Full text of The Northwestern Banker : December 1930, 35th Year, Number 521

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Federal Reserve Bank of St. Louis

D ecem b er, 1 9 3 0
The New First Vice President
of the A . B. A .
(See Page 31)

WMmswmm.

HENRY J, HAAS
First Vice President American
Bankers Association

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A
Correspondent
Service
developed
from 68 years’
experience

rem an

-S t a t e N

a t io n a l

Ba n k

F oreman -State T rust A nd Savings Bank
CHICAGO

N orthw estern Banker
Des Moines
The Oldest Financial Journal West of the Mississippi
Number 521

DECEMBER, 1930

35th Year

In T his Issue
4

J u st B etw e en

U s

A cross from the P ublisher

F ron tispiece, “ A B edtim e S tory”

Selling the Services o f a Bank

By Walter E. Devlin

N o Bank T oo Sm all fo r W in d o w D isplays
Farm s and F arm ing
S nappy Christm as G ifts fo r Bankers
Tri-State Bank C on feren ce (B eg in n in g )

N ew s and V iew s

By Clifford De Buy

B onds and Investm ents

By Harold V. Bosell

W h ere R ailroad Profits Go

L earning from C h icago F inancing

By Silas H. Strawn

Insurance
B ankers W ants

57
62

South D ak ota N ew s

N ebraska N ew s

M innesota N ew s

N orth D ak ota N ew s

Iow a Section

In the D irector’s R oom

In d ex to A dvertisers

• ONE OF THE

•

DePu y Banking Publications

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

W M . H. M AAS
1st N ational B k. B ldg.
V ic e President
C hicago
F R A N K P. S Y M S
25 W e st 45th Street
V ic e P resident
N ew Y ork

DORAN
E d itor

M em ber, Audit Bureau of Circulations
M em ber,
Financial Advertisers Association

33-55

The O pen-E nd M ortg age U tility B ond

£?

L. D. V A N
A ssocia te

By Boscoe Macy

On page 12 there is another wonderful article on window displays for
bankers by Alice Moshier.
Read
what she says about hooking up
events of local interest with your
own institution.

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

By the Farm Editor

Walter E. Delvin says: “A busi
ness institution or service which
survives for any length of time must
do two things * * * ” Read his
article starting on page 11 which
details
several
important
facts
which a banker must recognize if he
is to continue to make a profit from
his business.

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

B y Alice Moshier

Nearly twelve hundred bankers
and their wives attended the ThirtyThird Convention of the Nebraska
Bankers Association held in Omaha,
November 6 and 7. The meetings
developed a high degree of enthusiasm and it is felt that much good
will result therefrom. Turn to page
66 for full details of the convention
meetings and for the list of new offi
cers elected.

OMAHA
MINNEAPOLIS

.O F F I C E S . _
DES\MCHINES'
MILWAUKEE

CH IC A G O

F. S. L E W I S
840 Lbr. E x. B ldg.
M in n eap olis, M inn.
S pecial R epresen tative

NEW-YORK

Northwestern Banker, published monthly by the DePuy Publishing Company, Inc., at 555 7th street, Des Moines, Iowa.
Subscription, 50c per copy, $3.00 per year. Entered as second-class matter at the Des Moines post office. Copyright, 1930.

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Northwestern Banker December 1930

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oÀ Cedar Rapids Dank
¡ill I bis
' “ “ •Si a ì " » » ? ’

i »III« & fi filiBfljjjj»
t lit u i S li II II II Hit» ¡i

1111111«»»

Servicing cAll lovOa
T he

importance of your busi

ness in Cedar Rapids demands that you have
the best possible representation
That

makes

the

Merchants

in this city.

National

your

natural choice as your correspondent bank.

MERCHANTS
NATIONAL BANK
C ed ar R apids

Iow a

Northwestern Banker December 1930

“Here’s Your Party "
A click , a m om en tary pause,
and you are talking with an offi
cer o f Central Trust Company
o f Illinois — the Chicago office
for your bank. A few b r ie f
m inutes after you put down
the r e c e iv e r , y o u r b u sin e ss
is being promptly attended to
under the supervision o f the
proper officer.
W henever speed is a consid
e r a t io n — use the te le p h o n e ,
use C en tral T ru st C om p an y
o f Illinois.

Telephone Franklin 7400

C e n t r a l T r u st
C O M P A N Y O F IL LIN O IS

Northwestern Banker December 1930

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Federal Reserve Bank of St. Louis

2 0 8 South La Salle Street
CHICAGO

130 BANKING

INSTITUTIONS

and $ 4 8 5 ,0 0 0 ,0 0 0 RESOURCES
prove Soundness of Group Banking

hrough

GROUP banking, the strength

of many banks is being given to each. No longer
are u n it b an k s in the Northwest carrying the
burden of serving the growing needs of the
territory. In stead , 130 banking organizations
located in the leading centers of the Middle North
west have a ffilia te d to fo rm th e N orthw est
Bancorporation, with resources o f m ore than
$485,000,000.
Five hundred thousand customers of these
financial institutions have thus gained banking
service that is b oth sound and adequate. The
surprising growth and popularity of this compar
atively new financial institution have proved the
soundness of group banking in the Northwest.

N O R TH W E ST BANCORPORATION

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MINNEAPOLIS, MINNESOTA
COMBINED RESOURCES OVER $485,000,000
BancNorthwest Company— Investment Securities Division
Northwestern Banker December 1930

bicross
T*O TU

the

In the present phase
of our business cycle,
savings deposits are
increasing rapidly —
in fact they are $267,000,000 ahead of last
year.
This accumulated reserve will later on be used
for purchasing commodities and luxuries which
are not now being bought,. In addition to this
a great many promotional stocks will be sold to
the customers of your bank by high pressure sales
men who are already preparing their campaigns
to be started as soon as the first signs of better
business appear and confidence has been restored.
For over ten years the N orthwestern B anker
has sent out annual questionnaires to banks re
garding the bond and investment outlook and in
the earlier years of these reports many bankers
said they were opposed to either selling securities
themselves or advising their customers to pur
chase them because it took the money ont of their
savings deposits.
Later when bankers found that this money
was leaving the bank through the purchase of
questionable securities sold to their customers by
blue sky salesmen, they came to realize that it
was better for them to act as investment coun
sellors for their customers and sell them high
grade securities, making a profit on the trans
action themselves and thus benefiting the bank
and protecting the bank’s customers.
Just the other day we were talking to a banker
in a middle western city and he made the state
ment that “ the commercial banker who does not
soon become an investment banker must pass from
the picture.” You may or may not agree with
that statement but in any event your customers
who are accumulating funds in their savings ac

A r e You Giving
Your Customers
Proper
Investment
Advice?

Northwestern Banker December 1930
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hA
Publi

counts now more so than at any time in the past
few years, will soon be purchasers of stocks and
bonds.
It is up to you to see that your depositors buy
good sound securities and not the worthless type
of which so many millions have been sold in the
middle west in the period from 1917 to 1922. To
do this every banker should cooperate with high
grade, well managed, successful bond and invest
ment companies, whose officers are anxious to be
of service to them and their customers and who
sell only securities of the highest type.
The other day a prominent investment banker
said to ns that one of his salesmen in calling upon
a bank had been told that they were not inter
ested in purchasing securities for resale to their
customers because they did not want to reduce
the savings deposits in their bank.
This deduction is not a sound policy to follow
because the customers of that bank will take their
money out of their own volition to buy securities
if they so desire and the savings deposits will be
reduced just the same, but the question of every
wide-awake, intelligent banker to consider, is
whether or not he will help to guide his customers ’
investment policies, make a profit for himself by
so doing, and protect his depositors from purchas
ing a lot of worthless securities. The money
which is now being accumulated in savings ac
counts is going to seek an outlet in investment
channels and if it can be properly directed by
bankers and investment houses into high grade
securities it will not, only result in the savings of
millions of dollars that would otherwise be squan
dered but will also mean that these millions of
dollars will go into directed channels resnlting in
greater returns and benefit to the various commit
tees affected.

W h a t A r e

Probably one of the

m0St interestin£ ques
tionnaires that has been
prepared about the present business situation, is
the one recently sent out by John Burnham and
Company, Investment Bankers of Chicago.
These questions are so interesting that we are
reprinting them in full and here they are :
“ Get out your pencil and answer for yourself
“ Y es” or “ N o.”
Have you faith in yourself and your
ability to prosper !
........ .
Have you a well anchored faith in this
country’s future progress?
Y ou r

A n sw ers?

Has this country progressed consistently
over the past fifty years?
Has it prospered in spite of intermediate
recessions?
Did industry rise to greater heights fol
lowing each recession?
..........
Has this nation lost its ability to rise
above present conditions?
______
Can you recall one fundamental industry
that has “ vanished” in the last 15 years? .... .......
Are you right now making a definite and
heroic contribution to returning nor
malcy ?
Are you “ resting on the oars,” waiting
for “ George” to do it?
...........
Do you comprehend the fact that many
securities are NOT NOW selling on
“ values” but at prices reflecting “ financial
distress,” “ unreasonable fea r” and “ ig
norance” ?
___ __
Are these factors warping your better
judgment and blinding your vision to the
real opportunities all about you?
Do you realize that 25c to 50c will buy
$1.00 worth of real investment value at
handsome yields, in this market?
___ __
Did the man with vision who bought
sound securities in 1907-1914 or 1920 at
25c to 50c on the dollar, make a profit ?
Do you want to lay the foundation for
a fortune or competence ?
Should you be searching out the oppor
tunities for yourself RIGH T NOW ?
W E E X P E C T NO R E PLY. These pertinent
questions which \ye first asked ourselves and an
swered frankly, are passed along for each person
to ask OF himself and answer FOR himself— BY
himself.”
Unless you have lost complete faith in yourself

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and in the future of your country you will have to
answer most of these questions in the affirmative
and if you do, skies should look a little brighter and
the outlook more promising.
W

^ has always been our
opinion that grain and
live stock represented
quick assets and therefore good collateral upon
which any bank could loan with a degree of assur
ance and safety not always found in other forms
of collateral.
In a letter just received from a leading farm
mortgage banker he calls our specific attention
to a prominent farmer who has been managing
farm lands for more than fifty-five years, and yet
for the first time was unable to borrow $200 or
$300 to cover his second installment of 1929 taxes,
although his financial statement showed quick
assets of over $21,000.
The financial statement of this farmer, as it re
lates to grain, cash rent, and hogs, is as follow s:
Grain on hand
11,000 bushels oats @ 20c..... ................$ 2,200.00
1,230 bushels barley @ 35c________
420.00
18,000 bushels corn (estimated) @ 50c.... 9,000.00
Cash rent due from various tenants or to
be due by February 1, 1931_________
9,200.00
GO head of hogs on feed.......... ...................
960.00
h a t IS G o o d

Collateral?

$21,780.00
After referring to us the figures just mentioned
above our mortgage banker goes on to say, ‘ ‘ But if,
in the state of Iowa, a man that has $21,000 worth
of quick assets is unable to borrow enough to pay
$200 or $300 in taxes, the situation financially here
is going to be much more acute.
“ If the banking institutions do not wish to take
chattel mortgages on live stock and grain and feel
that they are not proper risks then there should
be an immediate and definite movement in this state
of organizations or institutions which would do
that. It would be very profitable and there would
be very little risk.
“ I cannot see where 50 per cent of the present
values as a basis for a loan on a chattel mortgage
on any of these grains should be risky for ninety
days, particularly when they bear 8 per cent in
terest.”
It. seems to us that grain and live stock represent
as quick assets as listed bonds and stocks, and cer
tainly bankers in the greatest agricultural state in
the union are not generally going to ask for better
collateral than grain and live stock when it comes
to quick assets.

Northwestern Banker December 1930

“ A BEDTIME STORY”
From the original painting by R. Ingerle, a Chicago artist, who has achieved much distinction as a colorist.

Northwestern Banker December 1930

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C o p y r ig h t b y

The Thos. D. M urphy Com pany
Red Oak, Iow a

A business institution or service which survives for any length of time
must do two things: First, render a valuable service to the people it
serves; or , to put it another way , it must sh ow a profit to the purchaser.
Second, it must earn a reasonable profit for itself.
That is the law of business.

Selling
T

the

Services

of a

Bank

that they are doing the bank a real favor
HE average bank employe never
By W A L T E R E . D E V L I N
even though they may have already issued
thinks of himself as a salesman. But
President, Devlin & Bennett, Inc.
checks for as much as they are depositing.
the fact remains that they are en
Research, Cost, Analysis
A great many people do this. In fact,
gaged in one of the most interesting of
Chicago
during the past ten or twelve years a
sales problems. Most persons have some
big majority of the large increase in the
thing tangible to sell, a bolt of cloth or
some other piece of merchandise which needs of the person to whom you are number of checking account depositors
selling. However, before we go into the lias come directly under this classifi
the customer can see or feel or taste.
Not so with banking service. Unless details of selling material and arguments cation.
he is a loan patron, the customer comes we should have a perfectly clear picture
Increasing Costs
in and makes his deposits and thus feels of exactly what the problem is and the
FEW years ago it used to be that
that he is giving the bank something and objective to strive for.
the person who maintained a check
A business institution or service which
he in return takes the established service
which the bank renders as a matter of survives for any length of time must do ing account was one who had a comfort
course.
Therefore, the bank service two things: First, render a valuable able surplus on hand. Those who, of
salesman has a somewhat different prob service to the people it serves; or, to put necessity, had to pay out all of their cur
it another way, it must show a profit to rent income almost as rapidly as it was
lem on his hands than other salesmen.
However, the fundamental salesman the purchaser. Second, it must earn a received did their business in cash. By
degrees, as they learned of the conven
ship principles remain exactly the same reasonable profit for itself. That is the
ience of checking account service, and as
and if you have never considered your law of business.
Apply this principle to the banking the bank urged them to become checking
work from this point of view, you will
be very much interested in what follows. business. I f checking account service is account depositors, a great many of these
No one can escape a certain amount of valuable, depositors should be willing to low balance accounts came into the check
ing account department of the bank.
salesmanship. Practically every move pay a reasonable price for it. If the
we make involves a certain amount of service is not sufficiently valuable for the In other words, the cost of manufactur
selling. A little later on a careful defini bank to get a reasonable profit for pro ing checking account service has so in
tion will be given of what selling is and viding it, then the service should be and creased that the banks are now faced with
the necessity of increasing
how it is to be applied to
their selling price.
a particular situation. We
Now the question is, how
( This is the sixth of a series of articles on bank salesmanship
believe that you will find
is it going to be done?
and merchandising written especially for the N O R T H W E S I here a great many things
You could simply tell your
which will be o f use in
E R N B A N K E R by Mr. Devlin, whose firm is Advertising and
customers that from now
everyday work and help
Sales Cotinsel for the Wisconsin Bankers Association.)
on they will have to pay
to make yourself more val
more for the service. But
uable to your bank and
that is not the best way to do it because it
long since would have been discontinued.
therefore, to yourself.
will make a great many customers angry
Whenever one deals with any customer In other words, the very fact that
or a prospective customer, as far as he is checking account service has survived and lose a lot of business for the bank
concerned, they are the bank’s official as long as it has and has grown so enor that could be retained on a profitable
representative. What is done determines mously in the past few years is ample basis.
Banks, like any other business institu
proof on the very face of things that the
his opinion of the institution.
Every contact made with the customer service is valuable to the people who tion, depend upon confidence and good
will for their business. As far as it is
is a sales opportunity. Suppose the sell use it.
Think over carefully all the things that humanly possible to do so, they wish
ing problem is that of making every
checking account profitable. As you get a bank has to do in rendering service on to secure and hold the good will and con
into the work you will find that there is any checking account and you will agree fidence o f everybody in their community.
a genuine thrill in putting over your at once that if any individual had to do They are only entitled to such a feeling
ideas with the customer who does not, at the same number of things for himself it of good will when they give everybody a
the beginning, see the light as you do. would take him a great deal more time square deal that profits them both. They
Your job is to mold his opinion. W. L. and cost him a large sum of money each know that the raise in price is more than
justified. They also know that any fairBarnhart defines salesmanship as “ the year.
I f every depositor knew as much about minded man or woman who will take the
power to persuade people to do what they
hadn’t intended or wanted to do with a checking account service as you do he slight trouble to acquaint himself with
would have a real appreciation of what the real facts, will also feel that the
resultant profit to them for doing so.”
Now, any selling job requires the use the service is worth to him. But most action is justified.
Therefore, they want every depositor
of two kinds of knowledge. One, is depositors take checking account service
knowledge of the product you have to for granted. They think that when they to reach their own conclusions on this
(Turn to page 87, please)
-sell. The other is knowledge of the deposit their salary check in the bank

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Northwestern Banker December 1930

Above, tiny figures representing a baseball team. The fence around the diamond is made of billboards of
the bank’s customers. There is a savings poster used in this connection.

HE alert bank
er of a small
town, having a
s m a l l advertising
budget, must choose
carefully the me
diums to be used.
O f t e n the small
town bank has no
local competitor. The bank in the adjoin
ing town is usually its chief competitor.
There being no competition locally, the
mere bringing of the bank’s name before
its small public is not so important as to
make its advertising connect the bank in
some Avay with civic enterprizes; making
it felt that the bank is the heart of the
community; that every interest is of im
portance to the home town bank. This
can be done by using the bank windows
for featuring displays of local interest.

Year Books of the
school, specimens of
the handwriting of
students, in fact,
anything bringing
before the public, a
brief array of what
is being done there,
is worthy of dis
play. When a bank stands back of its
teachers, student body, school board and
P. T. A., even in a small town, a large
group have been touched and the bank is
benefited.
As to a church display, care must be
used here that either every local church
has an equal representation in the space
given, or else that a full display is given
to each church, one display following close
upon the other. However, in all proba
bility, pictures of the present church
buildings, the original edifice; pictures,
with stories of youths of the churches,
AA'lio have gone to other lands as mission
aries, and any unusual feature character
izing each church. Care must be exercised
in giving figures as to church membership,
etc., Avhere a display is made up for more
than one church, as one might show up to
a disadvantage compared with the other
and the good Aidll created be of a negli
gible character. Such a display may be
made to touch and interest a very large
group and react in a splendid way for the
entire community, as well as for the bank.

No Bank Too Small for
W in d o w D is p l a y s

T avo objections Avili immediately sug
gest themselves— one is Time and the
other Material. A s to Time, in the small
bank, usually, the banker’s assistants have
feAV outside interests and would welcome
something neAV to break the routine and
give them a chance o f Avorking on a defi
nite advertising program for the bank.
But i f the force at the bank is busy, by
designating one employe, paying a small
sum for every creditable display created,
it would mean a “ little extra” and the
work could be begun. This extra compen
sation for the clerk having the displays in
hand, should be charged, not to salaries,
but to advertising, for it Avoidd amount to
just that.

How to Start

O MUCH for Time, and noAV as to
Material. No matter Iioav small, every
community can boast of the following :
School, church, library, tourist camp, a
club or tAvo, a fire department, some pio
neers, some antiques, some hobbiest (coin
collector, stamp collector, etc.), boy scouts,
camp fire girls and a baseball team.
In the beginning, it might be well to

place a card in the bank AvindoAv, stating
that “ It is the intentiton o f this bank to
use its window space for featuring local
displays. You may be called upon to as-

Northwestern Banker December 1930

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H ow to dress up your windows,
with almost no expenditure of
time or money

By A L IC E M O S H IE R
W indow Display Specialist

sist.

If you have something you feel
be o f interest in displays; educa
tional, historical or of any nature, speak
to Miss-------------, Avho is to have charge of
this work at the bank, and your interest
will be appreciated.” A similar notice
could be used in the local papers.
In the very beginning, displays might

Avould

be alloAved to remain for more than two
Aveeks, and neAV material added from time
to time, to keep it up-to-date. For in
stance, once an antique display is started,
articles Avill be brought in from every
quarter and Avhat might be but a small
display in the beginning would be o f as
tonishing proportions before it Avas withdrawn.

Perhaps the first display could feature
the school. A visit to the superintendent,
inviting his cooperation, will probably
give one a list of the honor pupils, the
athletes, and various outstanding students
Avho excel in one line or another. Some
times photographs are difficult to get, but
even snap shots, with a typed story of
their achievement, is sufficient. At least,
use a typed story, if the pictures are not
forthcoming. Use the trophies, banners
and various evidences of achievement,
held as the property of the school. Pic
tures of the teachers, the school buildings,
Avith information as to the number en
rolled in the past ten years, especially if a
groAvth is shown, are mere suggestions but
in every case something different will be
suggested and be very interesting. The

Good Material

OR a display featuring your library,
necessarily books suggest themselves as
the main material, but Lincoln and other
famous people have said very definite
things about the good public libraries
render to the community and the picture
of a famous man and a quotation from
him, could Avell center and give dignity to
the display. The librarian will be glad to
furnish figures as to the scope of work
done by the library. Perhaps the library
board will be the group most grateful for
this publicity given their Avork, but as this
board is made up of very representative
men and Avomen, their favor is sought.
The tourist camp display may be as

*
is in the fact that the board
elaborate as desired; a minia
'Vture of the camp, with trees,
fence around the diamond is
i
A:
made up of miniature bill
grass, buildings, stoves, etc.,
boards bearing the ad of
all there or it may be simply
a map marked by pins as to
varied and favorite customers
the destination of each of the
of the bank. In some cases,
hundreds of persons who were
merely the name of some
: .
?
the guests of your city during
product sold, with the typed
a
x
o
the tourist season of the year
name of the store, would be
sufficient, but when a mer
just past. Pictures of the
chant is appealed to for some
tourist camp should be shown,
'
(« r-Skr’HiT¿íi
thing to use on his billboard,
if possible. I f no “ attractive”
material seems forthcoming, borrow vari
he shows himself equal to the occasion, in
ous camp equipment from a local mer
most cases. For instance, one merchant
(probably Scotch) had his tiny billboard
chant, and give him credit for the cour
tesy by use of a card, and then tell the
read, “ $5.00 in cash will be paid to the
first player knocking a ball over this fence
facts by typed cards. The group having
— Smith and Jones, Sporting Goods.” A
in charge the tourist camp will be most
small poster toward the center could bear
interested in this display, perhaps, but as
the words, “ Your financial batting aver
a town is often judged by the courtesy
age, at the end of the season, is judged,
shown the stranger, making everyone real
rARELESSHESS CAUSES
not by what you make but by what you
ize their city is host to hundreds might
Scenes like t h is
save.” The background used was a scenic
make them more proud of their camp, and
design in wall paper border.
in turn more kindly to the stranger.
While it is difficult to state the amount of
For Fire Prevention W eek
money spent by tourists in a season, many
camps have had questionnaires filled out,
HE insurance men of every city join in
which show it runs into very large figures
boosting “ Fire Prevention Week” in
each year.
the fall and the accompanying picture
A display for one or more clubs would
shows a display where a window frame is
vary, according to the purposes for which
used, with curtains fastened in place on
a club is organized, but a request to the
the “ inside.” A box about a foot deep
president of any club, will undoubtedly
and exactly the size of the frame is used as
Above, advertising the home town
bring out more material than can be used
the background for the set-up. First line
lines of business, such as the round
in the ordinary bank display.
the box with red crepe and in about the
house at Jamestown, North Dakota.
Having suggested in detail thus far, the
middle of this place the figures of a mother
Below, a window used during Fire
Prevention Week, showing the re
remainder of the subjects will be found
and children. These may be secured from
sults of carelessness.
easily handled; all depending upon the
any movie house; not, o f course, in dupli
material at hand, the project worked out
cate but suitable figures. Crepe paper in
and the space to be given. In each case
brick design, complete the display below
the head of the group to be featured must your bank and creates much good will. the frame. To give the effect of fire, use
be reached, and thus authentic facts, fig
Purposely, mention of a baseball dis either red electric light globe or place your
ures and display material will be available. play has been left until last. The accom electric light in a wire protector, to avoid
Even if your fire department is made panying picture carries an ideal set-up fire, and wrap in red crepe. At either end
up of volunteers, there is all the more rea for your local baseball team. The dia of the display space use posters furnished
son for giving credit where it is deserved. mond is made of green burlap, marked by the insurance men.
A miniature set-up of fire equipment with white chalk. The players are dolls
In a railroad town, facts about the
proves most interesting to
amount of freight shipped
children and they must not
from your point, or the
be overlooked in any dis
“N o other advertising is so effective as the word-of-mouth and
number of railroad tickets
play.
sold, or perhaps the num
interesting displays of this nature are talked about and in turn
Pioneers, those for whom
ber of men employed, could
advertise the bank in a dignified, friendly manner to the
the city, the county or the
people in their own town. True, the number of persons view
be made attractive by the
county wards were named,
use of a miniature round
ing a display in your town may be small but they are the
should be featured in the
house and a line-up of boy
bank’s potential customers and to make them your friends,
display on pioneers and
dolls dressed in the conven
makes customers.”
pioneer days. A covered
tion blue overalls.
The
wagon, a tent, or any mini
roundhouse may be made
atures of frontier days may be used in dressed in uniform. A grand stand may of cardboard or be drawn by an artist.
be erected of pasteboard and the “ crowd”
the set-up.
If a continuous line of civic displays
In an antique display, secure anything may be large or small, depending upon can be created, a bank will find its adver
fifty years old. Give the name of the the number of dolls available. With dolls tising taking care of itself. For no other
person loaning each article, and, if pos it must always be “ the lucky seventh in advertising is so effective as the “word of
ning” when the crowd stand to wearily mouth” and interesting displays of this
sible, a story of its early use.
Any town has a group of persons hav “ stretch” for the exciting finish, as china nature are “ talked about” and in turn
ing a pet hobby. It may be collecting dolls must necessarily stand, but place advertise the bank in a dignified, friendly
coins, stamps, elephants, china dogs or card figures of suitable design may be manner to the people in their own town.
Avhat-not but these displays are educa used, in which case, they will bend and True, the number of persons viewing a
tional, in most cases, and perhaps suggest remain seated. However, the grandstand display in your town may be small but
the value of a hobby to others. At least may be eliminated, if necessary, but the they are potential customers and to make
it interests the public in your display, in chief advertising feature of this display them your friends, makes customers.

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Federal Reserve Bank of St. Louis

Northwestern Banker December 1930

A new principle in harvesting of corn is being tried out in the corn belt. After having been put in operation in Missouri,
Kansas and Nebraska, the corn combine pictured above has been given a tryout in various parts of Iowa. The corn is har
vested, shelled and graded all in one operation.

F A R M S A N D F A R M IN G
FARMING is more and more turning
mechanical.
One of the latest developments along
this line from the standpoint of cornbelt agriculture has been the introduction
of the corn combine for a tryout in Iowa.
This piece of machinery which harvests,
shells and grades the corn and chops up
the stalks in one operation previously had
been used experimentally in the fields of
Kansas, Missouri and Nebraska.
In general the reception accorded this
new machine was favorable although the
moisture content of corn at husking time
makes some solution of the drying prob
lem necessary before the average Iowa
field can be husked and the shelled corn
binned at the usual harvest time.
Backers of the newest farm tool claim
for it that it will reduce the cost of har
vesting and speed up the husking of the
crop.
It is claimed that the cost of husking
can he reduced to 3 to 5 cents a bushel.
“ Iowa will have to look to her laurels
as a corn growing state if her farmers are
not careful,” said one of the men in charge
of the demonstrations of the corn combine
which recently has harvested several fields
of corn in scattered parts of Iowa.
“ The use of this machine will cut the
cost of production to the place where
Texas, Oklahoma and other states in the
southern and southwestern sections can
profitably turn from cotton to corn,” he
continued.
All of which may be true because the
states where the corn has a longer grow
ing season and can be harvested drier

Northwestern Banker December 1930

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Federal Reserve Bank of St. Louis

By C. A. C R A IG
Farm, E ditor

than can the fields in the corn belt proper
probably can use a machine like the corn
combine to a better advantage than can
the farmer in Iowa or eastern Nebraska
or South Dakota.
But after all, where will they get the
hogs to feed the corn and thereby estab
lish a profitable market?
Most of the farmers in Iowa, Nebraska,
Minnesota and Illinois do not market any
very large quantities of corn as grain but
they do feed lots of it to dairy cows and
pigs and fattening steers.
Nevertheless, agriculture is turning
more and more to mechanical production
and who knows but that the advent of a
machine that will lessen the operations
from the field to the granary may have a
part in revolutionizing our entire methods
of production.
*
THE EAST met the west in the annual
interstate competition between 4-H Club
members in the AK-Sar-Ben livestock
show at Omaha, recently. Mari Matsuani,
young Japanese farmer boy, had won the
state 4-H Club championship in Nebraska
and was a strong contender for honors in
the Omaha show. He was defeated in the
contest for Hereford honors when Wayne
Tyler of Union County, Iowa, defeated
the entry of the boy with the oriental an
cestry.
Incidentally a new record was set for
champions when the purple in the open
fat steer show went to a tiny Hereford

that weighed but 680 pounds and was
less than nine months of age.
“ The craze for miniature has become
contagious,” said one ringside observer.
“ First it was golf and now it is steers.”
The entry was one owned by R. P. Lamont, Jr., Colorado Hereford breeder and
son of the United States Secretary of
Commerce.
* * *
FARMERS of the middlewest who lost
sleep last summer because of the drought
are still worrying.
It seems that the dry period isn’t over
yet.
Wells are dry and streams that usually
furnish water in abundance at this time of
year for livestock have dried up and there
is none too much moisture in the soil to
insure crops for the coming year.
There have been sufficient rains to make
fall plowing possible and to give the
winter wheat a normal start, however, and
plenty of rain or snow late this fall or
early next spring would bring the mois
ture situation back to normal.
The late fall has enabled the farmers
in most of the middle western states to
accomplish more than the usual amount
of work. Corn husking was completed
early and some have harvested their corn
and plowed the cornstalk ground all ready
for the growing of spring crops.
* * *
FARMERS IN IOWA, South Dakota
and Nebraska are finding that the corn
crop will not be as short as it looked on
September 1, or at least the government
(Turn to page 45, please)

Snappy Christmas Gifts for Bankers
By R O S C O E M A C Y
HE TIME has come for a drastic
revision of the traditional lists of
presents suitable for holiday gifts to
bankers. It is no longer comme il faut
to present a banker with a pocketbook, a
bill-fold, or an individual bond-portfolio.
Better far to give him something he can
use. I do not mean to say that the pol
ished banker will not appreciate the neat
compliment you hand him by hanging a
bill-fold on the Christmas tree for him,
but if you wish to bring a real gleam o f
approval to his tired eyes, don’t fail to
try him with a loaf of bread, a pair of
new shoe laces, a new pair of pants, or
at least a fresh trousers-seat for the busi
ness suit. I f you send your banker friend
a loaf of bread through the mail, how
ever, it is a wise precaution to mark it
“ Not to be opened until Christmas.” He
is not likely to starve altogether in the
meantime, and the waiting period will
make him all the more appreciative of the
feast when the day arrives.
There are some donors, of course, who
will not be satisfied to present their
bankers with such commonplace gifts as
those described above, and for such as
these, we have made out a list of sugges
tions which may aid them in the choice
of the more elaborate presents.

For the Late Sweeper

HE smarter gift shops are displaying
a nickel-plated dustpan and broom
rack for bankers whose customers have
a habit of arriving to transact business
before the sweeping is finished in the
morning. It is very distressing to the
sensitive cashier, as he leans his broom
against the counter and trips twitteringly
back to wait upon the early customer, to
have the latter knock the broom down
accidentally with a loud clatter, and pos
sibly trip him—or herself—over it and
fall prostrate in the lobby. After such
an accident in our bank recently, as I
helped the ponderous lady depositor to
regain her feet, I wished wholeheartedly
that I had one of these combination-dustpan-and-broom-racks.
The broom-rack
has four arms which are “set” something
after the fashion of a steel trap; wlien
the banker is interrupted in his sweeping,
he thrusts the broom into the rack, where
upon the catch is released, and the four
arms spring up and grasp the broom
handle, holding it in an upright position
until the operator returns to resume his
sweeping.
There is only one objection to this de
vice. It would be possible for a nervous
banker, moving hastily upon seeing a cus
tomer enter the bank, to step inadvertently

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Federal Reserve Bank of St. Louis

e*KVSN

‘ Y o u ’ll bring a gleam of approval to his tired eyes with a new trousers’ seat
for his business suit ’ ’

into the broom-rack, and be caught fast.
The situation would be an embarrassing
one; the broom couldn’t be expected to
wait upon the depositor.
Another striking gift suggestion con
sists of a special daily memorandum book
for absent-minded bankers. This book
is especially designed to prevent such embarassing experiences as that which, I
suffered the other morning. I arrived at
the bank early in the morning (at least,
it seemed early) to find a long line of cus
tomers waiting for admittance. Upon
reaching for my keys, I discovered I had
forgotten to bring them, and was forced
to return home for my key-ring. Re
turning in due time, I learned that some
inquisitive fellow had tried the front
door, whereupon it came out that I had
forgotten to lock the door the previous,
evening. I laughed the incident off, but
I couldn’t help wishing that I had one
of these “ Bankers’ Special” daily mem
orandum books.
Under each date in this unique and use
ful book is printed the following data:
(did
I lock the front door last
(did not (
night,
(do
l have my keys with me
Ido not (
this morning.”
Had I been equipped with such a book
on the morning in question, I would have
had only to open it, to date, and, finding
I had not locked the door the previous
evening, I would have entered non
chalantly, with a cheery “ Hello, Egbert”
(pretending, you see, that the assistant
cashier had arrived before me and un
locked the door, and was even now hiding
under the counter).
Of course, it might happen that the for
getful banker would neglect to cross out
the proper words to indicate the state of
lockment or unlockment of the door.

Even then, though, the banker has a 50-50
chance, which is quite a break for a
banker.
The absent-minded banker will also
appreciate the newest in shirts, now to be
seen in up-to-date haberdashers. This
shirt carries a synthetic necktie, painted
or embroidered on the shirt-front. Not
even the business man’s wife can tell, with
out close inspection, whether or not he has
forgotten to don his necktie.
The recently-patented outhouse anchor,
for Halloween use, will be a boon to suf
fering bankers. It is being shown in sets
of four, complete with chains, with a
neat metal case for storage during the
dull season.
Various types of portfolios, now being
displayed, all make handy gifts for bank
officers. There are portfolios for carrying
farmers, business men, and all types of
customers. Other styles are equipped for
the convenient carrying of Other Real Es
tate. These are fitted with ample pockets
for five farms in each portfolio, and in
case of foreclosure, each pocket has a
leather container for botli receiver and
transmitter. In the back is a special
pocket to hold lime and composite for the
rebuilding of depleted soils.
Do not fail to remember the banker with
a pair of hip boots for use in the base
ment after spring thaws. A liquid-proof
pocket-lining for his non-leakable foun
tain pen will likewise be remembered a
long time.
A set of combination ear-muffs-earphones will be found extremely useful.
The banker can connect up the ear-muffs
while engaged in his ordinary banking
duties, while he will wish to turn on the
ear-phones occasionally in order to listen
to the thundering approach of prosperity.
(Turn to page 61, please)

Northwestern Banker December 1930

TRI-STATE BANK CONFERENCE
Highlights from the hank management conference held last month in
Minneapolis by the state associations of Minnesota, North and South Dakota

Float Charge—a Profit Tonic
N ANY discussion of factors having a
direct bearing on the profit accounts of
banks there must be included that ele
ment known as “ float.” To gain the
proper viewpoint before considering its
relation to the undivided profit account
there are two facts which must he recog
nized. F irst: That float is the direct re
sult of conditions that exist in every
bank. Second: that because of these con
ditions a potential loss exists—a loss as
certain as that caused by any bad loan,
but more insidious, for the reason that
it often drains away the profits without
those in charge being aware of the
leakage.
At one time, and possibly not so long
ago for many, the term “ float” did not
mean anything more than that mysterious
deduction made by our city correspond
ents from our monthly interest balance.
Analyzing this problem convinced us
there was a difference between the in
terest we received and the interest we
would have received had not the word
“float” occurred. Yes, there was a loss—
but what caused that loss? The follow
ing illustration will serve to show how
our thinking has progressed along that
line.
One beautiful autumn morning John
Smith strode up to the window and an
nounced that he wished to pay his note.
Interest was carefully figured to date
whereupon Mr. Smith, as payment of the
loan, presented a live stock check drawn
on a distant bank. Did we refigure the
note to the date when the check would
be collected, and funds available for in
terest in our city bank? We did not.
But the conviction began to grow upon
us that what apparently represented
money to our customer was nothing but
a piece of paper to us until it had been
collected and the funds placed in our
own interest account.

A Real Loss

SCRUTINY of our daily transac
tions with our other customers fol
lowed until we realized that the deposit
ing of a multitude of out of town items
without the maintenance of a balance
large enough to cover the float and the
cost of handling the items was resulting

Northwestern Banker December 1930

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Federal Reserve Bank of St. Louis

By M . I. O R M S
Assistant Cashier, Security National Bank
and Trust Co., Sioux Falls, So. Dak.

in a loss just as surely as though we were
lending funds without interest and keep
ing our customers’ books free of charge.
To be sure, these facts did not occur
to us all at once, but, thanks to the

M. I. OEMS

pioneer work of our city correspondents,
and the excellent help given by our state
associations together with the fine pub
licity accorded the problem by the various
trade papers, I doubt if there is a banker
anywhere in our conference area who is
not familiar to some degree with float
and the losses caused by the failure to
recognize its true nature.
To present a concrete illustration of
float in an average country bank I have
examined the accounts of two banks as
they appear on our books. Both are
typical of country banks in this terri
tory, and as each has other accounts
besides the one maintained with us, the
figures following only reveal part of the
story, but enough to arrest our attention.
No. 1 bank has a total of about $260,000.00 in deposits. During one month

we received from that bank 1,320 items
with a money value of $39,000.00. These
required from one to six days before
funds were available for use, so that the
total float deduction from the bank’s in
terest account was $185,000.00.
No. 2 bank has a total of about $885,000.00 in deposits. During the same
period 1,800 items were handled. The
money value of these was $99,000.00, re
sulting in a float deduction of $383,000.00.
I f the other accounts maintained by
these banks received a corresponding
volume of checks you can readily see that
the resulting reduction of interest is an
item worthy of consideration. This re
duction is a complete loss, as we know of
a certainty that no effort is made in either
bank to counteract this condition.
The question is, “ What can be done?”
Is the subject akin to the weather, to be
discussed and forgotten immediately?
Most assuredly not! The condition can
be remedied if we only determine to put
the solution into practice. Our city cor
respondents, long ago, pointed the way,
and the committees of our own associa
tions have approved methods which will,
if adopted, go a long way toward check
ing the loss, if not actually yield a profit.
The answer is, “ Adopt a float charge.”
Acquaint yourself with the recommenda
tions of .jour own committee, and also
become familiar with what your city cor
respondent bank is doing. Then decide
on the charge you are going to adopt.
The only requirement is that it be ade
quate to not only cover the cost of
handling the check involved, but also
allow interest for the time you are out
the use of the funds while the item is
being collected.
Before instituting the charge gain the
cooperation of your neighboring competi
tor if possible— otherwise start the charge
alone. I f the proper foundation of pub
licity has been laid the enforcement of
this charge will meet with little if any
serious opposition. At least, such has
been the experience of others, and the
resulting revenue has been well worth the
effort.
The application of the charge is simple,
and need cause very little extra work.
As an out of town item is deposited a

=
notation of the charge to be assessed is
placed on the back of the deposit ticket,
from which it may be transferred to the
customer’s float sheet whenever conven
ient. These charges are accumulated,

Tri-State Conference —

;i ml at the close of the month may be run
to the customer’s account. In the case
of a check presented for cash the charge
may be deducted when the money is
paid out.

