for a day in a town, advertising their presence and asking people to call and inspect their exhibits. The Bankers Association did not move fast enough to suit me, so I started a campaign of my own. I remembered the words o f the old revival hymn, “ Count your Blessings,” and I turned to the census reports and found that our blessings were many; that our state ex celled in many things and that Benton county excelled many of our counties. I made from these statistics a series o f ads Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 99 December 1928 26 Have Faith In - IO W A — Count Y our Blessings — IOWA has many natural resources. try is large and constantly growing. The cement indus Watch this space next week. W e offer every banking service. VINTON SAVINGS BANK J. E. Marietta, President J. F. Traer, Cashier Have Faith In - IO W A AND PROCLAIM IT TO THE WORLD Have Faith In - IO W A AND PROCLAIM IT TO THE WORLD — Count Y our Blessings *— — Count Your Blessings —• IO W A ’S factories make great-demand for our food pro ducts. We offer every banking service to assist in the develop MORE PEOPLE can make a GOOD LIVING in IOWA than in any other place on earth. We offer every banking service to assist in the develop ment of our state. ment of our state. VINTON SAVINGS BANK J. E . Marietta, President J. F. Traer, Cashier VINTON SAVINGS BANK J. E. Marietta, President J. F. Traer, Cashier Three of the “ Have Faith in Iowa” advertisements Mr. Traer used in the Vinton, Iowa, news paper as a part of his regular bank advertising. showing the standing of our state and the standing o f our county in the state. These dealt exclusively with agriculture. I had about twenty o f such ads and was beginning to think that I had exhausted my subject when I remembered what the most o f us overlook, or do not know, that Iowa has large manufacturing interests. In fact, one o f them was right under my eye, the local canning company, which is one o f the largest in the business. I sawT in the morning paper a news item to the effect that one firm in Bettendorf had re ceived an order amounting to $3,500,000. I appealed to the Des Moines Chamber o f Commerce fo r statistics and from what they furnished I prepared another series o f ads dealing with Iowa as a manufac turing state. Our people do not realize the magnitude o f our manufacturing in terests nor do people outside the state realize it. I firmly believe that more people can make a good living in Iowa than any where else on earth. We have all the con veniences fo r modern, comfortable living. Our churches and schools are things to be proud o f and even our much maligned road system will soon be a matter of pride. I think that we should proclaim our ad vantages to the world and keep on p ro claiming them until everyone hears; in fact, fo r all time. A s to the results o f these ads in our own business, it is difficult to put your finger on the results o f bank advertising. I think different from other lines o f busi ness. I have had considerable favorable comment from outside and our business is larger than it was a year ago. I am so thoroughly convinced that I shall go on along these lines. W ill Resist Guaranty Assessment AN KERS, and the people o f Ne braska generally, mm recognize that one o f the most important problems facing the state legislature when it meets in January, if not, indeed, the most important problem o f all, is that connected with the bank guaranty law. The repeal o f the law does not, at this time, seem likely. Both candidates for governor expressed themselves as in favor o f strengthening it. A t the same time it is recognized that with a deficit o f ten millions in the fund, and with new failures occurring from time to time, that to redeem the guaranty pledge soon, under the conditions o f the pres ent law, will be extremely difficult, if not impossible. The proposal for a general state tax to take up the deficit has been put fo r ward, but has gained little support. At no time in the past was the credit o f the state pledged to repay the deposits B Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 in state banks managed under the guar anty system. An early test o f the constitutionality o f the law is seen in a circular letter re cently sent to the state bankers, asking them to join in an injunction suit to prevent collection o f the special assess ment upon the state banks, to meet losses o f banks organized under the guaranty law. The circular letter was signed by the heads o f three o f the largest state banks in Nebraska: A. L. Schantz, president o f the State Bank o f Omaha; Dan V. Stephens, president o f the Fremont State Bank, and William Seelenfreund, presi dent o f the Continental State Bank of Lincoln. They resist the special assessment o f one-fourth o f one per cent, based on de posits, recently announced by Clarence G. Bliss, secretary o f the state depart ment o f trade and commerce, which would bring to the guaranty fund a lit tle over one-half million dollars. No resistance is contemplated, accord ing to Mr. Schantz, to the regular bank guaranty assessment o f one-tenth of one per cent o f deposits, due on January first. The guaranty fund commission has been told by a Chicago auditing company that a complete audit o f the fund would cost $52,875. The report o f the auditing firm set forth that there are seventy-nine banks which the commission is still operating as a going concern, while 117 other banks have been placed under receivership dur ing its administration. The commission also has charge o f forty-eight other bank receiverships which it took over from the form er receivers when the guaranty fund commission was organized in 1923, and which have not yet been closed. The Chicago firm estimated the cost (Turn to page 79, please) 27 B y A . M. DE V O U R SN E Y Manager, Protective Department, Wisconsin Bankers Association A. M. DE VOURSNEY R E V E N T IV E protection, the objective o f bank asso ciation protective work, necessarily includes all phases o f protective thought and ac tivity. To no one preventive can be accorded all the credit fo r the recent experience o f genuine re lief from the depredations of burglars and robbers. Heavy vault doors, alarms, relocking devices, gas protection, commu nity protection, immediate and thorough investigation, satisfactory penalties im posed by modern laws, are all contributing to our present immunity from attack. It is not sufficient that a protective de partment have a past record of accom plishment. The past is gone and we must look to tomorrow. Do you know that in surance statisticians have predicted that some day burglaries would again predomi nate over robberies'? They believe that burglaries and robberies run in cycles, but offer no concise data on why or when. Statistics are based on past performances. Efficient bank protection requires more than statictics. It demands definite facts and constant analyzation of criminal trend. The Wisconsin Bankers Association pro tective manager reports on October 22nd, that there were only four robberies of member banks in Wisconsin in the past two years with »every robber captured and sentenced to fifteen years and upward in the state’ s prison, with a net robbery loss for that period o f less than $400. He re ports only one successful burglary in the same period with a loss o f but $208.00— a total net loss to Wisconsin Bankers Asso ciation members o f but $608.00 in two years by burglars and robbers. The report o f the American Bankers Association protective manager at Phila- P were 72 burglarious attacks on banks in Wisconsin causing money and security loss o f $209,548.93, and to offset this continued attack there were six convictions o f burglars for the burglary o f these banks with sentences aggregating 69 years meted out to these six men, the highest sentence being 30 years and the lowest being five years. This experience of Wisconsin is no different than the experi ence o f other states. They have all had numerous attacks with few convictions be cause the possibility o f identification was decidedly remote in cases o f burglary. W e are inclined to believe that the task o f eliminating the burglary hazard will be even greater than the task o f reducing the robbery hazard. Let us review the situa tion past and present: One of the earliest methods o f attack on banks was by punching the combina tion. This was reasonably successful until met by better vault doors, and relocking devices. About 1890 the use of black powder was introduced and followed after a number of years by dynamite. This was met by stronger safes— then came nitroglycerine and it now seems a far cry to the time when the yegg calmly sat upon the top of the safe and exploded the nitro with a sledge hammer. HOW SAFE 1 § Y O U R SAFE? Bank burglary is coining back equipped with modern methods that make burglary a greater po tential hazard than ever before. delphia, recently, indicates that for the year ending August 31,1928, their member banks suffered 177 daylight robberies and 28 night burglaries. Comparison with a similar preceding period shows that there have been an increase in robberies o f 55 per cent within a year and a reduction o f burglaries o f about the same percentage. Provide Real Hazard From these reports it is quite natural to presume that burglary is a decadent pro fession, doomed to early discard and aban donment by the thieving fraternity. This conclusion is unwarranted and erroneous. Bank burglary is coming back and is returning equipped with modern methods and tools that make burglary a greater potential hazard than ever before, while the hazard o f robbery is still engag ing the undivided attention o f bankers’ associations. Before we look to the future, let us see what the past burglary records show. Searching our records we find that from January, 1920, to December 31,1925, there Illinois Bank the First Victim The story o f the first burglary with nitro glycerine will bear retelling in part. It occurred in a bank at Salem, Illinois, and created such excitement and interest that the president of the bank called in the offi cers o f the banks in the neighboring towns to examine the premises. This examina tion caused considerable apprehension on Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 28 the part o f the bankers, and the safe com panies were all decidedly interested to ob tain the facts so that they could plan a safe that Avould foil this method o f attack. Meanwhile thieves from all over the United States^ flocked to the leader of this success ful gang- even offering to work for him for mere subsistence if he would only teach the round-screw door, the first o f which were o f plate construction. The thieves having some success with these forced the manufacturers to step forward again and they produced the solid round-door safe and then added manganese to the steel body o f the safe fo r further security. The next move was up to the bank thieves. Science had evolved the welding torch and later the cutting torch, both o f About five or six months ago a series o f successful burglaries started in Chicago. This gang has shown full and complete knowledge in combination punching, the use o f nitro-glycerine and the cutting torch, and now use all three methods in a single attack on a safe. One burglary netted $29,000— another lll!llil!!!ll!lllllfllllllllllj||lll[lllliIllllll!l!lllilllllll!ll]itl!ll[||Ill]||||Ililll!lll!IIIIIEIIIIIIllftll]|||||!ll!lll|]|||ll!|]iIlli The author of this article comes from a family identified with police work for several generations. A recent publication written by Herbert Asbury under the title of “ Gangs of New Y ork ” offers as a history of the draft riots July 14, 1863, as follow s: “ Throughout the evening another crowd had been assembling in City H all Park and Printing House Square, and when the uptown mob came streaming down Park Row an attack was immediately begun. Sergeant De Voursney attempted to defend ‘The Tribune’ building single handed, and fought valiantly in the door way until he was surrounded by a ring o f dead and disabled gangsters, but he was finally overwhelmed and the mob rushed into the building, over-running it and setting it on fire in half a dozen places. The editorial and mechanical forces, led by Horace Greeley, escaped down the back stairways, and Greeley was chased into a Park Row Restaurant, where he hid under a table.” Showing what an oxy-acetylene cutter will do in a few minutes when applied to ordinary type of vault door. Mr. A . M. De Voursney’s father was Chief of Medical Staff, Blackwell’s Island Peni tentiary, New Y ork, and his uncle was police and fire commissioner of Newark, N. J. them how to produce the nitro-glycerine and how to use it. The reason we mention this story is to emphasize the fact that a successful method o f burglary or robbery attracts considerable attention by not only At 29 years of age the author was manag ing one of the eighteen offices of an inter national detective agency, being the youngest man in this executive position at that time. Before he was 35 he was managing the criminal department of an international detective agency at Chicago and before com ing to Wisconsin was Chief Special Agent of the Illinois Bankers’ Association, where he still holds the record for work resulting in the speedy conviction of bank robbers and burglars in a case where Johnny Gardner and his gang was arrested, convicted, sentenced and on their way to Joliet penitentiary with in forty-eight hours after they had burglar ized the State Bank of Ohio, Bureau county, Illinois. Mr. De Voursney’s mechanical and electric al knowledge, as well as his ability along those lines, is conceded by manufacturers selling vault equipment, alarms and devices, who without an exception, maintain very friendly relations with the Protective De partment of the W isconsin Bankers’ Associa tion. (Editor’s Note.) llllllllllllllillllllllllllllllllinilllllllllllllllllllNIIIIIIIIIIIIIIIIIIIIIEIIIIIIIIIHIJIllllllilllllllltlllllllllllllllillllllllllllll Only forty-one seconds required to force entrance to vault illustrated above. the police, but by the thieves, and any method that proves successful will soon be come the method of other gangs. This nitro-glycerine epoch ran along for some considerable time. It was met by Northwestern Ranker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis which having found such extensive use in burglary. Many a good burglary was spoiled by a flareback that exploded the hose which connected the tanks with the operating torch, but armor-plated hose and better torches have eliminated the hazard o f flareback and our modern torch, or the more recent lance, are decidedly dangerous in their application to vault doors or safes that contain no resistance to this imple ment. This brings us up to date as far as burglarious tools are concerned. December 11)28 Another oxy-acetylene cutter job per formed by the usual equipment found in garages and welding shops. $26,000— another $16,000, and they con tinue unabated. As far as we know, no convictions have been obtained in con nection with these b :g mercantile bur glaries, in spite o f a $5,000 reward in one A common type of manganese safe that withstood the oxy-acetylene at tack but a few minutes. case offered by a mercantile establishment that was one o f the victims. Another case o f burglary, by appar ently this same gang and using all three methods o f burglarizing, was perpetrated on a watch-case manufacturer near Cin cinnati, Ohio, which netted a return to the burglars o f about $35,000 in gold bullion. This case makes it quite apparent that the Chicago gang is stepping out into new (Turn to page 88, please) 29 Profits and Capital Values in FARM IN B y H E N R Y V. McKIBBIN John Nickerson & Co. Inc. I N THE agricultural situation today is found evidence o f the termination of the postwar deflation— the last o f the major divisions of American industry to so adjust itself. The evi dence o f the culmination lies in the stabilization o f land values, which establishes the completion o f readjustment o f inflated war time capital values to sound values as based on returns from land. income available for total capital invested in agriculture be fore allowance for management reward (the equivalent of “ Adminstration” in other industries) was given as follows : Net Income Crop year ( In millions o f dollars) 5,030 1919-20 375 The fifth annual survey o f the farm land markets reported 1920-21 785 early this year by the National Association o f Real Estate Boards 1921-22 2,014 contains the folloAving findings: 1922-23 2,097 1923-24 1. A larger volume o f farm acreage was sold in 1927 than in 2,656 1924-25 1926 at the same or higher prices. 3,082 1925-26 2. An upward tendency is recorded in farm prices in 47 per 2,440 1926-27 cent o f the communities reporting. Prices are reported either stationary or upward in 85 per cent o f the communities. The same study reported total capital invested in agricul3. Purchases of farms are now predominantly by persons elect turai production as follows : ing the farm as a business enterprise and as a home. Moreover, Capital Invested Crop year in 10 per cent o f the communities reporting, purchasers are buy ( In millions o f dolla rs) ing farms to hold for an increase in price, and in 3 per cent they 79,459 1919-20 are buying farm land as an investment. 73,139 1920-21 4. Optimistic sentiment as to farming and farm land values 63,811 1921-22 prevails among the farmers themselves in 70 per cent o f the com 62,549 1922-23 munities reporting. 60,472 1923-24 The United States Department o f Agriculture, in a statement 59,743 1924-25 issued March 31, 1928, reporting farm bankruptcies (which have 59,712 , 1925-26 been the depressing influence on farm values) as having declined 58,255 1926-27 in 1927 to .99 per 1,000 farms from an average o f 1.22 per 1,000 r estment reflects the steadily The consistent reduction o f in\ farms during 1924 to 1926, said the follow ing: declining value of land. From the same source is obtained a statement o f value of the Bankruptcy Declining farm operators’ net investment in agricultural production, that “ Apparently the decline in the 1927 rate indicated an ap is, total agricultural investment less property rented and debts proaching end o f the abnormal wave of bankruptcies made in owed. evitable by the losses of the postwar agricultural crisis. This Capital Invested Crop year does not imply that no improvement in agricultural conditions (In millions o f dollars) had been made prior to 1927. Slow recovery began, in fact, as 47,065 1919-20 early as 1922. But changes in agricultural conditions are not re 41,172 1920-21 flected immediately in the rate o f farm bankruptcies. It usually 34,711 1921-22 takes several years for prosperity to reduce, or depression to 34,321 1922-23 increase, the farm bankruptcy rate. 33,046 1923-24 “ In other words, the numerous farm bankruptcies o f the last 32,574 1924-25 three or four years are a delayed reflection o f the depression 32,727 1925-26 o f 1921-22. In like manner, the decline in the bankruptcy rate 31,812 1926-27 in 1927 may be considered evidence both that the job o f clear The operators’ net income applicable to these latter figures ing away the wreckage o f the depression period is nearing is as follow s: completion, and also that the last feiv years have been on the Net Income whole a period o f agricultural recovery.” Crop year ( In millions o f dollars ) The earning power o f the United States farms has been on the 2,675 1919-20 upward trend since 1922. Land values, however, continued to 1920-21 ( ) 1,720 decline into 1927. In the agricultural industry where opera (-) 797 1921-22 tions are in small hands conducted mostly without business 419 1922-23 records and by trial and error methods and where investment 520 1923-24 is comparatively non-liquid, it has taken years o f unrelenting 1,039 1924-25 economic pressure to accomplish a revision o f value which in 1,413 1925-26 the more volatile manufacturing and trading business was at 874 1926-27 tained in one relatively brief but drastic move. The Bureau o f Agricultural Economics’ index o f estimated In a study o f the farm real estate situation prepared by the per acre value o f farm land of the United States as o f March Bureau o f Agricultural Economics o f the United States De 1st of each year is as follows (in per cent o f 1912-14 values) : partment o f Agriculture and published October, 1927, the net Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 192S so Index 169 157 139 135 130 127 124 119 March 1 1920 1921 1922 1923 1924 1925 1926 1927 A cursory survey o f the series o f figures just given would indicate an anomaly in improving returns from farm operations and declining capital value o f land. The answer lies in the application o f the income figures to the investment values for the corresponding periods. Indicated returns on capital value are thereby arrived at as follow s: Crop Year Return on Total Investment 1919-20 1920-21 1921-22 1922-23 1923-24 1924-25 1925-26 1926-27 6.3% .5 1.2 3.2 3.5 4.4 5.2 4.2 Return on Operators’ Investment 5.7% (— )4.2 (— )2.3 1.2 1.6 3.2 4.3 2.7 The trend has been persistently upward since 1921-22, ex cepting 1926-27. However, it is not until the high point of the recovery o f farm earning power is reached (1925-26) that an adequate rate o f return on capital value is found to support a stabilizing level. Even here is found a return from farm operations lower than the prevailing rate for mortgage money which means that farms can be bought and mortgaged for part o f the price only on the unattractive basis o f carrying the interest OME enquiries and one or two pro tests have reached me on the sub ject o f a statement in my article in last month’s issue, “ Banking Business Poor fo r Women.” The statement was to the effect that women’s departments in banks have proven failui’es. I may add that I made the same statement at Detroit on July 10th in my address to the Financial Advertisers’ Association, but so far none o f my audience— practi cally all bankers— has taken exception to it. Possibly they are all in accord with me in the matter. In any business a department that does not earn enough to pay fo r itself must be regarded as a failure. It may be carried for one motive or another, but nevertheless at the end o f the financial year its balance is written in red ink— and it stands branded as a failure. That is the case with the women’s departments in banks. The fast growing importance o f woman as a factor in the financial world has forced the banks to recognize her as such and to do what they can to secure her business. As a matter o f fact, however, both sides are still somewhat new to each other and not yet quite at their ease. S Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis charges by a contribution from earnings o f the equity invest ment. What is the situation today? Similarly comprehensive sta tistics for the period since the 1926 harvest are not at hand. The Department o f Agriculture, however, has published the results o f its 1927 annual survey o f about 15,000 farms which returns in the past have shown a close relationship in trend to the reports on the whole industry. This report indicates for the 1927 harvest a return to the 1925 peak. F or the 1928 harvest studies o f volume and price level indicate an increase o f about $500,000,000 in crop value over 1927. Furthermore, it is felt that because o f the wider use o f modern machinery and the con tinuing liquidation o f his indebtedness the farmers’ 1928 income has been bettered more than the increase in crop values would suggest. Without attempting to evaluate this latter considera tion, an approximation o f 1928-29 crop year total farm in come may be set down at $500,000,000 in excess o f 1925-26 re turns. The figures then a re : Net Income for Total Net Income fo r Operators’ Crop Year Capital Investment A'alue Capital Investment Value (In millions o f dollars) 1928-29 3,500 1,900 Since there has been apparently no substantial change in capital values, the 1926-27 figures may be used. The 1928 har vest returns on capital values are then: Return on Total Investment 6% Return on Operators’ Investment 6% which means a return on capital values, at the levels used, that establishes as profitable, equity investments in the farming in dustry. The revival o f interest in farm lands is accordingly explained. Farm lands in the United States are selling today, in terms o f the pre-war dollar, at 80% o f their 1912-14 values. B y MRS. BESSIE Q. M OTT Chairman, Advisory Committee, National Committee for Education of Woman in Fi nancial Matters and the Protectiori of Her Money ( Reprinted by permission from “ Woman and H er M oney’’ ) Woman has still to learn the rules o f the game, and the banks have to learn how woman regards such rules as she comes across, how she interprets them, and how she would like to m odify— some o f them. A Suggestion As a solution o f the problem someone suggested a women’s department, with its own space, its own staff and its own atmosphere. This made an immediate appeal— to those inside the banks. It could be— and was— made to look attrac tive. It provided dignified positions for some desirable additions to the bank per sonnel. It was a gracious concession to the fair sex. And— not the least impor tant point— it cleared a good deal o f space fo r other business. But it failed. It did not bring in or handle enough business to pay fo r itself. A few beginners came in, partly out o f December 1928 (In millions o f dollars) looking on banking as an adventure or a curiosity, partly because they did not know enough to know just what they did want. And the bank— that is, the depart ment— did its best fo r them. But their business was small and not real banking business. Most o f it belonged in the savings bank. The simple fact is that woman refused — and refuses—-to be segregated. When she becomes a business woman, she wants all the rights, privileges and facilities ac corded to man. She wants and means to be regarded as a human being without distinction o f sex, which, she feels, de tracts from her business dignity and im portance. Those o f us who have traveled on the continent o f Europe know the railroad compartments with the signs: “ Dames seules” or “ Fuer Frauen” over the door. In intention they are excellent, but the only women one ever sees in them have been put there— by their men-folk— pre sumably fo r safekeeping. No real, live, human female ever enters one of her own accord. It is the same in a bank. The woman who has graduated from the stage o f ( Turn to page 86, please) 31 ,, PHILLIPS CohfpA In (J vestm ent B A N K E R S p Er~ ~ - ^ * * V y C H IC A G O , I L L I N O I S D A V E N P O R T , IO W A W E O W N AND OFFER, SUBJECT TO PRIOR SA L E : M aturity Price T o Y ield Davenport, Iowa, School__________________ 4 % 5- 1-30 4 .1 0 % Montgomery County, Iowa, Funding_______ 6 % 1- 1-39 4 .2 5 % Winfield, Iowa, Funding__________________ 6 % 11- 1-31-39 4 .3 5 % Worth County, Iowa, Primary Roads______ 4 % % Federal Land Bank_________________________ 4 % % 5. 1 -4 0-34 11- 1-5 8-38 4 .2 0 % $ 100.00 4 .2 5 % Whiteside County, Illinois 4% % 6- 1 -3 6-48 4 .4 0 % 5 % 9 -1 5 -3 4 -4 1 4 .7 5 % Bridge Refunding________________________ 5 % 4 -1 0 -3 6 -5 8 4 .7 0 % Central Illinois Public Service Company___ 5 % 11 - 1-68 100.00 5 .0 0 % Interstate Power Company________________ 5 % 1- 1-57 9 6 .0 0 5 .2 7 % Shaffer Oil & Refining Co. Notes___________ 6 % 3- 1-33 100.00 6.00% Government of Argentine Nation_________ syt% 9 7 .5 0 5 .7 0 % (Prophetstown) Schools_________________ Menard County, Texas, Roads_____________ Scurry County, Texas, Road and 8- 1-62 Complete descriptive circulars on the above offerings gladly sent upon request. T H E IN V E S T M E N T RANKING HOUSE OF SERVICE Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December Î928 32 A lfred E. Smith, who just recently aspired to be President o f the United States, may become President anyway— not o f the United States, but o f a $55,000,000 Wall Street Bank which will be backed by the Duponts, the Fisher fam ily, and John J. Raskob. I f this plan materializes the new W all Street Bank will have the largest capital at its beginning with which any bank in the country has ever been organized. We have not been recently informed by President-elect Herbert Hoover, but we assume that he will carry his New York account with this bank. amounts to nearly $22,000,000,000, which is a gain o f $1,465,000,000 over a year ago. This is just another indication that the banking structure o f the United States is on a very sound and solid foundation. John Moody, head o f M oody’s Inves tors Service, Inc., believes that the com ing ten years will be the greatest period o f expansion which the United States has ever known. “ In my view,” says Mr. Moody, “ this G-eorge E. Roberts, vice president of the National City Bank o f New York, in a recent address pointed out that, “ A c tivities o f the Stock Exchange over re cent years has signified speculation on a great scale. This speculation has ab sorbed a supply o f surplus credit. The question o f interest now relates to the possible effect o f continuing demand fo r credit from the Stock Exchange now that no surplus supply exists. It is one thing to have speculation absorbing sur plus credit, and another to have it com peting with industry over a limited sup ply o f credit. Business generally would suffer if security speculation used up so much credit as to hamper constructive activities and industrial employment.” Personally we doubt very much if such a condition will exist. No banker is going to put his money on call in New York if there is active demand for it in his local community. It is only when surplus funds are available in any community that they are put on call in New York. John W . Platten, president of the United States Mortgage & Trust Com pany, has just issued a Silver A nni versary edition o f “ Trust Companies of the United States” fo r 1928, and in this the total resources of the trust companies of the states covered by the Northwest ern Banker are as follows : Iowa ............................$142,232,688.78 Minnesota ................. 98,176,113.86 Nebraska ................... 19,314,173.53 South Dakota............ 5,469,647.32 North Dakota............. 2,092,094.18 This is a very fine showing, and in Iowa alone during the past twelve months the banking resources o f the trust companies showed a gain o f $62,548,894. The banking resources o f all the trust companies in the United States now Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis new ei'a in America is in its first stages only. The coming decade will witness an expansion and extension far beyond its present state. It therefore behooves the American business man, the banker, the security dealer, the many who perform constructive service in these fields— to grow with the country, scan the future in the light o f the present, and continuously develop facilities fo r the larger business life which is looming in the years ahead.” I f there be pessimists who should be heard, let them speak now or forever after hold their peace. Otto H. Kahn, well known New York banker, philanthropist and patron o f the arts, spoke recently upon the important subject o f the use which we make of our leisure hours. “ Being given reasonably good health,” says Mr. Kahn— “ and the use o f our leisure hours has much to do, (Turn to page 37, please) Above, Basil T. Peterson, Chicago banker, president of the University of Wisconsin Club of Chicago, leading Iowa university alumni in singing ‘ ‘ That’s Where the Tall Corn Grows” , prior to the Wisconsin-Iowa game which the former won 13-0. Wisconsin’s later defeat by Minnesota and Iow a’s loss to Michigan put both teams out of the championship class. Heads Alumni Club Basil I. Peterson, vice president of the Stockyards National Bank of Chicago, in addition to banking duties, lias the posi tion o f president o f the University of W isconsin Club of Chicago and during his administration has featured his adminis tration Avith a series o f joint luncheons with Notre Dame, Purdue, Michigan, Iowa and Minnesota alumni preceding the respective football games with W iscon sin. The climax will be the annual football banquet to be held on Friday, December 7th, at the Lake Shore Athletic Club, located at Chestnut Street on Lake Shore Drive. All alumni and friends o f W is consin are invited to this affair. The 1928 Wisconsin team, together with its coach, December 1928 Glenn Thistlethwaite, and director o f athletics, George Litte, will be brought to Chicago fo r the occasion. Others in vited as guests o f honor include Governor Elect Kohler, President Glenn Frank, A l onzo A. Stagg, director o f athletics at the University o f Chicago; Knute Rockne, director o f athletics at Notre Dame Uni versity, and Judge W alter Steffen, fo o t ball coach, Carnegie Tech. A t this dinner a beautifully engraved gold watch will be presented by the Chi cago W isconsin Club to the man who has contributed the most to the success o f this year’s Wisconsin team. The winner will be selected by Mr. Thistlethwaite and his staff. f Selected Bonds r p i HE safety and desirability o f the bonds we offer to banks and conservative investors are vitally im por tant considerations to the management o f this invest ment house. For we realize that our reputation depends entirely upon the quality o f our offerings and the character of our service. Therefore our bond offerings are selected with ex treme care, with safety and dependability always the chief considerations. It has been our privilege during the past year to serve more Iowa hanks than ever before. W e have many bank customers who have been buying from us regu larly for years. Such patronage we value highly, for we believe that it demonstrates beyond question the satisfac tory character o f our offerings and service. Our December investment list contains several bond issues which are admirably suited to the requirements o f Iowa banks. A copy o f this list is yours on request, with out obligation. W. D. Hanna and Company ©ONDS FOR INVESTMENT Burlington, Iow a P ion eer Bank B uilding W a te rlo o T h e Laurel Building M uscatine T h e H igley Building C edar R apids Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 34 Dear H elen : Palmyria’s tete-a-tete was cut shorter than she wished by the rush o f customers coming in and interrupting. It was just the regular run o f business: making of deposits, buying o f drafts and checkingup o f accounts. One man brought a nice, big, yellow pumpkin and a jar o f that thick separa tor cream. You know what that means. Pumpkin pies and whipped cream— a vanishing hope o f ever attaining that slim, boyish figure so greatly desired. Another had a squash, some carrots, and a sack o f turnips and our cave is full to the door now with the finest o f provender fo r the winter when— “ The north wind doth blow, And we shall have snow.” W e all have caves out here, Helen, mostly for cold storage purposes and they take the place o f the old fashioned cel lars our grandparents used to have. Most o f them are built a few feet from the house, but ours is oft o f our base ment. You go down ten steps and into a small room completely bricked, even the ceiling. There is a tile in the roof for ventilation. Right now we have enough vegetables stored in there to feed a fam ily o f ten and all donated by our generous cus tomers. Not only vegetables, but since the cold weather has set in and the farm ers are butchering we have the choicest o f meats given us, and o f all the kinds, from tenderloin to pigs’ fe e t ; the homemade sausage is the most delectable. It fairly melts in your mouth, because even the hams and shoulders are all ground up and made into sausage. What can be better on some snappy, frosty morning than to sit down to a breakfast o f hot buck wheat cakes, maple syrup, some o f this sausage, and a cup o f steaming coffee. Oh, boy! This family, Helen, has always run true to form and had the national bird, the turkey, for our Thanksgiving dinner. Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis T h e Prizewinning Story Editor’s Note: Mrs. L. E. Hardy of Hamlet, Nebraska, is the winner of the second prize award of five dollars in the “ Unusual Experience” contest announced recently in the N o r t h w e s t e r n B a n k e r . Her story appears herewith. «¿©110®^» “ My Most Unusual Experience” By M rs. L. E. H ardy H amlet, Nebr. “ Married less than a year I decided to cook our meals during a week-end of landlady’s absence. Saturday evening about five o ’clock I had just put a cake in the oven when The -------------Packing Stock salesman came and wanted a bankdraft, as he had finished the territory and was leaving. 1 had met him several weeks before and was introduced as the cashier’s sister (with no prefix Miss or Mrs. attached). We went to the Bank, wrote the draft and when returning he mentioned the town was lonesome and that we might attend a show at a neighboring town and have dinner together. “ The only reply I could think of was ‘ I am very sorry but you see my husband would be disappointedly waiting for me, as I am cooking his dinner this evening.’ He was very cour teous, apologized and brought me on home. “ My husband and 1 have often laughed about this episode which happened ten years ago.” .........1..... ............ IIIIIIIIIIMIIIIIIIIIIIIIIIIIIIIIII....................................................................................................................................................... . This year, however, the contributions be gan to come in the Saturday before, and there wasn’t a ghost o f a chance fo r a turkey with all that meat on hand. My friends, the Smiths, were the first. They gave us two big, yellow-legged chickens, all dressed and ready for the oven. The Bayneses weren’t far behind with two more. Later Oscar Balcome laid a fine home cured ham on the “ Skipper’s” desk and the next day a leg o f lamb was brought in by one o f our sheep raisers. It was the two live ducks, though, that caused the excitement in the fam ily and almost an eruption. W e discussed the Thanksgiving meat proposition pro and con and finally de December 1928 cided in favor o f the ducks because it was game and nearer turkey meat, and besides, we hadn’t had any fo r a long time. The ducks had been brought to the house in a gunny sack, the usual mode of carrying things out here, and we had put them in the chicken yard pending the day o f slaughter. I hinted pretty strongly it might be well as long as it was cold, to get them dressed two or three days ahead o f time. Duck picking was new to me and entirely out o f my line. But the man o f the house assured me it was a very simple opera tion, merely a twist of the wrist. He had picked literally hundreds o f them in his hunting days, etc., and he would do it 35 Commanding in the Davenport T erritory OM M ERCIAL accounts and financial institutions like to choose a correspondent bank in each trade territory that is in defi nite command of the local situation. OFFICERS In Davenport and the surround ing region the American Commer cial and Savings Bank is in financial command, equipped with experi ence, knowledge, resources and re sourcefulness to efficiently serve Ed. K aufm ann ................................ ............... President R ay N y e m a s t e r ................................ . . .V ice President H. P. O etzm ann................................ . . .V ice President Frank B. Y e tte r................................ . . .V ice President Louis G. Bein ................................... ................... Cashier F. C. K roeger.................................... Assistant Cashier F. A . J oh n son .................................... .A ssistant Cashier J. D. B rockm a n n .............................. A ssistant Cashier A. H. H iegel...................................... Assistant Cashier Herm an S t a a k .................................. .A ssistant Cashier John J. B ra n d t................................ .A ssistant Cashier the interests of its commercial and correspondent clients. M em b er F ed era l R eserv e S ystem C A P IT A L $1,500,000.00 SU R P L U S A N D P R O FITS $1,500,000.00 T O T A L RESOU RCES O V E R $32,000,000.00 A M ER ICA N COMMERCIAL / SAVINGS BANK D A V E N P O R T IO W A Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 36 in a jiffy. I was a little dubious, Helen, still unconvinced, but I didn’t say any thing. I hadn’t seen any o f bis prowess displayed; in fact, coiddn’t remember o f ever having a live duck in all my house keeping days, but I held my peace and concealed my doubts. The next morning when I looked out, to my astonishment I saw one duck sitting on the outside o f the fence beside the one on the inside. In the excitement over this phenomenon, I let the back door slam and Avith that, both birds rose in the air and made the prettiest take-off that the Spirit o f St. Louis could ever hope to make. Away they sailed, over the top o f the house back o f us, over Rabdaeu’s pasture; and our Thanksgiving dinner went Avinging its Avay doAvn the valley. I wondered if it could be possible we had been fooled and these were Avild ducks! I never had seen tame ones fly like that. How could they when their wings Avere not exercised ? But there they were, sailing away as fine as you please. A fter they had gone about a quarter o f a mile they began to swerve, because o f the Avind and pretty soon they began to circle back; after considerable flying, A million dollars a day of new plant they finally landed across the street and every youngster in the neighborhood had a hand in their capture. They Avere put in the basement under a tub and no more chances taken Avith their get-a-way. N oav comes the second chapter. A gain I hinted it might be well to dress those fow ls and again I Avas put off with a AvaA7e o f the hand and an assurance that they would be dressed, cooled, and ready fo r the pan before I Avas awake next morn ing. Next morning, hoAvever, I was aAvare o f the trek to the basement. Later, when I called doAvn, I was told to postpone breakfast awhile, and still later, Avhen I went down, things didn’t seem to be com ing along as speedily as they might. I ignored the apparent difficulty because I didn’t want to spoil the anticipated pleas ure AArith which those tAvo beautifully dressed foAvls AATould be presented to me. The third call did not bring a cherry response and when I Avent doAvn, such a sight greeted my eyes. Feathers, feathers everywhere. The air was filled with them floating around. That man was coA7ered from the few stray hairs on the top of his head to the soles o f his feet. Eyes, ears, nose, eye lashes— bunches o f feathers on his face where he had tried to fight them off. The flannel shirt looked like one decorated fo r a Santa Claus, and a certain party Avasn’t in any mood fo r any comments. It was very e\fident there would be no ducks fo r this Thanksgiving dinner, so two chickens Avere hastily gotten ready fo r the oven. Things were pretty quiet as that man came up the stairs. ^ I 'R A I N - L O A D S o f te le p h o n e "*■ su p p lie s m o v e o u t across th e p la n n e d to d iv id e n d s for BELL TELEPH O N E S E C U R I T I E S CO. Inc. H ereafter, Avhen any more live ducks are brought to this house they will be promptly taken to the produce house and exchanged fo r dead ones. $ 3 , 250 , 000 , 000 . sp e n d It is $2,000,000,000 m o re in th e n e x t five y e ars for n ew c o n str u c tio n an d re p la c e m e n ts. Basic fa c ts on American Telephone sure an a m p le in v e sto rs. I ts I t is c o n s ta n tly s e e k in g v ic e n earer to p e r fe c tio n . m o re th a n 93% s to c k s I t ow n s o f th e c o m b in e d of th e o p e ra tin g co m p a n ie s o f th e B e ll S y s te m w hich furnishes to th e n a tio n . December 1928 s a fe ty to b rin g th e n a t io n ’s te le p h o n e ser W i t h its p re d ece sso rs, th e A m e r ic a n Northwestern Banker of a b o v e d iv id e n d re q u ire m e n ts . T e le p h o n e a n d T e le g r a p h C o m p a n y 195 Broadway m a r g in s to c k is h e ld b y m o r e th a n 4 30 ,0 0 0 com m on and Telegraph Co. as an investment https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis re g u la rly I t s e arn in gs as W r ite f o r booklet “ Some F in a n cia l F a cts" T h e p la n t in v e s tm e n t in th e B e ll S y s t e m is n o w th a n p a id fo r t y -e ig h t y e a r s . And, Helen, I wish you could have seen those b ird s! The first was fair although plenty more work necessary to get it clean. The second o n e ! Y oi! Yoi. The remaining doAvn and pin feathers were simply singed off Avith quills still there. And b la ck ! It took soap and hot water with a stiff brush to get it into shape. It was days before I ever dared men tion ducks. One evening I began to laugh. W ith a whimsical smile the “ Skipper” turned and said, “ I guess I ’m not as clever at duck picking as I used to be. Be a good sport, dear, and don’t tell.” c o u n tr y e v e r y d a y . m o re h as Two jerks and the flannel shirt was off, twisted into a wad and pitched down the basement stairs. Two more jerks and the khaki pants folloAved suit. A bee line Avas made fo r the bathroom Avith clouds o f feathers in his Avake. an in d isp e n sa b le se rv ice N ew York City ATou see, Helen, I intended telling you about some more o f our interesting cus tomers and I got switched off on the gen erous ones. The next time I Avant to tell you about Christmas in our little toAvn, 37 so that customer at the end o f the line with a shoe box under his arm will have to wait. Three guesses what’s in that box. W e wish you a Merry Christams, Helen, and may the New Year be one o f happi ness and prosperity. Lovingly, Lyda Collins. should be a sixth ship, and that this would be the flagship o f united coopera tion, if you are to win in the business battle. He also pointed out that in any city, 2 per cent lead, and these are the same 2 per cent who perform most o f the worth-while tasks. He did not ask the question; but I d o : “ Are you one o f the 2 per cent ?” News and Views J. R. Capps, cashier o f the Iowa Na tional Bank and the Des Moines Savings Bank & Trust Company, together with the other officers o f his institutions, has every reason to be proud o f the very fine showing which these banks made in their recent reports to the Des Moines Clearing House as o f October 3d. At that time the Iowa National Bank and Des Moines Savings Bank & Trust ( Continued from page 32) o f course, with the making or marring o f our health— I doubt whether the world has ever known a time when such won derful opportunities are available as there are now fo r making the life o f the average man in the leading countries fu ll and rich and interesting and stimu lating; more especially in our own coun try.” Emphasizing the fact that we should not get into a rut in our daily occupa tions or in our daily thinking, Mr. Kahn sa y s: “ As the soil o f agricultural land requires rotation in order to produce the best results, so does the soil o f our inner being require variety o f treatment in order to remain elastic and fertile, and to enable us to produce the best o f which we are capable.” Colonel Leonard G. Ayers, the well known financial prognosticator o f Cleve land, referring to the general situation, sa y s: “ General business has continued to roll along in good and ever increasing volume. It now appears probable that a good many new high records will be es tablished in 1928. It is entirely probable that the largest holiday trade in our ex perience lies just ahead.” The dates o f the American Bankers Convention, which will be held near the Golden Gate o f San Francisco next year, have been announced as September 30th to October 3d, inclusive. Don’t forget to bring your raincoat, your galoshes, your golfsticks, and your foghorn— everybody likes San Francisco regardless. While I was attending the Investment Bankers Convention at Atlantic City in October, I also attended the regular weekly meeting o f the Atlantic City R o tary Club, and the orator o f the day gave vent to this little dissertation on “ Ships,” which I jotted down and which I am passing on to you. “ Ships won the war. Ships also will win the business battle— and the ships to which I refer are: 1. Friendship 2. Acquaintanceship 3. Partnership 4. Leadership 5. Citizenship.” Company had total resources o f $27,053,274.50. The Des Moines Savings Bank & Trust Company and the Iowa National Bank are simply two parts o f a banking unit, the stock being held pro rata by the stockholders, and with the same directors and officers. John L. Mitchell, president o f the First National Bank o f Sioux City, keeps in touch with his employes, not only per sonally, but through messages which he sends them from time to time about their work and about the bank. One o f his most recent documents was entitled “ Progress,” in which he said : “ Progress is the result o f thought on present and future day requirements. The world is different today than it was Detail HE innumerable detail that constantly arises in your business requires expert and personal attention. Here, detail is given prompt and intelligent service. T he spirit o f friendly co-operation is the foundation o f our correspondent bank business. Our w orld w ide facilities make this an ideal banking connection for you. T The Foreman National Bank The Foreman Trust And Savings Bank La Salle and W ashington Streets, Chicago RESOURCES EXCEED 100 MILLION DOLLARS He then mentioned the fact that there Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 38 Interest Ignores B ankin g H o u rs ■ The Railroad, the Post Office, the Air-Mail, the Telephone, the Telegraph —all these agencies used by banks are in continuous operation. T o their “ w ork day” there is neither begin ning nor end. O bviously that bank can serve you best which a d o p t s as i t s o w n the w orking-hour schedule of the facilities it uses in con v e r tin g c o l l e c t i o n s i nt o cash. There is no lapse in the 24hour-daily service of our t r a n s i t and c o l l e c t i o n departments. one hundred years ago. Just as different as today’s world will be from that of tomorrow— a hundred years hence. “ Let’s invoice ourselves a little. Per haps therein we shall find an opportu nity fo r change— an opportunity for im provement that will better our results and make our record one o f progress, one o f success. And with it all there will be brought the joy that comes with the sense o f real achievement. “ No man will rise any higher than his thoughts.” Indeed if a man cannot think and does not think, how can he progress ? Mr. Mitchell has been thinking for his bank and with his bank employes for some time, and that is the reason that the First National Bank has been making the progress it so justly deserves. Emil Webbies, former president o f the First Iowa State Trust & Savings Bank o f Burlington, has resigned because of ill health and moved to California. E. S. Phelps, head o f the Phelps Insurance Agency o f Burlington, has been elected president o f the bank. Mr. Phelps is a past president o f the Fire Underwriters Association o f the Northwest and has been active in all o f Burlington’s busi ness affairs fo r many years. Emil Webbies made a fine record for himself as head o f this institution and his hundreds o f friends will regret in deed that he had to leave Burlington be cause o f ill health. On September 4th he was taken ill and on the 17th o f that month he asked fo r a leave o f absence. He seemed to improve considerably after this time, and when we talked to him at the American Bankers Convention in Philadelphia the first week o f October, he said he was “ feeling fine.” W e hope sincerely that Mr. Webbies will regain his health to such a degree that he can again return to the Hawkeye State, where he has so many friends and well-wishers. A. T. & T. Stockholders m ...THE... P H IL A D E L P H IA NATIONAL BANK PHILADELPHIA, PA. Capital, Surplus and Profits $54,000,000 Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 Stockholders o f the American Telephone and Telegraph Company have reached a new high record o f 450,000, partly as a result o f the recent offering o f additional stock. American Telephone has wider dis tribution on its stock than any other cor poration in the world. The recent offering o f new shares added 10 ,0 0 0 names to the record books, and altogether the list has increased by 28,000 since the beginning o f the year. In addition there are 200,000 employees purchasing the stock on the par tial payment plan. Resolve not to be p o o r : whatever you have, spend less. Poverty is a great en emy to human happiness; it certainly de stroys liberty, and it makes some virtues impracticable and others extremely diffi cult.