The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
ESTER Il Banker troll DES MOINES DECEMBER, 1934 mm *\ \ W / L. M . L A R S O N President South Dakota Bankers A ssocia tion Cashier Jerauld County Bank W essin gton Springs A re Bankers Using Service Charges as a Substitute for Aggressive Management? Page 7 ( S ee page 10) https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis How the Business Man Questions His Bank Page 9 A n Iowa Banker W rites to M r. Crowley Page 12 Property Management and Real Estate Sales Page 15 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis c4 Cedar Rapids Da I l f s l i p i ' in » 1 at m l I? it itH i it mm 1 ml i l H I I I 5 Ü IIII illi Hmu p i l l ! i II ss ««*» !',» !« SI 6 II I I I ! I Servicing t ill Iou)a S e a S O I I * S Supported by ability to meet season's needs and seasonable demands. In addition to Season’ s Greetings we wish to express the year around best wishes based on our years of experience and our year around ability to serve your requirements. MERCHANTS N ATION AL BAN K O F F I C E R S Chairman, James E. Hamilton; President, S. E. Coquillette; Vice Presi dents, H. N. Boyson, Roy C. Folsom, Marvin R. Selden; Vice President and Cashier, Mark J. Myers; Vice President and Trust Officer, George F. Miller; Assistant Cashiers, Fred W . Smith, R. W . Manatt, L. W . Broulik, Peter Bailey, R. D. Brown and O. A. Kearney. Cedar Rapids Iowa 3 N orth w estern Banker Des Moines The Oldest Financial Journal West of the Mississippi DECEMBER, 1934 Number 569 IN THIS 39th Year ISSUE Page Across the Desk from the Publisher.......................................... Frontispiece— “ The Rio Virgin” .............................................. Are Bankers Using Service Charges As a Substitute for Aggressive Management............................Wm. Buxton III News and Views........................................... .Clifford De Puy How the Business Man Questions His Bank. . .Harry B. Hall “ I Was Just Plain Lucky” ........................................................ The Central Bank— What Does It Expect to Accomplish? ....................................................................... C. Floyd Falck An Iowa Banker Writes to Mr. Crowley..........B. J. Howland Nebraska Bankers Hold Annual Convention in Lincoln........ A Campaign of Loss Prevention............................R. T. Wood Property Management and Real Estate Sales. .Louis Maginn The Public Wants to Know..............................Harvey Weeks A Present Day Analysis of Railroad Securities...................... ............................................................... Elliott P. Woodruff “ It Works for Me” ................................................... L. M. Hall South Dakota News............................................................ Nebraska Bank News........................................................ Minnesota Bank News....................................................... North Dakota Bank News. ................................................ Iowa Bank News............................................................... C L IF F O R D D E PU Y Publisher R. W . M O O R H E A D A ssocia te Publisher 7 8 9 10 11 12 13 14 15 16 19 29 33 35 37 39 41 H. H A Y N E S E d itor F. S. L E W I S Special R epresentative 511 E ssex B u ildin g M inn eap olis, M inn. T elephone, B rid gep ort 2523 F R A N K P. S Y M S V ic e President 19 W e st 44th Street Suite 1608 N ew Y ork Member, Audit Bureau of Circulations H. 4 6 J. A. S A R A Z E N C irculation M anager Member, Financial Advertisers Association 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, 1934. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis N orthw estern B anker D ecem b er Î934- 4 cross e D e s lç , rom íñ e T iiilis fie ï^ iäi JM[ci1c£ the I have talked with several R a tio prominent bankers in the last pi * i month, who have suggested ^ O vJTie ^hat the ratio of Deposits to Capital should be 8 to 1 rather than 10 to 1, and with a further suggestion that Government Bonds and Cash should be deducted before figuring such a ratio. For example, supposing a bank had a Capital of $100,000 and Deposits of $1,000,000 and had $500,000 in Cash and Governments. By deducting the $500,000 of Governments and Cash you have $500,000 of Deposits left, which would give you a 5 to 1 ratio in comparing your Deposits to your Capi tal. This, many hankers believe, is much fairer than the present government ratio of 10 to 1, which by all rules of logic should not be applied to Cash and Government securities, as they are in the super liquidity division of any bank. Bankers are suggesting this new ratio, and this deduction of Governments and Cash from their De posits, because many of them are in a position now where their Deposits have increased to a point where they feel they should not accept additional Deposits unless they increase their Capital, and this they do not wish to do, especially since they have been generously purchasing Government Securities. Certainly the new ratio of 8 to 1, with Govern ments and Cash deducted before any ratio is fig ured is logical and sound, and should be adopted by the government financial advisors. W h ere A rs Jesse Jones, chairman -j t-» ^ ° f the RFC, is trying to the Borrowers? find out where are the borrowers who will use the $580,000,000 which Con gress authorized for the purpose of making direct loans to industry. So far, less than $3,000,000 of this amount has N orthw estern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D ecem b er 193b been borrowed, which proves the same thing that bankers have found the country over, that the right kind of borrowers are not as numerous as Jesse Jones had assumed, or as he was trying to make bankers believe there were. Recent figures show that the RFC and the Fed eral Reserve Board, together have less than $5,000,000 loaned direct to industry, and that of the first 2,800 applications received by the Federal Reserve Board about 1,300 were rejected. The reasons for these rejections were the same as those used by good bankers everywhere, namely that the borrowers could not offer good collateral, or were not in a good financial condition, therefore, ineligible to borrow the money. Business men will commence to use the billions of dollars of bank credit available, when they know the governmental period of experimentation has ended and the era of constructive cooperation is at hand. A rp this issue of Putting T oo M uch B!fe x"';Tmv'':STLIiN r? 1 • anker is a very Emphasis on excellent article by Service (charges. William B u x t o n III, in which he discusses the question as to whether or not bankers are putting too much emphasis on service charges, and not enough on aggressive bank management. He does not say that service charges should be eliminated entirely, but he believes that it is a mis take when almost the entire profits of a bank are dependent entirely upon that source of revenue. He argues for a more aggressive bank manage ment which through its investment policy and its income from loans will be able to carry a larger share of the overhead of the bank than it is now doing. 5 Frankly, I am inclined to agree with Mr. Bux ton that there should be a happy medium between the emphasis to be placed upon service charges and upon the income from other sources. N o Central Bank Needed - Just A pp ly Pressure to Reserve Banks Tlle latest suggestion Bank of England from tlle flnancial New ISlot Government Dealers, seems to be that there will be no necessity for creating a central bank, controlled entirely by government officials at Washington, providing a little political pressure is put on the management of the twelve Federal Reserve Banks, and that the treasury department will be able to control its future financ ing without creating a central bank, to which there is so much opposition. One of the best analysis of this situation, which I have read, carries out its reasoning in the follow ing manner. A t the present time there are two heads at each Federal Reserve Bank, one is the governor, who is elected by the directors, who in turn are electe )y the member banks. The other official is the chair man of the board, who is appointed each December by the treasury, and is ex-officio representative cf the treasury in his particular district. In the past the governor has really been the key man in each bank, and has officially directed the affairs of the institution. With the Federal Reserve Board at Washington, completely under the control of the New Dealers, it is believed that they can make “ yes” men out of the chairmen of the various Federal Reserve Banks, and at the same time bring the governor into line, because their salaries are from $24,000 to $50,000 depending on the districts which they represent, but these salaries must be approved by the Fed eral Reserve Board at Washington. The advantage of all this, according to this writer, is that it will help the treasury’s borrowing and financing of the Federal deficit, if, as and when commercial banks are unwilling or unable to lend money for New Deal enterprises. According to the emergency banking legislation, passed last year, it authorizes Federal Reserve Banks to issue bonds, secured by currency, with no gold backing. Thus, if need be, the Reserve Banks could lend the government whatever amount was desired, and take as pay for this, currency, secured only by the very bonds which would be bought with that currency. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Whether or not this idea will be carried out, as this author suggests, remains to be seen, but nev ertheless it has its political possibilities, and may be the reason for the administration opposing the central bank idea. Tlle statements emanatmg out of a ashmgri . 11 j ton indicate that there Controlled will be no central bank legislation passed at the next session of Congress. Another significant thing that all of this discus sion is bringing out about a central bank, is the fact that in making comparisons with the Bank of England, a closer study of that institution on the part of the public and bankers as well, points out, as many already knew, that the Bank of England is privately owned and not controlled by the gov ernment. The Bank of England, as one author puts it, ‘ ‘ Operates with a free hand; at no time is it sub ject to regulation, domination or control by gov ernment officials or members of Parliament.” The directors of the bank have absolute control of the bank’s affairs and are elected by the stock holders— the board now consists of 26 members which include merchants, industrialists and pri vate citizens. Thus, a lot of this conversation about exempli fying the Bank of England and implying that it is a government owned bank is a mistaken idea, as it has always been privately owned. Stable Economic Planning Impossible .n , . ,, , In these d“-vs wllen the ideals of a planned economy are b e i n g much talked about, and more recently advocated by several well known brain-trusters. I was very much interested in read ing what Dean Ralph E. Heilman, of the School of Commerce, of the Northwestern University, had to say on this topic recently. Dean Heilman believes that economic planning which implies an even stable unchanging rate of economic and business activity, is an unattainable ideal in a business system which rests upon property rights, contract rights and freedom of initiative. He asserted that no economic plan can guarantee business stability in the United States, because fluc tuations here are frequently caused by foreign and worldwide conditions over which no single govern ment can exercise control. N orth w estern B anker D ecem b er 193k N orth w estern B anker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Copyright, by the Thomas D. Murphy Company, Red Oak, Iowa D ece m b er 19M 7 ARE BANKERS Using S ervice C harges as a Substitute for Aggressive Management HA T is our banking- program and where are we going? Where do we stand and what are we trying to do? Are we leading the public to be lieve that our emphasis is primarily on earnings? Has a “ depositor in good standing” become one who consistently keeps his checking account below mini mum requirements because the bank likes that little service charge assessment? Is there anything wrong with the picture o f two fellow bankers getting together and their conversation centering almost entirely on profits and service charges? Is there anything Avrong with the fre quent remark, “ I didn’t realize how many accounts we were carrying at a loss until we started analyzing them.” Is there anything wrong when a bank collects charges sufficient to pay all operating ex penses ? Are we on the wrong track when we, as bankers, admit within our own circles that we justify our service charges to our customers by blaming General Johnson, or the code, or anybody else but ourselves ? Are we meeting our prob lems by charging our depositors and then soothing them by saying that it would be worse i f they weren’t a customer? Are Ave building confidence when we charge a higher rate on uncollected funds than Ave allow on loanable balances? Are we helping to debunk the “ mystery” o f bank ing when we clothe our charges in terms unknown to the public so that they ac cept them rather than plead ignorance? And, most important, have we initiated blanket charges Avithout first analyzing our own local conditions to see what is fair? In other words, are we sacrificing fairness for uniformity and ease o f com putation? Are we taking advantage of our lessened competitive position? These are the questions I ask after I have lent an unbiased ear to the opinion o f the public. W S ervice C h a rg e C o m p le x I firmly believe that we are off on a tan gent; we are not putting first things first; we have a service charge complex, we are using service charges as a substitute for ag gressive management. I am not flatly op posed to service charges, I believe that there https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By WAI. BUXTON III Vice President Peoples Trust & Savings Bank Indian ola, Iowa sources. I believe that this is the greatest builder o f confidence and I am strongly convinced that confidence is the substance that gives strength to the outward shell o f our so-called 100 per cent liquidity. L o o k in g F orw a rd isnt much argument about the desirability of some charges and we only begin to differ as to the degree of application. That, how ever, is not the point I want to make, I am objecting to the time and emphasis we place upon them. I realize that to others this will seem to be the ideal time to inaugurate service charges because the public is receptive to new things; they are eager to learn o f the so-called mystery o f banking and have learned to appreciate the value of banks in the community. The time is ripe for banking reform and correction and, Avithout a doubt, service charges should have a place on our “ attention” list. M y point is, however, that it is only one o f the items on the list and not the first one by any means. M y fear is that we will have allowed an excellent opportunity fo r reform to have passed because I can not believe that Ave Avill have the incentive to assume aggressive leadership in our community when service charges occupy so large a place in our earnings, even to the point o f paying all operating expenses. I doubt that we will be Avilling to accept even normal risks when we can so easily produce income with no apparent loss. For instance, I can cite a bank that has been able to get a rate o f 5 % per cent on their govern ment holdings this year mainly by deal ing in called bonds and maturing certifi cates. Others have dismissed that source o f income by assuming that short-term governments give no return or long-time governments involve too much risk. In the one case the bank still regarded a de posit as a source o f profit; in the other, it was regarded as a loss, and service charges resulted. I prefer the former because I still believe that the banker has a responsibility to his community to make the most efficient use o f its re Let us lift our eyes beyond the earning statement o f 1934. Let us assume that 1934 is not going to be as profitable as Ave would like (although I am inclined to believe that it is a lot better than Ave are leading others to believe). Isn’t it possible that we must experience lean years the same as other businesses? Should we develop a long term program and policy to fit a single year? Let us reproduce the vivid image of the years that have just passed. Let us project into the future fo r the next five years. W hat should our program include in order that we may reconstruct our house and again assume a position o f lead ership and confidence in our communi ties? In that list I Avould certainly in clude to follow in g: 1. Rebirth of friendliness and cooper ation with our customers to replace aloof ness, indifference and rebuke. Let us AAfILLIAM B U X T O N N orthw estern B anker III D ecem b er 1934 8 place ourselves on the other side o f the counter more often. 2. An informational program o f adver tising1which will debunk the mysteries of banking giving less space to service charges, 100 per cent liquidity and other bunk. 3. A program o f limiting the size of time deposits in order to limit our vulner ability to contraction when confidence wanes and also to make the depositor less dependent upon the bank as his sole storage fo r savings. 4. Attack the laxity in the granting of charters to new banks. 5. Eliminate the competition between state and national banks. 6. Attack the inadequacy o f examina tions, both on the part o f the examiners and the bankers themselves. 7. Assume an open mind to new conlitions with the idea o f trying to control them, rather than resign ourselves to live under them. 8. Know our bank’s operations better. Many o f us have had unusual growth within the year. Many o f us have lost the true perspective o f wThat is going on in our banks. New responsibilities come with size. These are only a few that corner to my mind but they serve to illustrate my point. When and if conditions existing today appear to be permanent then there will be ample time to apply our service charges to the nth degree. In the interim, however, I am content to face our new problems with courage and to leave service charges as a blacklog o f profit to be utilized when other sources o f income have completely dried up. money, and in his copy said, “ When a bank extends credit to any person, firm or corporation, it also has the right to expect the return o f its money, and should be satisfied before the loan is made that repayment can and will be made. “ Last month, this bank made new loans to its customers amounting to $111,631. Every loan, however, was amply secured.” That is what I call taking your public into your confidence, and I know o f no better way to build up business and good will for your institution. ODNEY P. LIEN, formerly vice president o f the National Bank o f Waterloo, has resigned from that bank to become comptroller and treasurer o f the radio stations owned by the Register and Tribune o f D'es Moines. Mr. Lien, among other distinctions, was referred to by Ripley in “ Believe It Or Not,” because when he rearranges his first two names it reads like this, “ R. Pryor Lien.” Anyway, Mr. Lien has gone from bank ing into publishing, although the rumor I get is, his duties will be in the radio division. R B. DONHAM, dean of the Har. vard Business School, has just sent out the announcement o f a new course in “ Public Administration.” Perhaps the dean, who has been an anti-New Dealer, now believes that there should be more Harvard boys trained for the brain-trust division. In any event, this is rather an inter esting and novel departure in modern ed ucation, and here is what the announce ment says: “ The Harvard Business School is o f fering fo r the first time a program o f Public Administration designed to pre pare its graduate fo r public service. A new curricuTim is being established in the school diverging somewhat from the courses in business administration at the middle o f the first year’s work, but o f fering wide lattitude in the selection of courses, so that it will be possible for all men whether or not specializing in public service, to obtain a foundation in the business aspects o f government.” W HEN H E N R Y I. H ARR IM A N , president o f the United States Chamber o f Commerce, spoke in Des Moines recently, he mentioned among other things that at the last election on November 6th, the Democrats polled 55 per cent o f the total votes, and the Re publicans 45 per cent— in other words, a 10 per cent shift o f total votes cast would have made a tremendous difference in the election. There has been an apparent feeling that this was a Democratic landslide, but these figures indicate that it was not, but we must also remember that the prog ress o f the United States has been built under a two-party system, and let us hope that we may go forward under that political formula in the future. Mr. Harriman was optimistic about the future o f the United States, and emphasized that the housing program would be the one thing that would defi nitely pull us out o f the depression. He believed that it would put 3,000,000 men back to work building houses and re modeling them, and that this 3,000,000 would in turn be buying goods and serv ices which in turn would put other mil lions o f men on payrolls, and thus we would soon be on our way to a new up swing in the business cycle. W ROFESSO R GEORGE F. W A R REN, o f Cornell University, and the brain-truster who helped President Roose velt devalue the dollar, evidently doesn’t P N orthw estern B anker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D ecem b er 193b agree with H E N R Y W A LL A C E as to what caused the farmers’ decline in prices before the New Deal came into effect, because Professor Warren, in a speech recently, said: “ There is no indication that the depression o f 1929 v7as caused by overproduction.” I f that wasn’t the cause, then why is the philosophy o f DESTRUCTION in stead of PRODUCTION in effect with the A A A f R O B AB LY ONE OF THE F IR ST ACTS o f Congress will be to extend the expiration date o f the RFC from January 31, 1935, to January 31, 1936. The present authorization fo r that al phabetical division o f the government expires this coming month. The corporation now has on hand over $2,123,000,000, and during its existence, it has disbursed a total o f $4,608,000,000 fo r purposes other than advances fo r re lief and to governmental agencies, and o f this amount almost one-half or $2,251,000,000 has been prepaid by the bor rowers. P A LPH M ILLER, president o f the IowTa State Bank o f Algona, be lieves in telling his customers and his community about his own institution through local advertisements, and he ran an ad recently entitled “ Are Banks ‘ Tight’ W ith Credit?” In this advertisement he answers the criticism that banks were not loaning R E LIE V IN G that lawyers, at least some o f the lawyers in Cook county, are bigger crooks than most of the bank ers, ERIC O. N E RYIG , vice president o f the First National Bank of Humboldt, sent me an article showing that lawyers’ fees in connection with the foreclosure o f a mortgage were greater than the amount o f the mortgage itself. In his letter to me, Mr. Nervig said: “ I enclose an article showing distri bution made by receivers in Cook county. Would you say the depositors received a (Turn to page 22, please) B 9 "A Great Banker, If He Is Truly Great, Is First of Ail a Great Business Man. He Should Be the Top Business Man of His Community. If He Is, the Business Man Who Questions His Bank W ill Find His Questions Convincingly Answered" How the Business Man Questions His Bank By HARRY B. HALL Vice President American Appraisal Company Milwaukee HARRY r e p a r a t io n fo r discussion o f this subject has required extensive research work. I have interviewed many o f my friends in business on the subject and find that there is another case where “ even your best friends won’t tell you.” One after another I put the question to them, “ What questions do you ask your bank ?” and the invariable answer was, “ I don’t question my bank. The bank ques tions me.” I did succeed, however, in acquiring- the general impression that the business o f banks these days is practically the same as that o f our storage warehouses. The prevalent idea seems to be that about all a bank has to do is to take in the money, convert it into government bonds, cart them down cellar to the vault and call it a day. P A P ro fe s s io n I also encountered some indications of a desire on the part o f bankers to be classed as professional men instead o f business men. I never could quite understand the rea sons for this yen on the part o f real es tate men, insurance men, and now bank ers to be classed as members o f a profes sion rather than as followers o f a busi ness. I suppose the professional atmos phere in which we live, move and have our being these days may have something to do with it, but personally, I hate to see a business which is the most fundamental o f all businesses admit to the possession o f an inferiority complex by attempting to take on the halo and wings o f alleged purity which the professions like to brag so much about, but the existence o f which they have so much difficulty in proving. