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Vol. 1. No. 37 y v y > Des Moines, Iowa Housing In 19727 A Shift In Emphasis The following comments on the housing outlook for 1972 have been sent to the Northwestem Banker by Philip C. Jackson president of the Mortgage Bank ers Association of America: Housing was a star performer in the economy in 1971 and promises to con » tinue at record levels in 1972. Even though residential construction ac counted for a relatively small 4 percent v of the Gross National Product (GNP), it accounted for about 14 percent of the t growth in the GNP during 1971. The v value of residential construction jumped by a third in 1971 and promises to show another 10 percent gain in 1972. Traditionally, housing has been a counter-cyclical sector of the economy with strong gains recorded during early phases of business recoveries. Ample ► supplies of funds became available to the mortgage market in 1971, bringing the * current surge in activity to meet the backlog of housing demand. In physical volume, the number of housing starts in 1971 reached a new record exceeding 2 million units. When mobile home ship ments of over 500,000 units were added to the housing starts, total shelter pro duction exceeded 2.5 million. During 1972, the number of housing starts will increase slightly to 2.1 million V units and mobile home shipments will P also increase slightly. However, apart ment production will become less impor y tant, slipping from 875,000 units to 750,000 units while single-family hous- ing starts will exceed 1.3 million units, the highest since 1955. ► r x While the economy was supported by the strength in housing activity during 1971, the strength in the economy will support housing activity in 1972. Each major sector of the economy — con sumer spending, business outlays, state and local government purchases, federal government spending as well as construc tion activity — will show significant-tostrong gains in 1972. The GNP will increase a substantial 9.5 percent with the gain in real output of 6 percent and a somewhat smaller price increase of 3.5 percent. By every measure, 1972 will be a very good year for the economy with most of the problems of recovery moving close to resolution. Housing programs will need to face a shift in emphasis during the coming year as the backlog of housing demand .is satisfied. In most areas of the country, housing production is rapidly catching up with the need for new units, and in a few areas moderate overbuilding is appar ent for some types of housing units. Vacancy rates have already begun to climb from the exceptionally low levels John Mangold Senior Vice President MERCHANTS NATIONAL BANK CEDAR RAPIDS, IOW A Digitized v for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis of recent years, and the time necessary to rent new apartment units is stretching out reflecting the rising number of units being completed. A reasonable economic forecast of housing demand in 1972, assuming no escalation of federal or state government subsidy programs, would be housing starts of 1.8 million units and mobile home shipments of 500,000 units. A more realistic political forecast would indicate adoption of additional programs or expansion of existing programs to stimulate housing starts in 1972 above 2.1 million units which would exceed the 1971 record. One inevitable consequence will be additional overbuilding in many housing markets. Yet the discipline of the market place does not apply to government-subsidized units which, be cause of their cheaper out-of-pocket cost, will drain eligible households from the private housing market. The mix of housing starts, however, will reflect the limitations of private demand during 1972. Apartment starts are expected to decline in 1972 as cutbacks in private starts more than offset the stimulus from government multi-family programs. Single-family starts will increase further under very strong stimulus of government programs. Financing this continued boom in housing activity will require additional funds from the varipus government cred it agencies to help offset a modest reduction in funds available from the thrift institutions. Interest rate levels during 1972 will (Continued on back page) There ere so many ways we can help you That's why over half the banks in Iowa are — MNB correspondents ► *- January 17,1972 