If float, to any of you, is still that
mysterious total occurring each month,
let me again emphasize, experience has
proven that an adequate float charge
Avill be a splendid profit tonic.

D E T E R M IN IN G the V A L U E of an
ACCOUNT
I

AM connected with a bank of about
$500,000 in deposits, with approxi
mately 1,000 checking accounts. The
system we are using and suggest that you
follow is to make a complete check of
your individual ledger, picking out on
the first check, about fifty accounts that
you are practically sure are either show
ing a loss or are very close to the line.
Taking a few of these names at a time,
write them a letter, asking them to come
in and see you regarding their account.
You will have very little trouble in get
ting them in under this system. Of
course before doing this, you should have
a complete analysis of their account,
showing its exact status. These accounts,
of course, would all show a loss or you
would not have called them in. You will
find that very seldom there are two ac
counts that can be handled in the same
manner. The trouble with one account
might be in the nature of its deposits, of
another the number of checks written,
etc. We find one of the best methods
or leverages in influencing a customer
whose deposits are a source of expense,
is to intimate that unless the account is
kept in better shape, or a larger balance
carried, we would be forced to put into
effect, the so-called float charge, which
would cost him a great deal of money
in handling his out of town checks. In
our particular case, we started with the
chain stores, and must admit that we
had no difficulty in convincing them of
the expense of handling their accounts.
In fact, all they asked was to be shown
an abstract or analysis of their account,
and what we wanted in order to make
it pay. With these accounts well in hand,
we then started on other unprofitable ac
counts, and found that, same spirit of
cooperation, with the result that we now
have practically all of our accounts on
a paying basis.
A Good Idea

HERE is one idea which we have
worked out which I believe is worthy
of your consideration, and that is to have
the same man who works out these var
ious accounts to go through the individual
ledger each month in connection with
making out the service charge on small

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Federal Reserve Bank of St. Louis

checking accounts. This will keep you
in touch with the entire ledger at least
once a month, and at the same time you
tonic to the profit side o f your ledger,
can jot down any accounts which you
figure were missed in your previous list
of unprofitable accounts. While we have
not worked out any elaborate system of
determining the value of an account, we
believe that the average person who is
in contact with the individual ledger can
tell at a glance whether or not an account
is profitable. You will find that there are
many accounts which would really come
under the 50c monthly service charge
Avhich are actually costing you a great
deal more than that to handle. These
accounts might be classed as undesirable.
We have made it a practice of charging
five, three, and two dollars per month
without any serious reaction from our
customers. The systems of determining
the value of an account are practically
endless, as you will find in going through
your individual ledger that there are ac
counts continually showing up which
should be analyzed and actually show a
loss.
Now, our method in determining the
value of these accounts is taken almost
entirely from a small placard which our
secretary, Mr. Starring, has prepared,
showing a very simple way of determin
ing the profit or loss on an account. In
going through our individual ledger,
especially at the time of the month when
all the checks posted on the sheet are
counted, and by referring to the total, it
is easy to figure that if a customer writes
one hundred checks, lie should have a
balance of one thousand dollars or show
a loss, or if he writes fifty checks, he
should have a five hundred dollar bal
ance or the account will show a loss. I
am sure that you all have these cards, and
if not they no doubt can be secured
through your secretary.
The actual value of an account is of
course, its net earning power, and this
may be arrived at in the following man
ner. First take the customer’s deposits
for one week, and each day sort out all
the out of town items, divide their total
by the amount of the deposit and this
will give the per cent of float. Average

By W . P . J O N E S
Cashier, Citizens State Bank,
M obridge, South Dakota

this per cent for the week, and you will
have established a fairly accurate figure
to use in determining the net balance.
For instance if the average ledger bal
ance is one thousand dollars for the
month, and the float is thirty per cent,
your account will have a net balance of
seven hundred dollars, and by referring
to this small chart, you can readily find
out the number of checks that can be
charged against that balance without
showing a loss. We work on the theory
of getting an increased balance rather
than making a direct charge when the
account is found unprofitable.
In closing, I believe that the charge on
unprofitable checking accounts should be
put on a per item basis, with a minimum
charge of fifty cents per month, as it
seems unfair to charge an account fifty
cents where there are only five or ten
checks written, and charge the same
amount to the customer writing from
thirty to fifty or sixty checks on the
same daily balance. I also believe that
the charge would be more readily under
stood by the customer, if properly ex
plained to him, the expense in posting
and handling this large amount of checks,
and there is no question but that there
will be a greater spirit of cooperation
from the customer after he is once shown
the actual expense in handling his ac
count.

Scattered
Angry City Editor: Say, this is one
hell of a fine “ cut off” you gave me on this
big country club reception story!
Always Calm Foreman: Well, what
seems to be wrong with it?
City Editor: What’s wrong! Why
here you have the yarn ending with “ scat
tered throughout the large parlor were
Mr. and Mrs. S. Smythe Brown.”

Northwestern Banker December 1930

Tri-State Conference

Do You Remember
the O ld Days

W hen the Banker’s Head W as
His Credit File?
HE loans of all commercial banks
fall naturally into three general
classifications: collateral loans, en
dorsed or guaranteed loans, and unse
cured loans. We shall give our attention
here only to those included in the last
classification, and particularly to com
mercial loans in the smaller banks. The
country merchant presents a distinct and
difficult problem to his banker. With
specific security or the financial responsi
bility of some one other than the bor
rower, both beyond our reach, the first
matter of interest to us is the strength
represented by the signature on our note.
This brings us face to face with the
borrower and there is no better way to
judge him as a credit risk than by apply
ing the well-worn but accurate rule in
volving questions regarding his character,
capacity, and capital.
The author of this rule showed wisdom
in the order of the tests for, regardless
of a man’s financial strength, he is un
desirable as a borrower if he is dishonest.
Perhaps the greater his resources, the
more dangerous he may become. Surely,
if we find him dishonest we can eliminate
him from our consideration and save the
time and expense necessary to investi
gate and consider his request for unse
cured credit.

By C L A R E N C E R . C H A N E Y
Vice President, Northwestern National Bank,
Minneapolis

to good advantage it is not safe to grant
him unsecured credit. The best and, per
haps, the only safe method of determin
ing the ability of a customer is to know
definitely the results of his operations

The Second Question

F WE are satisfied as to the honesty of
our borrower, the matter of his capac
ity to manage the business in which he
will employ the borrowed funds should
be our next consideration. It comes sec
ond in our procedure of judging the credit
but it is fully as important as any other
phase of the situation. In these days of
greater competition in almost every line
of endeavor and narrower margins o f
profit, the matter of efficient management
is more important than ever before. Mer
chandise turn-over, the taking of pur
chase discounts, and the reduction of ex
penses are all vital matters and any one
of them may be the deciding factor in
earning a net profit. So, regardless of
the honesty and good intentions of our
borrower, unless he manages his business
well and will employ the borrowed funds

Northwestern Banker December 1930

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Federal Reserve Bank of St. Louis

CLARENCE R. CHANEY

from year to year. This information can
only be gathered from operating state
ments showing his sales, cost of goods
sold, gross profit, expenses, and net profit.
Because this term “ net profit” is not used
to express the same thing in all state
ments, it is important to carry the in
vestigation one step farther and inquire
regarding the disposition of the profit.
In many cases profits of considerable size
are used largely for depreciation or to
write off worthless assets originating in
prior periods, with the result that prac
tically nothing is carried to surplus at
the end of the year. It is this annual
addition of profits to surplus over a

period of years which is the final test of
the management. In many instances, the
local merchant who is the most popular
in personal respects may have the poorest
earning record to substantiate the ac
cepted fact that he runs his business well.
Even a balance sheet indicating a proper
ratio of current assets to liabilities may
not be a safe basis for credit if actual
earnings left in the business do not show
a trend in the right direction. The secur
ing of operating figures may be a painful
operation to begin Avith but when a bor
rower has become accustomed to furnish
ing them, he may find that they are not
only enlightening to him as well as his
banker but, if his showing is creditable,
it may enable him to borrow with less
difficulty the funds which his business
really requires.
I f we are satisfied with both o f the
tests which we have applied, our next
question should be regarding the capital
of the borrower, for honesty and good
management may be of no avail without
operating funds. Every business should
have normal capital supplied by its own
ers, and the test of normal capital should
be the ability of the borrower to get
entirely out of debt except for current
merchandise accounts at the period of
the year when the business happens to be
least active. The province of a bank is
to supply funds temporarily to carry a
business over its peak season or times
of unusual activity. When it goes beyond
this point it grants a capital loan and
becomes a partner in the business.
Financial Statements

S IMPORTANT as the amount of
capital is its distribution, and here
we are brought to the absolute necessity
for financial statements. Many borrow
ers, who are practical men of consider
able ability, are so enamored of a manu
facturing plant beyond the needs and
financial strength of their business, or an
elaborate store which they cannot affordr
that they find themselves without work
ing capital and, ultimately, without
profits. The banker should always satisfy
himself that too great a portion o f the
capital dollar is not invested in brick

— Tri-State Conference —
and stone. Then, there is the matter of
real estate not used in the business.
Many times this item results from the
taking- of properties in the settlement of
old accounts, or is explainable in some
other way. However, the importance of
the matter is not in how the properties
were accumulated but the fact that they
tie up the capital which may be needed
in the business and is largely unproduc
tive as it stands.

Kvon among the quick assets, the
matter of distribution of capital is very
important. A reasonable cash balance
may be regarded as insurance against
emergency. An unduly large total of ac
counts receivable usually indicates a lax
credit policy and may lead to losses on
accounts receivable which may consume
all possibility of profit. Changing con
ditions, which make it advisable for the
banker to watch his credits more closely

than ever before, should make the mer
chant do likewise. The question as to
whether he is doing so may be answered
by the amount of his notes and accounts
receivable as compared to his capital.
Frequently, a desire for sales volume
tempts the merchant to be too liberal
with his credits. In such instances he
should be reminded that it will take the
profits on many sales to offset the loss
(Turn to page 45, please)

TH E T O L L O F TH E Y E G G
IT SEEMS to be the rule to think of the
I “ Toll of the Yegg” as being almost ex
clusively connected with burglary and
robbery attacks on banks.
This, no
doubt, is largely true, when the word
“ yegg” is used, as that, word in the under
world is the name by which the bank
bandit or “ heavy man” is known. There
are other classes of bandits and thieves,
whose work may be connected up with
the professional yegg; the work of Avhom
is, no doubt, more serious to society in
general than that of the professional
bank yegg.
The class I refer to, is made up of
young men and boys, who, very unfor
tunately embark on lives of crime; and
to the older men, who have lost their
nerve in following the calling of a “ heavy
man,” and have become sneaks, petty
thieves, or “ weeders,” as they are some
times called. They are continually prey
ing on society, rather than making the
occasional, sensational attack, that is made
by the bank yegg. They are joined up,
in many cases, with well organized mobs
of bandits, thieves, and the accompany
ing “ fences,” where stolen goods may be
easily disposed of, and who are adding
to the rapidly growing devastations of
underwoi’ld crooks.
Their work in the night attacks that
are made on stores and other places of
business, and the wholesale robbery of
livestock and poultry from the farms are
as serious as the work of the professional
bank yegg.
A Problem for All

HIS problem of the toll of the yegg,
to which might be added closely con
nected associates of the yegg, is no longer
a problem that bankers or other groups
of citizens should attempt to solve, but
becomes a problem that can only be suc
cessfully defeated by the very intelligent
and persistent efforts of state, county,
city, and town authorities.
In many states, bankers through their
organizations, have endeavored to organ-

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Federal Reserve Bank of St. Louis

By W . C. M A C F A D D E N
Secretary, North Dakota Bankers A ss’n.

ize community protective committees,
called vigilante committees, town guards,
etc. In North Dakota, while our bankers’
association has made some persist
ent efforts to arouse our members to
the seriousness of this whole situation,
and to the necessity of cooperation and
assistance in defeating banditry, our offi
cers have all along believed that the prob
lem is one that must be solved by public
officials. This view of the matter, we
are happy to state, has been taken by
Governor Shafer, who has made more
liberal offers of rewards, to be paid by
the state for the apprehension and con
viction of guilty parties and for the pre
vention of successful attacks on banks,
than could be made by our State Bankers’
Association. Following up his view of
the problem, he recently instructed our
State Attorney General and the State
Adjutant General to visit different parts
of the state where county sheriffs, states
attorneys and other officials having police
powers, could be called together by dis
tricts, and the subject thoroughly dis
cussed in its various aspects with these
officials and the bankers and business
men in each district, with the view of
completing a comprehensive state wide
organization for the prevention of bank
robbery and crimes of this character.
These meetings were very interesting
and very valuable. Bankers and busi
ness men, in various communities, have
failed to see the part that they should
take in protecting the life and property
of citizens of the state. One of the im
portant features of combating crime,
that has been overlooked, is the equipment
of arms and ammunition, that should be
in the hands of all sheriffs, deputies,
police headquarters, and local officials;
such as town marshals.
The bank daylight robber has found it
very easy to enter almost any town or
community to take his toll from a bank,

in broad daylight and make his get-away
successfully, partly because of the neg
lect of properly equipping officers whose
duty it is to protect the communities
which they are elected or appointed to
protect.
I had the pleasure of attending some
of the meetings called by the Governor
and some of the disclosures at the meet
ings were interesting to say the least.
In one of the larger cities, the banks had
put in expensive silent alarms connected
with the police stations, but had neglected
to see if the station was properly
equipped to respond when called. We
found at the station, three Springfield
rifles that had been borrowed following
an attack on a bank in a nearby town.
A committee of bankers put the situa
tion up to the city commission and auto
matic rifles and shotguns were promptly
purchased. In the sheriff’s office in one
of the leading counties of the state, we
found a twenty-two rifle and an old gun
of some kind that had been lying around
the office for years. A committee of
bankers put the matter up to the county
commissioners and the proper equipment
was promptly provided. These are only
samples of numerous similar situations
that were disclosed.
The response from public officials in
practically all cases was prompt and very
satisfactory, so that there are not many
communities in North Dakota that are
not properly equipped to meet the yegg,
as he should be met.
The toll of the yegg has been partly
possible because many of you bankers
and business men in your communities
have neglected to see to it that first of
all the proper men are elected or ap
pointed as the guardians of your lives
and property and second because the com
munities have failed to back up your
officers and officials with the local or
ganization and equipment they should
have to meet crime conditions that are
growing more and more serious as time
goes on.

Northwestern Banker December 1930

----- Tri-State Conference —

W hy Bankers C a n 't W ork for
N VIEW of the fact that a large per
centage of country banks are still on
pretty much of a free service basis,
you may be surprised to know that all
of the banks in our particular part of the
state are on what we call a 100 per cent
service and float charge basis. The rea
son we got on that basis somewhat early
in the game is that we were forced there
if we wanted to continue in business and
I ’ll tell you how.
We in common with most country
banks, were pretty badly shaken by the
economic upheaval of 1920 and ’21, when
as you will recall, even staple commod
ities dropped more than 50 per cent
almost over night and when farm values,
the basis of our rural wealth, started to
decline and have continued to do so up
to the present time.
We argued that if our services were
o f any value, and we knew they were,
there was no more reason w7hy banks
should donate them than the lawyer, the
doctor or other professional man or to
expect the merchants to sell their goods
at a loss. Feeling that we were right in
our conclusions and that if we were right,
we had nothing to fear, we analyzed every
phase of our business, that is what we
had left, and went right down the line,
pretty well covering them all.
The float charge, the fairest and most
productive of earnings, seems to be the
last to be adopted, even by some of the
more progressive country banks. There
seems to be a mystery or uncertainty
about it which is hard to understand by
anyone who has put this into force.
Maybe we were not keen enough to see
the possible undesirable after effects if
there are any, and I don’t think there
are. However, we simply couldn’t wait,
we were losing money and had to stop
every leak possible.
We dug up our Federal Reserve Bank
availability chart, added to their time, the
time it took our items to get to Minne
apolis, figured interest at 6 per cent,
added 3 cents per item, the overhead cost
o f handling each item to a country bank,
then averaged the amounts for the sake
o f simplicity and to make it more readily
understood on the part of the public and
we had it.

Selling the Public

FTER working this out, it was im
portant that we put the matter
before the public in a way which would
enable them to see the fairness of it and
this was effectively done by a series of
explanatory ads, leading up to the an
nouncement and putting it into force.

Northwestern Banker December 1930

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Federal Reserve Bank of St. Louis

N O T H IN G
The float charge is the fairest and
most productive of all service
charges.

By H . H . M A R T I N
President, First National Bank,
Crosby, North Dakota

H. H. MARTIN

Quite naturally, we were somewhat
uncertain as to how the public would ac
cept these additional charges, this being
somewhat of a new wrinkle in the bank
ing business out our way. Imagine our
surprise when we found that approxi
mately 95 per cent of the public accepted
these charges, with the others, as the part
banks must play in meeting changing con
ditions. Analyzing that other 5 per cent,
we found that half of them were unprofit
able bank customers and the other half,
could not or would not see it from our
point of view. Considering the income
from that source, you can well afford
to lose that other 2% per cent but you
will not.
These various charges have meant the
stepping up of the incomes of every bank
in our territory, and we are all small
banks now, from $2,500 to $5,000, without
the material loss of any worth while
business.
Sizing up the country bank situation
at this time, we find that invariably, the
outstanding exponents of free service
were the first to close their doors, while
on the contrary, the exponents of fair
and reasonable charges for services ren
dered and modern methods in country
banking were, with few exceptions, still
on the firing line and when I say firing
line, it is no misnomer.
To you who think you have a pretty
good schedule worked out and particu
larly to those of you who might still be
on the free service basis, take note of
the following given to me by an auditor
of one of the Canadian banks.

Checking accounts to be worth while
should maintain an average monthly bal
ance of $10.00 per check written (10
checks, $100.00 average month balance,
20 checks $200 average balance and etc.)
On out o f town checks, cashed or re
ceived for deposit, where a branch is
maintained, a charge of one-eighth of one
per cent. Minimum, 15c; note minimum,
15c.
On out of town checks, cashed or re
ceived for deposit, where no branch is
maintained, a charge of one-fourth of
one per cent. Minimum, 25c; again note
minimum.
Drafts, 25c per hundred.
W e A re Pikers

IN COMPARISON, most of the schedI ules I have seen would indicate that we
are all mere pikers when it comes to
placing a value on our services and I ’ll
take my hat off to the Canadian bankers
any time. There, the public takes the cost
of handling the financial end of their busi
ness into consideration the same as any
other overhead expense and I am sure our
people will do likewise, when the matter
has been properly put before them.
Most of you will agree with me when
I say that we have been mighty negligent
in using the right kind of publicity in
our communities and instead of stressing
the value and importance of our banks
and their services to the community, the
old sterotype phrases are still being used.
We learned this from the advertising
used by us before the adoption of our
various schedules and feel that had we
all been using the same methods in the
past, the story of country banking in the
northwest would have been quite differ
ent from what it is.

A Costly E rror
“ My dear! What a lovely coat.
must have cost a fortune!”
“ No. Just a single kiss.”
“ That you gave your husband1?”
“ No; that he gave the maid.”

Looking Ahead
— A i ways!

T h e A m erica n

C om m ercial and

Savings

B an k

has

constantly

sought to anticipate the requirem ents o f service and authentic
k now ledge that m a y be m ade u p on it b y its associated B anks.

a result— especially in a period such as this— it offers unusual
advantages as a correspondent in this territory.

A request for

detailed in fo rm a tio n w ill be p rom p tly acknow ledged.

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Federal Reserve Bank of St. Louis

AMERICAN
BANK
COMMERCIAL AND SAVINGS

D A V E N P O R T , IO W A

Northwestern Banker December 1930

—: Tri-State Conference

—

W hen the A . B. A . convention in Cleveland adopted a resolution favoring
country-wide branch banking, it told the world that the unit system in small
country towns had failed. W e can disprove that feeling by paying more attention
to increasing our bank earnings.

Why W e Must Increase O u r
B A N K E A R N IN G S
F THERE is one subject that should
interest a group of bankers intent
upon studying various phases of ac
tivity connected with their business, it
is “Bank Earnings/’ that is, the net
earnings left over after all expenses are
paid, all losses deducted, and all pru
dent reserves are set aside.
This topic has become of more vital im
portance in the last few years due to the
downward curve in gross earnings and an
upward curve in the operating expenses
o f banks in general.
As a rule, the larger city banks have
met this situation by eliminating the un
profitable business as shown by their cost
analyses, by imposing service charges
and by establishing trust and securities
departments. These remarks will there
fore be addressed more to the country
bankers in charge of small unit banks.
The American Bankers Association at
its annual convention in Cleveland last
month adopted a resolution favoring
country-wide branch banking.
In so
doing, it said to the world that the unit
system of banking in small country towns
has proved itself a failure. The excessive
mortality among small banks in the
United States during the past ten years
has undoubtedly furnished it an excuse
if not a sufficient reason for the adoption
of this resolution.

By W M . C. R E M P F E R
Cashier, First National Bank,
Parkston, South Dakota

the small country banks is because long
ago they discontinued their unprofitable
operations and practices. Unprofitable
operations may result either from paying
too much interest for the loanable funds
of the bank or from receiving inadequate
pay for the numerous services which the
bank renders to the public.

W h y Bankers Fail

T IS axiomatic that the immediate cause
of bank failures is the lack of the
necessary earnings to pay operating ex
penses and cover the inevitable losses
which the business sustains. Adequate
earnings are therefore of paramount im
portance in banking operations; and the
policies, equipment and services of a bank
must necessarily be shaped always with
an eye to adequate earnings, if it is to
succeed. A community-building bank is
not one which loans all its funds in the
community which it serves, but one
which safeguards its deposits with proper
diversification, conservative management,
low overhead, and adequate earnings.
Perhaps the chief reason why the large
city banks have been more successful than

Northwestern Banker December 1930

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Federal Reserve Bank of St. Louis

W M . C. REM PFER

Judging from the opinions expressed
by bankers in attendance at the Cleve
land convention the larger banks are
finding the interest payments on deposits
very burdensome, resulting in lowering
net earnings and that there must be a
revision downward in the rates being
paid. Of course, there is only one way
to reduce interest rates on deposits, and
that is to reduce them, regardless of what
your competitor is doing. It is equally

true as a general rule that service charges
must be imposed in the same way, be
cause it is not often possible to get the
cooperation of your competitor, although
the public requires fewer explanations if
all the bankers in a given community
adopt the charges at the same time.
There has also been a marked trend in
recent years toward lower earnings from
loanable funds in small country banks.
This has resulted partly because the
banks have been compelled by circum
stances to keep larger reserves, partly
because they are purchasing more and
more low-yield securities for their sec
ondary reserves, but chiefly because loan
able funds, that is, deposits, are decreas
ing. This general decline in deposits in
country banks is due to the fact that the
depositor now purchases securities with
his surplus funds, or he finds it easy to
make banking connections in the larger
centers where he feels his money will be
safer or his line of credit larger; or be
cause of a general distrust o f the smaller
banks.
While deposits have been falling off in
recent years, the activity of checking
accounts has increased to an alarming
extent. Costs entering into the handling
of these checking accounts have mounted
from year to year until they constitute
one of the chief items of expense con
nected with the operations of the bank.
It is obvious that the earnings from loan
able funds cannot be increased very much
in country banks without also incurring
increasing losses. It is therefore neces
sary to increase earnings or decrease
losses in the service department of the
banks. And there is positively no good
reason why the earnings from loanable
funds should be used to pay the losses
incurred in keeping unprofitable check
ing accounts or in rendering other un
profitable services. It has been repeated
so often that it is almost a truism, that
it is impossible to determine whether a
checking account is profitable unless a
system of cost analysis is used for that
purpose. That there are still numerous
banks which do not analyze their costs
(Turn to page 47, please)

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Federal Reserve Bank of St. Louis

Fo r e m a n -S t a t e
C o r p o r a t io n

Investment Affiliate o f
Foreman-State National Bank

C H IC A G O

NEW

33 N . La Salle St.

YORK

52 W a ll St.

SA N F R A N C IS C O
1604 Russ Building

Northwestern Banker December 1930

SECRETARY OF COMMERCE ROB
ERT P. LAMONT, in speaking before the
Chicago Association of Commerce last
month, emphasized the fact that the tide
had about turned in business and ex
pressed his faith in the future by saying:
“ That conviction is made more profound
when we bear in mind that every funda
mental force which has made for progress
is still present among us and some forces
are working more powerfully than ever.
The vast accumulations of capital stored
up are still with us, crystallized in plant
and equipment of an efficiency matched
nowhere in the world’s history. We are
suffering from a temporary dislocation
o f the economic mechanism, not from the
onset of chronic decay.”
Certainly, so long as we are not suffer
ing from “ chronic decay” we should have
renewed faith in the future and look for
ward to 1931 with an increased degree
of optimism.
* * *
THE L aFOLLETTE BROTHERS are
working out a plan to end chain banking
and it will take the form of an attack
upon the system from two fronts and -will
be known as “ twin legislation” in the
form of bills which will be presented in
both the next congress and legislature,
according to a recent report of the ac
tivities of these two well-known poli
ticians.
Federal legislation is also necessary
because national banks are members of
various chains.
Senator Robert M. LaFollette II will
introduce the progressive anti-chain bank
bill in congress and Governor Phil La
Follette will lead the fight before the
Wisconsin legislature.
Under the LaFollette plan they will
also ask for a, dissolution of holding com
panies already organized because as the
Governor-Elect says: “ Otherwise a com
plete solution would not be had. It would
be unfair simply to bar further chains
and leave the field to those already in
the state.”
It is upon this sort of a platform that
Governor-Elect Phil LaFollette was
swept into office, but it will remain to
be seen what action really results from
a legislative standpoint after the state
senators and representatives convene.
* * *
DR. JULIUS KLEIN, assistant secre
tary of the United States Department of
Commerce, declares that “ the firm which
eliminates or radically curtails its adver
tising at this time in the interests of

Northwestern Banker December 1930

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Federal Reserve Bank of St. Louis

economy, is pursuing a short-sighted
policy.
“ In advertising the business world has
at its command a force which if intelli
gently employed will be certain to speed
up our progress towards economic well
being for past experiences have proven
the beneficial results of advertising at a
time when business is depressed.
“ Advertising is to national business at
the present moment just what initiative,
courage and resourcefulness are to an
individual. All signs indicate that we
have reached the bottom of the decline
and indeed in some phases we are grad
ually moving upward. Never was there
a better opportunity for sound manage
ment coupled with advertising having a
real message to help the business of the
country get started on its climb back to
prosperity.”
I f that isn’t good gospel we would
hardly know where to find it. Business
cannot any more expect to advance and
make progress without intelligent adver
tising than you can expect to run your
automobile without gasoline. It can’t
be done.
* * *
PRESIDENT HERBERT HOOVER
sounded the keynote of American enter
prise and enthusiasm in his speech before
the convention of the American Bankers
Association and it will bear repeating
here again. “ I always have been and I
remain an unquenchable believer in the
resistless dynamic powers of American
enterprise. This is no time— an audience
of American leaders is no place— to talk
of any surrender. We have known a
thousand temporary set-backs but the

where

Bankers Live

Above, the beautiful residence of
George C. Fullenweider, president of the
National Bank of Huron, South Dakota.

spirit of this people will never brook
defeat.”
Talking about sunshine will not stopit from raining, but if any American
would like to check up on his own out
look he only needs to compare his present
situation with what he might be if helived in half a dozen other countries that
we might name.
* * *
DURING THE MONTH OF NO\rEMBER I attended the Nebraska Bankers
Convention at Omaha and the Tri-StateBank Conference at Minneapolis, and as
usual, gathered a number of stories from
bankers far and near and I am passing
a few of them on to you for better or for
worse.
“ Ever hear the one about the man who
married a Scotch wife because he knew
she’d never give him a piece of her
mind ?”
“ A drugstore sandwich could be im
proved a lot by a little mark to show
which corner the meat is in.”
“ Do you like our tall buildings'?” “ No,
I don’t care much for continued stories.””
“ How many years did your son spend
in college ?” “ Every one.”
* * *
LEO E. STEVENS, former Iowa bank
er who now lives in Pasadena, sent me
the following story of the ordinary citi
zen who asked his banker friend for the
use of his lawn mower.
The conversation, according to this
story, is as follows :
Citizen (hat in hand) : “ I would like
to borrow your lawn-mower.”
Banker (scowling) : “ Sit down. How
long do you want to use the lawn-mower ?”
Citizen: “ About half an hour.”
Banker: “ What do you want to use it
f o r 1?”
Citizen : “ To cut the grass.”
Banker : “ You understand that it is not
my lawn-mower you are asking for—it
is one of the lawn-mowers people keep
in my garage . . . I have to be very care
ful. It is a sacred trust.”
Citizen: “ Yes sir . . . I thought if I
could get a mower for a few minutes—
Banker: “ Of course, there will be a
small fee for sharpening the mower.”
Citizen: “ Yes, sir.”
Banker: “ And a slight oiling charge.’”
Citizen: “ Yes, sir.”
Banker: “ And our regulations require
that you cut my grass before you take
the lawn-mower from the premises.”
Citizen: “ Yes sir, but I . . .”
Banker: “ And you will have to have an
insurance policy, in our favor, protect
ing us in case you cut off a foot . . .”
Citizen: “ Yes, sir.”
Banker: “ And you understand that yon
return this mower, plus two other lawnmowers.”
Citizen: “ Yes, sir.”
Banker: “ I think the loan of the laAvn(Turn to page 84, please)

bonds

L____ »

Three Reasons for Buying
High »Grade Bonds
Bonds are usually purchased by institutions and conservative indi
vidual investors for two reasons: safety and a steady income. Under
present conditions, a third reason might be logically advanced: prob
able price appreciation.
It is true that, in general, we have had a rising bond market for some
months. It is true that banks throughout America are buying more
bonds— member banks of the Federal Reserve System, for example,
have increased their security holdings over 15% thus far this year.
But many classes of sound bonds have yet to discount the favorable
factors of easy money rates, low commodity prices, diminution of new
security offerings, and the revived interest of millions of investors in
fixed i ome securities.
This long established Iowa investment house has upon its current
offering list several issues of bonds suitable for bank investment which
are selling on a particularly attractive yield basis. Bankers impressed
with the present advantages of increasing their investment reserves
are invited to write to our Burlington office for full particulars con
cerning these selected offerings.

W. D. Hanna and Company
BONDS

FOR

INVESTM ENT

B u r lin g t o n , Iow a
Pioneer Bank Building, Waterloo

The Higley Building, Cedar Rapids

The Laurel Building, Muscatine

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Federal Reserve Bank of St. Louis

Northwestern Banker December 1930

Tri-State Conference

G et Your Interest Rates Down!
INCE the deflation we have not only
learned the importance of operating
sound banks but that to do so it is
not only necessary to reduce the over
head as much as possible but to find new
sources of income. In this we country
bankers were way behind our city broth
ers and consequently suffered thereby.
These new sources were not enough
and the necessity of reducing the rate
paid on deposits which is the great source
o f increased income became very appar-

By J. A . D A N F O R T H
President, Dakota National Bank,
Yankton, South Dakota

ent. It was almost impossible to get
bankers in the country to reduce the rate
below five or six per cent. First because
many were not in shape to withstand the
reduction in deposits which they feared
would follow. Second, because of the
difficulty in getting the banks of a large

district to agree upon a rate. This neces
sity became so urgent that, as you will
remember, some state superintendents
ordered a state-wide reduction and in
this they had the cooperation of the
Comptroller of the Currency.

National City brings you
complete financial service—
world-wide in scope.

J. A. DANFORTH

When your customers buy
securities . . . why not back
your recommendations with
118 years o f National City
experience.
The N ational City Com pany
National City Bank. Building, New York
BONDS

SHORT

TERM

Northwestern Banker December 1930

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Federal Reserve Bank of St. Louis

NOTES

ACCEPTANCES

Many of us country bankers are still
paying four or five per cent on savings
and time deposits. It is to you who are
in this class that I have a few words
which I feel will be of interest.
My home bank is at Yankton, a beauti
ful college town of a little over 6,000
inhabitants, just across the Missouri
river from Nebraska and not fifty miles
from Iowa. We had been paying 5 per
cent on both time and savings deposits
for years not because we felt that we
could afford to but because we could not
get the other banks of our county and
those of towns adjacent to our borders
to make a reduction in rate. We feared
that an independent change would result
in a serious loss of deposits not only to
neighboring banks but to the many highpressure stock and bond salesmen.
Following a thorough study of the
matter and much discussion we concluded
that we could afford to lose some deposits
if necessary. Our Clearing House Asso
ciation finally fixed the twelve months
certificate rate at 3% per cent and 3 per
cent on six months certificates and sav
ings on which interest is computed semi
annually. This rule went into effect July
1st, 1928. Since then both time and sav
ings deposits have increased. This was.

27
done during a period in which there never
was more competition for the surplus
earnings of the community.
The installment payment salesman by
mail, radio broadcast, and personal solic
itations urged upon our customers auto
mobiles, radios and all kinds of house
hold equipment as well as stocks and
bonds both good and bad. All the local
public utility companies put on campaigns
in which every employe was schooled and
driven to sell their stocks, the preferred
as high as seven and eight per cent.
Under these circumstances we should
have been happy to maintain our total
of time deposits and yet they increased.
I do not believe that you will find our
banks an exception to the rule. Deposi
tors want safety and reduction in inter
est rates is one of the best indications
of safety.
With the present rate on high class
bonds you cannot pay 4 per cent for de
posits, deduct your reserve requirements,
and come out even. This being the case
you are tempted to carry less of this kind
o f paper in your secondary reserve than
is consistent with good banking.
Now that rates are much lower and our
customers are not so easily tempted to
buy real estate investment bonds or spec
ulate in stocks, it is an opportune time
for you to put the rates on time and sav
ings deposits down where they should be.

SEND
AND

Leavell Succeeds Stevens
James R. Leavell, assistant to Arthur
Reynolds, chairman of the board of the

JAMBS K. LEAVELL

Continental Illinois Bank and Trust Com
pany, last month was elected president of

the bank. Mr. Leavell’s election was to
fill the vacancy caused by the resignation
of Eugene M. Stevens, Avho recently was
appointed chairman of the board of the
Chicago Federal Reserve Bank.
Mr. Leavell came to Chicago in 1920 as
a vice president of the Continental and
Commercial National Bank. In 1928 he
was elected executive vice president of
the Continental National Company and
continued to hold the same office in the
Continental Illinois Company, the invest
ment securities affiliate organized at the
time of the consolidation of the Conti
nental National and the Illinois Mer
chants Trust Company. When elected
assistant to the chairman of the bank, he
was also made assistant to the chairman
of the board of the company.
Mr. Leavell was born in Montgomery
City, Missouri, October 12, 1884. While
attending school he worked in his father’s
bank in Fulton, Missouri, and on the
completion of his college course, got a
job as a clerk in the Mechanics American
National Bank of St. Louis. He became
an assistant cashier of this bank and later
a vice president of the First National
Bank of St. Louis, the position he re
signed to come to Chicago. Mr. Leavell
early gained recognition among bankers
in the southwest and is widely known
among business men and bankers in Chi
cago, NeAV York and on the Avest coast.

FOR

SUPER

SAFETY

W E 'L L

LEA VE

TH E

REST

SAM PLES
TO

YOUI

e ' d l i k e to fill this page with words and pictures explaining
the intricate laboratory tests that have proved the superiority of
Super-Safety Check Paper— that credited it with many times
the tensile strength and foldability of other check papers. . . .
But we know you’ re too busy to soidy scientific text and micro
photographs. So we're asking you just to set up a little labora
tory of your own on your desk!
Send for six assorted samples of Super-Safety. When they
arrive, take two minutes for their testing. And don't trust the
job to any one else!
Begin by folding Super-Safety, remembering that seventeen
people handle the average check in its lifetime. Crease it over
and over. You’ll tire out before Super-Safety breaks! . . . Im
patient hands tear checks from stubs and spindles. Tear SuperSafety and notice the extra-long fibers that make each check
strong enough to support the weight of a man. . . . Write on
Super-Safety’ s satin-smooth surface and see how perfectly and
promptly ink is absorbed. . . . Use knife, eraser or eradicator on
what you’ve written, and see the glaring spot that results.
Think what these tests mean to your depositors in protection
-—to you in prestige! Consider Super-Safety’ s pleasant pastel
colors and dignified pattern. Remember that it costs no more
than other kinds of check paper. Address inquiries to The Todd
Company. Bankers’ Supply Division. Rochester, N . Y . Offices
also in Boston, Brooklyn, Buffalo, Detroit, Cincinnati, Chicago,
St. Paul, Des Moines, Birmingham, Dallas, Denver, Spokane.

TO DD

DISTINCTIVE

BANKERS’

SUPPLIES

B ill

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

Northwestern Banker December 1930

Tri-State Conference —--

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

Making G ood on Float Charge
IN DISCUSSING a charge on out-oftown items taken by a bank, we often
hear the proceeds referred to as a new
and separate source o f revenue or profit.
As a matter of fact, the charge on items
in transit or “ float,” as we now commonly
say, is simply a stop loss. So the title
chosen by the program committee for
this discussion conveys an accurate
meaning.
The principal revenue or source of in
come for banks is of course from the

By L Y N N S. O L S O N
Vice President, First National Bank,
Owatonna, Minnesota

use of funds deposited with them. Ob
viously, it is impossible to loan funds
which are in the process of collection—
in transit. The amount of float or aggre
gate of items in transit all of the time
is a substantial portion of our total
checking deposits. According to my ob-

servations, i t . represents 12 per cent to
15 per cent of the average checking de
posits in country banks.
We used to offset this loss of the use
of funds in float by charging exchange
on checks drawn on our banks sent to
us for collection. That charge was not
strictly an exchange charge based on the
amount of the remittance draft but an
item charge on each check in the collec
tion letter. It was in fact a “ float
charge” made on the other banks float. It
was back end to. Its only merit was
expediency and it did not antagonize our
customers.
Our Blind Spot

HEN the Federal Reserve System
came into being, all of the National
Banks and most of the State Banks found

Economical distribution
— b y te le p h o n e
O N E of industry’ s great
needs, to lower cost of distri
bution, is receiving impor
tant aid from the telephone.
Business men are using long
distance more and more—to
buy, to sell and to keep up con
tacts. “ Key T ow n Selling” by
telephone saves time for both
parties, covers territories more
frequently, builds good will
and carries on the affairs of
business at lower expense.
This use of Bell System ser
vice is but on eof many signs of
the growing telephone habit.

T o take care of 65,000,000
local and long distance calls
a day, a vast plant has been
developed which measures its
telephones by millions, its wire
by tens of millions of miles,
its assets by billions.
T h e important fact for in
vestors to remember is that the
telephone has become a na
tional necessity, and that the
Bell System’ s growth year after
year has been continuous.
M a y w e send you a copy o f
our booklet, “ B e ll Telephone
Securities ’ ’ ?

