Full text of The Northwestern Banker : November 1932, 37th Year, Number 544

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Federal Reserve Bank of St. Louis

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COL. CHART,ES B. R O B B IN S
President, Federal Home Loan Bank,
Des Moines

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Federal Reserve Bank of St. Louis

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Servicing cAll Ion)a
W ide Experience
Our wide experience in handling corre
spondent bank accounts together with the
personal cooperation o f our officers assures
prompt and careful attention to every detail
in connection with correspondent services
entrusted to this long established institution.

M ERCHANTS
NATIONAL BANK
O FF IC E R S
President, James E. Hamilton; Vice Presidents, H. N. Boyson, S. E.
Coquillette, Van Vechten Shaffer, Roy C. Folsom, Marvin R. Selden; Vice
President and Cashier, Mark J. Myers; Vice President and Trust Officer,
George F. Miller; Assistant Cashiers, Fred W. Smith, R. W. Manatt, L. W.
Broulik, Peter Bailey, R. D. Brown, and O. A. Kearney.

Cedar Rapids

Iowa

Northwestern Banker
Des M oines
T h e O ldest F inancial Journal W est o f th e M ississippi
N O V E M B E R , 1932

Number 544

37th Year

IN THIS ISSUE
Page

Across the Desk from the Publisher...........................................
Frontispiece— “ How Dear to My Heart” ..................................
Banking Doesn’t Need to Apologize................. H arry J. Haas
Sugar From Minnesota................................................................
How Banks Use Direct Mail to Advertise to Their Customers
What Their Statements Show......................................................
Chicago Gets New Loop B ank......................................................
The First National Bank in 1990................. C . W . Fishbaugh
Making All Bank Services Pay Their W ay. . . .John J. Anton
News and V iew s................................................. Clifford De Puy
Banking Reform and the Reconstruction Finance Corporation
Railroad Bonds— Recovery or Default?. . .Harold G. Parker
“ Everybody Pays the Tax Bill” ................... Leroy A. Lincoln
South Dakota N ew s..............................................................
Nebraska N e w s .....................................................................
Minnesota N e w s ...................................................................
North Dakota N ew s..............................................................
Iowa N e w s .............................................................................
News From Here and There........................J. A. Sarazen
Index to Advertisers............................................................

8
10
11
12
13
14
15
16
17
19
20
25
31
37
39
41
43
45
49
54

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

R. W . M O O R H E A D
Associate Publisher
W M . H. M A A S
V ic e President
1st N ational Bk. B ldg.
Chicago

Member, Audit Bureau of Circulations

F R A N K P. S Y M S
V ice President
19 W e s t 44th Street
Suite 1608
N ew York

J. A . S A R A Z E N
Circulation M anager

H. H A Y N E S
Editor
F. S. L E W I S
Special Representative
218 E ssex Building
M inneapolis, M inn.

Member,
Financial Advertisers Association

Northwestern Banker, published monthly by the DePuy Publishing Company, Inc., at 555 7th Street, Des Moines, Iowa.
Subscription, 50c per copy, $3.00 per year. Entered as second-class matter at the Des Moines post office. Copyright, 1932.

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Northwestern Banker

November 1932

Deposited Stocks in Each Unit of

NORTH A M E R IC A N TRUST
SHARES, 1955
M A X IM U M CUM ULATION TYPE
(A s of October 17, 1931f>
C H E M IC A L
E. I. duPont de Nemours & Company . . . 200
Eastman Kodak C om p a n y.......................................100
The Procter & Gamble C om pany........................... 100
Union Carbide & Carbon Corporation . . . 300
E L E C T R IC A L E Q U IP M E N T
General Electric C om pany...................................... 400
Westinghouse Electric & Manufacturing Co. . 100
STEEL
United States Steel C o rp o ra tio n ........................... 100
FOOD
The Borden C o m p a n y ............................................ 200
C om Products Refining Company
. . . .
100
General Foods C o r p o r a t io n ................................. 100
National Biscuit C om pany.......................................200
Standard Brands I n c o r p o r a t e d ........................... 200
R E T A IL M E R C H A N D IS IN G
Drug I n c o r p o r a te d ..................................................100
Sears, Roebuck & C o................................................. 200
F. W . W oolworth C o................................................ 200
M A C H IN E R Y
American Can C o m p a n y ...................................... 100
American Radiator & Standard Sanitary Corp. 300
Otis Elevator C om pany............................................ 200
F A R M M A C H IN E R Y
International Harvester Company

. . . .

TOBACCO
The American Tobacco Company " B ” .
R. J. Reynolds Tobacco Company " B ” .

.
.

100

.
.

100
200

A U T O M O B IL E
General Motors C o rp o ra tio n .................................200
PETROLEUM
Standard Oil Company (N ew Jersey)

300

R A IL R O A D S
The Atchison, Topeka & Santa Fe Railway Co. 100
The New York Central Railroad Company . 100
The Pennsylvania Railroad Company . . . 100
Union Pacific Railroad C om pany........................... 100
U T IL IT IE S
American Telephone & Telegraph Company . 100
Columbia Gas & Electric Corporation . . . 400
Consolidated Gas Company of New York . . 200
The North American C o m p a n y ........................... 200
Pacific Gas & Electric Company . . . . .
200
Public Service Corporation of New Jersey . . 100
The United Gas Improvement Company . . 300
As of October 17, 1931, the date of execution of the
Trust Agreement, a stock unit consisted of the shares
listed above. The deposited stocks in each unit of
north American TRUST shares, 1956 (Maximum
Distribution Type) consisted on October 17, 1931,
of 1 /2 5th of the number of shares of the common
stocks listed above.

The offering price of north American trust shares
is based upon and varies with the actual N ew York
Stock Exchange 100-share lot transaction prices of
the underlying stocks during market hours. (Full
details of method of calculating offering price are
contained in the Offering Circular.'ll

The investor who purchases no rth Am erican trust shares knows exactly
ivhat he is buying and at all times what he holds. Details of the operations
followed in the creation of these shares are open to the inspection of any one.

Northwestern Banker

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Federal Reserve Bank of St. Louis

November 1932

NO SECRETS
T here are no secrets in

no rth

Am erican

trust shares .

T he investor who purchases no rth Am erican trust shares 1955 and 1956
knows exactly what he is buying, and, at all times, what he holds. H e obtains
an interest in common stocks of 34 companies the market value of whose out
standing common shares exceeds half the market value of all the common stocks
listed on the N e w Y ork Stock Exchange. T he portfolio in which he obtains an
interest is not composed merely of a broad selection of stocks. T he amounts
invested in each company and industry have been weighed scientifically to reflect
the relative importance of each.

Details o f the operations followed in the creation o f no rth American trust
shares 1955 and

1956 are open to the inspection o f any one. Records o f pur

chasing and pricing are subject to examination.
n
Bankers and investors will find every responsibility o f the Trustee, City Bank
Farmers Trust Company and the Depositor Corporation, Distributors Group, In
corporated, set forth in the trust indenture, copies o f which are publicly available.

Recently, for the first time in the history o f the fixed trust movement, a report
o f the research department o f a Sponsor was made available for every trust
shareholder. Special significance attaches to this "R eport on the Supervision of
n o rth

Am erican

trust shares 1955 and 1956” because it calls attention to

one of the important advances which this trust has made in the unit trust field.
Eliminations from the portfolio are not automatic upon the occurrence of a pre
determined event. Eliminations, according to the trust indenture, are made by
recommendation of a Research Department whose duties include the continual
examination of the industries and companies represented in the trust. Elimina
tions may be made only for long term investment reasons and substitutions are
not permitted. Thus judgment takes the place of mechanical provisions.

Investors have
purchased more than
21,000,000 shares

Recommended by
over 1500 investment
houses and banks

North L\merican
TRUST/

Y ,'S H A R E S

Copies of "Report on the Supervision of N O R T H A M E R IC A N T R U S T S H A R E S 1955 and 1956”
will be sent free on request

DISTRIBUTORS GROUP, INCORPORATED
63 W a l l
C H IC A G O

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Federal Reserve Bank of St. Louis

BOSTON

PITTSBURGH

Street,

Ne w Yor k

PHILADELPHIA

LOS

ANGELES

N EW O R L E A N S

Northwestern Banker

November 1932

Il l in o is
BANK A N D TRUST
COM PANY

o n t in e n t a l

C H IC AG O
Statement of Condition, September 30, 1932
RESOURCES
Cash and Due from B a n k s ........................................

$185,099,217.06
93,141,817.98

United States Government Securities
Other Bonds and S e c u r it ie s ........................................
Loans: Demand
Tim e

.
.

. 89,680,362.88

$105,803,172.55

363,295,515.65

257,492,343.10

Stock in Federal Reserve Bank

4,200,000.00
18,321,85433

Customers’ Liability under Letters o f Credit

. 23,584,832.20

Customers’ Liability on Acceptances

701,520.00

Other Banks’ Liability on Bills Purchased
.

Interest Accrued but N o t Collected

3,381,927.45
15,000,000.00

Bank B u i l d i n g ......................................................................

$796,407,047.55
L IA B IL IT IE S
................................................................................ $ 75,000,000.00

Capital

25,000,000.00

S u r p l u s ................................................................................

2,469,392.86

Undivided P r o f i t s ............................................................

1,500,000.00

Reserve for Dividend Payable October 1 .

11,548,998.52

Reserve for Taxes and I n t e r e s t ......................................
Deposits: Demand

Time

.
.

$449,251,666.99

187,308,386.39

636,560,053.38

Letters o f C r e d i t ......................................................................

18,794,964.02

Acceptances

24,125,788.54

701,520.00

Other Banks’ Bills Endorsed and Sold
Discount Collected but N o t Earned

706,330.23

$796,407,047.55

The capital stock of the Continental Illinois Company, held in trust for the stockholders o f the
Continental Illinois Bank and Trust Company, is not included in the above figures

Northwestern Banker

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Federal Reserve Bank of St. Louis

November 1932

Statements of Condition

The First National Bank of Chicago
ASSETS
Cash and Due from Banks
United States Bonds and Certificates
Other Bonds and Securities
Loans and Discounts
.
.
.
.
Real Estate (Bank Building)
Federal Reserve Bank Stock
Customers’ Liability Account of Acceptances
Interest Earned, not Collected
Assets Transferred * 7 Fo" ™ a,»-.S>ate N a tio n a l B an k
a l t e r D e d u c t i n g lt e s e r v e s

Other Assets
LIABILITIES
Capital Stock paid in
Surplus Fund
.
.
.
.
.
Other Undivided Profits
Discount Collected but not Earned .
Dividend No. 201, payable Sept. 30, 1932
Reserve for Taxes, etc.
Liability Account of Acceptances
Time Deposits
Demand Deposits
.
.
.
.
Liabilities other than those above stated
Contingent Liability

i T ' " ' " L“ 1" * “f

First Union Trust and Savings Bank

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Federal Reserve Bank of St. Louis

Cash and Due from Banks
United States Bonds and Certificates
Time Loans and Discounts
Demand Loans
.
.
.
.
Other Bonds and Securities
Assets Transferred
Other Assets

S*rf^

B“ k

LIABILITIES
Capital Stock paid in
Surplus Fund
Other Undivided Profits .
.
.
.
.
Reserve for Interest, Taxes, etc.
Reserve for Bonds held and Contingencies
Contingent Liabilities on Other Banks’ Bills Sold
Time Deposits
Demand Deposits
.
.
.
.
Liabilities other than those above stated

Combined
Capital, Surplus and Profits
Deposits
.
.
.
.
.
.
Resources .
.
.
.
.
.

Northwestern Banker

November Î932

cross lh e Z )es/\ ■
S e Publisher

The Real

During the thoughtful and conV a llie s
templative days through which we
r j •r
have been passing I am sure that
all 0f us have given more thought
than we usually do to the real values of life.
James Truslow Adams, in his very inspiring
book, “ The Epic of America,” points out that,
“ Just so long as wealth and power are our sole
badges of success so long will ambitious men strive
to attain them.”
When we look back over the last three years I
am convinced that all of us realize that there is
more in life than wealth and power because we
have seen both of these melt like the dew before
the morning sun.
Discussing this thought further Mr. Adams says,
“ Until countless men and women have decided in
their own heart through experience and perhaps
disillusion what is a genuinely satisfying life, a
‘ good life’ in the old Greek sense, we need look
to neither political or business leaders. Under
our political system it is useless save by the rarest
of happy accidents to expect a politician to rise
higher than the source of his power.”
Surely in analyzing and appraising the gen
uinely satisfying life, we are in a better position
now than we were a few years ago to put the right
appraisal on the advantages of a cultural life
which includes a higher appreciation of music,
art and literature and does not focus all of its
attention upon the mere getting of money and the
controlling of power, both of which have so elusively slipped through our fingers in the last few
years like water through a sieve.
I am sure that we agree more than ever with
Mr. Adams’ philosophy when he says, “ There is
nothing whatever in a fortune merely in itself, or
in a man merely in himself. It all depends on

Northwestern Banker

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Federal Reserve Bank of St. Louis

November 1932

what is made of each. Lincoln was not great be
cause he was born in a log cabin but because he
got out of it—that is because he rose above the
poverty, ignorance, lack of ambition, shiftlessness
of character, contentment with mean things and
low aims which kept so many thousands in the
huts where they were born.”
To have lived in a period and to have lived
through it when you and I have seen the colossal
fortunes and the gigantic power of men like Iver
Kreuger and Samuel Insull go tottering down to
a suicide’s grave in the one case, and in the other
to expatriation, I am convinced that we will come
to a fuller and deeper realization that the sound
values of life do not necessarily consist of a crown
of gold upon a throne of power, but they must
come from within us as each of us makes of him
self a better and more worth-while citizen.
I have just read some very
interesting figures making a
comparison of our banking
situation in 1921 with that of
today. These figures clearly indicate that while
we have fewer banks, we have better ones, and here
are the figures.
“ We now have about 19,500 banks in the United
States. Back in 1921, the peak year, we had 30,800
banks of all kinds. They had average capital
funds of $207,000, average deposits of $1,300,000,
and there were, on the average, about 3,400 persons
per bank in the nation as a whole. Today the
banks on the average have capital funds of $420,000, deposits of $2,500,000, and the population rep
resents about 6,100 persons per bank. This com
parison shows we have now only two-thirds as many
banks as we did at the peak, the average capital
and deposits have about doubled and banks on the

Fewer Banks
hut Better
Ones

average each have the business of some 80 per cent
more people.”
With fewer hanks but better ones, a fundamental
adjustment has taken place which means a stronger
and better banking system.
One
fhe main factors favoring
recovery is the large amount of
pent-up buying orders for goods
and commodities, which orders are
being held back until the public fully believes that
prices have reached the bottom of their downward
trend.
The advantages which will result from the re
versal in basic commodity price tendencies cannot
be overestimated.
Specifically, an advance of one cent per bushel
in the price of wheat adds approximately $7,000,000 to the purchasing power of producers of this
year’s wheat crop and this increased purchasing
power means that eventually the manufacturer
will have orders for their goods which will help
their wheels to start humming again.
The farm income for 1932 was estimated by
Standard Statistics Company in the middle of
August, to be about $4,350,000,000 and since that
time with the advance in the price of farm prod
ucts it could be reasonably expected that this
figure will be increased before the end of the sea
son.
Such increased buying power means that the
orders which have been held in abeyance will be
put in execution and that means that better busi
ness conditions are on the way.
P e t i t —U p
T lu v in n
O vdeV S

Start
Rebuilding
Confidence
N ow

In view of the experiences of
the past two years I am con
vinced that there is no better
time than now for bankers to
start rebuilding confidence in
their own institutions. If they think that because
the storm has passed it may not occur again they
are mistaken.
Only psychology has taken a vacation for the
moment, but as one banker says, “ Herein lies a
real danger to those banks that are 'willing to let
it go at that. 1 mean the danger of the lapsing
back into a do-nothing policy, thinking as they
have before, that everybody is happy so long as
the complaints are not too numerous or too out
spoken.
“ For years unnumbered bankers have sat se
cure in the thought that because they themselves
knew their banks were sound and well managed
the public must know it, too. Ostrich-like they

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have kept their heads buried in the sand of selfcomplacency and assumed that because there was
nothing more to worry about the public should not
worry. Nor was it—until about, two years ago.”
The time for a bank to build up its confidence
is not when it needs it, but before it needs it.
I am convinced that bankers are taking this
matter of re-establishing confidence in their banks
seriously. I believe that they are going to be
more careful in the personal contact of themselves
and their officers with the public. I am sure they
are going to explain more in detail the operation
of their institutions and the financial standing of
their banks.
After all, the customers of your bank, as you
well know, have a tremendous power to wield for
good or for ill, and by proper advertising and
proper personal contact in the handling of your
business you can re-establish confidence on a firm
foundation.
Nineteen thirty-one was the worst
year in history of American banking
when 2,300 banks closed with depos
its of $1,690,000,000.
Commenting on this situation,
however, II. J. Haas, retiring presi
dent of the American Bankers As
sociation, said “ Bank failure news has been her
alded to the country as though that meant a loss
of $1,690,000,000 of the public’s money deposited
in banks. It meant no such thing. It meant noth
ing more than that this gross amount of deposits
was temporarily tied up. A considerable amount
has already been paid back to depositors and the
bulk of it will ultimately be returned to them.
It has been estimated that on the average about
75 per cent of deposits are finally repaid through
liquidation of closed banks. This would mean
that the actual ultimate loss to depositors through
the 1931 suspensions will be less than $500,000,000.
Since this would be distributed among 2,300 insti
tutions the average bank failure represented a
loss of probably little more than $200,000. Since
it is estimated that the average bank has about
1,750 depositors, the general average per capita
loss among depositors as a whole would finally
be less than $125.”
These figures should convince even the most
skeptical that American banking made a very
good record in a tremendously trying year, and
when you consider these facts coupled with the
further evidence that nine out of ten banks were
not involved in suspensions and therefore caused
the public no losses, it is further proof that our
banking system has weathered the storm.

A Good
Record
Even in
a Bad
Year

Northwestern Banker

November 1932

H O W D E A R TO M Y H E A R T
Reproduced from the original pastel by W m . H . Thompson. Thompson saw active service in the W orld W a r,
where he was wounded and gassed.
Upon his return he took up his work which he had left at the
beginning of his artistic career, and has painted m any charm ing pictures of which the above is an example.

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Federal Reserve Bank of St. Louis

November 1932

Banking Doesn't
Need to Apologize
It has proven itself one o f the strongest elements
in our econom ic structure
ECLARING his faith “ that happier
conditions today represent a real
re-establishment o f fundamentally
sound banking, business and general eco
nomic conditions, ’ ’ as compared with
the “ banking pan ic” that surrounded
the annual convention o f the American
Bankers Association a year ago, Harry J.
Haas, president o f the organization, told
the delegates at the recent convention
that the improvement “ constitutes one
o f the greatest tributes to the traditions
and institutions o f this nation and to the
courage and resourcefulness o f our peo
ple that has even been written in the
annals o f the country in times either o f
peace or w ar.” He said the people had
taken the change from “ new era” o f
prosperity to adversity “ like true Amer
icans and good soldiers who have never
lost a w ar.”
Mr. Haas said in part: “ Property
rights have been respected. W e have had
no social upheavals as witnessed in other
parts of the world. The minority have
abided by the decision o f the majority.
W e have probably experienced the enact
ment o f some o f the greatest constructive
measures in our history. Our unemploy
ment had never been as great and the
fortitude with which they met their con
ditions is a matter o f record. Generous
assistance has been rendered to the un
fortunate by those who have been able
to carry the burden. Many o f our out
standing leaders in business and industry
have given liberally o f their time and
effort to public and social matters. In
short, no matter what our position in
life may be we should be proud o f the
fact that we are citizens o f this great
country Avhere these things are possible.
“ In considering the influences and
forces that have led toward recovery
from the depression, full recognition
should be given to the broad-minded,
nonpartisan and effective efforts of
the national government at Washington
in both its legislative and executive
branches. A t times progress was dis
couraging and it seemed well-nigh hope
less to expect fundamentally construc
tive action through political means. Yet,
in the net result, there has been a grati
fying avoidance o f seriously unsound
measures, and, when the full measure is
taken o f the things accomplished, we

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Federal Reserve Bank of St. Louis

realize that the greatest cooperative
effort ever undertaken by a great nation
to control the forces o f economic destruc
tion has been set in motion and promises
to enable us to conquer the depression by
positive action, instead o f follow ing the
fatalistic attitude o f allowing it to cure
itself.
Work Yet to Do
“ Yet, a great task o f government lies
ahead. It has yet to wrestle with over
taxation. Taxation up to the point re
quired to carry on the functions o f gov
ernment fo r the maintenance o f its basic
purposes is unquestioned.
But when
taxation is used as a social measure to
take an undue proportion o f the property
o f certain classes o f our people to finance
special benefits to certain other classes,
it is a violation o f our basic principle.
Both in public financial policies now in
force and in many proposals brought forward during the period o f stress we are
justified in fearing the result, as there
are involved government expenditures
that create tax demands that are unfair
to our people as a whole and would
create special class privileges. W e should
bear in mind that it is the duty o f our
people to support the government and
not the government to support the people.
Any other policy would lead to paternal
ism and endanger the very existence of
our institutions. Every dollar o f avoid
able governmental expense must be done
away with and every dollar o f unavoid
able expenditure should be made to pro
duce an adequate return or be abso
lutely necessary fo r the health or safety
o f our people.”
Discussing banking conditions, Mr.
Haas declared that his “ view o f the
record banking has made during this
depression is very different from that
manifestly created in general public
opinion,” and that, as compared with
other lines o f business “ banking need
not apologize to anyone” and in fact
proved itself one o f the strongest ele
ments in the economic structure.

HARRY J. HAAS
Retiring President, American Bankers
Association

Information Misconstrued

during the period o f fear, unreason and
mass hysteria a sober public considera
tion of the matter was undoubtedly im
possible. It may be possible now.
“ In 1931, 2,300 banks closed their
doors with deposit liabilities o f $1,690,000,000, heralded to the country as
though that meant a loss o f $1,690,000,000 o f the p u blic’ s money deposited in
banks.
It meant no such thing.
It
meant that this gross amount o f deposits
was temporarily tied up. A considerable
amount has already been paid back to
depositors and the bulk o f it will ulti
mately be returned to them.”
On the basis o f estimates that on the
average about 75 per cent o f deposits
are finally repaid through liquidation o f
closed banks, the actual ultimate loss
to depositors through the 1931 suspen
sions will be less than $500,000,000 dis
tributed among 2,300 institutions. This
would make the average bank failure
represent a loss o f probably little more
than $200,000, he said, adding that since
it is estimated the average bank has
about 1,750 depositors, the general aver
age per capita loss among depositors
would finally be less than $125.
“ It is true these averages will bring
small com fort to the individual who has
lost all or a goodly part o f his cash in
banks through failures,” he said. “ But
treating the bank failure situation as a
public question we must take it by and
large and not in individual cases. The
facts are that nine out o f ten banks were
not involved in suspensions and there
fore caused the public no losses. ’ ’

“ Popular misconceptions about bank
ing are attributable to the figures that
have been given out to the public with
out adequate efforts to put them in their
proper perspective,” he said. “ In fact,

Another public aspect o f this matter
that has been thrown entirely out o f
focus, he said, is the question o f the

In the Bank, and Out

Northwestern Banker

November 1932

12
relative safety o f money entrusted to
banks as deposits compared with what
happened to it elsewhere during the year
1931. He pointed out that at the outset
o f 1931 there was on deposit in all banks
the aggregate sum o f about $57,250,000,000 so that the amount ultimately lost to
depositors would be less than nine-tenths
o f 1 per cent o f the total.
“ That is, the money in our banks was
99.1 per cent safe throughout the most
disastrous year in the history o f the na
tion, ” Mr. Haas said. “ How about dol
lars invested in commodities? The Bu
reau o f Labor Statistics wholesale price
index for all commodities stood at 77 at
the opening o f 1931 and at 66 at the
close. This was a drop o f 14 per cent.
How about bonds ? A standard index for
a representative group stood at 99.6 in
January, 1931, and at 81.6 in December,
a loss o f 18 per cent. Finally, how about
stocks? A standard index comprising

over 400 good American stocks suffered
a depreciation o f 48 per cent during 1931
alone, and at the end o f that year it was
over 69 per cent below the 1929 average
price level on which a great many inves
tors in this field established their posi
tions. Some one might very properly
state that, as many are still holding their
investments and recently they have
shown a material improvement marketwise, it is impossible at this time to
determine their ultimate losses. The cal
culation must then be comparable to the
recoveries made on deposits in closed
banks. However, I believe the proper
comparison should be individual inves
tors with individual depositors. It is
safe to assume that individual investors,
with less expertly selected and less con
servatively restricted issues, took a loss
larger than the average. Do not these
figures clearly indicate that, on the basis
o f actual comparisons, money in bank

Sugar From Minnesota

UGAR, sugar— where does it all come
from ? Well, if you were up around
Frost, Minn., which is just across the
state line from Iowa, about this time o f
the year, you would realize that a great
deal o f it comes from that territory.
Above is a picture o f sugar beets aAvaiting shipment at Frost. According to C.
Kittlesen, cashier o f the State Bank of
Frost, sugar beets are the life blood o f
the territory. Last year the crop aver
aged 12 1-5 tons to the acre and there
were approximately 1700 acres planted.
The price received was $6 per ton, so
there was about $134,000 in revenue dis
tributed to the local farmers.
The number o f carloads o f sugar beets
shipped out o f Frost in the last ten years
is as follows :

Northwestern Banker

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Federal Reserve Bank of St. Louis

November 1932

Carloads
1 9 2 1 .................................................. 153
1922 ................................................... 143
1923 ................................................... 147
1924 ................................................... 179
1925 ................................................... 230
1926 ................................................... 264
1927 ................................................... 161
1928 ................................................... 229
1929 ................................................... 298
1930 ................................................... 326
1931 ................................................... 444
It is interesting to note there has been
a gradual increase in production and ac
cording to Mr. Kittlesen, there are 900
more acres planted this year than last,
which reached the peak in production.
The beets are shiped to the American
Beet Sugar Co. at Mason City, Iowa.

during the depression had a loss expe
rience that was far less abnormal than
that o f investors in stocks and bon d s?”