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I hate to see the business of banking come to such a sissy end as this. Professional men, you know, do not ad vertise. They consider it unethical to do so. They may starve to death but they do not advertise. Your dyed-in-the-wool professional man never seeks business. He waits fo r it. He sits in his office, trim ming his cuffs, sandpapering the nether portions o f his trousers to prevent undue deflection o f ultra violet rays, corresponds with his professional comrades in distant cities who are also waiting, and has a per fectly wonderful time taking each “ ethic” out o f its glass case, carefully examining it and putting it back again with all the complacent satisfaction o f the collector of rare but useless curios and pays his gro cer, butcher and landlord with about the same degree o f regularity. T h e Q u estion s A t the moment, the question o f the busi ness man who can submit no evidence that he could repay a loan if it were granted seems to be, “ Can I borrow some money?” At the moment, the question o f the busi ness man who could repay a loan seems to be, “ Do you think it’s going to rain?” And there you are. Nobody seems to question the safety o f banks at present. Nobody as yet has asked embarrassing questions as to whether the money he withdraws is as good money as that which he deposited. He may ask it eventually but he hasn’t yet. Nobody appears to be questioning the quality o f the service they are getting from the banks in respect to the many things they do besides loaning money. They notice that there are charges fo r many o f these services which formerly were rendered gratis, but they do not B. H A L L question the necessity fo r this. They are, o f course, grateful that the ice water, pens, inks, blotters and use o f the cuspi dors are still on the free list and are rather surprised at it, but on the whole, except on one or two points which I will presently discuss, at the present moment there seems to be very little questioning o f banks by business men. The business men who want money know they can’t get it and those who can get it don’t want it, and again, there you are. As fo r the present, speaking wholly as a layman, and simply conveying impres sions to you as I have received them from innumerable contacts and correspondence with business men, and without comment ing on the justice or injustice of the ques tions or attempting to provide you with the answers, I believe the major questions the business man is asking at the moment could be boiled down into these: (1) How long is my bank going to con tinue to function practically exclusively as a storage warehouse for government bonds instead o f as a community com mercial, industrial and agricultural financ ing agency? (2) In its administration of “ weak sis ters” which have been laid in its lap to “ work out,” is my bank concentrating its entire attention on ruthless endeavor to effect speedy repayment o f the bank’s loan or is it also giving at least some thought to saving the business fo r the community ? (3) When I go to my bank to state my case why do I have so much difficulty in meeting some one in the bank who has had a sufficiently broad business experience to comprehend my problem and at least give me constructive suggestion even i f he can not part with any o f the bank’s money ? N orthw estern Banker D ecem b er 193Í 10 These are questions which are not alone peculiar to the present “ status quo” situ ation in the banking- business. They are critical questions which always have been and always will be asked about banks by business men. The business man seeking accommodation at a bank always has been and always will be critical o f the bank which refuses him. It is human nature. I am not prepared to say that this ques tioning criticism on the unwillingness of banks to make loans and on the strin gency o f the provisions for repayment in sisted upon, is more generally prevalent now than it always has been but it is my impression that it is. And if it is I am not prepared to say whether the reason arises from the fact that more business men are seeking credit who are not entitled to it than formerly or from the fact that banks and bankers generally are afraid o f their shadow's at the moment and actually are unnecessarily and unwisely conservative. Neither am I prepared to suggest how a bank should answer this age old, but at present accentuated, critical question ing. But I am prepared to express the belief that banks and bankers can answer it, the conviction that they should answer it and the hope that they will answer it. May I say, however, that you will not answer it by printing pictures o f your magnificent buildings or wasting good printer’s ink in telling how old you are in your advertisements. T h e y W an t to K n o w The flow o f money now is in a direction opposite to the flow in the fall o f 1932. Banks are reputed to be surfeited with money, assuming government bonds are counted as money. Business men are // asking questions, not many but several, and they’re important. They want to know if the government has a monopoly on the borrowing facili ties o f your bank. They want to know if your bank is really interested in making loans to business any more. They want to know what kind of loans you are mak ing, if any. They want to know what kind o f loans you want to make, if any. The business man wants to know whether your bank is treating his business friends in trouble ruthlessly, as is always the accusation o f one-sided gossip, or are you treating the problems o f his business friends constructively— a bank procedure which is followed in countless cases but which possip never advertises. The business man wants to know when he calls at your bank fo r a loan or at least advice, if he will be turned over to an honest-to-goodness banker-business man who can comprehend his true situa tion or will be “ taken care o f” by a buckpassing junior office boy just out o f col lege who has neither the experience to comprehend nor the power to decide. In 1932 the safety o f banks was ques tioned by the general public and business men. I always will think that there was an effective job o f public education o f some sort that could have been done and should have been done at that time that was not done. Public fear and the business-man fear fo r the safety of his bank has now largely passed. The pressing need o f the present mo ment is to convince the general public and the business public that your bank is functioning as a bank and not as a stor age warehouse. May I say that one o f the greatest things fo r a bank to be able to advertise I W as Just Plain Lucky^ (S e e C o v er P h o to ) N A T IV E o f South Dakota, and liv ing on a farm there until he was 19 years old, L. M. Larson, cashier of the Jerauld County Bank o f Wessington Springs, started his banking career in the Bank of Vienna on March 20, 1911. Until February, 1917, he served here as bookkeeper and assistant cashier, and was then successful in being elected auditor o f Clark County. Mr. Larson held the position o f auditor fo r four years, and was then appointed special bank examiner in South Dakota under John Himing, superintendent o f banks at that time. In 1924 he resigned as bank examiner, and organized and opened a new bank in Wessington A N orthw estern B anker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D ecem b er 1931 Springs, the institution o f which he is now cashier. Mr. Larson has always taken an active interest in the affairs o f the South Dakota Bankers Association and its several di visions. In 1929 he served as president of Group Three, and was elected vice president o f the State Association in June, 1933. In July this year, at the Joint Convention with North Dakota held in Deadwood, he was named president o f the South Dakota Bankers Association. Asked as to his reason fo r choosing as a profession, Mr. Larson says: “ I was looking fo r a job when I was 19 years old, and I guess I was just plain lucky (if any banker is lucky) in getting my first job in a bank.” to business men if it can do so truthfully, but a thing it is suicide to advertise if it cannot do so truthfully, is the fact, if it is a fact, that your vice presidents avail able fo r consultation are not simply “ nice fellows” but are seasoned banker-bwriness men first and bank office-boys who have come up through the ranks through the seniority process, afterwards. With all due respect for academic knowledge o f economies and o f the bank ing business, with all due respect for the desirability of long years o f training and experience in the mechanics and philos ophy of banking, if in addition to this the man whom your questioning business men is to consult can have had a background of practical, industrial, commercial or agricultural experience, can have had the experience o f meeting a pay roll, can have acquired knowledge o f the necessity for keeping sales outlets open through per sonal selling and advertising pressure, can have a knowledge o f production cost ele ments, can have the business wisdom to recognize and interpret business values—property, management, methods, products and markets, in short if the bank official whom the questioning business man is to consult can be a man worth consulting, as an infinite number o f bankers unquestion ably are, that to my notion is one of the most valuable advertisable assets any bank can have, particularly at the present time. A great banker if he is truly great, is first o f all a great business man. He should be the top business man o f his community. I f he is, the business man who questions his bank will find his ques tions convincingly answered. New Investment Firm Lewis F. W heelock and James A. Cummins, investment securities dealers in Des Moines fo r 14 years, have estab lished the firm o f Wheelock and Cum mins, Inc., with offices at 200 Equitable building. Merger o f the two firms was an nounced on November 28th. In the new firm, besides Mr. W heelock and Mr. Cummins, is Roy Leriche, secretary and treasurer. Articles o f incorporation have been ap proved by the secretary o f state, it was announced. The suite o f W heelock and Company at 200 Equitable building has been en larged to accommodate the new firm. Mr. Cummins was form erly in the in vestment business at 620 Equitable build ing. In 1920 Mr-. W heelock established the first bond firm in Des Moines, known as Ringheim-Wheelock Company. The new company will deal primarily in municipal securities, with a general market service as well as handling Iowa municipal issues, it was announced. 11 — The Central Bank— W hat Does It Expect to Accomplish? URING times o f peace and prosper ity when industry is going along smoothly, the public gives little thought to the vital part played by the banking business. No one is much con cerned about how banks are operated or how they create the credit which is so necessary to industrial development. But the first signs o f stress and strain always bring the subject o f money and banking into the limelight. And in the United States there seems to be a tendency to look fo r relief in some form o f Federal control. This fact has been very force fully brought to our attention during the past few months by a certain faction Avhich advocates a strong central banking system as a solution o f our current finan cial difficulties. D C entral B an k The present agitation fo r a central bank grew out o f the depression and the after effects of the W orld War. Numerous banks failed, due to the abnormal strain placed upon them. This gave rise to talk o f overhauling the banking structure. When President Roosevelt took office the more radical element o f the Demo cratic party wanted to overhaul imme diately the Federal Reserve System or abolish it and put in its place a Central Bank which would be more subservient to the government than is the present Fed eral Reserve System. But none o f these ideas were written into the Banking Act o f 1933. However, events o f the past summer have started many o f the so-called “ right wing” Democrats toying with the idea o f revamping the banking system and substituting a strong Central Bank con trolled by the Federal government. The reason that these officials became inter ested in the Central Bank idea lay in the government bond market and in the fact that credit has not been flowing into in dustry as rapidly as they had hoped. U nruly M a rk et Early this summer the market for United States government securities be gan to get unruly. First came the assassi nation o f Dollfuss which burst unex pectedly out o f a clear sky. The result was that a wave o f selling o f United States securities from frightened dealers and other holders broke on a market which had only thin supporting orders. A hectic day in United States securities https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis "M ost Significant Is the Fact That of the Increase of $4,500,000,000 in Fed eral Debt Between June 30, 1933, and June 30, 1934, United States Banks Took $3,900,000,000, or 86 Per cent. W hat Better Results Could Be Expected From a Central Bank?" By C. FLOYD FALCK Corn Exchange Savings Bank Sioux Falls, South Dakota followed. The Treasury finally gave the market adequate support and the fear of war in Europe subsided, but the episode left everyone very nervous about their holding in United States government bonds. Their nerves were just about getting back in shape when a certain statistical service with a large list o f subscribers sent out a telegram advising the imme diate sale o f United States government bonds. Many o f the smaller banks still remembering the Dollfuss scare, rushed to sell their bonds and again a wave o f attempted selling hit a poorly supported United States security market. The Treasury finally put the proper support bids into the pool. However, the damage was done. Suspicion had been spread that the government was having a hard time marketing its bonds and since then the United States government bond market has remained nervous. In the meantime, rumors are prevalent that some o f the conservative New York banks or some one in W all Street, think ing that Republican Maine would defeat Roosevelt in the recent election and make him change his tactics are supposed to have let the Treasury know that unless some limit was put on government spend ing, their institutions did not see their way clear to expand their commitments in government bonds. Then Maine, instead of defeating the New Deal, gave it an unexpected endorse ment. So the cry has gone up in the ranks o f the New Dealers of “ free the government from the banks,” and nervous Treasury officials are searching around to see if in the Central Bank idea there cannot be created a more docile purchaser of United States government bonds or perhaps banks be whipped into full sup port o f the government bond market by the threat o f the Central Bank. Loans In the meantime through the whole New Deal the banks have not been able to do much toward expanding loans, so thus some o f the New Dealers are asking “ what use are they? They do not want to buy our bonds and they don’t lend money to industry, so why should we not have some institution which will do these things?” Thus the Central Bank idea gains mo mentum. Although numerous plans have been proposed for the machinery o f a Central Bank they are all still very indefinite. Many suggest a revamping o f the Fed eral Reserve System and the building o f a Central Bank on this super-structure. Others are in favor o f a single Central Bank to succeed the Federal Reserve Sys tem. In addition there are the long dis cussed matters of extending branch bank ing and consolidation of state and na tional banking systems fo r uniform ad ministration. However, most o f the schemes under discussion favor a Central Bank to compete with existing banks. T w o T hings The advocates o f a Central Bank expect it to accomplish two things, namely, to increase the flow o f credit into industry and second to provide a better outlet for the government securities. As to the first expectation, there is ample credit at present but the great un certainty as to the future developments prevent it from freely flowing into indus try. Banking credit is after all deposited private capital, and there would be a ques tion whether government banking could mobolize greater capital resources to its programs than is possible under the pres ent arrangement. Whether or not a Central Bank will provide a better outlet for government securities is still more doubtful. A re cent survey has shown that the banks in the United States as o f June 30, 1934, were carrying 51.04 per cent o f the United (Turn to page 24, please) N orth w estern Banker D ecem b er 193b 12 A n Iowa Banker W rite s to M r. Crowley B. J. Howland, Vice President of the Farmers State Bank of Keosauqua, Iowa, with Twenty-five Years of Experience in Country Bank Management, Makes a Few Suggestions to the Head of the Federal Deposit Insurance Corporation November 3, 1934 ON. LEO T. CROW LEY, Chairman o f the Board o f Directors, Federal Deposit Insurance Corp., Washington, D. C. Dear Mr. Crowley: “ A copy o f your address before the American Bankers Association was re ceived by this bank recently, and I have read the same with much interest. I am particularly impressed with your ex pressed desire fo r cooperation and con structive criticism. My experience o f over twenty-five years comes from the management o f a country bank in a small town, and I trust I will not be intruding, if I attempt to throw some light on the situation, from my humble position, which I believe to be fairly representative of the views o f the average country banker, in the agricultural districts. “ The chaotic conditions in banking you refer to, during the fore part o f 1933, and for several years immediately preced ing that time, are very impressive, in two very important particulars: First, as a measure o f the damage which would no doubt follow a recurrence o f those conditions. Second, that we have no other equal precedent in the history o f banking in the United States. “ An impartial analysis o f the causes o f bank failures, may attribute much of it to bad management, in making bad loans and bad investments, but we get this word B AD from the results expe rienced as a conclusion, while the truth is, that in many cases loans resulted in heavy losses, which were made with ample security, and with great care and caution, as measured by conditions prevailing at the time. While there may have been bad judgment used in many cases, which contributed to adverse results, there can now be no correct measure o f the results o f those we might call BAD, had condi tions remained normal, and on the main we must look elsewhere fo r the principal causes.” R eal E sta te V alues “ F or more than ten years just prior to March, 1933, and more particularly N orthw estern B anker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D ecem b er i93b the last five years o f that period, (using prevailing values and prices in March, 1933, as 100 per cent base) we find real estate values and prices receded from 100 to 2,000 per cent. I refer particularly to farm land values, and ‘new wealth’ commodities, or products o f the soil. During all o f that period bankers used those receding values and prices, as a measure o f credit capacity. This was not a partisan error, fo r members o f all par ties suffered equally. No one anticipated in conducting their business, banking or otherwise, such an unprecedented, pro longed and uninterrupted shrinkage in values. Out o f these experiences came tremendous losses, not only in what we now might call BAD loans and invest ments, but in many so-called good ones, which were well secured when made. In deed instances are numerous, wherein security represented as much as ten times the amount o f the loan, as measured by the then prevailing values, which were finally liquidated on a small percentage o f full realization. When we analyze the situation fully, we really begin to won der at the marvelous results. Really it is hard to conceive how so many banks could come out o f those experiences in solvent condition. During that whole period, the banker who would have been fool enough to anticipate such broad re sults, would have been boycotted, and run out o f his community. He could not say to the farmer, in granting him a loan, that his land in five years would recede from $200 per acre to $20 per acre, and corn would sell at ten cents per bushel. Nor would he be serving his community properly to take such a posi tion. When the farmer experienced his shortened income from year to year, it was up to the banker to foreclose his mortgage, or extend it. He took the latter course, anticipating o f course, that conditions would change, wherein fore closures would be unnecessary, each time losing more and more o f the margin in his security. The change came too late. “ The failure in deposit insurance laws in the states where they were in force, came during this period o f shrinkage in values, and it would be most difficult to conceive o f a deposit insurance law, strong enough to come out o f those ex periences in sound condition, and to have met all losses. It is easy to glide along on a plane o f increasing values. So called BAD loans, as well as good ones would be easy problems in those condi tions, and deposit insurance will expe rience little difficulty, nominal* cost, and wonderful success, beginning as it does, on the base o f present deflated values. But tom orrow! W hy worry about to morrow, when experiencing the soothing influence o f returned confidence, and ris ing values?” Bad M a n a gem en t “ While I believe that the main cause fo r bank failures was receding values, which brought ruination to many farm ers, bad management may have magnified the results. But bank discipline is a most difficult problem, under a deposit insurance law. It is particularly Amer ican, fo r business volume to flow along the line o f the least resistance, and peo ple in an agricultural community, do not fully understand, or will not always be warned, in the measure taken for their protection, and persist in peddling their business, where they can get the most free service or borrow the most money, at the best rate, and with the least secur ity, and where the banker is the least particular in prying into their personal affairs. With deposits insured in all banks, care and caution drives farmers away rather than attracts them. The bank failure horror had been growing in his mind to a point, where he began to measure the necessity o f property statements, the wife’s signature, the chat tel mortgage, and the collateral security. But now this inducement has entirely disappeared. It seems to me, you state the case most clearly in your speech, in that: ‘Insurance is no substitute fo r good management.’ But there should be some thing to build up good management, to offset the breaking down influence o f the deposit insurance law. The country bank(Turn to page 25, please) 13 Nebraska Bankers Hold Annual Convention in Lincoln Largest Attendance in Several Years Greets Nationally Known Speakers. O tto Kotouc, Head of Home State Bank, Humboldt, Named President TTO KOTOUC, president o f the Home State Bank, Humboldt, Ne braska, was elected president of the Nebraska Bankers Association at the close o f its thirty-seventh annual conven tion held last month in Lincoln. J. M. Sorensen, vice president o f the Stephens National Bank, Fremont, was named chairman o f the executive council, and Fred W . Thomas, vice president o f the First National Bank, Omaha, was named treasurer. William B. Hughes, Associa tion secretary, continues in that office which he has so efficiently filled fo r the past several years. Convention registration, in proportion to the number o f member banks, was the largest experienced fo r the past few years, indicating that bankers appreciate what their Association is doing fo r them, especially during periods o f stress and depression. With a number o f outstand ing speakers contributing to an excellent program, every session o f the convention was well attended. New members o f the executive council o f the state association are as follows : Stanley Maly, vice president o f the First National Bank o f Lincoln. John A. Changstrom, vice president of the Omaha National Bank. R. I. Stout, president o f the First Na tional o f Tekamah. Carl D. Ganz, cashier of the Farmers & Merchants Bank o f Alvo. H. D. Miller, president o f the First Na tional Bank o f Stanton, member at large. The holdover members o f the executive council are: H. A. Schneider, Plattsmouth; Robert Larson, Pilger; G. G. Hampton, Gothen burg; C. J. Abbott, Alliance; A. L. Coad, Omaha; F. W . Thomas, Omaha; T. B. Strain, Lincoln; J. M. Sorensen, Fre mont; 0 . A. Riley, Hastings; Otto Kotouc, Humboldt, and A. J. Jorgenson, Sidney. Charles S. McCain, president o f the United Light & Power Company o f Chi cago, and former president and chairman o f the board o f the Chase National Bank o f New York, spoke at one o f the ses sions. His topic was “ Today.” Honorable George H. Hamilton, gover O https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis nor of the Federal Reserve Bank of Kan sas City, spoke on the “ Federal Reserve System.” “ Banks and Recovery” was the subject o f Honorable J. F. T. O’Connor, Wash ington, D. C., comptroller o f the cur rency. Restoration o f the income o f the Amer ican farmer to a level commensurate with that going to other channels was recom- OTTO KOTOUC mended to members by Fred W . Sargent, president o f the Chicago & Northwestern Railroad. Mr. Sargent concluded that the depres sion was not due to an insufficient volume o f money or credit; that with all existing plant facilities and mechanical advances it would be utterly impossible to satisfy basic Americans wants with all the labor available if that labor were to work but thirty hours a week; that it is too late to correct maladjustments o f international trade by mass reduction o f tariffs, but reciprocal trade pacts are on the right course; that pegging o f prices will not restore prosperity; that this country is not overproduced and that farm produc tion should not be curtailed; that farm purchasing power should be brought to a parity, through subsidy o f foreign mar kets, i f necessary, and that the govern ment should undertake a water conserva tion program fo r farming regions. “ I suggest that the bankers and busi ness men o f the nation address their thoughts first to a plan for increasing the farmer’s share o f the national income in return fo r the new wealth that he pro duces fo r the nation. To do this I would not restrict his production, except as we could well afford to take out the submar ginal or unprofitable areas, and I would attempt to give back to the nation a sys tem o f forestation that would inure to the benefit o f the generations yet to come,” Mr. Sargent said. With the warning that upon private control o f the Federal Reserve Banks rests the future solvency o f the United States, Phil S. Hanna, editor o f the Chicago Journal o f Commerce, addressed a trench ant criticism o f the movement toward na tionalism o f credit. Hundreds o f bankers attending the first session o f the two-day convention ap plauded vigorously as Hanna, said, “ The most important business before the peo ple o f the United States today is to keep the banking business in the hands o f pri vate enterprise. “ I tolerate the ignorance o f those who mistakenly think that more devaluation and control o f credit by the government will be a means to recovery for they are out in the open, property owners and they differ honestly; but i f the same rub ber-stamp methods prevail in the coming congress as prevailed in the last, a bill to nationalize credit, drawn in secret cloisters by Harvard brain trusters whom you and I never had a chance to vote for, can become the law o f the land. These secret draftsmen do not work in the open. I f the danger o f nationalization o f credit is to be safely avoided the bankers must educate their customers in every commun ity as to what political banking means,” Mr. Hanna said. He pointed out that England had kept the Bank o f England under private con trol and with elimination o f access to un limited funds had cut governmental ex penses and increased taxes bringing (Turn to page 26, please) N orthw estern B anker D ecem b er 193J 14 A Campaign of L O S S P R E V E N T IO N "Department of Justice Officials Estimate That Crime Costs the Nation Twelve Billion Dollars Annually, As Well As Hundreds of Innocent Lives. Loss Prevention Must Be the Solution of the Problem. No Bank Wants to Suffer a Loss. It Would Much Rather Prevent the Loss." H ILE loss prevention has always been practiced with respect to fidelity risks in that all individual applications are investigated and with respect to all risks upon which experience has been bad, it is only in recent years that the realization has come that suffi cient information to estimate the hazard has not been required. A review of the origin and development of our present in terest will be helpful toward an under standing of the matter. It will be recalled that from the early twenties much was heard of a crime wave. A southwestern state appears early to have earned the distinction of being a proving ground fo r bank robberies. Its Bankers Asso ciation considered the problem and de cided in 1926 that the solution, would be to lock up the robbers. By way o f en couragement a reward o f $250 fo r the killing or arrest and conviction o f any one guilty o f robbing a bank was offered. While prior to 1926 very few bank rob bers were sent to the penitentiary, it developed that the assessment to take care o f claims for rewards was sufficient in the first year only. Subsequently, the amount of assessment to member banks was increased three successive times and it was necessary fo r the association to borrow7 money to pay the rewards o f fered. From November, 1930, to July 1, 1931, fifty-five bank robbers were cap tured and convicted and sent to the peni tentiary, putting the association in debt to the extent o f $13,600. In an appeal sent to member banks at that time it was pointed out that the robber was their common enemy and that if he were at large, he would continue to rob banks, never stopping or changing his racket until killed or sent to the penitentiary. It was pointed out that burglary insur ance was hard to get and that unless the record improved, that it would soon be impossible to get. Despite the vigorous campaign o f this Bankers Association, eighty-four banks were robbed during the two years prior to this appeal. In prac- W N orthw estern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D ecem b er Î93b By R. T. WOOD Underivriter American Surety Company New York tice, locking up bank robbers did not have the effect o f stopping bank robberies. R o b b e r ie s S pread Meanwhile, bank robberies were spread ing to other states and our countrywide experience had shown a non-permissive loss ratio fo r several years. Through the press and banking publications you are familiar with recent history and know that they have even extended to states where no bank robbery had previously occurred fo r fifty years. The necessity fo r correcting the situation became more and more acute. The alternatives facing us were: (1) to try to overcome the bad experience by increasing rates; (2) to stop Avriting the line partially or entirely; or (3) to cut down losses by preventive measures. Within certain limits the reme dy fo r bad experience is an increase