Full text of The Northwestern Banker : March 1939, Forty-Fourth Year, Number 620

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ARCH
1939

SAM UEL C. W AU G H
Executive Vice President and Trust Officer
First National Bank, Lincoln, Nebraska
President, Trust Division American Bankers Association
See page 37

HIGHLIGHTS of

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MINNEAPOLIS CONFERENCE
Pages 1 1 - 1 6

A CEDAR R A P ID S B A N K

CED A R
RAP ID 5

SERVICING A L L IOWA.

Genuine Interest in y 0ur Problems
At the Merchants National Bank you will find a thorough
familiarity with conditions, an experienced judgment in all
matters pertaining to correspondent’ s needs, and a genuine
interest in your problems.

M ERCHANTS
NATIONAL BANK
OFFICERS
Chairman, James E. Hamilton; President, S. E. Coquillette; Vice Presi
dents, H. N. Boyson, Roy C. Folsom, Marvin R. Selden, Fred W . Smith,
John T. Hamilton II; Vice President and Cashier, Mark J. Myers; Vice
President and Trust Officer, George F. Miller; Assistant Cashiers, R. W .
Manatt, L. W . Broulik, Peter Bailey, R. D. Brown, O. A. Kearney.

Cedar Rapids

Iowa

M em b e r F e d e ra l D e p osit In su ra n ce C o rp o ra tio n

Northwestern Banker, published monthly by the De Puy Publishing Company, Inc., at 555 7th Street, Des Moines, Iowa.
Subscription, 35c per copy, $3.00 per year. Entered as second-class matter at the Des Moines post office. Copyright, 193ft.

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MEMBER

FED ER A L

D EP O SIT

IN SU R A N CE

C O R P O R A T IO N

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March 1939

Federal Discount Corporation
Dubuque, Iowa

Automobile Finance
Time Payment Plans f o r
Automobile Purchasers

Capital, Surplus and Undivided Profits
Exceed O ne M illion Dollars
★

★

Short Term

Collateral Trust Notes
Notes Secured by Collateral Under Trust
Agreement with American National
Bank and Trust Co., Chicago, III.

★

Information on Request

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F/RF

Tongues of hot flame mercilessly engulf the home
owned or managed by your bank . . . damage its fur
nishings . . . drive tenants into the street!
During weeks of rebuilding, the structure cannot be
occupied. Other quarters must be sought out and paid
for. Rental value of your premises, if uninsured, is lost.
Vitally important is insurance against direct loss by
fire, but clearly it is not sufficient to cover the destruc
tion of invisible values upon which your bank’s income
depends.
Bankers today are safeguarding income from un
foreseen losses of this nature by having managed or
mortgaged properties protected against the indirect
damages caused by fire, explosion, windstorm.
Ask an agent of The Home to describe the advan
tages of Rent Insurance. This useful form reimburses
for rent lost while a residence remains untenantable
as the result of fire and related hazards . . . thus insuring
continuance of income otherwise cut off.

™

U flM F

INSURANCE
COMPANY

IlU M li
NEW YORK

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Federal Reserve Bank of St. Louis

March 1939

T wenty Dollars’ worth

j/^ .S a practical man in the
plumbing and heating field,
you know what happens to
the customer who tries to
build his own bathroom with
twenty dollars’ worth o f pipes
and valves and a second-hand
tub. He risks his home and
his family’s health. Fortu
nately, most practical men
know this too, so they cheer
fully pay for your services as
an expert middleman and ser
vice man in your field.
When the master plumber or
heating engineer buys insur
ance from an experienced
agent or broker o f a stock in
surance company, he does not
say “ $50 worth o f insurance,
please.” He asks for and gets
the advice and full services o f
an expert purchasing agent in
the complex insurance field,

like himself an expert middle
man in the service field. No
worries about uncovered risks
that might wreck a business.
*

Because we believe so thor
oughly in the services o f an
expert middleman whether
plumbing and heating con
tractor, insurance agent or
broker we refuse to accept
business direct because it is
not in the interests o f the
Company or the assured to do
so. When you buy National
Surety Fidelity Bonds, Surety
Bonds, Burglary or Forgery
Insurance through your local
insurance agent or broker,
you deal with a customer and
friend who is a fellow mem
ber and supporter of the
American Business System.

• This is a re p rin t of
an a d v e r t i s e m e n t of
a s to c k -in su ra n c e
co m p a n y d ire c te d
to the in d e p e n d e n t
b u s i n e s s m e n in
p lu m b in g , h e a tin g
an d a ir conditioning
in y o u r city.
The com m ercial bank,
like the m e rch a n t, is
a m id d le m a n , s p e
cializing in the credit
f ie l d . Its c u s t o m e r s
a n d its d irecto rs, a r e
ch iefly in d e p e n d e n t
business m en — r e p
r e s e n t a t iv e of th e
A m e ric a n B u sin e ss
Sy stem .

N a t i o n a l Su r e t y C o r p o r a t i o n
V IN C E N T C U L LE N ,

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March 1939

President

N O RTH W ESTERN
NUMBER 620

FORTY-FOURTH YEAR

The Northwestern Banker Oldest Financial Journal
west o f the Mississippi River.

IN THIS MARCH, 1939, ISSUE
CLIFFORD DE PUY
Publisher

Zditoïials
8

Across the Desk from the Publisher

'featuïe Û ïticles

RALPH W . M OORHEAD

Frontispiece— “ Ride ’em Cowboy” .....
The A. B. A. Regional Conference....
A. B. A. Conference Pictures..............
Future Banking and the Public...........
News and Views.......................................
In Washington.........................................
Notes of a Traveler................................
The “ Operating Ratio” of Your Bank
“ Operating Ratio” Chart--- ----- --------

Associate Publisher

HENRY H. HAYNES
Editor

..... 11, 12, 13, 14, 15,
..... 11, 12, 13, 14, 15,
................ S. H. Fifield
......... Clifford De Puy
......... Paul F. Lavezzo
...Ralph W. Moorhead
James M. Sutherland

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16
16
16
17
19
20
22

ûnsuïance

555 Seventh Street,
Des Moines, Iowa
Telephone 4-8163

The Purpose of Life Insurance....
Hail Insurance Protects..................
W hy Bankers Buy Fidelity Bonds.

..Geo. Willard Smith 24
........ W. A. Rutledge 2:7
Frederick W. Selsor 29

ß ovids avid QnOestments
A Flexible Investment fo r Larger Income........ ........................... ..............................
The Month’s Market Maneuvers.................................. ....................James H. Clarke
Iowa Investment Banking News................................................................................ .
Nebraska Investment Banking News................................................................... ........
N EW YO RK OFFICE

34
36
40
41

(ytate ßavihivKj Tieivs

FRANK P. SYMS

Nebraska News .................................................................................................................
Omaha Clearings ......................................................................................................
Lincoln Locals ............................................................................................................
South Dakota News............................................................................................................
Minnesota News ........................................................................... ....................................
Twin City News..........................................................................................................
North Dakota News............................................. ..............................................................
Montana News ........ ............................ .................................................. ............................
Iowa News ................................ .................. ................................................... ..................
Group Eleven Pictures..............................................................................................
Cullen Heads Group Eleven............................................................ ....... ..............

Vice President

330 West 42nd Street
Telephone Bryant 9-5490
MINNEAPOLIS OFFICE
J. A. SARAZEN
Associate Editor

SAN FRANCISCO OFFICE

43
45
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51
53
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56
57
62
64

£yaoinqs avid *Lean

J. LESLIE M EEK

New Problems in Real Estate and Mortgage Lending..... Franklin Hardinge, Jr. 71
Pictures Executive Committee Federal Home Loan Bank........................................ 72
“ To Know Each Other Better Is Better for Business” .............................................. 73

Pacific Coast Representative

564 Market Street

T i e D ilectote’ Room
A Few Short Stories to Make You Laugh..................................................................

F E B R U A R Y _________ 1939

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F S

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Federal Reserve Bank of St. Louis

M A R CH______________ 1939

S
5
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26

M T W
6
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27

7
14
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F S

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A P R I L ____

M T W

1939

F_S

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MEMBER
Audit Bureau o f Circulations
Financial Advertisers Association

dadi
ine 2 W L
torn th e u u b lid k e t
When Harry L. Hopkins,
S ecreta ry of Commerce,
made his famous speech in
Des Moines recently, lie gave the country his
formula for improving business.

The Hopkins
Formula

Personally, we hope that it works, and we are
anxious to give him our hearty cooperation in put
ting over most of the points in his program, but
we wish that he had made the speech or someone
else in authority in the administration had done
so four years ago.
To start wooing business now after it has been
kicked, cussed, and competed with during all of
the Roosevelt administration, will find business
men looking a little askance and skeptical at such
procedure. They hope it will work, but they also
must feel that the drive for recovery instead of
reform is being put on now because prosperity in
1940 will help to get votes for the Democratic
candidate for President, whoever he may be.
In his Des Moines speech, Secretary Hopkins
said, “ It is our determination to make every move
we know to promote recovery and get people back
to work on private jobs. If new jobs are to be
provided, the national income must be increased.
Lack of business confidence is and has been a hard,
stubborn fact.”
Correct you are, Mr. Hopkins, when you refer to
“ the lack of business confidence.” If you can
restore that, most of our problems will be solved,
and we are sure that every banker and business
man in America wishes you success in your plans,
but in view of the past record of the administra
tion, business is not likely to be over-enthusiastic
immediately.

Is it possible to manage
wild money?
That is a question which
must be answered very shortly if the United States
is to work out a sound fiscal policy.

Managing
W ild M o n ey

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March 1939

Orval W. Adams, past president of the Ameri
can Bankers Association, in a recent address in
San Francisco, brought up this important question
by saying:
“ The enormous excessive reserves in banks, in
creasing almost every week because of deficit
financing by sale of government bonds to banks,
in my opinion are reaching a dangerous point.
The chairman of the Federal Reserve Board evi
dently is himself seriously concerned for he is
about to ask Congress for further monetary con
trol. Let me ask you : Is it possible to manage
wild money? Why should not Congress refuse
this request and another which has also recently
been made—to increase the debt limit of the gov
ernment beyond the $45,000,000,000 amount now
prevailing? I don’t know a better way to start
on a return to sanity in fiscal affairs than for Con
gress to refuse this request.
“ The brazen demand made of Congress for au
thority to increase the public debt limit from $45,000,000,000 to $50,000,000,000 at a time when the
yearly deficits approximate $4,000,000,000 and
spending is out of hand, without a plan to curtail
all unnecessary government expenses and tax over
a broadened base, is an affront to the American
people. Those who manage the money affairs of
this great country have shown that they cannot
learn, they will not change; they must be stopped.
What we need more than military re-armament is
Treasury re-armament. Heaven forbid that this
pump-priming fallacy, an admitted colossal fail
ure, be allowed to continue under the pretense of
preparing for war.”
Of one economic principle we are very sure;
namely, that no one gets something for nothing,
either in private business or in government busi
ness. Debts must eventually be paid, either pri
vate or public, and the quicker this nation returns
to a sound policy of a balanced budget, the quicker
we will be on the road to a sound and permanent
recovery. Or, to put it as Mr. Adams does:

“ Change the trend of deficit spending through
a reduction in government expenditures and a
broadening of the tax base— or continue down
the trail to the last round-up.”

Fifty Cent
In a recent survey of
Basic Charae service charsepractices in
-x jr
,
\
banks in clearing house
M o s t Popular ceilters the bank manage.
ment commission of the American Bankers Asso
ciation found that the most popular type of service
charge was the “ fifty cent basic charge.”
This provides for a basic fee of 50 cents per
month on accounts not maintaining an average
monthly balance of $50. The next most popular
plan was the flat charge of $1.00 a month on bal
ances under $100.
Of the total number replying, or 331 clearing
houses, 69 per cent reported that their banks have
measured service charge plans in effect, and 67
or 14 per cent, reported the use of flat service
charge plans.
Whatever service charge schedule banks may
be using, one thing is quite evident—that the
public believes that it should pay a fair amount
for services rendered by the banks of the country.

M o n ey

There is more money in the
^an^s
America today to loan
or “ for rent” than at almost any
time in the history of this country.
There is no use at the moment going into all the
reasons why this is true, but it is imperative for
banks to do everything they can to find new ways
of lending this money.
Philip A. Benson, president of the American
Bankers Association, in speaking before the re
gional conference at Minneapolis, said, “ The re
sources of American banks today are at an alltime high as is the strength and efficiency of the
banking system.
“ Our plan is to discuss ways and means of put
ting more of the vast resources of banks to work.
“ A few years ago approximately 75 per cent of
a bank’s assets were in commercial loans, and 25
per cent in investments. Today less than 50 per
cent are in commercial businesses. There has been
a great change in demands of business for bank
credit.”
At this conference two plans for increasing
bank loans were discussed and they included, “ In
termediate Credit for Industry” by II. II. Sivright, vice president, lowa-Des Moines National
fo V R e n t

Bank and Trust Company, Des Moines, Iowa, and
“ Installment Credit and Personal Loans,” by W.
B. Harrison, president, Union National Bank,
Wichita, Kansas.
Both of these plans have proven successful and
are only examples of how banks today are lending
their money at a profit and with success.
Some bankers may
think that no further
education of the public
is needed about banking
affairs, simply because we set up the Federal De
posit Insurance Corporation, which protects ac
counts up to $5,000, but this is not the case.
Just so long as politicians and radio radicals
continue to make business men and bankers out
as the black sheep in the marts of trade, just so
long will there be need for a better understanding
on the part of the public as to the functions per
formed by banks and bankers.
This idea was presented most forcefully at the
A. B. A. Regional Conference by E. L. Pearce,
executive vice president of the Union National
Bank of Marquette, Michigan, when he said:
“ The public and, in this year especially, the
politician, too, no matter what his party, must
be educated.
“ We need a better public understanding of the
fundamental principles of business and econom
ics— those principles upon which our whole na
tional life and liberty are founded.
“ Throughout our land is being proclaimed a
vicious philosophy that would destroy those prin
ciples— a philosophy that ennobles improvidence
and disparages self-reliance; a philosophy that
teaches that all poor are pure and that all wealth
is wicked; that the way to prosperity is through
reckless spending; and the way out of debt is to
borrow money. It is time for the business men,
the professional men, and the bankers of America
to speak out.
“ Let us tell the people of this country what is
right with business—they are tired of hearing
what is wrong. Let us challenge the implied
accusation that all business and banking are
steeped in unrighteousness, lest public judgment
be rendered against us by default.”
The job of carrying on such a program must
begin first with bank employes, bank officers and
directors, because they are the ones who come in
contact with the public.
Better public understanding about banking
was never so much needed as now.

Better Public
Understanding
Needed

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March 1939

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A t the Minneapolis Conference — Reading from
left to right: 1— Fredrick W. Conrad, assistant cashier North
western National Bank, Minneapolis; and W. H. Brenton, vice
president Northwest Bancorporation, Minneapolis. 2—Charles
E. Watts, cashier Commercial State Bank, Pocahontas, Iowa;
Frank Kauffman, president Bankers Trust Company, Des Moines;
C. H. Walsh, Farmers & Merchants Savings Bank, Burlington,

Iowa; Charles Carey, assistant cashier Harris Trust & Savings
Bank, Chicago; Watson E. Vanderploeg, vice president Harris
Trust & Savings Bank, Chicago; and E. A. Ebersole, cashier State
Central Savings Bank, Keokuk, and president Iowa Bankers
Association. 3— Lester Gibson, director A. B. A. News Bureau,
New York City.

A . B. A . Regional (3 oHteieHce
Highlights of W hat the Conference Speakers Said Last
Month in Minneapolis
A N K E R S from eleven middlewestern states came to Minneapolis last
month to take part in the second
annual Regional Conference o f the Ameri
can Bankers Association. States included
were Illinois, Iowa, Kansas, Michigan,
Minnesota, Missouri, Montana, Nebraska,
North Dakota, South Dakota, Wisconsin
and Wyoming.
Registrations totaled

1,120.
The program fo r the Conference fo l
lowed much the same procedure as that
held in Des Moines a year ago, with ses
sions held morning, afternoon and eve
ning for the two days. The subjects o f
the several addresses were carefully chos
en, ably presented, and full o f excellent
information. A number o f the talks will
appear in full in coming issues o f T he
N orthwestern B anker . Excerpts from
a number o f the discussions presented at
the Conference are quoted below.

Effective Service in
Your Community
By Philip A. Benson
President, Dime Savings Bank, Brooklyn
President, American Bankers Association
6 í O IGrNIFICANT changes have come
O over the banking business. Funda
mental alterations in the habits o f busi
ness, the adoption o f advanced social poli
cies by government and the creation of
government sponsored and subsidized
agencies to compete with banks have di
minished the traditional services o f our
banks to their communities. These move
ments have seriously curtailed bank earn

ing power, and have made it necessary to
broaden banking services to the public in
order to find new earnings and to main
tain their positions as credit institutions.
W h'le we may look back fondly on the
good old days, we must move steadily in
the direction of becoming institutions
which serve, not merely the commercial
needs, but all the financial needs o f our
communities.
“ There is no occasion for a defeatist
attitude. Many o f the changes we have
witnessed may be permanent changes; and
the best way to deal with them is to
treat them as permanent. Society has a
way o f discarding things that no longer
serve its needs and adopting new things
which serve it better. I f we are to cope
with the decline o f our traditional serv
ices and sources o f earnings we shall
probably have to substitute others. I for
one should rather see us embrace lending
services formerly not handled by us, or
extend existing services, than go on in
creasing the employment o f our deposits
in the investment market, if such lending
services can be developed within the prop
er limits o f sound banking practice.
“ I am still optimistic enough to be
lieve that in the long run the public will
prefer to be served by chartered com
munity banks rather than by politically
managed governmental lending agencies.
And I therefore believe that we owe it to
the public as well as to ourselves to search
constantly for means o f improving the
management o f our institutions and the
enlargement o f their usefulness.
“ Do not infer from this that I condemn
all government lending. We must admit

that some o f it met a real need. But it
could be curtailed and certainly there is
no justification fo r new agencies. There
is no need, either, fo r the government to
use additional funds to create associations
that will seek savings in competition with
banks.
The charge is st'll made, though not
as frequently as formerly, that we are in
some way restricting credit or failing to
meet all credit needs and that we thus
hamper full recovery. Much of this talk
is political and is intended to distract at
tention from the failure o f the so-called
managed economy plans.
“ W e shall probably continue to be faced
with the threat o f the establishment of a
system o f federal intermediate credit
banks. Regardless o f how this threat may
he met in the legislative field, the pri
mary place fo r meeting it is in our own
communities, and the first way to meet
it is with intelligent and effective service
in the community.”

Meeting Public Needs
in Banking
By Frank P. Poivers
President, Kanabec State Bank,
Mora, Minnesota
President, Minnesota Bankers Association
t

I '‘H IS America o f ours has under1 gone many changes in recent
years, and we cannot follow exactly the
same paths we have in the past. It is
my belief that no one can continue to be
very successful who simply keeps on doN orthw estern Banker

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Federal Reserve Bank of St. Louis

March 1939

12
ing things in a certain way because o f
old established customs. It is necessary
that we adopt new methods and new sys
tems to meet the present trends in bank
ing. This, o f course, requires a different
technique than was applied ten years ago,
but we must realize that the old philos
ophy that we must either go ahead or
slip back still holds good.
“ One o f the most important responsi
bilities confronting officers, directors and
stockholders o f
banking institutions
should be their insistent desire to bring
about a better trained personnel within
our own institutions.
When we have
within our banks the majority o f our peo
ple well trained and educated in the busi
ness that they have chosen as their life’s
work, we have accomplished much in our
approach o f meeting public needs in
banking.
“ Every effort should be made to bring
the story o f banking and its value to our
respective communities, to the members
o f civic organizations, educational, and
religious organizations and organized ru
ral groups.
“ Accept every opportunity to bring to
your town at a community gathering di
rectors of farm cooperative institutions,
members o f the farm bureau, members o f
town boards, members o f rural school
boards and any other organization whose
members are interested in the welfare o f
their communities so that you may have
an opportunity to become better acquainter and exemplify to them the desire o f
your institution to become o f greater
value.
“ Use every effort to bring to the at
tention o f potential borrowers your will
ingness to take care o f the loans in your
community if they poss'bly can be made
within your requirements.”

Instalment Credit and
Personal Loans
By W. B. Harrison
President, Union National Bank
Wichita, Kansas
6 i ]~ ) ERSON AL loans on an instalment
£
basis, consumers’ goods instalment
loans, automobile purchase loans, real

estate development loans, and other loans
payable on a monthly basis are bound to
be a large part of the banker’s oppor
tunity fo r increased service and revenue.
How well we measure up to this oppor
tunity will, in some degree, determine our
justification as participants in the great
American system o f private banking and
private enterprise, which is the foundation
o f our society and government.
“ The establishment o f a personal loan
department in a bank should not be pri
marily fo r the purpose o f adding revenue
to the bank. This should be a secondary,
not a primary reason. Unless the de
partment can be based on a need fo r the
service rendered, and operate as an addi
tional service, desired by the patrons o f
the bank and by the community, I do not
think its establishment should be con
sidered. I f there is such a need, the
service will naturally and inevitably bring
a proper reward.
“ The rapid growth o f personal loan de
partments is not due entirely to the ava
lanche o f instalment buying which has
come over the United States, but instal
ment buying does contribute greatly to
the fostering o f personal loans. A t first,
bankers generally were against instalment
credit. Practically all o f us figured that
the public would be better off to wait
until it had cash before it bought and that
instalment debt did not contribute to
business prosperity. F or my own part,
I wish to say that I have changed my mind
on this proposition. Instalment buying
is here to stay and it is a sound economic
factor in the complicated industrial sys
tem which controls the prosperity or lack
o f prosperity in this country.
“ It would simply be impractical fo r
the masses who work fo r wages to pur
chase refrigerators, automobiles, washing
machines, radios and other devices that
our factories are turning out if they had
to save up cash to buy them. They just
wouldn’t buy and these factories would
be reduced to a fraction o f their present
output, thus throwing many thousands
more out o f employment.
“ Theoretically, cash buying is right,
and before our modern industrial era it
was the only proper way to buy. The
fact is that in the past centuries the
masses did not have these modem devices

A t the Minneapolis Conference —

Reading from
left to right: 1—Henry Hovey, president South Omaha Savings
Bank, Omaha. 2— George C. McMahon and G. L. McCarthy, both
of New York; and R. J. Reed, Chicago, all of Recordak Corpora-

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Federal Reserve Bank of St. Louis

which contribute to their leisure and
happiness and the market fo r goods was
confined mainly to the upper classes which
comprise from 10 per cent to 15 per
cent o f the population.
“ Today, the big market is among the
masses, and in order fo r that market to
function, our economic and financial sys
tem must be adapted to the needs o f the
masses. Instalment buying is a necessary
element in that situation. Bankers should
take this into account and should recog
nize instalment paper as a very large per
centage o f the paper that is going to be
offered to them.”

Intermediate Credit
■for Industry
By H. H. Sivright
Vice President
Iowa-Des Moines National Bank <& Trust
Company, Des Moines
6i

H A V E found the need fo r inV V termediate credit on the part o f
manufacturers, distributors, merchants
and processing plants who have been
good customers o f our bank for years. It
has been possible fo r us to meet these
needs in many cases, and in every one o f
which the credit granted has proved to
be o f real value to the borrower.
“ I would suggest that perhaps many o f
you who represent banks in smaller cen
ters may find that you can safely provide
this type of credit fo r some o f your
local enterprises who may be in need o f
modernization o f their places o f business,
new equipment or machinery, and who
may need longer than usual terms for
full payment, thus conserving their cur
rent working capital.
“ We have not gone out and actively
solicited this type o f loan. All of the
loans we have made have been to custo
mers o f long standing o f our own insti
tutions and in a few cases to customers
o f bank correspondents where the require
ments have been in excess o f our corre
spondent bank’s legal loan limit.
“ In considering these applications fo r
three and five years credits, many details
are essential— audited figures fo r several
years back are necessary. A study o f the

tion. 3—William Duncan, Jr., secretary Minnesota Bankers
Association; and A. B. Lathrop, vice president First National
Bank, St. Paul, and president Minnesota Bankers Association,

A t the Minneapolis Conference -Reading from
left to right: 1—Edwin N. Van Horne, executive vice president
American National Bank & Trust Company, Chicago; C. J. Mortensen, president Nebraska State Bank, Ord; and Plin Beebe,
president Bank of Kimball, Kimball, South Dakota. 2—Boyd
Simmons, assistant cashier Continental Illinois National Bank,
Chicago; John Hirning, executive vice president Miners & Mer
chants Savings Bank, Lead, South Dakota; John Thomson, cash

ier Bank of Centerville, South Dakota, and president South
Dakota Bankers Association; W. B. “ Bud” Allen, second vice
president Continental Illinois National, Chicago; and L. W.
Buckholz, Kalman & Company, Minneapolis. 3—Joe R. Knight,
Continental.Illinois National Bank, Chicago; Prentiss G. Folvag,
cashier Benton County Savings Bank, Norway, Iowa; and Frank
Covert, assistant cashier Drovers National Bank.

earnings o f the period under review, par the bank’s permission be obtained before
ticularly keeping in mind the company’s the acquisition o f other property or the
incurring of any obligation other than
ability to meet the amortized instalments
at monthly, semi-annual or annual pei'iods those required in the ordinary conduct of
the business. W e feel we are entitled to
— whichever is decided upon between the
periodic statements and earnings reports
customer and the bank. In each case we
have had our own accountant from our and the privilege o f sending our credit
men into the establishment to make inves
credit department examine the accounting
methods o f the business and in some cases tigations when any trend o f the business
had expert advice from those in similar or general conditions justify such p ro
cedure.
lines o f business. A study o f the plant
“ The question arises, ‘What percentage
itself is made. Particular attention is
o f a bank’s assets may properly be used
given to the management o f the business,
its ability to carry on against any emer in this type o f loan1?’ As banks are just
getting into these loans I think it is pretty
gency during the period o f the loan. In
some instances it has been deemed ad much up to the judgment o f each individ
visable to require insurance on the lives ual bank. I believe it is just as much the
o f the partners or on the life o f some par province o f a bank to make loans and
attempt to assist its customers with their
ticular executive in the case o f a close
problems as to accept their accounts only,
corporation with the management built
and call them your customers. W e used
around one outstanding executive.
“ In the application fo r the loan we give to hear a bank spoken o f as a conservative
particular attention to the purpose o f the bank or a liberal one. I think it behooves
loan. We ask the customer to furnish a all o f us in commercial banks to be con
detailed statement as to how the money is structive— to do the best job we can to
serve the commercial interests o f our city
to be used. I f it is fo r equipment we ask
him to bring into the bank invoices o f the and trade territory.”
concern from which he is purchasing the
equipment. I f the money is to be used
Real Estate Loans
fo r the improvement o f the plant we ask
fo r estimates from the contractor. In
By Newton C. Farr
setting up the credits it is very necessary
Regional
Vice President
to have a complete understanding with
National
Association
o f Real Estate
the management and in each case an agree
Boards, Chicago
ment is drawn specifying the total amount
i i |~~)EAL estate mortgages are still proo f the loan, length o f time, interest rate,
| \ during a substantially higher net
manner o f repayment. In some cases the
return to the investor than other forms
same rate prevails fo r the full term o f
the loan— in others a graduated rate is o f investment with no greater security.
agreed upon. The amortization o f thq Real estate mortgages are today paying
loan is outlined. Some are on a monthly interest at the rate o f from 4 per cent to
basis, some quarterly and some on a six 6 per cent, with a very few select mort
months’ basis. In all cases loan papers gages qualifying at the lower rate. I
believe that you will all agree that this is
are so drawn that in the event the pay'ment schedule is not adhered to the Avhole a high yield fo r investments in today’s
amount o f the balance of the loan becomes market.
due and payable at the option o f the bank.
“ Our country will continue to grow and
In some cases we have insisted that we will continue to need the erection of new
be consulted on dividend policies and the buildings fo r housing, industry and com
matter o f increase in salaries, and that merce. These buildings should be paid

for by private capital. The home owner
is very seldom able to save up enough
cash to build his home. I f he waits until
he has acquired sufficient capital he may
have lost the desire to build the home. It
is necessary that funds be available to
finance him in his progress toward home
ownership and good citizenship.
The
building o f new factories, stores, office
buildings and hotels must be financed, and
these funds must come from the public.
Our American cities have been built in
the past from funds provided by the pri
vate investor. They have not waited for
loans and grants from our government.
You are the representatives of the finan
cial institutions to whom we should look
in the future fo r real estate financing and
I urge you to assume this responsibility.
“ Real estate men o f the United States
are prepared to serve those who provide
this financing. Use competent real estate
management companies in the operation
o f real estate investments.”

Sound Program of
Savings Deposits
By Henry S. Kingman
President
Farmers & Mechanics Savings Bank
Minneapolis
U

A SOUND program fo r offering the
.A Y services of a savings department
must emphasize first o f all the need for
thrift in the community and must there
after provide a safe receptacle for pub
lic savings accumulated in response to the
thrift habit.
“ What is true o f other businesses is
likewise true o f individual banks and of
the banking business in general, namely,
that no business organization stands still.
It either progresses or retrogresses, and
a bank’s ■failure to attempt to progress
is equivalent to surrender to its competi
tors. A bank’s growth need not o f neces
sity involve large dollar deposits; but it
should imply increasing public contacts
N orthw estern Banker

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Federal Reserve Bank of St. Louis

March 1939

14
resulting from a consistent gain in the
number o f accounts. Simultaneously the
bank may be busy internally improving
its securities account, liquidating its real
estate, or enlarging its surplus.
“ I f your bank is to grow in importance
in its community, it must have something
to sell and must not hesitate to let the
public know about it. Your merchandise
consists o f a thrift service adequate to
your local needs, tested and proved in
good times and bad, and protected by all
the safeguards which can be furnished by
a wise policy o f diversified and carefully
selected investments. These selling points
are real and legitimate and are not likely
to be matched by your local competitors.
“ First, there is the large class o f those
who have always spent and who have
saved but little heretofore. No one knows
how great have been the chastening effects
o f the last few years on these people, but
it is quite certain that each day sees a
few o f them become live prospects for
your savings departments. Second, there
is the continually oncoming group of
young people emerging from schools into
business or domestic careers. Third, there
are savings accounts now in the hands o f
competitors, especially in the hands of
nonbanking institutions.
“ It is a familiar fact that individual
savings, when properly invested and safe
guarded, have heretofore been the most
reliable means of true personal security.
It is just as true, although perhaps less
apparent to the casual observer, that in
dividual savings are still one o f the im
portant means whereby the social system
extends its supply o f capital wealth. The
tiny streams o f millions o f small savings
accounts flow together into a great pool
o f available capital, prepared to assist in
the development of natural resources, the
enlargement o f productive capacity, and
the financing of worthy objectives in so
far as social progress requires. To what
ever extent that pool may dry up and dim
inish, following disappearance o f the
thrift habit among people, to that extent
will progress be restricted and living

standards lowered. One prime responsi
bility o f the savings banker is to prevent
such an occurrence.”

Making Loans in a
Country Bank
By E. E. Placek
President, First National Bank
Wahoo, Nebraska
66 A

F E W years ago we never thought
it necessary to require an ab
stract showing all previous liens and
chattel mortgages and unpaid taxes. W e
now demand such an abstract and we do
not make a loan without first ascertaining
if the borrower has current and delin
quent unpaid personal taxes which are a
prior lien on all personal property. If
the borrower has unpaid taxes, the loan is
increased to cover such unpaid taxes and
the bank pays the taxes instead o f trust
ing the borrower to do so.
“ With all the governmental agencies it
is necessary that the banker keep himself
accurately informed on all o f their activi
ties and take advantage o f every oppor
tunity to increase his profits. We carry
a substantial amount o f F H A Title I and
Title II loans because these loans carry
a good rate o f interest and in addition
thereto, these loans are guaranteed.
“ In 1933 when the first corn loans were
proposed, all o f our city correspondents
warned us that it was dangerous to make
such loans because the Commodity Credit
Corporation had a limited amount of
capital. The opinion o f the city bankers
was so unanimous that we decided that we
would make at least $100,000 o f corn
loans and before we were through, we
made $580,000 worth o f corn loans
through the First National Bank alone,
and we received 4 per cent interest, bring
ing us a very nice return. The most amaz
ing thing about those corn loans was the
fact that the more loans we made, the
more deposits we had, and the more re
serve. Afterwards the corn loan was in

A t the Minneapolis Conference ——Reading

from
left to right: 1—Byron Dunn, executive vice president National
Bank of Commerce, Lincoln, Nebraska. 2— Charles C. Rieger,
vice president Justus F. Lowe Company, Minneapolis; and Lloyd
Hanson, cashier American State Bank, Moorhead, Minnesota.

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Federal Reserve Bank of St. Louis

creased from 45e per bushel to 55c per
bushel and one o f the city banks that
warned us against making them wrote us
a letter wanting to know if we could send
them some corn loans. This year the
banks solicited and advertised fo r com
loans with the interest rate at 2y2 per
cent.
City banks solicited com loans
through country banks, agreeing to carry
them at 2 per cent, giving the country
bank a y2 per cent margin, or commission.
“ This year when the Wheat Crop Insur
ance was being written some o f the coun
try banks did not know what it was all
about and some o f them still don’t know.
Saunders county, where our bank is lo
cated, had more wheat crop insurance pol
icies than any other county in Nebraska
and more than any other county in the
United States. The question naturally
arises why Saunders county headed the
list. One reason was that our bank ad
vised the County Agricultural Commit
tee that we would loan the amount o f the
premium to every farmer who was unable
to pay such a premium and we took an
assignment of the policy and also a chat
tel mortgage and thus we were fully pro
tected. I f there was a loss under the
policy, we were fully covered and on the
other hand, if there was no loss, and
a normal crop was produced, we had a
chattel mortgage on the crop. W e even
went further than that. W e suggested to
the borrower that a separate note be exe
cuted fo r $2.50 per acre fo r harvesting the
crop but we did not give him the money
until he would actually need it fo r har
vesting. I f he did not need it, the note
would be returned to him. You may
properly ask, ‘What was the purpose o f
taking a second note fo r harvesting ex
penses'?’ Well, the reason was simply this.
The Federal Land Bank and some insur
ance companies have the nasty habit o f
getting a chattel mortgage on the whole
crop fo r delinquent taxes and interest
and tying the farmer up so that he can
not repair his binder, purchase twine, or
do anything else, so we took an assign
ment o f the policy not only for the

3— C. C. Wattam, secretary North Dakota Bankers Association,
Fargo; and C. E. Cunningham, cashier First & Commercial Na
tional Bank, Williston, and president North Dakota Bankers
Association. 4—Frank R. Warden and E. R. Buckley, vice presi
dents of the Central National Bank & Trust Co., Des Moines.

A t the Minneapolis Conference -----'leading

from
left to right: 1— George L. Mitchell, G. W. McSweeney, Chi
cago, and John C. Larsen, Madison, Wisconsin, all of the De
Luxe Check Printers, Inc. Mr. McSweeney is sales manager of
the organization. 2—J. T. Peterson, president State Bank of
LeSueur, Minnesota; B. G. Berg, cashier Security State Bank,
Kenyon, Minnesota; A. F. Wyer, cashier First National Bank,

premium advanced, but fo r $2.50 per acre
for harvesting. W e took a jump on the
Federal Land Bank and insurance com
pany by having a first mortgage on the
crop in addition to the assignment o f the
policy.”