On the Threshold
Mr. Haas declared that no class o f
business or business men in the nation
today represents more capable manage
ment, sounder financial conditions and a
greater capacity fo r constructive public
service than do the present 19,500 insti
tutions that make up our banking struc
ture. He attributed a large part o f the
bank failures to the fact that govern
ment officials, in both the state and na
tional systems, fo r over a period o f more
than twenty years permitted the organi
zation o f great numbers o f banks with
insufficient capital or in places where
they never could be successful, and in
many instances over the protest o f the
well established banks.
“ W e are justified in felling confident
that we now stand on the threshold o f a
return to better banking conditions,” he
said. “ Recent figures reflect changes.
There were 149 suspensions in June this
year with deposits o f $136,0000,000; 128
in July with deposits o f $56,000,000; and
85 in August with deposits less than
$35,000,000. Subsequent figures show a
continuation o f these improvements and
I am confident the banking situation is
well on its way back to normal. The
average closings o f banks in 1931 ran at
the rate o f about 44 a week. During
1932 they have run at the rate o f about
30, and in recent weeks half that. Re
openings have also shown a steady
trend. ’ ’
Mr. Haas said that when the “ forces
o f economic destruction converged on
banking through the breakdown o f other
lines o f business the consequent increase
in bank suspensions focused public opin
ion on the banks as the cause rather than
the victims o f the general breakdown,”
causing “ a politically stimulated clamor
for a political cure o f the situation by
means o f legislation,” which “ is becom
ing somewhat less violent as a clearer
view o f the truth has developed.” He
added:
Proper Banking Reform
‘ ‘ Bankers are not always in opposition
to important measures affecting banking.
All they ask is that these measures be
sound, timely and in the real public in
terest. As to such banking reform as
can be embodied in our laws, the ap
proach in the past has been wrong. What
has happened? Have we bankers been
forehanded enough? I am afraid not.
W e have seen things developing in bank
ing that some o f us questioned— but have
we been aggressive enough against them?
Others have seen these things too— and
then the first thing we know we are sud
denly confronted with an insistent pub(Turn to page 27, please)

How Banks Use Direct Mail
OW banks are using direct mail in
their advertising was the subject
o f discussion at the Financial A d
vertising Departmental o f the Fifteenth
Annual Conference o f the recent Direct
Mail Advertising Association. The speak
ers were Sheldon L. Stirling, assistant
treasurer o f the Union and New Haven
Trust Company, New Haven, Connecti
cut; Jacob Kushner, assistant secretary
o f the U. S. Trust Company, Paterson,
New Jersey, and Tracy M. Purse o f The
Purse Company, Chattanooga, Tennessee.
TI. A. Lyon, advertising manager o f the
Bankers Trust Company, New York, and
president o f the Financial Advertisers
Association, was the presiding officer.

“ Direct Mail to Promote Business for
Banking and Trust Companies” was the
subject o f Mr. S tirling’ s talk. Mr. Kush
ner spoke on “ Direct Mail That Helps
Solve Public Relations Problem s.” Mr.
P urse’s address was entitled “ Direct
Mail Technique Used by Banks in Vari
ous Parts o f the Country.”
A Business Promoter
Stressing the value o f direct mail as a
business promoter, Mr. Stirling empha
sized the point that direct mail, properly
used, not only increases sales, but also
cuts selling costs. He cautioned against
expecting too much from this medium,
pointing out that it attains maximum
effectiveness when coordinated with dis
play advertising and personal solicita
tion.
Comparing the financial advertiser’s
problem to that o f a military commander,
Mr. Stirling suggested the use o f display
advertising for firing broadsides along
the whole front and the use o f direct mail
as revenues brought up to concentrate
upon specific groups to accomplish spe

to Advertise
to Their Customers
institution were attributed largely to
care used in selecting names.
“ W e have consistently had a 25 per
cent return from our mailings,” Mr.
Stirling continued. “ In volume, leads
from direct mail have accounted for
about 50 per cent o f the amount o f new
trust business reported by our new busi
ness department.”
A fter deciding the purpose to be ac
complished, the type o f appeal to be used,
and the persons to receive the mailings,
Mr. Stirling listed the final step as deter
mination o f the number o f letters to be
sent out at a time and the best time fo r
mailing.
The number he suggested
should be based on the number of returns
that could be followed up promptly and
effectively by personal calls. The time
should be ascertained by tests, which
would probably indicate Tuesday, W ed
nesday or Thursday mornings.
In concluding his remarks, Mr. Stir
ling pointed out that direct mail could be
used effectively not only to solicit new
business, but also to build and maintain
good will, “ keep the customer sold,” and
enlist cooperation on the part o f special
groups such as insurance underwriters
and attorneys.
Public Relations Problems
“ To give banking character and repu
tation; to broaden the value and use of
bank services; to see that their use be
comes beneficial to customers and at the

A brief report on the addresses delivered at the Financial Advertising
Departmental of the recent Direct Mail Advertisers Association Con
vention in New York.

The program for this section was developed by

Robert Sparks, Bowery Savings Bank, New York, and by John Donovan,
Advertising Manager of the Central Hanover Bank and Trust Company.

cific purposes.
Personal solicitation
should be used to follow up and close.
Determination o f specific groups was
stressed as o f particular importance by
Mr. Stirling. He stated his conclusion
that it is much better to have a small list
o f carefully selected names than a large
list o f names gathered in a haphazard
manner. Successful results at his own

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Federal Reserve Bank of St. Louis

same time profitable to the bank ; to bring
understanding where ignorance exists ; to
bring cooperation where prejudice and
indifference prevail ; to make o f a bank
in the community the bank o f the com
munity; to mold all o f these into a per
manency o f confidence and faith in bank
ing ; are factors that come under the pub
lic relations program o f a bank,” was

the statement o f Mr. Kushner in intro
ducing his subject.
In an effort to determine how direct
mail could be used most effectively to
attain the stated objectives, Mr. Kushner
remarked that he had written a number
o f representative banking institutions in
different cities inquiring how their prob
lems were being met. He gave a sum
mary o f the replies, describing the vari
ous types of booklets, pamphlets, folders,
house organs, and miscellaneous mailing
pieces, utilized fo r direct mail contacts
by the different concerns.
Mr. Kushner emphasized the impor
tance o f exercising great care in using
“ the most personal of all direct mail—
the letter.” He pictured it as the voice
o f the bank, which should be not only
cordial and sincere, but clear and definite
in meaning. Personal letters, properly
used, were said to be o f the utmost value
in establishing a closer alliance between
the bank and customer.
“ Direct m ail,” concluded Mr. Kush
ner, “ does noble work in solving public
relations problems, whether used directly
fo r that purpose or in the advertising
and sale o f the bank’ s services. Every
piece o f direct mail used reflects thecharacter o f the bank sending it out. It
virtually speaks fo r the bank.”
The Proper Technique
Mr. Purse, the concluding speaker,,
opened his discussion o f direct mail tech
nique by sketching briefly the historical
development o f bank advertising. The
earliest stage was described as the edu
cational, when advertising was concen
trated on selling the idea o f using cor
porate executors and trustees. Later,
advertising emphasis was placed on the
individual services as they developed,
such as insurance trusts and business in
surance trust agreements. This, in turn,,
was pictured as leading to the develop
ment o f inquiries fo r master books.
As personal solicitation o f trust ac
counts developed, Mr. Purse stated that
advertising was focused on estate shrink
age, estate planning, and reduction of
transfer costs, more and more stress be
ing placed on the importance o f taxes.
The newest phase, he said, was the cur
rent emphasizing o f investment manage
ment qualifications.
Mr. Purse commented on the impor-

Northwestern Banker

November 1932

W hat Their Statements Show
(As of September 30, 1932)
E d ito rs N o te : ÎH E NORTHWESTERN BANKER invites its readers to forward their
r w ill be published herein, 1
from tim e to tim e.
IO W A
TO W N
BANK
Alg-ona............................... Iowa State B a n k .......................................................
A m e s................................... U nion Story Trust & Savings B a n k ...............
Cedar R apids................ Merchants National B a n k ....................................
Charles C ity ...................First Security Bank & Trust Co........................
C lin ton .............................. The City N ational B a n k ......................................
Coon R apids...................The First N ational B a n k ....................................
Council B lu ffs.............. First National B a n k ................................................
D avenport....................... U nion Savings Bank & Trust Co..................! . ! . .
Des M oines.....................Iow a-Des Moines National Bank & Trust Co..
Des M oines.....................Valley National B a n k ............................... .....................
Des M oines..................... Valley Savings B a n k ....................... ................................
Dubuque.......................... First National B a n k ..................................................... '
G rin nell............................Grinnell State B a n k .......................................................
Grundy C enter.............. Grundy Co. N atl. & Grundy Co. Sav. B anks. .
B a n k .....................................................
H um boldt........................ First National
Marshalltown................. Fidelity Savings B a n k ..................................................
M onticello....................... The Monticello) State B a n k .........................................
N ew to n ............................ Jasper County Savings B a n k .....................................
R ip pey.............................. Rippey Savings B a n k .....................................................
Sioux C ity ..................... Live Stock N ational B a n k ............................................
Sioux C ity ..................... Security National B a n k .................................................
S trah an ............................ Farmers State B a n k .....................................................
Toledo............................... The National B a n k .........................................
NORTH D AK OTA
F a rg o .................................The First N ational Bank & Trust Co....................
Grand F o rk s..................First National
B a n k ..................................
NEBRASKA
O m aha.............................. Live Stock National Bank.
M IN N E S O T A
B rainerd..........................First National B ank.

Capital
50,000
100,000
500,000
150,000
400,000
25,000
370,000
1,600,000
2,000,000
500,000
150,000
200,000
60,000
75,000
50,000
100,000
200,000
100,000
25,000
200,000
250,000
25,000
50,000

Surplus
and Profits
$
63,388
27,332
1,073,123
81,086
385,065
30,325
*48,977
1,404,068
1,163,447
204,844
285,768
357,785
46,059
23,513
29,750
149,570
215,339
61,116
27,365
216,703
318,738
7,715
31,245

Loans and
Discounts
$
360,024
375,827
6,649,642
1,063,467
4,438,080
220,732
1,524,220
12,798,854
9,847,346
1,529,098
1,682,948
1,508,549
316,680
266,799
353,896
1,605,798
2,893,635
**1,574,952
197,666
1,921,046
1,431,533
**78,752
319,170

Bonds and
Securities
$ 625,227
202,984
5,592,496
655,706
3,145,633
108,030
1,463,065
8,046,747
8,085,422
2,099,254
1,482,988
2,172,219
230,850
106,858
404,404
412,093
806,956
59,395
1,541,233
2,208,983
169,625

Cash and Due
From Banks
Deposits
$ 372,230
$ 1,268,594
223,288
1,366,949
5,917,195
16,988,699
159,138
1,444,068
1,204,252
8,385,743
50,014
321,622
373,221
2,657,242
3,245,496
17,147,815
7,552,766
25,201,943
949,900
3,620,453
550,074
3,332,939
762,624
3,684,991
97,045
560,187
82,149
292,479
137,322
800,510
415,496
2,243,795
357,837
3,131,313
351,407
1,988,156
19,218
227,899
1,518,496
4,340,190
1,451,991
4,531,386
32,374
83,529
84,877
436,048

Resources
$ 1,381,982
1,670,920
19,061,823
1,889,949
10,170,074
401,947
3,503,799
26,206,315
29,584,838
4,876,579
3,816,278
4,553,947
681,246
506,720
930^261
2,493,365
4,111,503
2,156,772
280,265
5,253,661
5,357,573
116,245
584,230

300,000
400,000

278,893
103,118

$ 2,303,430
2,289,142

$2,899,044
1,692,514

984,410
624,866

$ 6,047,706
3,994,366

S 6,929,774
5,535,525

$1,250,000
450,000
1,250,000

374,763
159,826
1,163,243

$ 5,050,546
2,604,534
12,966,364

$8,827,947
1,062,372
4,445,702

$5,278,584
1,478,935
7,567,603

$19,196,319
4,546,719
23,706,717

$20,821,083
5,320,344
27,258,528

194,331
357,939

$1,769,725
4,174,518

S 492,762
2,705,940

S 2,679,304
11,787,652

S 3,01.3 sin
13,655,845

100,000
1,000,000

638,237
6,488,484

^Surplus and capital combined.
*Loans and Discounts and Securities combined.

tance o f adapting advertising to the solu
tion o f the problems at hand, thus capi
talizing on current conditions. He enu
merated twenty different types o f adver
tising campaigns pursued successfully in
various communities and illustrated how
these general types o f campaign could be
made applicable to individual cases. By
concrete examples, he showed that direct
mail plays an important role in the
prosecution o f successful campaigns
through such media as letters, booklets,
phamphlets, folders, statement inserts,
and other publications.
Urging continuity o f advertising to
assure effectiveness, Mr. Purse also sug
gested conform ity to certain definite
standards, such as adaptability to local
conditions, reflection o f the bank’s stand
ing, capitalization o f the bank’ s strong
points, offsetting of competitors’ points,
gaining interest o f prospects, facilitating
o f closing, creation o f better understand
ing and growing use o f services, and
adherence to legal and ethical standards.
“ Advertising that meets such require
ments,” Mr. Purse assured his audience,
“ should prove sufficiently strong and
flexible to lend itself to a development
plan extending over a considerable pe
riod o f time, and should place you well
on the road toward the goal o f making
your trust advertising effective.”
He followed with a note o f warning to
be sure to set aside a sufficient fund to

Northwestern Banker

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Federal Reserve Bank of St. Louis

November 1932

see the campaign through and to allow
sufficient time to get the full effects.
“ Trust development in general,” he
concluded, 1‘ depends upon public accept
ance o f the corporate fiduciary as the
superior agency to meet certain human
needs and wants. Trust development in
your individual institution depends upon
your convincing each individual prospect
that your company can serve him to the
best advantage.”

First Vice President
A. B. A.
Francis Marion Law has been elected
first vice president of the American Bank
ers Association. He is president o f the
First National Bank, Houston, Texas. He
has been second vice president o f the
association during the past year. Mr. Law
was horn in Bryan, Texas, in 1877 and
was educated in the Bryan public schools,
Agricultural and Mechanical College o f
Texas and the University o f Texas. He
was a country school teacher fo r a short
time and then entered the First National
Bank o f Bryan as a bookkeeper, later be
coming assistant cashier. He then went
to the Commercial National Bank in Beau
mont as cashier. Subsequently lie became
cashier o f the First National Bank in
Beaumont, vice president o f the First
National Bank in Houston, and finally

president o f the latter bank, which posi
tion he now holds.
Mr. Law is a former president o f the
Texas Bankers Association. In the Ameri
can Bankers Association he was a mem
ber o f its executive council fo r two terms,
member o f the Executive Committee of
the National Bank Division, and o f the
Administrative Committee and Commerce
and Marine Commission.

W ill Pay Up
Lifting the tax muddle cloud off Chicago
and the straightening o f the city’s financial
affairs to the point where its securities
will again enjoy an A -l rating among
bankers and investment houses, is within
two months o f accomplishment, according
to an announcement made by City Comp
troller M. S. Szymczak.
The statement came as a result of a. sur
vey made by Comptroller Szymczak and
officials o f Cook county o f unpaid taxes
following the recent refusal o f the United
States Supreme Court to review the Bistor
case, an action brought in behalf o f owners
o f large pieces o f real estate who refused
to pay their taxes without a reduction of
the valuations fo r 1929 and 1930. Mr.
Szymczak added that he is confident that
approximately 90 per cent of the so-called
tax strikers will have paid up their back
taxes within ninety days.

Chicago Gets New Loop Bank
H IC A G O ’ S new bank opened Octo
ber 6th, is the City National Bank
& Trust Company of Chicago. It is
an entirely independent institution, organ
ized to give individuals and firms complete
banking service, and specialzing in com
mercial, savings, checking-savings, and
trust service.
The new' bank opened for business with
paid-in capitalization o f $4,000,000 and a
surplus o f $1,000,000, provided by a syn
dicate formed for that purpose.
City National Bank is organized under
the National Banking Act, and will oper
ate under the supervision of the Comp
troller of Currency o f the United States.
The new City National Bank and Trust
Company has assumed all o f the deposit
liabilities o f Central Republic Bank and
Trust Company. Those depositors who
were customers of the latter bank are now
served by the new bank in the quarters
now occupied by Central Republic Bank
and Trust Company, at 208 South La Salle
Street.
According to bank officers, there will be
no inconvenience to present customers.
F or the time being, they will be served by
the same tellers at the same location as in
the past. City National Bank will honor
all checks drawn on the Central Republic
Bank and Trust Company. Customers
havivng checking accounts wall continue to
use the same check forms and pass books
and these will be honored by the City
National Bank. Savings depositors will
continue to use the same forms for the time
being. This arrangement makes unneces
sary any special trips to the bank as the
transfer o f accounts is entirely automatic
and requires no red tape.

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Federal Reserve Bank of St. Louis

C ity N ational Bank and
Trust Com pany opens in
Central R epublic quarters
on LaS alle Street
Business and Civic Leaders on Board
Administration of activities of the bank
will be supervised by the following board
o f directors, including Charles G. Dawes,
Chairman, and Philip R. Clarke, Presi
dent, and containing quite a number of
business and civic leaders not previously
associated wTith Central Republic Bank
& Trust Company: Donald S. Boynton,
Pickands, Mather & Company; Henry M.
Dawes, President, Pure Oil C o.; Chas. S.
Dewey, Vice President, Colgate-PalmolivePeet Co.; George B. Dryden, President,
Dryden Rubber C o ; George F. Getz, Chair
man o f the Board, Globe Coal Co.; John
Goodridge, W illing Estate; Charles B.
Goodspeed, Manufacturer; Harry B.
Hurd, Messrs. Pam & H urd; James S.
Kemper, President, Lumbermen’s Mutual
Casualty Co.; Frank Knox, Publisher,
Chicago Daily New s; Theodore W . Rob
inson, Manufacturer; Elisha Walker, Cap
italist; Rawleigh Warner, Vice President
& Treasurer, The Pure Oil C o.; and Rob
ert E. W ood, President, Sears, Roebuck
& Co.
Chicago bankers feel that the new bank,
with its position o f extreme liquidity,
launches forth under unusually favorable
conditions and at a time when indications
point to improvement in general business
conditions.
Following the announcement of the for-

maton o f Chicago’s new national bank, the
City National Bank and Trust Company,
there came a flood o f varying opinions as
to wThat course the Central Republic Bank
and Trust Company would take.
Joseph E. Otis, new board chairman o f
Central Republic, made the bank’s posi
tion clear: “ Central Republic is not going
out o f business, in so far as its trust and
real estate loan departments are concerned.
The commercial business, savings depart
ment, and checking-savings department
have been taken over by City National.
But our trust, real estate loan and invest
ment affiliate, Central Republic Company,
will continue to do business.”
The readjustment o f the affairs of Cen
tral Republic was dictated by sound busi
ness principles. The nationwide decline
in bank deposits which reached a peak last
June, resulted in heavy withdrawals from
Central Republic, so that it was necessary
to borrow a substantial sum of money.
While this restored the favorable cash
position o f the bank, it imposed a severe
burden in the form o f interest on the
money borrowed.
Drastic reductions had been made in
overhead and salaries but the shrinkage in
earning assets due to declining deposits
wTas making it increasingly difficult to meet
fixed rental obligations and other charges.
When the cost o f borrowed money was
added to the other operating expense, the
continuation of Central Republic Bank
and Trust Company without some plan
o f readjustment could only have the effect
o f a steady impairment o f its assets.
The problem of how to remedy this un
economic condition had the constant atten
tion o f Central’s board o f directors. Every
effort was made to devise a plan that would

To the left —
Charles G. Dawes,
Chairman of the Board
To the right—
Philip R. Clarke,
President

Northwestern Banker

November 1932

16
retain intact the business o f the bank. A
careful analysis, however, o f all o f the
factors involved and particularly the high
fixed rental charges, made it apparent that
continued operating losses were inescap
able and could only result ultimately in
forced liquidation.
This would have
meant a sacrifice o f the bank’s assets.
Therefore it was finally concluded that
the Central Republic Bank and Trust Com

pany could only be enabled to remain in
existence by divesting itself of its deposits
and having them assumed by an outside
and distinct institution.
In the process Central Republic was able
to adjust many o f its heavy fixed charges
on a more reasonable basis. By thus per
mitting the continuation of operation there
is opportunity fo r realization o f its assets

to be made carefully during a prospective
period o f business recovery.
City National Bank will take over only
the commercial, savings, and checkingsavings departments o f the Central Re
public Bank. The latter will continue
with its present Trust and Real Estate
Loan Departments. Its investment affili
ate, Central Republic Company, will also
continue as in the past.

" T H E FIRST N A T I O N A L B A N K
N E V E R Y business there has been
speculations as to what will happen
in the next fifty or sixty years. But
not so in banking. W e admit there has
been enough speculation in banking;
yes, more than enough. But as to what
the next fifty years will bring forth only
the Man in the Moon and the Old Lady
in the Shoe know. So le t’ s take a look.
Roll back the curtain and peep at the
good old First National Bank o f Podunk
in 1990 A. D. (A fter Depression).
Naturally there is still the picture o f
Adolph W holing the First, founder of
the bank, hanging out in the front office.
But Adolph Avouldn’t recognize the bank
now; if he did he w ouldn’t admit it. He
might still recognize the outside, as the
same awnings are still out in front. But
everything else has changed with the
exception o f the note case. There are
still a few o f the notes that Adolph I
took on the opening day, many years
ago. The bank examiner has advised
Adolph III to get rid o f them, but he
can ’t bear to part with those prized pos
sessions of his grandsire. Besides, they
might be paid some d a y !
L et’s take a half peep inside the bank.
Adolph I had always recommended a
high grill Avork to protect the tellers
from the dishonest customers.
There
may still be dishonest customers, but the
g rill’ s gone. Just a plain counter is
all that’s left. It’s rather handy because
i t ’s a lot easier fo r the teller to lean on.
The poor, overworked tellers have at
last found relief. They can now sit at
the counters in rocking chairs. When a
customer comes in to deposit money the
teller just steps on a button and the cus
tom er’s money is automically counted
and the entry made in the pass book. I f
the customer merely wants to cash a
check the teller presses another button.
A ll the time the teller can keep rocking
and reading the paper, which now says
in large headlines : ‘ ‘ Government Plans
Farm R e lie f.”
Aside from this teller-saving device
there are many more inventions that
have come into common use. For in
stance, in the bookkeeping room we have

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November 1932

the self-correcting posting machine, that
finds your mistake before you make it.
The champion check-filing machine, the
combination mistake-adjuster, not to
mention the new deluxe overstuffed post
ing machine chair.
In the credit department we have the
triple-action machine fo r bad notes. It
can tell if a note is bad, a forgery, or a
renewal all in one action. Then there is
the lie detector that can tell when any
borrower makes a false statement. This
machine caused a great deal o f trouble
at first. Adolph III was making a loan
to himself and the bookkeeper acci
dently ran his statement through it.
Since that time all officers o f the bank
make their financial statements on
scratch paper with disappearing ink.
Science has indeed worked wonders in
banking; it has done everything but in
crease the profit. And right at this time
in 1990 they are working on a new profit
machine, but they ca n ’t finish till they
find a bank that paid a dividend the pre
vious year.
Now le t’ s look at the money in use.
The silver standard has now come into
vogue. The smallest piece o f silver made
is the dollar. There is no use fo r any
thing smaller. The currency is now the
size o f bond coupons. When the treas
ury department back in 1929 started the
new size currency they found they could
save money on the new small size.
They’ve gone the whole way now— they’re
using up the scrap paper they had left
in 1929.
But le t’s leave the money and physical
change o f the bank alone. E verything’ s
changed, so le t’s forget it.
The real change, the change that is a
change, is in the policy o f the bank.
Right under the picture o f President
W holing is a sign that reads: “ W e
Solicit Your 0. D .” I f Adolph I could
see that he would commit the unpardon
able sin and spit in the wastepaper
basket. The whole tone o f the bank
now is Good W ill. It wants your good
will even if you d on ’t have anything to
go with it. Adolph W holing III is out
fo r the good will o f every man, woman,

in 1990"
By C . W . FISHBAUGH
child and lawyer. He asks you to write
bad checks, kite checks and float checks.
He will loan money on any note for any
amount, providing you hand out the good
will. The O. D. list is larger than the
deposits, but what o f that? That only
makes the bank safer; the depositor
can’t lose when he carries an 0. D. Com
petition has grown so keen that i t ’ s
necessary to go after business with a
will, and that calls fo r good will. And
the old fighting blood o f his early ances
tors is still in W holing III and h e’ll run
a bank— even i f the directors have to
pay the light bill.

Heads Savings Division
Gilbert L. Daane was elected president
o f the savings division o f the American
Bankers Association at the annual conven
tion. He is president o f the Grand Rap
ids Savings Bank, Grand Rapids, Mich.
He has been vice president o f the savings
division during the past year.
Mr. Daane was born in Grand Rapids,
Mich., May 30, 1886. He was educated in
the public schools o f Grand Rapids, later
attending the Grand Rapids Business In
stitute and Michigan State College, East
Lansing, Mich. His first business position
was as a stenographer and bookkeeper.
Later he became teller in the Commercial
Savings Bank, Grand Rapids, then man
ager of the Michigan Exchange Private
Bank, also of Grand Rapids, vice presi
dent and cashier o f the Grand Rapids
Savings Bank, and finally president of the
latter bank, which position he now holds.
In his activities relating to the American
Bankers Association, Mr. Daane was chair
man o f membership committee 1930-1931,
member of executive council 1930 to date,
vice president savings division 1931-1932
and member legislative committee 19311932. He was president o f the Michigan
Bankers Association 1928-1929.

W e S h o u ld A p p l y O u rs e lv e s
to a F ix e d P ro g ram o f

M aking A ll Bank Services
Pa y Their W a y
By JOHN J. ANTON
Vice President The First National Bank
Chicago

the present.
unsatisfactory and trying condi
tions, notwithstanding the hysteria,
the crumbling markets for our securities,
the freezing of millions o f dollars in failed
banks, by far the larger proportion o f
banks in America deserve confidence.
Most of them are managed by men o f high
character who have the ability and the will
to bring their institutions safely through
the unprecedented business storm which
has raged fo r the past three years. We
may confidently expect that the end of
this depression will find the American
banking system still fundamentally sound
and, as in the past, exerting a powerful
influence fo r business recovery.
o t w it h s t a n d in g

Profit With Safety
I f the banking business is conducted
properly, it performs a very useful service
to the community and at the same time
shows a reasonable return to its stock
holders. It has been proved time and
again that employing the best manage
ment methods and making the best o f
available opportunities will produce the
most gratifying results : stability, confi
dence, and growth. To earn a fair profit
is not a cold philosophy. It does not pre
clude sentiment in banking. It is entirely
in harmony with the idea that a banker’s
principal function is to serve his com
munity and the men and women in it. Let
me emphasize that no banker properly
serves his community and its citizens un
less the bank makes a profit, fo r profit
in banking is inseperable from safety, and
a bank must be safe if it is to contribute
its proper share to the upbuilding and
development of its community.
Bankers have been fo r many years the
accredited leaders in civic and business
life. Yet I regret to say in too many in
stances in the conduct of their own busi

ness they have failed to demonstrate their
capacity fo r such leadership. It is a rec
ognized fact that a business, to be success
ful, must have earnings to justify its
stock investment. This is fundamental
economics in any business organized for
profit. And banking is, I believe, still
regarded as a commercial operation.
While remembering our responsibilities
to the public, we must not forget that we
still have stockholders who are looking to
the operation o f our institutions in large
part from the standpoint o f dividends.
W e have not yet succeeded in eliminating
losses from banking nor the need for set
ting up reserves for losses, fo r taxes, fo r
building and furniture and fixtures— and
fo r dividends, an item which many hanks
seem to have forgotten completely. Do
not mistake this as impertinent. These
are conditions we must face and quickly
correct if we are to resume our proper
place and again enjoy the confidence o f
our communities and o f our stockholders.
Good Management
I have known bankers to say that it is
impossible to formulate principles of good
management which may be applied gener
ally to any bank. They say, ‘‘M y bank is
different from any other bank. My town
is different.” They forget that there are
basic principles o f sound management
which have been developed through years
and years o f practical experience. These
principles did not spring up over night;
they are the result o f time-tested expe
rience o f many banks under varying con
ditions. I should like to state here that
these fundamental guiding principles o f
sound bank management are applicable to
every bank in this country, whether it be
large or small, whether it he located in
the country or in the city.
The evidence o f this new interest in

The address presented here was delivered by Mr. Anton at a number
of Group Meetings held recently in Northern Illinois.