BELL T E L E P H O N E
S E C U R I T I E S CO. Inc.
195 Broadway, N ew York City

Northwestern Banker December 1930

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Federal Reserve Bank of St. Louis

LYNN S. OLSON

this source of revenue cut off. Many of
us did not notice the paragraph in that
section of the Federal Reserve Act re
quiring us to remit for our checks at par
which provided that “ Nothing herein con
tained shall be construed as prohibiting
a member bank from charging its actual
expense in collecting........... funds.” I f
we did, few of us thought of the provision
as a proper charge to our customers for
cashing or crediting out-of-town items
until two or three years ago. All of
these years since the passage of the Fed
eral Reserve Act, we country bankers
have lost the entire use of income from
that portion o f our deposits represented
by items in transit.
Two or three years ago, a few bankers

29
in northern Minnesota led by George
Busens, who was then in Alexandria, and
Walter Brooks, of Bemidji, set up a.
schedule of “ float charges,” to recover
this lost revenue, which was generally
adopted by banks in the vicinity of those
two cities. Those of yon who heard Mr.
Brooks speak at the Tri-State Confer
ence last year know how successfully
their plan was applied. The Minnesota
Bankers Association, Committee on
Better Banking Practices, took up the
plan, prepared a very complete schedule
of charges and urged the various country
groups to adopt it with the result that
there are now nineteen County Bankers
Associations in Minnesota which have
adopted the plan as a unit. In addition,
there are five or six villages and towns
in other counties making such a charge.
Most of these banks have had the float
charge in effect only since January 1,
1930. I think that the 1929 Tri-State
Conference had a large influence in start
ing action among the banks in adopting
this important practice. The clearing
house banks in the Twin Cities have been
making a, similar charge for years.
I sent a questionnaire to many of the
banks which have been applying the float
charge in order to find their experience.
The replies, with one exception, show con
clusively that the float charge does re
turn very substantial revenues if not
quite up to Mr. Brooks’ happy experi
ence which showed a return of one per
cent on his bank’s average checking de
posits. I find that the returns are rela
tively higher in the northern part of the
state due, perhaps, to the very large tour
ist business. Based on nine months av
erage for 1930, the questionnaire discloses
that the southern Minnesota cities, prin
cipally in county seats, have collected
float charges aggregating over half of
Mr. Brooks’ estimate, to be exact .544
of 1 per cent, per annum, on their av
erage checking deposits or a return of
2.83 per cent on their capital stock. The
villages in southern Minnesota have col
lected .39 of 1 per cent, per annum, on
their average checking deposits or a re
turn of 1.25 per cent on their capital
stock. Apparently the larger proportion
o f industrial concern in the cities fur
nish a large relative volume of out-oftown checks.
Additional indirect revenue has been
obtained in some cases. Bor instance in
Steele county, cooperative creameries
selling their product in Philadelphia and
New York were advised to have their
commission firms in these cities remit
to our correspondent banks for their
credit. In this way our banks obtain
funds available for nse six to ten days
before we would if the commission firms
check had been sent direct to the cream
ery treasurer. He very often waited
three or four days before he deposited
it and it takes three to four days each

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Federal Reserve Bank of St. Louis

way if the checks are mailed. The float
charge would apply for only three days.
Rate Varies

HE questionnaire disclosed that the
rate of charge varies. There are two
distinct methods in use in Minnesota.
The northern banks generally use the
method recommended by the Minnesota
Bankers Association, v iz : 5 cents on all
items of $25.00 or under; 10 cents on all
items over $25.00 and up to $100.00; 15
cents on all items over $100.00 and up
to $200.00, and thereover at the rate of
17 cents per $1,000.00 per day outstand
ing. The banks in southern Minnesota
have generally adopted a charge of 5
cents per $100.00 or fraction thereof re
gardless of the time it takes to collect

the item. The latter plan assumes an
average transit period of three days.
$100.00 at 6 per cent, per annum, fori
three days is just exactly 5 cents. This
plan, while not as accurate as the other,
has the advantage of easy computation
and is less confusing for the bank pa
trons. I believe the returns are about
the same for tests indicate that the av
erage float is about two and one-half
days. The small margin in time in favor
of the southern Minnesota method is
probably offset by the higher rate in
the northern Minnesota plan for items in
the 10 cent classification. I think we
ought to work toward uniform charges
throughout the northwest. All of the
banks are making a minimum charge of
10 cents to non-depositors.

118 Tears
OF C O M M E R C IA L B A N K IN G

Established in 1 812, this
DIRECTORS

Bank was the first among

W illia m C . Arkell
Ch as. K . B eek m a n

N ational Banks in New

E dgar S. B lo o m
Pierre C . C artier
T h o m a s L. C h ad b otirn e
E u gen e E . d u P o n t

York to establish city-wide

E llis P . Earle
N orborn e P . G a tlin g

b ra n c h e s— fir s t also to

F ran k J. H eaney
R ich ard IT. H ig gin s

combine “ National” and

H . S tu a r t H o tch k iss
Edw ard F . H u tto n
H en ry R . J o h n sto n

“ Trust Company” in its

W illia m B . Joyce
G raveraet Y . K a u fm a n

title. A truly national bank,

Louis G . K a u fm a n
Fred M . K irb y
W illia m IT. K o o p

with the broadest business

L. A . L in coln
G eorge M a cD o n a ld
S a m u e l M cR o b e rts

contacts and experience—

W a lla c e T . Perkins
F ran k P h illip s

where neighborly spirit is

H a ro ld I. P ratt
J o h n R in g lin g
J. Frederick T a lc o tt
Frederick D . U nderw ood

still regarded as an indis

H ick s A . W e a th e rb ee

pensable quality.

M a x S. W e il
C h arles W . W e s to n

C H A T H A M P H E N IX
N A TIO N A L

BAN K

AN D T R U S T CO M PANY

N e w Y o r k C ity
MAIN

OFFICE:

Established 1812

14»

BROADWAY

Resources More Than 8300,000,000

Northwestern Banker December 1930

N ew R o b b e ry P rotective System
The primary object of all bandits in
staging bank hold-ups is naturally to se
cure the largest amount possible of cash
and negotiable securities. If this can be
prevented entirely or the quantity of cash
obtained reduced to an insignificant sum,
most of the daylight hold-ups will be
eliminated. Crooks will not follow their
chosen vocation if the results of their
efforts are little more than the wages
they would obtain by an honest day’s
work.
With this idea, in mind the Yale and
Towne Company have perfected a system
which the company officials believe will
prevent bandits from getting enough
money from their hold-ups to make it
profitable. This system is now on display

in the offices of the Iowa Bankers Asso
ciation in Des Moines.
The manufacturers in developing this
system have transferred the principles
of night protection to day-time activities.
By protecting cash during the daylight
hours by tough steel and time locks they
have carried out the same ideas that have
proven so effective in reducing to an in
significant quantity the number of night
attacks.
They have constructed safes large
enough to hold the average day’s require
ments of currency and coin, and equipped
them with a time lock mechanism which
will delay the opening, after the combi
nation has been worked, fifteen, twenty,
thirty or any pre-determined number of
minutes. Robbers will not waste very

What of

1931?
Before you make plans for the New Year,
we should like the opportunity to tell
you H O W this bank and its correspon
dents have forged ahead during 1 9 3 0
— and W H Y this is a yearly occurrence,
no m atter what business conditions
may be.
A sk us for full particulars, which will
gladly be given.

The National B an k o f the

REPUBLIC
• • O IF '

C H IC A G O

* *

Office o f NewYork Representative, No. 5 Nassau St.
Office o f Pacific Coast Representative, Citizens National Bank Bldg., Los Angeles
Office o f London Representative, 8 King William St., London, E. C. 4

Northwestern Banker December 1930

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Federal Reserve Bank of St. Louis

much time in a bank if they know they
must wait fifteen or twenty minutes,
before they can have access to the cash
because of the danger to them of the
possibility of silent alarms and having
their retreat cut off by heavily armed
sheriffs or vigilantes.
At the same time while the delay is
sufficient to discourage any attempt at
daylight hold-up it is not too long to
hinder the usual procedure of banking
activities. A depositor would be decidedly
unreasonable if he refused to wait fifteen
or twenty minutes for cash if he knew
that during that interval it was being
adequately protected by a safe with a
time lock system.
The safe is made in four styles. The
smallest safe equipped with time lock is
designed for smaller banks which require
but a small sum of money to be outside
the safe during working hours. The two
larger safes are not only equipped with
the regular compartment for the day’s
supply of cash but also has a working
drawer from which the teller can pay
out his cash instead of the methods now
in use. This drawer is connected with
the time lock system of the larger com
partment, and also has two controls, one
of which is used by the teller for his
ordinary day time operations and the
other which closes and automatically
throws on the time lock from any one of
a dozen or more stations. The fourth is
a. currency drawer only, large enough to
hold several thousand dollars in paper
money. It was designed for the use o f
larger banks where the regular safe is
unnecessary.
The safe is small enough to be placed
beneath the working counter of the
teller’s cage. It has sufficient capacity
for several thousand dollars in currency
and coin.
In the morning, cash is transferred
from the large vault to the safe, the vault
time-locked to open later in the day or
at the close o f business, and the timelock on the small safe set for fifteen or
twenty or any desired number of minutes.
Each safe is wired for electrical con
trol. Push buttons are placed in various
parts of the bank so that the safe may
be automatically closed and time-locked
by anyone who has access to any one o f
the buttons. After the trip has been
thrown and the safe closed and locked, it
requires the predetermined time limit
after the combination has been worked
before the safe can be opened and anyone
secure the cash within.
The electrical portion of the equip
ment also controls the alarm system. A
red light is flashed in the bank lobby and
burns the full time the time-lock is in
operation. At the same time a silent
alarm is flashed to the sheriff, the vigi
lantes, the telephone company and any
other desired point, to inform officers that
a robbery is in progress.

Tri-State Conference ~

The New First V ic e President of the
Harry J. Haas, who was elected first
vice president of the American Bankers
Association at the Cleveland convention,
began his banking career in a country
bank in 1902.
Six years later he joined the Merchants
National Bank of Philadelphia as assistant
cashier, and held -this position until it
merged with the First National Bank of
Philadelphia in 1910. He was elected first
vice president in December, 1916, and a
director in 1924.
Mr. Haas was born in lower Luzerne
County, Pennsylvania, on January 20,
1879. He received his education in the
public schools, the Wyoming Seminary
and College of Business at Kingston,
Pennsylvania, and the University of
Pennsylvania School of Accounts and
Finance.
He has been very prominent in associa
tion activities. He was four times a mem
ber of the executive council of the Amer
ican Bankers Association ; served twice on
the administrative committee; vice presi
dent and chairman of the executive com
mittee of the National Bank Division;
chairman o f the membership committee ;
was one of the incorporators of the Asso
ciation of Reserve City Bankers ; a past
president of the Pennsylvania Bankers
Association; and president of the Bank
Officers’ Club of Philadelphia.
Besides being a vice president and a
director of the First National Bank of
Philadelphia, he is also a director of the

A . B. A .
(See Cover Photo)
Merion Title and Trust Company at Ard
more, Penn., director and chairman of the
Finance committee of the Philadelphia

Commercial Exchange, and a director in
several corporations.
In 1914 Mr. Haas manled Rufie Watson
Sanders. His son, Joseph Sanders Haas,
was born on March 25, 1923.
Mr. Haas has attended seven annual
conventions of the Pennsylvania Bankers
Convention, and four conventions of the
American Bankers Association.

Scene in a M ilw a u
kee f a c t o r y
the

largest

w h ere
engines,

turbines a n d

water

wheels in th e w orld
have been built . .

vCLA-

Engines

and

T urbines
in use the world over

Wisconsin-made!

Throughout the world, important projects are carried
Home Brew
Wine-grape juice in five and ten gallon
kegs, “ guaranteed to please you,” is adver
tised in Milwaukee. It turns into Tokay,
Muscatel, Bergundy, Claret or Sauterne
wine in your cellar. Just how long it will
be before vineyards in California and
along the Ohio side of Lake Erie, will be
destroyed by the government we do not
know. But we incline to believe Milwau
kee would prefer a malt product produced
by natural phenomena.— By W. G. Sibley,
in Chicago Journal of Commerce.

Clearings Up 10 Millions
Omaha bank clearings for October, an
nounced by the clearing house association,
were more than 10 million dollars ahead
of September. The figures : October,
$191,749,136; September, $181,496,670;

on with the aid o f engines, turbines and water wheels
made in Wisconsin.

This state ranks second in the

manufacture o f these products with a total annual
production in excess o f sixty million dollars.*
The First Wisconsin National Bank has contributed
essential financial cooperation in the development o f
this and other major Wisconsin industries.

Its officers

are in close touch with state-wide industrial and
agricultural conditions.
*$62,549,223 in 1927 — latest figure available

F
N

ir s t

is c o n s in

a t i o n a l

a n k

MILWAUKEE
Is Assistant Cashier
Directors of the National City Bank
announce the apointment of Marcus H.
Elliott as an assistant cashier.

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Federal Reserve Bank of St. Louis

Unit of Wisconsin Bankshares Group

Northwestern Banker December 1930

( Constructive
Financing
lisp

BOND INVESTM ENT increases the

â#SÈ i

growth and prosperity of the com

m ä m m tem r-

munity, by directing the funds of the
mm*

- \-

liÜ ^ i
K llfc

I I »
sS Ä

v vC's

Northwestern Banker December 1930

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Federal Reserve Bank of St. Louis

investor into productive enterprises.
« A r s /ii

It has been the privilege of Metcalf,
Cowgill & Co., Inc., to participate in
the development of many middle
western communities through con
structive financial operations.

Metcalf, Cowgill & C o., Inc.
207 Equitable Building

DES MOINES

Bonds and Investments
H EN
the sug
gestion
was made by
Mr. Albig that
a discussion of
t h e open - end
mortgage util
ity bond as an
investment for savings banks would be
welcomed at this conference, I confess
that at first I was somewhat nonplussed.
This type of security is so generally ac
cepted in utility circles as a thoroughly
safe and sound investment that we are
surprised when anyone questions it. But
when I investigated the percentages of
your investments in utility bonds to learn,
for example, that your New York banks
have only 1.1 per cent of their funds in
utility bonds (as of July 1, 1929), I was
enlightened as to the possibility of your
interest in a discussion of this security. I
know, of course, that permissive legisla
tion opening the way for savings banks
to invest in utility bonds is of rather re
cent date, but I had assumed that, with
the permission once given, you had feasted
well. Let us hope for our mutual benefit
that your original taste will but whet your
appetite for what we believe to be health
giving provender.

and set aside
from the rest
of t h e entity
than could the
pound of flesh
be removed by
the crafty Shylock w ith ou t
draw in g th e
life-blood, or at least sapping the strength,
of his intended victim.

The O pen-End Mortgage
U T ILIT Y B O N D
W h y it is a good form of invest
ment for hanks.

By H A R O L D Y . B O Z E L L

Constantly Expanding

O BE more concrete, except for the oc
casional construction of a large power
plant, or a single long-distance transmis
but the fact that its growth is so widely sion line, the electric power and light com
known and advertised has been due to con pany grows by extending a pole line a few
tinued insistent demand for its services, blocks here; by installing a few more
which demand cannot—and would not— meters in the homes of a few more cus
be denied. It goes without saying that tomers there; by adding another generat
responsible executives and bankers have ing unit to the power house here; by re
had to design the financing vehicle most moving comparatively light overhead lines
adequate and satisfactory for obtaining and installing underground circuits of
the necessarily huge sums of money greater capacity there; or in the many
other specific moves by which its physical
needed to create the plant demand. But
most important in this growth is the fact property increases. It is a live, growing
that the electric power and light company business—not a fixed, static investment
develops as an entity and not by separate whose earning power may fluctuate up and
parts. It is like an animal, a human being down. Because it is a live, growing busi
almost. As a man imperceptibly gains ness, a large part of its plant is always
weight, yet appears at the end of a period of recent installation, modern and com
so many pounds heavier, so does the power paratively new. The security to fit such a
A Vitalizing Agency
company grow by imperceptible degrees, growing property and business is one
ITHOUT pretending to know your yet appears at the end of each five-year which must also grow and, in growing,
business, I assume
retain a l s o that same
that your interest in securi
strength and vitality that
ties for investment of your
the power company, itself,
'T have indicated to you that from the standpoint of safety
funds is primarily directed
possesses.
and marketability the utility open-end mortgage compares
toward safety of principal,
T h e open-end utility
favorably with the highest grade security. It certainly may
adequate yield and market
mortgage first appeared
take its place side by side with the first class Triple A railroad
ability. That appreciation
s o m e fifteen or twenty
mortgage, in which type of security savings banks have been
is not unwelcome goes
years ago, but it has been
investing for many years. And it has this additional advan
without saying, but it
intensively used only dur
tage— a higher yield.”
is hardly your primary
ing the past eight to ten
idea in seeking placement
years. It is such an ac
of funds. We believe that the utility mort period with almost twice the investment it cepted practice, however, that it appears
gage bond offers all three of the primary had at the beginning of the period.
to us archaic, today, to issue a $75 mort
It is a difficult thing, if not indeed fairly gage on the first $100 of property, and to
characteristics to a high degree, and that
the open-end feature, rather than detract impossible, to label by separate tags the guess that that company will never have
ing from any or all of these three, is actu property added in any five-year period more than $500 of property and therefore
ally a vitalizing agency contributing mate and to borrow money directly on that never need more than a $375 mortgage.
rially to their strength. This is true be property addition alone. I f wTe consider Rather we recognize that we cannot esti
cause of the intimate relation of this type the earning power of each of the separate mate the ultimate point to which the com
of mortgage to the utility industry, and I additions made during this five-year pe pany will grow, but we believe we can
believe that before making any dogmatic riod, or even consider them collectively— create a type of mortgage that will at all
statements as to the strength of the bonds but dissociated from the main property— times have the same relation to the prop
in these three directions, or presenting it would be difficult, and probably impos erty of the company that it has at the
any proofs of their past performance, I sible, to measure. And yet no one can start— at least we can define its limita
can be helpful to you in discussing the question its earning worth as a part of the tions.
need for such a security in the utility busi whole. No one can question its value as
To limit the mortgage credit of a com
ness, and how it functions in helping the property.
It has added vitality and pany on a given growing plant to the $375
industry grow and therefore contributes strength to what existed before, making assumed and then to admit, at a later date,
to its own strength.
%
the whole more valuable and able to do that it could borrow $750 as safely today
It is perhaps trite to point to the growth more in a material service to the body of as it borrowed the original $375, would
o f the electric power and light industry, customers. It can no more be removed of course mean that the company would
Ronbright

& Com pany

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Federal Reserve Bank of St. Louis

Northwestern Banker December 1930

34
provisions, and proper supervision of ac
A Typical Case
O RETURN to our typical case, and to tions under the provisions, there can never
use the open-end vehicle— we started be any dilution. On the contrary, through
with a debt of $75 on the first $100 ofthe processes I have outlined above, the
property, this grew to $375 on the $500 entire issue is related to a more homo
and then to $750 on the $1,000 of prop geneous property, with increased stability
erty; and today, the $750 mortgage is rec and earning power, than would be possible
ognized as being as good as a new $750 without such an open-end mortgage. With
mortgage which would be placed on the one or two minor exceptions, in no way
$1,000 of property if it had all been related to the type of mortgage but due to
created at once, just now. Meanwhile, extraneous causes, there has never been a
the security, growing with the property, default in an electric power and light
has helped that growth— certainly has not mortgage.
hindered it— and has done its part in mak
A n Enviable Record
ing the power company a more vital, virile
O GO further, we have investigated the
factor and a sound business enterprise.
position of the next junior security
A long series of closed bond issues on
(except where there are debentures),
parts of a property, even though they
were easily identifiable, would indeed namely, the preferred stock. To quote
make a heterogeneous family. A single, our conclusions: “ A careful analysis of
well defined open-end mortgage becomes the dividend records of practically every
a well knoAvn instrument, constantly alive, electric power and light operating com
at all times bearing a definite relation to pany with gross earnings of $1,500,000 or
a known active entity whose various parts more, and every holding company with
are of not so much interest as the entity gross earnings of $10,000,000 or more, the
combined capitalization of which repre
itself.
But to return to our three points of dis sents more than 9 per cent of the industry,
cussion— safety, marketability and yield. shows that:
If you are once satisfied that the original
“ 1. Current cash dividends are being
issue has the safety you need, the primary paid on all but three of the preferred
question then becomes: What possibility stocks included in this analysis.
is there that, by the issuance of additional
“ 2. In, only three cases are there accu
bonds, the entire issue under the mortgage mulated back dividends unpaid.
may become diluted below the level of the
“ 3. In twelve cases dividends have been
original issue? We believe that, by proper deferred but have subsequently been paid
off in stock or cash.
“4. In all other cases (186) the pre
ferred stocks have unbroken dividend rec
ords.”
This is an enviable record and seems to
Send You an
be valuable evidence that the open-end
mortgage, in increasingly wide use these
past fifteen years in the power industry,
has been a consistently safe protection for
funds invested under it.

have the choice of two evils—first to issue
a second mortgage on the entire property
on account of the impossibility of segre
gation; or, second, to call the first mort
gage bonds at considerable expense and
issue a new set of bonds under a newly
created mortgage. We saw this in the
early days of the industry and we all know
the limitations it put upon growth—the
difficulties it created in the obtaining of
new equity money, which of course is the
vital necessity. It put a limitation on pos
sible earnings on the stock, either because
money otherwise available was used to pay
premiums on bonds called or because new
money borrowed on second mortgage was
obtained only at a high cost.
And so the open-end mortgage was
adopted. It is not a trick security de
vised by an ingenious or wily banker. It
is the definite result of evolution and expe
rience. Start was made on the other
track. Second mortgages were tried. A
high limit on the first mortgage was tried,
supposedly to provide for all possible
growth. But they didn’t work. It was
only natural to turn to the open-end mort
gage, through which it was felt that
proper provision could be devised to give
the full protection necessary. During
these past eight years the capitalization
of the industry has grown from $4,600,000,000 to $11,100,000,000, and the openend mortgage has played an active part in
aiding this upbuilding.

Let Us

A N A L Y S IS
C O M M E R C IA L

SO LVEN TS

Prepared by Our Statistical Department

Babcock, Rushton & Company
Established 1895

209-10 Fleming Bldg.

Des Moines, Iowa

Direct Private Wires
Orders Executed in A ll Markets

LAVERNE M. BARLOW
Resident Manager

Phone 4- 5121
MEMBERS
N. Y. ST O CK E X C H A N G E

CHICAG O B O A R D OF T R A D E

CHICAG O ST O CK E X C H A N G E

Northwestern Banker December 1930

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Federal Reserve Bank of St. Louis

A n A id to Market Appraisal

URNING to marketability, the question
has been raised: Does not the issuance
of additional bonds under an open-end
mortgage tend to depress the market and
therefore impair the marketability? If
the previous conclusion as to dilution is
correct, surely there should be no reason
for a depression in market due to any in
herent weakness of the bond itself. The
bond has been purchased after full ap
praisal of its relative security and with
full knowledge that as the property grows
so may the size of the bond issue grow in
proportion. The market appraisal is well
known: it is public. Wise practice is to
accept that appraisal at its face value and
sell the additional bonds at that market.
The problem is merely to find those addi
tional investment funds seeking a bond of
the security and yield involved.
Experience supports this method of
determining the fair price level. As a
matter of fact, the additional bonds even
tually create a large and more widely

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Federal Reserve Bank of St. Louis

W h y Municipal Bonds
are the Standard of Sound
Investment Value
S e cu r ity — They are secured by five to fifty times their

value in taxable property, as strong as our tax system itself.
T a x E x e m p t — They are free from moneys and credits tax
and from Federal income tax.
Y ie ld — Good municipal and county bonds afford an excel
lent return at present attractive prices. Considering their
extreme safety, they are an ideal investment at this time.

Marketability— Municipal bonds are not subject to the ups
and downs of business.
shortest notice.

You can get cash for them on

Municipal and county bonds are the ideal form of invest
ment for your surplus funds.
Write or call for our latest list of selected offer
ings for banks, without obligation. As special
ists in this field we provide an exceptional serv
ice to those banks wishing the soundest, most
conservative in investments.

C A H L E l'O N D . B

(

Investment Securities
Suite 518 Liberty Building
D ES M O U SE S, IO W A
Dial 4-8161

Northwestern Banker December 1930

36
compares favorably with the highest grade
security. It certainly may take its place
side by side with the first class, “ triple
A,” railroad mortgage, in which type of
security savings banks have been investing
for many years. And it has this addi
tional advantage— a higher yield.
It is doubtful if the open-end feature
has any particular effect upon yield. The
only factor here is the fundamental char
acteristic of the utility industry itself,
namely, its constant development and
growth. There is much of invention, of
Good Yield With Safety
new ideas and applications, of the highest
THINK I have indicated to you that, initiative constantly needed in the indus
from the standpoint of safety and mar try in order that service may consistently
ketability, the utility open-end mortgage improve. New money is, therefore, needed

known issue and thus automatically in
crease the marketability o f the bonds.
Naturally,-the sharp-shooter likes to toy
with a market when an additional issue is
forthcoming, but we all know he is merely
gaming for a few dollars from the issuing
houses and does not really affect the per
manent market for the security. After
all, the sound appraisal of intrinsic merit
of an investment security of the type we
are discussing is the controlling feature as
to its market position.

with equal consistence; and, to encourage
its introduction in adequate amounts each
year, a yield commensurate to the need for
capital is only natural. It is not unnat
ural that this should be reflected through
out the various vehicles or securities
through which the industry obtains its
money, in due proportion. I should not
wish to leave this point, however, without
emphasizing again the fundamental safety
of the bond in question, a safety that is in
no way diminished by a more favorable
differential in yield.
Neither should a ship rely on one small
anchor, nor should life rest on a single
hope.—Epictetus.

North A merican
T rust Shares
The Largest Fixed Trust in the United States

TH E TIM E T O IN V E ST

Railroads
A tch., Top. & Santa Fe
R ailw ay Company
Canadian P ac. R y. Co.
Illinois Cent. R .R . Co.
Louis. & Nash. R .R . Co.
N. Y . Central R .R . Co.
Pennsylvania R .R . Co.
Southern P acific Co.
U nion P acific R .R . Co.

Oils
Royal Dutch Company
(N ew Y ork Shares)
Standard Oil Company
o f C alifornia
Standard Oil Company
(N ew Jersey)
Standard Oil Company
o f N ew York
Texas C orporation

Industrials
A m er. R adiator & Standard
Sanitary Corp.
Am erican Tobacco Co. (Class B)
duPont (E . I.) deNemours
& Company
Eastman Kodak Company
o f N ew Jersey
General E lectric Co.
Ingersoll-R and Company
N ational B iscuit Co.
Otis E levator Company
U nited Fruit Company
U . S. Steel C orporation
W estinghouse El. & M fg . Co.
W oolw orth (F. W .) Co.

There is a right time and a wrong time to buy speculative issues.
But no rules can be applied to this practice.
Conservative investors agree that any time is the right time to pur
chase securities meriting recognition as “ Investment Stocks.” Common
stocks in this category are limited. They represent fundamentally sound
values.
Twenty-eight of the soundest common stocks in the world are the se
curity underlying NORTH AMERICAN TRUST SHARES. Bought as
a group and held together, in a fixed trust, this group represents an in
vestment with exceptional stability, diversity and surety of income. An
investment of this character is worry-proof.
Financial authorities agree that the market is “ scraping bottom .”
We recommend NORTH AMERICAN TRUST SHARES as the right buy
at this time.

Price about $7.25 per share
We offer an attractive arrangement for bankers desirous of handling
these shares. W rite

H A R R Y

H .

P O L K

Investment Securities

Members of Distributors Group, Inc.

Utilities

Insurance Exchange Building

A m erican Tel. & Tel. Co.
Cons. Gas Co. o f N. Y.
W estern Union Tel. Co.

DES MOINES

Northwestern Banker Decem ber 1930

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Federal Reserve Bank of St. Louis

C O .

Our current list of high grade bonds can be had on request

in times like these . . .
DON’T EXPERIMENT
CORPO RATE

TRUSTSHARES

represent an ownership in
terest in these 28 great
companies.

■ HE wise investor today is buying only into those com■ panies which have, over a period of time, proved their
ability to weather wars, panics and depressions because they
have iortified their financial strength by plowing back into
their capital structure, in the form of tremendous surpluses, a
substantial part of their earnings during periods ot prosperity.

R A IL R O A D S

Atchison, Top. & Santa Fe
Illinois Central
Louisville & Nashville
New York Central
Pennsylvania Railroad
Southern Pacific
Union Pacific

You are making just such a dependable investment when
you purchase Corporate Trust Shares— a fixed investment
trust composed of the 28 stocks listed at the right. Th e com
bined assets of these companies exceed 23 billion dollars;
while surplus amounts to 5 billion, 890 million dollars.
T h e average age of the companies, or their direct predeces
sors, is 58 years, and dividends have been paid without inter
ruption for an average of 33 years.

O ILS

Standard Oil of California
Standard Oil of Indiana
Standard Oil (New Jersey)Standard Oil of New York
Texas Corporation
UTILITIES
and QUASI-UTILITIES

American Tel. &Tel.
Consolidated Gas of N. Y.
General Electric
Westinghouse Electric
Western Union Telegraph

W e recommend Corporate Trust Shares for conservative
investment, combining diversification, marketability and ex
cellent return. Th e independent trustee, with whom stocks
are deposited, also holds a cash reserve iund of more than
4 million dollars designed to stabilize a minimum distribution
o f 70^ per share per year, payable semi-annually. Th e mini
mum coupon is an excellent return at present market prices. A
historical check shows that for a period of 1 7 years in the past
the actual return would have greatly exceeded the coupon
minimum. Shareholders receive all distributions in excess of
the minimum designed by coupon, and in addition receive all
interest earnings on the reserve fund.

INDUSTRIALS

American' Tobacco
Amer. Rad. & Stand. San.
du Pont
Eastman Kodak
Ingersoll Rand
International Harvester
National Biscuit
Otis Elevator
United Fruit
United States Steel
Woolworth
M O O DVS COMPOSITE
PORTFOLIO RATING"A"

Price at the market
» «
Q

P Q

IN V E S T M E N T H O U S E S

AND

BANKS

O lFFER

O J J A N D RECO M M EN D C O R P O R A TE TR U ST SH^ARES

ASK

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Federal Reserve Bank of St. Louis

YOUR

INVESTMENT

HOUSE

BANK

about Corporate Trust Shares

S M I T H , BURRIS & C O .
Central Syndicate Managers
D

e t r o it

r r

120 S o u t h L a

S a l l e S t r e e t , C h ic a g o /

This is one of a group of investment trusts sponsored by Administrative

and

*• O m a h a

R esearch Corporation

Northwestern Banker D ecem ber 1930

W h ere Railroad Profits G o
“ The total increase in railway taxes,
during the nearly two-score years from
1890 to 1928, was from $31,000,000 to
$412,000,000, an increase of 1,220 per
cent.
“ Thus llie tax aggregate has been one
thing in the railway field that has shown
a continuing, and in this case an unfortu
nate, tendency to break all previous rec
ords year after year. Because taxes must
be paid before net railway operating in
come is reached in the income account, the
mounting railway tax has exerted a defi
nite unfavorable reaction on the amount
of that net income.
“ This rate of increase for railway taxes
in the past 38 years was more than 13

LMOST one-fourth of their net
earnings were paid by the railroads
in 1929 in taxes to the various fed
eral, state and local governments, accord
ing to a survey of railway taxation com
pleted recently by the Bureau of Railway
Economics.
This means that almost one-fourth of
the property, activities, and traffic of the
railways in 1929 were devoted to produc
ing net earnings sufficient to pay the tax
on railway property as a whole.
“ Taxation in the United States,"’ the
survey states, “ has become a major eco
nomic problem; every industry has felt its
increasing burden and every industry is
devoting attention to its own tax problem.

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High-grade Short Term Notes
Price
I
I

Y o r k W a t e r S e r v ic e C
Due D ec. 1, 1931

I
I

P eoples L ig h t & P o w
Due July 1, 1931

I
I

I
=

P e o p l e s L i g h t &? P o w
Due Dec. 1, 1931

E d is o n C
Due Dec. 1, 1931

r iz o n a

o r p .,

4 %

Yield

99 %

5 .0 0 %

5 s .............

99%

5 .2 0 %

., 5 s .....................................

99%

5 .5 0 %

99%

5 .7 5 %

o r p .,

5 s ....................

The above bonds are subject to prior sale and change in price

C ir c u la r s o n R e q u e s t

.L . O

C o .

IN C O R PO R ATED

Insurance Exchange Bldg.

Board o f Trade Building

DES M O IN E S

C H IC A G O

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Underwriters and Distributors
of Investment Securities
Complete Brokerage Service
Orders Executed on All Exchanges

WB.M£M!llamis Co.
Members Chicago Stock Exchange
Members New York Curb, Associate

120 South LaSalle St., Ghicagp
'Telephone "Randolph

Northwestern Banker Decem ber 1930

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Federal Reserve Bank of St. Louis

3031

times as great as the rate of population
growth; nearly three times as great as the
rate of increase in national wealth; more
than twice as great as the rate of increase
in national income; nearly three times as
great as the rate of growth in our foreign
commerce. It was more than six times as
great as the rate of growth in property
investment of the railways, two and onehalf times as great as the rate of increase
in railway gross earnings, and more than
five times as great as the rate of growth of
net earnings.
“ All taxes have been rising in the
United States, but railway taxes have run
ahead of the general trend. From 1890 to
1928 railway taxes increased 1,220 per
cent, while taxes other than those paid by
the railways increased 952 per cent.
“ By the close of 1929, railway taxes in
the United States had mounted to a larger
annual aggregate than ever before. Rail
way taxes were greater, in actual dollars,
in that year than in any corresponding
period in history.
“ Not only was railway taxation in 1929
the greatest in amount ever recorded, but
it came close to absorbing the greatest
proportion of railway gross earnings.
The ratio of 6.32 cents of taxes for each
dollar of gross earnings in 1929 was only
slightly below the corresponding average
o f 6.37 cents for 1928, and was greater
than in any year except 1928 alone. Con
sidered in relation to net earnings, rail
way taxes in 1929 absorbed 22.35 cents of
each dollar of net earnings.”

For Investment Information
“ Where can I find up-to-date informa
tion about investment?” Probably the
best answer to this question, asked a
multitude of times each year by investors,
students and business men, is the 1930
revised edition of “ Sources of Investment
Information” recently prepared by a com
mittee of the Special Libraries association
upon the suggestion of the Investment
Bankers Association of America, whose
interest in the work has made its publica
tion and distribution possible.
Designed primarily to aid investment
bankers and security holders, this bibliog
raphy is the first systematic attempt to
compile a usable and comprehensive list
of references dealing with the subject of
investments. Questions on a wide variety
of investment topics are readily answered
when the authorities, here conveniently
indexed by subjects, are consulted. Sug
gestions for a general reading course on
finance and investments, sources of cur
rent instalment sales data, references
which facilitate the identification of un
familiar securities— information of this

sort may readily be found Avitli the assist
ance of this unique source book.
“ Sources of Investment Information”
is the work of professional librarians Avho
daily are assisting' individuals coping Avitli
financial and investment problems. Miss
Virginia Savage, librarian for Halsey,
Stuart and Company, Chicago, is chair
man of the committee responsible for the
booklet. The other members of the com
mittee collaborating in the preparation
and revision of “ Sources of Investment
Information” are Miss Sue M. Wuehter,
librarian for Continental Illinois com
pany, Chicago, and Miss Ruth G. Nichols,
librarian for the Federal Reserve Bank
of Chicago.
The Investment Bankers Association of
America is distributing this booklet free
o f charge to its members and to public
libraries and educational institutions
throughout the country. Others desirous
of securing the source book are charged
25 cents to cover the printing and dis
tribution costs.

To St. Paul
The Continental Illinois company,
affiliated investment securities organiza
tion of the Continental Illinois Bank and
Trust company, Chicago, has announced
the appointment of Wallace H. Lanigan
as the company’s sales representative in
St. Paul.
Mr. Lanigan, Avho has been connected
Avitli the main office of the Continental
Illinois company in Chicago for a number
of years, aaGH make his headquarters at
826 Merchants Bank building, St, Paul.
The Continental Illinois company is en
gaged in underAvriting, wholesaling and
retailing immstment securities on a na
tional scale.
In addition to its main office in Chicago,
it maintains offices in principal cities, in
cluding NeAv York and San Francisco.
The company’s European representative
has headquarters in London.

The investment facilities o f
Priester, Quail & Cundy,

Inc.

include:
1. Recommendations of conserv
ative Bonds.
2. A ll available market quota
tions.
3. Current news items on corpo
rations.
4. C o m p l e t e information
called Bonds.

5. Suggestions on rearrangement
of holdings.
6. Execution of buy and sell
orders on all listed and un
listed markets.
W e invite the use of our organization in the
administration of your investment
program.

American Bank Suspends
The Irving Trust Company has been
appointed equity receiver for John Munroe & Company, private bankers, Avhose
main office in Paris is temporarily closed
folloAving a run last month. The French
house Avas established in 1851 and has
branches in Pan and Cannes. It is the
oldest American banking institution in
France. Inquiring depositors Avere in
formed that the main difficulty existed at
the N cav York office.

After the Crash
Gus: “ If you had five dollars in your
pocket, Avhat Avould you do?”
Olef : “ I ’d think I had somebody else’s
pants on ."— The Manu-Script.

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Federal Reserve Bank of St. Louis

yvsaer

‘

QUAIL €

C t /A ^ U y .