An Investment Program
for Banks
By Laurence R. Lunden
Investment Counsel, University o f
Minnesota, Minneapolis
( i rT'VHIS discussion does not permit
X the description o f a model system
which was developed and installed in a
state bank in order to check the cost,
efficacy, simplicity, and adaptability o f in
vestment files. It is sufficient, however,
to say that the system has proved to be
workable, and it does not impose an undue
hardship on small banks. The files deal
ing with industrial bonds, to cite one ex
ample, are designed to emphasize the
points included in the following rules
which have been repeatedly suggested fo r
the use o f bankers in the selection and
supervision o f industrial securities:
1. “ Securities o f industrial companies
that are especially vulnerable to depres
sion, or the demand fo r whose products is
elastic should generally be avoided.
2. “ To be eligible fo r investment by
banks, industrial bonds should be p ro
tected by earnings sufficient to cover fixed
charges on the average by at least 2.50
times annually over a five-year period.
3. “ To be eligible fo r investment by
banks, industrial bonds should also be
protected by a ratio o f net working capi
tal to funded debt o f at least 100 per
cent, in case inventory is o f a liquid char
acter; otherwise, this ratio should be cor
respondingly higher. As a matter o f fact,

Elmore, Minnesota; M. E. Uggen, cashier Peoples State Bank,
Wells, Minnesota, and E. O. Lund, president State Bank of Bricelyn, Minnesota. 3—R. W. Waite, vice president Waterloo Sav
ings Bank, Waterloo; Verne Bartling, assistant cashier First
National Bank, Chicago; and Charles W. Wilkins, vice president
First National Bank, Austin, Minnesota.

if the inventory is especially illiquid, it
should be studied over a period o f years
should be excluded from the computation
and in the light o f conditions affecting
o f working capital.
major items o f cost and volume of sales.
4.
“ Both earnings and current posi
This will enable one to determine whether
tion should conform to the minimum re the company under consideration has the
quirements. Industrial bonds might well
capacity to offset higher operating costs
be eligible, however, if earnings were tem or declining sales volume, whatever the
porarily below the minimum, provided
cause o f the narrowing margin.”
the ratio o f working capital to funded
debt is at least 200 per cent. Contrari
wise, if debt service requirements are cov
Agriculture and Banking
ered by a substantial margin, a somewhat
less strong current position may be per
By B. E. Groom
mitted.
Chairman, Agricultural Committee
5. “ Complete familiarity with the his
Greater North Dakota Association
tory, current operations, and future pros
Fargo
pects o f an industrial company, the bonds
o f which are under consideration fo r pur
Y CONCLUSIONS might be
chase, is a minimum requirement fo r
summarized as follow s:
bankers.
1.
“ Direct financing o f land purchases
6. “ The ration o f debt to total capital need not be considered. That problem
ization should preferably be no greater is, and will no doubt continue to be, han
than thirty-five per cent. Any figure in dled by the Federal Land Bank, insurance
excess o f thirty-five per cent warrants companies, and by contracts between buy
closer investigation into the affairs o f the ers and sellers on a long-time easy pay
company fo r the purpose o f determining ment basis that eliminates private bank
whether debt is really excessive.
credit.
7. “ The ratio o f debt to total capitaliza
2. “ Finances fo r implements and spe
tion should be supplemented by the ratio
cial equipment required fo r farmers re
o f debt to total market value o f the com quires little bank credit. Manufacturing
pany in order to determine the extent to concerns have developed credit sales sys
which the owners are trading on their tems that meet legitimate credit needs.
equity. The ratio o f debt to total market Bank credit appears to be solely along
value o f the company should be at least the line o f discounting dealers’ paper,
as low as the ratio o f debt to total capi purchase o f commercial paper, and occa
talization. I f the former is higher than sional deals with select customers.
the latter, one should concern himself with
3. “ In most cases, ample credit is avail
discovering the reason fo r the diminished able fo r livestock feeding, and banks are
equity behind the bonds.
freely participating in that type o f loans.
8. “ The ratio o f net operating income
This is financing the industrial phase of
to volume o f sales should be compared to the farm business.
accepted standards fo r the industry, and
4.
“ The credit need is for short term
any deviation from those standards should seasonal loans fo r operating the farm
be subject to explanation.
business, and fo r restocking farms with
9. “ The relationship between net oper herds and flocks o f breeding stock.
ating income and total volume o f sales
“ The problem o f developing and han-

“M

N orthw estern B anker

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

March 1989

A t the Minneapolis Conference ——Reading

from
left to right: 1—Cornelius Clark, cashier Farmers State Bank,
Winner, South Dakota; E. W. Jones, vice president Iowa-Des
Moines National Bank & Trust Company, Des Moines; and Byron
McKee, cashier Muscatine Bank & Trust Company, Muscatine,

dling this last named type o f loan is your
current farm credit problem.
I have
nothing' further to suggest along the line
of the development o f this type o f credit.
A fter twelve years’ experience in direct
ing work along this line, I am unable to
see that many major mistakes were made.
I f we are to repeat these twelve years,
I shall outline the development work
along very similar lines to those hitherto
employed.
“ Right now the country is overrun with
promoters o f all sorts o f cooperative un
dertakings. They are not the old type o f
“ co-op” promoters, whose business was
that of selling some commodity, or set
ting up some enterprise at a fine profit
for themselves, who then fade out o f the
picture, leaving stockholders to pay the
bills, and mourn over the wreck. The sys
tem is streamlined today, with federal
money. The promoters are operating as
official representatives o f the United
States Government. They have little re
spect or consideration for your business,
or that of any good, substantial business
customer o f yours. In short, you and
your good business customers are being
put on skids which are greased with your
own money.
“ Do not infer that I am opposed to all

cooperatives.
Far from that. I have
membership in some cooperative enter
prises, and I know there is a field fo r co
operative undertakings that are legiti
mate. At the same time, there is a much
larger field fo r independent effort and
independent business institutions.
“ The printed page, the radio and many
other sources of information, have re
sulted in a nation-wide consciousness of
the prob’ ems o f farm production, financ
ing, marketing and processing. Advice
from all sorts o f sources is freely given
and nation-wide unrest is the result. Never
before have we so badly needed some
horse sense and concerted action on the
part o f bankers, businessmen and level
headed farmers. The so-called farm prob
lem hangs over agriculture and every
allied business like a bewildering fo g at
the crossroads.
“ Prophets are as thick as grasshoppers,
and about as destructive. I firmly believe
that the substantial, sound-thinking type
o f farmer, whose business you want, ap
preciates your good judgment and assis
tance in the solution o f his problem. W e
have a common problem over a large area.
“ Stay on your job, as they stay on their
farms, and find the way to serve them
financially in the future as in the past.”

At the Minneapolis Conference —

Reading from
left to right: 1—Alden Bagnall, vice president, and R. E.
Kileen, of the Live Stock National Bank, Chicago. 2—The Con
ference display of the Fidelity & Deposit Company of Baltimore,
Maryland, in charge of Carroll F. Herwig, special agent for the

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Federal Reserve Bank of St. Louis

Iowa. 2— A group of Burroughs representatives, M. E. Beckley,
R. E. Jacobson, H. A. Lombard, J. A. Smith, George Ruhl, A. R.
Maclsaac, C. E. Rogers and Alice Danielson. 3—W. A. Gray,
president First National Bank, Albert Lea, and Harold Bull,
president National Citizens Bank, Mankato.

FUTURE B A N K IN G A N D
THE PUBLIC
By S. H. FIFIELD
Assistant Vice President
The Barnett National Bank
Jacksonville, Florida
H A V E read with interest the pros and
cons published in various financial pub
lications with reference to the question
asked— Is there a future fo r banking? In
my opinion there is a future fo r banking
because it is a. necessity. I quote a very
wise old banker who said: “ Banks we will
always have; they are a necessity.
Whether they can be operated successfully
or not under conservative management de
pends on the laws (Acts of Congress)
enacted by Congress.”
Having been interested in financial ad
vertising and bank public relations work
fo r over twenty-five years and in view o f
the above statement, I am convinced that
we have a greater job ahead o f us than
any thus far tackled. First, we must hold
the grounds already gained by efforts in
customer relations activity, i. e., that of
having sold our ranking bank officers
and the personnel o f the bank on their
(Turn to page 49, please)

Company, with headquarters in Minneapolis. 3—William C.
Duffy, cashier Union Savings Bank, Sioux Falls, South Dakota;
and L. K. Billings, assistant vice president City National Bank
¿b Trust Company, Chicago.

17
“ Glass H at” fo r dinner. This interest
ing rendezvous is located in the Hotel
Belmont Plaza. Also included in his
guest list were Mr. and Mrs. George L.
Todd o f Rochester, New York. Mr. Todd
is vice president o f the well-known Todd
Manufacturing Company.

The $12,000 Trust Company Banquet
at the W aldorf-A storia this year was
limited to 1,200 guests at $10 per plate,
who in turn were given a French lesson
free when they read their menu which
was as follow s :
MENU
Tortue Verte Des Iles
Paillettes Dorees
Celeri

Olives
Amandes Salees
Truite de Eiviere Meuniere
Concombres Doria
Intermission of Twenty Minutes
Filet Mignon Henri IV
Petits Pois a la Française
Pommes Anna
Salade Printanière
Couronne de Glace Jubile
Mignardises
Cafe des Princes
Cigars
Cigarettes

guard.
Mr. Hogan spoke on ‘Debts,
Deficits, and the Bill o f Rights,” and
among other things said, “ The time has
come, to face the situation squarely. It
is too late now to solve the problem solely
by retrenchment. O f course, there must
be retrenchment, there must be economy,
real and continued economy, but there
must also be heavy new taxation on a
scale probably greater than has ever be
fore been contemplated in this country.”

'-V

To prove that he can tell a snappy
story to illustrate his point, he was ex
plaining that the choice o f words is very
important in literature or conversation,
and he told o f a little girl who came home
and told her mother that she saw a preg
nant fireman coming down a ladder on

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Federal Reserve Bank of St. Louis

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1?
Samuel C. Waugh is president o f the
Trust Division o f the American Bankers
Association and when he isn’t playing
g olf acts as executive vice president and
trust officer of the First Trust Company
o f Lincoln, Nebrsaka.
His introduction was so short when he
presented Frank J. Hogan, president o f
the American Bar Association, that he
caught the distinguished barrister off

William Lyon Phelps o f Yale Univer
sity is probably one o f the most informed
men in America on the theater and mod
ern literature.
When he addresed a
Town Hall meeting in New York a few
Saturdays ago, he kept referring to his
audience as, “ My children.”

W. J. Pickering, president of AllanWales Corporation, returned from Flor
ida last month looking hale, hearty, and
sunburned. He was especially happy be
cause his company is having the greatest
sales record in its history.
One evening while we were in New
York he invited us to be his guest at the

George O. Everett, president o f the
Financial Advertisers Association and
assistant vice president o f the First Citi
zens Bank and Trust Company o f Utica,
New York, called a board meeting at the
W aldorf-Astoria last month and 24 di
rectors were in attendance. The total
membership o f the F. A. A. is now 487.
Each director is in charge o f a special
committee and reported to the board on
the work which he has accomplished and
which he plans to do for the balance o f
the year. The annual convention will be
held in Toronto, Canada, September 10th
to 13th, 1939. _ _
Just to show you how one director
(name on request) devotes himself to the
study o f hieroglyphics, during the board
meeting, we are reproducing here the re
sults o f his artistic efforts.
P. S.
W e forgot to mention that
George Everett will be married in April,
so be sure and send him your good
wishes.

During the dinner hour a handsome
Hindu palm reader gave us quite a “ line”
about the lines in our hands. W e were
interested to notice that all his remarks
were favorable and not once did he men
tion an unfavorable omen. At least that
is good psychology.

March 1939

18
her way home from school. Her mother
criticized her for using such a word and
then asked her if she knew what “ preg
nant” meant, and she said, “ Yes mother,
it means carrying a child.”
In a letter from George A. Malcolm,
vice president and cashier o f the Drovers
National Bank o f Chicago, he says, “ The
other night I sat up and read the N orth
western B anker from cover to cover.
I have always found a lot o f most in
teresting articles in the N orthwestern
B anker , and with the new plastic bind
ing you used on the February issue, I
just felt like turning page after page to
see what was coming next.”
The night we attended the Fred War
ing broadcast at the N. B. C. studios he
devoted his program to the Boy Scouts
of America and we were interested to
notice that all but three members o f his
organization had at one time been boy
scouts themselves.

I f you want to have a good laugh see
Victor Moore and Sophie Tucker in
“Leave It to Me.” Because o f a dona
tion to the political party in power, Mr.
Moore is appointed ambassador to Mos
cow but he doesn’t want to go to Russia
so he puts in most o f his time figuring
out what he can do to be recalled, and
in the process keeps you in good humor
most o f the time.
Eugene L. Voss,
assistant vice president o f the Continen
tal Bank and Trust Company o f New
York, was our delightful host on this
occasion.
Coming out o f the NBC studios one
night, we noticed at Fiftieth and Broad
way a shop which sold small live turtles.
These were about the size o f a silver
dollar and fo r 60c they put any name you
wish on the back o f the turtle and ship
them for you anywhere in the United
States. They will live from two to four
days without any food or water.

A. P. Gianninni, who has been having
a tough time with the Securities and E x
change Commission, because o f false
statements which the Commission claims
he made regarding the Trans-America
Corporation, will have a rest until March
20th when the hearings will be resumed.
In the meantime the Pacific Coast
financier who previously was an ardent
New Dealer and heavy contributor to
C. B. Chambers, president o f the First President Roosevelt’s Campaign Fund,
National Bank o f Oelwein, tells us that is now “ cured and disillusioned” about
at the regular director’s meeting M. C. what is going on in Washington,
Hanson was elected cashier to take the
The money paid to Mr. Gianninni, ac
place o f “ our loyal worker and great
cording to testimony o f Louis Ferrari,
friend, the late George W . Falk.” Don vice president and general counsel for
C. Witt was elected assistant cashier and the Bank o f America National Trust and
Harold Zeigler, manager o f the Savings
Savings Association, is as fo llo w s:
Department.
1932. ..$134,826
55,159
1925. . .$
Referring again to George Falk, Mr.
1933. . . 132,896
112,567
1926. ..
Chambers said, “ I have known many
1934. .. 100,596
245,906
1927. ..
men, but there are few who have been
1935. . . 251,952
680,933
1928. ..
more loyal to their position than George
1936. . . 65,914
288,277
1929. ..
was, and he will always be remembered
1937. .. 58,284
1930. . . 1,438,557
by us as one who could be depended on
1938. .. 34,000
266,977
1931. ..
at all times.”

Leonard Lyons in the New York Post
was quoted in the Readers Digest as say
ing, “ New Y ork’s Museum o f Natural
History has boasted o f the countless artlovers who came to see its wonders. But
when a com fort station was erected on
a nearby corner, museum attendance fell
off 100,000.”

attended the banquet and responded with
a few remarks on the business outlook.
Mr. Harriman is also a partner o f Brown
Brothers Harriman & Company o f New
York and a director o f the Guaranty
Trust Company.
B. F. Kauffman, president o f the
Bankers Trust Company o f Des Moines,
introduced Mr. Hopkins.
Lamson Brothers and Company, ac
cording to James A. White, one o f the
partners, has recently consolidated the
firm o f Harris, Burroughs and Hicks
with their own.
The new firm name will remain Lamson
Brothers and Company and will include
all o f the present partners o f Lamson
Brothers and Company and those listed
below o f Harris, Burroughs and H ick s:
Warren A. Lamson, Harry H. Lobdell, Edward F. Thompson, George E.
Booth, Henry J. Rogers, James A. White,
Benjamin L. Harigs, William C. Karlson,
Edward L. Hicks, Jr., Albert W . Lindeke,
John C. Pitcher, Theodore H. Price, Jr.,
Malcolm R. M cAdoo, Albert C. Fischer.
Ralph W. Moorhead, associate pub
lisher o f the N orthwestern B anker
will act as toastmaster at the Nebraska
Bankers Association Meeting o f Group
3 at Norfolk on Saturday, April 22nd.
Milton F. Barlow, cashier o f the Na
tional Citizens Bank o f Mankato, Minne
sota, and president o f the American In
stitute o f Banking, in speaking before
the Regional Conference at Minneapolis
said, “ There are 64,000 A. I. B. members
in the United States and 44,000 students
now attending classes, and during the
past 12 months the Institute has had
the greatest increase in class enrollments
in nine years.”
The American Institute o f Banking
was founded in Minneapolis.

It was our impression that “big busi
ness” was not superstitious but when you
take the elevator in the RCA building in
New York you will find that there is no
13th floor. You go from the 12th to the
14th.

When you are in New Y ork don’t waste
any money on “The Boys From Syra
cuse” which is a modern streamlined ver
sion o f Shakespeare’s play “ The Comedy
o f Errors,” because I don’t think it would
be good even if the boys were from
Buffalo.

William B. Whitman, assistant secre
tary o f the Manufacturers Trust Com
pany o f New Y ork made his first trip to
the twin cities when he attended the
A. B. A. Regional Conference last month.
There are not many other cities in the
United States, however, that have not
been honored by Bill’s handsome counte
nance and charming personality.

Charles P. Fisk, vice president o f the
General Motors Acceptance Corporation,
o f New York, told us the night o f the
Trust Company banquet, that he asked a
subway guard, “ What do you think of
the government program ?” He answered,
“ I think it is cockeyed. W hy should I
work from six o’clock in the morning till
late at night to help support W PA indi
viduals, a lot o f whom won’t work even if
they have a chance.”

When Secretary o f Commerce Harry
L. Hopkins made his famous speech in
Des Moines, W. Dale Clark, president o f
the Omaha National Bank and a member
o f the Business Advisory Council o f the
Department o f Commerce, sat at the
head table and was one o f the guests o f
honor.
Also, Averell Harriman, chairman o f
the Board o f the Union Pacific Railroad,

Harold Stonier, executive manager o f
the American Bankers Association, in
speaking before the A. B. A. Regional
Meeting in Minneapolis last month, said
there are 266,000 people working in the
banks o f the United States and empha
sized that, “ W e’ve got to put some fight
into these employes to help fight fo r the
continuance o f free enterprise and fo r
the preservation o f chartered banks.”

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March 1939

Extension of Title I, F H A

R E SID E N T R O O SE V E L T ’ S recent
appointments have created great in
terest and caused comment in many
circles. F or business men and investors
they merely create a new cause fo r un
certainty.
Harry Hopkins, apparently eager to
make good as Secretary o f Commerce, is
attempting to sell the Administration to
business and end an epoch o f guerrilla
warfare. Hopkins stated that if the na
tional income is to be increased, business
must be allowed to make a profit and
that he would do all in his power to see
that this is done.
But the appointment of former Repre
sentative Thomas R. Amlie to the Inter
state Commerce Commission came as a
shock not only to business, but to official
Washington as well.
There are many
speculations as to the reason back o f the
appointment. Some observers believe that
it is slowly paving the way fo r govern
ment ownership o f railroads while others
point out that one man on the committee
would not be able to do much in this di
rection.
Strongly opposed to government own
ership stands Philip A. Benson, president
o f the American Bankers Association.
Speaking in New York recently, he as
serted that real improvement in the rail
road problem may result from coopera
tion o f labor, management and govern
ment.
“ None o f us want to see government
ownership and operation o f the railroads,”
he declared.
Stressing the value o f the roads to busi
ness and national defense, he said that
until the situation is c’ arified the indus
try will not attract savings and trust
funds.
While the Amlie appointment continues
to receive strong opposition in the Senate,

By PAUL F. LAVEZZO
Washington Correspondent
The Northwestern Banker

attention is turned to the coming ap
pointment to fill the vacancy left by Su
preme Court Justice Brandeis.

Federal Housing Bill
The House Banking and Currency Com
mittee has been urged by Federal Housing
Administrator Stewart McDonald to ap
prove a bill which would double the
agency’s authorized mortgage insurance,
bringing it to $6,000,000,000.
Testifying in favor o f amendments set
forth in a bill sponsored by Rep. Henry
B. Steagall (D., Ala.), Mr. McDonald, in
answer to a question put by Rep. Wright
Patman (D., Tex.), stated that he did not
believe it wise to extend Title I o f the
act, under which loans fo r modernization

are insured. Unless Congress passes a
bill extending it, this clause will die with
the end o f the fiscal year.
“ My idea is that it should be dropped,”
McDonald said. “ I don’t think the gov
ernment should lend money to banks to
lend at high rates o f interest to small home
owners.”
He added that local banks should take
care o f this business, arguing that they
have had five years to learn it under FH A .
McDonald estimated that a loss o f $15,000,000 on $560,000,000 worth o f business
will be sustained by F H A under Title I,
contrasted to a net loss o f $160,000 on
$1,700,000,000 under Title II.
M ajor changes advocated by the admin
istrator, in addition to increasing the au
thorization, w ould:
1. Remove the limitation which prevents
insuring any mortgages on houses after
July 1st unless they previously were cov
ered by FHA-insured mortgages or were
built later than January 1, 1937.
2. Give the administrator permanently
the authority to insure mortgages up to
$5,400 fo r an amortization period of
twenty-five years. (A s the law now stands
the authority o f the administrator to in
sure mortgages on homes of $6,000 under
the 10 per cent down payment plan for
an amortization period o f more than
twenty years will expire on July 1st.)
3. Allow F H A to continue fo r two more
years to absorb foreclosure costs up to 2
per cent, but not more than $75, Avhere
mortgages are in default before the prin
cipal obligation is reduced to 80 per cent.

Public Utilities
The trend toward a clear understanding
between the administration and the pub
lic utility industry is generally looked
upon as opening the way for expansion in
this field.
(Turn to page 33, please;

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March Í939

of a Traveler
By RALPH MOORHEAD
Associate Publisher
The Northwestern Banker

HILE I was in the East recently,
the resignation o f J. P. Morgan
as a director o f the Aetna Insurance
Company, brought out some interesting
facts concerning the connection o f this
well-known international banker with
that company. His resignation came be
cause Mr. Morgan is now 72 years o f
age and is gradually getting away from
all active business responsibility and he
announced that he would not be a direc
tor o f any company unless he could
actively take part in company affairs.

I missed seeing another former Iowa
man in New York City, Sherman Drake,
vice president o f the National Surety
Corporation, who was out o f town on one
o f his many field tours. The National
Surety had an excellent year finishing
1938 with total assets o f $24,187,307,
and President Vincent Cullen reported
that loss ratios and expenses for the
year were on a very normal basis.
The Fidelity and Deposit Company o f
Baltimore did a good job during 1938
with net premiums o f $10,886,137, and
net underwriting profit as pointed out
by Sidney C. Doolittle, advertising man
ager, was $2,084,667, the largest in the
history o f the company. Incidentally,
the company had just elected two neAV
directors including E. T. Foreman, presi
dent o f the Foreman Company, Balti
more, and E. N. Rich, a Baltimore at
torney.
Manhattan Glimpses . . . W orld’s Fair
preparations in NeAv York are practically
completed. I was disappointed in not
being able to get through the fair
grounds, but at the time o f my arrival
in New York, exhibition officials had
closed all gates to the grounds since work
on the fair was being badly hampered
by the thousands o f visitors in automo
biles who were daily getting a preview
o f the world’s greatest fair, which is ex
pected to entertain 80,000,000 guests in
the two years it will doubtless run . . .
Broadway theaters have several good
shows, most o f which are hanging on
until W orld ’s Fair time this spring, when
they expect real business. I enjoyed
“Kiss the Boys Goodbye,” a clever satire
by Claire Booth on choosing a star fo r
“ Gone W ith the W ind.” It is a most
enjoyable satire both on the south and
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Federal Reserve Bank of St. Louis

March 1939

on the motion picture industry . . .
Radio City Music Hall with its wellknown “ Rockettes” also gave me a pleas
ant entertainment with the accompany
ing picture “Gunga Din,” which had been
running for several weeks straight . . .
In the world o f sports I enjoyed a pro
fessional ice hockey game in Madison
Square Garden between the New York
Rangers and the NewT York Americans,
and decided that Big Ten football is a
tea party by comparison . . .
New York City impresses the visitor
as almost a foreign city. One evening
on Broadway I witnessed the march of
some 10,000 Spanish residents o f Man
hattan, marching to a meeting to pro
test the interference o f Germany and
Italy in Spain. The demonstrators were
carrying all sorts o f placards and were
chanting a phrase “Hands Off Spain—
Hitler and Mussolini” in unison. The
follow ing Sunday afternoon likewise in
the Times Square district, I witnessed
a tremendous demonstration o f marchers
walking around a square block in Avhich
Avas located a local NeAv York radio sta
tion Avhich had that Sunday refused to
carry the usual address o f Father Cough
lin. Both these demonstrations dealing
with racial and foreign questions were
full o f the mob spirit, but Avere fortu
nately Avell handled by the NeAv York
police forces. It seemed that there Avere
literally thousands o f policemen keeping
people moving and preventing disorders,
although one is tempted to feel that a
few sparks here and there might bring
about real violence.
Washington, D. C., is the City of
Contrasts. W ithin ten blocks o f the na
tion’s capitol, where billions of dollars o f
relief money to the poor and unemployed
have been poured out in recent years, I
encountered more beggars than in any
city o f recent travels. It all seemed
rather confusing.
Likewise in Washington, I enjoyed a
brief Ausit Avith Cassius C. Dowell, vet
eran Des Moines congressman, Avho was
returned to congress last fall in the Avellknown Republican landslide. I had in
mind getting visitors passes to the
Senate or House gallery, and Congress
man DoAvell very graciously arranged
this little item fo r me. I Avas then dis

appointed to find that the House recessed
early that day and the Senate Avas not
in session at all. It seemed that after
the Senate had passed the reduced relief
measure, so many hard feelings were
brought about that senatorial leaders
thought it Avise to recess fo r five or six
days, in order to “ cool off.”
I took the time to look up an old Grinnell classmate, Clifton Eisele, in W ash
ington, D. C. Clifton, Avho comes from
IoAva, is president of Southeastern In
dustrial Bankers, Inc. His bank is doing
a fine business and has several branches
in and near Washington, D. C. It Avas
interesting to reminesce and talk o f old
Grinnell College classmates, many o f
Avhom are located in the capital city.
At the Chase National Bank I had the
misfortune to miss seeing Arthur M.
DeBebian, second vice president, Avho
Avas suffering from the influenza and also
missed Roland C. Irvine, vice president,
well-knoAvn to midAvestern bankers. R ol
and Avas attending the Texas Group meet
ings which are held at this time o f the
year. I enjoyed visiting Avith Vice Pres
ident Earl Gafford, Avho is Avell ac
quainted among bankers o f this area.
I arrived in NeAv York City a day too
late to bid bon voyage to a felloAV pub
lisher, Donald H. Clark, publisher o f
the Mid Continent Banker, the Local
Agent and L ife Insurance Selling, o f St.
Louis. Don, Avho Avas a classmate at
Grinnell College, had sailed on a cruise
to South America. I learned that travel
to South America this winter is quite
heavy due to unsettled conditions in
Europe and so much recent publicity on
the advantages o f South America.
While in NeAv York I spent a day or
tAvo with Clifford De Puy, publisher o f
the N orth western- B anker , Avho made
a quick trip to NeAv Y ork City to at
tend the annual director’s meeting o f
the Financial Advertising Association.
Clifford spent several busy days with this
hard working board o f directors and
then returned directly to Des Moines
after attending the Trust Company ban
quet at the W aldorf-Astoria. He did,
however, see a great many o f our banker
friends at the Trust Company banquet.
In NeAv York City I enjoyed visiting
Avith Craig R. Smith, assistant vice presi
dent o f the Central Hanover Bank and
Trust Company and also William G.
Allen, assistant vice president, Avho is
Avell acquainted Avith bankers throughout
the middlewest. Mr. Allen, in particu
lar, commented favorably on the colored
frontispage in the February N orthavestern B anker , and also expressed his
regret at being unable to attend the
Minneapolis A. B. A. Regional Confer
ence.

MEMBER
FEDERAL
DEPOSIT
INSURANCE
CORPORATION

National Bank
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March 1939

U se the Chart on
the opposite page and

C h e ck the “ O perating Ratio”
of
í í ^t

^IM E L Y ” is the word for the Min1 neapolis Federal Reserve Bank’s
1938 statement on operating ratios
o f member banks in the Ninth District.
F or it already is in the hands o f offi
cials o f the member banks— less than two
months after the close o f the year and
at a time when 1938 operations are still
the subject o f serious study, and 1939
plans still may be revised.
To the Minneapolis Federal Reserve
Bank, therefore, goes credit fo r being the
first o f the reserve banks to compile oper
ating ratio statistics fo r banks in its dis
trict.
Behind these figures lies an interesting
story exemplifying the reserve system’ s
efforts to provide the greatest possible
service to member banks.
F or years prior to 1937 several reserve
banks had been getting out operating fig
ures. There was no uniformity, however,
some districts studying only restricted
groups o f banks, others studying all or
most o f their banks but issuing reports
that were impossible o f comparison be
tween districts.

Uniform Ratio
Two years ago the reserve bank presi
dents decided to set up a committee to
work out a set o f ratios which could be
used uniformly in all districts. A mini
mum set o f operating ratio figures was
desired that could give some insight on
the operations o f groups o f banks in vari
ous deposit groups and enable individual
banks to compare their operations with
others o f their size.
Further, there was a need fo r accurate
statistics fo r use by educators, students,
statisticians, legislators and all the others
who for one reason and another desire in
formation on various phases o f bank op
erations.
To Minneapolis Federal’s own first vice
president, Oliver S. Powell, was assigned
the chairmanship o f this important com
mittee. Other reserve districts and the
Federal Reserve Board in Washington
were represented on the committee.
A year ago the result o f this committee’s
work was first made apparent when the
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March 1939

tycul Sank

By JAMES M. SUTHERLAND
Staff Correspondent
Minneapolis

various reserve banks published the op
erating ratio figures.
Not all the reserve banks published the
ratio information in the form utilized by
the Minneapolis bank. Some were more
elaborate, published in pamphlet form.
Some contained editorial comment.
But the principal thing was that the
statistics they contained were uniform and
could be compared with those fo r other
districts.
Minneapolis Federal Reserve Bank is
sued its first report on operating ratios
last April, covering 1937 operations o f
member banks.
The response was instantaneous and
most favorable. For— as the illustration
on the opposite page shows— each bank
was given, in addition to figures by de
posit groups, the same statistics covering
its own operations. Thus bank officers,
directors and stockholders could see at a
glance just how their bank compared Avith
others o f like size.

Additional Figures
One other result o f the first year’s ex
perience is shown in the 1938 report, just
issued.
It contains three additional
groups o f figures, included at request o f
member banks, but not part o f report as
originally set up by the committee.
These figures cover cash dividends de
clared, ratio o f deposits to capital, and
percentage o f service charges to total
earnings.
Although the 1938 report has been in
the hands of member banks less than three
weeks, the Minneapolis Federal Reserve
Bank already has a huge sheaf o f letters
from banks commenting favorably on the
report and its value to them.
Gleaned from this correspondence at
random are the folloAving quotations :

“ Very helpful in trying to keep the
different items in line.”

“ Facilitates our work in the matter o f
comparisons.”
“ Valuable information to revieAV the
past and b e t t e r chart the future.”
“ We read the greater part of the figures
to our stockholders.”
“ Hope you continue the good work.”
“ Boy, is it interesting to compare the
figures o f our bank with others.”
“ Clearly shows us our weak spots.”
Some o f the banks wrote in asking for
additional information about certain
specific figures, or fo r explanations. As
far as possible these have been answered.
In some instances, bankers requested ad
vice as to how they could improve their
setup as shown by the operating ratios.
Obviously, this is a service the Reserve
Bank cannot perform.

Officers
One thing that must be remembei’ed
about the figures. They do not present
statistics that can be considered “ ideal”
or that should be regarded as objectives
toward which all banks must strive. They
are simply averages, showing what banks
in the various deposit groups noA V are
doing.
Just because a bank’s figures are not
identical or even close to the ratios shoAvn
does not necessarily mean the bank should
revise its operations.
For most bankers the above explanation
is obviously unnecessary. But a few of
the letters received since the 1938 report
was issued indicate a tendency by a few
bankers to misconstrue the purpose o f the
operating ratios.
Two other observations concerning the
report and the resulting comment o f bank
ers are worth noting.
First, there is a growing desire that
next year’s report include a statement as
to the ratio between commercial and sav
ings (time) deposits.
Second, bankers hope that the style set
by the Minneapolis Federal Reserve Bank
in its report, particularly since it is the
first one issued, may be followed by other
reserve districts in issuing their reports.
The advantages in such a step, facilitating
comparisons between districts, are ob
vious.

“ OPERATING RATIOS” OF MEMBER BANKS IN THE NINTH FEDERAL RESERVE DISTRICT FOR THE YEARS 1938 AND 1937
Under
$250M
1938
1937
64
61

DEPOSIT GROUPS
1938

1937

Number of Banks

$5,000M$10,000M
1938
1937
14
15

Over
$10,000M
1938
1937
9
9

49.5
24.5
26.0

49.8
25.3
24.9

53.1
25.7
21.2

47.6
30.4
22.0

44.1
35.4
20.5

40.1
39.5
20.4

36.4
42.8
20.8

33.6
45.0
21.4

36.9
40.6
22.5

32.9
44.5
22.6

37.7
38.1
24.2

39.3
36.8
23.9

38.5
43.4
18.1

41.0
40.8
18.2

100.0

35.2
15.2
28.9

35.4
14.8
28.9

29.1
20.1
25.6

• 28.9
20.6
26.3

28.4
22.7
24.4

28.0
23.2
25.6

29.3
22.2
24.6

27.7
21.3
25.3

30.6
18.0
26.8

29.3
20.1
26.7

34.7
14.2
31.2

32.6
14.6
29.9

32.0
12.3
30.5

30.1
13.3
29.8

Total Current Expenses..........................
Net Earnings from Current Operations....

79.3
20.7

79.1
20.9

74.8
25.2

75.8
24.2

75.5
24.5

76.8
23.2

76.1
23.9

74.3
25.7

75.4
24.6

76.1
23.9

80.1
19.9

77.1
22.9

74.8
25.2

73.2
26.8

100.0
7.2

100.0
6.0

100.0
10.0

100.0
11.4

100.0
12.7

100.0
11.6

100.0
14.6

100.0
16.5

100.0
10.6

100.0
16.2

100.0
19.2

100.0
15.5

100.0
33.6

100.0
25.5

5.5
.2

5.2
0

4.6
•2

3.1
.6
.9

2.6
.8
.4

100.0

100.0
....

100.0

100.0
....

III. RATES OF EARNINGS AND LOSSES ON
LOANS AND SECURITIES
Percentage of Total Loans and Discounts:
Interest and discount on loans..............................
.... ....
Net losses (— ) or recoveries ( + ) ................................................
Percentage of Securities:
Interest and dividends........................................
.... ....
Profits on securities sold.......................................
.... ....
Net losses (— ) or recoveries ( + ) ....................
...................

N orthw estern B anker

$2,000M$5,000M
1937
1938
56
58

USE OF EARNINGS
Percentage of Total Current Earnings:
Salaries and wages.....................................
Interest on deposits.....................................
Other expenses ...........................................

Total Current Earnings.................................
Net Addition to Profits.......................................

IV.

$1,000M$2,000M
1938
1937
73
76

Your Bank
SOURCES OE EARNINGS
Percentage of Total Current Earnings:
Interest and discount on loans..................
Interest and dividends on securities.......
Other current earnings (See Section VII)
Total Current Earnings-............................

IT.

$500M$1,000M
1938
1937
119
122

$250M$500M
1938
1937
119
126

—

7.0
.9

—

3.5
.5
.8

—

7.0
7.0
1.1 — .7

—

3.6
.5
.3—

3.5
.6
1.7

—

6.7
.9 —

6.4
.2

—

3.7
.6
.8

3.4
.7
1.4

—

6.5
.2 —

5.7
.2

—

3.6
.7
1.1

3.3
.7
1.0 —

3.4
.5
.7 —

2.9
.6
1.3

—

5.8
.1

—

4.6
•4 +

5.0
.5

—

2.6
.4
.7 —

2.7
.7
.2

5.5
1.8

—

2.7
.4
.6

RATES OF EARNINGS ON AVAILABLE FUNDS
(Deposits, borrowed money, capital funds)
Percentage of Total Available Funds:
Total current earnings..................................................................
Net current earnings......................................................................
Net addition to profits.......................................
...................