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The profit-proving

points he makes will apply to your hank, also.

JOHN J. ANTON
bank management is to be found on every
hand. In banking publications, at state
and national bankers conventions, and at
group meetings, the discussions revolve
about this subject.
As we look back in bank history, I won
der if the old type of bank manager— the
fellow with the glass eye who usually
said “ no” and meant it, the hard boiled
banker o f earlier years— did not after all
have some cardinal virtues.
His cus
tomers abided by his decisions and re
spected him. Of late years, we have too
often reversed this principle; too often
have our depositors dictated the services
they should expect o f a bank and also the
terms. Obviously, we must change this
attitude on the part o f the customer if we
are to resume our proper standing in the
community.
Already there are definite indications
of a changed viewpoint on the part of
depositors. Banks which have been forced
as a result o f material decrease in depos
its to build up their income from special
sources, have been receiving remarkable
support and, incidentally, showing a
greatly improved position.
W e can help ourselves with depositors
and others by proper explanation of the
bank management standards discussed at
our conventions and group meetings. An
educational program featuring the need
for safe and profitable banking will, I
am sure, receive the endorsement o f your
people.
In publishing your periodical
statement of condition, some well-put

Northwestern Banker

November 1932

18
slogans will be found helpful in this con
nection.
Declining Profits
W e are presently concerned with de
clining profits, resulting from low inter
est rates, shrinking deposits, increased
taxes, increased operating expense, in
creased loan losses, bond depreciation.
W e are also suffering from a lack o f spe
cial or by-product incomes. I refer to
real estate and farm loan mortgage com
missions, commissions on real estate and
farm sales, and other sources of banking
income which we can well remember from
former years.
Today we have but two basic sources for
our profits: first, interest on our loans
and investments, and second, service
charges. Income from loans is practically
self-regulated by prevailing average dis
count rates; however, some increase in
revenue can be derived from this source
by applying a minimum charge of, say,
50c or $1 on small loans. While on this
subject o f a minimum charge, let me ask
what is the cost to your bank o f placing
a loan on your books, the proper record
o f loans, the cost of looking after the col
lateral, the cost o f insurance against
theft of customers’ collateral?
Surely
these are items o f expense not to be over
looked, and would seem to justify a min
imum charge or service charge on small
loans— and we all have them.
Item number two is service charges.
This item to my mind, gentlemen, offers a
definite and promising result if Ave will
but apply ourselves to a fixed program o f
making all bank services pay their way.
I am not here to discuss the logic or

soundness o f the principle o f service
charges. This has already been accepted
as a recognized standard o f banking. I
frankly say to any banker not following
the practice o f making charges on small
and unprofitable accounts, that he is neg
lecting a responsibility to himself and to
his stockholders; he is the exception to
the rule; he is sadly in the minority. Mo
defense is necessary for service charges;
they are founded on a sound and basic
principle. What I have to say on the
subject o f these charges is rather to urge
you to establish charges that are not alone
“ stop loss charges,” as they have become
commonly known, but which will in ad
dition provide for a profit on every item
o f service, instead of just enough to bear
the expense.
The M etered Charge
The metered ser\dce charge has been,
I believe, the most popular and the most
accurate plan fo r charging the small but
active checking account. This plan is also
a self-regulating analysis of the small ac
count and, regardless o f the activity, you
can depend upon having a self-sustaining
and profitable account. Larger accounts
should be analyzed and charges made
when results show a loss. We have too
often been weak-kneed in the matter of
carrying unprofitable accounts. What
would Ave think o f the wisdom or even the
credit o f a customer Avho admitted that
many o f his accounts were carried at a
loss?.
Beyond question, thousands of
checking accounts are being carried at a
loss, Avith the banker in some cases even
paying interest on the unprofitable ac
counts.

Looking down the banking floor of the new Paris Uptown Branch
of the Chase National Bank
This room is a striking example o f the modern treatment o f bank interiors Avith
its tellers’ counters instead o f old-fashioned cages, and its reliance fo r effect upon
simplicity o f line and natural beauty o f material.

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November 1932

Activity o f accounts is the stumbling
block fo r many bankers Avho are trying
to increase their profits. They apply serv
ice charges w7hich are based on minimum
balances but which fail to charge for ac
tivity. The number o f employes required
and the operating expense in a commercial
bank naturally vary with the number o f
transactions (deposits and withdrawals)
per month per $1,000 o f deposits. I f a
bank’s checking accounts are all high
quality, the number o f transactions is
relatively Ioav. Surveys indicate that the
number o f transactions per $1,000 o f
commercial department balances varies
from as I oav as 5 to as high as 87 per
month, or a spread o f about 1,700 per
cent. Is your bank getting paid fo r excess
activity?
The amount o f activity will
determine in a measure the number of
your employes.
A n Analysis
In an analysis covering a number o f
communities, 34 per cent o f the checking
accounts averaged $7.08 apiece; 49 per
cent average $14.82; 75 per cent averaged
$41. Three-fourths o f the accounts Avere
beloAv $50. Take 100 accounts with an
average balance o f $25, set up a reserve
o f 15 per cent and at 6 per cent the bank
will only make $128 on the loanable bal
ance. One need not go into higher math
ematics to knoAv how far $128 will go in
serving 100 accounts fo r a Avhole year.
The bank must provide part of the time
of a teller and a bookkeeper, checks, state
ments, passbooks, depreciation of book
keeping machinery, rent, light, taxes,
overhead and salaries. Those Avho have
figured costs carefully estimate that these
accounts will reveal a net loss o f $6 each
per year.
In a recent article a Wisconsin banker
described a systematic effort to reduce the
number o f unprofitable checking accounts.
In three years he cut the number down
one-half and then, to use his own Avords,
he “ tried to determine the amount actually
saved by losing an account,” and he esti
mates that every unprofitable account he
lost saved him $8.75 a year. The amount
he saved by eliminating the unprofitable
accounts and through service charges Avas
equal to 3 per cent on his capital stock.
His bank is located in a town of 556 peo
ple and he has deposits o f $260,000.
There are cases where banks have earned
from 2 to 19 per cent on their capital by
recourse to the service charge alone. One
thousand dollars in service charges col
lected annually is the equivalent of put
ting $66,000 in new business on the books
o f the bank at a net profit o f i y 2 per
cent; $6,000 in service charges annually is
the equivalent of adding $400,000 in neAV
business and netting i y 2 per cent thereon.
A well knoAvn bank consultant has re
cently collected some interesting figures
in this connection:
(Turn to page 28, please)

I NT A recent book by H A RPE R LEECH,
I “ The Paradox o f Plenty,” I think he
gives a good definition o f our present
economic picture, when he says, “ This is
not a depression, it is a mishandling of
the greatest era o f plenty the world has
ever known.”
IN THE Grill Room of the HOTEL
I GOVERNOR CLINTON, New York
City, they sell you six coupons for five
dollars to be used in buying their one dol
lar club luncheons, and as part of the sell
ing argument, they very facetiously re
mark, “ You will get an added thrill buying
coupons that really can be clipped— now.”
The trouble with other kinds of coupons
is not that they can not be clipped now,
but that many o f them have no particular
value after they are clipped.
Trading
coupons fo r food is not an unpleasant
task.
P R E D L. PALM ER, advertising inanI ager of the Distributors Group, called
my attention to an article in the Nation,
on “ Guesses fo r Sale,” by W. H. G A R
F IE L D which is the record o f the busi
ness forecasters. I f you wish some inter
esting reading, this will certainly give it
to you.
In this article Mr. Garfield analyzes
the records o f BABSON, BRO OKM IRE,
MOODY, and STAND ARD S T A T IS
TICS, and sums them up with this inter
esting paragraph: “ Thus we bring to a
close our survey o f forecasters who could
not forecast. Having missed the oppor
tunity to have their clients cash in on their
profits before the market crash o f 1929,
they had at least seven subsequent major
chances to save money fo r them by advis
ing them complete withdrawal from the
market. Not one o f these chances was
used to the full by any o f the organiza
tions. Most o f them were completely ig
nored. Instead, they plunged investors
in deeper and deeper with more and more
buying recommendations. And then, when
the market did turn, they were three weeks
late in realizing it.”
EORGE F. B E N K H A R T , vice presi
dent o f the General Motors Accept
ance Corporation o f New York, plays a
good game of golf but he recently left his
foursome after he had finished the six
teenth hole because a telephone call from
his secretary informed, him that there was
at his office a prospective buyer fo r a piece
o f real estate which he owned. As conso
lation fo r his leaving an unfinished game,

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he reports that he did sell the real estate
— and for cash, too.
HILE in New York last month, I
had the pleasure o f dining with MR.
AND MRS. W A L T E R IV. H E AD at
their delightful apartment at 440 Park
Avenue. Mr. Head is president o f the
Morris Plan Corporation o f America and
is enjoying the duties of his new position
very much. In addition to his many other
directorships in various corporations, he
still finds time to carry on his work as
president of the Boy Scouts of America.

IN ORDER to stimulate business ONE
I NEW Y O R K BOOTLEGGER who is
known as “ A l ,” gives free with every ten
dollar purchase, one bottle of BAC AR D I,
1873, according to an advertising folder
which one of my New York banker friends
(a dry, however) showed me. “ A l ” also
adds that “ F or anything, anytime, any
where, the fastest delivery service in town,
use your telephone. Don’t run to the cor
ner. Let us run to you.” Thus the mod
ern bootlegger is improving his efficiency
— if not his product— in the big cities.
IN THE October issue o f The Forum,
I is an article by FRED C. K E LLY ,
“ CAN
TRUST ‘ COM PANIES
BE
T R U ST E D ?” Mr. Kelly points out the
weaknesses o f certain procedures carried
on by trust companies and suggests how
they shoffid be corrected. Here is just
one o f Mr. Kelly’s harpoons: “ A large
trust company, because of its size, and the
very nature of its methods, is frequently
well nigh barred from intelligent action.
Because o f its prejudices and handicaps,
a trust company sometimes buys securities
for widows and orphans funds that many
of the company’s own employes would
know better than to buy for themselves.”
With the increasing growth of trust
company business, it is but natural that
some mistakes will occur, but trust com
pany officials should take it upon them
selves to immediately eliminate any ques
tionable methods which may in the future
reflect upon this business and the valuable
service it can render.
W A S very much interested in reading
the SUPREME COURT DECISION
OF N EW Y O R K which recently ruled
that the Superintendent o f Banking is
not responsible to individual bank deposi
tors for the financial statements pub
lished by banks in the state. The ruling
held that the superintendent can only ac

cept the bank’s statement and that he can
neither suppress them nor correct them.
The case arose because a depositor
placed money in a certain bank on the
strength of the bank’s published state
ment. Later on the bank closed and the
depositor sued the state superintendent
o f banking, charging that he was respon
sible for the money which he, the deposi
tor, lost in the bank.
Personally I would think it rather un
fair to hold any state banking superin
tendent responsible fo r the loss of funds
belonging to depositors, unless this might
be legalized into a new form of guarantee
ing deposits through the superintendent’s
office.
I ATTEN DED a lecture last month at
I Columbia University, Newr York City,
given bv PROF. A. W . M ACM AHON on
“ OUR TW O P A R T Y PO L IT IC A L S Y S
TEM .” In this lecture he brought out
that in most countries there are a large
number o f political parties, contrasted
with only two major parties in the United
States. Prof. Macmahon gave many rea
sons fo r the American two party plan,
saying our love o f sports had something
to do with it since Americans like team
play and cooperative combat between two
Avell organized groups.
Perhaps this is the reason the Republi
can and Democratic “ teams” have had so
much fun in this campaign, throwing sta
tistics at each other like so many forward
passes.
DO NOT know how many bankers
I have a philosophy o f life, but I think
most of us do, although we may not be
entirely aware o f it. Here is a bit o f
philosophy I heard recently which ap
pealed to me: “ If you get what you
want, you are successful. I f you want
what you get, you are happy.”
r A R N E S T ELMO CALKIN S, noted
L . advertising man, brought out a point
o f unusual interest in an address I heard
last month at a luncheon meeting o f the
New York Financial Advertisers Associa
tion, when he said that most o f the funda
mental factors in world recovery are un
popular and unpleasant to talk about.
Disarmament is one— balancing the gov
ernmental budget another— cancellation o f
Avar debts another— leveling tariff barriers
still another. He feels that the only Avay
that our age-old prejudices and dislikes
toAvard making changes can be overcome
is by education. In this connection, he
said banks haATe a great opportunity to
help change national thinking by pointing
out some o f the lessons of the past three
years.
Cu n n i n g h a m , of Los
Angeles, Avas the winner of the na
tional public speaking contest sponsored
by the American Institute o f Banking and
arold

Northwestern Ranker

November 1932

20
in an address before the A. B. A. conven
tion he said: “ The responsibilities o f the
banker cannot be overemphasized, but it
is time that there be written across the
horizon of American life in letters of
flame, the responsibilities o f the bank cus
tomer. When a bank account is opened
there is born a dual responsibility. That
of the bank is neither greater nor less
than that o f the customer. Only by com
mon shouldering o f the load can the prob

lems o f banking be solved.” It is the duty,
however, o f bankers, to educate their own
customers to the responsibilities which
they, the customers, have toward their own
banks.

rB A N C IS H. SISSON, new A. B. A.
I president, defends the American banker
by saying, “ As a matter o f fact, bankers
had to face criticism in the prosperous

years because o f their more conservative
attitude and lack of enthusiasm fo r the
‘new era.’ It is true that most bankers did
not realize how severe and prolonged the
reaction would be, but with a very few ex
ceptions, neither did any one else.”
May I suggest that I hope that the
“ guesses” of the future, which are made
by bankers and economists alike, will have
a better batting average than those of the
past ?

Banking Reform and
the Reconstruction Finance Corporation
These tw o subjects received their full share of discussion at the recent A . B. A .
C onvention.

Presented here is the report of the Econom ic P olicy Commission
as it relates to the above interesting topics

T HAS long been generally admitted
that one o f the drawbacks and weak
nesses o f our American banking sys
tem was that we had more banks than
were required by the economic needs o f
the nation. Unfortunate as were the
circumstances which brought it about it
can safely be said that there has in re
cent years been a marked correction o f
this particular weakness in American
banking, for during the past eleven years
the number o f banks in the United States
has been reduced from thirty to twenty
thousand through suspensions, consolida
tions, and voluntary liquidations.
In
this way many uneconomic units were
eliminated and the position o f the re
maining
institutions
was
thereby
strengthened.
Unfortunately the violence and rapid
ity with which the process o f elimina
tion has operated during the period o f
the depression carried it to disastrous
lengths that increased general business
unsettlement and public alarm. This in
turn caused the suspension o f many good
banks and the ruin o f many excellent
bankers that would otherwise have
weathered the storm. Doubtless, also,
many communities have been deprived
o f the banking facilities fo r which their
business activities present a real need.
In the main, however, the processes that
have so largely reduced the number o f
banks in the Untied States have, to a
great extent, weeded out institutions from
the banking field that fall under the fo l
lowing heads :

capital, lack o f proper qualifications to
engage in banking on the part o f their
organizers, or insufficient available busi
ness to support them in the places where
they were started.
(2) Banks in places where probably
permanent local changes later reduced
the volume o f available business to a
point below the amount necessary to
support then existing banking facilities.
(3) Finally, institutions in which im
proper or incompetent management had
come into control.
To the extent, therefore, that the banks
which have been removed from the bank
ing structure belonged in these foregoing
classes, there has been a salutary elimi
nation o f undesirable elements and
causes o f weakness that reacted against
all banking. To this extent, also there
has been a strengthening o f the banks
that are left and a raising o f the now
prevailing standards o f character and
soundness as measured in terms o f aver
age capital, resources, available volume
o f business and qualities o f management.
This reform has been enforced by these
inevitable readjustments with greater
thoroughness and effectiveness than
could have been accomplished by any o f
the sweeping plans fo r so-called banking
reconstruction by legislative reform
urged during the period o f economic con
fusion from which we are now happily
emerging.
Consider Changes Carefully

W e do not claim that all desirable re
adjustments in our banking structure and
Eliminated
methods have now been perfected, but
(1)
Banks that should never have been we do take the stand that any attempt
at extensive or forcible banking reforms
granted charters because o f inadequate

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November 1932

by means o f drastic legislation during
the period o f greatest economic distress
would have been most unfortunate. Some
changes in existing laws relating to bank
ing in order to bring them up to date
with economic changes that have taken
place since they were enacted and to cor
rect such features in them as experience
has proved undesirable are doubtless in
order. But such changes should be given
careful and deliberate consideration and
should be based on practical banking ex
perience and conditions and not on the
oretical or prejudiced views o f the oper
ations and position o f banking. For the
greater part, however, the further
strengthening and readjustments desir
able in the banking structure will come
in due course from other than legislative
sources.
W ithin banking it is to be expected
that the processes o f consolidation and
voluntary liquidation will continixe to
eliminate where and as required such un
economic units as still remain, and that
they will be the chief means o f this cor
rection, as distinguished from the de
structive forces o f the bank suspensions,
which, it is to be hoped, will hereafter
run a more normal course. Also in those
places which have been deprived of
needed banking facilities they should be
restored by reopenings, establishment o f
branches where state laws permit or or
ganizations o f new banks where fully
justified from all points o f view. These
processes present the most effective and
desirable means fo r bringing the banking
structure, both as to the number, capital
and distribution o f its units, into closer
contact with the economic needs o f the
nation.

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

THE
BOARD

OF D IR E CT O R S
W ILL BE:

Charles G. D awes , chairman

Philip R. Clarke , President

nnouncing

D onald S. B oynton
Pickands, Mather & Company
H enry M. D awes
President, The Pure Oil Co.

THE OPENING OF THE

Charles S. D ew ey
Vice Pres., Colgate-Palmolive-Peet Co.
G eorge B. D ryden
President, Dryden Rubber Co.

City National Bank

G eorge F. G etz
Chairman of the Board, Globe Coal Co.
John Goodridge
Willing Estate

Charles B. Goodspeed

AND TRUST COMPANY OF

Manufacturer

H arry B. H urd
Messrs. Pam & Hurd

CHICAGO . . . 208 SOUTH

James S. K emper
Pres., Lumbermens Mutual Casualty
Company

F rank K nox
Publisher, Chicago Daily News
T heodore W. R obinson

LA SALLE STREET

Manufacturer

E lisha W alker
Capitalist

R awleigh W arner

OCTOBER 6, 1 9 3 2

Vice President & Treasurer,
The Pure Oil Co.

R obert E. W ood
President, Sears, Roebuck & Co.

C i t y N a t io n a l B a n k
AND

TRUST

COMPANY

of Gkicac/o

Firm s and individuals are
invited to take advantage of the
banking services of the following departm ents:

. . . C O M M E R C IA L B A N K IN G

C A P IT A L

$4,000,000.00
SURPLUS
$ 1, 000 , 000.00

. . . S A V IN G S A C C O U N T S . . . C H E C K I N G SAV IN G S A C C O U N T S . . .T R U S T SE R V IC E S.

☆

Northwestern Banker

November 1932

Enough Banks Now
The looseness o f this contact that was
created in the past largely as a result of
former competitive and ill-considered
chartering practices on the part o f both
state and national banking authorities,
has, as we have indicated, been exten
sively corrected. It is one o f the cardinal
requirements o f insuring a sound bank
ing situation for the future that these
mistaken policies o f the past shall not
be repeated. Full consideration o f the
advisability o f granting new charters can
be exercised under existing laws, both
state and national, so there is no need
for any major legislative enactment to
prevent the return o f the evils o f over

banking or the entry o f unqualified per
sons into the banking business.
There are now about 19,500 banking
institutions in the United States. Prop
erly distributed, capitalized and man
aged, they should constitute an ample
banking plant fo r the nation. In 1921
there were 30,800 banks— clearly far
more than the nation needed.
Structure Strengthened
How this reduction in the number of
banks has strengthened the structure
more effectively than could be done by
legislation is demonstrated by compara
tive figures. The banks on the average
in 1921 had the economic activities o f

years of active
cooperation with its
correspondents in the
development of the
live stock industry
thru periods of stress
and prosperity.

T H E S T O C K Y A R D S N A T IO N A L B A N K
AN D

THE STOCK YARDS TRUST &SAVINGS BANK
o/~ C H I C A G O

Northwestern Banker

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

November 1932

only about 3,500 persons as the basis of
their business. Today there are more
than 6,000 persons per bank. In 1921 the
average capital funds per hank was
about $205,000 and the average deposits
$1,250,000. The average capital funds
fo r the banks in the present structure is
about $420,000, and the deposits nearly
$2,500,000— both twice the former sim
ilar figures. The total capital funds in
1921 were $6,360,000,000 and today they
are approximately $8,500,000,000— a re
adjustment downward from the high point
o f $10,000,000,000 reached in 1930,
W hile no arbitrary dimensions can be
stated fo r the size o f the banking plant
required by the economic activities of
the nation, it is probable that the read
justments that have now" taken place
have gone far in bringing it in line with
a sounder relationship to the actual bank
ing needs o f the nation than has existed
in over a decade, and that the present
number o f banks and volume of banking
capital can take care fo r some time to
come o f expansion in the business activi
ties o f the country which is now7 to be
expected. Over-competition among too
many banks and the dispersion of capital
among too large a number o f small, highcost units have been largely responsible
in the past fo r unsatisfactory banking
developments. Only prosperous banks
are safe.
Conditions Improved
W ith the internal improvements Avhieh
are developing in banking, improved ex
ternal conditions also are bringing about
a sounder situation on more fundamental
lines than could be provided by law-s.
These outside influences are the marked
subsidence o f public fear in regard to
banks, a reduction in withdrawals for
hoarding, a falling off in runs, a gradual
improvement in the ability o f borrowing
customers to meet past obligations, a
gradual revival o f sound industrial and
mercantile transactions as a basis for
new obligations, and above all in a re
turn toward normal market values in the
investment securities that form the basis
o f so large a part o f bank assets. Thus
are economic conditions by reversing
their trends exerting opposite influences
from those by which many banks were
previously wrecked.
The improvements that have taken
place should not lead us to underestimate
the difficulties that remain. Foremost
among those difficulties are the effects of
the tremendous declines that have taken
place in price levels, and especially in
those o f commodities and of lands.- While
some readjustments upward have oc
curred, and more may be expected, a
large part o f the changes to lower price
levels may prove to be o f long duration.
These price declines have greatly in
creased the burden o f existing private
and public debts, and because o f this

they constitute serious barriers to the
restoration o f normal business activity.
This is especially true in respect to the
expansion o f credit, since the creation o f
new obligations will necessarily be sub
ordinated to the magnified position that
old obligations hold in our economic
structure. Our current paying power has
shrunk, while our debts previously in
curred are large. A gradual reduction
in our top-heavy debt structure is a pre
requisite to full economic recovery.

Reconstruction Finance
In sketching this picture o f broad
banking improvement by processes and
changes which make general reform
measures by legislative processes far less
necessary than it seemed during the last
session o f Congress, full consideration is
given to the part played in the extra
ordinary situation that was prevalent by
the Reconstruction Finance Corporation
in enabling banking to regain its position
without further government intervention.
To September 1st, R. F. C. loans had
been authorized fo r 4,715 banks in the
amount o f $824,000,000. The great ma
jority o f these aided banks were in
trinsically sound, well managed institu
tions under anything like normal condi
tions and capable o f rendering useful
services to their communities.
Their
difficulties were due on one hand to an
impairment o f their assets and current
cash positions by the failure o f borrow
ing customers to meet their obligations
and to the ruinous temporary under-val
uation o f bank investment holdings re
sulting from the demoralized securities
markets. On the other hand, they were
subjected to urgent demands fo r cash on
the part o f depositing customers to meet
which involved the irretrievable sacrifice
o f securities or forced liquidation and
consequent ruin o f borrowing customers.

tion loans, which thus brought the pow
ers o f the nation’s public credit to the
support o f the banking structure, which
is a semi-public instrumentality, we
would particularly point out and empha
size that this is in no way constituted
“ banking r e lie f” in the sense o f helping
the banks to make money with the aid of
public funds or o f enabling them to pass
losses on to the government. Advances
to the banks by the R. F. C. plan were
purely loans on the basis o f intrinsically
good assets with ample margins o f se
curity and ample elements o f responsi
bility on the part o f the borrowers, so
that these advances should ultimately be
repaid in full.

Results Gratifying
In any event it has been amply dem
onstrated that the results have fully jus
tified the means. The change o f public
attitude has relieved pressure against the
banks and the turn in the securities mar
kets has materially aided in readjusting
their positions. Recovery in bond prices
has amply justified the theory on which
the Reconstruction Finance Corporation
was based and has gone far in making
possible a real start in liquidating the
temporary emergency credit structure
erected by it with public funds in the
public interest. In the case o f some
banks, o f course, their part in taking
down this structure by the repayment of

A id Needed
This was a wholly artificial situation
against which no banking structure could
be wholly p roof in all its parts without
special aid. It was created by public
conditions and public acts and called for
public aid and a change o f public atti
tude. The R. F. C. loans were the an
swer to this situation.
They enabled
banks endangered by it to borrow on
their good assets instead o f sacrificing
them beyond recall at current market
under-valuations, which would have been
further demoralized by such sales. They
enabled such banks to show forebearance
toward their borrowing customers. They
enabled them also to meet the demands o f
depositing customers for cash.
These
R. F. C. loans also restored needed public
confidence in banks and caused a drop in
withdrawals, runs and hoarding.
In connection with these reconstruc

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

Northwestern Banker

November 1932

24
their loans can be carried out promptly,
while in others doubtless the longer term
o f credit aid envisioned in the R. F. C.
loan plan will be necessary. However,
we would emphasize that in the banks’
own interest it is highly desirable to free
the banking structure as rapidly as pos
sible o f all leaning on public support and
it is to be hoped that the loans made by
the Reconstruction Finance Corporation
will be repaid as fast as general and in
dividual circumstances permit.

