Full text of The Northwestern Banker : October 1933, 38th Year, Number 555

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THWESTERN
Ba n k e r
DES MOINES
O C T O B E R , 1933

__________

Large Attendance at A . B . A , Convention
F. M . L A W

Page 7

President
American Bankers Association
President
First National Bank
Houston, Texas
(See page 17)


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Le t’s Fight for State Banks and
the Dual System of Banking
Page 8

The Glass Bill —
It’s Effect Upon New Business Development
Page 11


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Federal Reserve Bank of St. Louis

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Servicing cAll lovCa
Our Best Advertisement
A I AH E Best advertisement we possess is the good will
of a satisfied customer.
The facilities that this bank places at the disposition of
its correspondents, are based on this fundamental truth.
W e solicit the accounts of those who recognize the value of
such facilities.

MERCHANTS
NATIONAL BANK
O FFICER 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.

C edar R apids

Iow a

3

N o rth w e ste rn Banker
Des Moines
The Oldest Financial Journal W est of the Mississippi
OCTOBER,

Number 555

1933

38th Year

IN T H IS ISSUE
P age

Across the Desk from the Publisher.........................................
Frontispiece “ Your Humble Servant” ................... Karl Kohler
Large Attendance at A. B. A. Convention..................................
Let’s Fight for State Banks and the Dual System of Banking
............................................................................... L. A. Andrew
Acme Interest Tables................. Marion D. Woods 10, 12, 14,
The Glass Bill and Its Effect Upon New Business Development
......................................................................... W. E. Brockman
The New Importance of Saving.............................. J. M. Easton
Mankato Entertains Minnesota Bankers...........................
Your President Says.......................................................................
News and V iew s................................................. Clifford De Puy
Long Term Credit— a World Problem........... Frank M. Gordon
Whv Life Insurance Is Still One of the Best Investments----/ ............................................................................... 0. J. Arnold

4
6
7
8
16
11
13
15
17
17
19
25

South Dakota N ew s................................................................ 29
Nebraska N e w s .................................................................. 30, 31
Minnesota N e w s ............................................... .............. .. ••• 33
North Dakota N ew s..........................................................* •• 35
Iowa Bank N ew s..................................................................... 37

C LIFFO R D DE PUY
Publisher
H.

R. W . M O O R H E A D
Associate Publisher

F. S. L E W IS
Special Representative
218 Essex Building
Minneapolis, Minn.
Telephone, Bridgeport 2523

F R A NK P. SYM S
Vice President
19 W est 44th Street
Suite 1608
New York

Member, Audit Bureau of Circulations

H. H A Y N E S
Editor

J. A. SA R A ZE N
Circulation Manager

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, 1933.


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Northwestern Banker October 1933

4

(Z ^ fc ro s s
ro u i

the

c Y

Disadvantages of
Selling Preferred
C j.
1
r> T7
Stock to K. t . C.

1

heard Jesse
Jones> chairman
Reconstruction
nance Corporation;

Ho£
Fitell

the American Bankers Convention to “ Be smart
for once and take the government into partner­
ship with you. ’ ’
A good many bankers with whom I have talked
since then don’t think it would be “ so smart” to
sell preferred stock to the R. F. C., and many of
them w on’t unless they are forced to do so.
“ What the President wants the banks to d o,”
according to Mr. Jones, “ is to strengthen their
capital positions and do a banking business in a
normal way, furnishing credit where credit is
needed, based upon a solvent going country. What
the banks need is more capital and the R. F. C. pro­
poses to remedy that deficiency by buying pre­
ferred stock in banks and where state laws prevent
the issuance of preferred stock, by lending money
to the banks on capital notes.”
Many bankers believe that such a plan will give
still greater control of American Banking into the
hands of the R. F. C., and base their contention
on these three points:—
“ 1. All directors, officers and employes of the
bank receive compensation at rates not exceeding
maximum limits fixed by vote of a majority of the
preferred stock.
“ 2. The Reconstruction Finance Corporation,
with the approval of the comptroller of the cur­
rency, can direct the removal of any director, offi­
cer or employe, and replacement with one satis­
factory. If that is not done within thirty days,
the preferred, as a class, votes twice the amount
of the common.
“ 3. The bank cannot purchase any real estate
for its own use, or lease for longer than one year,
without an affirmative vote of a majority of the
preferred stock. ’ ’

Northwestern Banker October 1933

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/A

PuZ/i

On the other side is the argument that the gov­
ernment is only trying to be helpful to worthy in­
stitutions and will not use any of the drastic privi­
lege which it could exercise if it desired under the
Preferred Stock rulings.

I think that in the past many
bankers felt their institutions
were ‘ ‘ private ’ ’ corporations
because the capital stock was
personally subscribed by them and their associates.
That idea has given way to the “ public” view­
point and especially so since banking and its func­
tions have been on the “ front page” for three
years.
In discussing this phase of banking before the
F. A. A., Bayard Pope, Chairman of the Advisory
Committee of the Marine Midland Trust Company
of New York said:
‘ £Remember that we are public institutions. Our
depositors are numbered in tens of millions and
our stockholders in hundreds of thousands, scat­
tered widely throughout the world. We are exam­
ined and supervised by public authorities and we
are trustees for our depositors’ money. We haven’t
become accustomed to the public’s interest in bank­
ing, but the public now looks upon the banks as
organizations engaged in public service, and the
wise banker takes that viewpoint into account.”
Another point which Mr. Pope mentioned was,
“ to keep in tune with public thought by getting
out and talking with people inside and outside of
your institution. It is the people, and not you,
who should write the advertising.”
Naturally, in smaller communities, this personal
contact is maintained more than in larger centers—
but in either place it is highly desirable to know
what your citstomers think of YOU and “ TH EIR
B A N K .”

Banks A r e
Public
Institutions

5

launched itself upon the treacheries of a state guar­
anty of bank deposits. There is no logical relation­
ship between these old state guarantees and this
new federal insurance.
‘ ‘ In the first place, the state guarantees involved
purely localized and concentrated risks which thus
geographically invited the collapse of all if there
was a collapse in one. Federal insurance, on the
other hand, faithfully reflects the cardinal principle
of diffused risks which is the time-honored and ap­
proved reliance of all sound insurance in all other
fields.
“ In the second place, the state guarantees in­
volved complete protection for all banking re­
sources, thus largely eliminating the crucial element
of direct and individual banking responsibility
from the banks and bankers themselves. Federal
insurance, on the other hand, leaves the individual
bank and banker so seriously responsible for such
a preponderance of their resources that there is no
appreciable immunity at all.
“ In the third place, the state guarantees were
very loosely administered and were freely opened
to multitudes of new and needless banks which pro­
duced a fatal orgy of unrestricted competition.
Federal insurance will be firmly handled and is but
one factor in a new statutory regime which aims
at enforced soundness both in bank population and
in bank practice.
“ In the fourth place, the state guarantees had
no backing of resources and credit for the hour of
stress. Federal insurance is capitalized with truly
prodigal reserves. The initial fund is $290,000,000
before a single penny of insurance premiums are
paid. Its temporary borrowing capacity will ex­
ceed a billion dollars.
‘ ‘ I am chiefly interested in the limited emergency
formula guaranteeing deposits of $2,500.00, because
it represents a maximum answer to this social re­
sponsibility ; yet a minimum speculation in terms
of fiscal risk. The point is that this government is
committed by legislation and by an overwhelming
public opinion to some kind of new warrant to
In answer to these objections, and presenting a make the savings of America safe.”
strong case for “ Deposit Insurance,” and especially
Thus you have presented both sides of this highly
for a 100 per cent protection of all deposits up to controversial question, but it is a law and it was
$2,500.00, Senator Arthur H. Vandenberg of Michi­ absurd for the A. B. A. at this late date to pass
gan pointed out that :—
resolutions asking that the law be postponed. In
“ I freely recognize that bank deposit insurance my opinion they would have proven themselves
is a controversial subject upon which sincere opin­ much better politicians had they suggested a com­
ions may honestly and prayerfully differ. I com­ promise by accepting in good grace the $2,500.00
pletely concur in any and all the complaints which guaranty part of the law and then working for a
may be resurrected against the colossal and tragic repeal of the other sections which guarantee any
failures that were registered in every state which deposits above this amount.

The proponents of
the “ Banking Act of
1933’ say that it will.
They say that Deposit
Insurance is so very
different from the old
State Guaranty System that its success is assured.
At the annual convention of the National Asso­
ciation of Supervisors of State Banks at Chicago
both sides of this new legislation were very ably dis­
cussed.
Arguing against the Guaranty Plan, Robert C.
Clark of Vermont, President of the Association, was
bitter in his criticism when he said :—
“ Certain changes meet with the full approval of
all of us. Others create grave misgivings. The
guaranty of deposits has been a dismal failure wher­
ever tried. Is there any reason to believe that mem­
bership in the federal reserve system and the re­
sulting control by the federal reserve board at
Washington will make possible the elimination of
most of our bad banking and incapable bankers?
‘ ‘ That membership in the Federal Reserve Sys­
tem is no guaranty of soundness or of good man­
agement, the banking holiday and its succeeding
events prove. Will there be better results for the
depositors under federal insurance of deposits than
there has been without any guaranty or with the
numerous state guaranty funds?
“ If not, there will he an attractive field for the
bank which voluntarily withholds itself from par­
ticipation in the insurance plan and appeals to
the public on some other basis of safe operation.
When the depositors realize that the guaranty is
conditional on the right of unlimited assessment on
the good banks to make up the losses of poorly man­
aged banks, there are many of them who will prefer
to trust the hank officered by men well known in
the community as honest, prudent and endowed
with good judgment.
“ Partnership in bank deposit guaranty with
banks far removed from home may not look attrac­
tive to the depositor in its last analysis.”

W ill Deposit
Insurance W o r k
W h ere the
State Guaranty
Plan Failed ?


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Northwestern Banker October 1933


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Large Attendance
at A . B. A . Convention
Meeting in

a icago Adopts

D O P T IO N o f a permanent N R A
code was the most important action
taken by the 59th annual conven­
tion o f the American Bankers Association,
held in Chicago September 4th to 7th. The
code as drafted contains several modifica­
tions o f the temporary N R A regulations
under which banks have been operating
and will be presented for approval at
Washington September 28th by the code
committee o f the Association.
Article I o f the code defines the term
“ bank” to include “ all national banks,

A

Permanent N. R. A . Code

NATIONAL OFFICERS
President
Francis Marion Law
First Vice President
Rudolf S. Hecht
Second Vice President
Robert V. Fleming

Large Attendance
the executive officers and located in towns
o f less than 2,500 are exempt from the
code regulation fixing maximum hours of
employment.

Minimum Wages
Minimum wages for bank employes are
fixed by the code in accordance with dif­
ferences in population— a $15.00 per week
minimum for cities of over 500,000 popu­
lation;
in cities between 250,000 and
500,000, $14.50 per week; and in cities
between 2,500 and 250,000 the minimum
rate is set at $14.00 per week. The code
provides also that in cities o f less than
2,500 the wages o f all classes o f employes
shall be increased by not less than twenty
per cent provided that such increases shall
not require a minimum in excess o f $12.00
per week.

R U D O L F S. H E C H T
First Vice President
American Bankers Association

state banks, savings banks (both mutual
and stock), trust companies and private
banking
houses
accepting
deposits.”
Maximum hours o f employment are fixed
at forty hours per week averaged over a
period of thirteen consecutive weeks. Two
exceptions are made to this regulation,
one, permitting employes to work fortyeight hours per week for a period not to
exceed sixteen consecutive weeks during
seasonal peak loads, and the second excep­
tion is made when employes are required
to work after hours during examinations
by federal or state authorities. Employes
in managerial and executive capacities re­
ceiving more than $35 weekly, and em­
ployes in banking institutions employing
not more than two persons in addition to


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cently issued by the Federal Reserve
Board, fixing three per cent as the maxi­
mum rate to be paid on time and savings
deposits by members o f the Federal Re­
serve System. It is also agreed that the
rules and regulations o f all clearing house
associations or other groups shall prohibit
the payment of interest on demand de­
posits by any bank within such groups
whether members or nonmembers o f the
Federal Reserve System.

The cole is to be administered by a
banking code committee consisting of
members of the American Bankers Asso­
ciation, and a1so representation without
vote to be appointed by the President o f
the United States. Local committees are
to be appointed where banks are organized
in city clearing house associations, state
or county groups, and where no such
groups exist the banks will be required to
effect such an organization along the lines
o f procedure set forth in the Manual of
Organization and Management of Re­
gional
Clearing
House
Associations
compiled by the American Bankers A s ­
sociation.
Other significant features of the new
banking code are listed under the head of
“ Fair Trade Practices” and are designed
to achieve a uniformity in service charges
in local areas and to prevent unsound
competition in the payment of interest on
time and savings deposits. The code will
bring all banks except mutual savings
banks under the rules and regulations re­

Over 2,500 bankers arid guests attended
the Chicago convention. The large attend­
ance was accounted for in a good measure
by perplexing problems facing bankers
and a desire to thrash them out. The top­
ics of a possible rapid expansion o f bank
credit by other than strictly sound loans,
which appeared to be demanded by some
sponsors of the recovery program, and the
deposit insurance section o f the GlassSteagall Act were the two principal dis­
turbing factors in the present banking sit-

R O B E R T V. F L E M IN G
Second Vice President
American Bankers Association

uation which came to the front early in
the convention deliberations.
Eugene R. Black, governor of the Fed­
eral Reserve Board, arid Jesse H . Jones,
chairman o f the Reconstruction Finance
Corporation, presented the administra(Turn to page 41, please)

Northwestern Banker October 1933

8

O

N

L E T ’S F IG H T
FOR

STATE
BANKS
A ND
OUR

D U A L
SYSTEM
OF

B A N K IN G

STATE

B an ks!

H a lf

of

the

banks in the United States forced
out o f business.
Your own good
state bank destroyed with the rest.
Shall the state bankers of the country
be forced to accept such a program of
destruction ?

L.

A. A N D R E W

The battle for the preservation of the
American Dual System o f Banking has
now reached the critical stage and the
issue will probably be determined within
the next few months.
A fte r winning the great fight over Sec­
tion 19 o f the Glass Bill, those o f us who
are determined that the American Dual
System o f Banking shall be preserved,
have suffered a distinct reverse and there
is no use o f disguising the fact that our
enemies are nearer victory today than at
any time during the battle o f the last
several years. A guaranty of Bank de­
posits with the forcing o f all banks into
the Federal Ri'serve System is now the
new line o f attack.
W e cannot agree
with the Deposit Guaranty feature o f the
“ Banking A ct o f 1933.”
W e regard it
as unfair, unsound, and unworkable. It
is unfair to well managed banks in that
it makes them responsible for the failure
o f mismanaged institutions.
It is eco­
nomically unsound and unworkable be­
cause it has been tried in eight different
states and lias been a failure in each
one. A Deposit Guaranty Law will not
tend to improve banking practices; on
the other hand, it will put the premium
on the careless, unsafe banking methods.
Good bank management is all that is
required for safe banking and it can lie
enforced by proper supervising author­
ity. W hen deposits are guaranteed, all
kinds o f banking are put on the same
basis.
There is no good defense for a
deposit guaranty law under any name
and this part o f the act is simply the
result o f the depression hysteria.

W e Must Decide

By

L. A. ANDREW
PRESIDENT
STATE B A N K D IV IS IO N

A.
B.
A.
Northwestern Banker October 1933


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The question o f whether the state
bank systems shall be destroyed and
about half o f the banks o f this country
put out of business is now right up to
a decision. The State Bank Division of
the American Bankers Association has
naturally been in the forefront o f this
battle fo r a number o f years, as the very
existence o f this division and its thou­
sands o f members, comprising nearly half
o f the entire membership o f the American
Bankers Association, is threatened in this
conflict. It is very unfortunate that the
issue is so entangled with the depression
crisis that now exists.
The enemies of
our great state banking system are tak­
ing advantage o f the depression hysteria
to conclude in their favor the battle that
has been going on for a number o f years.
It is unfair that a great economic and
financial question, involving the existence
o f thousands o f banks and the financial
stability o f thousands o f American com-

y

•f

y

9
munities, should he brought up for decis­
ion at this time. The fight regarding the
American dual system o f banking is a
clear cut issue between those who be­
lieve in the sovereignty of our states and
home rule, and those who are in favor
of a “ unification of our banking systems”
into one W ashington bureau. It is also
a fight between the unit banker, both
national and state, and the proponents
o f a foreign system o f branch banking.
In fact, a careful analysis o f the issue
shows that the ultimate result o f this
battle, if it should be lost by the state
bankers, will be the placing o f seven or
eight large branch banking organizations
in charge of the financial business o f this
country. Those who are using the prop­
aganda that the unit country bank has
been a failure are putting forward the
remedy o f “ Safety in Bigness” ; that is,
the safety o f the foreign system o f na­
tion-wide branch banking.
Their argu­
ment is based upon an absolutely false
position. They say that the unit country
bank has been a failure, and that the
large number of failures among the
smaller banks, both national and state,
make it necessary to change the Am eri­
can dual system o f banking to a foreign
system.
The Am erican unit bank has
not been a, failure. The so-called small
country bank, whether national or state,
has indeed suffered from the great na­
tion-wide economic depression, because
the customers of these unit country banks
were unable to pay their obligations, and
also, in an equal measure, because the
bonds sold them by the large investment
houses and correspondent banks, turned
out to be a poor secondary reserve.
Losses in the bond accounts o f a large
number o f the unit country banks have
been as great or greater than the losses
on local loans.
These bonds were the
result o f “ Bigness in Business.”
Unit
country banks held millions o f so-called
“ gilt-edged securities,” sold them by “ Big
Business” listed on the exchanges as collateraled bonds, which, investigation
afterwards showed, never had a dollar
of collateral behind them. Millions more
of bonds were sold to the unit country
banks in an effort to make good the losses
o f large city banks with poor commercial
accounts. Do not get the idea, however,
that the unit country bank suffered any
more in proportion from this poor judg­
ment in bonds than the large city banks,
with their expensive bond specialists.
The losses in the large banks were even
greater in proportion.
This argument
fo r “ Safety in Bigness” is false from the
ground up. The official figures on fa il­
ures also prove that the arguments used
against the unit country bank are false.
The year 1931 was probably the worst
as regards failures.
During that year
2,316 banks closed. Banks with resources
o f under one million dollars closing dur(Turn to page 43, please)


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anr

HOSE of us who believe in the American dual system
o f hanking and those of us who wish to preserve the
unit country hank may as well realize now before it is too
late that we have a fight on our hands. The propaganda to
destroy the American system and to put in its place the
foreign system, represented primarily hy Canada and England,
is being pushed by powerful interests with plenty of money
for promotion purposes.
State-wide branch hanking is the
first step in the program, next comes the so-called trade area
branch hanking, and then follows, as a matter of course,
nation-wide branch hanking with seven or eight large systems
having three or four thousand branches each.’