5.1
1.1
.4

4.8
1.1
.3

4.8
1.3
.5

4.6
1.2
.6

4.3
1.1
.6

4.2
1.0
.5

3.7
.9
.6

3.8
1.0
.7

3.5
.9
.3

3.4
.8
.6

3.0
.6
.6

3.1
.7
.5

2.4
.6
.8

2.6
.7
.7

RATES OF EARNINGS ON CAPITAL
INVESTMENT
(Capital, surplus, undivided profits, reserves)
Percentage of Total Capital Account:
Net current earnings..................................
Net addition to profits..............................
Cash dividends declared............................

5.8
2.3
.9

5.8
2.0

10.0
4.4
3.3

9.6
4.7

10.2
5.0
2.8

9.9
4.9

9.1
5.2
2.6

9.9
6.4

7.7
3.7
2.3

8.5
5.8

6.2
5.8
2.5

7.7
5.3

6.9
9.2
5.1

7.6
7.2

VI.

March 1939

RATIO OF DEPOSITS TO CAPITAL
Dollars of Deposits per dollar of Total
Capital Account ............................................
VII. PERCENTAGE SERVICE CHARGES OF
TOTAL EARNINGS (excluding banks not
reporting any income from service charges....
FOOTNOTES:

4.5

7.0

8.4

8.8

9.3

9.9

5.0

3.7

4.0

4.8

5.9

6.1

3.3

Assets and liability items are averages of amounts shown on all Call Reports during the calendar year.
Earnings and expense items are the sum of the two semiannual reports of earnings and dividends.
Percentages were computed for each bank, and the percentages for all banks in each size-group were then averaged.
The deposit group in which your bank is included is checked thus: V

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Research and Statistical Department
Federal Reserve Bank of Minneapolis
Minneapolis, Minnesota

to
CO

Let Us Not Forget

0$e of Life Insurance
HERE is a growing feeling among
companies that one o f the great
needs today is to resell our agents
and the public on the first and great pur
pose of life insurance : the replacement of
economic values lost by death as opposed
to the savings or retirement features cur
rently so popular. The president o f a sis
ter company has recently said that the
most glorious function o f life insurance is
to protect against untimely death. I be
lieve that the purpose o f life insurance
will best be carried out by giving more
attention to this fundamental principle,
and that criticism o f the institution will
have little basis if we stick more closely to
this cardinal idea. In our company 80 per
cent o f our insurance is on life forms, and
I would be glad to see this proportion in
crease to 85 per cent, which was the ratio
five years ago.

Critics of Life Insurance
A great deal is being said and written
about those who seek to tear down the
structure of life insurance; who go on the
theory that whatever is, is wrong; who
assert that the level premium system which
has stood the test o f generations is in
equitable and that policyholders should
buy term insurance and divorce them
selves from the investment element. Most
o f these “ advisers” have had little or no
life insurance experience and are not sub
ject to state regulation, as they are not
licensed as agents. They seek selfish p ro f
it through a fee based upon a percentage
o f the cash surrender value o f policies
owned. Their interest in the prospect
ends when he has taken their advice, tom
down the fruits o f his savings over a pe
riod of years, and given them a percentage
o f these savings. How the owner o f the
policy invests the balance o f his cash sur
render value, and how his family fares
when he reaches an uninsurable age, is no
concern o f theirs. These counselors al
ways advise their clients to turn over their
policies fo r analysis without consulting
their insurance agent. They disregard the
trusteeship freely given without compen
sation by the insurance companies in the
investment o f these funds. Their advice
is unscientific, unsafe, and given only fo r
their own advantage.

Same Security
Alexander Maclean, vice president of
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March 1939

By GEO. W ILLARD SMITH
President
New England Mutual Life Ins. Co.

"How many of us can ap
preciate what it means to
have life insurance com
panies pay to the families
of America during the de
pression years, almost ten
billions of doll ars? The
actual amount from 1930
through 1936 was nine bil
lions, four hundred and five
millions, a sum which no
one of us can properly
evaluate. No wonder the
American public has con
fidence in Life Insurance."

the Massachusetts Mutual, has graphic
ally set forth in a recent pamphlet what
the policyholder who acts upon their ad
vice must do after surrender to have the
same security that he had before surren
der. He must invest the cash value imme
diately at 6 per cent. The interest on the
cash value must likewise be invested im
mediately at 6 per cent. The yearly in
terest on the interest must likewise be in
vested immediately at the same rate.
Every one o f the small investments must
be safe beyond question. A single loss
might upset the whole plan. Investments
must be all tax free, as the premiums paid
into life insurance do not produce taxable
income. The individual must keep track
o f all these particular investments so that
he may be able to determine how much
term insurance he needs year by year.
This capital must be readily marketable
so that he can obtain cash without loss if
an emergency arises. He is burdened
with a multiudinous detail o f small in
vestments and withdrawals in order to

keep his savings account safe beyond
doubt. These are only a few o f the points
Mr. Maclean mentioned, but they illusitrate the responsibility that falls upon the
individual in making such a plan work
able.
Term insurance has never been a satis
factory form o f insurance except fo r tem
porary protection. Many fraternal or
ganizations on the term insurance plan
have failed because the cost o f term in
surance increases so rapidly in the higher
ages that policyholders are unable to meet
these costs.
A Federal agency has undertaken an
examination into the affairs of the life in
surance companies, together with com
panies o f other types o f business. I f this
examination is fairly and intelligently
conducted, it will be constructive, as was
the Armstrong investigation.

Public Relations
We hear a great deal about the need o f
better public relations in our business and
we know how important this is because
our business is based on the confidence of
our policyholders. Many people believe
that the solution is a national institutional
advertising campaign about life insurance
companies to educate the people about its
structure, what it accomplishes, and how
it operates. Such a procedure would be
very difficult. Its value would be theoreti
cal. Life insurance covers many fields.
It would be almost an impossible task to
find one spokesman fo r life insurance or
one type o f advertisement acceptable to all
companies. An immediate and more prac
tical help in improving public relations is
to have every individual associated with
each company, from the newest field re
cruit to the president, in every letter and
contract, carry out the ideal o f intelligent
insurance service with courtesy and hu
man interest. But this must be supple
mented by company literature and prem
ium enclosures, simply yet strongly writ
ten, which will make the policyholder
understand and appreciate his life insur
ance estate.

Public Confidence
Public confidence in life insurance is
general in every village, town and city in
America, and everyone knows that life
insurance has had a glorious record of
accomplishment. The best illustration of

Forty-Second Annual Financial Statement

AMERICAN MUTUAL LIFE
I N S U R A N C E

C O M P A N Y

•

D E S

M O I N E S

A. H. H offm an, President

Financial Statement as o f D ecem ber 31, 1938

ASSETS

LIABILITIES

Cash and Government Bonds........$ 1,267,125.43
State, County and Municipal Bonds 16,748,465.36

138,065.50

Policy Reserve................................$25,947,723.90
Premiums and Interest Paid in Ad
vance .........................................
410,483.68
Reserve for Claims Being Paid in
98,369.53
Instalments ...............................
Reserve for Claims Not Yet Ap
proved .......................................
84,238.39
Reserve for Dividends...................
218,846.05
109,811.28
All Other Liabilities.......................
Total Surplus for Protection of
Policyholders .............................
1,608,043.32

Total Admitted Assets................... $28,477,516.15

To' Balance Assets....................... . $28,477,516.15

First Mortgage Loans...................
Loans to Policyholders..................
Home Office Building...................
Real Estate.....................................
Interest and Rents Due and Ac
crued .........................................
Net Premiums in Course of Collec
tion .............................................

621,826.65
5,889,322.16
162,800.00
3,348,075.59
301,835.46

Over $79,000,000.00 Paid to Policyholders and Beneficiaries Since Organization

its effectiveness is in the payment o f
claims to the families in these communi
ties. How many o f us can appreciate
what it means to have life insurance com
panies pay to the families o f America dur
ing1 the depression years almost $10,000,000,000? The actual amount from 1930
through 1936 was $9,405,000,000, a sum
which no one of us can properly evaluate.
No wonder the American public has confi
dence in life insurance.

A New England Institution
When the Columbian National Life In
surance Company o f Boston, Massachu
setts, was casting about fo r a slogan
which Avould be appropriately descriptive
o f its background and character, a num
ber of possibilities were discussed before
it was decided that o f all the suggestions,
just one seemed to fit exactly. The slogan
was, “ A New England Institution,” and
today the company is known almost as
well by that phrase as by the name under
which it was officially incorporated.
Together with the other few Massachu
setts companies, the Columbian National
has the unique distinction o f being char
tered in the first state to have specific
insurance legislation. Under the far-see
ing eye o f Elizur Wright, sometimes called
the “ father o f American Life Insurance,”
a regular insurance department was estab
lished with Mr. Wright as its head, and

ever since, Massachusetts insurance law
has been the standard fo r all the other
states.
The Columbian National was one of the
early companies which received its charter
directly by action o f the Massachusetts
General Court— that is, the state’s legis
lative body. Since then (1902) the pro
cedure o f charter has been somewhat al
tered, and today a life insurance company
can be incorporated in Massachusetts pro
vided it has sufficient capital and meets
the approval o f the Insurance Commis
sioner.
The location o f the Columbian Nation
al’s home office is at the corner o f Frank
lin and Arch streets. Arch street is one
o f those famous old Boston thoroughfares
which were laid out— according to gossip
— by cattle fo r whom the downtown Bos
ton of today was then a cow pasture. It
has been the source o f many a chuckle on
the part o f the company’s officers to real
ize that a prominent life insurance com
pany, dedicated to the principles o f pur
poseful, conservative and strict lines o f
operation should have grown up on an
avenue designed by aimless meanderings.
Changes o f any kind are probably
slower to occur in New England than in
any other section o f the United States.
In that sense, too, the Columbian National
L ife Insurance Company is typically “ A
New England Institution.” F or 25 years

the management o f the company was di
rected by practically the same staff of
executive officers. Its president today,
Francis P. Sears, is one o f its original
incorporators, and fo r 36 years, four Co
lumbian National directors served continu
ously on its board. Its field organization
reflects the same stability and permanence.
Over 25 per cent o f the company’s gen
eral agents have served the Columbian
National more than 25 years.

Splendid Progress
At the annual meeting o f the Farmers
Union Life Insurance Company, o f lies
Moines, Tom White, president, reported
splendid progress fo r the company dur
ing the year ending December 31, 1938,
the company having shown substantial
increases in assets, surplus and insurance
in force.
The report showed the company to have
assets o f $1,615,745, an increase of 3.3
per cent over the previous year; liabilities
were $1,281,735, an increase o f only 2.7
per cent, This gives the company a ratio
o f assets to liabilities of 126 per cent,
which is an unusually high percentage of
solvency. Surplus and contingency re
serves were $126,160, an increase o f 16.1
per cent. This, added to the capital stock
o f $207,850, gives a surplus as to policy
holders o f $334,010. The company had
cash of $66,845 and government and
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March 1939

26
municipal bonds with a market value of
$245,756, giving an excellent ratio o f
liquid assets to liabilities.

Valuable Guide
A most attractive booklet has come to
our attention with the title “ Property In
surance Digest,” published by the Mill
Owners Mutual Fire Insurance Company
o f Iowa.
It’s aim is evidently to give in a brief,
yet comprehensive, form a picture o f the
more important forms o f property insur
ance available fo r protection.
This should prove a very valuable guide
book fo r all bankers and those interested
in properties o f all kinds.
It is our understanding that this booklet
may be obtained by writing the Mill
Owners.

Makes Fine Record

A B O O K L E T FOR BANKERS
Because you are keenly interested in seeing that the
proper types of insurance are carried on property which
you manage or control, or on which you have made
mortgage loans — you’ll be more than a little interested
in the Property Insurance Digest. For here’s a handy
booklet — brief, yet informative — that explains the
more important forms of property insurance with which
every property insurance buyer should be familiar in
order properly to protect his investment against loss by
fire and other allied hazards.

If you’d like a copy —

The firth annual meeting o f the A gri
cultural Mutual Insurance Association
was held at its home office in Des Moines,
and the following officers and directors
were re-elected:
Secretary, Karl L. Wagner, Des
Moines; president, L. M. McKim, Nevada;
vice president, L. J. Gilmour, Davenport ;
assistant secretary, H. E. Wagner, Des
Moines; treasurer, Rolfe 0 . Wagner, A n
keny; directors, J. P. Haarup, Storm
Lake; George Pavlik, Le Mars; and J. E.
Don Carlos, Greenfield.
An evening banquet and program were
given in the East Des Moines clubrooms
and approximately 200 attended.
Talks given by the president and secre
tary stressed the facts that the association,
now beginning its sixth season, had super
seded all its previous records, now show
ing about a 300 per cent increase in mem
bers during the last four years, and that
gross assets now approximate $50,000.
Compared with preceding years, gross
assets o f the Agricultural Mutual in
creased 5.3 per cent; surplus increased
14.4 per cent; admitted assets were up
14.4 per cent; number o f memberships in
creased 15 per cent; and the number of
agents licensed showed a gain o f 26 per
cent.

without cost or obligation — it’s yours for the asking.

Peerless Casualty Figures

M ILL OWNERS MUTUAL
FI RE

INSURANCE
Des Moines, Iowa

All Policies Are
Strictly N on-Assessable

COMPANY

IOWA

Hamilton, Ontario

Annual Dividends to
Policyholders Since 1875

FIRE - - - WINDSTORM ■ - - BUSINESS INTERRUPTION - • ■ ALLIED COVERAGES
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March 1939

Total admitted assets of the Peerless
Casualty Company o f New Hampshire
are $1,520,250.25 according to the Decem
ber 31, 1938, statement o f condition, o f
this company. The Peerless Casualty is a
stock company capitalized at $600,000 and
has a surplus o f $450,987.91. Its cash and
government bond totals are 21/4 times its
liability.
The Peerless Casualty Company o f New
Hampshire which was incorporated in
1901, writes fidelity and surety bonds, lia
bility and casualty insurance. President
Walter G. Perry and William P. Perry,

27
secretary and treasurer, have been execu
tive heads o f this company since its or
ganization. The company has paid divi
dends to stockholders for 25 consecutive
years.
In this area, the Peerless Casualty Com
pany is represented by Scarborough &
Company, First National Bank Building,
Chicago, Managers o f Financial Insur
ance.
Scarborough & Company has a
record o f twenty-five years o f insurance
service to banks exclusively.

Add Four Directors
The board o f the Employers Mutual
Casualty Company o f Des Moines was in
creased to 15 members, with the election
o f four new directors at the annual meet
ing held at the company’s home office.
The new directors added to the board
include Frank Kohrs, president o f the
Kohrs Packing Company o f Davenport;
H. W . Read, president o f the Iowa Valve
Company o f Oskaloosa; Dr. D. E. Baugh
man, president o f the Fort Dodge Serum

Company, Fort Dodge; and R. L. Wood,
treasurer o f the W ood Bros. Thresher
Company, Des Moines.
John A. Gunn was re-elected president
and treasurer o f the company; John W .
Gunn was re-elected vice president ; John
F. Hynes, re-elected secretary; and Jessie
A. Miller, re-elected general counsel.
Employers Mutual is the largest cas
ualty company in Iowa, President Gunn
announced in his annual report. The re
port showed assets o f $3,612,396 at the

Hail Insurance

Pïûtecü
W hen the Storm Comes
By W. A. RUTLEDGE
Secretary
Farmers Mutual Hail Insurance Association
Des Moines

E. B. Rutledge, treasurer of Farmers
Mutual Hail, viewing the results of a
hail storm in a corn field last year.
AILSTO R M S occur wherever it
rains and the wind blows and there
are sudden changes o f atmosphere.
However, they are much more frequent
and much more severe in some localities.
Here in Iowa the state is generally divided
into three zones by the insurance com
panies, and the zone in the northwestern
part o f the state carries approximately a
50 per cent higher premium than the
southwestern part. The losses in western
Nebraska are four times those in the east
ern part. So far as is known at the pres
ent time the storms are of about equal fre
quency and severity over Illinois, Indi
ana, and Ohio.
The problem of the destruction o f
growing crops by hailstorm became acute
when our pioneer forefathers crossed the
Allegheny mountains and began to settle
in the broad prairies in the Mississippi
valley.
F or about one hundred years
thereafter the destruction o f the crops
by hailstorm was taken as a misfortune
which could neither be avoided nor miti
gated.
In the spring o f 1893 the writer o f this
article worked over a plan o f applying
insurance to losses on crops damaged by
hail, and on March 4th succeeded in in
corporating an association fo r that pur

pose.
This was on the very day that
Grover Cleveland was inaugurated the
second time as president o f the United
States. I immediately met with success
and from that time forty-six years ago
the association has been under the same
management. Before that time there had
been a few efforts made to meet this kind
o f a catastrophe, but the attempts had
been a failure and had been almost wholly
abandoned.
For quite some time the government
weather bureau has been gathering sta
tistics on the destruction wrought by hail
storms, but owing to the experience o f the
Farmers Mutual Hail Insurance Associa
tion more is known about Iowa hailstorms
than those o f any other state. This does
not mean that the storms o f this descrip
tion are more frequent and more destruc
tive than in other states, fo r this is not
true.
Minnesota has worse hailstorms
than Iowa, as do all states west o f Iowa,
including Texas and western Canada.
Many people are under the impression
that the year 1938 was a year o f little hail
damage to crops, and this is no doubt be
cause there was no large genera] storm
laying waste mile after mile o f fields and
causing spectacular conditions.
There
were, however, many storms o f small area
where the hail was very heavy, as in
stanced by the accompanying reproduc
tion o f a photograph o f E. B. Rutledge,
standing in a cornfield soon after it had

been destroyed by a hailstorm, occurring
on July 1, 1938. There were many spots
in Iowa, Nebraska, the Dakotas, Missouri,
Minnesota, Wisconsin, Illinois, Indiana,
Ohio, and other states where there we e
similar scenes. In all o f the states above
named the hailstorms did damage equal to,
or above, the normal year.
Crop damage was not the only harm
done by these hailstorms. In some places
the roofs o f the houses were so badly dam
aged that new roofs had to be put on and
in many other cases they had to be
patched. This is becoming a serious mat
ter to home owners, and in frequent in
stances the siding on the house on the side
from which the storm came had to be re
placed.
All the regular field crops are easily
destroyed by hailstorms, and protection
o f hybrid seed corn is receiving much at
tention. Whether com or small grain is
more easily damaged by hail is a mooted
question, but fruit, gardens, onions, mel
ons and like crops are more severely in
jured. Soy beans are somewhat more haz
ardous than the grain crops, as is cotton.
Tobacco is most severely and easily in
jured by this storm.
Many bankers are requiring that bor
rowers be protected by hail insurance.
Hail insurance is a legitimate, as well as
a lucrative business fo r the banker in the
small country town.
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March 1939

28
end o f the year. During the past year,
the report showed the company has
gained $146,533 in surplus after setting
aside a special voluntary contingency re
serve of $100,000. Assets increased ap
proximately $530,000 during the year, and
total premium income fo r 1938 was
$3,227,446.

Hawkeye Casualty
Buys Michigan Com pany
On Saturday, February 25th, at a spe
cial meeting of the stockholders, which the
United Automobile Insurance Company
held at the home office o f the company at
Grand Rapids, Michigan, with over 90 per
cent o f the stock represented in person
or by proxy, a resolution was unanimously
adopted accepting the offer on the part
o f Hawkeye Casualty Company of Des
Moines to purchase the assets and assume
the liabilities o f United. The matter was
submitted to the Michigan Insurance De
partment, and has been approved by the
Michigan Department.
The stockholders o f United will receive
at their option either $9.10 per share cash,
or one share o f Hawkeye stock fo r each
3 1/10 shares of United stock.
Also, the United home office in Grand
Rapids will become the Michigan branch
office o f Hawkeye Casualty with the same

employes, rates and underwriting proce
dure to be followed as has been followed
in the past year by United.
A t the stockholders’ meeting it was re
ported that fo r the year 1938 the ratio o f
loss and loss expense incurred to pre
miums earned for United was 31.8 per
cent and the gross premiums written fo r
the year $178,247.09. United has confined
its writings to the state o f Michigan,
writing full coverage automobile only.
Hawkeye Casualty Company’s writings
are almost wholly automobile insurance in
Iowa. The officers and directors o f Hawkeye in making the offer to purchase felt
that the acquisition o f this desirable vol
ume of additional business in Michigan,
together with the two hundred additional
agents, many of whom have represented
United fo r almost twenty years, would be
a desirable diversification o f territory as
well as a conservative opportunity for in
creasing the profits o f Hawkeye.

Logan, Des Moines, president, the Stand
ard Chemical Company ; Charles J.
Adams, Grand Rapids, Michigan, claim
manager, Hawkeye Casualty; Leland D.
Phelps, attorney, form erly general coun
sel fo r the United Autom obile; Paul
Risher, Perry D. Imhofe and Paul Neal,
Jr.

Officers o f the Hawkeye Casualty Com
pany a re: President, A. R. Nelson; vice
president, Herbert L. Stanley; vice presi
dent, George Olmsted; secretary and treas
urer, Karl L. Crittenden. These men, to
gether with Max Putnam, Allen W hit
field and James K. Miller, Jr., o f Des
Moines, form the Hawkeye Casualty
board o f directors, plus the addition of
the following new directors: Guy E.

Financial Advertisers Asso
ciation Welcomes Building
and Loan Memberships
At the directors’ meeting o f the
Financial Advertisers Association in
New York last month the board of
directors voted to extend a cordial
invitation to savings, building and
loan associations to become members
o f the F. A. A.
Preston E. Reed is executive vice
president o f the Association with
.offices at 231 South La Salle Street,
Chicago.
The Financial Advertisers Asso
ciation is a non-profit organization
fo r the betterment o f advertising,
publicity, new business methods and
public relations.

A Few Financial Figures about the

Oldest and Largest Mutual Hail
Insurance Association in the World
Forty-six Years Old
Net Cash Assets to Policyholders Above A ll Liabilities $1,038,797.08
Total Losses Paid to Date $13,947,656.12
Carries Hail Insurance on Growing Crops
A ll Coverage Automobile Insurance
Fire Insurance on T ow n Dwellings, and Broad Coverage of W in d and Tornado Insurance

Valley Bank Building, Des Moines, Iowa
N orthw estern Banker

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

March 1939

W h y Bankers and O thers
N o Business

Buy 7 ïàelitu

fèovìòs

Is Exempt Forever
From DisFionesty
B y FREDERICK W . SELSOR
Claim Attorney
The Fidelity & Casualty Company
New York

T M IGHT be helpful to begin this dis
cussion by trying to analyze sales re
sistance and to attempt to learn why
the employer does not want the bond. As
a claim man, I believe I can state to you
with reasonable accuracy, that you will
encounter three attitudes or types o f mind
among employers, and these will be, in
difference, belief in “ fool-p roof” book
keeping systems, and a blind faith in
trusted employes. Perhaps I have men
tioned these in the order o f their impor
tance.
It would seem that indifference should
be the easiest obstacle to overcome where

M cG r e g o r
& COMPANY
INSURANCE

don

the indifference is due to failure to realize
that dishonesty is a very formidable factor
in business life. Much o f the indifference
is o f this kind. These same employers
will take the utmost precaution to defend
the business from any external factors
which may threaten it. They will travel
far to attend conventions, study market
conditions and engage talent. When ad
verse legislation is imminent, time and
money are no object if that is a threat to
the business. In other words, it would
seem that business men are keenly alive
to external dangers, but many o f them are
seldom aware of the dishonesty factor and
the power o f even one man to disrupt the
entire business from the inside.
It would appear also that no difficulty
should be encountered in proving to the
employer that there is no such thing as a
“ fool-p roof” bookkeeping system. It has
been said that figures do not lie, but we
know from experience that liars can do
the figuring and dishonest employes have
displayed rare ingenuity in manipulating
figures to conceal embezzlements. O f
course, it is necessary to make annual aud

G c ju ita b le

its and to have accounting systems, and no
competent employer is without some satis
factory bookkeeping system. But this
does not prevent thefts; if it did the prob
lem o f dishonesty would have been solved
many years ago. W e know from experi
ence that the contrary is true.

Blind Faith
When we come to consider the third
difficulty, we find that many business men
have a blind faith in their employes, es
pecially if they have been engaged in the
business fo r a long period o f time. Some
even consider that it. would he disparaging
to the employes to have them bonded.
Here again so far as pure argument is
concerned, it should be necessary only to
state that trusted persons are the only ones
who can betray you and that it is a mark
o f distinction to bond an employe, fo r it
is not every one who can be bonded.
I have mentioned the three difficulties
that will be encountered and the usual
stock arguments that are given to over
come them. With these thoughts in mind,
I wish now to give you facts from the

Jl
S a n k e ls

f ln s u la n c e

G o

¡b la n k e t

and

Formerly

McGREGOR-TAYLOR CO.
Liberty Building

d o iv a

Phone 3-5297

DES MOINES, IOWA

Iowa’ s Pioneer Company
▼

Bankers Blanket Bonds
Forgery and Fidelity
Bonds
Automobile Fleet
Coverage

There is Nothing Better
T

GRADY V. FORT
General Agent
Des Moines, Iowa

'f o 'u je 'iij
a

@onds

^ s p e c ia lty

Inquiries Invited

U JITm ER -K flU FFm A n
Evans co.
General Insurance
410 Equitable Bldg.
Des Moines

▼
N o rth w e ste rn B a n ker

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

M arch 1939

30
claim angle, which may add to those you
already have and perhaps afford you a
little more material to operate in overcom
ing sales resistance.
Surety companies have paid millions of
dollars fo r losses occasioned by dishon
esty. They have dealt with thousands of
defaulters. Naturally, this experience has
given surety companies opportunity to
arrive at some accurate observations con
cerning the problem o f dishonesty.
It is conservatively estimated that each
year approximately $250,000,000 is stolen
by dishonest employes. The annual loss
occasioned by theft is usually compared to
the loss by fire, and sometimes the dis
honesty losses exceed the fire losses. Our
first observation, based upon years o f ex
perience, is that each year large sums o f
money are taken from various types of
business by dishonest employes. This is
true notwithstanding the fact that the ma
jority o f people are fundamentally hon
est, I f this were not true there could be no
surety company.

Countless thousands o f employes work
day in and day out, many o f them pressed
fo r money, and many o f them working for
small salaries, who are satisfied with what
ever progress they are able to make and
with the hope that tomorrow may bring
better opportunities. At the same time
there are large numbers of employes who
feel they are not making satisfactory
progress, who are impatient and who, for
one reason or another, become dishonest.
Each year this group brings about the
large losses mentioned.
I f we took the time to analyze this
group, you would see in it men represent
ing every industry, and every type of
position. It contains bank presidents,
cashiers, bookkeepers, accountants, public
officials, office help, and so on. Not only
is every position represented, but every
type of business will have one or more
representatives in this group each year.

No Business Exempt
It has been our observation that no

L. E. ELLIS & COMPANY
GENERAL AGENTS
for

Northwestern Fire & Marine Insurance Co.
Minneapolis, Minn.

business is exempt forever from dishon
esty. It will be noted also that these men
are not confined to one area, for dishon
esty is not a matter o f geographical loca
tion. In this group will be men from
every city and state in the Union and vari
ous towns throughout the United States.
The business man can no more tell whether
one or more o f his employes will fall with
in this group than a general can tell which
o f his soldiers will fall in battle. These
factors make dishonesty something to be
seriously considered.
The individuals who fall within the dis
honesty group can be readily divided into
three groups. These are: typical embez
zlers, the circumstantial thief, and the dis
honest trusted employe. Each o f these
groups has certain definite characteristics.
I call the first group “ typical embez
zlers” fo r claim experience indicates that
they began to steal as soon as they were
employed or shortly thereafter. I have
two observations to pass on to you in ref
erence to this group. The first is that the
individuals in this group are “ opportu
nity minded.” By that I mean that as
soon as they become employed they make
a very careful and minute examination of
the way the business is conducted, how the
audits are made, how petty cash may be
handled and whether or not there is some
looseness or loopho'e in the operation of
the business which affords an opportunity
to steal.
Usually, especially in large businesses,
there is some minor defect or loophole
which affords the employe this opportu
nity and he is very quick to exploit it.
Perhaps he notices that the auditor fails
to do some little thing, or he may observe

Twin City Fire Insurance Company
Minneapolis, Minn.
415 Securities Building
IOW A

DES MOINES

BANK INSURANCE
AGENCIES

LOSSES
TIME
Farmers insured in Agricultural Mutual can and do
pay their loans when due, Aug. 1 or Nov. 1, even in the
face of hail destruction— because this association pays
all losses at Harvest time. Bank production loans to farmers
in hundreds of instances are secured against loss by hail
through Agricultural Mutual’ s Modern plan. Bankers and farmers
choose Agricultural Mutual—

INVITED
Modern, attractive policies to
suit the needs of your cus
tomers.
for

Liberal

insurance

hanks.

franchises
agencies

Two reasons why you

F I R S T — b e c a u se m e m b e r s re c e iv e a n n u a lly O at L o s s c h e e k s
on A n g . 1 ; C orn lo s s c h e c k s on or b e fo r e N o v . 1.
S E C O N D — b e c a u se th is m u tu a l o ife r s an e a s y p a y m e n t p la n , an d p ro v id e s
fo r g u a r a n te e d d isc o u n t as w e ll as p a y m e n t o f lo s s e s a t H a r v e s t tim e .
Our re cord sp e a k s fo r it s e l f — 1934, 1935, 1936, 1937, an d 1938
— a ll lo sse s p aid a t H a r v e s t tim e .

ing plan offered by the

For further information on Hail Insurance— W rite
KARL W AG N E R , Secretary
RO LFE O. W AG N E R , Pres, of Capital City State Bank, Treas.
m
NOTE: This association has a few territories open for banker
J/
insurance agents. Write for information.

1L AINgricultural
Mutual -9
S U R A N C E A S S O C IA T IO N
^

C A P IT A L C IT Y

BANK BLO G

O ES M O I N E S , IA

ClfCeSi the St&im theRolniytru)
N o rth w e ste rn Ba n ker

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

M arch 1939

should write for the interest

U N I O N LIFE
Insurance Co.
Home Office, Des Moines, Iowa

31
that there is opportunity to steal by ma
nipulating the petty cash. Such oppor
tunities are usually present, and Mr. Typi
cal Thief is quick to seize them and very
often is skillful enough to cover the thefts
for a long period o f time.
When you find an individual who is dis
honest to begin with, and who has had
training in bookkeeping and auditing, a
dangerous combination is bom and the
power o f the employe to discover surface
opportunities for thefts is multiplied
many times. I mention this example be
cause this individual typifies many within
the dishonesty group.

W E SPECIALIZE
IN S U R E T Y BONDS

Second Group
The second group o f individuals, which
is smaller than the first, we designate as
“ circumstantial thieves.”
W e classify
them in this manner fo r want o f a better
term. These defaulters are not typical
embezzlers, nor do they fall within the
class o f trusted employes who go wrong.
These are the individuals who are usually
employed in trusted positions at small
salaries and who find it extremely diffi
cult to do many o f the things they desire,
because o f insufficient funds. Sometimes
these individuals are prompted to steal
because they are impatient with the prog
ress they are making and they seek to
take a “ short-cut.” Dishonesty is the re
sult o f such a fatuous choice. Many times
these individuals are employed in posi
tions where they are called upon daily to
handle large sums o f money and while
handling such funds may be subject to
constant temptation because o f the desires
and motives that may be playing upon
them.
The last group, perhaps the smallest of
the three, is composed o f trusted employes
who betrayed that trust and became
thieves. These are individuals who have
been employed in positions o f trust for
many years, and in whom the employer
had the utmost confidence. Many times
they were identified with civic enterprises
in the city and occupied positions of im
portance aside from their regular employ
ment. When these individuals fall below
the line, they not only steal the company’s
money, but very often wreck the entire
community.
Each year this group would be larger
but some o f them prefer to take their own
lives. Again the files in the claim depart
ments o f surety companies will disclose
to you outstanding examples o f individ
uals who worked fo r many years as trust
ed employes and who finally, fo r one rea
son or another, became thieves. The larg
est losses the surety companies know
about have been brought about by these
trusted individuals, and here again the
problem o f dishonesty is all the more acute
because the disposition to steal cannot be
detected and because the employer has no
Avay o f knowing what goes on inside o f the
employe’s mind.

Adequate Facilities
Prompt Service
Agents Inquiries Solicited

muTURL s u r e t y compflnv
O

V alley Bank Building

Des Moines, Iowa

Another Successful Year
For Iowa's Largest Exclusive
Hail Insurance Association
These Gains Tell the Story o f Growth and Service
Cash Surplus
Dec. 31st
1934

.........

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

...............$

1935 ______________________________

Number of
Policyholders

13,307.93

5,134

1936 _______________________ 76,450.57
1937 __________________
101,740.82

6,759
7,748

1938 __________________ 154,247.41

8,463

Paid to Iowa Policyholders in 1938
through Losses and Dividends........................ $138,407.29
Net Losses paid since organization....................... $1,902,369.74
In addition to a surplus of $154,247.41, this association
goes even farther to protect policyholders, and carries re
insurance in the amount of $100,000.00 as added protec
tion in case of excessive losses.
Square Deal protects farmers’ crops against hail at actual
cost. Its famous Guaranteed Price Per Bushel P olicy
has revolution’zed the hail insurance business in Iowa,
and there is still no policy the equal of it. Assessm ents
strictly limited—payable in the fall. Eighteen years of
steady growth and successful operation.

SQUARE DEAL MUTUAL
INSURANCE ASSN.
C. Fred Morgan, President
Valley Bank Building, D es M oines, Iowa

N o rth w estern B an ker

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

2,834

58,343.09

M arch 1939

32
These are the observations we have
made; these are the facts gleaned from
claim experience. These factors remain
constant, for each year there is a sizeable
loss through theft, brought about by these
three classes o f employes, and the motives
which prompted the theft will be those
which I have mentioned. Dishonesty is
a real problem, and a very formidable fa c
tor to be reckoned with in business life.
The only way business can protect itself
against it is by fidelity bonds.

From School Teacher
To Life Salesman
Grady V. Fort, general agent o f the
Des Moines agency o f the Equitable Life
Insurance Company o f Iowa, has had an
interesting career. At the conclusion o f
the W orld W ar he found the only avail
able occupation open to him was school
teaching, and started his teaching career
in Nebraska City, Nebraska. Two years
later he moved to Shenandoah and was
later promoted to the position o f princi
pal. Later he resigned his position as
principal and went into various promo
tional activities. Finally, against all the
advice o f his friends and business men,
he entered the life underwriting profes
sion. His work as a salesman was out
standing and after several years o f suc
cessful underwriting, he was promoted to
the position o f state supervisor.

MERCHANTS
MUTUAL

BONDING
COMPANY
Incorporated 1933

Later he became supervisor fo r the
United States and traveled throughout
the country directing the sales work of
various agencies and directing the train
ing o f many recruits'.
On September 1, 1937, Mr. Fort left
the home office to accept the home office
agency o f the company. A t that time the
agency ranked seventeenth in volume
among all the company’s agencies. At
the end o f 1937 the production had
reached the rank o f sixth, but at the end
o f the year 1938, the agency ranked first
o f all agencies in production, thereby
demonstrating the efficiency of the meth
ods advocated by Mr. Fort.

Good Gain in '38
Iowa’s largest exclusive hail insurance
association, Square Deal Mutual Insur
ance Association, continued to make good
gains during the past year, according to
C. Fred Morgan, president o f the asso
ciation.
This company in business fo r 17 years
writes a popular guaranteed price per
bushel policy and were the first to write
this policy.
At the recent annual meeting o f the
association at its offices in the Valley
Bank Building, Des Moines, Morgan re
ported the company had a net surplus o f
over $154,000, and since 1934 has grown
from an association serving 2,824 farmers
to an association now serving 8,463 fan n
ers.
Square Deal reported total income for
1938 amounting to $288,364.10. Net losses
paid since it was organized total $1,902,-

HOSPITAL BILLS PAID!
New, low cost policy covers hospital bills
for accidents. Needed by everybody. An
other reason why banks profit by a con
nection with this sound, old New England
Company.
I f interested write

Ralph E. DeMaris, General Agent

Home Office
V A L L E Y BANK BUILDING

1200 Paramount Building
Des Moines, Iowa
Representing

Des M oines, Iowa

.The Columbian National Life Ins. Co.