A Gibraltar of
Investment
Value
for these Times
T h ree generations o f investors have
kn ow n it.

Covert Cops Golf Prize
Frank M. Covert, Drovers National
Bank, Chicago, outstanding cross-handed
g olf shooter o f Northern Illinois and
Southern Wisconsin, stepped oft’ with the
blind bogey prize at the recent Drovers
Bank g olf tournament held at the CogHill course, Chicago.
Second honors went to Henry Sheffield,
while Robert Smoot and Fred Ogden
tied fo r third place. L oav net was won
by Robert Turley, and the ladies’ prize
went to Francis Hoffman.
Congratulations, Frank— and come out
to Iowa some time. There are some
banker-golfers out here who will be glad
to take you on.

T h ree years o f depression have again

HEADS

proved it.

LO A N

BANK

(See Cover Photo )

U n ited

States

govern m ent,

county

and m u n icip a l bonds are the great
G ibraltar o f stable security through
all the

years, in

tim es, all tim es.
past

three

good

tim es,

bad

E ven through the

years,

not

cent

p rin cip al or interest has been lost on
an Iowa C ou nty or M u n icip a l bon d
purchased

Write

through

for

our

this

latest

com pan y.

list

conservative offerings for banks

C arleton D. B eh C o .
m

I N V E S T M E N T S E C U R IT IE S
Des Moines Building, Des Moines, Iowa
Plione 4-8156

A big man for a big job, if you
want that job well done, so Col.
Charles Burton Robbins, of Cedar
Rapids, was chosen to head the
Federal Home Loan Bank estab
lished last month in Des Moines.
Soldier, lawyer, insurance execu
tive, bank director— it would be no
easy task to find a man of broader
experience— to find a man better
suited to tlie job in hand.
Col. Robbins was born in Has
tings, Iowa, now with a population
of 400, but perhaps not so many
back in 1877. He got his legal train
ing at Columbia University in New
York City, and was admitted to the
Iowa Bar in 1904. Having served
through t h e
Spanish-American
W ar, it is natural Col. Robbins
should take an active part in Na
tional defense activities. He was
appointed a Colonel in 1926, and
during 1928-29 was Assistant Secre
tary of War.
Colonel Robbins is president of
the Cedar Rapids Life Insurance
Company; and a director in the
Cedar Rapids Candy Company, the
Cedar Rapids Morris Plan Bank,
and the Merchants National Bank
of Cedar Rapids.

Northwestern Banker

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

November 1932

Bonds and Investments

RAILROAD B O N D S Recovery or Default?
S

U B STA N T IA L improvements in the
business and financial future o f the
railroads and in the position of in
vestors in their securities were indicated
in an analysis presented by Harold G.
Parker, vice president Standard Statistics
Company, New York, before the Savings
Division meeting at the convention of the
American Bankers Association. Outstand
ing points made by Mr. Parker were as
follow s:

ment beyond the usual seasonal will be
experienced this fall, low prices of some
securities have been established because it
was believed business could decline indefin
itely, but there is already some evidence of
a ‘buyers’ panic,’ stocks of merchandise
have been allowed to get too low and a
1.
No general statement that the rail gradual rise in business will restore bond
prices to normal.”
roads are “ over-bonded” can be sustained
These foregoing factors, he said, cou
when judgment is based on long-term earn
ings record and the vieAV that their busi pled with the release for long term in
vestment o f the vast liquid sums now
ness will necessarily return within striking
available, “ unless past experience is no
distance o f normal.
2.
A fter two years o f depression re use as a guide, will probably create higher
bond prices than most o f us have ever
ported “ fixed charges” of the railroads
seen soon after general confidence re
were lower for 1931 than any year since
turns.”
1923 which they exceeded by only $15,000,Change in Policy
000, while junior capital increases have
more than kept pace with those in funded
Mr. P a r k e r particularly discussed
debt.
changes that appear to have occurred in
3.
The Reconstruction Finance Cor the railroad policy of the Reconstruction
poration is merely carrying temporarily
Finance Corporation. He said it was at
financing that would normally be supplied
first assumed its functions were to take
by the commercial banks until restored
earnings permit public refinancing through
the bond market.
Part of an address by Harold
4.
Competition against railroads by
G. Parker, Vice President of
trucks, busses and waterways is magnified
beyond its real stature by the sub-normal
Standard Statistics, Inc., before
business volume offered all transportation
the Savings Bank Division at the
mediums.
recent American Bankers’ Asso
5.
When business increases the rail
roads will get their share and can easily
ciation convention, in which he
carry their debt burden.
pictures a better future for the
“ Furthermore we believe we are just
railroads.
about to see an increase in business and
traffic,” Mr. Parker declared. “ How soon
it will reach the necessary level to restore
general railroad credit no one can say, but
care o f refunding because the bond mar
sooner than most investors believe. While
ket was nonexistent and to keep bank loans
the railroads will continue to have many
to railroads liquid by making them ac
troubles, ‘normal’ conditions will later
ceptable as collateral when an individual
diminish them to a greater extent than
bank required assistance. However, when
pessimists now believe.” Other points he
a major short term loan matured and the
made were : “ The public has recently been
bankers asked fo r payment the R. F. C.
assured on the highest authority that there
compromised by advancing half the
will be no ‘m ajor’ railroad receiverships
amount, it was felt there would not be
in 1932.
enough funds to continue on the original
“ Three bodies, the Reconstruction F i basis.
nance Corporation, the Interstate Com
“ The result was that each remaining
merce Commission and the Railroad Credit
maturity and heavy interest payment con
Corporation have rendered a service the
tained a receivership threat, which was
value of which can scarcely be imagined.
reflected in the prices o f all bonds,” Mr.
They have undertaken a huge task and
Parker said. “ There were two schools
performed wonders in the short time they
of thought in the financial community.
have been in existence.
One felt that receivership and reorgan
“ W e believe the panic is over, improve
ization should be allowed to happen as

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Federal Reserve Bank of St. Louis

quickly as possible. The other maintained
that banks and insurance companies could
not stand such a shock— that receivership
was not necessary. When additional
funds were supplied to the Reconstruc
tion Finance Corporation by Congress, it
was obvious that it then had the capacity,
if it cared to use it, to prevent receiver
ships.
New President
“ The management o f the corporation
was changed. Charles A. Miller of the
Savings Bank o f Utica, former president
of the Savings Banks Association of New
York, was made president. Mr. Miller’s
appointment was o f great importance.
Mr. Miller has fo r years had the reputa
tion deservedly of being one o f the best
judges o f railroad bond values. He was
author of the original New York state
law on investments legal for savings
banks, which served the state, and in fact
trustees all over the country, as a safety
guide fo r more than twenty years.
“ It is obvious not only that the view
point o f such a man would be the ‘long
term,’ but that he would have a good
chance to ‘sell’ his views to the Interstate
Commerce Commission. A distinct change
seems to have come about in the policies
o f the Reconstruction Finance Corpora
tion and Interstate Commerce Commission
toward the railroads. Foremost is per
mission granted to consolidate four east
ern systems along the lines on which they
have been assembled by their sponsors.
It is possible to make loans to big groups
blanketing an entire industrial section
which would perhaps have been unwise
made to isolated units. The wise policy
would seem to be to carry on by means
of borrowed money until such time as a
‘new normal’ volume of traffic returns to
the roads.
“ Following this came the Baltimore &
Ohio loan application to the Reconstruc
tion Finance Corporation. In contrast
to the ‘Frisco’ case, which seemed utterly
impractical in that it required the volun
tary reorganization of a major road in
about two months, this plan seemed sound.
It helped to restore confidence in all rail
road bonds by taking care of a maturity
still several months away. Perhaps not
all o f the August advance in bond prices
was due to these apparent changes in
policy, but they played a major role in

Northwestern Banker

November 1932

26
the re-establishment of confidence in rail
road securities.
Earning Power

A Modern Service
for Iowa Bankers----

DIRECT PRIVATE
WIRE SYSTEM
connecting Iowa with
world financial centers
T h e recent installation o f a new private wire system to N ew Y o r k
and 3 5 leading cities in the U n ited States and C anada, now affords Iowa
bankers the opportun
m arket
New York
Albany
Allentown
Altoona
Atlan ta
Augusta
Birmingham
Boston
Bridgeport
Buffalo
Chattanooga
Chicago
Cincinnati
Columbus
Denver
Detroit
Elm ira

H arrisburg
Indianapolis
Ithaca
Jacksonville
Lincoln
Louisville
Milwaukee
Minneapolis
N ew Orleans
Omaha
Philadelphia
Pittsburgh
Pottsville
Savannah
Toronto
Trenton
W ashington
W ilm ington

centers,

w ell

the

added

advantage o f alm ost instantaneous direct
transaction

financial

business

w ith

these centers.
Iowa banks have been q u ick to take
advantage o f the expedited service p ro
vided

through

facilities.

these new

direct

and m u ch m ore expeditious.
invited.

wire

Y o u , too, w ill find it profitable
In qu iries

W e w ill also be pleased to d e m

onstrate this new service to you w h en you
next visit Des M oin es.

O U R B A N K E R S E R V IC E IN C L U D E S
V

Private wire service

Trading department facilities

State distributors for North A m er
ican Trust Shares

Bond and investment department

Statistical department

Earn Fixed Charges

Polk-Peterson Corporation
Investm ent Securities
Des Moines Building

Des Moines, Iowa
Telephone 3-3245

★

Northwestern Banker

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

November 1932

“ We think it safe to assume that the
Interstate Commerce Commission and the
Reconstruction Finance Corporation will
rule that a. loan may be adequately secured
even when the applicant does not offer
collateral of a market value in excess of
the loan. W e believe that they will give
due weight to past earnings records, as
well as estimates o f the future earnings
o f the applying road. Such a basis seems
much sounder than a strict collateral test.
In the last analysis, every banker knows
that a loan must depend mainly upon the
earning power of the borrower. The exe
cution of such a policy involves of neces
sity a belief in the ultimate recovery of
business and should greatly enhance the
general credit o f our railroads. The at
titude shown should inspire public belief
that the other loans o f the corporation
will be granted only after meeting the
tests that would be applied by experienced
bankers. So far as railroad loans, we be
lieve only a minor portion can be said to
be doubtful risks and the government will
eventually lose little, if any, money on this
phase o f the Reconstruction Finance Cor
poration activities.
“ The proposed ‘Frisco plan’ may estab
lish a precedent of vital long term impor
tance to all bondholders. Even with mod
ifications it would assure bondholders of
whatever capital position the earnings of
the road can later justify, in contrast to
the old method of writing down the capital
of bondholders to create an immediate
earning power and equity for the stock
holders, often before normal earning
power Avas restored. Whether you agree
as to the equity of the present plan as it
deals with the various securities or not,
savings bank men as long term investors
should fight hard to see that this general
principle of maintaining capita! is estab
lished and carried on.”

As to statements implying that all rail
roads are heavily indebted to the Recon
struction Finance Corporation he said
that of 72 Class 1 roads it is estimated
that 16 will earn their fixed charges in
1932, and there are 32 roads which, un
less business gets much worse, will not
have to borroAV from the Reconstruction
Finance Corporation or the Railroad
Credit Corporation.
“ I f volume of traffic were to pick up,
only 10 or 5 per cent of the old normal,
about 25 roads rvould cover their charges,”
he said. “ I f we rvere fortunate enough to
get a 25 per cent increase in present vol
ume about 40 roads Avould be ‘in the black.’
The railroads would come out of their
troubles very rapidly on any further im
provement.
“ As a result of shifting certain loans

27
from the bankers to the Reconstruction
Finance Corporation the total bank bor
rowings o f leading roads were estimated
to be down about $30,000,000. We esti
mate that the Class 1 railroads have ac
tually increased their total debt less than
$100,000,000 since January 1, 1932. They
have cut their dividends from a peak of
$506,000,000 in 1930 to an estimated $80,000,000 in 1932. The wage saving, about
$170,000,000 on present volume, will inerease rapidly on any increase m volume."
Return of Credit
The credit of the railroads will be re
established so that loans can be easily sold
to the public, to furnish the funds to pay
oft the Reconstruction Finance Corpora
tion, he said.
Only thirteen mortgage issues have de
faulted, he said, defaults for 1930, 1931
and to date in 1932 representing only 2.8
per cent of the principal of Class 1 rail
road bonds and 3.1 per cent o f annual
railroad bond interest, lie said that “ full
credit fo r holding these losses within
limits no greater than might be expe
rienced in any normal year must be given
to the Reconstruction Finance Corpora
tion and the interstate Commerce Com
mission.”
in support of his assertion that the
effect of competitive traffic was exagger
ated, Mr. Parker pointed out that the
airplane business is not booming, securi
ties indirectly indicate a depreciation in
pipe line developments, inland waterways
make profits only through subsidies by
government which in the future will be
more inclined to demand profitable opera
tion. Panama Canal tolls show a drop,
bus traffic revenue has decreased, auto
mobile production is off and truck sales
are low.
“ Truck manufacturers are still report
ing deficits,” he added. “ They are not
looking to truck transportation companies
for their next big orders, but to the brew
eries, if and when beer is legalized.”

Banking Doesn’t Need To
Apologize
(Continued from page 12)
lie demand under skilful political man
agement for banking laws that more
often than not were not based on prac
tical experience, or else carried good
ideas to bad extremes.
‘“ The question o f banking legislation
is too technical, too related to all phases
o f the public welfare, and it deals with
matters o f too delicate a character to
be subjected to the rough and tumble o f
partisan political or controversial battles
rather than a sober discussion o f the
merits o f the case. I think we might
well consider the Canadian procedure,
where it is provided by law that every
ten years the bankers and the legislators

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Federal Reserve Bank of St. Louis

shall sit down together, review the bank
ing laws, consider the economic changes
that have developed, study the lessons of
experience and then amicably work out
a program o f needed legislation.
“ Legislative measures are not the only
means for promoting improvements in
banking. The more fundamental actions
must come within the spirit and practice
o f banking itself. Our banking methods
at heart are sound, our established tra
ditions are fundamentally true. I f there
have been any deviations from them the
remedy is in a return to standard prin
ciples, not in a rigid formulation by law
o f those things that must be left to the
dictates o f experience and free discre
tion. W e cannot make banks fool-p roof
by legislation— but we can come near do
ing so by good management and common
sense. The principles o f good bank man
agement can be taught, and common
sense can be cultivated, by means o f
technical education.
“ Promotion o f banking education,
therefore, is one o f the major obliga
tions o f organized banking. The Amer
ican Bankers Association must step
ahead in this field. In the American
Institute o f Banking we have what is
considered to be the outstanding project
fo r adult education now being carried on
in business and industry. The institute
should be familiar to every member of

OUR OFFERING

LIST W IL L

the association, and every senior banker
should insist that his employes wherever
practicable shall pursue its courses. It
is one o f the best practical methods pos
sible fo r bringing about universal good
banking for Am erica.”

Retail Trade

Wage earners in September received
4.5 per cent more money than in August
according to the Monthly Consumers In
dex compiled by Investors Syndicate.
This gain in the national payrolls was
promptly reflected in a 3 per cent gain
in retail trade for the month.
A year ago, September payroll tota^
and retail trade both dropped sharply
below the levels o f the preceding month.
This reversal of last year’s trend
brought September, 1932, wage totals to
within 17.5 per cent of the same month
last year, a substantial narrowing of the
spread since August, which showed wage
totals 38 per cent below August, 1931.
A strong seasonal increase in public in
terest in securities was indicated by a 50
per cent gain over August investment
totals.
Home building increased at a more
rapid rate in September, according to the
Syndicate Index, showing a 10 per cent
improvement over August as compared
with a 5 per cent gain registered by Aug-

BE M A I L E D R E G U L A R L Y

GMAC

UPON

REQUEST

N otes

are a standard medium for short term investment.
Based on highly liquid assets, they provide a
sound instrument for the temporary employment
of surplus funds. G M A C obligations are in country-wide demand for the security portfolios of
individuals, institutions and thousands of banks.
available in convenient maturities and
denominations at current discount rates

G eneral M otors
A cceptance C o rporatio n
O F F I C E S

Executive Office

P R I N C I P A L

BROADW AY a t 5 7 T H STREET

CAPITAL AND SURPLUS

■ -

CITIES

H ew Tor\ City

SEV E N TY M ILLION DOLLARS

Northwestern Banker

November 1932

28
ust residential construction over July
figures.
Automobile buying declined 11.2 per
cent from August ; this, however, was less
than half the percentage o f decline from
August to September last year, according
to Investors Syndicate tabulations.

Sound Securities
Debentures to be issued by the Federal
Home Loan Bank system will be among
the soundest securities ever offered to
investors, Philip Lieber, Shreveport, La.,
first vice president o f the United States
Building and Loan League points out.
Citing the provisions o f the act which
created the system, the building and loan
official shows that every $100,000 worth of
such bonds will be secured by first liens
on units o f residential real estate with
total value of at least $285,000.

Chase National
Statement

$99,847,000; loans and discounts, $860,924,000, as compared with $860,646,000.

The statement of the Chase National
Bank fo r September 30th, made in re
sponse to the call o f the comptroller of
the currency, shows the following change
in important items since June 30th, the
last previous statement date.

$148,000,000, unchanged; surplus, $100,-

The capital o f the bank amounted to

Total resources amounted to $1,855,617,000, as compared with $1,731,509,000
on June 30th; cash in the bank’s vaults
and on deposit with the Federal Reserve
Bank and other banks $377,211,000, as
compared with $299,941,000; investments
in United States government securities,
$249,899,000, as compared with $218,073,000; securities maturing within two
years, $120,394,000 as compared with
$106,511,000; other bonds and securities,
including stock in the Federal Reserve
Bank, $90,371,216, as compared Avith

QUAIL €

C i/iV y jp .

■p&

Investment Securities
Davenport Bank Bldg.

Davenport, Iowa

000,000,

unchanged;

undivided

profits,

$18,335,000, as compared Avith $17,381,0 0 0 ; reserve for taxes, interest, contin
gencies, etc., $14,541,000, as compared
Avith $12,170,000; deposits, $1,420,221,000, as compared Avith $1,302,456,000.

New Banking- School
Plans for organizing a graduate school
o f banking was announced at the first
general session o f the American Bankers
Association convention by Harold Stonier,,
national educational director o f the
American Institute o f Banking Section
o f the Association. The graduate school
Avill be sponsored by the institute which,
has already trained 16,000 junior bank
employes in its four-year course.
“ The Avork is especially designed to
meet the demand o f men Avho have gone
through the regular institute school or
w h o have by experience obtained a bank
er’s position in the official class and want
to take advance Avork in some phases o f
banking not noA V offered in the institute
organization,” Mr. Stonier said.
A faculty o f recognized authorities is
being selected for the school, which will
include work on five subjects of an ad
vanced nature: bank management, trusts,
credit, the investment portfolio, and the
laAvs relating to the operation o f national
and state, as Avell as the Federal Reserve
systems. Intensive work on these sub
jects will probably be handled in threeAveek’s summer classes at NeAV York City
next year.

Making Bank Services
Pay Their W ay
(Continued from page 18)

Iowa
Bond Corporation

{A ,

Conservative Investments and
Investment Counsel for Banks
BONDS

NOTES

COMMERCIAL PAPER

Insurance Exchange Building

D E S M O IN E S
•V .V-

¿ ..y ,-.

Northwestern Banker

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Federal Reserve Bank of St. Louis

sÄ

November 1932

-An

In one bank Avith total deposits o f ap
proximately $4,000,000, capital, surplus,
and undivided profits o f $400,000, and net
earnings o f $33,000, it Avas found that 75
per cent o f the net earnings, or about
$25,000, was attributable directly to the
invested capital, and by-product depart
ments earned 15 per cent, or nearly $5,000. The earnings in the savings depart
ment Avere $12,000 and the commercial
department lost about $9,000.
In other
words, less than 10 per cent o f this bank’s
net revenue Avas earned by its banking
business— the commercial and savings de
partments.
Surveys covering hundreds of banks of
all kinds and sizes, and tens o f thousands
of check accounts, show that in the ab
sence of actiA7ity and service charges, about
seven out o f every ten accounts result in
a loss to the bank; one just about pays
its cost, and less than two are profitable.
A flat service charge isn’t always enough.
The cost depends on activity. One $50

29
account writes four checks, another twenty
checks. The charge should take activity
into consideration.
In one bank the average loss on all ac
counts with less than $1,000 in balances
was over $7.50 each annually. On ac
counts over $1,000, which represented
only 10 per cent o f the accounts in num
ber, the annual net profit on each was
something over $80. This profit was just
enough to offset the losses and leave a
slight net profit on the bank’s commercial
banking operations.

days necessary to collect it without in
terest. The time required may extend
anywhere from two days to ten days, de
pending upon where the check is payable.
Very often, in addition, out-of-town
checks involve cost of exchange and this
cost on nonpar items must be paid either
by your bank or by your correspondent.
Many banks are advanced in meeting
this float problem. Charges are made at
5 per cent or 6 per cent fo r the time out
standing*, and fo r simplicity purposes, the
federal reserve availability schedule is ap

plied. As an example, on a $1,000 check
requiring two days to collect, you would
charge 25 cents; on a four-day item, 50
cents, and so on, Avith a minimum charge
of 5 or 10 cents on small items.
There are other services too numerous
to mention on which a charge can be lev
ied. I f we will persist in this effort, I
have a profound faith that we shall ac
complish a logical correction o f a great
problem, the future progress o f banking
will be assured and the results o f good
management will be immeasureably great.

Balance Essential
Even though a checking account has no
activity, the banker should remember that
a certain balance is essential to cover the
expense o f carrying the account on the
books. In one bank, for example, it was
estimated that an inactive balance of more
than $75 would be required to cover this
general expense.
A checking account can reasonably be
considered purely a bookkeeping service
or a convenience fo r the depositor. You
receive his deposits, you clear his checks
deposited; you provide him with checks
with which to meet his bills, and at the
end o f the month you render a statement
o f credits and disbursements. I f his bal
ance is inadequate, a charge to make up
for the balance deficiency would seem log
ically in order. When this line o f reason
ing is properly presented, little difficulty
will be experienced in obtaining its ac
ceptance by the public.
How often have we persuaded ourselves
that the prospect o f future profits or the
development o f good will would in some
way make up fo r the losses we have sus
tained in unprofitable accounts? I con
tend that good will can be inspired with
equal success by making a just service
charge and giving prompt and intelligent
service.
Charges can also be made on the small
and yet active savings account. Perhaps
a metered plan should be worked out fo r
former checking customers who now use
their savings accounts as though they were
checking accounts. With the present low
returns on safe investments, interest
should be eliminated on the small savings
account. A charge should be made for
cashing checks and fo r furnishing cash
ier’s checks to nondepositors, and to de
positors where balances are not compen
sating.
Must we provide safe deposit facilities
at cost or less than cost, supply free checks
— often with the customer’s name im
printed— furnish free legal advice, free
investment service, and almost free trust
service ? Must we give customers imme
diate use, without charge, of funds repre
sented by checks on other banks not yet
collected, better known as float? When
you cash or give immediate credit on outof-town checks, it is in effect loaning the
amount of the check fo r the number o f

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Federal Reserve Bank of St. Louis

Guaranty Trust Company
of New York
140 Broadway
LONDON

PARIS

BRUSSELS

LIVERPOOL

HAVRE

ANTW ERP

Condensed Statement, September 30, 1932
RESOURCES
Cash on Hand, in Federal Reserve Bank,
and due from Banks and Bankers___________ $
U. S. Government Bonds and Certificates____
Public S ecu rities_______________________________
Stock of the Federal Reserve Bank____________
Other Securities________________________________
Loans and Bills Purchased______________________
Real Estate Bonds and Mortgages______________
Items in Transit with Foreign Branches----------Credits Granted on Acceptances_______________
Bank Buildings__________________________________
Accrued Interest and Accounts Receivable-----

203,355,932.39
464,819,497.64
56,245,057.46
7,800,000.00
24,693,165.03
495,152,411.74
2,045,662.43
4,004,603.43
74,593,820.45
14,381,404.79
7,894,864.18

$1,354,986,419.54

LIABILITIES
C a p ita l_______________________ $ 90,000,000.00
Surplus F u n d ________________ 170,000,000.00
Undivided P ro fits___________
10,830,233.44
$

270,830,233.44

Accrued Interest, Miscellaneous Accounts
Payable, Reserve for Taxes, etc.----------------6,983,374.04
A c ce p ta n ce s___________________________________
74,593,820.45
Liability as Endorser on Acceptances and
Foreign B i lls ________________________________
551,849.00
D ep osits_____________________ $976,925,986.09
Outstanding C h e c k s________
25,101,156.52
1,002,027,142.61
$1,354,986,419.54

Northwestern Banker

November 1932

★ ★ ★ ★ ★ ★ ★ ★
G rea t
S a lesm en
of
H isto ry
“ He was the wisest, best and greatest King that ever reigned in
England!”

So it is chronicled of Alfred the Great.

Disguised as a minstrel, Alfred invaded the enemy camps to spv
on their strength.

Armed with the information

thus

gained

he returned, rallied his demoralized forces, and in a series of
brilliant battles decisively defeated the Danes and drove them
out of the kingdom.
A most noteworthy feature of Alfred’s character was his zeal for
learning.

He established schools and labored himself as a scholar

and teacher.

Asser, Erigena and other noted schoolmen of the

day were invited to his court.

He collected and revised

the laws, encouraged industry, and is credited with the
construction of England’s first fleet.
His inspired achievements make his place in history
everlastingly secure.

ROYAL l \ IO \
LIFE INSURANCE
COM PANY
= P e s M oin es
A. C. TU C K ER
Chairman of the Board

Northwestern Banker

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Federal Reserve Bank of St. Louis

November 1932

lo W S I

=
J-

J- SH AM BAU G H
President

Insurance
/ /

Everybody Pays the Tax B ill"
says L e ro y A . L in c o ln , vice-president and general
counsel o f the M e tro p o lita n Life Insurance Com pany.
M r. L in co ln presented his subject over a n a tio n-w id e
broadcast on O c to b e r 22

must compete with this participating type
o f life insurance and the burden of taxa
tion is reflected in the premium charge
for such insurance just as it is reflected
in the reduction o f dividends on partici
pating policies.
A Serious Question

RESENTING the question whether
the representatives elected in the na
tion, the state, the city and the county,
represent organized minorities rather than
the majorities electing them to office, Mr.
Lincoln pointed out that special favors
at the hands of government have always
met with disfavor at the hands of the
American people when the people com
prehended what was going on. He cited
how the railroads, which were deemed to
be receiving special governmental favors
a generation or two ago, had been put into
a strait-jacket until the pendulum of
public opinion seems to be swinging the
other wav to allow them the proper per
formance in their great field o f real use
fulness, minus abuses which are admit
tedly things of the past.
Mr. Lincoln stated that the railroads,
the big service corporations, the big in
dustrial concerns no longer present a tax
problem comparable with that of organ
ized minorities, who in their demands for
special consideration from some govern
mental body, are responsible fo r a great
part of the extravagance in public spend
ing. This extravagance, he said, had be
come such a burden to everyone that there
is a peaceable rebellion against it from all
classes, since the public is coming to the
realization that taxes to pay government
expenditures are really paid by all and
not by some special class.