in rates. With continued bad . experience, however, this alternative does not pro vide the answer. The second remedy seemed too much like quitting under fire. The disturbing effect o f wholesale can cellations was something to be avoided. There Avas a need fo r insurance by the banks and it was unthinkable for them not to carry insurance. Having decided against the first two alternatives, we took up the third and began a campaign of loss prevention. Late in 1931 an analysis and study of robbery claims paid Avithin a three-year period Avas made. FolloAving this it' was concluded that all risks should be sur veyed so that the exposure to the robbery hazard in each case would be knoAvn. The original burglary and robbery question naire, improved from time to time as our experience developed, was used as a basis for surveying the entire bank bur glary and robbery business. Where un satisfactory hazards Avere found we asked that insured banks warrant their correc tion. This plan AATa s later submitted to the other burglary underwriters who had had similar experience and were endeav oring to find a remedy. They adopted it in principle and in July, 1933, brought out standard endorsements fo r limitation of cash, etc., in certain territories, sub ject to some exceptions. In April, 1934, the use o f this endorsement Avas extended to all territories. E x p e r ie n c e B ad The experience on Bankers Blanket Bonds from 1930 was also bad and rob bery losses under them showed an increase in frequency and total amount o f losses. Since similar coverage was given under Bankers Blanket Bonds, it was logical that the same survey be made as respects the burglary and robbery hazards. A study o f blanket bond experience, how ever, indicated that the heaviest losses Avere due to the dishonesty o f employes. Accordingly, a questionnaire was designed to cover the fidelity hazard. A fter ex tending this campaign to Bankers Blanket Bonds our findings were presented to the other blanket bond underwriters Avho have noAv adopted the program in principle. Someone has said that there is nothing so irresistible as an idea whose hour has arrived. This seems very true with re spect to the loss prevention campaign. While this Avas getting under way by means o f instructions to our field force and suggestions made to individual banks, the Protective Department of the Amer ican Bankers Association published in the latter part o f 1932 in the Association Journal some strong articles on the sub ject, stressing the fact that the cost of bank insurance against loss through crime had justifiably increased without inter ruption fo r more than ten years; that no company should be expected to keep on underwriting risks at rates which con tinued showing an inadequate return to cover losses and that never in the history (Turn to page 34, please) 15 Property Management and R E A L ESTATE S A LE S Every Banker Could Determine Real Estate Values, and Was Making W hat He Thought Good Loans, Even Though He Used No So-called S c ie n tific to maintain an income property on a H ILE each property taken over Methods of Appraisal. As profitable basis; so that all possible means through foreclosure is an entirely a Result There Have Been o f savings in operating and maintenance new problem, and must be treated cost must be enforced. Large savings as such, a general plan o f taking over, a Volume of Foreclosures, can be effected through mass buying. W e managing, and preparing fo r sale will all have, in our respective cities, local apply to all properties. Before you can and Many Bankers Now Building Owners’ and Managers’ Asso formulate a plan you must have a definite Find Themselves in the Role ciations. These associations save their end in view. In your new role o f prop members thousands o f dollars through erty manager the ultimate goal is— to of Property Managers, Try cooperative buying o f such items as coal, liquidate the property account, without ing to Make the Property electric and refrigeration equipment, loss to your lending clients. This can light bulbs, janitors’ supplies, paints, wall be accomplished only by maintaining Pay Interest on the Amount papers, etc., and I think we all could maximum occupancy at a profitable rent profit by joining our local Building Own of the Mortgage schedule, and by practicing rigid economy W in operating and maintenance cost. As I see it, then, our first step is to establish a rent schedule, and set-up an operating budget. Our next problem, then, is— how are we to obtain the rentals thus established? Surely tenants are not go ing to pay more fo r an apartment, or office, than it is worth. It is, therefore, our job, as property management con cerns, to bring the rental value o f the unit up to the asking price, and while many may disagree with me, nevertheless, I say that it can be done. H ow ? Cour teous treatment o f tenants, competent management service and immaculate building. T en a n t G o o d W ill Among other things, competent man agement service includes prompt atten tion to tenants’ requests, and while it is not necessary to grant every request a tenant makes, it is imperative that every request, regardless o f how trivial, be an swered either by letter, ’phone or per sonal call. “ Tenant good wall” is the very foundation o f a successful property management business, and the quickest and surest way to destroy it is to ignore complaints and requests. But a compe tent management concern goes further than mere prompt attention to tenants’ requests. I f you are to maintain a high percentage o f occupancy at profitable rentals, you must anticipate the tenants’ requirements. Your office records show, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By LOUIS MAGINN President Franciscus-Maginn, Incorporated St. Louis A n A d d ress B e fo r e th e M ortga ge B an kers A ssocia tion C on v en tion or at least you should have office records showing what decorations and repairs were made in each unit, and when they were made. So anticipating cleaning and decorating needs is simply a matter of checking office records. Having a represensative personally call on a tenant, and offer to clean or redecorate (should your man find redecorating necessary) instead o f waiting fo r the tenant to call you, will actually save “ decorating dollars.” In bringing the standard o f the building, and service up the point which justifies the established rent schedule, we must not overlook the fact that net and not gross rent pays the interest on your client’s investment. This means holding the operating and maintenance cost to an absolute minimum. Ma n ten a n ce It is a big job during times o f in creased vacancies, and decreased rentals ers’ and Managers’ Association. Another item o f waste in property management is fuel. I doubt if the average janitor realizes that an apartment building of 100 units can be heated in zero weather with three pounds o f steam. The fuel wasted, through improper care and op eration o f heating plants, runs into many thousands o f dollars each year. The fire man or janitor should be instructed in the care and operation of his heating plant and other mechanical equipment such as elevators, and refrigeration sys tems. F ix e d C harges Attention must also be given to the re duction o f fixed charges— taxes, and in surance. Insurance policies should be checked against an appraisal. Frequently you will find that property is over-in sured, or that you can reduce the rate through co-insurance, through the elim ination o f fire hazards, or the installation o f fire doors, extinguishers, etc. Tax problems should be intelligently presented to the tax board. Requests for reduction in taxes should be supported by facts, as to the ground value, the repro duction cost o f the building at the pre vailing construction prices, depreciation rates, rentals, operating and maintenance cost. A fter placing an income property on a profitable basis, we are now in a posi tion to present this investment fo r sale. (Turn to page 39, please) N orthw estern B anker D ecem b er 193b 16 How to M ake, and Keep, Banking Friends THE PUBLIC W A N T S T O K N O W H IS discussion is the result o f an interesting survey I have just com pleted. This survey is simply a candid discussion with more than 200 average American citizens in various walks o f life, professional men, business men, salaried people, as well as the un employed. From these people I at tempted to get a cross section, o f course in a limited way, o f the attitude or view point o f the American public toward the banking business o f ’ this country. Obviously, only a few o f the high spots can be covered, and I am going to ask you not to misunderstand my position when I attempt to answer the questions to be asked by Mr. Average Citizen. I hope the answers I give will at least illus trate that there are answers to be given to the American public, through which perhaps a better understanding and a less critical viewpoint may be achieved. Mr. Average Citizen Asks Five Questions . . . Why Is It So Difficult to Borrow Money? Who G ot the Mil lions Lost On Securities? Why Should I Pay Service Charges? W ith All the Losses, Do You Blame Me for Being Disturbed? Why So R e lu c ta n t to Make Loans On Improved Real Estate? Q u estion N o. 1 Assistant Vice President Central Hanover Bank & Trust Co. New York City T Why is it so difficult to borrow money from banks at the present time when the banks have so much idle cash? I am glad that you asked this ques tion because a great deal of publicity has been given to it recently in the news papers. \\ hen there is but little busi ness activity, there is no demand nor as a rule a basis fo r many legitimate bank loans. In the last few months I have talked to a large number o f bankers and without exception every single one of them told me that their banks were eager to obtain good loans. When you, Mr. Average Citizen, make a loan directly to a manufacturer, builder, or business man do you not do everything you can to make certain that the loan will be repaid? I f the loan is not repaid, you have lost your own money and it is en tirely your problem. On the other hand, when the bank finds that borrowers are unable to pay, the situation is different. The banks are not owners but trustees and custodians o f money entrusted to them by the people. The bank lends the depositors’ money and must be reasonably sure that the bor rower will be able to repay the loan, otherwise the bank is subject to criticism by its depositors for violating a sacred trust. As you know, in accepting de posits the bank in principle borrows from A, B, and C and when making loans lends the money, we will say to X, Y and Z. N orthw estern B anker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D ecem b er 193f By HARVEY WEEKS A n address b e fo r e th e recen t co n v en tio n o f th e N ew J ersey B an k ers A ssocia tion When A, B and C call at the bank for their money they will not take the excuse that the bank has loaned their money to their neighbor who is unable to repay. It is undoubtedly true that to some extent banks may be a little more conservative in making loans than they were several years ago, because experience o f many banks has proven to them the wisdom o f a more conservative policy. On the other hand, Congress feeling that perhaps the banks were not cooperating with business men, amended the Federal Re serve Bank Act in the summer of 1932 so as to give the Federal Reserve Bank the power to make loans directly to in dividuals under certain conditions pro vided the borrower was unable to secure the accommodation from a commercial bank. The figures published in the Federal Reserve Bulletin o f November 14, 1934, less than ten days ago, showed that the total advances o f all twelve Federal Re serve Banks in this country to industry was only $7,750,000. The Federal Reserve Bulletin o f October, 1934, showed that up to August 30, 1934, the Reconstruc tion Finance Corporation had authorized loans to industrial and commercial busi ness o f $8,105,000 and up to September 30, 1934, actually has disbursed $1,916,000, in addition to $627,925 participations with commercial banks in industrial loans. On this basis, does it seem reasonable that commercial banks have refused to make legitimate loans? Mr. Average Citizen, when you con sider that these two governmental agen cies, bending every effort to aid com merce and industry, have only been able to loan to the dates mentioned approxi mately $9,500,000, across the length and breadth o f the United States, aren’t you inclined to feel that it substantiates the bankers’ statement that banks are an xious to make loans to business and are cooperating with industry and commerce in their responsibility to depositors? Q u estion N o. 2 Mr. Banker, who got the hundreds of mil lions of dollars the American public lost on the securities purchased on the advice of bankers? Who got it? The shrinkage in values is almost un believable. F or instance, take the dif ference in market value o f stocks on the Stock Exchange September 1, 1929, to taling more than 89 billion and June 1, 1932, o f only 16 billion, making a differ ence of 73 billion. What has happened to this 73 billion? Who got it? Do you think the bankers did? Can you name ten people you know who are bet ter off today than they were in 1929? It is true there may be a few here and there but the truth in the matter is values vanished. The speculative fever had been so high that even men whose reputation fo r conservatism had been out standing, lost their heads in the wild at tempt to make quick profits and the re sult was that practically everyone lost. A distinction should be made, however, between commercial bankers and security dealers. Frankly, it is undoubtedly true that in those days many suggestions and recommendations were made by commer cial bankers which did not work out sat isfactorily. However, with few excep tions the suggestions and recommenda tions o f the bankers were made in good faith and with a sincerity o f purpose. It is most unfortunate that many people 17 were speculating, who thought they were investing, but on the other hand, the great majority o f people operating in the stock market would have to frankly admit that they knew they were speculating. During the 1925 to 1929 era we knew and heard o f large fortunes which were made in the stock market. The news papers carried headlines to the effect that many men were making millions o f dol lars. Have you seen many headlines in the papers telling o f great fortunes be ing made since that time ? I f the losses o f one group meant the gains o f another, it would have been extremely difficult fo r those making the 73 billion to have kept their good fortune a secret. The real answer is that no one got it— values vanished. Even though a depositor has an average balance o f $50,000, if there is so much work involved in the handling o f his account because o f the thousands o f pay roll checks, credit reports and many other bank services given him, the account, even Avith this large balance, may be unprofit able. The only compensation the bank re ceives for all the work it must do on account o f this kind, is in the Avay o f earnings on whatever part of the balance is available fo r investment. I f these earn ings are less than the actual cost, isn’t it fair that the large depositor should be made to pay his way as well as the small depositor ? On the other hand, even though a small depositor writes fe\v checks and uses practically none o f the other services offered by the bank, shouldn’t he likeAvise be charged if the earnings from his balance are not ade quate to cover the cost o f services ren dered ? Mr. Average Citizen, isn’t a. checking account the most reliable and efficient teller, bookkeeper and safe-keeper of the funds employed in your business? Or, if you are a salaried man or if your wife maintains a household account, isn’t the service charge much cheaper than the cost or risk o f attempting to pay the bills in Q u estion N o. 3 Why should I pay the bank a so-called service charge when the bank has the use of my money? Mr. Average Citizen, do you know the amount o f work, and expense involved in the operation o f a bank after you have made a deposit at the teller’s window or after you have cashed a check? The deposit is posted to your account and the checks you have deposited are sorted and sent fo r collection through the proper channels. Your checks have to be veri fied as to signature, proper endorsement, date, stop payment, and other special instructions and then entered in the ledger. I f checks are returned unpaid, the entry on the books must be reversed and the checks returned to you. The bank carries insurance against forgery o f checks fo r you. I f your business re quires cash, then the bank must carry for you a supply o f cash and coin in its vault which involves cost o f transporta tion and insurance. In addition, the law requires, beginning January o f this year, the banks must in sure your deposits up to $5,000 with the Federal Deposit Insurance Corporation which, o f course, constitutes another ex penditure to be borne by the banks. When you consider the amount o f work involved in cases where the actual cost of performing the service is greater than any possible profit on balance below a certain figure, isn’t it fair from your point o f view that the individual should pay for what he gets as well as enable the bank to make a small profit on his ac count? The source o f the bank’s income is practically limited to the profitable employment of its funds and a charge for the services it renders. People have always expected to pay fo r certain bank ing services such as rental o f safe-deposit boxes. A large number o f depositors have not been charged for many services given and accounts that were unprofitable were carried by the profitable ones. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis THE DROVERS BANKS E X TEN D TO YOU THE CORDIAL GREETINGS OF THE HOLIDAY SEASON AND BEST WISHES FOR YOUR SUCCESS IN 1935 r o v e r s D NATIONAL BANK TRU51 &SAVINU5 BANK Union Stock Yards Chicago N orth w estern B anker D ecem b er 193k 18 cash? Do not forget that your cancelled check is evidence o f payment o f a bill. Q u estion N o. 4 With thousands of banks closed and thou sands of depositors unable to get millions of dollars ivhich they had deposited in these banks, do you blame me for having been disturbed over the banking situation? Mr. Average Citizen, that question is a perfectly natural one. Let’s consider some o f the factors which brought this, condition about. jjMp Santa C laus m Bankers who bought good Iowa Municipals know there IS a Santa Claus. H i m Because Iowa Municipals have ignored the depression— enhanced in value month by month— paid interest and principal promptly when due— and escaped the rising tide of money taxes. Today, as ever, there is no better bank investment than Iowa Municipals. Ask for our latest list Carleton D. Beh Co. l o i v a ’ s L a r g e s t M u n i c ip a l B o n d H o u s e N orth w estern B anker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1230 Des Moines Building Des Moines Phone 4-8156 f il When you deposit a thousand dollars in the bank, the bank does not put the cash into the vault. This would not be banking, but rather safekeeping for which, Mr. Citizen, you would have to pay a safekeeping fee. Your deposit would shrink by the amount o f fees charged. Instead o f using this method, the bank keeps a part o f your thousand dollar deposit in cash in the vaults to meet your demands fo r small amounts. Part must be deposited as a reserve with the Federal Reserve System and on these two parts the bank does not earn any in terest. The rest o f your deposit the bank lends to trade and industry, either directly in the form o f an advance or discount, or indirectly by buying bonds issued by various concerns while a cer tain part is invested in government bonds. Now, Mr. Average Citizen, the busi ness o f banking is based on pretty much the same principle as that o f life insur ance. The life insurance companies do not expect that all o f its policyholders will ask fo r or demand the loan values o f their policies in one day, one week or one month. The bank does not ex pect that all o f its depositors will ask fo r their money at the same time. When people become panicky and line up before the teller’s window, demanding their deposits, it is obvious that the bank cannot pay them in full. First it pays out all the cash on hand, then the amount it is able to borrow from the Federal Re serve Bank. When these funds are ex hausted, the bank sells the bonds it is holding. Such sales usually entail losses since other banks, likewise confronted with runs, endeavor to sell their securi ties, thus glutting the market and natu rally causing a drop in prices. However, the bank cannot force the borrowers to repay the loans before they are due and is, consequently, compelled to close its doors, not matter how good the loans are regardless o f the fact that these loans are paid wThen due. Many exceptionally well managed banks were forced to close due to mass psychology and lack o f understanding on the part o f the depositors. (Turn to page 45, please) D ecem b er 1934 19 Bonds a A Present Day Analysis of Railroad Securities "It Is Expected That the Volume of Tonnage W ill Continue to Be the Dominant Factor in the Determination of Dividend and Interest Payments, and That the Quality of the Management, the Earning Power of the Individual Lines and the Financial Strength of the Various Companies W ill Continue to Be Vital Factors in the Determination of Security Values" HE vital role that political forces are playing- in the economic scene is strikingly borne out by an ap praisal o f the present status o f railroad securities. The prospects fo r government ownership, tonnage, rate increases, reor ganizations, receiverships, loans, expenses and profits may be adequately appraised only by giving careful consideration to the effect o f governmental activities. T Government ownership and operation o f railroads is by no means a new idea. Aside from one large system in Canada, the railroads o f the other major countries o f the world are largely under political control. The fact that the Administration does not contemplate government own ership, at least in the near future1 , is indi cated by the following expressions o f opinion by two p'owerful political figures. Joseph Eastman, Federal Collector of Transportation, in an address before the Trans-Missouri-Kansas Shippers Board and the Kansas City Traffic Club at Kan sas City on October 11, 1934, said “ I am suspected, I gather from all accounts, by some of my railroad and financial friends o f spending much o f my time in hatching a plot fo r public ownership and operation o f the railroads. Last January I dis cussed that possibility in detail in a re port to the President and Congress with the conclusion that I was unwilling to recommend such a plan under existing conditions. Reserving the right to change my mind i f good reason develops. I have not changed it yet.” Mr. Eastman, however, has said frankly on numerous occasions that he believes government ownership is the ultimate so lution. He advises against it under pres ent conditions, particularly because o f its possible disturbances in a financial way. The Chicago Journal o f Commerce re ported on October 9, 1934, that “ Jesse H. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By ELLIOTT P. WOODRUFF Railroad Security Analyst Shea and Company Chicago Jones, chairman o f the Reconstruction Finance Corporation, believes that the last thing the government should do is to take over ownership o f the lines.” Jones expressed this view at his regular press conference immediately following his re turn from a discussion with President Roosevelt. The general public apprehen sion about the government entering fur ther into business is expected to be a powerful force in warding off government ownership. B usiness A c tiv ity The prospective volume o f tonnage will, o f course, be determined to a large extent by business activity. It is anticipated that governmental policies will be very influential in this respect. The large amount o f government spending has un questionably given an impetus to con sumers’ goods industries. This stimula tion has been reflected by such reports as those o f the retail trade companies. A continuation o f the spending policy is expected to exert a supporting influence on the present artificial level at which such industries are operating. Such a policy, however, cannot be continued in definitely. The heavy industries, on the other hand, have not responded to the Administration’s attempt to “ prime the pump.” In this connection, it appears reasonable to accept the doctrine that a revival o f the capital goods industries would be a logical result o f a program calling fo r a reduction in costs in various industries in order to permit a substantial reduction in prices o f finished goods. The Administration could toward this end. effectively work T on n a ge The government has also played a part in determining the tonnage of individual commodities. The restriction o f price concessions fo r summer coal buying by the NRA Code has substantially retarded the movement of coal. During the five weeks ended September 1st, fo r example, reports o f coal loadings indicated an aver age weekly decrease under 1933 o f 21.7 per cent, whereas total loadings were only 4.3 per cent under last year. The spread was materially decreased in the four weeks ended September 29th when the average decrease fo r coal shipments was 6.2 per cent compared with 2.7 per cent. F or the four weeks ended October 27th, coal traffic was 5.7 per cent under 1933 and total traffic 3.8 per cent. During the week ended November 3rd, a 3.8 per cent increase was registered by coal shipments against a 3 per cent decrease for all load ings. The present trend may logically be expected to continue and a relatively better showing is anticipated fo r coal dur ing the coming weeks as a result of the government’s action. It is no new thing to feel the govern ment’s influence in the sphere o f rate making, inasmuch as it has been neces sary fo r the carriers to obtain the ap proval of the Interstate Commerce Com mission in matters o f rate changes for some time. This governmental agency is currently conducting hearing with re spect to a request by all o f the railroads fo r freight rate increases. On November 20, 1934, the Interstate Commerce Commission granted the rail roads the right to re-adjust class freight rates in western trunk line territory. The effect o f the decision wall be to permit the N orth w estern B anker D ecem b er 193b 20 application o f low rates on short-haul business and higher rates on long-haul. D e b t S tru ctu re Keyed to the Investment Needs of Iowa Banks # M o r e Iowa banks are turning constantly to Polk-Peterson Corporation, be cause the completeness and scope of the Bank Investment Service provides: 1. A nationwide private wire system into every important financial center. 2. A seasoned, unbiased analytical and legal department. 3. Skilled operators in our trading department who obtain the maximum advantages for our clients, both in buying and selling. 