369.74. As an additional safeguard to
policyholders in ease o f excessive losses,
the association has reinsurance in the
amount o f $100,000.

Enjoys G ood Year
A t the annual meeting o f the Mutual
Surety Company o f Iowa held recently in
Des Moines, the following officers were
elected: president, Russell F. Lundy; vice
president, Donald S. Peter; secretary, E.
L. Lundy; treasurer, Russell F. Lundy;
assistant secretary, E. J. Sathe.
The Mutual Surety Company, which is
located in the Valley Bank building, Des
Moines, last year showed a 250 per cent
increase in net premiums, and its loss
ratio was 2.14 per cent o f the net premi
ums. The company operates through local
agents exclusively and has established a
fine reputation fo r prompt service to its
many Iowa clients. It offers complete
facilities fo r the handling of surety and
fidelity bonds.

Annual Meeting
C. P. Rutledge was re-elected president
o f the Farmers Mutual Hail Insurance
Association o f Iowa, and W . A. Rutledge
was re-elected secretary at the company’s
annual meeting in Des Moines.
More than 350 officers, directors, and
agents o f the company attended the meet
ing and a dinner. E. B. Rutledge was re
elected treasurer o f the company and
Perry Rutledge was re-elected chairman
o f the board.
In his annual report, President Rut
ledge told delegates that the Farmers

POLICVHOLDtRS ÍTlUTUflL CfiSUfiLTV ComPflnV

/)]* A

Home Office: W est Liberty, Iowa
Business Office: Des Moines, Iowa
«
Full Coverage Autom obile
Non-Cancellable Accident and Health
Commercial Accident and Health
■

Home Office, Boston, Massachusetts
LIFE

ACCIDENT

AN N U ITIES

J&AitoK-T/laxMnumt SeAvicts

Agency Inquiries Invited

This is Iowa’s oldest surety company.
A

progressive company with experi

enced, conservative management.

are proud of our hundred and fifty
bank agents in Iowa.
T o be the exclusive representative of
this company is an asset to your bank.

Credit Life Insurance
For and in the Amount
of Your Loans

Straight Loans
Chattel Loans
FHA Mortgage
Built to Fit Your Need
Very Low Rates

Write to

E. H . W AR N ER
Secretary and Manager

WEBSTER LIFE INSURANCE
COMPANY
DES MOINES. IOWA

N o rth w e ste rn B a n ker

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

M arch 1939

JlacaeAt C&it
Our policy provides a maximum
assessment of 2*/2% in Zones
One and Two— and 3 fi % in
Zone Three (Western Iowa).

Hawkeye Mutual Hail
Insurance

Association

Carver Bldg.

Fort Dodge, Iowa

33
Mutual Hail Association gained $100,000
in its surplus during 1938, bringing the
total surplus to better than $1 ,000,000
above reserves. The report also showed
that the company paid $ 200,000 more in
losses to policyholders during 1938 than
in 1937. All departments of the company
showed an increase in business last year,
Rutledge reported.

IN WASHINGTON
(Continued from page 19)
President Roosevelt’s reassurance that
the government is planning no further
competition in the power field and the
agreement between the Tennessee Valley
Authority and Wendell Wilkie, head of
Commonwealth and Southern, fo r the
purchase of the Tennessee Power and
Light Company ai’e believed to be moves
in the right direction.
David E. Lilienthal, director o f TVA,
termed the sale agreement a “ wise and
sensible compromise” which would permit
the Authority to devote is entire attention
to its public duties in a “ wholesome at
mosphere o f peace and constructive e f
fort.”
Another competing private utility was
removed from the T V A area when the
Memphis Power and Light Company
agreed to sell its electric and gas p rop
erties to the city and the government
power agency.
Meanwhile, the House o f Representa
tives has agreed to a Senate-approved res
olution providing an additional $25,000
fo r the joint congressional investigation
o f the T V A and extending the life o f the
committee until April 1st. The commit
tee conducted hearings at Knoxville and
in Washington on an initial appropriation
o f $50,000.
The Senate has passed a bill sponsored
by Senator Carter Glass (D., V a.), con
tinuing the Reconstruction Finance Cor
poration until June 30, 1941. The House
Banking and Currency Committee has
held hearings on a similar bill.
Hearings have also been held in the
House on a bill to extend the Export-Im
port Bank o f Washington. The recent
loan to China has brought fears to some
congressmen’s minds that the bank might
be used to involve the United States in a
foreign war.
Senator Robert A. Taft
(R., O.), declared that the agency has
“ become an arm o f foreign policy and may
be used to finance a foreign war without
Congress knowing it.”
Senator Robert
F. Wagner (D., N. Y .) replied that “ you
can’t finance a war on $125,000,000, the
amount o f authorized capital stock asked
fo r the bank.

Taxes

g ood s

shipped

via

Philadelphia will move stead
ily” reads an a d v e rtise m e n t
published by the Port of Phila
delphia.

Checks and collection items, no
matter what the source or desti
nation, if sent to this Bank move
steadily

and

directly

the

place of payment.

Our Transit and Collection De
partments are in 24-hour con
tinuous operation.

... THE ...

P H I I.A W E I.P H IA
NATIONAL BANK
ORGANIZED 1803

PHILADELPHIA, PA.
Capital, Surplus and Undivided Profits

$40,000,000
Member of Federal Deposit Insurance Corporation

The House o f Representatives has
passed part o f President Roosevelt’s tax
program, the tax on government salaries.
The more important part, involving recip(Turn to page 56, please)
N o rth w e ste rn B a n ker

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

M arch 1939

A Flexible Investment for
f

a \ce \ in c o m e

The developm ent and operation of the ^Pittsburgh Plan
UT o f Pennsylvania over a century
ago came the idea o f the building
and loan association, now so much
a permanent part o f American finance
that the government’s own Federal savings
and loan associations have copied it in
remarkable detail. About the same time,
the concept o f open-market commercial
paper evolved out of the needs o f eastern
dry goods companies. It, too, became an
indispensable adjunct to the American
way of accomplishing things financial.
Out o f Pennsylvania also came, more
recently— in fact, only half a decade ago
— the Pittsburgh plan, which further
strengthens the century-old idea o f com
mercial paper with underlying security.
The story o f this unique hybrid— since
there is “ nothing new under the sun,” as
the philosopher has said— is an interesting
one, and in this case all the curious banker
needs to lend is an ear in order to pave his
way to larger income fo r his bank, with
out detracting from safety or liquidity o f
depositors’ funds.

Prepared by the Staff of

Origin of the Plan
Before prohibition, Pittsburgh was one
of the acknowledged whiskey centers and

SECURED COMMERCIAL PAPER
DISTRIBUTORS
Pittsburgh, Pa.

the financing o f the liquor industry en
joyed great prestige there, but when re
peal arrived the legal producers o f alco
holic beverages (more than a few old-time
distillers and rectifiers immediately re
turned to their previous, interrupted busi
ness) were faced with an impasse.
Their problem was twofold. First, dis
tillers primarily were confronted with the
question o f how they might economically
finance the enormous production called
for, if the demand fo r bonded liquor were
to be met within the next four or five
years.
Storing liquor requires delicate
financing and most o f the former liquorlenders among bankers had disappeared
during the arid era. The old channels
were no longer clear; a new generation o f
bankers, without knowledge o f liquor
financing, had come into control o f the
very institutions which had been the main
stays o f the liquor industry.

GROWTH OF THE PITTSBURGH PLAN FROM INCEPTION TO DATE
TRUSTS AND SUPPLEMENTARY ACCOMMODATIONS (CUMULATIVE)
One Inch Equals Forty M illion Dollars ($40,000,000)

1934
$2,157,924.25

N o rth w e ste rn B a n ker

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

1934-5
$13,936,795.79

1934-6
$34,146,296.77

M arch 1939

1934-7
$59,647,679.31

1934-8 (D ec. 1)
$77,019,958.87

Second, and this difficulty applied espe
cially to rectifiers and wholesalers, then
was the problem o f financing sales. F or
instance (to return to Pittsburgh’s State)
the Liquor Control Board o f the Com
monwealth o f Pennsylvania at the outset
bought its inventory on the basis o f nine
ty-day credit. Since this public monopoly
was the liquor industry’s biggest single
customer, buying ten per cent o f all sales
made, there definitely was a financial nut
that needed cracking. The same principle
applied to many other large purchasers of
alcoho’ ic beverages.
In their search fo r the way out o f this
labyrinth, some liquor men approached a
group o f Pittsburghers who finally were
able to solve the tortuous problems in
volved.
The Pittsburgh Plan was developed to
fit a particularly crying need, therefore,
and since then has been applied with
startling success outside o f the liquor in
dustry. F or instance, one o f its trusts is
that o f Rock-Ola Manufacturing Corpo
ration, which principally sells electric
phonographs on a deferred payment plan.

Factors in the Plan
So much fo r history. Since that mod
est beginning, banks and bankers have
purchased over sixty-eight million dollars’
worth o f Pittsburgh Plan paper, and the
Plan has also extended supplementary ac
commodations well in excess o f ten million
dollars— all notes due repaid one hundred
per cent at or before maturity.
The principal attraction o f The Pitts
burgh Plan is its simplicity, despite this
tremendous volume of successful issues.
Distillers with valid receipts issued by
bonded warehouses may borrow on this
inventory, which has a constantly increas
ing value. So may rectifiers who have,
on their books, accounts receivable
against sound customers. Thus this prob
lem o f the liquor industry has been solved
by The Pittsburgh Plan. The potential
borrower usually undergoes a testing pe
riod outside o f trusteed loans until knowl
edge-by-experience has been acquired by
the Plan o f the borrowers’ integrity and
soundness. In every case the borrower
and the security must pass rigid credit
tests.

35
From this point on, the Plan does not
operate as a banker, but simply as an
intermediary through which banks and
bankers may put their excess funds to
work. The security offered is scrutinized
by a co-trustee (sometimes called a tech
nical advisor) who is a specialist in the
industry represented by the borrower; if
it passes his strict requirements, it is
placed, together with cash or its equiva
lent, in the trust fo r the protection o f the
purchasers o f the Plan’s notes.

Security
The composition o f this security is at
all times more than adequate. F or in
stance, at January 1, 1939, the asset-cov
erage o f collateral plus reserve fund plus
redemption fund on the present issuers’
notes ranged from one hundred per cent
(in the cases o f closed trusts) up to as high
as 193.67 per cent o f the amount issued.
These notes have been issued by the fo l
lowing current borrowers: Cummins Dis
tilleries Corporation, Kinsey Distilling
Company, Kolmar, Inc., Laird and Com
pany, Rock-Ola Manufacturing Corpora
tion, Seaboard Acceptance Corporation,
E. L. Spellman Company, Inc., and Tom
Walker, Inc., with several others pend
ing. At January 1, 1939, these firms had
outstanding $4,045,000.00 (face value) of
secured commercial paper under the
Pittsburgh Plan.
These notes are usually referred to as
secured commercial paper because that
is the best description o f them. They
are representative o f commercial paper
because they are never issued fo r terms
in excess o f nine months, yet they are
secured by reason o f the redemption and
reserve funds, plus ample collateral, de
posited with the trustees, which have full
power to authenticate the notes and liqui
date in an emergency. A t the present
writing these trustees are the Allegheny
Trust Company and the Provident Trust
Company, both o f Pittsburgh, and the
City National Bank o f Philadelphia.

The attention o f our readers is called to
an error appearing in the figures o f state
ment o f condition o f the Iowa-Des Moines
National Bank & Trust Company, Des
Moines, as o f December 31, 1938, appear
ing on page 69 o f the February issue o f

With American National
Thomas F. Ford, who is widely known
among the bankers o f this district and
throughout the middle west, has become
associated with the American National
Bank and Trust Company of Chicago.
He will serve in the hank’s rapidly grow
ing correspondent bank division with
Charles C. Kuning and Roscoe J. Todd,
under Edwin N. Van Hom e, executive
vice president.
Mr. Ford, a native Chicagoan, was em
ployed fo r many years in an official ca
pacity by the Northern Trust Company
and later engaged in the investment busi
ness.

T he ; N orthwestern B anker .

Deposits were published as $25,145,435,
when they were on the above date, “ $38,549,846.” Instead o f being $10,358,435,
bonds and securities of the institution
should have been listed at “ $15,235,331,”
while cash and due from banks, shown at
$10,280,513, should have read “ $12,738,873.”
W e regret the error as noted above
and are happy to make this correction in
the figures o f the Iowa-Des Moines Na

t
G E N E R A L

M O T O R S

AC CEPTAN CE

CORPORATION

is engaged primarily in facilitating
wholesale distribution and retail sales
of the following products of General
Motors Corporation and its world'
wide affiliates: CADILLAC, LA SALLE,
B U IC K ,

O L D S M O B IL E ,

P O N T IA C ,

automobiles; f r i g i d a i r e
appliances for refrigeration and air
conditioning; DELCO lighting, power
and heating equipment; GMC trucks;

Ch e v r o l e t

BEDFORD, V A U X H A L L ,

OPEL,

The business consists of investments in
selfdiquidating credits, widely diversi'
fled as to region and enterprise, capital
employed being in excessof $80,000,000.

G E N E R A L

MOTORS
IN S T A L M E N T

P L A N
T h ese

notes

In obtaining short term accommodation,
GMAC issues one standard form of note.
This obligation it offers to banks and in'
stitutions, in convenient maturities and
denominations at current discount rates.

are available, in limited am ounts, u p on request.

E X E C U T IV E O F F IC E N E W Y O R K

B R A N C H E S IN P R I N C I P A L C IT IE S

N orth w estern B anker

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

B L IT Z

— foreign made automotive vehicles.

Distribution
The notes, after their issuance has been
carefully checked by these trustees and
the co-trustee or technical advisor, are
sold only to banks by brokers associated
with the Plan. The average per annum
discount rate is 3 ^ per cent; so the typi
cal banker is enabled to buy, at excellent
yields, amply protected short-term com
mercial paper to fit his needs.
This unique Plan consequently makes
available to banks— o f which approxi
mately nine hundred have purchased in
the last five years-— a chance to adapt ma
turities to precisely their own require
ments, backed up by a no-loss experience
with every note ever issued under The
Pittsburgh Plan.

tional Bank & Trust Company, Iowa’s
largest banking institution.

Correction

March 1939

The Month’s nlaïket Maneuvers
Prepared for THE NORTHWESTERN BANKER b y JAMES H. CLARKE,
Assistant Vice President, American National Bank & Trust Company, Chicago
EBRUARY, 1939, will be re
called— if it be remembered at
all— as the month when Washing
ton gently patted business on the
head. And business, still suffering
from previous pats which were not
so soothing, found itself confused
and still more confused.

A R L Y in the month the Ten
nessee Valley Authority and
the Commonwealth and Southern
Corporation, reached an agreement
on the sale o f the properties o f the Tennessee Electric
Power Company— and at a price higher than individual
investors thought possible. Public utility securities rallied.
Then the President announced— no new taxes fo r either
business or individuals this year. This, despite the fact
that the budget presented a few weeks before necessitated
new levies. And not to be outdone, Secretary Morgenthau confirmed the President, in addition suggesting that
businessmen go ahead with “ normal risks” .
These developments in themselves indicated some so ft
ening in the Administration’s attitude. But there was
more to come. Secretary Hopkins made his debut as the
champion o f business in a Bes Moines speech— reform
now is pretty well completed after six long years— and
at long last business is to be aided. Admittedly some
o f these developments were rather intangible, and busi
nessmen have heard somewhat similar promises before—
especially in years preceding an election Hence the
confusion. But one bad market influence got no worse
during the month— the foreign situation— and with the
recognition o f Franco by England and France, the
Spanish civil war moves to a close.

OW did the stock market interpret February'?
There were twenty-two trading days in the month
— two holidays. During eleven days the markets ad
vanced and in a similar number declined. But advances
exceeded declines so that Dow-Jones Industrial Averages
moved up from 143.76— the close on January 31st— to
147.30— the close on February 28th. The change, how
ever, was not very decisive— the volume o f trading was
small— only in two trading days did it exceed one million
shares. Some observers And hope in the fact that the
market has moved in a narrow range for three weeks—
that no heavy liquidation has come into it— and suggest
a comparison with the market o f early June 1938 before
that rise started.

OVERNMENT bond prices were higher in Feb
ruary— corporate “money bonds” being firm to
better. Second grade bonds followed the course of the
stock market, which we discussed above. Most of the
sharp gain in Government prices followed the announce
ment of the Treasury that no new money will be raised

N o rth w e ste rn B a n ker

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

M arch 1939

in March. In short— the financing will be confined to
refunding $1,294,000,000 of the June 2y8s. This an
nouncement came on Monday, the twenty-seventh— U.
S. Treasury 2y2s of 1950-52 were then selling at 102.10
and quickly rose about 10/32nds. The whole Govern
ment market thus reached new highs as the month
closed. With excess reserves at $3,300,000,000, and a
plethora of funds in the hands of banks, insurance com
panies and individuals, the pressure to invest continues
to assert itself in our bond markets.
H E R E were but two corporate offerings of impor
tance in February. North American Company’s
$70,000,000 issue was outstanding— divided into matu
rity groups o f ten, fifteen and twenty years— all issues
“ went out the window” and quickly sold to premiums
over offering prices o f one and one-half to two points.
The second new issue o f the month was $4,500,000
Central Maine Power
o f 1968, which was priced
at 102 and sold up at a small premium. A s March begins
the capital market shows definite signs o f reviving after
a two months’ sleep. Texas Corporation plans to sell
$40,000,000 o f twenty-year debenture 3s— and this will
be new money— fo r the development o f the company’ s
business here and abroad. Northern States Power Com
pany o f Wisconsin is on the list with a proposed iss,ue
o f $17,500,000 first mortgage Sy^s o f 1964— this is re
funding. Northern Indiana Public Service Company
may do refunding to the extent o f $58,000,000— W est
Texas Utilities is discussing plans fo r refunding its
$22,000,000 5s o f 1957— National Distillers will offer
$22,500,000 o f ten-year convertibles to retire bonds and
bank loans.
And there apparently will be other issues along too,
including $6,600,000 Community Public Service first
4s o f 1964— $25,000,000 Indiana and Michigan bonds
to refund the 5s— a possible refunding o f the Common
wealth Edison 4s o f 1981 and the sale o f $20,000,000
o f debentures— just to mention a few among the many
planned. I f market conditions are right, March will
be a busy month.

ROM a business standpoint activity lessened in February. It seems fair to estimate that the Federal Re
serve Index fo r the month was around 98, as compared
with 101 in January and 104 in December. The New
York Times’ Weekly Index of Business Activity also
declined— as did most of the other well recognized in
dices.
The markets fo r bonds and stocks, however,
ignored business and either rose or held firm. It is far
too early to interpret this as hopeful— that the markets
once again have turned up in advance o f business. But
it will be well to watch this relationship closely. The
markets represent the combined thinking o f millions o f
investors— if they are willing to hang on in spite of
bad news then it is worth our while to pay strict
attention.

Minneapolis Banker Dies
William L. Mitten, of Minneapolis, who
became a vice president o f Northwest
Bancorporation in January, died March
3rd. Funeral services were March 6 th.
He was born June 3, 1889, at Newville,
Pennsylvania.
In 1908 he joined the

Trust Division President
(See Cover Photo)
Samuel C. Waugh, executive vice presi
dent and trust officer, the First Trust
Company, Lincoln, Nebraska, is the new
president o f the trust division o f the
American Bankers Association.
Mr. Waugh, who had served as vice
president o f the division, was born in
Nebraska. A fter attending the University
o f Nebraska in 1913 he became connected
with the First Trust Company o f Lincoln,
and during the past twenty-five years has
received successive promotions until at
the present time he heads that institution.
He is a member o f the board o f trus
tees at the University o f Nebraska Foun

dation, and he is a life member o f the
Lincoln Chamber o f Commerce and has
been an active officer and director in
years past. He helped to organize and
was first president of the Corporate Fidu
ciaries Association o f Omaha and Lincoln.

Attended Trust Company
Conference
The following bankers from the N orth
B anker territory attended the
twenty-eighth annual banquet o f the Trust
Division of the American Bankers Asso
ciation at the W aldorf-Astoria last month:
Lyman E. Wakefield, president, First
National Bank & Tr. Co., Minneapolis;
western

PEERLESS P A Y S!
Fayette County Bank
S T . E L M O , IL L IN O IS

Scarborough & Company
First National Bank Building
Chicago, Illinois
W . L. M IT T E N

Minnesota Loan and Trust Company,
working in its municipal bond depart
ment. In 1930 he was placed in charge
o f Bancorporation’s Investment depart
ment. Two sisters survive.

1939 Convention Calendar
Colorado: June 16-17, Hotel Colorado,
Glenwood Springs.
District of Columbia: June 8-11, The
Homestead, Hot Springs, Virginia.
Illinois: May 25-26, Peoria.
Indiana: May 3-4, Indianapolis.
Iowa : June 5-7, Des Moines.
Kansas: May 10-12, Topeka.
Minnesota: June 14-16, St. Paul Hotel,
St. Paul.
Missouri: May 8-10, Excelsior Springs.
North Dakota: May 26-27, Grand Forks.
Ohio: Toledo, sometime in May.
Oklahoma: May 4-5, Oklahoma City.
South Dakota: June 2-3, Pierre.
Wisconsin: June 6-7, Milwaukee.

Dear Sirs:
We are herewith enclosing signed Proof of
Loss for the Peerless Casualty Company covering
the two losses we recently sustained.
We acknowledge receipt of your checks in
payment of these losses and wish to say that you
give prompt action and we do very much appreciate
it.
We are now convinced that your recommenda
tion of the Peerless Casualty Company, which we
investigated and subsequently ordered a blanket
bond through your office, was in every way what you
claimed, and we take this occasion to tell you
that we are thoroughly satisfied with your service
and the company that you represent.
Yours very truly,
FAYETTE COUNTY BANK

General Conventions
March 8-10: Regional A. B .,A . Confer
ence, W aldorf Astoria Hotel, New
York.
June 19-30: Graduate School o f Bank
ing, Rutgers University, New Bruns
wick, New Jersey.
June 5-9: American Institute o f Bank
ing, Pantiland Hotel, Grand Rapids,
Michigan.
September 25-28: American Bankers
Association, Seattle, Washington.

Insurance Counselors to Banks
M an agers, Financial Insurance For
PEERLESS CASU ALTY COM PANY

Cash and Government Bonds 2p%-Times Liability
T H I R T Y -F IV E

YEARS OF DEPEN DABLE

IN S U R A N C E

F IR S T N A T IO N A L B A N K B U IL D IN G

C H ICAGO
B lanket B onds

A ll R isk F orgery

S afe D eposit Insurance

N orthw estern B anker

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

March 1939

38
Tom K. Smith, president, Boatmen’s Na
tional Bank, St. Louis; Lauranee Armour,
president, American Natl. Bank & Tr. Co.,
Chicago; Edwin N. VanHome, executive
vice president, American Nati. Bank &
Tr. Co., Chicago; M. E. Feiwell, vice
president, American Nati. Bank & Tr.
Co., Chicago; John C. Mechern, vice
president, First National Bank, Chicago;
Philip L. Ray, president, First Trust
Company, St. Paul; Theodore Wold,
chairman o f board, Northwestern Natl.
Bank & Tr. Co., Minneapolis; John E.
Blunt, vice president, Continental Illinois
Nati. Bank & Tr. Co., Chicago; Howard
P. Preston, first vice president, Federal
Reserve Bank, Chicago; Hal Y. Lemon,

vice president, National Bank o f Detroit,
Detroit; Herbert L. Horton, vice presi
dent, Iowa-Des Moines National Bank
& Trust Co., Des Moines; Clyde H. Doo
little, trust officer, Iowa-Des Moines
National Bank & Trust Co., Des Moines;
Forrest N. Williams, assistant vice pres
ident, The First National Bank, Chi
cago ; Col Gillies, assistant vice presi
dent, The First National Bank, Chicago;
Dr. W . Lichtenstein, vice president, The
First Natl. Bank, Chicago; J. H. C.
Templeton, vice president, The First Natl.
Bank, Chicago; Oliver A. Bestel, vice
president, The First Natl. Bank, Chicago;
Roy D. Kercheval, vice president and
trust officer, The Boatmen’s Natl. Bank,

Intelligent Investigation
and Constant Review
of Investment Portfolio
“ E very bank should arrange for facilities ade
quate to intelligent investigation and constant
review o f its investment portfolio.
“ Those banks not equipped to do their own
statistical work and maintain sources o f in
formation, should provide for com petent and
disinterested outside advice. This should in
clude proper investigation before purchase
and periodic review o f all investment hold
ings and o f investment p o lic y .”
From “ Statement of Principles and Standards
of Investment for Commercial Banks” issued
by the American Bankers Association.

ANUFACTURERS TRUST COMPANY, through its In
vestment Advisory Division, has for a number of

years provided banks throughout the country with com pre
hensive and disinterested guidance in the formulation of
investment policies and in the solution of investment p rob
lems. An important feature of this service is the periodic
review of individual bank portfolios.
Financial institutions throughout the United States are
cordially invited to avail themselves o f our broad facilities.

MANUFACTURERS TRUST
COMPANY
Investment Advisory Division

55 BROAD STREET, NEW YORK

N o rth w e ste rn B a n ker

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

M arch 1939

St. Louis; L. L. McArthur, Jr., vice presi
dent, The Northern Trust Co., Chicago;
Joseph W . White, trust officer, MercantileCommerce Bank & Tr. Co., St. Louis;
Frank F. Taylor, vice president, Con
tinental Illinois Nat. Bank & Tr. Co.,
Chicago; Robert S. Drew, second vice
president, Continental Illinois Natl. Bank
& Tr. Co., Chicago; Ronald M. Kimball,
secretary, Continental Illinois Natl. Bank
& Tr. Co., Chicago; Howell W . Kitchell,
second vice president, Continental Illinois
Natl. Bank & Tr. Co., Chicago; Fred E.
Musgrove, vice president, Continental Illi
nois Natl. Bank & Tr. Co., Chicago;
Anthony von Wening, second vice presi
dent, Continental Illinois Natl. Bank &
Tr. Co., Chicago; Clifford S. Young, vice
president, Federal Reserve Bank, Chicago;
T. B. Strain, president, Continental Na
tional Bank, Lincoln, Nebraska; Victor
F. Rotering, vice president, First Natl.
Bank & Tr. Co., Minneapolis; L. B.
Robbins, vice president, Northern Trust
Company, Chicago; Sidney Maestre,
president, Mississippi Valley Trust Co.,
St. Louis; David H. Reimers, president,
Livestock National Bank, Chicago; James
B. Forgan, vice president, First National
Bank, Chicago; Arthur Leonard, vice
president, City Natl. Bank & Tr. Co.,
Chicago; William Hinshaw, trust officer,
City Natl. Bank & Tr. Co., Chicago;
William Miller, vice president, City Natl.
Bank & Tr. Co., Chicago; James S.
Kemper, director, City Natl. Bank & Tr.
Co., Chicago; Milton R. Stahl, vice presi
dent, Mississippi Valley Tr. Co., St.
Louis; C. A. Tolin, associate trust officer,
Mississippi Valley Tr. Co., St. Louis;
Daniel J. Monen, vice president, The
Omaha National Bank, Omaha; Frank D.
Williams, Hall, Cline & Williams, Lincoln,
N ebr.; Don W . Stewart, partner, Stewart,
Stewart & Whitworth, Lincoln, Nebr.;
V ictor Cullin, assistant secretary, Missis
sippi Valley Tr. Co., St. Louis; J. J.
Farrell, secretary, Mercantile Commerce
Bank & Tr. Co., St. Louis; Carl H. Zeiss,
vice president and general attorney, The
Northern Tr. Co., Chicago; William S.
Turner, second vice president, The North
ern Trust Company, Chicago; Harve H.
Page, second vice president, The North
ern Trust Company, Chicago; Keith J.
Sheekler, vice president, The Northern
Trust Company, Chicago; Solomon B.
Smith, vice president, The Northern Trust
Co., Chicago; Edward B. Smith, second
vice president, The Northern Trust Com
pany, Chicago; I. L. Wright, trust officer,
Central Natl. Bank & Tr. Co., Des Moines;
F. R. Warden, vice president, Central
Natl. Bank & Tr. Co., Des Moines; Clar
ence B. Jennett, vice president, The First
National Bank, Chicago; T. H. Beacom,
Jr., assistant vice president, The First
National Bank, Chicago; Clifford De Puy,
publisher, N orthwestern B anker , Des
Moines.

Breaks Al! Records

New York Conference

According to W . J. Pickering, presi
dent o f the Allan-Wales Corporation, 515
Madison Avenue, New York, in Decem
ber, 1938, had the biggest month o f any
month in 35 years o f the company’s his
tory. The domestic and foreign sales were
both greater than any previous month.

A regional conference for commercial
and savings bankers will be held on March
8 , 9 and 10 at the W aldorf Astoria Hotel,
New York, under the auspices o f the
American Bankers Association in co
operation with the bankers associations

o f eleven states and the District o f Co
lumbia. Invitations have been mailed to
4,275 commercial banks and 534 savings
banks in the east, according to Philip A.
Benson, president of the American Bank
ers Association and president o f The Dime
Savings Bank o f Brooklyn, New York.

Municipal
Public Utility

BONDS

Industrial
A .C .A

L L Y N

a n d

COMPANY

Incorporated

100 West Monroe Street, Chicago— Tel. Franklin 8400

W . J. PICKERIN G

Allan-Wales machines are now being
shipped to more than 40 foreign countries.
In January, 1939, all records were
again broken by exceeding December,
1938, by 10 per cent.
This company builds adding machines
only. The total foreign business for the
entire adding listing machine business
covering new machines was minus 32 per
cent in 1938 as compared with 1937 and
during the same period the Allan-Wales
business was 18 per cent plus.

New York
Representatives:

Milwaukee
Waterloo

Des Moines

Omaha
Cedar Rapids

CREDIT COMPANY

Hi. d i l l Si .
1

C A P IT A L A N D

SURPLUS

OVER

$ 6 4 ,0 0 0 ,0 0 0

MUNICIPAL

ounded

in 1 9 1 2 , with $ 300 ,0 0 0

capital, Commercial Credit Company

B O N D S

is today one of the largest institutions of
its kind. It operates through more than

□

4,000 employees in more than 186 offices
Walter P. Davis,

in the United States and Canada, and is

Manager

owned by more than 20,000 stockholders.

Des Moines Office

BANK
RELATIONS
DEPARTMENT

□

314 Equitable Bldg.
Des Moines

1 0 0 E. 4 2 n d Street

Iowa

SHORT T E R M NOTES
available in limited amounts upon
request, at current discount rates.

N ew Y ork

N orth w estern B anker

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

March 1939

40
California and at the last notional con
vention, was chairman o f the important
resolutions committee.
Since the formation o f the Independent
Bankers Association o f the Twelfth Fed
eral Reserve District, Mr. Lathrop has
been a member o f the executive council
and is now serving his second term in that
capacity. He is also a director o f the
Independent Bankers Association o f
Southern California.

ûoiva
Investm ent B an kers
A ssociation
JOHN J. QUAIL
President
Davenport

ROY W. LERICHE
Secretary
Des Moines

Organized 1935

OHN J. QUAIL, Davenport, vice presi
dent o f Priester, Quail & Company,
and president o f the Iowa Investment
Bankers Association, has announced the
appointment by the association executive
committee o f R oy W . Leriche as secretary
o f the organization. Mr. Leriche is asso
ciated with Wheelock & Cummins, Inc.,
Des Moines, and assumes the office held
by W . George Potts, who has resigned.
Mr. Potts, formerly with the Polk-Peterson Corporation, Des Moines, is now
in New York where he has become con
nected with Amott, Baker and Company,
Inc., o f 150 Broadway, as manager o f
the corporate securities department o f
the firm. Mr. Potts has been with PolkPeterson Corporation fo r the past five
years, and was formerly associated with
the First Securities Corporation, also of
Des Moines.

Left out o f the American Bankers A s
sociation picture fo r the past 20 years
bankers o f the Pacific coast are beginning
to feel that the time has come fo r one o f

Joins Staff
Carl W. Lauer has joined the research
staff o f W oodruff & Company, Inc., in
vestment counselors fo r banks and insur
ance companies, in Chicago.
Mr. Lauer will act in the capacity o f
industrial security analyst. He was fo r
merly affiliated with Lehman Bros, and
Winthrop, Mitchell & Company.

Celebrating This Year
C. E. Erickson, president, C. E. Erick
son Company, Inc., Des Moines, Iowa,
widely known advertising specialty firm,
is celebrating the twenty-ninth anniver
sary o f the business he founded at Newton,
Iowa, in 1910.
From a. small beginning, the Erickson
company has consistently grown to a siz
able institution occupying, at present, a
six story structure, comprising more than
60,000 square feet o f floor space, located
at 15th and Walnut streets, in Des Moines,
Iowa.
In addition to manufacturing a wide

Independent Bankers
Propose Lathrop
A. L. Lathrop, vice president and a
director o f the Union Bank & Trust
Company, an outstanding unit bank o f
Los Angeles, has been drafted unani
mously by the independent bankers o f the
Twelfth Federal Reserve District and
he has consented to become a candidate
fo r the second vice presidency o f the
American Bankers Association at the con
vention to be held in Seattle September
25 to 28, 1939.

A. L. L A TH R O P

their number to be included in the list
o f high officials o f the nation’s major
banking organization.
Mr. Lathrop is now serving the A. B. A.
as a member o f its executive council, its
executive committee, trust division; its
committee on state legislation; is chair
man o f the State Legislative Council for
C. E. ERICKSON

V. W . B r e w e r C o .
M

u n ic ip a l

o n d s

T h e State o f North D akota has sufficient cash in the R eal Estate
B on d

S in k in g

Fund

to pay

the bon ds

m a tu rin g

FIR S T N A T -S O O LIN E BLDG.

MINNEAPOLIS
N orth w estern Banker

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

March 1939

through

1943.

variety of more than sixty-five advertis
ing specialties, the Erickson company
produces display fixtures and highway
advertising signs.
The annual payroll is in excess o f
$200,000. Normally, this company em
ploys approximately 150 factory and
office workers. In addition to these em
ployes the company maintains a selling
force in excess o f 150 men located in all
parts o f the United States.
‘‘Banks, insurance concerns and their
agents, together with other financial
houses, are valuable customers o f our
company,” Mr. Erickson stated, in a
somewhat boastful manner.

COMMERCIAL
INVESTMENT
TRUST

Investm ent B an k ers
A ssociation
O r g a n iz e d

R. W AR B HALL,
President
Omaha

IN C O R P O R A T E D

1920

H AR R Y F. SMITH
Secretary
Omaha

Jayne Housh, Corresponding Secretary

A R R Y SCH ECH TEL, former Chi
cago newsboy, whose spectacular
financial rise ended three years ago when
he was sentenced to a federal prison from
Denver fo r bucket shop operations, was
found guilty by a Denver jury recently
o f conspiracy to commit forgery in con
nection with attempted disposal o f $100 ,000 worth o f forged Omaha city bonds.
The verdict carried a possible penalty
o f ten years in prison.
Schechtel was the last o f a ring dealing
in the forged bonds, to face trial, all
others either having been convicted or
pleaded guilty to the charges. Schechtel
was granted 15 days to file motion for a
new trial.