W e All Pay
“ Governments, as such, have no magic
power to support themselves,” said Mr.
Lincoln. “ Their income, the money used
to pay for their expenditures must come
out o f your pockets and mine whether
we are rich or poor. It makes no differ
ence, we all pay, either directly or indi
rectly. I f the rising flood o f taxes is to
be effectively stemmed before it destroys
us all, every citizen must be fully alive
to his own individual interest in the prob
lems of taxation. He must become active
in his opposition to every unwise and un
necessary governmental expenditure be
cause, in the last analysis, governmental
expenditures can be supported only
through taxation. Each citizen must ex
tend his interest to every branch o f gov
ernmental, national, state and local, fo r

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out o f them comes the sum total of all the
taxes with which we are so grievously
burdened.”
Mr. Lincoln pointed out how the land
lord and the merchant, the railroads and
the public utilities, must all pass along
their tax burden to the ultimate consumer.
He then continued:
“ I am speaking not on'y as a citizen
but as an executive of a life insurance
company which has millions o f policy
holders. What is the interest o f life in
surance in this problem ? There are some
sixty-eight million life insurance policy
holders in the United States. Every other
individual is a policyholder. They, with
their beneficiaries, constitute a major por
tion of the population o f the country.
Taxes purporting to be upon the business
of life insurance companies are fair ex
amples o f those indirect taxes ostensibly
levied against a big corporation but ac
tually paid by the individual policyholder.
Even Life Insurance
“ The policyholder pays his tax with
every remittance to his company, but
there is no separate bill fo r this item to
remind him o f the tax. In every state in
the Union, save one, a percentage o f every
life insurance premium paid by the pol
icyholder must be paid by the company
into the treasury o f the state by way of
a tax. There are also numerous other
license taxes and fees, and, finally, the
federal income tax imposed upon all life
insurance companies.
“ These taxes, all of them, must, in the
last analysis, be borne by the policyholder,
as reflected in the cost o f his insurance.
Tax a life insurance company a hundred
thousand dollars in your state and those
o f you who have policies in that company
have to stand that tax bill either in in
creased premiums or decreased dividends
on your policies.
“ It should be understood that nearly 80
per cent o f the life insurance in force
in this country is on what is called the
participating basis, that is to say, the
premium cost is reduced by dividends to
policyholders. The remaining something
over 20 per cent of the country’s life in
surance, on a basis which does not provide
for reduction o f premiums by dividends,

“ Life insurance companies destroy no
natural resources, enjoy no special priv
ileges and put the state to very little ex
pense. On the contrary, they serve the
state. By far the largest percentage of
life insurance claim payments goes to
the support of those who might otherwise
he dependent upon private or public char
ity and thus become a burden upon the
state. Policyholders are already impos
ing upon themselves a charge to provide
independence from public support and
are relieving society of a burden it would
otherwise have to carry.
Why should
these thrifty policyholders be singled out
fo r special taxation? This is a cold prac
tical question that every policyholder
should bear in mind. He should know
that a tax on his life insurance company
is a tax on himself, collected from him,
without notice to him, through the me
dium o f his life insurance company.
“ And so it is whether the tax is one
on real estate or on railroads, on living
expenses or on life insurance. There is
no such thing as a tax on property or
services which does not inevitably come
out o f the pocket of the ultimate con
sumer of the goods or service involved.
“ Indirect taxation acts like an opiate.
Its accompanying deception that only a
few are paying taxes fo r the support of
projects to be enjoyed by all, has brought
upon us the same sort o f debility as fo l
lows the use o f a drug. The habit of in
creasing public budgets has been gradu
ally— almost unnoticeably— growing upon
us and we have not been awake to Avhat
has been going on. But now the tragic
enormity of the situation has become clear
to us in this time o f depression. There
remains for us but one avenue of escape,
and aroused and wide-spread public de
mand fo r the utmost economy in govern
mental expenditures.
Time to Reduce
“ What can we do about it? Each one
o f us can associate himself with organ
izations in his own locality or align him
self with national or state organizations
devoted to securing government economy
and tax reduction, and actively cooperate
with them. W e must all inform ourselves
about local and state expenditures and

Northwestern Banker

November 1932

Meeting today’s
reduced budgets . . .

O ver half of
Iow a counties n o w

SAVING
20% - 35%

know the position of candidates fo r o f
fice on this question. W e must make our
views felt by direct communication with
candidates before, and with representa
tives after, election. W e need advocate
no particular scheme o f reduction of ex
penditure or taxes. W e should look to
our elected representatives to accomplish
that necessary result through means which
they should best understand. They should
know where reduction o f expenditures is
practical. The necessary reductions will
be made when, and only when, our repre
sentatives in the various legislative bodies
fully understand that the people back
home demand reduced expenditures and
reduced taxation and will have them.”

A New “ H igh”

CASU ALTY
IN SU R AN CE
(Non-Assessable)
Workmen’s Compensation
Public Liability
Town Liability
Automobile Fleet
Fire Truck Liability
Volunteer Fireman’s Accident

I n T H E hands of every bank
ing official should be the FAC TS concern
ing the actual cash savings offered by the
Employers Mutual on Casualty insurance.
The Employers Mutual offers you a full
line of casualty policies that fit 1933 budg
ets — W I T H O U T C O M P R O M ISIN G
ON P R O T E C T IO N . Write today for
rates and full details on this preferred
business.
Our personal assistance in conference
with boards of supervisors, city coun
cils and prospects for other large poli
cies cheerfully extended to our agents.

Employers Mutual
Casualty Co.

Spurred on by the desire to “ make Octo
ber hit a new high fo r ’32,” the entire
agency organization o f Northwestern Na
tional L ife o f Minneapolis has set out to
pay its respects to President O. J. Arnold,
who last month began his eighth year as
head o f NwNL. October was designated
“ Arnold Month,” and, as it is also Mr.
Arnold’s birthday month, the occasion is
doubly appropriate for a testimonial to
his fine leadership and the excellent de
pression record NwW L has made under
his direction.
Many letters have been going back and
forth between many o f the company’s
leading general agents and managers call
ing upon their fieldmen to leave no stone
unturned in making the celebration a suc
cessful one, feeling that, because o f the
enviable reputation NwNL has earned in
the life insurance world, the Arnold
Month will be the greatest one which the
agency organization has been privileged
to celebrate.
Every one o f the company’s hundreds
o f fieldmen will participate in this tribute,
and those who do work o f outstanding
merit during the month will be given spe
cial recognition in the 1932 Arnold Month
Roster and Year Book to be published
shortly after the first o f the year. This
book is an annual publication and con
tains a record o f all the outstanding activ
ities o f the agency organization during the
last year. Last year was the first year
fo r which a year book was published and
it met with great favor with the com
pany’s field force.

DES MOINES
Largest writers of Casualty
Insurance in Iowa

Assets over $1,000,000.00
(Over 80 per cent invested in Iowa Road,
School, County and Municipal bonds.
Not a dollar of interest past due.)

Northwestern Banker

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Federal Reserve Bank of St. Louis

November 1932

Unwilling- Farmers
Picturing life insurance companies as
the most “ unwilling fanners” o f our na
tion today, Deane W . Trick, manager o f
the mortgage loan department, Bankers
Life Company, Des Moines, addressed the
Mortgage Bankers Association o f Amer
ica assembled in convention at Niagara
Falls.
He said, “ A large part o f the farm
mortgage debt represents money advanced

by life insurance companies. This money
that the farmer borrowed did not come
from a rich lender to whom it would make
little difference if the debt were paid or
not; it represents the slow accumulation
o f hard earned savings sent in to the
company by many thousands o f policyholders, and entrusted to the care o f the
companies’ investment officers to be safely
invested, so that those savings will yield
an adequate return and so that the funds
will be promptly available to pay policy
contracts, when needed.
“ There are times when some difficulty is
encountered in convincing some people
that there is not a definite movement un
derway among investors to gain control of
the farm land of this country. Any such
aim can be vigorously denied; most peo
ple know that it is inconceivable that in
stitutional investors should be inspired by
any such motive.
“ When life insurance companies who
have substantial farm mortgage holdings
are forced to take over the security which
they hold under a farm loan in order to
protect the interests o f their policyhold
ers, they do so only after all restorative
measures have failed. They do not want
the land. They do not foreclose unless
the borrower’s debt burden is hopeless or
unless they fall in the hands of an owner
who is totally disregarding the mortgage
debt, and diverting the proceeds o f farm
income elsewhere,” continued Mr. Trick.

Heads Trust Division
Richard M. Sims was elected president
of the trust division o f the American
Bankers Association at the annual con
vention held at Los Angeles. Mr. Sims is
vice president and trust officer o f the
American Trust Company, San Fran
cisco. He was born in Rock Hill, South
Carolina, in 1873. He attended high
school in Charleston, South Carolina, and
graduated from the University of South
Carolina. He was at first engaged in
engineering but gave this up when he
moved to California, where he became a
high school teacher in Sonoma. He took
up the study of law and in 1898 resigned
his teaching position to practice law in
San Francisco, fo r four years being an
assistant city attorney. In 1909 he ac
cepted the position o f trust officer o f the
Mercantile Trust Company o f San Fran
cisco, which through mergers is now the
American Trust Company. Mr. Sims is
now vice president and trust officer o f the
latter bank.

Heads N. W . Mutual
M. J. Cleary, vice president, was elected
president o f the Northwestern Mutual
Life Insurance Co. o f Milwaukee at a
recent meeting o f the board o f directors.
Mr. Cleary has been connected with the
Northwestern Mutual for more than 15

33
years and is deemed one of the outstand
ing insurance men o f the nation.
Following his graduation from college
:as an attorney Mr. Cleary practiced law
fo r a few years and then, becoming inter
ested in the life insurance business through
Fis legal practice, he became a part-time
subagent with the Northwestern Mutual.
While thus employed he became inter
ested in state politics and was elected
state senator in Wisconsin. Later he be
came insurance commissioner o f the state
and while holding that position was elected
president o f the National Association of
Insurance
Commissioners, a position
which he held with high honor to the asso
ciation.
Following his service to the state as
insurance commissioner of Wisconsin,
Mr. McCleary returned to the Northwest
ern Mutual L ife as vice president, a posi
tion which he has held up to the present
time, and in which he is accredited with
having been a strong factor in the fine
progress that company has made in the
insurance field.

Deposits Increase
The total deposits of the Northern
Trust Company o f Chicago have increased
*60 per cent since September 30th o f last
year and they have increased $21,000,000
since the last bank call. In a year’s time
savings deposits have increased 82 per
■cent, growing from $18,000,000 to $33,000,000. In the last three months savings
have increased almost $6,000,000.

Heads State Bank
Division
L. A. Andrew was elected president
■of the State Bank Division of the Amer
ican Bankers Association at the annual
convention. Mr. Andrew is vice president
of the First Bank & Trust Company of
Ottumwa, Iowa. He was born in Ash
land, Wisconsin, in 1875.
During his
early business career he was a newspaper
publisher in Illinois and Iowa. He later
established the Citizens Savings Bank in
Ottumwa, and continued in the banking
business for 25 years.
In the American Bankers Association
Mr, Andrew has served seven years on the
executive council, on the executive commit
tee o f the state bank division, has been a
member o f the nominating committee for
15 years, and has also served on several
■other committees during the past 20 years.
He was president o f the Iowa Bankers
Association 1920-21.

Check Tax Rules
Three important rulings have recently
been announced by the tax department
with respect to the tax on checks, accord
ing to J. S. Seidman, tax expert o f Seid
man & Seidman, certified public account
ants. The first holds that the tax does not

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apply to checks drawn by federal trustees
or referees in bankruptcy. The second is
that bank drafts purchased by postmas
ters fo r the purpose o f transferring postal
savings funds from one post office to an
other are subject to tax. Finally, checks
drawn by charitable or educational insti
tutions are held to be taxable, unless they
are state, county, or municipal institutions
supported entirely from public funds.
“ Another ruling that will be o f interest
to banks and trust companies,” Mr. Seid
man added, “ has to do with stamp taxes on
the transfers of stocks and bonds. It is
held that where a person turns over stocks
and bonds to a bank as trustee, the trans
fer tax applies, even though the declarer
of the trust reserves the right to revoke it.
The tax will also be imposed on the trans
fer o f the securities back to the grantor
upon revocation o f the trust.
“ An important ruling has also recently
been issued with respect to the 10 per
cent tax on the lease o f safe deposit
boxes,” Mr. Seidman declared. “ This tax,
it will be recalled, became effective June
21, 1932. A case arose where the renewal
fee fo r the safe deposit box became due
in May, 1932, but was paid in August.
The question was whether the tax applied
under these circumstances. It was held
that the tax attaches to any amount col
lected after June 21st for use o f the box
after that date. Consequently, that por
tion o f the rental charge paid in August,

which covered the use o f the box fo r the
period on and after June 21st, was de
clared taxable.”

Loans Decreasing
When asked fo r a statement regarding
the position o f the company, particularly
in regard to policy loans, President W al
ton L. Crocker o f the John Hancock Mu
tual Life Insurance Company o f Boston,
said:
“ The company has not experienced any
emergency in its affairs during the present
business depression. It has been able to
duly meet every obligation, without
strain, from current income.
“ The company has not borrowed from
the Reconstruction Finance Corporation
nor from any other source, and has not
been obliged to sell securities.
“ Demands from policyholders for loans
continue to be large in number, but the
aggregate amount being loaned appears
to be less than it was a few months ago.
F or example, the loans made during July
and August were approximately 13 per
cent less than those of the peak month o f
the year.
“ The assets have continued to increase,
and the company’s new insurance paid for
has averaged more than $2,000,000 for
each working day fo r the first eight
months o f 1932 while the company paid to
policyholders during the year up to Sep
tember 1, the sum o f over $71,000,000.”

When the U P T U R N
Comes in Life Insurance
The curve of new life insurance sales has not yet turned
upward, but when it does, NWNL anticipates that it will be
marked by the increased sale of life insurance for the
primary purpose of protection. For this its agents will
be well equipped.

As much protection as possible for

as little money as possible will be the demand of life
insurance purchasers.

They will not be disappointed in

the offering of NW NL agents.

SOME NWNL LOW COST POLICIES
(Figures for Policies Issued at A g e 35)
M inimum
Am ount

Kind

Whole Life Preferred Risk............. ........$10,000
20 year surrendered net annual cost
per $1,000— $0.15.
20 Payment Life Preferred Risk.... ....... 5,000
20 year surrendered net annual profit
per $1,000— $6.55.
47th Year

Annual
Premium
Per $1000

$22.91
32.03

Northwestern National
LIFE INSURANCE COMPANY
O .J. ARNOLD,

President

STRONG-* M
in
n
eap
o
lis.M
in
n
.—
LIBERAL

Northwestern Banker

November 1932

This department of THE NORTHWESTERN BANKER is to
assist subscribers in obtaining goods or service hard to find.
It is free to subscribers. To non-subscribers the charge is
five cents per word. Hse it. ASK HS, as we can tell you
where to buy anything you need in your bank or for your
bank. TELL HS, ag your “ want” will be published under
the above heading free o f charge. In answering classified
advertisements which have key numbers please enclose a
two-cent stamp. This is used to forward your letter.
Position Wanted— In office or bank.
Young man, age 23, just out of commer
cial college. Will start at small salary.
Best references with business experience.
Address Northwestern Banker No. 3198.
10- 11- 12,
Position Wanted— In office or bank.
Can operate Burroughs Posting Machine,
and familiar with departments of bank.
Age 20. Good references. Now unem
ployed. Address Northwestern Banker
No. 3197. 9-10-11.
For Sale— Two Burroughs latest style
posting machines at a wonderful bargain.
Also transient machine, late Burroughs,
also two Brandt cashiers. Address the
Northwestern Banker No. 3196. 9-10.
Position Wanted— In bank or office.
Young man, age 25, single. Six years
general banking experience including
stenographic work. Very good refer
ences. Write Northwestern Banker. No.
3199. 11.

Heads Secretaries
Wall G. Coapman Avas elected president
o f the State Secretaries Section o f the
American Bankers Association at the an
nual convention held at Los Angeles. Mr.
Coapman is secretary o f the Wisconsin
Bankers Association. He Avas born in
Reeseville, Wisconsin, in 1885, and grad
uated from the Columbus, Wisconsin, high
school, the University o f Minnesota, and
the Mihvaukee chapter of the American

LOUIS J. MUEHLE &
COMPANY
Certified Public Accountants
601-602 Securities Building
DES MOINES, IOW A

Institute o f Banking. He began his busi
ness career with the First National Bank
of Racine, Wisconsin, later going to the
First National Bank o f Portage, Wiscon
sin. He was assistant secretary o f the
Wisconsin Bankers Association from 1916
to 1924. Since 1924 lie has been secretary
o f that association.

Trust Conference
Trust problems in the light o f presentday conditions Avill be the chief topic o f
discussion at the eighth midcontinent trust
conference to be held under the auspices
o f the American Bankers Association
trust division at the Hotel New Pfister,
Milwaukee, Wisconsin, November 17th
and 18th. The program as announced by
R. M. Sims, president o f the division, vice
president American Trust Company, San
Francisco, gives special attention to ques
tions o f immediate importance to trust
men in the states in the conference region,
comprising Arkansas, Colorado, Illinois,
Indiana, loAA’a, Kansas, Kentucky, Mich
igan, Minnesota, Missouri, Nebraska,
North Dakota, Ohio, Oklahoma, South
Dakota, Texas and Wisconsin.

trust share portfolio,” Mr. Beason saick
“ In response to this demand we are offer
ing our shareholders the option of modi
fying Avithout charge, their certificates so
that such nondividend payers may be held
in the portfolio and so contribute their
recovery power to the group investment.
“ As Ave conceive of our duties as
sponsor Ave can not make such modifica
tion at any expense to our shareholders.
Strong sponsorship, in our opinion, must
alter the set-up o f its trust to meet chang
ing conditions. Accordingly Ave plan to
stand the entire expense o f making modi
fication, despite the fact that such expense
might have been met by a per share levy.
The total cost o f this modification Avili run
in excess of $175,000.”

Chicago Manager
Hobart E. Smith, formerly manager o f
the municipal department in the Chicago
office of National City Company, has
joined the Chicago office o f Stifel, Nico
laus & Company, in a similar capacity.
Mr. Smith Avas with the National City
Company for sixteen years; he was one
of four employes who assisted in the open
ing of its Chicago office on November 16,
1916.

Advertising
W. H. Hodge, vice president and man
ager sales and advertising department,
Byllesby Engineering and Management
Corporation, discussed “ Today’s Adver
tising Needs” Avhen he addressed the com
mercial section of the American Gas Asso
ciation on October 11th at At'antic City.
Mr. Hodge is chairman o f the publicity
and advertising section of the American
Gas Association.

Bullard Retires
W. Irving Bullard, vice president o f
the Central Republic Bank & Trust Com
pany of Chicago, announces his retirement
as an official of that bank. Mr. Bullard
will devote his time temporarily to his
eastern textile interests including the E.
H. Jacobs Manufacturing Company and
the Will iamsvi lie Buff Manufacturing
Company, both of Danielson, Conn. He
is treasurer of both companies.

Strong Position
With the leading corporations of
America in perhaps the strongest finan
cial position in decades, it is logical for
holders o f fixed investment trust shares
to demand that sound corporation stocks
be retained in trust portfolios regardless
o f dividend omission, according to Ross
Beason, president o f Admin's'rative and
Research Corporation, New York, spon
sors o f corporate trust shares.
“ We have had thousands o f requests
that common stocks o f great American
industries be retained in the corporate

Northwestern Banker

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

November 1932

The “ Review” Says:
The folloAving comments on business
conditions are reprinted from the current
issue of the NortliAvest Bancorporation
R e v ie w , Avhich says :
With a number o f major economic in
dices pointing to betterment, and definite
improvement to be found in the composite
business reports, the country, eighteen days
before the event, is waiting for the pass
ing o f the election. Although general con
ditions noAV are very different from those
of more recent quadrennial election years

35
and are not at all comparable to corre
sponding periods farther hack when there
was much tenseness, the tradition that
business hesitation must precede an elec
tion still persists, and even this year the
country has not wholly escaped effect. For
the past six or seven weeks to have shown
something o f lessened activity, would have
been the expectation had this influence
been felt as fully as in the past. On the
contrary many indicative changes cover
ing September and the first part of Octo
ber, while working out into percentages
that require the use o f only the smaller
decimals, were changes towards an upward
trend. Conclusions reached a month or
six weeks ago by some o f the professional
and most o f the country’s practical econo
mists that the long continued downward
movement finally had spent itself, are be
ing fortified. Coincident with a hesitating
tendency that just recently has begun to
be more manifest is the more general
feeling that the trend, following the smashup of 1929, has run itself out and business
has been pounding bed-rock fo r several
months. Were this the case in other than
a pre-election period, the upturns would
be more general and more pronounced.
Meanwhile, with the week ending Octo
ber 1 showing 80,099 carloadings originat
ing in the northwestern district, which
was the largest weekly activity of the
year, the month began encouragingly.
Grain receipts in Minneapolis in Septem
ber o f this year were 20,195,320 bushels
compared with 14,610,700 in September,
1931, which increase was o f course an im
portant contributing factor. Looking at
the northwestern district the “ less worse”
comparisons, by which progress in these
times is so often measured, show carload
ings, for 14 weeks ending September 3,
1932, as compared with the same period
last year, down 41.4 per cent, while for
the four weeks preceding September 3 of
this year, the decline from the correspond
ing four weeks in 1931 was 36.5 per cent,
and fo r four weeks ending October 1,
27.7 per cent below 1931. F or the entire
United States the figures fo r the corre
sponding periods are: 14 weeks ending
September 3, 1932, 32.8 per cent less than
the same weeks in 1931; for the fou r weeks
preceding September 3, a decline o f 29.4
per cent; and for the four weeks ending
October 1, a decrease o f 21.1 per cent.
From the foregoing it can be seen that
the upward swing in the third quarter o f
this year presents strong contrast to ex
treme declines o f the corresponding period
o f 1931. Slowness o f business recovery
is still being reflected in loans, however,
the general trend continuing slowly down
ward. On October 5, 1932, the loan total
was at low point fo r the year both with
respect to loans on securities and with
respect to all other loans; the drop in
advances on security collateral has been
relatively greater than the decline in loans

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

included in the miscellaneous classification,
“ all other loans.”
In the past few months, with deposits
mounting and loans slowly contracting,
the slack thus created has been taken up
in various -ways. As has been noted, bor
rowings from reserve banks have been
considerably liquidated and reserves have
been built up both at reserve and corre
spondent banks. In amount, the greatest
change o f all has been in investments,
which have been increased by more than
a billion dollars over the low point in
1932. The increase in investment, how
ever, has been almost vTholly in holdings
o f government securities; holdings o f in
vestments other than governments have
---------

j i.

- j (.

remained about stationary— in fact, at the
present time they are practically identical
with the total reported in the first week in
January.
The amount o f funds that banks can
lend or invest, of course, is closely gov
erned by deposits. I f these are declining
and go beyond a certain relationship with
credit outstanding, banks are obliged to
limit their loans or trim down their invest
ment holdings— or borrow, which they are
loath to do. The satisfactory ratio be
tween credit outstanding and deposits is
naturally not a set percentage, being sub
ject to many modifications. In the spring
o f this year, at about the time Federal
banks began their open market operations
=5i

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

( an You Afford It?
V E R Y bit of constructive advertising you ever
did, accomplished more than merely the selling
of your goods or your services: it helped to
build up the most valuable asset of your business—
Good Will.

Good W ill is as powerful as a giant dynamo- -and as
hard to build.
It is as precious as the finest diamond— and as hard to
find. It is as wonderful as youth— and as hard to keep.
What are Y O U doing to keep the good will and friend
ship of the customers who have made it possible for
you to remain in business when so many have been
unable to weather the storm?
There never was a time in the history of business
when the good will of the customer was of so much
importance as N O W .
Good W ill Advertising is the best salesman on your
force. It determines what your business will be in

1933.
Can you afford to take this Master Salesman off your
payroll in times like these?
Ask the Gerlach-Barklow salesman to show you GoodW ill Advertising that makes friends of customers and
customers of friends.

The
( f E

€ H

- B

\ V

C O ,

J o lie t, Illin o is
=5€=

Northwestern Banker

November 1932

36
on a large scale, city commercial banks
as a rnle were maintaining an uncomfort
ably high ratio o f loans and investments
to deposits (101 per cent, March 2, 1932).
This was not due to mounting loans and
investments— there had been a large de
cline and it was still in progress; it may
be remembered that banks at that time
were receiving much loose criticism be
cause they were not expanding their credit
outstanding. The high ratio was caused,
rather, by a much greater decline on the
other side o f the balance sheet, in deposits,
a falling oft that had been in progress for
more than a year. By midsummer, how
ever, the position was considerably im
proved, and at the present time the ratio
o f loans and investments to deposits may

be considered to be about normal. What
is not normal, however, is the relatively
low proportion which loans— taken by
themselves, investments eliminated— bear
to deposits. City banks, nationally con
sidered, are apparently in a favorable
position to expand commercial loans when
ever business demand increases.

Urge Tax Reform
Reduction o f government taxes to the
irreducible minimum, levying o f a beer
tax to return three-quarters o f a billion
dollars annually, and restriction o f local
and state taxing powers fo r the purpose
o f re-establishing real estate values were
advanced at the opening sessions of the

WE KNOW OUR
NEIGHBORS

JL OR 35 Y E A R S we have continually poked our nose into the

livestock business.

(The yards are practically next door.)

For

35 years we have made it our job to understand the banking
requirements of this exciting industry.