MEMBER FDIC Bank of Bellevue contends that the Bank of Bellevue should not be allowed to establish a facility in the Capehart hous ing, addition near Offut Air Force Base. The suit also asks that the Bank of Bellevue be restrained from operating a facility in existence for several years on the base itself. NORTH PLATTE: The State Depart ment of Banking has denied an applica tion for a bank charter for the proposed American State Bank at 420 Rodeo Road. w e're here on your account SECURITY NATIONAL 6 T H A N D P IE R C E BANK S IO U X C IT Y , IO W A IOWA NEWS CHEROKEE: Edwin M. Hartliep, 56, vice president, Steele State Bank, died recently following a heart attack. DES MOINES: The Council of Admin istration of the Iowa Bankers Association has directed its legislative committee to meet again on January 25 to reconsider its support of a bill to restrict multi-bank holding companies and liberalize the state’s bank office law. The omnibus bill restricts a bank holding company to controlling no more than 10% of the total deposits in the state. Some banks within the Association — chiefly those identified with the new ly-formed Iowa Independent Bankers As sociation — seek a 3% to 4% deposit ceiling because they feel the 10% limita tion tends toward economic concentra tion. The omnibus bill also liberalizes the Iowa bank office law — expanding the number of bank offices per bank, es pecially in urban areas, and authorizing additional functions, including the mak ing of loans. The legislative committee had voted 27-7 in support of the omnibus bill at a meeting Dec. 15 in Des Moines. The Iowa Bankers Association staff announced late last month that because Northeast Iowa Banks When you’re ready for it, make an appointment to see our computer compute. It can solve a lot of problems for your bank. When your bank needs this or any other service, call Bill Rickert or Ken Young. of the sensitivity and importance of the banking structure issues, it would con duct a poll of the 665 member banks to gauge reaction to the omnibus bill. Arthur E. Lindquist Jr., executive vice president and secretary, said the reaction from approximately 100 banks that responded to a Dec. 17 survey letter was overwhelmingly opposed to one or more provisions of the omnibus bank bill as now written. There were only a handful, he said, who supported the bill in its present form. LONE ROCK: A charter trip to the Independent Bankers Convention is be ing planned for bankers and their wives by K. W. Jackson, president, Lone Rock Bank. The group will leave Des Moines on March 11 and return on March 19 after a side trip to Freeport in the Bahamas. Cost of trip is $385, including hotels, ground and air transportation, and extras. RIPPEY: Dwight M. Crumley has retired as active president of the bank following 54 years of service, according to H. A. Norgren, executive vice president. NEBRASKA NEWS BELLEVUE: A suit filed in Sarpy Coun ty District Court by the First National [ ] I would like to sell my majority bank stock. [ ] I would like to buy majority bank stock. Please Contact: J. Henry, Pres. P. O. Box 1313, Omaha, Neb. 68101 Phone: (402) 553-6400 ILLINOIS NEWS CHICAGO: Members of the Illinois Bankers Association will hold their 20th Annual Public Relations and Marketing Conference, January 27-28, at the Sheraton-Chicago Hotel. The group will take an in-depth look at “ Marketing During the Profit Squeeze.” The opening luncheon speaker will be Lt. Gov. George Nigh of Okla homa. Registration will start at 11:00 A.M. on Thursday, January 27 in the East Room Foyer, 9th Floor, according to Conference Chairman William R. Beckmann, director of PR and Adver tising for National Boulevard Bank, Chi cago. President of the IBA public rela tions division is Marvin R. Strunk, senior vice president, Madison Bank & Trust, Chicago. The conference will adjourn Friday noon. DEERFIELD: A permit to organize has been issued to establish the Deerbrook State Bank at the Deerbrook Shopping Center. Total capital will be $1,000,000. Organizers include: Donald Brown, Northbrook; Fred C. Griffiths, Park Ridge; Charles Kimball, Chicago; C. T. Mitchell, Western Springs, and Robert J. Wilson, Naperville. NAPERVILLE: An application for a permit to organize has been made for a bank to be known as the Indian Hill Bank and Trust Company. Total capital ization would be $ 1,000,000. Organizers