INVESTMENT SECURITIES

American Bank Building

DAVENPORT, IOWA

Northwestern Banker Decem ber 1930

Learning from Chicago Financing
By S IL A S H . S T R A W N
assessing officials, saw- that under the or
der their activities would be cramped and
ultimately ended. The result was that the
assessment for the year 1928, which should
have been completed in the late fall of that
year, was not finished untif May 1, 1930.
Under the law of the state, taxes for
1928 were collectible between February
and May of 1929 and became delinquent
on May 1, 1929. Obviously, no taxes
could be paid until they were assessed.
In December, 1929, a few citizens of
Chicago organized a Citizens’ Committee
to see what could be done to bring about
an early completion of the assessment and
to provide against a recurrence of such a
condition.
In February, 1930, judges of the courts,
The work o f the toAvnship assessors is
policemen, firemen and all other city and
reviewed by the board o f assessors and
county employes had not been paid for
the work o f the board o f assessors in turn,
more than two months. Nurses in the
is reviewed by the board o f review.
The state tax commission has supreme County Hospital had not been paid for a
and final jurisdiction over all local assess year. Meanwhile, they had financed them
selves but could do so no longer. There
ing bodies.
were no funds to maintain the Old Peo
The Present System
ples’ Home, the Tuberculosis Sanitarium
HE present assessing system has ob and other charitable institutions. Supply
tained since 1898, Avhen the existing bills totaling $1,500,000 had been running
law became effective. Like many othermore than 18 months. Supply men threat
states, Illinois attempts to limit the debt- ened to cut off supplies of food and fuel
creating power of municipalities by pro because they no longer could stand the
hibiting cities from becoming indebted financial strain.
more than to the extent of five per cent of
Tax W a r r a n t s
assessed value of the property therein lo
OR
a
number
of years, it had been the
cated. This limitation compels the organi
custom to issue tax anticipation war
zation of a separate corporation whenever
rants against the taxes to be assessed but
it is necessary to finance a new improve
ment. There now are 418 different tax neither the county, the city, the sanitary
creating bodies functioning in Cook district nor the board of education could
county, each with its organization, its offi sell more tax anticipation warrants be
cers and its political coterie. The un cause these four major municipalities had
wieldiness, inefficiency and extravagance outstanding more than $240,000,000 of
such warrants, issued against taxes for the
of such a setup is obvious.
The situation become so bad that the years 1928 and 1929, a large part of which
courts, in two cases, held the 1927 quad warrants were past due. Warrants issued
rennial assessment of real estate void be against taxes for 1928 were payable in the
cause of lack of uniformity and of such spring and early summer of 1929. Those
gross unequalities as to amount to fraud. issued against taxes for 1929 were payable
This resulted in an order by the state tax in the spring and early summer of 1930.
commission in July, 1928, directing a re They could not be paid because the taxes
Consequently,
assessment. Then followed persistent ef had not been assessed.
forts, by scores of politicians, big and while these four municipalities had in
little, to defeat or to delay the execution their treasuries certain tax anticipation
of the order because it directed that taxes warrants, efforts of their officials to sell
must be assessed upon a scientific basis, more warrants failed. Thus it was that
upon valuations actually made by ap while the bonded indebtedness of Chicago
praisers, instead of guessed at or esti is much less than that of many other cities,
mated on general information and ad there was no money available to enable
justed in the discretion of the assessors the city and county to carry on.
The situation was desperate. A state
and board of review.
These efforts were maintained in court of anarchy was imminent. In the emerg
actions and in every way the ingenuity of ency, the Citizens’ Committee conceived
the politician could devise.
The tax the idea of organizing the Cook County
“ fixer” and petty “grafter,” who had, or Taxpayers’ Warrant Trust and appealed
claimed to have, some influence with the to citizens to buy certificates of interest

HE precipitating cause of Chicago’s
acute impecuniosity last year was fail
ure to assess and collect taxes to meet
current expenses and accumulated deficits.
When a great city expends more than
$250,000,000 a year in its regular opera
tion, the chief source of supply being
taxes, and no taxes are collected for two
years— something must and did happen.
Under the laws of the state, real estate
is valued for the purpose of taxation
every four years. The last quadrennial
tax valuation year was 1927. Assessment
in Cook county, which includes Chicago, is
made by 30 township assessors, a board
of assessors composed of five members
and a board of review with three members.

T
COMPLETE
F IN A N C IA L
FACILITIES
DEVELOPED
SINCE 1863
The First N a tio n a l
B a n k o f C h ic a g o
Affiliated

F irst Union T r u st
and Savings Bank
Resources Exceed $600,000,000

W e can supply or supplement every
conservative investment need.
Our experience and facilities
enable us to offer a wide range of
securities, all measuring up
to high grade investment
standards.

The White-Phillips Co., Inc.
I n v e s t m e n t B a n k ers

DAVENPORT, IOWA

Northwestern Banker Decem ber 1930
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

41
issued by the trust against tax anticipa
tion warrants which the trust bought from
the county, sanitary district, board of edu
cation and city.
Philip R. Clarke, president of the Cen
tral Trust Company of Illinois and a
splendid citizen, headed a campaign which
obtained subscriptions totaling more than
$75,000,000 for these certificates of in
terest. This was considered enough to
carry on county and municipal functions
and to meet maturing bonds and interest
until July 1, 1930, when, it was expected,
taxes for 1928 would be coming in and the
Citizens’ Committee, joining with the city
and county officials, could obtain from the
legislature the necessary relief.
The committee was obliged to call for
but 70 per cent of subscriptions and this
amount, some $53,000,000, was repaid to
the subscribers plus J1/^ per cent interest
thereon, within six weeks after the ad

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

journment of the special session of the
legislature. Bills were passed by the leg
islature temporarily increasing tax rates
and authorizing issuance of bonds totaling
about $63,000,000.
The credit of Chicago was re-established
and her obligations, bonds and tax antici
pation warrants, which could not be sold
at any price in February last, now are
selling at a premium.
The experience of Chicago is of no gen
eral interest except as it may be a warn
ing to other cities. Trouble comes to
cities, not when debts are incurred, but
when these debts must be paid. Good
municipal financiers always provide for
the payment of debts at the time of their
creation but to municipalities whose chief
source of revenue is taxes, Chicago’s ex
perience illustrates what may happen if
and when the source of supply is stopped.

McKay with Central Trust
George McKay, formerly a sales repre
sentative of C. F. Childs and Company,
has joined the Business Extension De
partment of Central Trust Company of
Illinois and its affiliates of the Central
Group. Mr. McKay was graduated from
Northwestern university in 1922, and has
an extensive acquaintance in Chicago.

Tragedy
Mrs. Tellem: Why did the Smith’s
separate ?
Mrs. Gossip : Nobody knows.
Mrs. Tellem: How terrible.

Petty Petting
Mother: How long did that young man
stay last night?
Daughter: Oh, ma, don’t bother me
with petty matters.

Originators, Dealers, Distributors of

HIGH G R A D E
BONDS

AND

STOCKS

A ll Issues Bought — Sold — Quoted

Hill & C ompany
IN C O R P O R A T ED

Investment Securities

214 S ix th

Avenue,

D E S M O IN E S

Northwestern Banker D ecem ber 1930

Finds Conditions Improving
HE undertone of business sentiment
has made a definite turn for the
better despite the fact that actual
business operations have not kept pace
with the usual advance for this season
of the year, the current issue of the Busi
ness Observer, monthly review of the
Foreman-State National Bank of Chicago,
finds.
Thus far, consumer buying has been
surprisingly well maintained while pro
duction has been curtailed even more than
had been anticipated, the review states.
The trend of the near future, however, de
pends on what happens to purchasing
power. The Business Observer says:
“ Relative stability in commodity prices
since the end of July, after a long precipi
tous decline, has been a large factor in
improving the undertone of business senti
ment. Relative firmness in consumer buy
ing during the last two months, and the
elimination, during the latter half of Oc
tober, of weak situations which hung over
the stock market have added to the re
assurance of business observers.”
Insofar as an inflated credit structure
was a casual factor of the depression
period the Business Observer opines that
real progress has been made toward im
provement, especially in the case of credits

xk:

:xíc

supporting security markets and commer
cial activity. Commercial loans and loans
on stock exchange collateral have been re
duced markedly in harmony with the de
flation of business volume and security
values. On the other hand, the volume
of installment credit outstanding has con
tinued to gain in relation to business
volume and constitutes a relatively larger
burden on present incomes than at any
previous date.
The softness during the early part of
November in some of the conspicuous com
modities, like wheat, corn and cotton, Avas
counterbalanced by renewed strength in
the stock market, the publication notes.
Department store figures have been more
favorable since August, and chain store
sales continue to register higher than
might have been expected. The foreign
trade of the United States is recording
some improvement.
The Business Ob
server adds:
“ Employment and wage payments re
ceded nearly two per cent between Sep
tember and October. This is contrary to
the usual seasonal trend, and is the most
disappointing aspect of the current situa
tion. Unemployment in the industrial
centers, particularly, is very serious. The
decline in factory payrolls in two repre
ix k:

ixk:

IXXI

ixk :

Now
is the m ost opportune tim e to purchase sound
bonds, notes and com m ercial paper, suitable for
your bank investm ent accounts.

W e are offering at this tim e a n u m b er o f high
grade bonds at prices attractive in the current
m arket.

W rite for our descriptive circular.

sentative industrial states like Illinois and
New York has been approximately
twenty-five per cent since the high point
of last year.”
The Foreman-State publication points
out that cotton manufacturers and building
construction have bettered the average
performance for the season, while depart
ment store sales exactly duplicated the
five year average percentage gains. The
textile industries in general have shown
more improvement than most other lines
of business and apparently have turned
the comer on the road to recovery. The
remaining barometers listed have fallen
somewhat below normal seasonal expect
ancy.
“ It is admitted now,” the Business Ob
server states, “ that the situation was not
strong enough in August to sustain the
upward movement in business. There is
a general tendency among forecasters
now to move the date of expected upturn
forward to coincide with the normal ex
pansion of business in the spring.”
Actual recovery, however, will get under
way when the weakness in credit and price
structure which brought on the deflation
have been sufficiently corrected, the re
view concludes.

T em p orary R elief or
R econstruction
Discussing the recent suggestion that
the Federal Reserve System purchase
$500,000,000 of government securities,
thus placing that amount in the member
banks as additional currency and expand
ing their loaning capacity by several bil
lions, West <& Company, in the current
issue of their fortnightly financial review,
raise the question as to whether the need
of the country is for temporary relief.
“ Or do we want to build ourselves up
again on the sound bulwark of economy
in our national affairs, in mercantile busi
nesses, and in our home life?” the bankers
ask. “ The experiment of forcing funds
into the market was used by our Federal
Reserve System in 1927. We had pros
perity in 1928 and 1929, but few there are
who would not relinquish the reward of
that period for a more stable business
now, with a greater national feeling of
confidence. The country today finds itself
in a situation that can be gotten out of
only by work and savings.”

B ecom es
Investment Securities

5tli Floor Insurance Exchange Bldg.
DES MOINES

ixtc
Northwestern Banker Decem ber 1930

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

:xx:

ixjc

zxkt:

Eastern Representative

Announcement is made of the appoint
ment of G. L. Fischer as eastern repre
sentative of Central Trust Company of
Illinois and Central-lllinois Company,
Chicago, with offices in New York, to suc
ceed George B. Cortelvou, Jr., who lias
resigned in order to devote all of his

attention to the activities of Distributors
Group, Inc., of which he is director and
vice president.
Mr. Fischer has been associated with
the bank in Chicago for the past three
years, having been active in the business
extension work in the bankers’ division
as well as along general lines. Mr.
Fischer was graduated from Harvard uni
versity in 1920 and Avas connected with
one of the banks of Ivewanee, Illinois,
before coming to Central Trust Company
of Illinois.

Are
You Interested
in
Natural Gas?

The Foreman-State Corporation, the
investment affiliate of the Foreman-State
National Bank, opened an office in San
Francisco last month. The opening of
this office, in charge of John W. Ogden,
\dce presdient, marks the corporation’s
second expansion move in the past year,
a Noav York office having been opened in
January.
The Foreman-State National Bank,
founded 68 years ago, last year aggres
sively entered the field of investment
banking through its affiliate. In the first
nine months of this year the ForemanState Corporation has participated in the
underwriting of over $250,000,000 of se
curities.
Mr. Ogden Avas a vice president in the
Chicago office, having previously been
assistant manager of the bond depart
ment of the Foreman Trust and Savings
Bank.

offer a new field for the in

New Booklet oil Investing Savings

Kansas Natural Gas Com

“ Investing Savings” by Austin McLanaban, president Savings Bank of Balti
more, Baltimore, Md., former president
of the Savings Bank Division, American
Bankers Association, is the title of a book
let issued by the division. Mr. McLanahan enumerates the different desirable
types of investment of savings funds, Avith
detailed explanations in each case, such
as collateral loans, bankers’ acceptances,
loans secured by first mortgages and ATarious classes of bonds. He says that “ in
the handling of savings funds, it is not
so much ‘what you make as what you don’t
lose,’ ” and concludes by observing that
a trustee of a savings fund is somewhat
like a gardener. He should cultivate the
promising plants, get rid of the unsuitable
ones and keep a watchful eye for any
signs of unhealthiness.

Natural

Gas

Securities

vestor who seeks the utmost
for his working dollars.
The securities of the A r
kansas Valley Natural Gas
Company and the Illinoispany, which we underwrite
and distribute, give “ threepoint” satisfaction—safety,
yield and marketability.
We solicit your inquiries.

Banks Consolidate
The Citizens Savings Bank of L oav
Moor has been merged Avith the Clinton
City National Bank of Clinton, IoAva.
F. E. Conover, who has been cashier of
the Low Moor Bank for many years, Avili
become assistant cashier of the Clinton
bank.

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

E. RAYMOND DUTRO, President

A m e r ic a n B a n k B ld g .

D A V E N P O R T , IO W A

Northwestern Banker Decem ber 1930

Investor in Abnormal M oney Market
T

HE spread between short-time money
rates and interest rates on long-time
investments has rarely, if ever, been
wider than at the present time. Call
money on the New York Stock Exchange
has been averaging less than 2 per cent.
United States Treasury Notes maturing
in December of this year yielded, on Octo
ber 27, 1.55 per cent. Prime bank accept
ances up to ninety days yield 1% per cent
to 2 per cent. On the other hand, the re
turn on listed bonds on the New York
Stock Exchange, except for the absolutely
gilt-edged bonds, is very high, while the

Extract from an Address by

B E N J A M IN M . A N D E R S O N ,
J R ., P H .D .

Economist of The Chase National Bank of
the City of N ew Y ork
B efore the Nebraska Bankers Association
at Omaha, Nebraska

yield on good foreign bonds is extremely
high. There are bonds, which, so far as
security and market activity are con
cerned, are almost, if not quite, as good as
those which we call gilt-edged bonds,

A Short Term Investment
Especially Suitable For Banks

Morton Grove, Illinois
6% Local Improvement Bonds
Maturities $23,000 annually D ecem ber 31st, 1931 to 1939 inclusive

Morton Grove, one of Chicago’s oldest suburbs,
is located about 15 miles from the “ Loop” and
about three miles from the city limits of
Chicago.
These bonds, issued for paving certain streets
in Morton Grove, are payable through assess
ments levied against the property benefited by
these improvements.
Legality approved by M r. Holland M . Cassidy, A ttorney, Chicago

which still are selling to give surprisingly
high yields, merely because they are not
“ seasoned,” that is to say, because they
have not been known to investors for a
sufficient length of time and because a
sufficient volume of them has not found
final lodgment in the strong boxes of inves
tors who believe in them and mean to keep
them, whatever the market may do. The
very best mortgages are in demand, and
rates on mortgage money for prime mort
gages have moderated since last year.
But there are many good mortgages which
do not find ready takers and which must
pay unusually high rates.
The line between money and capital,
moreover, is more sharply drawn than we
have seen it for a long time, and there are
not a few obligations of strong borrowers
with maturity coming in two or three
years which Ave would ordinarily look
upon as very suitable purchases for the
man who has temporarily idle money,
which are today selling at yields that put
them in the long-term investment class.
Finally, among the unlisted bonds with
narrow market, there are many of un
doubted goodness which sell on a yield
basis that can only reflect the investor’s
reluctance to tie up his money because of
vague and unreasonable fears.

Price: 100 and Interest, to Yield 6 %
Descriptive Circular on Request

Lansford i| A Company
Securities
33 North La Salle Street, Chicago
Specializing in Illinois Local Im provem ent Bonds
Exem pt from all Federal Incom e Taxes

Our Iowa Offices
Are Equipped to Render Complete
Brokerage Service on all Principal Exchanges
C E D A R R AP ID S
IO W A FALLS
STO R M L A K E
DAVENPORT
M ARSH ALLTO W N
W A TE R LO O
DUBUQUE
M A SO N C IT Y
D ES M O IN E S
FO R T D O D G E
S IO U X C IT Y

L a m

s o

B r o s . & G o.
Established 1874

STOCKS
GRAIN
COTTON
BONDS

Members of Leading Exchanges

Northwestern Banker Decem ber 1930

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

L eased W ire s
T e l. W A B a sh 2400

166 W . Jackson Blvd.
CHICAGO

Bargain Day

OR the discriminating investor who
knows how to study the security lying
behind bonds and mortgages, or the ordi
nary investor who \\dll go to his banker
and get the benefit of the banker’s advice
regarding individual bonds and individual
mortgages, today is bargain day. Eor the
banker, on the other hand, today is a day
of temptation. His great business is to
keep his resources liquid, not only that he
may be able to meet his depositors’ claims
on demand, but also that he may have a
reserve of lending power when business
revives, when he must supply pocket cash
for the people out of his reserves and
when he must increase his loans to business
customers. The banker in agricultural
regions, must, of course, in good times and
in bad, meet the seasonal needs of his
farmer customers and must keep his idle
funds, at the period when borrowing is
low, free, so that he can surely meet the
borrowing needs at the peak season.

W ith returns on acceptances, commer
cial paper, and highly liquid impersonal
loans at the Stock Exchange very low, the
temptation is great for the banker to put
an undue proportion o f his funds into
bonds and mortgages. The veteran banker
has seen this happen many times.
He
knows that bonds bought merely because
the banker has excess funds must be sold
again when the banker needs funds for his
customers, and he knoAVS that mortgages

45
bought at such times cannot be sold again,
but represents a more or less permanent
lockup o£ capital. He knows that the
banker should not put more into mort
gages than he can safely leave in mort
gages, and he knows that the banker is
exposed to the risk of losses on his bonds
if he buys them in large quantities in times
of very cheap money in order to get a
high return on his secondary reserve.
Individual bankers must solve their
problems with reference to their particu
lar situations. Sweeping general rules
are to be avoided. Certainly the banker
in a distressed agricultural community
will do all that he can to see that renewals
are made of good farm mortgages. Indi
vidual bankers with unusually large sec
ondary reserves may feel justified in tak
ing advantage of the extraordinary bond
market in moderate measure. But the
banking community as a whole will be well
advised not to increase its holdings of
mortgages unnecessarily and not to in
crease its holdings of bonds. If the gen
eral banking community buys bonds freely
today, it will also be obliged to engage in
concerted selling of bonds at a later time
—which will not help either the earnings
of the banks or the bond market. It is not
pleasant for bankers to accept the low
rates which the most liquid employments
of secondary reserves pay. But the first
duty of the banker is to protect the
liquidity.

When the Banker’s Head Was
His Credit File
(Continued from page 19)
of a single, worthless account. I f the
customer will discuss his credit policy
with his banker, perhaps the banker can
secure for him information regarding
present or prospective customers that will
help him to determine what limits to put
upon their accounts. The total of re
ceivables may also include amounts due
from officers or employes or other con
cerns in which the borrower is interested.
All such receivables are likely to be slow
of collection and should be taken out of
the quick assets in the analysis of the
statement. Merchandise inventory is just
as important as the matter of receivables.

summer is said to have a decided influence
on the increase of the estimates.
* * %
THE addition of two pounds of oats
per head to the rations of calves being
wintered in Nebraska proved a profitable
change in the ration. Calves being fed
prairie hay alone gained only 42 pounds
each in 180 days while those receiving oats
in addition gained 172 pounds. The cost
of the extra gain on the oat-fed lot was
but $3.30.
# • ♦ *MINNESOTA has the greatest acreage
in history in legume crops but crops
specialists at the University of Minnesota
Bicorne

+3on

state that there is no danger of the farm
ers getting too much of these crops. In
stead they are urging further increases as
legume crops are economically desirable
under present conditions, they say.
* * *
WHEAT AND RYE are the cheapest
hog feeds grown in Minnesota the results
of feeding tests conducted within the state
during the last month have shown.
Because o f the lower price for wheat
the lot of pigs fed durum wheat made
gain at a cost of $2.24 less than those fed
shelled corn. The corn fed lot consumed
two and a half times as much protein sup
plement as the wheat fed lot.

Fl^ctua +,Bonds

p i'ieTS Governi,ment
CoDimer ° ia l
■Paper
es
.X,

Time Loans

joc

*3
V * t ,* 1** Dn

DePOSits
o
<\. Bank Income

Viy. “ 5)e®a
....,ÏV7

°«>

Security

emand Loans

Many Factors Should Govern
the Selection of Bonds for Your Bank
S AFETY.. . marketability ... income
.. . the sponsorship o f a good house
. . . and what besides?
Right here is where ordinary bond
buying leaves off, and where a policy of
sound investment begins. Many bonds
conform to the requirements given
above; but among these many, there will
very likely be only a few which afford
just the additional features required by
a given bank at a given time.
Maximum investment value can ob
viously not be arrived at through ruleof-thumb methods. It can be determined

only after a careful and detailed study of
the bank, its present situation, the con
ditions under which it operates, and the
investments it already holds.
Thoroughgoing analytical studies of
this kind, leading to sound investment
policies and programs, are a part o f the
service which Halsey, Stuart & Co. pro
vides for its bank clients without cost.
Further suggestions in regard to bank
investment and its problems will be
found in our folder, SoundInvestmentPrac
ticefor the Commercial Bank. A copy will
gladly be sent to any bank requesting it.

Farms and Farming
(Continued from page 14)
report of November 1, indicated a stead
ily rising estimate of production.
In Iowa the estimate was revised up
ward a total of 27,000,000 bushels in the
two months.
There may be more corn than there was
on September 1, but many crop estimators
figure that the attitude of the farmers is
largely responsible for the increase. The
months of September and October were
especially favorable for the maturing of
the late corn but the reaction from a pessi
mistic point of view at the end of the

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

HALSEY, STUART

INCORPORATED

C H I C A G O , 201 South La Salle St.
AND

OTHER

N E W Y O R K , 35 Wall St.

PRINCIPAL

CITIES

Every Wednesday Evening thousands increase their knowledge
o f sound investment by listening to the O ld Counsellor on the
Halsey, Stuart & Co. program. Broadcast over a Coast to Coast
chain o f 37 stations associated with National Broadcasting C o.

THE PROGRAM
THAT DOES MORE
THAN
ENTERTAIN

9 P. M. Eastern Standard Time
8 P. M. Central Standard Time

B O N D S

CO.

F I T

7 P. M. Mountain Standard Time
6 P.M. Pacific Standard Time

T H E

I N V E S T O R

Northwestern Banker Decem ber 1930

46
Perhaps no other item in the statement
presents so many elements of danger for
both the banker and the borrower. If
the amount is unduly large, it means a
slow turn-over and a laek of profits. It
may he the result of unwillingness to
keep the shelves clean and the cai’rying
forward year after year of obsolete mer
chandise which ought not to be included
in the inventory account. The sale of
such items, even at a ridiculously low
figure is desirable for if they are included
in the inventory year after year not only
the banker but the borrower himself may
be deceived as to the actual condition of
the business. When the banker has satis
fied himself regarding the question of ob
solete or unsalable merchandise, the next
matter of interest is that of pricing. A
conservative policy in the pricing of mer
chandise for inventory purposes not only
makes a. true showing of the borrower’s
current condition but, also, adds to the
possibility of reasonable profits in future
periods.
While it is popularly supposed that a
certain ratio of quick assets to current
debts indicates the ability of the bor
rower to repay his bank loans, a topheavy condition in either the receivables
or inventory, or perhaps in both of them,
may lead to capital loans.
There are some important figures which
many borrowers do not feel it necessary
to include in their statements, such as

contingent liabilities in respect to receiv
ables sold or purchase contracts. The
rapid growth of finance companies is re
sulting in more cases where the first
named of these two types of liabilities
are to be found. Falling commodity mar
kets such as we are now experiencing are
likely to make commitments for the
future delivery of both raw and manu
factured goods very dangerous. Ques
tions regarding these matters should be
asked of all borrowers when they submit
their statements.
With his analysis of these questions,
the banker should always keep in mind
general trade conditions affecting the
borrower. While they are beyond his
control, they may make it impossible for
him to meet his obligations and result
in a loss to the bank.
Practically all o f the matters we have
discussed make good credit records in
dispensable. The day when the banker
could keep in his head all of the informa
tion regarding his borrowers is past.
Credit files need not be elaborate or cum
bersome but they should contain the
essential facts regarding each borrower
in such a manner that the banker knows
at all times his condition. The payment
of income taxes and the charging to sur
plus, between statement dates, of various
other items which have not been pro
vided for out of profits at the end of the
fiscal year, make it important that the

Corporate Trust
Shares
u

A r>

A fixed investm ent trust, derivin g their se
curity and earnings from the stocks o f 28
leadin g A m erica n com pan ies, ca re fu lly se
lected fo r strength, dem on strated earning
p o w e r and ou tlook.
T h ey represent A m e r
ican industry at its best.

Descriptive Circular on Request.

701-702 Register and-Tribune Building

Northwestern Banker Decem ber 1930

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

Eastern Banker Dead
Willard D. Howe, assistant secretary,
Irving Trust Company, died last month
at Pleasantville, New York, after a
short illness. He would have been 54
years old on Christmas day.
Mr. Howe was graduated from Yale in
1901. After a number of years in pro
fessional and business activities, he be
came associated with the Irving National
Bank (later the Irving Trust Company)
and was elected assistant secretary, De
cember 11, 1926. Since 1922 he was at
tached to the Irving’s out-of-town office
and on frequent business trips made
many warm friends in Pennsylvania,
Illinois, Indiana, Iowa, Wisconsin and
Delaware, states that were included in his
territory.

Plan New Bank
A community meeting was held in the
town of Grant, Iowa, recently, to discuss
ways and means of establishing a new
bank for the town. Since the closing of
the Farmers Savings Bank in Grant, sev
eral weeks ago, the people of that com
munity have felt the need of a bank, and
efforts are now under wav to have a
badly needed institution of that kind
established.
H. Hausen, of Yillisca, was present at
the meeting and told some facts about
the banking business generally and the
problems which beset it at the present
time. Mr. Hausen, who is a large stock
holder in the Yillisca National Bank,
told his hearers that a bank, to have the
confidence of the community, must be
managed and directed by men of honesty
and competency. Mr. Hausen is dso
connected with F. M. Durham in the own
ership of the private bank at Morton
Mills.

Depositors Get Dividend

Priced about $7.00 per share.

Des Moines, Iowa

credit file contain not only annual bal
ance sheets but operating figures, even
though they may be in condensed form,
and an analysis of surplus and capital
accounts. Such credit records not only
insure the banker against unreasonable
losses but, at the same time, they will
enable the deserving borrower to secure
credit more readily when he needs it. In
that way, they will bring the banker and
his customer into a much closer and more
profitable relationship.

Phone 3-5181

Dividend checks of 20 per cent have
been distributed to depositors of the
First National Bank of Coleridge, Ne
braska, according to Receiver George B.
Cronkleton.
This is the third dividend to be paid
from this closed bank and makes a total
of 85 per cent. The first dividend was
30 per cent and was given out a year
ago in October and amounted to $42,000.
Thirty-five per cent was the second divi
dend which was paid to the depositors.

47
Why W e Must Increase Our
Bank Earnings
(Continued from page 22)
of operation, must be true because so
many o f them are not eliminating their
unprofitable accounts.
The fortunate
thing about eliminating unprofitable
checking accounts and other unprofitable
services, is that the overhead of a bank
can be reduced almost in direct propor
tion to the amount of unprofitable serv
ices which are discontinued.
A Needed Analysis

IN THIS connection it might be wise for
I country bankers to analyze their ac
counts with a view to determine whether
any checking account with balances
under $200 pays its way, or whether any
loan under $100 is a profitable one for
the bank although the maximum legal
rate of interest is charged. A cost analy
sis might also show, for example, that
a checking account with an average bal
ance of $300 but with 40 or 50 checks
per year against it, might be a profitable
one while an account with an average
free balance of $15,000, but with 25,000
checks against it during the year, might
be a very unprofitable one. This analysis
might show that taking a deposit over
the counter may actually cost the bank
as much as $1.00, and that a deposit
made by a local merchant rarely costs
the bank less than 30 cents. It will show,
as the city banker long since has found
out, that it costs a bank at least $5.00 per
year just to have an account on the books,
without taking into consideration its ac
tivity at all. And so those banks which
have been imposing a service charge on a
flat rate basis might Avell look into the
matter of changing to a measured charge
based on activity.
The analysis may show that 60 per cent
to 80 per cent of a small bank’s checking
accounts cause the bank a loss of $1 to
$10 each per year, and that these ac
counts take more of the bankers’ time
and are more costly than the ones with
substantial balances. Isn’t it true that
most of the customers who come into the
bank and ask what their balances, have
balances of less than $25.00 and about
half of them overdrawn ?
A recent survey of the earnings of
country banks in a certain state shows
that less than 20 per cent of them are
making money. Surely, if unit banking
is to survive in that state, some agency
must be found which will force the ex
ecutives of the unprofitable banks to in
crease earnings in their institutions.
The unit banker of the small country
town must soon realize that he must make
his bank a service station rather than an
investment house and that he must make
a profit on every service or he will make
a profit on none. The exception becomes

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Federal Reserve Bank of St. Louis

a valuable service and is entitled to pay
for it, such pay to cover cost plus a
reasonable profit.

the rule faster in a bank than anywhere
else in the world, and once a banker
makes exceptions to charges imposed for
services, he will soon find that every
service is excepted and no charges are
made.
The country banker must get back to
fundamentals. He must remember that
the original function of a bank is to
transfer money from one point to another.
The pay which a bank receives for this
service is called exchange. In the early
history of banking the revenue from ex
change charges constituted the chief in
come of the bank. The country banker
must get back to first principles and in
sist that when he transfers money from
his bank to Minneapolis or from Minne
apolis to his home town either by draft
or by check he is rendering his customer

We all know that the banker must
learn to say “no” to the excessive bor
rower of money, but isn’t it true that he
must also learn to say “no” to the ex
cessive writer of checks'? I ’m not sure
that the latter hasn’t caused the greater
damage to the small banks.
Adequate bank earnings are impossible
without competent management.
The
argument is often advanced that the small
country bank cannot afford to hire com
petent help. It can’t afford not to. A
bank which makes plenty of money can
hire competent executives. And compe
tent executives will operate the bank so
it will make money. If the directors of

banks are now using this serv
ice . . . the bank acts as the
ADVISOR in the purchase and
sale of securities to its cus
tomers . . . we furnish statis
tical data, quotations, etc.,
and do all detail work with
out charge . . . full informa
tion sent promptly on request.
•

M atthews & L ewis Co .
Inves tmen t Seen rities
231 South La Salle Street
C H I C A G O

Northwestern Banker December 1930

48
any bank, whether in the city or in the
country, will take time off from their own
business and their golf, long enough to
hire a good manager for their bank, he
will see to it that the bank makes money.
If there is not sufficient banking business
in a given community to support a thriv
ing bank, the competent manager will
soon discover it and advise his directors
to transfer or dispose of the business.
There is no question but what supervis
ing authorities should never have granted
charters in numerous places and that
even now a great many banks should be
moved, consolidated with others, or
liquidated.

Meeting Places and Dates
The Administrative Committee of the
American Bankers Association has se
lected Augusta, Georgia, for the 1931
spring meeting of its executive council,
fixing the dates April 13-16 inclusive, at
the Bon Air-Yanderbilt Hotel, while A t
lantic City was chosen for the annual
convention, which will be held there Oc
tober 5-8 inclusive, with the Traymore
Hotel as headquarters, it was announced
recently by Rome C. Stephenson, presi
dent o f the Association.
Those present at the meeting of the
committee were as follows : Rome C.

Municipal Bonds
Yielding

to 6%

Circulars on request

Stephenson, vice president St. Joseph
County Savings Bank, South Bend, In
diana, chairman; Ben Alev, vice presi
dent United States National Bank, Den
ver, Colorado; M. Plin Beebe, president
Bank of Ipswich, Ipswich, South Dakota ;
Harry J. Haas, vice president First Na
tional Bank, Philadelphia, Pa.; Grant
McPherrin, president Central National
Bank & Trust Company, Des Moines,
Iowa; Will F. Morrish, vice president
Bank of America, San Francisco, Cali
fornia; A. C. Robinson, president
Peoples-Pittsburgh Trust Company, Pitts
burgh, Pa.; A. D. Simpson, vice presi
dent National Bank of Commerce,
Houston, Texas; Francis H. Sisson, vice
president Guaranty Trust Company, New
York City; Gilbert T. Stephenson, vice
president Equitable Trust Company, W il
mington, Delaware; Edmund S. Wolfe,
president First National Bank & Trust
Company, Bridgeport, Connecticut; W il
liam G. Edens, vice president Central
Trust Company of Illinois, Chicago, Illi
nois; John H. Puelicher, president Mar
shall & Ilsley Bank, Milwaukee, Wiscon
sin; and of the American Bankers Asso
ciation staff, F. N. Shepherd, executive
manager; T. B. Patou, general counsel
and W. G. Fitzwilson, secretary and as
sistant treasurer.

To Confer with Foreign Bankers

SheMmchettSiondCb
Incorporated 1910

3 9 S o u t h L a S a lle S tr e e t , C h ic a g o

NEW YORK

DETROIT

PHILADELPHIA

ST. LOUIS

George L. Harrison, governor of the
Federal Reserve Bank of New York, has
sailed for Europe to confer with the heads
of the central banks in London, Paris and
Berlin on the problems arising out of the
current world-wide business depression.

Crime as ‘"Big Business”

M U N IC IP A L E L E C T R IC L IG H T P L A N T
6%
P LE D G E ^O R D ER S
f ree fr o m

F e d e r a l in c o m e ta x a n d

a ll t a x a t io n

in I o w a w h e n is s u e d b y I o w a m u n i c i p a l i t y .

THESE ORDERS are a lien on and payable from the earnings of
municipal light plants of various cities and towns in Iowa and neigh
boring States. They are issued to pay a part of the cost of installa
tion of new, modern generating equipment. THESE ORDERS are in
bond form, with semi-annual interest coupons attached.
Maturities— 1931 to 1940 inclusive.
Pi'ice— Par to yield 6 % .
Concessions allowed to Bankers.

BALLARD-HASSETT CO.
Investment Securities

1114-1120 Commonwealth Bldg.

DES M O IN E S

------------------------------ ¡p f V
Northwestern Banker Decem ber 1930

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Federal Reserve Bank of St. Louis

Crime in this country has not only
“ assumed the gigantic proportions of big
business, keen and influential,” but it is
also well organized and fortified to resist
the law, even after arrests have been
effected by the police authorities. James
E. Baum, Deputy Manager American
Bankers Association in charge of its Pro
tective department, told the Tri-State
Better Bank Management Conference.
“ Crime is strongly entrenched, not
alone in politics, but also as one of the
major elements which tend to raise the
cost of conducting legitimate business-—
and that means the cost of living,” he
declared.
“ The direct financial loss
through crime in this country has stead
ily increased until it has reached the stag
gering total of five billion dollars yearly,
or more than the annual budget o f our
Federal Government. Double this figure
to account for the rapidly expanding costs
of our numerous investigative and police
forces, criminal courts and prisons and
we gain some idea of the tremendous tax
wdiich criminals impose on virtually all of
our people.”
The “ business-like view” taken by
many victims of crime when the loss is

49
covered by insurance, and prosecution
would be looked upon as a net loss or
unnecessary expense since the time and
expense would frequently exceed the
amount of loss, aids crooks in escaping
prosecution, he declared. Even when
prosecution seems likely, he added, “ the
professional crook is business-like and
smart enough to offer restitution. When
restitution is accepted prosecution is
compromised, sometimes exposing the
victim to the charge of compounding a
felony.
Any system which condones
crime by restitution or otherwise serves
no practical purpose.”
Experience of casualty and surety com
panies, and the records of the American
Bankers Association’s Protective Depart
ment, indicate that during the past five
years the direct loss which crime inflicted
upon banking averages more than $12,000,000 annually, Baum said. Of this yearly
burden the embezzler accounted for not
less than $7,000,000 and the forger took
another $1,000,000,— “ losses resulting
from crimes of opportunity which are
preventable with reasonable care and
controllable within the banks.” The
amount “ doled out annually to the latest
and most serious menace to bankers, the
holdup bandit, is less than $2,000,000,”
he said, and losses from bank burglary
average about $400,000 annually, the re
mainder being divided among credit
sharps, sneak thieves and swindlers.
“ Premium rates for insurance against
robbery give a fair index to the popular
trend in bank robbery,” he said. “ Eleven
years ago the night burglary hazard was
so much greater than daylight robbery
that insurance premiums for the latter
risk ranged from one-fourth to one-half
of the burglary rate. Today the reverse
is true and in many states the gap be
tween premiums on the two risks has
steadily widened.”
Automatic alarm systems and torch,
drill and explosive proof metals have gone
a long way toward making bank burglary
unprofitable, he said, adding “ Our burg
lary problem is not entirely solved but
only the ‘soft’ safes are yielding to the
burglar’s tools. One of every three bank
burglaries attempted the past six years
has been frustrated. I f experience means
anything, science and invention have
caught up with the burglar.”

Completes Executive Personnel
Cumulative Shares Corporation, a fixed
type of investment trust under the spon
sorship of Bancamerica-Blair Corporation
and Directors Group, Inc., has announced
the completion of its executive personnel
and its board of directors. The trust also
announced the establishment of a research
department under the direction of Dean
Langmuir, who has just been elected a
vice president of Cumulative Shares Cor
poration.
Those elected to the board of directors

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Federal Reserve Bank of St. Louis

were Hunter S. Marston, president, and
Robert C. Adams and George X. Lindsay,
vice presidents of Bancamerica-Blair Cor
poration ; Arthur W. Loasby, formerly
president of the Equitable Trust Com
pany of New York; Dean Langmuir, vice
president, Cumulative Shares Corpora
tion; W. W. Watson, Jr., partner, West
& Company; Henry Lay Duer, partner,
W. W. Lanahan & Company; Newton P.
Frye, vice president, Central-Illinois Com
pany; John S. Myers, attorney, Hughes,
Schurman & Dwight; Geo. B. Cortelyou,
Jr., eastern representative, Central-Illinois Company; Hugh W. Long, vice presi
dent, Distributors Group, Inc.

W ith Harry H. Polk & Co.
Harry II. Polk, of Harry H. Polk &
Company, Des Moines investment house,
announces the election of W. T. Frame as
executive vice president and manager of
the firm to succeed C. G. Hanemann. R.
E. Cunningham has been elected secretary

F. M. Hubbell
F. M. Hubbell, pioneer Iowa financier,
died in Des Moines, November 11. He
was a pioneer railroad builder, the oldest
member of the Iowa bar, and one of the
wealthiest men in the state.

New York Banks
In a recent clearing house statement
there were thirteen of the members with
net deposits of over one hundred million
dollars. Following is their numerical or
der of average net deposits for the week
preceding November 10 :
Chase National .................. $1,647,774,000
National C it y ..................... 1,256,082,000
Guaranty T ru st.................. 1,083,297,000
Bankers T r u s t...................
525,321,000
Central Hanover B. & T . ...
456,816,000
Irving Trust .....................
450,826,000
First N ational....................
266,620,000
Bank of Manhattan Tr. Co. 263,443,000
Chemical Bank & Tr. Co.. . 257,771,000
New York Trust..................
245,564,000
Bank of America, N. A .. ..
244,143,000
Corn Exchange Bk. Tr. Co.
215,075,000
Chatham Phénix N. B. & T. 194,171,000

W . T. FRAM E

succeeding D. P. Bardeen. Messrs. Hane
mann and Bardeen have left the firm to
organize their own investment house.
Mr. Frame was formerly deputy super
intendent of the Securities Department of
the state of Iowa, and has had lengthy
experience in the securities business.

GUARAN TEED
GOOD
and

investors

BONDS ARE
BONDS

holding

this type

security

should give thanks for tlieir intrinsic value as
well as the safeguards applied to them by the
guarantee of two old-line surety companies.