4 ¿'""p 'H E FIGHT against the
-k- unit country bank is
not political, hut is a fight that
large interests are making to
concentrate the banking power
of this country in a few hands.
The campaigning is carefully
manipulated, untrue propa­
ganda is spread broadcast and
the unit hanker fighting for
his very life is confused by the
rapid changes in the form of
attack. The primary idea, of
course, is to control all of the
banking
interests
of
this
country hy one bureau in
Washington.”

ii-V TO

STATE BANKS!
Half of the hanks

in the United States forced out
of business.
Your own good state bank
destroyed with the rest.
Shall the state hankers of
the country he forced to
accept such a program of
destruction ?
The battle for the preserva­
tion of the American Dual
System of Banking has now
reached the critical stage and
the issue will probably be
determined within the next
few weeks.”

i ir

I ' HE American unit bank has NOT been a failure. The
-K go-called small country bank, whether national or state,
has indeed suffered from the great nation-wide economic
depression, because the customers of these unit country banks
were unable to pay their obligations, and also, in an equal
measure, because the bonds sold them hy the large investment
houses and correspondent banks, turned out to be a poor
secondary reserve. Losses in the Bond Accounts of a large
number of the unit country banks have been as great or greater
than the losses on local loans. These bonds were the result of
“■Bigness in Business.” Unit country banks held millions of
so-called “ gilt-edged securities,” sold them hy “ Big Business”
listed on the Exchanges as Collateraled bonds, which, investi­
gation afterwards showed, never had a dollar of collateral
behind them.”
Northwestern Banker October 1933

10

A cm e Interest Tables
Compiled By MARION D. WOODS
ONTINUED in this issue of T h e N o r t h w e s t e r n B a n k e r are two sets of
the Acme Interest Tables, as compiled by Marion I). Woods, of Des Moines.
Last month appeared the first of the series, the 5 and 6 per cent tables,
with detailed explanation for their use.

C

Below are published the 5% per cent and 6% per cent tables, reproduced in
the same style as heretofore, with a wide margin to facilitate binding.

Wide Margin
for Binding
if Desired

In the November issue of T h e N o r t h w e s t e r n B a n k e r will appear the final
set, giving figures for the 7 per cent and 8 per cent tables.

5 '/2%
D ays
i
2
3
4
5
«
7
s
»
1«
11
13
13
14
15
1«
17
IS
1S>
20
21
22
23
24
25
20
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
40
47
48
49
50
51
52
53
54
55
50
57
58
59
00

(il

(Continued on page 12)

Northwestern Banker October Î933


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Federal Reserve Bank of St. Louis

02
03
04
65
66
07
68
09
70
71
72
73
74
75
70
77
78
79
80
81
82
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84
85

10000

20000

30000

40000

50000

60000

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000458
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012375
012833
013292
013750
014208
014667
015125
015583
016042
016500
016958
017417
017875
018333
018792
019250
019708
020167
020625
021083

000611
001222
001833
002444
003056
003667
004278
004889
005500
006111
006722
007333
007944
008556
009167
009778
010389
011000
011611
012222
012833
013444
014056
014667
015278
015889
016500
017111
017722
018333
018944
019556
020167
020778
021389
022000
022611
023222
023833
024444
025056
025667
026278
026889
027500
028111

000764
001528
002292
003056
003819
004583
005347
006111
006875
007639
008403
009167
009931
010694
011458
012222
012986
013750
014514
015278
016042
016806
017569
018333
019097
019861
020625
021389
022153
022917
023681
024444
025208
025972
026736
027500
028264
029028
029792
030556
031319
032083
032847
033611
034375
035139

000917
001833
002750
003667
004583
005500
006417
007333
008250
009167
010083
011000
011917
012833
013750
014667
015583
016500
017417
018333
019250
020167
021083
022000
022917
023833
024750
025667
026583
027500
028417
029333
030250
031167
032083
033000
033917
034833
035750
036667
037583
038500
039417
040333
041250
042167

001069
002139
003208
004278
005347
006417
007486
008556
009625
010694
011764
012833
013903
014972
016042
017111
018181
019250
020319
021389
022458
023528
024597
025667
026736
027806
028875
029944
031014
032083
033153
034222
035292
036361
037431
038500
039569
040639
041708
042778
043847
044917
045986
047056
048125
049194

001222
002444
003667
004889
006111
007333
008556
009778
011000
012222
013444
014667
015889
017111
018333
019556
020778
022000
023222
024444
025667
026889
028111
029333
030556
031778
033000
034222
035444
036667
037889
039111
040333
041556
042778
044000
045222
046444
047667
048889
050111
051333
052556
053778
055000
056222

001375
002750
004125
005500
006875
008250
009625
011000
012375
013750
015125
016500
017875
019250
020625
022000
023375
024750
026125
027500
028875
030250
031625
033000
034375
035750
037125
038500
039875
041250
042625
044000
045375
046750
048125
049500
050875
052250
053625
055000
056375
057750
059125
060500
061875
063250

007181
007333
007486
007639
007792
007944
008097
008250
008403
008556
008708
008861
009014
009167
00931 9
009472
009625
009778
009931
010083
010236
010389
010542
010694
010847
011000
011153
011306
011458
011611
011764
011917
012069
012222
012375
012528
012681
012833
012986

014361
014667
014972
015278
015583
015889
01619 4
016500
016806
017111
017417
017722
018028
018333
018639
018944
019250
019556
019861
020167
020472
020778
021083
021389
021694
022000
022306
022611
022917
023222
023528
023833
024139
024444
024750
025056
025361
025667
025972

021542
022000
022458
022917
023375
023833
024292
024750
025208
025667
026125
026583
027042
027500
027958
028417
028875
029333
029792
030250
030708
031167
031625
032083
032542
033000
033458
033917
034375
034833
035292
035750
036208
036667
037125
037583
038042
038500
038958

028722
029333
029944
030556
031167
031778
032389
033000
033611
034222
034833
035444
036056
036667
037278
037889
038500
039111
039722
040333
040944
041556
042167
042778
043389
044000
044611
045222
045833
046444
047056
047667
048278
048889
049500
050111
050722
051333
051944

035903
036667
037431
038194
038958
039722
040486
041250
042014
042778
043542
044306
045069
045833
046597
047361
048125
048889
049653
050417
051181
051944
052708
053472
054236
055000
055764
056528
057292
058056
058819
059583
060347
061111
061875
062639
063403
064167
064931

043083
044000
044917
045833
046750
047667
048583
049500
050417
051333
052250
053167
054083
055000
055917
056833
057750
058667
059583
060500
061417
062333
063250
064167
065083
066000
066917
067833
068750
069667
070583
071500
072417
073333
074250
075167
076083
077000
077917

050264
051333
052403
053472
054542
055611
056681
057750
058819
059889
060958
062028
063097
064167
065236
066306
067375
068444
069514
070583
071653
072722
073792
074861
075931
077000
078069
079139
080208
081278
082347
083417
084486
085556
086625
087694
088764
089833
090903

057444
058667
059889
061111
062333
063556
064778
066000
067222
068444
069667
070889
072111
073333
074556
075778
077000
078222
079444
080667
081889
083111
084333
085556
086778
088000
089222
090444
091667
092889
094111
095333
096556
097778
099000
100222
101444
102667
103889

064625
066000
067375
068750
070125
071500
072875
074250
075625
077000
078375
079750
081125
082500
083875
085250
086625
088000
089375
090750
092125
093500
094875
096250
097625
099000
100375
101750
103125
104500
105875
107250
108625
110000
111375
112750
114125
115500
116875

11

The Glass Bill—
and Its Effect Upon
New Business Development
U T o f every great emergency there
is bound to come revolutionary
changes that affect, not only bank­
ing, business, and industry, but civiliza­
tion itself.
Frequently, the habits and
customs o f our Am erican people undergo
completely a change.
The W o rld W a r,
filled with suffering and hardships, as it
was, brought about changes that have
been far-reaching in the influence which
they have exerted upon this generation.
In industry, we developed the process
o f mass production, the result of which
has had a lasting effect upon the employ­
ment o f labor. Business expanding on a
gigantic scale, reached its zenith in 1929.
Office buildings rose to heights heretofore
unknown, and credit expanded beyond its
limits, with a, result that millions were
lost to security owners and bank deposi­
tors.

O

In society, women demonstrated their
rightful position of equality in business
and in the home. From a national view­
point, Jew and gentile, Catholic and
protestant, became united into one great
American fam ily, breaking down preju­
dices that had been built up over cen­
turies.

Something New to Sell
One could discourse for hours on the
influences which national and interna­
tional events have upon mankind, but we
are today concerned with the changes in
the banking systems o f the country which
have been brought about by changed eco­
nomic conditions. W e are concerned with
the Public Relations aspect o f the bank­
ing business.
Today, we have new merchandise to
sell. True, to some degree, it partakes of
the old merchandise, yet it is very differ­
ent than what we had to sell even one
year ago. Not only has our merchandise
changed, but our clients and customers
have also undergone a very decided
change— a change in viewpoint— a change
in their understanding o f a bank’s func­
tion.
Preceding the bank holiday, distrust
and lack o f confidence arose. It was ap­
parent on every side.
I can illustrate
this by telling an incident which occurred
in a large mid-western bank prior to the
banking holiday.
A man was approaching the teller’s
window with a sizable bundle o f money.


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

By W. E. BROCKMAN
Assistant SecretaryNorthwest Bancorporation
Minneapolis
He was nervous and restless. Seeing a
friend standing near, he said, “ Do you
think this bank is s a fe ? ”
The friend,
who was well acquainted with the bank
and its officers, said, “ The officers are all
crooks, but I think the bank is absolutely
safe.”
I could relate many, many in­
stances o f this kind that have come to
my attention and which happened in
many parts of the country.
O f the present situation, David Law­
rence says in his weekly, “ Two big ob­
jectives have been won though they are
little emphasized. Confidence— the goal
o f 1932— has been attained. There is a
faith now in the inevitability of the up-

W.

E. BR O C K M A N

been made in connection with banks and
security houses. Fuel has been added to
the fire as a result o f hearings held by
Congress in W ashington. More recently
the Detroit hearings have aroused public
opinion in distrust.
I f we, as bankers, are to build business
successfully in the future years, we must
restore confidence in existing banks and
in the banking profession and cooperate
with state and government bodies in reg­
ulating future banking operations.

The Glass Bill

"IF W E , as bankers, are to
build business successfully
in the future years, we must
restore confidence in exist­
ing banks and in the bank­
ing profession, and co op er­
ate with state and national
government bodies in regu­
lating future banking oper­
ations"
(From an address before the recent
Financial Advertisers Association Con­
vention in New York.)

turn.
Also there is not the slightest
worry about the safety or solvency of
the banks.”

Distrust
Assume that confidence in the solvency
o f banks has been restored, recent bank­
ing history has caused a great deal of
distrust o f bankers. The most damaging
factor o f all has been newspaper and m ag­
azine comment coming as a result o f in­
vestigations o f various kinds that have

Far-reaching in its effect upon the development o f business are features o f the
Glass Banking Bill. They affect the large
and small banks.
I shall speak first
mainly from the standpoint of the rela­
tively small bank in cities outside o f the
larger metropolitan centers. Let us con­
sider now what changes must be made in
soliciting bank accounts.
It is fair to
assume that the large corporation ac­
counts will be solicited in practically the
same manner as in the past. The size of
the bank, the location, its ability to ren­
der service, its security and stability, will
be the determining factors to be consid­
ered by a corporation in placing its de­
posits.
W h en it comes to the solicitation o f
small accounts and savings, the problem
will be somewhat different. Preliminary
figures disclose the fa ct that approxi­
mately 96.5 per cent of all the bank de­
positors in the country will have their
deposits completely guaranteed under the
Glass Bill. In other words, only about
3 1/ 2 per cent o f the depositors have more
than $2,500 in the bank.*
I f these figures are accurate, the small
bank that has advertised “ safety” will
have to find another selling point. In my
(Turn to page 27, please)
* 23.7 per cent deposits.
$10,000 to $50,000 represents 1 per cent of
depositors and 44.6 per cent of deposits.

Northwestern Banker October 1933

12
Acme Interest Tables

Days
86

10000

20000

30000

40000

50000

60000

013139
013292
013444
013597
013750
013903
014056

026278
026583
0268 89
027194
027500
027806
028111

052556
053167
053778
054389
055000
055611
056222

70000

039417
039875
040333
040792
041250
041708
042167

065694
066458
067222
067986
068750
069514
070278

80000

90000

078833
079750
080667
081583
082500
083417
084333

091972
093042
094111
095181
096250
097319
098389

105111
106333
107556
108778
110000
111222
112444

118250
119625
121000
122375
123750
125125
126500

113
113
114
115
116
117
118
119
130
131
133
133
134
135
136
137
138
139
130
131
133
133
134
135
136
137
138

014208
014361
014514
014667
014819
014972
015125
015278
015431
015583
015736
015889
016042
016194
016347
016500
016653
016806
016958
017111
017264
017417
017569
017722
017875
018028
018181
018333
018486
018639
018792
018944
019097
019250
019403
019556
019708
019861
020014
020167
020319
020472
020625
020778
020931
021083

028417
028722
029028
029333
029639
029944
030250
030556
030861
031167
031472
031778
032083
032389
032694
033000
033306
033611
033917
034222
034528
034833
035139
035444
035750
036056
036361
036667
036972
037278
037583
037889
03819 4
038500
038806
039111
039417
039722
040028
040333
040639
040944
041250
041556
041861
042167

042625
043083
043542
044000
044458
044917
045375
045833
046292
046750
047208
047667
048125
048583
049042
049500
049958
050417
050875
051333
051792
052250
052708
053167
053625
054083
054542
055000
055458
055917
056375
056833
057292
057750
058208
058667
059125
059583
060042
060500
060958
061417
061875
062333
06279 2
063250

056833
057444
058056
058667
059278
059889
060500
061111
061722
062333
062944
063556
064167
064778
065389
066000
066611
067222
067833
068444
069056
069667
070278
070889
071500
072111
072722
073333
073944
074556
075167
075778
076389
077000
077611
078222
078833
079444
080056
080667
081278
081889
082500
083111
083722
084333

071042
071806
072569
073333
074097
074861
075625
076389
077153
077917
078681
079444
080208
080972
081736
082500
083264
084028
084792
085556
086319
087083
087847
088611
089375
090139
090903
091667
092431
093194
093958
094722
095486
096250
097014
097778
098542
099306
100069
100833
101597
102361
103125
103889
104653
105417

085250
086167
087083
088000
088917
089833
0907 50
091667
092583
093500
094417
095333
096250
097167
098083
099000
099917
100833
101750
102667
103583
104500
105417
106333
107250
108167
109083
110000
110917
111833
112750
113667
114583
115500
116417
117333
118250
119167
120083
121000
121917
12283 3
123750
124667
125583
126500

099458
100528
101597
102667
103736
104806
105875
106944
108014
109083
110153
111222
112292
113361
114431
115500
116569
117639
118708
119778
120847
121917
122986
124056
125125
126194
127264
128333
129403
130472
131542
132611
133681
134750
135819
136889
137958
139028
140097
141167
142236
143306
144375
145444
146514
147583

113667
114889
116111
117333
118556
119778
121000
122222
123444
124667
125889
127111
128333
129556
130778
132000
133222
134444
135667
136889
138111
139333
140556
141778
143000
144222
145444
146667
147889
149111
150333
151556
152778
154000
155222
156444
157667
158889
160111
161333
162556
163778
165000
166222
167444
168667

127875
129250
130625
132000
133375
134750
136125
137500
138875
140250
141625
143000
144375
145750
147125
148500
149875
151250
152625
154000
155375
156750
158125
159500
160875
162250
163625
165000
166375
167750
169125
170500
171875
173250
1 746 25
176000
177375
178750
180125
181500
182875
184250
185625
187000
188375
189750

139
140
141
143
143
144
145
146
147
148
149
150
151
153
153
154
155
156
157
158
159
160
161
163
163
164
165
166
167
168
169
170
171
173
173
174
175
176
177
178
179
180
7 m o s.
8 m o s.
9 m os.
10 m o s.
11 m o s.
13 m o s.