4. Breadth of service, covering every important type of security, listed or unlisted. Give us an opportunity to dem onstrate just what this service DIRECT PRIVATE WIRES TO can mean to Y O U . telephone orders at our expense. N ew Y ork C hicago San F ra n cisco B oston A tlanta B a ltim ore B uffa lo C levela n d D e n v er D e tr o it K a n sa s C ity L in coln L o s A n g e le s M in n ea p olis Omaha Philadelphia P ittsbu rgh P ortlan d, Ore. St. L o u is S ea ttle W a sh in gton POLK-PETERSON CORPORATION INVESTMENT SECURITIES Des Moines Building, Des Moines Telephone 3-3245 and all other principal financial markets. N orthw estern B anker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Wire or Branch Offices in Sioux City, Ottumwa, Waterloo, Davenport D ecem b er 1934 The practice in railroad reorganiza tions in the past has been to obtain the average results by considering earnings over a period o f years and reducing the fixed debt to a point where charges would be covered about one and one-half times by the earnings of an average year. Mr. Eastman advocates speedy reorganizations and suggests that earnings fo r the depres ión years be used as a basis for scaling down the present debt structures. Such a policy would reduce receivership costs and by more drastic reorganization place the carriers in a position which would en able them to survive future periods o f low earnings. In an address before the American Life Convention in Chicago on October 10, 1934, Mr. Eastman made the following statements in this connection: “ Early in these remarks I endeavored to make clear the present and future danger o f the railroad situation which lies in the heavy debt now outstanding. It is this danger wdiich makes financial reorganiza tions imperative in many cases . . . post poning reorganizations is expensive, be cause receiverships are costly. The ques tion then arises whether it is not possible to reorganize noAV on a basis o f fixed charges which will not be an undue load even in times o f severe depression, and permit the security holders to recoup when times o f better earnings arrive . . . I have mentioned the point to you, how ever, because I believe you should not overlook the advantages o f the early re organization o f the companies which are now in receivership or bankruptcy.” The fact that the government has loaned about $483,000,000 to the railroads indicates the significance o f the attitude o f the administration in the matter of prospective interest defaults and receiv erships. Jesse Jones does not regard the present as a favorable time to reorganize the railroads. The Chicago Journal of Finance reported on October 9, 1934, as follow s: “ About $30,000,000 will take care of the carrier’s present needs accord ing to RFC fig’ures, Jones said, adding that the Government agency is prepared to go further next spring if necessary in the event the expected business im provement does not benefit the roads’ earnings.” D iffe r e n t T rea tm en t A more recent report, however, indi cates that the Administration has been considering different financial treatment for the railroads. Instead o f loaning funds to meet interest or bond maturi ties, it was suggested that these obliga tions might be put through the wringer and have the government lend for mod ernization work or new equipment. The 21 thought seemed to be that loans fo r work ing capital were doing nothing to aid em ployment, merely keeping alive’ obliga tions which needed paring down. The best opinion is that the carriers will be tided over wherever possible until Con gress can consider some plan fo r reduc ing interest charges. It is possible that wholesale reorganizations might follow. In considering the effect o f such an even tuality on bond portfolios, it is important to bear in mind that the density o f traffic on the mileage securing individual mort gages indicates the earning power o f that mileage and is regarded, therefore, as the most important factor in determining how various issues will fare in reorgani zations. It is common knowledge that the ex penses and profits of the railroads have been affected to an extraordinary degree by the increased price level resulting from the Administration’s policies. Higher wages and higher costs fo r materials, sup plies and fuels, increased taxes to offset the increased government expenditures and additional appropriations fo r pen sion payments are being reflected in a substantial measure in the current reports o f operating results of the various rail roads. W E AR E A L W A Y S IN T H E M A R K E T TO BUY IOWA MUNICIPAL BONDS L egisla tion The helpful legislation, including the anticipated regulation o f competing forms o f transportation, which is expected to be provided fo r in the coming session o f Con gress, the intelligent and aggressive at tack on the problems o f waste, unneces sary duplication o f facilities and perma nent legislation by the Federal Coordina tor, the outstanding progress that has been made in recent years in the matter o f operating efficiency and the action o f the industry in giving greater authority than ever before to a central organization lend encouragement to the outlook for railroad securities. It is expected that the volume o f tonnage will continue to be the dominant factor in the determination o f dividend and interest payments and that the quality o f the management, the earning power of the individual lines and the financial strength o f the various com panies will continue to be vital factors in the determination o f security values. It cannot be denied, however, that the prob lem of security analysis, during these times, has been rendered increasingly complex by the increased importance o f political forces. The policies and atti tudes of outstanding public officials must be carefully scrutinized if reasonable judgments with regard to the prospects o f securities are to be formed. IM M E D IA T E ON ANY F IR M BID S IS S U E S JACKLEY & COMPANY IN VESTM EN T 210-11 SEC U R ITIES E Q U IT A B LE B U IL D IN G P H O N E 3-5181 DES M O IN E S Doctor: “ You must avoid all forms o f excitement.” Male Patient: “ But, doctor, can’t I even look at them on the street1?” https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis N orth w estern B anker D ecem b er 193b 22 NEWS AND VIEWS (Continued from page 8) payment from earnings on their invest ment in a bank deposit when they re ceived 25 per cent o f the amount col lected by the receiver and the other 75 per cent went to such receiver and law yers ? “ It would seem that depositors would have a right to some protection from their government. Assuming that the bankers are crooks and have robbed the depositors and that the government has snatched the remaining assets from the crooks and placed such assets in the hands o f government control, the deposi tors have a right to expect a semblance o f justice and protection. But here they are raided by the very forces that should be their preservers and protectors. “ I especially call your attention to the foreclosure o f a mortgage fo r $625. The attorneys’ fees were $1,000 and allowed by the judge. The depositors would have been $375 ahead if the mortgage had been stuck into the stove and the home owner had a clear home. “ O f course the lawyers could rob with out let or hindrance and if the depositors did not get anything it would all he charged to the crooked bankers. The lawyers could report they had done their best and this was all they were able to ( Sale limited to State of loiva) N ew Issue 5,000 Shares The Rath Packing Company W aterloo, Iowa ti% Cumulative Preferred Stock An Iowa Corporation Par value, $100 per share IHor over 40 years The Rath Packing Company has been in the meat packing business, producing a complete line of packing house products sold throughout the United States and foreign countries. Dividends on their Preferred Stock have been paid semi-annually May 1st and November 1st for the past 27 years without interruption. The Company has no bonds or mortgage indebtedness. The busi ness has shown an operating profit for the past 37 years. Net earnings for the past five years on the Preferred Stock outstanding, after depreciation and federal income taxes, have averaged Four Times Dividend requirements. There has always been a good demand for Rath Preferred Stock, and due to the limited amount available we recommend immediate purchase. Tax Exempt in Iowa Further Details on Request recover, but fo r the same procedure the bankers ought to be sent to the pen or hell. Please read the marked article and draw your conclusion as to which are the big crooks, the bar or the bankers.” There is no question but that many lawyers have worked a “ racket business” during the depression, in the handling o f foreclosures, and like every other bad business practice, it should be eradicated. L Y M AN E. W A K E F IE L D , president o f the Association o f Reserve City Bankers, gives the result of a survey o f the lending activities o f a group o f banks which carry over 35 per cent o f the com mercial banking deposits of the country, and indicates (1) that there are lines o f credit now available to borrowers and unused to the extent o f probably $8,000,000,000 or $10,000,000,000 and (2) that, excluding loans on collateral security and renewals o f old loans, new loans to the amount o f $3,877,000,000 were made by these banks during the first six months o f this year. W A S D R IV IN G OVER TO OM AHA last month with three of my banking and insurance friends and they wished to stop at the Council Bluffs “ IO W A LIQUOR CONTROL COMMISSION” store, to replenish their supply, and so I stepped inside to see what the place looked like, this being my first entrance into an Iowa Control Liquor store—strange as it may seem, and believe it or not. I became very greatly interested in the mottoes which adorned the walls of the “ Liquid Emporium,” and here are a few o f them: “ W e don’t want your grocers’ money.” I “ You voted against the bootlegger,— don’t be his partner.” “ Temperance is the only solution o f the liquor problem.” “ A forged check and a bootlegger’s la bel have the same cash value.” “ Our merchandise is made from grain, the bootlegger’s is made from molasses. Grain grows in Iowa, molasses grows in Cuba.” All o f winch seems to me to prove one thing, namely that the bootlegger, like the poor, we will have with us always, no matter how the liquor traffic is han dled or supervised. Price 100 per share to yield 6 .0 0 % W.D. Hanna and Company BURLINGTON W aterloo W ashington N orthw estern B anker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D ecem b er Î93b Cedar Rapids Des M oines K. W A IB E L , Advertising counsel, . Continental Illinois National Bank & Trust Company, Chicago, was recently elected commander o f the Continental Illinois Bank Post No. 383 of the Ameri can Legion— but what I want to know is will he give the “ commands” in his ex cellent German and provide beer and pretzels when the former fighters are “ at ease” ? J 23 OL. W IL L IA M G. EDENS, honor ary vice president o f the Terminal National Bank o f Chicago, celebrated his 71st birthday November 27th, with a quiet family dinner at the home o f his son, W . M. Edens, young official o f the Conti nental Illinois Bank and Trust Company. li= C Underlying Divisional Although he retired from active service as vice president o f the Central Republic Bank o f Chicago in 1931, Col. Edens has continued to play an active part in the affairs o f the American Bankers Associa tion and the Illinois Bankers Association. He has been a strong advocate o f the need fo r education to re-establish banks and bankers as leaders in community enter prise. Col. Edens was recently appointed a member o f the important Commerce and Marine Committee o f the American Bankers Association. P h i l l i p s , speaking before an Iowa University class in bank ing recently, paid a mighty fine tribute to Prank Warner, secretary of the Iowa Bankers Association. The dean said: “ Mr. Warner is the most outstanding banking secretary in the country, re spected and admired by all bankers, yet one of the most truly modest men I ’ve ever known.” A statement with which we are in hearty accord. certain UNDERLYING Railroad Bonds which Protection Class I railroad systems, are ean D A high degree of security is afforded by have been outstanding since the days of early railroad consolidations. In many cases such bonds, in relation to History o f the bank holdup business has proved one thing these days and that is that it is absolutely essential to pro vide one’s self with adequate Underwrit er’s approved Timelock Protection. A half century ago, the installation o f night timelocks put a stop to the practice o f kidnapping a banker in his home, marching him to the bank and by means o f force, made him open his safe or vault. Insurance companies, conserva f i v e bankers and underwriters now realize that the only way to put a stop to the day holdup is to also place a physical barrier around what the holdup is seeking, namely, the banker’s money. Many banks have already equipped themselves with this new means o f protection and until a good many more do, there is very little hope o f getting any reduction o f insur ance rates, The Yale & Towne Manufacturing Com pany are applying the same old reliable type o f delayed timelocks as they did over a half century ago, applying it only in a new form. They have designed a fully jewelled timelock o f double safety con struction that has proven very effective during the past ten years in eliminating the visit o f a day holdup man. One of the main features besides their reliability to give an uninterrupted service, is the matter o f its variable nature o f delayed time control. In fact, they can be varied https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1. A mortgage on strategic properties of the larger Road. 2. Payable as to interest as an oper ating charge under the terms of the lease. 3. Guaranteed as to interest and /or principal. Such obligations are ideal investments for Bank funds and are available to yield from 4 per cent to 6 per cent. W e invite you to consult with us for fur ther information. QUAILS w C U N ÿ y INVESTMENT SECURITIES Davenport Bank Bldg. Davenport, Iowa 711 N orth w estern B anker Ir D ecem b er 193 b 24 V P ersonal S upervision Every clients individual own receives supervision. function security our our personal Our complete facilities constantly, not purpose of trading your for the securities but to find for you sounder values at equal or better prices. from any period o f three minutes up to . providing a seven hour delayed opening. It has always been felt that a longer delay period should be used fo r the first open ing o f a safe in the morning and this can be accomplished by the banker himself, a feature, we believe not obtainable in other types o f delayed control equipment. The F. E. Davenport & Company of Omaha, Nebraska, are the agents fo r the Yale Variable Delayed Timelocks and they report that bankers through the territory that already have this type o f equipment would not be without it. In order to place an opportunity fo r every banker to become familiar with the operation o f the equipment in his own bank, they are mak ing a special offer o f a thirty day free trial o f the equipment. A s one o f the officers o f the Davenport company re marked, “ W e have never believed in try ing to sell a banker anything, we would rather have him buy it fo r in only this way can he be thoroughly satisfied with the equipment.” Their willingness to have a banker sell himself one the Yale Variable Delayed Timelock equipment by using it in his bank, seems to be a very fair proposition, though usually unheard of. past five years on the preferred stock out standing, after depreciation, and federal income taxes, have averaged over four times dividend requirements. In W aterloo The Carleton D. Beh Company, Des Moines, recently announced the appoint ment o f C. H. Rathbun o f Waterloo to head the company’s business in Waterloo and northeast Iowa territory. Mr. Rathbun was fo r fourteen years associated with the Geo. M. Bechtel Com pany and is well known in Iowa munici pal bond circles. He has already taken over his position with the Des Moines in vestment banking house. McKinstry Vice President of W aterloo Bank James M. Graham, president o f The National Bank o f Waterloo, Waterloo, Iowa, and his board o f directors, are pleased to announce the appointment o f Charles S. McKinstry as vice president Y our account, as a client of this firm, is reviewed. constantly surveyed and W h e n any change in the status of one of your securities is discovered, you are inform ed instantly by the most rapid means of communication available. ★ ★ ★ W e Have No Securities for Sale ★ ★ ★ Consult SH EA & CO. INC. 39 South LaSalle St. Telephone Central 8232 C H IC A G O Iowa Representative C . L. Kluss Telephone 4-3095 A N orth w estern B anker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis DES MOINES _ = D ece m b er 193b Visit Packing Plant Members o f the firm o f W. D. Hanna & Company, investment bankers o f Bur lington, Iowa, were in Waterloo last month attending a sales meeting o f the organization, and at the same time took an inspection trip through the plant of the Rath Packing Company. Participat ing in the sales meeting and plant in spection were: Leo L. Mak, Leslie H. Schrubbe, Harry Bahr, Oral Larkin, W aterloo; Leon E. Gardner, Des Moines; Thomas L. Crabbe, J. K . Munn, A. E. Dickinson, Don A. Carlson, Cedar Rapids; Walker Hanna, A. R. Kramer, Harlod E. Cooper, D. M. Kurtz, and Richard H. Jensen, Burling ton. For over forty years this packing com pany has been in the meat packing busi ness producing packing house products sold throughout the United States and foreign countries. This industry was started in 1891 and has been built up until they now kill over 1,300,000 animals an nually. Rath have over three hundred salesmen and three hundred people in their office and over two thousand people in the packing plant. They have one o f the most modern up to date packing plants in the country. Dividends on their preferred stock have been paid without interruption since the stock was issued over twenty-seven years ago. The company has no bonds or mort gage indebtedness. The business has shown an operating profit fo r the past thirty-seven years. Net earnings fo r the ch arles s. m c k in s t r y and operating head o f that institution. The appointment became effective Decembi r 1st. Mr. McKinstry, formerly cashier, suc ceeds liodn-y P. Lein, who has resigned to ac< ept an execution position with the Register and Tribune, Des Moines. Other changes in the personnel o f The National Bank o f Waterloo are the ap pointment o f Robert L. Fenne as cashier, and Henry F. Hoffer and R. L. Kilgore to the position of assistant cashiers. THE CENTRAL BANK (Continued from page 11) States debt as compared with 44.03 per cent in 1933, 42.73 per cent in 1932, 24.99 per cent in 1928 and only 15.34 per cent in 1920. Conversely, the percentage o f Federal paper held by the public has dropped 25 from 84.63 per cent in 1920 to 47.63 per cent in 1934. Banks o f this country which had 8.93 per cent o f their deposits invested in gov ernment issues in 1920, now have 29.49 per cent o f their depositors money ad vanced on government securities. Contrast these figures with the fact that Canadian banks have 18 per cent o f their national debt in their assets and the big British banks have only 11 per cent o f the British Treasury debt on their books. But most significant is the fact that o f the increase o f $4,500,000,000 in Federal debt between June 30, 1933, and June 30,1934, United States banks took $3,900,000,000, or 86 per cent. What better results could be expected from a Central Bank? It is the consensus of opinion that some changes in our banking laws are bound to be made during the next session o f Congress. Just what they are to be no one can accurately predict at the pres ent time. President Roosevelt is not entirely sold on the Central Bank idea, and the Federal Reserve System has many staunch friends in the administration. Officials are disagreeing on the policy and how it could be done but the predom inate political forces eventually will be fo r some form o f more centralized con trol under the Federal government. Specialists M B unicipal onds Suitable for Investment of Ban\s, Institutions and Trust Funds W e will be glad to furnish a complete list of these tax exempt securities on request James C. Sh aw O w en P. M cD ermott Jack Sparks Shaw, McDermott a Sparks Investment- Securities 307 EQUITABLE BLDG. PHONE 3-6119 DES MOINES AN IO W A BANKER WRITES TO MR. CROWLEY (Continued from page 12) A P erso n a l In v estm en t S ervice fo r Io w a Banks er can only offer liberality in making loans, or in free service, on which to build his clientele. It seems to me something can be worked out by the department, in the form o f wholesome rules and policies, that would help wonderfully. Can it be done? W ill it be done?” N o S ufficient In c o m e “ It seems to me that as government bonds do not provide a sufficient income fo r a country bank, as an exclusive bond investment, that some constructive plan could be worked out, to give the country banker a chance fo r a safe investment, based on a careful examination o f capital set up, and income statement, together with ratings, fixed rates, government ap provals, and such other safeguards as would be positive and reliable. A t the present time, many securities rated A A A , A A or A, by bond service organizations, are dragging along at prices unwarranted by prevailing conditions, while many others rated BBB, BB or B, are selling at par, or much above par. Many a sound utility with high rating, whose capital structures have been fixed as a result o f public hearings, and rates ample to meet fixed charges have been estab https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Expert analysis and recommenda tions to fit your individual bank needs. A s k our B an k S ervice D ep a rtm en t to h e lp you. N o ob liga tion . S im p ly w rite, p h o n e or call. Direct private wire to all leading markets. Both Listed and Unlisted bought, sold and quoted. M c M v rc re n v H il l & C bonds o m p a n y IN C O R P O R A T E D INVESTMENT 214 Sixth Avenue SECURITIES D ES M O IN E S Phone 4-4138 N orth w estern B anker D ecem b er 1934 26 fished, and the public thereby invited to invest in them, now show a tremendous loss to the investors. The public has built up a strong- prejudice against them, based on the theory that they are owned by ‘Wall Street Speculators/ when in reality the depression in their values are felt by the laborer, farmer and general masses alike, in effecting their savings, their life insurance or their personal investments. G M A C SHORT TER M ILOTES available in limited amounts upon request G e n e r a l M otors A c c e p t a n c e C o r p o r a t io n Executive Office " Broadw ay OFFICES IN at 57th Str e e t P R I N C I P A L ~ Efew Yor\, T[. Y. CITIES “ At present low values, it seems that if there ever was a time when a farm mort gage was a proper bank investment, that time is right now, when they are appraised at present low values. But long and per sistent training seems to prevail with most bankers, that it is improper to loan demand deposits on such long terms. It would seem imperative that a positive and ready market for them should be established, and their eligibility for rediscount or sale, should be established, as a part of their making and completion, and the ability to use them, should be as free from delay and red tape. W ith such a market such investments would be proper for demand deposits, but it seems to me, present conditions would be far from making such investments proper. “ I hope that in thus writing to you, that my writing will be taken in good faith, free from partisan influence. In fact it comes too late fo r that purpose, and is not being used for that purpose. I am sure the suggestions I have made would help wonderfully, if they could be used.” Yours truly, B. J. Howland Keosauqua. NEBRASKA BANKERS A N N U AL CONVENTION (Continued from page 13) Safety * Safety is A L W A Y S the first consideration . . . nothing else is so important. The plan of the State Bond and Mortgage Company for accumulating a reserve is 100 per cent safe. Authorities agree that everything possible has been done to provide Absolute Safety. The guarantee fund, which is at all times equal to the company’s liability to bondholders, is assigned to and deposited with the State Auditor of Iowa. State Bond & Mortgage Co. C. G. S T E V E N S O N , Vice President D E S M O IN E S * A m p ly provided fo r in our Five-Point Reserve Fund Bond Plan N orth w estern B anker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D ecem b er 1934- about near reality o f balanced budget and restoration o f confidence that made pos sible refunding o f the war debt at lower interest and saving o f 150 million dollars a year. Mr. Hanna charged that politics is be hind the credit nationalization move, and divided its cohorts into two factions: Those believing that business would re vive i f a supposed artificial restriction o f credit were raised; and those who know that power goes with control of credit. The latter he named “ most vicious.” How Much Are Your Taxes? I f you have an annual income o f $2,080 or less, how much o f it goes fo r taxes ? There’s a good chance that you will say, “ none,” inasmuch as your income is below the level reached by the income tax, and you may have little or no property on which taxes must be paid. But, according to an article by Royal F. Munger in the Chicago Daily News, 27 your taxes come to some $480 a year. One hundred and twenty dollars o f this repre sents taxes included in your rent— the landlord pays them and passes the cost on to you. Ninety-six dollars is included in the price o f your family’s food— the farmer, the processor, the distributor and retailer pay them, and they become part o f the cost o f everything in the grocery store. Twenty-four dollars is included in the clothing, furniture and similar items you and your dependents purchase— here again, manufacturers, middlemen and re tailers are all heavily taxed and must pass their taxes on to the public. This totals $240. Finally, says Mr. Munger, other indirect tax burdens that affect the cost o f living are estimated to take $240 more out o f your family’s $2,080 annual income. On a percentage basis, as a result, you pay almost twenty per cent o f all you earn to government. Too many people have accepted the fanciful theory that the rich pay all the taxes while the rest o f us get the benefits fo r nothing. No one escapes taxes— no one ever will. And the average man, with a small or medium-sized income1 , would gain most from retrenchment in tax levies, regard less o f the guise under which they may be labeled. SH ORT TE R M NOTES Rates and maturities upon request. C O M M E R C IA L CR ED IT C O M P A N Y B A L TIM O R E Sales office: 100 East 42nd St., New York Investment Securities Scott McIntyre & Company Merchants National Bank Bldg. Cedar Rapids Good Nor Bad Current business, in the light o f depres sion standards, is neither good nor had. There have been few changes during the last few months. The seasonal drop that always comes with fall has been o f about the size that was anticipated. Adminis tration leaders are frankly disappointed with the progress o f the recovery move ment— it is obvious that the great hopes held out for improvement two years ago have not materialized. On the other hand, most o f the business periodicals have lately reported that business leaders are more confident— that they feel a marked change fo r the better will take place be fore long. The latest reports show: A larger-thanseasonal drop in automobile production; a decline in carloadings to below the level touched in the comparable period last year; a slight fall in the commodity price level; improvement in soft coal and steel activity. Stormy weather outdoors. But the watchword for your telephone is All Clear. The lines must be kept open so your voice can get through. Moreover, the quality of voice transmission must be All Clear. That these "musts” become realities is shown by in creased use of the telephone on bad days— at times 100% above normal. Sure Would “ Why, hello, Jimmy, I hear you lost your job in the department store.” “ Oh, yes, I got fired.” “ You got fired? How did that happen?” “ Oh, I just took a sign from a lady’s shirt waist and put it on a bath tub ?” “ And you got fired fo r that? W ell tell me what the sign read.” “ It said, ‘How would you like to see your best girl in this fo r $2.75 ?’ ” https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bell Telephone System N orth w estern B anker D ecem b er 1934 28 Management GEORGE OLM STED GEORGE OLM STED, S ecretary-T reasurer and General M anager, a leader in Iow a in surance circle s for m any years. A fter six years in the U. S. A rm y, inclu d in g four years and graduation at W e st P oint, he becam e a loca l agent, as O lm sted, Inc., Des M oines. In 1926 he branched out as a general agency, b ecom in g the largest a utom obile w ritin g a gen cy in Iow a. A fter several years as Iow aN ebraska m anager, the O hio C asualty Com pany, he becam e secretary-treasurer and man ager, the T ravelers M utual Casualty, in 1927. M r. O lm sted is also president, the U nited Federal Savings and L oan A ssocia tion , and of the F irst Insurance F inance C orporation. He is a past-president, the U. S. Junior Chamber of Com m erce. A L ega l R e s e r v e C om pany E stablish ed , 1927 As experience is the cornerstone of insurance, so must successful manage ment be based on experience. Competent Home Office executives should be well trained in local agency work, field supervision, as well as Home Office routine. Executive management, experienced along these lines, is largely respons ible for the steady growth of the T R A V E L E R S MUTUAL CAS UALTY COMPANY, Des Moines, and presented herewith are facts about the executive personnel of this organization. J O H N D. L Y N C H FR E D M IL L E R JOH N D. L Y N C H , V ic e President and General Coun sel. M r. L yn ch started, as a b oy, in his father’ s lo ca l agency at S iou x C ity, in the nineties, the J. M . L yn ch agency. Served as attorney for the W estern Surety, S ioux F alls, also repre sented other surety and ca s ualty com panies as attorney. R epresented the T ravelers M utual Casualty, Omaha o f fice, in charge o f cla im s and branch office, one year, b e fore com in g to its hom e o f fice a year ago. F R E D M I L L E R , M anager U n d e r w r i t i n g Departm ent. M r. M ille r started as auto m obile underwriter, South ern Surety, ten years ago, later supervised seven states* all lines, for same com pany. One year as lo ca l agent in D es M oin es, then a year w ith the C ontinental Cas ualty, . C hicago, m anager C om pensation L ia b ility and Steam B o ile r D epartm ent, C hicago Branch, b efore con n ectin g w ith T ravelers M u tual Casualty. K. L. M cK i n le y K. L. M c K I N L E Y , C om p troller. Three years a pu blic accountant, then w ith the Southern Surety A ccou n tin g D epartm ent for eight years. M ov ed to St. L ou is w ith the com pany, as auditor. W en t w ith com pany to N ew York, as C hief A ccoun tan t and A ssistant C om ptroller, serv ing tw o years in the same ca p a city fo r the H om e In dem nity C om pany o f N ew Y ork. A year as loca l agent in D es M oines, then becam e C om ptroller, T ra velers M u tual Casualty. Travelers Mutual Casualty Company A u to , Truck, Bus and Taxicab Insurance N orthw estern B anker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D ecem b er 1931- DES M O IN E S , IO W A Health and A ccident Insurance 29 Insurance "IT W ORKS FOR ME" E R V IC E is a word that has been over worked by advertisers to the extent that to approach a few remarks un der this title is to convey the impression that the reader is to be treated to a few aged bromides along those lines which have been covered countless times and which have proven rather disappointing. However, I ’m rising up in meeting and putting in my testimonial to the effec tiveness o f a service that really brings re sults and which are entirely unorthodox. I hesitate to recommend this system of mine to underwriters in general as it might appear on the surface to be a bit Polly Annish and impractical, but it has been o f immeasurable value to me and I ’m simply passing it on fo r what it is worth. I was considerably relieved after read ing Vash Young’s “ A Fortune to Share,” fo r he has proven beyond any doubt that it is possible for a man to give o f his serv ice and time unselfishly and make it pay. He has reached down into the heart o f the system that I have only touched upon, but I ’m finding in my modest experience that the results are there if we get the vision clearly. I ’ll simrlv illustrate a series o f sales that resulted directly from what I felt at the time to be simply a matter o f help ing an utter stranger out o f a little mess that he had unwittingly gotten into. The mess is beside the point, but the fact that after helping him out as I did, with no thought o f reward, his reaction was the natural one o f wanting to return the fa vor i f possible. That, o f course, brought into focus my business, and as a result a sale o f $2,000 on his life and one o f $2,000 on his son. In working out the sale on the son I was able to advise him on a little matter entirely aside from our business together, and like father like son. The results there were very similar. I was referred to a prospective brother-in-law. B y that time I had the confidence o f the family to the extent that the subsequent sale to the young man in question was merely that o f taking an application. However, this chap worked fo r his brother on a large farm and in the negotiations I was able to help in the sale o f some corn, getting something above market price fo r him. This resulted, not at once under stand, but in the course o f a few weeks, in the sale o f $7,500 on the brother and $2,000 each o f two children. This ap peared to be the end o f the chain, but the next time I saw the chap who had made S https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By L. M. HALL General Agent Cedar Rapids Life Insurance Co. Collins, Iowa the last purchase, he told me about an other brother some few miles from him who might be interested. I proceeded there at once and found him waiting for me, having been sold by the rest o f the family. This resulted in $5,000. There remains only one brother and he is in the process o f being sold at this writing. Unusual V o lu m e This experience is unique in that it re sulted in volume considerably in excess o f the usual run o f cases o f this nature. But the thought is that the possibilities vary with each individual case, but that L. M. H A L L the results as to reaction are usually the same. This doesn’t indicate that the sales man should devote his time to being the good Samaritan, selling insurance as a side line, but it does indicate, to me at least, that by keeping the opportunity o f service before you, and at the same time keep your business always in mind in the final analysis you will be amply repaid fo r your services. O f course, the attitude behind the service is the essential thing. I f you are thinking o f the sale you are trying to make, using the service as a lever, I ’m afraid you will be disappointed. These are times when the opportunity fo r service o f this nature is constantly before us. W e all realize, o f course, that the people are troubled now as perhaps never before in our time. They are beset with worries o f one sort and another, and upon the least indication o f encourage ment the average will break down and tell you his troubles if fo r no other reason than to get it off his chest. I f we appear to be interested, and will continue in that atti tude, even though it should call fo r a little effort on our part, enough cases will drop in our net to amply repay us fo r all our interest. It also naturally follow's that we have our trouble along with the' average, but we must assume that our difficulties are o f no interest to others. In other words, listen to the troubles o f others but tell no one o f your own. Please do not misunderstand me; the old time honored methods o f prospecting and sale are still good and dependable. These suggestions o f mine are merely to supplement those methods. It may be that when conditions change to the extent that financial troubles are fewer, the plan outlined will be less effective, and Pm in clined to that view. In building upon this sort o f a foun dation we are to a large extent eliminat ing troublesome competition, we are rap idly doing away with the old idea that life insurance agents are pests, and we are finally accomplishing the thing that we have long striven for, the professionaliz ing o f our service. Idealistic as this may seem it is really a concrete plan o f action and one that will lift the profession to a plane to which it is justly entitled. Sm all C om m u n ities I might add that my work is confined to small cities and towns and farms. These conditions lend themselves more readily to this idea than those o f the ur ban centers. And it is with this thought in mind that I advance these ideas. I can see where in the cities it would be im practical as outlined but there are no doubt opportunities even in those surroundings fo r something along this line. A n o th e r A n g le I hesitate to mention another angle o f this idea but the picture isn’t complete without it, and I ’m going to shoot the works. That is the feeling o f satisfaction you get in addition to any material re ward that may come your way. I am the N orth w estern B anker D ecem b er 193b 80 Strength Service Savings Secure Th ese Business Building Features for Your Property Owners Western Mutual Fire is strong; is getting even stronger every day. Western Mutual Fire makes it a point to pay every claim the same day proof of loss is received. Western Mutual Fire provides genuine savings year after year to thrifty prop erly owners insured by careful underwriters in this growing mutual company. Minnesota Agents Write for Western Mutual Proposition W e now are offering Western Mutual strength, service and savings to selected property owners serviced by capable in surance agencies in Minnesota, Iowa, Nebraska and South Da kota. Interested agencies write directly to the home office in Des Moines now. Ask to receive “ Contact” , Western Mutual’s national prize winning publication for insurance underwriters. WESTERN Mutual Fire Insurance Company 10th Floor Hubbell Bldg. DES MOINES, IO W A N orthw estern B anker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D ecem b er 193b recipient o f a great deal o f spoofing from my associates fo r my various activities such as selling corn, finding a farm fo r some chap to rent, looking fo r a good work horse fo r another farmer, or per haps finding a good home fo r a good male dog, which by the way, are all serv ices rendered in the past few weeks, but it has really paid in a material way and best o f all I have gotten quite a kick out o f it. It can all be done in passing and without neglecting any phase o f your work. I f you haven’t tried it just try it out. It may surprise you. Contacts are our stock in trade and anything that will make them is worth while. I find business improving as my unselfish attitude grows. Sermonizing? Perhaps, but there’s some thing to it— believe me. Bankers Association of America as chair man o f the Mortgage Bankers Advisory Committee o f insurance officials. Other members o f the committee are : A. A. Zinn o f the State Life o f In diana; R. R. Rogers o f the Prudential; Deane Trick o f the Bankers Life of Iowa ; Paul Yob mar o f the Western and South ern; and Murray Waters o f the Aetna. Travelers Mutual Casualty Growing Steadily True to its tradition as “ The Hartford o f the W est,” Des Moines is witnessing the steady growth o f another strong cas ualty company, the Travelers Mutual Cas ualty Company, which is concentrating on the writing of automobile, truck, bus and taxicab insurance, along with the full covage o f accident and health lines. Killed and Injured Established in 1927, the Travelers Mu Approximately 28,400 persons have tual Casualty now has total admitted as been killed and 740,000 injured as a sets o f almost a quarter million dollars, a result o f nearly 600,000 automobile acci large part o f which is made up o f cash, dents in this country during the first ten bonds and premiums in course o f collec months o f this year, according to statis tion. Surplus to policyholders totals the tics compiled by the Travelers Insurance substantial figure o f $135,652. Company from state reports. Back o f the Travelers Mutual Casualty The increase in fatalities, which amounts Company is a strong and experienced to 16 per cent, indicates that the annual management, centered around George record o f fatalities from street and high Olmsted, secretary and general manager, way accidents this year will exceed 36,000. who has been a leader in Iowa insurance This will be an all-time high mark in circles fo r many years. J. S. Osborn is deaths from automobile accidents, as the president ; John D. Lynch, vice president previous record was in 1931 when more and general counsel; Fred Miller, mana than 33,000 persons were killed. The ger o f the underwriting department ; and deaths this year may even approximate K . L. McKinley is comptroller. All are 37,000, inasmuch as the indicated increase experienced casualty executives who have o f 16 per cent is based largely upon pre had a wide range o f experience both in liminary reports. local agency field and home office work. The record thus fa r shows that 48 per Directors o f the company include Ju cent o f all the persons killed in street and lian Brody, John D. Lynch, K . L. Mc highway accidents have been pedestrians, Kinley, Fred Miller, R, W . Miller, George as against less than 45 per cent fo r the Olmsted, J. S. Osborn, F. L. Olmsted and whole o f last year. More persons also Dr. L. D. Smith. have been killed this year as a result o f An outstanding feature o f the Travel the collision o f automobiles with street ers Mutual Casualty is that every execu cars, fixed objects and with bicycles. The tive o f the company has been a local agent fatalities resulting from collisions between at some time during his insurance career. automobiles comprise almost 23 per cent The company feels that the background o f this year’s total, and deaths because o f is extremely valuable since it gives the collisions o f automobiles with fixed ob home office a thorough understanding o f jects total almost 12 per cent, while fatali local agency problems. ties from non-collision accidents comprise Also, the company has no prohibited 10.5 per cent o f the total. list o f risks, believing that every risk is August has been the only month so far entitled to consideration, and that correct this year to show a decrease compared to underwriting means the selection of good the corresponding month last year in the risks from the bad, rather than the rejec number o f persons killed in automobile tion o f all risks, both good and bad, in any accidents, although the drop was less than given class. half o f one per cent. In June, July and Travelers Mutual rates are not the low in September the percentage increases in est in the field, since the company believes fatalities were not as great as the average that rates must be adequate to pay losses, indicated thus fa r this year. expenses and a fair margin o f profit. As a means o f underwriting economy, the Named Chairman company has established a system o f us G. C. Holmberg, treasurer o f North ing combined claim, field, and accident western National L ife o f Minneapolis, prevention men throughout its territory. has been appointed by the Mortgage The claim record o f the Travelers Mu- 31 tual Casualty is excellent, since the man agement constantly endeavors to make friends and boosters out o f claimants, standing ready, however, to resist to the limit, unjust claims. The Travelers Mutual Casualty thor oughly believes that a company is good not because o f its plan o f organization nor its size, but because o f the integrity and ability of its management. The company writes private automo bile, truck, bus and taxicab insurance, in cluding tire, theft, windstorm, collision, cargo, public liability and property dam age. Its accident and health lines offer full coverage, including traveler, pedes trian, auto accident and athletic accident insurance. In this connection, the company re cently came out with a novel health and accident policy, which is quite new in in surance circles, building up coverage and rates precisely as automobile coverage is built up. The assured is given his choice o f any or all o f fourteen hazards to be covered, and a rate is worked out on each specific coverage, making the policy a “ tailor made” policy. Important News : For Men W ith Wives and Families For Agents W ho Sell to Them . . NORTHWESTERN NATIONAL LIFE announces a new life insurance policy, which provides whole life benefits with sharply reduced premium payments in early years. G PR* Readjustment Life Policy * ( G uaranteed P rem iu m R ed u ctio n s) T he G P R R eadjustm ent L ife p o lic y furnishes perm a Fits Reduced Incomes nent insurance on the W h o le L ife plan, but the co n tribu tion to the reserve or savings feature (required under the usual W h o le L ife p o lic y ) has been substantially reduced during the first five years, w ith a corresp on din g saving to the insured in prem ium deposits. in F d W t u a r im lc i^ I ) jV B egin n in g w ith the second p o lic y year 111 AhllCtl, LVruaiamees menus and con tinu in g throughout the life of the p o lic y the G P R R eadjustm ent L ife offers a guaranteed reduction in the annual deposit corresp on din g to a liberal dividend. A s a result, ail figures furnished fo r illu stratin g this con tract are based on guarantees throughout— no ifs, no ands, no buts.— so that, regardless o f how business con dition s affect p o lic y d ividends now or at any tim e, these illustrations represent the la rgest prem ium outlay the insured can be ca lled upon to pay and the least that he can exp ect in benefits. T hese guaranteed figures w ill be im proved by excess interest on funds le ft w ith the Com pany and by d ividends after the tenth year, as d eclared b y the Company. A f F o r r l s s S a v i n o -« o d v m g s dep osit fund and added to create a savings fund fo r P l a n The Guaranteed Prem ium R eductions m ay be le ft w ith A JdXl Com pany at a guaranteed rate o f interest in a prem ium the cash value of the p o lic y to pay up or mature the p o lic y or to use at age 60 or 65. No r t h w e s t e r n N a t i o n a l LIFE INSURANCE COMPANY Best Month Arnold Month— observed each October by fieldmen o f Northwestern National Life o f Minneapolis in honor o f President 0 . J. Arnold— turned out to be the com pany’s best month o f 1934 to date and the best October it has ever had in total new business produced. With a volume o f $7,062,131, the month beat the previous October record, set last year, by 8 per cent, and was 12 per cent better than any other month so far this year. A new mark also was established in the number o f agencies producing $100,000 or more in any single month. Nine teen were in the $100,000 class in Octo ber, two more than the best previous record set in May, 1929. The White & Odell agency, Minneap olis, led the field with a total o f $1,058,272 of new business fo r the month. The Truman H. Cummings agency, Detroit, was second with $355,373, the A. W. Crary agency, Fargo, third with $341,932, and the Texas State agency, Houston, fourth with $319,342. President M. B. A. Owen M. Murray o f Dallas, Texas, is the new president o f the Mortgage Bank ers Association o f America. Mr. Murray is president o f the Murray Investment Company at Dallas. The election o f Mr. Murray is a climax in the recognition o f a man in the mort gage banking field, by his associates, that started 26 years ago when he first entered the mortgage investment business. Mr. Murray has been a member o f the Mort gage Bankers Association fo r sixteen https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis O. J. ARNOLD. P r e s id e n t S T R O N G * ' Nîmneapoüs.Mïnn. - L I B E R A L It’s a Policy BUILT TO SELL Because It Meets ALL the Demands of Today’s Life Insurance Buyers. W e “ See Things” Like Our Banker-Agents ' | 'H E R E is a real reason why our home office and our ^ Iowa banker-agents get along so “famously.” W e ’ve got the same point of view. For we’re an Iowa company, manned by Iowans, who understand the Iowa bankers’ problems from 18 years of working with them. Our president is, himself, a former Iowa banker. And there is the equally important fact that we are not too big for personal service and cooperation, although large enough for unquestioned strength ($201 of assets for every $100 of liabilities*). If you are interested in improving your insurance connections in 1935, write. *U . S. R eview — Southern U nderw riter rating. C. Ed Beman, President Fire— L ig h tn in g — T o r n a d o — A u to IO W A N A T IO N A L FIRE INSURANCE C O M P A N L C. ED BEMAN, PRESIDENT DES M O IN E S , I A . N orthw estern B anker D ecem b er 193b 32 years, and fo r the past four years has been a member o f the board o f governors. In 1932 he was president of the Texas Mortgage Bankers Association. • Since 1924, Mr. Murray has operated exclusively in Texas, where he has han dled both farm and city loans. Other officers elected included the fo l lowing vice presidents: Frank C. Waples, president o f the Midland Mortgage Com pany, Cedar Rapids, Iow a; E. E. Mur ray, vice president, Nashville Trust Com pany, Nashville, Tennessee; Frank C. Evans, Evans, DeVore & Company, Crawfordsville, Indiana; and James W . Col lins, president, Tracy Loan & Trust Com pany, Salt Lake City, Utah. Mr. Waples, Mr. Evans and Mr. Collins were re elected. M. Elliott Houston, president, Title Guaranty Company, Denver, Colorado, was elected to the board o f governors, term ending 1935, to fill the vanacy occa sioned by the elevation of Owen M. Mur ray to the presidency. Members o f the board o f governors elected for term end ing 1938 are H. F. Whittle, vice presi dent, Acacia Mutual Life Insurance Com pany, Washington, D1. C.; Irvin Jacobs, Irvin Jacobs & Company, Chicago; J. J. F. Steiner, president, Realty Mortgage Company, Birmingham, Alabama; S. M. Waters, secretary, M. R. Waters & Sons, Inc., Minneapolis, Minnesota; Thomas S. Clark, The Thomas S. Clark Company, New Haven, Connecticut, and Sylvanus B. Nye, president, Nye Mortgage Corpo ration, Buffalo, New York. Controlling Interest Purchase o f controlling interest in the Iowa National Fire Insurance Company o f Des Moines, by a group o f Iowa and Kansas City business men, headed by Frank C. Harvey o f Kansas C ity,'M is souri, is interpreted by executives o f the Iowa National Fire as a constructive measure and conducive to the future growth o f the company. C. Ed Beman, president o f the Iowa National Fire, was in Chicago when the stock o f the Iowa National Fire was o f fered fo r sale by H. B. Hershey, liquida- the Specialist! C. E D B E M A N In modern business, in science or in the professions, when special service or advice is needed, one rule is followed : “ Call the Specialist.” That rule is equally good in the banking and live stock business. W e are specialists in handling the live stock items of country banks. Every officer and employe o f the Live Stock National Bank of Sioux City knows this phase of banking from beginning to end. Try our facilities. Live Stock National Bank Sioux City, Iowa Affiliated w ith N o rth w est Bancorporation N orth w estern B anker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis "THE BANK AT THE YARDS" D ecem b er 193b tor fo r the Illinois Insurance Depart ment, acting as receiver for the Fire In surance Company o f Chicago, which owned controlling interest in the Iowa National, and upon his return to Des Moines, Mr. Beman said that control o f the company is now entirely in the hands o f substantial middle western interests and that headquarters o f the Iowa Na tional will remain in Des Moines. Iowa National stock has a par value o f $10 per share, and Mr. Harvey’s bid was $7. The Iowa National Fire is making splendid progress both in its underwrit ing and investment departments, and un der the management o f Mr. Beman during the past year has expanded its agency plant materially. Mr. Beman, a former Iowa banker, and member o f the Iowa State Fair Board, has made many profit able changes in company policies and has been quite successful in popularizing this veteran Iowa company. There will be no change in the present management. Mr. Beman said that final action of the court, in approving the transfer o f stock and other routine matters, would require some time before the transfer of the con trol is officially consummated. 33 South D akota Bank N e w s Officers South Dakota Bankers Association with Fred Lewis as president, and A. O. Rolien as cashier. The merger leaves Bison fifty miles from a bank and many farmers and ranch ers will be 75 to 100 miles from a bank. Mobridge Meeting The annual fall meeting o f the group six bankers was held in Mobridge with a V ice P resid en t.G eo. C. Fullinweider good attendance and a well-rounded pro H uron gram. A. J. Haerter o f Hosmer, group G E O R G E A. S T A R R IN G L. M. L A R S E N Executive M anager. Geo. A. Starring president, was unable to be present, and Executive M anager Huron President arrangements fo r the meeting were made by W . P. Jones, secretary. Principal speakers on the program in cluded Harry Ziemer, deputy governor, Federal Reserve Bank o f Minneapolis, who discussed “ Loans To Industry;” Wm. J. Learv, o f South Dakota State College By J. A. SARAZEN at Brookings, Avho talked on “ The Seed Field Representative Emergency,” and Dr. G. S. Weaver of State College, Avho discussed “ Drought HE South Dakota Bankers Associa by C. Floyd Falck, Corn Exchange Sav Feeds.” tion held their group meetings ing Bank, Sioux Falls, on the “ Develop Addresses were also given by L. M. ment o f the Central Bank Idea.” His ad throughout the state during November Larsen o f Wessington Springs, president dress is reproduced elsewhere in this issue this year instead o f in the spring as has o f the South Dakota Bankers Association, o f N o r th w ester n B a n k e r . been the custom in the past. The meet and Dan E. Coffey, federal housing ad An address on agriculture was made ings held consecutively by dates were as ministration, Sioux Falls. Geo. A. Star by W . S. Given, chairman, state agricul follow's: ring, secretary o f the South Dakota Bank November 14th, Group 6 at Mobridge. tural committee. ers Association, discussed the affairs o f L. M. Larson, president, South Dakota November 15th, Group 5 at Huron. the association. Bankers Association, made the final ad November 16th, Group 7 at Deadwood. dress which was followed by general dis November 20th, Group 3 at Mitchell. cussion led by Geo. A. Starring, executive New Bank November 21st, Group 1 at Vermillion. manager. Garretson again has a bank operating November 22nd, Group 2 at Sioux Falls. Madison was selected as the meeting November 23rd, Group 4 at Webster. with all the usual functions o f such an place fo r 1935. institution. Orders to open the bank were Most all meetings were evening dinner New officers elected w ere: Otto Meyreceived by T. E. Wangsness, who has meetings, well attended, with programs haus, president, president Com Exchange been acting as conservator since the bank well arranged by the group officers. Savings Bank, Sioux Falls; Lester Fore holiday last year. The new' bank will be At practically all meetings considerable man, vice president, president, Com Ex known as the First National Bank o f stress was laid on the seed situation in change Bank, Elkton; E. J. Dirksen, sec Garretson. The First National Bank of South Dakota. retary, assistant cashier, Security Bank Sherman is being moved to Garretson, and & Trust Company, Madison, and W . L. it will take over the business. G rou p T w o Group Two o f the South Dakota Bank Baker, member executive committee, pres ident, First National Bank, Sioux Falls. ers Association met at the Cataract Hotel, Robbers Escape Sioux Falls, November 22nd fo r their an Four masked bandits who nonchalantly nual meeting. The meeting was well at Deposits Increase robbed the First State Bank o f Roscoe o f tended with 104 bankers and bank direc between $600 and $700 have apparently The First National Bank & Trust Com tors present. made good their escape. pany, Sioux Falls, in a recent statement Dinner was served at 6:30 and no time lists deposits o f more than $4,000,000, Although posses were on the lookout in was wasted in getting the meeting under these deposits having increased more than the hills o f the immediate Roscoe terri way. The opening address was made by tory and officers Avithin a 400 mile radius $1,400,000 from the low point in 1933. J. C. Vandagrift, group president. W . W . Baker, cashier, is .responsible for Avere watching highAvays, the last report “ Loans to Industry” was the subject o f the latter statement. This bank pays 3 o f the bandit quartette revealed nothing. H. I. Ziemier, deputy governor, Federal per cent interest. Three o f the hanks in Reserve Bank, Minneapolis. Sioux Falls are paying 3 per cent and Government Bank Frank Strain, superintendent o f banks two banks pay 2 per cent. The National Farmers Union, meeting o f South Dakota, was the next speaker. in Sioux Falls, was on record as favoring The seed and feed emergency were Merger direct issuance o f currency to refinance dwelt upon by Hugh Nash and Dr. Weaver farm indebtedness and establishment o f a Consolidation o f the First National from the South Dakota State College, Bank o f Bison with one o f the same name government OAvned and operated banking Brookings. system. in Lemmon, with the banking house to be Report o f agricultural committee was Resolutions covering the subjects Avere located in the latter place, has been an led by C. A. Stone, Carthage. adopted at the annual meeting. C. R. Goss, state director, .Federal nounced. Both banks have been affiliates Other resolutions favored an old age o f the First Bank Stock Corporation of Housing Administration, Sioux Falls, was pension system, remonetization o f silver, Minneapolis. next on the program with an interesting talk. regulation o f farm crop marketing to in The combined institution will he known sure cost o f production and a fair profit, A. very constructive address was given as the First National Bank in Lemmon, P resid en t........................ L. M. Larsen W essington Springs 1934 Group Meetings T https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Northwestern Banker December 193b 34 promotion o f foreign markets for agri cultural surpluses, and a net income tax. Clearings October Sioux Falls bank clearings are up $1,157,561.25 over the same month o f 1933, it was shown in a check-up at the local clearing house. October exceeds September in bank clearings total by $610,427.34 and is the stand-out month o f the year for bank clearings. The 1934 showing fo r the first 10 months o f the year exceeds the months from Jan uary to October, inclusive, in 1933, by $4,658,544.38, for one o f the most strik ing gains shown in local bank clearings in years. The month of October, with a total o f $4,443,170.40, vastly surpassed the $3,285,608.15, which was the total for October, 1933, and overshadowed the $3,832,743.06 o f September by a substan tial margin. A CAM PAIG N OF LOSS PREVENTION (Continued from page 14) o f banking had the opportunity fo r dollar savings by prevention o f loss been great er. In response to the need, there also came on the market about this time new and improved bank equipment which has HE M E A S U R E OF V A L U E of a CITY CORRESPONDENT is its ability and desire to serve. The facilities of this bank are com plete for the prompt handling of any business. W e would like to prove both our a b ility and desire to serve you in Sioux City. IRST N A T IO N A L F IN SIOUX A . S. Hanford, President N orth w estern B anker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Cl b BANK Frederick R. Jones, V ice Pres. Fritz Fritzson, Cashier been of great assistance in preventing losses. The advertising campaign o f the manufacturers o f such equipment was helpful in bringing the subject home to bankers. T w o Q u estion n a ires At the present time two questionnaires are used which are the product o f ex perience in the handling of thousands of claims a year plus contributions made by accountants and eminent banking author ities. A burglary and robbery hazard questionnaire is completed by the field man in connection with every bank burg lary and robbery policy or Bankers Blan ket Bond. Without going into the ques tionnaire fully, the various hazards will be discussed briefly. It is impossible to make a bank absolutely impregnable. With respect to the burglary hazard, ac cess to the banking premises should be made difficult. With respect to the rob bery hazard, the longer it takes to accom plish a robbery, the greater the danger to the bandits. The larger the amount o f cash and securities readily available, the greater is the temptation to bandits. The amount o f cash and securities read ily available should be kept as low as possible and access to reserve cash and securities should be delayed to such an extent that bandits will consider it un safe to remain long enough to gain access to the safes, vaults or other receptacles in which these are kept. The purpose o f the survey is not to sell certain types o f equipment, although such equipment may be the means o f improving the risk. The intransit hazard question is designed to cover the hazards o f collecting or de livering cash and securities outside the bank. It is desirable that not more than $5,000 be entrusted to an unaccompanied messenger at any time. Irregularity both as to time o f trip and route taken are desirable as is the rotation o f messen gers and guards and the supervision of the dispatching o f messengers by a des ignated officer o f employe. In addition, a fidelity and forgery haz ard questionnaire is completed in con nection with every Bankers Blanket Bond. Fidelity losses fall roughly into two groups. The first group consists of money or securities stolen by an em ploye without any manipulation o f the records o f the bank. These losses are subject to immediate detection. Certain parts o f the questionnaire deal with cash and securities which are readily avail able. Definite responsibility for such cash and securities should be fixed upon certain employes and the amount should be kept down as far as possible. Another part deals with reserve cash and securi ties. The amounts of these items can not be governed, but from a fidelity stand point, it is desirable to have them all (Turn to page 37, please) D ecem b er 193b 35 president o f the National Bank o f Com merce and o f the Bankers National Life Insurance Company of Jersey City, New Jersey. Nebraska Bank N e w s Officers Nebraska Bankers Association OTTO KOTOTJC President Cooperative P resid en t...........................Otto K otouc Hum boldt Chairman Executive C ou n cil.......... ..........................., . . J. M. Sorensen Kimball T rea su rer................F red W . Thomas Omaha S ecreta ry.................W m . B . Hughes Omaha W M. B . H U G H E S Secretary Fire Damage Earlier Closing Fire originating1 in a desk caused a blaze at the Smith National Bank build ing1, St. Edward. When first discovered the blaze appeared to be flaring up in the middle o f the room. Firemen had to force the front door and in so doing badly damaged the marble entrance. The fire was confined entirely to the desk, which with a radio on it, was de stroyed. Other damage was from smoke and chemicals used to extinguish the fire. Walls and woodwork are damaged to ex ceed $500. The Security National Bank at Laurel has decided to join with many other banks in this territory in closing an hour ear lier each day. This move is being made so that the time may be devoted to the numerous amount o f detail work that accumulates at this season o f the year and makes a lot o f night work. At a meeting o f the business men o f Hemingford a cooperative bank plan was explained by T. A. Myers o f Lincoln. As suggested by the title the plan is one in which the members o f the institution own and operate the bank. General favor was expressed by a majority o f those present and fifteen men signed the appli cation fo r a charter, three o f whom will appear before the state banking commis sion. Joins Federal Reserve The Farmers State Bank o f Scribner has been admitted to membership in the Federal Reserve System. Affiliation with the great Federal system will -permit the local bank to enjoy all the benefits and facilities afforded to its members. Carl Weil Dies Carl Weil, Lincoln banker many years, died at Omaha recently, following a long illness. He was 52. Taken to an Omaha hospital several weeks ago, he underwent an abdominal operation. Vice President Born at Burr Oak, Kansas, April 28, M. E. Isaacson o f Marquette has been 1882, he later came to Lincoln with his elected vice president o f the association parents and attended the Lincoln Busi o f secretary-treasurers o f the eighth fed ness College and the University o f Ne eral land bank district. braska college o f law. There are 509 associations in the dis His early experience in the banking trict, which comprises Nebraska, Iowa, business was with the American Exchange South Dakota and Wyoming. Mr. Isaac National Bank o f Lincoln in 1899. At son states that more organization work is the time o f his death he was president of contemplated during the coming year, the Commerce Trust Company and vice with group meetings in the various states. Big Business The Federal Land Bank o f Omaha re ported recently it has done a quarter bil lion dollar business in the last 18 months. Loans closed since May 1, 1933, hit the 250 million mark, representing a flow o f credit with which farmers o f Iowa, Nebraska, South Dakota and Wyoming have been able to clean up old debts and readjust obligations on a long-term re payment plan at lower interest rates. In the 18 months since the farm credit administration started to function, farm ers have been extended more credit than Depository Banks Thurston residents, about 15 in num ber, subscribed fo r bank stock in a nomi nal amount fo r the purpose of creating a depository bank. No permanent organi zation, however, has yet been effected. According to the program the bank would be affiliated with a Lincoln insti tution, which would handle loans, which had the approval o f the three elected mem bers o f the Thurston board. There would be 11 officers, elected by stockholders, ac cording to the plans outlined. New Equipment Recently the Farmers State Bank o f Humphrey added some new equipment to its bank fixtures to take care of its fast increasing1 business. New safety boxes, all steel in construction, were added as were two steel chests. Some minor equip ment such as filing cases and the like were also added. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis CASH AND COLLECTION ITEMS GIVEN SPECIAL ATTENTION ( Try Our Service ) Live Stock National Bank O M A H A N orth w estern Banker D ecem b er 193b 36 F OR more than a century and a quarter this institution has adhered to a single policy of service to correspondent banks. Experienced management Efficiency of operation Extensive connections Liberal reciprocal arrange ments have produced a steadily in creasing volume of business. We solicit new accounts on the basis of a service that has withstood every test. during the preceding 16 years, the report stated. Loans closed between 1917 and May 1, 1933, totaled $244,290,290. Since May 1, 1933, loans totaled $249,957,950. Loans by states show $124,163,150 credit to Iowa in the last year and a half, $80,346,750 to Nebraska, $40,287,100 to South Dakota, and $5,161,950 to W yom ing. Ninety-three cents o f each dollar has gone to refinance debts, bank officials said. Credit Association Final, plans fo r a cooperative credit association were made at a recent meeting o f Battle Creek business men, when a state charter was delivered and a board of directors, a supervising committee and a loan committee were elected. The direc tors are W . C. Tranb, W . C. Gregory, C. C. Zimmerman, H. E. Reavis and E. P. Scott, Supervisors are W . L. Boyer, Elmer Doering and George Scheerger. The loan committee is comprised of C. E. Tillotson, M. G. Doering and Dr. M. W . Hunt. A t Meadow Grove A large group o f interested citizens gathered at the school auditorium in Meadow Grove where an explanation of the procedure o f the cooperative credit association was explained. Following the discussion the people expressed themselves as favoring the plan and proceeded to organize. This organ ization necessitated the electing o f three committees, as follows : Board o f Directors— Gray McCarroll, W . S. Crook, G. C. Rouse, J. W . War rick, Jr., and IL W . Botsford. Credit Committee— F. C. Werner, J. E. Hauge and C. E. Rouse. Supervisory Committee— M. K. Hicks, G. E. Warrick and J. G. Wiese. ?n Dunbar PHILADELPHIA N A T IO N A L B A N K ORGANIZED 1803 P H IL A D E LP H IA , PA. CAPITAL and SURPLUS________________$30,000,000 N orth w estern Banker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D ecem b er 193b Without banking facilities for the past three months, Dunbar is now served by a cooperative credit association. Articles of incorporation for the asso ciation were filed with the Otoe county clerk. The new institution occupies the building which formerly housed the now defunct Farmers State Bank o f Dunbar. Carl Weiler was organizer o f the coopera tive. Members o f the board are Henry Schutte, E. R. Ferguson, J. A. D’unbar and Oscar Weiler. That's Right “ How do you spend your income1?” “ About 30 per cent for shelter, 30 per cent fo r clothing, 40 per cent for food and 20 per cent fo r amusement,” “ But that adds up to 120 per cent.” “ That’s right.” 37 No Retrictions Minnesota Bank Ne ws The State Bank o f Delano removed all restrictions on deposits at a recent meeting o f the board o f directors. This means that 60 per cent o f all deposits which Avent into the bank at the time o f the signing o f the depositors’ agreement will be ¡laid in fu ll in place o f being spread out over a period o f years as previously provided. Officers Minnesota Bankers Association D. J. R O U Q U E TTE President P resid en t........................... D . J. Fouquette St. Cloud V ice P resid en t...............W m , N. Johnson M inneapolis T r e a s u r e r ............................. Oluf Gandrud Benson S ecreta ry................ W illiam D uncan, Jr. Mankato W IL L IA M DU N CAN , Jr. Secretary & Trust Company, Minneapolis. Mr. Washburn is president o f the A. J. B. M. Peyton, president o f the Minne Krank Company, St. Paul. sota National Bank, Duluth, will serve during the coming year as a member o f the banking studies committee o f the Coid Springs Meeting American Bankers Association, it was Cold Springs’ band gave the Stearnslearned from the association headquar Benton Bankers Association a real sere ters in New York. nade when they gathered there fo r their Bankers representative o f all sections regular meeting. About 65 bankers o f o f the country and all classes and sizes the two counties attended and enjoyed o f institutions have been called upon to an evening o f business and pleasure. fill the appointments covering members Speakers included Dan J. Fouquette, at large o f the executive council and president, and William Duncan, secre membership on the five commissions and tary, o f the Minnesota Bankers Associa 13 general commissions o f the associa tion; George Susens, Washington, D. C., tion. president o f the protective credit corpo Banking Studies ration ; Fred Schilplin, director o f the federal housing program in Minnesota; County Meeting C. A. Arduser o f Marion was elected W . J. Obie, director o f the St. Paul president o f the LaMoure-Dickey County Bank fo r Cooperatives; Charles Reger, Bankers Association at its regular quar vice president o f the J. M. Daim & Com terly meeting at Edgeley. Theo. H. pany o f Minneapolis, securities invest Geidt o f Kulm was chosen vice president, ment firm; J. J. Sterner, Winsted banker. and Laurence Larson of D’ickey was elected secretary. Finance Advisor The next meeting will be held at ElAppointment o f D. J. Fouqnette, presi lendale in February. Attending from LaMoure were Paul dent, St. Cloud State Bank, as an as sistant on the federal housing adminis Adams and P. P. Bennett. tration was announced by Fred Schilplin, St. Cloud, state director. Appointment New Bank o f C. S. White, Minneapolis, to the di Howard Lake was so overjoyed at the rectors’ staff as appraiser, and Robert prospect o f having a bank in the village C. Johnson, Robbinsdale, as credit man, again that a big celebration was held also was announced. when the Security State Bank there opened. Merchants offered special in National Bank ducements on the day o f the opening I t ’s the “ First National Bank at St. and there was a special entertainment Jam es” now instead o f the Farmers & program. Merchants State Bank. This new name and federal charter is the culmination Reserve Directors o f many month o f work on the part of M. 0. Grangaard was elected a class officers, employes and directors o f the A director and W . 0 . Washburn was bank. reelected a class B director o f the Fed The new national bank continues the eral Reserve Bank o f Minneapolis at a business o f the state bank, so all checks meeting at the bank. Their terms ex and bank forms will be used until new pire December 31, 1937. The class A supplies are available. directors consist o f bankers and the class B directors o f industrialists not bankers. Cashier The election is by representatives o f group 1 banks o f this district, the group Mr. and Mrs. W ilbur Echart have being composed o f banks with $400,000 moved to Clarkfield where Mr. Echart capital or more. Mr. Grangaard is vice has accepted a position as cashier in the president o f the First National Bank Farmers and Merchants State Bank. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A CAM PAIGN OF LOSS PREVENTION (Continued from page 34) subject to dual control. The second group o f fidelity losses involves a suppression or manipulation o f the bank’s records. Losses o f this character may extend over a long period because they are difficult to detect. The various operations o f the bank and the accounts governing such operations, together with the bookkeep ing involved, are covered. The method of checking each account is ascertained. It is desirable to have the account checked by some person other than the one oper ating the account. F o r g e r y Losses Forgery losses fall roughly into two groups. The first group includes all losses where the check Avas paid over the coun ter. To perpetrate a loss o f this kind it is essential for the depositor or person presenting the check to have established himself in the confidence o f the teller or official approving the transaction. For this reason references should be required and investigated carefully. The second group of losses includes those due to in struments received through the Clearing House or by mail. Careful scrutiny of these instruments and a, prompt com parison o f signatures with signature cards is the best safeguard against losses in this group. So fa r all burglary and robbery in sureds and about half o f the blanket bond insureds have been surveyed. The field man completes the questionnaire Avith the insured bank. It is believed that having him complete the form makes for a more thorough exploration o f the subject and meeting o f the minds than merely send ing along forms to be filled out. Rec ommendations are made at the time with regard to any un usual hazards. Banks have been found Avhich have magnificent equipment, but send messengers with large sums of money through the streets with little or no protection. Other banks take elaborate precautions with money transported outside the banking prem ises, but are careless within. One bank stated that it protected itself against holdup before the bank Avas open for business by having all the curtains draAvn. N orthw estern Banker D ecem b er Í934 38 Another bank had a board in the bank ing room where keys to safe deposit boxes were hung. An official o f the bank ad mitted that he knew what every cus tomer had in his box. The completed forms are sent to the home office where they are carefully reviewed and addi tional recommendations made on points not already covered. One thing in par ticular which has been accomplished is a general reduction in the amount o f counter cash. The willingness of bank ers throughout the country to cooperate in improving the risks has been splendid, although once in a while this cooperation is expressed in such picturesque language as: “ W e have new burglary insurance 1863 D policy and note the regulations with re spect to keeping the time lock in use in the day time, Avhich regulation we shall comply with— but Avith about the same degree o f satisfaction as a mule eating briars.” F or the year 1933 our experience on bank robbery and Bankers Blanket Bonds showed an improvement over 1932, although the loss ratio on both Avas nonpermissive. F or the first six months o f 1934 AA7e' had the first permissive loss ratio on bank robbery since 1925 and the first permissive loss ratio on Bankers Blanket Bonds since 1929. F or the same period the number of bank robbery losses and the amount o f the average loss has also decreased. Because they take longer to 1934\ U R I N G seventy years o f conservative experience under varying economic con ditions, this bank has had con tin uin g relations w ith correspondent banks in every section of the country. For nearly thirty years the Banks and Bankers Division has been the point of contact through w hich w orld-w ide facilities have been available to correspondents. mature, it is too early to draw any con clusions about fidelity losses. It is our belief, Avhich is shared by accountants, that systems can be devised Avhich Avill cut down the length o f time during Avhich an employe can steal Avithout detection. A n y progress in this direction should have the effect o f reducing losses. W e struggled fo r many years with a patience that noAV seems remarkable be fore concluding that loss prevention must be the solution o f the problem. No bank wants to suffer a loss. It Avould rather prevent than suffer the loss. I f a loss is suffered, the amount may exceed the insurance carried, which would be costly to the hank. Even though a loss is fully covered, there is a charge fo r restoring the insurance. I f no losses are suffered, the bank is not subject to these costs. The effect on the general public o f any loss suffered by a bank also requires con sideration. W hile the campaign is based principally upon loss prevention, the sug gestions made are in line with good bank ing practices and may be o f assistance to a bank in perfecting* its method o f operation. Rates follow experience so that with sufficient improvement in ex perience an adjustment o f rates must fo l low to your advantage. This is the cam paign in Avhich Ave are engaged and in which Ave ask your continued cooperation. "Making Money" Every industry, every worker, every farmer, has a direct interest in the wel fare o f the mining industry. A stable and progressive mining indus try is absolutely essential to the perpetua tion o f a modern industrial civilization. Metals enter into everything Ave buy and need and use. Mining creates neAV wealth. It creates jobs, taxes, investments, capital. It liter ally “ makes money.” It stimulates the entire industrial and agricultural order— to the benefit o f all. Today the mining outlook seems consid erably better than fo r several years past. New properties are being developed, old ones reopened. I f that trend continues, it will be a mighty aid to the cause o f gen eral recovery. He "Taught" Him The First N ational Bank o f Chicago Little Johnny had been sent to bed by his mother fo r swearing. When his father came home, she sent him upstairs to talk with him. “ I ’ll teach the little rascal to swear,” he exclaimed as he started up the stair way. He tripped on the top step, bruised Charter N um ber Eight his shin and fo r a feAV minutes even his Avife had to hold her ears. N orthw estern B anker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis “ You’d better come down now,” she called up after the air had cleared a little, “ he’s had enough fo r his first lesson.” D ece m b er 1934- 39 North Dakota Bank News Officers North Dakota Bankers Association P resid en t........................................................................... F . D . M cCartney Oakes V ice P resid en t......................................................................... . . G u y Cook Carrington T rea su rer..................................................................................W . E . Tooley Minot F. D . M c Ca r t n P resident ey S ecreta ry.................................................................................. C. C. Wattam Fargo Transfer Deposits Announcement that the Citizens State Bank o f Rugby has assumed the deposit liabilities o f the Berwick State Bank o f Berwick, 'amounting to about $60,000, is made. R. S. See, deputy state bank examiner, supervised the details o f the transfer o f deposit liabilities. Both See and H. O. Lyngstad, presi dent o f the Citizens Bank, said that the Berwick bank was “ in very good shape” and that the transfer o f its deposits to the Rugby institution was entirely vol untary and made because it had been found that the Berwick institution no longer could operate at a profit. Other officers o f the Rugby bank in ad dition to President Lyngstad, a re : Vice president, H. B. Nelson; cashier, Leonard Sessing. P. O. Holland o f Northfield, Minneso ta, is president o f the Berwick bank; A. M. Wigen, Drake, is vice president; and G. H. Gorder, Berwick, is cashier. Lefor Honored Adam A. Lefor of Dickinson, and state bank examiner, was honored by being named on the legislative committee o f the Bank Supervisors Association, to repre sent the Ninth Federal Reserve District. The appointment was made at Balti more, where Mr. Lefor attended the Bank Supervisors Convention. The committee is composed o f 12 men, each representing a federal reserve district. The Dickinson man is the youngest member o f the super visors. The ninth district includes the states o f Montana, North Dakota., South Dakota, Minnesota, Wisconsin and Michi gan. His position on the committee will take him to Washington, D. C., during Con gressional sessions to protect the interests of state banking institutions. T, J. Clifford Dies T. J. Clifford, lawyer and a candidate fo r judgeship in the second judicial dis trict, died in Langdon after a month’s ill ness. He had been a resident o f North https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Dakota since 1905, coming from New York. Clifford had been identified with the Nonpartisan League in politics. He op posed O. B. Burtness fo r Congress in 1930 but was defeated fo r the Republican nomination. He had resided fo r 10 years in Lang don and prior had been in the banking business in Towner and Rolette counties. He at one time operated extensive land holdings. In 1913-14 Clifford was state bank ex aminer in the L. B. Hanna administra tion. F. McEntee, cashier; Emil V. Slavick, assistant cashier, and A. O. Lona, assist ant cashier. GEORGE STROUP has been appointed bookkeeper o f the Union State Bank of Hazen, succeeding Walter Bohrer, Avho has resigned. J. A. O’BRIE N has been elected a di rector o f The Union Bank o f Dunn Cen ter, succeeding H. P. Johnson. THE R E S E R V A T IO N State Bank, Makoti, has assumed the deposit liabili ties o f the First National Bank o f Makoti and last mentioned bank has discontinued business and gone into voluntary liquida tion. The directors o f the Reservation State Bank are J. S. Johnson, W . N. Harris and P. M. Shefveland. Its offi cers are: J. S. Johnson, president; W . N. Harris, vice president; M. J. Gorder, cashier, and B. J. Rogelstad, assistant cashier. PROPERTY MANAGEMENT AND REAL ESTATE SALES (Continued from page 15) G A IL H ERN ETT has accepted a posi tion as assistant cashier of the Farmers State Bank o f Zeeland. Presenting an income property fo r sale is not unlike that o f presenting a mort gage fo r sale. When we sell a mortgage on income property, we sell the future net income from that property, because it is this net income that is to pay, during the life o f the mortgage, interest, taxes, and principal payments. In selling the property itself, we are selling that same quantity— future net income. I feel that Ave all should be reminded o f the fact that in selling the property under our man agement, Ave are in possession o f more sales arguments, than we were at the time Ave sold the mortgage on that same prop erty. When the mortgage was made, we Avere obliged either to accept the owners’ figures o f income and expenses, or to esti mate them ourselves. W e now have the actual income and operating cost, so our sales arguments are based on facts, and, therefore, should be more convinc ing. In addition to selling the present worth o f the future income, we are sell ing all the future rights to ownership, and all indications point to firmer rentals, reduced vacancies, and reduced mainte nance cost, resulting in a greater demand fo r real estate as an investment. When this demand is reached prices, o f course,' advance and the purchaser makes his profit. THE FOLLOW IN G officers and direc tors have been elected at the Citizens State Bank o f New England : Directors— J. P. Schafer, J. F. McEntee and Henry Melaas. Officers— J. P. Schafer, presi dent; Henry Melaas, vice president; J. You have the same advantage in pre senting a dAvelling fo r sale. When the mortgage on a home was sold your lend ing client did not have the opportunity to make as thorough an inspection as Dies in Mayvilie Following an illness from pneumonia, M. L. Elken, 77, pioneer business man, banker and land owmer o f