P R O V ID E N T

STATE

S EC U R IT IE S

CO.

134 NORTH L A SALLE STREET

C H I C A G O , ILL.
Northwestern Banker Decem ber 1930

50
methods and policies must keep pace with
modern business progress, for into our
banks are woven the fortunes and lives of
multiplied thousands of men and women.

M o d era B an k in g N eeds
HE banking knowledge which fitted
a banker for the operation of a
bank two decades ago, valuable as
that knowledge is today, is not sufficient
to meet the needs of the complex business
structure which has developed in recent
years,” declared Herbert V. Prochnow,
of the First National Bank of Chicago, in
an address recently before the Better
Banking Conference, conducted by the
Michigan Bankers Association.
“ A significant fact regarding banking
technique is that surveys and research
constantly reveal methods of improving
management,” lie continued. “ It remains,
therefore, always an unfinished study.
For the sake of stable operation alone, if
for no other purpose, banking knowledge,

“ Never before have bankers been faced
with so many new problems. Never be
fore has the need for cooperation been
more urgent.
While proponents of
group, chain and branch banking are
championing their respective plans, unit
bankers are staunchly defending the mer
its of the banking system, which has
played such an important part in the de
velopment of these United States. But,
there is a common ground upon which all
bankers may meet, regardless of their
leanings toward a particular type of bank
organization, and that common ground
is the need for sound bank management.

W e invite Iowa bankers to avail themselves of the
facilities of our organization in connection with the
purchase and sale of securities for Secondary Reserve
Accounts.

C O M P A N Y

In c

703 205 F lem in g B u ild in g

Des Moines, Iowa
BRANCH OFFICE: CEDAR RAPIDS AND SIOUX CITY

o x

1 2 0 S o v t h Lh S a l l e S t r e e t
TELEPHO NE CENTRAL 2 7 0 7

G h ig ag o

Northwestern Banker Decem ber 1930

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

G o .

INCORPORATED
In v e s t m e n t S e g v r i t i e s

“ It is true,” said Mr. Prochnow, “ that
decades of experience have demonstrated
the soundness of many important bank
ing principles, but modern banking re
search and study have always revealed
new opportunities for increasing effic
iency, reducing costs, building profits and
deposits, which it is imperative that every
banker know. Each year, in the last five
years, has increased the rapidity with
which scientific bank management has
progressed.”
Meager Profits

R. PROCHNOW called attention to
the meager profits earned in many
banks and the necessity for adequate
profits to insure safety in banking.
He said, “ No one can survey the profit
trends in individual banks and banks gen
erally without coming to the inevitable
conclusion that there is a need for some
straight thinking in this connection. To
give just one example: One-third of the
banks in a middle western state show a net
profit of less than 4 per cent on their in
vested capital. These earnings are ac
tually less than the rate which many of
the banks pay on their savings accounts.
And, yet, despite the fact that many banks
submit disappointing reports of this kind,
there are hundreds of country banks earn
ing from 10 per cent to 15 per cent on
their capital. Somewhere in the manage
ment of these profitable banks will be
found methods and policies, a knowledge
of which would be of inestimable value
to those institutions less ably conducted.
Almost every day there are unsuccessful
banks taken out of the hands of unsuc
cessful bankers and brought over into
sound, profitable institutions through
good management.
The fundamental
guiding principles of sound bank manage
ment are applicable to every bank in this
country, whether it be large or small,
whether it be located in the country or in
the city.”

The increased cost of bank operation
has resulted in heavy losses in the han
dling of checking accounts in many banks,
according to Mr. Prochnow, who said,
“ Surveys covering hundreds of banks of
all kinds and sizes, and tens of thousands
of checking accounts, show that when a
bank does not have the proper service or
activity charges, seven out of ten check
ing accounts result in a loss to the bank;
one just about pays its way, and two are
profitable. A flat service charge is not
always sufficient. One individual with a
$50.00 balance may write four checks in
a month; another with the same balance,
20 checks a month. The service charge
should take activity into consideration.
Beyond question, thousands of checking
accounts are being carried at a loss with
the banker even paying interest on some
large unprofitable accounts.”

INVESTING
IO W A

M O N E Y

IN I OWA
fl lias

always been the policy of this house to specialize in the financing

of projects within the state.

Thousands of miles of well paved roads,

many modern schools, numerous attractive public buildings, constructive
improvements of many kinds have been soundly financed through this
pioneer Iowa investment house.
Of the 1,000 miles of new primary road paving construction this year in
Iowa, more than 335 miles have been paid for through the proceeds of
bond issues totalling approximately $9,000,000 sold to this house.
other 665 miles were financed through 22 other firms.

The

The second largest

buyer of Iowa primary road bonds purchased about half of the amount
sold to us.
This 1930 record is typical of Bechtel activities during its 39 years of
service to Iowa municipalities, industrial concerns, hanks and investors.
Our long experience in selecting Municipal Bonds and other classes of
securities in which bankers are interested, enables us to render unusually
valuable service to financial institutions throughout this state.

Inquiries regarding our latest investment offerings,
addressed to our Davenport office, are invited and will
receive our prompt attention.

G eo.M .B echtel

r C o.

Established. 1891
Bechtel Building, Davenport,Iowa.
F ir s t I o w a T r u s t B l d g .
B u r lin g to n

I O W A ’ S

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

O L D E S T

E q u ita b le

B u ild in g

G r a n d O p e r a H o u s e B ld g .

D e s M o in e s

A N D

L A R G E S T

Dubuque

B O N D

H O U S E

Northwestern Banker Decem ber 1930

HOW WE L
KNOW
BEHIND

“¡ L O N G th e s tre e ts o f y o u r t o w n a re m a n y
s t o r e s h a n d l i n g m a n y lin e s . S o m e w h e r e o n
o n e o f t h o s e s tre e ts t h e r e is a m a n

d o in g

b u s in e s s u n d e r a fa m ilia r s ig n . H e is th e
M c C o r m i c k - D e e r i n g d e a l e r — a p l a in m a n t o w h o m
t h e w h o l e c o m m u n i t y is i n d e b t e d .
T h e d e a le r in fa r m p o w e r a n d e q u i p m e n t is a m a n

T o d a y , m o r e t h a n e v e r , th is m a n c a n b e o f p r a c
tic a l v it a l s e r v ic e t o a ll in y o u r t o w n . H e r e p r e s e n ts
n o t o n l y th e v e r y b e g i n n i n g o f m o d e r n a g r ic u ltu r e ,
o f w h i c h t h e e m b l e m is th e first M c C o r m i c k R e a p e r ,

but all the remarkable changes and improvements that
have revolutionized agriculture.
I n t h e o l d d a y s , w h e n fa r m i n g w a s a m u c h h a r d e r

fa r m e r r o u n d a b o u t . Y o u c a n n o t t e ll it b y h is " f r o n t ”

j o b in l a b o r , t o i l , a n d d r u d g e r y , th e d e a l e r ’ s s e r v ic e
w a s m u c h s i m p l e r — ju s t lik e th e m a c h in e s a n d i m

b ecau se h e d o e s n o t g o

p l e m e n t s o f h is t im e .

great

im p o r ta n c e

h is
in

to w n

m uch

and

fo r

sh ow .

every
You

m a y h a v e t o g o a r o u n d th e c o r n e r t o fin d h is s t o r e .
B u t, ju s t th e s a m e , this man under the McCormick-

Deering sign is the most vitally necessary merchant
in to wn.

Good Equipment Is Vital
g r o c e r ie s

and

dry

good s,

p ia n o s

and

h o u s e fu r n is h in g s , t h e r e m u s t b e m o n e y f o r th e s e
t h in g s . T h e m e n f o l k s m u s t e a r n it —

with land and

good equipment.
Today
h ig h

th e w h o l e

stan d a rd

fa m ily o n

th e

fa r m

e n jo y s

o f l i v i n g — e d u c a t io n , a u t o m o b il e s ,

m u s ic , th e t a lk ie s , a n d a ll th e r e s t — b e c a u s e o f th e
la b o r -s a v i n g , c o s t -r e d u c in g
e q u i p m e n t t h a t th e
M c C o r m i c k - D e e r i n g m e r c h a n t is s e l li n g t o h e l p th e
fa r m e r m a k e m o n e y .

H o w d iffe r e n t it is t o d a y ! M i g h t y c h a n g e s h a v e
t r a n s f o r m e d th e w o r l d s in c e 1 9 0 0 . N e w m e t h o d s
a n d n e w e ffic ie n c ie s c a m e t o th e a id o f a g r ic u ltu r e .

B e f o r e t h e w o m e n f o l k s g o in t o s h o p f o r h a ts a n d
c lo th in g ,

The Changing World

N e w and b ig g e r a n d m o r e c o m p lic a te d e q u ip m e n t
se t

o u t to

b a t te r d o w n

th e

F a r m in g b e c a m e a b u s in e s s .

co sts

w a s d e v e l o p e d in its m a n y p h a s e s .
lo w e d

the le a d

o f p r o d u c tio n .

POW ER

o f in d u s t r y a n d m e c h a n i z e d itse lf.

T h e d e a le r h a s k e p t h i m s e l f a b r e a s t o f th e s e g r e a t
w a v e s o f c h a n g e . Y e a r a fte r y e a r h e h a s le a r n e d
m o r e a b o u t p o w e r an d m o d e r n e q u ip m e n t. T o d a y
h is s t o r e is h e a d q u a r t e r s f o r th e m o d e r n e q u i p m e n t
th a t m a k e s u p th e M c C o r m i c k - D e e r i n g l i n e — a n d
h is m i n d is a s t o r e h o u s e o f i n f o r m a t i o n t o g o w it h
th e e q u ip m e n t .
first

ord er.

is a p r o s p e r i t y b u il d e r o f th e

h as

c o n t r ib u t e d

m uch

c o m m u n i t y — h e w i l l c o n t r ib u t e m u c h

In t e r n a t io n a l
606 So. Michigan

McCORMICK-PEERING
Northwestern Banker Decem ber 1930

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

F A R M IN G

A g r ic u ltu r e f o l

H arvester

Ave. ° / A M E R I C ^

( Incorporated)

your

m ore.

C o m pan y
Chicago, Illinois

B ank Chains and Suspensions
(Editorial in N ew York Journal of
C om m erce)

ONDAY was a banner day for
bank suspensions. Fifty-one in
stitutions in the South failed to
open their doors ; the largest bank in
Kentucky, established 96 years ago and
doing business under a, national bank
charter, was placed in the hands of a
receiver, while several affiliated State in
stitutions suspended operations. In Ar
kansas 39 banks suspended temporarily
on Monday, and four others closed for
liquidation or reorganization following
the announcement that the largest bank
in that State would suspend payments for
a period of five days.
This does not exhaust the list of the
day’s closures, but the total is sufficiently
impressive to induce some reflections
upon the consequences of permitting an
unregulated development of chain and
group banking while our bankers and
legislators debate and disagree about the
need to protect the “independent” bank
ing unit against the development of
branch banking. The events of Monday
undeniably illustrate in a striking way
the evils that may result from hybrid
forms of banking organizations that,
while formally preserving the independ
ence of local banking units, actually
often subject them to alien dictation and
make their fate dependent upon the for
tunes of outside groups.
The Journal of Commerce has said on
a previous occasion that “ there is no use
paying tribute or doing lip service to the
unit bank, recognizing the desire of the
community in many parts of the country
that local banks shall be independent re
fraining on that account from giving
branch powers to large banks and yet
sitting tight and doing nothing whatever
about the control of chain and group
banking.” What advantage, indeed, lies
in the maintenance of a supposed inde
pendence that subjects unit banks to the
dangers of suspension as a result of
events over which they have no control
and which they are powerless to prevent !
That is the thought that should be kept
in mind in connection with the suspen
sions of the last few days.
It is merely befogging the issue to
emphasize various contributory causes
of the numerous simultaneous closures
and to try to divert attention from the
main difficulty by pointing out that some
o f the closed banks are no doubt solvent
and have suspended merely as a precau
tion. The question that calls for answer
is why so many banks professing solvency
should upon the same day, seized simul
taneously by well-justified fears of runs,
suspend operations over a wide area ?
There are, of course, a great many rea
sons why the banks of this part of the
South should be hard pressed. They have
been doubly hit—both by the general con-

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Federal Reserve Bank of St. Louis

ditions of overexpansion from which the
country at large is suffering and by the
severity of localized agricultural dis
tresses that have followed an unprece
dented drouth. The conditions are un
questionably such as to create an atmos
phere in which depositors are quick to
take alarm.
Precisely at such times, however, the
lauded virtues of the independent “ unit”
bank ought to shine forth most clearly.
Independent banks whose managements
have by their acts won a reputation for
conservatism, intelligence and rigid hon
esty should be equipped to resist the
storms of popular distrust that sweep
away the weak and incapable when pub
lic confidence has been momentarily de
stroyed. But the highest qualities of

achievement may prove powerless to
protect local institutions against the ef
fects of panic, if it becomes known or
even suspected that the actual control of
policies is dictated from without by
groups that are unknown or possibly sus
pect.
The Southern bank suspensions, there
fore, in order to be seen in their proper
perspective must be considered in rela
tion to this problem of control of chain
or group banking. It matters little so
far as the moral is concerned whether the
losses prove to be large or small, whether
the public has been stupid in taking
fright or only Avise after the event. In
any case, it is safe to conclude that if the
51 banks that closed their doors on Mon
day had been in reality the independent

Lee, Higginson & Co.
Established 1848

13 7 W e s t Jackson Boulevard
a t L a Salle Street
BOSTON

C H IC A G O

H ig g in s o n & C o .

Lee, Higginson et Cif

NEW

YO RK

LONDON

PARIS

Xorthwestern Ranker Decem ber 19SO

units that they purport to be, many of
them would be open for business today.
No doubt some of them will reopen after
a period of cautious waiting, with lim
ited if any losses to depositors. Never
theless the damage done to them by rea
son of their outside financial affiliations
will not be easy to repair.
In all that has been said, there is no
intention of bringing a general indict
ment against group or chain banking.
That system may under different condi
tions prove a source of local strength,
notwithstanding the fact that in the in
stance cited it has been an additional
cause of weakness. There can be no
doubt, however, that a strong case can
be made out for guaranteeing banks that
desire independence against outside con
trol. It is also imperative that control
should be extended to cover the opera

tions of the chains and groups that have
in effect destroyed the independence of
large numbers of local unit banks.

Fighting the Sales Tax
Senator Mastick admits that the New
York State Tax Revision Commission
desires to find substitute taxes that will
permit of the shifting of one-third the
taxes borne by realty to other ratables.
The desire to relieve realty is doubtless
justified, but the means suggested by
some members of the commission, namely,
the imposition of a tax on retail gross
sales, is not one to commend itself to the
sound judgment of students of taxation.
If it is necessary to give relief to owners
of realty, it should be done by increasing
the payments made either by individuals
or business with some regard for their
ability to pay.

Bond Trading
We specialize in short term securi
ties, packers, and other high grade
industrial bonds, both listed and un
listed.
We maintain markets in
utility bonds and certain utility com
mon and preferred slocks.
Orders executed on any exchange and
quotations cheerfully given.
Our
private wire system extends to New
York, Baltimore, Boston, Philadel
phia. Cleveland and Detroit.
We solicit the opportunity to serve
you in the purchase and sale of either
listed or unlisted bonds and stocks.
Iow a R e p r e s e n ta tiv e

MAURICE F. LEAHY
M a n a g e r o f T r a d in g S e r v i c e D e p a r t m e n t

THOMAS F. FORD

B R O KAW
AND COMPANY
105 South La Salle Street
CHICAGO

Northwestern Banker Decem ber 1930

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Federal Reserve Bank of St. Louis

A tax levied on gross sales of retail
businesses violates the first principle of
sound taxation by ignoring ability to
pay. Taxes levied on gross sales not only
are imposed without regard to profit but
they may, and in some States they have,
sometimes resulted in taxing those con
cerns least able to pay more than the
strong and financially capable. In fact,
the gross sales tax has even been defended
upon occasion as a means of eliminating
the incapable and rewarding the efficient.
Apart from the disadvantage of not
being able to relate the tax to the income
producing capacity of taxed businesses,
a levy on gross sales has the further
defect of entailing an added charge to
the consumer of an arbitrary sort, due
to efforts to shift the tax from the
shoulders of the seller. The fact that
such shifting may not always be com
pensatory or may on the other hand result
in an advance in prices out of proportion
to the amount of the tax, affords addi
tional arguments against such a form of
indirect taxation.
Especially at this
time, when the restoration o f business
activity demands a downward readjust
ment of retail prices, taxes that would
offer an excuse for maintaining prices
at high levels are especially indefensible.
-—From New York Journal of Commerce.

Net Loss of $657,944
The Wright Aeronautical Corporation
and subsidiaries report for the quarter
ended September 30, 1930, a net loss of
$657,944 after charges, comparing with
a net loss of $889,388 in the preceding
quarter and a net profit of $299,331, equal
to 50c a share on 600,000 no par shares
of stock, in the third quarter of the previ
ous year.
Net loss for the nine months ended
September 30 amounted to $1,932,189
after charges, against a net profit of
$1,653,828, equal to $2.75 a share on
600,000 shares, in the first nine months
of 1929.
The Curtiss Aeroplane & Motor Co.,
Inc., (controlled by Curtiss-Wright Cor
poration), reports for the quarter ended
September 30 a net income of $107,706
after all charges. This compares with a
net loss of $138,061 in the preceding quar
ter and a net income of $292,269 in the
third quarter of 1929.
For the nine months ended September
30 the net loss amounted to $91,804 after
charges, comparing with a, net income of
$1,371,012 in the first nine months of the
previous year.

Preferred Stocks
Some of the nation’s most astute in
vestors are today turning to the field of
preferred stocks for opportunities to buy
assured income at an attractive price, a
review issued by the Investment Research
Committee of the Financial Advertisers
Association last month declares. This re-

55
view is one of a series issued by the In
vestment Research Committee pointing
out the attractive opportunities afforded
now to buy the various types of securities,
including bonds, preferred stocks, sound
investment trust securities and sound
common stocks.
Commenting on the position of pre
ferred stocks and their attractiveness at
the present time, the review says:
“ In the normal course of recovery in
the securities markets, fixed-income bear
ing securities are first to reflect rising
prices. But since bonds are better known
and better understood than preferred
stocks, this process of recovery comes first
in the bond market. Later, it will inevita
bly spread to high-grade preferred stocks.
“ We have already seen this typical
course of recovery in the market for highgrade bonds . . . these have shown a ris
ing tendency for several months. Well
informed observers believe that this ten
dency will continue—and that it must
surely include, before very long, the mar
ket for good preferred stocks.
“ Now—before this rise begins—is the
time for the shrewd investor to take ad
vantage of the preferred stock opportuni
ties that are now available.
“ In addition to the special and tem
porary situation that makes preferred
stocks particularly attractive at this time,
the intelligent investor will not overlook
the factors that make high-grade pre
ferred stocks a good investment at any
time. A recent tabulation shows the yield
on 20 high-grade preferred stocks over a
period of five years, as compared to the
yield on high-grade bonds and on common
stocks. It shows that the yield on pre
ferred stocks is almost as stable as that
on bonds . . . that the preferred stock
yield averages practically a full 1 per
cent higher than that of the high-grade
bonds.
“ This differential in income return
should receive the most careful attention
from the investor who is buying income.
High-grade bonds, of course, have their
place in every investment list. They are
the safest of investments. But the in
vestor who is seeking maximum income
may profitably and properly place a cer
tain part of his funds in securities that
pay a higher rate.
“ Let it be remembered, therefore, that
high-grade preferred stocks are an invest
ment medium worthy of careful consider
ation on their intrinsic merits—and that
today, because of a temporary market
situation, you can buy good preferred
stocks at an especially attractive price
level. This price level cannot prevail for
long . . . the far-sighted investor will
take advantage of it today.”

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Federal Reserve Bank of St. Louis

formative part in the setting up and oper
ation of the New York Federal Reserve
Bank. The historical background pre
sented, the picture given of the inner work
ings of the system and the practical opin
ions and ideas revealed make the volume
an invaluable addition to the library of
bankers, business executives and students
of American banking.

Interpretations of Federal
Reserve Policy
The outstanding speeches and writings
of Benjamin Strong, first governor of the
Federal Reserve Bank of New York, have
at last been made available in a volume
titled “ The Interpretations of Federal
Reserve Policy,” and published by Harper
& Brothers. The book is edited by W.
Randolph Burgess, deputy governor of
the Federal Reserve Bank of New York.
The text, in Mr. Strong’s own words,
presents an illuminating account of the
establishment and operation of the Fed
eral Reserve System from its organization
in the autumn of 1914 until his death on
October 16, 1928. The editor has selected
those documents which best perform the
service of recording the important policies
and decisions of the man who played a

OUR
WILL

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Self-Starters
So many persons function like engines
on cold mornings they have to be warmed
up before they will run. The low boiling
point man is a self-starter. He doesn’t
need inspirational talks and preachments
and proddings from others. He gener
ates his own enthusiasm and is off to a.
flying start that leaves his colleagues or
competitors far behind.— Credit Monthly.

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Northwestern Banker Decem ber 1930

The Royal Union Life Insur
ance Company offers a full and
complete line of policies to an
swer every agency need:
Age limits 0 to 60.
Wom en accepted on equal
basis with men.
Non-medical privileges.
Rapid plan inspection serv
ice.
Juvenile policies with pre
mium payor insurance added.
Group life insurance.
If you are not now under con
tract and are looking for a
profitable agency connection it
would pay you to investigate
our proposition.
Royal Union Life Building
Comer Seventh and Grand Avenue
Ves Moines, loiva

Northwestern Banker Decem ber 1930

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Federal Reserve Bank of St. Louis

Insurance

Forgery Bonds and How They A re
F
Written

ORGERY insurance as a separate field
is a comparatively recent development
as far as the United States is con
cerned. It has existed for a number of
years as a phase of the dishonesty cover
age afforded hv Fidelity and Surety Bonds
but only within the past decade has it
achieved prominence on its own merits.
Naturally the field for this particular line
is to a great extent undeveloped. The
majority of banking institutions carry
some form of forgery protection and some
individuals, partnerships, and corpora
tions have also seen the wisdom of pro
tection against losses of this nature. By
far the greater majority of such institu
tions, however, either have no protection
whatsoever or their needs are inadequately
covered.

any party thereto, can be acquired through
or under such signature, unless the party
against whom it is sought to enforce
such right is precluded from setting up
the forgery or want of authority.”
By C. C. V A R N E Y
The effect of this statute is to make the
A ttorney and Superintendent, Fidelity
party cashing a forged instrument sustain
and Surety Division, Aetna Casualty
the loss which accrues from the forgery
and Surety Com pany
unless the purported maker is estopped to
set up the forgery. This is true whether
is a potential opportunity to the forger the party accepting the forged instrument
and it must be remembered that Jimmie, is an individual, partnership, corporation,
the Penman, is no respecter of persons. or hank. About the only time when the
The check for a small amount offers him doctrine of estoppel would operate to pre
just as great an opportunity as the one clude the purported maker from alleging
the forgery would be when he had knowl
edge that it had been or was about to be
perpetrated and had failed to give the
cashing party notice to stop payment on
A Serious Situation
the instrument. Unfortunately, a forger
does not ordinarily advise the party whose
HEN one considers the fact that
name he proposes to forge before perpe
forgery losses for the year 1929 were
trating the act so that the instances of
variously estimated at from $65,000,000 to
estoppel are rare indeed.
$200,000,000, one can readily appreciate
The following forms of forgery bonds
the seriousness of the situation as it now
are issued by the leading American com
exists. It is, of course, impossible to as
panies :
certain the exact amount of such losses
Depositors’ Forgery Bond; Commer
but probably $125,000,000 per year is a
cial Forgery Bond; Combination Forgery
reasonably accurate figure. Certainly not
Bond; Bankers’ Blanket Forgery Bond;
more than 15 per cent of such losses are
Bankers’ Limited Forgery Bond; Supple
covered by proper and adequate insur
mentary to Form 8 Forgery Bond; Se
ance. If a situation of like nature ob
curities Bond No. 1 and Securities Bond
tained in connection with other lines of
No. 2.
insurance, the agent would feel that he
The Depositors’ Forgery Bond is de
had been extremely negligent in the per
signed
to protect the assured from losses
formance of his duty to his clients. Nat
which may be sustained through forgeries
urally he would bend every effort to an
or alterations upon the assured’s own
alyze and correct existing conditions.
C. C. VARNEY
paper. It is true that in almost every in
Many agents who take a personal interest
in proper insurance protection for their which is drawn for five figures, and no stance where the opportunity for altera
clients have attempted such an analysis in mechanical protection has ever been de tion was not afforded by the negligence
connection with forgery bonds with vary vised which is proof against his skill. of the maker of the check, the party who
cashes such an instrument is legally liable.
ing degrees of success. Others have felt
Adequate insurance alone can provide
It is equally true, however, that the bur
that, with the possible exception of bank safety.
den of proof of such legal liability is upon
forgery insurance, the subject was not of
The Legal Liability
the party alleging the alteration—in most
such importance as to warrant careful
EFORE outlining the forms of forgery instances, the depositor, and he will sus
study. The result is that they have missed
protection now offered by the members tain large litigation expenses in producing
an opportunity to obtain a very consider
of the Surety Association, and the field such proof if the bank refuses to recog
able volume of profitable business. In
for the various types of coverage, it is nize his claim and requires him to sub
many instances the failure to provide this
desirable to review briefly the legal liabil stantiate it by suit. The same situation
protection to a client who stood in need
ity attaching to the various parties to a will usually arise where a forgery of the
thereof has resulted in the loss of other
negotiable instrument. That liability is name of some party to the instrument is
lilies.
clearly set forth by Section 42 of the Uni so cleverly done as to admit of dispute.
The opportunity for forgery business form Negotiable Instruments Act, which The bond protects both the depositor and
throughout the middle west should be al reads as follows:
his bank and the purchase of this coverage
most unlimited. The enormous sales and
“ Where a signature is forged or made will go a long way toward the elimination
purchases of agricultural, industrial and without authority of the person whose of all disputes between the depositor and
mining products, together with the equip signature it purports to be, it is wholly his bank as well as avoiding litigation ex
ment necessary for these pursuits all in inoperative, and no right to retain the penses, bad business relations and the
volve the use of negotiable instruments. instrument, or to give a discharge there possibility of withdrawal of credit. Sec
Each such instrument issued or accepted for, or to enforce payment thei’eof against tion A of the Combination Forgery Bond

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Federal Reserve Bank of St. Louis

Northwestern Banker December 1930

58
a note, which is in no sense the payment
thereof, and for which there is no coverage
under this particular form.
Extends Coverage
Bankers’ Limited Forgery coverage em
HE Commercial Forgery Bond gives braces payment of withdrawal orders,
the same protection as the Depositors’ receipts on savings, thrift, interest, special
form and also extends the coverage to ininterest or similar accounts, certificates of
coming checks. It is limited, however, to deposit, certified checks, and the bank’s
75 per cent of the amount of any check own paper drawn upon itself or any de
accepted in exchange for merchandise, pository, which shall be forged.
property sold or delivered, and/or serv
The Forgery Bond Supplementary to
ices rendered excluding “ no account or Form 8 Revised is of particular value to
those banks carrying a Form 8 Bond be
insufficient funds checks.”
The Combination Forgery Bond is sim cause it includes those coverages given in
ilar to the Commercial form but extends the Bankers’ Blanket and Bankers’ Lim
the coverage on incoming checks to 100 ited Forgery Bonds, which were not in
per cent of the actual loss sustained by cluded in the Form 8 in its most recent
the assured. In view of the broader cov revision. Where formerly it was neces
erage afforded by this particular form, it sary to purchase the Form 8 Bond plus
is necessary to exercise care in the selec both the Bankers’ Blanket and Bankers’
tion of prospects. The field for Deposi Limited Forgery Bonds, the same cover
tors’, Commercial and Combination Forg age is now obtained in the Form 8 Bond
ery Bonds is limited only by the number and the Supplemental Forgery Bond.
The Securities Bond No. 1 includes in
of people who issue and accept checks.
The Bankers’ Blanket Forgery Bond the protection granted the purchasing,
protects the bank against losses through selling, registering, transfering, counter
the forgery of the name of one of its signing, validating, issuing, guaranteeing,
depositors on any check or draft cashed witnessing, paying, or purchasing for re
by the bank and also protects it against demption, retirement, or cancellation of
the forgery of the name of any party to the various securities as defined in the
an instrument actually drawn by its de bond. The assured may purchase the en
positor. It includes coverage for the pay tire coverage or may limit itself to those
ment of promissory notes but this must not sections which most particularly fit its
be confused with the discounting of such oAvn needs. Tt is under insuring clause

affords this same protection at the same
nominal premium.

To H
G

elp

gents

R esults

O LIFE underwriter can afford to be
baffled by his prospect’s questions or
objections when closing a sale, nor can one
become successful in a chosen field without
fundamental training — and surely, no one
l<nows so much that he cannot learn more.
It is the aim of Northwestern National to
facilitate the work of its representatives, old
and new, through its new educational course,
' The Doorway to Life Underwriting.” The
course is composed of a series of five com
pact booklets dealing with different phases
of the life insurance business.
Its purpose
is twofold; to help the new agent get im
mediate results from his work in the field; and
to give the experienced man a review of the
fundamentals of life underwriting so that he
may benefit from them.

N o r t h w e s t e r n N a t io n a l
LIFE INSURANCE COMPANY
O .J . A R N O L D ,

President

S T R O N G -* MïnneanoHs.MInP - L I B E R A L

Northwestern Banker Decem ber 1930

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Federal Reserve Bank of St. Louis

A subsection M of this form alone that
coverage for discounting of promissory
notes may be obtained.
Securities Bond No. 2 is devised to pro
tect the assured against loss which it
might sustain through the handling of
forged or counterfeit stock of its own
issue. It is of value to those corporations
which handle their own stock.
The average commercial bank doing
business in a large city, where it is not
limited to business intercourse with its
own depositors, should carry a Form 8
Blanket Bond, a Forgery Bond Supple
mentary to the Form 8 Bond and such
insuring clauses of Securities Bond Stand
ard Form No. 1 Revised as may fit the
needs of the particular institution. That
question is one which can best be decided
by the bank with the advice of its insur
ance broker. Commercial banks located
in small towns whose business is neces
sarily limited to the circle of their own
depositors do not require the protection
afforded by the Form 8 Bond and can
obtain all forgery coverage necessary un
der the Bankers’ Blanket Forgery Bond
and the Bankers’ Limited Forgery Bond.
The two bonds rather than the Bankers’
Blanket Forgery with Rider No. 1 (which
gives the limited coverage) attached are
recommended because the cost is very little
higher and a loss which would be covered
under one o f these bonds does not reduce
the amount of the other whereas a loss
falling under the rider would reduce not
only the amount of the rider but also the
amount of the Bankers’ Blanket Forgery
bond itself.
Under the Bankers’ Limited Forgery
Bond, savings banks and building and
loan associations ordinarily receive pro
tection which more nearly fits the par
ticular type of business in which they
engage.

The Peak Estate
The value of the estate of George B.
Peak, founder and president of the Cen
tral Life of Iowa, who died in August,
1923, was set at $841,632.66 in probate
papers filed in district court in Des
Moines.
The report shows that the total inherit
ance tax paid on the estate amounted to
$37,876.94. The value of the gross estate
was originally placed by the United States
internal revenue department at $1,444,065.10. Deductions, however, were al
lowed in the amount of $564,353.44. In
come tax deduction for the years 1922 and
1923 were also made.
Heirs to the estate are the widow, Alice
H. Peak, a daughter, Vesta Peak Denny,
and a son, George A. Peak.

Hard-Boiled Soothsayers
“ Do you know a reliable fortune teller?”
“ Well, Dun and Bradstreet are rather
good.”

59
Lee D ou gh erty O ptim istic O ver
Business Future
HERE is no reason for anything but
an optimistic view of the future, de
spite the widespread talk of depres
sion, declared L. J. Dougherty, president
of the Guaranty Life Insurance Company
of Davenport, in a recent address at Bur
lington, Iowa, before a large group of
Burlington business men.
“ I believe the worst is over,” said Mr.
Dougherty. “ That with plenty of work,
plenty of confidence, we can go forward
with the assurance that the horizon above
us reflects peace and plenty. A gathering
such as you have here is bound to establish
closer ties of friendship and increase your
deposits in the bank of confidence and
good will. The trouble with most of us is
that we have forgotten how to work and
we have learned to grumble and complain.

Casualty
Insurance?

Yes!
Surety Bonds? '

Certainly!
Service?

Absolutely!
L. J. D OUGH ERTY
W e must begin to learn that character is
made from the scars o f experience. No
means have been devised whereby a human
being can liquidate a debt without paying
for it. This is a period when we should
realize Ave should pay something for the
space Ave occupy and it is nice to see an
organization like the Lions and other sim
ilar groups, meeting for the purpose o f
asking the citizens in general to take an
optimistic vieAV o f the future. This is the
time above all times AAThen Ave should lia\re
greater faith in our institutions and our
conditions and our country.

Write to

Federal Surety Company

No Time for Super Critic

I DO NOT believe this is any time for

Home Office, Davenport, Iowa

I the business man to be too critical.
January and February Avill see the good,
Avell managed, liAre institutions greater

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Federal Reserve Bank of St. Louis

Northwestern Banker Decem ber 1930

60
and bigger than ever before, while the
merchant and the business man who has
been standing still or falling behind, will
drop by the wayside. Do not have weak
knees now. What you need is a good,
strong heart to go ahead.
Should Spend Now

ERCHANTS in many instances are
complaining of people not buying.
In certain localities this lack of trading
has been construed as a buyers’ strike.
But right here I want to say there is no
reason for this let-up in business. Our
banks are overflowing with money. What
we need now is not money in storage, but
money in circulation. We should all have
due regard for thrift and economy, but
there are extremes in this respect, as well
as extremes in spending and both are
equally injurious to our economic system.
Just at this time those of us who have the
money should make it a point to spend
just a little more in order to help those out
of employment and in distress.”

Robbers Captured

PROFIT FROM THESE CONTACTS
n every American city there
are selected groups of families
who are foremost in its social,
commercial and civic life. The importance of cultivating this rich
market cannot be overstressed. • There is no better method of
approach to these prospects than by developing A. B. A. Cheque
sales. They must come to the bank to buy their cheques and
you reach them at a time when bank facilities are most needed.
They must arrange to have their affairs attended to during
their absence. They will be interested in trust services, securities
management, silver storage, safe deposit. • And this contact with your customers is maintained even

Cheque you sell them appears the bank’s name
—an important and exclusive A. B. A. feature.

CHEQUES
CERTIFIED

OFFICIAL

TRAVEL

CHEQUE

AM ERICAN

Northwestern Banker December 1930

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Federal Reserve Bank of St. Louis

BANKERS

Forgery Losses
William B. Joyce, chairman of the Na
tional Surety Company, says that because
of temporarily depressed business condi
tions forgeries in the United States
amount now to $150,000,000 every year.
The National Surety Company has paid
many thousands forgery losses since Jan
uary last. They are fast increasing. Two
weeks ago in New York $300,000 was
fraudulently obtained through forgeries.

Crime Statistics

while they are away, for on every A. B. A.

AB A

Two men whose criminal activities have
caused insurance companies losses esti
mated at $30,000 from April, when they
got out of the Iowa penitentiary, until
their capture September 22nd, have been
sentenced to forty years in prison in Ne
braska. They are Joseph B. Fisher and
John S. Giles, who admitted they held up
and robbed the Genoa, Nebraska, State
Bank of $6,500 in June. They confessed
to more than twenty-five robberies, mostly
banks and stores, while they were at lib
erty.

ASSOCIATION

Crime statistics compiled monthly by
the bureau of investigation of the United
States Department of Justice on the num
ber of grave offenses known to the police
show that robbery, burglary, larceny and
theft go to make up the major part of the
more serious criminal activities.
A summary of these crime statistics by
the Travelers for a recent month reveals
information of value to every agent in the
solicitation of risks covering residence
burglary, paymaster and messenger rob
bery, office and store robbery, mercantile
safe burglary and bank and safe deposit
box burglary and robbery.

Out of a total of 47,312 grave offenses
in a recent month, 44,419 involved rob
bery, burglary, larceny and theft, includ
ing automobile thefts. The very fact that
the offenses enumerated constituted 94 per
cent of the grave offenses made known to
the police in many cities throughout the
country during a recent month is an in
dication that there is a widespread need
for all forms of burglary and robbery
insurance by persons desiring to protect
their property against the depredations of
burglars, robbers, holdup men and thieves.
Excluding the number of offenses in
volving automobile thefts from the grand
total reported for the one month, the num
ber of offenses comprising robbery, bur
glary, larceny and theft constituted 69 per
cent of all the grave offenses reported.
This means that approximately seven out
of ten of all grave offenses have to do with
attempts to obtain money and goods by
unlawful means.
A detailed analysis of the figures by the
Travelers shows further that more than 5
per cent of the total offenses have to do
with robbery, more than 20 per cent in
volve burglary, while 43 per cent have to
do with larceny and theft.

to establish the exact whereabouts of the
pipe in three or four trips down the
room.
Some shopmen are showing combina
tion sets, containing a pipe-finder, a pitchfinder, and a range-finder. But I am
somewhat inclined to doubt the salability
of these articles in combination. Any
banker can—and does—lose his pipe, but
I have attended many bankers’ conven
tions of the song-shop variety, and I never
felt that any banker ever had a pitch to
lose. As for the range-finder, it strikes
me that a range, even of the small kitchen
ette variety, would be a difficult thing
even for an absent-minded banker to lose.

Cause and Effect
A daily newspaper in Nice recently con
tained the following advertisement:
Millionaire, young, good looking, wishes
to meet, with a view to marriage, a girl
like the heroine in M------ ’s novel.
Within twenty-four hours the novel in
question was sold out.— Onlooker in the
‘‘Daily Mail.''
Wife (trying on hats) : “ Do you like
this turned down, dear?”
Husband: “ How much is it?”
“ Eleven dollars.”
“Yes, turn it down.”— Capper's Weekly.

No “ Bargains”
There are no insurance “ bargains.”
“ Cheap” insurance is not cheap; when
you buy insurance from a good old line
company, you get only what you pay for,
and when you go off the beaten path you
usually do not get very satisfactory pro
tection. An insurance bargain, in other
words, is nothing more or less than an
arithmetical illusion.
Every insurance
man when crowded into an actuarial cor
ner, will admit that insurance costs are
approximately the same for all of the
old line companies.— Magazine of Wall
Street.

Equipped and Ready
to Serve You
’Though Des Moines Life and Annuity lias
grown rapidly— has hung up new production

Snappy Christmas Gifts for
Bankers

records year after year— it has never lost its
personal

(Continued from page 15)
Book balancers, vault unlockers, and
errorfinders galore furnish an excellent
store of holiday gifts from which the dis
criminating donor may choose a welcome
remembrance for his friend, the banker.
Most useful of all, to my mind, is the pipe
tinder.. This sensitive instrument, some
what resembling a water-witch in its gen
eral conformation, is designed to indicate
the noxious-vapor content of the atmo
sphere. The banker who has misplaced
his pipe has only to travel back and forth
across his banking-room with this sensi
tive mechanism in his hand. As he ap
proaches the secret hiding-place of his lost
pipe, the indicator on the instrument
rises toward the 100-mark. I f he passes
the point where his pipe is lying, the in
dicator drops, and it is a simple matter

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Federal Reserve Bank of St. Louis

interest

the

individual

agent.