IOWA-DES MOINES NATIONAL BANK National Bank of Waterloo Larry Welch <!) OMAHA: The State Department of Banking has reported that an application for a bank charter at the southwest corner of Custer and Nathan Hale Lane, Offut Air Force Base, has been with drawn. We know the importance of your bank to your community. Correspond with us. Sb https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mason C H A R L E S E. W A L T E R S C O ., IN C . >-§ Member Federal Deposit Insurance Corporation M united missouri bank THE NEW MARK IN BANKING IS HERE. CITY NATIONAL BANK AND TRUST COMfftNY Kansas City, M issouri include: Howard Esser, Jr.; Philip F. Flynn; Harold E. Moser; Alfred Rubin; Robert R. Wallace, and Warren Wood, all of Naperville. GOT AN IMPOSSIBLE DREAM? CALL BOB REED @ MINNESOTA NEWS BROOKLYN CENTER: Joe Kolar, for mer president of the Calumet State •Bank, has been named president of the Brooklyn Center State Bank. CORRESPONDENT BANKING DEPARTMENT / SIXTH AND LOCUST / DES MOINES BANKERS TR U S T CALUMET: Romane Kaufmann of Anolca has been elected president of the Calumet State Bank. MINNEAPOLIS: A Federal district court in Minneapolis at the request of the State Commerce Commission and the Indepen dent Bankers Association of Minnesota has issued a temporary restraining order against Comptroller of the Currency Wil liam B. Camp from proceeding with a scheduled hearing on the application by the First National Bank of Minneapolis to relocate one of its branches here. First National seeks to relocate its north side office at W. Broadway and Washington Avenue South across the city to 53rd and Lyndale Avenue. NEW HOPE: Hearings will begin Febru ary 15 on a new application for a state bank here. This is the second application filed by Milton C. Honsey, William J. Egan and Willard H. Honsey. The first application, filed Dec. 15, 1970, was denied. NORWOOD: Clinton D. Kurtz, former vice president of the Blue Earth State Bank, has been elected vice president and -k Sales and Service Full line of bank security equipment YALE BANK SERVICE DIVISION. Regional offices I960 W. 12th Place Denver, Colorado 80204 Phone: 303/825-8241 F 2066 Farnam Street Omaha, Nebraska 68104 Phone: 402/342-1821 « W m H I Security Products m I . • I H & Systems director of the Citizens State Bank. Frick has been executive vice president. His father, Alvin C. Frick, was president of the bank from 1933 to 1959. RICHFIELD: Funeral services were held recently for James C. Hazlett, 63, presi dent of the Summit State Bank. He died while vacationing in Florida. NORTH DAKOTA NEWS FARGO: A public hearing is scheduled for January 21 in Bismarck on a charter application for a state bank to be located in the West Acres shopping center. Pro posed name of the bank is Union State Bank of Fargo. WAYZATA: Robert B. Frick has been named president of Wayzata State Bank & Trust Company, succeeding Wayne Blackmarr, who has been named chair man and chief executive officer. Mr. Attention Bank Purchasers. • • If you want a bank with: (1) (2) (3) (4) (5) (6) (7) An “ Already approved Holding Com pany“ 82% Ownership of the Bank Stock Built-In Management Excellent Note & Securities Portfolio One Bank — Community of 2,000 Increased Earnings Potential $3.5 M illion Total A s s e ts T H IS, Contact: PLUS 10% Return on Investment BANK INVESTORS 8450 Hickman Road -Suite B Des Moines, Iowa 50322 Telephone - 516-278-2891 Office 515-276-0038 Home If you aren't registered with us now, it might be wise to do s o —no obligation! Call on the "Perform ance U n iq u e ly prepared to h an d le u n c o m m o n tra n sa c tio n s u n c o m m o n ly well. FIRST NATIONAL BANK & TRUST COMPANY OF LINCOLN https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis dreams P O S S IB L E ALL YALE SECURITY EQUIPMENT “MAKING ' ^ possible 13th and M Street • Lincoln, Nebraska 68501 • Member, F.D.I.C. COULSON ^ 4 CANNON C A AND MUIR i m mam A mm Three of our men W b J S M I 4H H Y S t I on your side at Fred Coulson Tom Cannon * C ommerce Bank mmmasmm ISlJ il dKsSr « 1 J? * ^ Housing in 1972 (Continued from Page 1) show little identifiable trends during most of the year, though an upward thrust should be expected as the rise in economic activity accelerates late in the year. A repetition of a seasonal upturn in the spring would be expected though the amount of rise in interest yields