Mayvilie, died at his home recently. News o f his passing was received Avith much regret by his many friends, who had spent many an xious moments awaiting Avord o f his con dition. Besides many business connections Mr. Elken during his residence in Mayvilie had other important connections. He served fo r many years as president o f the Goose River Bank, was at one time vice president o f the Russel Graler Company, an officer in the Missouri River Lumber Company and other activities. F or many years past he has spent his time looking after extensive land interests in this part o f the country. Brief News DAM J. H E ZEL has been elected cashier o f the Farmers State Bank o f Zeeland, succeeding M. J. Ivempf, who has resigned. A A D w ellin g N orth w estern B anker D ecem b er 193b 40 “ Mr. Home Buyer” has. In most cases the house was occupied when the mort gagee made his inspection; he was hur ried through, and given just about enough time to count the rooms; but now the house is vacant, upper floor decorated, basement clean, and you in another role o f house salesman are in possession of all the selling qualities of the home. You know the quality o f the new decorations, the efficiency o f the heating plant, condi tion o f the roof, etc., because all such fea tures have been checked by your office. You and your salesmen are also equipped, or at least should be, with a complete de scriptive circular o f the house. This de scriptive circular or listing sheet should include description o f the interior of the house, such as type of plumbing and heating equipment, floors, walls, trim, etc. It should also include photograph, floor plan, a neighborhood plan, legal descrip tion ; distance from transportation, schools, churches, and stores. The mortgage banker of today, in my opinion, can increase his business beyond the fondest hopes of expectation. Where he formerly had one client, he now has two. In his new role o f property man ager, he is in the unique position o f still serving his former lending client. By the scientific developments o f his phase o f his business, he is able to secure a return on his client’s invested capital, and through the sale o f the property, he returns his lending client from property owner to his original status o f mortgagee. In his new role o f real estate salesman, he se cures a new client in the purchaser of the property, whose rights to future own ership by reason o f a greater demand for real estate, must necessarily include a profit on his investment; and there is no client so valuable as the client who has made a profit on the investment you sold him. He is not only a prospective pur chaser fo r another property, but he is also a prospective mortgage investor. PWA Profit P W A has realized a net cash profit o f more than a third o f a million dollars through the sale o f bonds which cost the government less than $20,000,000 to aid in financing public works projects, Philip M. Benton, director o f the finance divi sion of P W A , reported recently to Public Works Administrator Harold L. Ickes. Securities which P W A bought for $19,599,142 in effecting work and construction creating loans to local units have been sold to private investors for $19,969,823, a premium o f $370,681, or an operating profit o f 1.84 per cent as a result o f bond sales to date. The Next Depression All o f us devoutly hope that the present depression will be the last one— that the future will bring an unending era of abundance. The lessons o f history, however, present a different forecast. The economic cycle swings constantly— it never holds a steady course. Perhaps there won’t be another major depression in the lifetime o f per sons now living— but, no matter how good conditions become, it is inevitable that there will be recessions. M .............................. JL ▼JLORE T H A N four decades have passed since The Northern Trust Company was founded. In that time this bank has grown greatly. To each customer’s problems our officers and personnel give close, individual attention. There is a spirit of friendliness in the bank. Out-of-town banks which believe with us in the value of such customer relationships are invited to make inquiry. THE NORTHERN TRUST COMPANY NORTH W EST N orth w estern B anker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis CORNER LA SALLE A N D C H IC A G O MONROE STREETS Thousands o f wise Americans are pre paring for that next depression now. They are putting away what money they can to meet it— and as their earnings rise they intend to put away more. And their investment plans are very different from what they would have been a few years ago. Most have learned, to their sorrow, that speculation cannot enter into a sound savings plan. They are now pluti/ting safety first, last and all the time. Many o f these foresighted citizens are turning to life insurance, knowing of its fine record o f achievement during recent trying years. They be'ieve it offers them the highest attainable standards o f safety. Money that comes with comparative ease today is going into contracts that can be collected in later life or when earning power slackens. Whatever the plan used, it’s a fine augury fo r the future that our national attitude toward investing and saving has grown wiser. D ecem b er 193b 41 it will probably consist of free roast beef sandwiches and coffee, and a free moving picture during the afternoon and evening. Iowa Bank N e w s Resources Gain Officers Iowa Bankers Association cates. The Farmers Savings was released from S. F. I l l on March 5th, on a 60-40 waiver basis, and is now paying their sec ond 10 per cent dividend. The first pay ment was paid on July 5tli. Combined resources o f 518 Iowa state banks, all under release from S. F. I l l restrictions, were $284,129,054.78, Octo ber 17th, a gain o f more than 25 million dollars since the last bank call June 30th, D. W . Bates, state superintendent of banking, reported recently. Superintendent Bates’ report to Gover nor Clyde L. Herring showed the greatest gain was made in credits subject to sight draft. These increased $11,558,370.37 during the three and one-half month pe riod. The superintendent’s consolidated state ment included 310 savings banks, 212 state banks and five trust companies. A t Convention Pays Out 100 Per Cent Omaha and Des Moines were both rep resented at the twelfth annual convention o f the Association o f Bank Women, when that organization held its meeting this year in Washington, I). C. Miss Mary P. Doyle, o f the Omaha National Bank, rep resented the Mid-Western Division, and presented one o f seven papers on “ Con structive Customer Relations.” Miss Doyle is in charge o f the women’s depart ment o f the Omaha National. Miss Lucile Wallett. assistant secretary o f the Bankers Trust Company, Des Moines, was the representative from Iowa’s capital city. R. J. Penniston, who is also examiner fo r banks in Blanchard and Braddyville, has made the announcement from the Commercial Savings Bank in Farragut that the final 5 per cent payment o f divi dends will be made. This makes the total payment o f 100 per cent on the deposits. The bank has been closed for two years, during which time Mr. Penniston has been examiner-in-charge. P resid en t........................ Frank W elch Cedar R apids V ice P resident. . . Clarence A . Diehl Des Moines T rea su rer...............M ax von Schrader Ottumwa FRANK W ELCH President S ecreta ry......................Frank Des Moines New Safe Profiting by past experience and in an attempt to minimize the success o f any future daylight robbery the First National Bank o f Hawarden has installed a small new Diebold safe equipped with a delayed time lock. The new safe is designed to afford the bank maximum protection from hold-ups during banking hours. It stands only 27 inches high but weighs 450 pounds so that it cannot be readi’y picked up and carried off. It has been installed in the bank vault, reposing on top o f the old larger safe. The time lock is so devised that it is impossible for anyone to open the safe until a full thirty minutes have elapsed after the combination has been dialed. Loan Bank Director J. W . Irons, secretary o f the Mutual Building and Loan Association o f Mason City, has been elected a member o f the board o f directors o f Federal Home Loan Bank o f Des Moines, according to a com munication he received from R. L. Nagle, secretary to the Federal Home Loan Bank Board at Washington, D. C. Mr. Irons will begin his term o f one year on the bank board January 1st. New in OdeboSt The Odebolt State Bank, the estab lishment of which has been awaited lo cally with much patience, opened for business November 22nd. The new bank is a home controlled and operated institution, with 40 local stock holders. It has a capital structure of $25,000, with $5,000 surplus. W orking in the bank are R. E. Rogde, who comes from Ruthton, Minnesota, as president; Ira Martin and Walter Wadsley, formerly connected with the local First National Bank, as cashier and as sistant cashier, respectively. Second Payment Guy C. Martin, cashier o f the Farmers Savings Bank of Martelle, has announced that another 10 per cent dividend is now available to all holders o f trust certifi https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis W arner FRAN K W ARN ER Secretary Excellent Statement The Manson State Bank, under the di rection of G. L. Scoles, vice president and cashier, has made an excellent showing since its opening fo r business in July, 1933. The institution has deposits o f $391,270, according to its last published statement, and total resources of $406,731. The bank is in a satisfactory liquid condi tion, showing cash and due from banks o f $243,903, has government bonds amount ing to $61,250, and county and city bonds and commercial paper at $63,000, at the same time taking care o f its local loans in the amount of $33,000. To Celebrate W ord has been received from Washing ton that the new banking set-up o f the First National Bank o f Newell had been approved and an opening would be au thorized as soon as the necessary details were carried out. A tentative date for the opening has been set for Wednesday, December 5th. Merchants of Newell, cooperating with the First National Bank, are planning a gala day fo r the grand opening at this time. Final plans have not been made but Banker Dies Joe Fridolph, 72, long time merchant, postmaster and banker for the people of Nyman, died recently after a long illness from diabetes. Joe Fridolph and his cousin, John Fridolph, o f Red Oak, came to Nyman and started a country store in 1886, which has continued for the past 48 years. Lately the business has been largely con ducted by his two sons, Carl and Ber nard. He is survived by his wife, two sons and two daughters. Mr. Fridolph was the owner o f several farms in that community. Pay R. F. C. Payment o f $40,820.67, representing the balance due on principal and interest on a Reconstruction Finance Corporation loan, o f $95,689.58 to the Bettendorf Sav ings Bank, was authorized by an order signed recently in the Scott county district court. An application fo r authority to make the final payment was filed by D. W. Bates, receiver, and A. W . Poffenberger, examiner in charge. The amount o f the final payment in cludes $1,144.79 in interest on the bal ance due on the loan negotiated last March 15th fo r the purpose o f liquidat ing an old loan and helping in the pay ment o f an 18 per cent dividend. N orth w estern B anker D ecem b er 193k 42 Dies in W all Lake A fter many months of illness, the last few o f which was in a state o f utter help lessness, death came to release Charles Goodenow at his home in W all Lake. Mr. Goodenow had long been president o f the Wall Lake Savings Bank, and un der his leadership the bank has always been considered one o f the strong financial institutions in this part o f the state. He has been prominent in the affairs o f his home community for many years. Regulations Member banks of the Iowa Bankers Association have received from Federal housing administrator, James A. Moffett, regulations of the second and third sec tions of the national housing act, which provides for a long range housing con struction program under auspices o f the Federal government. Moffett outlined to Iowa banks the sa lient points of the two sections, pointing out that the first section (Title I o f the A ct) provides fo r modernization and re pair o f homes under comparatively short time loans. “ These portions o f the act provide the legal basis fo r the long range program o f the federal housing administration as distinguished from the modernization and improvement program, which under Title I has been going on since August 10th, and which will terminate by statutory lim itation at the end o f 1935 unless extended by Congress,” Moffett said. He told bankers the housing act pro vided fo r the first time in history, a uni form basic interest rates level for private capital, pointing out that heretofore both legal interest rates in the different states and prevailing interest rates as well have varied. Important conditions o f the program, as affecting banks, were listed as follows by the housing administrator: 1. Mutual insurance o f mortgages on existing or new dwellings in amounts up to 80 per cent o f the appraised value, for as much as $16,000, for periods up to 20 years, and with the privilege o f payment by regular periodic installments. 2. Loans on such insured mortgages to be made by private lending institutions, suc-h as banks, building and loan associa tions, insurance companies and loan and trust companies which are able to qualify as mortgagees approved by the FITA. 3. The act authorizes variation in inter est rates on insured mortgages from 5 per cent to 6 per cent. A basic maximum o f 5 per cent, other than for refunding, where 5y2 per cent will apply, is fixed in the regulations. 4. Mortgage loans not to be made by the F H A itself but by the various existing agencies designated as approved mort gagees. An approved mortgagee in a mortgage otherwise eligible for insurance under this title, shall (a) be a chartered financial institution whose activity in the residential mortgage field is principally that o f loaning funds under its own con trol; (b) have succession for not less than 20 years beyond the date o f application fo r insurance of the mortgage; (c) be sub ject to supervision by the governmental agencies. Hold-Up The Omaha National Bank N orth w estern B anker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D ece m b er 193b Two young bandits held up the Orange City National Bank on November 24th, and escaped with $1,000 in cash. The men, both about 25, drove west in a brown and tan Studebaker sedan with Iowa license numbers 97-12400. The li cense plates were reported stolen in Sioux City. Two bank employes and two customers were in the bank when the bandits entered the building. The men had parked their car a half block south o f the bank. To Continue J. F. Johnston, head o f the bank at St. Charles, has announced the continuation o f his bank, a private institution. Some weeks ago the bank served notice on the public that it would cease to accept deposits on November 1st, and invited de positors to check out their deposits. Reconsideration o f this plan was due to the protests o f patrons who foresaw 43 the likelihood of losing banking accommo dations. Position in Winterset Leo Gillespie has been added to the staff of the Farmers and Merchants Na tional Bank in Winterset. The young man was graduated from the Winterset high school with the class o f 1934. Since that time he has been at tending the American Institute o f Busi ness in Des Moines. County Meeting The Calhoun County Bankers Associa tion met at the Lohrville Community build ing recently, bankers from Lohrville, Rockwell City, Lake City, Mason City, Pomeroy and Farnhamville being present. Matters relative to present day banking problems and service were discussed. At the close of the evening, four ladies o f the local banks served lunch to the group. Bunce, deputy superintendent o f the State Banking Department, said recently. E. C. Engelbrecht was named cashier O f the 15, three already have completed o f the Waverly Savings Bank to fill the depositors’ agreements, Mr. Bunce said. vacancy caused by the death o f W . H. He declared that by January 1st all Babcock. He was also named on the banks would be released from limitations board in Mr. Babcock’s place. o f the act. More than 600 banks were Mr. Engelbrecht has been in the bank under S. F. I l l after the inauguration o f fo r the past twenty-one and a half years, the act in 1933. except fo r the time spent in army service in this country and abroad. For a num ber o f years he has served in the capacity Savings U p o f assistant cashier. Savings accounts in Des Moines banks are increasing daily and at present are No More S. F. IS I approximately 50 per cent above what they were at the time of the bank holiday, Only 15 Iowa banks still are operating March 4th, 1933, Des Moines bankers say. under limitations o f S. F. I l l , Ralph Made Cash ier Assistant Cashier Fred Keseberg was named an assistant cashier o f the First National Bank o f Waverly at the meeting o f the bank’s board o f directors. Other members o f the staff o f the bank are E. L. Johnson, president; W. H. Wehrmacher, vice president; H. C. Nolting, cashier; Geo. Stephenson, assistant cashier, and Margaret Kehe, teller. Cashier Resigns A. B. Blunt, who has been cashier o f the Maynard Savings Bank fo r the past 16 years, severed his connection with the institution recently. Mr. Buenecke, who has been assistant to Mr. Blunt fo r the past few years, will take over the office of cashier and will do all the work, thus eliminating one man in the office. Mr. and Mrs. Blunt are planning on a trip to the Pacific coast. A fter two terms as county treasurer, Mr. Blunt went to work in the Randalia Savings Bank as cashier fo r seven years, then going to the Maynard bank. Banks to Aid Cooperation o f the banking industry in furthering the advance o f recovery in the United States was assured by B. F. Kauffman, president o f the Bankers Trust Company, Des Moines, recently. Mr. Kauffman was speaker o f the ban quet meeting of the Iowa Mortgage Bank ers Association in Hotel Kirkwood. More than 60 Iowa bankers attended. He outlined current trends in mortgage banking and recounted tendencies dis played at the recent Washington, D. C., convention o f the National Bankers Asso ciation. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis New Friends In the year just closing, one of the most pleasant developments, for us, has been the number of Iowa hankers who have chosen this hank as their Des Moines correspondent. BankersTrustCo . Bank CORNER 6th A N D LOCUST STS., DES M O IN E S -W federal reserve i^ S Y S T E M ^ ' - C A P IT A L $1,000,000 SURPLUS $200,000 ---------------------------------------- D I R E C T O R S ---------------------------------------L. B. BARTHOLOMEW V ic e P re s.-T r u st Officer PAUL BEER P resid en t, T h e F ly n n D a iry Co. DR. O. J. FAY Surgeon HENRY FRANKEL T rea s., Y ou n k er B ros. J. G. GAMBLE A tto rn ey J. W. HOWELL V ic e P resid en t, W a rS eld -P ra tt-H o w ell Co. F. W. HUBBELL V ic e P res. - T reas., E q u ita b le L i f e Ins. C om pany o f Iow a J. W. HUBBELL V ic e P resid en t, F. M . H u b b ell Son <& Co. B. F. KAUFFMAN P resid en t L. B. MAYTAG C apitalist R. R. ROLLINS A ssista n t C ashier S>. L. SHEUERMAN P resid en t, Sheuerm an B roth ers, Inc. B. B. VORSE D ir ecto r N orth w estern B anker D ecem b er 193b 44 New Ackley Bank A new banking1 institution, the Ackley State Bank, opened recently as a reor ganization of the old Rath State Exchange Bank, which had been operating under restrictions under Senate File 111 for more than a year. The opening of the reorganized insti tution released $207,000 o f the deposits in the Rath State Exchange Bank which had been held under restrictions according to Senate File 111. The officiary o f the new institution will differ somewhat from that o f the old. H. A. Carstens of Ackley is president and H. S. Lekwa, formerly of Dows, is the cashier. The complete officiary is as follows : President, H. A. Carstens; vice presi dent and cashier, H. S. Lekwa ; assistant cashier, G. H. Ballard; directors, W. T. S. Rath, Irvin Bleeker, H. A. Car stens, George L. Carstens, H. S. Lekwa. First to Apply The Peoples Savings Bank, Cedar Rap ids, is the first bank in the state to apply for the status of an approved mortgagee under the mortgage insurance section of the federal housing law. The bank, headed by Frank C. Welch, president o f the Iowa Bankers Associa OFFICERS J. H . N IS S E N Cashier & Assistant Trust Officer E. J O H A N N S E N Assistant Cashier H. M. O L N E Y Assistant Cashier M IL O J. G A B R I E L Vice President F . E. C O N O V E R Assistant Cashier O. P. P E T T Y Vice President and Trust Officer F. H. H A M A N N Assistant Cashier H . G. K R A M E R Vice President A . R. T H U R N Vice President R. A . W . L A T I M E R Comptroller Clinton County’s Largest Bank SOUND FOUNDATIONS Sound, prudent banking principles— a thor ough knowledge of local trade and credit con ditions— an able staff, schooled in the ways of promptness, accuracy and hearty cooperation— these are the foundations on which pleasant and profitable depository and correspondent relationships are built. T he City N ational Bank CLINTON, IOWA tion, made application to the state F H A office, J. J. Hughes, Iowa F H A director, announced. He said the application will be referred to the F H A administration in Washington, D. C. New in Cedar Rapids Cedar Rapids’ newest financial institu tion, the First Trust and Savings Bank, opened fo r business last month, imme diately after receiving a license from D. W. Bates, superintendent of banking. The new bank, through which deposi tors o f the old Iowa State Savings Bank will at once receive approximately $600,000 o f their deposits “ frozen” since Jan uary, 1933, will conduct a general bank ing business, including commercial, sav ings, trust, and safety deposit service. Application has been made to the Fed eral Deposit Insurance Corporation for insurance on all accounts o f depositors o f $5,000 and under. John W . Pichner, president o f the K ing’s Crown Plaster Company, vice president of the Cedar Rapids Building and Loan Association, president o f the Onslow Lumber Company at Onslow, and president of the What Cheer Clay Prod ucts Company, is president o f the First Ti'ust and Savings Bank. F. S. Mitvalsky o f Cedar Rapids, president o f the wholesale and retail fur company bearing his name and one of the leading furriers o f IoWa, is vice president. F. J. Dvorak, well known in Cedar Rapids banking cir cles, will serve as cashier. New Officer R. B. Truckenmiller, who has acted as assistant cashier of the Sibley State Bank fo r the past few7 years, has resigned his position, effective November 1st. Marvin Leritz o f May City has been added to the bank’s personnel. Before coming to Sibley, he was employed in the Capital City State Bank in Dés Moines. Previous to that he was employed for three years in a bank in Hartley. Office Closed The office o f the State Bank of Fort Dodge, which has been in operation at Duncombe fo r the past three years with L. J. Connors as cashier, was closed last month. The closing o f this office became necessary when the Fort Dodge bank be came a member o f the Federal Banking System which does not permit such offices. DIRECTORS W. A. ANDERSON President c . a . Ar m s t r o n g President C. F. Curtis Company, Inc. A. A. BENTLEY President Fidelity Life Association A. P. BRYANT Vice President Clinton Company N orthw estern B anker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis O. D. COLLIS President The Collis Co. G. L. CURTIS President Curtis Companies, Inc. MILO J. GABRIEL Vice President President Gabriel Lumber & Fuel Co. D ecem b er 193b E. L. MILLER Attorney F. H. VAN ALLEN President J. D. Van Allen & Son, Inc. F. J. W ARD Vice President and Genera] Manager Eclipse Lumber Co. G. E. WILSON Pres. Clinton Bridge Works Heads County Bankers Ira L. Hayes o f the City National Bank, Council Bluffs, has been elected president o f the Pottawattamie County Bankers Association. Mr. Hayes succeeds Lynn Barnes o f the McClelland Savings Bank. Other officers who were elected are : 45 Roy Maxfield, First National Bank, vice president; John Kelson, State Savings Bank, secretary, and J. W . Davis, Citi zens Savings Bank, Avoca, re-elected treasurer. Twenty-five men were present at the meeting. The principal discussion per tained to the vigilantes under the direction o f the association. Members agreed it is advisable to continue the vigilante group. Banks which were represented at the meeting are : State Savings, City Na tional and First National of Council Bluffs, Citizens State and Oakland Sav ings o f Oakland, Farmers and Merchants State o f Neola, Underwood Savings, Mc Clelland Savings and Avoca State and Citizens Savings o f Avoca. years? Is it not true that even in these cases the borrower does not expect, nor does he see any possibility at the time the loan is made o f making repayment at the maturity o f the loan? In attempting to answer this question it is necessary to discuss various types o f loans that commercial banks make. As a rule commercial banks make only short term advances to trade and industry for the purpose o f financing self-liquidating transactions, such as lending money to a manufacturer to pay fo r raw materials, the loan to be repaid from the proceeds o f the sale of the manufactured goods. Banks cannot wisely tie up their de positors’ money fo r long periods since they do not know when the depositors will ask to have their money returned to them. Real estate loans are by the very nature o f the business o f long-term character. Moreover, the federal laws and the laws in most o f the states limit the amount o f real estate loans made by banks. This dialogue is at an end, but if you men use your imagination to the point that you feel that Mr. Average Citizen is expressing the viewpoint o f the Amer ican public when he says that we have not informed him, have not told him the real J. H. McCord Dies Joel H. McCord, 66, former banker and former prominent resident o f Spen cer, died in the Masonic sanitarium at Bettendorf recently, following an illness o f several months. While residing at Brighton, Iowa, a few years ago, Mr. McCord was stricken with paralysis, which later resulted in his death. Following his graduation from Oberlin, Mr. McCord was employed by A. W. Boyden in a bank at Sheffield, TIL, fo r a year. He then came to Iowa and accepted a position in the State Bank at Lake View, at which place he was employed for sev eral years. Leaving Lake View, Mr. M c Cord went to Early as cashier in the State Bank, remaining there a few years before going to Sioux Rapids, at which place he was associated in the Mills’ State Bank. Mr. McCord went to Spencer in 1907 and became associated with the Citizens National Bank, remaining there until 1926. For twenty years, J. H. McCord took an active part in the business, political and social life in Spencer and the state o f Iowa. He was at one time president o f the Iowa Bankers Association, had charge o f the sale o f liberty bonds in twelve northwest Iowa counties during the W orld W ar and after the sale o f these bonds, was taken over by the Greater Iowa Association, and those twelve counties were among the first to go over the top. THE PUBLIC WANTS TO KNO W (Continued from page 18) Q u estion N o. 5 Why are hanks so reluctant to make loans on improved real estate which for many years has been considered perhaps the safest type of investment? Are the kind of real estate loans, which you refer to, loans that are ordinarily made fo r a period of from three to five https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis C EN TR AL NATIONAL BANK^ R ^ S t T c^ A Service to I O W A CENTRAL NATIONAL’S years of experience, the integrity and wise counsel of its personnel, its ability and capacity to offer complete banking serv ice, make tbis your ideal correspondent in Des Moines. C WM. J. GOODWIN Chairman of the Board GRANT McPHERRiN President LYNN FULLER Vice President C. W. OXBORROW Cashier "THE OLD RELIABLE C en tr a l Na t io n a l BANK £ TRUSTCOMPANY F IF T H A V E . Between W A L N U T and L O C U S T D es M o in e s ________ I o w a Established 1895 N orthw estern B anker D ecem b er 193't 