That’ s one of the reasons why “ Co-operator”
contracts are so highly profitable to the agents
who hold them.
The Des Moines Life agent in your community
is equipped and ready to serve your patrons
intelligently and completely.

DES

M O IN ES

LIFE

& A N N U IT Y

J. J. S H A M B A U G H , President
DES M O IN ES, IO W A

Northwestern Banker Decem ber 1930

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, ag 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.
Cashier of country bank would like to
make connection with city bank as assist
ant cashier. Can furnish A -l references.
Moderate salary expected. Married and
steady. Address No. 3149, care North
western Banker.— 10-TF.

Wanted—Position as Assistant Cashier
or Teller in country or city bank. Ten
years banking and receivership experi
ence. Married, age 30. Available on
thirty days’ notice. Best reference. Ad
dress No. 3148, care Northwestern
Banker.— 10-TF.

Sister’ s Bob?
Visitor (speaking of little boy) : He
has his mother’s eyes.
Mother: And his father’s mouth.
Child: And his brother’s trousers.

For Sale—A Mosler screw door, triple
lock safe, in good condition. For sale on
account of consolidation of two banks.
Address No. 3147, care Northwestern
Banker.— 10-TF.
Position wanted— In good bank or cor
poration where there is good opportunity.
Fifteen years experience, ten as cashier.
Can make small investment if necessary.
References will be furnished. Age 39,
married, Protestant. Address No. 3150,
care Northwestern Banker.— 10-TF.
Enjoy Omaha Hospitality
at

T h e Fo n t e n e l l e
Omaha’s Finest H otel
H E Fontenelle !s the Social
and C iv ic Rendezvous, the
H ub of Business and Pleasure
Travel and the C e n te r of Things
G o in g O n in O m ah a.

N oted Dance Bands Play
Noon and N igh tly in
the M ain Restaurant.

350 Rooms

$3 to $5 350 Baths
"Omaha’s
Welcome to the
World"

A cco u n ta n ts
Oldest firm in Des Moines
Call us for certified work
MUEHLE, REAM & McCLAIN
U 0S C o m m o n w e a lt h B u ild in g

Steel and Copper Engraved
S T A T I O N E R Y , B U S IN E S S
ANNOUNCEM ENTS AN D CARDS

F o r q u a lit y w o r k a d d re ss
W a l l a c e - H o m e s t e a d C o ., D e s M o i n e s

Northwestern Banker Decem ber 1930

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Federal Reserve Bank of St. Louis

Wanted—Broker or small Investment
Banker in Iowa to underwrite or assist in
underwriting a $500,000.00 First Mort
gage Gold Note Hydro-Electric security.
Address No. 3151, care Northwestern
Banker.— 10-TF.
Wanted— Position as cashier in good
country bank. Twelve years experience
with all phases of banking, including
farm loans and insurance. Age 32. Mar
ried. Protestant. Best references. Address
No. 3152, care Northwestern Banker.—
11-TF.

Bond Salesman, over eight year’s ex
perience, at present employed, desires
position with Bank or Bond House in East
ern Iowa.
Has established clientele
throughout Iowa. Can analyze securities
and fully competent to manage or start
bond department of bank. Reasonable
salary to start, with increased opportunity
for advancement. Excellent references.
Address No. 3156, care Northwestern
Banker.— 12-TF.
For Sale— Motor Return Carriage Bur
roughs Posting Machine in good condition,
No. 804000. Write Union Bank & Trust
Co., Strawberry Point, Iowa.— 12-1.
Young lady desires position as stenog
rapher, posting machine operator or teller
in Iowa bank. Age twenty-one. High
school and Commercial College graduate.
Protestant. Two and one-half years’ ex
perience. Employed at present. Thirty
days’ notice required. Excellent refer
ences as to business ability and character.
Address No. 3155, care Northwestern
Banker.— 12-TF.
Wanted—Position as cashier or execu
tive officer in a sound Iowa bank. Can
make a substantial investment if condi
tions are satisfactory. Thirteen years
successful executive experience. Good
references.
Address No. 3154, care
Northwestern Banker.—-12-1.

And The Banker
r e d

had

th a t
o n ly

e i l e r s

acre

fie ld

w a s e a r n in g h im
$ 1 0 0 .0 0 p e r y e a r

b e c a u s e it w a s t o o w e t
fo r a n y th in g b u t p o o r
p a stu re.
a to ta l

H e t il e d it a t
c o s t o f $ 4 7 5 .0 0 .

The next year that field
produced 70 bushels of
corn to the acre which sold
at 70 cents for a total of
$980.00. Thus the first
year’s crop repaid the total
cost of tiling and left in his
bank account five times as
many dollars as the field
had ever earned him before
in one year.
Since then Mr. Eilers’ in
come from that field has
varied some what with the
crop planted and the mar
ket prices, but always it has
been several times as much
as before the field was tiled.
Tile drainage will in
crease the income of your
customers who have wet
fields or spots on their
farms. Thus it will increase
the funds handled through
your bank, and so the
profits you earn.
Thorough tile drainage
will go far in solving the
farm problem of your trade
territory.

MASON CITY BRICK
and TILE COMPANY
Denison Building
MASON CITY,
IOWA

South Dakota
Bank News
Officers South Dakota Bankers
Association

A. B. CABALAN
President

A. B. Cahalan
President... ..........
Miller
Vice President-........ ... J. W. Bryant
Mitchell
Secretary...............George A. Starring
Huron
Treasurer....................Don W. DeVey GEORGE H. STARRING
Westport
Secretary

Closed Bank Pays Dividend
A dividend of 10 per cent has been paid
to creditors of the closed Wakonda, South
Dakota, State Bank, increasing dividends
paid since suspension to 20 per cent.

Four Banks Pay Depositors
The South Dakota state banking de
partment has announced payment of divi
dends to creditors of four closed hanks.
They are:
James Valley Bank, Huron, a third
dividend of 7 per cent, increasing divi
dends paid to 25 per cent.
Iroquois State Bank, Iroquois, a third
dividend of 10 per cent, increasing divi
dends paid to 45 per cent.
Citizens State Bank, Henry, a second
dividend of 10 per cent, making a total of
20 per cent paid.
State Bank of Butler, Butler, a first
dividend of 25 per cent.

Bank Examiner Resigns
A. F. Wosnuk has announced his resig
nation as receiver for South Dakota State
Banks. He has accepted a position as dis
trict manager for the Southern Minnesota
Joint Stock Land Bank, and will be in
charge of a district yet to be assigned him.
He will have his headquarters in some
eastern South Dakota town, probably
Brookings.
Mr. Wosnuk has been with the state
banking department for the past 14 years,
and is leaving with great regret, he states.
The new position offers a considerably
larger salary and opportunities for ad
vancement and permanency which he felt
in justice to himself he should accept.
Mr. Wosnuk’s work has been taken over
by D. E. Coffey, who has had charge of
the closed state banks in Deuel county
while Mr. Wosnuk had the banks in
Brookings county. Mr. Coffey will con
tinue his residence in Brookings and will
have his headquarters in the Midland
State Bank building where Mr. Wosnuk
has been located.

Files Incorporation Papers
Several Artesian, South Dakota, citi
zens have organized to operate the Live

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Federal Reserve Bank of St. Louis

Stock State Bank of Artesian, for which
articles of incorporation were filed with
the secretary of state. The bank will have
a capital stock of $25,000. The organizers
are Ole T. Olson, R. F. Looby, W. R.
Quinn, 0. M. Hamro and O. E. Adams,
all of Artesian.

Armour Banks Merge
For the first time in the history of the
town, Armour, South Dakota, has but one
bank, as the resrdt of the merger of the
Armour State and the Citizens State
Bank. The new bank is to be known as
the Citizens’ State Bank and it occupies
the quarters of the former Armour State
Bank.
The new bank is incorporated with a
capital and surplus of $40,000.
The officers of the new bank are D. H.
Raben, president; A. B. Mather and E. E.
Dubes, vice presidents; R. McKinnon,
cashier; W. H. Palmer and Gladys CarIon, assistant cashiers, and George
Palmer, chairman of the board of direc
tors.
Bert Beaumont, ex-president of the A r
mour State Bank, has retired, disposing
of his entire banking interests.
Stockholders who bought stock in the
bank upon the merger are J. E. Booth,
George Storm, J. W. Boyes, H. H. Peter
son, Albert Hebbin and Fred Holbeck.

Group Elects Officers
The selection of officers and a board of
governors featured a meeting of the newly
organized American Institute of Banking
chapter in Sioux Falls, South Dakota, at
the chamber of commerce last month. Clif
ford Pruitt was elected president of the
chapter; Robert Armstrong, vice presi
dent, and Paul Taubert, secretary-treas
urer.
Those comprising the board of gover
nors are as follows: Robert Armstrong of
the Union Savings Bank; Ben F. Borgers,
Security National Bank & Trust Com
pany; Raymond Larson, First National
Bank & Trust Company; J. E. Loberg,
Harrisburg State Bank; Raymond Phil
lips, Corn Exchange Savings Bank; Clif
ford Pruitt, Citizens National Bank &

Trust Company; J. D. Rathman, First
National Bank of Egan; and Paul Tau
bert of the Security National Bank A
Trust Company.
Following the election of officers the
board of governors appointed the follow
ing as members of the membership com
mittee : Clifford Pruitt, Raymond Phillips,
Archie Sprague, and Ben F. Borgers. A.
N. Winter was appointed instructor for
the course of banking fundamentals to be
studied by the chapter members.
The purpose of the chapter and its
study courses is to make its members more
proficient in banking work and to enable
them to render better service to the gen
eral public, as well as to acquaint them
selves with all the principles of banking
whereby members may obtain promotions.
Chapters are branch organizations of the
American Bankers Association.

Borrowed Books
A witty book collector once remarked
that when he wished to spend an hour or
two among his favorite volumes he visited
several of his friends. Such a practice,
however, may have its perils, as one man
learned the other day. He was a professor
of psychology who had lent some text
books to a friend. When lie called to ask
for them he was hit on the head with a
telephone book and later was accused in
court of attacking the one who hit him.
As a psychologist this booklender should
have known better than to ask bluntly
for his property. Never should a bor
rowed book long overdue lead the owner
to engage in physical combat—though the
temptation be strong, as frequently it is.
For books are seldom to be obtained by
any such crude technique. Among those
who borrow them—and who doesn’t?—it
is considered bad form to request their
return in so many words. They may be
the most precious volumes in the lender’s
library, yet allusions to them as such
must be warily avoided. Once let the bor
rower suspect that he carried away from
your shelves something specially cherished
and the chances of retrieving the treasure
are reduced to nearly nothing. The right
formula is always to allude carelessly, even
disparagingly, to the book, speaking each
time—though it may be the fifteenth at
tempt— as if it were a topic never to be
discussed again. The wise lender will
mention casually, perhaps, that his nephew
read the book while in bed with measles.
When calling upon a borrower the book
owner may be fortunate enough to catch
a glimpse of his property lying on a table
or shelf. The appropriate question in this
case might be, with a nod toward the vol
ume, “ Did you like that silly story?” The
book may be “ War and Peace” or “ David
Copperfield”—no matter, this slur may
take effect, and if the book owner is lucky
the borrower will reply, “ Oh, it really
wasn’t bad—here, you’d better take it
Northwestern Banker Decem ber 1930

64
along- now, and many thanks.” But if the
book is not in sight on successive visits to
the borrower’s home it were best not
begged for directly. For the embarrassing
reply might be, “ Oh, that— why, I lent it to
my mother-in-law a month ago. I will ask
her for it.” But who does?—New York,
Sun.

Ford’s Confidence

SALMON P. CHASE,

S e c r e ta ry o f th e T rea su ry u n d er L I N C O L N

T h e Chase National Bank
o f the City of N ew York
P in e

Capital

S tre e t co rn er o f N a s s a u

$ 148,000,000.00

Surplus and Profits

213,523,927.12

Deposits (Sept. 24, 1930)

1,852,295,045.10

DIRECTORS
Albert H. Wiggin
John McHugh
Charles S. McCain
Robert L. Clarkson
Winthrop W . Aldrich
Harry M. Addinsell
Frank Altschul
Vincent Astor
Gordon Auchincloss
Earl D. Babst
Howard Bayne
Amos L. Beaty
Hugh Blair-Smith
Henry S. Bowers
E. N. Brown
Francis H. Brownell
Kenneth P. Budd
H. Donald Campbell
Henry W . Cannon
Newcomb Carlton
Walter S. Carpenter, Jr.
Malcolm G. Chace
Harold Benjamin Clark
J. S. Coffin
Howard E. Cole
Edward J. Cornish
Harvey C. Couch
Frederic R. Coudert
Clarkson Cowl

Paul D. Cravath
Bertram Cutler
Gerhard M. Dahl
Thomas M. Debevoise
Clarence Dillon
Franklin D ’Olier
Frederick H. Eeker
Halstead G. Freeman
T. M. Girdler
David M. Goodrich
E. Carleton Granbery
Edward H. R. Green
A. H. Griswold
William E. S. Griswold
Henry O. Havemeyer
Charles Hayden
James N. Hill
Arthur G. Hoffman
Ralph C. Holmes
George H. Howard
Daniel C. Jackling
Otto H. Kahn
Lewis Cass Ledyard, Jr.
James T. Lee
L. F. Loree
H. Edmund Macliold
John R. Macomber
John C. Martin
Thomas N. McCarter

Chas. G. Meyer
Albert G. Milbank
Jeremiah Milbank
George M. Moffett
George Welwood Murray
Joseph D. Oliver
Henry Ollesheimer
Eugenius H. Outerbridge
Thomas I. Parkinson
Frank L. Polk
Robert C. Pruyn
Samuel F. Pryor
Lyman Rhoades
Andrew W . Robertson
FerdinM W . Roebling, Jr.
Reeve Schley
Carl J. Sehmidlapp
Charles M. Schwab
Alfred P. Sloan, Jr.
Lloyd W . Smith
Robert C. Stanley
John C. Traphagen
Cornelius Vanderbilt
Thomas F. Vietor
George P. Whaley
F. Edson White
Henry Rogers Winthrop

Foreign and Trust Department Facilities
Northwestern Banker Decem ber 1930

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Federal Reserve Bank of St. Louis

The Ford Motor Company announces
that the $60,000,000 it is spending for new
plants and improvements in this country
and abroad is an expression of its faith in
the future of the automobile business.
This is typical of the splendid leadership
we have come to expect from the automo
bile industry. The incident demonstrates
what a sorry state of mind we must be in
when such an announcement is first page
news, partly because it involves a large
sum but principally because it does ex
press confidence in the future of the auto
mobile business. It is somewhat like an
expression of confidence would have been
in the, future of the railroads sixty years
ago. For the automobile industry is just
coming into its real greatness.
There are 35,000,000 automobiles in the
world. Of them 76 per cent are in the
United States. The world last year pro
duced 6,287,552 automobiles. Of these,
5,621,709 are produced by American auto
mobile makers and their Canadian subsidi
aries. There are 7,800,000 miles of high
way in the world, of which 3,000,000 miles
are in the United States. If those figures
do not impress one with the inevitability
of the enormous expansion of this busi
ness, our domestic situation should be im
pressive. Only within the last ten years
have we begun to comprehend the real
utility of the automobile, and only within
the last three or four years have we made
the progress toward capitalizing that util
ity that the opportunity suggests.
The automobile has ceased to be a lux
ury and is almost an indispensable utility.
Workmen must have them to go to their
jobs and children must use them to get to
school. The two-car family market lias
barely been touched. More than this,
transportation is going on to the highway
faster than we can build highways and at
a rate that constitutes a national menace
to railroads and waterways. And the
practicability, the permanence, and (lie
expansive potentialities of this highway
traffic is best indicated by the fact that
railroads individually and by association
are planning to protect themselves by go
ing into the highway transportation busi
ness on a large scale.
If we cannot have a complete and abid
ing faith in the future of the automobile
industry, where can we put our faith in
the business future ?— From Chicago Journal of Commerce.

Moody’s Investors Service
Moody’s Investors Service for the fiscal
year ended September 30, 1930, reports
net income of $371,973 after all charges
and taxes, against $495,434 in 1929. Net
income for 1930 was equal to $6.20 a share
earned on the outstanding 60,000 shares
of participating preference $3 cumulative
dividend stock. In 1928 the balance avail
able for dividends was $338,691, the past
fiscal year, therefore, being more favor
able than 1928.

A Forgotten Proposal
It was a little over a year ago that the
heads of the great life insurance com
panies in the city gathered under the
leadership of the state superintendent of
insurance to discuss the wisdom of
amending the State law to permit them
to purchase common stocks. Following
the meeting, which took place while pan
icky conditions prevailed on the stock
market, a statement was issued indicating
that the insurance executives favored
serious consideration of this proposal, in
view of the “ low prices” to which stocks
had fallen at the time.
Since then, prices have fallen consider
ably lower, and many issues are selling
very far below the bottom levels of the
panic. Nevertheless, nothing has been
heard of the proposal through an entire
session of the state legislature, and there
is good reason to believe that it has been
consigned to limbo.
It might be argued, of course, that the
entire thing was merely a gesture to re
store confidence at a time when a selling
stampede had developed in the security
markets which bade fair to get entirely
out of hand. From this point of view,
the meeting of the insurance executives
would be construed as merely a little piece
of innocuous deception which, under the
circumstances, could do no mischief.
On the other hand, if there was any
serious intent to support insurance in
vestment in common stocks, the experi
ence of the past year furnishes an ex
cellent object lesson. All securities are
subject to some decline in market price,
but common stocks show especially wide
variations. Past experience shows that
a carefully selected list of common stocks
may, over a period of time, show rela
tively high returns. But it is also evi
dent that a substantial “ time hazard”
exists, in that purchases at times of high
prices may result in very large losses
in the value of the principal of the in
vestment during the subsequent deflation
period.
One argument often advanced for fav
oring* institutional investment in common
stocks is that the leading American en
terprises have now come of age in a finan

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Federal Reserve Bank of St. Louis

cial sense, having established earning
power, and large cash resources to pro
tect them in times of depression. But it
must be remembered that the innate
strength of the enterprise does not con
stitute protection against enormous
losses through depreciation of securities
in the market. The strongest issues were
among those that were whirled up fast
est during the inflation period that cul
minated last fall, and buyers o f such
securities were thus in danger of suffering
very heavy losses.
While individual enterprises have
greatly strengthened themselves finan
cially, stock markets continue to show as
great or greater lack of stability as ever.
Serious consideration of the proposal to
permit life insurance companies to buy
common stocks should thus wait upon the
inauguration of a period of greater price
stability on our stock exchanges.— From
New Y ork Journal o f Commerce.

Absorbs Farmiiigdale Bank
Announcement that the First National
Bank of Rapid City, South Dakota, had
taken over the business of the First State
Bank of Farmingdale was made at the
bank recently. The deposits, and deposit
liabilities, totaling in the neighborhood
of $35,000, are taken over hv the bank
in Rapid City and the business will be
conducted there.
Adolph Mallmann was president and
Emma M. Kluthe cashier of the Farmingdale bank.

Taking the Chance
Father: Didn’t I tell you not to let me
catch you doing that again?
Little Willie: Yes, sir.
Father: Then why did you do that?
Little Willie: Because I did not think
you would catch me.

Banking Service
— b y

o t o r !

Speedy messengers in guarded auto
mobiles save time for you on collec
tions and all banking transactions
with Sioux City firms— one part of
the efficient service of the Live Stock
National Bank.
Through our motorized facilities,
we offer Sioux City depositors and
customers of correspondent banks an
experienced, reliable banking service
at the Sioux City stock yards and any
point within the city limits.
Use this dependable short cut for
all your Sioux City transactions.

L iv e S t o c k Na t io n a l B a n k
SIO U X

C IT Y .

A ffiliated

IO W A

with

N O R T H W E S T BANCORPORATION

Affiliated With Northwest Bancorporation
C O M B IN E D

RESOURCES

OVER

$ 4 8 5 ,0 0 0 ,0 0 0 0

Northwestern Banker Decem ber 1930

66
NEW OFFICERS
President— J. G. Lowe, president Farm
ers State Bank, Kearney.
Chairman— E. N. VanHorne, president
Continental National Bank, Lincoln.
Treasurer-—- Denman Kountze, v i c e
president First National Bank, Omaha.
Secretary— Wm. B. Hughes, 420 Farnam
Building, Omaha.

Nebraska
Bank News
Officers Nebraska Bankers
Association
President..............................J. C. Lowe
Kearney
Chairman, Executive C ou n cil....
................................E. N. Van Horne
Lincoln
Treasurer .............. Denman Kountze
Secretary..................... W m. B. Hughes
Omaha

W M. B. HUGHES
Secretary

Practical Problems A re Discussed
at Omaha
HE thirty-third convention of the Ne
braska Bankers Association, which
was held in the Hotel Fontenelle,
Omaha, Nebraska, last month produced
one of the most interesting and satisfac
tory programs in the association’s history.
The convention was attended by approxi
mately 800 bankers and 360 ladies.
The service charge, which has been the
subject of discussion in practically every
meeting of bankers within Nebraska for a
considerable period of time, was one of the
outstanding features of the convention.
Not only did the speakers outline why and
how a schedule of service charges should
be inaugurated in each bank, but the bank
ers themselves in the open meeting fol
lowing the speeches, showed a keen inter
est in this important question.
On the afternoon of the first day W. E.
Devlin, president of Devlin and Bennett,
Chicago, started the program of addresses
with the subject “Know Your Costs—
Then Sell Your Service at a Profit.”
“ The sale of all of the services of a bank
should be on the same basis as that of a
manufacturing company,” said Mr. Dev
lin. “A profit must be made on all of the
services sold. These consist of checking
account service, savings account service,
trust service, safe deposit service, etc.
“ If a bank is going to sell all its services
at a profit, it must know what it costs to
produce them. How much it costs to pro
duce the checking account services. The
cost to make a loan. What the net and
gross income from earning assets are.
The amount of the operating expenses of
the various departments of the bank. The
cost of handling a transit item. All this
information and much more is absolutely
necessary. Then the proper selling prices
can be established on the various services
rendered.

based upon costs, plus a fair profit. Profit
is the first law of good business. Other
things shoidd be taken into consideration
in fixing the final prices. Competition
must be considered. Also, the value of the
service to the customer.”
W. L. Brooks, president of the Northern
National Bank, Bemidji, followed Mr.
Devlin with an address on “ Float
Charges.”
Mr. Brooks brought out the fact that
his bank with a capitalization of $50,000
is earning $8,000 each year in net profits.
He stated that this would be impossible if
it were not for the complete system of
service charges he has installed in his in
stitution.
He also stated in his address that com
plete cooperation on the part of all banks
in a town or community is necessary if the
float charge is to be profitable; that if
there had been proper clearing house co
operation in the past Ave would not have
group banking.
“ It really is the duty,” he said, “ o f the
large banks to teach their correspondent
banks the value o f the float charge. It is
safe to say that after a float charge has
been in operation for thirty days that you
will not Avant to eliminate it.”

Walter W. Head, president of the Fore
man-State National Bank, addressed the
Friday morning session on the subject
“ Backward We Look that Forward We
May See.”
“ Those who vieAV Nebraska from afar
speak o f this state as the bright spot on
the economic m ap,” W alter W . Head told
the bankers. “ Collectively, Nebraska has
Touched bottom’ and is noAV on the u p
grade and marching forward.”

He called upon the bankers to face the
future AAuth its neAV conditions and new
FTER the bank has knowledge of its problems, Avith the same courage that Avas
costs, it is then prepared to fix the shoAvn by the pioneer bankers of the state
in their day.
proper selling prices and these should be
Profit First Law

Northwestern Banker Decem ber 1930

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Federal Reserve Bank of St. Louis

NEW MEMBERS OF THE EXECUTIVE
COUNCIL
W. Dale Clark, president Omaha Na
tional Bank. Representing Omaha.
E. N. VanHorne, president Continental
National Bank, Lincoln. Representing
Lincoln.
Dale S. Boyles, cashier Farmers and
Merchants State Bank, McCook. At large.
Thos. D. Griffin, president Security
State Bank, Superior. At large.
Carl D. Ganz, cashier Farmers & Mer
chants Bank, Alvo. At large.
Chas. Finegan, cashier Bank of Hyannis.
Representing Group Seven. At large.

The Pioneer Attitude

OULD Joseph H. Millard, Ezra Mil
lard, Augustus Kountze or Herman
Kountze have been discouraged or have
contemplated the possibility of defeat if
they Avere alive today ?” the speaker asked.

He said it was the duty of the banker in
the city and in the town to cooperate in
the building o f a greater Nebraska and
to show leadership in doing Avhatever was
best for the state’s future.

O. P. Cordill, assistant cashier of the
Federal Reserve Bank of Omaha, talked
on “ Banking, a Learned Profession,” and
M. A. Kendall, vice president of the
Farmers Deposit National Bank of Pitts
burgh, Pa., on the subject, “ Why Is a
Millionaire ?”
At the last meeting of the convention,
held on Friday afternoon, the new officers
were elected. New members of the execu
tive council are W. Dale Clark, president
Omaha National Bank, representing
Omaha; E. N. Van Horne, president Con
tinental National Bank, Lincoln, repre
senting Lincoln; Dale S. Boyles, cashier
Farmers and Merchants State Bank, Mc
Cook, at large; Tlios. D. Griffin, president
Securities State Bank, Superior, at large;
Carl D. Ganz, cashier Farmers & Mer
chants Bank, Alvo, at large; Chas. Fine
gan, cashier Bank of Hyannis, represent
ing Group Seven.
The election of the officers Avas followed
by addresses by J. V. Webster, cashier
of the First National Bank of Chadron;
Dr. B. M. Anderson, Jr., Economist, Chase
National Bank, New York City, and Alex
ander Legge, chairman, Federal Farm
Board.

Bank Dividend
E. H. Henderson, trustee of the deposi
tors’ committee of the Colon State Bank,
has mailed out dividend checks for 20 per
cent. This makes 60 per cent payment.

U. S. National Promotions
Shirley S. Ford, vice president of the
Great Falls National Bank, Great Falls,
Montana, was elected vice president and
director of the United States National
Bank, Omaha, Nebraska, at a meeting of
directors of the United States National
Bank held last month. Mr. Ford who is
moving to Omaha to take up his new
duties is a brother of Lee M. Ford, presi
dent of the bank at Great Falls.
At the Omaha meeting, P. B. Hen
dricks, assistant vice president was made
vice president; V. B. Caldwell, assistant
cashier, was made assistant vice president,
and Joseph F. Kingiand was made as
sistant cashier.
The United States National announced
some official changes a short time ago by
which Gwyer H. Yates became president
and R. P. Morsman who had been presi
dent became chairman of the executive
committee of the board of directors,
W. B. T. Belt remaining chairman of the
board.

use by banks in towns the size of Aurora
and smaller.
A service charge of fifty cents for
checking accounts which averaged under
$50 is the first item of importance in the
new policy. Local bankers have found in
making a study of their checking accounts
that three-fourths of them are so small
that they entail service out of all propor
tion to the revenue derived from them,
many of them being an actual expense to
the banks.
An analysis of checking accounts has
shown that it costs more than $1 a month
to operate the average checking account,
including stationery, passbooks, supplies

and clerical help. It is to partially cover
this that the banks decided upon the serv
ice charge.
Aurora bankers believe that the new
system will be beneficial to all concerned
and do not expect it to discourage the
practice of having a checking account.
Religious, educational and civic groups
are exempt from the seiwice charge, as are
savings accounts and time certificates.
Each overdraft will be charged 25 cents.
Ten cents a hundred dollars will be
charged on drafts and cashiers’ checks.
Imprinting and numbering customers’
checks will also be charged. A number
of other charges are included in the sched-

Vote to Reorganize
A depositors’ meeting of the Bank of
Creighton was held at the city hall in
Creighton, Nebraska, to hear the report of
the committee appointed to make an ex
amination of the condition of the bank.
It reported that it found notes good
enough to be taken into a new bank,
amounting to $56,929.40; bonds, $133,122.65; banking house, furniture and fix
tures, $8,000; cash and due from banks,
$173,079.83, making a total of good assets
worth 100 cents on the dollar, $371,131.88.
A standing vote was taken to see how
many were in favor of reorganization, and
the motion was carried unanimously. In
order for the bank to be reorganized it is
necessary for 85 per cent of the depositors
to agree to the plan, which in this case is
a write down of 50 per cent of the de
posits, which would make 50 per cent
available upon the opening of the bank.

Reduce Number of Directors
The board of directors of the First Na
tional Bank of Omaha will be reduced
from 11 to 9 members. Election of W. D.
Hosford as a director of the Federal Re
serve Bank of Kansas City and the death
of E. L. Droste had reduced the board to
nine members.

Installs Service Charges
A service charge for small checking ac
counts and a scale of charges for other
services, some of which have hitherto been
given free, has been announced by the
three Aurora, Nebraska, banks. It be
came effective November 15, 1930.
The new policy is similar to that used
by city banks over the entire country for
a number of years, and is also in extensive

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Federal Reserve Bank of St. Louis

THE STOCKYARDS
NATIONAL BANK
AND
THE STOCK YARDS TRUST & SAVINGS BANK
o f

CHICAGO

Northwestern Banker Decem ber 1930

E LCO M E
T O

NEW YORK

AND

THE

H
G

o t e l

o v e r n o r

jn t o n
31 - ST
7 -A V E
OPPOSITE
PENNA. H R. STATION

A pre-eminent Hotel
of 1200 Rooms, each
having

Bath, C ir

culating Ice W ater
and many other in
novations featuring
a sincere spirit of
hospitality.

ROOM a n d BATH $3UP
Northwestern Banker Decem ber 1930

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Federal Reserve Bank of St. Louis

ule, although some of them have been in
force for some time.
The service charge for checking ac
counts has been used in several of the
other banks of Hamilton county for some
time, and has been found very satisfac
tory. Bankers say it has a tendency to
increase the amount of accounts, rather
than discourage keeping an account.

Use “ Peep-Hole”
A “ peep-hole” system of admitting cus
tomers has been adopted by the bank in
Hildreth, Nebraska, as a means of pre
venting robberies.
The bank door is
equipped with an electric locking device,
which is operated by officers on the inside.
When a known customer approaches, a
button is pushed and he gains admittance
readily. When a stranger appears he is
identified before the button releasing the
lock is pushed.

Active in Chest Campaign
Ford E. Hovey, president of the Stock
Yards National Bank of Omaha, and ac
tive in the Northwest Bancorporation, is
receiving the congratulations of Omaha
for his successful leadership in the Com
munity Chest campaign that ended No
vember 20.
With a goal of $459,685, much larger
than the charities budget of a year ago,
Mr. Hovey managed a campaign that
brought in subscriptions exceeding the
budget by $13,335. This was the first time
in the seven years of the Community Chest
in Omaha that the drive for funds has been
successfully completed on the day it was
supposed to end.
In making gifts to the chest, the largest
single subscription in Omaha Avas that of
$20,000 by the Omaha Clearing House
Association. The banks that are members
of the association have adopted the prac
tice of contributing to charities and civic
funds, not as individual banks, but
through the clearing house.
Gwyer Yates, president of the United
States National Bank, Avas head of the big
gifts committee of the chest campaign,
which had the task of soliciting subscrip
tions of $100 or more, and Avhose success
among the larger givers contributed mate
rially to the success of the campaign.
Victor B. Smith, vice president of the
Omaha National Bank, Avas chairman of
the publicity committee. Omaha bankers
generally aided in direction of the cam
paign, and in giving their time to solici
tation.
OMAHA BANKS began paying their
Christmas savings accounts ten days be
fore the end of November, advancing the
usual time of payment of this savings
group in order to aid the “ Buy Now”
campaign. One-half million dollars, in
round numbers, Avas added to the channels
of trade in Omaha from this source.
The bankers estimated that 80 per cent

of the funds accumulated in the Christmas
savings account Avili be expended in the
few Aveeks remaining until Christmas time.
Twenty per cent, according to past expe
rience, Avili form the basis of neAV savings
accounts.
The banks at the same time launched
new Christmas savings clubs. This form
of saving has proved extremely popular in
Omaha in recent years. The United States
National and the Omaha National Banks
stress Christmas savings especially. The
First National, while forming Christmas
accounts, also stresses, in the fall and Avinter, its vacation club savings, to provide
funds for summer vacation trips. The
South Side banks and the state banks also
add to their deposits by Christmas savings.
THE NEBRASKA BANKERS ASSO
CIATION has officially warned its mem
bers to be cautious in signing question
naires or supplying information over the
bank signature. It points out that a year
or so ago sixteen Nebraska banks found
that they had signed \Talid bank advertis
ing contracts for $200 apiece, Avhen they
thought they Avere giving information for
directories. “ There is no reason in the
world why such things need an official
signature, and if you withhold your official
signature you will never get in any trouble
on them,” says the association Record.
DEPOSITS IN NEBRASKA state
banks at the close of business September
6 amounted to 157 million dollars. State
Bank Commissioner Woods reported a
June 30 balance of $158,935,190.
On September 6, 596 banks reported,
compared to 602 banks in June. The Sep
tember loans Avere $105,020,545, compared
to $109,696,580 in June. The cash reserve
percentage increased from 22 per cent in
June to 24 per cent in September. The
bond reserve remained unchanged at 18
per cent.

Vote on Liability
Two measures of importance to bankers
and banking practice in Nebraska Avere
voted upon at the election November 4,
under the provisions for the initiative and
referendum. Both Avere matters calling
for constitutional amendment.
One proposal, which was carried, Avould
provide for immediate liability o f bank
stockholders after failure o f the bank. It
had been the experience o f the state in the
past that after the failure o f banks, in
spite of the double liability o f stockhold
ers, many o f them were able to convey
property to other pai’ties, or go into bank
ruptcy, or otherwise eArade the payment of
the liability.
So it Avas proposed that
upon the failure o f a bank or banking
institution, the individual liability of
stockholders fixed at double the amount
o f their stock, Avould become immediately
collectible.
This provision will void at
tempted transfers o f property to evade

69
such double liability, after the failure of
the bank.
The second measure, which was defeated
by the voters, was the proposal for an 8
million dollar fund to partly reimburse
the depositors of failed state hanks which
had been operated by the guaranty fund
commission under the provisions of the
bank guaranty act. The proposed amend
ment was submitted to the referendum as
a means “ to relieve distress and prevent
suffering and to stabilize and strengthen
the state banking system.”
There was no campaign for the latter
proposal, however, and some organized
opposition to it. The sum of 8 million
dollars is less than half the amount of
the deficit in the guaranty fund, but it was
occasionally urged that the state, by oper
ating insolvent banks at a loss, had a
moral debt to the depositors. The meas
ure, however, was decisively defeated.

Since 1889 this in
stitution has served
C h i c a g o and the
Middle W est. Its
facilities for hand
ling the business of
out-of-town banks

New Vice President
Shirley S. Ford, vice president of the
Great Falls National Bank, who has been
made vice president of the United States
National Bank, Omaha, will take up his
duties December 1st. The change will
bring Mi-. Ford into a larger field. The

are complete.

THE NORTHERN
TRUST COMPANY
Northwest Corner LaSalle and Monroe Sts.
CHICAGO

SH IR LE Y S. FORD

Great Falls National, established in 1891,
is an outstanding Montana institution
capitalized at $250,000, with resources
$2,838,000. The change, however, will
make Mr. Ford an executive in a much
larger institution, the United States Na
tional Bank of Omaha having capital of
$1,100,000 a n d resources exceeding
$26,000,000. Both banks are members of
Northwest Bancorporation group.
Mr. Ford, who has been vice president
since 1913, is a brother of Lee M. Ford,
president of the Great Falls National
Bank, which was founded by their father.

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Federal Reserve Bank of St. Louis

A T Y O U R S E R V IC E
O ur p rom pt and

e ffic ie n t

m e th o d

f o r h a n d l i n g a ll O m a h a c o l l e c t i o n s
L IV E

STOCK

PROCEEDS

G R A IN

DRAFTS

L IV E S T O C K N A T IO N A L B A N K
Union Stock Yards
OM AHA
Northwestern Banker Decem ber 1930

70
Shirley S. Ford is a graduate of the
St. Paul’s school at Concord, New Hamp
shire, and of Harvard College. He has
been active in civic affairs and other ex
traneous activities and at present is vice
president of the Montana Bankers As
sociation. He has been president of the
Associated Industries of Montana and
of the Great Falls Chamber of Commerce,
and twice was president of the Montana
Hereford Breeders Association.

“ The Golden Harvest
When Nebraska received what seemed
to be an excessive rainfall early in 1930,
some were inclined to complain, but a
trip through the cornfields today brings

a much different point of view. It is
true, crops seemed late—corn did not
mature as early as in former years—yet,
you should see the quality of it now.
Great, well-filled ears of yellow corn—
the golden harvest is on.
E. J. Loutzenheiser, vice president of
the Gothenburg State Bank says, in a
recent letter:
“ Farmers in the vicinity of Gothenburg
seem to be in a prosperous condition and,
although present prices are discouraging
to some, the yield is such that they are
quite satisfied. Corn is making from
thirty to seventy bushels to the acre, and
the quality is of the very best. The low
grain market and the abundance of al

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Northwestern Banker Decem ber 1930

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Federal Reserve Bank of St. Louis

falfa and forage crops has encouraged
many to hold stock over for feeding pur
poses, with the result that reports indi
cate 90 to 100 per cent the usual number
of cattle and about the normal number of
hogs on feed. Farmers who are selling
their grain are very happy over the splen
did yield and quality o f the harvest—
which is making up (at least in part)
for the decline in price. Business is very
good with us.”

Regional Bank Officers Meet
The Southern Nebraska Regional Clear
ing House Association held a meeting at
Pawnee City with bankers of Gage county
as invited guests. Sixty-two attended
the banquet at the Exchange hotel, where
the business meeting was afterward held.
Discussions of general business conditions
and banking problems were given by E.
N. Van Horne and T. B. Strain of the
Continental National Bank, Lincoln. Sen
ator K. S. Wherry of Pawnee City, spoke
on legislative problems affecting banks.
The concluding address was given by
Fred W. Bauman, Topeka, assistant sec
retary of the Kansas Bankers’ Associa
tion, who discussed protection of banks
against robbers. An invitation to Gage
county bankers to join the association
was extended at the close of the meet
ing. Membership in this clearing house
association is now composed of bankers
of Nemaha, Johnson, Richardson and
Pawnee counties. Officers elected were
A. B. Kammerer, Burchard, president ;
Frank Dafoe, Tecumseh, vice president,
and H. C. Van Horne, Pawnee City, W.
L. Evans of Shubert, R. F. Frerichs of
Sterling and R. W. Dierks of Auburn,
members of the board of directors.