021236
021389
021542
021694
021847
022000
022153
022306
022458
022611
022764
022917
023069
023222
0233 75
023528
023681
023833
023986
0241 39
024292
024444
024597
024750
024903
025056
025208
025361
025514
025667
025819
025972
026125
026278
026431
026583
026736
026889
027042
027194
027347
027500
032083
0366 67
041250
045833
050417
055000

042472
042778
043083
043389
043694
044000
044306
044611
044917
045222
045528
045833
046139
046444
046750
047056
047361
047667
047972
048278
048583
048889
049194
049500
049806
050111
050417
050722
051028
051333
051639
051944
052250
052556
052861
053167
053472
053778
054083
054389
05469 4
055000
064167
073333
082500
091667
100833
110000

063708
064167
064625
065083
065542
066000
066458
066917
067375
067833
068292
068750
069208
069667
070125
070583
071042
071500
071958
072417
072875
073333
073792
074250
074708
075167
075625
076083
076542
077000
077458
077917
078375
078833
079292
079750
080208
080667
081125
081583
082042
082500
096250
110000
123750
137500
151250
165000

084944
085556
086167
086778
087389
088000
088611
089222
089833
090444
091056
091667
092278
092889
093500
094111
094722
095333
095944
096556
097167
097778
098389
099000
099611
100222
100833
101444
102056
102667
103278
103889
104500
105111
105722
106333
106944
107556
108167
108778
109389
110000
128333
146667
165000
183333
201667
220000

106181
106944
107708
108472
109236
110000
110764
111528
112292
113056
113819
114583
115347
116111
116875
117639
118403
119167
119931
120694
121458
122222
122986
123750
124514
125278
126042
126806
127569
128333
129097
129861
130625
131389
132153
132917
133681
134444
135208
135972
136736
137500
160417
183333
206250
229167
252083
275000

127417
128333
129250
130167
131083
132000
132917
133833
134750
135667
136583
137500
138417
139333
140250
141167
142083
143000
143917
144833
145750
146667
147583
148500
149417
150333
151250
152167
153083
154000
154917
155833
156750
157667
158583
159500
160417
161333
162250
163167
164083
165000
192500
220000
247500
275000
302500
330000

148653
149722
150792
151861
152931
154000
155069
156139
157208
158278
159347
160417
161486
162556
163625
164694
165764
166833
167903
168972
170042
171111
172181
173250
174319
175389
176458
177528
178597
179667
180736
181806
182875
183944
185014
186083
187153
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189292
190361
191431
192500
224583
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172333
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176000
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179667
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182111
183333
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187000
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1894 44
190667
191889
193111
194333
195556
196778
198000
199222
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202889
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206556
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209000
210222
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213889
215111
216333
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218778
220000
256667
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330000
366667
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191125
192500
193875
195250
196625
198000
199375
200750
202125
203500
204875
206250
207625
209000
210375
211750
213125
214500
215875
217250
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220000
221375
222750
224125
225500
226875
228250
229625
231000
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235125
236500
237875
239250
240625
242000
243375
244750
246125
247500
288750
330000
371250
412500
453750
495000

Days
1
2
3
4
5
(i
7

10000
000181
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000903
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20000
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30000

40000

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60000

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87

88
8»
!>0
111
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93
94
95
96
97
98
99
to o

101
103
103
104
105
106
107
108
109

110
111

6 '/2 %

(Continued on page 14)

Northwestern Banker October 1933

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

é

13

"I Have a Feeling That Savings
Will Assume a New Importance
With the Years. Thrift and the
Need for a Cash Reserve Will
Always Exist"

B y J. M. EASTON
Manager Advertising and Publicity,
The Northern Trust Co., Chicago

J. M . E A S T O N

New Importance of Saving
OR the past three or four months I
have been reading, off-and-on, a thou­
sand page book on “ Financial A d ­
vertising” written in 1908 by E. St. Elmo
Lewis.*
I am getting a great store o f
good from the book. It is comprehensive
and thorough and although it is 25 years
old its material is recommended to you.
The same motives and desires hold today
as were present 25 years ago. Human
nature has not changed. Only the devices
and media have improved through which
you and 1 tell our story to the public
we wish to attract.

F

In his book, M r. Lewis in speaking of
bank advertising makes this observation
which has not changed a bit— “ I f the
advertising o f a commercial bank is the
hardest test o f financial advertising”
(and it still is), “ and if the advertising
o f a trust company is interesting, the
advertising o f a savings bank is fascinat­
ing.” Today that is as true as it was in
the yesterday o f 1908.
Let us discuss three or four items of
mutual interest without giving too much
time to the immediate factors which dis­
turb some o f us. Let us assume that men
and women who want to save and are
able to save will always be with us. Let
us assume also that our greatest pros­
pects lie in the wide layer o f people who
want to save, who know they should save
yet have never done anything about it.
Their habits are fixed— their day to day
living does not include an orderly finan­
cial program which will find them ready
to meet their obligations. They live for
today.
Tomorrow’s needs will be met
*Levey Printing Company, Indianapolis, Indiana


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

E X C E R P T S from an address
by M r. Easton before the
Financial A d vertisers C o n ­
vention held last month in
New York
somehow. M ay we also consider in pass­
ing those who make up the largest strata
o f savings depositors— those who are
saving for something they wish to possess
— for an ambition they purpose to fulfill
— for an opportunity they intend to meet.

A Simple Operation
Advertising fo r savings is a simple op­
eration.
Its appeals are all elemental
yet the saving instinct is one not easily
reached by advertising. Men and women
are too involved in the business o f satis­
fyin g their daily wants to enter into what
they may term the “ discipline o f saving.”
Y et there are many ways to attract sav­
ings to our institutions. Let us assume
you and I know how to advertise for
accounts, and let us look at what we get
in the way o f response.
Your savings department is interesting
in make-up. It is the bank’s most nonselective department. It speaks no com­
mon language and has little customer
distinction for it is made up of all classes
and kinds. It deals in one commodity
and is perhaps the bank’s mechanical
department. But it has the greatest pos­
sibilities fo r proper cultivation.
In it
lie shifting transient factors which too

often fa il to grow deep and permanent
roots.
The latter being true, to what extent
can you and I develop the loyalty o f our
savings depositors and weld them more
closely to u s? Should banks ever again
be as vulnerable in the future as they
have been in the recent past ? Should the
saving public again be subject to vicious
propaganda or be the victims o f unscrup­
ulous bankers; if they are prostrated
again with fear and suspicion concerning
our national medium o f exchange will
they be prepared any the better for the
experience to which banks have been sub­
jected ?
To the savers of America who have taken
our institutions on confidence and faith
should be given an opportunity to know
our institution and through a continuing
treatment be made to feel the bank is more
than a mere depository— that it is an insti­
tution o f sound management, able direction
and o f sufficient strength to merit their
fullest confidence. Perhaps there is a way
to accomplish this to a point where savers
will be less inflammable, less receptive
to groundless tales. . .
W e make an effort to welcome our new
savings depositors. W e are anxious that
each catches the spirit o f The Northern
Trust Company, knows our history, is
acquainted with all o f our facilities.
Thus a new savings customer is given, at
the time his account is opened, a hand­
some catalog which describes briefly and
illustrates the various departments o f
the bank. A few days later he receives
a signed letter from the president thank(Turn to page 28, please)

Northwestern Banker October 1933

14

A cm e

In te re s t

T a b le s

Days
s
9
10
11
12
13
11
15
1«
17
IS
19
30
31
33
33
34
35
30
37
38
39
30
31
33
33
34
35
30
37
38
39
40
41
43
43
44
45
40
47
48
49
50
51
53
53
54
55
50
57
58
59
(¡0
01
03
03
04
05
00
07
08
09
70
71
73
73
74
75
70
77
78
79
80
81
S3
83
84
85
80
87
88
89
90
91
93
93
94
95
90
97
98
99
100
101
103
103
104
105
100
107
108
109
110
111
113
113
114

115
110
117

118
119
(Continued on page 16)

Northwestern Banker October 1933

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

130
131

10000

20000

30000

40000

50000

60000

70000

80000

90000

001444
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032500
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033222

025458
026000
026542
027083
027625
028167
028708
029250
029792
030333
030875
031417
031958
032500
033042
033583
034125
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035208
035750
036292
036833
037375
037917
038458
039000
039542
040083
040625
041167
041708
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042792
043333
043875
044417
044958
045500
046042
046583
047125
047667
048208
048750
049292
049833

033944
034667
035389
036111
036833
037556
038278
039000
039722
040444
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042611
043333
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046944
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042431
043333
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046042
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047847
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065000
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066806
067708
068611
069514
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078542
079444
080347
081250
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050917
052000
053083
054167
055250
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057417
058500
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065000
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068250
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071500
072583
073667
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076917
078000
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080167
081250
082333
083417
084500
085583
086667
087750
088833
089917
091000
092083
093167
094250
095333
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072042
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086125
087750
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091000
092625
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105625
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126750
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050375
050917
051458
052000
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074389
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077278
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117542
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120069
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127653
128917
130181
131444
132708
133972
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142819
144083
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147875
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134333
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147333
148778
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151125
152750
154375
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159250
160875
162500
164125
165750
167375
169000
170625
172250
173875
175500
177125
178750
180375
182000
183625
185250
186875
188500
190125
191750
193375
195000
196625

15

Mankato Entertains Minnesota Bankers
Group Two of Minnesota
G
Bankers Association Holds

R O U P T W O o f the Minnesota Bank­
ers Association met at the Mankato
G olf Club, September 15th, with a
splendid attendance.
One hundred and
thirty bankers representing- 111 banks in
14 southwestern Minnesota counties were
in attendance.
Interest was manifest in all speeches and
seldom have bankers taken more interest
in every word spoken than at this meeting.
G olf was oil the program for 3 :30 but
there Avas no g olf played, as every one
seemed willing to forego golf to get all
he could out of the meeting.
Great interest was shown in the address
by George Susens. secretary o f the state
association Avhen he reviewed the high­
lights and operation o f the deposit guar­
anty bill.
Mr. Susens had just returned from at­
tending the A . B. A . meeting held in Chi­
cago and Avas well qualified to interpret
the new legislation.
He also explained
what effect he thought this neAv legislation
would have on banking in the future.
He emphasized that the guarantee of
bank deposits av o u UI go into effect January
1st whether we liked it or not. That there
A\-as no Avay to modify or repeal the bill
now and therefore we may as Avell prepare
fo r it. H e said after all it may not be so
bad and it Avouid hardly he fair to cite
past experience o f deposit guarantee in
some states that have tried it, in compar-


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

Annual Meeting
ing it with the present set-up. This is on
a much larger scale and it must be remem­
bered that banks taken in now are clean
and their assets should increase in value
as business gets better. On the other hand
where states have had deposit guarantee,
the guarantee Avas usually created Avhen
prices were fairly high and practically all
banks were let in and their deposits guar­
anteed regardless o f their condition.
Again, a single state may have a crop
failure for a year or tAvo and conditions
in that state Avouid be bad and may lead
to the failure o f a number o f banks. The
burden becomes too great for the remaining
banks in a single state but on a national
scale the effects o f trouble in one state
Avouid hardly be noticed. Mr. Susens also
said that the guarantee o f deposits may
return a great deal of money to the banks
from postal savings. He said, o f course
this would not increase the deposits as most
o f this money is already in the banks, but
it then would not be necessary for the
bank to have their best assets up for security and their money in I oav yield bonds.
Other speakers on the program were
W illiam Duncan, Jr., o f Mankato, presi­
dent of the Minnesota Bankers Associa-

tion ; Elmer A . Benson, State Commission­
er of Banks; and R. E. Jones of Wabasha,
manager o f the Minnesota Cooperative
W o o l GroAvers' Association.

Edwin Brickson, president o f the Adrian
State Bank, led a round table discussion,
and E . W . SAvanson substituted for J. N.
Peyton, chairman o f the Federal Reserve
Board.
Officers elected for the coming year Avere
C. H . Keller, Lake Chrystal, president;
E. A . Timm, Balaton, vice president; John
Bondhus, Heron Lake, secretary-treasurer ;
and E. J. Feldman, Pipestone, and Y . A .
Batzner, Mankato, members o f the execut ia'c committee.

Addresses F. A . A.
W . E . Brockman, assistant secretary o f
the Northwest Baneorporation, attended
the Public Relations Conference held by
the Financial Advertisers’ Association in
NeAV York, September 10th to 14th. A t
this convention Mr. Brockman made three
addresses on the following topics:
1. Developing NeAv Business as a Re­
sult o f Economic Changes and Changes in
the Banking System.
2. Branch Banking Legislation.
3. The American System o f Banking in
the Light of American Economics.

The Mankato Golf Club AA/here Group Two Bankers Convened

Northwestern Banker October 1933

16
Acme Interest Tables

7 per cent and 8 per cent tables
will appear in the November issue
of The Northwestern Banker.

10000

20000

90000

022028
022208
022389
022569
022750
022931
023111
023292
023472
023653
023833
024014
024194
024375
024556
024736
024917

044056
044417
044778
045139
045500
045861
046222
046583
046944
047306
047667
048028
048389
048750
049111
049472
049833

066083
066625
067167
067708
068250
068792
069333
069875
070417
070950
071500
072042
072583
073125
073667
074208
074750

088111
088833
089556
090278
091000
091722
092444
093167
093889
094611
095333
096056
096778
097500
098222
098944
099667

110139
111042
111944
112847
113750
114653
115556
116458
117361
118264
119167
120069
120972
121875
122778
123681
124583

132167
133250
134333
135417
136500
1375S3
138667
139750
140833
141917
143000
144083
145167
146250
147333
148417
149500

154194
155458
156722
157986
159250
160514
161778
163042
164306
165569
166833
168097
169361
170625
171889
173153
174417

80000

122
12 a
124
125
12«
127
128
12»
130
131
132
133
134
135
136
137
138

176222
177667
179111
180556
182000
183444
184889
186333
187778
189222
190667
192111
193556
195000
196444
197889
199333

198250
199875
201500
203125
204750
206375
208000
209625
211250
212875
214500
216125
217750
219375
221000
222625
224250

13»
140
141
142
143
144
145
14 «
147
148
14»
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168
16»
170
171
172
173
174
175
176
177
178
1 7»
180
7
8
»
10
11
12

025097
025278
025458
025639
025819
026000
026181
026361
026542
026722
026903
027083
027264
027444
027625
027806
027986
028167
028347
028528
028708
028889
029069
029250
029431
029611
029792
029972
030153
030333
030514
030694
030875
031056
031236
031417
031597
031778
031958
032139
032319
032500
037917
043333
048750
054167
059583
065000

050194
050556
050917
051278
051639
052000
052361
052722
053083
053444
053806
054167
054528
054889
055250
055611
055972
056333
056694
057056
057417
057778
058139
058500
058861
059222
059583
059944
060306
060667
061028
061389
061750
062111
062472
062833
063194
063556
063917
064278
064639
065000
075833
086667
097500
108333
119167
130000

075292
075833
076375
076917
077458
078000
078542
079083
079625
080167
080708
081250
081792
082333
082875
083417
083958
084500
085042
085583
086125
086667
087208
087750
088292
088333
089375
089917
090458
091000
091542
092083
092625
093167
093708
094250
094792
095333
095875
096417
096958
097500
113750
130000
146250
162500
178750
195000

100389
101833
102556
103278
104000
104722
105444
106167
106889
107611
108333
109056
109778
110500
111222
111944
112667
113389
114111
114833
115556
116278
117000
117722
118444
119167
119889
120611
121333
122056
122778
123500
124222
124944
125667
126389
127111
127833
128556
129278
130000
151667
173333
195000
216667
238333
260000

125486
126389
127292
128194
129097
130000
130903
131806
132708
133611
134514
135417
136319
137222
138125
139028
139931
140833
141736
142639
143542
144444
145347
146250
147153
148056
148958
149861
150764
151667
152569
153472
154375
155278
156181
157083
157986
158889
159792
160694
161597
162500
189583
216667
243750
270833
297917
325000

150583
151667
152750
153833
154917
156000
157083
158167
159250
160333
161417
162500
163583
164667
165750
166833
167917
169000
170083
171167
172250
173333
174417
175500
176583
177667
178750
179833
180917
182000
183083
184167
185250
186333
187417
188500
189583
190667
191750
192833
193917
195000
227500
260000
292500
325000
357500
390000

175681
176944
178208
179472
180736
182000
183264
184528
185792
187056
188319
189583
190847
192111
193375
194639
195903
197167
198431
199694
200958
202222
203486
204750
206014
207278
208542
209806
211069
212333
213597
214861
216125
217389
218653
219917
221181
222444
223708
224972
226236
227500
265417
303333
341250
379167
417083
455000

200778
202222
203667
205111
206556
208000
209444
210889
212333
213778
215222
216667
218111
219556
221000
222444
223889
225333
226778
228222
229667
231111
232556
234000
235444
236889
238333
239778
241222
242667
24411 1
245556
247000
248444
249889
251333
252778
254222
255667
257111
258556
260000
303333
346667
390000
433333
476667
520000

225875
227500
229125
230750
232375
234000
235625
237250
238875
240500
242125
243750
245375
247000
248625
250250
251875
253500
255125
256750
258375
260000
261625
263250
264875
266500
268125
269750
271375
273000
274625
276250
277875
279500
281125
282750
284375
286000
287625
289250
290875
292500
341250
390000
438750
487500
536250
585000

Days

1110 s.
111 os.
1110 s.
1110 s.
1110 s.
1110 s.

30000

Christie Heads
Investment Bankers
Robert E . Christie, Jr., of Dillon, Read
& Co., New York, has been chosen by the
board o f governors o f the Investment
Bankers Association of America as presi­
dent of the association for the year 193334, it was announced at the association’s
office. Nomination by the board o f gov­
ernors is subject to election at the associa­
tion’s forthcoming
annual
convention
October 28th to November 1st, but as the
official selection by the board has always
been approved by the convention, nomina­
tion is considered equivalent to election.
Mr. Christie will succeed Frank M . Gor­
don o f the First National Bank o f Chicago.
Mr. Christie was born in New York,
November 20, 1893. H e attended private
schools in New York and Princeton Uni­
versity, class of 1915. During the W orld

Northwestern Banker October 1933

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

ROBERT

E.

