Full text of The Northwestern Banker : July 21, 1969, No. 1173

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Oldest Financial Journal Serving The Central and Western States

No. 1173__________________________ Des Moines, Iowa

Blame CD Rate Ceiling for Money Woes

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Large banks in major cities
have felt the pinch of monetary
restraint in recent months more
than the smaller banks in smaller
centers, according to the current
report from the Federal Reserve
Bank of Chicago.
The reason given for the greater
pinch of the large banks has been
the restriction on rates banks are
permitted to pay on time deposits.
A s interest rates on market secu­
rities have risen, business firms
and state-local governments in
increasing numbers have cashed
in their time certificates of de­
posit as they matured and shifted
the funds to other investments.
Since this kind of deposit is
mainly held at the large banks,
these banks have been affected
most.
Suggestions that the interest
rate ceiling on large certificates
pf deposit be raised has been re­
jected by Federal Reserve Board
Governor Andrew F. Brimmer.
“ If such a step were taken, in
my opinion, it would further under­
mine the effects of monetary re­
straint in the United States,” he
said. “ Commercial banks could
be expected to use any new headroom given to compete vigorously
for funds in the domestic market,
and this would reduce their incen­
tives for exerting much needed

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restraint on lending, particularly
lending to bu sin ess.”
Limitations on the availability
of funds to lenders, he said, are
a “ critical element” of monetary
restraint, especially in an infla­
tionary period when many borrow­
ers are willing to pay rising inter­
est rates to obtain funds.
Total time deposits declined
22% at large banks in New York
City and 13% at large banks in
Chicago in the six months ending
May 28, while at country member
banks of the Federal Reserve
System such deposits increased
4.5% , according to the bank’ s
figures.
These large banks, then, were
unable to increase the credit
extended to their customers, even
though they obtained large amounts
of funds from sources other than
deposits.

Prime R a t e . ..
The increase in the prime rate
to 8%% last month was clearly
a response to financial market
pressures faced by the banks
in major cities. Banks in the
smaller
towns
throughout
the
Northwestern Banker area are con­
tinuing to charge 7%% to many of
their better borrowers.
Banking sources in Washington

Ju ly 21,1969
believe that political realities
make it quite hazardous for the
bankers in major centers to hike
the prime rate again, Respite the
fact that credit conditions may
dictate such an increase.
They point out that another
prime rate might jeopardize enactiment of an acceptable one-bank
holding company bill in the House;
it might lead to Congressional
action of placing a ceiling on
interest rates and might add fuel
to the fire in the area of increased
taxation of commercial banks.

Savings Bond R a t e . ..
Steps are being taken to remove
the maximum rate that may be paid
on any Treasury bond, including
savings bonds. The rate is now
4.25% , a statutory limitation which
has been unchanged since 1918.
If the ceiling is removed, the
Treasury intends to set the sav­
ings bond rate at 5%. Dollar limit
on annual bond purchases by an
individual would be reduced from
$20,000 to $5,000.
Despite the reduction in the
dollar limit on savings bond pur­
chases,
thrift institutions are
worried about the psychological
impact on the saver of the new
5% rate.
But Treasury department of­
ficials don’ t expect large shifts
(Continued on Page 4)

Correspondent service? Call the. bankers
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HOMER JENSEN
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Federal Reserve Bank of St. Louis

S/XTH AND LOCUST. DES MOINES
M em ber: F .fl.S . a F .D .I.C .

W e're here to help
you get what you want

IOWA-DES MOINES
NATIONAL BANK
Jerry Nelson

Mfwbw Fed eral D eposit Insurance Corporation

New High for Fed Funds...
Rates for “ Federal funds’ ’ hit
record levels last week as banks
sought to borrow from each other to
meet reserve requirements on the
Federal R eserve’ s midweek settle­
ment date.
Rates of 11% were recorded for
those uncommitted reserves banks
lend each other for short periods,
usually
overnight.
The
previous
record was 10-5/8%*reached June 27.
Market analysis attributed the high
rates to banks’ misjudging the mar­
ket and encountering a shortage of
money with which to meet their re­
serve requirements.