Mr. and Mrs. A. C. Potter and W . B.
Millard, Jr., o f Omaha, were in Minne
apolis recently as guests o f Mr. and Mrs.
Lucien Strong. They attended the ten
nis matches there. Mr. Potter is head o f
the Burns-Potter investment banking
firm and Mr. Millard is vice president o f
the Omaha National Bank.
Directors o f the South Omaha Produc
tion Credit Corporation recently re
elected Charles L. Yochum o f Ashland,
Nebraska, president; J. E. McArdle, Elkhorn, Nebraska, vice president; Everett
Spangler, Omaha, secretary.
W oodmen o f the W orld L ife Insurance
Association has purchased the entire
bond issue o f $1,289,000 outstanding on
the South Omaha bridge. The bonds were
purchased in New York, from the Recon
struction Finance Corporation, with Mor-

ris Mather & Company o f New York, act
ing as agent fo r the buyer.
The Omaha company paid a small
premium, it was said. “ W e bought the
bonds because we thought they were an
excellent investment,” said T. E. Patter
son, vice president o f the insurance firm.
The purchase made the insurance com
pany an extensive holder o f bridge se
curities. The company also owns half
o f the $2,350,000 in bonds issued by AkSar-Ben to purchase the Douglas street
bridge at Omaha from the street car com
pany.
The South Omaha bridge bonds orig
inally were issued by the public works
administration and are payable solely
from revenues o f the bridge. They bear
(Turn to page 48, please)

Available for Bank Investment
Originated and Serviced by

THE NATIONAL COMPANY
OF OMAHA
500 First National Bank Building
OMAHA, NEBRASKA

capital and surplus in excess
o f $ 5 7 , 0 0 0 ,0 0 0 ,

provides a

nation-wide sales finance ser
vice through subsidiary com
panies w ith a n e tw o rk o f
branch offices throughout the
United States. T h is service,
which consists o f purchasing
self-liquidating accounts, ex
tends to automobile dealers,
household appliance dealers,
and to m anufacturers and
dealers in many lines o f indus

a m s o n
B r o s .
8 c

Co.

E s t a b l is h e d

1874

141 W. Jackson Blvd., Chicago
50 Broadway, New York
Our branch offices are
equipped to render com
plete brokerage service
in the handling of grain
(cash and f ut ur es ) ,
stocks, bonds, cotton and
provisions. Private wires
direct to all markets.
BRANCH OFFICES

F.H.A.
\
Insured Mortgages

C o m m e r c ia l I n v e s t m e n t
T r u s t I n c o r p o r a te d , w ith

Des M oines, low *
Dubuque, Iowa
M arshalltown.Iowa
Sioux City, Iowa
Storm Lake, Iowa
Fort Dodge, Iowa
Kansas City, Mo.
Peoria, III.
Quincy, III.
Galesburg, 111.
Bloomington, 111.
La Salle, 111.
Muskogee, Okla.

trial, commercial and profes
sional equipment, including
the heavy goods industries.

C . I .T . offers its stand
ard notes for short term
accommodation in varying
amounts from $1,000 to
$100,000, in maturities from
60 to 270 days and at cur
rent discount rates. These
notes are payable at any of
our 2 7 9 depositary banks
located in principal cities
throughout the country.
L a te st pu blish ed f i n a n c i a l

Davenport, Iowa
Cedar Rapids, Iowa
Mason City, lowa
W aterloo, Iowa
Iowa Falls, Iowa
St. Louis, Mo.
Lincoln, Neb.
Omaha, Neb.
De Kalb, 111.
Gilman, III.
La F ayette, Ind.
Frankfort, Ind.
Ada, Okla.

statement a?id list o f depositary

MEMBERS OF LEADING SECURITY
and COM M O DITY EXCHANGES

IParkAve.,New York, N. Y.

banks w ill be mailed upon request.
ADDRESS

Treasurer
Commercial Investment
Trust Incorporated

N orth w estern Banker

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

March 1939

E very

day

becom es

m ore

evident that live stock is essential
to

continuing

prosperity

this

territory.

This market and this bank are
organized and equipped to serve
banks and live stock interests.

Stock Yards National
Bank of South Omaha
Omaha, Nebraska
Member Federal Deposit Insurance Corporation

Northwestern Banker

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

March 1939

Group Meetings
Places and dates fo r the 1939 Nebraska
Group meetings have been determined, as
follow s:
Group Two at Fremont, Saturday, A p
ril 22 nd.
Group Three at Norfolk, Saturday,
April 22nd.
Group Six at Alliance, Monday, May
22 nd.
Group Five at Lexington, Tuesday, May
23rd.
Group Four at Hastings, Wednesday,
May 24th.
Group One at Lincoln, Thursday, May
25th.
The usual special train will be arranged
to make the rounds o f the four Group
meetings late in May concerning which
another announcement will be sent out
when the information is ready.

Resigns
Leon J. Petr, who has been with the
Clarkson Bank since its organization in
May, 1934, first as bookkeeper and later
as assistant cashier, resigned from his
position last month and is now located at
Los Angeles, California. His position was
filled by Edward Svik, o f Clarkson, who
will serve the bank in the capacity o f
bookkeeper.
In spite o f adverse business conditions
and o f the serious drouth o f the last seven
years the bank has made a steady prog
ress. Its preferred stock o f $20,000 was
retired in full two years ago, 50 per cent
o f which was taken up by the earnings of
the bank and 50 per cent was paid fo r
by the individual stockholders. The bank
now has a capital structure o f $50,000
and a dividend o f 5 per cent was paid to
the stockholders on their common stock
for the year 1938; this was a second
dividend declared by the directors.

Tie biasIza
NEWS

Committee Meets

Franklin

Chairman J. Y. Webster o f the Regional
Clearing House Committee has called a
meeting fo r March 7th at Grand Island to
which the presidents o f the fourteen Re
gional Clearing Houses in the state are
asked to come in order to plan fo r the
future o f the regional clearing house
movement, and particularly to discuss
arrangements fo r the next series o f meet
ings of these organizations. All other
officers o f these clearing houses who will
come to the conference will be welcome, as
will any and every member banker. The
meeting will be at the Yancey Hotel at
1 0 :00 o’clock. One regional has already
set its date fo r next meeting, the South
Central Nebraska Clearing House Asso
ciation, on the 29th o f March, the place to
be announced.

A t the semiannual meeting o f the board
o f directors o f the Franklin State Bank
the following officers were elected fo r the
ensuing year: T. R. Blank, president; W .
S. Yates, vice president, and chairman o f
board o f directors; P. L. Slocum, execu
tive vice president and cashier; Irene T.
Larraway, assistant cashier. Other rou
tine business Avas disposed with.

Wins Award
William Cook, assistant cashier o f the
Beatrice National Bank, recently held the
distinction o f being the city’s first official
“ most distinguished citizen” fo r merito
rious civic enterprise.
Amid the cheers o f fellow members o f
the Junior Chamber o f Commerce Cook
was handed a small gold medal, symbolic
o f his signal award.

Dies in Pierce
Dawson Is Speaker
Members o f the Nebraska Investment
Bankers Association are launching a
rather new program o f sales stimulation
for their salesmen. The Association has
engaged Fred Dawson, former University
of Nebraska football coach, to give a series
o f fou r lectures. Dawson’s dynamic per
sonality and his football background have
prepared him to take the fighting spirit
o f football and turn it into a personal,
motivating force.

WM. B. HUGHES
Secretary
Omaha

E. S. HOLCOMB
President
Broken Bow

James R. Duff, 80, one o f Pierce’s best
known citizens, died recently at his home
following a long period o f failing health.
Born in 1858 at Huntley, Illinois, he came
from a distinguished line o f Scottish an
cestors. In 1880, after teaching school
several years, he entered the milk business
with his brother at Norfolk. A fter 25
years in this business he moved here in
1905.
Mr. Duff Avas associated with several
Pierce county banks.

Shorter Hours
According to a recent announcement
the hours fo r serving the public have been
shortened at the First National Bank,
York.
The opening hour has been
changed to 9 :30 a. m. and the closing time
is now 3 p. m.
Under the new arrangement the man
agement o f the institution hopes to shorten
the extra time Avhich it has been necessary
fo r all employes to devote to bookkeeping
and accounting.

Dies in Kansas City
Holdrege friends o f the family have
received word o f the death o f Roscoe
J. Slater, who died at Kansas City after
an illness which has extended over the
last feAv months. Mr. Slater was fo r
merly a resident o f Phelps county, having
been engaged in the banking business at
Bertrand. He left that place in 1921,
going to Lincoln Avhere he engaged in
bank and investments. F or the past sev
eral months his health failed and he has
been at Kansas City undergoing treat
ment.

Farmers Are Guests
Despite unfavorable weather conditions
a group o f some 275 o f the farmers o f the
eastern portion o f Cass county, were in
Plattsmouth recently to enjoy the evening

UNITED STATES C H E C K B O O K C O M P A N Y
•

O MA H A . N E B R A S K A
B A N K E R S
S U P P L I E S

•
N o rth w e ste rn Banker

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

M arch 1939

44
as the guests o f the Plattsmouth State
Bank.
This was the second annual dinner given
by the bank and proved in every way a
fine get-together and one that all o f the
group will pleasantly remember in the
tine social time and the real worthwhile
messages o f the speakers.
H. A. Schneider, president o f the bank,
was the presiding chairman.

" F L O A T " Minimized
Buy Stock

By quick and competent handling
of all Transit Items
Send Us Your Transit and Collection Items
LIV E STOCK N ATION AL BANK
O

MEMBER FEDERAL DEPOSIT INSURANCE CORPORATION

O f interest to many Nebraska Citians
is the recent purchase o f the Wishart in
terests in the Citizens Bank o f Bennet
by members o f the Bratt family of that
village, giving them full ownership of
all stock.
In a reorganization following the pur
chase, J. H. Bratt, father o f Charles H.
Bratt, science teacher in Nebraska City
high school, was elected president ; A. D.
Bratt, vice president and cashier; J. H.
Bratt, A. D. Bratt, H. C. Bratt and C. C.
Coale, directors.

President Dies
George C. Bruning, 57, president of
Bruning State Bank fo r 20 years, died
at his home o f heart failure. lie had
been in failing health fo r the past six
months. Surviving are his wife and a son,
Paul.

Pawnee C ity

HOTEL

ONTENELLE
OMAHA

Paxton

Travelers readily agree that the Fontenelle is the
superior hotel, thoroughly modernized with every
facility for luxury, comfort, and convenience.

3
BLACK MIRROR • COFFEE SHOP
BOMBAY ROOM
A ir Conditioned For Year ’Round Comfort.

O M A H A ’S W E L C O M E

N orthw estern Banker

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

March 1939

Stockholders and directors o f the Citi
zens State Bank held their annual meet
ing in Pawnee City.
A. H. Wherry was reelected as presi
dent; F. L. Aikins, vice president ; John
A. Barr, cashier; Miss Nettie Hanon, as
sistant cashier. The board o f directors
was increased by the election o f Ross Barr,
and A. C. Parli was elected chairman o f
the board.

THE

WORLD

Peter Eginton, T. M. Halloran and H.
C. Hartman were named directors at the
annual meeting o f the stockholders o f the
Bank o f Paxton. Following the stock
holders’ meeting, the directors organized,
with Pete Eginton being name vice presi
dent and J. F. Fleak, cashier.
The only change in the officers o f the
bank was the selection o f Mr. Hartman
as a member o f the board of directors in
place o f Raul Heiser.

YOUR STATE BANKERS ASSOCIATION
OFFICIAL SAFE, VAULT AND
TIMELOCK EXPERTS

F. E. DAVENPORT & CO.
OMAHA

Kearney
Stockholders and directors o f the Fort
Kearney State Bank, at their annual meet
ing, reelected all officers and directors.
Thomas Gas will again serve as presi
dent, Paul Kannow as vice president and
cashier with Tom Russell and Bob Burman, assistant cashiers.

Elgin
The entire group o f officers and direc
tors who served during the past year in
the Bank o f Elgin were again named to
continue their services.
Directing the
business are J. J. DeLay, president; F.
X. Fritz, vice president; George A.
Wright, cashier; E. L. Link, assistant
cashier; L. E. Jackson and Chas. EL K el
sey. In reviewing business conditions in
1938 at the Bank o f Elgin, George
Wright, cashier, commented, “ Our busi
ness shows a substantial gain over a year
ago. W e enjoyed a 35 per cent increase
in 1938 in the number o f patrons using
our services. With our ability to help this
community strengthened, prospects are
very bright.”

First National Officer
Edward E. Brown, president o f the
First National Bank o f Chicago, an
nounced that John W . Kearns has been
elected one o f the attorneys and an officer
of the First National Bank, effective
March 1st. Mr. Kearns has withdrawn
as a partner o f the firm o f Burry, John
stone, Peters & Dixon, with which firm
he has been associated since he began the
practice o f law.

Board Member
Henry P. Turnbull, senior vice presi
dent o f the Central Hanover Bank and
Trust Company, has been elected a mem
ber of the board o f trustees of the com
pany.
Mr. Turnbull entered the employ o f the
Hanover National Bank on August 6 ,
1900, and at the time o f its merger with
the Central Union Trust Company in 1929
he was a vice president and director of
the company. Since the merger he has
continued to serve as a vice president of
Central Hanover.

EMBERS o f the executive commit
tee o f the Nebraska Bankers’ A s
sociation recently voted unanimously to
launch a program to restore livestock in
Nebraska.
The committee urged all o f the 450
banks in the state to make “ full value”
loans to farmers fo r the purchase o f
brood sows, heifers, ewes and chickens.
The committee also decided to poll its
membership on a proposal that a special
corporation be formed to pool bank funds
fo r financing livestock rehabilitation in
areas where local banks may not have
reserve to enter into the program.

Standard Statistics Company index o f
bank debits fo r December showed Oma
ha’s index to be the highest since October,
1937.
In recent weeks, Omaha clearings and
debits have been showing consistent in
creases over the same period last year.
A new schedule o f banking hours was
announced recently by the First National,

Omaha National and United States Na
tional, Omaha’s three big downtown
banks. It was to be effective March 6 th.
Commercial departments will be open
from 9 :30 a. m. to 2 p. m. on week days,
and from 9:30 to noon on Saturdays.
Savings departments will be open from
9 :30 until 2, including Saturdays. Safety
deposit vaults will be open from 9 :30
until 4 on weeks days, from 9 :30 to 2 on
Saturdays.
Requirements of the new wage-hour
law necessitated the new hours.
The old schedule will be continued at
the South Omaha banks, and at outlying
Omaha suburban banks.

Annual roll call o f the nation’s largest
banks, revealed by The American Banker,
showed that three Omaha banks and one
Lincoln institution rank among the three
hundred largest in the nation.
The Omaha National ranks 139 th
among all United States banks; the First
National o f Omaha, 218th, and the United

O u t-of-tow n banks and bankers will find here
com plete banking facilities for prom pt and
economical handling o f accounts in Chicago. W e

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would appreciate the opportunity o f serving you.

Surprisingly Reasonable Rates
Rooms With Bath
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Omaha

i t y

a t i o n a l

AND

TRUST

2 0 8

S O U T H

C O M P A N Y

a n k

of Chicago

L A S A L L E

S T R E E T

{Member Federal Deposit Insurance Corporation)

N o rth w e ste rn Ba n ker

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

M arch 1939

=: N e b r a s k a N e w s =
States National, 235th. The First Na
tional o f Lincoln ranks 279th.
Robert Hall, executive officer o f the
Bank o f Florence, Omaha, suburban in
stitution, is president o f the North Oma
ha Iviwanis Club, whose members jou r
neyed recently to Fort Calhoun, Ne
braska, where they entertained and were
entertained.
Each Omaha man was host to a Fort
Calhoun man at a dinner. Omaha’s City
Attorney Seymour Smith gave an im-

personation o f Bob Burns. Following the
dinner, the Omahans were guests o f the
Fort Calhoun men at the Washington
county historical museum. Fort Calhoun
is one o f the oldest settlements in Ne
braska.
T. L. Davis, president o f the First Na
tional Bank o f Omaha, was elected presi
dent o f the Omaha Clearing House Asso
ciation recently to succeed Alvin E. John
son, president o f the Live Stock National
Bank.

1939

1863

A Background to Meet
Today’s Problems
The accumulated experience of T he First
National Bank o f Chicago covers seventyfive years.

During that time the bank has

seen the nation pass through m any business
cycles, each with its succession of com pli
cated economic factors. Each o f these phases
in turn has created its ow n special problems.

Other new officers are H. M. Bushnell,
president o f the United States National
Bank, vice president; William B. Hughes,
re-elected secretary-treasurer.
Members o f the clearing house com
mittee are Mr. Bushnell, chairman; Mr.
Davis, W . Dale Clark, W . A. Sawtell, J.
F. Coad, and Mr. Johnson.

The basis fo r European dictatorships
was laid in ancient history, according to
Dr. Walter Lichtenstein, vice president
o f the First National Bank o f Chicago,
who recently addressed the Omaha chap
ter, American Institute o f Banking, at
a dinner.
He spoke on “ International Relations,”
tracing European governmental develop
ments through the centuries. Two hun
dred attended the dinner, at the Fontenelle Hotel.

Roy Harrup, chairman o f the “ People’s
Municipal Bank League” o f Omaha, re
cently began circulating petitions fo r a
charter amendment election in Omaha on
a proposal to establish the “ Omaha mu
nicipal bank.” Harrop, veteran worker
in “ new party” movements, would finance
such a bank by having the city issue
$200 ,000,000 worth o f warrants, about 20
times the city’s present bonded debt.
The “ municipal hank” would use these
warrants “ fo r the advance o f a like
amount o f Omaha municipal bank credit
to depositors.” Profits o f the bank, ac
cording to his plan, Avould be used to
create a “ city general pension fund,” out
o f which nearly anybody could draw $50
a month.

T o m eet specifically the requirem ents o f
business, the Divisional Organization o f The
First National Bank was developed in 1905.
This distinctive feature brings bankers into
immediate contact with officers who

are

specialists in the requirements o f correspond
ents.

Victor B. Smith, vice presilent o f the
Omaha National Bank, has been re
elected president o f the University o f Ne
braska Foundation. A t the annual meet
ing in Lincoln recently, reports were
made o f a foundation fund that may
total a third of a million dollars.

T he long and valuable experience of

the bank thus becomes immediately appli
cable to the problems of today.

The First National
Bank o f Chicago
MEMBER

FEDERAL

D EPOSIT

IN SU RA N C E

Ward B. Clarke, 60, Rapid City, South
Dakota, banker and former Omahan, was
killed recently when his car went off the
road and overturned near Las Vegas, Ne
vada. He was a brother o f Louis S.
Clarke o f Omaha. His w ife was in
jured. The couple was en route to Cali
fornia fo r a vacation. Two sisters also
survive. Burial was in Custer, South Da
kota.

C ORPORATION

Henry Karpf, vice president o f the
Livestock National Bank o f South OmaN orthw estern Banker

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

March 1939

47
ha, has purchased a 10 -room residence o f
English design in Fairacres, Omaha west
ern suburban area. The K arpfs planned
to occupy their new home March 1st.

A secret jury o f five chose C. Louis
Meyer, manufacturer, as Omaha’s bestdressed man o f 1939, on the eve o f St.
Valentine’s day. Given honorable men
tion were W. B. Millard, Jr., vice presi
dent o f the Omaha National Bank, who
has won the crown twice b e fo re ; Law
rence Brinker, Walter B. Roberts, A. C.
Potter, Karl Herwig, Robert Ellick and
James Lowman, investment bankers.
Three ladies o f fashion, a young manabout-toAvn, and a tailor, composed the
jury. Three doctors made the list. Con
spicuous by their absence were the at
torneys, politicians, utility executives,
railroad men, packers and commission
men.
James P. Lee, vice president o f the
Omaha and Council Bluffs Street Railway
Company and form er Omaha banker, has
been elected a member o f His M ajesty’s
council o f Ak-Sar-Ben.

Mr. and Mrs. W . Dale Clark sojourned
recently in New York. They had planned
to go to Florida before returning, but
illness o f Mrs. Clark hastened their re
turn to Omaha. Mr. Clark is president o f
the Omaha National Bank. Mr. Clark
also attended a business advisory council
meeting in Washington.

Fifty Years
On March 1st the First National Bank
o f Elwood celebrated its fiftieth anni
versary. On March 1 , 1889, E. Shallenberger and associates incorporated the
State Bank o f Elwood. It carried its
state charter until May 1, 1904, when it
became a national institution. Four years
later the bank built a new building, the
one which it occupies at the present time.
G. E. Shallenberger, son o f the founder,
became associated with the bank in his
early years, and was named president in
1923, the year his father died. The First
National o f Elwood was one of the first
banks in Nebraska to open after the bank
holiday.

GOING TO THE N. Y. FAIR?

NUMBER o f consolidations are
being urged before the Nebraska
legislature. These include merging the
insurance department with the banking
department; the legislative reference
bureau, the legislative council and the
legislative clerk into one agency; aero
nautics commission with the railway com
mission; athletic division with the audi
tor, and state normal board with the
university regents.

The estate o f Charles Stuart, promi
nent Lincoln business men and financier,
is valued at $1,085,215.73 fo r inheritance
tax pirrposes in the report filed in county
court. The valuation was as o f May 2,
1938, the date o f Mr. Stuart’s death.
The Stuart holdings centered in Ante
lope, Boone, Holt, Madison, Platte and
Lancaster counties, with $1,052,845.73 in
Lancaster county.
Of this amount, nearly half— $513,449.64— was shares o f common capital

stock in the Stuart Investment company.
There were 5,742 shares valued at $89.42
each. The estate listed also 550 shares
o f common capital stock in the First
National Bank o f Lincoln, valued at
$71,500; 388 shares o f common capital
stock in the First Trust Company o f
Lincoln, valued at $49,470; 1,500 shares
o f common capital stock o f the Sidles
Company, valued at $135,000; and 162
shares o f the preferred stock o f the
Realty Syndicate, valued at $44,029.94.

D.
D. Muir, 85, pioneer Nebraska bank
er, died recently in Lincoln, after a long
illness.
Mr. Muir came to Lincoln in 1878 and
worked up to the position o f cashier of
the First National Bank. In the eighties
he left Lincoln to become president o f a
Denver bank, but didn’t stay there long,
returning to Lincoln to become president
o f the First National Bank.

Friendly
and
Constructive
Correspondent Service

( o n t in j ^t a l R a tio n a l

Nebraskan, former N. Y. resident, will
drive Nebr. party to W orld’s Fair for
transportation. Leave June 1. Address
3256 c/o Northwestern Banker, Des
Moines, Iowa.

E>a/

L IN C O L N
M em b er Federal D ep osit Insurance Corporation

N orth w estern Banker

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

March 1939

Ne br as ka News
Later he was a banker in W orcester,
Massachusetts, and Boston.
Legislative Bill 85, by the committee
on banking, commerce and insurance, to
eliminate the statutory double liability
against bank stockholders, has been ad
vanced to enrollment and review fo r re
view without opposition. Last fall the
people o f Nebraska repealed the consti
tutional liability. Some time ago na
tional bank stockholders were relieved
o f this burden. The bill provides that
repeal o f double liability shall become

finally effective September 1, 1940, on
deposits withdrawn before that date. It
does not interfere in any way with ex
isting claims or judgments based on
liability.

Lincoln bank clearings during January
were nearly $600,000 above January of
1938, but showed a $900,000 drop from
December totals. Clearings fo r January,
1939, totaled $11,119,521 as compared
with $10,589,515 in January o f 1938 and
$12,027,858 in December, 1938.

nn
Streamlined
Speed u p collections on you r live
stock item s to S iou x City by u s i n g
the

specialized

the

Live

service

Stock

available

N ational

B an k

at
in

OFFICERS
C. L. Fredricksen, President
M. A. W ilson, V ice President and Cashier
W . G. Nelson, Assistant Cashier
W . C. Schenk, Assistant Cashier
L. W . Ross, Assistant Cashier

S iou x City.
Our

fortu n ate

location

the

stock yards, p lu s ou r detailed k n ow l
edge

the

live

stock

business

assure you o f “ stream -lined service” .
Use the L ive Stock N ational B ank
fo r you r S iou x City business.

LIVE

N EB R A SK A INVESTMENT
N EW S
(Continued from page 41)
4 per cent interest. A little more than a
year and a half ago, they were sold by
P W A to the RFC.
Rev. George W . Taft, father o f Gordon
D. Taft, Omaha investment broker, died
recently at De Land, Florida. He was a
form er president o f Grand Island, Ne
braska, College and also once headed the
Northern Baptist Theological Seminary
in Chicago.
Edwin J. Hewitt, Federal Land Bank
o f Omaha accountant, has purchased an
Omaha residence which attracted na
tional attention when it was built because
o f its distinctive design and interior plan.
Charles McCumsey, president o f the
Omaha Federal Land Bank, was principal
speaker at the annual meeting o f the
First Federal Farm Loan Association at
Eagle Grove, Iowa, February 15th.
A crew recently started installing airconditioning equipment in the Farm
Credit building at Omaha. It is expected
that the job, on all 12 floors, will be com
pleted before the first hot weather.

D IR E C TO RS
C. R. McKenna, President, Johnson Biscuit Co.
B. L. Sifford, Attorney, Sifford & Wadden
G. F. Silknitter, Pres., S. C. Stock Yards Co.
C. L. Fredricksen, President
M. A. W ilson, V ice President and Cashier
H. C. Boswell, Secretary-Treasurer, Western
Contracting Corporation

STOCK

Clarence L. Landen, vice president and
general manager o f the Securities A c
ceptance Corporation, has been elected
president o f the board o f the Salvation
Arm y at Omaha.
The Laurel, Nebraska City Council re
cently authorized sale o f' $8,500 o f city
auditorium bonds to Wachob-Bendex
Company o f Omaha.
Fiftieth annual meeting o f stockhold
ers o f the Occidental Building and Loan
Association o f Omaha was held recently.
S. J. Weekes, president o f the O’Neill,
Nebraska, National Bank, was re-elected
a director.

NATI ONAL

BANK

Sioux C ity , Iowa
“ The Bank at the Yards*’
Member Federal Deposit Insurance Corporation

#
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Federal Reserve Bank of St. Louis

March 1939

An improvement in the mortgage bank
ing situation, particularly because o f in
creased farm mortgage activity and fed
eral housing administration loans on
homes, was predicted in Omaha by S. M.
W aters o f Minneapolis, president, and
George H. Patterson, Chicago, vice presi
dent o f the Mortgage Bankers’ Associa
tion o f America. They spoke at a dinner
in their honor at the Fontanelle Hotel,
sponsored by the Nebraska association.
C. W . Mead, o f Omaha, president o f the
Nebraska group, presided.

Ag Chairman
R. M. DePuy, vice president o f the
Northwest Security N a t i o n a l Bank,
Brookings, has been appointed chairman
o f the agricultural committee o f the South
Dakota Bankers Association.
Mr. DePuy’s appointment was made by
John N. Thompson, Centerville, president
o f the Association.

Remodeled
The Farmers State Bank, Flandreau,
has undergone a noticeable change. Metal
grills above the marble fronts o f the long
counter were removed, and in order to
give a more finished appearance to the
top, glass plates o f a dull gray color were
installed to constitute a shelf and some
measure o f protection to papers behind.
The altered condition gives a more modern
appearance to the institution.

Election
The stockholders o f First State Bank,
Buffalo, reelected their former directors.
The following will continue in their offices:
H. W . Clarkson, president; F. M. Clark
son, vice president; J. A. Clarkson, vice
president; Thomas L. Seppala, cashier,
and Matt R. Hann, assistant cashier.
Records o f the bank show an increase o f
about $50,000 in deposits over the pre
vious year.

Future Banking and
the Public

g o u

t k

Dakota
JOHN N. THOMSON
President
Centerville

NEWS

GEORGE M. STARRING
Secretary-Treasurer
Huron

Exchange Bank

Beresford

Arrangements have recently been com
pleted for Canistota to have an exchange
bank operated under the auspices o f the
McCook County National Bank o f Salem.
W ard Clark will be in charge o f the
exchange which will be located in the
old National Bank building.

At the annual meeting o f the stock
holders and officers of the First National
Bank, Beresford, J. J. DeLay o f Norfolk,
Nebraska, was reelected president; A. R.
Olsen, vice president; T. A. Peterson,
cashier; Sophia Muhlenkort, assistant
cashier. Reports showed a healthy in
crease in business and in profits.

Final Dividend
A fifth and final dividend o f 4.75 per
cent amounting to $3,246.98 is being paid
to creditors o f the closed Fedora State
Bank, the South Dakota Banking Depart
ment has announced. The bank was closed
October 19, 193], and prior to the final
payment disbursed dividends totaling $17,795.60.

Named Director
Stockholders o f the Liberty National
Farm Loan Association o f Dixon, South
Dakota, elected E. O. Blessing o f Dallas
and Thomas Petry o f Dallas to serve on
the board o f directors fo r the ensuing
year. Edward H. Bohlander is president
and J. S. Lunn is secretary-treasurer with
offices at Winner. The board also includes
Arthur J. Sinclair and Anders Anderson.

Pioneer Dies

(Continued from page 16)
responsibility to the public as far as ren
dering service is concerned. Second, if
the American banking system is to func
tion in the best interest o f the American
people all of the time, then they (the
American people) must be made to see
that they have a responsibility to their
banks; and that at the present time one
o f their responsibilities is to come to the
rescue o f the banks before the conniving
and scheming politicians get absolute con
trol o f the National banking system.
Should the unscrupulous or the ignorant
politician get control o f the great reser
voirs o f money now on deposit in all the
banks, it would not be long before the
temptation to use it fo r political purposes
would be too great fo r them to withstand.
Already we have had some demonstration
o f this very thing.

Funeral services were held recently in
Belle Fourche fo r Dave R. Evans, 76,
prominent Mason, business man, banker,
legislator and honorary life chairman o f
the Black Hills roundup, who died at his
home after a long illness. Mr. Evans
came to the Black Hills, locating in Minnesela, now a ghost town, in 1884. He
later located in Belle Fourche.

Madison
Directors o f the Security Bank &
Trust, Madison, have advanced A. D.
Parker from vice president to president.
He succeeds the recently resigned Carl A.
Stensland.
James A. Robson is vice
president; E. J. Dirksen, cashier; Frank
H. Elbert and George L. Scully, assistant
cashiers. Other members o f the board
include Oscar A. Olson and John Ingebretson, o f Kenneth, Minnesota.

Armour
The stockholders o f the First National
Bank in Armour held its semiannual
stockholders meeting.
The following officers were elected for
the year 1939: Henry Zeier, president;
J. J. Walter, vice president; Chas. Krug,
chairman o f the board o f directors; C.
L. Breckenridge, cashier, and Clara
Foran, assistant cashier. The board o f
directors are Chas. Krug, Henry Zeier,
George Zeier, J. J. Walter and C. L.
Breckenridge.

Custer
At the annual meeting of the stockhold
ers o f the Custer County Bank, Custer, the
board o f directors, consisting o f T. W.
Delicate, C. E. Perrin, M. A. Willis, A. J.
Jones and S. E. Ainslie was reelected for
the ensuing year.
Following the meeting o f stockholders

UNITED STATES C H EC K B O O K C O M P A N Y
OMAHA,

•

B A NK E R S

NEBRASKA

S U P P L I E S

•

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Federal Reserve Bank of St. Louis

March 1939

Sout h Dakot a Ne ws
the directors held their first meeting of the
year and chose the following officers: T.
W . Delicate, president ; A. J. Jones, vice
president; C. E. Perrin, cashier; and R.
E. Scheinhost, assistant cashier.

Iroquois
The stockholders o f the Farmers and
Merchants Bank, Iroquois, held their an
nual meeting recently and heard a report
on the year’s business given by L. A.
Hollenbeck.
The following directors were reelected
fo r the coming year: Peter H. Schultz,

H. C. Strub, G. F. Ulrich, J. L. Fisher,
F. B. Lynch, L. A. Hollenbeck, M. G.
Hollenbeck.
A fter the stockholders’ meeting, the
board o f directors met and reelected the
old officers: Peter H. Schultz, president;
H. C. Strub, first vice president; G. F.
Ulrich, second vice president ; L. A. H ol
lenbeck, cashier; H. D. Harrington, as
sistant cashier; Mrs. L. A. Hollenbeck,
bookkeeper.

elected president o f the Lake Norden First
National Bank and Trust Company to suc
ceed Joe Salo who disposed of his inter
ests in the institution. Other officers
elected include Olga B. Spencer and S. F.
Spencer, vice presidents; L. A. Lohr,
cashier; and Martin Hanson, assistant
cashier.
A change iir the controlling interests
was affected as Joe Salo and Arnold Gerberding sold their interests to Lohr and
Dr. Spencer.

Lake Norden
Dr. L. S. Spencer o f Watertown was

SAVINGS

TRUSTS

What is the difference . . .
What is the difference between one bank and

Rapid City
R. E. Driscoll was elected president o f
the First National Bank o f the Black
Hills at an annual meeting o f stockholders
o f the institution in its Rapid City office.
Driscoll was elected to head the institu
tion, which has seven offices, by a board
o f directors o f 17 members headed by
George Y. Avi'es, Deadwood, as chairman.
Following the election o f directors, the
hoard met and chose, in addition to Dris
coll as president, the following for the
Rapid City office:
C. C. Anderson, executive vice presi
dent; W . H. Johnson, vice president ; Noel
W . Klar, cashier; Warner M. Brown,
H. R. Browning, James T. Noble and H.
R. Horlocker, assistant cashiers, and
Maude C. Nelson, assistant cashier and
auditor.

another? Perhaps it is mainly a difference of
More New Homes
atmosphere. At the American National you will
find the atmosphere definitely friendly. That is
why officers of our correspondent banks always
come in and see us when they are in Chicago.

AMERICAN NATIONAL
B A N K A N D TRUS T
COMPANY

Increase o f the limit o f mortgages that
can be insured by F H A from two billion
to thi’ee billion dollars was cited in Omaha
as a boon to Nebraska new home saYs
prospects fo r coming months.
Frank S. Selbv, vice president o f the
National company, which has been mak
ing F H A loans at 5 per cent fo r many
months, said extension o f the limit would
help many Nebraskans become home own
ers. The public is beginning to realize
advantages o f the loans and will continue
the fast-groAving volume o f applications,
Selby belie\Tes.
Prospecti\Te home owners are forgetting
bugaboos about red tape connected Avith
the loans, Selby said, and have come to
understand that the process is simple—
the lending institution making the loan
in the usual manner, with F H A as a guar
antor. Lending institutions, he said, are
doing meritorious service in handling
F H A details fo r home applicants.

0 ^ C A Z ccu^C r

Director
LA

S A L L E

S T R E E T

W A S H I N G T O N

MEMBER FEDERAL DEPOSIT INSURANCE CORPORATION
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Federal Reserve Bank of St. Louis

March 1939

P. Blair Lee, president of the Western
Saving Fund Society o f Philadelphia, has
been elected a director o f the Philadel
phia National Bank.

H. S. Cole Dies
Colonel Haydn S. Cole, age 77, presi
dent o f the First National Bank o f Hast
ings since he was first elected in 1914 and
previous to that a director o f the bank,
died recently in St. Paul from a heart
ailment. He had been in ill health about
10 days.

ITHnnesota
NEWS

Quarterly Meeting
Sixty bankers from Winona, Filmore
and Houston counties attended the South
eastern Minnesota Clearing House Asso
ciation quarterly meeting at Chatfield re
cently.
Joseph Underleak, president o f the
First Nat’onal Bank at Chatfield, who will
be 85 years old March 13th, was the prin
cipal speaker, giving an interesting talk
on early conditions in Winona, Chatfield
and this territory. He came to Albeid Lea
in 1854, and to Chatfield in 1856.

45th Birthday
The State Bank o f Brooten recently
observed its 45th anniversary.
John
Bohmer, the president, went to Brooten
in 1894 and opened the banking house on
February 23rd of that year. He later built
a structure which has housed the bank
ever since. Serving with Mr. Bohmer as
president are W . J. Bohmer, vice presi
dent; H. 0 . Imsdahl, cashier; Edwin
Sandvig, assistant cashier; and El wood
Nelson.

More Savings
Rounding out 14 years in business in
St. Paul in 1938, the Northern Federal
Savings and Loan Association has entered
1939 with a record o f more savings in
January than in any month in the institu
tion’s history, according to Angus J.
Cameron, president o f the organization.
It was also reported that the associa
tion’s resources now exceed one-half mil
lion dollars and reserves total more than
$11,300.