C H R IS T IE , JR.

40000

101111

50000

60000

70,000

W a r he was a captain in the air service
o f the army. A s an aide to John D. Ryan,
Under-Secretary of W a r, he accompanied
the Secretary o f W a r and the Under­
secretary o f W a r in their inspection o f
the A . E . F . in the summer o f 1918.
In 1919 Mr. Christie became associated
with W illiam A . Read & Co., which firm
became Dillon, Read & Co. in 1921. He
was admitted to membership in Dillon,
Read & Co. January 1, 1927.
Nomina­
tion of Mr. Christie, it was said at the
association’s office, is in recognition of his
many years o f work in the interest of the
investment banking business. H e has been
a, member o f the board of governors of the
Investment Bankers Association since
1930. For the past two years he has been
chairman of the association’s business
problems committee and of its New York
group. H e has also served on other im­
portant committees o f the association and
the New York Group.

17

Your President Says:
Remarks of F. M. Law, President First National Bank, Houston,
Texas, on Being Inducted Into Office as President
of the American Bankers Association
(See Cover Photo)

HE
number of unlicensed banks
throughout the country including those
which are either closed or restricted has
been very materially reduced in recent

T

months and the deposits in such banks rep­
resent a total which is less than seven per
cent o f total deposits in licensed banks.
There is reason to believe that a large
percentage o f these unlicensed banks will
be reorganized before New Y ear’s day.
W hen they are reopened, it will be on a
sound basis.
The fourteen thousand or
more banks now operating’ on an unre­
stricted basis have gone fa r in the matter
o f setting their own houses in order, each
fo r itself. In my opinion, very few bank­
ers who are actively engaged in the bank­
ing business today will in the course of
their lifetime forget the lessons taught by
the past four years.
Every man o f us
should be, and doubtless is a better banker
by reason o f these distressing experiences.
Most, i f not all of us know better than
ever before the requisites o f good banking.
W e know now, if we never knew before,
the meaning o f sound policies and the in­
terpretation o f them in the right running
o f a bank, and especially with regard to
the use o f depositors’ money in the mak­
ing o f loans. It is perhaps not much o f
an over-statement to say that the average
banker in this country today knows how to
be a good banker, but there still remain
two big’ ifs in each equation. H e know’s
how, and he will run a good bank and a
successful bank i f he has the courage to
live up to his own convictions and experi­
ence.
The second if simply is— I f the
banker, knowing enough and with suffi­
cient courage, will work hard enough to
master thoroughly the affairs o f his own
shop. Ability, even with experience added,
is not enough. It must be accompanied
by a lot o f courage and a prodigious
amount o f hard work.
A synonym for
hard work in this connection is digging.
There may he good bankers who lack cour­
age or energy, but they are the exception
and in such cases they are good in spite o f
these weaknesses.
“ The new administration of the Am er­
ican Bankers Association, on this its first
day in office, pledges the government at
Washington its whole hearted and loyal
support in the herculean efforts that are
just now in the making to put more people
to work and to raise wage levels. It is
soug’ht, o f course, to increase mass buying
power. The government is working dili-


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Federal Reserve Bank of St. Louis

gentlv to bring about these results which
we all so earnestly desire, and I feel cer­
tain that in this emergency every member
o f the American Bankers Association, re­
gardless o f creed or party, is not only
ready, but eager to cooperate to the end
that the measures now under way may be
made a success. The people of the country
seem to be practically a unit in their re­
sponse to the plans as proposed by the
President o f the United States. W ith your
approval, as your President, I shall an­
nounce to M r. Roosevelt that the bankers
o f this association are going to do every­
thing permissible to good bankers to make
the National Recovery A ct work so that

W A S greatly saddened last month to
hear o f the death o f F R A N C IS H .
S IS S O N , vice president o f the Guar­
anty Trust Company, and past president
o f the A . B. A . I had known him for
years and heard him deliver his excellent
address before the Chicago Convention,
and he seemed in excellent health. Ob­
viously, 1933, the most trying banking
year in our life time, must have taken
much o f his strength and physical re­
serve, and his sudden heart attack was
the result. H e will be sincerely missed.
ED COOIv in his well known column
says, “ One o f the distinguished B rit­
ishers invited by Canada to survey her
banking methods is a former member o f
the Royal Commission on Lunacy and
M ental Disorders. Those Canadians cer­
tainly know what they’re about.” And
fo r once I think I, also, agree with the
Canadians.

T

it will become a blessing to every man,
woman and child under the American flag.
It will take time, o f course, and this fact
should be stressed so that people will not
become discouraged when good results are
not immediate.
“ When the new congress meets in Jan­
uary it is generally believed that there will
be some new banking legislation. I earn­
estly hope that the thoughtful and patri­
otic bankers o f the country will make a
real contribution in the working out and
perfecting o f such amendments to the
Banking Act as may be necessary. The
country has a right to expect as much
from us. W e must be content in this na­
tion with nothing less than the best bank­
ing system that the human mind can devise.
The best talent in the banking world must
lend itself freely to the task. It goes with­
out saying that in such efforts grab and
greed and selfishness will have no place.
The goal is to provide banking legislation
which will enable and encourage banks to
operate in such manner as to best serve
the people as a whole.
I, for one, am
confident o f the result.”

W . K O E N E K E , Bank Connnis. sioner o f Kansas, says it is false
reasoning to assume that if the Postal
Savings (Deposits $1,177,625,132) Law
was repealed that this money would re­
turn to the banks. The money is already
there, having been redepositecl by the
U. S. Government and protected by gov­
ernment bonds put up as collateral by
the banks.
Most o f the money would
otherwise go into hiding, is the belief
o f Mr. Koeneke.

H

E . C O Q U IL L E T T E , vice president
. of the Merchants National Bank
o f Cedar Rapids, arrived early at the
A . B. A . Convention, and to see the Fair
(both blondes and brunettes).
H e was
also very much interested in seeing Sally
Rand, because he thought she was a cousin
o f “ Remington-Rand,” and especially be­
cause it had been a long time since he had
seen a F A N — at least that is what he
told me.

S

S. B A G N A L L , assistant cashier of
# the Live Stock N ational Bank o f T C H A T T E D with A R T H U R R E Y N 1
O LD S in the lobby at the Stevens
Chicago, is rightly proud o f the fact that
during the A . B. A . H e is now vice chair­
76 per cent o f their deposits consist of
man of the Board o f the Bank of Am erica
(1) cash, (2) short term Government, (3)
at Los Angeles. H e tells the story o f the
marketable bonds, and (4) 90 day com­
newcomer who after being driven 50 miles
mercial paper.

A

Northwestern Banker October 1933

18
in each direction or more, from Los
Angeles, and being informed that he was
still in the city, asked “ W here is the out­
lying section” and the local booster said
“ W h y no one can outlie Los Angeles.”

A . IR IS H , vice president o f the
• First N ational Bank and Trust
Company of Fargo, North Dakota, and
treasurer o f the Greater North Dakota
Association, spread the gospel o f the
“ busy bee” at the A . B. A . because the
average colony of North Dakota bees
will yield 120 to 170 pounds of honey in
a season, which is three times the United
States average. “ H ow doth the little busy
bee improve each shining hour,” is the
title o f a pamphlet which M r. Irish gave
to the delegates and which contained this
“ Bee-Banking” philosophy:
“ W hen business is poor and loans are
hard to collect, remember the honey bee.
Each clover blossom it visits contains less
than one-eighth o f a grain o f sugar; 7,000
grains are required to make a pound
o f honey; to collect that many grains the
bee must visit 56,000 blossoms and in­
sert its proboscis separately into each,
flower tube, o f which there are about 60
to a clover head.
“ In perform ing that operation 56,000
multiplied by 60, or 3,360,000 times, the
bee gets only enough nectar fo r one pound
of honey— and then doesn’t get the
honey! So what the hell are you crabbin’
ab o u t!”

F

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and County
Bonds
Specializing in conservative,
personally-examined issues
for Iowa Banks
Write for our current list
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Carleton D. Beh Co.
INVESTMENT SECURITIES
Twelfth Floor, Des Moines Building
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Phone 4-8156

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Federal Reserve Bank of St. Louis

ENATOR ARTHUR H. V AN D EN B E R G o f Michigan, addressed the
Thirty-second National Association of
Supervisors o f State Banks at Chicago,
on “ Federal Banking Legislation,” and
upheld the Guaranty of Deposit fea­
ture of the neAV banking bill, especially
the guaranteeing o f all deposits up to
$2,500.
H e believes we could eliminate
the other guaranty phases o f the bill and
allow only this one to remain as $2,500
represents the average bank balance o f
96.5 per cent o f our 40,000,000 deposits,
although only 23.5 per cent o f our $43,000,000,000 o f deposits.
The Senator believes that liquidity has
ruined banking expansion and that the
guaranty plan will release liquidity re­
quirements.
H e said that “ a liquidity
rule is murderous and solvency is the
long range view. On March 3rd we said
U . S. A . is only worth what it would
bring under the hammer— a villainous
view.”
H e also believes that Guaranty o f De­
posits or Postal Savings— one or the other
— faces the U. S. A .
A s an opponent o f the guaranty idea,
because it has never worked yet, and is
false in theory and practice, I would
rather limit the plan to $2,500 only as a
permanent feature, and thus reach the
(Turn to page 26, please)

S

19

Bonds and Investments

Long Term Credit—
a W o rld Problem
"Every depression is followed by a demand for
long-term credit as capital investments. Such credit
will start the wheels of industry turning.
now reached that point in this depression.

W e have
W e will

not go far on the road to recovery until means for
meeting this demand is made available."
By FRANK M. GORDON
President, Investment Bankers Association
F F E C T I V E , constructive operation
o f long-term credit is the foremost
world problem today. The best de­
scription that I have seen o f the depres­
sion, which Ave are all striving to circum­
vent, was given some months ago by a
distinguished educator. H e said that the
depression Avas a mountain o f fixed debt
on one side and a violently fluctuating
price structure on the other.
W e have
seen a considerable improvement in com­
modity prices and debt redemption or
adjustment. W e hope for still greater im­
provement, but the description sticks in
my mind because it illustrates the funda­
mental importance o f your Avork and mine,
that o f cooperating in business recoA7ery
through sound and constructive uses of
long-term credit.

E

Our long- experience as individuals of
our respective groups, o f the supervisors
arid the supervised, has demonstrated, I
believe beyond a doubt, that Ave must con­
tinue to be, as in the past, the closest o f
co-Avorkers to the common purpose of
preventing fraud in the creation and pub­
lic distribution o f securities, and in fu r­
thering the sound and productive uses of
credit.
The securities commissioner has a public
duty to perform. To perform that duty
Avell he must be thorough, and to be thor­
ough he sometimes becomes inconvenient.
The investment banker, though engaged
fo r profit in a private business, also has
certain public duties, one o f Avhicli is to
submit to reasonable inconvenience in the
interest o f the general public welfare.
W hen, however, this inconvenience goes
beyond the point o f reasonableness, to


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Federal Reserve Bank of St. Louis

needless requirements affecting only pri­
vate affairs, then public duty ceases on the
part of both the commissioner and the
investment banker.

British Companies Act
It is needless to repeat the story o f the
origin and development of legislation cal-

TH IS A D D R E S S was de­
livered by Mr. G ordon
before the recent con­
vention of the National
A ssociation of Securities
Com missioners in Mil­
waukee.

FRA N K M. G O R D O N

intensive surveys by high-minded com­
missions.
This laAV is still a subject o f
acute controversy in Great Britain, and
one of the outstanding legal battles o f the
day is noAv being waged around an effort
by the British government to extradite
and to carry back to that country for trial
one o f our citizens alleged to have de­
frauded Englishmen o f several millions
o f dollars. In that instance, and in many
others o f record, the famed British laAV
did not prevent, although it may yet
punish.
The fact that securities laAvs have not
seemed wholly satisfactory does not argue
that they are of no value or that such e f­
forts are futile. W e all know, and candor
calls upon us to assert, that they have ac­
complished a very great deal in the right
direction. The failure to satisfy, hoAvever,
does argue certain things.

Security Losses
culated to suppress fraud and to regulate
the sale o f securities. It may he Avell to
point out, however, that thus far all secur­
ities laAvs, both here and abroad, have
necessarily been a, series of legalistic ex­
perimentations which even noAv fail to
satisfy. A s evidence o f this I need only to
point to the numerous modifications at
practically every session of the legisla­
tures and the frequency Avith Avhich such
laws are supplanted by a neAv law designed
to the same purpose. Legislative commit­
tees are now authorized in different juris­
dictions to make further surveys and ex­
perimentations, in a further effort to find
a practical, Avorkable solution. The muchtalked-of British Companies Act has gone
through several revisions after as many

First, that many o f the alleg-ed frauds
are not frauds at all. It does not follow
that because one has lost through an invest­
ment that he has been defrauded. The cold
facts are that the percentage o f losses by
security investors is loAver than the per­
centage of losses through investments o f
holdings in other forms o f property such
as real estate, farm products, merchandise,
etc.
One large mercantile establishment
alone Avas compelled, during one year of
the existing depression, to charge off from
its inventory account a loss o f more than
six million dollars, by reason o f the de­
cline in merchandise values.
Can it be
said this company was defrauded ? Count­
less real estate holders find their holdings
to be Avorth less than half the amount of

Northwestern Banker October 1933

20

NO. 3 OF A S E R I E S I N T R O D U C I N G
T H E M E M B E R S OF O U R O R G A N I Z A T I O N

MRS. P E R IN A M O E L L E R , Secretary

their investment, and no complaint o f
fraud. Y et there is a widespread disposi­
tion to attribute all securities losses to
some element o f fraud.
Secondly, the head line allegations as to
losses through the sale o f “ worthless” se­
curities, which make catchy and interest­
ing reading, are fa r out o f proportion to
the actual facts. Those head line figures
have progressively increased from year
to year notwithstanding all the laws and
the efforts o f all the commissioners com­
bined. Some such headline estimates for
certain periods exceed the total known
sales o f all securities during the same
period. Such statements o f course simply
cannot be true.
Thirdly, all too much is expected o f the
edict of law. No law within and by itself
ever functioned against the crook or the
fraudulent.
The Aveapons authorized by
the la,AV, to be effecti\Te, must be carried to
the doors of the crook and those engaged
in practices tending to perpetrate fraudsRegardless o f the detailed requirements o f
a securities law, fraud is never knowingly
brought before a commissioner fo r leis­
urely inspection.
Fourthly, inexperienced investors un­
wittingly have been, and are being, led to
believe that they may wholly depend upon
the state, through its securities commis­
sioner, to do their investment thinking
fo r them. In some jurisdictions this has
been pointed to as a menace o f the laAVTo such extent as this menace exists the
law defeats its o \vn purpose, and creates
its own barrier to satisfactory results.

State Laws

RA IN ED in Banking and Investment fields
through associations with the Merchants Na­
tional Bank, Cedar Rapids, and the Iowa National
Bank, Des Moines, Mrs. Perina Moeller is the effi­
cient Secretary of Jackley-Wiedman & Company,
Des Moines bond house specializing in Iowa Muni­
cipals. One of Iowa’s most capable business women,
Mrs. Moeller brings to her position a charming grace
of manner and a becoming modesty.

T

J A C K L E Y 'W lE D M A N
6sP C

om pany

DES M O IN ES
Register and Tribune Bldg.
C ED AR R A P ID S

C H A R IT O N

Northwestern Banker October 1933

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

Phone 3-5181
M ASON C IT Y

OMAHA

That this failure to satisfy is not at­
tributable to the form of statute or the
type of law is evidenced by the fact that
in the 47 states Avith securities laws various
forms and types o f law exist Avith no two
exactly alike and less than 50 per cent o f
them very similar.
Yet the volume o f
complaints as to lack of satisfying results
is about equal m one jurisdiction to that
o f another, Avith modest exceptions. There
are losses under all the law's and always
will be, but a loss is a loss, while all too.
frequently loss is regarded as synonymous
Avith fraud.
But hoAV may these laws be made more
nearly satisfactory ?
Existing laAvs may and doubtless can be
improved both to the end o f facilitating
legitimate business and to applying the
teeth in the law Avhen and where needed.
But it is not through these minor changes
that the laAvs will be made to satisfy.

There have been those Avho advocated
granting to the commissioners arbitrary,
discretionary power to pass upon a given
security offered within a given jurisdic­
tion, upon his or their OAvn judgments o f
economic Avorth and that only those o f
known sound values be offered Avithin the
state. It has been argued this Avould sat­
isfy the needs if not the Avislies o f the

21
people. This theory, of course, is based
upon the premise that there is at least one
man who knows the future as well as the
past. Aside from the state and federal
constitutional inhibitions to any such
powers, it is very doubtful if any one
equal to the requirements could be found.
And woe to that man who would undertake
such a task of omniscience, when he makes
his inevitable mistake o f misjudging the
future.
Certainly he, and not the law,
would then be to blame as unsatisfactory.

Suggested Improvem ent
To improve the situation, I should like
to lay these suggestions before the wealth
o f practical experience which you com­
missioners represent :
First, stop trying to legislate against
“ frauds” which in fact do not exist.
Second, let us hold our consideration to
actualities and discard the exaggerated
headline estimates o f the catch phrase
artist.
Third, we should bear in mind that laws
are not self-enforcing* and that improved
results may be had more through increased
facilities for applying the provisions now
existing than by adding new provisions.
Fourth, clearly the public must learn to
assume some of the normal responsibilities
that are entailed by the ownership o f
money or any other form of property and
not presume that the state can supply a
full measure of common sense to every
investor.
Fifth , improve the facilities fo r apply­
ing the policing powers granted under all
these laws through added personnel, if
needed, to the end of prompt and vigorous
activity when and where fraud is evident
or strongly suspected.
I f these things might be brought about
in all probability no new laws would be
needed and the provisions o f existing laws
would serve every purpose.