Govt. Stops Issuing Currency in
Denominations over $100
The government announced last
week it has stopped issuing currency
in denominations of $500, $1,000,
$5,000 and $10,000.
The Treasury Department and Fed-

eral Reserve Board said use of the
large-denomination b ills has declined
to the point where it is not worth the
cost of printing new Supplies.
E ffective immediately, the agency
said, the largest b ills to be issued
will be for $ 100.
A ll existing supplies of the largedenomination bills at Federal Reserve
banks will be turned over to the
Treasury for destruction and circu­
lating notes will be destroyed when
they find their way back to Federal
Reserve banks.
The last supply of the big bills
was printed in 1946; the Treasury
said the number available has now
diminished to the point where ad­
ditional printing would be n e ce s­
sary if they were to be kept in circu­
lation.
Meanwhile, Rep. Silvio O. Conte,
(R ., M ass.), will urge Congressional
approval of his bill to mint one-dollar
U. S. coins composed of 800 parts
silver and 200 parts copper, for
a three-year period starting Janu­
ary 1, 1970.

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That's why ovar half tha banb in Iowa ara
— MNB correspondents

MERCHANTS NATIONAL BANK
CEDAR RAPIDS, IOW A 52401

Member FOIC

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N ATIO N AL NEWS
NEW YORK: Edward Eller, formerly
vice president of the Chase Manhat­
tan Bank, New York, has joined the
staff of United California Bank Inter­
national as executive vice president.
On October 1, he will su cceed Stan­
field Taylor, executive vice president
and director, who will be transferred
to the bank’ s Los Angeles, C alif.,
headquarters. Mr. Taylor w ill su c­
ceed Victor R. Rose as senior vice
president and head of the bank’ s
international division. Mr. R ose will
retire, but w ill continue as a con­
sultant and senior vice president in
charge of foreign investments and
international acquisitions.
PARK RIDGE, IL L .: William B. Carr,
executive vice president of the Provi­
dent National Bank, Philadelphia,
Penn., has taken over as the new
president of the Bank Administration
Institute, succeeding Earl L. Bimson,
president of the Valley National
Bank o f Arizona, Phoenix. Other new
BAI officers include: First vice pres­
ident—Charles A. Agemian, executive
v ice
president, Chase Manhattan
Bank, N .A ., New York; second vice
president—Raymond E. Kolb, senior
vice president and cashier, Mellon
National Bank & Trust Company,
Pittsburgh, Penn.; treasurer—Herman
L. Scott, senior vice president, First
National Bank of Memphis, Tenn.

IOWA NEWS

Joe Phernetton
Vice President

G E N E H AGEN

P *H

mfg. of custom

we can

BRITT: Robert Gopperton, formerly of
Spencer, has been named assistant
vice president and agricultural repre­
sentative at the First State Bank
here, succeeding Jim Mallen, who
has been named president of the
Farmers State Bank at Kanawha.
Mr. Gopperton has been associated
with Equitable of Iowa as farm mort­
gage representative for the past
eight years.
CLIMBING HILL: Milo B. Goodrich
has been elected chairman and pres­
ident of the Climbing Hill Savings
Bank. He fills the vacancy created
by the death early this year of Joseph
P. Gesaman.

COLUMBUS JUNCTION: J. E. Hen­
son has retired as vice president of
the Columbus Junction State Bank

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F I R S T N A T IO N A L B A N K f i T R U S T C O M P A N Y O F L IN C O L N
12th &. N S tre e t • L IN C O L N , N E B R A S K A • Member: F .D .I.C .

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after completing nearly 52 years o f
banking service.
GRUNDY CENTER: The Peoples
Savings Bank has purchased the for­
mer Wellsburg Hatchery property,
just east of the bank, for develop­
ment into a bank parking lot.
LE MARS: The First National Bank
has announced a 100% stock dividend.
This represents a $100,000 increase
in the bank’s capital to $200,000.
MASON CITY: Jay Gannon has been
elected assistant cashier of the First
National Bank. He joined the bank
in 1966 and has been a member of the
installment loan department.