Dispose of Bank Interests
Clyde D. Ray, Otto ..A. Uhrig and
Nathan A. Rockey have sold their inter
est in the Farmers State Bank, of Hemingford, Nebraska. They have been con
nected with this bank since its organiza
tion in May, 1919, as officers and direc
tors. Mrs. Margaret Erskine and Miss
Dora Reiman, who have been with the
bank for ten and four years respectively,
have also resigned their positions.

New Directory List
The 1930-1931 edition of the “ Directory
of Directors in the City of New York,”
giving the names and business addresses
of over 43,000 directors in Greater New
York, together with the various compa
nies with which each is associated, has
just been issued. There are over 6,500
new names in this year’s edition and each
director is on the board of at least one
company capitalized at $25,000 or over.
The directory has been published contin
uously since 1898, when it appeared with
only 13,000 names.

M in n e s o ta
B an k N ew s
Officers Minnesota Bankers
Association

C. B. BROMBACH
President

President................... C. B. Brombach
Minneapolis
Vice President........... J. R. Chappell
Winona
Treasurer..................... W . L. Brooks
Bemidji
Secretary......................George Susens
Minneapolis

Bank Building Purchased
Sale of a four-story structure occupied
by the Albert Lea, Minnesota, State Bank
until it closed a year ago, was authorized
by Judge N. E. Peterson in district court.
The First Bank Stock Corporation pur
chased the building for $120,000. It will
be occupied by the Freeborn County Na
tional Bank and Trust Company, an
affiliate. Fixtures and equipment were
included in the transaction.

Vetter Re-elected
George H. Vetter, of the Klossner State
Bank, was re-elected president o f the
Nicollet County Bankers Association at
a meeting of that organization at the
Nicollet State Bank held in St. Peter,
Minnesota. J. C. Kettner, of the Courtland State Bank, was made vice president
and W E. Jenson of the Nicollet bank,
secretary-treasurer. George Susens, sec
retary of the Minnesota Bankers Associa
tion, talked on the present crime prob
lem and gave some valuable information
on how banks can guard against holdups.
He cautioned the banks to keep down the
cash on hand to the lowest possible mini
mum.

GEORGE SUSENS
Secretary

western, and George B. Norris, president
of the Metropolitan. It was declared that
all officials and employes of the merged
banks would retain places in the com
bined institution.
Minneapolis police formed an armed
cordon between the two buildings as the
work of transferring the funds and se
curities began. Traffic, including street
cars, was rerouted, and machine guns
were trained on the street from numerous
points of vantage.
The terms of the merger provide that
the banking business will be taken over
by the Northwestern National, and the
safety deposit boxes will be handled by
the Minnesota Loan and Trust Company.

Buys Bank Stock
Acquisition of a large block of stock
of the First National Bank of Plainview,
Minnesota, by E. W. Harrington, of
Winona, who lias become its president,
was announced last month.
W. H. Harrington, of Dakota, Minne
sota, father of the new president, was

reported to be associated in the purchase
of the stock.
With the stock purchase and change of
officials which already has taken place,
George H. Yermilya retires as president
of the institution which he lias headed
since 1920.
Mr. Yermilya will continue as vice
president and will be interested in the
affairs of the bank.
The Harringtons have managed a hank
at Dakota for many years and E. W. Har
rington was formerly engaged in business
for five years as a member of the Harington Motor Company of Plainview
and a director of the Peoples State Bank
of Plainview.

Resources Up 14 Millions
Total resources of the First Bank Stock
Corporation’s group of 108 banks and
trust companies increased $14,500,000
from June 30 to September 24.
This was announced in a consolidated
statement of banks in the group given
out by P. I. Leeman, vice president and
general manager. The dates cited are
the most recent calls for statements of
condition from the comptroller of cur
rency.
The statement shows total resources
of $478,793,338.20 as of September 24.
This total does not include the separate
capital investments of the holding com
pany, it was pointed out.
Deposits in banks increased $9,973,000
and now total $389,305,441.12. Loans
and discounts rose from $191,529,000 on
June 30, 1930, to $199,695,000 on Sep
tember 24. Cash accounts rose from
$92,580,144 on June 30 to $98,461,731
on September 24, an increase of approxi
mately $5,881,500.

Pays Second Dividend
A second dividend of 10 per cent, total
ing $22,27 5.40, has been declared on the
closed Citizens State Bank of Beardsley,
Minnesota, by A. J. Yeigel, state com
missioner of banks.
The bank was closed October 17, 1929.
A first dividend of 10 per cent was de
clared May 16th.

In Triple Merger
Merger of the Metropolitan National
Bank with the Northwestern National
Bank and the Minnesota Loan and Trust
Company, all of Minneapolis, was an
nounced recently.
The Metropolitan, fourth largest bank
in Minneapolis, h a d
deposits o f
$10,000,000. The combined bank will
have deposits of $98,000,000.
Announcement of the merger was made
by E. W. Decker, president of the North

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Federal Reserve Bank of St. Louis

Northwestern Banker Decem ber 1930

72
Bank bldg., fur. and fixt.
Overdrafts .......................
Other assets.....................
Cash on band due from
banks ...........................

The September 24 consolidated state
ment is as follow s:
Resources
Loans and discounts. .. .$199,695,206.07
U. S. Bonds..................... 56,873,829.03
Other bonds and securities 94,182,901.71

7,938,171.06
79,106.75
21,562,292.48

Liabilities
Capital ............................. $ 32,892,400.00
Surplus ........................... 18,705,492.06
Undivided profits ............
6,557,145.31

98,461,731.10

Total resources ..........$478,793,338.20

Total capital structure.
Reserves ...........................

58,155,037.37
5,787,387.56

Deposits ...............................

389,305,541.12

Other liabilities ..............

25,545,372.15

Total liabilities ..........$478,793,338.20

W h y Bankers Are Buying
Federal Interm ediate Credit Bank

Bank Pays
The Security State Bank, of Benson,
Minn., closed June 10, 1929, is paying
depositors at that time 10 per cent, or
$35,827.15, which is the second dividend
of 10 per cent.

In te r e s t- B e a rin g

DEBENTURES
Ex em p t fro m All T a x e s.

Advise Mergers

M a tu ritie s : 6 to 9 Months

Althoug’h the number of bank failures
is declining steadily in Minnesota, there
still are too many banks in some locali
ties, and the state government, in its
effort to strengthen the bank structure, is
refusing' charters for new banks, except
where public need is proven, and is urg
ing consolidations, A. J. Yeigel, state
commissioner of banks, said recently. He
was the speaker at a luncheon of the St.
Paul Office Men’s club at the St. Paul
Athletic club.
“ Where it is evident that too many
banks exist in a community, our depart
ment worked out plans for mergers,” Mr.
Yeigel said. “ Thirty-seven state banks
in Minnesota have been consolidated this
year and a total of 205 have been merged
since 1923. These consolidations have
been a prime factor in improving bank
conditions.”
Comparatively few banks have failed
because of dishonesty on the part of offi
cers, Mr. Yeigel said. The department of
banks has done all in its power to elimi
nate incompetent as well as dishonest
bankers, he said.

B ecau se these Debentures are issued in convenient short-term
maturities, varying from 6 to 9 months, making them exceedingly liquid.
Becau se these Debentures enjoy a very high rating as to security.
The capital of the issuing Banks is subscribed by the Treasury of the
United States. The banks operate under the supervision of the Federal
Farm Loan Board.
B ecause these Debentures yield a slightly higher return than
short-term Government securities.
B ecause these Debentures are exempt from all taxes, Federal,
State and Municipal.
Because these Debentures are obligations of the issuing bank
and under the act all 12 Federal Intermediate Credit Banks are mutually
liable for each other’s obligations.
Because they are eligible for purchase by the Federal Reserve
Banks, when not more than six months from maturity.

Charles Ro Dynn,

Fiscal A g en t

31 N a ssa u S tre e t

N ew Y o rk C ity

FEDERAL INTERMEDIATE CREDIT BANKS
S p r i n g f i e l d , M a s s . B a l t i m o r e , EVId.
N ew O rlea n s, La.
Lo u isv ille, Ky.
S t . P a u l, M inn.
O m aha, Nebr.
H o u s t o n , Toii.
B eríícS cy, C e!,

C olum bia, S. C.
S f. Lo uis, M o.
W ich ita , Kan.
S p o k an e, W ash.

MIDLAND BANK

Form Clearing House
Representatives of four banks in St.
Cloud, Minnesota, organized the St. Cloud
Clearing House Association, electing
Otto Zapp president.

LIMITED

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Head Office :
Overseas Branch:

122

Northwestern Banker Decem ber 1930

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Federal Reserve Bank of St. Louis

C. A. Fauller, of Park Rapids, Minne
sota, was elected president of the Hubhard County Bankers Association at the
annual meeting.
Walter J. Dahms, of Akeley, was
elected vice president and A. J. Waldon,
of Guthrie, was chosen secretary and
treasurer.
The association voted to take the lead
in organizing a taxpayers league in Hub
bard county and appointed J. E. Flynn, of
Park Rapids, chairman of a committee.
Other members are G. H. French, of Park
Rapids, C. R. Hewitt, of Dorset, Mr.
Dahms, A. J. Waldon, of Guthrie, and J.
Score, of LaPorte.

Declares Branch Bank Referendum Improper
A

PROPOSAL that the American
Bankers Association take a mem
bership referendum on the resolu
tion adopted by its general convention at
Cleveland October 1, reaffirming its belief
in unit banking but recognizing the eco
nomic desirability of a limited extension
of branch banking, has been rejected by
President Rome C. Stephenson on the
ground that compliance “ would not only
lie unauthorized but would be improper
as in violation” of the organic law of the
association. His stand is taken as the re
sult of a communication urging a referen
dum from J. R. Chappell of Winona,
Minnesota, as chairman of the Committee
on Unit or Independent Banking of the
Minnesota Bankers Association.
President Stephenson declares in his
reply that he is a unit banker and in sym
pathy with the maintenance of that sys
tem, but feels that “ any action toward
ascertaining and determining the policy
of the association must be in accordance
with, and not in defiance of, its estab
lished law and methods of procedure.”
He goes on to quote General Counsel
T. B. Patón of the association to the effect
that its constitution makes the general
convention the supreme authority, gives
it the power to determine matters of pol
icy and provides that the sole method for
such action by it is the vote of the dele
gates present. He also points out that
the only time a general membership refer
endum is authorized is between conven
tions “upon matters of policy and action
not inconsistent with any previous action
of the general convention” when in the
judgment of the president occasion war
rants. Mr. Chappell asks in effect, Mr.
Stephenson declares, “ that the association
through its responsible officials and with
out authority of the general convention
Avhich has just declared its policy, initiate
an inquiry of all the members whether or
not they are in accord with such policy,
and having for its purpose the discredit
ing if possible of the validity of such de
clared policy.”

banker and in sympathy Avith the main
tenance of that system o f banking, I feel
that any action toAvard ascertaining and
determining the policy o f the association
upon such an economic subject must be
in accordance with, and not in defiance of,
its established laAv and methods of pro
cedure.

“ The subject o f unit, chain and branch
banking Avas advertised Avell in advance
through announcement o f the president
mailed direct to every member as one of
three major subjects which would be de

bated and acted upon at the Cleveland
Convention and, further, all delegates had
notice through the columns of the Ameri
can Bankers Association Journal that this
important subject was to be on the pro
gram for discussion and decision. On
the convention floor, the resolution Avas in
fact debated at considerable length, prior
to the voting of the delegates.
“ The American Bankers Association
having, at its Cleveland Convention at
tended by a large representation of dele
gates from all sections and after full dis-

It is a pleasure
to take this opportunity
to wish the new friends we have made
and those whose friendships
have ripened with the years
a Very Merry Christmas
and a
Very Successful N ew Year

Writes Letter

PART of Mr. Stephenson’s letter is
as follows:
“ Your letter of October 1 addressed to
the American Bankers Association, was
received at the General Office and has
been forwarded to me as president of the
association. Your suggestion is that the
association, ‘advancing no arguments for
or against,’ mail a questionnaire to every
member, requesting an expression of their
views upon the resolution Avith respect to
unit and branch banking adopted at the
recent General Convention at Cleveland.

ROVERS

NATIONAL BANK

TRU5T# SAVINGS BANK

Union Stock Yards - Chicago, III.

“ I doubt A7ery much the propriety of
such action.
Although m yself a unit

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Federal Reserve Bank of St. Louis

Northwestern Banker Decem ber 1930

A
Clearing House
of Service
A bank, like other institutions and
organizations engaged in public
service, reflects the character of
those w hom it serves and of those
w ho serve it.
This Bank numbers among its
clientele and correspondents the
leading financial institutions here
and abroad. W h ether located in
small tow n or large city each con
tributes something of its ow n
strength and facilities to the m u
tual interest of all.
T he distinguishing features that
have made this group of banks
successful each in its ow n field
insure a high quality of service
available to all our depositors and
correspondents.
m
. . . T H E . . .

P H IL A D E L P H IA
N A T I O N A L

B A N K

ORGANIZED 1803

PHILADELPHIA, PA.
Capital and Surplus . . $ 5 0 ,0 0 0 ,0 0 0

PHILADELPHIA’S LARGEST BANK

Northwestern Banker Decem ber 1930

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Federal Reserve Bank of St. Louis

eussion, adopted a resolution on the
subject of unit and branch banking, such
policy becomes the established policy of
the association, legally and constitution
ally declared, and our organic law pro
vides no method by which such policy can
be changed other than by vote of the dele
gates at a subsequent general convention.
“ What you are asking, in effect, is that
the association, through its responsible
officials and without authority of the Gen
eral Convention which has just declared
its policy upon this subject, initiate an
inquiry of all the members whether or not
they are in accord with such policy, and
having for its purpose the discrediting
if possible of the validity of such declared
policy.
“ You will see from the foregoing state
ment of facts, therefore, that a compliance
with your request would not only be un
authorized but would be improper as in
violation of our organic law.”

Pay First Dividend
A first dividend of 10 per cent totaling
$7,246.61 has been declared by A. J.
Yeigel, state commissioner of banks, to
depositors of the closed State Bank of
Georgetown.
This bank Avas closed
February II, 1929.

Cashier Resigns
A. 0. Lea, cashier of the First National
Bank, NeAV Richland, Minnesota, since it
Avas founded in 1914, has resigned his
position due to failing health. Mr. Lea
will devote time to handling the bank’s
insurance business. He will be succeeded
by 0. O. Bottolfsen, of Otisco.

To Winter in California
F. A. Jewett, of the First National
Bank of Fergus Falls, Minnesota, accom
panied by Mrs. Jewett, has gone to Cali
fornia to spend the Avinter. Mr. Jewett
has been cashier of the First National
Bank of Fergus Falls for forty-eight
years and is the oldest cashier in point of
service in the state. The First National
Bank of Fergus Falls has been in opera
tion for fifty-eight years and is one of
the oldest national banks in the state
Avhich has continued from the beginning
unchanged.

Picks Directors
Election of three directors of the
Minneapolis Federal Reserve Bank was
announced following completion of the
balloting, which Avas carried on by mail.
John S. Owen of Eau Claire, Wis., was
reelected for a three year term; J. E.
O’Connell of Helena, Mont., Avas named
to till the remaining tAvo years of the
term of Norman B. Holier, resigned, and
H. C. Hansen of Churehs Ferry, N. II.,
Avas elected to succeed Carl J. Farup.
Directors will meet in January to elect
officers.

75
idea o f selecting a competitor in mind.
We know Ave are privileged to produce
Avheat and compete Avith land Avorth onefourth o f our land. Or Ave can feed out
our stock, produce beef, pork, mutton,
milk, butter and poultry and compete Avith
land worth four times Avhat our land is
worth. It doesn’t take much o f an econo
mist to figure out Avhich is the better play.

Joins Bancorporation

DISCUSSES N O R T H D A K O T A
L A N D P R O B LE M S
HE outlook for agriculture in the
northwest is not fundamentally bad
nor is the situation hopeless, in the
opinion of James S. Milloy, secretary of
the Greater North Dakota Association,
who spoke last month at the Tri-State
Bank conference in Minneapolis on “ Other
Real Estate.” Describing in detail the
comprehensive program for handling
“ other real estate” and excess rented land
in North Dakota, which was fostered and
promoted by the Greater North Dakota
Association, Mr. Milloy said, in part:

“ While it is true that many items repre
sented in the ‘other real estate’ column
are the result of poor loans that should
never have been made, and in no way re
flect present conditions, there is no ques
tion but that to a considerable degree the
volume of excess rented land in the north
west is aii indication of unsatisfactory
conditions in agriculture during the past
few years. However, you cannot justly
claim that agriculture in the northwest
is fundamentally bad or the outlook hope
less. We know what the northwest has
produced this year, despite the most wide
spread and prolonged drought in half a
century. We know what we are paying
in interest and taxes in a large part of the
northwest this fall—locating one of the
few white spots on the business map of
the nation. So Ave claim there is nothing
hopeless about northAvest agriculture and
deny that the loan on farm land is not as
basically sound as heretofore recognized.
It is just a shifting of conditions. North
Avest agriculture has had its bad innings.
City real estate and industrial investment
have been having a good inning. But if
current condition's in business and indus
try continue, you Avill find bankers in other
sections devoting time on their programs
in the near future to such subjects as:
‘The Loan that Became an Apartment
Building,’ or ‘The Loan that Became a
Furniture Factory.’ And you Avill prob
ably find the banks involved studying each

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Federal Reserve Bank of St. Louis

case with its many angles and proceeding
to make the best of it. You can’t lose
sight of the fact that this thing of a bank
going into farming or any other line of
outside business is just part of the bank
ing business. Some avoid the grief be
cause they are smarter or lucky and guess
right. You can write your own ticket on
responsibility or credit as the case may
lie. But the real test is to meet the grief
when it arrives and overcome it.
“ I would add in connection with meet
ing the grief involved in ‘other real es-

The First National Bank, Garrison,
N. D., the name of which Avili be changed
to the First National Bank in Garrison,
lias become a member of Northwest Bancorporation group. The bank lias $30,000
capital and surplus, deposits $160,000,
and resources $250,000. Officers are A.
A. Yonker, president; J. W. Robinson,
ATice president ; C. J. Fillers, cashier, who
with W. D. DeHaven and Archie Snyder,
are directors. The bank was established
in 1909. Garrison is in McLean county
on the Soo Line in west central North
Dakota. Addition of the Garrison bank
brings the number of North Dakota insti
tutions affiliated with Northwest Bancor
poration to 14, others being at Bismarck,
Edmore, Fargo, Grafton, Hillsboro,
Jamestown, Maddock, Mandan, Minoa,
Napoleon, StarkAveather, Valley City and
Wahpeton, and the total number of affi
liated banks trust or finance companies
to 129 Avith total resources $485,000,000.

Injured Banker Dies
Injured when a horse tripped and fell
on him five Aveeks ago, EdAvard S. Person,
president of the Union National Bank
and Trust Company, of Minot, N. D.,
died at NorthAvestern hospital in Minne
apolis. He was 58 years old. Mr. Person
Avas a native of Zumbrota, Minn. He is
survived by his widow and a daughter,
Miss Elizabeth Person. He was colonel
of the 321st cavalry of the officei-s’ re
serve.

North Dakota Banks Merge

JAM ES S. M IL L O Y
late,’ that the contribution the Greater
North Dakota Association makes by Avay
o f a suggestion to bankers in North D a
kota can be related A7ery briefly. It holds
true for the banker Avith ‘other real es
tate’ or the individual farmer. It has to
do AA7ith the question o f picking our com
petitor. The man responsible for tlie crop
ping program on our $25 or $50 land can
operate so that lie is competing Avith the
$10 and $15 land producing wheat or he
can decide to compete Avith loAva farm
land AA'orth $125 to $150. There are, no
doubt, many angles to the farm problem
but A\Te in North Dakota try to keep the

Announcement of the merger of the
First National Bank and Farmers State
Bank, of Van Hook, North Dakota, was
made by A. P. Olson, cashier of the First
National. The consolidation was effected
when the First National, under Avhose
name the combined institutions wi 11 op
erate, purchased control of the Farmers
State Bank. August Peterson, o f HarA7ey, president, and Cashier Olson will
continue in charge of the bank’s affairs.

Seventy Banks Merge
Thirty-five bank consolidations, em
bracing tAvice as many banks, have been
effected in the last 15 months to give ad
ditional strength to banking in North
Dakota, according to the annual report
and supplementary figures announced by
Gilbert Semingson, state examiner.
During the fiscal year ending June 30,
Northwestern Banker Decem ber 1930

1930, covered in the report just filed vvitli
Governor George F. Shafer, 26 consoli
dations were made. From the end of the
fiscal year to the middle of October, nine
additional bank mergers were effected.
Consolidation of banks is encouraged
by the banking division as it has the
effect of bringing about a stronger bank
ing situation, Mr. Semingston said. In
smaller communities where there is an
excess of banking facilities, efforts are
being made to combine the banks.

The Secretary of State has issued a
certificate increasing the capital stock of
the Elgin State Bank from $10,000.00 to
$15,000.00.
F. R. Oftedahl has been elected cashier
of the Security State Bank of Bowdon.
The Secretary of State has issued a
certificate increasing the capital stock of
the Farmers State Bank of Lisbon from
$20,000.00 to $25,000.00.

North Dakota News
Claus B. Graff has accepted a position
as bookkeeper and teller of the First
State Bank of Gilbv.

The Pierce County State Bank, Balta,
has increased the number of its directors
to five.

The First State Bank, Ashley, has
amended its articles of association so as
to have three members on its board of
directors.

The Farmers State Bank, Van Hook,
lias gone into voluntary liquidation and
its deposit liabilities have been assumed
by the First National Bank of Van Hook.

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Northwestern Banker Decem ber 1930

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Federal Reserve Bank of St. Louis

Foreign Investments
The magnitude of direct investments
by American corporations in foreign
countries is revealed in a bulletin on this
subject which the Commerce Department
has just released. This bulletin, embody
ing the results of a comprehensive study
recently completed by Paul D. Dickens
of the Department’s Finance and Invest
ment division, shows that approximately
seven-and-a-half billion dollars of Amer
ican capital is invested abroad in busi
ness enterprises, such as branch factories,
mines, sugar plantations, public utilities,
etc. These investments, it is pointed out,
include practically every industrial and
commercial activity in which the citizens
o f this country are engaged.
More American capital is employed in
Canada than in any other part of the
world, followed in the order named by
South America, Europe, and the West
Indies, Cuba accounting for the great
bulk of investments in the last-named
area. The distribution of American cap
ital in the regions mentioned is as fol
lows: Canada, $1,960,320,000; South
America, $1,547,895,000; Europe, $1,352,753,000; Cuba and West Indies $1,053,731,000.
Contrary to the general impression, in
vestments in branch plants does not con
stitute the largest item in the total, being
exceeded by that in public utilities which
amounts to over $1,625,000,000. This is
nearly $100,000,000 more than the invest
ment in manufacturing, it is pointed out.
Mines and smelters valued at over $1,200,000,000 and petroleum properties over
$1,115,000,000 follow in importance. The
chief public utility properties controlled
by American capital are located in Can
ada, Mexico and Central America, and
South America.
American branch plants are of the
greatest value in Europe, amounting to
over $628,000,000, according to the study'
Canada ranks second in this respect with
a total of $540,593,000. This finding, it
is pointed out, reverses the order usually
given in estimates of American invest
ments abroad.
This analysis of direct American in
vestments in foreign countries, Mr.
Dickens points out, shows the extent to
which American capital has gone abroad
to develop resources that are either not
available in the United States or not
available in sufficient quantities to satisfy
the demands of American corporations.
Among these may be mentioned the woodpulp and papfer mills in Canada, the
banana and sugar plantations in Central
America and the West Indies, rubber
production in British Malaya and the
Netherlands, East Indies, and various
metals essential in the production of
alloy steels.

All the banks in the county have agreed
to close on the following days: New
Year’s day, Washington’s birthday, Good
Friday, bankers’ group meeting*, Memor
ial clay, July 4, Labor day, vigilantes’
day, Armistice day, Thanksgiving day,
and Christmas.

10 W A
SECTION
Officers Iowa Bankers
Association

Heads County Group

President..................._.C. C. Jacobsen
Sioux City
Vice Pres..........Walter T. Robinson
Hampton
Treasurer............ ........Jos. W . Meyer
Dubuque
0 . 0. JACOBSEN
President

Secretary....................... Prank Warner
Des Moines

93 Comités Hold Meetings
Bankers and vigilantes in ninety-three
of Iowa’s ninety-nine counties have held
meetings since June 1, this year, to plan
war on bank bandits or to discuss other
bank business.
A report just issued by Frank Warner,
secretary of the association, based upon
incomplete returns, shows that 2,415
bankers and bank directors have been
present at these meetings, while 1,078
vigilantes attended. Mr. Warner said
these totals wTill be much larger when
attendance figures have been received
from all of the gatherings.
The report shows that fifty-three meet
ings were held specifically to perfect
county vigilance organizations, obtain
more guns and ammunition and provide
quicker means of sounding alarms when
bank robberies are being committed.
Pistol and rifle shoots were held in con
nection with twenty-three of the meet
ings.
Plymouth county has carried off the
attendance honors to date with 210 bank
officials and vigilantes. Woodbury is close
behind with 200, while Winnebago is
third with 180, and Monona is fourth
with 150. Boone and Ida counties regis
tered 120 and 130, respectively. Jackson had an even 100. State Chief R. W.
Nebergall met with most of the county
organizations.
Van Buren county which allowed its
vigilance committee to lapse several
years ago has just reorganized, and has
hung out the “ welcome” sign for the ban
dits, Mr. Warner said. County Chief J. S.
Stong, of Keosauqua, has notified state
headquarters that all of his men have
been sworn in and equipped, and that am
munition will be issued at once.

Deposits Over Half Billion
Deposits in Iowa state and saving
banks and trust companies September 24
aggregated $516,246,018.15, L. A. Andrew,
superintendent of banking, reported re
cently.
Their capital stock amounted to
$40,352,300, with surplus of $19,544,890.10
and undivided profits of $11,022,145.14.
The statement, representing the quarterly

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Federal Reserve Bank of St. Louis

FRANK W ARNER
Secretary

bank call, covered the records of 634 sav
ings banks, 311 state banks and 13 trust
companies.

Bank Assets Sold
Pursuant to an order of the district
court of Humboldt county the remaining
assets of the Farmers Savings Bank of
Ottosen were sold November 26, under
the direction of L. A. Andrew, receiver,
and J. P. Spalla,, examiner in charge.

Install Service Charges
The Mitchell County Bankers Associa
tion passed a resolution at a recent meet
ing, instituting a set of charges, which
will become uniformly effective through
out the county on and after January 1.
The charges follow:
Checking accounts: A charge of 50
cents a month will be made to the cus
tomer who fails to maintain a balance of
$50 or more. This will not be applied
against accounts of religious, fraternal,
educational, municipal or charitable or
ganizations.
Special form customers’ checks, im
printing customers’ cards, and indorse
ment stamps will be furnished at cost.
A charg’e of 1% per cent will be made
for clerking sales.
Ordering, collecting or converting
bonds, $1 per $1,000; minimum, 50 cents.
Collecting coupons (U. S. coupons ex
cepted), each issue, 25 cents.
Credit reports, minimum fee, 25 cents.
Collection of drafts, 10 cents per $100;
minimum, 25 cents.
Drafts (exchange), $10 or less, 5 cents;
per $100, 10 cents.
Ordering and paying taxes for custom
ers, 25 cents.
Licenses: Auto, dog, hunting, etc., in
cluding notary, 25 cents.
Service notary charge, 25 cents.
Preparing deeds, mortgages, leases,
minimum charge, $1.
Cashing out-of-town checks or drafts
for non-customers, per $100, 10 cents;
minimum, 10 cents.
Charge maker for each check returned
on account of “ insufficient funds,” 25
cents.
Minimum fee on loan, 25 cents.

H. C. Brown, cashier of the First Na
tional Bank of Merrill, Iowa, was elected
president of the Plymouth County Bank
ers’ Association to succeed C. M. Boiser,
president of the American Trust and
Savings Bank of LeMars at the annual
meeting. Other new officers are E H.
Youngstrom, cashier of the Akron Sav
ings Bank, vice president ; H. J. Harmen,
president of the First State Bank of
Brunsville, secretary, and M. O. Brown,
cashier of the Bank of Hinton, treasurer.
C. C. Jacobsen, vice president of the Se
curity National Bank of Sioux City, and
president of the Iowa Bankers Associa
tion, spoke before the meeting.

Change at Popejoy
Mr. Y. E. Rogers, of Dumont, has pur
chased the interests of F. A. Rummel in
the Bank of Popejoy and has assumed
the position as cashier. Mr. Rogers is
not new in the banking business as he has
had nine years experience in a bank at
Allison,

County Bankers Meet
The annual fall meeting of the Greene
County Bankers Association was held in
Jefferson, Iowa, last month, with Mr. R.
W. Nebergall, state chief of vigilantes, in
attendance. Following the dinner, Mr.
Nebergall reported on the work of the
state agents. The meeting was also in
the nature of a farewell to Andrew E.
Jensen, of the Rippey Savings Bank,
Rippey, Iowa, who left to assume his
new duties at the First National Bank,
at Creston, Iowa. Mr. E. B. Wilson, at
torney at Jefferson, gave a short talk
on Mr. Jensen’s activities in the county
while he lived there.
According to Howard E. Jackson, pres
ident of the county association, all of
the member banks are carrying a mini
mum of cash on hand, and this under
time lock during the day, and a number
of the banks have installed private alarm
systems to various points in their towns
to give an alarm to the vigilantes should
a holdup occur.

Assumes Cashier's Duties
Major G. B. Jensen, president of Euclid
Avenue State Bank, of Des Moines, has
announced that he will assume the posi
tion of cashier formerly held by Ann
Morrison until the annual meeting in
January and possibly longer. Miss Mor
rison, the first woman bank cashier in the
city, died recently of a heart attack.
Northwestern Banker D ecem ber 1930

78
M IN N E S O T A
for the amount of the
seller d r e w a
check.
sight draft on
“ The check was never
4
—
4
the buyer in favor of a
paid, and you still owe
Minnesota bank, at
me the amount there
tached the bill of lad
of,” the creditor con
ing’, and gave the bank
tended.
written instructions to
“ When you surren
deliver the bill of lad
dered the check to the
ing on payment of the
bank, and took a de
draft and not other
posit certificate payable
wise.
The Minnesota
to yourself or some
bank forwarded t h e
body whom you desig
draft to a Kansas bank for collection,
nated,
it
was
equivalent
to payment, and
B y THE LEGAL EDITOR
with the same instructions, but the
releases me,” the debtor maintained, and
Kansas bank, for some reason or other,
the Iowa Supreme Court ruled in his
or for no reason at all, delivered the bill
favor in 216 N. W. 15.
of lading to the buyer without collecting N. E. 53, the note contained the follow
“At the time of dealing, which was
ing clause:
the draft.
about noon, cash in the bank totaled ap
“ We also agree that in case said note proximately $3,500. Had money been de
When the buyer examined the goods
he wired the seller that they were of in is not paid at maturity, that it is at the manded on the check, it would have been
ferior quality. After some correspond option of the holder hereof to extend, forthcoming. Evidence of the balance
ence, the seller authorized the buyer to as he deems proper, the payment of the at the close of the day does not overcome
pay the draft less an allowance of $500, above note, and that said extension shall the actual facts regarding the amounts
and the buyer paid the draft on this not in any manner release one or either on hand during the previous business
of us from the payment hereof.
basis.
hours. Withdrawals took place in the
Then the Minnesota bank sued the
“ Numerous authorities are cited from afternoon. As a matter of fact, the
Kansas bank for the $500.
this and other states by counsel for ap banking establishment did not discon
“ If you had followed our instructions pellant on this question. In most of tinue operations until the third day there
the draft would have been collected in them, the note recites that the payee re after. Meanwhile, it was open for the
full,” the Minnesota bank pointed out.
serves the right of option of extension customary activities, but the certificates
“We admit that, and we are bound to at any time, either before or after ma were not presented for payment. They
pay you whatever loss you sustained, but turity, and we do not consider them in did not reappear until after said business
what is your loss?” the Kansas bank de point. The quoted words do not affect finally ceased. Under these circumstances,
manded. “ You received all that the the character of the note before or up the acceptance of the debtor’s check was
goods were worth, consequently there to its maturity, either in its certainty, not conditional,” the court said.
was no actual damage.”
amount to be paid, the date of payment
I f A gives B a check, B must present
“ There is a feeling that negotiable or the person to whom payment is to be it within a reasonable time, in order to
paper intrusted to a bank for collection made. The clause in question does not hold A, and if B fails to present it within
should be so handled that
a reasonable time, it re
its face value may be
leases A from liability to
N O T E N E G O T IA B IL IT Y
forthcoming in order that
the extent of any loss
the commercial world may
which he may have sus
"In order for a note to be negotiable, it must be payable on
not be disturbed by fail
tained by reason of the de
a fixed or determinable future date, but promissory notes often
ure to treat such paper
lay. It follows, that if the
contain a clause which allows the final payment to be extended
with the sacredness it de
bank on which the check is
without notice to the parties, the parties often contend that
serves, and it is doubtless
drawn is honoring checks
such a clause destroys the negotiability of the note, and the
true that a bank collecting
in due course, A has funds
decisions of the state courts are not uniform on this point.”
commercial paper, or a
to his credit to pay the
bank intrusted with the
check, but B does not pre
commission to handle other valuable se destroy the negotiability of the note,”
sent the check until after the bank has
curities, must use due diligence in the said the court.
failed, A is discharged from liability
performance of its duties. But it would
On the other hand, if A has insufficient
A n Iowa Certificate
be a harsh rule which would require a
funds to pay the check, lie cannot show
N IOWA debtor gave his creditor that he suffered any loss on account of the
bank in all instances to account for the
a check on an Iowa bank for over delay, as the check would have been dis
face value on all paper intrusted to it,”
$2,000—the debtor had sufficient to his
said the Kansas Supreme Court, in de
honored, even if presented half an hour
credit to meet the check and the creditor after it was signed.
ciding in favor of the Kansas bank.
presented it for payment.
These are elementary rules that every
A n Illinois Note
“ Do you want the cash, or would you bank janitor knows, but, suppose that A
I N ORDER for a note to be negotiable, prefer a. deposit certificate?” the cashier has insufficient funds, but an officer of
I it must be payable on a fixed or de queried.
the bank agrees to honor the cheek, and
“ A certificate will be just as good,” B delays presentment. Has A suffered
terminable future date, but promissory
notes often contain a clause which allows the creditor agreed, accepted a certificate any loss in this case?
the final payment to be expended without for the face of the check, the bank
These facts were presented to the Iowa
notice to the parties, the parties often marked the check “ paid,” and in due Supreme Court in a case where A gave
contend that such a clause destroys the time the cancelled check was returned B a check against insufficient funds, but
negotiability of the note, and the deci to the debtor.
an officer of the bank had agreed that the
sions of the state courts are not uniform
A few days later the bank closed its check would be paid on presentment, A
on this point.
doors, the deposit certificate was not and B resided in the same town, B held
In an Illinois decision reported in 95 paid, and the creditor sued the debtor the check for six or seven days and did

— Q U E S T IO N S
OF

B A N K IN G L A W

Northwestern Banker Decem ber 1930

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Federal Reserve Bank of St. Louis

79
not present it for payment until the hank
had failed, and the court ruled that A
was discharged from liability to the ex
tent of the funds which he had on deposit
at the time the bank failed.
“ Under the rules we have laid down,
it is our judgment, that as a matter of
law, this check was not presented within
a reasonable time. Having reached this
conclusion it follows that B was negli
gent,” the court said.

New Bank for Earlham
A new bank is being organized in Earl
ham, Iowa, which will be known as the
Earlham Savings Bank. It will be cap
italized for $25,000, with a surplus of
$12,500, and expects to open for business
January I, 1931.
Two hundred and fifty shares of stock
have been sold and the application for a
charter has been approved by the state
banking department. C. E. Deets has
been chosen president, William Acker
man, vice president, and W. Gt. Jackson,
cashier. These three officials, with Roy
Imboden and F. R. Hunter, will compose
the board of directors.
Earlham has one other bank, the Bank
of Earlham. The Citizens State Bank
closed its doors September 6, 1930. It
was the first bank failure in the entire
history of Madison county.

is paid the depositors of the Peoples Na
tional will have received exactly 55 per
cent of their deposits. The last dividend
prior to this one was ten per cent, paid
in August, 1929. Previous to that 25
and 10 per cent dividends had been paid.

The bankers completed an organization
to work with the group of vigilantes. W.
L. Crumley, of Minburn, is the president
and Bert King, of Adel, the secretary
and treasurer.

Organize to Prevent Robberies

Edwin C. Manning was elected a mem
ber of the board of directors of the Iowa
National Bank, of Ottumwa, Iowa, at a
recent meeting of the board.
Announcement of Manning’s election
was made by C. K. Blake, president of
the bank. Manning succeeds the late
C. E. McDaniels as a member of the
board.

Made Bank Director
Representatives of every bank in Dal
las county met in the court house in
Adel, Iowa, recently and organized to
prevent robberies, if possible, and to
make it unpleasant for the thieves if there
are any. The sheriff was present and
gave to each representative a sawed-off
shot gun.

“ I o w a ban\s who c a r
ry D es M o in es

ac'

cou n ts know that ou r
efforts, li\e theirs, are
cen tered on m aking

1930

good

year

for Io w a .”

Corydon Banker Dies
A. J. Carpenter, 59, cashier of the
Corydon State Bank, who had been in
poor health for the past year died of
heart disease while driving his car three
miles east of Albia. He formerly was
connected with a bank at Elkader and
went to Corydon as receiver of the old
Wayne County Bank. When the Cory
don State Bank was organized he became
cashier.

Re-elected President
W. R. Lee was re-elected president of
the American Savings Bank at the annual
meeting of directors, which was held in
Carroll, Iowa, recently.
The other officers, all of whom were re
elected, were F. H. Arts, vice president;
L. J. Wegman, cashier; William Schultes,
first assistant cashier, and D. W. Hansen,
second assistant cashier.

To Release Dividend
The Peoples National Bank, receiver
ship at Waukon, Iowa, will soon release
another ten per cent dividend, according
to a statement made by Receiver W. G.
Kane, Avho says the checks are being
made out and after being sent to Wash
ington for final approval will be ready
for distribution in about three or four
weeks.
The dividend amounts to $49,809.03
and is the fourth dividend declared by
this receivership. When this dividend

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Federal Reserve Bank of St. Louis

rT 'H E message above was
w r i t t e n last January.
During i93o,businessinIowa
has been c o n s p i c u o u s l y
above the national average.
W e commend Iowa bank
ers for the progressive part
they have played in making
this record.

BANKERS TRUST CO.
BAN K

Cor. 6th and L ocust Sts., D es M oines
C apital $ 1 ,0 0 0 ,0 0 0 .0 0

S u rp lu s $ 2 0 0 ,0 0 0 .0 0

Northwestern Banker Decem ber 1930

Start $20,000 Improvements
Improvements, alterations and addi
tions entailing- an expense of $20,000 are
being made to the building- of the Iowa
State Savings Bank, Clinton, Iowa.
It is expected the work will be done in
two months.
A two-story addition to the structure
is being built of brick and terra cotta,
to conform Avitli the rest of the building.
Plans call for usage of the downstairs
part of the addition for coupon rooms
and offices.
The book department will be located on
the upper floor.