— Johnson. 39 N ew Bankers’ Blanket B ond HE approval given on July 19th last to the revised form o f Banker’s Blanket Bond by the Insurance Com mittee o f the American Bankers Associa tion was accepted at the meeting o f the Executive Council o f the association at the Philadelphia convention held recently. T erage o f a loan honestly made by one employe on the strength o f a fraudu lently prepared statement o f another em ploye. A revision was also effected, satisfac tory to both parties in the discussions, to clarify the prior rights o f insurers under Last year at the association’s conven tion in Houston the committee withdrew its approval o f Banker’s Blanket Bonds Standard Forms No. 1 and No. 8 . This action resulted in so many inquiries of an apprehensive character from banks throughout the country that the leading surety companies sought conferences with the authorized officials o f the bankers’ association, which these officials had been seeking without result fo r two years. A fter a series o f conferences between the Insurance Committee o f the bankers’ association and the Blanket Bond Sub committee o f the Surety Association of America, the new form o f Banker’s Blanket Bond, designated as “ Standard Form No. 8 — R e v i s e d ” was adopted by the surety association on June 11th. A fter receiving guarantees from the surety as sociation that the old Form No. 8 would not be sold to any new risks but only to those banks holding that form and in sisting upon continuing it, the Insurance Committee o f the American Bankers A s sociation gave its approval to the revised bond. The most important improvement in the neiv form over the old, the committee pointed out, was in insuring paragraph D, to include cashing as well as paying. Also, the word “ raised” was changed to “ altered.” In addition to “ checks,” as specified in the old form, this clause in the new bond also covers withdrawal orders or receipts on savings, thrift, interest, special interest or similar accounts, cer tificates o f deposit, drafts drawn against banks, money orders and orders upon pub lic treasuries. primary bonds to recoveries before other companies writing excess insurance on the same risks. The definition of “ property” was enlarged by specifically including coin, bank notes and several instruments not named in the old form. The new form, the committee pointed KEEP TH EM CLEAN And IN S T A N T L Y A CC E SSIBL E — your legal blanks and “ U n i fo rm ” Insurance Form s and “ Standard” Policies. Reputations are in part constantly determined by the condition o f papers and docum ents turned out to the public by your institution— perhaps more often than you think. You know the “ feel” o f a new bill. T hat’s why m any banks, especially in com petitive territory, try to cash checks with clean currency. These cabinets were designed especially to keep legal and insurance forms from becoming -wrinkled, dusty or fingermarked and to have them instantly available w ithout shuffling through a whole pile of different forms. Scores o f these cabinets have been sent into every state in the union. N ote the convenient size! Each cabinet contains 32 small drawers divided into four general sections fo r usual forms and two large drawers for miscellaneous papers all fitted with polished label pulls. And utility isn’t all; it is an attractive piece of furniture. It comes handsomely finished in either hand rubbed light or dark oak, mahogany, walnut or olive green. A N D M O R E TH AN T H A T ! The price is only $ 3 7 .5 0 . (Just to satisfy yourself ask your sta tioner if he does not want two or three times as much for the same size in any other make or kin d.) Furthermore we will ship this cabinet prepaid to your station on five days’ approval. I f you don’t find it perfectly satisfactory in every way send it back. T h at’s fair, isn’t it? Tell your assistant or secretary N OW to send for it, stating finish desired. (Delivered price east o f Cleveland, $ 1 .4 0 higher, south o f Ohio River or Kansas City or west o f Missouri River $ 2 .9 0 higher to cover additional freight charges.) Height about 4 5 inches W idth about 24 inches Depth about 18 inches NATIONAL SERVICE, Inc. Executive Manufacturers o f fine desks and cabinets offices: M etropolitan Bank Bldg., Minneapolis, K'l ( V»-CnyFfTCYR'VI U. S. A. H.HKHj+OTl I o w a U t lio (ji* o p liiiif| G o m p a n g 515 T W E N T Y EIGHTH S T R E E T D es M o in e s C la u s e E x t e n d e d In the new bond form the wording of insuring paragraph A, the “ fidelity” clause, was changed to extend its mean ing to include losses o f “ property” as de fined regardless of whether the insured is liable therefor. The new form also covers any o th e r kind o f property lost through dishonest or criminal acts o f em ployes, providing it is owned by the bank or the bank is legally liable therefor. The “ robbery” clause (b) was broad ened to include property in Canada as well as in the United States, and a simi lar extension o f territory was made to cover property in transit. Amendment was also made so as not to exclude cov- EXPERIENCE - QVALITY SERVICE T ounded by G E O R G E H. R A G S D A L E E D W I N G. R A G S D A L E S ECR E TA R V Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 40 out, was not as broad as it had hoped for, the surety companies contending that to extend the coverage further would raise the premiums above a salable level. It was, however, the best that could be obtained from domestic companies at the present time. The new form was made available to banks on July 25th last without any in crease above the premiums charged fo r its predecessor. The committee urges all member banks o f the association to renew only upon the new form, because o f its broader coverage. It is the only blanket contract o f the domestic com panies which carries the approval o f the insurance committee. Of equal importance with the broader National Bank of Commerce in New York E s t a b li s h e d 1 8 3 9 Chairman of the Board President JA M E S S. A L E X A N D E R STEVENSON E. W A R D Vice Presidents J. H O W A R D A R D R E Y R O Y H. PA SSM O R E TH O M A S W . B O W ER S E U G EN E M. P R E N T IC E E M A N U E L C. GE R STE N E V E R E T T E. R IS L E Y H E N R Y C. S T E V E N S Second Vice Presidents R O B E R T E. BROOME H A R R Y J. C A R P E N T E R H E R O Y 1,1. D Y CK M A N W. SPRO U LL GRAVES J O H N J. K E E N A N E L L IO T T H. LE E R O W L A N D R. M cE L V A R E JA M E S M. N IC E L Y JO H N B. P U T N A M E D W A R D H. R A W L S H A R R Y A . R EE D H E N R Y T. SK E LD IN G Cashier Auditor JU L IU S P A U L P A U L B. H OLM ES Assistant Cashiers IR A W . ALDOM E L L S W O R T H C. B ISSELL FR A N C IS W . BOEHM J A Y E. B O T T O M L E Y W IL L IA M W . C RE H O R E , J JA M E S F. F A R R E L L r . M A R S H A L L B. H A L L W IL L IA M J. K IS SE L L H A R R Y F. L IT T L E J O H N H E R M A N SAFR O R OGE R T O P P EDW ARD V AN D E R PO E L F oreign D epartm ent Vice Presidents H A R R Y P. B A R R A N D FRAN Z M EYER Second Vice Presidents Assistant Cashiers H E R M A N G. BROCK F R A N K S TE M PLE H A R O L D F. A N D E R S O N SA M U E L D. POST Manager E Z R A C. B R O W N E L L Assistant Managers R A L P H E. K IM P E L J O H N H. SCH W OO N P H IL IP F. S W A R T , JR. T ru st D epartm en t Vice President C. A L IS O N S C U L L Y Second Vice Presidents and Trust Officers Assistant Trust Officers T H O M AS A. S H IE L D S TH O M AS Z A B R IS K IE B E V E R L E Y DU E R M E L V IL L E W . T E R R Y M id tow n Office Second Vice President Assistant Cashier è AMES S. A L E X A N D E R , J r. E R N E S T H. SCH N E ID E R Assistant Manager F R A N K C. RIGGS Capital, Surplus and Undivided Profits $70,000,000 coverage obtained by transferring to the new bond is the need o f having a super seded suretyship rider attached. This rider, which is available upon request, is essential to preserve the continuity o f coverage which would otherwise be broken by such a change of forms or by transferring blanket insurance from one company to another. Under this rider, the insurance company agrees to pay losses sustained before the inception o f the new bond providing they otherwise would be recoverable thereunder and pro viding they are not recoverable under the old bond but would have been covered had it been continued in effect. The committee stated in its report that it greatly appreciates the helpful coop eration uniformly accorded by the repre sentatives o f the surety association throughout the negotiations that resulted in this improved form o f banker’s blanket bond. The committee recommended to the incoming Insurance Committee o f the American Bankers Association that a study be made o f the existing bankers’ forgery policies with a view to determin ing whether they meet the requirements o f banks in general, and bringing about any desirable improvements in forgery protection. Buys Into Chicago Bank R. A. Drum, president o f the old Dear born State Bank, announces that inter ests identified with the Chicago Trust Company have purchased a substantial amount o f the capital stock o f the old Dearborn State Bank and will become identified with the directorate o f that in stitution. Lucius Teter, president o f the Chicago Trust Company, will become chairman of the board o f the old Dear born State Bank succeeding J. L. K raft, who will remain as a member o f the board. There will be other additions to the board to be later announced. No change is contemplated in the official staff or personnel o f the bank which will continue to operate as such in its newly occupied building at Wabash Avenue and Lake Street. The old Dearborn State Bank was or ganized in 1919 as the Lake-State Bank, located at State and Lake Streets. The name was changed to the old Dearborn State Bank at the time o f removal to its present new building quarters at the cor ner o f Wabash Avenue and Lake Street within the original reservation o f Old Fort Dearborn. The bank has a capital o f $500,000; surplus, $100,000, and total resources in excess o f $5,000,000. New interests added to the present group will enable the bank to keep pace with the rapid development o f the section in which it is located. I feel a host in this single arm.— Schiller. Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 41 With National Park Bank Roland C. Irvine, form erly vice presi dent and cashier o f the Bankers Trust Company, Little Rock, Arkansas, has been elected assistant vice president of the National Park Bank. Born in 1895 in Little Rock, he received his education in the public schools o f Little Rock and in 1913 graduated from the Little Rock High School, later attending Hendrix College. Completing his education, he was em ployed as bookkeeper by the Faulkner County Bank & Trust Company, Conway, Arkansas. Several years later he became connected with the Bankers Trust Com pany o f Little Rock as bookkeeper and in December, .1915, during the W orld War, enlisted in the United States army and received the commission o f second lieutenant o f the infantry. A fter the war he returned to the Bankers Trust Company in Little Rock. He was elected assistant cashier in 1920 and cashier in 1924. In 1925 he received a further pro- . . . f r o m » MUSKY Perhaps you’re not going to Jassy or Musky. But that makes no difference. Your A-B-A Cheques will be cashed just as readily in Jerusalem or Bangkok, New Orleans or Chicago. And, like the holders of the cheques illustrated, you too will be im m une from loss or theft. Why risk loss of time or money when this insurance costs so little? Bankers Trust Company, N. Y. A g e n ts fo r th e I s s u in g B a n k s ROLAND C. IRVINE motion as vice president and cashier, and in 1926 was elected a director o f that institution. Mr. Irvine has been active in many civic enterprises in and about Little Rock. In 1925 he was treasurer and di rector o f the Little Rock Chamber o f Commerce and served on a number o f im portant committees while with this or ganization. He was also elected secre tary o f the Little Rock Clearing House Association and a member o f the A sso ciation o f Reserve City Bankers. Dur ing 1926 he was state vice president o f the American Bankers Association o f Arkansas, and served as chairman o f sev eral important committees with that or ganization. Mr. Irvine will assume his duties with the National Park Bank on January 1. Rem em ber these points about A * B- A Cheques 1. T h e y are th e T ra v e l B a n k e rs A s s o c ia tio n . 2 . T h e y are bank. bankers C heques of th e A m e r ic a n ch eq u es, d raw n by a b a n k on a 3 . T h e y a r e certified, a n d h e n c e le g a lly a c c e p t a b le in p a y m e n t o f U . S . C u s t o m s d u tie s . 4 . A s t w o - n a m e p a p e r t h e y a r e o f t e n a c c o r d e d p r e fe r e n t i a l t r e a t m e n t i n f o r e ig n e x c h a n g e . 5 . T h e y p r o v id e , a t r e a s o n a b le c o s t , c o m p l e t e i n s u r a n c e a g a i n s t t h e lo s s o f tr a v e l f u n d s . BUY THEM AMERICAN FROM YOUR BANKERS A B A OWN BANK ASSOCIATION Certified T R A V E L CH EQUES Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 42 Milwaukee Merger Aids Developm ent MERGER o f the Second W ard Savings Bank with the First W is consin National o f Milwaukee, fusing the two largest banks in W iscon sin into a $2 0 0 ,0 0 0 ,0 0 0 institution, is under way, to become effective about December fifteenth. The deal, which will be by far the biggest in the history o f Milwaukee, will greatly enhance that city’s financial pres tige by giving it a bank adequately A equipped to handle all o f the require ments o f its rapidly developing indus tries. Tentative plans were drawn up and agreed on recently by the heads o f both institutions and will be submitted to the directors of each bank before being put before the stockholders for- ratification. These plans call fo r operating the con solidated bank under the name and char ter o f the First Wisconsin National with Two Bankers from Iowa Associated with L E O M . M E E K E R » President P A N A M E R I C A N B A N K O F C A L IF O R N IA people w h o have com e from those sections to swell the population o f L os Angeles and the Southland. And what a solid, substantial citi zenship they represent! The State o f Iow a has ninety-nme counties. A nd this great com m onwealth has contributed on an average approximately 1000 residents to Southern California for each o f its ninetynine counties— it being estimated that there are close to 100,000 former Iowans n ow located in and around L os Angeles. M any o f positions business group o f o f them. A s I look over the map o f middlewestern states and m y eye courses the borders o f Iowa, Illin ois, Minnesota, W isconsin, Nebraska and other nearby communities I get a very graphic men tal picture o f the thousands upon thousands o f these middlewestemers have risen to o f prominence in Southern California circles. There is scarcely a business any size that does not have its quota The Pan American Bank is no exception and I am happy to introduce tw o o f our senior of ficers w h o are form er Iowans: M R . C. L. H IL L and M R . P. W . H A L L Vice President Vice President MR. H A L L organized the Shel don Iow a National Bank and was its Vice-President and Cashier. In 1910 he w as elected Secretary o f the Iow a Bankers Association. F or the past eleven years he has been associated with the Mechan ics and Metals National Bank of N ew York, later consolidated with the Chase National Bank o f N ew York. M ost o f this time w as spent in charge o f the bank’s business in the middlewestern states, with offices in Des Moines, Iowa. MR. H IL L is a native Iow an anc began his banking career in that State. F or four years he w as con nected with the Hopkinton State Bank and later w ent to the First National Bank o f Fort Morgan, Colorado. F or the past ten years he has been associated with me in the management o f a number o f banks in Southern California, including the First National of Riverside, the First National of Beverly Hills, the First National o f El Monte, and the First Na tional o f Garden Grove. We extend a cordial invitation to Iowans visiting Los Angeles to come in and meet Mr. Hill and Mr. Hall sonaiized banking service to the many men and w om en from widely varying localities, w ho are engaged in business in L os Angeles and vicinity. These officers together with Mr. S. A . Lanning, Cashier, and Mr. J. M . M cE vers and Mr. H. S. Pierce, Assistant Cashiers, represent a wide experience in business and in banking in many middlewestern and eastern states which en ables the Pan American to offer a highly per- P R E S ID E N T PAN AMERICAN BANK O F C A L I F O R N I A Commercial ♦ Savings ♦ Trust Broadway at 8th Los Angeles, Calif. 10 5 Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 headquarters in the main office o f the First Wisconsin at East W ater and Mason streets. The two branches o f the Second Ward will become branches o f the First W is consin and the four outlying banks now controlled by the Second W ard will be come affiliated with the First Wisconsin. This will give the consolidated organi zation fou r branches and eleven affiliated banks in the downtown district and out lying area. Aggregate resources will exceed $200,000,000 and deposits $150,000,000 and total capital and surplus will be $15,- 000, 000. The transaction creates not only the greatest banking institution in the state and northwest o f Chicago, but leaves no other bank in this section approaching it in size. Moreover, when the recently approved amalgamation o f the Continen tal National Bank and the Illinois Mer chants Trust Company becomes effective there will be only two banks in Chicago that will outrank Milwaukee’s new com bined institution in total assets. Although details have not been worked out, it is expected that Walter Kasten, president o f the First W iscon sin, will head the merger. Mr. Kasten has occupied his present position since 1924, when he succeeded Oliver C. Fuller, who had held the office since the consolidation o f the First Na tional and W isconsin National banks on July 1, 1919. He is recognized nation ally as one o f the country’s outstanding bankers. All officers and members o f the staff of the two institutions will continue to occupy as nearly as possible the same relatively important positions they now hold. A second consolidation will probably take place in connection with the deal involving the Second Ward Securities and First Wisconsin companies, invest ment units o f the respective banks. Break in Tradition Due Directors o f the Bank o f England have agreed to recommend the re-election April 10th next o f Montagu Norman as Gov ernor. The proposal to elect Sir E. Har vey a Deputy Governor is the first occa sion that a former official o f the Bank of England has been chosen fo r this posi tion, marking a break in the tradition by which professional bankers are excluded from the Bank o f England in official ca pacities. 43 Bank Recapitalizing Stockholders o f the Bank o f United States at a special meeting voted to reduce the par value o f the bank’s stock from $100 to $25 a share and to increase the number o f the bank’s present shares o f 89,334 to 357,366 shares, and at a special meeting voted to increase the present cap ital o f the bank o f $8,933,400 to $17,866,800. This action doubles the present cap ital o f the bank and gives it a total of 714,672 shares o f a par value o f $25 each. This action is the first step in the plan to combine the interests o f the stock holders o f the bank with those o f the stockholders o f the City Finance Corpo ration, which latter institution is closely affiliated with the bank in its management. Details of the plan fo r uniting the two interests is contained in a letter sent out to the stockholders of the bank and o f the City Finance Corporation, signed by Ber nard K . Marcus, C. Stanley Mitchell and Saul Singer as a special committee. There is nothing so sweet as the soft ness and gentleness o f power.— Beecher. Wishing for Our Many Friends and Custo A Alerry (fhnstmas Money Earning and Money Saving Bank Equipment Complete Electrical Bank Protection Electrical Chime Clock Systems The Automatic After Hour Depository The Vault Ventilator M ade by MASTER BUILDERS K in the factories o f O. B. M c C L IN T O C K CO. The Largest and Most Complete O rganization o f its Kind in the W orld ~ - i s n e r u ro F IX T U R E H E A D Q U A R < T E 3 R J l (P / fa r fe s CPi t i ) , r/ a . MINNEAPOLIS, MINN. Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 44 Lauds W ork of Vigilantes A N K crime figures in the United States recorded a sharp increase during the past year due to an un precedented rise in daylight robberies in the fou r states o f California, Missouri, Oklahoma and Texas, James E. Baum, Deputy Manager, American Bankers A s sociation in charge o f its Protective De partment, reported to the Executive Council o f the association meeting at its annual convention. This increase, he said, wiped out gains made during the preceding three years in the fight to re duce bank crimes o f violence. Reliance on insurance indemnity instead o f vig orous effort at prevention and prosecu tion, he declared, was an important con B SHORT TERM tributing factor in the increase. The report also showed that the detective agents o f the association had caused the arrest o f 251 o f the 445 bank crim inals apprehended during the year. O f these 194 were sent to prison and in addition there were 78 convictions o f prisoners who were arrested by the as sociation agents the previous year. “ During the year ended August 31, 1928 member banks o f the association suffered 177 daylight robberies and 28 night burglaries,” Mr. Baum said. “ In the similar preceding period there were 114 daylight attacks and 62 burglaries against members. This uprising in day light holdups o f 55 per cent within a IN V E STM E N TS FOR BANKS UR sh o rts obligations have.^ been p u r chased by more t h a n 6 , o o o banks in the United States. G en era l M otors A cceptance C orporation Executive Office * B R O A D W A Y at 57 ™ ST. * New York City Capital, Surplus & Undivided Profits Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis . $ 52 , 156,000 December 1928 year does not mean bank banditry is spreading throughout the country for, contrary to the rule o f finding the bulk o f daylight holdups occurring in seven or eight states, the record this year shows bank banditry flourishing so well in four states that this smaller area now accounts fo r the majority o f these crimes. O f the 177 daylight attacks investigated this year, 98 were directed against banks in California, Missouri, Oklahoma and Texas. Moreover, banks in California alone suffered 50 o f these bandit raids, 39 being against branch banks. “ In addition to the failure o f outside forces, such as weak laws or disconnected, and oftentimes inefficient or under manned police power, the principal cause o f robbery loss is within the banks. Our investigations make it plain that the out standing needs are discontinuance o f the practice o f having an excessive amount o f cash unguarded on the counters, installation and proper maintenance of modern alarm systems or other protective equipment and observance o f a few sim ple precautions which would either frustrate the robbery or at least min imize loss. Our investigations also make it clear that a chief reason for the kind o f carelessness which invites robbery is in the willingness o f banks to substitute insurance protection fo r adequate means o f prevention and punishment. Joint Conference “ Your Protective Committee invited the presidents o f the leading surety com panies into joint conference to secure closer cooperation o f the underwriters in the apprehension and prosecution of bank criminals. A fter four conferences with special committees o f surety com pany executives and claim department representatives, the chairman o f the A s sociation o f Casualty and Surety Execu tives assures the committee that the surety companies have expressed ‘a gen eral desire to cooperate in principle with the American Bankers Association in the prosecution o f criminals,’ also To lend assistance in specific cases where the circumstances ju stify such specific effort’ and that we are flaying a foundation for a very real and practical cooperation as between the American Bankers A s sociation and the surety companies generally.’ ” The report endorsed bankers’ cam paigns o f armed vigilantes in the Cen tral West against banditry, saying “ A revival o f the vigilante spirit, strongly organized and controlled, has already demonstrated its value in supplementing the work o f constituted police author ities. I f the merits o f these vigilance campaigns were ever doubted, the recent action o f the underwriters should dispel any fears as to the practicable value of these special law-enforcing units. The underwriters’ rating bureau approved our 45 proposal o f a discount in the burglary and robbery insurance costs in those states where these special units are maintained.’’ W ithin the next few months, Mr. Baum pointed out, legislative bodies o f 43 states will open regular sessions, and this presents “ an unusual opportunity fo r bankers to help modernize criminal laws and rules o f procedure so that criminals will be kept in custody after arrest. Bank crooks continue to be most active in states where the legislators have failed to keep abreast o f other states in re vamping their penal codes and procedural laws. “ W e hear a great deal about the sov ereignty o f each state and ‘ States’ Rights,’ but the professional criminals’ distinction o f state lines is according to the severity and certainty o f punishment he may expect on either side o f the bor der— and as exists fo r escape. Moreover, these same boundaries usually distinguish between good, bad and indifferent en forcement o f law or the rights o f the people to protection o f their lives and property.” Construction Gains 71 Per Cent October construction contracts were awarded in Minnesota to the amount o f $7,937,000, according to F. W . Dodge Corporation. The above figure was more than double the September, 1928, total and was 71 per cent above the October record fo r 1927. Included in the contract total were the following classes of importance: $4,231,500, or 53 per cent o f all construction, fo r residential buildings; $2,414,400, or 30 per cent, fo r public works and utilities; $509,500, or 6 per cent, fo r commercial buildings; and $468,500, or 6 per cent, for industrial plants. During, the past ten months there was $46,974,400 worth of new building and engineering work started in Minnesota which was a drop o f 16 per cent from the amount started during the same period of last year. Defends Rise in Rates Money market rates are high, because o f the law o f supply and demand, not by artificial control, George E. Roberts, vice president o f the National City Bank o f New York, told the National Association o f Finance companies in conference in New York City. Mr. Roberts said that banks have been giving preference to general business and letting the stock market have what they had to spare o f available funds, with the result that the market has not had enough money to meet its demand, has been bid ding vigorously for more and thereby has been making the high rate necessary to attract the supply o f credit wanted. New home o f the State Ban\ o f C h ica go—-La Salle and M onroe Streets. Dependability U T -O F -T O W N banks find that they can depend upon this old institution to handle their Chicago business in a manner w hich w ill be satisfactory from every standpoint. O Housed in its new home, and w ith a complete departmental organisation, it is well equipped to give correspondent banks the type o f service they desire in the nation’ s second city. Henry A . Haugan Chairman Board of Directors Leroy A . Goddard Chairman Executive Committee Oscar H. Haugan Vice-Chairman of the Board State Bank o f Chicago A Trust C om pany LA SALLE AND MONROE STREETS Member Federal Reserve System C apital, Surplus and Undivided Profits Over $13,000,000 Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 46 Breckinridge Jones Dead Breckinridge Jones, chairman o f the board o f directors o f the Mississippi Valley Trust Company, and one o f the best-known bankers in the United States, died November 21st. His death Avas caused by an infection o f the throat. Mr. Jones was born on October 2, 1856, in Boyle county, Kentucky. A fter his graduation from Centre College at Dan ville, Kentucky, in 1875, he taught school one year and then entered the law office o f Col. Thomas P. Hill, o f Stanford, Kentucky, reading law fo r two years be fore his admission to the bar o f Ken tucky when twenty-two years old. In October, 1878, he came to St. Louis and took a course in the St. Louis Law School, following this with a course at the University o f Virginia Law School. He then opened a law office in St. Louis and continued his practice fo r nine years. In 1888, he went to New Decatur, Ala bama, as vice president and general man ager o f the Decatur Land Improvement and Furnace Company, then the largest corporation in northern Alabama. A fter successfully reorganizing this company, he returned to St. Louis to resume his law practice. dent and counsel, and in 1906, upon the retirement o f Mr. Walsh as the active head of the institution, Mr. Jones became president. This position he held until 1925, when he was elected chairman of the board. In addition to his banking achieve ments, Mr. Jones took an active part in public life and always found time fo r organization work. In 1882 he was a member o f the Missouri legislature. In 1904 he served on the W orld’s Fair board In 1890, in company with the late Julius S. Walsh and other prominent business men, Mr. Jones took an active part in organizing the Mississippi Valley Trust Company, o f which he was the first secretary. In 1894, he became vice presi- The Real Facts in the Case M on th after month and year after year, more and more bankers continue to select the Republic as the home for their Chicago account. These bankers have told us that the one element that influenced their deep sion most, is that close, personal, man to man relationship which exists between our officers and theirs. A nd if you are looking for a Chicago correspondent to whom you can turn with your problems as one friend BRECKINRIDGE JONES and, follow ing the fair, took an active interest in the Missouri Historical So ciety, which preserved the records and traditions o f the Fair and o f other im portant events. Lately he has been the acting head o f this society. The financial world knows Mr. Jones as the organizer o f the Trust Company Section o f the American Bankers Asso ciation, and as the author o f the revised" banking laws o f Missouri, which were recommended by a commission beaded by him and passed by the legislature in 1915. In 1927 he Avas chosen to member ship in the executive committee o f the Federal Reserve Board’s Advisory Coun cil, a position he held at the time he died. to another, we should welcome the oppor' Figuring Insurance Discounts tunity of handling your account, too. H oav the American Bankers Associa The Service Department The National Bank o f the REPUBLIC ♦ • OF CHICAGO ♦* Office o f N ew Y ork R ep resen ta tiv e, N o. 1 W all St. Office o f P a cific C oast R ep re sen ta tiv e, C itizen s N a tio n a l B a n k B ld g ., L os A n g eles Office o f L on d on R ep re sen ta tiv e, 8 K in g W illia m S t., L on d on , E . C. 4 Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 tion has succeeded in adding the valu able benefit o f reduced bank burglary and robbery insurance premiums for banks subscribing to and maintaining an ap proved standard o f vigilante organiza tion, to the advantages o f better preven tion and protection Avhich the vigilante plan gives, is disclosed in a statement recently by James E. Baum, Manager o f the Protective Department, American Bankers Association, outlining the agree ment recently reached Avith the underwriters. “ Bankers throughout the Mississippi 47 Valley are acquainted with the upward trend in premium rates for bank burglary and robbery insurance during the last six years,” said Mr. Baum. “ In some states rates have risen to an almost pro hibitive level. Oklahoma banks, fo r ex ample, must pay $10 per thousand on robbery insurance, which is ten times the rate charged banks in Iowa where the vigilante spirit was revived by bankers in 1921. Almost from its inception this movement made bank bandits shy away from that state and reduced robbery in Iowa. The success o f this movement, which strengthened the arm o f the law in an emergency that apparently over taxed the constituted authorities, is a lasting tribute to the determined efforts o f the Iowa Bankers Association. “ Beginning in 1924, the Protective Committee o f the American Bankers A s sociation has repeatedly endorsed and en couraged the extension o f this system of organized vigilance into other states where bank crimes o f violence were in creasing. The response o f bankers in other states speaks for itself. During the past three years the vigilante idea was taken up by bankers’ associations in seven other states, namely, Illinois, Indiana, Kansas, Michigan, Minnesota, Wisconsin and Oklahoma. “ In the interest o f all banks in these states the American Bankers Association appointed a special committee to negoti ate with the underwriters’ rating bureau to secure its approval o f these vigilante campaigns. The committee proposed that this approval be in the form of discounts in the burglary and robbery insurance premiums o f those banks which maintain these special law enforcement units. A f ter several conferences with a committee representing the underwriters, the Amer ican Bankers Association committee se cured approval o f discounts at the rate o f 10 per cent on the premiums fo r burglary and robbery insurance o f every bank subscribing to and maintaing an approved standard o f vigilante organization. “ Final fulfillment o f requirements fo r these discounts promises savings o f up wards o f $90,000 annually in the cost of bank burglary and robbery insurance in the states above referred to. A ll banks should be interested in the fact that dur ing the negotiations fo r this reduction the underwriters’ representatives insisted upon the negotiations being conducted with the American Bankers Association. They also concluded that no bank would be given these discounts without a cer tificate issued by, and upon the form of, the American Bankers Association, whether member or non-member. In other words, it was through this great federation of bankers as represented by the American Bankers Association that this tremendous saving in bank insur ance costs was made possible.” AN ARTIST IN YOUR OWN BACK ROOM Suppose you could fit out a back room in your bank as an artist’s studio. Suppose you could pay thousands of dollars a year for a talented com mercial artist. It is almost like that when your bank publicity is built by Wessling. Our pictures, drawn by master artists, are simple and interest ing. They must be. They must breathe the same spirit as the earnest, personal w r i t t e n messages. Banks and trust com panies tell me that our publicity builds business for them be- cause it Calling on Wessling Services for art work is like calling on a great artist in your own bank building. Indeed, it is better than that. We always have hundreds of new pen and brush pictures classified and ready in electrotype form. And our staff artists are constantly making more creations is so H U M A N . Folks like to read it. Bankers like to sign their names to it. to meet special needs. On our staff are some of the best commercial artists in the United States. No one bank could afford to pay their high salaries. Since hundreds of banks and trust companies using Wessling Serv ices share the cost, it is slight for each one, of Best of all, Wessling publicity gets action. It reaches the patron’s heart. It does this because it is built on an original publicity principle, dif ferent from more costly highly colored publicity. Wessling messages are unique. And they are simple and personal, written just as the home banker would talk. Where pictures are used, they ¡.“ speak”— with human interest and dignity. T V esslin cL S PLANNERS AND R V CREATORS E OF I C E O R IG IN A L fi S BANK S E R VIC E S Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis . IO W A at LY T TO M December 1928 48 Where the Administrator W HEN THE BANK HE administrator o f an estate, generally during the time the es tate is in the hands o f the court, has moneys come into his possession that are required to be safely kept by him. A deposit o f these funds is usually made in some bank, in an account specially designated as, fo r instance, John Doe, Administrator o f the Estate of Richard Doe, deceased. T B y th e L eg a l D ep a r tm e n t Is the administrator, and the surety on his bond, liable fo r the funds o f the es tate, deposited by the administrator in his representative capacity fo r safe keep ing in a bank, which afterwards failed? Consider, for example, a situation where the bank was o f good repute and ap- A n tic ip a tin e ! I lie fin a n cia l r e q u ir e m e n ts o f ttie th ir teen th in d u s tr ia l c ity in A m e r ic a . Fi r s t W i s c o n s i n Na t i o n a l B a n k M I L C a p ila / a n d W A U R E E S u rp lu s T e n M i l l i o n D o l l a r s parently solvent when the deposit was made. Hie deposit made by the admin istrator was the proceeds from a life insurance policy held by the deceased. In eighteen days after the administrator made the deposit, the bank failed, and was closed by the banking department. Court action was brought by the heirs against the administrator and the surety on his bond, claiming that an administra tor is responsible fo r all moneys received by him in such capacity absolutely and in all events. This now brings before use the exact requirements and obligations placed upon an administrator in the handling o f and accounting for funds o f an estate. This estate money was deposited in the bank in good faith by the administrator for safe keeping until disposition could be made o f same under an order o f the court. Among the undertakings and guaran tees in the bond, the administrator agreed and the surety guaranteed that said ad ministrator would make just and true ac counts, and would make due and proper settlements thereof, from time to time, according to law, the lawful order, or de cree o f any court having competent juris diction o f the subject matter. The heirs o f the estate predicated their action upon the theory that administrators o f estates and their sureties are insurors or absolute guarantors o f any and all properties and moneys which may come into their hands in their representative capacities. It is certainly imprudent and hazard ous fo r administrators to keep upon their person or in private hiding places, funds o f the estate, and not just and inequitable to require them to deposit the funds be longing to the estate in banks at their own or their bondsmen’s peril. Such a rule would impose harsh and unreason able responsibilities upon administrators, and prevent prudent business men from assuming such responsibilities. The law has worked out a rule ap plicable to situations o f this kind which is equitable and just. It is as follows, omitting unimportant p a rts: “ As a general rule, there is no absolute requirement o f law that funds o f the estate shall be deposited in a bank or other depository where money is usually placed fo r safe keeping, but the duty of the personal representative in such mat ters is governed by the rule that he must exercise the care and prudence that or dinarily prudent men exercise in regard Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 49 to their own affairs; and this is the measure o f his responsibility if he fails to deposit the funds o f the estate in a safe place. * * * I f any executor or any administrator, in hi s representative ca pacity, deposits funds o f the estate in a bank in good standing, and nothing oc curs to indicate that the affairs o f the bank are in such condition as would lead a reasonably prudent man to withdraw the funds, he is not liable fo r the loss thereof, though resulting from the sub sequent failure o f the bank. * * * The consent o f the beneficiaries to the deposit will relieve the personal representative from liability fo r loss.” “ It is an accepted principle in most jurisdictions that an executor or admin istrator who deposits the money o f the estate in good faith in a solvent bank o f good repute, to trust account and not to his own account or credit, is not liable fo r the loss o f such money through the subsequent insolvency or failure o f the bank.” It is proper for the administrator, fo r the purpose o f safely keeping the funds o f the estate during administration, to deposit the same in a bank, and indeed, in some cases the representative is re quired by court order, or empowered to do so by law. I f the funds are so deposited and due care is used in the selecting o f the de pository, the representative is not neces sarily responsible fo r a loss resulting from the subsequent failure o f the bank; the test being whether he has exercised such care as men o f common prudence ordinarily exercise in their own affairs. The administrator was required to ad minister the estate in accordance with the law, and the law does not exact unrea sonable things. The funds o f the estate coming into the possession of the admin istrator were sufficiently accounted for by showing that they were deposited for safe keeping upon receipt, in a bank which was a going concern and apparent ly solvent and so regarded in the com munity although the bank failed and was closed within a short time after deposit was made. The undertaking o f administrators and bondsmen is to faithfully administer the estate and make a true account and settlement thereof. Administrators are not required to, or prohibited from, depositing, funds of an estate fo r safe keeping until disposi tion by order o f court. Administrators must exercise prudence o f an ordinarily prudent person in handling funds o f an estate, though not generally required to deposit funds in a bank. Administrator’s deposit o f funds in a bank which was a going concern is held proper, notwithstanding insolvency within three weeks after deposit is made. H ere s A Book Tkat W"ill Save ^Mmirv'Valuakle H ours T ins company lias compiled a practical li.andLoo k of mlieritance taxes m TIew Y o rk , N ew Jersey and Connecticut as well as die Federal Estate T a x . T li e autlior is RoLert Tfoeeker, Assistant Treasurer ol tins com pany, and an expert on tax matters. It is designed to lielp you get necessary tax information quickly and easdy. W dtliou t it you may Lave to work tlirougli a vast and scattered mass of tax laws, Treasury rulings and regulations, decisions of tlie C ourts and o f t i e B oard ol T a x A_ppeals. It is tliorouglily up-to-date, attractively Lound m elotli and provided witli a complete taLle of contents. A limited numLer ol copies are availaLle at $ 2 .0 0 per volume post paid. C e n t r a l U n io n TRUST C O M P A N Y OF N E W B A N K IN G YO R K TRUSTS P la za Office: Fifth Avenue at 60th St. NO 4 2 n d S treet O f f ce : 80 B R O A D ACAY .Madison A \ at 42nd St- S E C U R IT IE S F O R S A L E Capital, Surplus and Undivided Profits Over 50 .Million D o ll a Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 50 CURRENT QUOTATIONS On a representative list of HIGH GRADE RAILROAD, PUBLIC UTILITY, INDUSTRIAL, CANADIAN and FOREIGN BONDS Security Bid Asked A labam a Pr. Co. 5s, 1951....................... 101% 102 Alberta, (Canada) 4 % s, 1956............. 95 97 A m er. Chain Co. 6s, 1933..................... 96% 97 A m erican R adiator 4% s, 1947............. 98% 98% A m er. R oll. Mills Co. 5s, 1948............. 97% 98 A m er. Smelt. & R efg. Co. 5s, 1 9 4 7 ... 100% 1003,4 Am er. Sugar R efg. Co. 6s, 1937........ 103% 104 A m er. Tel. & Tel. 4s, 1929. .................... 99% 99% Am er. Tel. & Tel. Co. 5s, 1960...........106% 106% 90% Am er. Tobacco Co. 4s, 1951................. 90 A naconda Cop. Min. Co. 6s, 1953_____105% 105% A ppalachian Elec. Pr. Co. 5s, 1956.. 99% 99% A ppalachian Pr. Co. 5s, 1941................. 102% 102% A rgen tine 6s, 1958 .................................. 99% 100 ” Associated Oil Co. 6s, 1935......................102% 102% A tch. Top. & S. F. Ry. 4 % s, 1962___ 99% 99% A tl. Coast L ine R. R . 4s, 1952........... 93% 94 A ustralia 5s, 1955 .................................. 