should be much smaller than in recent years. A special feature of mortgage interest yields is the return to a positive yield spread between single-family mort gages and high-grade corporate bonds.. This yield spread deteriorated in late 1970 so that during most of 1971 the highly unusual situation of a negative yield spread prevailed between home mortgages and corporate bonds. With the problems of adequate sup plies of housing units and availability of mortgage financing fading into history, it is time to turn attention to the problems of people. The direct subsidization of consumers is the preferred means of pursuing social goals that are not other wise met. Direct subsidies avoid the warping of financial institutions. They are visible and they are less inflationary than borrowings of the federal govern ment or federal agencies. In addition to being extremely cost ly, the present housing interest subsidy programs are in many instances most inequitable. Citizens who have worked hard for many years to acquire decent shelter have been angered because some ■g.... jj. §11® • of Kansas City gg ®.. ¿SsiUti new neighbors with comparable or higher incomes have been able to obtain subsi dies from the federal government to purchase the same or even better hous ing. A program is needed which will screen applicants for housing subsidies more carefully so that inequities will be non-existent or minimal. An expanded housing allowance program could ac complish this result. W Y O M IN G GREELEY: Dale Hinman has been named chairman of the board of the Greeley National Bank. He has served as president since 1959 when he joined the bank. Mr. Hinman is a director of the Denver branch of the Federal Reserve Bank, and continues to serve as chief executive of the Greeley Bank, MONTANANEW S BOZEMAN: Montana Bankers will hold their Annual Agricultural Credit Confer ence, January 27-29 at Montana State University. Registration will start at 9:00 Thursday morning, January 27. The pro gram will start this same day at 1:30 P.M. with a panel discussion on “What’s New In Our Area,” A social hour and smorgasbord will be held at Holiday Inn starting at 6:00 P.M. The Friday meeting will start at 9:00 A.M. and will continue throughout the day. A social hour and banquet will again be held at Holiday Inn, and a basketball game between Montana State You dorrt need us. W e need you! c Dick Muir Central National Bank & Trust Com pany LOCUST AT SIXTH AVENUE. DOWNTOWN DES MOINES. PHONE 243 8181 MEMBER FDIC. and Gonzaga will follow. Workshop ses sions will be held Saturday A.M. Regis tration is being handled by Wayne Gib son, Security Bank and Trust Company, Billings, W ANT ADS Rates 25 cents per word per insertion. Minimum: 12 words. NORTHWESTERN BANKER 306 15th St., Des Moines, Iowa POSITION WANTED Young aggressive banker, age 35, with 17 years banking experience, seven years as managing officer, desires to relocate either as man aging officer or as second man with opportunity to advance. Write Box BPR, NORTHWESTERN BANKER, 306 Fifteenth Street, Des Moines, Iowa 50309. TWO GOOD OPENINGS in separate banks. Executive officer and second man. Salary negotiable. Write Box GBT, NORTHWESTERN BANKER, 306 Fifteenth Street, Des Moines, Iowa 50309. LA SALLE’S Teller Referral Guide can help your tellers work more efficiently It’s a handy card that gives your tellers a; complete step-by-step procedure for the proper handling of their various opera tions. Yours without charge. Just write or phone Cy Kirk or Max Roy at the LaSalle National Bank in Chicago today. Telephone (312) 443-2774. LOWER YOUR FARM LOAN RISK By sending him DOANE’S Farming For Profit, the hard-hitting, factfilled monthly new sletter that pro vides help in management, produc tion and marketing. Free sample subscription for 6 months. Write D. R. Gorr, DOANE Agricultural Ser v ice, Inc., Dept. 701, 8900 Man chester Road, St. Louis, Missouri 63144. Voi. 1. No. 37 Northwestern Banker Newsletter is published weekly by the Northwestern Banker Company, 306 Fifteenth Street, Des Moines, Iowa 50309. Subscriptions 25tf per copy, $6 per year. Second c la ss postage paid at Des Moines, Iowa. Address all mail subscriptions, changes of address (Form 3579), manuscripts, mail items to above address. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis
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