Bankers in Meeting
Practically every bank in the county
Avas represented at the meeting of the
Marshall County Bankers Association,
held last month in Marshalltown, IoAva.
H. M Vawter, president of the organi

zation, presided, and gave a report on the
activities of the association during the
past year, and a general discussion on
matters of interest to bankers and the
community Avas held.
Harry W. Jennings, secretary of the
association, gave a very complete report
on the activities of the vigilance organi
zation and made several suggestions to
make the vigilantes’ Avork even more
effective, which will be carried out in
plans made by the bankers.

Banker Dies Suddenly
Charles W. Carlson, 61, died at his
home in Farnhamville, IoAva, early in
November from acute indigestion, being
ill only three hours.
Mr. Carlson was born at Paxton, 111.
He came to IoAva in 1875 and lived on a
farm north o f Farnhamville until about
tAvelve years ago, when he moved into

Farnhamville. Mr. Carlson was a direc
tor of the First National Bank and a
toAvnship trustee at the time of his death.
He is survived by his AvidoAv and tAvo
sisters, Mrs. August Shalgren, of Greeley,
Colorado, and Mrs. Alfred Anderson, of
GoAvrie, IoAva.

Everett Martin Resigns
The resignation of Everett Martin as
\Tice president of the Citizens State Bank
of Mitchellville, IoAva, was announced
recently.
Mr. Martin has served as an official in
the local bank for the past 10 years. He
is taking up a position with the Equitable
Life Insurance Company as district agent
in IoAva.
B. S. Rothrock, of the bank at Bondurant, has been secured to replace Mr. Mar
tin. Mr. Rothrock has been connected
with the Bondurant bank for more than
10 years.

Sees Banking Prosperity

Speed-Accuracy-Satisfaction
Ï T I T ? Ç T T
l l A O

IO W A S T A T E
n
T R U S T & S A Y IN G S

A V

T I 7

D i \ l > IV

Capital $600,000.00

BURLINGTON, IOWA

PEOPLES
TRUSTS,
SA V IN G 5

BANK

your service
in Eastern Iowa
and

W ester n Illinois

PeoplesTrust & Savings Bank
—

REMEMBER

C L IN T O N , IQ W A =

IT THIS W A Y — “ PEOPLES

T R U ST”

OFFICERS
W . W . C O O K , P re s id e n t
J . Q. J E F F E R I E S , V ice Pres.
J . C. L A N G A N . V ic e P res
W M . M . W I L S O N , V ic e P res.
J. L . B O H N S O N , C a sh ie r
C. S. H A R R I S , A s s is ta n t C a shie r
F . W . S P A L D I N G , A sst. C a sh ie r
E M I L J O H A N N S E N , A s s t. C a sh ie r

Northwestern Banker Decem ber 1930

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Federal Reserve Bank of St. Louis

The condition of the IoAAm bankingsystem at present is better than it has
been since 1920 and is better than that
of any other midwest state, according to
L. A. Andrew, state superintendent of
banking.
Moreover, he thinks, Iowa banks are
at their low ebb for the coming year. He
believes that the banks of the state Avill
at the end of the year look back on one
o f the best periods of operations in the
last decade.
“ The steadily improving condition of
Iowa banking is due to the inauguration
of better banking practices due to the
work of the state department of bank
ing and legislative measures,” Mr. An
drew said.
“ The laAV passed by the last legislature
raising the required capital of neAVTbanks
from $10,000 to $25,000, and the law
passed at the same time requiring all borroAvers of $500 or more Avithout security
to present satisfactory financial state
ments, have aided Iowa banks.
“ Illinois is in the same period of de
pression that IoAva was five years ago.
Wisconsin is suffering banking difficulties
for the first time in years. In Missouri
the drought is blamed for poor banking,
and in Nebraska it is the reaction from
the failure of the bank guarantee laAV.
“ Iowa ought to be the first state to
come back to normal. The ratio between
the loss of grain and the increase in its
price is exceptionally favorable to Iowa,
and should result in better liquidation of
loans and deposits.
“ In Des Moines the condition of the
banking system is laudable,” Mr. AndreAV said. “ While deposits are not at
a peak for all time, they are encourag
ingly large indicating that the territory
around the city has not been hit hard
by either the stock market crash or the
drought.”

Men Who Make
the

Central National

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Federal Reserve Bank of St. Louis

LYNN G. FULLER

Lynn

Fuller,

Vice

Presi

Vice

President and Cashier

dent and Cashier, is well
known

among

bankers

throughout Iowa.

His long

experience both as a country
and city banker has helped
to build a wide friendship
for the Central National.
Drop in on Lynn, or any
of our other officers the next
time you are in Des Moines.

GRANT McPHERRlN

LELAND WINDSOR

LYNN G. FULLER

President

Vice President

Vice President and Cashier

C entral Na t io n a l Ba n k
AN D

T R U S T
O f'

D E S

C O M D A N V
M O I N E S

Northwestern Banker Decem ber 1930

Discusses Investment Trust Shares
Following the statement by Cedric H.
Smith, vice president of the Administra
tive & Research Corporation of Chicago,
to the effect that the 10,000,000 share
mark had been passed in the distribution
of corporate trust shares, Mr. Smith was
asked what single factor played the larg
est part in the present popularity of fixed
investment trust shares. He replied, “ It
is probably the unqualified faith of people
in the early recovery of American indus
try, coupled with the knowledge that the
strong fixed trust, through its diversifi
cation, makes it possible for investors,
large and small, to realize on the present
buying opportunity and at the same time
be well safeguarded.”

ilQUX
w

HERE

Vigilantes Hold Shoot

the mechanics

of bank ing are

tempered

by the personal supervision
of experienced officers . .

J. L. MITCHELL
President
H. B. SCOTT, Vice President
H. A. GOOCH, Vice President
J. P. HAINER, Cashier

F. R. KIRK, Assistant Cashier
L. M. ASH LEY, Assistant Cashier
GEO. J. N. SMITH, Assistant Cashier

1876

1930

frie n d ly ,

in te llig e n t

se rv ic e a d a p te d
needs

co rre sp o n d e n t

to th e im m e d ia te
Io w a

ban kers

is o f f e r e d b y

Consolidated National Bank
D U B U Q U E ,

IO W A

J. K . Deming, President
Geo. W . Myers, Vice President

Northwestern Banker Decem ber 1930

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Federal Reserve Bank of St. Louis

Jos. W . Meyer, Cashier

Sixty-five members of the vigilance
committee of Monona County Bankers
Association attended a pistol shoot and
meeting at Soldier, Iowa, recently. All
banks in the county remained closed the
afternoon of the shoot.
Edwin Valentine, of Mapleton, was
high man at the shoot. M. H. Dorothy,
of Ute, and W. H. Templeton, of Onawa,
tied for second place, and Maurice Cfraetz
of Soldier, third.
A dinner was served by the Soldier
ladies auxiliary at six o’clock in the new
community building, after which R. W.
Nebergall, state chief of the vigilantes,
gave the main address. Short talks were
made by Sheriff C. W. Neal, Special
Deputy Sheriff Kraft and Rolla Williams.
The Monona County Vigilantes are Avell
equipped with guns and ammunition and
are ready to act quickly in event of a
bank holdup.

Institute Activities
Officers of the Des Moines chapter of
the American Institute o f Banking re
port that the chapter affairs are progress
ing in a very satisfactory manner. The
class in accounting and statement analy
sis, of which Mr. Fred J. Peterson is in
structor, proved to be too large to be
accommodated by its present facilities
and it was found necessary to divide it;
as a result, this course is presented on
Monday and Tuesday nights, instead of
on Tuesday nights only, as heretofore.
The hard times party which was pre
viously announced was cancelled because
of unusual circumstances, and in its place,
an informal dance was held at the
Wakonda Club on the evening of No
vember 20.
It is with pride that members of the
Institute look upon the recent election
of Messrs. L. M. Fryer, E. M. Fegtly and
Verne Bonnett to assistant cashierships
of the Iowa-Des Moines National Bank
and Trust Company. All of these men
are members of the Institute and Messrs.
Fegtly and Bonnett are actively engaged
in the class work of the organization.

Their promotions are examples of the
possible successes which await those who
properly prepare themselves for the
higher, more responsible positions in the
banking profession.

Changes at Rippey
A. E. Jensen, who has served as cash
ier of the Rippey Savings Bank at
Rippey, Iowa, has resigned his position
to become the executive vice president
of the First National Bank of Creston.
D. M. Crumley has been elected cash
ier to succeed Mr. Jensen in the active
management. Mr. Crumley has been con
nected with the Rippey bank for thirteen
years.
Miss Margaret A. Moore succeeds Mr.
Crumley as assistant cashier.

ECEN T

ns of bank

fixtures by Fisher is very
Employes W in Promotion
V. T. Bonnett, E. M. Fegtly and L. M.
Fryer, all employes of the Iowa-Des
Moines National Bank and Trust Com
pany, were named assistant cashiers of
the bank at a meeting of the board of
directors held in Des Moines.
Fegtly and Bonnett have been em
ployed in the note cage, while Fryer has
been on the information desk. Bonnett
and Fryer in their new positions will be
in the business development department
under Winfield Scott. Fegtly will join
the staff of the loan department.
Fegtly has been with the bank since
1908 ; Bonnett since 1922, and Fryer since
1924. W. H. Brenton, executive vice
president of the bank, said the promotion
of the three young men from the employes
is in line with the policy which the bank
has adopted of recognizing good service
and training its own employes for execu
tive positions.

Smith, Burris Meeting
Smith, Burris & Co., Chicago, central
syndicate managers for Fixed Trust
Shares, Corporate Trust Shares and
Basic Industry Shares, entertained their
wholesale distributors last month in Chi
cago, the feature of the day’s meeting
being’ a luncheon at the Tavern Club,
where dealers witnessed a premiere show
ing of a new talking motion picture fea
turing the twenty-eight stocks that are
included in the set-up of Corporate Trust
Shares. It is an educational picture, pro
duced by the Burton-Holmes studios, and
shows twenty-eight of the nation’s great
est corporations engaged in production,
transportation and distribution.
About thirty wholesale distributors
were present for the day’s meeting.
Among those attending were Lloyd
Phillips, executive vice president of
Smith, Burris & Co., Omaha, and Fairburn Kurtz and C. Mugge, of M(-Murray,
Hill and Co., Des Moines.

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Federal Reserve Bank of St. Louis

good evidence that bank
ers throughout the Middle
West are alive to the importance of
equipping their banks with the most
modern and labor saving fixtures.
Th ese bankers know too that
an up-to-date, well equippe d bank
encourages new accounts and in
still s con fidence in old customerr.
Specify Fisher Fixtures when
remodeling

building

anew.

^ITihe f isher Co.
BANK

FIXTURE

H EAD Q U ARTER Sl

G k c u r l e s G i t y > I o u ? cl

Northwestern Banker Decem ber 1930

84
On School Board
Charles C. McKinstry, assistant cash
ier at the Commercial National Bank and
state vice commander of the American
Legion, was appointed a member of the
East Waterloo, Iowa, district school
board. He fills a vacancy caused by the
resignation of Ray Holdiman, who is
moving to Dunkerton.

Goes to Chicago
A. Roy Thompson, former vice presi
dent of the Valley National Bank of Des
Moines, has been elected president of
the Albany Park National Bank and
Trust Company, 3424 Lawrence Avenue,
Chicago.

Mr. Thompson will take up his new
duties there at once.
Mr. Thompson, who was president of
the Nebraska National Bank at Hastings
for fifteen years will continue as chair
man of the board and principal owner of
the bank in the state where he was widely
known in banking circles. He was chair
man of the executive council of the Ne
braska Bankers Association for three
years and is still a director of the Equity
Life Insurance Company of Omaha.
The Albany Park National Bank and
Trust Company is one of the larger sub
urban banks of Chicago. It has resources
of $4,409,716.92.
The former president, Murray Mac
Leod, whom Mr. Thompson succeeds, Avas

killed last spring in an automobile acci
dent. Some of the best known business
and professional men of Chicago and
Evanston are on the board, and the bank
is affiliated with the Chicago Clearing
House Association and the Federal Re
serve System.
Mr. Thompson has been in the bond
business since resigning several months
ago from the vice presidency of the
Valley National Bank.

Bankers Elect Officers
Thirty-one members of the Boone
County Bankers’ Association met last
month in Ogden, Iowa, and heard an ad
dress by a prominent IoAva banker and
elected new officers.
Those chosen for the ensuing year
were: President, John H. Goeppinger,
Boone; vice president, Roy Crouch, Pilot
Mound; secretary, C. W. Anderson,
Madrid.
An executive committee will be ap
pointed by the newly elected president,
in the near future.
Following the dinner an address was
delivered by Clarence Diehl, vice presi
dent of the Iowa-Des Moines National
Bank. A social hour followed the busi
ness meeting and address. The associa
tion is composed of two men from each
Boone county bank. F. P. McDonald of
Boone, retiring president, presided at
the meeting.

News and Views
(Continued from page 24)
mower is 0. K., but, of course, you under
stand that I must take this matter up
with my house committee, so if you come
in in the morning about 10:30 I will ar
range the matter. Don’t worry, I am
quite sure it Avill go through. See you
tomorroAV. Good-bye and thanks for call
ing.”
Next day—10:30 right on the dot.
Citizen: “ Good-morning, Mr. Banker,
how about it?”
Banker: “ Oh, good-morning, Mr. Citi
zen. Take a seat and I aaoII be with you
in a, minute.”
(Keeps Mr. Citizen Availing the usual
half hour.)
Banker: “ W e ll, Mr. Citizen, the com
mittee decided that there are so many
demands just novv fo r laAvn-mowers and
the weather also looks so bad for Citizens
that they really don’t Avish to make the
loan, but you knovv, M r. Citizen, I am
your friend and I always pull fo r you,
and I told them you were a good neigh
bor and I liked you very much, and in
the past I loaned you a bucket and you
returned it all painted nicely, so they
decided to help you out, but they couldn’t
let you have all you asked— so I am au
thorized to let you have the lawn-mower
less one AA’heel and the handle.
If' that
is O. K . we can fix you up.”

Northwestern Banker Decem ber 1930

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

85
Banker has usual benevolent smile, but
Mr. Citizen drops dead with joy at his
great generosity.
* * #
H. N. STRONCK and J. EIGELBERNER have just written a very interesting
book entitled “Bank Loans and Manage
ment” which was published by Rand
McNally & Co. of Chicago, and is most
interesting.
“ Improper loan administration,” say
the authors, “ has been the cause of more
bank failures than any other single fac
tor. A high operating profit is wasted
when ineffective loan administration re
sults in net losses so great as to absorb
the major part if not all of the operat
ing profit.”
The authors have “ ten commandments”
which they believe should be followed as
a guide to sound loan administration.
This is a most interesting book and
should be on every banker’s desk.
ifr
ifc
WHEN I THINK OF THE ROMANCE
of the banking business I wonder if we
will ever get to the point where we will
be able to write about it as picturesquely
as some of our most famous authors have
in the past when they have been writing
descriptions of life with all of its roman
tic aspects.
I was reading something from GUY DE
MAUPASSANT the other day and here
are two paragraphs from it that just
made me wonder what he would have done
with the life story of a savings bank
book which told of the thrift, economy
and denial on the part of a customer
man or woman who had toiled through
hardships on up the ladder of success by
means of constant savings.
Anyway, here is what the famous
French writer says about the sea :
“ It was tea time— the hour before the
lamps were brought in. The villa over
looked the sea; the sun had disappeared
and left in its wake a crimson sky flecked
with gold; and the Mediterranean, not
a ripple disturbing its smooth, gleaming
surface, looked like a polished and limit
less sheet of metal.
“ To the right, in the far distance,
jagged mountain-peaks reared their dusky
outline against the tender purple of the
sunset.”
* *
GARNER B. PERRY, vice president
of the Northwest Bancorporation, and
W. E. BROCKMAN, Director of Public
Relations of the Bancorporation, were in
Des Moines recently conferring with offi
cers of the Iowa-Des Moines National
Bank.
Mr. Perry, who has spent some time
in the east recently, believes that con
ditions in the middle west are much
better and the feeling of optimism is
greater here than on the eastern sea
board.
The man in the middle Avest, according

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

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D a n ie l B . S e v e rs o n ..........................A ss’t C a sh ie r
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51 5 TWENTY EIGHTH S T R E E T

D e s M o in e s
J)
EXPERIEN CE
- Q VALITY
SERVIC E

Tounded
GEORGE
EDWIN

H. R A G S D A L E
G. R A G S D A L E

S E C R E TA RY

Northwestern Banker Decem ber 1930

86
to Mr. Perry, who had $100 to spend
last year, has around $90 this year, while
on the other hand the easterner who had
$300 to spend last year, probably has
nothing now.
It is his belief, however, that the people
in the east are going through the dark
ness which precedes the dawn.
* ifc *

FIRST
mm*,,

N A T IO N A L

BENJAMIN M. ANDERSON, JR.,
economist of the Chase National Bank,
in speaking before the Kansas City Cham
ber of Commerce last month, said: “ The
year 1930 to date stands well above the
first ten months of the year 1921 and the
worst of 1930 is not as bad as the worst
of 1921, but we have come measurably
close to the low point of 1921 and the
fundamentals do not justify that.”
According to Mr. Anderson we were
in greater danger in the summer of 1929
than we are today because now we are
facing facts whereas then we were dream
ing dreams.
Improvement from our present low
levels can come any time, according to
the economist and can also represent a
very strong improvement when it does
come.
* ifc

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IN TH E UNIT ED STATES

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Northwestern Banker Decem ber 1930

***

COURTESY is one of the greatest
assets which any bank can have in deal
ing with the public and it is interesting
to know that the cost of the word
“ Please” in telegraph tolls in this country
is estimated to be $1,000,000 a year. Cer
tainly this is ample testimony that it
pays to invest in courtesy.

w r it e us

to d a y ?

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Federal Reserve Bank of St. Louis

JAMES E. BAUM, head of the protec
tive department of the A. B. A., in speak
ing before the Tri-State Bankers Con
vention in Minneapolis, pointed out that
holdup men, yeggs, forgers and other
thieves took over $12,000,000 annually
from the banks of the United States and
that the sum was mounting steadily.
Crime, he pointed out, had already gotten
in the hands of big business and drastic
measures should be taken by bankers as
sociations everywhere to fight this in
creasing menace.

Depositors of the closed Marietta State
Bank will receive $22,683.73 as the result
of a second dividend of 10 per cent de
clared by A. J. Veigel, state commissioner
of banks. A first 10 per cent dividend
was declared April 2, 1930. The bank
was closed November 15, 1926.

Second Dividend
A second dividend of 10 per cent total
ing $11,205.44, was declared today by A.
J. Veigel, State Commissioner of Banks
on the closed Louisburg, Minnesota,
State Bank.
A first dividend of 10 per cent was de
clared January 16. The bank was closed
June 7, 1929.

Selling the Services of a Bank
(Continued from page 11)
question. They shall supply him with
all of the necessary facts and call to his
attention the different points of value
which he obtains from the service. Then
he will be able to see for himself exactly
the right thing to do.
Think over the names of all of the
successful salesman that you know.
Probably one outstanding feature will be
common to all of these men or women
and that is a more or less pleasing per
sonality. A great many people have mis
taken the importance of personality and
conclude that a breezy manner and a
big smile is all that is needed for suc
cessful selling. Pleasing personality IS
of vital importance. But pleasing per
sonality comes from a number of causes
which lie much deeper.
A sale is a transaction in which one
person exchanges something he has for
something another person has. Nowa
days with so many different things com
peting for the money we earn, we consider
very carefully before buying things
which are not necessities. Selling is,
therefore, an explanation of fact made
so clear that the other person under
stands and agrees with the statement, to
the point that he is willing to buy. In
other words, when a sale is made, you
have to convince the buyer that it is to
his best interest to use the money to
buy what you have to sell in preference
to the things that countless other people
have to sell.
Selling That Is Valuable

ELLING by persuasion is the only kind
of selling that is worth anything.
The so-called high pressure salesmanship
that by mere dominating will-power
temporarily overbalances another per
son’s judgment to the point of having
him do something that he regrets later,
is of no value in an institution. The
only selling that is valuable to your bank
or any other permanent institution is
the kind of selling which persuades the
buyer to make a purchase. That kind of
selling is permanent and builds good will
and is valuable to the institution, and that
is the kind of selling wdiich you want your
employes to do.
The first thing to do is thoroughly to
acquaint yourself with all of the facts in
the case. There is no man who is at a
greater disadvantage than the man who
is armed with only a part of the facts.
There is no man in a better position than
the one who has all of the essential points
at his tongue’s tip. In other words, to
make people believe you when you speak
you must have the courage of conviction
and the confident bearing that comes of
knowing the facts. The person who has a,
difficult time in the discussion of any sub-

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

J-i"

COMMERCIAL

NATIONAL BANK

Our thorough knowledge of the
rich territory served by this bank is
natural.
This bank has grown up with it
had a real part in the development
and has kept in touch with its people.
This institution can give every
type of financial service promptly and
efficiently.

E. W . M I L L E R
President

S. C. K IM M
Assistant Cashier

JAM ES M. GRAHAM
Vice President

R. L. P E N N E
Assistant Cashier

h e

W. W ENTE
Cashier

o m m e r c ia l
W

a t e w l o o

C H A S S. M c K I N S T R Y
Assistant Cashier

t io n a l

a n k

.I O W A

Northwestern Banker Decem ber 1930

City National
Bank
CLINTON, IOW A
COMPLETE BAN K IN G
SERVICE DEVELOPED AND
PERFECTED B Y
S IX T Y YEAR S OF
SUCCESSFUL,
CONSERVATIVE
BAN K IN G .
YO U R BUSINESS INVITED

G. L. CURTIS,
President
MILO J. GABRIEL,
Vice President
W. A. ANDERSON
Vice President
O. P. PETTY,
Vice President and Cashier
J. H. NISSEN,
Assistant Cashier
H. G. KRAMER,
Assistant Cashier
H. M. OLNEY,
Assistant Cashier
D IR E C T O R S

C. A. ARMSTRONG,
President C. F. Curtis
Company, Inc.
A. P. BRYANT,
Manager of Operations
Clinton Corn Syrup
Refining Co.
O. D. COLLIS
President The Collis Co.
E. J. CURTIS,
Vice President Curtis Bros.
& Co.
G. L. CURTIS,
President
President Curtis Companies,
Inc.
G. W. DULANY. JR.,
President Eclipse Lumber
Co.
Chairman Climax Engineer
ing Co.
MILO J. GABRIEL,
Vice President
President Gabriel Lumber
& Fuel Co.
B. M. JACOBSEN,
President Clinton Thrift Co.
J. PETERSON
O. P. PETTY,
Vice President and Cashier
H. W. SEAMAN
J. O. SHAFF,
Farmer and Live Stock
Dealer
W. R. SMITH,
General Manager
Clinton Com Syrup
Refining Co.
F. H. VAN ALLEN.
President J. D. Van Allen
& Son, Inc.

Clinton
County's
Largest
Bank

C ity National Bank
CLINTON IOWA
Northwestern Banker Decem ber 1930

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Federal Reserve Bank of St. Louis

ject is the one who is trying- to join in a
conversation without knowing what he is
talking about. So first of all post yourself
thoroughly on everything you need to
know to talk intelligently about the values
of the service you are selling.
Many years ago a creed of salesmanship
was established. Here it is applied to the
business of selling bank service.
TO BE SINCERE: In order to CON
VEY my Sincerity to others, I must
have Confidence in mysef, Confidence
in the bank I work for— Confidence in
the service I sell.
TO BE COURTEOUS : I must always
be Courteous and Obliging. Courtesy
is a mark of breeding that compels
esteem, respect: and admiration.
TO BE TACTFUL: I must use Tact
in meeting objections. I must learn
to see the thing from the customer’s
viewpoint. Tact is a rare form of
diplomacy that never offends.
TO BE AGREEABLE : People always
patronize those who Cheerfully
Oblige, Painstakingly Perform and
Honestly Serve. Therefore, I must
try to be Agreeable, which means
being Agreeable in everything.
TO BE FRIENDLY: In order to have
friends, I must be one. Smiles help
sell—grouches do not. A pleasing
personality always wins a Friend.
TO BE ENTHUSIASTIC: No other
asset yields as much as genuine En
thusiasm. It’s the finished art of
high persuasion. The more I study
my proposition, the more Enthusiastic
I will be about it.
TO BE TRUTHFUL : I will always tell
the Truth and then I won’t have to
worry about “ What I told my cus
tomer.”
Truth will safeguard me
against come-backs.
TO BE NATURAL: To sell goods
successfully, 1 must always act
Natural.
“ Personality” is simply
being Natural. Boasting, Bragging,
Imitating, always antagonizes.
TO BE NEUTRAL: Arguing never
convinces—always antagonizes. There
are better ways for meeting objec
tions. I must never tell a customer
that I disagree with him.
TO BE DEPENDABLE: In order to
build good wall I must keep my prom
ises. I f impossible, then I should
notify the customer in advance. To
make excuses destroys Confidence—
a priceless thing in business.
The man or woman who, in addition to
knowing the regular technique o f the
banking business, can sell the services
of a bank, will write their own ticket in
the future. It is an end of the business
that cannot be done with machinery.

Mellon Interests Active
Mellon interests are said to have in
creased their holdings o f Aluminum Com
pany of America on the recent decline.

89
Form Investment Company
Chester G. Hanemann and Dewey P.
Bardeen, formerly associated with Harry
H. Polk and Company of Des Moines,

complete and efficient service to the
various types of investors.
For the past three years, Mr. Hane
mann has been associated with Harry H.
Polk as vice president and general man
ager. Prior to that he was connected
with White, Phillips and Company for
ten years, having laid the groundwork
for that company in Iowa in 1922. His
entire experience in the bond business has
been within the state of Iowa, and he has
therefore a large acquaintance among the
banks and investors of this state. Mr.
Hanemann is a graduate of Iowa Uni
versity.
Mr. Bardeen was associated with Harry
II. Polk and Company since 1925 with the

position as secretary. Prior to his con
nection with this company he was with
the Iowa Loan and Trust Company.

Consider Protective Measures
Representatives of bankers associations
from ten of the central western states
met at the Nicollet Hotel, Minneapolis,
last month to consider bank protective
measures and insurance problems. The
state bankers associations represented
were Illinois, Indiana, Iowa, Kansas,
Michigan, Minnesota, Nebraska, North
Dakota, South Dakota and Wisconsin.
Under the section of bank insurance,
the ideas considered were Lloyd’s bank

CHESTER G. H A N E M A N N

have formed a new investment company
to be known as the Des Moines Securities
Company. The new institution is located
on the third floor of the Southern Surety
building-.
The company will deal in a complete

O R nearly three-quarters
of a century the name “ Pioneer
National” has been synonymous
w ith “ service” in its relations
w ith its customers. It offers
you now, as always, utmost
satisfaction in the handling of
your correspondent business.

NationalBank
D E W E Y P. BARDEEN

#»
:V

investment service comprising not only
the various types of bonds, but also in
vestment trusts, and if desired by their
customers common and preferred stocks.
The idea of Mr. Hanemann and Mr. Bar
deen is not to devote particular attention
to any one type of security, but to so
round out their activities as to render a

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

Established by John H.Leavitt in 1856
Waterloalowa
IRA RODAMAR
.

President

J. O. TRUMBAUER, Vice President
FRED H. W RAY, Vice President and Cashier

Northwestern Banker December 1930

90
policies, and the Interstate Bankers In
surance Company. The idea of forming
an Interstate Bankers Mutual Insurance
Company was taken Up for consideration
and was thoroughly discussed. It was
decided that a coiximittee should be ap
pointed to investigate this subject fur
ther and to repoi’t at the next meeting.
Under the bank protective work they
discussed the following subjects :

58 Years Service
to I owa Banks
The combined experience and strength of near
ly six decades of correspondent bank relation
ships recommend the Valley National as your
connection in Des Moines. W e are alert to
render every service possible to you here in
Iowa’s logical reserve center.
Founded 1872

V A L L E Y
NATIONAL BANK
DES M O IN ES
O F F I C E R S

R. A. Crawford, P r e s i d e n t
Charles W. E nyart, V i c e P r e s i d e n t
D. S. Chamberlain, V i c e
C. T. Cole, Jr., V i c e P r e s i d e n t
W. E. Barrett, C a s h i e r
C. O. Craig, V i c e P r e s i d e n t
C. M. Cornwell, A s s i s t a n t

Northwestern Banker Decem ber 1930

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

P r e sid e n t

C a s h ie r

“How Can Criminal Statutes Be
Strengthened” ; “ Unify Bank Robbery
Penalty Statutes” ; “ Payment of Re
wards” ; “ Death Penalty for Bank Ban
dits” ; “ State Owned Radio Stations” ;
“ Chiefs of Police Appointed by Govex’nors” ; “ County Road Patrols” ; “ State
Bureaus of Investigation” ; “ County
Fingerprint Bureaus” ; “ Enlarging the
Federal Fingerprint Bureau at Washing
ton, D. C.” ; “ State Schools o f Instruc
tion for Peace Officers” ; “ County Schools
of Instruction for Coixnty Peace Officers” ;
“ Larger Uniform Salaries for All Peace
Officers” ; “ State Police” ; “ Compensatioxx by State of Injured or Killed Peace
Officers” ; “ Interstate Crime Commis
sion” ; “Bankers Associations Assigning
Attorneys” ; “How County Auxiliary
Protective Units Can Be Further De
veloped” ; “Iowa Bankers Association
Research.”
At the conclusion of the meeting a confex-ence decided to accept the invitation
to hold its next meeting in Des Moines, and
that it might be held prior to January
1, 1931.

Takes Over Montana Bank
The First National Bank of Kalispell,
Montana, has taken over the business of
the Bank of Commerce of Kalispell and
has become a member of Northwest
Bancorporation gx-oup. The Bank of
Commerce, which was absorbed, had
$460,000 in deposits and total resources
$585,000.
The First National of Kalispell after
the consolidation has deposits of $1,750,000 and x-esoux-ces exceeding $2,000,000.
Officers are II. C. Keith, president;
G. H. Adams and Di\ H. E. Houston,
vice presidents, and W. F. Schnell,
cashier, who with C. H. Foot, Henry
Good, C. B. March, Paul Neils and
Charles Kettelhohn compi’ise the board
of directors.
Including the Kalispell bank, North
west Bancox-poration now has 12 affiliated
banks in Montana, others being at Ana
conda, Dillon, Great Falls, Harlowton,
Havre, Helena, Lewistown, Malta, Manhattaxx, Miles City and Roundup.
In a truly heroic life there is no peradventux*e. It is always either doing oxdying.—Hitchcock.

Not Half Stript
During the hearing of a ease, the
Judge was disturbed by a youth who
kept moving about in the rear of the
court.
“ Young man,” he exclaimed, “ you are
making a good deal of unnecessary noise.
What are you doing?”
“ I have lost my overcoat and am trying
to find it,” replied the offender.
“ Well,” said the Judge, “ people often
lose whole suits in here without all that
fuss.”— Philadelphia Public Ledger.
During a grouse hunt two sportsmen
were potting the birds from butts situ
ated very close together.
Suddenly a red face showed over the
top of one butt, and the occupant said,
“ Curse you, sir, you almost hit my wife
just now.”
“ Did I ? ” said the man, aghast. “ I’m
terribly sorry— er—have a shot at mine
over there.”— Stevens Stone Mill.

Fifteen Cents Net
Uncle John watched his nephew and
some other little boys playing soldiers, at
tacking a fort. “ Tommy,” he said, “ if
you and your side can take that fort in
half an hour I ’ll give you a quarter.”
About two minutes later there came an
eager cry, “ Uncle, can I have that quarter
now? AVe’ve taken the fold.”
“ That was very smart,” said Uncle John,
as he handed over the coin. “ How did
you manage it so quickly?”
“ Oh, I just offered the other side a
dime to give in,” answered Tommy.

So Many Cents a Pound
Mother: You got everything all right,
dear, but did you ask the grocer how he
sold his limburger cheese ?
Johnny : Yes, mother, and he said that’s
what he often wondered himself.

Fight! Fight! Fight!
Henry was worrying about his hair. It
was falling out with appalling rapidity.
Finally he wrote to a famous specialist and
told him about the fight he was waging,
and asked him for advice. The doctor
answered:
“ Keep up the fight. Either you or
your hair will come out on top.”

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Federal Reserve Bank of St. Louis

Discovered!

Collecting Evidence

The city kid was roaming about in the
country when he came upon a dozen or so
condensed milk cans. Greatly excited, ho
yelled to his companions: “ Hey, fellers,
come here quick! I’ve found a cow’s nest!”

Dubious Person: I ’ve been getting
threatening letters through the mail. Isn’t
there a law against that?
Post Office Inspector: Of course there
is. It’s a very serious offense to send
threatening letters. Have you any idea
who’s doing it?
Dubious Person : Sure. T lie W oof us
Furniture Co.

Big-Hearted
“ That Scotch lad is no tightwad.”
“ No ?”
“ No. He just told one of the Siamese
twins he’d take her to lunch—if she
could get away.”

Making the Best of It
Uncle (during interval) : This show is
not at all— er— what I expected, I ’m afraid
it’s—er—scarcely a play for a girl of your
age.
Niece: Don’t worry, old thing. I ex
pect it’ll liven up a bit in the next act.

Symptoms
“ Pardon me, Professor, but last night
your daughter accepted my proposal of
marriage. I have called this morning to
ask if there is any insanity in your fam
ily?”
“ There must be.”

Elopement
“ I hear that the flea, circus got stranded
in Allentown.”
“ Yes, the leading Iadv ran off with a
poodle.”— Lafayette Lyre.

Doleful

Direct Current-cy
Teller: What kind of a bank account
would you like to start?
Wisecracker: One that I can just plug
into the light socket.

Business
Private Secretary (on Boss’ lap) : I
feel sorry for the poor bookkeeper you
fired today. He has a wife and family.
Boss : Give me a kiss and forget it, kid.
There’s no place for sentiment in business.
Bridget, the maid-of-all-work, knocked
on the door of the drawing-room and en
tered.
“ What is it, Bridget?” asked her mis
tress.
“ I’m leaving, ma’am,” replied the girl.
“ Leaving!” echoed the surprised mis
tress. “ But you only came yesterday.”
“ I know, but I can see you don’t trust
me,” explained the girl.
“ But I gave you the keys of the cellar,
my jewel-case, and your master’s desk,
the other put in; “ that was proof enough.”
“ Yes; but none of the keys fit,” Bridget
replied.
— Answers.

“ Know where there’s a good funeral ?”
“ No! W hy?”
“ I’ve just been reading a Kussian novel
“ Is your mistress at home?” inquired
and I want something to cheer me up.”—■
Mrs. Boreham, standing in the shadow of
Washington Columns.
the doorway.
“ I don’t know, ma’am,” replied the serv
“ Just a word of warning!” announced
a jealous husband sternly. “ You are be ant. “ Can’t tell whether she’s at home or
not until I get a look at ye. If ye have a
ing seen too much with my wife.”
“ Thanks, old man,” replied the gay wart on the side of your nose, ma’am, she
homewrecker, “ we’ll be more careful in the ain’t.”
■
— The Out span.
future.”

Somnolent Study

Another Motlier-in-Law Joke

It was said of a recent prep-school
graduate that one night he left a note on
his door for his roommate, who had gone
to the movies. This bore the legend: “ If
I ’m studying’ when you get back, wake
me up.”
—Record.

“ How did you win that medal you’re
wearing?”
“ Saved a life.”
“ How?”
“ Shot at my mother-in-law and missed
her.”
-—V. P. I. Skipper.
Northwestern Banker Decem ber 1930

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THE N O R T H W EST E R N B A N K E R AND THE TE R R IT O R Y IT COVERS
P u blish ed by D e P u y P u b l is h in g C o m p a n y

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CLIFFO R D DEPU Y
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Editor

G ER ALD A. SNIDER
Associate Publisher

L. D. V A N DORAN
Associate Editor

F R A N K P. SYM S
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W M . H. M AAS
Vice President

Chicago Office: W m . H. Maas, 1221 First National Bank Bldg., Phone Central 3591
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Minneapolis Office: Frank S. Lewis, 840 Lumber Exchange, Phone Main 3865

Official Publication of
T H E S O U T H D A K O T A BA N K E R S A S S O C IA T IO N
T H E I O W A FARM M O R T G A G E A SS O C IA T IO N
T H E IO W A IN V E S T M E N T B A N K E R S A S S O C IA T IO N

Northwestern Banker Decem ber 1930

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

s
t=
p
si

D es M o in e s L ife & A n n u it y . ..................
D r o v e r s N a tio n a l B a n k .............................
D u tr o & C o m p a n y .........................................

30
26
69
58

62
40

O R G A N IZ E D

M EM BER
FEDERAL RESERVE

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

1877
° ' V /V E C T \ 0 ' ^

A T IS F A C T IO N
^

speed— accuracy,

are the three outstanding features of

our correspondent service.

A d d to

this a vast banking experience and a
keen personal interest in each transaction
and you have the reasons why the
Cedar Rapids National grows steadily
in the good w ill of its customers.

Glenn M. Averill, Pres.
E. M. Scott. Vice Fres.
C. C. Kuning, V. P.
and Cashier
Van Vechten Shaffer,
Vice Pres.
Geo. F. Miller, V. P.
and Trust Officer
Marvin It. Selden,
Vice Pres.
Assistant Cashiers
Peter Bailey
Bertha M. Wolf
Geo. W. Swab
Maud W. Carpenter
R. I). Brown
O. A. Kearney

C ed ar T^apids National Dank
Cedar T^ajoids, Iovtet

IO W A

Rolls Up Records
B u s in e s s

observers,

th o u g h ts

to w a rd

to d a y ,

Io w a .

are

tu r n in g

th e ir

s ta tis tic ia n s

it is

r a n k e d a s th e m o s t p r o s p e r o u s S ta te in th e U n i o n .
I n p e r c a p ita w e a lth
average

t iv e y e a r

$1400.00.

it s

crops

$ 7 0 0 ,0 0 0 ,0 0 0 .

w ill

it e x c e e d s th e n a tu ra l

For
be

t h e fifth
w o rth

Io w a

p r e p a r in g fo r

This Bank has aided the growth o f Iowa.
As a participant in the State’s progress, it is

arm y o f 3 0 ,0 0 0

m en

unusually well

qualified

offer authentic

information; and fully equipped to aid your

fo r g in g

even

ous sections, will further enhance the pros
perity o f the State.

m o r e th a n

Its in d u s tr ia l o u tp u t w ill su r

This

additional mileage, knitting together the vari

con secu

pass $ 8 0 0 ,0 0 0 ,0 0 0 .
And

thousand mile road-paving program.

b e tte r
is

w ith o u t

days to

e m p lo y e d

c e a s in g ;

com e.
on

it s

An
one

business interests throughout this great, pros
perous section. Y our correspondence is cor
dially invited.

Io w a - Des Mo in es n atio n al bank
s - T rust C ompany

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

affiliated ‘with

NORTHWEST

BANCORPORATION

Combined Resources Over $48 5,000,000

Full text of The Northwestern Banker : December 1930, 35th Year, Number 521

FRASER