Federal Law
On March 29th, President Roosevelt sent
to Congress his message recommending the
enactment o f a federal securities law, with
which all o f you are familiar. He said in
part :
“ There is, however, an obligation upon
us to insist that every issue o f new securi­
ties to be sold in interstate commerce shall
be accompanied by full publicity and in­
formation, and that no essentially impor­
tant element attending the issue shall be
concealed from the buying public.
“ This proposal adds to the ancient rule
o f caveat em ptor, the further doctrine
‘let the seller also beware.’ It puts the
burden o f telling the whole truth on the
seller. It should give impetus to honest
dealing in securities and thereby bring
back public confidence.
“ The purpose o f the legislation I sug­
gest is to protect the public with the least
possible interference to honest business.”
This message was wholeheartedly ap-


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Federal Reserve Bank of St. Louis

TIMES
NEW FINANCING
NEW BONDS
o

N E of the major services of PolkPeterson Corporation to Iowa banks and bankers lies in furnishing
timely information on all securities. Because of the unusual interest
being manifested by banks and bankers today in the new Home Loan
Corporation Bonds, we offer below a resumé of outstanding points
concerning this new issue.
P H Y S IC A L
Coupon rate— 4 %

C H A R A C T E R IS T IC S

or lower.

Maturity— 18 years or less from date of issue.
Actual bonds available about October 1, 1933.
Non-optional.
Denominations— $50, $100, $500, $1,000.
Amount

Authorized— $2,000,000,000.

IN V E S T M E N T

FACTORS

1. Interest guaranteed by U. S. Government.

(Principal not guaranteed.)

2. Tax-exempt as to principal and interest.

(Excepting surtaxes, gift, inheritance and

estate taxes.)
3. Secured 100% by first mortgages on real estate at deflated values plus 1 0 % in stock
subscribed to by U. S. Government.
4. Acceptable at market value not exceeding par as security for Postal Savings Deposits.
.5. Acceptable as collateral by R. F. C. at 8 0 % of par.
6. Acceptable by twelve Federal Reserve Banks as collateral for loans to member banks.
7. Acceptable at par by Home Owners’ Loan Corp. against obligations of its debtors.
8. Special efforts are being made to make bonds eligible as security for trust funds,
insurance companies, etc., under various state jurisdictions.

M A R K E T Q U O T A T IO N S
The market at the present time (Sept. 29, 1933) is quoted 87 bid, 88 asked.

If e will be pleased to supply the latest bids and offers
at the market, and furnish circulars upon request.

P O L K - P E T E R S O N CORP.
INVESTMENT
Des Moines Building, Des Moines

SECURITIES
Telephone 3-3245

Branch offices at Ottumwa, Waterloo, Sioux City and Cedar Rapids
P R I V A T E WIRES T O A L L O F T H E L E A D I N G F I N A N C I A L M A R K E T S

Northwestern Banker October 1933

proved by the Investment Bankers Asso­
ciation o f America and by the country
generally.
W e can all agree on these
principles and we welcome them as a basis
on which to conduct business.
A bill purporting to embody the princi­
ples o f the President’s message Avas intro­
duced in Congress on the same day o f the
message.
A t a hearing on the bill before the Com­
mittee of Congress on March 31st, the
second day following its introduction, I
sa id :
“ I wish to assure you that the Presi­
dent’ s message to Congress, outlining the
need for and the objectives to be accom­
plished by a federal securities laAV, has
the entire approval o f our Association,
and I am sure, also, that it has the ap­
proval o f the country at large.
“ Our Association tenders it full co­
operation without reservations toward a
detailed consideration o f the provisions
o f the act to carry out the purposes o f the
President’s message to the end that prac­
ticable and workable legislation may
result.
“ I know o f no responsible security
dealer who is not eager to see effective
laws to prevent and punish fraud and misrepresentation in the sale o f securities.
“ Such laAVS are not only in the interest
of the public, but also in the interest o f
those Avho deal in legitimate securities, and
Ave are therefore thoroughly in accord Avitli
the intent o f the bill now under con­
sideration.”
I stand by that statement.

Hazards in New Law
Unfortunately, the law which finally re­
sulted has had an effect particularly upon

G M A C

SHORT

officers and directors o f issuing corpora­
tions and to some extent upon underAvriters apparently not contemplated in
the President’s message. In any event,
the issuance of ucav securities since the
effective date o f the law has practically

ceased.
It is argued by some that it is the con­
ditions o f the times and not the securities
law which has dried up the market for neAV
issues. Doubtless this, to some degree, is
true. But it is equally evident to those in
intimate contact Avith prospective issuers
that the unusual liabilities o f the laAV con­
stitute hazards which officers and directors
o f corporations decline to assume.
There are those who state that any such
fears are Avholly unwarranted. Competent
and independent legal counsel, however,
give legal opinions supporting the fears
and give legal reasons therefor. Unfortu­
nately, most o f those who insist there are
no causes for fear are not legal advisers
to issuers or their officers and directors
and for the most part have nothing other
than their opinion at stake.
Citing only one provision o f the law,
viz., that of joint and several liabilty on
the part o f individuals, parties to the reg­
istration and sale of an issue o f securities,
largely and even wholly dissociated in so
far as joint action is concerned.
This
alone, I submit, is sufficient to cause one
to hesitate and justifies fear of unwar­
ranted liability.
Issuers and underwriters are perfectly
Avilling to assume the liabilities incident to

their own acts. They must refuse, Iioavever, to be responsible fo r the acts of oth­
ers. It is unjust to expect any man to
assume the sins and liabilities of others.
I need not go further into the provisions

TERM

MOTES

available in limited amounts
upon request

G eneral
A cceptance
Executive Office

"

C o r po ratio n

B r o a d w a y at 5 7 t h S t r e e t

OFFICES

IN

Northwestern Banker October 193d


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Federal Reserve Bank of St. Louis

M otors

P R I N C I P A L

~

Hew York., N- Y.

CITIES

o f this laAV or its current effects on busi­
ness, Avhich, by all the rules of the game,
should noAV be reviving.

Long Term Credit
The point most important fo r us to real­
ize in this discussion is the effect o f our
activities on business in its efforts toAvard
recovery and not the effect on investment
bankers.
Investment bankers may en­
tirely be eliminated from our discussion;
the legitimate interests o f industry are
considered because investment banking
aa’ ill
inevitably
advance
as
business
advances.
W e are still in the throes o f a great
depression— and unprecedented in the an­
nals o f history. W e have had problems to
reckon with never before experienced. W e
have had depressions, it is true, and have
pulled out o f them as Ave Avill pull out of
this one.
But there are certain funda­
mental principles Avhich may aid in and
hasten the day of recovery.
E\rery depression we have ever experi­
enced Avas followed by a demand for long­
term credit as capital investments, to start
the Avheels o f industry turning. W e have
iioav reached that point in this depression.
This economic demand is great and by rea­
son o f the piling up o f maturities, many
o f them more than sound, is becoming
greater every day.
W e will not go far
on the road to recovery until means for
meeting this demand is made available.
That which has made this country great
is the men avIio had the initiative. Civi­
lization has advanced thereby and in pro­
portion thereto.
For one hundred and
fifty years the- business acumen o f our
people lias been the main spring to inven­
tive and industrial achievement. Let’s not
clutter this path o f experience Avitli too
many obstacles, but rather leave this in­
itiative, this native acumen, unleashed so
long as it is inclined to run in legitimate
channels.
That the securities laAV o f 1933 was a
m ajor piece of legislation, important to
industry, to credit, and to investment
banking, is acknowledged by all. That it
did not have the deliberate study and
thoughtful consideration necessary to ma­
jor legislation is apparent.
Years of
study, o f research and conscientious effort
were expended before the enactment of
the Federal Reserve Act. The Glass-Steagall Banking- Act Avas in process o f fo r­
mation and discussion for tAvo years or
more. The Securities Law, hoAvever, A v a s
introduced, enacted and approved Avithin
a period of less than two months.
Since the passage o f the Federal Se­
curities LaAV an intensive study has been
made o f it from every angle by potential
issuers of securities, underwriters and
their counsel. It is the consensus o f those
Avho have made this study that modifica­
tions must be made if sound securities are
to be issued and sold to the public. There-

23

★

★

Behind this institution’s 44 years of experience,
now, as always in the past, is the unchanging
strength of conservative banking
If w e can serve you in Chicago your
inquiries are respectfully invited.

THE NORTHERN
TRUST COMPANY
Northwest Corner La Salle and Monroe Streets
Chicago

★

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

★
Northwestern Banker October 1933

24
fore, let us have the constructive help of
all who, by experience or training, can
contribute to the erection o f a thoroughly
workable piece o f legislation which will
carry out the purposes expressed by Presi­
dent Roosevelt, viz., “ Protect the public
with the least possible interference to
honest business.”
W e welcome sound and workable super­
vision.

To Address
Mortgage Bankers
M r. W illiam F . Stevenson, chairman of
the Home Loan Bank Board, Washington,
D. C., will deliver an address on “ Mortgage
Bankers and their Relationship to Gov­
ernmental Credit Agencies” at the Twen­
tieth Annual Convention o f the Mortgage
Bankers Association of America to be held

Regular Dividend
The board o f directors o f The Northern
Trust Company, Chicago, declared the
regular quarterly dividend o f $4.50 pay­
able October 2nd to stockholders of record
September 19th.
This is at the rate of
$18 per annum.

in St. Louis, Missouri, on October 10th
and 11th.
It is felt by many that this address will
be o f special importance not only to mort­

located
States.

throughout

the

entire

United

Mr. Stevenson will stress in his address
the value of the new Home Owners’ Loan
Corporation, which is administered by the
Home Loan Bank Board, in so fa r as it
is proving helpful to home owners in re­
taining their holdings and easing their
financial burdens. He will give a detailed
explanation o f this act.
Mr. Stevenson will also touch on the
relationship o f mortgage banking to other
governmental credit agencies, and follow­
ing his speech an informal discussion will
be held.

gage bankers and other business men inter­
ested in the field of real estate finance but
also to the great mass o f home owners

Francis H. Sisson Dies
Francis H . Sisson, vice president o f the
Guaranty Trust Company o f New York,
and formerly president o f the American
Bankers Association, died o f a heart ail­
ment after an illness of only four days, at
his home, 70 Undercliff; Street, Park Hill,
Yonkers, New York, Sunday morning,
September 17, 1933. H e was 62 years of
age.
Surviving him are his wife, Grace
Lass Sisson, and one sister, Mrs. M ary
Sisson McCandless o f Chicago, Illinois.
Mr. Sisson had for years been promi­
nent in the field o f financial publicity. He
directed publicity, advertising and public
relations work o f his institution. H e had
wide experience in the publishing and ad­
vertising field, his association with this
line of work having commenced during his
early school days in Galesburg, Illinois,
where he was born June 14, 1871. H e was
a graduate o f K n ox College and also o f
Harvard College, where he did postgradu­
ate work.

Long Distance telephone service sells goods. Says a Vir­
ginia coal company, " W e contact more prospects per day
by telephone, resulting in increased sales per salesman, at
less cost per ton.”
Many other businesses are finding Long Distance val­
uable because it is so fast, so convenient, so economical.
(From New York to Philadelphia, 50c; Chicago to Pitts­
burgh, $1.80; Washington, D. C., to Atlanta, $2.35.)
Long Distance may be profitably fitted into your oper­
ating plans, just as it has in such widely different fields as
tires and refrigerators. For helpful information, call the

Previous to his association with the
Guaranty Trust Company, Mr. Sisson was
active in railroad circles as assistant chair­
man of the Advisory Committee o f the
Association o f Railway Executives, and
m this capacity and in his editorial, ad­
vertising and banking experience he has.
written and spoken extensively.
Mr. Sisson was elected president of the
American Bankers Association at their
convention at Los Angeles on October 6,
1932, and served for one year.

Sandy McTavish wTas strolling along the
banks o f the river when he came acrossan English visitor fishing.
“ M an,” said Sandy, “ ye’ll no’ catch ony
fish there. Y e ’ll hae tae gang farther uptill ye come tae a guid place.”
“ A h ,” said the visitor, “ but how will
I know when I come to a good place?”
“ Hoots, man,” said Sandy, “ ye can
easy tell a guid place by the number o ’
empty bottles lyin’ aboot.”

local B ell Telephone Business Office.
R a tes a b o v e a r e f o r sta tion -to-sta tion , d a ytim e calls. E v e n in g a n d n ig h t ra tes , c o n ­
sid er a b ly lo w er . W h ere th e ch a rg e is 50c o r m o re a fe d e r a l ta x a p p lies as fo l lo w s :
50c to 99c, ta x 10c; $1.00 to $1.99 , ta x 15c; $2.00 o r m ore9 ta x 20c .

Northwestern Banker October 1933


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Federal Reserve Bank of St. Louis

The most sublime psalm that can be
heard on this earth is the lisping o f a
human soul from the lips o f childhood.—
Victor Hugo.

25

Insurance

W h y Life Insuranee
Is Still O n e of
the Best Investments
B y 0 . J. ARNOLD
President, Northwestern National Life Insurance Company

A Special Form
But while life insurance easily holds its
own with other forms of investment when
measured by
O. J. AR N O L D

a common yardstick,

does not tell the whole story.

this

Life insur­

ance is, after all, unlike bonds or stocks or
N A P P R A I S I N G the excellence of any

mortgages or ordinary savings, and these

form o f investment it is necessary first

differences make it impractical to judge it

o f all to set np a clear cut definition o f

accurately by the same standards.

I

what constitutes desirability in an invest­
ment.

Judged by any test which considers

all the various factors essential to a sound
investment, there is none better than life
insurance.
I do not think it necessary to incorpo­
rate in this article a detailed presentation
o f how life insurance today measures up
as an investment, as such an analysis has
already been made and masterfully pre­
sented by M . A . Linton, president o f the
Provident Mutual Life Insurance Com­
pany, in a recent address before a group
o f life insurance men in Chicago.
Mr.
Linton discussed, in the light of present
conditions, the ability o f life insurance to
meet each o f the most important invest­
ment tests— namely, security o f principal,
potential appreciation, marketability and
value as collateral, and income return.
The sum total of his findings certainly jus­
tifies the conclusion that no events of re­
cent months have impaired the rating of
life insurance as an investment to more
than a slight degree. Only in the matter
o f marketability and collateral value has
life insurance suffered, but it should be
remembered that the restrictions which
nearly all states adopted to prevent the
unnecessary withdrawal o f life insurance
reserves came at a time when the banking
functions o f the nation were completely
paralyzed, when no investment could be
called marketable, and even the govern­
ment had been forced to go back on its
promise to pay gold. Already, it should
be pointed out, the most serious aspects of
this situation have been ironed out.


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Federal Reserve Bank of St. Louis

Life insurance is a special form o f in­
vestment ; it is bought to perform a spe­
cific task, which can be accomplished in
no other way. Stated broadly, the job o f
life insurance is to eliminate risk— mainly,
the risk that every man runs every day,
o f dying.
W hile life insurance cannot
prevent death, it can and does guarantee
that financial stringency will not visit it­
self upon a fam ily following the death o f
the breadwinner.
L ife insurance offers
the only sure solution to the financial
problem that death presents. Another risk
which life insurance eliminates is the risk
o f dependence on others in one’s old age.
In these two respects, life insurance sub­
stitutes certainty for doubt.
Because life insurance is designed to ac­
complish a specific task, any analysis of
its suitability should properly place a
good deal o f weight on the answer to the
question: H ow certain is it that this task
will be accomplished? Surely the recent
history of life insurance offers all the evi­
dence that is needed of its ability to per­
form its specific task with virtually one
hundred per cent efficiency. The remark­
able record o f life insurance throughout
the depression is a matter o f general
knowledge.
W ith negligible exceptions,
policyholders and beneficiaries have re­
ceived life insurance proceeds promptly
when due, and in full. More than that,
life insurance has rendered a tremendous
service by pouring millions of dollars in
cash, representing a substantial portion o f
the life insurance reserves o f many thou­
sands o f individual policyholders, into the

economic life stream of the nation at a,
most critical time.

About

Inflation ’

So much for the past record of life in­
surance, which, by its remarkable degree
o f solvency and its performance in the face
o f economic adversity, has won and held
public confidence as no other financial in­
stitution has been able to do. Now, as to
the future. W h a t conditions may arise,
what changes ensue, that might be ex­
pected to provoke a swing away from life
insurance in counter action to the gratify­
ing degree o f public confidence which it
now enjoys?
On all sides these days we hear talk o f
“ inflation.”
Occasionally the life insur­
ance salesman meets a prospective buyer
who has heard that money is destined to
be “ cheaper” and who therefore expresses
an unwillingness to put his money into
life insurance at this time as he feels that
he will be paying his premiums in “ ex­
pensive” dollars while the proceeds o f his
policy will come back to him or his family
in the form o f “ cheap” dollars.
It is
urged that the wise investor will instead
take advantage o f the opportunity to put
his money where it will yield him a quick
and substantial return and thus counteract
the action o f inflation which is to reduce
the value of the dollar.
That this advice is not being taken by
any considerable portion of the public
is shown by the fact that the curve denot­
ing life insurance sales is not falling off,
as would be expected if this idea pre­
vailed, but is instead steadily rising in
the face o f the moderate inflation we have
already experienced, as denoted by rising
prices.
Evidently the vast majority o f
life insurance buyers, wisely enough, are
not swayed by the logic o f those who would
substitute for their life insurance some­
thing which they expect to sell out at a
profit in the near future. This is further
evidence that life insurance buyers regard
their life insurance as in a class distinct

Northwestern Banker October 1933

26
from their other investments, recognizing
that life insurance enables them to accom­
plish certain financial objectives which
they regard as most important and which
they can be assured of reaching by no
other means.