96% 96% A ustrian 7s, 1943 .....................................103% 103% Baden Consol. Mun. 7s, 1951............... 96% 97 Bald. Loco. W ks. 5s, 1940.......................106% 106% B. & O. R. R. 5s, 2000............................. 103% 103% B. & O. R. R. 4 % s, 1933..................... 98% 99 Batavian Pet. Co. 4% s, 1942..............93% 93% Bavaria, Germany, 6% s, 1945............. 97% 97% Belgium 6s, 1955........................................100% 101 Bell Tel. Co., Canada, 5s, 1955............... 102% 102% Bell Tel. Co., Penn., 5s, 1948................. 106% 106% Berlin, (Germ any) 6% s, 1950............. 98% 99 Berlin E. E. & Und. Rys. 6 % s, 1956. . 94% 94% Beth. Steel Corp. 5s, 1936..................... 100% 101 B irm ingham R y. Lt. & Pr. 4 % s 1954 94% 94% Birm ingham W . W ks. 5s, 1954........... 96 96% Brazil 6% s, 1957...................................... 96% 96% Bremen, (Germ any) 7s, 1935.................102% 102% Brisbane, Australia, 5s, 1957............... 92% 92% British Columbia 4 % s, 1951............... 95% 97 Brooklyn Borough Gas 5s, 1967...........102% 103 B rooklyn Edison 5s, 1949....................... 105% 106 B rooklyn U nion Gas 6s, 1947...............117% 117% Buenos A ires 6% s, 1955......................... 101% 101% Buenos A ires, Prov. 7s, 1952.................100% 100% Buffalo Gen. Elec. Co. 5s, 1939............ 102% 102% Bush Term inal Bldg. 5s, 1960.................102% 103 Butte E lectric P r. Co. 5s, 1951............ 103% 104 C alif. G. & E. Co. 5s, 1937.....................1035% 1033% Calif. Pet. Corp. 5% s, 1938.....................104% 104% Canada 4 % s, 1936..................................... 99% 99% Cañad. N a t’ l Ry. Co. 4 % s, 1930........... 99% 99% Cañad. Pacific Rys. 4% s, 1946............. 98% 98% Carolina Pr. & Lt. Co. 5s, 1956........ 101s% 101% Cent, o f Ga. Ry. 6s, 1929........................ 99% 100 Cent, o f Ga. Ry. 5s, 1945.......................103% 1035% Cent. 111. Lt. Co. 5s, 1943....................... 101% 101% Cent. 111. Pub. Serv. 5s, 1956.............. 98% 99 Cent. N ew E ng. R y. 4s, 1961................ 85% 85% Cent. Pacific Ry. 5s, 1960....................... 103% 104 ~ Cent. Pr. & Lt. Co. 5s, 1956.................. 98»% 99 C. & O. Ry. Co. 5s, 1929....................... 99% 99®% C. B. & Q. R. R. 4s, 1949...................... 93% 94 C. C. C. & St. L. R. R. 6s, 1929.............100% 100% C. C. C. & St. L. R. R. 5s, 1929___ 99% 100 C. C. C. & St. L. R. R. 5s, 1963.............104% 104% Chgo., Mem. & Gulf R. R. 5s, 1940. . . 95% 96% C „ Mil. & St. P. Ry. Co. 4s, 1989____ 88% 88% C. & N or. W es. Ry. 4 % s, 2037............ 99% 99% C. R. I. & P. R. R. 4s, 1934.................. 95B % 95% Chgo. U nion Stat. 4 % s, 1963...............100% 101 Chile 6s, 1960............................................. 93% 935% Chile, M tge. Bank of, 6% s, 1957___ 97% 97% Cincinn. St. R y. 5% s, 1952.................... 98% 98% Cities Service Co. 5s, 1966.................... 94% 94% Clev. U nion Term . 5s, 1973................... 104% 105 Cologne, (Germ any) 6% s, 1950........... 98% 98% Colom bia, Rep. of, 6s, 1961................... 90% 90% Colorado Pr. Co. 5s, 1953......................... 100% 100% Columbia Gas & Elec. 5s, 1952.............100% 100% Columbus R y. Lt. & Pr. 4 % s, 1957.. 94% 94% Comm onwealth Ed. Co. 4 % s, 1956. . . . 99% 99% Connecticutt, Lt. & Pr. Co. 4 % s, 1956 100% 100% Cons. Gas N. Y „ 5 % s, 1945..................... 106% 106% Consol. H ydro-El. U. W urt, 7s, 1956.. 97% 97% Consumers Pr. Co. 5s, 1952..................... 104% 104% Copenhagen, (Denm ark) 5s, 1 9 5 2 .... 96% 97 Costa, R ica 7s, 1951.................................. 95% 95% Cuba Railroad 5s, 1952......................... 96% 96% Cudahy Pack. Co. 5s, 1946................... 100% 101 Cumberland Co. Pr. & Lt. 4% s, 1956 93% 94 Czechoslovak 8s, 1951..............................109% 109% Security Bid Asked Danish Con. Mun. Loan 5 % s, 1955.. 98% 99 Delaware & Hudson Co. 4s, 1943......... 94% 95 Denmark 5 % s, 1955 ................................ 99% 100 Denm ark, K ing o f, 6s, 1942...................104% 104% Denver G. & E. Lt. Co. 5s, 1951........... 99% 99% Det. C ity Gas Co. 5s, 1950.....................101% 101% D etroit Edison Co. 5s, 1949.....................104% 104% D om inican R epublic 5% s, 1942........... 99% 99% Duquesne Lt. Co. 4 % s, 1967.....................100% 100% Dutch East Indies 6s, 1947.....................104% 104% Edison Elec. Ilium. 4 % s, 1930............. 99% 99% Elec. P r. Corp., (Germ any) 6% s, 1950 94% 94% Finland, Rep. of, 6s, 1945. ...................... 96 96% Fla. Pr. & Lt. Co. 1st 5s, 1954............. 92% 93 Ft. W orth P r. & Lt. Co. 5s, 1931___ 99% 99% France, 7s, 1949 ...................................... 107% 107% General Elec. Co. 3 % s, 1942............... 94% 94% Gen. Motors A cc. Corp. 5s, 1929........ 99% 100 General Pet. Corp. 5s, 1940.................102% 102% Ga. & A labam a R y. 5s, 1945............... 89% 90 Georgia P. Co. 5s, 1 9 6 7 ..................... 99 99% Georgia Ry. & El. Co. 5s, 1932........... 99% 99% German 7s, 1949 ....................................... 106% 106% German Cen. A gr. Bk. 7s, 1950........... 98% 98% German Con. Mun. L oa n , 7s, 1947.. 97% 97% German Ge. Elec. Co. 6% s, 1 9 4 0 ....1 1 9 % 120 Goodyear T. & R. 5s, 1957................. 93% 93% Grand Trunk W est. R y. 6s, 1 9 3 6 ....1 0 6 % 106% Grt. N or. Ry. Co. 4% s, 1976............... 99% 99% Great W estern Pr. Co. 5s, 1946.........102 102% Greek Gov’t, 7s, 1964.............................. 98% 98% Gulf Oil Corp., Pa. 5s, 1947.................101% 102 H aiti, R epublic, 6s, 1952......................... 99% 100 H am burg, Germany, 6s, 1946............... 97% 98 H ocking V alley R. R. 4 % s, 1999. .. . 100% 101 Hudson County Gas Co. 5s, 1 9 4 9 .... 104% 104% Hum ble Oil & R e fg. Co. 5 % s, 193 2 ..10 1 % 101% H ungary, K ingdom , 7 % s, 1944...........101% 102 H ungary M unicipal 7 % s, 1945........... 97% 97% Idaho P ow er Co. 5s, 1947........................100% 101 111. Bell Tel. Co. 5s, 1956........................104% 104% 100% 111. Cent. Ry. 4% s, 1966......................... 100 111. Pr. & Lt. Co. 5s, 1956....................... 96% 96% 111. Steel Co. 4 % s, 1940......................... 99% 99% 101% Ind. Mich. Elec. Co. 5s, 1957...............101 Ind. P r. & Lt. Co. 5s, 1957................. 99% 100 Inland Steel Co. 4 % s, 1978................... 933% 93% Internat. Paper Co. 5s, 1947............... 95% 95% 96% InternatT Ry. C. A. 6% s, 1947........... 96% Interstate P r. Co. 5s, 1957................. 96% 96% Iow a Pub. Serv. Co. 5s, 1957............. 97% 97% Italy, 7s, 1951 .......................................... 96% 97 Japanese Gov’t 6% s, 1954................... 101% 101% Jones & Laugh. Steel 5s, 1939...........104% 104% 104% K. C. P r. & Lt. Co. 5s, 1952............104 K. C. Southern Ry. Co. 5s, 1 9 5 0 ....1 0 0 100% Kansas Elec. P r. Co. 5s, 1951........... 95 95% Laclede Gas. Lt. Co. 5s, 1934.............100% 100% Lehigh V alley R. R. 4% s, 2003........... 99% 99% L igg. & Myers Tob. Co. 5s, 1 9 5 1 ....1 0 2 % 102% L orillard Co., 5s, 1951......................... 85% 85% L. & N. R. R. Co. 4s, 1940................... 95% 95% Louisville G. & E. Co. 5s, 1952...........103% 103% Louisville L igh tin g Co. 5s, 1953.........102 102% Lyons, City o f, 6s, 1934....................... 99% 100 Maine Cent. R. R. 4 % s, 1935............... 94% 94% M anitoba P ow er Co. 5% s, 1951...........101% 101% Mass. Gas Co. 4 % s, 1931..................... 98% 99 Mich. Cent. R. R. Co. 5s, 1931........... 99 99% Mid. Steel & Ord. Co. 5s, 1936........... 99% 99% M ilwaukee Gas. L t. Co. 4 % s, 1 9 6 7 ... 100% 100% M innesota P r. & Lt, Co. 5s, 1 9 5 5 .... 100% 100% M . , St. P. & S. S. M. Ry. 4s, 1 9 3 8 ... 90% Miss. R iv. Pr. Co. 5s, 1951.................101% 1013,4 Mo., Kas. & T. R. R. 4s, 1990............. 87% 87% Mo. Pac. R. R. 5s, 1977....................... 99% 99% M ontana P ow er Co. 5s, 1943...............102% 103 M ontevideo (U ruguay) 7s, 1952.........101% 102 M ontreal (Canada) 4 % s, 1946............. 96% 98% M orris & Co. 4% s, 1939....................... 87% 87% Mutual Fuel Gas Co. 5s, 1947.............100% 100% N arragansett Co., 5s, 1957................... 99% 99% N ational Press Bldg. 5 % s, 1950......... 98% 98% N ational Tube Co. 5s, 1952................... 104% 105 N etherlands 6s, 1954 ........................... 100% 100% N ew Brunswick (C an.) 4% s, 1 9 3 6 .... 98% 100 N ew E ng. G. & E. Co. 5s, 1947........ 96% 96% N ew E ng. Tel. & Tel. Co. 4% s, 1961.101% 101% N ew foundland 5 % s, 1942 ...................102% 103 Security Bid Asked N. Orleans Term . Co. 4s, 1953........ 92% 92% N ew South W ales 5s, 1958................... 93% 93% N. Y. Cent. Lines 4% s, 2013.................100% 100% N ew York Edison Co. 5s, 1944.......... 104% 105 N ew York P r. & Lt, Co. 4 % s, 1967.. 93% 94 N. Y. Tel. Co. 4% s, 1939....................... 101 101% N iagara Falls P r. Co. 5s, 1932...........103% 103% N or. Ind. G. & E. Co.5s, 1929............. 99% 99% N or. Pac. Ry. Co. 4s, 1997................... 92% 92% N or. States Pr. Co. 5s, 1941...............101% 101% N orw ay, Kingdom of, 5 % s, 1965.........100% 100% N urem burg, City o f, 6s, 1952............. 90% 90% Ohio P r. Co. 5s, 1952............................... 100% 100 Ohio Riv. Edison Co. 5s, 1951........... 99% 100 Ontario, P rov. o f, 4 % s, 1931............... 98% 99% Ontario P ow er Co. 5s, 1943.................101% 102 Oregon Sht, L in e R. R. 4s, 1 9 2 9 .... 99% 99% Oslo, N orw ay, 5 % s, 1946.......................100% 100% Pacific Coast P r. Co. 5s, 1940............ 100% 101 P acific Gas & Elec. Co. 5s, 1955..........103% 103% Pacific Tel. & Tel. Co. 5s, 1952.......... 105% 1053/8 Panam a 5% s, 1953 .................................102% 102% 101% Penn. Edison Co. 5s, 1948..................... 101 Penn. R. R. Co. 5s, 1964....................... 103% 103% Penn., Ohio & Det, R. R. 4 % s, 1977 98% 98% P enn . P r. & Lt, Co. 5s, 1953.............102 102% Peoples Gas Lt, & Coke Co. 5s, 1947.105% 106 P ere M arquette Ry. 5s, 1956................ 104% 105 Peru 6s, 1960 .......................................... 91 91% Phila, Elec. Co. (P a .) 4% s, 1967___ 100% 100% P illsbury Flour Mills Co. 6s, 1 9 4 3 ... 104% 104% P otom ac Edison Co. 5s, 1956............... 99% 100 Pressed Steel Car Co. 5s, 1933........... 97% 98 Prussia (Germ any) 6% s, 1951........... 95% 96 Pub. Service Co., Ókla., 5s, 1 9 6 1 .... 96% 97 Queensland (A ustralia) 7s, 1 9 4 1 .... 110% 110% 102% R epublic Iron & Steel 5s, 1940...........102 Rhine-W est. Elec. P r. 7s, 1950...........101% 101% R io Grande Do Sul 7s, 1966................. 98% 98% R io de Janeiro 8s, 1946....................... 105% 106 Rotterdam (H ollan d) 6s, 1964...........103% 103% St. L „ Ir. Mt. & So. Ry. 5s, 1 9 3 1 ... 99% 100 St. Paul Gas L t, Co. 5s, 1944............. 100% 101 St, P. U nion Stk. Yds. Co. 5s, 1946.. 100% 100% Salvador 8s, 1948 ....................................112 112% San Joaquin Lt. & P r. 5s, 1957...........102 102% San Paulo, City, 8s, 1952..................... 115% 115% San Paulo, State, 8s, 1936................... 106% 106% Saskatchewan, P rov., 5s, 1943...........100% 101 Sauda, Falls Co. 5s, 1955....................... 101 101% Saxon Pub. W ks. 7s, 1945................... 99% 100 Shawinigan W tr. & P r. Co. 4 % s, 1967 95% 95% Shell U nion Oil 5s, 1947........................ 98% 98% Sherman H otel Co. 5 % s, 1930............. 99% 100 Siemens & Halske, A. G. 7s, 1 9 3 6 ... 102% 103 Sinclair P ipe 5s, 1942............................ 95% 96 Sixty-one Broad. B ldg., 5% s, 1 95 0 ..10 0 % 100% Solvay A m er. Inv. 5s, 1942................. 98"% 99 So. Car. & Ga. Ry. 5% s, 1929............. 99% 100 So. C alif. Edison Co. 5s, 1951...............102% 102% So. Pac. R y. 4s, 1929............................... 99% 99% Southern R y. Co. 4s, 1956.................... 8 9 ^ 89% Southwest Bell Tel. 5s, 1954.................104% 104% Stand. Oil Co., N. Y. 4 % s, 1951___ 97% 98 Stand. Mill. Co. 5s, 1930...................... 99% 99% Sun Oil Co. 5% s, 1939............................101% 101% Swedish Gov’t 5% s, 1954 ................... 103% 103% S w ift & Co. 5s, 1944............................... 101% 102 Swiss Gov’t 5% s, 1946............................103% 103% Texas P r. & Lt. Co. 5s, 1937............... 101 101% T oronto, Canada, 5s, 1934................... 100 100% U nion Oil Co., C alif., 5s, 1935........... 99% 99% 91 Pac. R. R. Co. 4s, 1947........... 94% 95 U nion U. K. Gt. Br. 5 % s, 1937....................... 104% 104% U nited Steel W ks. 6% s, 1951............... 91 91% U ruguay 6s, 1960 .................................... 97% 97% U tah Lt. & Tr. Co. 5s, 1944............... 96% 97 V a, Ry. & P r. Co. 5s, 1934.................100% 100% W abash Ry. 5s, 1975..............................101% 102 W ard (M ontgom ery) & Co. 5s, 1946.101% 102 W est Penn P r. Co. 5s, 1946................... 103% 103% W estern E lectric Co. 5s, 1944.............103% 103% W estern Md. Ry. 4s, 1952................... 81% 82 W estern P a cif. R. R. 5s, 1946............. 100% 101 W estern U nion Tel. Co. 4 % s, 1 9 5 0 ... 99% 99% Westhse. Elec. & M fg. Co. 5s, 1944. .104 104% W innipeg (Canada) 4 % s, 1946........... 95% 96 Yadkin River P r. Co. 5s, 1941.........101% 101% Youngstow n Sheet & Tube 5s, 1978.. 100% 100% CAMP, T H O R N E & CO., Inc., 29 S. La Salle St., Chicago M IN N E A P O L IS ST. LOU IS Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis DES M OINES December 1928 DAVENPORT N EW YORK LASALLE J A N E S V IL L E M IL W A U K E E SA N FRAN C ISC O 51 Bonds and Investments W hen Saving Ceases T o Be a Virtue T IS possible to spend too little as to spend too much. In other words, it is as important to be a miser as to be a spendthrift. This is the opening thought in a splen did discussion o f “ Over Saving and Its Effects on Business,” in a recent copy o f “ I n v e s t m e n t s published by the Guardian Detroit Co., Inc. First making the point that there are evil consequences that follow relative overexpansion in particular industries— that there may be too much saving util ized in one direction and not enough in another, the bulletin goes on to s a y : “ Our second and perhaps more novel contention is that oversaving in the ag gregate with what it implies, relative un derconsumption, is also possible and is inimical to the orderly conduct o f busi ness. A very little consideration will serve to show that oversaving in the aggregate is not the same thing as “ general over production.” It is itself a form, and a most important form , o f relative over expansion of particular industries. It is overexpansion o f those particular indus tries which produce capital goods rela tively to those that produce consumption goods. And the illustration o f railroad building in the eighties shows that this form o f unbalanced production— too much production o f capital goods and not enough o f consumption goods— is par ticularly perilous to business prosperity. The reactions are, o f course, more violent when there is general oversaving than when there is simply oversaving in some few particular lines. I Suppose the United States had reached a condition in which the entire working population was successfully distributed among the different industries o f the country— no unemployment in the sense o f distress and the balance o f the differ ent industries so nicely adjusted that they were all satisfying one another’s needs to the full extent o f their productive ca pacity. Saving would not then cease to be necessary. To begin with, existing capital equipment would be wearing out and requiring replacement to maintain the existing level o f efficiency. This would mean that saving would have to be provided for in the “ set-up” o f industry, at least to the extent o f such replacement. I f the total capital equip ment o f the nation required replacement at an average rate of, say, 10 per cent per annum, industries would have to be car ried on to effect that replacement. A por tion o f the nation’s capital equipment, re sources and working personnel would then be employed in carrying out real saving to this extent. But such a rate of saving would not necessarily furnish the basis fo r an increasing standard o f living. In the first place, the numbers o f the working population would be constantly augmented by recruits from the natural increase in population and from immi gration. Even if no changes o f any kind in productive technique were taking place, the capital equipment o f the nation would under the circumstances require to be, not merely maintained at the existing B O N D Large Saving Necessary “ It is not contended that a very large aggregate o f saving is unnecessary or un desirable. It is obviously desirable fo r an isolated individual to increase his sav ings as long as he gains substantially more in the not too distant future in in creased consumption. In other words, he is wise to save as a means of raising his “ standard o f living.” The same prin ciple applies to the community, and in a more striking way. F or the community is not a single individual with a definitely limited life. Its life is indefinite in length, and, what is more, the community is normally constantly increasing in size. This means that the aggregate volume o f saving should also constantly increase. But saving is not an end in itself. Its object is future consumption on a more liberal scale— a generally higher standard o f living fo r all members o f the com munity. aggregate, but increased as rapidly as the increase in working population. In other words, the amount o f capital equipment per head o f the working population would require to be kept up in order that the existing standard o f living be main tained. Further, to maintain the highest possible efficiency in all directions, masses o f existing capital equipment would have to be constantly “ scrapped” and replaced by new and improved equip ment. This would mean still further ad ditions to the rate o f saving. A Standard for Saving To summarize at this point : 1. Saving should be so distributed among the different industries o f the country as to maintain a smooth working balance between these industries, since they are really both producers and cus tomers fo r one another. 2 . Actual saving should be continu ously increased from year to year so as (a) to maintain the amount o f capital equipment per head o f a constantly grow ing working population ; (b) to replace existing equipment with new and better equipment; and (c) to keep up annual repairs and re placements o f this constantly increasing volume o f equipment. 3. I f saving is not carried out in these ways, the economic life o f the nation will suffer. The maldistribution o f savings among industries causes dislocations of markets that may result in serious busi- Y I E L D S h* 5.0 0 1 9 2 3 19 2 4 19 2 5 19 2 6 19 2 7 Chart, courtesy Guardian Detroit Co. Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 2 December 1928 52 vertising agency, fo r the past twelve years, having joined their organization April 5, 1916. Diming the past several years he has served as space buyer and account executive. ness recessions. An excessive amount o f saving in relation to current consump tion leads to the glutting o f markets and unemployment. Continued deficiencies in saving result in the deterioration of capital equipment, the ultimate impover ishment o f the nation, and decline in the well-being o f the people. This announcement o f the call to the larger field o f endeavor will be a source of gratification to Walter’s many friends, his service with the Frank organization having permitted him to surround himself with a clientele that numbers the most prominent men in the Chicago financial district. His conscientious effort has won him a high place in the regard of men of finance. Queenan with Osborne An announcement o f unusual interest in the Chicago financial district recently by the Guy S. Osborne & Company revealed the addition to the staff o f this organiza tion o f Walter R. Queenan. fie will serve as financial representative on La Salle Street. Mr. Queenan has been with the firm o f Albert Frank & Company, financial ad- The Osborne organization represents the New York Times, Des Moines RegisterTribune, St. Louis Globe-Democrat, Phila delphia Public Ledger and New York Post. ★ ★ Selects New Officers The Debate Society o f the Chicago Chapter American Institute o f Banking, which has attracted unusual support from the banks o f Chicago, has developed some real talent to compete locally and with teams from other cities. By supporting the society, banks feel they are aiding junior executives to develop poise and selfassurance, which is a necessary factor in successful debating. New7 officers have recently been an nounced by the Chicago group. H. Clinton Kinkaid, Manager, Savings Department, Harris Trust and Savings Bank, succeeds J. Cecil Bessel as president. Mr. Bessel has been transferred by his company to Boston. Ervdn Larnpe, o f the Continental National Bank and Trust Company, has been elected vice president. Rudolph Ostengaard, assistant cashier and advertising manager o f the Capital State Savings Bank, has been elected chairman o f the membership committee. Show Increase nvesimenis The September report o f the Public Utilities Consolidated Corporation con trolled and managed by W . B. Foshay Company continues to reflect a satis factory increase in earnings over previous periods. September 30 being the end o f the Company’s fiscal year, this report reflects the first year’s operations under Foshay management o f the original group o f properties taken on October 1, 1927. Gross earnings increased $93,341.43 or 5.97 per cent over the corresponding 12 months’ period ending September 30, 1927, and reflects a gross earning fo r all properties now7 operated o f $1,658,022.10. The net income available for interest, depreciation, amortization and dividends increased $34,993.20, or 5.54 per cent over the corresponding period last year. an nvesim eni ervice K issel, K in n ic u tt ROBERT & Co. STEVENSON RESIDENT PARTNER ME MBER NEW YORK STOCK E XC HA NGE MEMBER CHICAGO STOCK WEST ADAMS 120 TEL. Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis RANDOLPH December 1928 EXCHANGE S T. 7100 Markets Only Farm Need Rumors o f bankruptcy in the northwest were denounced as propaganda and the “ problems o f the farmer” were declared to be those o f reduction o f surplus crops through marketing rather than by pro duction by B. V. Moore, deputy governor o f the Ninth Federal Reserve Bank, in an address before the Traffic Club o f Minne apolis. The speaker held no hope for a return to “ normalcy” through legislation. “ Things are as they are because of economic laws over which we have no direct control, and it is impossible to legislate ourselves back to any desired state o f affairs,” he said. Declaring that the help the farmer needed was in marketing o f his surplus, Mr. Moore said that the farmer did not require the “ nursery bottle o f government aid” any more than the industries o f the northwest needed the patronage o f laws. 53 Investment Bonds Conservative Character HEN W YOU BUY conservative securities you buy a stable, reli able source m ent o f in c o m e . recom m en d a tion s The oi invest M e tc a li, C o w g ill & C o ., In c ., are based u p on careful analyses, search in g investigations and the prop er use o f broad facilities. Metcalf, Cowgill & Co., Inc. 207-221 Equitable Building Ch ic a g o • D ES M O IN E S S IO U X C IT Y S IO U X F A L L S Ê M .C .C . Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 54 HE economic and financial reha bilitation o f Germany since the end o f 1923 is one o f the most significant events in the postwar eco nomic development o f Europe,” says an interesting new bulletin recently assem bled and published by the Institute of International Finance, an organization conducted by the Investment Bankers Association o f America. Since Germany, since the inauguration o f the Dawes plan, has offered abroad about $1,390,000,000 o f securities up to June, 1928, the credit position o f this nation is o f real interest to investors the world over. T The bulletin comments, in part, as fo llo w s : “ The economic and financial rehabili tation o f Germany since the end o f 1923 is one o f the most significant events in the postwar economic development o f Europe. But while the stabilization of the exchange, the balancing o f the budget, and the reorganization o f industry ended the process o f reconstruction in other countries, in Germany the reparations question and the large amount o f exter nal borrowing injected an element o f uncertainty. Since the inauguration o f the Dawes plan up to the end of June, Expert Advice to Bankers Mr. J. W . McIntosh, Comptroller of the Currency, in a speech at the American Bankers Associa tion Convention, gave this advice to banks: “ A correspondent bank or a good investment house often offers a service which is valuable, that is, analysis of the bank’s security holdings. An analy sis of this sort which is of great value to the banker is one which analyzes his reserve and investment needs and meas ures his actual situation against these requirements. Such an analysis, when intelligently and conscientiously made, is invaluable to a banker in dealing with his problems.” Our Department of Economics and Surveys is well equipped to render this service to banks. “ A Valuable A id to Batiks and In vestors” is a booklet describing the work o f this I 1 I I I I Department. Request copy on you r letterhead, asking f o r AG-10 AjC.A L L Y N and I co m pany INCORPORATED 1 I n v e s tm e n t S ecurities 67 W est Monroe Street, Chicago NEW YORK MILWAUKEE r A ........ . Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BOSTON ST. LOUIS PHILADELPHIA M INNEAPOLIS I DETROIT SA N FRANCISCO ____ u ...................... - — z z — ____________________ :______ J] December 1928 1928, Germany has publicly offered abroad securities representing a nominal par value o f about $1,390,000,000 in United States currency, excluding the Dawes Loan. The amount o f German in ternal securities sold abroad can hardly be estimated, but reliable sources place it at over $1,000,000,000 United States currency at par o f exchange. Never be fore in the financial history o f the world has an industrially developed nation in curred liabilities abroad on such a large scale and within such a short period of time. The situation is further compli cated by the reparation payments, the normal annual amount o f which after September 1, 1928, will, under the Dawes plan, be 2,500,000,000 gold marks or $600,000,00 per annum. The large vol ume o f foreign loans contracted by Ger many, coupled with the reparation obli gations, has created considerable discus sion particularly with reference to Ger many’s capacity to meet her international obligations. “ In making a careful survey o f presentday Germany, one must realize that the country today is in an entirely different position than it was before the war, due to losses resulting from the Treaty o f Versailles and to the depreciation o f the currency. Germany’s Area “ In 1910, the area o f Germany proper amounted to 208,820 square miles with a population o f 64,926,000, representing a density o f 312 per square mile. A fter the Avar, the area including the Saar basin Avas reduced to 181,700 square miles with a population o f 60,528,453 according to the 1925 census, representing a density of 333 persons per square mile. “ As result o f the Avar Germany lost 13 per cent o f her European territory, 10 per cent o f her population, 75 per cent o f the total iron ore reserves, 26 per cent o f the coal reserves, and about 70 per cent o f the zinc ore deposits. In addition, Germany lost about 90 per cent o f her total merchant marine, all her colonies and overseas possessions, and most o f her foreign investments. All these factors are o f importance in a com parison o f present-day conditions Avith those o f the preAvar era. “ Significant as these losses were, per haps o f even greater importance Avere the economic consequences o f the deprecia tion o f the exchange which wiped out a very large part o f the Avorking capital and savings o f the nation. The follow ing figures Avill illustrate the loss o f working capital sustained through the depreciation o f the exchange. 55 Broadcasting Investment Information to the Millions H E R E exists an “ urgent need for m ore enlight ened understanding o f investm ent,” as Congressman Louis T . M cF a d d en expressed it, speaking last A p ril on the opening night o f the H a lsey , Stuart & Co. R adio Programs. “ N ever before . . . have so many peop le had a surplus,” said M r . M cF a d d en . “ E m p loy in g this vast network . . . to broadcast the principles o f sound in vestm ent is really a unique undertaking in the history o f finance.” T T hat, briefly, interprets the reason for and the purpose o f the radio programs sponsored by H alsey, Stuart & C o., broadcast each Thursday evening over a network o f thirty stations in the East, South and M id d le W est. T h e O ld C ounsellor, who has already becom e a definite radio personality, answers on these programs questions com m on am ong investors. H is simple, non-technical discussions o f investm ent problem s are heard each week by a vast audience o f interested listeners. F rom time to time, leaders in various fields o f bus iness, industry, and finance also speak on these p ro grams. N otew orth y during the past m onths, in addition to M r. M cF a d d en , have been addresses by G ov ern or R o y A . Y o u n g o f the Federal Reserve Board, Samuel Instill, and Silas H . Strawn, form er president o f the Am erican Bar Association. A n instrumental ensem ble of selected artists provides music o f variety and distinction. O f Special Benefit to Banks and Bankers T h e audience reached by these programs is largely made up o f bank customers — actual or potential. T h e habit of investing, or a desire to invest, leads naturally to the use o f various bank facilities. It is felt, therefore, that these programs are rendering a valuable service to banks, both in developin g an investment sense am ong their customers and in otherwise stimulating bank pat ronage. Support o f these programs from banks to a gratifying degree is already evident, and it is hoped that this interest and support w ill grow as bankers generally becom e familiar with the purpose o f the undertaking. H A L S E Y , S T U A R T &, CO. I N C O R P O R A T E D Ch ic a g o 2 o i S. L a Salle St. P h il a d e l p h ia i l l South Fifteenth St. st. Louis 3 1 9 N . Fourth St. new yo rk 35 W a l l St. De t r o it 6 0 1 G risw old St. bo sto n 85 Devonshire St. Mil w a u k e e 4 2 5 East W a te r St. Cl e v e l a n d 92 5 E uclid A v e . Pit t s b u r g h 3 0 7 F ifth A v e . Min n e a p o l is 608 Second A v e S. Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 56 (In millions of dollars) 1913 E n d of 1923 Savings banks . 4,692 23 Banks _ . 3,192 643 Cooperatives . 1,096 95 Insurance institutions.. 1,501 285 Total .10,481 1,046 “ The war loans, mortgage bonds, and other fixed interest-bearing securities, were also to a very large extent Aviped out as far as the individual holders were concerned, but relieved the private com panies to a large extent o f their funded indebtedness. The great discrepancy be tween the internal and external pur chasing power o f the mark presented a favorable opportunity to foreigners to acquire both movable and immovable property at low prices and many took advantage o f the opportunity. “ The stabilization o f the mark at the end o f 1923 brought these conditions to a sudden halt and inaugurated a new era. Hence, in appraising present conditions in Germany, one cannot draw analyses from conditions before the Avar when Germany was making rapid strides toAvards economic hegemony in Europe, or from the hectic period existing from the end o f the war to the end o f 1923. On the contrary, in analyzing economic con ditions in Germany, today, one has to F ix e d T r u s t S h a r e s Issued by THE EQUITABLE TRUST COMPANY OF NEW YORK Trustee ORE and more bankers are recognizing the merits of Fixed Trust Shares, and are recommending them wholeheartedly for investment. Some of the outstanding reasons are the following: M 1. D i v e r s i f i c a t i o n — Income derived from 30 great corporations. Av erage of only about 3 per cent of principal invested in each company. 2. C a s h S u r r e n d e r P r i v i l e g e — Absolute marketability through trustee of a n y number of shares, in addition to national syndicate mar ket. Not necessary to assemble 500 or 1000 shares in order to con vert to the underlying stocks or the cash value thereof. 3. H i g h L o a n V a l u e — Because no substitution of underlying stocks — the best possible guaranty that the stocks which you buy today can never be replaced by stocks of lesser value. 4. R e s e r v e F u n d f o r S t a b i l i z in g D i v i d e n d s — Obviates ultimate in vestor dissatisfaction arising from excessive dividends one year and lean dividends the next— a condition unsuited to the needs of most investors. 5. H ig h A v era g e t o d a y ’s price. Y i e l d — Six year average better than 7 per cent on Established investment dealers and banks are invited to participate. Smith, Burris Co. S y n d ic a t e M a n a g e r s — C e n tr a l U n i t e d S ta tes 120 S o u th La S a lle S tre et, C H IC A G O P h i l l i p s 6s? C o m p a n y Wholesale Representatives for Smith, Burris & Co. Union National Bank Bldg., F R E M O N T , N E B . Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 192S begin Avith 1924 and study the progress made during the past fou r years. “ Notwithstanding the heavy losses suf fered as a result o f the Avar and currency depreciation, the German economic struc ture is based on a solid foundation. Pro duction generally in the territories com prising Germany o f today, with the ex ception o f agriculture, is larger than be fore the war. In fact, such progress has been made in various branches of in dustry that the productive capacity is by fa r superior to that at any other time in the industrial history o f the country. The process o f rationalization and the merging o f the more important branches o f industry into huge combines has en abled German industry to meet more adequately international competition and to regain to a very large extent its former foreign markets. The German currency since its stabilization has remained stable and the gold stock o f the Reichsbank on October 6 , 1928, is by about $481,000,000 larger than at the end of 1923. The budget is balanced and revenues have tended to increase despite the fact that some taxes, notably the turn-over tax, have been reduced. Germany’s problem today, therefore, is not one o f productive capacity, or fluctuating exchanges, or un balanced budgets, but rather the problem created by large borrowings abroad, Avhich have altered its position as a cred itor nation to that o f one o f the largest debtor countries in the Avorld, to which should be added the heavy burden o f re paration payments with their tremendous influence on the movement o f trade and the balance of payments.” Fifty Per Cent Profit Its First Year ( Continued from page 20) his county warrants were $2,007, and his loans and discounts had jumped up to $41,341. His capital stock still remained $15,000, his surplus $3,000, his undivided profits $951.81, and his earnings just for the four months o f 1928, Avere $4,275.93. Ilis deposits had jumped to $327,503.18. This banker writes m e : “ W e have about 400 depositors. It is true now Ave have a large public fund ac count, but the earnings from that are not high, because we don’t lend a cent o f it. W e leave it with our correspondents. A small bank that doesn’t get paid for its service is on the wrong road. IT IS E A S Y A FT E R GETTING YOUR OWN CONSENT.” This is a little history o f the Bank of Marion in the State o f Arkansas AA'hich Avas started on a service charge basis, continues on that basis, and is making over 50 per cent a year. The cashier o f that bank is paid and he has one assistant. They are occupying the old bank building and have that almost free. 57 A u th orized and a p p ro v ed by the C ouncil o f the L eague o f Nations. $ 1 3 ,0 0 0 ,0 0 0 K in gdom o f Bulgaria 71 / 2 % Stabilization Loan 1928 F o rty -Y ea r Secured Sinking Fund G old Bonds. ( P a r t o f I n t e r n a tio n a l S t a b iliz a t io n L o a n o f 1 9 2 8 .) Dated Novem ber 15, 1928, due N ovem ber 15, 1968. Interest payable May 15 and Novem ber 15. P rincipal and interest payable in New York at the office o f Speyer & Co. or o f J. H enry Schroder Banking' Corporation, in U nited States gold coin, without deduction fo r any Bulgarian taxes, present or future. Principal and interest will also be collectible, at the option of the holder, in Belgian francs in Brussels, in lire in Milan and in Swiss francs in Zurich, at the banking houses referred to below, at the current buying rates for sight exchange on N ew York. Coupon Bonds in denom inations o f $1,000 and $500. Cumulative Sinking Fund sufficient to repay all o f these Bonds at or before m aturity, to be applied to the sem i-annual redem ption o f Bonds by lot at par, the first redem ption to be on Novem ber 15, 1929. Not subject to call before Novem ber 15, 1938, except fo r sin king fund. The Governm ent reserves the right to repay at par on that date, or on any interest date thereafter, all or any p a rt o f the Bonds then outstanding, upon six m onths’ previous notice. $4,000,000 Bonds o f the above issue have been withdrawn fo r sale as fo llo w s: $1,000,000 in Belgium by Banque Belge pour 1 E tranger, Brussels, $1,500,000 in Italy by Banca Comm erciale Italiana, Milan, and $1,500,000 in Switzerland by Credit Suisse, Zu rich. These $13,000,000 Bonds are part of an International Loan, limited (as authorized by the Council of the League of Nations) to yield to the Government a net amount equivalent to £5,000,000 Sterling; the balance of this Loan is being offered as follows: £1,500,000 Sterling Bonds in London by the Ottoman Bank, J. Henry Schroder & Co. and Stern Brothers; £200,000 in Amsterdam by Hope & Co. and Banque de Paris et des Pays-Bas; £100,000 in Prague by Ziynostenska Banka v Praze on behalf of a Czechoslovakian Banking Syndicate, and Fes. 130,000,000 Bonds in Paris by Banque de Paris et des Pay-Bas, Banque de l’Union Parisienne, Comptoir National d’Escompte de Paris, Credit Lyon nais, Credit Mobilier Français and Société Generale pour Favoriser le Développement du Commerce et de l’Indus trie en France. His Excellency Wladimir Molloff, Minister of Finance, has authorized the following statement in behalf of the Bulgarian Government ; having been transmitted by cable, it is subject to correction : The Loan is issued pursuant to the Geneva P rotocol o f M arch 10, 1928, as amended September 8th, approved by the Council o f the League o f N ations by Resolutions o f M arch 10, June 9, and September 17, 1928, ratified by A cts o f the B ulgarian Parliam ent o f A p ril 13 and September 27, 1928, and pursuant to an A ct o f the P arliam ent o f Novem ber 15, 1928, approving the Loan Contract. The am ount o f the Loan is limited to $13,000,000 Dollar Bonds, £1,800,000 Ster ling Bonds and Fr. Fes, 130,000,000 Bonds. The Loan w ill be the direct obligation o f the Bulgarian Govern ment and will be secured by a first charge on all receipts from the im port, export and other customs duties. The receipts from these revenues fo r the tw o years ended M arch 31, 1928, and the estimated am ount fo r the current fiscal year, are approxim ately as follow s : Fiscal year ending M arch 31, 1927 1928 1929 A m ount $8,753,000 9,282,000 9,021,000 or, for each year, over four times the annual interest and sinking fund on the entire Loan. B y R esolution o f September 24, 1928, the Inter-A llied Commis sion (established under the Treaty o f N euilly) released the customs revenues from the first charge fo r reparations and costs o f occupa tion and the general charge fo r treaty obligations. I f at any tim e the receipts from the above revenues should fa ll below 150% o f the annual service requirem ents o f the Loan, the Inter-A llied Comm ission has agreed to release, at the request o f the Council o f the League o f N ations, from the above general charge additional revenues sufficient to insure total revenues equal to at least 150% o f the service requirem ents, and the additional revenues so released shall be forthw ith assigned to the service o f the Loan. The Pledged Revenues w ill be paid as collected into a special account (w ith the N ational Bank o f B ulgaria), to be controlled by a Comm issioner appointed by the Council o f the League and, after the term ination o f his fun ction s, by the Trustees fo r the Bondholders to be appointed by the Council o f the League.. The sum required fo r the service of the Loan will be rem itted to the F iscal A gents in m onthly instalm ents fo r the account o f the Trustees. F rom the Proceeds o f the L oan, approxim ately $7,300,000 will be paid to the N ational Bank o f B ulgaria fo r stabilizing the cur rency, and approxim ately $3,163,000 to the A gricu ltu ral Bank and to the Central C ooperative Bank fo r additional w orking c a p ita l; the balance will be expended under the direct control o f the Com m issioner, approxim ately as follow s : $6,083,000 f o r the im provem ent o f roads, railw ays and ports, $2,433,000 fo r reconstruction work necessitated by the earthquakes o f last spring, and $5,353,000 fo r the paym ent o f floating debt in order that the revenues of the State may be used to m aintain a balanced budget. The Currency, which has been subject to only small fluctuations during the past five years, will be stabilized in relation to gold by law. F or the year ended March 31, 1928, revenues w ere about $50,290.000, and the surplus over expenditures, was about $435,000. Bulgaria, w ith an area o f about 40,000 square miles, has over 5.000. 000 inhabitants, or a larger population than Denmark, Finland, N orw ay or Switzerland. The country is m ainly agricultural, and exports considerable quantities o f tobacco, cereals and other farm products. External loans o f Bulgaria were sold before the war in England and leading countries o f Continental Europe ; the 4 % % Bonds o f 1907 and 1909 (the last pre-w ar L oans) were marketed on a 5% basis. Conversions have been made at 138 Leva to the Dollar and at par o f exchange fo r other currencies. A pplication will be made to list these B nds cn the N ew Y ork Stock Exchange F or furth er inform ation , reference is made to a letter dated N ovem ber 16, 1928, from His E xcellency W ladim ir M olloff, M inister o f Finance o f the K ingdom o f Bulgaria, copies o f which m ay be obtained from the undersigned. A ll proceedings in connection with the issuance o f the above Bonds are subject to the approval of our counsel, Messrs. Cadwalader, W ickersham & T a ft and associate Bulgarian counsel. We* o ffe r th e a b o v e B o n d s f o r s u b s c r ip tio n , i f , a s an d w hen is s u e d and r e c e iv e d by u s, at 9 7 % and a ccru ed interest, to yield to m aturity 7 3/4% W e reserve the rig h t to close the subscription at any time without notice and to reject any application or to allot a smaller am ount than applied for. Am ounts due on allotm ent w ill be payable at the office o f Speyer & Co., 24 & 26 P ine Street, in N ew Y ork funds, on or about December 3, 1928, as called for, against delivery o f Interim Receipts exchangeable fo r Definitive Bonds when ready. SPEYER & CO. J. HENRY SCHRODER BANKING CORP. N ovem ber 21, 1928. Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 58 Guaranteed Mortgage Certificates As Bank Investments T IS, o f course, understood that banks are restricted in their investments in various ways. Savings banks are urged to place their funds in mortgages and have a limit o f 65 per cent. They are protected by a sixty-day clause. Na- I Community W ater B y HORACE W . FOSTER New York Title and Mortgage Company tional banks, under the terms o f the McFadden Bill, have had their powers to invest in mortgages increased but it limits Service Company SUBSIDIARIES P e n n a . S ta te W a t e r C o rp . V aluation $10.394,162 Funded D ebt 5,450,000 Preferred Stock 10,500 Shares HE simplicity of the f i n a n c i a l structure of the Com munity Water Service Company makes it easy to determine the values back of its se curities. The com b i n e d valuation of property, plant and equipment of its sub sidiaries totals $55,657,705 against which are outstanding $31,080,700 of underlying bonds and $8,392,650 of Preferred Stocks. Against t h e l a r g e T W illia m s p o r t W a t e r C o . V aluation $3,998,069 Funded D ebt 2,500,000 Preferred Stock 8,297 Shares N e w J e rse y W a t e r C o . V aluation $2,197,951 Funded D eb t 1,200,000 Preferred Stock 303,750 N e w R o c h e lle W a t e r C o . V alu a tion $7,381,951 Funded D ebt 4,325,000 Preferred S tock 1,300,000 P e o ria W a t e r W o r k s C o . V alu a tion $5,030,000 Funded D eb t 3,472,300 Preferred S tock 250,000 C a iro W a t e r C o . V aluation $436 787 Funded D ebt 300.000 Preferred Stock 150.000 C itiz e n s W a t e r C o . o f W ashington, Pa. V alu a tion $2,646,317 Funded D eb t 1,760,000 Preferred Stock 550,000 equities owned by the Community W a t e r S e r v i c e Company, there are issued and outstanding in the hands of the public only $7,120,000 De bentures. Due to con servative and capable management, the se curities of the Com munity Water Service Company and its sub sidiaries a r e h i g h grade investments of the type which appeal to conservative in vestors. L e x in g t o n W a t e r C o . V aluation $3,620 357 Funded D ebt 1,725.200 Preferred Stock 275,000 O h io C ities W a t e r C o rp . V aluation $2,992.347 Funded D ebt 1,425,000 Preferred Stock 907,600 W e s t m o r e la n d W a t e r C o . V aluation $4,036,239 Funded D ebt 2,480,000 Preferred Stock 6,500 G r e e n w ic h W a t e r & G a s C o . V aluation $13.520,589 Funded D eb t 6,297,200 Preferred Stock 2,126,600 All figures used are as of June 30, 1928, but giving effect to new acquisitions after that date and while not guaranteed are believed to be reliable. A P. W. CHAPMAN e CO.. INC. 115 W . A d a m s Street C H IC A G O Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 42 Cedar Street N EW YORK such loans to the Federal Reserve District in which they are situated or within 100 miles o f the bank. State banks and trust companies are frequently customers fo r mortgages located outside o f their own city. From the foregoing, it will be seen that it would be difficult to generalize on mort gages as investments fo r banks for the reason that the limitations make sweep ing statements hard to substantiate. It is true, however, that mortgages, as a bank investment, are becoming more pop ular. It is estimated that over $1,000,0 0 0 ,0 0 0 o f first mortgage financing was done last year, a gain o f 12 per cent over the preceding year. Further estimates are given that insurance companise, banks and other lending institutions now hold more than $1 0 ,0 0 0 ,00 0 ,0 0 0 o f mortgages. There is, however, a form o f mortgage investment which has been popularized by large mortgage guaranty companies o f Few York, which are known as guaran teed mortgage certificates. These cer tificates are issued against guaranteed mortgages or groups o f mortgages which are deposited with the trust company that authenticates each certificate and sees to it that the amount o f certificates outstanding at no time totals more than the sum o f the mortgages deposited. These institutions are under the super vision o f the State Insurance Depart ment. Before an investment can be made by a bank, it is frequently necessary for several persons and the lending commit tee to pass upon it. When a bank has a definite sum o f money to invest in a mort gage, either fo r itself or for some client, it must first find the mortgage. Every mortgage is naturally made for a certain amount and if the bank has, say, $140,0 0 0 , at its disposal fo r this type of invest ment, it must first secure an offering o f one or several mortgages which total ex actly that amount. These mortgages are submitted to the lending officer and by him to his committee. The committee ap proves. It is then frequently found, par ticularly in an active market, that the company which has guaranteed these mortgages has sold them to another client. A new set o f mortgages is sub mitted and the whole proceeding starts again. In the meantime, the bank is los ing interest and the mortgage company is distracted between its desire to please its clients and the necessity o f turning over its own funds. Guaranteed mortgage certificates, when they can be legally invested in by a banking institution, form an excellent so- 59 lution for these vexing problems. The certificates may be issued against a very large mortgage, in which case the bank’s lending committee can see the property itself ; or, if the certificate is issued against a group o f mortgages, can famil iarize itself with the type o f loans made by the guaranty company and can be as- holder. These features appeal to banks fo r investments fo r trust purposes, or in their recommendation to individuals who desire to have a certain sum immediately available to their estate, outside o f their life insurance. Guaranteed mortgage certificates, as issued at present, carry interest at the rate o f 5 to 5 % per cent. Investigations, conducted at various times by insurance companies, state committees and others, have shown that the rate realized from mortgages is usually from 1 to i y 2 per cent higher than that on other securities considered as being in the same class. The history fo r guaranteed mortgages in New York City is very impressive. It A is estimated that over $3,000,000,000 o f these securities have been sold in the metropolis without loss in principal or interest. New York City enjoys the con centrated prosperity o f the country. Its real estate values, meaning by this apart ment houses and residential sections, are not affected by seasonal depressions or regional disturbances. The city is de pendent on no single industry. Land values are made by population. The pop ulation o f New York City constantly in creases and its importance draws there men o f affairs from all points o f the country, who, in turn, bring with them the influence o f their money and connec tions. N ew and INVESTMENT in the Oldest and Safest Field HE first mortgage on real estate has long proved the most stable, conservative and best income-paying of investments. In the form of First Mortgage 6% Collateral Trust Notes, we have made available this old, time-tested security in a new and more convenient form, particularly fitted to the requirements of banks and individual investors. T HORACE W. FOSTER sured o f the guaranty company’s financial soundness, and waive inspection. In this case, investment may be made at once fo r the entire sum at the disposal o f the bank, and, usually, with the best possible terms o f maturity. Guaranteed mortgage certificates which are issued against one very large prop erty are arranged in serial maturities to cover amortization. For example, if the loan is $1,000,000, perhaps $25,000 a year will be paid in on the principal. Certifi cates are issued against these payments which last over a period o f several years, and on the remainder, which will run probably for ten years. W hile it is not the custom o f mortgage guaranty com panies to obligate themselves to repur chase mortgages or certificates before their due dates, yet it is the practice to make such repurchases, particularly from financial institutions, either at par or fo r a nominal discount to cover cost of re issuance. Guaranteed mortgage certificates which are issued against groups o f guaranteed mortgages generally have several addi tional features which recommend them to banks or private investors. They nor mally mature in ten years, but they may be called in by the holder at any inter est date after three years, to be paid from the proceeds o f maturing mortgages. In many instances, they are payable at the termination o f the trust or death o f the First Mortgage 6% Collateral Trust Notes, maturing Sept. 15, 1931, are secured by pledge and assignment of mortgage collateral consisting of first mortgage notes secured by first mortgages on well-located suburban properties in the metropolitan dis trict of Chicago. These notes, the obligation of Krenn & Dato, Inc., (which has a net worth, BOND KRENN as of Dec. 31, 1927, of $2,388,133.92), are secured by mortgages represent ing approximately only 31.6% of the independently appraised value of the mortgaged properties. Each mortgage deposited with the Trustee is the direct obligation of a property owner who has paid twothirds of the purchase price on his indi vidual property. Guarantees of title have been issued by Chicago Title & Trust Company, or Security Title & Trust Company, Waukegan, 111. The Trustee is The National Bank of the Republic of Chicago. In view of their diverse and ample security, convenient maturity and liberal yield, we recommend these notes without reservation for sound investment. Full details will be sent promptly upon request. DEPARTMENT & DATO, Inc. Exclusive Agents for Edith Rockefeller McCormick Trust 111 B r o a d w a y NEW Y O R K 39 S o . L a S a lle S tr e e t C H IC A G O Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 60 Reviewing the Bond Market HILE bond prices have im proved somewhat over the low point registered in midsummer, this year, they are still in an attractive position for the investors, says the No vember survey o f the National City Bank o f New York, which comments in part as fo llo w s: “ A somewhat easier tone in the col lateral loan markets is apparently at the bottom o f the change for the better in bonds. In contrast to conditions pre W vailing a short time ago when almost any demand could be met on short notice, any substantial market order now usually necessitates active bidding. New o ffe r ings are moving satisfactorily and be cause o f the reduced volume o f under writings, dealers’ stocks have not had a chance to accumulate. Reports from a few o f the leading underwriters indicate that new financing is finding its way to the market just as rapidly as it can be negotiated and that few issues are being held back by dealers awaiting further market improvement. It is quite possible o f course that the borrowing urge will be stimulated by any substantial improve ment in bond prices. While there has been some improvement in the price level from the low point registered during mid summer, prices still remain attractive es pecially in view o f the fact that present levels are due to changes in money rates and not to weakening in security. There appears to be fair agreement that interest rates over a long range will work towards lower levels. Certainly the present bond market offers a real opportunity to the investor who is looking forward to in come over a period o f years. United States Treasury Operations Bankers and Investors considering 1 th e p u r chase of foreign bonds should have a general knowledge of the offering government, its political and industrial history, and the place it holds in the commercial and diplomatic world. To secure this information, the investor must either spend a great deal of time and effort in careful research, or rely upon expert opinion. That is one of the functions of Baker, Kellogg & Company, Inc., to furnish without obliga tion, expert advice on all phases of Foreign bond investment. Our highly trained staff will be glad to answer any inquiry relative to Foreign bonds. “A final move in clearing up the Third Liberty Loan was taken on October 8 th with the offering o f $300,000,000, or thereabouts, o f 11-months U. S. Treasury Certificates o f Indebtedness bearing 4% per cent interest. The terms of the o f fering were more attractive than antici pated, although the amount was slightly larger than had been generally predicted. Any concern over the 4 % per cent rate, which was higher by $4 o f 1 per cent than the last previous treasury offering and the highest since the tight credit period o f 1920-1921, was relieved by imitations by the treasury department that such rate should not be considered as an un favorable forecast fo r bonds generally but as simply the result o f pricing the certificates to the prevailing market. “ The high coupon rate made the issue particularly attractive to banking in stitutions for their secondary reserves. Applications were received totaling $838,000,000. Banks subscribed to the issue and obtaining allotments do not o f course pay fo r the bonds at once but simply credit the treasury with deposit bal ances. Inasmuch as these government deposits will be gradually withdrawn and receive a relatively low rate of in terest, they are a source o f real banking profit at prevailing money rates. Municipal Market Better B A K E R , K E L L O G G & CO ., Inc. A Specialized Service in Foreign Securities for B A N K S and IN VESTO R S 111 West Monroe Street CHICAGO NEW YORK LON D ON Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Telephone R andolph December 1928 0415 BOGOTA B U E N O S A IR E S “ The municipal bond market is in ex cellent condition. For the first time in several months there is evidence o f real buying demand among institutional and private investors. Dealers’ stocks are unusually low and a fa ir increase in vol ume o f new municipal financing appar ently will be required to keep pace with the growing investor demand. While it is true that some municipalities have de layed their more urgent borrowings awaiting an improvement in the general situation, the visible supply o f new issues 61 is not now sufficiently large to suggest that the market will have any difficulty in absorbing it. In view o f the fact that municipal bond prices have already re covered part o f their earlier decline, there has been some surprise that new issues have not been coming along in greater volume. It must be remembered that this is a pre-election period during which local officials are busy cultivating favor with the voters. It is a season when bonds are being authorized rather than sold. The decision of voters on bonding programs submitted at the November g’eneral elections will be a fair indica tion o f what to look fo r in the Avay o f new issues for some months to come. Authorizations will no doubt run into large figures but such approval does not mean immediate issuance because so many programs cover a considerable period o f time and the total amounts author ized will be split up into smaller blocks to be offered for sale only as funds are needed. Several states will ask author ization on road building projects which will call for spreading o f the expendi ture over a number of years. “ Outstanding among new municipal o f ferings during the month was a $ 1 0 ,0 0 0 ,000 issue o f City o f St. Louis, Missouri, 414 per cent bonds due serially Novem ber 1, 1933-48 inclusive and offered at prices to yield around 4.10 per cent. These bonds are issued for public build ings and improvements and are part o f a $75,000,000 bonding program author ized by the voters in 1923 and now about half completed. Convertibles “ Outstanding strength in many repre sentative common shares on the New York Stock Exchange gave impetus to the upward movement in convertible and warrant bonds whose markets are controlled by the position o f the stocks into which they are convertible. Among the coppers Andes Convertible 7s and Anaconda Convertible 7s both continued on the upgrade, Andes 7s reaching 169% coincident with the public offering o f the stock at $37 per share, and Ana conda 7s moving into new high territory around 148 in sympathy with the up ward movement in Anaconda common. Conversion of the third $10,000,000 block o f Anaconda 7s has now been completed and current conversions are on the basis o f $62 per common share. Barnsdall Corporation 6 s with warrants attached reached a new high and at present are selling around 134. A spectacular per formance among the convertible utilities has been the Brooklyn Union Gas 5% s, which are currently quoted at around 310. These bonds, issued several years ago, carry the privilege o f conversion into common at 50 after January 1, 1929. The stock around 160 is 110 points above the conversion price, which nat urally accounts fo r the enormous pre mium. The market fo r the bonds is still somewhat behind the stock, due no doubt to the deferred conversion privilege. “ Convertible and warrant attached bonds have been meeting considerable favor in recent years because o f the op portunities such securities provide for sharing on an equity basis in the future prosperity o f the business. The attrac tive feature o f such securities from an investment standpoint is that they usual ly begin their history as pure investments whose markets are unaffected by minor fluctuations in earnings. When and if the common stock equities improve, the bonds furnish a medium for sharing in the improvement. A fter such bonds sell on a conversion rather than an invest ment basis, their price movements are governed by the movement of the stock and recessions may be quite as violent as advances. Once the conversion feature has carried the price o f a. convertible bond well above an investment basis it may be to the investor’s advantage from an income standpoint to convert into com mon stock, particularly so if this stock has achieved a good investment rating.” A man who feels that his religion is a slavery has not begun to comprehend the real nature o f religion.— Titcomb. Boy Bonds N ow for the Long Pull T IS agreed by most market observers that bond prices today are at a comparatively low level — and that this low level will be followed by a tendency toward higher prices and lower yields. Recognising this fact, many banks are at present turning away from the call money and short-time paper market, and are placing their funds in high-grade bonds at current levels. Those who are doing this will secure for themselves a good return for many years to come. W r ite f o r O u r L ist o f S e le c te d O fferin g s A. J. Boldt & Com pany P utnam Bldg. Davenport, Iowa Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 192S 62 Demand Unabated From a survey o f the real estate and building construction situations in New York City, issued recently by the New York Title and Mortgage Company, it is estimated that this company will have loaned approximately $240,000,000 dur ing 1928 on first mortgages, secured by improved real estate in Greater New York, Long Island and Westchester county. “ It is now a safe assumption,” the survey declares, “ that the total building volume in the metropolitan zone, fo r the first nine months o f this year, exceeds $1,000,000,000. The total o f building contracts awarded, during the period un der review, amounts to $1,152,604,400, an increase o f 14 per cent over the same pe riod a year ago.” Concerning the subject o f conservative appraisals in the first mortgage field, a subject which has received much atten tion o f late, the report advocates strict adherence to the most conservative ap praisal standards, stating that this policy presents one o f the chief features which distinguish the conservative first mort gage lending organization among its in stitutional as well as individual clien teles. Upon the subject o f first mortgage ap praisals, the survey states that the New Bonds for Short or Long Term Investment to meet the Needs of Banks, Institutions and Private Investors D e Wolf & C ompany , inc . Established 1889 - Investment Securities 100 West Monroe Street CHICAGO Korthivestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 97 East Wisconsin Avenue MILWAUKEE York Title and Mortgage Company is unalterably opposed to the practice, still current in some quarters, o f having land valued by one appraiser and building by another, instead o f considering the en tire property as a unit. To quote : “ The Real Estate Securities Committee o f the Investment Bankers Association, at their seventeenth annual convention, during October, last, reported, the moment a building is completed, the land and build ing become a unit having a mortgage value as such until the building becomes obsolete or too old fo r use. “ For many years, the conservative first mortgage institutions,” the survey con tinues, “ has pioneered along the lines now recommended by this committee, particularly adhering to the policy o f requiring that joint valuation o f land and buildings, based on physical values, be checked from the standpoint o f earn ings, trend of neighborhood, obsolescence, economic adequacy, etc., before arriving at a scientific determination o f true val uation.” The principle, that real estate values invariably follow population, is again strikingly brought out in the survey by the statement that the increase alone in New York City realty assessments dur ing the year, amounting to about $1,500,0 0 0 ,0 0 0 , is greater than the total assessed valuation o f real estate in four o f the largest American cities, v iz .: Dallas, Den ver, Indianapolis and Kansas City. Bankers’ Balances in Chicago From the Bureau o f Business Research, University o f Illinois, comes a very in teresting bulletin, entitled, “ An Analy sis o f Bankers’ Balances in Chicago,” known as Bulletin 21. A brief synopsis o f salient facts therein fo llo w s: “ Approximately 9,000 banks, one out o f every three in the United States, have correspondents in Chicago. In almost 7,000 instances are Chicago banks re ported as correspondents by banks in the greater part o f the middle west. This is two and one-half times the represen tation o f the New York banks in this area. Furthermore, Chicago banks are chosen as correspondents to a very large extent by banks in the far west. O f the 64 reserve cities outside of Chicago and New York, two-thirds o f them show that every national bank has direct Chicago connections. These reserve cities are in every part o f the United States. In a number o f states, Chicago banks almost completely dominate as the correspond ents o f country banks. For example, 94 per cent o f all the banking towns o f Iowa report that at least one bank has a Chi cago correspondent. Slightly in excess o f 4,800 banking points in the country as a whole— close to 30 per cent o f the total -—have direct banking connections with 63 Chicago through at least one correspond ent. “ A t the close o f 1927, bankers’ bal ances held by Chicago banks aggregated almost 360 millions as compared with 139 millions reported by them at the end of 1900. The largest o f the national banks hold most of these deposits— at the pres ent time, approximately 70 per cent of the total. The outlying national banks are not important as holders o f bankers’ deposits; practically all of the remainder, that is 30 per cent, is in the hands o f the state banks. The latter banks show a greater concentration o f these funds in a relatively few banks than do the na tional banks. Ten o f the state institu tions report as holding close to 96 per cent of the aggregate held by all the state banks. “ An analysis of the data o f the central reserve city banks, that is, the largest of the national banks, shows that no pro nounced seasonal movement in bankers’ deposits has existed. There has ap peared, however, a rather marked up ward movement in the spring, followed by a decline o f about the same amount in the summer. During late winter and early spring, country bankers have al lowed their deposits to accumulate in Chicago banks; by summer a decline has usually taken place. From summer to fall and from fall to winter but little or no regular movement has been observed. In the case o f the New York banks, it is found the falling off in bankers’ balances does not take place in the summer but a season later. “ During the 26 years studied, bankers’ deposits held by Chicago banks have moved in fou r rather distinct cycles. There has been a marked tendency for these deposits to be at the lowest point when business generally was most de pressed. A recovery in general business conditions has usually been accompanied with an upward swing in bankers’ bal ances. There are a number o f instances when extraordinary fluctuations in these deposits took place. Examples are those o f 1907 and 1908; 1914 and 1915; 1920 and 1921. “ While bankers’ deposits relative to individual deposits do not hold the place they form erly held due to the huge ex pansion which has taken place in the de posits o f individuals and corporations, they nevertheless constitute one o f the most important factors in the Chicago money market.” The Fourth Natural Resource Natural gas now ranks next to petrol eum, coal and iron as America’s fourth natural resource, according to the weekly report on the public utility industry by the W . B. Foshay Company. The report follow s : “ Production o f natural gas in 1927 reached 1,445,428,000,000 cubic feet, valued at $318,000,000, and estimates point to a substantial increase this year. “ Rapid development o f the natural gas industry in this country during the last two decades can be seen from the fa ct that in 1907 the total production was less than 10 per cent o f the present output. In 1927 there were 3,984,000 domestic consumers o f natural gas in the United States, in increase o f 253,000 over the previous year. “ During 1928 there has been a large in crease in the number o f natural gas con sumers, until now that form o f gas ranks as the fourth natural resource o f this nation. Next year will see an even great er development, according to present in dications in the industry. “ Many electric power plants, during the last year, have changed from other forms of fuel to the use o f natural gas, so that in many cities o f the country to day natural gas is supplying the entire community with power, light and heat. “ As gas consumption has increased, industry throughout the nation has been de\Teloped because o f the relation be tween the two. Greater gas consump tion has meant lower cost, which in turn has made it possible fo r industry to ex pand. Gas already is put to more than 21 ,0 0 0 different uses in industry.” Illinois Local Improvement 6 % Bonds These bonds are issued by suburbs o f Chicago and are paid out o f taxes levied as special assessments against the property bene fited by the improvements. Being payable out o f taxes they are Exem pt from Federal Income 7 ax W au kegan, I llin o is , 6% B onds S pecial A ssessm ents N os. 835 and 843— W a te r M ains S pecial A ssessm ents N os. 887 and 904— Street P a vin g Z ion , Illin o is , 6% Bonds S pecial A ssessm ents N os. 50 and 5 1 W a te r M ains S pecial A ssessm ent N o. 52— Sewers M undelein, I llin o is , 6% B onds S pecial A ssessm ent N o. 43— Street P aving G lenview , I llin o is , 6% Bonds S pecial A ssessm ent N o. 56— Sewers N iles Center, Illin o is, 6% Bonds S pecial A ssessm ent N o. 173, D ock et 59634— Street P aving No. W heaton , Illin o is, 6% Bonds Special A ssessm ents N os. 322, 331 and 333 — W a te r M ains S pecial A ssessm ent N o. 330— Sewers B ellw ood , Illin o is, 6% Bonds S pecial A ssessm ents N os. 109 and Street P a vin g B roadview , Illin o is, 6% Bonds S pecial A ssessm ent No. 16— W a te r M ains W estch ester, Illin o is , 6% B onds Special A ssessm ents N os. 3, 4 and 6— W ater M ains S pecial A ssessm ents N os. 5 and 11— Sewers Special A ssessm ents N os. 7, 9 and 19— Street P aving M a turities 1930 to 1938 P rice— 100 and Interest Y ie ld in g 6% F ull inform ation on request Knight Blanchard & Co. Local Improvement Bond Specialists 29 So. La Salle Street CHICAGO Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 110— December 1928 64 “ E con om ie B rie fs” The prospective good-will trip o f Presi dent-elect Hoover to the countries of Latin America is focusing public atten tion on the ever-increasing intimacy o f the economic, political and cultural rela tions between the United States and these countries. The latest data to ap pear on these countries has just been pub lished by Ames, Emerich & Co., invest ment bankers, under the title “ Economic Briefs o f Latin America.” In this book is discussed in a concise but comprehen sive fashion, the economic development o f the Latin American nations during re cent years. In opening their discussion o f this re gion to the south o f us, the bankers say, “ There can be no doubt about the increas ing commercial relations which exist be tween the United States and Latin Amer ican countries as compared with a few years ago. Government statistics reveal this clearly. Imports from Latin Amer ica, which averaged $435,500,000 fo r the years 1910-14, increased to $1,018,900,000 in 1927, a gain o f 133.8 per cent. Latin America, on the other hand, is be coming an increasingly important market fo r exports from the United States. The average amount o f these exports fo r the years 1910-14 was $332,800,000, while in 1927 the amount increased to $839,800,-. 000, a gain o f 152.3 per cent. “ The -financial relations which exist be tween the United States and Latin Amer ica are quite as close as are the commer cial relations. The Latin American coun tries have been increasingly heavy bor rowers in the United States. In 1914 they floated loans in this country to the amount o f $13,903,750, while in 1927 the volume o f financing had increased to $365,269,300, a growth o f 2,518 per cent.” This book, written by Dr. Paul M. A t kins, economist fo r the bankers, is a companion volume to “ Economic Briefs o f Europe,” which was published by them last year. Office Established The Des Moines office o f Dawson, Howe & Dawes is now established at 522 In surance Exchange Building, and, as fo r merly announced, the manager o f the U N D E R W R IT E R S and D IS T R IB U T O R S o f C O R P O R A T IO N S E C U R IT IE S OR many years Brokaw and Company has specialized in Packers, Equipment Trust, Pacific Coast and Canadian Securities. F W ith representatives throughout the MiddleWest and direct wire connections to the larger Eastern centers, we are able to render a compre hensive investment service to Banks, Bankers, Corporations and Individuals. G. A. MOSELEY Des Moines branch will be G. A. Moseley, who is also a partner in the firm. Mr. Moseley needs no introduction to bankers and investors o f Iowa, as his acquaintance is wide in this territory. Iowa Representatives M A U R I C E F. L E A H Y R A Y E. M A S O N Manager o f Trading Service D epa rtm ent TH O M AS T. FORD BROKAW A N D COM PANY 105 South La Salle Street, Chicago Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 Gains $10,000,000 That national prosperity is not fiction fo r California citrus growers is proved by figures released in the annual report of E. G. Dezell, general manager of the Cali fornia Fruit Growers Exchange, which shows a return o f $130,000,000 for the California citrus crop o f 59,396 carloads fo r the jmar ending October 31st, a gain o f $10,000,000 over 1927. Banks Change H ands The Charles E. Walters Company o f Omaha report fo r the month o f November the sale o f the following banks to the respective purchasers: First National Bank, Ault, Colo., to B. B. Helmick o f Lincoln, Neb., formerly vice president o f the Continental State Bank of Lincoln. 65 Chicago Investment News B y W M . H. M AAS Chicago Vice President Northwestern BanTcer LaSalle Street last month welcomed another Iowa investment house which opened Chicago offices. M etcalf, Cowgill & Co., Inc., with headquarters at Des Moines, appointed J. C. W hite as man ager o f their Chicago offices in the State Bank Building, 120 South LaSalle Street. This progressive Iowa bond house also has offices in Los Angeles, Sioux City, Cedar Rapids and Sioux Falls. General business is still follow ing a course o f progressive improvement with strengthened optimism asserting itself in many lines since the election. The re cent weekly letters o f Babcock, Rushton & Company, point out that the volume o f production throughout the country as measured by factory employment, elec tric power consumed by the leading in dustries, and payrolls, is showing an ex pansion o f unexpected proportions. “ Even in the depressed industries there are definite signs o f fundamental better ment. The production o f cotton textiles has not only been held within the re quirements o f consumption but there has been a further reduction in the stocks on hand. The output o f bituminous coal is growing, in response to the seasonal de mand, but the leaders in the trade are avoiding excess production by effective cooperation. Late reports from the lum ber industry indicate that although out put is increasing, demand is keeping pace. This is the most encouraging report from the lumber trade in many months. In view o f the great benefits which have ac crued to the oil business this year from the self-imposed curtailment program, it is interesting to learn that the producing wells in tAvo o f the most troublesome fields in the country are declining rapidly in output.” R. A. Drum, president of the Old Dear born State Bank, announces that in terests identified with the Chicago Trust Company have purchased a substantial amount o f the capital stock o f the Old Dearborn State Bank and will become identified with the directorate o f that in stitution. Mr. Lucius Teter, president o f the Chicago Trust Company, will become chairman o f the board o f the Old Dear born State Bank, succeeding Mr. J. L. K raft, avIi o will remain as a member o f the board. There will be other additions to the board to be later announced. No change is contemplated in the official staff or personnel o f the bank which will continue to operate as such in its newly occupied building at Wabash Avenue and Lake Street. The Old Dearborn State Bank was or ganized in 1919 as the Lake-State Bank located at State and Lake Streets. The name was changed to the Old Dearborn State Bank at the time o f removal to its present new building quarters at the corner o f Wabash Avenue and Lake Street, within the original reservation of Old Fort Dearborn. The bank has a capital o f $500,000. New interests added to the present group will enable the bank to keep pace with the rapid development of the section in which it is located. A reflection o f the strong financial position o f the Stinnes organization o f Germany is seen in the announcement that Hugo Stinnes Industries, Inc., has already anticipated the sinking fund pay ment due in March o f 1929 on the issue o f 7 per cent debentures of the company. j p r ...................... I What is a “Satisfied Investor ' ? I 'HERE are several factors that go to make an investor satisfied—but the important thing is safety. Knowledge that principal is protected —that its security is sound and ample—breeds peace of mind in high degree. And this satisfaction is essential to the investments of institutions and individuals alike. * Robert S. Strauss 6? Company is in a position to offer investors a selection of high grade first mortgage real estate bonds secured by well located income-producing properties in the City of Chicago. The safety of these bonds is assured. A list of current offerings will be sent upon request. R obert S.S tm k ss & Co. — — —I LIUI'. J. I' — — ii i i l Investment Bonds— First Mortgages 105 W est M on roe St. C H IC A G O 150 Broadway NEW YORK Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 66 Halsey, Stuart & Company and A. G. Becker & Company, joint fiscal agents fo r the company, have been notified that funds fo r the payment, which is in excess o f $200,000, are now available. W ith this payment, the original issue o f $12,500,000 debentures, offered in 1926, will be reduced to $11,372,500. Hugo Stinnes Industries, Inc., is one o f the two principal companies compris ing the Stinnes organization. It owns or controls stocks representing the coal and coal products holdings and certain other interests o f the organization. The mines form a group which are among, the largest and most efficient in Germany, and other controlled properties include extensive water and rail terminal facilities, efficient coal handling equipment, barges, tug boats, ocean steamers; also several im portant by-products plants and related enterprises producing and selling gas, electric power, chemical products, glass, brick and the like. The company does an international business. A new indoor sport which has been given the timely name o f “ conversations” among large bank executives, bids fair to become a popular pastime throughout the country during the next few months. Usage o f the word is refreshing in that it has taken the place o f the old camou flage o f the word conference. Preceding W hat is Group Banking? ROUP Banking is the operation of a number of banks in affilia tion with a central organization, which maintains highly specialized departments working in harmony with each bank in order that the bank may render to its customers and community greater service than it could individually supply. Group banking does not necessitate any change in the ind ivid u ality or personnel of an affiliated bank. G A brochure of Questions and Answers regarding the nation-wide group banking program of this organization available upon request. [ T h e t e rm “ G r o u p B a n k in g ” w as o r ig in a t e d a n d first u s e d b y A m e r ic a n F in a n c ia l C o r p o r a t io n o f N ew Y o r k . L ik e w is e , th e d e t a ils o f o p e r a t i o n o f a G r o u p B a n k in g p r o g r a m w ere first c le a r ly set f o r t h b y th is C o r p o r a t io n . A m e r ic a n E n a n c ia l C o r p o r a t io n O f SO Br o a d w Ne w ay © 1928, A. F. C. of N . Y. Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 Y o r k . N e w Y o rk , the contemplated merger o f bank struc tures nowadays, the reporters and inquir ing public are told by officers o f the insti tutions that there has been “ conversa tions” regarding the matter, but nothing definite had happened. Have you had any “ conversations” carried on in your bank recently? Following the removal o f the Conti nental National Bank into the home o f the Illinois Merchants Trust Company, with which institution the Continental has merged, announcement has been made that the Central Trust Company will occupy the Continental building. It is expected that removal will be made about February 1st. The announcement has also been made that General Chas. G. Dawes will return to his old post as chairman o f the board o f the Central Trust Company, following expiration o f his term as vice president o f the United States. Application has been made by Joseph T. Ryerson & Son, Inc., to list 400,000 shares o f its capital stock on the Chicago Stock Exchange. Donald M. Ryerson, chairman, states, “ Sales for 1928 are esti mated in excess o f $29,000,000 and net profits at $1,630,000, or over $4 a share, in contrast with $1,248,974 or $3.12 per share in 1927. “ Further improvement is anticipated as the company is benefiting by the com bination o f sustained demand for steel with upward trend in prices, and the better relationship between productive capacity and consumption in the in dustry.” Celotex Company’s annual statement soon to be issued will show substantial gains in earnings, according to Bror G. Dahlberg, president. “ The company,” says Mr. Dahlberg, “ with control o f abundant raw materials assured, with factory costs reduced, and with an ex panding volume of sales, was never in a better position than it is today. New products now being developed will in crease the sales volume considerably. “ In 1927 our business was hampered by a shortage o f raw materials, bagasse, due to the failure o f the Louisiana cane crop. W e had to import raw materials from Cuba at considerable expense. Through affiliations with the South Coast Company in Louisiana, and the Southern Sugar Company in Florida, a permanent supply o f raw material at low cost is now available. Business during 1928 was very satisfactory fo r Celotex, and I anticipate that 1929 will be still better. W ith increased sales and lower manu facturing costs, Celotex profits should continue next year to show still further gains.” 6' Iowa Bankers Appreciate the Proved Principles of Iow a ’s Oldest and Largest Bond House HE fact that so large a proportion o f Iowa’ s banks T buy bonds from Iowa’ s oldest and largest bond house, is persuasive evidence that they appreciate not only the character o f our offerings, but also the sound policies that govern in all our transactions. During the thirty-seven years in which bankers have been buying our high-grade, conservative securities, they have found it invariably the case that with respect to interest and maturities alike, their money has always been ready when their money was due. Our current list o f high-grade offerings, with diversified maturities especially suitable for bank investment, will be sent immediately upon request. Please Address Our Davenport Office G eo .M .B ech tel &T Co. Established 1 8 9 1 Bechtel Building, Davenport,Iowa. E q u it a b le B u i l d i n g F ir s t I o w a Des Moines I O W A ’ S O L D E S T T ru st B ld g . G r a n d O p e r a FIo u s e B l d g . Burlington AND Dubuque L A R G E S T B O N D Northwestern Honker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis H O U S E December 1928 68 A Chicago -----Office For---Your Bank W hen you establish a connection with Central Trust C o m p a n y of Illin ois, you op en , in effect, an office in the heart of Chicago’s finan cial district ♦... an office fully equipped and ready to give you prompt satis faction in every phase o f your correspondent business. C entral T r u st C O M P A N Y O F IL L IN O IS 125 W . M O N R O E STREET at LaSALLE C H IC A G O Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 69 Plan to Develop Iowa Iowa is fast becoming one o f the best bond states in the country, according to officials o f A. C. Allyn & Company, Chi cago, who have recently made plans for a more extensive development o f the security business in this section. Gerald Nordberg, with headquarters in Chicago, is now devoting practically all o f his time to Iowa. Prior to his affiliation with the Allyn organization, he spent sev eral years in the bond department o f the Illllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllli Complete Diversification ONTINUOUS analysis of financial conditions in your territory, and a close connection with the large securi ties market, enable us to place at your disposal at all times the exact type of investment necessary to meet your requirements. No matter what your needs might be, our well diversified list will fit into your most intricate invest ment problems. W e will gladly consult with you at any time. C Dawson, Howe & Dawes, Inc. Investment Securities CHICAGO DAVENPORT DES MOINES llllllllllllllllllllllllllllllllllllll!III!lllllllllllilllllllillllllllllllllllllllll!llllllllllllllllllllllllll!lllllllllllllllllllillllllllllllllllllllllllllllll G E R A L D N O R D BERG First Trust & Savings Bank o f Chicago, and lists Illinois State University as his Alma Mater. J. H. Riley, a director o f the firm, and former resident of Dubuque, as well as J. B. Frazier, o f the Omaha office, likewise devote part o f their time to a growing Iowa clientele. The firm o f A. C. Allyn & Company was organized sixteen years ago and specializes largely in the organization o f public utility issues as well as industrial financing. Again Heads Trust Group John A. Reynolds, vice president of the Union Trust Company o f Detroit, has been appointed fo r the third successive time a member o f the insurance trust committee o f the trust company division o f the American Bankers Association. To this committee is entrusted the develop ment o f greater cooperation between in surance companies and financial institu tions. Mr. Reynolds furnished much o f the practical experience and advice upon which is based a new general form of un funded life insurance trust agreement now in use. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BUY EQUIPMENT TRUST CERTIFICATES Issued Under Philadelphia Plan Equipment obligations o f all kinds have been pronounced the strongest o f corpo rate obligations. They have a remarkable record o f safety, according to financial writers o f accepted authority. Never, except in one case some 50 years ago, has the holder o f a railroad equip ment security o f which record is obtain able lost on his investment. The contract is perhaps more nearly standardized in these issues than for any other type o f cor poration security. Send fo r Circular F ir s t I l l in o is C om pany BO N D S CHICAGO FOR I N V E S T M E N T NEW YORK Northwestern Banker December 1928 70 ITH the tremendous develop ment o f aviation in the United States investment houses are turning their attention to ways and means o f financing this growing industry. A ir transportation presents investment prob lems quite new. A recent issue o f “Bond B r i e f s published by the Northern Trust Company o f Chicago, devotes considerable space to this problem, commenting in part as fo llo w s: “ Although convinced o f its practicabil ity, the public still regards air transpor tation as a recent development. A ir W transport in the United States has been organized and is developing on a basis o f practical business utility. The 1927 gov ernment survey shows a moderate im provement in the transportation phase o f the industry through the gradual elimi nation o f insufficiently financed and im practical operators. Competition fo r mail, passenger and express business among the many transportation compa nies without sufficient information for de termining profitable rates has precipi tated many failures. Until the public is educated to the utility of aircraft and 5V2% First M ortgage In vestm en ts a $ 6 0 ,0 0 0 ,0 0 0 Guarantee O u r 5 / 2% G F M C have every element of safety. Behind them is the value of the property, always conservatively appraised, the bond of the borrower, and our guarantee of principal and interest backed by Capital Funds of over $60,000,000. u a r a n t e e d ir s t a n d e r t if ic a t e s The graph here reproduced shows the steady growth in the population of New York City from 119,734 in 1810, to 5,970,800, as estimated by the Bureau of the Census for 1927- Real estate values follow population. 5 ,9 7 0 ,8 0 0 / 4 .0 0 0 . o r tg a g e s 000 3 .0 0 0 . 0 0 0 2 .0 0 0 . 0 0 0 1 .0 0 0 . 0 0 0 1927 1925 19Ï5 1910 1920 1900 1890 1880 1870 1860 1850 1840 1830 1820 1810 1 1 9 ,7 3 4 Investigate this ideal invest ment that is as “ secure as the bedrock of New York.” W rite for our booklet N ew Y ork T itle a n d M o r t g a g e Com pany Capital Funds over $ 6 0 ,0 0 0 ,0 0 0 135 Broadway, New York City Secure as Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Bedrock, D e c e m b e r 1928 of New York. companies restrict their operation to com munities having a sufficient volume o f business to support aerial service, the successful progress in this phase o f the industry will be centered in the hands o f the large and more efficiently managed companies. Economic Aspects “ Capital requirements fo r air trans portation are much less than for rail roads which have a vast amount o f capi tal invested in track equipment. Thus fa r capital fo r the development o f aero nautical enterprises has been obtained from the sale o f common and preferred stock. Eventually air lines may be fi nanced by the issuance o f various types o f bonds, including equipment trust cer tificates, but not until the industry has passed from its present promotional stage and is composed o f companies having a record o f earnings established through sound economic management. “ O f vital importance in this connection is the development o f adequate insurance policies covering* airplane equipment. The first step in the use o f bonds for air plane financing has been made by the trustees o f the Guggenheim Fund who authorized an equipment loan to the Western Air Express Company for the operation o f a model passenger airway between Los Angeles and San Fancisco. The experience o f this loan, it is hoped, will be useful in form ing a basis fo r fu ture airway financing. Investment Considerations “ The spectacular performances in 1927 stimulated the investing public, and money everywhere seemed to be available for aviation ventures. So marked was this develojnnent that Lindbergh issued a warning against investment in ill con sidered projects and questionable promo tions. Many o f the present companies are in the hands o f inexperienced opera tors who fail to appreciate the economic aspects o f their business and do not keep accurate records of their methods and re sults. The numerous transport compa nies operating in unprofitable territories and those failing to set aside depletion and depreciation reserves from earnings cannot be expected to prove successful. “ Many investors fail to consider that the industry is yet very young and in a decidedly unstable condition. One o f the outstanding adverse conditions appears to be the possibility o f overproduction due to the attraction of much outside capital and inexperienced management into this new field. Several years o f care fu l research and actual experience will be necessary fo r the determination o f profit able rates and economically sound meth ods o f management before the aviation industry can be considered a field for conservative investment. Only those com panies which have been most active and 71 whose activities are well diversified within the industry are worthy o f present consideration fo r speculative invest ment.” Moody Forecasts Future Prosperity By J o h n M oody President, Moody's Investors Service, Inc. “ The eight years which have passed since the Presidential election o f 1920 have been epochal years in the economic and financial history o f the United States. Not only have they been years o f progress and growing prosperity, but a silent revolution has been going on in methods o f production and distribution. The introduction and development of new industries, the expansion in volume and output o f older industries, the per fection o f methods fo r developing effi ciency, cutting out waste and speeding up deliveries o f goods; the knitting to gether o f business activities o f every kind into1 larger and more harmonious units; these are a few o f the things which have characterized the period since the abnormal years o f the W orld War. “ More and more, the corporate indus tries o f the United States are becoming the property o f the p u b lic; more and more are individual citizens investing their wealth and their savings in corpo rate securities. It is estimated that per haps 15,000,000 men, women and children today own stocks or bonds o f one type or another; millions more are indirectly affected by such ownership. And the end is not yet. N ew Era Starting “ In my view, this new era in America is in its first stages only. The coming dec ade will witness its expansion and ex tension fa r beyond its»present state. It therefore behooves the American business man, the banker, the security dealer, the many who perform constructive service in these fields, to grow with the country, scan the future in the light o f the pres ent, and continuously develop facilities fo r the larger business life which is loom ing in the years ahead. “ The background o f American wealth production has undergone profound changes since the pre-war days. Unsound banking, political unsettlement, high fi nance and labor unrest are a few o f the things that were always a menace to busi ness in the pre-war days. None o f these things have been outstanding in this country during the last eight years, while the steady recovery o f Europe (especially in the last four years) has had a continu ously constructive influence on America. Stage Set Soundly “ Thus has the stage been soundly set for the remarkable period o f prosperity in which America now finds itself. And Southern Power & Light Company One Year 5 % Gold Notes Essentially an electric light and power obligation. No mortgage debt can be placed upon properties. Property value over 2Vo times funded debt. Earnings over twice annual inter est charges. Due November 1, 1929. Price 99 yielding 6%. A Bank investment in which the short maturity eliminates th e problem of market fluctuation. Full descriptive circular will be sent upon request without obliga tion. QUAIL £ IM M ljy . UVq BONDS FOR INVESTMENT American Bank Building D A V E N P O R T , IO W A Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 72 “ W ith this vast broadening o f corpo rate activities, the machinery facilities fo r the financing of this modern business giant have become immensely greater than ever b e fo re ; investment banking, for the mobilizing o f investment capital, has become one o f the gigantic cogs in the wheel o f American life. And all other activities necessary to serve this eco nomic giant, such as engineering, audit ing, research and statistical facilities, have been obliged to steadily expand their facilities. “ I f there is any logical explanation for the unprecedented volume o f sustained stock trading during the past year or two, it is wrapped up in the facts that I have outlined above. It is being over done, yes; but its basic causes are those which I have stated.’’ the structure which has been built up on this foundation is still in the making. The American economic child o f thirty years ago (then so dependent on Europe for much o f its financing) has become a giant; not only has it vastly increased in size but it has evolved into a mammoth corporate mechanism. Wealth produc tion o f almost every nature has gone into the corporate form and all industries are steadily changing into larger and larger corporate units. Industries and methods which hardly existed or were in their in fancy eight years ago are now becoming outstanding features in our economic life. Witness the marvelous development of the chain store and mail order move ments, the astounding development of the motion picture and motor industries, the radio and aeronautical industries. M o r e p r o fit from present depositors By offering your depositors bonds recommended by The National City Company you not only create another source o f profit for your bank, but also give your customers the benefits of National City knowledge o f bonds and bond markets. The world-wide facilities o f this Company are available to you whenever you say the word. May we send you our special Bankers’ List? It will keep you in touch with attractive current offerings. The National City Company National City Bank Building, New York Offices in more than 50 leading cities throughout the world BONDS ' SHORT Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis T E R M N O TE S December 1928 ' A C C E P T A N C E S Worth a M illion to His Home Town ( Continued from page 18) ture heads had been baffled by the prob lems of obtaining the right o f way and financing construction. How this youth accomplished this almost superhuman task, with the aid o f those friends he had made in the real estate business and in school, would take too long to recount here, but suffice it to say the road was finally fin ished and is still in operation today. Task No. 2 o f his life, that filled a longfelt need, was the opening o f a brokerage office at Hot Springs, where prominent capitalists were wont to spend their vaca tions. Realizing these men needed the op portunity to keep in touch with their o f fices, Lonsdale arranged for a direct tele graph line to the East and fitted up a brokerage office. Thus he came in almost daily contact with the men o f finance and it was but natural that his engaging man ner should win him extensive patronage and valuable friendships. It was only a short time, therefore, and before he had reached the age o f 30, that he became a prominent figure in the brokerage world and New York offices were bidding high fo r his services. A c cepting one o f these offers in 1904, the year o f the Great W orld’s Fair in St. Louis, he became a partner in the banking’ and brokerage firm o f Logan and Bryan. W on Financial Fame In the next ten years Lonsdale’s name was more firmly impressed than ever on Wall Street. He handled large deals and won fame and success as a financier, his fundamental training in the real estate field and in the brokerage office at Hot Springs enabling him to grasp thoroughly the new details of larger and more com plicated financial transactions. One day his financial ability came to the attention o f The National Bank of Commerce in St. Louis. At that time the bank Avas in need o f a man o f financial Avisdom and vision. And so it came to pass that in 1915, Lonsdale Avas called upon to become president o f “ Commerce,” a posi tion which he has held ever since with in creasing efficiency. In St. Louis he at once became a per manent fixture and launched Avith zeal into all sorts o f civic Avork, so before he had been here five years he Avas appraised by one editor as being “ Avorth more than a million-dollar plant to the city.” The esteem in AAdiich he is held has con tinued to gloAV, not only locally, but na tionally, and he is called upon on numer ous occasions to head this or that com mittee, or to take part in varied activities that look forward to local or national improvement. To read the list o f his activities one AA’ould AA7onder Avhen his Avork ends, and 73 yet he handles his many duties with ad mirable poise and ease o f mind. Here are some o f his present activities : Presi dent o f National Bank o f Commerce, Chairman o f Board o f Federal Commerce Trust Company and head o f St. Louis Commerce Company, both affiliated Avith the National Bank o f Commerce ; Director Federal Reserve Bank, Eighth District ; Director Missouri Pacific Railroad, Presi dent St. Louis Clearing House Associa tion, President Bankers Club o f St. Louis, First Vice President American Bankers Association, Director o f Cham ber o f Commerce o f United States, repre senting finance, and a member of Foreign Commerce Advisory Committee. Has Held Many Posts In the past he has held many high posts in the work o f the American Bankers A s sociation such as President National Bank Division, Chairman Rail Consolidation Committee and memberships in many com mittees. Similar important posts have been given him in the United States Chamber o f Com merce, including the chairmanship o f the Committee on Aeronautics, membership on a Business Men’s Commission on A gri culture, appointed jointly by The National Industrial Conference Board and The Na tional Chamber, and member o f Flood Control Committee, in addition to numer ous other committee assignments. These outside duties are taken seriously by Lonsdale because it is a part o f his makeup to want to see constructive move ments succeed. He feels that it is a part o f his duty to humanity to put his shoulder to the Avheel Avhenever the call comes, whether it be civic Avork or banking. But it must not be inferred that these activities take up his time to the exclusion of important banking Avork. SomehoAV he seems to find time, without confusion to go from one task to another Avith fresh vision and energy and to dominate Avhatever situation arises. The fact that he has built up The National Bank o f Commerce in St. Louis to a commanding position, AAffiere it is noAV recognized as one o f the great banks of the nation, is living testi mony to the effectiveness o f his financial skill and banking ability. Kentucky State Telephone Company First Mortgage 6% Gold Bonds Series “A ” Dated September 1, 1928 Due September 1, 1948 Price 99 and Interest to Yield 6.08% 77v C o m p a n y agrees to p a y in te re s t w ith o u t d e d u c tio n f o r a n y n o r m a l F e d e ra l I n c o m e T a x u p to 2 % . T h e fo llo w in g in fo r m a tio n i s ta k e n f r o m o ffic ia l so u rces: The properties of the Company are located in 9 counties in the well known Blue Grass region and the rapidly developing coal and industrial area of Eastern Kentucky, serving a combined population of 98,000. The Company serves 3,494 stations. The properties are excellently located for future expansion, and it is the inten tion of the Company to materially increase the present number of stations and communities served. Hagenah & Dorsey, Independent Engineers, have valued the physical properties of the Com pany at a reproduction value new of $699,079, and after allowance for depreciation a sound value of $381,308, or 199% and 166% , respec tively, of this $350,000 issue of bonds, the sole funded debt of the Company. Earnings available for interest audited by Messrs. Haskins & to $48,708.17, or more than 2.3 mum annual interest charges of requirements as Sells, amounted times the maxi $21,000. Management of the Company is in the hands of executives and engineers who have had many years of practical experience in the telephone business. We recommend these bonds for investment and shall be pleased to send circulars describing the issue in detail. Resigns Post as Comptroller The resignation of Joseph W . McIntosh, comptroller o f the currency, was received by President Coolidge and accepted im mediately. Later in the same day the President announced the appointment of John W . Pole o f Ohio as comptroller. Mr. Pole was chief o f the national bank examiners. Previously he had served as national examiner in the Fourth Federal Reserve district and as chief examiner o f the Sixth district. He became chief na tional examiner in 1924. TRU E SECURITIES CO. David O. True, President 231 South La Salle Street Telephone Central 6556 CHICAGO Norlhivestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 74 “ Your Money and Mine” — H o w O CAREFUL are life insurance com panies in the investment o f the mil lions that policyholders are con stantly pouring into the companies’ treasuries that the science o f selection has been extended to embrace a diversi fication extending in fou r directions. W ilbur Sherwood, assistant cashier of The Travelers Insurance Company, Hart ford, Conn., an an address before the Financial Section o f the American Life Convention in St. Louis recently, ex geographical allocation; by diversifica tion on the basis o f kinds and divisions o f industry, and fourth on the basis o f maturity. “ Starting with a few investments near at home the degree o f diversification will naturally be increased with the growth of the life insurance company. Moderate amounts in many different issues will be found in the lists o f investment securi ties published by many o f the larger companies.” plained this multiple diversification. In order to insure maximum safety, in vestments are made by division as per tains to mortgages, bonds and stocks; by In discussing diversification as to kinds and divisions o f industry, Mr. S Diversification Trading Facilities Our trading department has complete facilities for the execution o f on ders in unlisted Stocks and Bonds. MR. ED W A R D J. KELLY Manager Investment Department Orders solicited for Listed Stocks and Bonds E S T A B L I S H E D 1895 BABCOCK, RUSHTON MEMBERS NEW YO RK STOCK EXCHANGE CH IC AG O S T O C K E XC H A N G E C H IC A G O BO A R D OF T R A D E 137 S O U T H L A S A L L E S T R E E T C H IC A G O Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 & CO. Is In v ested Sherwood said public utilities may be safely bought, but one should include several, such as electric light and power, water, telephone and telegraph, gas, transportation, etc. Investments thus made gain a tw o-fold diversification. The practice o f selecting proper ma turities is follow ed by most careful in vestors because it has a tendency to keep investments liquid and at the same time permits unlimited discretion so fa r as it relates to the selection of future dates when funds may be invested and rein vested fo r greater periods o f time and at more satisfactory rates o f interest. The problem o f the investment o f life insurance funds is not one o f simply put ting the funds to work at interest, Mr. Sherwood pointed out. “ It is more espe cially a problem of investing funds safely and profitably and at a satisfactory and proper rate o f interest.” Figures contributed by fifty-two legal reserve life insurance companies to the Association o f L ife Insurance Presidents show that at the close o f the year 1927 there was a life insurance fund at work estimated to be fourteen billion, five hun dred million dollars, Mr. Sherwood said. “ This compares with less than six billion dollars ten years ago. Last year the ad mitted assets of the country’s life insur ance companies increased more than one and one-half billion dollars. Reports re ceived this year indicate that the end of the year 1928 will show assets further increased by more than 11 per cent.” A t present mortgages appear to be most favored as life insurance invest ments. Of the total estimated assets o f all United States life insurance com panies, amounting to fourteen billion, five hundred million dollars, 43.4 per cent was invested in mortgages as o f December 31st, last year. Bonds and stocks repre sent nearly five million dollars, or 37.3 per cent o f the total estimated assets. Mortgage Holdings O f the 142 life insurance companies comprising the total membership o f the American L ife Convention at the close o f business 1927, 70 per cent o f the member companies, it was asserted, each held be tween 43 and 78 per cent of their total admitted assets in mortgages. At the same time each o f only nineteen member companies, or less than 14 per cent o f the total membership, held stocks and bonds equal to 37 per cent o f their total assets. United States government bonds are held by life insurance companies as a sec ondary reserve in lieu o f cash. A t the 75 close of 1921, largely as an answer to the call o f the government, life insurance companies held more than eight hundred million dollars o f these securities. Dur ing the years that have followed, there has been a decrease in these holdings be cause o f the low rate o f return, and today life insurance companies have only a lit tle over 3 per cent o f their total combined assets in such investments, as compared with more than 10 per cent in 1921. An investment in government bonds, if held fo r a period of years, will show a profit or loss according to the purchasers abil ity to estimate the future trend o f money, and not on the quality o f the bonds, ac cording to Mr. Sherwood. He adds that it is well to remember that with money rates approaching lower levels long term bonds o f similar coupon rate and secur ity will appreciate in market value to a greater degree than bonds o f a shorter maturity. Among the various choice investments o f life insurance companies which Mr. Sherwood mentioned are state bonds, is sued principally for bridge and road con struction, and municipal bonds. State bonds, however, because o f their high price and consequently low yield as com pared with bonds o f principal cities, are not so eagerly sought by life insurance companies. Municipal bonds are desirable invest ments for life insurance companies and especially so when issued fo r water, sewer, school, road and other construc tive purposes. The legality of the pro ceedings relating to the issue must always be investigated thoroughly by a compe tent attorney, and if the bonds constitute a direct obligation o f the municipality and are payable both principal and inter est from unlimited taxes against all the assessable property, the bonds are worthy o f consideration. In connection with his discussion o f municipal bonds, Mr. Sherwood also cited the principal causes o f default in bonds by counties and municipalities. These he listed as fo llo w s: A desire for improvements which they cannot afford. The issuance of bonds by small strug gling communities where the property and taxing power is not sufficient to provide fo r the payment o f principal and interest. Misfortunes, such as disastrous floods, fever epidemics, etc. in the holdings o f these securities by life insurance companies. Those respon sible fo r acquiring such investments, how ever, need a wealth o f understanding and statistical knowledge o f securities, it was declared. The railroad equipment trust certifi cate is one type o f railroad securities where default of principal and interest is practically unknown, Mr. Sherwood says. Ordinarily they are issued fo r not more than 75 per cent o f the total and proper cost o f standard new equipment. The lease executed by the trustee to the railroad usually calls fo r a rental charge sufficient to pay the principal and inter est o f all the certificates as they mature. The bonds o f public utility companies A Bank’s Service To Banks T O D A Y ’S in Vesi me n t opportunities ^ or those inv estors who buy sound securities on intrinsic values, wisely appraised— whose judgment is unwarped by “ mass psychob ogy” — today’s in v e s tm e n t markets afford great opportunities. There has been a temporary neglect o f sound investment issues on account o f current speculative activity. M oreover, abnormal stringency in the money markets has for the present eliminated many banks and financial institutions as purchasers. A s a result, the p ru dent buyer can obtain today long' term securities whose income return is attractive under ex isting circum stances. A s speculative co n d itio n s and money rates return to normal the p rices o f sound bonds and p re fe rre d stocks should advance materially. Investm ent values in the public utility field are based on the econom ic progress of the nation. D escriptions of a number of issues which we recom m end for im mediate purchase will be sent on request. ust M and c o m p e tent, o f course, but we add something — a personal inter est w h ich assures s a t i s f a c t i o n and indefinite continu a tio n o f th e r e la tionship. On these terms w e invite y o u r business CHICAGO GLOhrsirqmô Co. TRUST INCORPORATED Railroad Securities Securities o f the leading railroads have been and should continue to be a prime source o f investment fo r the funds o f life insurance companies. A t the close of 1927, 19.5 per cent o f the total assets of life insurance companies were invested in bonds and stocks o f railroads. The total amounted to two billion five hundred seventy-four million dollars. In a year there was an increase of over 7 per cent be prom pt F o r t y -F our W a ll Street Hew York P H IL A D E L P H IA 225 So. 15th St. BOSTON 30 Federal St. C H IC A G O 231 So. La Salle St. LOS AN G E LE S 548 So. Spring St. M IN N E A P O L IS M cK night Building D E T R O IT Buhl Building M IL W A U K E E 425 E. W ater St. ST. LOUIS Liberty Central Bldg. COMPANY LUCIUS TETER JOHN W. O’LEARY President Vice-President CHICAGO SAN FR A N C ISC O Russ Building Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 76 form a type o f security which has be come increasingly attractive to life insur ance companies within the last five years. The investments in public utility obliga tions have more than doubled in this fiveyear period, so that now life insurance companies hold nearly 8 per cent o f their assets in the bonds and stocks o f these companies. At the end o f May, 1928, life insurance companies held nearly 35 per cent more public utility bonds and stocks E. H. O ttm an & Co. Incorporated In v e s tm e n t S ec u rities Underwriters Wholesalers Participating Distributors The time probably will never come, in the view o f Mr. Sherwood, when stocks, regardless o f legality, will occupy in the investment list o f life insurance com panies a position comparable with either mortgages or bonds. Stocks represented in 1927 less than 1 per cent o f the ad mitted assets of life insurance com panies. Earning power, first, last and always, must be increasingly evident, it was said. An investment in stocks, how ever, does not necessarily imply specu lation. “ The risk finds its best expres sion in the ratio o f current return ex pected on the capital.” In the banking and trust company field there are choice investments represented by shares o f common stock. For the most part there are no preferred stocks or bonds ahead o f these shares. Public Utility, Industrial and First Mortgage Real Estate Bonds B ankers B u ild in g than at the same time the year pre viously'. As with the securities o f rail roads, here again the analysis must be exhaustive. C hicago The investment buying power o f life insurance companies is a business sta bilizer o f tremendous magnitude. “ When securities are Ioav, why should we not buy them, and contribute our bit, using the force o f a portion o f our investment power toward the stabilization o f values so fa r as it relates to thoroughly tried and tested high-grade preferred and com mon stocks?” In s u r e d B o n d s N a t i o n a l Distributors of Guaranteed First Mortgage Real Estate Bonds yielding 6 per cent. These bonds are indorsed by Surety Companies whose names appear on the Government Ap proved list. Bank and Dealer Inquiries Invited. H. S M I T H & C O M P A N Y T H E B A N K E R S B U IL D IN G 105 W est Adams Street CHICAGO Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 Mr. Sherwood said it would be inter esting during the coming years to watch the stabilizing value o f this great buying power and its attitude o f encouragement toward future financing through the me dium o f preferred shares o f stock, as a result o f the passage o f the Wales-Merriman act by the New York State legisla ture. This act permits life insurance companies o f New York State to invest in preferred shares o f many corpora tions, subject to well-defined and proper restrictions. The certainty o f the investment must ever be the paramount consideration o f life insurance companies, Mr. Sherwood says. “ W e must be diligent and compe tent and need no instruction in common honesty. Neither we nor those with us must relinquish our study of the funda mental principles o f economics, o f invest ment, o f all that will help to make a safer and greater contribution to our country and our policyholders through the me dium o f our investment funds.” The sublimity o f administration con sists o f knowing the proper degree of power which should be exerted on d if ferent occasions.— Montesquieu. Our bravest lessons are not learned through success, but misadventure.— Alcott. 77 Announce New Corporation The National Bank o f the Republic has announced the formation o f a new affili ated corporation, to be known as The National Republic Industrial Service Corporation, which will render analytical and reconstructive service to corpora tions or business firms which are not mak ing' proper financial progress. “ I have felt for many years that a com pany o f this sort could render construc tive service,” said George Woodruff, vicechairman o f The National Bank o f the Republic, in announcing the new corpora tion. “ I feel that losses can be avoided by not only the creditors but also by the stockholders o f business concerns if un profitable practices and procedures can be detected and stamped out prior to the development o f financial weaknesses.” The combined capital and surplus o f the Seaboard National Bank will be $25,000,000, as soon as the capital issue ap proved by the Directors is authorized by the stockholders and approved by the comptroller o f the currency. It is expected that the present dividend rate o f 16 per cent on Seaboard Bank stock will be continued after the consum mation o f the capital increase. Sub “ The National Republic Industrial Service Corporation will make a thorough analytical survey o f administrative, pro ductive and distributive activities and will outline a proper schedule fo r future successful operations. In case additional capital should be considered necessary or if a refinancing program should be de cided upon, The National Republic In dustrial Service Corporation will be in an advantageous position to offer attractive underwritings to banks or investment banking houses.” Arthur J. Hughes, now a vice president o f The National Bank o f the Republic of Chicago, will be president o f this new corporation and the executive officers of the bank will act as an advisory com mittee. bonds offered by this company are safeguarded by our careful study of their adaptability to bank investment. They are favorite in vestments of careful bond buyers who seek safety of principal first and fore most. Ca Write for detailed circulars. r l e t o i ^ D . B IN V E S T M E N T The $6,000,000 of additional capital which will be paid in as a result o f this proposal is to be employed as follows : An increase o f $2,000,000 in the capital stock o f the Seaboard National Bank, bringing it from $9,000,000 to $11,000,000; an in crease in the surplus o f $3,000,000, bring ing the surplus from $11,000,000 to $14,000,000; and the remaining $1,000,000 to be allocated to the Seaboard National Corporation fo r an increase in the capi tal funds o f that subsidiarv from $2,250,000 to $3,250,000. Great personages, who are selfish and whimsical, are generally surrounded by parasites and buffoons.— Disraeli. u n ic ip a l M To Increase Capital Stock A t a special meeting o f the Board o f Directors o f the Seaboard National Bank held last month, it was decided to call a meeting o f the stockholders to authorize an increase in the bank’s stock from 90,000 to 110,000 shares. It is proposed also to increase the stock o f the Seaboard National Corporation by a like number o f shares. Units consisting o f one new share in each institution will be offered fo r subscription to shareholders pro rata at the rate o f $300 per unit. Accordingly, each holder o f fou r and one half shares o f stock o f each institution will be en titled to subscribe to one new unit. scription warrants fo r the new shares will be issued on December 14, 1928, to stock holders o f record on that date, and the right to subscribe fo r these shares will expire December 29, 1928. e u o . S E C U R IT IE S S U I T E 51 8 L I B E R T Y B L D G . DES D M O IN E S, a w e s 6 ? C IO W A o m p a n y IN C O R P O R A T E D Investment Securities 39 SOUTH LA SALLE STREET Chicago Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis C December 1928 78 Building a Bank on Security and Service ( Continued from page 21) First, that o f protecting the funds o f its depositors beyond any possibility o f loss; and secondly, that o f investing its money T he D in enterprises which were not only safe, but economically beneficial to the com munity. Security to the depositors, and service to the community, have become the watch words o f this great Los Angeles bank. e t r o it C o m pan y A ffilia te d w ith D etroit and S ecurity Tkust $ mpany W e maintain active markets in the follow ing bonds : . 5’s 1956 . . 4 K ’s 1967 Commonwealth Subsidiary Corp. . 5UTs 1948 . 5’s 1948 . 5*s 1967 . 5’s 1932 Central 111. Public Service Co. Public Service Co. Northern Illinois In q u iries are invited 137 South LaSalle Street C H I C A G O A. B. Leach & Co., Inc. Underwriters and Distributors o f Investment Securities Government Municipal Public Utility Industrial Private Wire Connections to Principal Cities 39 South La Salle Street, Chicago N E W YO R K Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis S A N F R A N C ISC O December 1928 Today the Security Trust & Savings Bank stands as striking evidence of the soundness o f the principles upon which it was founded. It is today the largest bank west of Chicago operating in a single met ropolitan district. It has more than 328,000 depositors, equal to one out o f every four residents o f the district in and about Los Angeles in which it is established. The officers o f the Security Bank be lieved from the beginning that the secret o f the bank’s growth would lie in the de velopment o f the community. Therefore, as time has recorded the years, officers and directors o f the bank have been identi fied with every major forward movement o f the city o f Los Angeles. They have seen it become one o f the five largest cities in America. In 1889 the population o f Los Angeles was 50,000. At the end o f the same year the Security Trust & Savings Bank had total deposits o f $154,007, or $3.08 for every person in the city. Today the popu lation of the city is estimated at about 1,250,000. Today the Security Trust & Savings Bank has total deposits o f $252,000,000, or $200 fo r every one of the pres ent population. In 1889 the business section o f Los A n geles consisted o f a few low buildings in the vicinity o f the Plaza. Today the cen tral shopping area o f Los Angeles is spread from First Street to Figueroa Street. I 11 1889 the Security Bank occu pied one room in a building at First and Main Streets. Today it occupies, with its branches, ground floor space in 56 modern buildings. And the city and the bank con tinue to grow, each with a feeling o f friendship and respect for the other. From 1913 to 1918 J. F. Sartori wTas a member o f the Currency Commission o f the American Bankers Association, and during 1914 he was president o f the Sav ings Bank Division o f the American Bank ers Association. From 1908 to 1928 lie was a member o f the Legislative Commit tee o f the California Bankers Association, resigning last June at the time o f the con vention o f the association. He is credited with the authorship o f the California Bank Act, a model of legislation since copied in many states. Bank failures in California since its passage are said to have been the smallest in number o f any state in the Union. Mr. Sartori is president o f the follow ing organizations : The Los Angeles Clear ing House Association, Security Com pany, the investment subsidiary o f the Security Bank; Subway Terminal Cor poration o f Los Angeles and the Security Bank o f Alhambra. He is vice president and director o f the Central Investment Company. He is director o f the follow ing institutions: Los Angeles Branch o f the Federal Reserve Bank o f San Fran cisco, Morris Plan Company o f Los 79 Angeles, Central F ireproof Building Company, Century F ireproof Building Company, Chester F ireproof Building Company, and Commercial Fireproof Building Company. Mr. Sartori called and presided over the group o f men who built the Biltmore Hotel and Avas the dominant figure in the conception and erection o f the Subway Terminal Building. His social activities are centered in the Los Angeles Country Club o f Avhich he is president and the California Club o f which he is a past president. Mr. Sartori helped found the former club and has been re elected president fo r fifteen terms. He is also a member o f the Johnathan Club, University Club, MidAvick Country Club, Los Angeles Athletic Club, Crags Country Club, Phi Delta Theta fraternity, the His torical Society o f Southern California and is a director-member o f the Automobile Club o f Southern California. Mr. Sartori Avas married in June, 1886, to Margaret Rishel at Le Mars, Iowa. Mrs. Sartori is a regent o f the University o f California in Los Angeles and is active in the affairs o f the Federation o f W om en’s Clubs. Mr. Sartori, as president o f the Secur ity Trust & Savings Bank, Avith resources o f more than a quarter-billion dollars, is head o f the eighth largest bank in the United States, outside o f NeAv York City. It has fifty-three branches in the Los A n geles metropolitan area. He has achieved a notable place in financial circles through his keen insight, his exceptional grasp of the broader principles o f finance, his sound judgments and sterling integrity. fT ^ H lS — is institution was organized now being conducted— and will continue as a conservative investment banking organization— with progressive management. R/ÏY M P M N iY IN C O R P O R A T E D IN V E S T M E N T S E C U R IT IE S L IB E R T Y B U IL D IN G DES M O IN E S TELEPHO NE. W A LN U T 3 9 1 7 W ill Resist Guaranty Assessment ( Continued from, page 26) o f auditing each going bank at an aver age o f $300 and each receivership at $175. Other indications o f the restive atti tude o f the state toAvard the bank guar anty law have come from Bridgeport and Yerdel. Depositors of two failed banks at Bridgeport decided to ask the legislature to make a thorough investi gation o f the methods o f the guaranty fund. The Bridgeport State Bank Avas closed three years ago, and then was operated by the commission until its as sets were sold. Depositors say they have received only 10 per cent o f their deposits. The Nebraska State Bank at Bridgeport, which closed last April, has paid 15 per cent, they say. A t Yerdel, A\There the Farmers State Bank Avas taken over by the commission in Jnly, 1925, and operated fo r two and a half years before finally closing, de positors say they have received nothing. A Group of Attractive Utility Securities R ate D ue Yield About 5s May 1948 5-35% Iowa Southern Utilities Co. 5 h July 1950 5.40% Southern Ind.Tel.U Tel. Co. 6s June 1947 6 .0 0 % General W ater W orks Corp. 5s June 1943 6 .0 0 % Council BluSs Gas Co. . . Federal Pub. Serv.Corp. Pfd. 6 W o 7.00% Descriptive Circulars on Request H o aglan d , A l l u m ò ( o. IN C O R P O R A T E D 14 S. La Salle S t C H IC A G O 34 Pine St. N E W YORK Punishment o f a miser— to pay the drafts o f his heir in his tomb.— Haw thorne. Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December Î928 80 R O Y A L U N IO N L I F E IN SU R A N C E C O M P A N Y DES MOINES, IOWA A Fast Selling Policy A “ best seller” of the day is our Ordinary Life Coupon policy. It is the last word in thrift and savings, coupled with life insurance. By cou pons it may be made a paidup participating policy in 11 to 22 years, or an endowment in 25 years. death this In great event of contract gives protection at ordinary life rates and refunds cou pon amounts at compound interest. No wonder it is a fast seller. It sells itself. R o y a l Union L ife B uilding C orner S eventh and Grand A v en u e D e s M oin es, Iow a R O Y A L U N IO N L IF E IN S U R A N C E Des Moines, Iowa A. C. TUCKER, President Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 COMPANY 81 In s u r a n c e AM o f the belief that contract than one which I the greatest weapon in delivered a very short time the world with which to after going into the busi tight Bolshevism and Reds ness. It was in the city o f is property ownership and Seattle, Washington, and it ownership of a Life Insur wTas to an executive o f a ance policy. We never find car corporation. He had the spirit o f Bolshevism ris an income o f $18,000 a ing where there is peace year, and in those days that and contentment, w h e r e was considered a very good there is property owner income. He owned a beau ship, where that thing that tiful city home and a cot inspires the buying o f a tage by the lake. He had policy contract is present, three automobiles, one for and after I consider the power o f Life In his wife, one for his daughter and one for W hat this great institution is surance, I think o f its functions, I think himself. He was then a director o f many doing to make America a bet o f Life Insurance in action. I believe corporations, although only 36 years o f ter place in which to live. perhaps the two greatest functions o f Life age. His wife and daughter and his Insurance are, first, to pay debts and to mother-in-law were on their way to the B y JOHN W . YATES leave an individual square with the world city o f New York preparatory for the General Agent when he passes away, and the second daughter and grandmother to spend a year Massachusetts Mutual Life greatest thing that I believe, for the in Europe, where the daughter was to largest number, is to continue income after study. On the way there, they received a it has been cut off. Every individual on wire from this man saying that he had a as the man would distribute them if he the face o f this earth must some day have light case o f smallpox, nothing to be wor were here, so that the only difference is their income entirely cut off by one of ried about. On their arrival in New York that he is not here to sign the checks. May three things. Either from old age gradu they received a telegram that he was dead. I ask you to get that picture so clear in ally coming on, the hardening o f the He died about 6 o’clock in the morning; mind that you will never forget it— that muscles, the dying down o f the winds that at 3 o’clock that afternoon he was cre Life Insurance reaches out and pays the fail before the ship has finally crossed mated. They thought the nurse must have economic value o f a Life Insurance policy life’s seas; or disability, the loss o f earn poisoned him by mistake. in every pay check that a man would get ing power whereby a man becomes a con during his entire lifetime. Innumerable It just happened that he had this life sumer o f income rather contract with our com than a producer o f in pany providing for $150 come, when he still con per month payable to The Results of Life insurance tinues to need the things his wife during her life that i n c o m e produces time. The family rushed "1 cannot think of the power of Life Insurance without thinking but has no income with back to the city of Seattle, of that great amount of twelve billion dollars which has been col which to produce i t ; and and when they rounded lected from the byways and the highways of this great country of finally the thing that I up the estate, they had always mention last in ours, that section of the money that has largely been salvaged, that to sell the automobiles. any talk, Death, that It was necessary to sell would have otherwise been placed in other less worthy channels, monster demon that has their city home and to that has been brought to this particular canvassing machinery of no respect for persons, move into the cottage by Life Insurance companies, in order that this vast total might make that usually comes at the lake, and when the the wrong time and cuts wife came to our office, America a more wonderful place in which to live.” off income and there she was disappointed fore causes man’s plans that on $15,000 worth o f millions o f dollars are placed in the reser o f life to fail in their fulfillment. insurance, $5,000 o f which was paid to the voir o f funds o f Life Insurance com bank for a loan, she received a check for W hen Everything Else Fails panies, to be distributed back again to only $150. She said that she had splendid those people that need it. O f all the plans devised by intelligent opportunities, places in which she could men since the days o f Adam, we have the put her money. She mentioned four o f I ask you to think o f a train leaving only institution and the only business that them, and she had absolute faith in them, the city o f Washington each night loaded begins to function where everything else especially one, which was a second automo with a cargo o f four million dollars o f fails. Any other plan o f creating an es bile concern guaranteed to pay 25 per cent, money in cash, making a trip around tate, any other plan o f providing for the dividends. Reduced, if you please, from America, through every valley, dale, and members o f a man’s family after the loss the height of prosperity to the depths of hill, and distributing to the needy people o f earning power, has failed. But we re despair. The day that Mrs. Yates left for at each and every country in this great move those hazards. Life Insurance Chicago, this widow called up and said I America o f ours, that portion o f a man’s reaches out into the future, five, ten, fif had been very kind, and would we be in earnings which he contracted should be teen twenty years, yes, for a lifetime. terested in renting her piano for $5 a delivered to somebody else when he is no Life Insurance companies guarantee the month. But as the sun sinks down into longer there. distribution o f the earnings o f that man the lake o f Washington tonight, sadness who has put it into a policy contract. I think perhaps that I never received will probably come into the hearts o f this They guarantee to distribute them exactly greater satisfaction in my life from a life little family, but at the same time gladness I BY - PRODUCT! Life Insurance Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 82 will be there that this month and every month for the past seven years and every month through the entire lifetime of this little woman, that check will be delivered to the front door o f that little cottage so that she knows that her children and her self cannot come to want. “Where There's Smoke There May Be Fire" Furnaces, stoves, open fire' places— -all contribute to the warmth of your de' positors. A flying spark, a misstep, carelessness, neglect — a 11 contribute to the danger of being “ put out in the cold." Caution your clients to be cautious. Cautiousness includes full coverage w ith an Iowa N ation al Fire Insuran ce Policy. The Tall Grown C om pany in the Tall Corn State Io w a N a t io n a l Fire Insurance Company DES MOINES Fire, Lightning, Tornado, A utom obile H Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 The Heart of Life Insurance And I think that the very heart o f Life Insurance is monthly income. Let me say to you that the reason fo r buying Life In surance is not because the insured is going to die, in that case he is as useless in the picture as the man is at the wedding, he is just being operated on, that fellow. The reason for buying Life Insurance is not because the insured or policyholder is go ing to die, but because somebody else is going to live and must be provided for. The very name itself suggests that. It is called Life Insurance, if you please, be cause it sustains life, and the only plan of insurance that sustains life is monthly income.— From Sales Congress Address. May Boost Omaha Rates Notice has been served on Omaha offi cials by W illiam D Rohan o f New York, fire engineer fo r the National Board of Fire Underwriters, that unless imme diate measures are taken to restore the fire fighting forces o f the city to normal, rates will certainly be increased. The commission recently cut down the amount available fo r the department during the remainder o f the year to such an extent that the number o f firemen on duty at one time is materially decreased. Mr. De Rohan is in Omaha to supervise an in vestigation o f fire prevention facilities. Joseph Barker, vice president o f the Foster-Barker agency, one o f the largest in the city, said that the rate increase will be from 20 to 50 per cent unless adequate relief is given the department. To Pay All Losses The Nebraska Insurance Department announces that all losses incurred by the State Hail Insurance Bureau will be paid in fu ll this year. Last year, Avitli twice the volume o f premium receipts, the fund was able to pay only 85 per cent o f its adjusted losses. Premium payments were but $21,386 this year compared with $51,000 last year. Losses this year were $19,602. Payment of losses Avill be made December 1st, by Avhich time county treasurers must ha\re their collections remitted. Issues No. 100,000,000 The Metropolitan L ife Insurance Com pany has issued industrial insurance policy No. 100,000,000. The company’s first industrial policy was Avritten in November, 1879, 49 years ago. Recently, in one Aveek, 73,779 other industrial 83 policies were issued by the home office. The total insurance represented by these industrial policies is approximately $14,750,000,000. To Meet This Month Stressing the present day mission o f business as a builder o f national unity, speakers at the twenty-second annual convention o f the Association o f L ife In surance Presidents will point to out standing achievements and paint a com posite picture o f further opportunities at hand. Accomplishments o f business in general and life insurance in particular will be discussed. Emphasis will be placed on the way in which business, by breaking down state barriers, is bring ing the people o f the East and West, the North and the South, into closer bonds o f a common understanding and purpose. The convention, as usual, will be held at the Hotel Astor, in New York, the dates being Thursday and Friday, December 13th and 14th. H old District Conference Fourteen representatives o f the North western National Insurance Company at tended a district meeting held at Crestón, Iowa, recently. H. O. Wilhelm, manager fo r Iowa and Nebraska, had charge o f the business session in the afternoon, and was the principal speaker at the banquet. The representatives came from Yillisca, Clearfield, Corning and Diagonal. Insurance Trusts Growing Our enormously increased wealth as a result o f this country becoming the money center o f the world and the great est industrial nation has been reflected in a greatly augmented personal and life insurance trust business in banking insti tutions throughout the United States, ac cording to W alter Tresc-kow, o f the Cen tral Union Trust Company o f New York. It is not possible to estimate the total of personal and life insurance trusts, Mr. Tresckow states, because complete figures are not available and also because the different banks and trust companies keep their books by different methods; some report par values Avhile others use market quotations fo r securities held in trusts. It is believed, however, that life in surance trusts alone approximate three quarters o f a billion dollars. Over and above this, the tremendous gain in the number of incorporated in dustrial enterprises, has swelled the ag gregate o f corporate trusts to many bil lions o f dollars, including those handled by state banks and trust companies as well as by national banks. In addition to the necessity fo r safe guarding properly the enhanced wealth o f the nation, another factor promoting the creation o f personal trusts has been the general realization o f the value o f experienced banking and trust company officers in handling the investment of trust funds and in settling estates. “ In the banking field,” it was stated by Mr. Tresckow, “ a result o f our appre ciation in Avealth has been to increase ma terially the number o f banks and trust companies having trust powers so that at present not far from one-fifth o f all the banks and trust companies in the United States are acting as trustees in either the personal or corporate trust branches or in both. “ A survey o f the situation shows that in the 26,389 state, national, savings banks, and trust companies in continental United States, 4,925, or 18 per cent, now have trust poAvers. As is natural, the older and wealthier states where there are large industrial units, and where numerous large private fortunes have -J O H N H A N C O C K S E R IE S - Insurance companies give the best odds in the world. EArery man knows in his own heart that an insurance company will bet him more than he is Avorth that he won’t die.” —Will Rogers. “ A Unique F eature of Management CTIVE direction by a com pact body of m en of large affairs is one of the excellent fea tures of Northwestern National Life’s m anage m en t. Of special im portance is the fact that the Board,through its executive and finance com m ittee of six m e m bers which m eets each week, m akes all the C om pany’ s investm ents and closely supervises its progress. I BOARD OF D IR E C T O R S |____ I *F . A . Chamberlain C'hmn. Exec. Com. First National Bank *E . W . Decker Pres. Northwestern National Bank *C. T . Jaffray President “ Soo” Railway ^Theodore W o ld Vice Pres. Northwestern National Bank E. L. Carpenter Pres. Shevlin, Carpenter & Clarke Co. A . F. Pillsbury Treas. Pillsbury Flour Mills Co. * T . F. W allace Pres. Farmers & Mechanics Savings Bank Frank T . Heffelfinger Pres. F. H. Peavey & Co. * 0 . J. Arnold Pres. Northwestern National Life Harry Haskins State Agent 206 Sixth Ave. Des Moines, Iowa Tel. Walnut 1033 * M e m b e r e x e c u tiv e an d fin a n c e co m m itte e Li f e I n s u r a n c e C o m p a n y ' of Bo s t o n . M a s s a c h u s e t t s 197 Clarendon St., B oston, M ass. O V E R S IX T Y -F IV E Y E A R S I N B U S IN E S S ------------------- Northw estern Na tio n a l LIFE IN S U R A N C E C O M P A N Y Minneapolis.Minn. STRONG Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis L IB E R A L December 1928 84 been built up, are found the higher per centages of banks so empowered. “ The lowest ratio is that o f North Da kota, where only 15, or 3 per cent, o f its banks are authorized to maintain trusts. Delaware’s percentage— 50— is the high est, although Vermont follows closely with 49.” Is Southern Representative Louis Jacoby, widely known among Southern business men not only in the realm o f commerce, but likewise in golf, is returning to the South from New York City as Southern representative o f the Seaboard National Bank o f New York City, with headquarters at Dallas. Mr. Jacoby, who has been connected with the Westinghouse Electric & M fg. Co., fo r nineteen years, most o f this time in the South, is a native o f Dallas. He had charge o f the Westinghouse offices at Dallas, from 1920 to 1926 when he was transferred to the New York City execu tive offices o f the Westinghouse Com mercial Investment Company. Mr. Jacoby left the Westinghouse Corporation to return to the South fo r the Seaboard National Bank. South for his firm and formed a wide acquaintance in the business field. Mr. Jacoby is a graduate o f the Massa chussetts Institute o f Technology o f Bos ton, with a B. S. degree in Electrical En gineering and o f the University of Texas with an A. B. degree. He was elected to Phi Beta Kappa at Texas. His early schooling was in Dallas. He is a member o f the Dallas Athletic Club, the Dallas Country Club and the Brook Hollow Golf Club. Previous to 1920, Mr. Jacoby had served as manager o f the Westinghouse offices in Houston, New Orleans and Charlotte, N. C., for a five-year period. He traveled extensively through the “ A Hunting We W ill G o” When fou r Des Moines men, including Clarence N. Anderson, Des Moines gen eral agent fo r the New England Mutual Life, wanted to go duck hunting re cently, they chartered a, four-passenger Fairchild airplane and hopped off on a A Great Company Daily Growing Greater The Missouri State Life shows a gain of more than 50 per cent in Paid For busi ness for the eleven months of 1928 over the same period of 1927. Paid For business to November 15, 1928, totals over $ 2 6 0 .0 0 0 ,0 0 0 .0 0 . In surance in force now over $ 1 ,1 4 0 ,0 0 0 ,0 0 0 .0 0 . Largest Life Insurance Company West of the Mississippi River Saturday morning fo r Minot, North Da kota. The following Tuesday evening they flew back to Iowa with 40 ducks to show fo r their hunting skill. Mr. Ander son, with Pilot John Cable, are shown above, standing in front o f the plane.