W e have kept our eyes

twenty-first annual convention of the In
vestment Bankers Association of America.
Citing the increase in the public debt
from $19,487,000,000 at the beginning o f
the current fiscal year to about $20,600,000,000 on September 1, the federal taxa
tion committee, headed by Edward Hopkinson, Jr., o f Drexel and Company,
Philadelphia, stressed the need of a mini
mum tax burden on productive industry
for continued business recovery, and a
broader tax base that would include low
ering present exemptions.
A tax on beer up to 40 cents a gallon
could be levied without increasing the
price, it was held. Figuring malt liquor
consumption in this country as in 1917,
last full year before war-time prohibition,
of about 1,885,000,000 gallons, this would
bring in a revenue o f $754,000,000 a year
— equal to 75 per cent o f the entire income
tax collected for the last fiscal year, the
report shows.
“ The assistance which such additional
revenue would be in the present emer
gency, representing a voluntary payment
only fo r those who would choose to become
subject thereto, cannot be disregarded,’7
it was stated.
“ Furthermore, a substantial portion o f
this revenue would not represent addi
tional public expenditure, but rather a
diversion of funds now going into boot
legging channels.
“ Present taxes on real estate may be
reduced, but the return o f prosperity
would see them rise again unless re
stricted,” according to the committee on
real estate securities headed by Louis K.
Boysen, vice president of the First Union
Trust and Savings Bank, Chicago. Trac
ing the increased volume o f realty bond
defaults since 1931, the report offered
scant encouragement for a near upturn
“ until there is some semblance o f normal
prosperity, accompanied by a substantial
reduction in real estate taxes.”

and ears open.

A Major Factor
As a result you will find few banks with a more intimate,
authoritative knowledge of the livestock industry.

It is one of

the advantages you get when you ask us to be your correspond
ent in Sioux City.

It is also one of the reasons why we are

able to handle your livestock transactions with dispatch.

Livestock Nati«» il a I I tank
S IO U X C IT Y , IO W A

“ The Bank at the Yards”
Affiliated w ith N orthw est Bancorporation

Scarcity o f financial transactions of a
type creating pure commercial credit,
caused by changed business methods rather
than voluntary banking policies, was a
major factor in the non-liquid banking
situation that was “ abnormally vulnerable
to the general business reaction” which
began in 1929, the Economic Policy Com
mission, American Bankers Association,
says in a report made public here today.
Banking readjustments that have now been
made and a return by business to former
financial practices are more effective means
fo r restoring desirable conditions than
“ too much regulation by means of radical
legislation,” it says.

Handicapped
Girl (to one-armed driver) : “ For good
ness’ sake, use two hands.”
D river: “ Can’t. Gotta drive with one.”

Northwestern Banker

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

November 1932

Group One Meets

South Dakota
Bank News
Officers South Dakota Bankers
Association

T. M . B R I S B I N E
President

P resid ent........................ T. M. Brisbine
Woonsocket
V ice P resid ent................ E . R . Heaton
Y ankton
T reasurer........................... Russell Bard
Miller
Executive M an a ger. Geo. A . Starring
H uron

G E O R G E A . S T A R R IN G
Executive Manager

New Group Officers
President, Arthur Haerter,
Group 1— Meeting at Yankton. A t Mobridge.
tendance 68. 1933 meeting to be held at Hosmer; vice president, H. B. Zenk,
Yrankton.
President, C. I. Danforth, Eureka; secretary-treasurer, H. A. SAvenY ankton ; vice president, J. E. Lloyd, son, Mobridge.
Group 7— Meeting at Belle Fourche.
Yankton; secretary-treasurer, H. E. Ed
munds, Yankton, and one executive com Attendance 54. 1933 meeting to be held
at Rapid City. President, Noel Klar,
mitteeman from each county in the group.
Group 2— Meeting at Dell Rapids. A t Rapid City; vice president, D. J. Hull,
tendance 116. 1933 meeting to be held at NeAvell ; secretary-treasurer, C. W . WaldBrookings. President, R. G. Eilers, Hud man, Sturgis. W . B. Penfold o f Belle
son; vice president, Robert Henry, V ol Fourche was nominated as member o f the
ga; secretary-treasurer, Horace Pishback, executive council o f the State Associa
Brookings, and one executive committee tion, to be ratified by the next state con
man from each county in the group. G. vention.
J. Moen of Canton, was nominated as a
member of the executive council o f the
Loan Examiner
state association, to be ratified by the next
state convention.
Harold Mitchell, o f Madison, recently
Group 3— Meeting at Mitchell.
A t received word of his appointment as loan
tendance 98. 1933 meeting to be held at examiner for the Regional Agricultural
Mitchell. President, R. E. Montgomery,
Corporation, with his headquarters in
Chamberlain ; vice p r e s i d e n t, Julius
Sioux City. Mr. Mitchell has had many
Bertsch, Pulton ; secretary-treasurer, J. years o f banking experience. He is a
M. Patton, Mitchell, and one executive graduate of the University o f South Da
committeeman from each county in the kota and has been business manager o f
group. Wm. C. Rempfer of Parkston the NeAV Madison hospital fo r the past
was nominated as a member o f the execu year. Mr. Mitchell has assumed his neAv
tive council o f the State Association, to duties in Sioux City.
be ratified by the next state convention.
Group 4— Meeting at Watertown. A t
tendance 42. 1933 meeting to be held at
New Bank
Webster. President, S. L. Allen, Aber
Tyndall
has
been without banking fa
deen; vice president, J. E. Paulson, Sum
mit; secretary-treasurer, J. A. Anderson, cilities for some time, so that the assur
Pierpont, and one executive committeeman ance o f the opening of a neAv bank is
from each county in the group. Don W . pleasant news.
The new bank, which will be known as
DeVey of W estport Avas nominated as a
member of the executive council o f the the Security State Bank, will open fo r
State Association, to be ratified by the business the first of November. Every
thing is underway and all legal parts of
next state convention.
Group 5— Meeting at Huron. Attend the proceedings for forming the neAv as
ance 80. 1933 meeting to be held at sociation have been approved, fixtures
Huron. President, L. A. Anderson, ordered and everything will be in readi
Hitchcock; vice president, L. L. Branch, ness for the opening day.
W . Z. Sharp, o f Sioux Falls, will head
Pierre; secretary-treasurer, George M.
Townsend, Huron. Geo. C. Fullinweider the organization as president and will
o f Huron was nominated as a member o f have as his co-Avorkers in the organization,
the executive council o f the State Asso 0. YT. Meyliaus and F. H. Hollister o f
ciation, to be ratified by the next state Sioux Falls, and Anton Chastka, F. M.
Scoblic and M. F. Schmitt of Tyndall.
convention.
Group 6— Meeting at Mobridge. A t B. R. Laird, of Fedora, has been selected
tendance 49. 1933 meeting to be held at as cashier.

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Federal Reserve Bank of St. Louis

Reduction of state expenditures in
every department, a state tax league to
aid in such reductions and other current
problems were discussed by about sixty
bankers of southeastern South Dakota at
the annual meeting o f Group One o f the
South Dakota Bankers Association, held
at Yankton recently.
Officials from nearly every bank in
cluded in the district o f nine counties
Avere present and entered into discussions
o f the various problems. Group One in
cludes the counties o f Bon Homme, Clay,
Charles Mix, Gregory, Yankton, Mellette,
Union, Tripp and Turner.
Speeches dealing with current problems
of the bankers Avere given by officials of
the association and others associated, with
the main speech, an explanation of the
neAv federal farm loans, being given by
J. M. Hutchinson of Sioux City, secre
tary to C. C. Jacobsen, assistant manager
o f the Federal Agricultural Credit Corpo
ration fo r the eighth district. Election
o f officers and other official business con
cluded the annual meeting.

Dies at Gettysburg
Adam Richardson, 74 years old, active
in Gettysburg banking circles for the past
twenty-three years, died at his home there
recently. Mr. Richardson Avas born at
Toledo, Illinois, October, 1864. He came
to Gettysburg in 1903 as president of the
First National Bank and retained that
position until the bank affiliated with the
First Bank Stock Corporation of Min
neapolis tAvo years ago, and the Potter
County National Bank was formed.

Another Pioneer Gone
Z. A. Crain, pioneer Redfield merchant,
civic leader and banker, died at his home
recently from cancer ailment.
Mr. Crain pioneered in Spink county
forty-six years ago. Coming from In
diana, he settled first in Doland, where he
established a drug business with his
brother, Dr. F. M. Crain.
In 1900 he moved to Redfield and en
tered the drug business under the same
name. In 1902 he organized the Redfield
National Bank, holding the position of
president until the time of his death.

NEBRASKA

NEW S

Dies in Omaha
Albert H. Metzger, 61, pioneer Merriinau, Nebraska, banker who had been ill
in an Omaha hospital, died there recently.
He had lived in Merriman fo r 40 years.
Surviving are four brothers: William
A., o f Gordon; Fred C., of Montana;
Marrion O., of Merriman, and C. E., of
Omaha, and three sisters, Mrs. Clara
Stander o f Gordon, Miss Lillie A. of
Plattsmouth, and Mrs. Amelia Mayer o f
Ulm, Germany.

Northwestern Banker

November 1932

38
Merged
The consolidation o f the First National
and Farmers State Banks o f Tekamah
was announced recently. This merger has
been under consideration fo r some months.

Wayne Man Honored
Rollie W . Ley, president o f the State
National Bank of Wayne, has been named
a member of the committee in charge o f
the eighth district o f the Agricultural
Credit Corporation.
This organization
has been effected by the federal Recon
struction Finance Corporation to inaugu
rate and carry out a program o f feeder
livestock loans. Mr. Ley and H. H. Adair

o f Dakota City, are the only Nebraska
members of the association.

Reopened
The Farmers & Merchants State Bank
of Cereseo was reopened fo r business re
cently, on authority o f the Nebraska de
partment o f trade and commerce.
Former stockholders and depositors re
organized the bank and restored it to
solvency. The bank was reopened with
deposits o f $48,537 and capital of $20,000.
Under the plan o f reorganization about
50 per cent o f the bank’s deposits will be
released to the depositors upon reopening.
The balance is being released on monthly

installments. The contract provides for
eventual total payment o f deposits.
New officers o f the bank were announced
as follow’s : Frank Wedberg, president;
Herman Nelson, vice president; Fred
Mostrom, cashier.

Banks In Good Shape
Omaha banks are in excellent condition,
reports issued at the instance of the comp
troller o f the currency indicated. Depos
its totaled $77,527,789 compared with
$79,502,529 on June 30th, when the last
report was made, and loans aggregated
$36,905,850 as against $37,884,376.

Quitting Business

hroughout

the

years

Recently the Arthur State Bank o f
Arthur announced that it would go out o f
business. Their announcement says :
“ Because of small volume of deposits
and the fact that the cashier wants to
leave, it has been decided by the directors
o f this bank to liquidate the affairs of the
bank, paying off the depositors one hun
dred cents on the dollar and going out of
business.
“ Business will be carried on as usual to
October 22d, after which it is expected
that no further deposits will be accepted
and no checks will be paid. Depositors
whose accounts have not been closed be
fore October 22d, will please call at the
bank and withdraw their balances before
November 5th, the bank building will be
open but one or two days a week after
that date. Withdrawals of more than
$100 will be paid by draft unless cur
rency is arranged fo r a few days in ad
vance.”
The officers of the Arthur State Bank
are R. H. Barber, president ; Ray C. Lang
ford, North Platte, vice president; Theo.
Lightbody, Arthur, cashier; Paul H. Kannow, Kearney, vice president.

this

bank has faithfully adhered to the
principles of sound banking.

The

banks for whom we act as corre

Interest Ready

spondent find this traditional char

In spite of greatly increased delin
quency of payments on its farm loans
throughout Nebraska and Iowa during the
first nine months o f 1932, the Lincoln
Joint Stock Land Bank has sufficient
money set aside to pay $400,000 o f inter
est on its own bonds which will fall due
November 1st, and is pursuing the most
lenient policy possible toward borrowers
in distress, President W . E. Barkley re
ported to the stockholders at their annual
meeting.
While many o f the bank’s farm debtors
have been unable to make their full pay
ments on amortized loan installments,
other farmers are taking advantage of low
prices fo r land by purchasing farms
Avhich the bank was compelled to take over
on defaulted indebtedness, Barkley said.
Of the farms thus disposed of during
nine months ending September 30th, the
bank received cash payment fo r 61 per
cent o f the sales.

acteristic a valuable asset in their
relationship.
If we can serve you in Chicago your
inquiries

are respectfully

invited.

THE NORTHERN
TRUST COMPANY
Northwest Corner LaSalle and Monroe Streets
C H ICA G O

★

*
Northwestern Banker

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

November 1932

Nebraska
Bank News
President.................... E. N . Y a n H orne
Lincoln
Chairman, Executive Council.......
.....................................W . H . M cD onald
North Platte
T r e a s u r e r ..................................Carl W e il
Lincoln
E. N. V A N H O R N E
President

Secretary............ ..........W m . B . H ughes
Omaha

W M . B. H U G H E S
Secretary

Lincoln Bank Figures
“ j” OTAL deposits of $20,618,337 were
I reported by the national banks of Lin
coln in answer to the national bank call
as of the close of business September 30th.
Loans totalling $10,005,050 were listed by
the banks.
The statements fo r the close o f business
June 30th showed total deposits of $22,192,462 and total loans o f $11,173,285.
The First National Bank reported total
deposits on September 30th, amounting to
$10,817,130 and loans amounting to $5,208,588 as against $11,825,207 deposits
and $5,893,904 reported fo r June 30th.
The Continental National Bank re
ported deposits of $5,130,768 and loans
o f $2,200,523 for September 30th. The
June 30th statement showed deposits o f
$5,096,889 and loans of $2,447,785.
The National Bank o f Commerce had
deposits o f $4,503,439 and loans amount
ing to $2,502,939 on September 30th as
against $5,106,366 and loans o f $2,741,596
on June 30th.

County Meeting
The Cass County Bankers Association
held its annual meeting on Wednesday,
October 12th, at Greem\7ood, a very large
percentage o f the membership being in
attendance.
The business session opened at 2 o ’clock
in the afternoon at the Masonic Hall with
President H. A. Schneider o f Plattsmouth,
presiding. The visitors Avere Avelcomed
by Mayor E. A. Landon o f Greenwood,
who is also vice president of the GreenAvood State Bank. To the Avelcome the
response w7as made by Carl Ganz, cashier
o f the Farmers & Merchants Bank o f Alvo.
“ The N cav Receivership System” Avas
discussed by George Woods, o f Lincoln,
bank commissioner, avIio explained the
plan by Avhieh the affairs o f closed banks
were now being handled by the state de
partment.
Attorney James L. Brown, o f Lincoln,
discussed the “ Prejudgments Against the
Legal Profession,” taking up a large num

ber of the prejudices that are held against
the laAvyers.
George Holmes o f the First National
Bank o f Lincoln, and Clarence Owens of
the Stock Yards National Bank of Omaha,
also spoke briefly on matters of interest
to the bankers in general.
William Hughes, s e c r e t a r y of the
State Bankers Association, w7as also pres
ent and touched on the Avork o f the state
association.
He also extended to the
bankers an invitation to attend the state
meeting at Omaha.
In the annual election o f the officers of
the association the f olloAving Avere named:
W. N. McLenon o f Elnrwood, president ;
Harvey K oop of LouiseA7ille, vice presi
dent; Guy Clements of Elmwood, secre
tary-treasurer.
The next meeting will be held at Elm
wood, the county association accepting the
invitation o f the tAvo banks of that city.

Bank Moved
Definite arrangements have now been
completed fo r the removal of the Max
State Bank to Benkelman sometime soon,
the exact date o f moving not being known
at this time due to the fact that some of
the final details are yet to be Avorked out.
The management has completed the purchase of the old Bank of Benkelman build
ing.

Annual Meeting
The annual meeting and election of
officers of the First Nebraska Bankers
Regional Clearing House Association AA7a s
held October 13th, at the Hotel Pathfinder
in Fremont, with a dinner at 6:30 and
the meeting immediately thereafter. The
present officers were re-elected, that is :
J. M. Sorensen o f Fremont, president,

The Havelock National Bank reported
deposits o f $167,000 and loans o f $93,000
fo r September 30th, and said that both
figures represented a drop o f approxi
mately $3,000 since the June 30th state
ment.
Officials of all banks said that published
statements would show unusually strong
reserves and that the statements showed
the banks in strong financial positions.
One leading banker said, “ All the banks
have exceptionally strong reserves and
there is no pressure being felt. We are
not operating on any federal reserve bor
rowed money at all. Usually Ave have bor
rowed money at this time o f year to take
care o f cattle feeding loans. This year
many of the feeders are financing them
selves on a smaller scale or taking ad
vantage o f R. F. C. funds.
“ Then, too, the small movement of grain
has meant but little demand fo r funds.
The Canadian grain movement is just
about over and I look for an appreciable
gain in AAdieat prices about the first of
December.”

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

Condensed Statement September 30, 1932
RESOURCES
l oans and Discounts
Bonds and Securities
U. S. Bonds to Secure Circulation
U. S. Government Securities
Stock in Federal Reserve Bank
Banking House
Furniture and Fixtures
Other Real Estate
Due from U. S. Treasury
Cash and Sight Exchange

2 , 6 0 4 ,5 3 4.58
8 8 , 367.32
1 0 0 ,0 0 0 . 0 0
9 7 4 , 005.20
1 6 , 5 0 0.00
5 3 , 000.00
None
1.00
5 , 000.00
1 , 4 7 8 ,9 3 5.98

LIABILITIES
Capital
Surplus
Undivided Profits, Net
Unearned Discount
Reserved for Taxes, Interest, etc.
Dividend payable Sept. 30, 1932
Circulation
Deposits

5 , 3 2 0 , 344.08

4 5 0 .0 0 0 .
00
100.000.
00
5 9 , 826.69
2 5 ,5 8 0 .7 7
3 1 ,5 0 7.43
6 , 750.00
9 9 , 960.00
4 , 5 4 6 , 719.19

5 , 3 2 0 ,344.08

This Bank Has NO Affiliated Companies
Member of Federal Reserve System and Omaha Clearing House Association

LIV E STOCK N A T IO N A L B A N K
O M A H A , NEBRASKA

Northwestern Banker

November 1932

40
and H. H. Peters o f Yutan, secretarytreasurer.
C. C. Kuning of the Omaha branch o f
the newly organized Regional Agricul
tural Credit Corporation was present and
gave a very interesting talk on the plans,
policies and functions of his organization.
A large representation o f the district
was present.

Home Loan Bank
Dave Rowe, of Fremont, has returned
from Topeka where the organization of
the Federal Home Loan Bank for the
tenth district was perfected after a threedays’ session o f the directors appointed
from Washington. Mr. Rowe is the only

one from Nebraska on the board, made up
o f five directors from Oklahoma, three
from Kansas, two from Colorado and one
from Nebraska, comprising the tenth dis
trict, all serving without pay.
Mr. Rowe is confident that the money
available from the regional banks will
play its part in bringing business to a
higher level.
The Federal Home Loan system can
not be expected to perform economic
magic on all the home owning and mort
gage ills. Changes in the financial struc
ture are in the nature of the case brought
about slowly, especially where so large a
territory and so many participating insti
tutions are involved.

National Bank Head
J. R. Cain, Jr., vice president o f the
Omaha National Bank, was elected presi
dent of the national bank division o f the
American Bankers Association, in con
vention at Los Angeles.
Mr. Cain was present at the meeting.
For the past year, Mr. Cain has been
vice president o f the National Bank di
vision. He is a past president of the
Nebraska Bankers Association.
Mr. Cain was born in Falls City, Neb.
A fter several years of banking experience
there, he came to Omaha in 1914, as vice
president of the State Bank of Omaha.
In 1920, lie helped organize the Peters
National Bank, o f which he became vice
president in active charge. He vTas elected
a vice president o f the Omaha National
in 1930.
While in Falls City, he was a state rep
resentative and then a state senator.
Mr. Cain is a past grand master o f Ne
braska Masons and is a thirty-third de
gree member o f Scottish Rite.

Too Much Money

V isit the International This Year
A m e r ic a ’ s P re m ie r L iv e S to c k
E x p o s itio n
N o v e m b e r 2 6 to D e c e m b e r 3 , 1 9 3 2
Packers, Commission Men, Live Stock Breeders,
Business Men and Banks of the Yards, combine forces
to make the International the Spectacle Supreme.
Visit this great Exposition this year, learn of the
strides Live Stock is making toward better times. Talk
to the leaders in the Industry.
you at the International”

“ See

ROVERS
N A TIO N A L B A N K

TRli5T6'SAVINES BANK

Union Stock Yards « Chicago, 111.

The Drovers Banks are glad to contribute this
advertisement for the benefit of the “ International.”
Incidentally, the International, 100 per cent of the
nationally known packers, the leading commission
men and business men of the Stock Yards carry their
accounts at the Drovers.

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

November 1932

A couple o f small boys were “ prospect
ing” in Arlington and came upon an old
heap o f rubbish at the rear of the First
National Bank Building. Poking through
the debris they discovered a lot of pennies.
In just a minute, a “ gold” rush was on,
and from every direction came the young
sters. When the entire pile had been finecombed one lad had found nearly a hun
dred, and others had from five to twentyfive.
Recently receivers who have been in
charge o f the bank had a house cleaning
day and hauled out several truck loads
o f “ rubbish.” Just how the money came
to be carried out with the trash was not
known.

Explains A. C. C.
Charles C. Kuning, manager o f the
Omaha office o f the Agricultural Credit
Corporation, outlined purposes o f the
corporation in a talk to the Triangle Club
at the Conant recently.

Promoted
■After ten years o f serving in the Toy
hanking institutions, beginning under the
tutelage o f his father, M. J. Kuhl, cashier
of the First National Bank, Osmond,
Nebraska, Alexus Kuhl has earned the
promotion which now comes to him. Be
ginning this week, he is to be auditor for
the Toy banks o f Nebraska and Iowa,
leaving his position as cashier o f the Toy
bank at Varina, Iow7a.
His headquarters will be in Sioux City
and he will make periodic audits, it being
the custom o f the Toy banks to audit
privately besides undergoing an examina
tion from time to time by the national
examiner.

41
During the war he served as a member of
the Waseca County Fuel Administration.

Minnesota
Bank News

Banks Unite
The Shaffer State Bank o f Shaffer,
Minnesota, has been consolidated with the
Stannard State Bank at Taylors Falls to
continue under the latter name.

Officers Minnesota Bankers
Association

M. F. E R N S T
President

P resid ent.................................M. F. Ernst
St. Paul
V ice P resid ent................ W illiam Duncan
Mankato
Treasurer............................ D . J. Fouquette
St. Cloud
Secretary.................................George Susens
Minneapolis

Annual Meeting
GEORGE SU SENS
Secretary

Operate Banking Clinic
P E R ATIN G on the premise it was
poor management rather than hard
times which caused many bank failures,
an organization at the University o f Min
nesota has set about a task of fact-finding
to strengthen the administration of Min
nesota’s financial institutions.
Projected largely as an aid to the small
independent banks, a banking clinic to
cure some o f the ills of finance in the
state has been established within the Em
ployment Stabilization Research Insti

tute.
The clinic, headed by leading staff mem
bers in the university school o f business
administration, purposes to act as an ed
ucational institution informing its stu
dents on how to buy bonds and generally
keep order in the balance sheets.
It intends, hackers o f the project say,
to show small town bankers where they
are behind the large organizations in mat
ters of daily efficiency and the making o f
investments. Purchase o f bonds is re
garded at the clinic as one o f the most
annoying problems because the small
banker often fails to study the relation o f
“ debt” to “ total net worth” of industries
having bonds for sale.
To this end is published a monthly
“ Financial and Investment Review,”
whose first issue, now in circulation, takes
several market favorites, emphasizing the
security o f some and the instability o f
others by determining the “ margin o f p ro
tection.”
Teaching the banker how to do this for
himself is one of the clinic’s purposes.
The clinic also rvill seek information on
banking policies and causes for bank
failures, analyze the failures, establish
operating standards, audit banks, and
survey existing credit facilities in Minne
sota.
Heads of the clinic staff are Dean Rus
sell A. Stevenson, Professors Alvin H.
Hansen and Robert Weidenhammer, and
Arthur R. Upgren.

War On Bandits
A crack state police force, instead o f the
antiquated sheriff and constable system

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Federal Reserve Bank of St. Louis

in combatting the raids o f organized bank
“ mobs” will be sought of the next state
legislature by the Minnesota Bankers A s
sociation.
The ease with which the machine-gun
armed desperadoes have looted scores o f
northwest banks o f hundreds of thousands
o f dollars during the past year has proved
the breakdown o f the local constabulary
in meeting the challenge o f the bank rob
ber, bankers said.
The total from bank robberies in thirtyone Minnesota holdups since September
1, 1931, has been $300,000. In the Da
kotas similar losses have been sustained.
Friday a bandit held up the Pennock
State Bank o f $400 and escaped before
pursuit could be effectively organized in
the latest raid.
Even in the large towns where vigi
lantes groups have been formed the simple
w'eapon o f roofing nails scattered on the
road behind a fleeing bandit automobile
has baffled pursuit.
The compact, carefully selected Minne
sota h i g h w a y patrol, a motorcycle
mounted unit, and the state bureau o f
criminal apprehension would be combined
under the new plan and enlarged into a
super c r i m e fighting organization,
equipped perhaps with radio and air
planes.
During the past year the crime bureau
has been able to trace the course o f outof-state gangs which have generally
started their forays in Wisconsin and then
struck in rapid succession in larger towns
in Minnesota and the Dakotas before
turning southward into Iowa and Ne
braska.

Dies at Waseca
Anton O. Lea, 66, died recently at the
home o f his brother in Waseca. He had
been suffering fo r several years, but was
only confined to his bed five days.
Mr. Lea served as postmaster at New
Richland eight years and wTas cashier o f
the First National Bank of New Richland
fo r eighteen years. He also served on
the school board for several years and
held the office o f mayor for two terms.

J. O. Haugen was elected president;
0. S. Kyvig, Starbuck, vice president;
T. R. Thompson, Glenwood, secretary,
and H. F. Engbretson, Lowry, treasurer,
when the Pope County Bankers Associa
tion held its annual meeting. About 34
bankers attended the meeting, which was
held at Glenwood.

New Location
The Rice Street State Bank o f St. Paul,
has opened for business in its neAV location
at Wabasha and Rice Streets, The lobby
o f the new bank is finished in marble and
the flooring is o f terazza. New fixtures
have been installed throughout. Officers
are Otto Bremer, president; Anton J.
Helget, cashier, and George F. Dodor,
assistant cashier.

Maple Plain Death
Funeral services fo r Adolph Hallberg,
43 years old, were conducted recently in
Maple Plain.
For twenty years Mr. Hallberg had been
affiliated with the State Bank of Maple
Plain. He was a member o f the Minne
apolis Shrine, the Wayzata Masonic
lodge and the Scottish Rite. Mr. Hall
berg belonged to the Maple Plain Amer
ican Legion. Surviving are his wife and
three children, Vida ire, Audrey and Carl.

Bank Deposits
Deposits o f Minneapolis banks total
$285,895,603, while their loans and dis
counts amount to $140,420,162.
These
figures compare with $337,950,546 and
$151,728,783 a year ago.
Figures made public by the ten national
banks, in response to statement calls by
the comptroller o f the currency, show
total deposits o f $181,937,174 at the close
o f business September 30th, compared
with $211,858,962 on September 29, 1931.
Their loans and discounts were $97,419,890, against $111,982,331 a year ago.
The three trust companies report de
posits o f $37,418,367, compared with $46,178,370 on September 29, 1931, while
their loans have decreased from $26,343,161 a year ago, to $22,202,335. State
banks of Minneapolis reported total de
posits o f $5,119,072 as o f September 28th,
against $6,213,119 on September 29, 1931,
while their loans declined from $2,271,620 to $2,094,670 in the year. Savings
banks showed deposits of $61,419,990
September 28th, against $65,009,897 a
year ago.