Final Dividend
A report comes in from Arthur T.
Scriver, president o f the First National
Bank in Cannon Falls, that the trustees
o f the old Citizens State Bank o f Can
non Falls have paid out their final divi
dend, thereby paying out the trust 100
per cent. Since the “ bank holiday” the
First National has worked with the three
trustees making every effort toward this
accomplishment. The First National and
the trustees are receiving many congratu
lations from the depositors and the people
o f their community. The trustees besides
Mr. Scriver are Samuel K raft, pioneer
merchant in Cannon Falls, and Alfred
G. Johnson, one o f the able farmers in
the Spring Garden community.
The First National Bank had a very

FRANK P. POWERS
President
Mora

satisfactory year and is now glad to be
able to put their undivided attention on
the real .job o f banking. Loans have in
creased during the past year some $35,000.
Farmers are still optimistic, hoping for
better dairy and grain prices before
spiing.
At the annual meeting o f the First Na
tional the following officers and directors
were reelected: Arthur T. Scriver, presi
dent; Albert Scriver, vice pres’dent; Algot W . Swanson, cashier; E. L. Peters,
assistant cashier; and Hiram T. Scriver,
director.

W ILLIAM DUNOAN, Jr.
Secretary
Minneapolis

ensuing year, C. H. Bade, president; A.
B. Babcock, vice president; M. C. Teseh,
cashier; George Nelson, assistant cashier,
and Evelyn Kilmartin, bookkeeper and
teller. Additional directors reelected are
E. P. Babcock and Theodore Albrecht.

Caledonia

Mr. Carl Erdahl, who has fo r the past
25 years been assistant cashier o f the
State Bank o f Frost, was the honored
guest at a banquet given by his associates
at the Folken Cafe, in Frost, early last
month.

The annual meeting o f the officers and
stockholders o f the Caledonia State Bank
was held recently.
Officers reelected are as follows: O. E.
Burtness, president; N. C. Koel, vice
president; A. M. Eiken, cashier; W ilfred
T. Schlitz, assistant cashier. Directors:
Emil Gensmer, J. A. Roerkohl, J. P.
Schummers, Chas. A. Dorival, A. M.
Eiken, O. E. Burtness, N. C. Koel and
L. L. Duxbury.
Officers o f the bank report that busi
ness during the past year met all ex
pectations.

Annual Meeting

Waterville

Honored Guest

All o f the 22 directors o f the Fii-st
Bank Stock Corporation were reelected at
the eleventh annual meeting o f its stock
holders he’ d in Minneapolis. Clive T. Jaffrav, president, analyzed the 1938 report
o f the bank group and cited factors evi
dencing improved conditions and earning
power o f the affiliated institutions and
forecasting still further gains this year.
At the annual meeting o f directors, fo l
lowing the stockholders’ session, the board
declared a semiannual dividend of 25 cents
a share, payable April 1st to stockholders
o f record March 15th. This maintains the
dividend rate o f 50 cents a year, in effect
with First Bank stock for about two years.

Reelected
M. P. Miller was rechosen president o f
the Ellendale State Bank at its annual
meeting.

Elk River
The annual meeting o f the stockholders
o f the Bank o f Elk River was held re
cently at the bank.
All the officers were reelected fo r the

The annual meeting o f the stockholders
o f the First National Bank o f Waterville
was held recently. At this meeting E.
Robson was elected pi’esident to succeed
the late Geo. E. Greene. Mr. Robson has
been connected with the bank for the past
30 years, serving as assistant cashier and
cashier.
Emil Gregor was reelected as vice presi
dent.
Fred A. Drews, who has been assistant
cashier fo r a number o f years, was ad
vanced to cashier, and Janice Terrell and
Edgar Eggers wei*e made assistant cash
iers.

Truman
The annual meeting o f the Blue Earth
Valiev National Bank took place at the
banking offices in Winnebago.
The following directors were elected for
the ensuing y ea r: G. H. Andrews, I. A.
Babcock, H. S. Muir, G. M. Seaberg, and
Willis Sonnicksen.
The directors held a meeting- imme
diately following the election and ap
pointed the following officers: H. S.
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March 1939

Minnesota
Muir, president ; G. S. Seaberg, executive
vice president; Willis Sonnicksen, vice
president; I. A. Babcock, cashier.

News

Banker Dies
W . E. Landeene, 70, secretary-manager
o f the Alexandria Federal Savings and
Loan Association, died recently. He was
a prominent banker at Elbow Lake fo r
40 years, and was a Knight Templar and
member o f the Masonic Shrine. Surviv
ing are his widow, four sons and two
daughters.

President
Leon J. Kaliher, former president o f
the Union State Bank in Thief River
Falls and who left early last year to as
sume the post o f vice president o f the
First National Bank at Red W ing, was
named president o f the institution by the
board of directors at its annual meeting
held recently.

Heron Lake
Present directors and officers o f the
First National Bank o f Heron Lake were
reelected fo r another year.

The “ Northwestern’s” complete facilities
include the services o f a Bond Department
especially equipped to assist correspondent

The directors are W . H. Jarmuth, Ern
est Winzer, Wm. J. Mathias, O. H. Bondhus and J. O. Bondhus. J. 0 . Bondhus
is president and Merrill 0 . Nelson is as
sistant cashier. Edwin Maus is bookographer.
keeper and Miss Esther Nerge is sten-

Mora
The annual meeting o f the stockholders
o f the Kanabec State Bank was held with
a large majority o f the stockholders in
attendance.
The usual nineteenth consecutive divi
dend was declared.
The following directors and officers
were elected fo r the ensuing year: Frank
P. Powers, president; K . E. Mcllhargey,
vice president; R. P. Campbell, cashier;
H. R. Ness, assistant cashier.
The stockholders o f the State Bank o f
Mora met in annual session also. All
officers were reelected, as follow s: C. H.
Sommers, president; C. E. Williams, vice
president; Chas. T. Peterson, cashier;
Wendell Johnson and Mabel Nelson, as
sistant cashiers.

banks in handling investment problems.

Le Sueur
This

Bond

Department buys and sells

United States Government, M unicipal and
State bonds, and executes orders for the
purchase and sale o f other securities.

★

Pipestone

Service to Bankers Since 1872

★

Department of Banks and Bankers
W m. N. Johnson
V ice President

F. W . Conrad
Asst. Cashier

D. E. Crouley
Asst. Cashier

Recently the directors o f the State
Bank o f Le Sueur held their regular an
nual meeting, at which time the organiza
tion was formed fo r another year. The
following were elected as officers in the
bank : L. E. Felton, chairman o f the board
and vice president ; J. T. Peterson, presi
dent, and H. J. Grant, cashier; Misses
Hedvig Dahl and Evelyn Nelson, assist
ant cashiers, and Misses Louise Funk and
Kathleen Trainor, bookkeepers and tellers.

L. P. Gisvold
Asst. Cashier

A ll officers and directors were reelected
when Pipestone’s two banks, the Pipe
stone National Bank and the First Na
tional Bank held their annual meetings.
Both banks had their annual stockhold
ers’ meetings fo r the purpose o f electing
directors, and a meeting o f the directors
fo r each bank was held following the
stockholders’ meetings.

On Federal Board

NORTHWESTERN NATIONAL BANK
AND TRUST COMPANY
Marquette Avenue: 6th to 7th Street
Minneapolis, Minnesota

Member Federal Deposit Insurance Corporation

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Federal Reserve Bank of St. Louis

March 1939

Walter W . Smith, president, First Na
tional Bank in St. Louis, has been re
elected president o f the advisory council
to the Board o f Governors, Federal Re
serve System. He was first elected presi
dent o f the council in 1931, and has been
reelected annually.
Membership o f the council consists o f
twelve o f the country’s leading bankers,
one being elected from each o f the Federal
Reserve districts.

E. JOHNSON, vice president o f
. Empire National Bank and Trust
Company, St. Paul, has been elected
president o f the St. Paul Athletic Club.

In the death o f William P. Kenney,
president o f the Great Northern Railroad,
First National Bank o f St. Paul lost a
director.
William S. Given, who recently re
signed as vice president o f the First Na
tional Bank o f Aberdeen, South Dakota,
has joined the staff o f Northwest Bancorporation, with which the Aberdeen
bank is affiliated. He will serve as field
representative and examiner, with head
quarters in Minneapolis. Mr. Given had
been in the banking business in South
Dakota fo r 30 years.
Arthur C. Danenbaum, 64, vice presi
dent and real estate officer o f First Min
neapolis Company, affiliated with First
National Bank and Trust Company, died
last month. He organized the real estate
department fo r the old Minneapolis
Trust Company in 1904 and had been
with this firm and the First Minneapolis
Company ever since. The widow and two
sisters survive.
Minnesota’s law permitting the state
to take over inactive bank balances when
20 years old or more, has been ruled in
valid as far as national banks are con
cerned. The ruling was given by District
Judge Carlton McNally in Ramsey coun
ty (St. Paul).
E. C. Kibbee was elected to the board
o f directors o f W oodard-Elwood and
Company, Minneapolis, at the annual
meeting.
Lester Bigelow, active in Twin City

JAMES M. SUTHERLAND
Special Correspondent

investment banking circles for 19 years,
now is associated with Thrall W est Com
pany, Minneapolis. He helped organize
BigeloAv W ebb and Company seven years
ago. In 1930 he was chairman o f the
Minnesota group, Investment Bankers
Association, and in 1936 was president
o f the Twin City Bond Club.
Directors o f First Bank Stock Corpora
tion declared a dividend o f 25 cents per
share at the eleventh annual meeting o f
stockholders and directors in Minne
apolis.
The dividend is payable April 1st to
stockholders o f record March 15th. It
continues the dividend rate in effect fo r
some time.
A ll 22 directors were re-elected by
stockholders, and they in turn re-elected
all present officers.
Charles Z. Meyer, comptroller o f First
National Bank o f Chicago and second
vice president o f the National Associa
tion o f Bank Auditors and Comptrollers,
discussed, “ Safeguarding the Bank and
the Customer” at a meeting o f the Twin
City chapter in Minneapolis.
Colonel Haydn Cole, 77, president o f
the Northwestern Trust Company o f St.
Paul until its consolidation in 1914 with
the First Trust Company, died in St. Paul
recently.
The W agner bill fo r creation o f a bil
lion-dollar mortgage discount bank was
attacked by George H. Patterson, secre
tary o f the Mortgage Bankers Associa
tion o f America, in an address before
the St. Paul and Minneapolis Mortgage

Bankers Association in St. Paul. He
charged such an institution would hold
the weapons fo r causing inflated real
estate values but would make the federal
government the principal loser if these
values collapsed.
Washington’s birthday found group
one o f the Wisconsin Bankers Associa
tion in its annual Twin City meeting—
this year in St. Paul. Attendance ap
proximated 400, including a number o f
bankers from midwestern states who
came a day early to sit in on the group
one sessions.
The traditional pre-convention smoker
and buffet supper, February 21st, found
bankers chatting, relaxing and singing.
Program was staged by the St. Paul
Clearinghouse Association, under per
sonal direction o f W . L. Boss o f First
National and Guy A. Dailey o f American
National Bank.
John G Maclean, cashier o f First Na
tional Bank and Trust Company, Minne
apolis, has been elected president o f the
Minneapolis Athletic Club.
M. O. Grangaard, vice president o f
First National Bank and Trust Company,
Minneapolis, has just returned from a
business trip to the west coast.

A . I. B. N EW S FROM
M IN N ESO TA
Duluth
Thirty students are taking the bank
organization and operation class under
the direction o f John L. Evans, director
o f education o f the Duluth chapter.
Last month members o f the Duluth
chapter, A. I. B., were entertained at a
movie party in the chapter club rooms
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March 1939

M i n n e s o t a
in the First and American National
Bank. Earle Andree, president o f the
Duluth chapter, showed pictures taken
at the 1938 A. I. B. convention at Louis
ville, Kentucky. These pictures being in
colors depicted the beauty o f the south
and were very interesting to all the
members, and especially to those Avho
attended the convention, bringing back
to them in memory the enjoyable time
spent in Louisville.
Rose C. Moritz, chairman o f the pub
licity committee, and Mr. Andree also
presented movies taken at various winter
outings o f the local chapter.
Marie
Cranmer, chairman o f the publication
committee, was hostess at this party.
A fter the movies doxiglinuts and coffee
were served, and all the “ Movie-FanDonut-Dunking Members” had a pleasant
time.
Inez M. Campbell, chairman o f the
entertainment committee, assisted by
the members o f the committee enter
tained the chapter members at a winter
outing which was held at the Northland
Country Club on February 22nd. The
outdoor sports began at two o’clock p. m.,
which included skiing, tobogganing,
snow-shoeing and skating. Rose C. Mor
itz, and Earle Andree took moving pic
tures o f the colorful scenes at the Coun

N e w s

try Club. W ith the hills o f white fluffy
snow, the many hued winter outfits worn
by the girls, and the action o f the
members enjoying the various sports,
beautiful pictures were obtained.
A fter dusk a delicious buffet supper
was served at the club, which was fo l
lowed by dancing fo r the remainder of
the evening. About one hundred mem
bers attended and all enjoyed the party
to the fullest extent.
Rose Moritz, Publicity Chairman.

Minneapolis
On February 16th Wm. R. Chapman,
president o f Minneapolis chapter, flew
to Chicago to attend the annual banquet
o f the institute chapter in that city. He
reports that it was a fine meeting and
that he enjoyed the opportunity to visit
with the many institute people in
Chicago.
Eight members o f Minneapolis chapter
recently appeared on the radio broadcast
which is sponsored weekly by Mark
Qnestion o f the Minneapolis Journal.
This broadcast takes the form o f a
“ question and answer” program Avith
prizes to the contestants who answer
successfully the most questions. A t the
completion o f the regular run o f ques

tio n s

th re e

Avith

had

51
a ir
to

m is s e d
q u e s tio n s

th e

p e r fe c t

and

w ere

th ree

tie d

o th e rs

q u e s tio n .

th e

A v h ich Avere a s k e d

over

th e

o n ly

th e m

b a n k in g

c o n te sta n ts

score
one

Avere d i r e c t l y

s u b je c ts ;

th e

p e r ta in in g

r e m a in in g

Avere q u e s t i o n s o n g e n e r a l neAvs i n f o r m a
tio n .

On February 14th Minneapolis chap
ter held a Valentine Dance at the Hotel
Radisson’s Flame Room and in spite o f
the beloAv-zero weather there Avere ap
proximately 250 attended the dance.

The debate section o f the chapter has
been active again this year, having al
ready held three debates, one Avith
Kansas City lost, and one each with
Omaha and Milwaukee Avon. There is
remaining a debate Avith Chicago on
March 4th and one Avith St. Paul on
March 10th.
A. W. Johnson, chairman o f the forum
committee and first vice president o f the
chapter, has announced that the next
forum meeting o f Minneapolis chapter
Avill be held on Wednesday, March 15th.
At this meeting Dr. Herbert Fleaton,
president o f economic history at the
University o f Minnesota, will speak on
the topic “ The Traveling Umbrella.”
His talk Avill relate, o f course, to the
famous umbrella o f NeAnlle Chamberlain
and the results o f its famous journeys

On February 22nd the public affairs
committee under the direction o f Mary
Cunningham, the chapter treasurer, spon
sored tAvo different industrial tours. T avo
sections went through the Munsingwear
Company plant and tAvo sections visited
the LeArin Brothers furniture factory.

The membership o f Minneapolis chap
ter has gained someAvhat this year but
the enrollment has fallen beloAV the
standard set in the past feAV years.
R. C. Rutherford,
Executive Secretary.

To Storm Lake
H. S. Noonan and W alter Bush, na
tional bank examiners, are moving their
headquarters from Sioux City to Storm
Lake. The U. S. banking department has
leased office space fo r them in the W . F.
Park building.
The headquarters fo r these tAvo special
government men has been in Sioux City
in the past, but it has been decided that
the Storm Lake offices will be a better
location fo r them in this territory.
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Federal Reserve Bank of St. Louis

March 1939

Brief News
M. Gr. Elliott has been elected director
o f the Farmers & Merchants State Bank
o f Berlin to succeed John Southall, who
recently passed away. E. R. Shockman
has been elected as vice president to
succeed John Southall.
E. L. Easton has been elected as direc
tor and vice president o f the Farmers
State Bank o f Crosby to succeed C. M.
Hanson, who has resigned.
Tena Hill has been elected as director
o f the Farmers State Bank o f Erie to
succeed Duncan M. Bissett, who has re
signed.
A. O. Lona has been elected as director
o f the Citizens State Bank o f New Eng
land to succeed Henry Melaas. A. 0.
Lona has been elected as cashier and
J. F. McEntee, form er cashier and vice
president, has been elected as president.
John C. Chambers, form er teller and
bookkeeper, has been elected as assistant
cashier to succeed A. 0 . Lona.
John M. Hein has been elected as vice
president o f the Security State Bank
o f New Salem to succeed C. W . W iegman, who has resigned.
P. M. Shefveland has been elected as
vice president o f the Peoples State Bank
o f Parshall to succeed W . N. Harris, who
has resigned. E. 0 . Lerberg has been
elected a director to succeed W . N.
Harris, Avho has resigned.
Bank of Scranton, Scanton, North
Dakota, was closed by its board o f direc
tors as o f the close o f business January
16, 1939.
The First State Bank o f Buxton as
sumed the deposit liability o f the State
Bank o f Reynolds as o f the close o f
business January 28, 1939, and the Rey
nolds bank went into voluntary liquida
tion as o f that date.
The First International Bank o f Landa
was closed by its board o f directors as o f
the close o f busines February 1, 1939.
The First State Bank o f Harvey as
sumed the deposit liability o f the State
Bank o f Heimdal as o f the close o f busi
ness on February 11, 1939, and the Heim
dal bank went into voluntary liquida
tion as o f that date.

Buys Building
W ith the approval o f the district court,
title to the bank building at the corner
o f Fourth and DeMers passes to the
First National Bank in Grand Forks,
which now occupies the premises as
banking headquarters.

The price paid fo r the property is
$215,800, which is the amount o f the
bid made by the bank some time ago.

Titus Dies
Moses Starr Titus o f Minto, North
Dakota, a long time resident o f Walsh
county, died recently in Grand Forks.
He was 80 years old and had been in
failing health fo r some time.
Mr. Titus was born at Shakopee, Min
nesota, October 22 , 1858. He came to
Grand Forks in the early 80’s and was
fo r a time associated with his brother,
the late S. S. Titus, in the original First
National Bank.
In 1885 he moved to Minto, where he
and associates took over the Bank o f
Forest River, which has since been oper
ated continuously as the Bank o f Minto.

banks relected all officers at their annual
meetings.
Officers o f the First National Bank in
clude H. E. Baird, president; R. C. Collinson, cashier; Wendell Haley, assist
ant cashier; and E. J. Baird, Edna Haley,
Wendell Haley, H. E. Baird and R. C.
Collinson, directors.
Officers o f the Ramsey County National
Bank are Blanding Fisher, president; S.
K. Fisher, vice president; A. W . Omdahl, cashier; C. L. Hodgson, W . G.
Elmslie and F. C. Hoghaug, assistant
cashiers; and Blanding Fisher, T. A.
Haslam, S. K. Fisher, Clyde Duffy and
A. W. Omdahl, directors.

Grand Forks

Dr. R. D. Campbell was named chair
man o f the board o f the First National
Bank, Grand Forks, and Fred R. Orth
Budget
was advanced from vice president to
Frank Vogel, manager o f the Bank o f
president by the directors, all o f whom
North Dakota, met with the industrial
were retained at the stockholders’ meet
commission to submit a proposed budget
ing.
fo r the bank at the request o f the com
Other officers elected are M. W . Mur
mission in compliance with the “ jackpot”
ray, vice president; Carther Jackson,
law.
cashier and trust officer; Harold S. Pond,
The budget asks $246,632 fo r the oper
Martin Lystad, Oscar Norby and A. M.
ation o f the bank, $12,500 less than was
Lommen, assistant cashiers.
spent in the 1937-39 biennium, and $343,All officers and directors o f the Red
316 fo r the land collection department,
River National were renamed. They are
the same as the present biennial figure.
Bjerken, president; F. C. Gustafson, vice
president; D .W. Westbee, cashier; A. M.
Bismarck
Spence, assistant cashier. Directors are
F.
B. Heath, was reelected president Bjerken, Gustafsson, O. B. Burtness, E.
F. Chandler, Henry Holt, J. E. MacLean,
o f the Dakota National Bank and Trust
Company, Bismarck, and all other officers J. H. Ruettell, John L. Ryan and Don
E. Whitman.
were returned at the annual meeting of
the board o f directors follow ing the
yearly stockholders’ meeting.
Other officers renamed were J. P. W ag Williston
ner, vice president; A. A. Mayer, cashier;
Confidence that the coming months will
H. E. Baker, assistant cashier, and J. R.
see better times fo r this section was
Thomas, teller.
voiced by stockholders o f the First and
Directors reelected fo r another year
Commercial National Bank, W illiston, at
were Heath, A. M. Brandt, F. M. Davis,
their annual meeting.
J. E. Davis, J. C. Oberg, Theodore QuanA ll form er directors and officers were
rud, Louis Rubin, J. C. Tavlor and R. B.
reelected as follow s: J. Arthur Cun
Webb.
ningham, president; A. F. W indel and
Wm. E. Monroe, vice presidents; C. E.
Devils Lake
Cunningham, cashier, and G. R. RasmusStockholders o f Devils Lake’s two
son, assistant cashier.
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56
The Commercial National Bank stock
holders also reelected their directors and
the directors reelected the officers. All
the stock o f the bank was represented at
the meeting.

T fto n ta n a NEWS

IN W A S H IN G T O N
(Continued from page 33)

Lewiston

rocal taxes on federal, state and munici
pal securities, is being handled separately.
Organized state opposition to the secu
rities tax has led some observers to be
lieve that its chances o f becoming law this
session are very limited but the adminis
tration is determined to fight to end the
exemptions.
R oy Blough, treasury tax research di
G reat Falls
rector, in rebuttal to arguments against
All officers and directors o f Great Falls’
the proposal, told the special Senate com
three banks were reelected at the annual mittee studying the program that the tax
meetings o f the institutions and two new exemption enjoyed by holders o f public
directors were added to the personnel of
securities causes increased burdens on
the Montana Bank & Trust Company.
lower income groups.
The new directors elected by the Mon
“ The net addition in taxes that must
tana Bank & Trust Company were J.
be raised falls mostly on the smaller in
George Graham o f Great Falls and F. C.
come groups since it has proved necessary
Barribal, vice president and cashier of
to use excise taxes and other consumption
the Citizens State Bank o f Choteau.
taxes to supplement the progressive levies
Officers who were reelected by the Mon imposed by federal and state govern
tana Bank a re: Howard H. Stanley, pres ments,” Blough pointed out.
ident; C. J. Thronson, vice president; L.
He said that some people to whom pub
R. Fousek, cashier, and George 0 . Hus lic securities are otherwise a highly de
ton, assistant cashier. Members o f the sirable form o f investment do not buy
board o f directors in addition to Graham
them because o f low yields.
and Banribal are Stanley, chairman; Ray
Appearing before the committee in op
F. Duggan, Fred L. Woehner, Thronson
position to the tax, Mayor LaGuardia o f
and Fousek.
New York urged simplification o f the
Reelected officers o f the Great Falls nation’s tax structure. He asked Con
National Bank include Lee M. Ford, pres gress to give serious thought to the “ neces
ident; D. J. Dundas, vice president; R. R.
sity o f reducing the number o f tax col
Williams, cashier, and F. E. Bower and lecting agencies and eliminating duplica
L. J. Robin, assistant cashiers. Members tion in taxes.”
o f the board are I. W . Church, chairman;
Mr. LaGuardia said the proposal would
L. E. Taylor, F. J. Gies, Fred Birch, Ford,
not produce the revenue anticipated and
Dundas and Williams.
would create a great deal o f damage. He
A t the First National Bank, those re said that New York City is preparing for
elected were E. 0 . Jenkins, president;
a big bond issue, and such a tax “ will hit
E. F. Galt, vice president; L. F. Curry,
us right between the eyes.”
cashier; A. R. Moore and George L. StraiHarley L. Lutz, Princeton University
ton, assistant cashiers. Members o f the professor o f public finance, said that the
board are Sam Stephenson, chairman;
tax would cost more than it would bring
A. E. W iggin, John E. Dawson, I. B.
in. He estimated that federal taxation o f
Armstrong, W . H. Hoover, Jenkins and
state and local securities would cost states
Galt.
and municipalities at least $113,000,000
annually in increased costs and that the
federal revenue would average only $95,-

Following the annual shareholders’
meeting of the National Bank o f Lewis
ton, the newly-elected board o f directors
proceeded to rename A. W . Johnson,
president; Harry E. Lay, vice president,
and R. S. Baker, cashier, fo r another
term.
A t the shareholders’ meeting, President
Johnson presented a report reflecting con
tinued sound and progressive banking.
Following this, the bank directors were
elected as follow s: Harry E. Lay, Cas
sius C. Williamson, E. 0 . Jenkins, A. W .
Johnson, and R. S. Baker.

Brooke Hartman was elected a director
and a vice president o f the Gallatin Trust
and Savings Bank as the only change
made in the directorates and officials of
the three Bozeman banks in their annual
stockholders’ and subsequent directors’
meetings.
A t the Security Bank and Trust Com
pany meeting all directors and officers
were reelected. The officers are A. G.
Berthot, president; E. J. Parkin, vice
president; J. D. Street, cashier, and H. C.
Gossack, assistant cashier.

AXEL NELSON
President
Sidney

Dies in Miles City
Found dead in his room at a Miles City
hotel, Elroy Herman Westbrook, 51, pres
ident of the Midland National Bank, Bil
lings, is believed to have died from a heart
attack. He was found by Louis Hall, a
teller at the Midland bank with whom he
had gone on a business trip.
Mr. Westbrook left Billings apparently
in good health. He had been at the bank
regularly and had made no remarks to
anyone to indicate that his health was any
thing but normal, associates said.

Whitefish
C. H. Jennings was reelected president
o f the First National Bank o f Whitefish
at the annual meeting. Other officers re
elected include L. J. Sissel, vice president ;
P. C. Lilly, second vice president and
cashier, and L. C. Larson, assistant cash
ier. Attorney Rock D. Frederick is a
member o f the board o f directors along
with the above officers.

Stocks Sold
Fred L. Woehner, executor o f the estate
o f Fred A. Woehner, has filed a report
and petition in district court asking ap
proval o f the sale o f 150 shares o f the
capital stock o f the Sunburst State Bank
in Shelby for $32,250. Purchasers were
Nat Taylor, Louis B. O’Neill and J. Hugo
Aronson.

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March 1939

Bozeman

000 ,000 .

Trust Indentures
Hearings have been held but at this
writing no report made by the committee
on Senator Barkley’s bill providing regu
lation o f trust indentures. The bill p ro
vides fo r approval o f the indenture by
the Securities and Exchange Commission
and prohibits the use o f the mails or in
terstate commerce in the sale o f securities
unless an application fo r qualification o f
the indenture is effective.

I O W A NEWS
B y J. A. SARAZEN
Associate Editor
The Farmers and Merchants Savings
Bank, Burlington, formed a corporation
last fall and purchased the office build
ing in which it has made its home fo r the
last five years. Statement o f December 31st
shows the bank building is being carried
at $60,500, furniture and fixtures at $10,000. H. E. Simon, cashier, reports an
increase in deposits during the past year
o f over $250,000 and now total $2,400,000 .
Banks at Keokuk have paid 1 per cent
on deposits since July, 1937.
R>. J. McCleary, vice president, Se
curity State Bank, Keokuk, is to be com
plimented on the Avay his bank is reduc
ing the preferred stock. Original pre
ferred was $50,000 and this has been re
duced to $26,000.
Common stock is
$74,000. Deposits have increased $120 ,000 here in the last 12 months.
Checking deposits at the Danville
State Bank are $129,000, time deposits
are $90,000. Two and one-half per cent
interest is being paid. Stockholders re
ceived a 4 per cent dividend last year
and surplus was increased $ 2 ,000 .
The Henry County Savings Bank, Mt.
Pleasant, had a nice increase in deposits
in 1938 o f $170,000 and loans and dis
counts are up $100,000. Total deposits
are $1,350,000. Two per cent is paid
savings and six month certificate deposits
and 2A/2 per cent on 12 month certificate
deposits.
The last call o f the National Bank o f
Burlington lists deposits o f over $2,000,000 and United States Government se
curities o f $944,000.
C. E. Kindwall, cashier, Albert City
Savings Bank, reports a good year for
his bank. Total corn loans made total
over $100,000. Deposits are $400,000.
The Graettinger State Bank has mod
ernized the tellers’ cages and added one
new wicket.
The Avoca State Bank joined the Fed
eral Reserve System last August. De
posite here are $540,000.

FRANK W ARNER
Secretary
Des Moines

E. A. EBERSOLE
President
Keokuk

F. J. Lewis, assistant cashier, Harlan
National Bank, was recently elected to
the board o f directors.
B. A. Gronstal, president, Council
Bluffs Savings Bank, reports that the
past year was a good year fo r his bank.
A 11 per cent dividend was paid to the
stockholders and a bonus to the em
ployes.
The Early Savings Bank paid a 10 per
cent dividend last year. Deposits in
creased $100,000 and are now around
$360,000.
D. H. Dingsley, cashier, Rowley Sav
ings Bank, reports that the past year
was the best year his bank has ever had
from an earnings standpoint. Deposits
have increased and local demand is fine.
Fifteen per cent was recently paid on the
trust and the balance o f $5,000 will soon
be cleaned up.
Deposits at the Oakland Savings Bank
are now over $600,000 which is the high
point fo r the last nine years. The bank
paid a regular dividend last year and in
creased surplus $3,500. Corn loans made
total more than $160,000.
Ed Dobler, assistant cashier, Westside
State Savings Bank, has quit the bank
and gone farming. He said work is most
simple on his farm— all you do is pull
an electric switch to get the work done.
Recent statement o f the Blenco State
Bank lists demand deposits at $170,000,
time deposits at $81,800 and public funds
o f $45,000. The total capital structure
is over $50,000.

Several signs around the First Na
tional Bank, Woodbine, notify customers
that the new banking hours are now 9
a. m. to 3 p. m.
The Farmers State Savings Bank, In
dependence, has added a private office
fo r E. F. Sorg, president, at the rear o f
the building and has enlarged the lobby
space several feet by moving the wickets
back. Mr. Sorg said his bank made over
$150,000 worth o f corn loans and all are
being carried in the bank.
A. C. Blanchard, president, State Sav
ings Bank, Council Bluffs, has been
spending a few weeks visiting at Dallas
and New Orleans.
The First National Bank in Council
Bluffs paid a 12 per cent stock dividend
on their original $50,000 common capital
stock February 1st and retired a like
amount o f preferred stock. Preferred
is now $30,000 and common $70,000. Sur
plus and profits are $62,000.
B. O. Beadle, director, Whitney Loan
and Trust Company Bank, Atlantic,
passed away January 27tli at the age o f
62.
Deposits at the Atlantic State Bank
are now around $1,500,000 which is a nice
gain over a year ago.
J. C. Cave and W . H. Alter, o f the
Home Savings Bank, Persia, recently had
a narrow escape when the automobile in
which they were riding with two other
persons left the road and rolled down a
steep embankment rolling over twice.
The Merchants National Bank, Cedar

UNITED STATES C H EC K B O O K C O M P A N Y
OMAHA,

•

B A N K E R S

NEBRASKA

S U P P L I E S

•

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March 1939

INSTITUTIONS

THAT

MAKE

Upper Left — The pork cutting floor in the Ottum w a plant. • Center — Group of M orrell Savory Canned M ea ts, showing prize-winning label
•
Lower Left — The main M orrell Plant in Ottum w a • Lower Right — Governm ent inspector checking pork carcass.

designs.

BANKERS

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6th and Locust Streets

O U TG R O W TH

of a q u e s t f o r g o o d h o g s
Appreciation of good meats, is a heritage
of Britain. For generations, pride in their
steaks, mutton chops, hams and bacon has
been a tradition in English meat shops.
As provisioners supplying the finest Brit
ish trade, John Morrell & Co. in Liverpool
was naturally on the lookout for dependable
sources of top quality meats. Midway in
the nineteenth century, when the western
hemisphere gained increasing importance
in meat-production, the Morrells decided to
establish their own offices in America.
Paradoxically, the origin of the house of
Morrell was in fruits, rather than meats.
In 1827, with the profit on a boat-load of
oranges, George Morrell established a fruit
stall. His fruit business expanded to in
clude provisions, then meat-curing.
He
took his sons into partnership. Later, di
rection passed to a son, John Morrell.
Morrell’s first American office was estab
lished at New York in 1865. Meat-packing,
operations were started at London, Ontario,
in 1868. Three years later, a Chicago plant
was opened; and in 1877 — still seeking
better-fed hogs to produce superior hams
and bacon — Morrell selected Ottumwa,
Iowa, as location for another plant.
The Ottumwa plant grew so rapidly that,
by 1888, American operations were centered
there. By 1909, Morrell headquarters moved
from Liverpool to Ottumwa. The finger-tip
outpost of thirty years before, became the
nerve center of a world-wide business.
An outstanding figure in this impressive
development is Thomas D. Loster. Grand
son of the founder, Foster came to New
York when American offices were opened.
In 1872, he was placed in charge of Ameri
can operations, a responsibility which he
carried until his death in 1915.
Since 1900, John Morrell & Co. has
acquired two more plants — one at Sioux

Falls, S. D., built in 1909; one at Topeka,
Kans., purchased in 1931. Today, Morrell
is the largest U. S. meat-packing organiza
tion not headquartered in Chicago. Annual
business is approximately $100,000,000. In
every year except two since 1900, the com
pany has earned a profit. After 112 years,
direct descendants of the founder still head
the business.
Morrell products are highly diversified.
Fresh and cured meats are distributed
through sixteen American branches and
many foreign offices. The smartly-designed
blue label of Morrell canned-meat special
ties stands for quality the world over. In
barely five years, Morrell Red Heart Dog
Food has become a national leader.
Recent operating figures show annual
expenditure of approximately $60,000,000
for livestock, of which about half goes to
Iowa farmers. Of Morrell’s 6,000 employes,
over 2,500 work in Iowa.
Both in the extent of its contribution to
Iowa agricultural and industrial income,
and in the merit of its comprehensive line of
products, John Morrell & Co. has justly
earned a place among the “ Institutions
That Make Iowa.”

Just as John Morrell & Co. blazed new
trails in developing a superior provision
service, so has the Bankers Trust Company
persistently worked toward the development
of superior financial service — planned es
pecially for Iowa business and correspond
ent-bank accounts.
A steadily increasing number of Iowa
banks rely on the Bankers Trust to handle
their business in Des Moines. Among these
banks is the Union Bank and Trust Com
pany of Ottumwa, one of the important
banks serving John Morrell & Co.

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....I o w a

N e w s

,■

opening a personal loan de
on the third floor o f their
This new department will be
o f Stanley Mohrbacker.

Bloomfield, has had a phenomenal growth
in deposits since 1933. Deposits were
then $177,500 and they now are over
$875,000.

E. A. Ebersole, cashier, State Central
Savings Bank, Keokuk, is building a fine
new home.

W alter Light, vice president, First
Bank and Trust Company, Ottumwa, re
turned March 1st from a month’s vaca
tion in California.

Rapids, is
partment
building.
in charge

Burlington banks reduced interest rates
the first o f the year to l 1/^ per cent on
certificate deposits and 1 per cent on
savings.
The

Davis

County

Savings

Bank,

The First National Bank, Fairfield,
pays 1 per cent interest on savings and
six months certificate deposits and 1 %
per cent on 12 months certificate de
posits. Deposits have increased $150,-

000 in the last year and loans and dis
counts are up $100 ,000 .

The First National Bank, Eldon, is en
joying a steady increase in deposits and
loans and discounts. A 10 per cent divi
dend was paid to stockholders last year.
The interest rate paid here is 2 per cent.
Demand deposits at the Iowa State
Bank, Fairfield, are $670,000 and time o f
$266,000. Two per cent interest is being
paid on savings and six months certifi
cate deposits and 2 % per cent on 12
months certificate deposits.
V. Z. Breneman, cashier, Farmers
State Bank, New London, among many
other Iowa bankers, was confined to his
home with the flu the later part o f Feb
ruary. The bank was being ably man
aged by R. C. Eckey, assistant cashier.
The bank at W ever reduced interest
rates last fall from 2y2 per cent to 2
per cent.
Fort Madison banks are paying 2 per
cent on deposits.
An official o f the Sheatfer Pen Com
pany, Fort Madison, reports that last
January was the second best January in
the history o f his company and was only
exceeded by January, 1929.
Deposits at the Citizens State Bank,
Donnellson, are $750,000 which is the
highest ever.
W aterloo banks recently made a re
duction in interest rates and are now
paying i y 2 per cent on deposits up to
$2,500 and 1 per cent thereafter.