For Greater Returns
There is, however, much that can be said
to offset the “ inflation” arguments of those
who insist on regarding life insurance
strictly as a dollars and cents investment.
The man looking lo r a quick and substan­
tial appreciation in the value o f his in­
vestments should realize that there is a
possibility that his life insurance may yield
far greater returns than any other sound
investment possibly could. Consider the
case o f the life insurance buyer who dies
within a few years; his beneficiary will
receive a sum many times in excess of the
premiums he paid in, thus producing an
“ inflation” of his dollars far outweighing
any reduction in their purchasing power
which we might reasonably expect. For
instance, if a man pays a $100 premium
on a life insurance policy and dies the
first year, his beneficiary will get back
those dollars multiplied as many as fifty
times, as compared with a possible reduc­
tion in their purchasing power which
could not be expected to exceed 50 per
cent. If' he dies in the fifth year instead
o f the first, the “ inflation” will still be
as much as ten times, and even if death

occurs in the tenth year it will be as high
as five times his investment.
F or the man who lives to see his life
insurance mature for his own old age, the
scales are just as likely to be tipped in his
favor as against him, for who knows what
will be the value o f the dollar twenty,
forty, or sixty years hence? Over a pe­
riod o f years he may look for constant
variations in the value of the dollar, both
upward and downward, and in the long
run these variations will in all probability
strike a fair average. He is just as likely
to profit as to lose on the transaction.

A Definite Future
Whenever the proceeds o f a life insur­
ance policy become payable— whether in
one year or fifty— the value of these life
insurance dollars to the widow, or to the
holder o f a maturing policy, is multiplied
several times because they arrive at a
time Avhen they are most appreciated.
This “ inflation” in the value of the dollars
paid out by life insurance companies, due
to the timely character o f life insurance
payments, also helps to compensate for
any possible reduction in purchasing
power that we may look fo r due to actual
inflation.
O f fa r greater importance to
the policyholder than any comparatively
slight fluctuation in the dollar’s value,
either one way or the other, is the fact
that life insurance has made it possible for
him to carry on his financial plans with

Fire Prevention
Means Son ml Insurance
At a Saving
This 26-year-old company has observed fire
prevention measures through inspections of
properties since its inception in 1907. Regular
inspections and judicious selection of properties
insured result in a lower loss ratio. • Western
Mutual invites investigation of its record of
sound protection, capable management and
prompt payment of losses.

W ESTERN
FIRE

MUTUAL

INSURANCE

COMPANY

O p era tin g in Io w a , S o u th D a k o ta a n d N eb ra sk a

Hubbell Building, Des Moines, Iowa

Northwestern Banker October 1933


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

the certain knowledge that both he and his
family have made definite provision for
the future.
It cannot now be foretold whether the
march toward economic recovery has
gained impetus enough to carry on with­
out
further
artificial
stimulation
or
whether it will be deemed necessary to
speed up the process by the adoption of
an inflationary program. In either event,
I am confident that life insurance will
continue to occupy its acknowledged posi­
tion as the keystone in the average man’s
financial program, and that it will con­
tinue to ju stify the faith o f the millions
who today look with satisfaction on their
life insurance as the best investment they
could have made.

N EW S A N D VIEW S
(Continued from page 18)
m ajority o f depositors and the smallest
amount of total deposits. One sure thing
the guaranty idea will not be repealed by
the next Congress, so why not amend the
law to eliminate all o f it but the least ob­
jectionable part.

I

W A S discussing with F R E D A . C U SC A D E N , vice president of the North­
ern Trust Company, Chicago, the ques­
tion o f the government policy o f more or
less “ forcing” banks to make loans in
order to stimulate business, and he ex­
pressed the view that he was more than
willing to make “ good loans,” to any
reputable concern desiring credit, but
his bank would not change its policy and
make “ capital” loans and that was prac­
tically what the government was suggest­
ing. That job, M r. Cuscaden pointed out,
was for the investment houses to do but
they can’t do it until a more liberal inter­
pretation is placed on the new Securities
Bill.

A L P H G. M E R S E Y , assistant cash­
ier o f the First National Bank of
Chicago, invited me to lunch with him
recently in the bank’s private dining
room (mighty good food, too ), and I
asked him why the Field Building was
being built when Chicago had so many
vacant offices. He told me that Marshall
Field’s will provided that a certain amount
of the income of the estate must be in­
vested every so often in “ loop” real
estate so that is the reason for the new
Field Building.

R

W

M . C. C U M M IN G S , president of
Drovers N ational Bank o f Chicago,
has two hobbies, one is he likes to travel
(he has been everywhere), and the other
is lie believes in smiling. A sk him about
the pyramids o f Mexico (did you know
they had a n y ?). H e says they are more
beautiful than the ones in Egypt.

27
One o f his tellers who was a most
efficient young man, didn’t make friends
for the bank because he was so grouchy.
So one day M r. Cummings called him in
and gave him a small pocket mirror and
told him to look at him self every hour.
H e did so and soon changed his expres­
sion, and the customers all commented on
it, proving again that it does pay to
keep smiling.

its staff, which must extend to every em­
ployee o f the institution.
It is m y opinion that a new business
man whose principal “ stock-in-trade” in
the past has been a bright smile and a
genial disposition must entirely change
his front. H e can still retain the bright
smile but lie must actually sell his bank
to the prospective customer, and after
making the sale, must see that service is
provided.

R E S T O N R E E D , secretary o f the
The changes that have already taken
Financial Advertisers Association,
place in the banking system are only
came back from New Y ork with great
preliminary to the changes that are bound
enthusiasm about their annual convention
to occur. The Comptroller in his talk be­
last month.
Am ong the entertainment
fore the A . B. A ., recommended a repeal
features was a boat ride, and the “ cir­
of the Postal Savings law. Think what
cular” describing the “ skyscrapers” in­
this would mean to the banks o f the
cluded the follow ing explanations:
country!
1.
Chrysler Building (M r. Chrysler Before the Civil W a r, branch banking
may be seen on the 66th floor waving
was a recognized American system. In
from the window— he promised.)
1863, the unit system came in with the
2.
Paramount Building, (the clock in­ National Bank A ct.
Gradually, states
dicates at hourly intervals the notes due
and municipalities legalized branch bank­
the banks).
in g; until by 1930, there were some 3,500
3.
Chanin Building (fo r 50c you can go branches in the country.
Since 1929,
on top and look up at the Chrysler build­
group banking has developed and today
ing.)
large group systems operate in nearly
4.
Empire State building,
(for $1.00 all parts o f the country.
you can go on top and look down at the
A Unified System
Chrysler building.)
5.
New York L ife (not to be confused
The Glass Banking Bill is designed to
with Broadway Life— the policies are
unify the banking system, bringing all
different).
banks into *the Federal Reserve System.
6.
Metropolitan
(Seriously — every
quarter and fu ll hour the light blinks
the time.)
7.
W o o l worth (Especially washed for
this convention).
8.
Singer (W e ll— it used to be a sky­
scraper in 19 08 ).
9. Cities Service (S h !)
10.
City Bank— Farmers Trust (No,
we’re wrong.)

P

The minimum capital requirements will
further tend to equalize and un ify the
banking system. It is logical to assume
that this is but a transitory stage and
that eventually branch banking will be
legalized throughout the country; the
trend seems to indicate that it will be
state-wide branch banking.
This, in itself, will chang'e completely
the public relations problem o f our banks,
it will further change the methods o f
developing new business. It will reduce
competition between large banks and
small banks and place competition more
upon an equal basis.
W e , as bank advertisers and business
promotion men, are facing a future full
o f interest and with great possibilities.
The public attitude toward banks will be
a large factor in the future trend o f bank­
ing. In m y own judgment, the good will
which a bank enjoys in its own commu­
nity, coupled with the personal service
offered and rendered by the contact peo­
ple, will be the determining factor in
building new business in the future.
Building good will is not entirely a public
relations job, it is decidedly a manage­
ment and personnel problem as well.
W hether or not we will be able to
measure up to our responsibilities and
our opportunities is a question that fu ­
ture generations will have to answer.
The opportunity is before us.

The Fruit o f M an y Years of

C O N T IN U O U S CAPABLE
MANAGEMENT
“ If every policyholder had demanded the maximum
cash loan value of his policy on December 31st last, the

THE G L A S S BILL— ITS
E FF E C T UPON N EW
BUSINESS

Company’s cash and bonds alone, sold at their market
value as of that date, would have come within $391,531 of
meeting these demands.

(Continued from page 11)
own judgment, personal service will play
a more important part in the develop­
ment: o f business in the future than it has
ever done in the past. The depositors,
who have put their savings into a large
bank because o f its reputed strength, m ay
now seek out smaller banks where they
are acquainted with every employe from
the president to the janitor.

$18,000,000, not including $10,000,000 in policy loans.”
-— F rom the rem arks o f P residen t O. J. Arnold
at N wN L ’s recen t agen cy convention.
T h is e x c e p tio n a l fin a n cia l p o sitio n is n o t th e re su lt o f ch a n c e,
b u t is du e to m a n y y e a r s
NWNL


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

o f c o n tin u o u s

c a p a b le m a n a g e m e n t.

is u n iq u e in h a v in g a B o a r d o f D ir e c to r s c o m p o s e d o f

le a d ers in th e
d ir e c tin g

Must “ Deliver the Goods”
The large institutions which boast of
the friendly way in which their employees
treat the customers m ay be called upon
to actually deliver the “ goods” which
they have advertised for so many years.
A s I see the picture, the average sized
bank, will face the problem o f building its
business through the personal efforts o f

In addition to this cash and

bonds, the Company had other assets valued in excess of

th e

b u s in e s s

w o r ld , each

C o m p a n y ’s

a ffa irs

in d e p e n d e n t o f th e

s o le ly

in th e

in te re s ts

o th e r ,
of

its

p o lic y h o ld e r s .

No r t h w e s t e r n Na tio n a l
LIFE INSURANCE COMPANY
O. J. ARNOLD. President

S T R O N G - Minneapoüs.Miim.- L I B E R A L

®

Northwestern Hanker October Í933

28
Let us review the problems that con­
front us in a studious frame o f mind. Let
us face the future o f building new busi­
ness with a full consciousness o f the bar­
riers o f distrust that must be broken down
before the public will again be willing to
shake our hands.
Let us resolve to go
straight forward to the public with an hon­
est story o f the merchandise we have to
offer.
The government has taken the necessary
step to revamp the banking system— to
provide fo r a better, a cleaner product.
Our job is to create consumer acceptance
to the end that banking and banks may
once more enjoy the prestige that is nec­
essary for operation and growth.

THE N EW IM P O R TA N C E
O F SA V IN G
(Continued from page 13)
ing him fo r choosing The Northern Trust
Company as his depository and inviting
his attention to the convenience o f Saving-by-M ail. Enclosed is a Savings K it.
I f he does not make use of Saving-by­
mail in thirty days, a well-illustrated
follow -up permit-mail piece is sent. He
is thus initiated into the fam ily from
our staff.

A New Importance
. . . A ll o f us will be better equipped
to talk o f the future when the next few

Service to Your
Livestock Shippers
You can give increased service to the livestock shippers
in your territory if you carry an account with the Live
Stock National Bank of Sioux City because this institution
will give you better and faster service on collections than
you can secure in any other way.
Give your livestock shippers the benefit of our experience
and thus keep them as satisfied customers of your own
institution.

Live Stock National Bank
S IO U X C IT Y , IO W A

Affiliated with Northwest Bancorpor at ion

months have been placed behind us. W h a t
will be necessary and valuable in building
customer relationships then will be clear.
Maybe they will be unnecessary. But I
have a feeling that savings will assume
a new importance with the years. Legiti­
mate motives and desires will not be
legislative.
Thrift and the need for a
cash reserve will always exist— unless
human nature can be remade.
There is a problem in establishing sub­
stantial contacts with our savings de­
positors. Their relationship with us at
present is fa r too impersonal and rarely
assumes the same depth as those o f other
departments. It is clear in my mind that
a thorough job o f public relations can be
accomplished.
It will take time and a
modest investment. W hether you think
it is worth the effort can be answered
by the extent to which your institution
was ravaged in the onslaught of 1932-33.
The reiterated story o f good management
and the daily demonstration of its pres­
ence ; the reiterated story o f your insti­
tution’s traditional principles; the peri­
odic explanation o f your bank’s financial
strength and its investment policies; the
humanizing of your personnel and the
visible evidence o f your desire to estab­
lish friendly, personal relationships with
your savings customers should forearm
you against wholesale future unfavorable
reactions.
There is a new importance in savings—
the importance o f an improved customer
relation. It demands our close attention
and earnest study. It is a problem which
you must contemplate more as an insur­
ance against unfavorable reaction, less
as defensive selling.

Invite A . B. A .
The American Bankers Association has
received invitations for two years ahead
from cities desirous o f acting as host to
this annual gathering.
A n invitation was received from W ash­
ington, D. C., fo r the 1934 convention,
and another from New Orleans, fo r 1935.
The president and executive manager o f
the Association were authorized to take,
at the proper time, such steps as they
deem are in the interest o f the Association
with respect to these invitations.

“ T H E B A N K A T T H E Y A R D S ’’
OFFICERS
A. G. Sam, President
C. L. Fredricksen, Vice President
W . G. Nelson, Asst. Cashier

Offer City Bonds
M. A. Wilson, Cashier
W . C. Schenk, Asst. Cashier

Jackley-Wiedman & Company with the
Central National Bank & Trust Company,
D’es Moines, are offering $54,000 City of
Des Moines 5 per cent Funding Bonds,
1936 to 1942, prices ranging from 4.30 to
4.50 basis. This is a part of an issue o f
$193,000.00 These bonds are offered for
delivery October 10th.
Those only can thoroughly feel the
meaning o f death who know what is per­
fect love.— George Eliot.

Northwestern hanker October 1933


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

29
in Chicago, notified the headquarters office.
Mr. Starring also was retained on the
board o f control o f the secretaries section.

South D ako ta
Bank N ew s

Reduce Counter Cash

Officers South Dakota Bankers
Association
Pr es id en t....................... E. R. Heaton
Yankton
Vic e P res id ent ............ L. M. Larsen
Wessington Springs
E. R. H E A T O N
President

Executive Ma na ge r. Geo. A. Starring
Huron

GE OR GE A. S T A R R I N G
Executive Manager

whom they know.
Strangers must iden­
tify themselves by using a telephone simi­
lar to those in use in the vestibule o f
D.
A . McCullough, state superintendentapartment houses.
o f banks and chairman o f the democratic
party in South Dakota, was found dead in
A . B. A . Conventionites
his automobile in Pierre the evening of
September 19th.
H is death is believed
The following were delegates from
to have been caused by cerebral hemor­
South Dakota to the American Bankers
rhage.
Association convention in Chicago:
R. D. Chapman found Mr. McCullough
C. E . Barkl, president, Farmers & Mer­
in his auto which was parked on a resi­
chants Bank, H u ron ; E. C. Beebe, direc­
dential street.
Chapman said he was
tor, Bank o f Kimball, K im b a ll; M . Plinn
passing the car when he heard a noise.
Beebe, chairman o f board, Bank o f Tim ­
Upon investigation he found McCullough
ber Lake, Timber Lake; T. M. Brisbine,
in the back seat, evidently dead.
cashier, Woonsocket State Bank, W o on ­
Mr. McCullough, who was 71 years of
socket; Arthur Cahalan and wife, presi­
age, had been prominent in democratic
dent, First National Bank, M iller; China
circles fo r many years. H e first came to
R. Clarke, vice president, Security Nation­
Pierre as rural credit commissioner in
al Bank & Trust Co., Sioux F a lls; R. E.
1927, a position he held until July, 1931.
Driscoll, vice president, First National
H e was the democratic nominee for gov­
Bank, Lead; E. R. Heaton, president,
ernor in 1930, being defeated by former
South Dakota Bankers Association and
Governor W arren Green. H e headed the
First Dakota National Bank & Trust Co.,
party in its 1932 landslide victory and was
Yankton; W . H . Jarmuth, president, First
appointed superintendent o f banks by
National Bank and Trust Co., Verm illion;
Governor Tom Berry.
Harmon Kopperud, cashier, Community
The banking superintendent formerly
State Bank, Lake Preston; J. M. Lloyd,
lived at Howard and Sioux Palls where
vice president, American State Bank,
he was engaged in the banking business.
Yankton; L. T. Morris, president, First
Mr. McCullough’s death is the second
Citizens National Bank, W atertow n; A . R.
among democratic officials within the past
Olson, vice president, First National
month.
L. E . Corey, former state tax
Bank, Peresford; Oscar A . Olson and
director, died suddenly a few weeks ago
wife, cashier, Bank of Timber Lake, Tim­
in Yankton.
ber Lake; Robert Peterson, vice president.

D. A . McCullough
Dies in Pierre

Bandit Trap
The Farmers State Bank o f Kaylor,
which was raided by bank bandits last
spring, when the son of the cashier was
shot, lias installed a bandit trap. A bandit
now seeking to hold up the bank could be
caught and held. The moment he stepped
into the vestibule an iron door would lock
behind him and another iron barred door
would bar his entrance to the bank.
The vestibule of the bank is converted
into a trap with iron bars on all sides and
the door is equipped with electric locks
controlled by push buttons located in the
interior o f the bank. The inner door of
the vestibule is always locked except as
opened by the bankers to admit people


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Federal Reserve Bank of St. Louis

Security National Bank, V ib org; L. A .
Pier, president, Belvidere State Bank,
Belvidere; Geo. A . Starring, wife, son and
daughter, secretary, South Dakota Bank­
ers Association, H uron; F . R. Strain,
deputy superintendent o f banks, State of
South Dakota, Pierre; J. C. Vandagrift,
president, Union Savings Bank, Sioux
Falls.