—Photo, courtesy Des Moines Register and Tribune-Capital. J. CARTER W IT T , Manager, Des Moines Branch Redeem Belgian Bonds MISSOURI STATE LIFE J. P. Morgan & Co. and the Guaranty Trust Company, as sinking fund admin istrators, have notified holders o f K ing dom of Belgium external loan thirty-year sinking fund 6 per cent gold bonds, due January 1, 1955, issued under contract dated December 16, 1924, to the effect, that $1,591,800 principal amount o f the bonds have been drawn by lot for redemp tion at par on January 1 out o f moneys in the sinking fund. Bonds so drawn will be redeemed on or after January 2 at J. P. Morgan & Co. or at the Guaranty Trust Company. INSURANCE COMPANY Hillsman Taylor, President Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 Home Office, St. Louis 85 Figuring Interest and H ow ! ( Continued from page 15) balances compounded semiannually.— ($54.78.) The Executive Committee o f the Sav ing’s Bank Division, however, has pub lished four methods of computing interest, for the sake o f uniformity and the four methods are as follow s: a. Interest to be compounded semian nually. Deposits to draw interest from date o f deposit, on all sums on deposit for at least one calendar month preceding in terest date. Year to be divided into four quarters. No interest to be allowed on withdrawals made during the quarter. Withdrawals to be deducted from latest deposits. b. Interest to be compounded semian nually. Deposits to draw interest from date o f deposit, on all sums on deposit for at least one calendar month preceding in terest date. No interest to be allowed on withdrawals made during the six months period. Withdrawals to be deducted from latest deposits. c. Interest to be compounded semian nually. Deposits to draw interest from first o f each month on all sums on deposit for at least one calendar month preceding interest date. Year to be divided into four quarters. On withdrawals interest to cease on first day o f quarter in which with drawal is made. Withdrawals to be de ducted from latest deposits. d. Interest to be compounded semian nually. Deposits to draw interest from first o f each month, on all sums on deposit fo r at least one calendar month preceding interest date. Deposits made after the first o f each month to draw interest from the first o f the following month. No interest to be allowed on withdrawals between in terest periods. Withdrawals to be deducted from latest deposits. On savings accounts remaining dormant fo r two years, where the balance is $5.00 or less, it is recommended that payment o f interest cease. Graf Zeppelin Was First The first recorded use o f manufactured gas as fuel for an air craft was marked by the recent arrival o f the Graff Zeppelin in America, comments the Pennsylvania Public Service Information Committee. Gas has hitherto been used on land, under ground and underwater, but this was its entrance into a new field. The gas, known as “ Blau gas,” named after its discoverer, Herman Blau, o f Augsburg, Germany, is said to be a mix ture o f ethylene and butane, both bases already well known to chemists. Ameri cans were fo r many years familiar with Blau gas, which was used fo r illumination in railroad coaches in light called “ Pintsch lights.” The Des Moines Life » A nnuity' COMPAHf The Company of Co - operation Absolutely Dependable Many things go to make up a thoroughly de pendable life insurance company. 1. Financial strength. 2. Relations with policyholders. 3. Relations with agents. 4. Measure of its service. In all of these “ The Company of Co-operation'" is absolutely dependable. You can’t ask for more and we would not offer you less. Des Moines Life and Annuity Company J. J. Sham baugh, Pres. Des M oines, Iowa Can Use 10 to 15 A dditional Bank Agencies and M ake Liberal Earnings for Them . W R I T E U S Can also Use T w o or Three Insurance Salesmen. REFERENCES—Any Des Moines Bank J. A. BLUM, General Agent G u a r a n t y L ife In s u ra n c e C o m p a n y 416 Iowa National Bank Building Des M oines, Iowa Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 86 This department of THE NORTHWESTERN BANKER is to assist subscribers in obtaining goods or service hard to find. It is free to subscribers. To non-subscribers the charge is five cents per word. Use it. ASK US, as we can tell you where to buy anything you need in your bank or for your bank. TELL US, as your ‘ ‘ want ’ ’ will be published under the above heading free of charge. In answering classified advertisements which have key numbers please enclose a two-cent stamp. This is used to forward your letter. Position wanted as assistant cashier or bookkeeper and teller for January 1, 1929, or sooner on short notice, in bank where there is plenty of work and a chance for industrious and thrifty man, age 25, single, 6 years’ banking experience. At present employed. Can invest if desired. Address No. 3065, care Northwestern Banker— 11-12-1. Young m an, 35 years old, with 10 years’ practical country bank experience, desires change to some good country bank with privilege of writing some insurance. Will invest some capital to get an execu tive position. Would like cashiership in a city of 1,000 to 1,500 population. Can change at any time. What have you to offer? Address No. 3066, care North western Banker— 11-12-1. Wanted— Position in good growing bank, where opportunity fo r advancing is good. In real live school and church town. Age 36, married and family. Protestant, college education. Thirteen years of steady banking experience. Now employed as cashier of small town bank, changing on account o f school. Could make small investment. Best of refer ences. Address No. 3037, Northwestern Banker— 7-12. Are you the right man? A sound, fast growing financial institution in the Mid dle West wants to get in touch with five men of banking experience who are un attached at the present time or who are interested in a position where there is op portunity for growth. This institution directs this advertisement to bankers, because in their present staff the most outstanding successes are bankers. Full information will be furnished in a per sonal interview if you will tell all about yourself in the first letter. Men between 25 and 45 preferred. No investment necessary. Address No. 3067, care North western Banker—-11-12. Y o u n g m an with some capital, would like to secure a position in some medium sized city in the capacity of assistant cashier, with opportunity fo r advance ment. Has had several years of country banking as assistant cashier. Address No. 3068, care Northwestern Banker— 11-12-1. Wanted at once, young man familiar with stenography, one or two years of bank work, as assistant cashier o f new, clean growing bank. Make detailed ap plication. Rolette State Bank, Rolette, North Dakota— 11-7. Wanted J o b ! — Assistant cashier by young married man. Wants place where there is plenty work. Can give best re f erences. Address No. 3073, care North western Banker.— 12. Northwestern hanker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 An Ex-service Man, with several years’ banking experience and some accounting desires change to some bank or other corporation where there is plenty of work to do, and a chance for an executive po sition in a year or so. Can make a small investment, and make a change at most any time. Wages not the reason fo r change. Excellent references. Address No. 3074, care Northwestern Banker.— 12-1-2. An Unusual Opportunity for a High Class Salesman The Standard Statistics Company of New York wishes a high grade repre sentative to sell its publications to banks, investment houses, large investors and corporations in Iowa and Nebraska. These publications furnish vital in formation regarding investment securi ties, and trade and economic conditions. They are now being used by all the big gest financial institutions in this country. This company is the largest statistical organization in the world. This man will have the advantage of an established prestige. He will also have the support of an advertising campaign, and co-oper ation from the home office in closing by mail, prospects he is unable to close per sonally. He must furnish his own car. A por tion of his sales work will require a car. Compensation— generous commission, drawing account and traveling expenses. This opening means hard work. But it offers unusual rewards to the right man. T allest H o tel in the W o r ld 46 Stories H ig h M o st Central in the City H o m e of the Terrace Garden Chicago’s MORRISON HOTEL Corner of M ad ison & Clark 1944 Outside Rooms Each w ith Bath, s2-50 up A ll room s have running ice w ater, telephone, bed-head lam p and Servidor. W r ite or w ir e fo r reserv a tio n s Our seasoned men are earning $6,000 to $12,000 a year. If this interests you, write giving com plete information regarding your busi ness and sales experience. Also refer ences. Arrangements will be made for an interview in Des Moines and Omaha in the near future, if your letter indicates that this will be mutually profitable. Address: R. G. Stoddard, Sales Promo tion Manager, Standard Statistics Co., Inc., 200 Varick St., New York, N. Y. W hy W om en’ s Departments Fail ( Continued from page 30) new game and has come to regard it as a business wants the bars down. She wants to do business out in the open and to play the game without handicaps or al lowances. And so she passes by the window o f the woman’s cage and comes out on the floor. Another Point There is another important point in volved. The woman in charge o f the women’s department, if she is any good, as most o f them are, should either be holding an executive position on the gen eral staff o f the bank or in line for the next vacancy. Many men have sense enough to consult a woman on matters that should be within her range o f knowl edge and experience, and many such matters are constantly cropping up in business. But the man may not go to the women’s department, although there is nothing to keep the women to it. And so much o f a good executive’s capabilities are wasted by the restrictions imposed upon her position. Both the bank and its clientele need women on the executive staff, but the women’s department should be relegated to the place where one’s un successful experiments are interred— after one has drawn all the possible de ductions from them. Poverty, like many other miseries o f life, is often little more than an imagin ary calamity. Men often call themselves poor, not because they want necessaries, but because they have not more than they want.— Johnson. Remember the teakettle— though up to its neck in hot water it still sings. It is better to be on the level than to climb upward on a crooked path. 87 South Dakota Bank News Officers South D akota Bankers Association P r e s id e n t ....................................R . E . D ris c o ll Lead V ic e P r e s i d e n t ..................................... T h om a s O ’ B r ie n H oven S e c r e t a r y ..................... G e o rg e H u ron R . E. D R IS C O L L P r e s id e n t A. S ta r r in g T r e a s u r e r ....................................J . C. B a s se tt A b e rd e e n In New Building The form al reopening' o f the First Na tional Bank o f Miller, South Dakota, was held recently in the completely remodeled building. Among the improvements in the build ing were an addition o f 25 feet to the length o f it, and new fixtures throughout. Punch and wafers were served, and ladies were presented with flowers. There were many floral tributes from friends o f the bank and from other banks. The improvements in the banking house were made at a. cost o f $40,000, according to officials. The bank is said to be one o f the best equipped in the state. GEO. A . S T A R R IN G S e cre ta ry are Theodore Hass, president; Fred P. Hampton and W alter Johnson, vice pres idents; John W . Kelley, cashier. Pioneer Dies O. L. Branson, 67, pioneer banker o f Mitchell, South Dakota, died at his home recently after an illness o f two years. Mr. Branson came to Mitchell in 1896 and took charge o f the First National Bank. He later purchased the controlling interest and became its president. He sold his interest in 1925 and entered a farm loan and investment company and later organized the O. L. Branson com pany bank, which he operated up to the time o f his illness. He is survived by a widow, two sons and one daughter. Sioux Falls Clearings Sioux Falls, South Dakota, bank clear ings fo r October were $1,182,306.88 more than they were fo r the same month last year. The bank clearings fo r the month were $7,257,602.76, while the bank clearings fo r October, 1927, were $6,075,295.88. Sioux Falls bank clearings fo r the month o f October this year exceeded the amount fo r the month previous by $683,253.50. The September bank clearings were $6,574,349.26. Twenty-five Years Old The Commercial National Bank o f Sturgis, South Dakota, has observed its twenty-fifth anniversary. The bank opened its doors fo r the first time 25 years ago. It was opened then by N. W . Brown, cashier, and Frank W . Shaw, assistant cashier. Its growth has been slow but sub stantial and continuous, the last pub lished statement made at the call o f the national comptroller o f the currency showed total assets o f over $1,100,000. The bank recently added considerable space to the floor accommodations by adding two large rooms and a large allsteel fire and burglar proof vault, and increasing the lighting facilities and desk room. The present officers o f the bank Meet in Canton An association known as the Sioux Val ley Bankers Association was formed at a meeting o f 23 bankers from Alcester, Beresford and the towns o f Lincoln County, which was held at Canton, South Dakota, recently. The officers elected were H. J. Moen of the First National Bank, Canton, secretary. The association is similar to that of others being formed throughout the state and northwest, Mr. Moen stated, and has for its object the promotion o f sound banking principles and the rendering o f the most efficient service possible to the banking public. Meetings will be held from time to time throughout the district served by the mem ber banks and it is planned to have promi nent visiting bankers and students of economics and finance address these meetings. S ou th D a k ota N ew s The South Dakota Bankers Association has completed a statewide survey to as certain the status o f interest rates on time deposits. A trifle over 80 per cent return was received, 336 banks have sent in their questionnaire blanks. This survey shows that 75 per cent or 252 banks are paying 4 per cent or less on time deposits. Forty-five banks are paying 4 per cent for six months and 5 per cent fo r twelve months. Thirty-six banks are paying 5 per cent straight; two banks are paying 4 and 4 ^ per cent and one bank is paying 4 ^ and 5 per cent. Of the eighty-four banks which are pay ing more than 4 per cent interest, fiftyfive state that they are planning to re duce this rate within the next few months — many o f them by January 1, 1929. Forty-two banks have reduced their rate o f interest since January 1, 1928. A total of 219 South Dakota banks have adopted the service charge on un profitable checking accounts. This ac tion has been taken by 126 banks since January 1, 1928. The protective department o f the South Dakota Bankers Association will soon supply all o f the member banks with an accurate printed list o f South Dakota banks fo r the use o f tellers and transit departments. Banks are having an increasingly amount o f trouble on ac count o f bad checks passed on local mer chants and drawn on fictitious banks or closed banks. This list will be o f con siderable assistance to bank clerks in handling such items. The regular meeting of the Hanson County Bankers Association was held at Farmer, recently, with a good attend ance, all but one bank in the county be ing represented. President Charles Coyne, o f Emery, presented a report o f the tax meeting which was held in Huron. It was voted that the local delegation to the next legislature be invited to the December meeting o f the county associa tion fo r a full discussion o f taxes and other legislative matters. The Clark County Bankers Associa tion held its semi-annual meeting re cently, president o f the association pre siding. One o f the chief subjects o f dis cussion was the agricultural work o f the county association, which was presented by M. J. McGillivary o f Garden City, chairman o f the county agricultural committee, and by County Agent Eberle. Their reports revealed that bankers o f the county had loaned farm boys money on sales contracts fo r the purchase o f forty-tw o good dairy calves. Geo. A. Starring, secretary o f the South Dakota Bankers Association, was present and discussed such items as service charges, interest rates, analysis o f accounts and taxation. The trouble is, too many people just think they think. All the sobriety which religion needs or requires is that which real earnestness produces.— Beecher. Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 How Safe Is Y our Safe? ( Continued from page 28) territory after their successful attacks in Chicago. With well-planned jobs, adopting three methods in one operation, with a back ground o f success on a large scale, this gang or other gangs adopting these meth ods are going to travel far before they are successfully stopped. There have been few actual convictions for bank burglary. Little evidence can be brought into cou rt; very seldom can witnesses positively iden tify men seen in the semidarkness, and the best results have been obtained from a law penalizing the possession o f burglar tools. Wisconsin and a few other states have such a law. It is quite apparent that strength of equipment is the first deterrent to be con sidered. A big man very seldom gets a punch on the nose. Another matter to be considered in connection with burglary are adequate burglar alarms such as the Mc Clintock “ A ” Grade of full six-sided pro tection having a burglary discount o f 65 per cent, which reduction in itself is a very favorable recommendation, and fo r the smaller banks there are preventative devices that will foil or prevent entry to vaults through the door or that will delay their action to some considerable extent. Our department has endeavored to im press upon the members o f this associa tion the necessity for the incorporation of torch-resisting metal in vault doors. There are still some banks that place price above D EPO SITO RS A PPR EC IA T E T H E “ SERV ICE OF P R O T E C T IO N ” IN T H E SE D IST IN C T IV E SU PPLIES utility and buy laminated vault doors that are laid up with successive plates o f openhearth steel. The resistance to modern burglarious attempts o f such a door is ap pallingly small. The most modern development in vault doors sponsored by such high-class com panies as the Hosier Safe & Lock Co., York Safe & Lock Co., etc., is the door with the integral shell casting with the heavy “ V ” type cast jam laid up with heat-resisting and drill-resisting metals and engineered to resist the known methods o f attack. This type o f door is sponsored by the leading vault engineers o f the coun try and has the approval o f this depart ment. W e are fully aware that the under writers give the same burglary discount in their manual for the door that is poorly constructed of the cheapest material, as long as it be of steel, as they do for the most carefully constructed door built to the highest type o f specifications, includ ing the best o f materials and workman ship ; but the question presents itself, are you purchasing insurance discount or are you buying a door to protect the contents of your vault f Simply because the insur ance companies persist in retaining an ob solete classification there is no excuse for a bank to take the chance of a serious loss, and furthermore, what bank has complete insurance coverage? There are many banks that cannot afford large doors and these banks are in the greater majority. What are we doing for them ? A l l standard ch eckin g form s are available on S u p er-S a fety paper T he air of quality in the Covers and Binders. A n appearance and “ feel” of tique Moorish Savings and the b e a u t ifu lly tin te d Commercial Pass Books, S u p e r - S a f e t y C hecks Pocket Check Covers and speaks well for the bank R in g -b o u n d C u sto m e r T r a d e -m a r k that issues them. But the Check Covers, a standard most appreciated feature ized line o f b e a u t ifu l, of these attractive checks is a service durable supplies, are well qualified of protection they render depositors’ to represent your service. W ith bank funds in transit. A n y attempt at building or business seal embossed alteration is exposed immediately. A on the covers they become a digni glaring white spot appears if knife, fied advertising asset. ink eradicator or eraser is used to See the local Todd representative change the check. There is further or retu rn the co u p o n . B a n k e r s ’ protection in the fact that SuperSupply Division, The Todd Com Safety Checks are never sold in blank pany, Rochester, Chicago, New York, sheets — they are made only to a St. Paul, Denver, Dallas. bank’s individual order. To prevent counterfeiting, each sheet of SuperB a n kers’ Supply D ivisio n 12-28 Safety paper is guarded as the Gov T H E T O D D C O M P A N Y , 1149 U n iv e rs ity ernment guards bank-note paper. A v e ., R ochester, N . Y . The thoughtful service of provid ing depositors with Super-Safety Checks for protection against check alteration is evidence of an interest in and regard for a client's welfare. A personal note such as this in mod ern banking has done much to estab lish preference for a bank’s service. M any leading banks supply de positors with attractive Super-Safety Checks and use with them the hand some, distinctive Antique Moorish Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 State and 60th Sts., Ch icago, 111.; 33 T h irty-fo u rth St., B rooklyn , N . Y . ; 1200 L aw rence St., D enver, C o lo .; 2021 Jackson St., D allas, T exas. (A d d r e s s nearest office.) S e n d m e m o r e in fo r m a t io n a b o u t S u p e r -S a fe t y C h eck s a n d A n tiq u e M o o r ish s u p p lie s . N a m e o f B a n k _____________________________ _ N a m e o f O fficer_____________________________ S tr e e t________________________________________ T o w n ____________________ S ta te______________ About three years ago the writer had occasion to examine gas protective devices. Inquiries kept coming in relative to a bottle to be attached to a door or placed in a safe that was selling at such low price that it attracted the banker’s attention and many orders were placed subject to in quiry by this department. W e have access to several chemical analyzation laboratories, so we had this socalled gas analyzed. It turned out to be a very cheap combination o f ammonia and mustard oil and upon so advising our mem bers they cancelled their tentative orders. Gas Not Always Effective Realizing that there was a genuine de mand for gas protective devices, possibly induced through the publicity relative to the use of gas during war time, this de partment endeavored to segregate the sheep from the goats, as this demand was being met by both good and bad devices. There were two products about two or three years ago that impressed us favor ably. One was a solid gas, and the other was a liquid gas of the chlorpicirine type that was quite effective but liable to leak age and breakage and at the same time was inclined to be toxic to a greater degree than we felt was safe; therefore, we ad vised our members as to the results o f this 89 inquiry and stated that if they decided to use gas protection we would recommend the solid rather than the liquid gas, all other things being equal. Later we had an opportunity to test some o f this solid gas that had been in our possession for about seven months. En deavoring to set it off in the usual way we found that it would not function. W e then lit it with a match and it burned, but ap parently no tear gas was generated. This evidence o f deterioration led us to inquire further and we find that this gas is being sold to police departments, sheriffs’ offices, etc., and that the company’s laboratories advise that the cartridges have an “ effec tive life of ( only) one year.” This statement caused us to think. Many o f our banks installed this protective de vice two years ago or more and we were wondering what amount o f protection they had if this gas deteriorates so rapidly. In quiry among men who are in a position to know, develops the fact that jolting or shaking is one cause o f deterioration, and they state that the opening and shutting of vault doors will in time separate the black powder contents o f this gas so that it is not in a position to liberate the active ele ment in the gas. Realizing the possibilities o f gas protec tion and looking for something more sub stantial in the way of service to our banks we then conferred with the Anakin Com pany o f Chicago, and they are offering a curring unfavorable criticism at a later date. This company is using a very mod ern product in their gas bomb. Think and Act Big! Jessie Rittenhouse years ago wrote this little bit o f verse: W hen Locked in Vault Recent robbery attacks have also created a demand fo r some means o f safety for those who may be imprisoned in a vault by robbers. This demand has been met by the ventilator and vault-escape. The vault ventilator has been the choice o f some banks, while others prefer to spend a little more to insure their immediate release from the vault. We are quoting Mr. H. P. Michael o f the Underwriters Laboratories, Chicago, who states: “ The banker should consider human life, he should not expect his employes to resist the bandit’s command if resistance jeop ardizes the lives o f employes and custom ers. Do not allow them to be locked in a vault. There are door attachments to pre vent just such happenings.” MY WAGE I bargained with Life for a penny, And Life would pay no move, However, I begged at evening When I counted my scanty store. For Life is a just employer, He gives you what you ask, But once you have set the wages, Why you must bear the task. I worked for a menial's hire Only to learn, dismayed, That any wage I had asked of Life, Life would have paid. An Old Story five-year guarantee on their gas and locks together, backed by a $500 bond for faith ful performance of the function for which these protective devices are sold, and after the demonstration o f the effectiveness of the combination o f these two devices in the recent burglary o f the post office at Ripon, Wisconsin, we believe that favor able action can be taken by this depart ment on their devices without danger o f in The usual compromise that means in creased outlays by the railroads for wages has been effected between the Western roads and their trainmen and conductors. It looked at one time as i f disagreement would end in a strike and in fact every attempt at mediation was exhausted with out result until the President appointed a special fact-finding commission, as pro- Your Representative at the Stockyards / The Only Bank located a t th e S to c k y a r d s ^ O U R SERVICE OFFICERS W e provide immediate credit of proceeds from sale of livestock. W hy should commis" sion checks travel from Sioux City to your town, be deposited in your bank, and travel back again for collection? A . G. SAM President H. B. SCOTT Vice President C. L. FREDRICICSEN Cashier W e can save you many dollars each year in interest and labor. M . A . W IL S O N Assistant Cashier Live Stock National Bank _ . . -----7^THE0NLY BANK\-----------" " ( located AT THE) ___ — -------------------------------------------- X^STOCKVAROSyf SIO U X C ITV " , W . G. NELSON Assistant Cashier . --------------- * 1O W A Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 90 Neighbors! A /O l * have to get close to people to understand their problems and their needs. Situated here in the great Middle W e s t we are close enough to do that. Our years of caring for the casualty insurance and surety needs vided under the Rail Labor Act, to investi gate the situation and report its findings. This body has apparently succeeded in bringing about a compromise whereby the roads relinquish their demands fo r alter ations o f certain working rules that would have reduced expenses while the men con sent to take a wage increase of 6 V2 per cent instead o f 7 ^ per cent. As the in crease is retroactive, several millions will be added to the wages bill, past due, o f the hard pressed Western roads. Sometime there will have to be an end to the kind o f shilly-shally compromises between the roads and their employees, o f which this Western dispute provides the latest illustration. Attempts to settle wage controversies by legal methods are meritorius if they work, but when laws are used merely as a shield to cover the lack o f any reasonable basis fo r agreement they are worse than useless, for they en courage just the sort o f temporizing tac tics that have been in vogue since the rail labor law was enacted. The experience o f Germany with a system o f compulsory arbitration indicates what may happen to the system o f mediation and voluntary ar bitration which our railroads are enduring. The German steel industry, after first sub mitting to demands fo r wage advances, has at last taken a stand against the sys tem and is now resisting an officially sanc tioned award of wage increases. Although our rail labor law contains no similar ele ments o f compulsion, it possesses certain sanctions due to newness and the pro visions fo r Government intervention as a means o f influencing public opinion. But these features will not forever hold in leash the elements that are at war.— From N. Y. Journal of Commerce. in this great field have proved this. Become Vice Presidents And we carry on— soliciting your con fidence and patronage. F e d e r a l Su r e t y Com pany William C. Potter, president o f the Guaranty Trust Company, New York, has announced the appointment of A lfred C. Howell and William L. Kleitz as vice presidents. Mr. Howell was president of the Ames Shovel and Tool Company, o f Boston, when he went to the Guaranty Trust Company a few months ago. Mr. Kleitz has been an assistant vice president o f the Guaranty Company for the last five years. He is a graduate o f Cornell Uni versity, and entered the employ o f the Guaranty after serving as a captain in the U. S. Army during the W orld War. W. L . T A Y L O R To Study Credits Vice President and General Manager The Duluth, Minnesota, chapter o f the American Institute o f Banking will study “ credits” this winter. W . C. Beckman is president. The course is based on the in stitute’s text book on the subject. L. G. Castle, cashier o f the Northern National Bank, is instructor. Classes are in the Spalding hotel. H O M E O F F IC E • • • D A V E N P O R T , IO W A Casualty Insurance— Surety Bonds In all 120 chaplains are on duty with the regular army in the United States. Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 91 counts. The largest amounts to be paid will be at the Omaha National Bank, where $165,000 is on deposit, and at the United States National Bank, which has approxi mately $100,000 in such accounts. The Christmas savings account is con sidered a big factor in the holiday trade season. N ebrask a Bank News Officers Nebraska Bankers Association P r e s id e n t ............................................. P h il H a ll G re e n w o o d Thought in Germany C h a irm a n o f the E x e cu tiv e C o u n c il............................. P . R . E a s te r d a y S e c r e t a r y .............................W m . B . H u g h e s P H IL H A L L P r e s id e n t T r e a s u r e r ............................. A r t h u r L . C oad O m aha Directors Meet The Federal Land Bank o f Omaha, will loan approximately $18,000,000 this year, according to John Carmody, secretary. The bank made $16,750,000 in loans dur ing the first 10 months o f 1928, and now has more than $163,000,000 in loans. Directors o f the bank met recently to discuss the placing o f money in reserve, and the annual dividend. Forty Years Old The State Bank o f Elkhorn, Nebraska, was forty years old Monday, November 5th. The institution was originally organ ized as a private bank and began busi ness November 5, 1888, by J. M. Bruner and B. B. Baldwin. On June 15, 1909, it became a state bank and continued under the manage ment o f Messrs. Bruner and Baldwin until April 15, 1915, when it was pur chased by the late Otto H. Schurman o f Fremont, the late J. N. W yatt, E. A. Schurman and J. A. Gibbons. Mr. W yatt was president o f the bank until his death about 18 months ago, with E. A. Schurman as cashier. On the death o f Mr. W yatt, Mr. Schurman be came president. Otto H. Schurman sold his interest a few years before his death, in March, 1927. W M . B. H U G H E S S e c r e ta r y Miller, as president, and is, in effect, the outgrowth of the loan and securities business which he established individu ally after selling out his interests in the First National Bank three years ago and in which his son, Leonard S. Miller, has been associated with him since last June. Investigate Armored Car Cashier Resigns George W right, cashier of the Creigh ton, Nebraska, National Bank fo r the past three years, has resigned his posi tion. W right will be associated with W . H. Van Doozer in the organizing and building o f cooperative creameries for the Nebraska Dairy Development Com pany. W . L. Merrick o f Minneapolis, Minn., will fill the position made vacant by Mr. W right. Mr. Merrick has had several years’ banking experience and comes to Creighton well recommended. Organize Security Company W ith an authorized capital stock o f $100,000, the Miller Allied Securities Company has been incorporated by a group o f prominent Columbus, Nebraska, men to do a general business in real estate, insurance, abstracting, loans, in vestment banking, guardian, administra tion, securities and other associated lines. The new corporation is headed by A. R. Omaha may soon have an armored automobile to take care o f payrolls and also o f currency between banks and vari ous business establishments. J. R. Allen of the Brinks Express Com pany o f Chicago recently interviewed many Omaha banks and business houses in connection with the armored car. His company carries payrolls, currency and securities for 147 banks in Chicago, be sides having contracts in many large cities o f the country. Farm Purchase Power Eastern investment bankers are advis ing their customers to put a larger pro portion o f their funds into sound invest ments, according to A. C. Potter, senior partner o f Burns, Potter & Co., on his return to Omaha from NewT York City, Mr. Potter attended a meeting o f the Omaha & Council Bluffs Street Railway Company Bondholders Protective Com mittee while in New York City. The purchase power o f farm products compared to other commodities is 90 per cent o f the 1909-14 pre-war parity, ac cording to C. J. Claassen, chairman of the publicity committee o f the Nebraska Bankers Association. Mr. Claassen said this ratio is possible in spite o f an ap proximate 5 per cent production over 1927. “ The sustaining influence to this favor able position is due mostly to the live stock industry,” Mr. Claassen said. Talks to Secretaries Install Heating Plant Omaha’s greatness lies in its agricul tural setting and its trade territory, said W alter W . Head, president o f the Omaha National Bank in a recent address before the convention o f the Nebraska Associa tion o f Commercial Organization Secre taries. Mr. Head said that Omaha was as much dependent on the smaller cities in its trade territory as the smaller cities are on Omaha. The Citizens State Bank of Dorchester, Nebraska, has started to put in a steam heating plant under the rear part of their building and in addition to their own place o f business they will heat the post office. The plant will use oil for fuel and they wall install one o f the very latest improved oil burners. Use Sound Investments Resigns W . O. Larson, assistant cashier o f the Rising City, Nebraska, Bank fo r several years, has severed his connection with the bank and is succeeded by W ayne Drawbaugh, employed in the bank for two years. Search for Paul Wupper, fugitive pres ident o f the defunct state bank o f Beemer, Neb., has shifted to Germany, it was disclosed recently by County A t torney R. R. Moodie o f Cuming county. Moodie said he had been unable to discover any evidence o f W upper having ever taken out final naturalization papers and was o f the opinion that he may have fled to Germany, believing that as a Ger man citizen it would be harder to extra dite him from that country. Christmas Savings Omaha banks will pay approximately $500,000, about December 15th, to de positors having Christmas savings ac President Dies Carl H. Heckman, 39, president of the First State Bank o f Hickman, Nebraska,, died recently in a Lincoln hospital. He has been a lifelong resident o f the Hick man community. His Avidow and one daughter survive. Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 92 Rancher Leaves Fortune F. M. Heinrich lived most o f his ma ture years on his cattle ranch in Hardin, Mont. He rode herd as a youth, and as his years multiplied he became a cattle raiser and eventually a man o f means, probably a millionaire. Often in the last seven years he visited Omaha and there sprang up between him and those he met in a business and social way at the Stockyards National Bank a close friendship. Then, on October 27, the rancher was taken by death. The friendships he made in Omaha were the greatest friendships o f his life. He bequeathed $140,000 to his five Omaha friends. Ford Hovey, the bank’s president, was his financial adviser and host to the rancher. He was left $50,000. And Mrs. Ford Hovey, who presided at the table where Mr. Heinrich was honor guest so many times, likewise received $50,000. Henry Hovey, son o f the president, is assistant cashier at the bank. The young man was quite a favorite with the rancher. He was left $25,000. James B. Owen, vice president o f the bank, was given a legacy o f $10,000, and the cashier, W . H. Dressier, who kept books fo r the rancher fo r the last two years was remembered with $5,000. No Levy Yet Nebraska Commerce Secretary Bliss has not yet made the second special levy on state banks fo r the guaranty fund, but says he intends to do so before the end o f the year. It is rumored that an injunction suit will be brought by a large number o f banks, acting in concert, to prevent collection o f this assessment. Your Bank and the Coming Year Each new year brings many changes; some planned; some the natural resuits of growth. Each year brings to us additional numbers of banks attracted by the painstaking service rendered to all correspondents. Tour business is invited THE NORTHERN TRUST COMPANY CHICAGO In the H eart o f the Financial D istrict Northwest Corner LaSalle and Monroe Streets Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 The banks, however, may not object to a sufficient assessment to pay all remain ing receivers’ certificates which were pur chased by individual banks in good faith. Locate Stolen Checks That the men responsible for dynamit ing the vault of the bank at Harrisburg, Nebraska, on the night o f August 20 last, and who got away with $2,000 in currency and a large number o f checks, decided to take no chances on being apprehended through attempts to raise money on the checks they stole became certain recently when special agents o f the Union Pacific railroad secured possession o f several bundles o f vouchers which have since been identified as those missing from the Harrisburg bank, the total o f the checks being reported at $16,500. The checks were found along the right-of-way o f the new Union Pacific railroad extension near Egbert, W yo., where the Egbert-Creighton extension crosses the Lincoln highway and connects with the main line. The finding o f one bunch o f checks in a thicket near the railroad resulted in a search o f the local ity where the robbers are thought to have stopped fo r a division o f loot before boarding a main line train, and all o f the missing checks were found. Not Enough Signers The plan advocated by the Nebraska Bankers Association o f offering’ $5,000 reward fo r each “ dead” bank robber garnered in the state hasn’t been ap proved by a sufficient number of mem bers o f the association and maybe never will be, William Hughes, secretary o f the association said recently. To make the plan effective 700 bankers must agree to pay $7.50 for each dead robber. A fter several months agitation 681 bankers have signed up, 54 voted against the proposal and 139 were non committal. Hughes is making every possible effort to secure the needed nineteen signatures but said prospects are not very bright, al though he believes the proposal eventu ally will carry. Hurt in Accident Charles E. Wood, cashier and acting president of the Bank o f Talmage, Ne braska, was seriously injured when the automobile he was driving left the high way and entered a ditch. His shoulder was crushed. Mrs. King, another occupant o f the car, was hurt, but less seriously. She has been a housekeeper fo r the W ood fam ily fo r a number o f years. Mr. W ood attributed the accident to the steering wheel o f his sedan which he says became suddenly inoperative. The machine, headed south before the acci- 93 dent, was headed north after entering the ditch. Although damaged consid erably, it was not totally wrecked. Visits ill Omaha Eugene C. Eppley, head o f the Eppley Hotels Company, was host recently at his Hotel Fontenelle in Omaha to Sir Thomas Lipton, internationally famous tea merchant and yachtman, and best be loved o f Britishers. An Omaha newspaper, commenting on the visit o f Sir Thomas to Omaha, ob served : “ When a famous host is host to a famous host, a couple o f continents may be ivarmed by that hospitality.” Sir Thomas, who spends much time in America, numbering by hundreds his friends in this country, is world re nowned as the king o f sportsmen and promoter o f international good fellow ship, and as a unique example unparal leled in staid old Britain, o f the selfmade man. For, unaided, he rose from stowaway to baronet, making his fifty millions before the age o f forty, then organized all his holdings into a huge liability company and devoted himself thenceforth to the enjoyment thereof in his favorite sport o f yachting. Com plete Financial Service U Q National B an k • □.TrustCom pany Omaha ARE YOU INTERESTED IN GETTING Quicker Returns on Live Stock Shipments? WRITE US L IV E S T O C K N A T I O N A L B A N K Union Stock Yards— OM AHA BOND INVESTMENTS Nebraska News W r it e f o r O u r A ttr a c tiv e L ist o f C a r e fu lly S e le c te d B o n d s George C. Cronkleton, receiver o f the First National Bank o f Laurel, Neb., has filed suit in federal court against each o f seven stockholders, in an effort to establish that stockholders are liable to an assessment up to the amount o f their stock interest if the bank fails and its assets are less than its liabilities. The Hartington National Bank, Cedar county’s oldest banking institution, went into receivership November 14th. W. H. Allen, o f Kansas City, has been ap2>ointed receiver. C. M. Jones, Sr., presi dent, said slow paper on farm loans had forced the closing of the bank, and he was doubtful whether the bank, whose assets were form erly $500,000, could salvage much. H o t e l s of Hospitality Hotel Fontenelle______________________ Omaha, Neb. Hotel Chieftain_______________Council Bluffs, Iowa John W. Bender, who helped organize the First National Bank o f Humphrey, Neb., and who was vice president o f the bank from its beginning, died November 10th. He served two terms in the state legislature. Hotel Lincoln__________________________ Lincoln, Neb. Hotel R om e_____________________________ Omaha, Neb. Hotel M ontrose________________ Cedar Rapids, Iowa In Los Angeles Hotel Capital___________________________Lincoln, Neb. Hotel Alexandria Hotel Martin_____________________________ Sioux City,Iowa $2 up. Hotel N orfolk __________________________N orfolk, Neb. C. J. Claasen, o f the Peters National Hotel Carpenter----------------------------- Sioux Falls, S. D. Hotel Cataract_____________________ Sioux Falls, S. D. A c c o u n ta n ts Oldest firm in Des Moines Call us for certified work Hotel Magnus___________________ Cedar Rapids, Iowa Operated by Eppley Hotels Company MUEHLE, REAM & McCLAIN 1106 C o m m o n w e a l t h B u il d i n g Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 94 Bank and Trust Company, and o f the publicity committee o f the Nebraska Bankers Association, has received a letter from Ernest S. Coats, a farmer of Valley county, Nebraska, urging' Ne braska to advertise its resources, in or der to prevent farms being abandoned and to stimulate business. He spoke o f meeting Nebraska, Iowa and Dakota farmers on a trijo to California, all o f whom were planning to return to their farms in the spring. “ There must be some prosperity on the farms if a farmer and his wife can spend from $500 to $2,000 on a trip and have possibly the same amount invested in an auto, besides owning a modern residence and up-to-date farm buildings at home,” he writes. “ F or one, I am proud o f my occupation as a farmer, and do not relish being held up as sub ject to the need o f government aid.” A. E. Anderson, state and federal crop and live stock statistician, upon receiv ing his regular reports from Nebraska bankers, announced at Lincoln that while shipments o f stocker and feeder cattle into the state in July, August and September were nearly double what they were in 1927 during those months, the late movement is expected to be below that o f a year ago and winter feeding operations will be reduced. During the three months named, 132,419 cattle were brought into the state, against 69,000 the previous year. Sixtyfive Nebraska bankers reported sufficient corn fo r all feeding operations and ninety bankers said there was enough hay and forage. Bankers report only 83 per cent as many locally produced cattle were sold fo r grain feeding as compared to a year ago. John G-. Lowe, president o f the Farm ers State Bank o f Kearney, Neb., re cently made an extended trip through the east, including stops at Washington, D. C., Baltimore and New York City. He urges an appropriation o f $100,000 by the next state legislature to adver tise the resources o f Nebraska. Public offering o f the securities o f the newly organized Southern Bond and Share Corporation was made recently by Taylor, Ewart & Company and E. E. MacCrone & Company. The financing is in the form o f 40,000 shares o f no par value $3.00 series preferred stock priced at $50 per share, and accrued dividend, each share carrying one-half share of Class B common. Southern Bond and Share Corporation started business several weeks ago when offering was made o f 40,000 shares of Class A stock and 20,000 shares o f Class B common stock, which offering was THE HANOVER NATIONAL BANK OF THE CITY OF NEW YORK Established 1851 largely oversubscribed. The current issue will bring the total investments o f the corporation up to more than $3,000,000. Upon completion o f this financing the company will have outstanding 40,000 shares o f $3 series preferred, and 40,000 shares Class A common and 110,000 shares Class B common. The capitalization of the company also provides fo r a prior preferred stock and eventually the issuance o f debentures. Not Telling Clergyman: “ Do you know where little boys go who fish on Sundays? Little B oy: “ Yes.” Clergyman: “ Well, where?” Little B o y : “ You must find out for your self, like I had to. I ’m not letting you in on a good thing.” Guaranty Company Expands Guaranty Company o f New York has taken corporate proceedings to increase the capital stock o f the company from $5,000,000 to $9,000,000. When this in crease in capital becomes effective a stock dividend o f $4,000,000 will be declared out o f surplus and reserve accounts. As the Guaranty Trust Company o f New York owns all o f the stock of Guaranty Com pany o f New York, the dividend will he paid to the Guaranty Trust Company o f New York. W e W i l l G ive Y ou Reliable Information About Canada D E V E L O P M E N T B R A N C H : For information regarding the mining industry of Canada, the develop ment and supply of industrial raw materials available from resources along the lines of the Canadian Pacific Railway, c o n s u lt th is b r a n c h . W e have an expert staff continuously engaged in research relative to all resources including the examination of mineral deposits. Practical informa tion is available concerning development opportu nities, the use of by-products, markets, industrial crops, prospecting and mining. Capital . . Surplus and Profits . $5,000,000 . $27,000,000 B U R E A U OF C A N A D I A N I N F O R M A T I O N : The Canadian Pacific Railway, through its Bureau of Canadian Information, will furnish you with the latest reliable information on every phase of indus trial and agricultural development in Canada. Our Reference Library, at Montreal, maintains a com plete data service covering Natural Resources, Climate, Labor, Transportation Business Openings, etc., additional data constantly being added to keep it up to date. C A N A D IA N P A C IF IC R A IL W A Y C O . Department of Colonization and Development J . S. D E N N IS , C h ie f C o m m i s s io n e r , W i n d s o r S t a t i o n , M a n t r e a l , C a n . Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 95 The action is in line with the efforts o f the state commissioner to provide fewer and stronger banks throughout the state. John E. Matson, is president, and Frank A. Carlson, cashier. Both are of Dasseh Minnesota Bank News Reorganized Officers Minnesota Bankers Association I. E. H A N SE N P r e s id e n t P r e s id e n t ...........................I . E . H a n s e n St. P a u l V ic e P r e s id e n t ............R . W . P u tn a m R e d W in s T r e a s u r e r .......................T . A . P e r k in s W in d o m S e c r e t a r y ........................G e o rg e S usen s M in n e a p o lis A s s is ta n t S e c r e t a r y . .V i d a R ic h a r d s M in n e a p o lis G EO RG E SUSENS S ecreta ry In a reorganization of the Farmers and Merchants State Bank o f Delhi, Minne sota, recently completed, L. I. Ewart, vice president of the Citizens State Bank of Redwood Falls, took charge of the institu tion. Wealth Increased Liquidates Direct evidence o f a vastly improved banking situation in the northwest and o f a big increase in the aggregate wealth o f northwest people, as compared both with pre-war years and with the 1919-1921 period o f inflation, is furnished by figures showing that, on June 30, 1928, the 2,555 banks in the ninth federal reserve district held total deposits o f $1,677,259,000, had total commercial loans o f $940,212,000 outstanding and had borrowed only $14,938.000 from the federal reserve and corre spondent banks. This deposit total of $1,677,259,000 is more than double the $755,534,000 re ported for June 30, 1913, representing, in fact, an increase o f 122 per cent. This gain was registered despite the fact that the number o f banks in operation in the ninth district decreased 13 per cent in the 15 years, from 2,928 in 1913 to 2,555 last June. By contrast, this year’s dis count total, $940,212,000, represents an increase o f only 55 per cent over the $613,393.000 recorded as of June 30, 1913. Even more striking evidence o f im proved financial conditions throughout the northwestern states is supplied by the records o f the borrowings o f ninth district banks from the Federal Reserve Bank of Minneapolis and their correspondent in stitutions. On June 30th o f this year, the agg*regate sum borrowed was $14,398,000. No record is available o f the borrowings in 1913 and 1914, but the figures for this year and last are roughly parallel to those fo r the pre-war years o f 1915 and 1916. Formal notice o f voluntary liquidation of the First State Bank o f Pine Creek. Minnesota, was received recently by A. J. Yeigel, state commissioner o f banks. It was certified that all depositors and creditors of the bank have been paid in full. Midland National Bank A dopt Service Charge Elected Director A t a meeting o f the Martin County Bankers Association, held at Fairmont, Minnesota, recently, the follow ing offi cers were elected fo r the ensuing y e a r: John H. Field, president o f the North western Lumber and Wrecking Company and an executive in several other com panies, has been elected a director o f the Metropolitan National Bank of Minne apolis, to fill the vacancy caused by the death o f James H. Leek. Mr. Field has been prominent in Minne apolis business since 1883, when he became affiliated with the old Washington Bank. Later he became cashier o f the Scandia Bank and then organized and served as president o f the Bankers Exchange Bank. He organized the Northwestern Lumber and Wrecking Company in 1902. In addi tion he is chief executive o f the Central Investment Company, Field-Martin Com pany, Crystal Lake Cemetery Association, vice president o f the Hillside Cemetery Association and secretary and treasurer o f the Real Estate Development Company. President, J. F. Haeckel, cashier, F air mont National Bank, Fairm ont; vice president, G. W . Gruber, president, First National Bank, Ceylon; secretary, Arthur J. Peterson, cashier, Triumph State Bank, Triumph; treasurer, B. J. Dahlman, cashier, People’s State Bank, Truman. A resolution was adopted putting the service charge recommended by the Min nesota Bankers Association into effect, beginning with the month of January. A charge o f 50 cents per month will be made on checking accounts not having an average balance o f $50.00 fo r the month. The uniform schedule in regard to other charges, recommended by the state association, was also adopted. Iii Pine City Urge Excise Tax An excise tax on banks to get around the federal supreme court decision hold ing Minnesota’s national bank tax law illegal, was proposed in the annual report o f A. J. Yeigel, state bank commissioner. Most national banks in Minnesota last year paid, and this year are paying, the tax as levied under the state law, as a result o f an agreement made near the close of the last legislative session, by which the legislature was prevented from hastily enacting a new bank tax law which might have proved detrimental to the banks. The state’s bank tax law, as applied to national banks, was held invalid by the federal supreme court as a result o f an appeal by the First National Bank o f St. Paul. The proposal outlined by Mr. Yeigel points out that the federal bank law pro vides fo r four possible means o f taxing national banks by states, the fourth which allows use o f an excise tax having been little used. It is this one which would allow the plan proposed for Minnesota, Mr. Yeigel said. Irving Melin, formerly cashier o f the Henriette State Bank, has accepted a posi tion in the First National Bank o f Pine City, Minnesota, and began work there re cently. Since the consolidation of the Henriette Bank with Mora State Bank, Mr. Melin has been working at the Mora Bank. Merge in Dassel Consolidation o f the Kingston State Bank o f Dassel, Minnesota, and the Citi zens State Bank o f Dassel, to be known as the Farmers and Merchants State Bank of Dassel, was announced recently by A. J. Yeigel, state commissioner o f banks. The merged institution will have a capital of $30,000 and will begin business with de posits of $584,000. and Trust C ompany « Resources $25,000,000.00 t MINNEAPOLIS Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 96 Deposits Increase Deposits o f country banks in the Ninth Federal Reserve District increased 8 per cent in the last year, while city banks, members o f the Federal Reserve System, had an increase in deposits totaling $25,000,000 between September 19th and October 17th, the Federal Reserve Bank o f Minneapolis reported recently. Country member banks were able to in crease their holdings o f bonds and other securities 13 per cent during the year. The largest percentage increase in de posits was in the livestock range banks. The volume o f business in the north west during October apparently will equal the total o f last October, which was the largest fo r October in any year since the Federal Reserve Bank o f Minneapolis started gathering statistics, according to the monthly review o f the bank. The forecast fo r Minnesota, North and South Dakota, Montana, and parts of Michigan and Wisconsin is based on con ditions in the Ninth District during the first half o f the month. An increase in the volume fo r Minne apolis and rural portions o f the district offsets a decrease at St. Paul and Duluth, as compared with a year ago, the report said. president, and R. A. Potter o f Owatonna, secretary-treasurer. The association will join in on the state campaign o f the Min nesota Bankers Association to help agri culture, cooperating with County Agent R. W . Seath and the county farm bureau to promote more alfalfa growing, to get lime for rundown farms and better seed for the farmers. The smaller grain movement is called an important factor in the reduced volume o f debits at Minneapolis and Duluth dur ing September and at Duluth during the first part o f October. Dies in Wadena Heads County Bankers The Steele County Bankers Association at a meeting in Owatonna, Minnesota, elected B. M. Hanson o f Medford, presi dent; W . E. Galloway o f Ellendale, vice Warren E. Parker, 59 years old, banker in Wadena, Minnesota, for 35 years, died at his home recently. He was operated on at Rochester following an illness o f sev eral months. He was cashier o f the First National Bank o f Wadena. Surviving are his wife, father, five sons, two daughters, a brother and sister. Mr. Parker was prominent in Masonic circles and was a past president o f the Wadena Lions Club. Bank Celebrates What’s Christmas Without a Calendar IT’S NOT TOO LATE A call to T h e T h o s . D . M urphy C om p an y at Red O ak, Iow a, w ill m ake it unnecessary to disappoint y ou r custom ers. W rite, Phone or Wire THE THOS. D. MURPHY CO |RED O A K , IO W A The Birthplace o f Art Calendars! M em o to Stenographer: Write The Tlios. D. Murphy Co., Red Oak, Iowa, about Christmas calendars and greetings. greetings. Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 Also mention personal The First National Bank o f Gilbert, Minnesota, recently celebrated its twentieth anniversary, having invited 400 to attend. Stores helped by offering special bargains, which brought the people in from the rural districts. A program was given at 1 p. m. in the high school auditorium with supper in the cafeteria. President Alfred Hoel talked and Miss Lillian Havilah, as sistant cashier, made a talk in Finnish on the relation o f banking and farming. H. G. Sandhoff, agricultural instructor, talked on animal husbandry. Carl Salminen, editor o f the Duluth Finnish paper, was the chief speaker. Thirty-five presents were given to visitors. Banker Passes Marshall C. Dalton, fo r years a resident o f Fairmont, and for the last several years cashier o f the First State Bank at Eagle Lake, Minnesota, died at a Mankato hos pital recently, follow ing a short illness with brain fever. Elected Vice President Julius H. Brogmus, for the past three years cashier o f the Security State Bank o f St. Paul, Minnesota, has been elected vice president and a director and assumed active management o f the bank. Mr. Brog mus was born and raised in Iowa and was formally connected with the Citizens Bank o f St. Ansgar and the First National Bank o f Pomeroy. The Security State Bank is one o f St. Paul’s largest suburban banks with resources o f a million dollars. It operated a real estate loan, bond and in surance department, besides its growing savings and commercial departments. Mr. Brogmus has also been elected treas urer and a director of the Riverview Commercial Club, which is one o f the outstanding clubs in the city. 97 North Dakota Entering New Era concern itself. These remarks must be travel. The establishment there of a E. DANIELSON, the president state or possibly a national park has confined to some of the major things. of the Greater North Dakota * Association, had occasion to ad Rarely has nature favored any region been given a good start. “ Of great importance also is the pro dress recently the Service Clubs of Mi with more magnificent and awe-inspiring not. He explained in detail just what scenery than part of that section of the posal to divert the Missouri river so as to create extensive artificial bodies of state known as the Bad Lands. At some the Greater North Dakota Association was and what it was trying to accom time in the future this spectacle of the water in North Dakota ; thereby not only Creator’s handiwork will assuredly be providing great summer recreational plish. A part of his address follow s: more profoundly appreciated than is now centers in this otherwise almost lakeless “ While we may not yet announce that the case. We can do a great deal to state, but, at the same time, diverting a the aims of the Greater North Dakota sufficient volume of water from the Mis hasten that day, and thereby hasten the Association have been fully realized, it souri river each spring to measurably re recognition of our state as a Mecca for is generally agreed that North Dakota duce the hazards of the terrible life and the rapidly increasing volume of tourist has taken a decided step forward. Our state is entering upon a new era—an era that for stability and economic security for its people will be second to none in the United States. For this happy con Make this bank your headquarters when you come to summation no organization, however Chicago fo r the International Live Stock E xposition, strongly financed or ably directed, could December 1 to December 8. ever claim anything but a relatively small part of the credit, since without the resources with which a benevolent Creator has endowed our state, all human effort would be futile. But, on the other hand, having this great heritage of natural resources, having throughout the state a splendid citizenship, and hav ing the energetic and, in fact, unsur passed cooperation of such a citizenship, I wish to say that the work which was F ifty to 90 per cent o f the Chicago undertaken with doubt and misgiving has in all of its branches progressed with E xchange o f a large num ber o f m idalmost uplioped for success. C W ithin 100 Steps of Our Front D oor “ According to a survey made a few months ago by the University of Colo rado, North Dakota is thus far the only state in the union to advertise the com monwealth on a nationwide basis. After listing the names of state advertising agencies throughout the nation, the uni versity’s report declares that ‘the most interesting case of this group is the Greater North Dakota Association.’ Mention is being made also of the sub stantial financial support the Associa tion has received from over the state. Commenting on its methods the report of the university’s survey commission says: ‘This indicates that the experiment has been successful. As far as this study has been able to determine this is the only statewide organization that has suc cessfully advertised the whole state on a nationwide basis from voluntary con tributions. It is impossible to go into details at this time, but its success seems to be due to the fact that it has a de velopment program as well as one of ad vertising. * * * It has approached the problem with a scientific attitude, and has worked to improve the state as well as to sell it to others.’ “ Time and space do not permit of more than slight mention of more than a few of the great projects with which the Greater North Dakota Association must western banks originates w ithin steps o f onr fro n t door. Y o u r live stock shipm ents can be handled by us with a saving o f tim e and interest. T hat’ s why one thousand hanks are correspondents o f the Stock Y ards N ational Bank. THE STOCK YARDS NATIONAL BANK AND THE STOCK YARDS TRUST & SAVINGS B A N K q /" C H IC A G O # 4 Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 100 December 1928 98 SALM ON P . CH ASE , S ecretary o f the T reasury under L IN CO L N (the (Chase ^Xntimtal J&nnk of fíje PINE of ^cto Book STREET C O RNER OF C a p i t a l ............................... N A S S A U $60,00 0,000.00 Surplus and Profits 78,807 ,343.06 D eposits (O cto b e r 3, 1 9 28) 892.38 8,858.54 OFFICERS A L B E R T H . W 1G G IN C h a irm a n o f th e B o a r d JO H N M cH U G H C h a irm a n o f th e E x e c u t i v e C o m m itt e e R O B E R T L. C L A R K S O N P r e s id e n t V ic e P r e s id e n ts S A M U E L H. M IL L E R G E O R G E E. W A R R E N H U G H N. K I R K L A N D C A R L J. S C H M I D L A P P G E O R G E D. G R A V E S JA M E S H. GAN N ON REEVE F R A N K O. R O E W IL L IA M E. P U R D Y HARRY G E O R G E H. SA Y LO R SCH LEY S H E R R IL L S M IT H H . POND H E N R Y O L L E S H E IM E R S A M U E L S. C A M P B E L L M. H A D D E N H O W E L L ALFRED C. W IL L IA M E. L A K E J O S E P H C. R O V E N S K Y ROBERT I. ANDREW S BARR CH ARLES A. SAC K E TT V ic e P r e s id e n t a n d C a s h ie r W IL L IA M P. H O L L Y S econ d FREDERICK W. GEHLE EDWIN A. LEE ALFRED W. HUDSON JAMES L. MILLER JOSEPH PULVERMACHER LEON H. JOHNSTON N orth Dakota C onvention V ic e P r e s id e n t s FRANKLIN H. GATES ARTHUR M. AIKEN S. FREDERICK TELLEEN OTIS EVERETT WILLIAM H. MOORHEAD HAROLD L. VAN KLEECK T. ARTHUR PYTERMAN property destroying floods of the Mis souri and along the Mississippi river. “ Of immediate and surpassing im portance is the agricultural development question. That is the foremost question with which the Greater North Dakota Association has to deal at present. Ref erence to the necessity of agricultural development may seem very common place. It may have become a trite sub ject, but when we consider that agricul ture is the basic industry, the one upon which rests our economic security, then it becomes clear that our concern lies primarily along this line. “ The Greater North Dakota Associa tion is not a benevolent institution for the farmers of this state. It is a purely constructive, non-political organization through which the farmers may function for the advancement of their industry, as it is an organization through which all other business interests within the state may function. It seeks to be of service to all necessary and legitimate en terprises, and as agriculture is the prin cipal industry, the one upon which all other businesses in the state are de pendent, it is natural that it be given primary consideration. “ I feel justified in saying that, guided by the splendid cooperation and advice we have had from practical and earnest men in all parts of the state, as well as from the group of outside members, the work of the Greater North Dakota Asso ciation has been carried out to date with a substantial degree of success. We are now in the midst of a program of con structive activity, such as calls for re newal of our energies and a revival of our determination, that justice may be done to our state, and that North Da kota may not only continue to shine be fore others as a state where great things are started, but also as a state where, with the aid of such boosters as North Dakota is ividely known to possess, great things are carried to a successful con clusion. AMBROSE E. IMPEY ROBERT J. KIESLING LYNDE SELDEN THOMAS B. NICHOLS GEORGE S. SCHAEFFER J. SPERRY KANE GEORGE A. KINNEY C o m p t r o lle r TH O M A S R IT C H IE Foreign and Trust Department Facilities June was favored as the month in which the annual convention of the North Dakota Bankers Association will be held in Minot, by members of the executive committee meeting in Minot. The selection of a definite date was left to R. E. Barron, of Minot, chairman of the executive committee, and vice president of the association. He will confer with other Minot bank ers and with officials of the Association of Commerce before a date is set. He who borrows trouble pays interest with worry. A product is what the men who make it are. Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 99 J . W . Hubbard is now a direetor and vice president of The Citizens State Bank, Mohall, succeeding L. M. Depue, who has resigned. North Dakota Bank News The First State Bank. Glenfield, has increased the number of its directors from three to five. Officers North Dakota Bankers Association P resid en t .......................................................... M. C. Bachelier Grand Forks V ice P resid en t.........................................................R . E. B arron Minot T rea su rer................................................................... J. I. Hegge M addock S ecreta ry............................................................W . C. M acfadden F argo S ch ool Savings A total of 3,645 pupils out of an en rollment of 6,453 pupils in the Sioux Falls, South Dakota, schools deposited a total of $840.93 in the school savings sys tem conducted under the auspices of the Union Savings Association, at the last banking day, it was announced recently in the weekly report of the school’s sav ing system. The percentage of depositors was 56.4 per cent and the amount of interest for the week was $14.37. The balance on hand now is $38,488.99. Sells B ank Interests David Lloyd, organizer and president of the First National Bank of LaMoure, North Dakota, completed negotiations recently whereby most of his holdings in the bank are sold to A. F. Lehr and J. M. Hummel of Gackle. Mr. Lehr suc ceeds Mr. Lloyd as president of the bank, but Mr. Lloyd continues as a director. Mr. Lehr is also president of the First National Bank of Gackle. Paul Adams continues as vice presi dent and R. A. Lowe as cashier of the bank. Mr. Hummel’s name has been added to the board of directors. Mr. Lloyd who is just past 80 years has been actively engaged in the busi ness life of LaMoure since the early ’80’s. He organized the First National Bank of LaMoure more than 30 years ago. It is said he has placed loans of upwards of $3,000,000 and never had to resort to foreclosure proceedings. Dies in Jam estown D. C. Rand, 51, a resident of James town, North Dakota, for the last 30 years, president of the Citizens National Bank, owner of the Northern Auto Com pany and considerable city and farm property, died at his home recently fol lowing an illness of several months. Mr. Rand was born at Sheldon, N. D. He was a member of the El Zagal temple, Fargo, the Jamestown Masonic lodge, A. F. &. A. M., the Jamestown W . C. M A C F A D D E N S ecretary lodge of the Elks, the Episcopal church and had taken a prominent part in the development of the community. He es tablished the Northern Auto Company in 1907 and had been engaged in the auto mobile business continuously since then. S ound C onditions Prevail Sound banking conditions prevail in North Dakota, according to officials of the state banking department who have recently compiled the statement showing the condition of all state banks at the time of the last call for a report on October 3. Deposits have increased and loans and discounts also have gone up, indicating a tendency on the part of banks to be more liberal in their loaning policy. At the same time, it is pointed out, the statements of the banks do not show as heavy an increase in deposits as might reasonably be expected from the sale of crops produced this year, the reason be ing that a relatively large part of the wheat and other crops is being held on the farms in hope of obtaining higher prices. All banks are carrying heavy reserves with approved federal reserve agents, some of the money from this year’s crop having not yet been invested. This item totals $12,087,671,56, an increase of $1,510,022.97 since October of last year and $3,902,153.07 since June. Demand certificates of deposit, a form of “ quick” money, totals $807,285.99 an increase of $514,186.10 since October, 1927, and of $279,498.05 since June. North Dakota News Clarence Bahr has accepted a position as bookkeeper of the Northern State Bank, Grand Forks. The Secretary of State has issued a certificate changing the name of the In terstate Bank of Billings County, Sentinel Butte, to “ The Interstate Bank.” This bank has also renewed the term of its corporate existence and increased its capital stock from $10,000 to $15,000. O . A . R u u d is now a director of The Farmers State Bank, Hoople, succeeding Robert Baird, who passed away recently. S. A . Haas, formerly assistant cashier, is now cashier of the First Security Bank, Raleigh, succeeding W. C. Grace, who is now out West. Franklin. Gifford has accepted a posi tion as assistant cashier of the Shields State Bank. Ernest W . Pederson has accepted a position as assistant cashier of the Se curity State Bank of Killdeer. ‘ "B ootleg" M on ey and Safety o f Call Loans ( Continued from page 18) terest rates. The result would be an in crease in the rate with a consequent re turn of money into the market. Again, there are many lenders representing a large number of diversified interests, and it seems that with the great volume of outside money now in the market, that rates will remain high enough to prevent the sudden withdrawal of large amounts. A Proper Risk “ Taking into consideration the experi ence and responsibility of correspondent banks, through which call loans are usually obtained, the margin demanded in the security, the liquidity of the market, and the reputation and responsibility of the members of the New York Stock Ex change, it is my personal opinion that call loans in reasonable amounts repre sent a proper business risk for banks de siring to obtain, for a portion of their funds, and without sacrifice of liquidity, a higher rate of interest than that paid for open accounts.” L. C . Fischer is now a direetor of the First State Bank of Strasburg. Watch Needs at Home Laura V. Meyer has been appointed stenographer and assistant teller of the Citizens State Bank of Wales. J. L. Mitchell, president of the First National Bank of Sioux City, likewise sees no cause for alarm in the call loan market, but sounds a note of caution to Iowa Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 100 bankers not to overlook the credit needs of their own communities. He says : “ I feel that loans such as are issued, as a Avhole, are good and that there is suffi cient collateral back of them to make their liquidity sound. Possibly there are excep tions to the rule, but on the whole, I feel they are good. However, 1 have some times wondered whether or not some bankers in Iowa were not taking the atti tude of leaning backwards when they call attention to secondary reserve and show large amounts loaned on call. Secondary reserve is a very commendable position for a bank to occupy, providing they have not misused their communities by withholding funds from a legitimate safe use from their clientele with the sole purpose in mind of showing secondary reserve. Funds deposited in Iowa banks should be so used as to assist borrowers in the com munities where the banks are located so that community can prosper. I do not mean by this that loans should be made that are not liquid, but I do believe that as far as possible the money available in Iowa should be used for Iowa purposes and where we border on other states it should include the entire territory that we are serving. “ I fully realize the necessity of being in a strong position of first reserve and a certain percentage of secondary reserve, but in viewing some bank statements I find that a large portion of their funds have been loaned or invested in securities, in which would be included brokers’ loans, when in their community there are loans available that are safe and sound and of not long maturities. “Now, money produced through agri culture will only be made when proper, safe consideration is given to financing those that are engaged in this occupation. I, myself, prefer loans to our local cus tomers and particularly to good farmer clients in this territory whose statements show that they are entitled to assistance in feeding cattle and hogs and retaining their surplus of grain and corn so that all can be marketed in an orderly manner.” T he Supreme Gift Life M ay it be genuinely enjoyable and filled with successful achievements for you. in 1929 It has been a pleasure to serve you— to work with you during the past year— and in token o f our appreciation we send this sincere Christmas-New Year message to our bankerfriends in the Middle West D r o v e r s NATIONAL B A N K TRL5T65AYING5 BANK Union Stock Yards Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 <• Chicago 101 IOWA SEGTION Officers Iowa Bankers Association P resid en t............................................. R ay Nyemaster D avenport V ice p residen t................. M. W . Ellis Charles City T rea su rer............................E. E . Phelps Mt. Pleasant R A Y NYEM ASTER President S ecreta ry......................................... P rank W arner P R A N K W A R N E R Secretary Des Moines I. B. A. A pp oin tm en ts Ray Nyemaster of Davenport, presi dent of the Iowa Bankers Association, recently announced his committee ap pointments for the year 1929. The ap pointments follow : Agriculture — O tto C. H erm a n B oon e, ch a irm a n ; C. E . N a re y , S p ir it L a k e ; I r a R od a m a r, W a t e r lo o ; E . E . P h elp s, M ou n t P le a s a n t; J . F . A rch e r, A r c h e r ; F r e d S. R isser, C h a r ito n ; C. R . W o o d e n , C en te rv ille ; F . L . P e a rso n , W e st B r a n c h ; C. S. R ye, M a n ly ; C. J . A d a m , G u tte n b e rg , an d T . P . B reh en y , A tla n tic . Americanisation— L . A . A n d re w , O ttum w a, ch a irm a n ; O. P . M iller, R o ck R a p id s ; R . E . J on es, W e b s te r C it y ; H a n fo r d M a cN id e r, M a so n C it y ; F . S. R ich a rd s, M c G r e g o r ; J . W . M iller, J r., D e n iso n ; E . D. R a y b u rn , M o n te z u m a ; J . M . D in w id d ie , C edar R a p id s ; G. L . M itch e ll, M a q u o k e ta ; H . J . S tu h lm iller, F o n ta n e lle ; T . W . K rie e h b au m , B u rlin g to n . Auditing— D. V . F e r ris, D ia g o n a l, ch a ir m a n ; H a lste a d M . C arpen ter, M o n tice llo , an d N . P . B la ck , P er ry . Banking Analysis— I r v in J . G reen, D a v e n p o r t, c h a irm a n ; L . F . P a rk e r, C h erok ee; E . H . R ich , F o r t D o d g e ; K . J . J oh n son , O s a g e ; F . M . O rr, M o n o n a ; L e o J . W e g m a n , C a rro ll; R . A . C ra w fo rd , D es M o in e s ; E . R . M o o re , C edar R a p id s ; O scar A n d e rso n , L a m o n i; F . V o n S ch ra d er, O ttu m w a ; C arl M . K e ck , W a s h in g t o n ; E m il W e b b ie s, B u rlin g to n , and L . A . A n d re w , state su p erin ten d en t o f b a n k in g . Bank Taxation— E . H . F u rro w , Cedar R a p id s, ch a irm a n ; C. E . B re n to n , D es M o in e s ; J o h n W . F o s te r, G uthrie C en ter; A . M . H en d erson , S to r y C it y ; N . C. G in d o rff, D u b u q u e ; G e o rg e J . S ch aller, S to rm L ak e, and J . C. J a co b se n D a n b u ry. Federal Beserve— C harles C. K u n in g , Ce d ar R a p id s, ch a irm a n ; H . L . H o rto n , D es M oin es, a n d C. J . W e ise r, D ecora h . Insurance— R o b e r t L . L e a ch , A d e l, ch a ir m a n ; P . J . T h ede, D ix o n , and H . H . K a rrm ann, O elw ein. Legislative— C. C. J a co b so n , S io u x C ity, ch a irm a n ; F r e d J . F ig g e , O ssia n ; M . W . F itz , M a n so n ; R . D . M cC u llou g h , W a p e llo ; F . E . S h eldon , M ou n t A y r ; C. E . B em an , O skaloosa, an d W . G. C. B a g le y , M a son C ity. County Organisation— I . O. H asb rou ek , c h a irm a n ; E . S. P itm a n , B u ck ey e, and S to d d a rd M . R o b in so n , In d ia n o la . Fivers Development— J. K . D e m in g , D u buqu e, c h a irm a n ; A . C. S m ith , C lin to n ; G us ta v S teuben , D a v e n p o r t; B . L . M c K e e , M u s c a tin e ; J . L . E d w a rd s, B u r lin g to n ; J . A . D u n la p , K e o k u k ; J oh n P . E ck e rt, G u tten b e r g ; J . L . M itch e ll, S io u x C it y ; F . F . E v erest, C ou n cil B lu ffs , a n d C. F . Joh n ston , Sheffield. Time Locks— J o h n Sieh, S p en cer, ch a ir m a n ; R a y W h ita cr e , W e s t L ib e r ty , and I . G. M cQ u een, M ou lton . Publicity— G. O. V a n D erveer, W a v e r ly , ch a irm a n ; L . L . B lom g ren , W in te r s e t ; H a r o ld J . K r ie b s , E lk p o r t ; B e rt M c K e e , D es M o in e s ; C. F . R ausch er, O ttu m w a ; G. A . P h elp s, K in g s le y , a n d G. H . M cM u rra y , G rinnell. State Banking Board— L . A . A n d rew , O t tum w a, ch a irm a n ; R a y N y em a ster, D a v en p o r t ; C. J . W o lilen b erg , H o ls te in ; E . W . M ille r, W a te rlo o , and H om er A . M iller, D es M oin es. Education— M . E . T ate, K eok u k , ch a ir m a n ; M . H . D ak e, L o s t N a t io n ; W ill A . L an e, W a t e r lo o ; W . C. R ath ke, G le n w o o d ; E . N . D ou g h erty , C reston ; F r a n k Cam p, W e s t U n io n ; W . N . E n y a rt, A g e n c y ; A . W . Crossan, E ld o r a ; B . B . V orse, D es M o in e s; C arl C. W o lilen b erg , H olstein , and H . E. S m ith , C larion. county vigilance committee being the guests of the association. Anthon vigi lantes were represented by L. J. Schrunk, Wm. Schrunk, John Walling, Ray W il son, Ronald Ripple and John Stender. E. S. Phelps Succeeds Emil Webbies E. S. Phelps, prominent Burlington, Iowa, business man, and head of the Phelps Insurance agency of that city, has been elected president of the First Iowa State Trust & Savings Bank of Burlington, succeeding Emil Webbies, who resigned on account of ill health. He has already assumed the duties of his new position. Mr. Phelps, a native of Burlington, is likewise one of its most influential citi zens. The insurance agency that bears his name has been in operation since 1883. He will retain his interests in the agency. Mr. Phelps is president of the Citizens Water Company of Burlington, V an G order M arried The marriage of E. S. Van Gorder, president of the First National Bank of Audubon, Iowa, to Mrs. Jessie McKee of Connorsville, Indiana, was performed re cently. Mr. and Mrs. Van Gorder have left for an extended wedding trip through Cali fornia. They will return to Audubon shortly before the holidays. C ooperative Bank Under the new cooperative banking law passed some time ago by the Iowa legislature, the town of Leland, in Winne bago county, is establishing a cooperative bank, the second of its kind in the state. The first cooperative bank was started at What Cheer a year or two ago. Any profits derived from the bank will be credited to the depositors of the institu tion after all expenses for conducting the bank are paid. Sioux City M eeting John B. Sills of the Anthon State Bank; Edward O’Donnell, I. G. Umhoefer and N. H. Nielsen, of the Citizens State Bank, were Anthon’s representatives at the meeting of the Woodbury County Bankers Association held recently in Sioux City, Iowa. Two hundred persons attended the ban quet with the members of the Woodbury E . S. P H E L P S a past president of the Burlington Ro tary Club, and a member of the Greater Burlington Association. He likewise served a term as president of the Fire Underwriters Association of the North west and is nationally known as an in surance man. Mr. Webbies, the retiring president, and past president of the Iowa Bankers Association, became ill six weeks ago and requested a leave of absence that he might go to Battle Creek to regain his health. He was able to return to Burling ton later, and then went to California to rest. His wife and children have joined him on the west coast. The First Iowa State Trust & Savings Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 102 Bank is one of Iowa’s largest banks backed by a strong directorate, which includes the following men: John Blaul, William Bongert, William Carson, H. W. Chittenden, W. N. Churchill, J. R. Cope land, Walter B. Eaton, W. F. Gilman, W. H. Grape, G. G. Higbee, W. C. Kurrle, C. S. Leopold, C. H. Mohland, Robert Moir, C E. Perkins, E. S. Phelps, H. S. Rand, RayJRedfem, Henry Ritter, Ralph E. Schramm, J. J. Seerley. Buys B ank Stock L. R. Perry of Forest City has bought of J. P. Helgeson the stock formerly owned by the latter in the First National Bank of Thompson, Iowa, With the pur chase of this block of stock Mr. Perry was named as a member of the board of directors of the institution. Stock in the bank that was owned by C. H. Martin of Des Moines has been pur chased by C. F. Lehmann. M eet in C larion U. II. Rummel was reelected president of the Wright County Bankers Associa tion at a meeting at Clarion, Iowa, re cently. H. P. Luick, Belmond, vice presi dent; Geo. W. Young, Jr., Clarion, secre tary; and D. C. Young, Clarion, treasurer are the other officers of the association. Y our Om aha Items About forty bankers representing every bank in the county were present and the frequent bank robberies in Iowa and near by states was the principal topic dis cussed. As Private Secretary Miss Lenore Swinehart has accepted a position as private secretary to the president of the Knoxville National Bank and Trust Company at Knoxville, Iowa. In Omaha H ospital Clyde Rochholz, assistant cashier of the Exchange Bank of Adair, Iowa, under went a, hernia operation at one of the hospitals in Omaha recently. Mrs. Roch holz accompanied her husband and ex pects to remain with him. M eet in Sioux City J. P. Brooks, cashier of the Farmer’s Savings Bank of Pierson, Iowa, Mayor W. H. Hinkhouse, Marshall E. S. Crom, D. J. Pedersen, Dewey Forbes, James Watkins, A. N. Bryant, and P. L. Mc Curdy attended the meeting of the Bank ers Association and Yigilance Committee, which was held in Sioux City recently. T h e m e e t in g Avas c a lle d pose of c u r b in g d is c u s s in g h o ld u p s w ays and fo r th e p u r an d m eans bank of r o b b e r ie s , w h ic h h a v e b e e n so p r e v a le n t . F or 62 years T lie Om aha N ational Talks were given by Charles Logan, of MoAÛlle, president of Bankers Associa tion ; Sheriff Paul Beardsley ; Sheriff-elect John A. Davenport, who was a guest; Deputy Sheriff A. M. Mead; Chief of the Vigilance Committee C. C. Jacobson of Sioux City, and W. E. Hall, mayor of Moville. Bank lias ren dered exceptional serv ice on Om aha items. T oda y we serve m any o f the leading banks through ou t the country. Y o u r bank can profit by the advantages we offer. H ouse W arm ing The Omaha National Bank F A R NA M R ESO URC ES Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AT OV ER December 1928 S E V E N T E E NTH FO R X V M I L L I O N S Employes of the Whitney Loan & Trust Company Bank of Atlantic, Iowa, and the Whitney Insurance Agency and their families staged a surprise house warming affair and fruit shower recently in honor of Mr. and Mrs. Ralph Lehman in their new home. Mrs Lehman is em ployed with the insurance department at the bank. Twenty were present at the affair. O pens to P u b lic The newly organized State Bank of Terril, Iowa, opened its doors to the pub lic recently, and in the center of a pros perous trade territory, the new institution began business under a bright prospect, with every indication of a prosperous future. The institution is capitalized at $25,000 with a surplus of $5,000. F. E. Duroe of Minneapolis is president, Gay lord Olson, vice president, and C. R. Duroe, cashier. The board of directors consists of P. E. Duroe, C. R. Duroe, Gay- 103 lord Olson and Fritz Buhl of Terril and L. A. Parker of Des Moines. T o B u ild A d d ition A $25,000 addition to the Euclid Ave nue State Bank building will be added to tliQ present structure early next year it was announced by Mayor G. B. Jensen, president of this Des Moines Bank. Construction will get under way next spring, as soon as a building now occupy ing the site can be dismantled and neces sary grading completed. Offices of the bank will be moved from its present corner quarters to a position near the center of the new building, Mr. Jensen stated. Nepovim and Hadrava were taken to the state penitentiary at Fort Madison, Iowa, on May 23rd for robbing the Palo and the Swisher banks. Their sentence was for the duration of their natural lives. But since their incarceration they have been working on a plan to prevent bank holdups and when it is completed they have promised to turn it over to the bankers of Iowa. A d d D eposit Boxes Since the merger ings Bank with the pany Bank in Des deposit boxes have of the Peoples Sav Bankers Trust Com Moines, 600 safety been added to the vaults of the latter institution, it was announced by B. Frank Kauffman, presi dent. No other expansions are contem plated at this time, it was reported. Vote o f Thanks At the meeting of the Crawford County Bankers Association, which was held at Kiron, Iowa, recently, a resolution was passed according Sheriff A. C. Greene a vote of thanks for his many good deeds and courageous efforts in curbing law lessness, particularly that of highway robbery and holdups. The County Bankers Association has been cooperating with the county vigi- Celebrates B irthday J. W. Wadsworth, president of the board of directors of the Kossuth County State Bank at Algona, Iowa, was 75 years old recently. The bank force re membered his birthday by placing a large and beautiful bouquet upon his desk. Mr. Wadsworth entered the Ingham & Smith Bank, the first in Algona, on May 12, 1873, as bookkeeper. He was then a young man 20 years of age and from a clerk he rose to cashier, vice president and later president. Fifty-five years of service spent in the same location is a record of which Mr. Wadsworth might well be proud. Of the original officers of this pioneer bank, which consisted of Captain W. H. Ingham, Lewis II. Smith, Barnett Devine, Theodore Chrischilles, J. R. Jones and others, he is the only survivor. O rganize V igilantes Seventy-seven vigilantes in various parts of Keokuk County, Iowa, were ap pointed at a recent meeting of the Keokuk County Bankers. The meeting was called by Attorney Willcockson and Sheriff Beasey. Hi Yackey and A. B. Neyman of the Des Moines Department of Justice also attended. There had in years gone by been a similar organization in Sigourney, but no organization of the entire county and, with the large number of bank robberies occurring, it was considered wise to or ganize the entire county, the county organization to be a part of a like state organization. T o Prevent H oldu ps If the old adage that it takes a thief to catch a thief is true, then it logically follows that the best person to catch a bank robber is a bank robber. For that reason, Jerry Nepovim, 21, and Joe Had rava, 29, believe they are well qualified to work out a scheme for preventing and thwarting bank holdups. And that is the very thing they are attempting to do. merger o f the Peoples Savings Bank into the Bankers Trust Com pany marks am other step o f progress in our history. W e invite you to share in the advantages o f this increase in resources and personnel. Officers and Directors B . F. K a u f f m a n , P residen t B . B . V o rse , V ice P resident O. H . M a r t i n , V ice P residen t L . B . B a r t h o l o m e w , V ice P res. E. A. S l in in g e r , V ice P residen t Ca r l W . M e s m e r , Asst. V ice P res. C. H . S t e p h e n s o n , Cashier S. C. P id g e o n , S ecretary E. R . M il l a r d , Assistant Cashier P a u l B eer P residen t, The F lynn D a iry Co. D r . O. J. F a y S urgeon H en r y Fr a n k e l T reasurer T ou n k er B ros.-H arris-E m ery Co. J. G. G a m b l e A ttorn ey J. W . H o w e l l V ice P residen t W arfield-Pratt-H ow ell Co. J. W . H u b b e l l V ice-P res., F. M. H ubbell S on & Co. S. L. S h e u e r m a n S ecreta ry, Sheuerm an B ros., In c. B A N K E R S T R U S T CO. B A N K Cor. 6th and L o c u st Sts., D es M oines Capital $1,000,000.00 Surplus $ 2 0 0 ,0 0 0 .0 0 Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 104 lantes, believing that this system affords much protection. The association presented Sheriff A. C. Greene with a check for $100.00. Cathcart, Dr. Milton Daily, C. C. Flanley, H. P. Guiney, F. L. Hutchins, H. J. Hutton, Mike King and George Sinclair of Sioux City, and C. J. Wohlenberg of Holstein, Iowa. and the concern will continue the busi ness policy it has pursued under the management of these men. Change in Officials H. W. Wente, cashier of the Commer cial National Bank, was elected president of the Black Hawk County Bankers As sociation for the ensuing year, at the annual meeting held recently in Water loo, Iowa. Mr. Wente succeeds J. H. Byers of Cedar Falls. Other officers elected were H. C. Smith, cashier of the Cedar Falls National Bank, first vice president; Ralph Bordner, Hudson, second vice president; Albert J. Burk, First National Bank, Waterloo, secretary, and F. P. Davis, president of First National Bank, Dunkerton, treasurer. Sheriff H. T. Wagner discussed the timely subject of protection of banks against robbery, suggesting a watchman behind a steel balcony, for each bank. The plan would entail considerable ex pense but would aid materially in the reduction of the number of bank holdups, and lower insurance rates, the speaker said. L aid to Rest Last rites were held recently for John Jacob Large, former president of the First National Bank of Sioux City, Iowa. Intimate friends of the family and former business associates were active and honorary pallbearers. Active pall bearers were A. B. Darling, W. J. Hay ward, L. L. Hobelson, W. L. Frost and W. W. Orcutt, of Sioux City, and A. D. Horton of Hawarden, Iowa,. Honorary pallbearers were C. W. Brit ton, W. J. Bertke, Charles Breun, John Announcement was made recently of the advancement of J. Fred Mattert and M. D. Brodt to the presidency and cashiership of the First National Bank of Sibley, Iowa. J. B. Ludlow becomes vice president and a new member of the board of directors. The affairs of the bank have been entirely in charge of Messrs. Mattert and Brodt for a number of years, practically since Mr. Emmert moved to Canada more than 15 years ago, A Distinctive Service fo r Banks and Bankers Through a special division, handling exclu sively the accounts of banks, a service is offered which is complete, efficient and distinctive. This division, in charge of four officers, is co-ordinated by the officers with other divi sions and departments of the two banks. Our service for banks and hankers, developed since 1863, is completely outlined in a booklet which bankers have found helpful. W e will gladly mail you a copy on request. F IR S T N A T IO N A L BANK ofCHICAGO ■Affiliated FIRST TRUST AND SAVINGS BANK Resources Exceed $450,000,000.00 Frank O. Wetmore, Chairman Melvin A. Traylor, President H eads County Bankers Rates Favorable Iowa compares favorably with otherstates in the matter of bank insurance rates against bandits. The rate in Iowa is $1 a thousand, while in Oklahoma, the same insurance costs $10. Other states having high rates are Kansas and Illinois, $6; Michigan and Missouri, $4, and Arkansas and In diana, $3. That coverage is for protection only against holdup men staging daylight rob beries. Additional insurance is carried by banks against burglaries, embezzle ment and other losses. The banks are given a discount of 10 per cent each for the employment of daytime watchmen up to three. Other allowances are made, computed on the basis of the equipment of the bank and its location with refer ence to the section of the city and prox imity to a police station or county author ities headquarters. Discounts are allowed for resistance enclosures, daylight holdup alarms and tear gas equipment. N oon H ou r Closing The two Colfax, Iowa, banks, the Citi zens State and First National, will close S o ld In I o w a b y J. H . W E L C H P R IN T IN G CO. 1 1 6 6 -6 8 -7 0 S ix t h A v e ., D e s M o in e s . P r i n t e r s , B in d e r s , M f g . S t a t i o n e r s . Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 105 THE NAME The Commercial National —’Waterloo” means a strong bank—a good business friend to its correspondents —a busi ness friend with the facilities and an organisation to give exceptionally com petent and intelligent banking service as a matter of daily routine. s v E. W. MILLER, President JAMES M. GRAHAM, Vice President H. W. WENTE, Cashier S. C. KIMM, Assistant Cashier R. L. PENNE, Assistant Cashier C. S. McKINSTRY, Assistant Cashier 2 V C o m m e r c ia l N a t io n a l Ba n k WATERLOO, IOWA CAPITAL AND SURPLUS— ONE-HALF MILLION DOLLARS |B= Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 106 their places of business during the noon hour. This action is taken at the recom mendation of the State Bankers Associa tion and as a safeguard for the banks. During the noon hour there is almost always just one man in each bank and with the outbreak of more daylight bank robberies the past few weeks over the state, the Bankers Association is recom mending that all of the banks in the smaller towns and cities take all precau tions possible to safeguard against these holdups. A. B. I. M eeting The Tri-City Chapter of the American Bankers Institute met recently in Daven port, Iowa, for study on the subject “Negotiable Instruments,” with Attorney Albert Block of the American Commer cial and Savings Bank as the instructor. The class met in the First National Bank. In M em oriam The Federal Reserve Bank of Chicago has made public the resolutions passed by its board of directors on the death of Director C. H. McNider which occurred October 30th. The resolutions follow : “ WHEREAS, Charles Henry McNider has served as a director of the Federal Reserve Bank of Chicago since January 3, 1920, and “ WHEREAS, Mr. McNider, by his clear sighted vision acquired by signal achievements in financial and business activities, by his wise and able counsel, and by his generous gift of time and energy, has rendered the Federal Re serve Bank of Chicago distinguished and invaluable service and has contributed to the sound development of the Federal Reserve System as a whole; be it “ RESOLVED, that in the death of Mr. McNider, the Federal Reserve Bank of Chicago has been deprived of a valuable friend and a wise counsellor; and be it further “ RESOLVED, that as an expression of our sympathy a copy of these resolutions be spread upon the records of this board, and that a copy be sent to the surviving members of the family of the late Mr. McNider.” Clayton C ounty M eeting Seventy-nine bankers and guests rep resenting every town and nearly every bank in the county attended the annua! fall meeting of the Clayton County Bankers Association which this year was held in Guttenberg, Iowa. The banquet was served by the ladies of the 0. E. S., and was followed by a short business meeting at which R. C. Lemka, now deputy clerk of the courts, resigned his office of president. K. W. Rash of Monona, former vice president, was advanced to the office of president and George Downey of Edgewood was elected to succeed Mr. Rash. F or R eserve D irector C a p ita l - - O n e M illio n D o lla rs R e so u rc e s - T e n M illio n D o lla rs P rom pt, intelligent service is rendered correspondent banks b y every good bank, but the outstanding feature o f the F IR S T N A T IO N A L B A N K O F SIO U X C IT Y service is our real co-operation in m eeting the needs o f corresp on d ent banks in the extension o f credit and helpfulness in securing high class investm ents fo r their secondary reserve. W E IN V IT E Y O U R A C C O U N T D I R E C T O R S : R. J . A N D R E W S RALPH J. HALEY W. S. K N A P P Real E sta te an d Insurance P r e s i d e n t , H a le y - N e e l e y C o. P r e s i d e n t , K n a p p & S p e n c e r Co. F. B. B U C K W A L T E R W . A. K L I N G E R A. S . H A N F O R D , S R . P r e s i d e n t , T h e B u c k w a l t e r C o. Constructor P r e s i d e n t , H a n f o r d P r o d u c e C o. E. C. C U R R I E R J . L. M IT C H E L L President, Hansen G lass & P ain t H. A. G O O C H President Co. V ic e P r e s i d e n t D. C. S H U L L D A V E D A V ID SO N A t t o rn e y P r e s i d e n t , D a v i d s o n B r o s . C o. JO H N B. K E E F E E. B. F L IN N S e c r e t a r y - T r e a s u r e r , M. L . F li n n H E N R Y G. W E A R E Ranchm an and Ban ker P re s i d e n t. M. L . F l i n n P a v i n g C o. P a v i n g Co. Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 President Irvin J. Green of the First National Bank of Davenport has been nominated for election to a directorship of the Chicago District of the Federal Reserve Bank, the vacancy being caused by the death of the late C. H. McNider of Mason City. Five states are included in the Chicago District, Iowa, Illinois, Indiana, Mich igan and Wisconsin. The electing banks for the vacant directorship number about 300. One other Iowan has been placed in nomination. He is Glenn M. Averill, Cedar Rapids, also a very well known Hawkeye banker. Christmas Clubs Iowa banks will distribute $5,600,000 in Christmas clubs. Of this amount, Des Moines banks will contribute approxi mately $176,300. The Des Moines figures by banks are, roughly: $50,000, Central State Bank; $45,000, Bankers Trust Company; $40,000, Capital City State Bank; "$30,000, Valley National Bank; $5,500, Home Savings Bank; $4,000, Euclid Avenue State Bank; $1,800, Continental Trust and Savings Bank. 107 Some of the banks do not have larger amounts because they did not stress the Christmas savings angle. Other banks discontinued the club. Among those who discontinued the club are Iowa National Bank, Des Moines National Bank and the University State Bank. Though the fashion for Christmas clubs is apparently declining, a record Christmas club distribution, estimated at $550,000,000, will be made by more than 8,000 banks and financial institu tions of the United States. In the distribution, more than 8,000,000 members will participate. The sum is about 10 per cent larger than last year’s distribution of about $500,000,000 and more than five times the amount in 1920. The average distribution to each member amounts to $59.10, a slight increase over 1927. The consolidated bank, the Continental Illinois Bank and Trust Company, takes its place as one of the financial giants of the country. It has combined deposits of $874,209,900 with combined resources of a billion dollars. On the Warpath Iowa’s vigilantes are on the warpath. The recent robbery of a trio of Iowa banks has been taken by the vigilantes as a challenge flung in their faces by the holdup gangs, and vigilance organizations all over the state are preparing a drastic reception for future invaders. According to a bulletin issued by Frank Warner, secretary of the Iowa Bankers Association, the vigilantes are clamoring for more sawed-olf shotguns and am munition, and county units are holding rifle and pistol matches daily. Linn County vigilantes even have an airplane at their disposal. Cass County bankers following the bank robbery at Atlantic got busy, and are now completing the organization of a vigilance committee. Formerly Cass had not been organized. Worth County vigilantes now are mak ing a daily patrol of the banks located in the various towns morning, noon and 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 F o r q u a lit y w o r k a d d re ss The H o m e ste a d Com pany, D es M o in e s Is Assigned Iow a T erritory W. M. Knutson, representing the Illi nois Merchants Trust Company of Chi cago, in Iowa, Nebraska, Minnesota and South Dakota, for the past few years, is now devoting his entire time to build ing up Iowa business for the Continental Illinois Bank and Trust Company, which A 1 connection with the I C entral S tate Bank gives you the benefit o f the resources and facilities of an institution adequately W . M. K N U T S O N ca a was recently formed by the consolidation of the Illinois Merchants Trust and the Continental National Bank and Trust Company. Mr. Knutson is a thorough student of Iowa banking conditions, starting in the banking business in northern Iowa at the age of seventeen years. At the age of twenty-one he was cashier of an Iowa bank. He served with the Iowa state banking department for three years and has been four years with the Illinois Mer chants. equipped to meet every de mand o f modern banking. C entral State Bank | OF DES M OINES g S3 = y //A » m ~ m u i g Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis —4 ^ December 1928 108 Bank Help T h orou g h ly experien ced office m en and w om en fu r nished to the em ployer w ith out charge. <L Commercial E m p lo y m e n t Bureau Merchants Bk. Bldg. St. Paul evening-, while the Cherokee County vigilantes are making a practice of sta tioning men at vantage points during the opening hours, the noon hour and at clos ing time. These sharpshooters command every approach to each bank, and the robber crew that tries to operate in Cherokee County will not find the vigi lante artillery loaded with blanks. Several other counties have adopted similar measures, and a number are clos ing at 3 o’clock instead of 4 o’clock in the afternoon. This practice will con tinue during the winter months, so that it will still be broad daylight when the front blinds are drawn, and holdups will not have the cover of oncoming night to shield them in their getaway. M eet in Des M oines The Polk County Bankers Association held its regular monthly meeting recently -A y&zrry (Tfyristmas T h e First National Bank o f Omaha wishes its correspondent banks a M erry Christ mas. W e have had pleasant relations w ith some o f our correspondent banks for nearly three-fourths o f a century. u n m r a At your service in Eastern Iowa and Western Illinois PEOPLES T RUST & SAVINGS BANK in the East Des Moines Club rooms. Following the dinner, A. J. Robertson, vice president of the Iowa National Bank, gave a talk on “Bonds from the Standpoint of the Bank as Purchasing Them.” A business meeting followed the address given by Mr. Robertson. One thing of particular interest en gaging the attention of the Polk County Bankers Association is an agricultural project being worked out between the county association and the county agent for Polk county. Elmer Myhre, cashier of the Farmers Savings Bank at Ankeny, made a report on behalf of his commit tee that had conferred with the agent on the agricultural project of making it more convenient for farmers to have a supply of lime on hand with which to lime the soil, looking toward the Avidespread introduction of alfalfa produc tion in this county. Walter B. Skinner, cashier of the Farmers Savings Bank at Runnells, reported on what his bank had done in the little town of Runnells and gave an interesting talk on the forma tion of a local organization of twenty farmers with his bank in building a large bin that will hold several carloads of lime, which is sold both to members and nonmembers of their organization at cost plus 20 cents a ton. It is anticipated that the 20 cents will eventually pay the original twenty farmers and the bank for the cost of building the lime bin with the slight overhead involved in the man aging1 of it. It just makes it possible for farmers to get lime at any time they may want it or whenever they find the roads are available to haul it. Hereto fore, oftentimes the lime arrived when the roads were bad or when the farmer was so tied up with his work that he could not get to town. It then was in cumbent upon him to pay the demur rage charges, all of which added to the cost as well as to the inconvenience of the farmer. The meeting being the annual one, nerv officers were elected by the forty bank ers present. The new officers elected were : President, Elmer Myhre, cashier, Farmers Savings Bank, Ankeny; vice president, Will A. Luge, cashier, Capi tal City State Bank, Des Moines ; secre tary, W. E. Grismer, cashier, Citizens State Bank, Mitchellville ; treasurer, E. A. Landess, assistant cashier, Polk City Savings Bank, Polk City. M erge in V in ton P e o p le slr u slIk S a y in ^ a n k C L IN T O N , IO W A.. Remember i t this w ay-"P E O P LE S TRUST Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 Establishment of the strongest and big gest bank in Benton county’s history was revealed in Vinton, Iowa, recently, with the announcement of the merging of the Farmers National Bank and the Vinton Savings Bank. Combined assets of the two merging institutions will total nearly $1,500,000, 109 according to A. H. Ellis, president of the new bank. The new bank will be called the Farm ers National Bank in Vinton. Officers of the new merged bank will be : Clarence Nichols, chairman of the board of directors ; A. H. Ellis, presi dent; J. F. Traer, vice president; H. M. Main, cashier ; F. L. Gerberich, assistant cashier. The board of directors of the new bank will be composed of Clarence Nichols, J. D. Nichols, Garth Carrier, George Horridge, A. H. Ellis, H. M. Main, all from the old Farmers National Bank; and Dr. C. C. Griffin, W. E. Bickel and J. F. Traer, from the old Vinton Savings Bank. Successful Management By Men With Over 30 Years’ Experience In The Operation O f Public Utilities Financing And Directing Industrial Companies A dvocates H old in g Crops It is the custom of M. W. Fitz, presi dent of the Farmers Savings Bank at Manson, Iowa, to publish in his local newspaper occasionally a column discuss ing crops and the farm situation in gen eral. Recently Mr. Fitz commented on the disposal of the 1928 corn crop, saying that he believed it better to hold the crop for better j:>rices, rather than to make a sacrifice resulting in a loss. The grain buyers, of course, think it wrong for Mr. Fitz to advise farmers to hold their crops. The conclusion of Mr. Fitz’ statement follow s: “ Personally, I have always held to the farm warehouse system rather than cen tral terminal or the market warehousing. To discuss this section of the subject in hand would require an entire treatise, and the farm warehousing involves the farmer in doing his own financing, which is now being advocated by Carl N. Ken nedy, assistant secretary of agriculture, who states that many of the Iowa banks “For Over Eleven Years— All Your Money— All The Time— On Time ” of the Tower Just Completed and the Outstanding Success of the City The Belvedere Hotel N E W Y O R K C ITY 48th Street, W est of Broadway Times Square’ s Finest Hotel Within convenient walking distance to important business centers and theatres. Ideal transit facilities. 450 rooms, 450 baths. Every room an out side room— with two large windows. Large single rooms, size 11' 6" by 20' with bath. $4.00 per day. For two, $5.00— twin beds, $6.00. Large dou ble rooms, twin beds, bath, $ 6.00 per day. Special weekly rates. Fur nished or unfurnished suites with serving pantries $95 to $150 per month. Moderately priced restau rant featuring a peerless cuisine. Illustrated "booklet free on request P e a r so n H o t e l Pearson and Seneca Streets One Block East of North Michigan Avenue C H IC A G O HE Pearson, located in the famous new hotel district of the near North Side, offers its guests an address of distinction and convenience. Within a few minutes’ walk, or a short ride by bus or taxi, from the offices, shops, and theaters of the downtown district, the Pearson is distin guished for an atmosphere of quiet refinement, gentility, and unobtrusive service. Large, bright, airy, elegantly furnished rooms. An excellent restaurant. 300-car fireproof garage nearby. T Charges agreeably moderate throughout. D aily R ates: Single, $3.50 to $ 6 .0 0 ; D ouble, $5.00 to $7.00. CURTIS A. H ALE, Managing Director Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 IK) D IR EC T O R S AND O FFIC ER S Successful Conservative Banking Statement of Condition of TH E CITY N A T IO N A L BANK of Clinton, Iowa November 13, 1928 RESO URCES Time and Demand L o an s.............. $5,961,917.40 U. S. Bonds.......................................... 393,799.54 Stock in Federal Reserve Bank. . 19,500.00 Banking House and Real Estate 97,383.51 Bill-of-Lading Items-in-Transit. 99,126.44 Cash and Due from Banks and U. S..................................................... 1,149,286.83 $7,721,013.72 L IA B IL IT IE S Capital ................................................. $ 300,000.00 Surplus ................................................. 350,000.00 Undivided Profits............................. 219,328.55 Reserved forInterest and Taxes. 90,000.00 C irculation........................................... 300,000.00 Deposits ............................................... 6,461,685.17 $7,721,013.72 ALFRED G. SMITH, Chairman ALFRED 0. SMITH, President G. L. CURTIS, Vice President President, Curtis Companies, Inc. G. W. DULANY, JR., President, Eclipse Lumber Co. Chairman, Climax Engineering Co. H. W. SEAMAN, President Clinton Wire Cloth Co. M. J. GABRIEL, President Gabriel Lumber & Fuel Co. J. PETERSON, Peterson-Bowman Imple ment Co. J. O. SHAFF, State Senator Farmer and Lire Stock Dealer B. M. JACOBSEN, President Clinton Thrift Co. E. J. CURTIS, Vice President Curtis Bros. & Co. C. A. ARMSTRONG, Pres. 0. F. Curtis Company, Inc. W. R. SMITH, General Manager Clinton Com Syrup Refining Co. A. P. BRYANT, Manager of Operations Clinton Com Syrup Refining Co. F. H. VAN ALLEN, V. P. and Sec’y. J. D. Van Allen & Son, Inc. H. S. TOWLE, V. P. and Treas. Towles & Hypes Co. O. P. PETTY, Cashier J. H. NISSEN, Assistant C ash ier H. G. KRAMER, Assistant Cashier Clinton County’s Largest Bank are already becoming* interested in of fering service to the farmer, taking as security warehouse receipts, bills of sale and chattel mortgages^ on the same plan operated between the farmer-feeder and their banks. Another timely suggestion on this section of the subject is that in some sections of the state afflicted with bank troubles, the farmer will not be able to secure financial aid from this source, many of them will be forced to market the crop, therefore this plan of storage in no way endangers the gradual or sys tematic marketing of the crop and will constantly supply any reasonable demand and in the event of an unnatural demand will automatically advance the price.” T w o Bankers fro m Iowa Leo M. Meeker, president of the PanAmerican Bank of Los Angeles, recently introduced to the people of Los Angeles, through the pages of the Los Angeles Examiner, two vice presidents o f his in stitution who are, as he calls them, “ two bankers from Iowa.” C. L. Hill began his banking career in Iowa, and for four years was connected with the Hopkinton State Bank. Prom Iowa he was engaged in banking in Colo rado, and more recently has been con nected with a number of California in stitutions. P. W. Hall needs no introduction to Iowa bankers, having been the secretary for a time of their state association. Mr. Hall organized the Sheldon, Iowa, Na tional Bank and was its vice president and cashier. Por the past eleven years he has been associated with the Mechan ics & Metals National of New York, and later with the Chase National when it absorbed the former institution. Mr. Meeker extends a cordial invita tion to former Iowans and those visiting Los Angeles from that state, to come to the bank and meet Mr. Hill and Mr. Hall. A C orrection An item relative to the Wayland Sav ings Bank at Wayland, Iowa, published in the November issue of the N o r t h w estern B a n k e r , gave the impression that the Wayland Savings was a new in stitution and had just opened recently. What really occurred was that the Wayland Savings had renewed its char ter for another fifty years. The bank was originally organized in 1893, and has been doing business at the old stand ever since. We are glad to make the above cor rection. City National Bank CLINTON IOWA Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 Cashier Resigns G. 0. Summers has announced his resignation as cashier of the Bonaparte State Bank of Bonaparte, Iowa. About a year and a half ago Mr. Summers Ill bought a 10-acre poultry farm one and a quarter miles northwest of Bloomfield and since that time has been planning to change his position from that of banker to poultry farmer. Miss Opal Van Auken, deputy treas urer of Van Buren County, is the new employe in the bank in place of Mr. Summers. I 1 8 7 6 9 2 8 ¡j Changes P osition John S. McCord, cashier of the Mo ravia, Iowa, State Bank, which was re cently robbed, has resigned to become cashier of the Security State Bank at Promise City. He began his new duties November 1st. A Pioneer In K n o x v ille B ank A m ong C. C. Cooper of Glendale, California, has purchased an interest in the Knox ville National Bank and Trust Company of Knoxville, Iowa, and will become a vice president in that institution. Cooper will succeed J. A. Bundy as an officer in the bank. The bank was purchased by A. M. Bundy and R. J. Harrison of Cedar Rapids more than a year ago. Bundy and Harrison will continue their in terest in the bank, the former as presi dent and the latter as vice president. Cooper and E. R. Jordan will be the active vice presidents and S. L. Walker will continue as cashier. Iowas Fin Institutions and Growing in Service G oes to Scranton Glen C. Cory, who has been cashier of the Pilot Mound Savings Bank the past five years, has resigned his place and ac cepted a position with the J. W. Holden Bank of Scranton, Iowa. D. W. Crouch, president of the Pilot Mound bank, will take active charge as president and manager, and Roy Crouch will remain as assistant cashier. with the Years C onsolidated The Citizens Savings Bank and the Security Trust and Savings Bank of Cedar Falls, Iowa, have merged and the consolidated bank began operations re cently. Business will be continued in the building occupied by the Citizens Bank. The consolidated bank will have resources amounting to $1,400,000. The merger is in the interest of sound banking and fol lows the trend in banking circles to create larger units of banking capital and to cut down the cost of operation. The merger leaves the town with but two banks. B ecom es V ice President Sam S. Hiller is now vice president and director of the State Central Sav ings Bank of Keokuk, Iowa, succeeding L. J. Montgomery, whose resignation be came effective recently. Mr. Hiller has ¡1 Consolidated National Bank 1 s'ji UNITED STATES DEPOSITORY D U B U Q U E , IO W A ¡¡j j"! J. K. Deming, President Geo. W . Myers, Vice President Herman Eschen, Secretary Jos. W. Meyer, Cashier Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Decem ber 1928 112 ^ | ^ HE Des Moines business of Iowa banks is invited. These banks are thoroughly equipped in every department. Valley National Bank AND Valley Savings Bank DES M O IN E S, IO W A Valley Bank Building: E s t a b l i s h e d 1872 Combined Capital and Surplus $1,100,000.00 R. A. CRAWFORD, President D. S. CHAMBERLAIN, Vice President C. T. COLE, JR., Vice President C. O. CRAIG, Vice President W . E. BARRETT, Cashier JOHN H. GINSBERG, Asst. Cashier C. M. CORNWELL, Asst. Cashier been in Keokuk acquainting himself with the routine duties of the office. Mr. Hiller is no stranger either to Keokuk or to the banking business. In the summer of 1893 he was in Keokuk in the Central Savings Bank which was then situated on Seventh street. In the fall of 1894 he was one of' the organizers of the Exchange Bank at Kahoka, Mis souri, being elected assistant cashier at its organization. In 1895 he was elected cashier of that bank and continued as such until November 1st of this year, when he was named vice president of that bank, a position which he still holds. N ew B ank The State Bank of Strawberry Point, Iowa, an institution resulting from the reorganization of the Strawberry Point State Bank, opened for business re cently. The new bank is capitalized at $35,000, and J. J. Matthews, for the past five years an employe of the State De partment of Banking, is the cashier. The other officers and directors chosen at a recent meeting of the stockholders are: President, L. W. Preston; vice president, H. M. Eaton; directors, J. R. Alderson, Albert Kash, L. W. Preston, R. C. Norris, E. H. Fitzgibbons, H. M. Eaton and Carl Zwanziger. T o Increase Rates O FFIC ER S O FFIC ER S C. A. MARSH President A. M. PLACE Vice President H. A. MAINE Vice President W ILL A. LANE Cashier P. W. EIGHMEY Assistant Cashier L. R. SWENSON Assistant Cashier A Waterloo Connection That You Can Rely Upon in E VER Y W a y First N ational B an k "Waterloo, Iow a Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 A. C. Hauck, cashier of the First Trust and Savings Bank of Alta, Iowa, is ad vertising the action of the board of di rectors in deciding that they would issue long time investment certificates with semiannual interest coupons attached. With this decision they also decided that they would pay an increase in rate of interest on these certificates. The threeyear certificates will draw interest at the rate of 4 per cent payable semiannually and the five-year certificates will draw 4% per cent interest, payable semi annually. D airying and B ank Deposits Figures are usually dull and unin teresting. But recently we ran across some that are most significant. In an advertisement by one of the Strawberry Point banks the total deposits of the 24 banks in Clayton County are tabu lated. The total was, in round numbers, twelve million dollars. Clayton County has about twice the population of Audu bon County. Audubon County has long been recog nized as one having strong banks. The deposits of Audubon County banks are above the average for the banks of Iowa, as are their average assets. But the total deposits in Audubon County are approxi mately three million dollars, or onefourth the deposits in Clayton County. To those who have traveled through 113 I f northeastern Iowa the figures are not sur prising. There is one dominant reason — the dairy cow. The hills of Clayton County will not produce half as much corn as Audubon County hills. That is the good fortune of that county. The twelve million dollars in bank deposits of that county are mute but expressive evidence of that fact. The cooperative creameries that one sees frequently in that section of the state are turning out tubs of gold and bringing in streams of gold to the farmers and merchants. The well painted farm buildings indicate that bank deposits are not being built up at the expense of other things, either. We even marveled at the fact that the barns in that section of Iowa are all painted white. Farmers there scorn to use cheap red paint. There are almost no run down farms and the towns have an appearance of prosperity that we are sorry to say is not seen in many parts of the state. Other counties in Iowa have seen the light. Up at Spencer the business men have been encouraging dairying by financing the purchase of dairy calves for several hundred boys and girls of Clay County. That’s casting their bread upon the waters in a most intelligent way. I f this newspaper were to name the one thing which might be done in Audu bon county that would bring a larger measure of prosperity than a dozen McNary-Haugen bills, it would be the fos tering of the dairy industry. We would rather see ten thousand dairy cattle in Audubon County than a guarantee that corn could be sold at a dollar every year. The one would encourage the kind of farming that makes for permanent pros perity, the other would encourage the kind of farming that robs the soil and: impoverishes an agricultural community in the long run. What an opportunity there is before the farm bureau, the banks and the civic organizations in Audubon County! -— From the Audubon, Iowa, Advertiser. Attends R eu n ion C. J. Weiser, president of the Winnesheik County State Bank at Decorah, was among the many Iowa bankers who attended the recent A. B. A. convention in Philadelphia. While in the east, it was also his privilege to attend a re-, union of the Weiser family, held in York, Pennsylvania. York was the home of Conrad Weiser, the first member of the family to land on our shores, coming here in 1720. Conrad Weiser became a nationally known character, and was on intimate terms with George Washington, Benja min Franklin, and other prominent men of that period. C. J. Weiser says the present generation is the ninth, and that each generation has had a plentiful sup ply of bankers among its numbers. % https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis THE ONLY NATIONAL BANK in Scott County , Iow a , and Rock Island County , Illinois! This fact facilities together fo r with ou r p rom p tly and com plete efficiently caring fo r any business referred to us urges y ou r appointm ent of the First N ational B ank o f D avenport, Iow a, as you r correspondent bank in this territory. FirstH ationalBank Second street and Main I ^ ^ o v n d e d w i th v i s i o n D a v e n p o r t, I o w a ________________ B u ilt b y S e r v ic e Northwestern Banker December 1928 114 Standard F oreign T rade B ook s More than two hundred foreign trade executives, educators, economists and edi tors have contributed to a selected bibli ography of foreign trade which has just been issued by the National Foreign Trade Council. The bibliography which lists about 120 titles, is published as a guide to the standard books and reference works most widely used by American foreign traders. It is obvious from this bibliography that American foreign traders are now stand- ing on their own feet as regards the liter ature o f foreign trade. They systematized information on international business con ditions from thoroughly authentic Ameri can sources which this booklet reveals is available to every American business man and it is his privilege to make the most of it. American foreign trade grows through the far-sighted capacity of most Ameri can traders to share the knowledge and experience which have helped the fortun ate few. This bibliography carries on that Stabilizing the Banking Business (Little Talks on Tiling, No. 37 ) EADY, STincomes dependable farm make the entire banking- business stable, safe and profitable. Stability of farm income is more dependent on the uniformity of crop yields than on any other one thing. And weather is the chief cause of fluctuating crop yields. But farmers who have all their clay soils thoroughly tile drained find that their crop yields are practically independent of weather extremes. They get good, dependable yields whether the season is wet and cold, hot and dry, or just average. Year in and year out their crop pro duction and cash income are about the same from a given acreage. Stabilize Y o u r O w n B usin ess B y Stabilizing F arm Incom es M a s o n City B ric k a n d T ile Co. 312 Denison Bldg. spirit of co-operation by citing the most worth-while books on foreign trade theory, foreign trade practice, the merchant ma rine, trade with Latin America and the far east, and reference books and directories. The council has also listed a number of government handbooks and pamphlets of the bureau of foreign and domestic com merce with special regard to their prac tical use. I Y achts at M illion Each Yachting in million dollar pleasure cruising craft would appear to be the hobby of chief executives and big stock holders of the General Motors Corpora tion, inasmuch as orders for three such and others costing less have recently been placed with a New York shipbuilding com pany. Alfred P. Sloan, president of the Gen eral Motors Company, and Fred J. Fisher, an executive of the same organization, are to have two of the million dollar ships. The third has been ordered by another automobile executive whose name was not disclosed. Charles F. Kettering, chief engineer for General Motors, has ordered a $500,000 yacht. Jules S. Bach, New York financier, is to own a $200,000 vessel. The shipbuild ing company said the total of $3,700,000 in orders is the largest sum ever placed with an American designer for delivery of pleasure yachts. The three $1,000,00*0 vessels are to be identical in practically all details, and will be among the most lux urious of their type. Mason City, Iowa Show Increase in Earnings A Complete Banking Service Th e Midland Bank offers exceptional facilities for the transaction o f banking business o f every description. Together with its affiliations it operates over 2400 branches in Great Britain and Northern Ireland, and has agents and correspondents in all parts o f the world. Th e 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 o f visitors in London. AMERICAN DEPARTMENT : POULTRY, LON D O N, E .C .2 MIDLAND BANK LIMITED HEAD OFFICE . Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 5 TH R E A D N E E D L E STR EET, L O N D O N , E .C .2 December 1928 The department of commerce reports gross earnings in September, 1928, of 95 public utility enterprises, exclusive of telephone and telegraph companies, as $179,000,000, compared with $174,000,000 in August, and $169,413,885 in September, 1927, increases of 2.8 per cent and 5.6 per cent respectively; for the nine months ended September, 1928, $1,637,917,891, against $1,558,277,178 in the correspond ing period of 1927, increase of 5.1 per cent. Net earnings, representing in general the gross, less operating expenses and taxes, or the nearest comparable figures, were $67,000,000 in September, 1928, com pared with $60,000,000 in August, increase of 11.6 per cent, and $61,897,207 in Sep tember, last year, increase of 8.2 per cent; for nine months ended September, 1928, $618,457,941, against $560,765,642 in cor responding period of 1927, increase of 10.2 per cent. W ish I Had Father: “ Well, do you think you can make my daughter really happy V’ Suitor: “ Say, you should have seen her last night!” è 115 M iles Per G allon Marie came walking home, tired from an auto ride, denouncing the new flivver. “ What’s the matter with it ?” she was asked. “ Oh, they go so far on a gallon of gas that they’re far out in the country be fore the tank runs dry.” Bad M anagem ent A small boy, while walking on a rail road track, was astonished when he saw that two fast freight trains running on the same track were about to crash head-on. Much frightened, he took to a nearby high bank where he witnessed the smashup. Later some officials, learn ing that there had been an eyewitness to the wreck, found him and asked: “ What were your thoughts at the time of the crash?” “ Well,” the boy answered slowly, “ I thought it was a darn poor way to run a railroad.” T o o M u ch Progress Book agent to farmer: “ You ought to buy an encyclopedia, now your boy is going to school.” Farmer: “ Not on your life. Let him walk, the same as I did.” V ery O bliging Widow writing a testimonial for a life insurance company: “ On August 9th my husband took out a policy. In less than a month he was drowned. I consider in surance a good investment.” “ B are” A ll R ight Two bluejackets were watching the bathing girls at Atlantic City when one of them pipes up : “ Do you think the girls could wear their bathing suits much smaller ?” “ I don’t know,” said his shipmate, “ but there’s a bare possibility.” H e K n ew The female orator was raving and ranting to a small audience of men. “ Women,” she shrieked, “ at all times have been the backbone of all nations. Who was the world’s greatest hero ? Helen of Troy! Who was the world’s greatest martyr? Joan of Arc! Who was the world’s greatest ruler? Who, I say, was the world’s greatest ruler?” And simultaneously that entire crowd of men arose and answered in one voice, “ My w ife!” Same Thing “ Well, pop has another wife to sup port now!” “ What, what— he’s not a bigamist, is he—do tell?” “Nope, but I just got married.” A N ew A p p roa ch “ Well, who’s been waiting the long est?” asked the dentist cheerfully as he opened the door of his surgery. “ I think I have,” said the tailor, pre senting his bill. “ I delivered that suit you’re wearing three years ago.” T he M eat B o y ’ s Love I never sausage eyes as thine, And if you’ll butcher hand in mine, And liver round me every day, We’ll seek some ham-let far away, We’ll meat life’s frown with life’s caress And cleaver road to happiness. Nam e, Please! Although the lovers had known each other only three days, they had to part. “ Come along, please!” shouted the brakeman and the young couple, linger ing on the edge of the platform, started. “ It’ll be beastly without you,” he ob served. “And I ’ll miss you, too,” she said. “ I never was so happy, and all because we met three days ago.” “ But think how dreadful it’s going to be,” he wailed. “ Stand away, there!” shouted the trainman. “ You’ll write?” she called from the window. “Every day,” he answered. Then suddenly he tore after the train, and as he almost overbalanced on the extreme end of the platform, he made a trumpet of his hands and cried: “Darling! Darling! What on earth did you say your name was?” N ot G uilty Judge: “ You have been acquitted of the charge of bigamy and are quite free to go home.” Prisoner: “ To which one, your honor ?” Justifiable G rounds Judge: “And what are your grounds for divorce?” Young Bride: “ Harry snores.” Judge: “ How long have you been married ?” Y. B .: “ Two weeks.” Judge : “ Granted; he shouldn’t snore.” M ush fo r Breakfast W ife : “ George, the cook left and I don’t know what we are going to eat for the next few days.” Mr. H .: “ You still have my old let ters, haven’t you?” W ife: “Yes, of course.” Mr. H .: “ Well, drag ’em out, and we’ll have mush for breakfast, anyway.” N ot That K in d Kind Old Gentleman: “ What do you call those two kittens, Johnny?” Small Boy: “ I call ’em Tom and Harry.” K. 0. G .: “ Why don’t you name them Cook and Peary after the great ex plorers ?” S. B .: “ Aw, gwan, mister; these ain’t polecats.” N o H op e “Now,” cautioned the judge, “ remem ber you are to tell the truth, the whole truth and nothing but the truth.” “ Golly!” exclaimed the dusky defend ant. “ Mah case am los’ right now!” T o o G ood The day at the links had distinctly not been a success. Neither the irascible Jones nor the equally so Smith had suc ceeded in breaking a hundred and a quar ter. In the hope of averting conversa tion from his disastrous score, Jones asked when they reached the clubhouse: “ Is your caddy good?” “ Good?” exploded Smith. “ Say, when it comes to telling me how many strokes I’m lying, that boy’s a religious fanatic.” Power exhibits itself under two dis tinct forms— strength and force— each possessing peculiar qualities, and each perfect in its own sphere. Strength is typified by the oak, the rock, the moun tain. Force embodies itself in the cat aract, the tempest, and the thunder-bolt. — Garfield. Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis December 1928 116 Í7nò ex Öo ¿A d vertisers A A . B. A. C h e q u e s ........................................... A lly n , A. C. & C o ........................................ A m e r ic a n C o m ’l & Sav. B a n k ................ A m e r ic a n F in a n c ia l C o r p o r a t i o n . . . . A n a k in C o ....................................................... F ir s t N a t’l B a n k , C h i c a g o ...................... 104 F ir s t N a t’l B a n k , D a v e n p o r t .................113 F ir s t N a t’l B a n k , M i n n e a p o l i s .................. 9 F ir s t N a t’l B a n k o f O m a h a ..................108 F ir s t N a t’ l B a n k , W a t e r l o o ................... 112 F ir s t N a t’l B a n k , S io u x C i t y ................ 106 F i r s t - W i s c o n s i n N a t ’ l B a n k .................... 48 F i s h e r C o ............................................................... 43 74 F o r e m a n B a n k s .............................................. 37 60 F o s h a y , W . B . C o ............................................ 109 41 54 35 66 5 M is s o u r i M o r r is o n M u eh le, M u rp h y , S ta te L ife In s. C o ................... H o t e l ............................................. R eam & M c C la in ...................... T h o s. D. C o................................. 84 86 93 96 N N a tio n a l B a n k o f C o m m e r ce in N. Y. 40 N a t’l B a n k o f th e R e p u b l i c ............... 46 It N a tio n a l C ity C o ....................................... 72 B a b c o c k , R u s h to n & C o .......................... N a tio n a l ¡S ervice C o .......................... 39 B a k e r , K e l l o g g & Co., I n c ...................... N e w Y o r k T itle & M tg . C o ............... 70 B a n k e r s T r u s t Co., D e s M o in e s ............ 10i3 G N o r th e rn T ru s t C o ................................... 92 B e c h te l, G eo. M. & C o ............................... 67 G e n e r a l M o t o r s A c c e p t a n c e C o r p ......... 44 N o r th w e s t e r n N a t’ l B a n k .................... 2 B eh , C a r le to n D. C o.................................... 109 G u a r a n t y L i f e I n s . C o .................................. 85 N o r th w e s t e r n N a t’ l L ife In s. C o .. . . . 83 B e lv e d e r e H o t e l .......................................... 77 B e ll T e le p h o n e S ecu r. C o ...................... 36 H O B o ld t, A. J. & C o ........................................ 61 H a l s e y - S t u a r t & C o ....................................... 55 O h rstrom , G. L. & C o ............................ 75 B r o k a w & C o ................................................. 64 H a n n a , W . D . C o .............................................. 33 O m ah a N a t’ l B a n k .................................... 102 H a n o v e r N a t ’ l B a n k ..................................... 94 O ttm an , E. H. & C o ................................. 76 C H o a g l a n d , A l l u m & C o .................................. 79 C am p, T h o r n e & C o ................................... 50 P H o m e s t e a d C o ......................................................106 C a n a d ia n P a c ific R y ................................... 94 H o t e l M o n t c l a i r ............................................ 76 P a n -A m e r ic a n B a n k ............................... 42 C ed ar R a p id s N a t’ l B a n k ......................... 8 P e a r s o n H o t e l ..............................................109 C e n tr a l iState B a n k , D e s M o in e s . . . . 107 I P e o p le s T r u s t & S a v in g s B a n k . . . . . .108 C e n tra l T r u s t Co. o f I l l i n o i s ................ 68 I l l i n o i s - M e r c h a n t s T r u s t C o .................... 118 P h ila d e lp h ia N a t’ l B a n k ...................... 38 C e n tra l U n io n T r u s t Co. o f N. Y ........ 49 I n t e r n a t i o n a l H a r v e s t e r C o ..................... 10 P r ie s te r , Q u ail & C u n dy, I n c ............... 71 C h a pm an , P. W . & C o ............................... 58 I o w a L i t h o g r a p h i n g C o ............................. 39 R C h a se N a t’l B a n k ........................................ 98 I o w a N a t ’ l B a n k .............................................. 11 C h ic a g o T ru s t C o ........................................ 75 I o w a N a t ’ l F i r e I n s . C o ............................... 82 R o y a l U n io n L ife In s. C o .................... 80 C ity N a t’ l B a n k ........................................... 110 S J C o m m e r cia l E m p lo y m e n t B u r e a u . . . .108 C o m m e r c ia l N a t’l B a n k ............................ 105 J o h n H a n c o c k M u t u a l L i f e I n s . C o . . . 83 S m ith , H. & C o .......................................... 76 S m ith, B u r r is & C o ................................. 56 C o n s o lid a t e d N a t’ l B a n k ..........................I l l Iv S p e y e r & C o ................................................... 57 C o n tin e n ta l N a t’l B a n k & T r u s t C o .. 6 K i s s e l , K i n n i c u t t & C o . . . ' . .................... 52 S c h r o d e r , J. H e n ry , B a n k in g C o r p ... 57 D K n i g h t B l a n c h a r d & C o ............................. 63 S ta te B a n k o f C h ic a g o ......................... 45 D a w e s & Co., I n c ........................................ 77 K r e n n & D a t o ................................................... 59 S to c k Y a r d s N a t’ l B a n k ....................... 97 D a w s o n , H o w e & D a w e s ......................... 69 S tr a u ss, R o b ’t S. & C o ............................. 65 L D e s M o in e s L ife & A n n u it y C o......... 85 T D e s M o in e s N a t’ l B a n k .......................... 117 L e a c h , A . B . C o ................................................ 78 D e t r o it C o ....................................................... 78 L i v e S t o c k N a t ’ l B a n k o f S o. O m a h a . 93 T o d d C o .......................................................... 88 D e W o l f & Co., I n c ..................................... 62 L i v e S t o c k N a t ’ l B a n k , S io u x C i t y . . . . 89 T ru e ¡S ecu rities C o ................................. 73 D r o v e r s N a t’ l B a n k .....................................100 M M c C l i n t o c k , O. B . C o ...................................... U U n ite d S ta tes N a t’ l B a n k .................... 93 43 V 79 M a s o n C it y B r i c k & T i l e C o .................... 114 V a lle y N a t’ l B a n k .................................... 112 F W M e r c h a n t s N a t ’ l B a n k ................................ 7 F e d e r a l S u r e ty C o ...................................... 90 M e t c a l f C o w g i l l & C o .................................. 53 W e lc h , J. H. P r in t in g C o.................... 104 F ir s t I llin o is C o ............................................ 69 M id la n d B a n k , L t d .......................................... 114 W e s s lin g S e r v i c e s ............................... 47 F ir s t I o w a S ta te T r. & Sav. B a n k .. 4 M i d l a n d N a t ’ l B a n k & T r u s t C o ............. 95 W h it e - P h illip s C o...................................... 31 E E p p le y H o t e ls ............................................. 93 M c M u r r a y H i l l & C o ...................................... THE N O RTH W ESTERN P ublished by B A N K E R AN D TH E T E R R IT O R Y D e Puy P ublishing Company 555 Seventh Street, Des Moines C L IF F O R D D E P U Y Publisher R. W . M O O R H E A D E d itor G E R A L D A . S N ID E R A ssocia te Publisher H. H. H A Y N E S A ssocia te M anager C hicago O ffice: W m . H. M aas, 1221 F irst N ational Bank B ld g ., Phone Central 3591 St. L ou is O ffice: D . H. Clark, 408 O liv e St., Phone Garfield 2138 M inn eapolis O ffice: Frank S. L ew is, 840 Lum ber E xchange, Phone M ain 3865 O fficial P u b lica tion of T H E S O U T H D A K O T A B A N K E R S A S S O C IA T IO N T H E IO W A FA RM M O R T G A G E A S S O C IA T IO N T H E IO W A B O N D D E A L E R S A S S O C IA T IO N Northwestern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Decem ber 1928 IT C O V E R S (L^ristmas (Breetings in extending Christmas Greetings to the bankers o f Iowa, the offi cers and directors o f the Des M oines N ational B ank send to y ou an expression o f a genuine feelin g o f frien d sh ip — not only during the h olid a y season, but fo r every day o f the year. C51)£ y i < t w Pear W e believe 1928 has shown conclusive evidence o f an im provm eiit in Iowa business con ditions, w hich entirely justifies an optim istic ou t look fo r the com ing year. O F F I C E R S L O U IS C. K U R T Z , President A N D R E W J. H U G L IN , V ic e Pres. H E R B E R T L. H O R T O N , V ic e Pres. C L A R E N C E A . D I E H L , V ic e Pres. G E O R G E D. T H O M P S O N , Cashier W A L T E R J. R O B E R T S , A sst. V . P. R IC H A R D H. C O L L IN S , A sst. V . P. E D W I N F. B U C K L E Y , A sst. V . P. O W E N P. M c D E R M O T T , A sst. Cash. L E L A N D J. A N D E R E C K , M gr. B ond Dept. C L Y D E H. D O O L I T T L E , T r. Officer V I C T O R H. P U L IS , A sst. Tr. Officer D I R E C T O R S H. J. B O E K E N H O F F A N D R E W J. H U G L IN FRED BOH EN L O U IS C. K U R T Z JOH N C O W LE S JO S . M U E L H A U P T W . J. G O O D W I N C H A S. A. R A W S O N J O H N H. H O G A N R A L P H E. R O L L IN S H E R B E R T L. H O R T O N W . W . SEARS FRED W . W E IT Z https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis t h e a p p r o a c h i n g c o n s o l i d a t i o n ... R . . . 1 roviding an even more C O M P R E H E N S I V E SERVI CE correspondent banks U --------------------- the consolidation facility and dispatch. It is planned o f Illinois M erchants that the consolidated bank will be T ru st C om pany and a m em ber o f the Federal R eserve System. pon Continental National Trust Contine ntal I llinois C o m p a n y , C om pany o f Chicago to form C o n t i the affiliated securities com pany to I l l i no i s B a n k a n d T r u s t be capitalized at $ 20 , 0 00 ,0 0 0 , will p rov id e e x c e p tio n a lly stro n g c o nental Bank and C o m p a n y , there will be conveniently concentrated in the new institution a greater and still m ore com prehensive distributing o f investment securities. service to correspondent banks. It will offer an unusually wide range operation in the underwriting and T h e new bank’s resources o f over o f securities suitable both for the in a billion dollars and the many thou vestment o f bank funds and for resale sands o f bank correspondents which to bank customers. It will be a valu- it will have in every part o f the world abl e source ol investment information and counsel. (it will serve m ore banks than any other bank in the U nited States) In the co n so lid a te d in stitu tion , make possible service on a scale to customers will continue to transact their business with the same officers who are now serving them. satisfy every bank’s requirements and to handle each bank’s business with I Merchan Company l l i n o i s T rust 'Resources Over 45° zJxtillion ‘Dollars CHICAGO https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis t s
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