Temptation and opportunity combined m ay, in time, wreck

In Des Moines

an em ployee's character as termites wreck a building. Out

Sydney Gustafson, son o f Mr. and
Mrs. R. J. Gustafson o f Odebolt, has re
cently been employed by the University
State Bank in Des Moines.
Mr. Gustafson is a graduate o f the
Odebolt high school. He received his
business training at the American In
stitute o f Business in Des Moines.

wardly, the man and the building are intact. Inwardly, they
are destroyed. A bank or business relying on such a m an is
due for losses —unless it carries adequate fidelity coverage
in a sound, trustworthy com pany like the F & D ...9500 agents
. . . offices in 48 cities.

Official Changes

FIDELITY. SURETY AND

BANKERS

BLANKET

BONDS

B U R G L A R Y , ROBBERY. F O R G E R Y A ND G L A S S I N S U R A N C E

FIDELITY and DEPOSIT
COMPANY
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March 1939

MARYLAND,

B A L T IM O R E

A number o f changes in officers o f the
Washington State Bank have been made
recently, due to the rsignation o f Vice
President Moore, who is now located in
Danville, Illinois.
John F. Foster, formerly president, is
now chairman o f the board, and G. N.
Barclay, a director, has been named presi
dent. Lee Holland, formerly cashier, is
now vice president o f the bank, and Frank
L. Kos has been advanced from assistant

61
=
cashier to cashier. Charles M. Barclay
has come into the bank as assistant
cashier.
Lee Holland has been made a member
o f the board o f directors, filling' the place
left vacant by the resignation o f Mr.
Moore.

County Meeting

I o w a

N e w s

Keokuk, president, and Milton Lehning o f
Fort Madison, secretary-treasurer.
There were bankers and employes pres
ent from Keokuk, Fort Madison, Donnellson and W ever banks.

cepted a position as teller in the Clay
County National Bank. He formerly was
employed at the Central National Bank
and Trust Company o f Des Moines.

Charles C ity Meeting

Reserve Member
Announcement was made recently by
the Federal Reserve Bank o f Chicago that
the Union Bank & Trust Company of
Strawberry Point had been admitted as
a member o f the Federal Reserve System.

W oodbury County Bankers Associa
tion met in Sioux City at a 6 :30 dinner.
There were thirty-nine present repre
senting fifteen banks.
J. R. Capps, cashier o f the Central Na
With Spencer Bank
tional Bank and Trust Company, Des
Claire A. Thomas o f Spencer has ac
Moines, addressed the group on the Fed
eral Wage and Hour Bill.
C.
0 . McLarn, cashier of the Climbing
Hill Savings Bank, Climbing Hill, is
president, and Henry W . Bush, assistant
cashier o f the Farmers Savings Bank,
Pierson, is secretary.

The Charles City Clearing House Asso
ciation, co-operating with officers of the
Iowa State Bankers Association and Or
ganization o f Officers of County Bankers
Associations, sponsored a meeting of
bankers from Chickasaw, Floyd, Howard
and Mitchell counties recently. The three
local banks served as hosts at the gather
ing which was one o f a series of inter-

Entertains
H. N. Reints, cashier o f the Iowa State
Bank o f Clarksville, entertained a group
o f bank officials o f Butler county institu
tions at his home in Clarksville. Fifteen
men were present to enjoy a delightful
6 :30 dinner and a pleasant evening of
fellowship together.
Those present included George DeBuhr,
Kesley; Vern Gearhart, Aplington; Sam
Patterson, Austinville; Steve and James
Barlow, Dumont ; 0 . L. Whitlatch and F.
C. Voights, Allison; 0 . A. Bailey and
Oliver Jungling, Parkersburg; D. C. Ellis
and C. C. Cave, Greene; H. Bochman,
Aredale ; M. Remmers, Plainfield ; Fred
Seitz and the host o f Clarksville.

Quic&e/i S&u/ice t ecause —
QJ3IM 1

f f ii

§mm mm mm
Those non-productive “ float” balances — reduce them by dealing

Patton Dies
Funeral services were held recently in
Laurel fo r Merle C. Patton, 52, banker,
who died in St. Thomas hospital in Mar
shalltown. Mr. Patton had been ill fo r
a few days with influenza and pneumonia
developed.

with the Chicago bank that can give you really quick service on
agricultural transit items. W h y? Because we’re located where
things happen here in Chicago. In the Yards — next door to the
packing houses; in constant contact with commission men, buy
ers, shippers, railroads. And only a stone’ s throw from the only
mail distributing station in Chicago (outside the central post

Opens Office

office) where mail is delivered directly to and from rail terminals.

The Laurens State Bank is starting an
office at Havelock. The old First National
Bank building there is being remodelled
on the interior and redecorated and com
plete banking outfit of fixtures are being
installed. Walter B. Dale o f Rock Rapids
will have charge o f the office.

And quicker service because we have the internal facilities to get

Honor Ebersole
Members o f the Lee County Bankers
Association, to the number o f forty,
gathered in Keokuk fo r dinner, honoring
E. A. Ebersole, president o f the Iowa
Bankers Association.
The association
officers were also re-elected fo r the coming
year and are James W . Huiskamp, Jr., o f

things done quickly — ample equipment, efficient methods ( de
veloped through 70 years of specialization), and half our staff en
gaged in this one service. Nearly 500 banks find benefit in their
correspondent connection here. Why not check into the facts in
your own case?

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ME MB E R

F E D E R A L

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I N S U R A N C E

C O R P O R A T I O N

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Federal Reserve Bank of St. Louis

March 1939

A t the Group Eleven Meeting in Burlington
Beading from left to right: 1—Julian Frost, vice president
Clarke County State Bank, Osceola; William B. Whitman, assist
ant secretary Manufacturers Trust Company, New York; Frank
Fuchs, assistant cashier First National Bank, St. Louis; and
Ray Scott, Commerce Trust Company, Kansas City. 2— Elmer
Shipman, vice president State Bank of Wapello; and Arthur
Donhowe, vice president Central National Bank & Trust Com
pany, Des Moines. 3— C. M. Nelson, vice president and cashier
Northern Trust Company, Chicago; Lawrence A. Kempf, assist
ant cashier Northern Trust; and Dave Bates, Iowa superinten
dent of banking. 4—K. A. Coates, cashier Peoples Savings
Bank, Crawfords ville; Harriet Bringer, W. D. Hanna Company,
Burlington; John Beyer, Shaw, McDermott & Sparks, Davenport;
and Eleanor Friedei, W. D. Hanna Company. 5—Fred Cummins,
Drovers National Bank, Chicago; W. E. Resseguie, Continental

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Federal Reserve Bank of St. Louis

M arch 1939

Illinois National Bank & Trust Company, Chicago; Ward Mac
Fadden and R. H. Kube, Scarborough & Company, Chicago.
6—Bruce Townsend, vice president City National Bank, Clinton;
R. O. Byerrum, executive vice president First Trust & Savings
Bank, Davenport; Gene Voss, assistant vice president Continen
tal Bank & Trust Company, New York; and Charles Carey,
assistant cashier Harris Trust & Savings Bank, Chicago. 7—
Verne Bartling, assistant cashier First National Bank, Chicago;
and G. W. Mattern, president Citizens State Bank, Donnellson.
8—William Zunkel, cashier Decatur County State Bank, Leon;
H. O. Lovett, vice president First National Bank, Fairfield;
C. E. Baylor, president First Trust & Union Savings Bank, Sig
ourney; Everett Griffith, assistant vice president Iowa-Des
Moines National Bank & Trust Company, Des Moines; R. K.
McGee, cashier Clarke County State Bank, Osceola; Robert Garlock, assistant cashier Decatur County State Bank, Leon.

63
=
county meetings being held throughout
the state fo r bankers.
Speakers includede Frank Warner, Des
Moines, secretary o f Iowa Bankers Asso
ciation; R. L. Bunce, Des Moines, deputy
superintendent o f banks; S. R. Torgeson,
Lake Mills, president o f Organization o f
Officers o f County Bankers Associations.
Others outside the four counties were V.
W . Johnson, Cedar Falls, president o f the
Union Bank and Trust Company, and
Douglas G. Swale, Mason City, assistant
cashier o f the First National Bank.

Philo Clark Dies

I o w a

N e w s

----------

wyk o f Breda, and R. A. Neary o f Scran
ton, together with several others.
Those attending from Carroll included
R. M. Moehn, Francis Maher, Dr. R. H.
Lott, George Hess, George Werdel, C. E.
Reynolds. J. E. Wilson of Lanesboro
also attended.

on state bank legislation; Frank Warner,
Des Moines, on the wage and hour law;
Lehman Plummer, Des Moines, install
ment financing; R. L. Bunce, Des Moines,
federal banking legislation, and Everett
Griffith, Des Moines, rural bank invest
ments.

Red Oak Meeting

With FD IC

Sixty representatives from fifty-four
banks in Mills, Fremont, Page, Taylor,
Cass, Adams and Montgomery counties
attended the “ Dutch Treat” dinner and
meeting held in Red Oak.
E. C. Fishbaugh, Shenandoah, spoke

H. B. Jacobson has resigned his posi
tion as assistant cashier o f the Story
County State Bank, Zearing, and has ac
cepted a position as bank examiner with
the federal government and will work
under the Federal Insurance Corporation.

Paid Philo Clark, 82, former Iowa
hanker, died recently in Des Moines.
Mr. Clark, member o f a widely known
hanking family, had been engaged in that
business at Red Oak, Iowa, for many
years.
Mr. Clark was born at Williston, V ir
ginia, and before coming to Des Moines
last December, had lived in Washington,
D. C.

County President
Irwin Mosher, cashier o f the West
Liberty State Bank, was' elected president
o f the Muscatine County Bankers Asso
ciation at the annual dinner meeting held
in Muscatine. He succeeds Glen Down
ing o f Muscatine who headed the organ
ization during the past year.
Other officers named by the group were :
W . F. Siemers o f the Muscatine Bank and
Trust Company, vice president; Harold
Nicolaus o f the Wilton Savings Bank,
secretary; and L. D. Krueger o f the Cen
tral State Bank, treasurer.

New in Nevada
The State Bank and Trust Company,
Nevada, which has been in the course o f
organization fo r some time, has filed its
articles o f incorporation and announces,
through its officers, its readiness to open
fo r business in the former First National
Bank building.
The board o f directors and officers of
the institution consist o f John Hattery,
president; E. A. Fawcett, vice president;
H. T. Fawcett, cashier; G. E. Everett,
Glen Davis, C. E. Markland.

Jefferson Meeting
An inter-county group meeting o f bank
officers was held at Jefferson last month.
Sac, Audubon, Calhoun, Greene, Dallas
and Carroll counties were represented.
This is one o f a series held throughout
the state.
Principal talks were given by Frank
Warner o f Des Moines, secretary o f the
Towa Bankers’ Association, F. Van Erde-

I N S IO U X C IT Y ■■•
W hen good fortune brings you to S iou x City, we
invite you to drop in and visit us.

W^hen you have

business transactions in S iou x City, we invite you to
use our correspondent service and see w hy the First
National Bank in S iou x City serves so many banks in
the S iou x City trade area.

OFFICERS
J. R. GRAIN IN G
Assistant Cashier
E. A. JOH NSON
Assistant Cashier
J. P. H A IN E R
J. T. GRANT
Executive V ice President
Assistant Cashier
F R IT Z F R ITZS O N , V ice President & Cashier
A. S. H AN FORD
President

Member Federal Deposit Insurance Corporation

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Federal Reserve Bank of St. Louis

March 1939

I o w a

For New Bank
Organization plans fo r a new bank to
serve Dow City and vicinity are now un
derway.
Ten members have been ap
pointed by the Dow City Commercial Club
to solicit sale o f stock.
They follow :
Joseph R. Smith, chairman; Albert
Schlitz, Andrew Jackson, Jay Dwine,
Lloyd Coleman, George Scott, Oliver
Cook, William Cross, J. Leo Ahart and
Charles J. Smith.

N e w s

Cullen Heads Group 11
P. CULLEN, Burlington, executive
. vice president o f the National Bank
o f Burlington, was elected chairman of
Group 11, Iowa Bankers Association, in
annual meeting on February 22nd. H.
Lee Huston, o f the Columbus Junction
State Bank, was elected secretary. They
will serve fo r twTo years.
Members o f the nominating committee

L ong experience,
geographic location,
and a nation-w ide network
o f correspondent banks
make
C ontinental Illinois
collection service
synonym ous
with speed and efficiency

C o n t i n e n t a l I llinois
N a t i o n a l Ba n k
and T rust C ompany
of C h i c a g o
231 SOUTH LA SALLE STREET

Member Federal Deposit Insurance Corporation

were Wesley Swiler, Burlington, chair
man; Frank Crone, Washington, Iowa,
and Thomas Dyer, Wever, Iowa.
The report o f the resolutions commit
tee, composed o f H. B. Hammer, vice
president of the State Bank at Wapello,
chairman; R. J. McCleary, vice president
o f the Security State Bank at Keokuk;
and H. O. Lovett, vice president o f the
Fairfield First National Bank, was
adopted as read.
The bankers went on record as opposed
“ to any transfer o f our state banking de
partment whereby its defense o f the pres
ent unit and dual banking system may be
weakened or its policies may be affected
by political considerations,” Other reso
lutions are:
“ We oppose further expansion o f postal
savings or other governmental sponsored
bank competition.
“ We oppose compulsory membership in
the Federal Reserve System.
“ We oppose further centralization by
the government o f the credit resources.
“ W e commend the superintendent o f
banking and his department for their con
structive efforts toward effecting a better
banking system fo r Iowa.
“ We commend the Iowa Bankers Asso
ciation fo r continued service to Iowa
banks and we especially commend our
secretary, Frank Warner, fo r his untiring
and efficient work in our behalf.
“ W e commend the Governor o f Ioiva
and the Forty-eighth Assembly for their
policy o f economy in state government.
“ W e urge continued caution in bank
investments.
“ W e appreciate the honor o f having in
this group the president o f the Iowa
Bankers Association, Ed Ebersole o f K eo
kuk.
“ W e thank the Burlington banks, W .
D. Hanna & Company, officers o f this
group and the management o f the Bur
lington Hotel fo r so splendidly providing
fo r our entertainment and comfort.”

IO W A A . I. B. N EW S
Des Moines
F or some time there has been a con
siderable demand fo r a good practical
course in Business Letter W riting. W ith
this thought in mind, the educational
committee contacted Thos. F. Dunn o f
Drake University to teach the use o f
correct and effective English in the writ
ing o f business letters.
This course
started February 8 th and will last fo r
ten classes.
People around Des Moines are com-

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Federal Reserve Bank of St. Louis

M arch 1939

65
=
plaining about the maple syrup that is
running down F ifth Avenue these days.
This is all due to the slashing o f pins
hit by bowling balls, which occurs every
Thursday afternoon. W ith the season a
little more than half over, it now appears
that six o f the twelve teams which form
the league are still in the running fo r
first place. This close race makes com
petition very keen. A t the present time
Iowa-Des Moines National Bank and
Trust Company Mortgage Department is
leading the race, being pursued by the
boys from the other side o f the riverrepresenting the Capital City State Bank.
Individual leadership changes like the
wind, but at present it’s Frank Tamse and
Gilbert Phillips leading the league by a
nose. Art Erickson from Bankers Trust
has a fine series to his credit and is
leading the league in that division. A
great game this bowling, at least we
all think so, and win, lose or draw we
all have a swell time.

I o w a

N e w s

■

we look forward to his speedy recovery
and hope that he will be back Avith us
soon.
Larry Erritt has resigned his position
Avith the Fort Dodge National Bank and
accepted a position with the Davenport
Ice & Coal Company, Davenport. Sorry
to lose you, Larry. Success in your neAV
venture!
Helen K. Collins, Reporter.
Grinnell
The Grinnell Group Study Class Avas

again reorganized this past fall, taking
up the subject o f Economics I. This is
the fourth year in successful operation,
and on completion o f this year’s Avork,
many o f the members will be eligible
fo r the pre-standard certificate issued
by the national office of the American
Institute o f Banking.
The instructor this year is Professor
Joseph Charlton, head o f the economics
department o f Grinnell College. Joe has
been giving us some good work this
winter.

Members o f the Des Moines chapter
swung out to their annual Valentine
Dance to the strains o f Jimmy Stewart’s
Swing Band. The Uptown Dance Studio,
where the dance was held, was filled with
laughter and merrymaking as those
present danced the Lambeth W alk led
by that likable young lawyer, James
Stewart. Novelty dances were features
o f the evning and furnished much amuse
ment to all; the prizes awarded to the
lucky ones more than repaid them fo r
venturing out on such a cold wintry
night.
Hazel Reinholtz, Reporter.
Fort Dodge
The Fort Dodge group consists o f
twenty-four members drawn from the
two local banks, The State Bank and
The Fort Dodge National Bank, and
from Farmers Savings Bank, Vincent,
Burnside Savings Bank, Burnside, Lehigh
Office o f Burnside Savings Bank, Lehigh,
and First National Bank, Dayton. The
instructor is a prominent Fort Dodge
attorney, Dwight G. Rider. The class
meets regularly every Thursday and no
sessions have been missed. Only one
meeting has been postponed and that to
allow Mr. Rider to attend the Governor’s
Inaugural Ball.
Class attendance is practically 100
per cent with the exceptions o f Ed
Weiss and Steve Manchester o f The
State Bank who were called to help
settle the Swift & Company labor diffi
culty last October at Sioux City. As
members o f the National Guard thenduty to their country came first. A t
present Gus Rasch o f the Fort Dodge
National is absent because o f illness but

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Federal Reserve Bank of St. Louis

M arch 1939

fr ie n d ly
0 orresp onde nt
ervicein
D e s ^Jj)(o/nes

V alley
SAVINGS BANK
Officers
H erbert A . M etcalfe, Chairman of Board
Frederick M. M orrison, President
W infield W . Scott, Vice President
J. R. Astley, Cashier
E. P. Kautzky, Asst. Cashier

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M arch 1939

HOTEL AND BATHS

Hugh C. McCIeery, cashier o f the
Grinnell State Bank, accompanied by
his Avife spent their vacation this year on
a trip into the southland. Hugh, presi
dent o f the Grinnell Group Study Class,
reported a very enjoyable vacation.
Helen C. Hargrave, member o f the
Grinnell Group Study Classes fo r 193536-37 o f the Grinnell State Bank, was
made the new assistant cashier o f that
bank at the annual meeting held in
January. You deserve this promotion,
Helen, and we know your many friends
were glad to hear about it.
W. N. Shellenbarger, cashier o f the
Hartwick State Bank, and a former
member and president o f the Iowa City
Group Study Class when he was assist
ant cashier o f the Lone Tree Savings
Bank, joined the Grinnell Class. Shelly
travels about forty miles each Thursday
evening to attend classes and over some
roads which are not the best gravel.
C. W . Fowler, Jr., Reporter.
Keokuk
The Keokuk Group Study Class ex
perienced their first A. I. B. exam re
cently, being a quiz over the first four
chapters o f Banking I.
Everybody
seemed to have a worry as the time drew
near, little black books everywhere and
much last minute cramming.
But it
wasn’t so bad. In the class o f nineteen
students— ten men and nine women—
(including the w ife o f a vice president
o f one o f the banks, who has had no
banking experience whatever) there was
no grade under 90!
The Keokuk reporter strayed to
QLiincy, Illinois not long ago, as the
guest o f Miss Ethel Groves, assistant
cashier o f the Broadway Bank o f Quincy
and the fellow A. I. B.-er, and attended
a debate between the St. Louis Chapter
o f the A. I. B. and the Quincy Chapter.
The affair was most interesting and en
joyable, attended by about eighty per
sons, among them many o f the A. I. B.
members from the Hannibal, Missouri
branch.
The subject fo r debate w a s: “ R e
solved: That the United States Should
Adopt a Substantially Increased Arma
ment Program,” and was won by the
St. Louis team, who had the affirmative
side o f the question, but the Quincy de
baters were by no means easily defeated,
as they presented an amazingly good
argument on the negative side o f a much-

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F. E. DAVENPORT & CO.
H. GRADY MANNING Pres.

OM AHA

I o wa Ne ws
discussed present-day question.
The
president o f the St. Louis Chapter,
Dewey Shea, was one o f the members o f
the St. Louis team.
The debate was preceded by a dinner
fo r the members o f both teams and their
wives and officers o f the Quincy Chapter,
and a buffet luncheon was served to all
present follow ing the debate, at which
time everybody got to know everybody
else, and it was indeed a very pleasant
occasion, with A. I. B. friendliness much
in evidence, and we liked Quincy’s hos
pitality. W e here in Keokuk feel especi
ally close to the Quincy Chapter anyway
-—the natural link being our teacher,
Mr. Prall, instructor at the Gem City
Business College at Quincy, who also
teaches the Quincy Chapter o f A. I. B.
W e hear tell o f them considerably and I
dare say they hear about us, ever and
anon.
Helen J. Kollmyer, Reporter.
Marshalltown
The Marshall County Group Study
Class have just completed their second
written test, grades running unusually
high. Mr. Hancock reports the grades
were from 86 to 99. When asked why
a grade o f 100 was not given he stated
that he believed on an essay type test
that there was very little likelihood o f a
perfect paper. However, he was much
pleased with the results o f the test. Mr.
Hancock is an instructor in the public
schools o f Marshalltown, having received
his Master’s Degree from the University
o f Iowa, Iowa City.
The Marshall county group study class
is a new group in the American Institute
o f Banking. This group was organized
last fall and is comprised o f bankers
from MarshalltoAvn, Melbourne, Green
Mountain, Grundy Center, Zearing, and
Union with a total enrollment o f 18. The
president o f the class and the secretary
are planning to enlarge the class next
year by taking in some o f the towns
east o f Marshalltown. The group meets
every Wednesday at the Central Iowa
Business College, which, incidentally, is
donated to the use o f the class by Mr.
Hunt, president o f the business college.
Every fourth Wednesday the group
journeys to Grundy Center fo r the meet
ing as there are fou r from the two
banks there in the class and thus divid

SELL YOUR BANK
The “Walters” Way
Without Publicity

ing the traveling expense
group.

among the

The success in the organization o f the
Marshall county group study class goes
largely to Dutton Stahl, associate coun
cilman fo r Iowa. Mr. Stahl made a trip
or two to Marshalltown aiding in a
very satisfactory manner in the organ
ization o f this group.
Mr. Stahl is
assistant trust officer in the Iowa-Des
Moines National Bank.
The class elected John G. Bartine,
Fidelity Savings Bank, Marshalltown,
as president and Perry J. Everett, Com
mercial State Bank, Marshalltown, as
secretary-treasurer. Of course, being a
new group, it was necessary that they

start with the course “ Bank Organiza
tion and Operation.”
A fter several
months o f study the class finds that, as
a whole, it did not know as much about
bank organization as was supposed by
many. There is some discussion at presentregarding the class fo r next year, which in
all probability will be Economics I.
Perry J. Everett, Reporter.

Nevada
Professor William Schrampher, in
structor o f the Story county group study
class, received a “ blessed event” last
December.
This reporter notices he
paces back and forth in front o f the
class with greater ease than he did be
fore the stork arrived. Perhaps he re-

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WITH OUT-OF-TOWN
CORRESPONDENTS
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valuable financial and fiduciary experience. The benefits
o f this experience, together with an extensive fund o f
useful business information and broad fact-finding facili
ties, are at the disposal o f correspondents.
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our mutual problems.

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TRUST COMPANY
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Omaha, Nebraska
N o rth w e ste rn B a n ker

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Federal Reserve Bank of St. Louis

M arch 1939

68
........

I o wa News

ceives more practice walking at home
since the new arrival.

the Story County Bankers Association
fo r 1939.

H. B. Jacobson and Ralph Bean, who
are both members o f the Story county
group, have taken the examination fo r
assistant examiners o f the F.D.I.C. Mr.
Jacobson has received his appointment
and expects to take up his new work
very soon.

G. Roger Alley o f the Ames Trust &
Savings Bank, Ames, and a member of
the Story county group study class,
discussed A. I. B. group study class
work at the inter-county group meeting
in Newton recently.

T. E. LaVelle o f the College Savings
Bank in Ames and F. G. King o f the
Nevada National Bank, Nevada, who
are both members o f the group study
class, have been elected vice president
and secretary-treasurer respectively o f

Professor William Schampher pre
sented a talk on the aims and purposes
o f the group study class at the annual
meeting o f the Story County Bankers
Association.
J. L. Henry, Reporter.
Ogden
Our instructor, L. R. (Rusty) Johnson,
had a birthday last month. The class, in
appreciation o f the fine work he has been
doing for them presented him with a
gift.

r W h e n You Step
off the Train in
NEW YORK

The class has been tendered an in
vitation by one o f its members, Art
Herman, o f the Citizens National Bank
o f Boone, to hold a meeting in the near
future at his cabin located along the
Des Moines River near the Ledges State
Park. Plans are now in progress for
this meeting.
A fter study hour the members o f the
class have enjoyed several sessions o f
table tennis, thanks to the Citizens Na
tional Bank which has furnished these
facilities. W e are all hoping that Good
o f Ogden will be able to get some prac

unii1.1.

The Hotel McAlpin is only a
block away from the Penn
sylvania R. R. Station and
only seven minutes from the
Grand

Central

Term inal.

W e are indebted to the Boone State
Bank & Trust Co. fo r our meeting place
again this year.
R. J. Nachazel, Reporter.
W ebster City
The Hamilton county group study class
with a membership o f eighteen, repre
senting the follow ing towns, W ebster
City, Williams, Randall and Stratford,
came to order recently fo r the nineteenth
consecutive time. Class attendance has
been very regular this year due to the
exceptionally fine weather we are en
joying.
Our instructor, E. P. Prince, is back
from a two weeks vacation in Florida—
how we envy him! Whitley Hemingway
did a splendid job o f substituting as
instructor during Mr. Prince’s absence.
Another o f our fellow students, Melvin
Johnson, has also been taking a welldeserved vacation in the south. W e are
looking forward to your return, Mr.
Johnson, as your presence is missed by
all.
W e were given our second test a few
weeks ago and were very proud to hear
that everyone received a passing grade.
Here’s hoping we keep up the good work.
We

understand

that

the

Williams

..9 * . a <faad
c u A ic u n e A

B. & 0 . Motor Coaches stop
at our door.

EXPERT SERVICE

W Q S ltU 1 7

Decidedly, the Hotel McAlpin
is

tice in the near future so that he can
make the games with his opponents
more interesting.

Questioned Documents

'’ A Great H otel” in the

Infra-Red Photography

center of convenience.

Ultra Violet Ray

L A R G E R O O M S , NEWLY
FURNISHED & D ECORA TED

Finger Prints

SIN GLE ROOM from $3
D O U B L E ROOM from $4.50
T W O P O P U LA R PRICED
R E STA U R A N TS

Expert Testimony
Admitted to Practice Law
Iowa and Indiana

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you place on customer good-will?
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customers? Thousands of business
firms in all parts of the country
have found Erickson Advertising
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we tell you more about it?
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C. E. ERICKSON C O .

SHERIFF'S OFFICE
BROADWAY AT 34»h ST., NEW YORK
. Under KNOTT Mgt. John J. W oelfle, Mgr.

N orth w estern B a n ker

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Federal Reserve Bank of St. Louis

M arch 1939

Des Moines, Iowa

Phone 3-1121

Incorporated

DES MOINES, IOWA

69
Savings Bank o f Williams has recently
finished remodeling, follow ing the ex
ample set by the First State Bank and
the Farmers National Bank o f Webster
City. The remodeling has made a won
derful improvement in all three banks.
Billy F. Vance, Reporter.

Federal Home Loan Bank
Clinic Held in St. Louis
The twelve permanent Federal Home
Loan Banks, comprising the Federal
Home Loan Bank System, when in need
o f money to advance to the thrift and
home financing institutions members o f
the banks, do from time to time float
consolidated bank debentures and there
are now outstanding $90,000,000 in such
debentures— $41,500,000 at 1 per cent due
July 1, 1939, $25,000,000 at 2 per cent
due December 1, 1940, and $23,500,000 at
2 per cent due April 1, 1943.
These debentures are the joint and sev
eral liability o f the twelve Federal Home
Loan Banks and are exempt both as to
principal and interest from all taxation
except surtaxes, gift, estate and inheri
tance taxes.
The issues, when offered, met with an
overwhelming response from the finan
ciers and dealers throughout the country
and were many times oversubscribed.
Commercial banks and dealers have shown
considerable interest in these debentures
and Everett Smith, financial representa

tive o f the Federal Home Loan Banks,
with headquarters at 31 Nassau Street,
New York City, has personally contacted
in many cities representatives of com
mercial banks and agents so interested,
explaining the Federal Home Loan Bank
system and that which stands behind these
debentures. Such contacts indicated to
Mr. Smith a lack o f knowledge and under
standing, to a certain extent, o f the Fed
eral Home Loan Bank system and a desire
on the part of bankers and dealers inter
ested in debentures to learn more about
the system.
Accordingly, to meet this need and for
the purpose of further popularizing de
bentures by acquainting purchasers— ac
tual and prospective— with the soundness
o f the security which underlies them, the
Federal Home Loan Bank o f Des Moines,
represented by its president, Robert J.
Richardson, met with Everett Smith at
the Federal Reserve Bank in St. Louis
early last month. Wm. McChesney Mar
tin, president o f the Federal Reserve
Bank, generously made available his beau
tiful board room fo r this purpose and
twenty-eight representatives o f local banks
attended and a clinic was held upon the
literal working o f a Federal Home Loan
Bank.
Mr. Richardson explained in detail the
workings of the Federal Home Loan Bank
o f Des Moines, beginning with qualifica
tion fo r membership o f eligible institu
tions, reviewing o f periodical reports, re-

BtcUe finance.
B U osit 'lesw n fltoteA .
Rates and Maturities
Upon Request

CAPITAL AND SURPLUS
OVER $1,500,000.00

Established 1897
■

■

State Finance
Company
Southern Surety Bldg.

Des Moines

Over a Century of Service

The American
Bank Reporter
Published March/ July, November
New Edition Ready March 15
Connsett

EXPERIENCE
-Q V A L IT Y -

A complete list o f banks, bankers,
savings banks and trust companies
in the United States, Canada and
principal cities o f foreign countries,
with names o f officers, capital, sur
plus and undivided profits, loans, de
posits, securities, cash and due from
banks, members o f the Federal De
posit Insurance Corporation,
principal correspondents,
attorney list, etc.
N E W C O M P L E T E E D IT IO N
D E L IV E R E D $10.00
SP E C IA L S T A T E E D IT IO N S or
C O M B IN A T IO N OF ST A T E S
Moderately priced
ORDER YO U R COPY T O D A Y

IO W A LITHOGRAPHING C O .
Edwin G. Ragsdale, Secy. — DES MOINES

American Bank Reporter
420IEAST 149th STREET
NEW YORK, N. Y.
'N orthw estern B a n ker

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Federal Reserve Bank of St. Louis

M arch 1939

70
quired, method o f fixing lines o f credit,
making loans, examinations, supervision,
including bank rating analysis o f a mem
ber institution, examiners’ reports, and
the reviewing of many other exhibits. An
actual individual case Avas taken from
start to finish, from the time it made ap
plication for membership and how its busi-

ness was handled with the bank and the
bank’s with it.
Mr. Richardson stated the twelve Fed
eral Home Loan Banks are a permanent
reserve credit system established in 1932
fo r home financing institutions which
qualify fo r membership.
The Federal
Home Loan Banks are to the thrift and

Tfjinneûota Jedeàal
SAVINGS

AND

LOAN

ASSOCIATION

Savings and Loan Building— Saint Paul, Minnesota

Largest Federal Savings and Loan Association in the Northwest

FINANCIAL STATEMENT
As of February 28, 1939
R ESOURCES
First Mortgage Loans. .$11,772,895.98
Loans secured by Pledge
of A ccounts....
10,848.68
Home Purchase Con
tracts .............................
Federal H o m e
Bank S to c k ....

576,519.21

Loan
275,000.00

Office Building, Furni
ture and Fixtures. . ..

186,725.12

Real Estate Owned. . ..

184,352.01

Other Resources ...........

9,712.92

Cash on Hand and in
Banks ...........................

192,215.82

L IA B IL IT IE S
Savings and Investment
Accounts .....................$10,050,234.91
Advances from Federal
Home Loan Bank. . . . 2,550,000.00
Mortgage Loans in Pro
cess ...............................
316,127.22
Reserves and Undivided
P rofits...........................
Contingent Res.
Fund ............$90,000.00
Fed. Ins. Res.
Fund ............ 35,921.56
Special Reserves 51,002.41
Undivid. Profits 44,213.96

T o t a l .............................
Miscellaneous Liabilities
Net Earnings from Jan
uary 1,1939...................

Total Resources........ $13,208,269.74
I

n v e s t m e n t

221,137.93
15,977.17
54,792.51

Total Liabilities......... $13,208,269.74

n q u ir ie s

n v it e d

A S A F E , PR O FIT A B LE
IN V E ST M E N T
FOR SURPLUS FUNDS
For sixteen years, this $8,000.000.00 association has financed the
buying and building of homes in the twin cities of St. Paul and
Minneapolis.
Today, its sound financial condition, its govern
ment charter and supervision, its ample reserves and experienced
management make its shares a safe and profitable investment for
the funds of insurance companies, business and social organiza
tions, and individuals alike. We will gladly submit our statement
to anyone interested.

TWIN CITY FEDERAL
SAVINGS A LOAN ASSN
EI GHTH A MA R QUE T T E

N o rth w estern B an ker

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Federal Reserve Bank of St. Louis

M arch 1939

MI NNEAPOLI S

home financing institutions o f the country
what the Federal Reseiwe System is
largely to its membership.
Membership in the Federal Home Loan
Banks is composed o f Federal savings
and loan associations (Federally char
tered and supervised), state-chartered
building and loan associations, insurance
companies and savings banks. Each mem
ber institution must own stock in its
regional bank to the amount o f at least
I per cent o f the aggregate o f the unpaid
principal o f the member’s home mort
gage loans, but not less than $500.
The United States Treasury has sub
scribed and paid in on the capital stock
o f the banks $124,741,000. Other funds,
in addition to debenture issues, come from
purchase o f stock by members. Each
bank must carry to a reserve account semiannually 20 per cent o f its net earnings,
until this reserve equals its paid-in capi
tal, and thereafter 5 per cent must be set
up. All reserves o f all the banks are in
vested in direct or guaranteed obligations
o f the United States.
All present were impressed with the
record and phenomenal growth o f the
Federal Home Loan Bank system during
the more or less brief time it has been in
evidence, as evidenced by the following
picture as o f December 31, 1938.
Advances outstanding total $198,842,438, an increase o f $2,617,501 compared
with June 30, 1938. Of this sum, $45,239,652 represents short term loans which
are due and payable Avithin a period of
one year. The remainder represents long
term loans maturing over a ten-year pe
riod, on Avhich installments approximat
ing $17,338,407 are due Avithin twelve
months. The total o f loans advanced by
the twelve banks since the beginning o f
operations on October 15, 1932, to De
cember 31, 1938, amount to $487,141,873,
o f Avhich $288,299,435, or 59 per cent, has
been repaid. A s o f December 31, 1938,
I I members of the banks Avere in liquida
tion, Avhich members OAved the banks a
total amount o f $500,838 secured by col
lateral o f an estimated value o f $611,741
and by additional collateral o f $76,800,
representing the investment by such mem
bers in the stock o f the banks.

The banks

anticipate no loss on the advances to mem
bers in liquidation.