More than 80 per cent of South Dakota
hanks which are not covered by blanket
robbery insurance or which do not have
protective devices approved by the under­
writers, have signed an agreement with
the South Dakota Bankers Association
that they will reduce their exposure of
cash on the counters 85 per cent. These
banks have been supplied with a warning
card which requests customers of the bank
not to expect too quick service for a re­
quest for any unusual amount o f cash.
These banks are keeping most of their
cash and securities with their city corre­
spondents or with the Federal Reserve
Bank and a large part o f the balance is
kept under time lock all day during bank­
ing hours.
This agreement is in line with new re­
strictions imposed by the insurance com­
panies which provide that they will not
pay losses incurred in a holdup beyond a
15 per cent exposure o f cash unless the
banks are equipped with tear gas or bandit
barrier or unless the cash is kept under
time lock and when time locks are not
operating the banks must have two armed
guards at open doors or keep the doors
locked.
This will be a great inconvenience to
the public at times but the banks are
obliged to comply with the regulations.
The losses from holdups this' year should
decrease anywhere from 50 to 75 per cent
in South Dakota.

New Superintendent
Frank R. Strain of Fort Pierre has been
appointed by Governor Tom Berry as
state banking superintendent, to succeed
the late D. A . McCullough o f Sioux Falls.
Mr. Strain has been deputy superinten­
dent.

Ruling On Claims

The South Dakota Supreme Court held
recently that reorganization o f closed
state banks does not relieve stockholders
o f liability to creditors who do not con­
sent to waive their claims.
In a case appealed from Yankton coun­
ty circuit court, the high court upheld a
judgment for 0 . 1. Sneve, deposit creditor
of the Citizens State Bank o f Irene, who
sued A . H . Hagen and C. M . Peterson,
Starring Honored
stockholders.
W hen the bank was reorganized with
George A . Starring, executive manager
approval o f the required 80 per cent of
o f the South Dakota Bankers Association,
the creditors, who agreed to w7aive 70 per
was elected first vice president of the State
cent o f their claims, Sneve protested and
Secretaries Section of the American Bank­
refused to waive his claims. The circuit
ers Association at Chicago.
E.
R. Heaton, Yankton, president o f thecourt awarded him judgments totaling
$3,360 against the two stockholders.
South Dakota Association, who also was

Northwestern Banker October 1933

30
Hagen, and Peterson claimed that by
purchasing stock in the new bank they
were freed from liability to Sneve, but the
Supreme Court said :
“ W hile it may be laudable to reorganize
closed banks and put them on a solvent
basis, vet the framers o f our laws never
intended that that should be accomplished
at the expense o f the non-consenting cred­
itor and thus deprive him of participating
in the funds to be derived from stock­
holders’ liability.”

members of the Sioux Falls Chapter o f the
American Institute of Banking when they
met at the community house to join the
national commencement exercises.
Pre-standard certificates were awarded
to Fred Anderson, R. A . Armstrong, Ben
F.

Borgers,

Orson

N.

Geegh,

A n address by Newton D. Baker, former
secretary o f war, was heard recently by

T.

Charlotte Mead, Deodotta Moen, Christina

Unrestricted
The Farmers Security Bank o f M aywood, which has been operating- on a re­
stricted basis since the bank holiday in
March, was placed on the unrestricted list
recently, deposits being made available
100 per cent.

Mueller, G. Oliver Nordbv, W . E . Perrenoud,

R.

Raymond

Phillips,

Sprague, and John T. Torsev.

Add resses A . I. B.

Gene

Hobbs, Alice M . Keavy, Holla L. Larson,

N EBRA SKA N EW S

A.

M.

Four o f

the members had already received their
certificates. These are Oliver Bray, Arthur
W inter, John Loberg, and Adolph Lodmell.

Cooperative Bank
Preparations fo r the opening o f a bank
for cooperatives in the Omaha Land Bank
district, are being made by W . J. Hart,
economist o f the grain division, farm
credit administration.
The bank for cooperatives will be one
of four units which will serve farmers o f
this district when the farm credit struc­
ture is recognized sometime between now
and January 1st. Its function will be to
furnish funds fo r cooperative associations
of grain and cattle men.

HE M EA SU R E

OF V A LU E

Mr. Hart, who has been working pri­
vately in this district, has now taken an
office in the Federal Land Bank building,
and will continue his work there.

of a C IT Y C O R R E S P O N D E D
is its ability and desire to serve.
The facilities of this bank are com­
plete for the prompt handling of
any business.
W e would like to prove both
our a b ility and desire to serve
you in Sioux City.

Pioneer Dies
E. A . W iltsie, 75, pioneer Thurston
county banker, died last month from heart
trouble after several weeks’ illness.
He
was president o f the First National Bank
o f Pender, with which lie had been con­
nected since 1889. He was a leading re­
publican o f Thurston county.

Stephens Picnic
About 200 guests, including children o f
the Masonic-Eastern Star home, officers of
the Nebraska Grand Lodge o f Masons, and
employes and their families of the
Stephens National Bank, Nebraska State
Building and Loan Association, Ham ­
mond-Stephens Company and Fremont
State Company were present for the pic­
nic and outing held at the Cottonwoods,
summer home o f Dan V . Stephens. The
members o f the group were the guests o f
the Stephens National Bank.

Consolidate

F

IRST NATIONAL B A N I/
IN S I O U X

A . S. Hanford, President

CITY
Frederick R. Jones, V i c e Pres.

Fritz Fritzson, Cashier

Northwestern Banker October 1933


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

The two Fairmont banks, Farmers State
Bank and Bank o f Fairmont, have consol­
idated as the Farmers State Bank, capital
stock $25,000, surplus $5,000, undivided
profits $2,000. The officers are : President,
Francis F. P n tlitz; vice president, Leroy
Stines; cashier, Charles Tous; directors,
Shelley Stines, Francis F . Putlitz, Leroy
Stines and Charles Tous, all o f Fairmont,
and Earl H . W ilkins o f Geneva. Shelley
Stines is chairman o f the board. The old
quarters of the Farmers State Bank are
used.

31

Nebraska
Bank News
Officers Nebraska Bankers
Association

R. H. B A R B E R
President

P res id ent ........................ R. H. Barber
Paxton
Chairman Executive C o un c il..........
..................................H. A. Schneider
Plattsmouth
T rea su rer ................... C. F. Brinkman
Omaha
Secretary................... Wm, B. Hughes
Omaha

WM. B. H U G H E S
Secretary

Convention Announcement
ROM Billy Hughes, able secretary of
the Nebraska Bankers Association,
comes the word that great things are in
store fo r those who attend the convention
in Omaha November 15th and 16th. A l­
ready speakers of national reputation have
been obtained, who will discuss current
topics as related to banking. In a recent
bulletin, Mr. Hughes writes as follow s:
“ W e are now in position to make an
announcement about speakers who have
been secured fo r our meeting.
“ In our circular letter of September
11th about the American Bankers Asso­
ciation convention we announced that Dr.
Harold Stonier, who made the very finest
address at Chicago, will be on our pro­
gram. H e is educational director o f the
American Institute o f Banking, and is an
accomplished speaker. W e know that all
Nebraska bankers will enjoy hearing him.
“ Another speaker whose name will un­
doubtedly arouse great interest is Pro­
fessor Raymond Moley, until recently
Assistant Secretary o f State, and now
associated with Vincent Astor in the pub­
lication o f a political weekly.
“ W e have secured the help of Russell A .
Alg-ire to cover the perplexing subject of
robbery losses, insurance against same,
premium rates fo r the coverage, and re­
quirements as to counter exposure. This
is a timely subject, and Mr. Algire’s posi­
tion as vice president o f the National
Surety Corporation in charge o f this part
o f its business, enables him to speak with
authority. W e are sure that this feature
o f our program will be interesting and
instructive.
“ W e always like to have at least one
Nebraska banker speaker on our program,
and this year A . B. W ood, cashier of the
State Bank o f Bartley, has consented to
take a place on our program.
H e is
chairman o f the special committee on ad­
mission of non-members o f the Federal
Reserve to the guarantee plan.
“ W e have been in correspondence with
Senator George W . Norris, and if he has
not been called to Washington by the time
o f our meeting, he will appear on our
program.

F


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Federal Reserve Bank of St. Louis

“ W e have hopes of inducing Governor
George H . Hamilton o f the Federal Re­
serve Bank o f Kansas City to be with us
to address our members. W e feel that,
in view of the developments that are to
take place in the banking business within
the next few months, this is an especially
appropriate time fo r a message from
Governor Hamilton.
“ Douglas Malloch o f Chicago, an experi­
enced
and
accomplished
after-dinner
speaker, has promised to be with us for
the evening session. He is a humorist and
philosopher of known ability and we feel
very sure that he will please our members.
“ W e learn that there is a special rate o f
fare and a third in effect for the A k -S arBen Stock Show, and that there is no
necessity, therefore, o f a special rate for
our convention. The Stock Show rate is
what is known as an “open” rate. A n y ­
one and everyone gets the benefit of it and
no certificate is necessary.”

A . B. A . Conventionites

N o rfo lk ; Don Easterday, First National
Bank, Lincoln; Phil R. Easterday, execu­
tive vice president, First National Bank,
Lincoln; Ernest Hanson and wife, cashier,
First National Bank, W a h oo ; Mrs. Nellie
Hogrefe, secretary to E . H . Luikart, Lin­
coln; W m . B. Hughes, secretary, Nebras­
ka Bankers Association, Omaha; T. A .
James and wife, president, First National
Bank, Stromsburg; Arthur Jensen and
wife, vice president, Nebraska National
Bank, Minden; Alvin E. Johnson, vice
president, Live Stock National Bank,
Omaha; Rollie W . Ley, president, State
National Bank, W a y n e ; E. H . Luikart,
Superintendent of Banks of the State of
Nebraska, Lincoln; C. C. Neumann, cash­
ier, Farmers & Merchants National Bank,
Oakland; H . W . Renken, and wife, assist­
ant cashier, Bank of Talmage, Talm age;
0 . A . Riley, vice president, the Hastings
National Bank, H astings; J. D. Stocker
and wife, cashier, Otoe County National
Bank, Nebraska C ity; Earl Sutherland,
president, Security National Bank o f
Lauren, Lauren; M . M . Taylor, vice presi­
dent, Central National Bank, Columbia;
A . Thuman and wife, president, State
Bank, Trenton; Edwin N. V an Horne and
wife, president, the Continental National
Bank, Lincoln; Samuel C. W augh, execu­
tive vice president, the First Trust Com­
pany, Lincoln; H . J. W ragge and wife,
cashier, First National Bank, Tecumseh.

Committee Head
Lucile Thornton, employe of the Fed­
eral Reserve Bank branch o f Omaha, has
been appointed chairman of the women’s
committee o f the Omaha chapter, Am er­
ican Institute of Banking, fo r 1933-34.

Birthday

The following were delegates from N e­
September 18th marked the seventybraska to the American Bankers Associa­
sixth anniversary of the establishment o f
tion convention in Chicago :
the Merchants National Bank, o f Nebraska
Edw. A . Becker and wife, cashier, Con­
City, an institution whose history was told
tinental NationalBank, Lincoln; Fred S.
in complete detail last year when the
Berry,
director, State
National Bank,
“ diamond anniversary” was observed.
W a yn e ; J. R. Cain, Jr., vice president,
Starting in the midst o f a national
Omaha
National Bank,
Omaha; J. J.
panic, in one o f the outposts of civilization
Delay,
president,
Delay NationalBank,
on this continent, Merchants National has
gone through a half dozen depressions
with colors flying at the masthead.
Merchants National is the oldest bank
in Nebraska. Observers o f banking will
unanimously attest that it is one of the
strongest.

1933

CONVENTION
will be held at

OMAHA
W E D N E S D A Y and T H U R S D A Y
November 15th and 16tli
Headquarters— Fontenelle Hotel

Consolidate
Transfer o f the duties of the Land Bank
Commissioner’s Agent and his force to the
Federal Land Bank of Omaha has been
completed, according to J. J. K lim a, sec­
retary-treasurer of the Milligan National
Farm Loan Association.
Bert W addell former agent of the land

Northwestern Banker October 1933

32
bank commissioner in this district now
becomes a vice president o f the Federal
Land Bank. Mr. W addell will also be a
member of the loan committee.
Under the consolidated plan both Fed­
eral Land Bank and Commissioner’s loan
applications will be handled by the bank.
A joint application has been adopted for
both loans.

Takes Over Bank
In conformity with the banking- policy
now prevalent over the entire country,
suggested by the expediency of consolidat­
ing’ banks, not alone to permit of adequate
resources and capital structures but there­
by to reduce overhead on account of wan­
ing profits, a policy involving liquidations,
consolidations and mergers of banks, the
First National Bank o f Grand Island has
announced acquisition o f the National
Bank of Doniphan, one of Nebraska’s
oldest established country banks and
which recently fully met the government’s
requirements in converting from a state to
a national institution.
C. M . Carlson, cashier, and for years
the executive head o f the D'oniphan bank,
and with previous banking experience in
central Nebraska, comes to the First N a­
tional, as does Miss Bess Gideon, assistant
cashier, o f the Doniphan bank.

Regional Meeting
A meeting o f the Fourth Regional Clear­
ing House Association, composed o f bank­
ers from Nemaha, Richardson, Johnson
and Pawnee counties met last month at
Auburn for a banquet and business meet­
ing. Forty-six members o f the association
were present.
A fter the dinner there was a speaking
program and a general discussion o f prob­
- V « ------------r x k

r

lems now confronting the bankers.
It
was a very interesting as well as profitable
session. Speakers included George Holmes,
president o f the First National Bank of
Lincoln; W illiam B. Hughes, Omaha,
secretary o f the Nebraska Bankers Asso­
ciation; George W . W oods, Lincoln, State
Bank Commissioner; Fred L. Liles o f the
National Security Corporation and Cullen
W right o f Scottsbluff.

Reorganized
The First State Bank at Hordville, Ne­
braska having been operating under re­
strictions since the banking holiday last
March, was reopened on September 2nd
after having completed a reorganization
that places the bank in a sound and liquid
condition that meets the approval of the
Banking Department.
The bank will continue under the man­
agement of R. C. Gustafson as president;
E . W . Hahn as vice president and W . L.
Kupke, assistant cashier. The stockhold­
ers are G. W . Randahl, Emma Bengston,
W . L. Kupke, E. W . Hahn, S. I. Benson,
Lars C. Larsen, John Jones, Albert John­
son, L. P. Jones, John W . Benson, C. C.
Rodine, M ary C. Erickson and R. C.
Gustafson.

Refuse Warrants
Omaha banks will refuse to finance
Douglas county during the next year by
general acceptance o f county warrants,
it Avas reported.
The banks last year refused to buy
county warrants, declaring that the county
must balance its budget to obtain any
money.
The banks, through the Clearing House
Association, of which all national banks
are members, had been asked to take about
■x x ----------- x

x iC

k

:

$1,200,000 in county warrants during the
year up to next August. The full amount,
it was said, would not be out at any one
time, but bankers belie\7ed from six hun­
dred to nine hundred might be floated at
once.
A t present the county has about
150 thousand in warrants outstanding.
The bankers’ probable refusal, it was
said, will be to some extent based on public
policy. I f the banks bought all warrants
issued, it was said, financing Avould be so
easy as to lead to extravagant spending.

Named Appraiser
Carl Jones o f Fremont, has been named
appraiser for the Federal Land Bank at
Omaha, he Avas informed from W ashing­
ton.
Jones was one of three appraisers ap­
pointed from the Fremont district.

Head in Omaha
W alter W . Head, former Omaha banker

Avho has been elected president o f the
General American Life Insurance Com­
pany of St. Louis after purchase o f assets
o f the Missouri State Life, Avas in Omaha
recently fo r a monthly directors’ meeting
of the H inky-D inky Stores Corporation.
Mr. Head is chairman o f the board of
the H inky-D inky organization.

Making Loans
The Federal Land Bank gets as many
applications for loans in 10 days now as it
did during the Avhole o f 1932, President
D. P. Hogan said recently. Applications
are coming in at the rate of $1,850,000,
daily, compared with $18,902,000 for all
of 1932.
I f the rate keeps up, 1933’s
applications Avill pass the half billion
mark.
The bank once had eight appraisers;
now it has 247.
The bank did nearly one-third o f the
total business done by Fedei’al Land
Banks in the first six months of 1933.

Deposit Hearing

AK - SAR - BEN
LIVE STOCK SHOW - HORSE SHOW - RODEO
OM AHA - NOVEMBER 11 to 17th
® • ®

LIVE STOCK NATIONAL BANK
O M
TH IS

Pt~rrzx>c

zxx:

BANK

HAS

NO

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Northwestern Banker October 1933

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

A H

A

A F F IL IA T E D
XX -

C O M P A N IE S

- x xr - z z ix x— =

x tc

»J

State Banking Superintendent Luikart
is trying to Avin the right of Nebraska
banks to participation in the national de­
posit guaranty law Avithout further exam­
ination.
Mr. Luikart Avas named at a recent Chi­
cago conference o f bank supervisors to
represent the tenth federal reserve district
at a Washington conference with federal
officials.
The state banking officials
wanted the government to accept state
examinations for qualifying banks for
federal reserve membership AA’hich is nec­
essary to come under the deposit guaranty
plan.