46 story, aren’t you inclined to feel that there is a real ease to be presented by the banking business o f this country to the American public? I f so, how can this be done? Obviously, there will be many different ideas and opinions on this subject. B e tte r U nderstanding The banking business o f this country, through its own organizations such as the American Bankers Association, state as sociations, local clearing house associa tions, individual banks and officers of banks, has the facilities to answer not only these few questions but many others which undoubtedly came into your minds. I f you feel that this is a problem fo r the leaders, the outstanding men in the banking business o f this country, may I suggest that each one o f you who may favor some concerted action on the part o f the banking business, write to your National Association and encourage them in the program which they already have started because in the last analysis the success o f this movement, like any other, is largely dependent upon the help and cooperation given by the individual mem bers. On September 21, 1931, when the morn ing newspapers o f Great Britain an nounced that the Bank o f England had suspended specie payment, what hap pened? Did the people run to the banks to demand their money? No. They were undisturbed fo r they trusted their banks. They considered the abandonment o f the gold standard to be a matter concerning the banks and not them. They have been educated to understand the basic prin ciples o f banking and they know that a bank which performs its functions con scientiously and keeps the sacred trust, cannot repay all the deposits within a few days. In this country there are 56 million depositors in insured banks, one million in uninsured banks and 12 million de positors in the mutual savings banks, making a total o f 69 million depositors or customers o f the banks in America. Does it not seem reasonable that if these 69 million customers o f the banks in this country better understood the basic prin ciples o f banking through which good will and confidence would be enlarged, that there would be little to fear as to the trend of future banking legislation. Business O u tlo o k Better By WINTHROP W. ALDRICH Chairman, B oa rd o f D ir ecto r s o f T he Chase N a tion a l B ank o f the C ity o f N ew Y ork Complete facilities make this organization the logical channel to handle your Northeastern Iowa business. Your account is invited Me NATIONAL BA N K / W ATERLOO JA M E S M . G R A H A M , President R. L. PENNE, Cashier C H AS. S. McKINSTRY, V ice President HENRY HOFFER, Assistant Cashier R, L. KILGORE, Assistant Cashier PROTECT AGAINST AN I EARLY MORNING RAID 1 it is essential th at a longer than a 30minute d elay period be used to d isco u r age the E a rly Morning Holdups. The Y ale V a ria b le Delayed Period Timelock can be varied to meet each Banker's individual requirem ents. Let us explain our plan of dem onstrating this modern U n d erw riter's approved Holdup equipment in your own bank on a th irty day fre e tria l. Sold by F. E. D A V E N P O R T & C O M P A N Y Official Experts for Iowa Bankers Association N orthw estern B anker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis OMAHA, NEBRASKA D ecem b er Î93b There are two questions which I find seem to be in the minds of almost every one with whom I have talked recently. The first question which has been asked is what we think o f general business con ditions. In reply to this question, let me say that both in the eastern portion o f the country through which we have traveled, where manufacturing is the principal ac tivity, and in the agricultural communi ties further west, which have suffered so severely from the terrible drought o f the past summer, there has been during the past few weeks not only a recovery from the pessimism which had existed during the summer months, but also a real upturn in the trend o f business. The second question which has been asked again and again is whether the new spirit o f cooperation between finance and industry on the one hand and the govern ment on the other, evidenced by the events which transpired at the meetings o f the American Bankers Association and o f the United States Chamber of Com merce in Washington during the past few weeks, may be expected to continue. In replying to that question, I do not think it can be emphasized too strongly that there has always been a realization both upon the part o f our government and upon the part o f finance and industry that, in order to bring the country safely through the present crisis, there must be 47 full cooperation between them. The ap parent lack o f cooperation has arisen not because o f any failure to realize this fun damental fact, but because differences of opinion have existed either as to the neces sity fo r certain emergency measures which have been undertaken by the government or with regard to the character o f such measures. I would prefer to describe what has taken place in the last few weeks, not as the creation o f a new spirit o f coopera tion between finance and industry and the government, but as the expression o f a more sympathetic attitude on the part o f each towards the difficulties with which the other is faced in carrying out a spirit o f cooperation which has always been in existence. I believe that both this coop eration and this attitude o f understand ing will unquestionably continue. In say ing this, I do not intend to imply that d if ferences o f opinion may not still exist nor do I mean to say that, where such d if ferences o f opinion do exist, criticism o f government policy will not be expressed in the future. I am a believer in sound money. I re gretted most profoundly the action taken by the government in devaluing the gold content o f the dollar. I am one o f those who believe that the stabilizing o f the currencies o f the nations of the world on a gold basis through international agree ment at the earliest possible moment is an essential step towards the re-establishment o f the foreign trade o f the world and towards the ultimate economic recovery o f this country. A sympathetic consideration o f the difficulties o f the government, how ever, leads one to the conclusion, first, that the devaluation o f the dollar may well have been politically necessary, and, sec ond, that the fixing o f the gold content of the dollar early in 1934, with its mainte nance unchanged since that time, the re cent removal o f restrictions on foreign exchange and the helpful cooperation which has just taken place between our monetary authorities and one o f the coun tries in the gold bloc, designed to help in ternational monetary stability, are all o f high significance and great importance, both in themselves and as an indication o f policy on the part o f the government to achieve, as soon as possible, both national and international stability o f currencies. large o f the executive council and o f the five commissions and thirteen general association committees, and vice presi dents fo r territories and foreign countries. The twelve members at large o f the executive council as announced by Mr. Hecht, who was elected association presi dent at the recent annual convention o f the association in Washington, D. C., are as follow s: E. G. Bennett, president, First Security Bank o f Idaho, Boise, Idaho; Eugene R. Black, governor, Fed eral Reserve Bank o f Atlanta, Atlanta, Georgia ; W . C. Bowman, president, First National Bank, Montgomery, Alabama; E. E. Brown, president, First National Bank, Chicago, Illinois; Walter J. Cum- LAST CALL FOR CALENDARS DON’T DISAPPOINT YOUR CUSTOMERS PHONE, WRITE OR WIRE The Thos. D. Murphy Co. A. B. A. Appointments Bankers representative o f all sections o f the United States and all classes and sizes o f banking institutions will take part in the various working bodies o f the American Bankers Association fo r the coming association year, it is shown in an announcement o f appointments made pub lic by the president, R. S. Hecht, chair man, Hibernia National Bank, New Or leans, Louisiana, covering members at https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis mings, chairman o f board, Continental Illinois National Bank & Trust Company, Chicago, Illinois; Guy Emerson, vice president, Bankers Trust Company, New York, New Y ork; Thomas C. Hennings, vice president, Mercantile-Commerce Bank & Trust Company, St. Louis, Mis souri; Henry R. Kinsey, vice president, Williamsburgh Savings Bank, Brooklyn, New Y ork; W . R. Morehouse, vice presi dent, Security-First National Bank, Los Angeles, California; James H. Perkins, president, City Bank Farmers Trust Com pany, New York, New Y ork ; Ronald Ran som, executive vice president, Fulton Na tional Bank, Atlanta, Georgia; R. G. Stockton, vice president, Wachovia Bank RED O A K , I O W A The Birthplace of Art Calendars A Complete P u blicity Line at Your Service N orthw estern B anker D ecem b er 1934- & Trust Company, Winston-Salem, North Carolina. The chairmen of commissions are as follows.: Agriculture— D. Lane Young, executive manager, Citizens & Southern Nation«1 Bank, Atlanta, Georgia, chair man. Bank Management — Orval W . Adams, vice president, Utah State Na tional Bank, Salt Lake City Utah, chair man ; P. D. Houston, chairman o f board, American National Bank, Nashville, Ten nessee, vice chairman. Commerce and Marine— Fred I. Kent, director, Bankers Trust Company, New York, New York, chairman. Economic Policy— Leonard P. Ayres, vice president, Cleveland Trust Company, Cleveland, Ohio, chairman. “Six Spots of Hospitality’ Des Moines T ravelers in Iow a and M innesota say— “ Y es— if you want the best o f everyth in g at the m ost reasonable prices, stay at B l a c k H aw k H o te ls .’ ’ B lack H aw k H otels are p o p u la r! N E X T T IM E you travel in Iow a or M innesota, try B la ck H aw k H otels for com fort, con venience and savings. Our low prices m ean traveling econom y fo r y o u ! M inim um rates at our hotels range from $1.50 to $2.50 and we have P L E N T Y OP M IN IM U M R A T E room s to offer. E xtra guest onlv $ 1. 0 0 . In Des Moines H OTEL FORT D E S M O IN E S $2.50 and up B. C. N orthington, M gr. Public Education— John H. Puelicher, president, Marshall & Ilsley Bank, Mil waukee, Wisconsin, chairman. The chairmen of committees are as fo l low s: Administrative— Rudolf S. Hecht, chairman o f board, Hibernia National Bank, New Orleans, Louisiana, chairman. Banking Code— Abner J. Stilwell, vice president, Continental Illinois National Bank & Trust Company, Chicago, Illi nois, chairman. Banking Studies— Tom Iv. Smith, president, Boatmen’s National Bank, St. Louis, Missouri, chairman; Francis Marion Law, president, First Na tional Bank, Houston, Texas, vice chair man. Bankruptcy— M. R. Sturtevant, vice president, First National Bank, St. Louis, Missouri, chairman. Export-Im port Bank Advisory Committee— Robert F. Maddox, director, First National Bank, Atlanta, Georgia, chairman; Joseph C. Rovensky, vice president, Chase National Bank, New York, New York, vice chair man ; Fred I. Kent, director, Bankers Trust Company, New York, New York, and chairman, Commerce and Marine Commission, American Bankers Associa tion, New A ork, New J ork, chief consul tant. Federal Legislation and Federal Legislative Council — Ronald Ransom, executive vice president, Fulton National Bank, Atlanta, Georgia, chairman. F i nance'— Robert V. Fleming, president, Riggs National Bank, Washington, D. C., chairman. Foundation Trustees— John H. Puelicher, president, Marshall & Ils ley Bank, Milwaukee, Wisconsin, chair man. Insurance— W. F. Kevser, secre tary, Missouri Bankers Association, Sedalia, Missouri, chairman. Membership— E. N. A an Horne, president, Continental National Bank, Lincoln, Nebraska, chair man. Special Committee on Section 5219 U. S. Revised Statutes— Charles P. Blinn, Jr., vice president, Philadelphia National Bank, Philadelphia, Pa., chairman. State Legislation and State Legislative Council In Davenport H O TE L B L A C K H A W K $2.00 find up W . O. L ofg ren , M gr. H O TE L M IS S IS S IP P I $2.50 and up J. C. K en ned y, M gr. H O TE L D A V E N P O R T $ i 50 and up S id Caple, M gr. In Mason City HOTEL H ANFORD $1.50 and up Tad M artin, Mgr. In St. Paul, Minn. H O T E L S A IN T P A U L $ 2 .5 0 and up B . E. Calhoun, M gr. BLACK HAWK “1 HOTELS r N orthw estern B anker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D ecem b er 193?i Now — - A room with private bath $2.50 in the city’s finest hotel. — A. T. Hibbard, president, Union Bank & Trust Company, Helena, Montana, chairman. Taxation — Robertson Gris wold, vice president, Maryland Trust Company, Baltimore, Maryland, chair man. School Savings Deposits School savings deposits are “ decidedly on the upgrade,” it is declared by AY. Espey Albig, deputy manager, American Bankers Association, in making public the annual report o f the association’s savings division on the savings bank projects con ducted in schools throughout the United States. “ The net increase— the difference be tween the amount deposited and the amount withdrawn— during the year clos ing June 30, 1934, was $3,690,560 over the volume o f the preceding year,” the report says. School savings in the two former years had fallen off, pupils a year ago having withdrawn two and a quarter million dol lars. more than they had deposited during the preceding twelve months, thus using their reserves set up in former years, the report says. Two years ago the loss reached almost three million dollars. “ During the past year, school savers in twenty-four states showed an excess of deposits over withdrawals, and in many of the other states the loss was materially reduced,” Air. Albig comments. “ Thus the drastic run-off o f net deposits in school savings, which began in 1929-1930 and continued with such devastating effects until a year ago, is now stayed and the up ward trend resumed. Bankers' W a n t s This department of The Northwest ern Banker is free to subscribers. To non-subscribers, a charge of five cents per word. In answering key numbers, please enclose postage for forwarding purposes. And remem ber, this service is free to subscribers. Position Wanted: As cashier country bank. 58 years of age. Don’t look over 35 and am in best o f health.) 40 years bank experience from bookkeeper to executive officer. Can handle notary work and insurance. Native American and married. Am now employed as bank re ceiver, but want to get back in bank work. Good references. Address Northwestern Banker No. 3225. 12-1-2. 11- 12- 1. Now Available— An executive of wide experience. Cashier of National Bank for twenty-five years— Cashier of State Bank for two years. Familiar with every phase o f commercial and savings banking. De sires an affiliation with a good, going in stitution in Iowa. Excellent references. Write Northwestern Banker, No. 3222. 10- 11- 12. 49 “ The severe effects o f poor business, a bad banking- situation, reduced prices for agricultural products, unstable conditions, and lack o f employment, on school savings over a period o f five years can readily be seen in the rapid decrease in net savings in all the states. The correction o f these conditions in part, at last, is evidenced by the upturn in school savings. “ F or the year ending June 30, 1934, school children deposited $10,727,505, an increase over the preceding year o f $394,935. Of this, $1,375,307 remained at the end o f the year. During the preceding year they deposited $10,322,569. An amount equal to this sum was withdrawn during that year, and in addition, a fur ther sum o f $2,315,252 from deposits made in former years. “ The gain came not so much through increased deposits as through less with drawals. The withdrawals, in many cases, were for a different purpose than they were a year ago. At that time the notices o f withdrawals breathed immediate need fo r food, clothing, medicine and shelter. Those items, o f course, are also present this year, but the withdrawals generally show more matured and leisurely judg ment— to buy a piano, to pay interest on the mortgage, to attend ‘A Century o f Progress,’ to visit Washington, D. C.” F or the year ending June 30, 1934, the number o f schools affording school sav ings numbered 9,471, a decrease in a year o f 1,419, or 13.03 per cent, the report shows. Participants decreased from 3,080,685 to 2,802,899, a loss o f 277,786, or 9 per cent. Trade Complaint Rules Prompt and effective methods of hand ling complaints by investors and others against security dealers have been formu lated by the Investment Bankers Code Committee and were mailed by the com mittee’s office to the seventeen regional code committees throughout the United States. The document, approved by the NRA and containing thirteen articles with thirty-two sections in precise, legal phrase ology, bears the heady title “ Procedure fo r Handling Trade Complaints o f the Code o f Fair Competition fo r Investment Bankers.” Divested o f formal verbiage, the rules o f procedure, it was explained, provide a direct and simple method by which investors or others may make com plaints, regional code committees, under the Code Committee, may make investiga tions and conduct hearings, and penalties fo r malpractices in investment transac tions may be evoked, either under author ity o f the code or through local, state or Federal law enforcement bodies. The procedure provides fo r formal and informal complaints, both as to registered a n d non-registered security dealers. Where a violation is in the class o f an unintentional, technical inobservance o f the code, such as may arise from misun derstanding o f the many code rules by a reputable dealer, and no wilful or actual malpractice is involved, the procedure is informal and requires a pledge to the re gional code committee that the infraction will not be repeated. The code adminis tration, it was pointed out, aims to be tfn d c x O ío A A m e r i c a n T e l e p h o n e & T e l e g r a p h Co. 27 A s s ’ n to M a in t a in F r e e d o m in L i v e s t o c k M a r k e t i n g ......................... 51 II B a n k e r s T r u s t C o ...................................... C a r l e t o n D. B e h C o ................................... B i s m a r c k H o t e l ........................................ B l a c k H a w k H o t e l s .................................. 43 18 49 48 C C e n t r a l N a t i o n a l B a n k & T r u s t Co. C ity N a t i o n a l B a n k .................................. C o m m e r c i a l C r e d it C o ............................... C u r tis H o t e l ................................................. 45 44 27 48 F F i r s t N a t i o n a l B a n k , C h i c a g o .............. 38 F i r s t N a t i o n a l B a n k , S io u x C i t y . . . . 34 G G e n e r a l M o t o r s A c c e p t a n c e C o r p . . . . 26 II W . D. H a n n a & C o ...................................... 22 I I o w a - D e s M o i n e s N a t i o n a l B a n k . . . . 52 I o w a G u a r a n t e e M o r t g a g e C o r p . . . . 26 I o w a N a t i o n a l F i r e Ins. C o .................. 31 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Not Homesick Mose was in the war. At every explo sion he strove fo r the rear line. His colonel talked to him thus: “ You shouldn’t be afraid, Mose. Why, what if you do die ? Heaven’s your home.” “ Yassuh, ah knows. sick.” a But ah ain’t home Hotel w it h a HISTORY For ye a rs th e nam e 'B is m a rc k " has be en a m ark o f g o o d fo o d . You w ill also a p p re c ia te the q u ie t, r e s tfu l ro o m s in this m o d e rn ,w e ll-e q u ip p e d ho stel ry . . . th e new est in th e lo o p . In th e s p a c io u s b lo c k - lo n g lo b b y , am id se ttin g s rich in r e fin e m e n t, y o u m e e t y o u r frie n d s — f o r th a t d a te — w ith o u t jo stlin g th ro u g h a cro w d . £ J J a c k l e y & C o ................................................. 21 L L i v e S t o c k N a t i o n a l B an k, O m a h a . . 35 L i v e S t o c k N a t i o n a l B a n k , S i o u x C ity 32 M M c M u r r a y H i l l & C o ................................. M e r c h a n t s N a t i o n a l B a n k .................... T h o s . D. M u r p h y C o ................................... 25 2 47 iln the b e a u tifu l W a ln u t Room y o u a re e n t e r t a in e d w ith r a d io ’s fa v o rite orch e stra . A d e lig h tfu l a n d v ib ra n t flo o r s h o w is f e a t u r e d n ig h t ly . N N a t i o n a l B a n k o f W a t e r l o o .................. 46 N o r t h e r n T r u s t C o ...................................... 40 N o r t h w e s t e r n N a t i o n a l L i f e Ins. Co. 31 I) F. E. D a v e n p o r t & C o ............................... 46 D r o v e r s N a t i o n a l B a n k ........................... 17 educational and corrective and, particu larly, wishes to concentrate enforcement againts wilful and harmful malpractices without cluttering up its activities with technical, unintentional violations that of themselves may be virtually harmless. O Omaha N ational B a n k ........................... 42 P P h i l a d e l p h i a N a t i o n a l B a n k ................ 36 P o l k - P e t e r s o n C o r p ................................... 20 P r ie s t e r , Q u a il & C un dy , I n c ............... 23 S Scott, M c I n t y r e & C o ................................. Sha w , M c D e r m o t t & S p a r k s .................. S hea & C o ....................................................... S ta te B o n d & M o r t g a g e C o .................... 27 25 24 26 T T r a v e l e r s M u t u a l C a s u a l t y C o . . ......... 28 W W e s t e r n M u t u a l F i r e Ins. C o ............... 30 ^ ^ | l n the co zy B ierstube w ith its q u a in tO ld -W o rld a tm osp he re you m ay jo in the g a y B ava rian Ensemble singers an d d a n c ers in th e ir ro llic k in g songs. Rooms without bath, $2.50 Rooms with bath, $3.50 up BlfMARCK HOTEL RANDOLPH AT LA Salle ( U I C A G Q N orthw estern B anker D ecem b er 1934- Thank You 300 Feet Skip This One Three blood transfusions were necessary to save a lady patient’s life at a hospital. A brawny young” Scotchman offered his blood. The patient gave him $50 fo r the first pint, $25 fo r the second pint— but the third time she had so much Scotch blood in her she only thanked him. “ What are they moving that church and the schoolhouse fo r ? ” “ I ’ll tell you. I ’m mayor o f this here diggin’s an’ I ’m fer law enforcement pure an’ simple. W e’ve got an ordinance what says they hain’t to be no saloons within 300 feet o f a church buildin’ er schoolhouse, an’ so we’re movin’ the church an’ the school.” Saw Bill just rushing into a shop. Sezze, don’t stop me; I ’m going in here to buy a cover fo r my typewriter. Sezzi, but that’s a fur shop. Sezze, well? Shoes “ No, I didn’t say she was Dutch, I said she was a ‘wooden shoe’ girl.” “ Wooden shoe1 , how come?” “ Oh, wooden shoe buy me this and wooden shoe buy me that, you know.” Would You? Frenchman: “ You have to fill in the nationality blank also, sir. You are a Spaniard, n’est ce pas?” Spaniard: “ No, sir. I ’m English. My mother and father were English.” Frenchman: “ But you were bom in Spain.” Spaniard: “ That’s nothing. I f your dog had pups in the china closet, would you call them soup plates?” Strangers An extra girl in Hollywood was play ing a practice round o f golf alone. On the fourth fairway she stooped over to tie a shoelace and as she did so a ball driven by a member o f a foursome on the third tee smacked her. The man who had hit her ran up to apologize. Before he could say a word she began to berate him. “ Sir,” she snapped, rubbing the sore spot, “ your ball hit me right in the middle o f the back.” “ It didn’t look to me like it was the middle o f your back,” he said. “ Well, you’re a stranger to me and therefore it’s the middle o f my back to you.” Handy for the Cut-Ups “ I hear the surgeons have operated on you again.” “ Yes.” “ How many times does this make?” “ Five. They’re going to put on a swinging door next time.” N orthw estern B anker https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D ecem b er 193b The Pants W illie was being measured fo r his first made-to-order suit o f clothes. “ Do you want the shoulders padded, my little man?” inquired the tailor. “ Naw,” said Willie, “ pad the pants.” He— Let’s get married, or sumpthin. She— W e’ll get married or nothin! Policeman: “ How did you knock him down?” M otorist: “ I didn’t ! I pulled up to let him go across and he fainted.” Commission One salesman met another one in an arm-chair restaurant. “ W hat’s the matter, B ill? You are eating only crackers and milk. Are you on a diet?” B ill: “ No, on commission.” Don’t W orry A woman got on a trolley car and find ing that she had no change handed the conductor a $10 bill. “ I ’m sorry,” she said, “ but I haven’t a nickel.” “ Don’t worry, lady,” said the conductor, “ you’ll have just 199 o f ’em in a minute.” Lawyer: “ I must know the whole truth before I can successfully defend you. Have you told me everything?” Prisoner : “ Except where I hid the money. I want that fo r myself.” So inquisitive “ And what did the insurance agent say when lie came to the door while you were . in your bath, John ?” “ He wanted to know if I was fully covered.” W hat He Needed Mountaineer (taking son to school room) : “ M y boy’s arter lam in’. What have you g ot?” Teacher: “ W e offer arithmetic, English, trigonometry, spelling, etc.” Mountaineer: “ Just give him some of that thar triggernomerty; he’s the worst shot in the family.” The young and keen police officer was being shown over his new night beat by the sergeant. “ D ’ye see that red light in the distance? Well, that’s the limit o f your beat. Now get along with it.” The young policeman set out, and was not seen again fo r a week. When he did show up at headquarters the sergeant demanded furiously where he had been. “ Ye remember that red light?” asked the cop. “ Yes.” “ Well, that was a moving van bound for Chicago.” A certain famous motor car manufac turer advertised that he had put a car together in seven minutes. The next evening he was called on the phope at dinner time and asked if it were so. “ Yes,” was the reply. “ W h y?” “ Olx, nothing. But I believe I ’ve got the car.” First L a d y : “ I saw a young man trying to kiss your daughter in the park last night.” Second Lady: “ Did he succeed?” First Lady: “ No.” Second L a d y : “ That wasn’t my daugh ter.” Letter to the Editor Dear Editor: I got your letter about what I owe you. I f this wuz judgment day and you wuz no more prepared to meet your Maker than I am to meet your account you sure would have to go to hell. Trusting you will do this, I am T h o u s a n d s of jobs Millions in payrolls ......... brought to corn belt towns by direct marketing of livestock O TE A D ^ employment to thousands of citizens lias been brought to the Corn Belt by direct marketing. Take Iowa, for in stance. During 1933, the six major interior meat packers paid $12,618,652.00 in wages to their 8,513 employes. 17 small pack ers, 615 retail butchers who slaughter livestock and 58 livestock buying stations and concentration points, also employed large numbers of Iowa citizens. Similar figures could be cited for each of the Corn Belt states. You can easily see what it would mean if any of this group of people were caused to lose their jobs as a result of the restriction or elimination of direct marketing of livestock. Therefore, in their effort to maintain freedom of livestock marketing, livestock producers, shippers and processors are concerned about more than their own interests. They are en deavoring to protect a substantial home industry in which every small town banker, merchant and professional man in the Corn Belt has an interest at stake. Yet, the issue is clear and simple. All that livestock producers ask is the preservation of their right to sell their livestock where it will net them the most money, whether that be at a terminal market or at one of the local or direct markets. A S S O C IA T IO N TO <J7t PAYS Inform ed https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis > \ / M A IN T A IN FREEDOM IN LIVESTOCK M A R K E T IN G 5 1 5 In s u r a n c e E x c h a n g e B ld g . Des Moines, Iowa ■\f- ■] Iow a -Des Mo in e s . .h i *. - -'V. * . - i V » v . : ; .Vs. f I* / " ' * ' - -iT--, Na t io n a l Ba n k irT R u sT C o m p a n y https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis B an kers o f I o n a A r e In vited T o U se r ill o f T h e s e Services
@FedFRASER