O f the total amount

o f the outstanding advances on December

31, 1938, to members not in liquidation,
only loans amounting to $18,475 with in
terest o f $142 were delinquent in excess
o f 30 days.
Net income fo r the year 1938 amounted
to $4,779,896, o f which $1,218,000 AA7as
allocated to reserves. Dividends aggre
gating $2,405,622 were declared by the
banks during the year 1938, resulting in
an increase o f $1,156,274 during the year
in undivided profits.

New Problems to M eet In
Real Estate and Mortgage Lending
MONG bankers and mortgage lend
ers there is more interest and con
cern about methods o f appraising
real estate today than ever before. W hy
should that be? A fter all, property has
been security fo r loans and the value o f
that property has been appraised for
many years gone by. Foreclosures have
taken place and properties which secured
loans have been acquired. As a matter of
fact, foreclosures were considered one o f
the risks o f mortgage lending. Also, p rop
erty which was acquired was managed and
disposed of, mostly without loss. What
conditions changed which have made those
interested in real estate or mortgage loans
more appraisal conscious than ever be
fore ?
To work backwards in finding the con
ditions which exist today, there is more
real estate owned by institutions and the
government than ever before in the finan
cial history. F or one thing, this means
that there is less land in possession of
private individuals. When millions o f
residential units and farms were being ac
quired by the Home Owners’ Loan Cor
poration and the farm relief agencies,
many appraisals were made. During this
process o f transferring ownership of
property to the government agencies,
banks and mortgage lending institutions
became conscious o f the appraisal p ro
cesses which were being developed. It
was a logical step for them to analyze the
real estate which was left in the portfolios
o f their institutions. Some loan managers
and heads o f newly formed real estate de
partments were shocked to discover how
little they knew about the physical se
curity which was behind loans still on
their books and about property already
acquired.
Thorough reappraisals were
the only answer to determine manage
ment and liquidation policies which would
both be sound and which would most bene
fit the institutions involved.

Small Return
The appraisals made o f real estate
owned by lending institutions first re
vealed that there was a very small return
being earned on the book value o f these
properties. Further analysis was neces
sary to figure out how the liquidation o f
these low-earning or loss-producing assets
could be accomplished. Further, it was
necessary to see how prospective owners

By
F R A N K L IN

H A R D I N G E , Jr.

Secretary
Society of Residential Appraisers
Chicago

could he justified in purchasing this p rop
erty which the banks and lending institu
tions did not want. It was in the further
analysis o f property owned that there was
discovered factors influencing value such
as the amenities which a home owner
would pay for, yet which a renter would
not, and what expenses in the management
o f residential property an institution
would have to bear which would be non-

F R A N K L I N H A R D IN G E , JR.

existent should an owner occupy the same
house. This type o f analysis was neces
sary, moreover, in order to further reveal
the justification fo r new loans to be made
on new or existing property.
There were many banks which made a
firm resolution never to return to the
mortgage loan field fo r investment o f
their funds after the trouble o f the early
thirties. There were many managers o f
other types o f mortgage lending institu
tions whose confidence was badly shaken

in this type of investment. A fter all,
there was an excellent opportunity to
have the weaknesses o f past lending
policies revealed in a study o f the ten
billion dollars o f loans which were in a
distressed condition.
What was more
startling than past experience was the
proposals fo r new loans to be made at
higher percentages o f the value o f real
estate than was ever before known.
A s a result o f the experience learned
with past lending practices and policies,
the dangers o f the straight first and
amortizing second mortgage system were
revealed. Studies made have shown con
clusively that costs o f mortgage financing
in the twenties were approximately 20 per
cent to 35 per cent more than they are
today. Further, a practical study of the
amounts loaned under first and second
mortgages revealed that the total very
nearly approximated, if not actually ex
ceeded, the higher percentage loans beingencouraged and made today.
Past Experience
The 75 per cent, SO per cent and 90 per
cent loans possible under existing mort
gage plans drew more attention to the
value o f the security to which these per
centages were applied. I f past foreclos
ure experience had not early shown up the
meaningless efforts o f past so-called ap
praising, a study o f how appraisals were
to be made to fit into the new lending
practices did this very thing. It was not
hard to find where too much reliance had
been placed on sales prices o f real estate
in determining the value upon which loans
were made in the twenties. Therefore,
the conclusion was reached that not all
real estate salesmen are good appraisers.
As a matter o f fact, their alternating
over-optimism and over-pessimism are in
fluences to avoid in making appraisals
today. However, the importance o f sales
prices in arriving at conclusions about
value still is obvious to loan managers
who are all preparing to meet current
conditions in the mortgage lending market.
Examples were legion as to the diffi
culties banks and lending institutions had
encountered by making mortgage loans
because “ Jones was good fo r that amount
o f money.” In this instance no considera
tion was given to the underlying security
and no thought was given to the possibility
(Turn to page 75, please)
N o rth w e ste rn B a n ker

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Federal Reserve Bank of St. Louis

M arch 1939

Hold Meeting in Des Moines—The

execu tive com
m ittee o f the F ederal H om e L oan B ank o f Des M oines came to
I o w a ’s Capital C ity recen tly, to hold their q uarterly m eeting
in co n ju n ction w ith the annual stockh olders ’ m eeting o f the
organ ization.
P ictu red a bove are m em bers o f the execu tive
com m ittee w ho attended, and reading from le ft to righ t th ey are:
1— Fred E. Hodgson, secretary Fergus Falls Savings and Loan
A ssocia tion , Fergus Falls, M in n esota; H. H. Bennett, secretary
Perpetual Savings and L oan A ssocia tion , Cedar R apids, Io w a ;
Robert L. Hill, A lum ni R ecord er, U n iversity o f M issouri, Colum
b ia ; and John D: Gray, secretary F id e lity Savings and L oan A s
sociation , V a lle y C ity, N orth D akota. 2— Everett Smith, finan
cial represen tative, F ederal H om e L oan B a n k s; Col. C. B. Rob

bins, chairm an o f the board, Cedar R a pid s; Fred W . Catlett,
m em ber o f the board, F ederal H om e L oan Banks, W ashington,
D. C. ; and Robert J. Richardson, president F ederal H om e Loan
Bank, Des M oines. 3— A. F. Leonhardt, secretary E con om y S a v
ings and L oan A ssocia tion , St. L ou is; William E. West, secretary
Standard F ederal Savings and L oan A ssocia tion , K ansas C ity ;
John Newbury, secretary H om e B u ildin g and L oa n A ssociation ,
Jefferson C ity, M issouri; and Louis H. Kelley, secretary H en
nepin F ederal Savings and L oa n A ssocia tion , M inneapolis.
4— E. J. Russell, v ice chairm an, St. L ou is: L. A. Boyles, sec
retary Y an k ton B u ildin g and L oan A ssocia tion , Y an k ton ,
South D a k ota ; and E. A . Purdy, v ice president W e lls-D ick e y
Com pany, M inneapolis.

Are you bothered by

ST. PAU L
F E D E R A L SAVINGS
and L O A N
ASS’ N

SMALL TRUST
HEADACHES?
U. S. Government Supervision

Current

L E G A L IN V E S T M E N T

Assets $1,100,000
Member of the Home Loan Bank
of Des Moines
All investments insured up to $5,000
by an instrumentality of the U. S.
Government.
Investments Welcome
Conservative

For
IN S U R A N C E C O M P A N IE S

(Current Dividend Rate)

Accounts Insured Up to $5,000

NORTHWESTERN

Friendly
Dependable

FEDERAL

Savings & Loan Association

4 E. 4th St., St. Paul, Minn.

823 Marquette Ave.

Axel A. Olson, Secy-Mgr.

MINNEAPOLIS, MINN.

N o rth w e ste rn B an ker

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Federal Reserve Bank of St. Louis

M arch 1939

Now you can safely and profitably
handle small trust funds. By investing
the entire amount of accounts $5,000.00
or less . . . as many as you wish . . .
in United Federal Savings and Loan Cer
tificates, you avoid needless bookkeeping
and other expenses. The principal of
each account is insured up to $5,000 by
a U. S. Government Agency. Current
Dividends 4% semi-annually. Assets over
$750,000. W rite for full particulars.

UNITED

iederal Savings

AND

LOAN

ASSOCIATION

OP DES M O I N E S
216 8th Street

Phone 4-5324

"To Know Each Other Better
IS

Better for Business
H ILE John F. Scott, energetic
president o f the Minnesota Fed
eral Savings and Loan Associa
tion, o f Saint Paul, Minnesota, does not
impress one as being a “ dreamer” , he may
have had his visionary moments when, as
the very young general counsel o f the Fed
eral Land Bank o f Saint Paul, he occu
pied a desk back in 1922 in the very build
ing which today houses his thirteen mil
lion dollar savings and loan association.
This imposing stone edifice, built in
1908 by the First National Bank o f Saint
Paul, was completely remodeled and mod
ernized since its recent purchase by the
Minnesota Federal, and stands today as
a noteworthy example o f the part this
organization has played in the progress o f
the city of Saint Paul since its inception
in 1922. Mr. Scott has been president
since that time, and two others o f the orig
inal board o f directors are still serving in
that capacity, J. C. Enright, president
o f the Old Fashioned Millers, Inc., and
Thos. E. Good, president o f the Saint
Paul Union Stockyards Company, o f
South Saint Paul.
Mr. Scott feels that the cordial employ
er-employe relationship existing in his
organization has contributed much toward
the progress the association has made. In
the remodeling of the building a large
part o f the basement was converted into
recreation quarters fo r the employes in

the form o f a river cruiser christened the
“ S. S. Minnesota Federal.”
The sidewalls o f the main room— or deck— consist
o f large photo-murals o f the Mississippi
river at Saint Paul, which, with the constx-uction o f the remainder in true nautical
manner, creates a most convincing illusion
that one is really aboard ship. The larg
est photo-mural is 32 feet long and 8 feet
high and represents an enlargement o f
2,304 times o f an original negative 8 x 10
inches in size. The “ steel” sides o f the
ship are made o f a composition material,
with large brass-headed tacks simulating
the rivets. With the application o f three
coats of white paint the effect is startlingly
accurate. As the entire building is airconditioned by its own 310 feet artesian
well, the hum o f the motors in the base
ment operating the circulatory fans adds
to the illusion and the air current keeps
in continuous motion the flags o f the In
ternational Code. Novel lighting effects
cans transform the main, or promenade,
deck to a “ Moonlight on the Mississippi”
scene which is most entrancing.
The captain’s cabin, which is fore, is
the library, paneled in redwood and fu r
nished up to the nautical minute with red
maple. Even the sloping floor suggests
a ship. Here may be found all up to date
reading matter pertaining to savings and
loan.
The crew’s mess, which is aft, is where

The home o f the M innesota F ederal Savings and L oan A ssocia
tion, in St. Paul

JOHN F. SCOTT

the “ crew” o f the good ship gather each
day to enjoy their noonday lunch (packed
up at home), coffee being brewed in the
galley adjoining, which is completely
equipped with electric stove and ice box,
dishes, silver and linen.
Locker, shower and rest rooms also lo
cated on the basement level, have been
provided to complete a most convenient
and comfortable whole.
“ Upstairs” on the second floor is located
the beautiful women’s lounge, designed
fo r the comfort and convenience o f women
customers and their friends. Here one
may meet her friends, cheek her parcels,
powder her nose, make either Saint Paul
or Minneapolis telephone calls without
charge, or write her personal notes on at
tractive letter paper furnished by the
association.
The entrance to the women’s lounge

This is the prom enade deck o f the S. S. M IN N E S O T A F E D
E R A L , look in g tow a rd the port side. In the b a ck grou n d can
be seen the large photo-m ural m entioned in the accom panying
article.
N o rth w estern Banker

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Federal Reserve Bank of St. Louis

M arch 1939

74
reminds you o f the porch at home— low
swinging outdoor lantern, rug at the en
trance, an inviting door, and you enter
a dream o f a reception room, in a cool
misty blue and warm white; rust drapes
brighten the windows on even the grayest
days, and the Minnesota Federal’s gold
eagle peers from its perch on the chande
lier. Off: the reception room is the powder
room, silver and blue, with carrara glass
walls. Seven steps, with gracefully curv
ing balustrade, lead down to the lounge
proper. This room presents a quiet re
treat from the busy street below. The

knotty pine walls have a satiny finish
through two coatings o f wax. The twisted
chenille carpeting is Bermuda sand color;
glazed chintz draperies in flower design
on a dark brown background hang
straight from the high windows, the chintz
being used also to upholster the wing-back
chair near the red brick fireplace, where
a brightly glowing fire creates an atmos
phere of cheer and welcome. Blond wood
occasional chairs are covered in a striped
satin, and a charmingly appointed desk,
also in blond wood, and attractive floor
lamps, complete the picture. A gracious

CONVENIENT
CONSTRUCTIVE
EXPERIENCED
FRIENDLY

Insurance Companies
Partnerships

SERVICE

Individuals

•••

Corporations

POLK COUNTY FEDERAL

Are Numbered Among the
Investors of This Association

SAVINGS AND LOANInsist on

ASSOCIATION

Insured Safety

Assets over $1,000.000.00
•

•

GATE CITY

Member o f the
FEDERAL HOME LOAN BANK SYSTEM

511 7th Street
DES MOINES, IOWA

Building & Loan Association
FARGO

518 N. P. Ave.
NO. DAKOTA

Member Federal Home Loan Bank System

A SECURITY FOR EXACTING
INVESTORS
Some of the leading business executives and some of the fore
most corporations in the United States have placed part of
their own funds in shares of the Hennepin Federal Savings
and Loan Association.
Our motive is two-fold:
1. Safety— Every investor’s holding in a Federal Savings
and loan Association are fully insured up to $5,000.
2. Public Service— Funds so invested are loaned mainly for
the building and improvement of homes, leading to the
employment of labor and the purchase of materials, thus
creating business activity from which everyone benefits.

W e will be glad to give you further information on the ways
in which this Association protects your savings and serves the
interests of this community.
Write for information

HENNEPIN FEDERAL SAVINGS and LOAN
ASSOCIATION of MINNEAPOLIS
408 Second Ave. S.
N orth w estern B an ker

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

M arch 1939

hostess welcomes all women guests to this
restful room, and here are held the Minne
sota Federal’s radio broadcasts on Mon
days, Wednesdays and Fridays, with an
opportunity afforded guests o f the associa
tion to personally meet and chat with the
artists who appear on these programs.
Walnnt paneling makes a pleasing con
trast with the Italian marble walls on the
main floor. Up-to-date posting machines
and silent typewriters add to the comfort
and convenience o f the employes and fa
cilitate the handling o f the volume of
business which has favored this associa
tion.
“ We know our investment in the pur
chase and remodeling o f this new home
will pay big dividends through the years
in loyalty, enthusiasm, camaraderie and
efficiency o f our personnel,” writes John
F. Scott, president o f the association.
“ Further, the recreational facilities p ro
vide a means fo r social entertainment of
customers and their wives (such as con
tractors, realtors and architects) after
business hours, and are also available for
social purposes fo r responsible civic or
ganizations, many o f which have already
made use o f them during the four months
which we have occupied the building. The
only limit upon their effective use is the
ingenuity o f the executive management.
To know each other better is better fo r
business.”

Reports Continued Gain
When James M. Camp called to order
the 1939 annual shareholders’ meeting of
the United States Federal Savings & Loan
Association, as secretary and manager, it
was the fifth consecutive year he had a
wholesome gain in the affairs o f the com
pany to report. The United Federal Sav
ings and Loan was one o f the very first
of such organizations to be established in
the United States. In less than five years
since inception, first mortgage monthly
amortized loans in its portfolio have risen
to $683,000, and surplus has exceeded
$ 20,000.
“ The United Federal Savings and Loan
Association,” Mr. Camp told his share
holders, “ not only has enjoyed phenome
nal development, but today stands in a
better position than ever fo r expansion.
For example, during the past year many
o f our larger Des Moines casualty insur
ance companies have invested funds in the
United Federal Savings and Loan, and
banks, too, are investing the funds o f small
trust accounts in our certificates. I pre
dict we will become the depository for
many thousands o f dollars more o f these
funds during the next year.”
Indicative o f this trend o f investment
in federal savings and loan institutions is
the fact that the United Federal Savings
& Loan issued over $30,000 worth o f cer
tificates to new shareholders the first
twenty days o f January this year.

75
Mr. Camp further pointed out that one
type loan, (small first mortgage, not to
run too long, and with monthly payments
o f interest and principal set-up to meet
the earning capacity o f the borrower, and
based on very low appraisal), was the
main contributing reason fo r the fact his
company has 347 amortized loans, with the
average unpaid balance per loan being
less than $2,000.
“ This fact,” stated Mr. Camp, “ equals
the Federal insurance o f accounts in the

rapid establishment o f public confidence
in our association and gives added safety
to our investors. Mortgages which we
made four years ago and still in our files
have been reduced 28 per cent. The av
erage o f all current loans, including those

January 31, 1939
RESOURCES
Advances to Members__ $15,317,288.80
U. S. Treasury Bonds------ 2,874,468.58
Home Owners Loan
Corp. Bonds_________
24,000.00
Interest Receivable
69,889.70
Accrued_____________
Deferred Charges--------25,157.28
Cash ___________________ 2,046,054.12
$20,356,858.48

This long established institution
furnishes you a good investment
for your savings.

LIABILITIES

It helps you to make your home
come first, by arranging a lowcost, long-term budget payment
plan for the financing of said
home.

411 6th Ave.
ELMER E. MILLER
Pres, and Sec.

4-8303
HUBERT E. JAMES
Asst. Sec.

Member Federal Home Loan Bank System

DES MOINES, IOWA
Statement of Condition

Security Means
Everything

DES M O IN ES BUILD IN G -LO AN &
SAVINGS ASSOCIATION

Federal Home Loan
Bank of Des Moines

JAMES M. CAMP

made as o f today, have been reduced 15
per cent. A s you know, each account up
to $5,000 is insured by an agency o f the
Federal government. Certainly these facts
are an inducement that will attract addi
tional trust funds to United Federal
Savings and Loan Certificates. Particu
larly, since our shares have never failed
to pay less than 4 per cent semiannual
dividends.”

N EW PROBLEM S IN M O R T
G A G E LEN D IN G
(Continued from page 71)
that Jones’ financial affairs might change
in the near future. Loans are, therefore,
not to be made today without an adequate
analysis o f both the physical security and
the moral risk o f Jones.
On the other side o f the blacker picture
of the past were the causes fo r loss on
mortgage loans made with no considera
tion fo r Jones’ moral risk and with con
sideration being given only to the cost o f
building Jones’ home. The bids or esti
mates o f architects and contractors who
considered only the brick and mortar be
ing used in the house, with no reference
to the economic and social soundness of
the house as related to its surroundings,
cost many a lending institution more
money than it cares to disclose. Present
appraisals, therefore, give consideration to
reproduction costs as the upper limit o f
value, but recognize that cost and value
are not synonymous.

Government Stock Sub
scription _____________ $ 7,394,900.00
Members’ Stock Subscrip
tion _________________
2,127,700.00
Participation-Consolidated
Bank Debentures_____ 9,500,000.00
Deposits_______________
842,750.00
Interest Payable Accrued
43,008.54
Deferred Credit-----------11,562.52
Surplus:
Reserve _$235,382.28
Undivided
Profits _ 201,555.14
436,937.42
$20,356,858.48

Current Dividends

4 % on Savings
Paid Semi-annually
Write for Information

INSURANCE PLAN SAVINGS &
LOAN ASSOCIATION
522 Grand Ave.

Des Moines

3 GOOD REASONS
W H Y YOU WILL LIKE
THIS SAVINGS PLAN—
1. Liberal Earnings
2. High Safety Margin
3. Friendly Service

S TA TE BUILDING LOAN AND
SAVINGS ASSOCIATION
519 6th Ave.

DES MOINES

N o rth w e ste rn B a n ker

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

M arch 1939

COMMERCIAL
FINANCE
CORPORATION
Wholesale and Retail
Installment Financing
of
Household Appliances

PAUL W. CARROLL, Pres.
1116 Paramount Bldg.

Des Moines

DO PEOPLE READ
BANK ADVERTISING?

New Problems
Having determined what was not going
to be done when appraising the security
o f loans to be made today, new problems
were encountered by appraisers seeking
to adapt themselves to newly found con
ditions. In order to consider not only the
present value o f property but also the
future trend o f the property and its sur
rounding district, some factors which
previously seemed to have no bearing on
the value o f the individual home were dis
covered to he most important. The ap
praiser who seeks to render his opinion o f
value on property today without giving
some consideration to the present demand
or the probable future demand fo r the
type of property is not doing his job and
he may get his employer into trouble.
Closely related to the way population
is growing is the way in which population
is shifting from one section o f the country
to the other and from farm to city and
from city to city o f varying sizes. He
will have to give consideration to the
effect on his city o f the decrease or pos
sible increase o f immigrants. In some
sections o f his city he might find an ex
cess o f vacancies because the accommoda
tions which are o f the lowest type will be
inhabited only by those who first come to
this country and will not be inhabited by
first generation foreign people. He will
have to examine the trends which show
that cities o f certain size are growing or
are declining in population so as to de
termine which trend his own city is ex
periencing.
So the appraiser has started by study
ing national statistics and found that his
research has carried him back to his own
city and to some very practical conclusions
which definitely influence his estimate of
value determined fo r his employer who
is to make loans on property within his
city.
There are two professional appraisal
organizations which are attempting to
help the appraisers throughout the nation
to do a better job. A great many banks,
building and loan associations and insur
ance companies are actively supporting
these two organizations because o f the
very practical benefits which will come

NO--when it is about
big US and little
YOU.
YES--when it is as
interesting as the
news and pictures
in their newspaper.
May we prove it?

FOR OVER FIFTY YEARS
we have been

Selling to Bankers
PRINTING
and

L E S S IN G A D V E R T IS IN G C O ., Inc.
910 Walnut Bldg.

Des Moines, Iowa

Serving Iowa Business Since 1 9 0 7

N o rth w e ste rn B a n ker

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

M arch 1939

SUPPLIES
MESSENGER PRINTING CO.
Fort Dodge, Iowa

Iowa’ s Largest Business Training School

Many banks, bond-houses, insurance
companies and other financial insti
tutions employ A. I. B. graduates.
Write or telephone when you need
efficient office employes.
E. O. FENTON, President

American Institu te of Business
DES MOINES
10th and Grand
Tel. 4-4203

77
from their activities. There have been
changes and there will continue to be
changes in the real estate and mortgage
lending field as our country comes out of
its frontier stage into its maturity. Each

tfriòex

individual has a better chance o f being
informed about these changes if he pools
his efforts in these appraisal societies with
many others who have the same practical
interest in these changes.

Over-Counter Facilities
in All Markets
Primary Markets in Iowa
Securities

McGUIRE, WELCH & CO.

Go S^dvertisers

231 So. LaSalle
CH ICAGO

Bankers Trust Bldg.
DES

MOINES

Agricultural Mutual Insurance Assn....3 0
Allen Wales ..................................................... 79
Allyn and Company, A. C........................... 39
American Bank Reporter............................ 69
American Institute of Business............... 76
American Mutual Life Insurance C o .... 25
American National Bank & Trust Co.. . . 50

Koch B ro th ers.................................................
L
Lamson Bros, and Company.....................
Lessing Advertising Company, Inc..........
Livestock National Bank, Chicago...........
Livestock National Bank, Omaha.............
Livestock National Bank, Sioux C it y ...

41
76
61
44
48

McGregor Company, D on............................
McGuire, Welch & Company.....................
Manufacturers Trust Company.................
Merchants Mutual Bonding Company..
Merchants National B ank............................
Messenger Printing Company...................
Mill Owners Mutual Fire Insurance Co..
Minnesota Federal Sav. & Loan A ssn ...
Moon Printing and Engraving Company
Mutual Surety Company of Iow a.............

29
77
38
32
2
76
26
70
77
31

Bankers Trust Company...........................58-59
Ben Franklin Federal Sav. & Loan Assn. 75
Brewer Company, V. W ................................ 40
C
Central National Bank & Trust Co..........
3
City National Bank & Trust Company. . 45
Colonial Finance Company.......................... 76
Columbian National Life Insurance Co.. 32
Commercial Credit Company..................... 39
Commercial Finance Corporation............. 76
Commercial Investment Trust, Inc.......... 41
Continental-Illinois National B a n k .... 64
Continental National B ank....................... 47
Crummer and Company, R. E ..................... 39

D
Davenport and Company, F. E................44-66
Des Moines Bldg-. Loan and Sav. Assn.. . 75
Drovers National B ank................................ 65
Eastman Hotel ............................................... 66
Ellis and Company, L. E.............................. 30
Enyart, Inc., J. C............................................ 76
Equitable of la. (Grady Fort, Gen. Agt.) 29
Erickson Company, C. E ................................ 68
F
Farmers Mutual Hail Insurance A ssn ... 28
Farmers Union Life Insurance Co............ 30
Federal Discount Corporation...................
4
Federal Home Loan Bank of Des Moines 75
Fidelity and Deposit Company................. 60
Financial Credit System.............................. 77
First National Bank, Chicago................... 46
First National Bank, Sioux City............... 63
G

Gate City Building & Loan Association 74
General Motors Acceptance Corp............. 35
Gessell, Harold J. E........................................ 68

National Company of Omaha, The...........
National Surety Corporation.....................
Northern Federal Savings & Loan Assn.
Northern Trust Company............................
Northwestern Fed. Sav. & Loan Assn.
of M inneapolis.................................
Northwestern Nat’l Bank & Trust Co.. .

41
6
75
67

Omaha National B ank..................................
P
Philadelphia National B ank.....................
Policyholders Mutual Casualty Co........
Polk Co. Federal Savings & Loan Assn..

32
74
77
5
44
68
66
45

Insurance Plan Savings & Loan Assn.. . 75
Iowa-Des Moines Nat’l Bank & Tr. Co. 80
Iowa Lithographing Company................... 69

33
32
74

Radisson Hotel ............................................... 54
Ransom Tea Room ........................................ 77
S

Scarborough & Company...........................
Square Deal Mutual Hail Ins. Assn........
State Building, Loan and Savings Assn.
State Finance Company................................
Stockyards National Bank of O m a h a...
St. Paul Federal Savings & Loan Assn..

StbeasnlUved
W e install lighting systems that
combine Efficiency, Economy
and Beauty

Write for Estimates

Louise G. Weston
LIGHTING STUDIO
925 Grand Ave.
DES MOINES

72
52

37
31
75
69
42
72

IO W A

R a n som

Room
IF here Really Delicious Food
Is Served

L U N C H E O N and DINNER
Sunday Service

708 */2

STELLA E. BARKER
Locust St.
Des Moines, Iowa
(Second Floor)

Twin City Federal Sav. & Loan A ssn ... 70

Hawkeye Mutual Hail Insurance Assn..
Hennepin Federal Sav. & Loan A s s n ....
Holley and Sons Co., L. W .........................
Home Insurance Co........................................
Hotel Fontenelle ...........................................
Hotel M c A lp in .................................................
Hotel Majestic ...............................................
Hotel Wellington ...........................................

U
United Federal Savings & Loan Assn.. . 72
United States Check Book Co........ 43-49-57
V

Valley Savings B an k....................................

W
Walters Company, Charles E .....................
W ant Ad ...........................................................
Webster Life Insurance Company...........
Weston Lighting Studio..............................
Witmer-Kauffman-Evans Company . . .
World Finance Company..............................

67
47
32
77
29
76

For Bank Supplies
Com bining Quality,
Service and Price

if. W. Holley b^onsGo.
100 East Grand Ave.
Des Moines

M Q Q N [|™T>riG

We advance cash to dealers who
sell automobile tires and other small
units of merchandise on our budget
plan.

é u z d íd íJ 9A.

F I NE BUSI NESS STATI 0 N E R Y
Original designs upon request
Prices most reasonable

Iowa

Quotations cheerfully furnished
Engraving denotes quality

inancial
CREDIT
S Y S T E M

1210 Grand Avenue

DES MOINES, IOWA
Home Office, Flynn Bldg., Des Moines, Iowa

N o rth w e ste rn B a n ker

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

M arch 1939

Some Dog

Moon Won

In Doubt

A man was strolling clown the street,
holding a large dog by a leash, when he
met a friend. The conversation soon
turned to the merits o f the dog.
“ Yes,” said the owner, “ that dog could
detect a bird a mile away.”
“ Indeed!” said the friend who noticed
the animal sniffing nervously. “ That dog
acts as if a bird were under his nose, and
there isn’t a bird near.”
The owner looked perplexed. Seeing
another man near him, he approached him
and asked, “ Pardon me, but have you a
bird in your pocket1?”
“ No,” answered the man.
A fter a few minutes the dog’s owner
said, “ Excuse me, but what’s your name?
“ Partridge.”
“ Ah,” said the owner to his friend, “ that
explains it.”

Sambo had joined a debating society,
and the day after his first meeting he was
being questioned by a group o f his friends.
“ What was de subject o f de debate,
Sambo?”
“ De subject were ‘What is de most bene
fit to mankind, de sun or de moon ?’ ” re
plied Sambo.
“ And which side did you take?”
“ De moon’s,” said Sambo. “ I argued
dat de sun shines by day when we doan’
need de light, hut de moon shines by night
when dat light mos’ certainly am needed.
A n ’ they couldn’t answer dat, sail!”

Traffic Copper: “ Hey, you! Is that
your car?”
Sorrowful-Looking Motorist: “ Well,
officer, since you ask me, considering the
fact that I still have fifty payments to
make, owe three repair bills, have not set
tled fo r two new tires and don’t know when
I will be able to, I really don’t think it is.”

The Pedestrian
I gaze across the street so wide; I start,
I dart, I squirm, I glide; I take my
chances, oh, so slim—-I trust to eye and
nerve and limb.
I scoot to right, I gallop through; I ’m
here and there, I ’m lost to view. My life,
I know, hangs in the toss— another plunge
— I am across!
Oh, give me pity, if you can— I ’m just
a poor pedestrian.

G lad You Cam e
“ I don’t often eat such a dinner as I ’ve
had today,” complimented the important
guest.
“ W e don’t either,” rejoined the small
son o f the host.

Co rrect Dress Essential
1st Student: “ I failed in my history
examination.”
2nd Student: “ But I thought you had
all the answers written on your cuff.”
1st Student : “ So I had, but by mistake
I put on my geography shirt.”

Deep Impression
D octor: “ W hy do you have BF7652 tat
tooed on your back?”
Patient : “ That’s not tattooed, doctor.
That’ s where my wife ran into me with the
car when I was opening the garage doors.”

Cured
McTavish had never had the reputation
o f being an early bird and things became
so had that the foreman reprimanded him.
A few days later, noticing a considerable
improvement, he complimented Mac on his
changed ways.
“ Aye,” retorted the latter, “ I ’ve got a
parrot now.”
“ But what has a parrot got to do with
it. Didn’t I advise you to get an alarm
clock ?”
“ I bought one,” admitted McTavish,
“ but after a morning or two I got used to
it and then it failed to wake me, so I just
got a parrot and now when I go to bed I
hang the alarm over its cage. When it
rings it awakens the parrot, and what the
parrot says would awaken anybody.”

Said He, Sharply
E d : “ While we’re sitting in the moon
light, I ’d like to ask you—
C o-ed: “ Yes, dear.”
E d : “ I f you couldn’t move over, I ’m
sitting on a nail.”

Union Activity
Service
The owner o f a midget car drove to a
filling station and asked fo r a pint o f gaso
line and two ounces o f oil.
“ Right,” said the attendant. “ And
would you like me to sneeze in the tires ?”
N o rth w estern B an ker

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

M arch 1939

Jones (calling Smith over telephone) :
“ Can’t you come over tonight?”
Smith (answering Jones) : “ I can’t, I ’m
washing my B. Y. D.’s.”
Just here the operator accommodatingly
remarked : “ I ’m ringing them.”

Certainly Not
M otorist: “ But, officer, you can’t arrest
me, I come from one of the best families
in North Carolina.”
C o p : “ That’s all right, buddy, I ’m not
arresting you fo r breeding purposes.”

Nothing But Holes!
Women are seeking
The great open spaces,
Blouses with eyelets
And sheerest o f laces,
Stockings o f mesh,
A sandal that shows
Through punctured partitions
Sections o f toes.
It goes very hard
On sensitive souls
To step out attired
In nothing but holes.

Strong Measures
“ So you say the water that you get here
at the fraternity house is unsafe?”
“ Yeah.”
“ Well, tell me, what precautions do you
take against it?”
“ First we filter it.”
“ Yes.”
“ Then we boil it.”
“ Yes.”
“ Then we boil it.”
“ Then we add chemicals to it.”
“ Yes.”
“ And then we drink beer.”

To Be Read Softly
They apparently had not met for some
time. They were sitting in the twilight to
gether listening to the languorous roll o f
the sea below.
“ And you say that last week you were
in town where I live?” she asked softly.
“ Uh-huh.”
‘And you thought o f me, John?”
“ Yep,” replied John. “ I said to myself,
‘W hy, I remember— this is where what’sher-name lives!’ ”

WE SELL ALLEN WALES -THE WORLD'S FINEST ADDING MACHINES
A. F. Misch
212 & 214 W est 9th Street
Colfeyville—Telephone 54

C. A. Bishop
410 Felix Street
St. Joseph—Telephone 6-0562

R. E. Murphy
321 West Third St.
Grand Island—Telephone 140

W . E. Wilcox
501-2 Lafayette Bldg.
Waterloo—Telephone 3924

E. R. Barr
24 West 6th Street
Emporia—Telephone 344

Allen W ales Adding Machine Agency
252 Glover Building
Kansas City—Victor 3228

L. M. Goeller
Norfolk—Telephone 1515

T. I. McLane
213 Fifth Avenue South
Clinton—Telephone 386

D. Filizola
114 E. Wall Street
Fort Scott—Telephone 164

Guy W . Edmunds
211 N. 7th Street
St. Louis—Chestnut 0220

Lee B. Hausam
408-410 N. Main Street
Hutchinson—Telephone 127

F. H. Fogg
318 Joplin Street
Joplin—Telephone 2150

E. E. Moore
1829 Main Street
Parsons—Telephone 197

C. W . Anderson
208 South 7th Street
Brainerd—Telephone 300

Wilbur E. Walker
145 N. Broadway
Wichita-Dial 2-3486

M. J. Daboll
828 St. Germain St.
St. Cloud—Telephone 630

R. D. Dennis
308 South Fifth St.
Leavenworth—Telephone 176

A. L. Hamilton
111 Third St.
Thief River Falls—Telephone 198

B. J. Redden
2 OV2 E. Main Street
Marshalltown—Telephone 3203

J. W . Paxton
Bloomington—Telephone 2384

J. G. Downs
203 E. Capitol Ave.
for
FRASER
Jefferson
City—Phone 2254

Allen Wales Adding Machine Sales Co.
127 South Third Street
Minneapolis—Bridgeport 7074

G. H. Bailey
230 E. Second St.
Ottumwa—Telephone 1539

Allen Wales Adding Machine A gency
209 W est Jackson Blvd.
Chicago—Phone Wabash 4679-80

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

J. F. Karbush
18th & Douglas
Omaha—Atlantic 2413
E. L. McDonald
301 Shops Building
Des Moines—Telephone 3-7762
Don R. Sheldon
683 West 11th Street
Dubuque—Telephone 4610
L. G. Shannon
1005 Central Ave.
Fort Dodge—Phone Walnut 3446

A. J. Rader
406 Sixth Street
Sioux City—Telephone 5-5764
A. L. Riley
New Hampton—Telephone 110
E. E. Fritzinger
521 Tama Bldg.
Burlington—Telephone 428
V. D. Merveaux
211‘/2 Third St., S. E.
Cedar Rapids—Telephone 4546

. .

t y

central location . . . prompt, dependable service . . .

size, age, organization, facilities and contacts . . . this
Bank ranks high in the list of correspondents for Iowa
Banks.
When you select this Bank for your Des Moines
correspondent account, you confirm the choice already
made by many leading Banks throughout the State.

Since 1875 . . . A Dependable Correspondent Connection . . . Through Good Times and Bad

Iow a -Des Moines National Bank
& Trust Company
MEMBER

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

F EDE RAL

DEPOSI T

I NS U R ANC E

CORPORATION