JLL

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board and will remain active in the
bank until the end of the year. C ecil
Pogatchnik has been elected pres­
ident and Dale Pogatchnik a vice
president. Both men will be moving
to the Hallock area.
HAWLEY: I. B. Leverson has retired
from the State Bank of Hawley after
45 years of service. He joined the
bank in 1924 and had been serving
as v ice president and director.

ISLE: Clifford Hammarberg has been
named president of the Lakeside
State Bank here. Mr. Hammarberg,
formerly vice president, su cceed s
I. C. Rasmussen, who has resigned.

YOUR STATE BANKERS ASSOCIATION
OFFICIAL SAFE. VAULT AND
TIMELOCK EXPERTS

F. E. DAVENPORT & CO.
OMAHA

president of the V alley National Bank
o f Eagan Township, is also one of
the organizers of the bank.
SAVAGE: James A lgeo, a vice pres­
ident of Green Giant Company, has
been named a vice president o f the
Savage State Bank. He has been a
director o f the bank since it was
organized in August, I960.
WARREN: Laveme Norman, formerly
cashier of the Farmers State Bank of
Stephen for 14 years, has taken over
as executive vice president and
managing officer o f the Peoples State
Bank here, succeeding Clarence Nybakken, who will continue as chair­
man of the board. Mr. Nybakken has
been with the bank for 39 years,
serving as president during the last
seven years.

SIOUX CITY: Shareholders of the MINNEAPOLIS: Ed Griffin has joined
Security National Bank have voted the Central Northwestern National
approval of a proposed merger and Bank as business development and
reorganization plan to form a hold­ marketing representative.
ing company. Under the proposed
reorganization, the bank will become
the subsidiary of the new Security MORRIS: The third session of the
National
Corporation,
with each Midwest Banking Institute will be
share of bank stock exchanged for held July 20—25 at the University of
10 shares of the newly formed corpo­ Minnesota campus here. The institute
ration. The proposal is subject to is sponsored by the Minnesota, North
ILLINOIS NEWS
approval of the Comptroller o f the Dakota and South Dakota Bankers
Currency.
A ssociations.
CHICAGO: Frank J. Tesar has been
named assistant trust officer at the
ST. PAUL: Joseph H. Summers, e x ­ Exchange National Bank.
MINNESOTA NEWS
ecutive director o f the Independent
Bankers of Minnesota sin ce its CHICAGO: Henry W. Washington, c o l­
BLUE EARTH: A1 Holland, local
founding in 1961, has died following lection manager at the University
implement dealer, has been named
a long illness. Mr. Summers was 58. National Bank, has been named
assistant cashier at the Blue Earth
He had been hospitalized sin ce assistant cashier.
State Bank, effective August 1. May 13.
GRAND MEADOW: Ray Gomer has
been promoted from cashier to execu ­
tive v ice president and cashier at
the First American Bank here. He
has been with the bank for the past
13 years.
HALLOCK: Controlling interest in
the Northwestern State Bank of Hallock has been sold by J. R. Chappell,
chairman; R. C. N elson, president,
and C. B. Dahlquist, director, to
C ecil Pogatchnik, formerly v ice pres­
ident o f the First National Bank of
Butte, Mont.; Dale Pogatchnik, c o ­
ordinator of the audio-visual depart­
ment of the Bloomington Independent
School District, and Lowell Pogatchnik, president of the First National
Bank of Middle River and the First

National
Bank of Kilkenny. Mr. N el­
https://fraser.stlouisfed.org
son has been elected chairman of the
Federal Reserve Bank of St. Louis