Northwestern Banker

November 1932

Retires from Office

Converting
Collections
Into Cash

John Sheehy, president o f the First
National Bank of Montgomery, has an
nounced his retirement from active lead
ership o f the bank and will be succeeded
in the office by F. M. Pexa, veteran Mont
gomery business man and a director o f
the bank fo r a long period. Mr. Sheehy,
who served four terms as mayor o f Mont
gomery and many more as a member o f
the village council, started the First Na
tional with his father as a private insti
tution, the Bank of Montgomery, in 1890.

Renews Charter

The best collection system is that
which converts time items into
R ESERVE in the least time at the
lowest cost.
W e reach

all

p oin ts

th e

T h ird

F ed era l

R e se rv e D istr ic t a s w ell a s th e p ricipal cities
and to w n s in th e U n ite d S ta te s direct.
N o lo ss o f tim e in r eceiv in g r e m itta n c e s 71

or a d v ices o f cred it.

W e h a v e p riv a te telep h on e lin es to our local
teleg ra p h office and in to N e w Y o r k C ity .

N o d elay in m a k in g te le g ra p h ic tr a n s - 71
fe r s .

W e o p era te our T r a n sit and C ollection D e
p a r tm e n ts t w e n ty -fo u r h ou rs each d ay .
M a il m a tte r a ddressed to us or b y us 71

w a ste s no tim e in th e P o st Office.

A ll items handled at par for corre
spondents. No charge for tele
graphic transfers of funds.

. . . T H E .. .

PHILADELPHIA
N A T IO N A L B A N K
ORGANIZED 1803

PHILADELPHIA, PA.
CA P IT A L

Northwestern Banker

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

and SURPLUS_________________$42,000,000

November 1932

The State Bank o f Clements, in exist
ence for thirty years, has obtained an ex
tension of the charter fo r another thirty
years.
The bank was established by
Springfield residents when the railroad
was built through Clements.

Sign Waivers
Because almost every depositor in Kasson’s two banks was willing to sign waiv
ers on deposits fo r a five-year period, both
banks opened their doors, following a fiveday holiday declared by Mayor E. P.
Healy. Depositors were asked by local
business men to sign the waivers which
allow withdrawal o f only certain percent
ages o f their deposits for five years. The
two banks are the National Farmers Bank
o f Kasson and the National Bank of
Dodge county.

Bank Group Head
Miss Leonilla Joseph is new chairman
o f the women’s committee of the Minneap
olis chapter o f the American Institute of
Banking, appointed by President R. C.
Rutherford.

Experienced
Administrative control of the twelve
Federal Home Loan Banks which opened
October 15 is vested in 108 men o f long
experience in the home financing business,
a circumstance which bodes well for the
success of the system, the United States
Building and Loan League points out. A
majority of the directors for the several
Home Loan Banks have been leaders in
building and loan association management
fo r the past ten to forty years.
The League, which was one o f the ardent
advocates of this new home financing meas
ure during the last congress, is co-operat
ing with the system, and bringing building
and loan associations into membership in
the regional banks.
The banks’ directorates include twentyfour representatives o f the public interest
in addition to the directors who were
chosen for their experience in managing
home mortgages. Capital o f $134,000,000
is now at the disposal of the banks.

North Dakota Bank News
Officers North Dakota Bankers Association
President........................................................................................T . A . Tollefson
I>ickinson
Vice P resid ent.................................................................................. D . R . Green
Grand Porks
C. C. W attam

Secretary
Fargo

W . N. Steele Retires
ONCLUDING a term o f 44 years as
head of the banking institution he
founded in the pioneer days of North
Dakota, Warren N. Steele has resigned
as president of the First National Bank
o f Kolia. Mr. Steele has been living in
California fo r several years, returning to
Kolia during the summer to look after his
extensive interests in this territory, and
it was because of the fact that he was now
only available in the banks’ counsels dur
ing such a short part o f the year that he
decided to give way to a more active
executive.
F. A. Foley, who as vice president, has
been the active managing officer of the
bank, will succeed Mr. Steele as presi
dent, and John A. Stormon, prominent
local attorney and member o f the bank’s
board, will become vice president. Oscar
Hjelt will continue to serve as cashier'
and John Munro, chairman of the board
for many years, continues in that office.
At the time of First National’s affilia
tion with the First Bank Stock Corpora
tion in 1929, Mr. Steele was anxious to
definitely retire, but was prevailed upon
to continue in office until the present time.
It was in 1888, a year before North
Dakota was admitted to statehood, that
Mr. Steele in association with Charles F.
Wilbur, organized the Rolette County
Bank. Rolla was then little more than a
townsite and the bank was one o f its first
business institutions. A state charter was
later obtained, under which the bank op
erated until February 14, 1902, when the
bank entered the national system as the
First National Bank o f Rolla. Mr. Steele
was a vigorous figure in the development
of this section of the state. His faith in
the country was unbounded and he as
sisted with financing many o f the projects
which marked its growth.

In 1929, when the First National entered
the First Bank Stock Corporation group,
Mr. Steele expressed his gratification at
the accomplishment as he foresaw that
eventually he would have to completely
relinquish his responsibility to the bank
and the community which he had borne
fo r many years.
“ I am very glad to entrust the bank to

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Federal Reserve Bank of St. Louis

To Classify Soil
Determined to attack its farm taxation
problem wherever possible with facts in
stead o f guesswork, McKensie county, in
western North Dakota, has inaugurated
a comprehensive, exhaustive soil classi
fication as the first step in a new land val
uation program, the United States Depart
ment of Agriculture says. The classifica
tion is being made by state workers and
the soil survey o f the department.
Students o f soils, taxation, and land
utilization have praised the McKensie
county commissioners for their progres
siveness in turning to scientists fo r knowl
edge about their problem. The project is
being watched with interest, especially

such an organization as the First Bank
Stock Corporation, with the knowledge
that its future is assured under sound and
conservative management,” Mr. Steele
said at that time.
A. G. B JE R K E N has been elected
president and director of the Benson
County State Bank of Minnewaukan, suc
ceeding M. M. Hayden, who has resigned.
H. L. COLE has resigned as director
o f the Bank of Barney and P. S. Nielson
has been elected as his successor.
B lack
H aw k
H otels
have led the w ay in r e
ducing hotel rates.
At
all of the seven B lack
H aw k H otels your travel
dollars go farther in b u y
ing the finest of accom
m odations and service.

THE SE C R E T A R Y o f State has issued
a certificate renewing the term o f corpo
rate existence of the Bank o f Webster.

In W ho’ s W ho
Nine Fargoans and three others from
North Dakota are listed in the new 19321933 edition of “ W ho’s Who in America,”
national compendium o f notables, who
were not listed in the previous edition.
Newcomers to the publication from
Fargo are:
Frederick B. Bartlett, bishop o f North
Dakota fo r the Episcopalian church.
Norman D. Black, publisher o f the
Fargo Forum.
William Lemke, attorney and Repub
lican nominee fo r congress.
James S. Milloy, recently moved to
Minneapolis where he is associated with
the Minneapolis Tribune., chairman o f the
board o f directors of the Greater North
Dakota Association.
H. II. Paulson, editor o f the Fargo
Forum.
Dr. William C. Sainsbury, pastor o f
the First Methodist Episcopal church.
Dr. John H. Shepperd, president o f
the North Dakota Agricultural College.
Walter L. Stockwell, general grand
master o f the general grand council, Royal
and Select Masons, and grand secretary
o f the grand lodge, A. F. and A. M. of
North Dakota.
E. J. Weiser, president o f the First
National Bank & Trust Company.

Des Moines

NO DELAY
1 0 0 % more minimum
rate room s at new low
rates guarantee desired
accom m odations without
delay or inconvenience.
R ates for extra guest re
duced to surprisingly low
figures.
Y o u w ill enjoy your
visit at any of our hotels
___ and w ill want to come
again.

In Des Moines
H OTEL SA VE R Y
$ 2 .0 0 and up
H O T E L FO R T DES
M O IN E S
$ 2 .5 0 and up

In Davenport
HOTEL B LA C K H A W K
$ 2 .0 0 and up
H O T E L M IS S IS S IP P I
$ 2 .5 0 and up
HOTEL DAVENPORT
$ 1 .5 0 and up

In Mason City
H OTEL H ANFORD
$ 2 .0 0 and up

In St. Paul, Minn.
H O T E L S A IN T P A U L
$ 2 .5 0 and up

BLACK HAWK
HOTELS r
Northwestern Banker

November 1932

44
because the county is on the western border
o f the state and is in what is known as
the Northern Great P ’ ains area, or dry
land belt. Although not classed as mar
ginal land, the 2,800 square miles o f ter
ritory o f the county lie in a region where
rainfall is light and where thé correct use
of the land is essential to profitable op
eration.

Davenport Bank and Trust
Company
Davenport, Iowa
S T A T E M E N T O F C O N D IT IO N S E P T E M B E R 30, 1932.

A S S E T S
C ash on H an d and in R e se rv e B a n k s ..........$ 3 ,1 0 7 ,2 0 9 .7 0
U n ited S ta te s G o v ern m en t B o n d s............... 1 ,1 5 7 ,7 1 6 .0 2
5 3 3 ,1 3 5 .4 1
Io w a R oad and M u n icipal B o n d s..................
C o m m ercia l and C ollateral P ap er
R ea d ily M a r k e ta b le ....................................
4 1 2 ,6 3 3 .8 0
C ash and its E q u iv a le n t
L o a n s and D isc o u n ts .......
F u rn itu re and F ix tu r e s ..
O v e r d r a fts ............................

$ 5 ,2 1 0 ,6 9 4 .9 3
4 ,4 7 5 ,0 5 8 .8 3
1 4 ,0 1 3 .6 5
9 .0 5
$ 9 ,6 9 9 ,7 7 6 .4 6

L I A B I L I T I E S
C ap ital ................ .
S u rp lu s ....................
U n d ivid ed P rofits
D e p o sits ..................

6 0 0 ,0 0 0 .0 0

The soil workers from the department
will chart the composition of the soil and
the topography, and will also record in
formation on the grass covering. This
information will be useful in estimating
the grazing possibilities o f the land. The
survey will show all wagon roads, canal
ditches, lakes, rivers, creeks, telephone
lines, powrer lines, springs, fences, as well
as houses, churches, schools, roads, and
other landmarks. It considers such fac
tors as the water supply, the drainage, the
subsoil, and slopes.
The fieldmen grade the land from a soils
standpoint, giving the best land in the
county a grade o f 100, and grading the
rest accordingly.

An Open Case
Sherlock: “ Ah, W atson! 1 see you have
put on your winter underwear.”
W atson: “ Marvelous, Holmes! How
did you deduct that?”
Sherlock: “ Well, you have forgotten to
put on your trousers!”

200, 000.00
9 7 ,6 8 9 .1 6
8 ,8 0 2 ,0 8 7 .3 0
$ 9 ,6 9 9 ,7 7 6 .4 6

O FF IC ER S
E. P. A D L E R .................................................President
V . O. F IG G E ................ Executive Vice President
A . H . H I E G E L ............................... A ssistant Cashier
H E R M A N S T A A K ............................................ Cashier
FR E D G R U E N W A L D ............... Assistant Cashier
D IR E CT O R S
E. P. A D L E R
President Lee Syndicate Newspapers
J. W . B E T T E N D O R F
The Bettendorf Company
H. O. S E IF F E R T
H . O. Seiffert Lum ber Co.
DR. K U N O H. ST R U C K
Physician

O. FIGGE
Executive V ice President
H . E. L IT T IG
V ice President Peoples Light Co.
K A R L P. T E S K E
Teske M illing Co.
J. L. H E C H T
French and Hecht, Inc.

JOS. S. K IM M E L
President Republic Electric Co.
D R. F R E D E R IC K H. L A M B
Physician

T . J. W A L S H
W alsh Construction Co.
C. D. W A T E R M A N
Lane and W aterm an

A NEW BANK
O R G A N I Z E D N I N E T E E N T H I R T Y -T W O

Banker
Digitized forNorthwestern
FRASER
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Federal Reserve Bank of St. Louis

The survey is one o f the most difficult
the soil survey has ever undertaken be
cause the soils in McKenzie county vary
widely. When completed the survey will
showT the exact soil composition of all the
soil in the county. The fourteen men at
work in the survey are making special
reports on each twenty acres. They walk
over the ground and take soil samples at
frequent intervals.

November 1932

Worth the Money
Father criticized the sermon, mother dis
liked the blunders o f the organist, and the
eldest daughter thought the choir’s singing
atrocious.
The subject had to be dropped when the
small boy of the family, with the school
boy’s love o f fair play, chipped in wuth the
remark:
“ Dad, I think it was a .jolly good show7
for a penny.” —-Cumberland Herald.

Hang on, Girlie
The lights in the crowded bus had failed
and the passengers were thrown into con
fusion.
“ Can I find you a s t r a p t h e tall young
man asked a young lady at his side.
“ Thank you,” she replied, “ but I have
just found one.”
“ Good,” he replied. “ Then perhaps you
wouldn’t mind letting go o f my tie?” —
Answers.

45
was assistant cashier of the bank until
1905, when he moved to Central City and
took over the cashiership.

Iowa
Bank News

New Bank

Officers Iowa Bankers
Association
President...........................Fred J. Figge
Ossian
V ice President. . . . Robt. W . Turner
Council Bluffs
T reasurer........................B . D . Helscher
Sigourney
F R E D J. F IG G E
President

Secretary........................ Frank
Des Moines

W arn er

FRANK W AR N ER
Secretary

How the A . C. C. Operates
OW federal funds are being- made
available promptly for the relief o f
farmers in the middle west is explained in
a recent interview" given by J. M. Hutch
inson, executive vice president and gen
eral manager o f the Sioux City branch
o f the Agricultural Credit Corporation,
an R. F. C. organization.
Mr. Hutchinson, a former Cedar Rapids
bank executive, noted especially the ra
pidity with which the federal government
put the Agricultural Credit Corporation
into the business o f aiding farm credit.
“ There are four classifications o f loans
that we can make. To livestock men we
make range and breeder loans, pasture
loans and feeder loans. The fourth class
ification is general farm personal prop
erty. There is no delay when an appli
cant for a loan comes into our offices.
“ Immediately after an application is
filed it is checked by one o f our examin
ers. I f he finds that the applicant is
entitled, by reputation, integrity, and so
forth, to credit, one o f the field men goes
out at once to make an appraisal o f the
applicant’s security.
As soon as that
man’s report is completed, the applicant
can come in and get his money.
“ W e are making loans that are based
on the character o f the borrower, his abil
ity as a farmer, and his willingness to co
operate with us in working his w7ay out
o f debt, W e loan direct to farmers, live
stock men and corporations engaged in
the business o f farming or raising, breed
ing, feeding and the marketing o f live
stock. W e have $3,000,000 of capital,
with rediscount privileges totaling $25,000,000 more.
“ The whole process of completing a
loan is confined to our office, which elimi
nates red tape and delay. As soon as an
application is approved, a check awaits
the borrower. That check is written in
our office, signed by executives there. W e
have in Sioux City the entire set-up nec
essary to the kind o f business we are
doing.
“ We consider one of the most impor
tant types o f loans to be those on general
farm personal property. Many farmers

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Federal Reserve Bank of St. Louis

who are anxious to make a fight for re
covery and liquidation o f their debts are
absolutely put out o f business when some
holder of a chattel mortgage or lien steps
in and takes away their personal property.
We want to prevent that procedure
wherever and whenever possible.
“ And despite the speed with which we
are working, we are making reasonable
loans. W e check carefully on every ap
plicant. He must be able to show that if
we lend him money fo r the purchase o f
livestock, he is in position to feed out
that stock and carry it 30 days beyond
the date at which it may be ready for
market,
“ I f a good applicant wants a loan to
buy livestock, we tell him to go ahead,
just as soon as we have determined that
he is entitled to credit. He can come to
us one day and buy his livestock within
a day or two if we are able to confirm
him as a good borrower.”

Injured
C. A. Baker, former cashier o f the State
Savings Bank, Greenfield, was seriously
injured in a car accident near Ladora,
Iowa. Mr. and Mrs. Baker left to drive
to Davenport and Chicago, fo r a visit
with their children, and when he turned
out for another car he lost control o f his
car and overturned in the ditch. He re
ceived an injury to his head, which caused
concussion o f the brain and he has been
unconscious since the accident.

Dies at Cedar Rapids
Edward LeClere, who fo r several years
has been a resident o f Cedar Rapids,
moving there from Central City, died at
his home recently, following a two years’
illness.
Mr. LeClere was cashier o f the Central
City State Bank, while there. He was
born in Coggon, November 24, 1876, son
o f Mr. and Mrs. Charles LeClere. He at
tended high school in Monticello and later
graduated from the Cedar Rapids Busi
ness College.
In 1900 he went to Coggon, where he

A massmeeting was held at Story City
recently fo r the purpose of taking the
first steps leading to the formation of a
new bank.
Practically all the business houses were
represented, as well as some of the farm
organizations. By unanimous vote it was
decided to go ahead with plans to organ
ize a new bank as soon as possible. A
committee was selected to notify the state
banking department that such a move
ment had been started and that in due
time, if the efforts to get stock subscribed
are successful, a charter will lie applied
for.

Begins Work
Robert J. Richardson of St. Louis, Mo.,
who was named executive vice president
o f the eighth district home loan bank in
Des Moines, began his new duties recently.
The veteran home loan executive said
scores o f applications are being received
for direct loans to home owners. He
emphasized that applicants must furnish
proof that they have tried and failed to
get loans from private concerns before
the home loan bank can consider their
requests.
W ork on permanent quarters of the
bank on the fourth floor of the Des Moines
Building has been started. Meanwhile,
offices are being maintained on the sev
enth floor o f the building.

Leaves Bank
Miss Bertha Wells who has been as
sociated with the Miles Savings Bank for
the past several years severed her connec
tion with it recently and has returned to
her home in Clinton.

Foiled
Robbers paid another visit to the North
west Davenport Savings Bank recently,
but Herbert Langfeldt spoiled their plans
and saved the funds that were in his
“ cage” at the time of the visit.
“ Stick ’em up,” the holdup men or
dered as they entered the bank. Lang
feldt, who had been in the bank when it
was robbed o f $6,000 on December 7,1931,
didn’t obey. Instead, he dropped to the
floor and released a quantity of tear gas
that drove the men from the bank to their
car, in which three companions Avaited.
Police took the trail of the would-be
robbers immediately after they had left
the Davenport bank, and by taking a short
cut, were able to intercept the machine.
A gun battle followed, and in the fight
one of the bandits lost his life and an
other one was critically wounded, Avhile
one o f the police was shot, but Avas not
considered in a dangerous condition.

Northwestern Banker

November 1932

46
Reorganization Plans
Preliminary steps have been taken by a
group o f Dubuque business and profes
sional men looking toward the organiza
tion of a new state bank which, if organ
ized, will be located in the banking rooms
occupied by the Union Trust & Savings
Bank.
This became known when it was learned
that L. A. Andrew, state superintendent
of banking and receiver of the Union
Trust & Savings Bank, had filed an ap
plication in the state district court asking
a court order authorizing him to enter into
an optional contract with W . H. Klauer,
president o f the Klauer Manufacturing
Company, and Frank D. Gilloon, o f the
law firm of Frantzen, Gilloon & Glenn,

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Federal Reserve Bank of St. Louis

for the sale o f the Union Trust & Savings
Bank building and fixtures.
The sale
price is fixed at $62,500.

Remodel Building
The lowa-Des Moines National Bank
& Trust Company will remodel the build
ing it formerly occupied on the northeast
corner of Sixth Avenue and Walnut
Street at a cost o f $50,000, Louis C. Kurtz,
chairman o f the board, said recently.
Alterations will be confined mainly to
the basement and the first three floors o f
the bank, which were formerly occupied
by the bank and trust company. A new
front on the Sixth Avenue and Walnut
Street sides will be installed.
The bank, which recently moved to its

new building directly across the street
on Walnut Street, formerly used the first
and second floors as a banking room, the
basement fo r vaults and the third floor
for a business office.
These parts of the building will be pre
pared in skeleton form in the remodeling
and will be subdivided and remodeled later
according to the desires of tenants to
whom they are let.
The remaining three floors of the build
ing are in condition now for tenants, Mr.
Kurtz said.
“ W e have decided to remodel our old
building now,” Mr. Kurtz said, “ in order
to aid employment conditions. W e will
use local labor and materials wherever
possible.”

Check Tax
The federal tax collected in Iowa on
bank checks during September totaled
$69,790.50, George W . Bird, assistant col
lector o f internal revenue, reported re
cently.
Collections of miscellaneous federal
taxes in the state during the month showed
a rise of nearly 60 per cent over the
August total, Bird said, increasing from
$121,243.66 to $139,163.50. The bank tax
was the largest item. The August figure
on this levy was $67,099.49.
The electric energy tax brought in $38,908 against $18,627.90 fo r August. All
other taxes increased except on admis
sions, which fell from $8,221.90 to $8,025.30.
Other miscellaneous collections last
month included:
Toilet articles, $22,851.54; telephone, $2,746.50; jewelry, $3,776.52; dues and initiation fees, $5,011.67;
soft drinks, $3,932.93; safety deposit box
leases, $1,776.14; and candy, $1,521.63.

Success Talk
“ The luggage any person carries through
life determines his success,” Maynard W .
F. Park, Kansas City banker, told the
Des Moines chapter o f the American Insti
tute o f Banking at a recent meeting.
Mr. Park, assistant cashier o f the Fed
eral Reserve Bank in Kansas City, and
member of the national executive council
of the institute, pointed out that if one’s
luggage includes fear, extravagance and
satisfaction Avith small accomplishments,
his life is doomed to failure.
Mr. Park said, on the other hand, if a
man voluntarily takes as his load, am
bition, study and the desire to push forward into new fields of usefulness, he will
be a success.
“ Don’t worry about the man with a
pull,” Park said. “ Preparedness will ob
tain a promotion 99 times where pull gets
it once.”
The address folloAved dinner and enter
tainment. Guy Lines, president o f the
chapter, had charge of the program.
Allen Evans presented certificates to

47
five junior bankers who have completed
the standard educational course offered
here each winter. They are Kay Braniff,
Orville Gore, Louis Rodenbaugh, A. E.
Wallace and C. F. Carlson.
Georg’e Harnagel received a prestandard
certificate.

Reduce Service Charge
Bankers o f north Linn county held a
meeting at the Wapsie Valley State Bank,
Central City, and decided that the service
charge, which was formerly 50 cents a
month on accounts below $50, would be
50 cents on accounts falling below $25
during the month. It has been the cus
tom for some time to charge exchange on
foreign checks, and this practice will be
continued. The service charge as above
mentioned may not have been the same in
all instances, but they have now adopted
a uniform plan, and will abide by that
plan. The banks represented were the
Alburnett State B ank; Center PointWalker banks, from Center Point, Walker
and Coggan, and the Wapsie Valley State
Bank, with its Prairieburg branch bank.

Banker Dies

Armored Cars

E. D. Baird, age 83, bank president,
former Iowa eounty officer and former
state representative, died at North Eng
lish recently. He was one o f the best
known residents o f Iowa county.
Born in New York, he came to Iowa
with his parents in 1855. A fter getting
his education at Marengo, he taught school
fo r several years, served as deputy county
treasurer for eight years, and later served
in both the offices o f county auditor and
county clerk. Coming to North English
in 1889, he organized the North English
Savings Bank, of which he became presi
dent.

Two armored cars to transfer money
fo r banks and business concerns were re
cently placed in service in Des Moines by
the Lewis System, Inc.
State officers fo r the concern, which
operates in several middle western states,
will be established in Des Moines before
January 1st, H. Lewds o f Omaha, presi
dent o f the firm, said.
The armored cars, constructed o f bul
let p roof steel and glass, are equipped
with machine guns, riot guns and gas
masks.
The equipment, with the exception o f
the car, will be under police control and

ability and

willingness to be helpful
Polk Elected President
F ifty Iowa investment bankers, meeting
last month at Hotel Savery in Des Moines,
made tentative plans fo r a state associa
tion and elected officers and directors.
The group decided either to form an
entirely new organization or to revise the
dormant Iowa Bond Dealers Association.
Definite action will be taken later by the
board and officers.
H. H. Polk, Des Moines, chairman, was
elected president of the projected as
sociation, and J. A. Cummins, Des Moines,
secretary-treasurer.
Mr. Polk and Mr. Cummins and C. W.
Britton, Sioux City; John Quail and
Robert Alexander, both o f Davenport;
F. E. Coquillette, Cedar Rapids; J. W.
Leavitt, Cedar Falls; L. L. Hill and Har
old Klein, both of Des Moines, and Leo
Mack, Waterloo, were chosen on the board
o f directors.

that is the keynote of
our service to Iowa bank
correspondents.

BANKERS TRUST CO.
B A N

Cor. 6th and Locust Sts., D es M oines

Capital $1,000,000.00

Surplus $200,000.00

Complete Service
The Newton National Bank has been
granted permission to act as trustee,
e x e c u t o r , administrator, registrar o f
stocks and bonds, guardian o f estates,
assignee, receive!’, and various other fidu
ciary capacities, according to word re
ceived from the federal reserve board.
The requirements fo r obtaining this
permission are of the most rigid sort, in
volving the financial condition o f the
bank, the genei’al character o f its per
sonnel, and ability of its management.
By this appointment, the Newton Na
tional is capable o f rendering a complete
banking service to the community.

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

D IR E C T O R S
L. B. BARTHOLOM EW—
Vice President-Trust Officer

PAUL BEER—
President, The Flynn Dairy Co.

DR. O. J. FAY-

Surgeon

HENRY FRANKEL—
Treasurer, Younker Brothers

J. G. GAMBLE—

Attorney

J. W . HOWELL—
Vice President, War
field-Pratt-Howell Co.

F. W . HUBBELL—
Vice Pres.-Treas., Equi
table Life Ins. Co. of Iowa

J. W. HUBBELL—
Vice President, F. M .
Hubbell Son & Co.

B. F. KAUFFMAN—

President

L. B. M A YTAG —

Capitalist

S. L. SHEUERMAN—
Secretary, Sheuerman Bros., Inc.

B. B. VORSE —

Vice President

Northwestern Banker

November 1932

48
will be issued to the operators of the cars
only when needed.
Each car is manned with four men, two
in the driver’s compartment and one each
in tV'O other compartments separated from
each other by dual locks.

Hotel Savery. Chapter consuls in each
bank are taking enrollments.
Prof. Herbert W . Bohlman o f Drake
University teaches money and banking.
James M. Stewart, Des Moines attorney,
has the class in negotiable instruments.
Fred Atkins of the Bankers Trust Com
pany teaches bank organization and op
eration, and Prof. John R. Stockton of
Drake University teaches analysis of fi
nancial statements.

A. I. B. Classes
Annual night school classes sponsored
by the Des Moines chapter of the Ameri
can Institute o f Banking, began October
10th, C. F. Carlson, educational chairman,
announced recently.
Sessions will be held every Monday,
Tuesday and Wednesday from 7 to 9 p. m.
in the Chamber of Commerce rooms at

Resigns
John Rainbow, who has been assistant
cashier o f the Farmers National Bank o f
mderson for the past four years, re

signed last month. He wTill continue to
reside in Henderson, where he purchased
from V. H. Rutledge the truck and oil
business. Mr. Rainbow will handle the
products o f the Phillips Petroleum Com
pany.

County Meeting
A meeting of the Kossuth County Bank
ers Association was held at Burt, Iowa,
October 6th, which w7as attended by four
teen bankers o f the county.
Officers elected are : William Boyken,
vice president Titonka Savings Bank,
president ; W . T. Peters, president Burt
Savings Bank, vice president; H. L. Gil
more, cashier Iowra State Bank, Algona,
secretary, and F. E. Rubey, vice president
Burt Savings Bank, treasurer.

Butter for Your Bread

MEASURE

VALUE

of a C ITY C O R R E S P O N D E N T
is its ability and desire to serve.
The facilities of this bank are com
plete for the prompt handling of
any business.
W e w o u ld like to prove both
o u r a b ility and desire to serve
you in Sioux C ity.

CIRST N A T IO N A L B A N I /
in

sioux

cuy

The railroads are in the worst condi
tion o f any major American industry.
The natural question is, ‘ ‘ W hy ? ’ ’ Ever
since they were returned to private hands
at the end o f the war, the rails have
raised their standards o f efficiency, cut
costs and made tremendous strides in
improving their service to the public.
Yet in not a single year since then have
they been able to earn the “ fair return”
o f 5% per cent stipulated by the Trans
portation Act. During the very height
o f the boom, in 1928-29, their net return
on investment was between four and five
per cent.
Now a number o f important lines have
passed dividends. Others are planning to
pass them when next they fall due.
Many have been forced to borrow money
from the Reconstruction Finance Corpo
ration in order to pay fixed charges, such
as taxes and bond interest. The average
American road is earning less than one
per cent on its invested capital. Five
hundred thousand railroad men are out
o f work— the jobs o f thousands o f others
are in a precarious position.
The major cause o f all this has been
our transportation policy. W e have raised
railroad taxes to the highest point in his
tory and passed law7 after law regulating
one phase or another o f operation. At
the same time, we have permitted com
peting agencies to operate without cor
responding regulation and, in the case of
the waterways, have actually financed
them from the public treasury. Here is
a real public problem in a nutshell— and
it is a problem that, directly or indirectly,
affects the jobs, pocketbooks and savings
o f us all.

You Don’t Mean It!
A . S. Hanford, President

Northwestern Banker

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

Frederick R. Jones, Vice Pres.
Fritz Fritzson, Cashier

November 1932

49
HAS. W. LOGAN, president First
Trust & Savings Bank, Movilla,
Iowa, feels confidence has been greatly re
stored in bis territory. It is evident people
feel his bank has stood the test for during
the month of September, deposits in
creased $30,000.

News from Here and There
By J. A. SARAZEN
Staff Reporter

JAMES T. V A N D Y K E , assistant
cashier o f the First Trust & Savings
Bank, Anthon, Iowa, for the past three
years, was transferred to the Toy National
Bank, Sioux City, Iowa, October 1st.
James F. Toy is his grandfather and the
First Trust & Savings Bank is affiliated
with the Toy bank.
Mr. Van Dyke will still be a stockholder
and director o f the First Trust & Savings
Bank.

JULIUS LARSON, director of the State
Bank of Clarks Grove, Minn., died
last month. He had been ailing since last
spring.
POUND A. M cKINNEY, president ClegI horn State Bank, is at his home helping
his wife give the house the once over be
fore cold weather sets in.

A RL J. ODEGARD, for the past thir
teen years assistant vice president o f
the First Naitonal Bank & Trust Com
pany, Watertown, S. Dak., has accepted a
position with the Northwestern Bank at
Madison, S. Dak., as cashier. He suc
ceeds George Schumacher, who has re
turned to the examining force o f the

JOHN BARTON, cashier of the Secury j itv National Bank & Trust Company,
Sioux Falls, is a better than average
golfer. I saw some o f his score cards of
games played the last few months and
there were many birdies and an occasional
eagle. His average is well down in the
seventies.
HE Luverne National Bank, Luverne,
Minn., which was organized April 22,
1931, shows an increase of $54,000 in de
posits in their statement o f September
30, 1932, over their statement of Sep
tember 29, 1931. The latest statement
lists deposits of $261,243.61.

CftfrRM HATim

HE Corn Exchange Savings Bank,
Sioux Falls, which opened fo r busi
ness February 2, 1926, lists in its state
ment o f September 30, 1932, deposits of
$749,333.89, capital $100,000 and surplus
and undivided profits of $43,005.64.

TRUST COMPAQ -

HE First National Bank & Trust Com
pany, Sioux Falls, of which W . L.
Baker is president, lists in its statement
o f September 30, 1932, deposits of $3,741,360. Loans and discounts, $1,015,931.42; cash and due from banks, $461,000. The capital is $200,000. Surplus,
undivided profits and reserves, $144,890.

HE Citizens National
company, Sioux Falls,
ated with the First Bank
tion, lists deposits as o f
1932, as $1,388,830.

E. K A LTQ N , cashier Security
♦ State Bank, Wells, Minn.— “ We
feel especially fortunate here at Wells and
believe business in southern Minnesota is
better than throughout the country as a
Avliole. Business has not been bad for us.”
J. OBRECHT, cashier Holstein
♦ State Bank, Holstein, Iowa, is a
died-in-the-wool baseball fan. He and a
few other townspeople took the train to
Chicago to attend the W orld Series.

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Federal Reserve Bank of St. Louis

-Irt A A i f /

ShsriQHPAtlY

Bank & Trust
which is affili
Stock Corpora
September 30,

M
C

AwL NATIONA

Through this door

■

Y o u ’ll F in d G o o d Banking Service
an d a F rie n d ly Welcome

C en t r a l Na t io n a l b a n k
and
f if t h

DES

TRUST COMPANY

A VE. - B e -tw een
WALNUT and L O C U ST
M O I N E S ----------------------------------------------------I O W A .

Northwestern Banker

November 1932

50
Northwest Baneorporation. Both banks
are affiliated with the Baneorporation.

year, as it will average about forty bushels
to the acre, but what we need is price.”

HINMAN, president First National
T H E Central Trust & Savings Bank,
. Bank, Primghar, Iowa, says, “ We I Cherokee, Iowa, of which A. W . Jones
can’t complain about our corn crop this is president, has just finished remodeling

“Only $3 for all this?”
Y ou’ll be surprised, too, when you see how
much luxury and convenience you can en
joy at the Hotel Lexington for as little as
$3 a day.

O. T H A Y E R , cashier of the Fifth
♦ North western Bank, Minneapolis,
Minn., is quite busy these days. He is
serving as manager of District 35 for the
Community Fund.
FOR YOUR BULLETIN BOARD
Both men and money are at
their best when busy

HOTEL JCEXINGTON

Oppose
Banking Unification

In Grand Central Zone, Lexington Ave. at 4 8 th Street

N E W Y O R K C IT Y
E. R O C H E S T E R ,

General Manager

C O M I N G T O C H IC AG O ?
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unequalled luxury at low rates. In the
heart o f Chicago’s Rialto with its brilliant
night life.
Close to stores, offices and
railroad stations.
UNEQUALLED

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F R O M $3

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and
YOU

CAN

IN T O

D R IV E

HOTEL

YOUR

CAR

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R IG H T

GARAGE

H O M E of the CO LLEG E IN N
C h ic a g o ’s B r ig h te s t S p o t

HOTEL SHERMAN
Northwestern Banker

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

November 1932

L. LAFOON, cashier Commercial
♦ State Savings Bank, Sioux City,
Iowa, believes it is not any political or
ganization that has put the farmer in the
position he is in today, but really as much
the farmer’s own fault as anything else.
He says the basic reason fo r the farmers’
ills is the price to which they helped push
farm lands themselves. As an illustration
o f this the president of his bank recently
examined an abstract where a 400 acre
farm changed hands as follow s:
In 1912
the farm sold for $26,400
In 1914
the farm sold for
44,000
In 1918
the farm sold for
58,000
In 1920
the farm sold for
70,000
In 1932
the farm sold fo r
20,000
The farmer should have known there
wasn’t any logical reason fo r these in
creases and it has helped to put him in the
position lie is in today.

And here’s another fact that’ll make your
expense account beam with gratitude — it
costs only $1 a day more for two persons at
the Lexington. A room which is $3 for one,
for instance, is only $4 for two persons.

CHARLES

the exterior o f its bank building. The
old brick has been replaced with white
stone on the lower part of the building
and mat brick on the upper part.

Unification o f commercial banking op
erations by extending further the scope
o f the Federal Reserve System among
state banks, rather than by doing away
with the state banking systems and forc
ing all commercial banks under Federal
charter as proposed at Washington, is
advocated by the Economic Policy Com
mission o f the American Bankers Asso
ciation in a recent report. It points out
that the ratio o f commercial banking
activities conducted by members o f the
system comprising both state and na
tional banks, has risen in recent years
to nearly 80 per cent o f the total volume,
while the percentage o f non-members has
decreased.
Improvement in banking conditions, it
declares, can be attained without sacri
ficing “ the dual banking system o f op
tional state and national charters w7hich,
in the banking field, stands as just as
great a defense against undue central
government control over the financial lib
erties o f our people as the dual system
o f state and federal government juris
dictions represents in respect to their
political liberties.”
The report says in
part :
“ It is the theory o f proposals for uni
fication that a single, unified system fo r

51
the country as a whole under federal
government supervision would make fo r
better supervision, a more compact and
better coordinated banking structure, a
nationally higher standard o f manage
ment for all banks and a credit mechan
ism that would be subject to greater
control in the national interest. W hile
we are wholly in sympathy with'the basic
purposes o f this argument, we believe
they can be attained under the present
dual system o f state and national char
ters, that this dual system has additional
virtues in itself, and particularly along
the lines o f maintaining local financial
independence and credit sympathies free
from the domination o f over-centralized
federal government, and that the dual
system should be strengthened rather
than destroyed.
“ Material enlargement o f the sphere
o f the Federal Reserve System is par
ticularly favored by the reduction o f the
banking picture to its present dimensions
and character. In 1921, 65 per cent of
all banks in the commercial field were not
Federal Reserve members. The great
bulk, however, o f the activities in that
field were within the system since mem
bers represented 71 per cent o f the de
posits and loans and investments. This
extensive unification existing even then
has been carried further by subsequent
developments. In June, 1931, the ratio
o f outside banks had fallen to 62 per
cent, while 75 per cent o f the commercial
banking capital funds were in the system,
79 per cent o f the deposits and 78 per
cent o f the loans and investments. This
is a distinct move in the right direction.
The changes this has involved have pro
moted unity in the operating aspects o f
our commercial banking system (unbrac
ing both state and national banks, Avitliout abrogating their respective charterrights or nullifying the advantages of
our dual system.
‘ ‘ W ith these developments pointing the
way, the end to be sought is not destruc
tion o f the dual banking system, but pro
motion to the utmost o f further develop
ments along the lines indicated. As a
condition developed in which the greater
portion o f banks were o f a size and char
acter to qualify them fo r membership in
the Federal Reserve System, and as the
system by its demonstrated advantages
o f membership extended its scope, we
would approach in the dual system it
self, without sacrificing its own peculiar
virtues, all the virtues claimed fo r a uni
fied system.
“ It is true the Federal Reserve Sys
tem ’s record has in no sense shown it to
be a panacea for banking difficulties or
an impregnable defense against depres
sion. Many banks have failed within
the system as well as outside. However,
the record for the banks in the system
was materially better than fo r those out
side. Moreover, although the facts in

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

dicate that greater strength is to be de
sired for banks both inside and outside,
it is our conviction that the system con
stitutes the most promising instrumental
ity fo r building up the kind o f banking
structure that is to be desired. W e are
in favor, therefore, o f a broadening unity
in the functioning o f our commercial
banks both state and national, along
sound, coordinated lines under the leader
ship o f an ever-improving Federal R e
serve System.”
M e r c h a n d is in g

Wholesale trade in the seventh dis
trict expanded in September considerably

more than seasonally in all reporting
groups except drugs where the gain o f
4 per cent over August was the same as
in the 1923-31 average for the period.
The increase in grocery sales o f 9 per
cent this September compared with only
4 per cent in the average, that o f 15 per
cent in hardware with 9 per cent, the 37
per cent gain in dry goods with 17 per
cent, 161/2 per cent in shoes with 5 per
cent, and 9 per cent in electrical suplilies with 3 per cent in the average.
Further reductions in the size o f the de
clines from a year ago were recorded in
all lines but drugs. Sales in the first
three-quarters o f 1932 totaled 21 per cent

60 YEARS SUCCESSFUL OPERATION
DESIGNING AND MANUFACTURING FIXTURES
FOR

BANKS, STORES, C O U R T HOUSES, PUBLIC
BUILDINGS, ETC.

THE FISHER COMPANY
C H A R L E S C IT Y , IO W A

SPECIALIZING ON FIXTURES FOR BANKS.

I o i v a

l t l i o f i r a p l i l n

W RITE FOR PRICES

o m

a m

515 TWENTY EIGHTH S T R E E T

D e s

o i n e s

EDWIN G. R AGSDALE
SEC RE TA R Y

Northwestern Banker

November 1932

52
smaller fo r groceries than in the same
period o f 1931; hardware sales were 27
per cent less, dry goods 32 per cent,
drugs 22 per cent, shoes 40 per cent, and
electrical supplies 43 }ter cent smaller.
Prices fo r the most part remained steady
or showed a further tendency to
strengthen.

A Step Toward Prosperity
In a recent address, John Hays Ham
mond urged the rehabilitation o f silver
as a step toward the restoration o f pros
perity.
He pointed out that one o f the major
causes o f world depression has been the
appreciation o f gold in gold-standard
countries, and the depreciation o f silver
in silver-standard countries. The drop o f
silver from 60 to 30 cents an ounce has
reduced by half the wealth and purchas
ing power o f millions o f people. Silver
has long been the poor m an’s gold-—and
in what Mr. Hammond calls the “ back
w ard” countries, silver alone is accepted
as a medium o f exchange.
There is not gold enough to keep the
commerce o f the world in motion. In
addition, the supply o f gold from the
Rand, which has supplied half the
w orld ’ s needs fo r three decades, is ex
pected to decline materially. Ho poten
tially important gold fields are known to
exist. A practical solution is rehabilita
tion o f silver so that it may take its old
place in the machinery o f finance and
commerce.

Leadership
Whatever may be your needs,
the friendly cooperative service
of the First N a tio n a l may be
d e p e n d e d upon to p ro v id e
complete satisfaction.
It is because of this complete
service that the First National
Bank has been able to maintain
its leadership in this territory.

OFFICERS

Hanfoni MacNider
Chairman of the Board
W. G. C. Bagley
President
C. A. Parker
Vice President
R. P. Smith
Vice President
F. C. Heneman
Asst. Vice President
H. V. Bull
Cashier
W. W . Boyd
Assistant Cashier
H. C. Fisher
Assistant Cashier
R. B. Johnson
Assistant Cashier
R. E. Wiley
Assistant Cashier

¥ H 6 0 .ttTM MH t ; Ä UÌ.n.

First National B ank
g

M a s o n

City , Iowa

Affiliated With Northwest Bancor por ation

Northwestern Banker

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

November 1932

School Savings
Demonstrates Power
A nation-wide demonstration o f the
power o f school savings to aid families
o f small means in distress from the de
pression is presented in the annual re
port on school savings systems issued by
the savings division, American Bankers
Association, denoting that during the
year ending June 30,1932, almost $3,000,000 accumulated in previous years was
withdrawn from this type o f “ rainy
d a y ” deposits to meet pressing needs.
‘ ‘ Sarah must draw her money from the
bank,— not one o f the fam ily can get
work, and Sarah needs shoes, ’ ’ wrote the
mother o f a school savings depositor to
the school principal, the report quotes as
typical o f the reason generally assigned
by many parents fo r withdrawals by
their children.
The report also brings out the attitude
o f bankers toAvard school savings by
quoting the officer o f a bank with $300,000 in 31,000 children's accounts as say
ing : ‘ 1The \mst good school savings bank
ing has done to impress on our children
habits o f thrift is too obvious for com
ment. School saving must go on. Dur
ing the last three years— certainly the
most trying in our history— school sav
ings have met the test and they will con-

53
tinue to do so. They have helped to pay
rent, buy food, clothing and medicine;
and I learned o f a case where savings o f
this kind kept the schools open through
the purchase o f tax anticipation war
rants. Our major business enterprises
have learned that a financial reserve is
necessary for uninterrupted progress.
When our average citizen does the same,
business in America will be on a much
sounder footing.
Our only hope for
changing conditions is through financial
education and this must be provided by
the public school system. The 31,000
contacts our bank had with juvenile de
positors cost about $1,500 per year be
yond the amount earned on these deposits
— yet this bank would not abandon school
savings under any circumstances to save
the relatively small loss in operating it .”
A colored man injured in a motor acci
dent died and the insurance adjuster went
to investigate.
“ Did Washington P. Johnson live
here?” he asked the weeping woman who
opened the door.
“ Yassah,” she replied between sobs.
“ I want to see the remains.”
With a new sense o f importance the
dusky widow drew herself erect- and an
swered proudly, “ I ’m de remains.” — Cath
olic News.

OFFICERS

J. H. NISSEN

G. L. CURTIS
President

Cashier & Assistant
Trust Officer

MILO J. GABRIEL
Vice President

M. E. McCRABB
Assistant Cashier

W. A. ANDERSON
Vice President

E. JOHANNSEN
Assistant Cashier

O. P. PETTY
Vice President and
Trust Officer

H. M. OLNEY
Assistant Cashier
F. E. CONOVER
Assistant Cashier

H. G. KRAM ER
Vice President

F. H. HAMANN
Assistant Cashier

A. R. THURN
Vice President

R. A. W . LATIMER
Auditor

C lin to n

County’s

L a rgest B a n k

Ability
The a b ility o f the officers and directors of
the C ity N ation a l Bank to satisfactorily care for
the needs of their correspondent customers has

Wliat a Blow!
W A N T E D .— Man who has had experi
ence on Bread or Milk Route, or Selling
Insurance. Box H. G. Care, Hour.— Nor
walk Hour.
“ Just,” sobs Joe Smith, the insurance
demon, “ when we thought we had a pro
fession !”

A Distinction
Passerby (running into house after
hearing screams) : “ I f you don’t quit beat
ing your child, I ’ll call the police.”
Man’s AToice from W ith in : “ This ain’t
no child. It’s my wife.”
Passerby: “ Oh, pardon me. I ’m so
sorry I intruded.” — S. C. Wampus.

been

a major factor in keeping an d

these accounts over a long period of time.
Those
N ational

w ho direct the policies o f the C ity
represent experience in all

P U B L IS H E R ’ S S TA TE M E N T
Statement of the Ownership, Management, C ir
culation, etc., required by the A ct of Congress of
A ugust 24, 1912, of the N O R T H W E S T E R N
B A N K E R , published monthly, at Des Moines, Iowa,
fo r October 1, 1932.
1. Name of Publisher, Clifford De Puy, Des
Moines, Iow a .
Editor, H enry H . Haynes, Des
Moines, Iow a. Business Manager, R alph W . M oor
head, Des Moines, Iow a.
2. O w ners: Clifford De Puy, Des Moines, Io w a ;
W m . H. Maas, Chicago, Illinois.
3. That the know n bondholders, m ortgagees and
other security holders ow n in g or holding 1 per cent
or more of total amount of bonds, m ortgages, or
other securities are:
None.
H E N R Y H. H A Y N E S , E ditor.
Sworn to and subscribed before me this 30th
day o f September, 1932.
E A R L S. LIN N , N otary Public.
(S E A L )
(M y commission expires July 4, 19.38.)

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

lines o f

endeavor - - men w ho have been success iul in
their own business.
M a y we be of service to you?
T H E

C ity National Bank
C L IN T O N , IO W A

A Spring Pun
“ How did he get so many children?”
“ Offspring fever,” — Penn. State Froth.

h o ld ing

Assets Over S 9,000,000.00
DI RECTORS

W . A. ANDERSON
Vice President
C. A. ARMSTRONG
President C. F. Curtis
Company. Inc.
A. A. BENTLEY
President
Fidelity Life Association
A. P. BRYANT
Vice President
Clinton Com Syrup
Refining Co.
O. D. COLLIS.
President The Collis Co.

E. L. MILLER
E. J. CURTIS.
Attorney
Vice President Curtis Bros.
& Co.
J. PETERSON.
G. L. CURTIS.
President
O. P. PETTY.
President Curtis Companies.
Vice President
Inc.
H. W . SEAMAN
G. W . DULANY. JR.
President Eclipse Lumber
Co.
J. O. SHAFF.
Chairman Climax Engineer
Farmer and Live Stock
Dealer
ing Co.
MILO J. GABRIEL.
F. H. VAN ALLEN,
Vice President
President J. D. Van Allen
President Gabriel Lumber
& Son, Inc.
& Fuel Co.
B. M. JACOBSEN,
G. E. WILSON
Congressman Second Iowa
Pres. Clinton Bridge Works
District

Northivestern Banker

November 1932

54
ÎIÇ
I

r t is

r s

Bankers Trust Co........................................

Carleton D. Beh Co...................................

Black H a w k H otels C orp ....................... 43

General Motors Acceptance C o r p .... 27
The G erlach-B arklow Co........................ 35
Guaranty T rust C om pany....................

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

N orthw est Bancorporation .................. 55
Northwestern National L ife Ins. Co. 33

Central National Bank & Trust Co.. . 49
Chase National B a n k ............................... 23

H otel Francis D rake.

City National Bank, C lin to n ................ 53

Hotel L e x in g t o n .........

City National Bank & Trust Co........... 21

Hotel Sherman ...........

Iow a Bond Corp..........................................

Continental 111. Bank & Trust C o ...

Northern Trust Company

Omaha National B a n k .

Davenport Bank & Trust Co...............

Distributors G r o u p ..................................... 4,5
Drovers National B a n k ........................... 40

Philadelphia National B a n k ................

Iow a-D es Moines Natl. Bank & Trust 56 Polk-P eterson Corp...................................
Iow a Lithographing Co.
51
Priester, Quail & Cundy Inc.

26
28

Em ployers M utual Casualty Co........... 32

F irst National Bank, C h icago..............

F irst National Bank, Mason C ity. . . .
F irst National Bank, Sioux C ity .........

52
48

The Fisher C om pan y................................ 51

Live Stock National Bank, Om aha. . . 39
Live Stock National Bank, Sioux City 36

Merchants National B a n k ......................

R oyal Union Life Insurance Co.

Stock Yards National B ank.

Louis J. Muehle & Co............................... 35

TH E N O R T H W E ST E R N B A N K E R AND TH E T E R R IT O R Y IT COVERS
P u b l is h e d b y D e P u y

P u b l is h in g C o m p a n y

555 Seventh Street, Des Moines

C L IF F O R D D E P U Y
Publisher
R. W . M O O R H E A D
A ssociate Publisher
W M . H. M A A S
V ice President

F R A N K P. S Y M S
V ic e President

H . H. H A Y N E S
Editor
F R A N K S. L E W I S
Special Representative

Chicago O ffice: W m . H . M a a s, 1221 First N ational Bank B ld g., Phone Central 3591
N ew York O ffice: Frank P. Sym s, 19 W e s t 44th St., Phone M urray H ill 2-5036
M inneapolis O ffice:
Frank S. L ew is, 218 E ssex B uildin g, Phone BR2523.

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

ÌlfAìirAilìATiiruliTTiliTYilf;-

Northwestern Banker

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

November 1932

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

\ V L the public should know
about the Loan Policies o f well
operated b a n k s.......................
T ext of recent advertisement of Northwest Bancorporation
Banks, designed to bring about a clearer understanding and
closer relationship between the banks and t h e ir customers

OUND

and

proved

policies must

A one-way loan, with only the extension

in the

of credit considered and no provision

management o f every successful business

made for a system of repayments over a

enterprise.

period o f time, is just as bad for the

the

guiding

This

influence

is especially true of

banking institutions, which are charged

business to which it is made as it is for

with the responsibility of handling money

the bank which makes it. Neither is it

belonging to their depositors.

fair to the depositors of the bank, who have

In abnormal times such as have existed

every right to be sure that their money

for several years, it becomes "fashion

is amply protected, and who also have

able” to criticize. Banks usually come in

the right to demand it without notice.

for their share of criticism, some of

Bank

credit is

basically

short-term

which may be deserved but a great deal

financing with a definite plan o f repay

o f which is due to lack o f public under

ment in view. A bank cannot provide

standing as to the real function of a bank.

capital to permit the establishment of a

Let us understand that the primary func

business. It cannot take the risks with

tion o f a bank is to receive deposits and

the money on deposit that a business

pay them out upon the order of the

takes with its invested capital. A bank

depositors. W ith money left on deposit,

must make only the kind of loans that

loans are extended and investments made.

can be paid promptly.

This bank is just as anxious to loan
money as customers are to borrow it.
In fact, that is our most important way

An account with us, established and

of making money. But it is the business

maintained in proper volume, is abasis

of the bank to see that these loans are

for loan consideration at a later date.

wisely made.

Northwest Bancorporation
M IN N E A P O L IS, M IN N E S O T A
B a n c N o r t h w e s t C o m p a n y — I n v e s t m e n t S e c u r itie s

{«rowing
... .Hi rough Service
FIFTY-SEVEN years of sound and
conservative management.
• Strict and continued adherence to
sound banking principles.
• Ability and willingness to lend
money for constructive business
purposes in periods of retrench
ment, as well as prosperity.
Department of Banks
and Bankers

• Substantially improved facilities in
our transit and other departments
serving correspondent banks.

J. R. CAPPS
Vice President

E. W. JONES
Vice President

CLARENCE A. DIEHL
Vice President

These are but a few of the reasons why one
out o f every three Iowa banks keeps its
account here . . . and for the continued
growth

which

has

made

this — Iowa’s

Largest Bank.

IOW A-DES MOINES NATIONAL BANK
& Tr u st C om pany

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

A ffilia te d ■with

NORTHWEST

BANCOR.PORATION