ROSELLE: R ussell C. Shockey, for­
ROSEVILLE: The Comptroller of the
merly trust officer at the Elmhurst
Currency has given preliminary ap­
National Bank, has been named trust
proval to the application for a new
bank, the Suburban National Bank of
□ I would like to sell my majority
R osev ille, to be loca ted in the new
bank stock.
Rosedale shopping center. Organizers
□ I would like to buy majority bank
stock.
of the bank are W. G. Andrews of
Pleas* Contact: J. Mason Henry, President
Mendota Heights, F. A. McGonigle of
Charles E. Wallers Co., Inc.
Eagan; C. P. McGough and J. E.
P. O. Box 1313, Omaha, Nebr. 68101
Parranto of Eagan. David A. Shern,

For Decisive Action
Rely on N BC for all your correspondent needs.
M em ber F D tc

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of Commerce

Mein S e n k 130» * . O S te . >FnHo O ffic e lO t k O O S t . /Lin coln. N e b re e h *

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Kansas City, Missouri
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officer at the R oselle State Bank and
Trust Company.
SPRINGFIELD: Don S. Browning,
controller at the Illinois National
Bank, has been appointed to the
additional position of cashier.

NORTH DAKO TA NEWS
HATTON: Gladys Hogen has retired
from the Farmers and Merchants Na­
tional Bank, following 25 years of
service with that institution.

SOUTH DAKOTA NEWS
PLANKINTON : An open house was

held recently at the newly remodeled
Farmers & Merchants State Bank here.

POSITION WANTED
Managing officer in Nebraska Bank
with 16 years executive experience
in bank of $5 million desires new
management opportunity in Nebraska.
C ollege and banking sch ool graduate.
Write F ile NVB, in care of the
NORTHWESTERN BANKER, 306 15th St., Des Moines, Iowa 50309-

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Write Box FFB, in care o f the
NORTHWESTERN BANKER, 306 15th Street, Des Moines, Iowa 50309-

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WANT TO BUY
Wish to purchase NCR proof machine
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WATERTOWN: Wayne Bredeson, pres­
ident and chairman of the Farmers & Savings Bond
Merchants Bank & Trust Company of (Continued from Page 1)
Watertown, has announced two pro­ of funds away from savings institu­
motions and a transfer of $50,000 tions into savings bonds.
from unassigned earnings to the
“ We don’ t think this action will
bank’ s capital account, bringing total have a decided and noticeable impact ü
capital at the bank to $1,292,400- on savings institutions,” Treasury
Promoted were Darwin R. Anderson, Undersecretary for Monetary Affairs ^
to assistant cashier and insurance Paul A. Volcker said.

Rates 25 cents per word per
insertion. Minimum: 12 words.
NORTHWESTERN BANKER
306 15th St., Des Moines, Iowa

Call

department manager, and Paul D.
Sigelman, to assistant vice president
and director of marketing and public
re lations.

CASH FLOW SHEETS
*
Monthly cash flow income and expense
forms —so helpful in planning budget
loans for farmers and ranchers. Sam­
ples available. The Farm Business ^
Council, Inc-, P. O. Box F , Urbana,
Illinois 61801.
WANTED
Experienced insurance man with banking experience preferred for $7 mil­
lion bank in southwestern Minnesota.
Salary open. Send resume to Box AIR,
NORTHWESTERN BANKER, 306 15th
St., Des Moines, Iowa 50309. Confi­
dential.

^
^

INCREASE 1969 PROFITS
Cy Kirk and Max R oy, v ice presidents
of LaSalle National Bank, C hicago,
<
are prepared to a ssist you and your
“ The Bank That Cares” bank in planning increased profits
for 1969* Whether it is an analysis of
your bond portfolio or a co st study
of your general banking se rv ice s,
LaSalle National Bank has the fa cil- 1
ities to serve your every need. Call
BANK
AND T R U S T
COMPANY
Cy or Max today at (Area Code 312) 07
Deposit Insuran ce Corporation
782—5200 for immediate action.

i

No. 1173 Northwestern Banker is published five times monthly by the Northwestern Banker Company, 306 Fifteenth Street, Des

DigitizedMoines,
for FRASER
Iowa 50309. Subscriptions 50^ per copy, $6 per year. Second class postage paid at Des Moines, Iowa. Address all mail
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Federal Reserve Bank of St. Louis