More Nebraska News
Page 30

33

Minnesota
Bank News
Officers Minnesota Bankers
Association

W IL L IA M DU N CAN , Jr.
President

P resid en t................. W illiam Duncan, Jr.
Mankato
V ice P resid en t................. D. J. Fouquette
St. Cloud
T r e a s u r e r ............................ Oluf Gandrud
Benson
S ecreta ry............................... George Susens
Minneapolis

G E O R G E SUSENS
Secretary

Independent Bankers
Meet in St. Paul

of all banks to the insurance fund, with
the banks expected to pass this added cost
on to the borrowers.

Addressing’ the annual convention o f the
Independent Bankers Association at the
Rvan Hotel, St. Paul, Elmer A . Benson,
State Banking1 Commissioner, attacked
branch banking “ as calculated to central­
ize banking wealth and banking credit,”
and urged independent bankers to oppose
its development.

H arry Lee o f Long Prairie was elected
president o f the association at the final
business meeting. H e was president also
in 1930 and 1931. Other officers elected
are: T. F . Spricter o f Newport, vice pres­
ident; W . W . Churchill o f Rochester,
treasurer; Theodore Aune o f Glenwood,
A . P. Stoll o f Pierz, E. 0 . Habberstad of
Blooming Prairie, A . B. Larson of Fari­
bault, Olaf Gandrud of Benson and M . L.
Erickson o f Lake City, new members o f
the executive council.
The council will
appoint a secretary.

Two hundred bankers from Minnesota
and neighboring states were in attendance
at the one-day convention which concludes
with a dinner at which Governor Floyd
B. Olson was the principal speaker. The
governor discussed “ The Changing Trend
in Banking.”
Theodore Aune o f Glenwood was in charge as president. Other
speakers were Charles W . Sterling, St.
Paul attorney, and Otto Bremer, new head
o f the Home Loan Bank.
Mr. Benson in his address said “ the in­
surance feature o f the 1933 bank act is
something the American people demand,”
but he criticized features of the new law
requiring state banks to join the federel
reserve system. He urged that an effort be
made at the coming congressional session
to obtain amendments to the law “ that will
prevent centralized banking control.”
Creation o f a state deposit insurance
system, with the state government as the
guarantor, was suggested by Governor
Olson as a way to save several hundred
state-chartered banks assertedly threatened
with extinction under the Glass-Steagall
bill.
The plan would provide for separation
o f savings and commercial accounts into
two distinct departments, with time de­
posit funds and demand deposit funds
parted. Types of securities on which loans
could be made would be limited.
There
would be created a state deposit insurance
corporation similar to the present federal
insurance corporation, but with two out­
standing differences. In the first, the state
itself would underwrite the insurance, re­
serving the right to collect from solvent
banks all money expended on insolvent
banks.
In the second, assessments on
banks would take the form o f diversion of
an adequate portion of the interest income


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Federal Reserve Bank of St. Louis

A . B. A . Conventionites
The following’ were delegates from
Minnesota to the American Bankers Asso­
ciation convention in Chicago :
L. D. Allen and wife, vice president,
W inona National & Savings Bank, W i ­
nona; R. S. Banfield, vice president, First
National Bank, A u stin; John W . Barton
and wife, vice president-manager, R. A .
C. C. Regional Agricultural Credit Cor­
poration, Minneapolis; V . A . Batzner and
wife, vice president and cashier, National
Citizens Bank, M ankato; P. D. Beaulieu
and wife, vice president, Austin State
Bank, A ustin; H . W . Bless, director, Peo­
ples State Bank, Welles ; W . E. Brockman,
Northwestern National Bank, Minneapo­
lis; D. F. Case and wife, president, Secur­
ity State Bank, Cannon F a lls; J. R. Chap­
pell and wife, vice president, Merchants
Bank, W in o n a ; C. F. Dabelstein and wife
and two daughters, president, Olmsted
County Bank & Trust Co., Rochester; J. R.
D eW itt and wife, cashier, First State Bank
o f Shevlin, Shevlin; W illiam Duncan Jr.,
wife and daughter, vice president, First
National Bank o f Mankato, also president,
Minnesota Bankers Association, Mankato ;
W illiam B. Geery, governor, Federal Re­
serve Bank o f Minneapolis, Minnesota ;
Paul S. Gillespie, vice president, American
National Bank, Little F a lls; Herbert H allenberg and son Herbert .Jr., chief exam­
iner, Northwest Bank Corporation, Minne­
apolis; C. E . Johnson and wife, vice pres­
ident, Em pire National Bank and Trust

Co., St. P aul; Evan M. Johnson, Assistant
comptroller, First National Bank & Trust
Co., Minneapolis; W in. N. Johnson, vice
president, Northwestern National Bank,
Minneapolis ; Cecil L. Keith, cashier, M id­
land National Bank & Trust Co., Minne­
apolis; Henry S. Kingman, treasurer,
Farmers & Mechanics Savings Bank,
Minneapolis; A . B. Lathrop, vice presi­
dent, First National Bank, St. P au l; W . A .
Mahl and wife, vice president, The First
National Bank, W in o n a ; Edgar L. M att­
son, President, Midland National Bank &
Trust Company, Minneapolis; M. A . Nye
and wife, director, The First National
Bank, Farm ington; 0 . H . Odin, vice pres­
ident, Marquette National Bank, Minne­
apolis; B. N. Onsgard, cashier, Onsgard
State Bank, Spring G rove; R. M . Peterson
and wife, vice president, State Bank of
Cokato; B. Murray Peyton, president,
Minnesota National Bank, Duluth; H . H .
Peyton, president, Pioneer National Bank,
D uluth; George H . Pi’ince, chairman, First
National Bank o f St. Paul, St. P au l; H . C.
Robertson and wife, vice president, First
National Bank, Stillwater; Victor F.
Rotering, vice president, First National
Bank & Trust Co., Minneapolis; E. E.
Shepard, vice president and trust officer,
First National Bank, W in o n a ; W m . J.
Stevenson, vice president, First National
Bank & Trust Co., Minneapolis; George
Susens, wife and son, Secretary, Minne­
sota Bankers Association, Minneapolis;
A . W . Swanson, wife and two sons and
niece, cashier, First National Bank, Can­
non F a lls; J. Cameron Thomson, and wife,
president and general manager of North­
west Bancorporation, also vice president,
Northwestern National Bank, Minneapo­
lis; M. E . Uggen, cashier, Peoples State
Bank, W e lls; Joseph S. Ulland, wife and
two daughters, president, Fergus Falls
National Bank, Fergus F a lls; Charles 0 .
Vangen, assistant cashier, First National
Bank, Albert Lea; A . J. Veigel and wife,
President, University State Bank, Minne­
apolis; Lyman E . Wakefield, president,
First National Bank & Trust Co., Minne­
apolis; A . McC. Washburn, vice president
and general counsel, First National Bank,
Minneapolis; G. A . W hitman and wife,
president, First National Bank, Eveleth.

To Albert Lea
William A . Gray o f Lincoln, Neb., took
up his work as cashier of the First N a­
tional Bank o f Albert Lea recently. He
succeeds Frank Reese, Sr.
The First National Bank of Albert Lea
is affiliated with the Northwest Bancor­
poration.

Clearing House
Representing Chippewa, Yellow Medi­
cine, Swift counties and part o f Renville
county, 45 bankers met in Montevideo for

Northwestern Banker October 1933

34

X o r Gloom
of
N igh t
Above

the

fa c a d e

of

the

Post

Office building in New York there
is engraved this inscription:
“ Neither rain nor snow nor heat nor
gloom of night stays these couriers

the purpose o f forming’ an inter-county or
regional clearing house.
George Susens, secretary of the Minne­
sota Bankers Association, was present and
gave an enlightening talk on the future of
banking under the Glass-Steagall Act.
A.
P. Heineman, a representative o f the
Federal Reserve Bank, discussed the new
federal rules under the Glass-Steagall Act.
A committee comprising two men from
each county will meet in Montevideo to
form plans fo r a permanent organization.

On Committee
Appointment o f Lyman E . Wakefield,
president of the First National Bank and
Trust Company, Minneapolis, as member
o f a research committee o f the Reserve
City Bankers Association to study major
problems confronting banks was an­
nounced by John II. Hogan o f Chicago,
president o f the association. Banks in the
62 reserve and central reserve cities hold
membership in the association and repre­
sent 38 per cent of the deposits and 42
per cent o f the capital o f all American
banks.

from the swift completion o f their

A . I. B. in St. Paul

appointed rounds.”
The services of this hank are based
upon the outstanding efficiency of
the U n i t e d

States

Post

Office

Department.
Our system of continuous opera­
tion permits of no avoidable delay
in the conversion of collection items
into available cash.

P H IL A D E L P H IA
N A TIO N AL B A N K
ORGANIZED 1803

PHILADELPHIA, PA.

Members o f the St. Paul Chapter, Am er­
ican Institute of Banking should continue
to pursue the educational advantages
afforded through membership in the organ­
ization.
They were so advised by Albert S.
Puelicher, Milwaukee, president o f the
American Institute o f Banking.
Mr.
Puelicher was principal speaker at the fall
dinner of the chapter. Approximately 450
persons attended. Alfred Holtan, St. Paul
Chapter president, presided.
The debate team o f St. Paul Chapter
presented to the chapter the loving* cup
won by the team at the national convention
o f the American Institute of Banking in
Chicago in June.
Miss D'orothy Goth,
made the presentation. The cup was ac­
cepted in the behalf of the chapter by
A . B. Lathrop, vice president, First Na­
tional Bank.
T H E C IT IZ E N S State Bank, Fairfax,
Minn., have recently changed the fixtures
around and are in the process o f install­
ing bullet-proof glass.

R. M . J O N E S , assistant cashier, First
State Bank, Okabena, thinks someone
should sponsor a uniform size check. He
says at present we have too many sizes
which only makes it hard to handle them.

C A P IT A L and SURPLUS_________________$30,000,000


Northwestern Banker October 1933
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Federal Reserve Bank of St. Louis

A friendship formed in childhood, in
youth,— by happy accident at any stage
o f rising manhood,— becomes the genius
that rules the rest of life.— A . Bronson

A lcott.

35

North Dakota Bank News
Officers North Dakota Bankers Association
P resid en t....................
Grand Forks
V ice P r e s id e n t ........
Oakes
T rea su rer...................

.............. H . D. Crosby
Fargo

S ecreta ry...................
D. R. G R E E N

Discuss New
Bank Rulings
Rulings which will prohibit member
banks of the Federal Reserve System from
paying more than 3 per cent interest on
savings deposits after November 1st and
other new rules and regulations were dis­
cussed at a conference of bankers o f south­
eastern North Dakota in Fargo last month.
C. C. W attam , secretary of the North
Dakota Bankers Association, was chairman
and speakers included John Peyton, chair­
man o f the board o f directors, federal re­
serve bank o f Minneapolis, and H . L.
W ilson, former Fargo banker, now repre­
sentative of Cameron & Co., Chicago bond
service house.
Under the new “ regulation Q” o f the
federal reserve board, W attam explained,
a savings deposit is defined as:
“ A deposit which consists o f funds
accumulated for bona fide thrift purposes.”
In addition to a maximum o f 3 per cent
which may be paid on such deposits after
November 1st, no member bank o f the fed­
eral reserve system may waive notice o f
intended withdrawal o f a saving deposit
or any part o f it, without waiving such
notice as to the same portion or percentage
of the deposit o f every other depositor
which are subject to the same requirement.
“ In other words,” W attam explained,
“ if a bank has a clause in its savings de­
posit contract which requires say 60 days’
notice on the part of the depositor before
this deposit may be withdrawn, the bank
cannot waive the 60 day clause for one
patron without granting the same privi­
lege to eveiy other depositor.
“ This undoubtedly will mean the banks
will strictly enforce the 60 day notice
rule.”
Fargo members of the federal reserve
are now paying 3 per cent on savings
deposits.

Elected President
George Laney, former resident o f Bis­
marck, has been elected president of the
First National Bank of Napoleon. Laney
had been vice president o f the bank for
the last four years, having succeeded H . C.


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Federal Reserve Bank of St. Louis

Fargo

Young o f Fargo. Fred B. Heath, who has
been cashier o f the bank fo r the last 23
years, resigned to take a position with the
First National Bank o f Mandan. W . D.
Heupel, assistant cashier o f the Napoleon
bank for the last six years, succeeds Heath
as cashier of the institution.

A . B. A . Conventionites
The following we re delegates from
North Dakota to the American Bankers
Association convention in Chicago:
F . A . Irish, Vice President, First N a­
tional Bank, F a rg o ; Gilbert Semingson
and Eda, Bank Examiner, State o f North
Dakota, Bismarck; C. O. W attam , secre­
tary, North Dakota Bankers Association,
F a rg o ; E. J. W eiser, president, First N a­
tional Bank, F a rg o; H . M . W eydahl, Vice
president, First National Bank of Killdeer,
Killdeer.

Joins Bank of
North Dakota
George M . Thompson, Jamestown, who
recently resigned as secretary o f the state
hospital for the insane, has accepted a
pasition in the Bank o f North Dakota,
according to R. M . Stangler, manager o f
the bank.
The transfer became effective on Sep­
tember 1st.

May Insure Deposits
A North Dakota state bank, under its
general powers o f carrying on the business
o f banking, may insure its deposits with
the federal deposit insurance corporation
created by the last session o f congress,
Harold D*. Shaft, assistant attorney gen­
eral, ruled in an opinion handed to Gilbert
Semingson, state bank examiner.
State banks may, Shaft continued, take
state law, invest in the stock o f the federal
deposit insurance corporation, Shaft said.
State banks may, Shaft continued, take
advantage o f the provisions o f the federal
law providing that if any state bank is
not permitted by the laws under which it
was organized to purchase stock in the
corporation, it may apply to the corpora-

tion for the admission to the benefits, and
if the application be granted it must de­
posit with the corporation an amount equal
to the amount which it would have been
required to pay on account o f a subscrip­
tion to the capital stock o f the corporation.
“ This provision is temporary only,”
Shaft added, “ and if the state law is not
amended at the next session of the legis­
lature or if it is amended and the state
bank does not within six months thereafter
subscribe for the requisite amount o f stock,
the membership is forfeited and the de­
posit returned.

To Open Soon
Early opening o f the new First National
Bank in Grand 'Forks was seen in the
recent announcement from Washington
that the Reconstruction Finance corpora­
tion had finally approved the $810,000 loan
to the old institution.
Certain technicalities have delayed ac­
tion on this loan, which is to be used in
payment o f a 50 per cent dividend on the
deposits in the old bank. Now that this
has been cleared up, only routine formal­
ities remain before the bank can open.

Banker Dies
Alva J. Field, resident of Williston since
1900 and for many years engaged in the
real estate business, died at his home re­
cently.
Mr. Field was 54 years of age, born in
Pittsfield, 111., where his father and a sister
now live. For a few years after his arrival
in Williston he taught school and then
entered the real estate business, being at
the time o f his death a partner o f F . P.
Bergman in the First Loan and Invest­
ment Co., and was for a number of years
a director of the First National Bank.

New Ruling
The Federal Trade Commission has an­
nounced a new ruling to its securities regu­
lations designed to allow an extension o f
twenty days to a registrant in which he
may amend his registration without issu­
ance o f a stop-order.
The new procedure avoid d prevent the
making o f an adverse record against a
registrant Avho the commission believes
wishes to conform to the act. Under the
new rule the commission can afford him
sufficient time to make his registration
statement conform to the act, and at the
same time prevent the sale of the securities
until the necessary amendments have been
made.
According to the new ruling, whoever is
designated in a registration statement to
receive communications regarding it from
the Federal Trade Commission is given
(1) power to amend the registration state­
ment by altering to a subsequent date the

Northwestern Banker October 1933

36
date o f the proposed offering o f the secur­

vacated on a showing to the commission

ities registered, (2 ) power to withdraw the

that the registration statement as amended

registration statement or amendment (3)

is no longer incomplete or inaccurate.

power to consent to entry of an order by

Other rules adopted by the commission

the commission, prior to the effective date

pertain to the withdrawal o f a registration

o f the registration, refusing to permit the

statement

registration statement to become effective

amendments filed pursuant to an order of

or

an

amendment

thereto,

until it has been amended in accordance

a commission, and a definition o f ‘‘distri­

with an order.

bution” as used in section 11 of the act.

A consent order entered

by the commission under this ruling is to

The new rules permit the incorporation

be without prejudice to the right o f the

by reference of exhibits filed with previous

registrant thereafter to have such order

registration statements.

S I I V C E

IS

Heads A . B. A.
Trust Division
On Monday, September 5th, Howard 0 .
Edmonds, vice president, The Northern
Trust Company, was elected president of
the Trust Division of the American Bank­
ers Association in convention at the
Stevens Hotel. Mr. Edmonds, long active
in the affairs o f the A . B. A ., served that
organization last year as chairman of the
executive committee o f the Trust Division.
Mr. Edmonds has been identified with
The Northern Trust Company since June
1, 1896.
Born in Pottsville, Pa., Mr.
Edmonds was educated in the public
schools o f Washington, D. C., receiving
his secondary schooling in law institutions
o f Washington and Chicago.
He was
admitted to the bar in Illinois.
Mr. Edmonds was secretary o f the
W o rld ’s Columbian Exposition in 1893.

HELPFULLY SERVING
MAJOR MIDDLE WEST
INDUSTRIES
New

accounts

invited

from

business firms, responsible in­
dividuals, and out-of-Chicago
banks desirous of establishing
an equitable banking relation­
ship from which satisfactory
accommodations can be
obtained

LIVE STOCK NATIONAL BAN K

H O W A R D O. E D M O N D S

A t the close o f the exposition he was asso­
ciated in the management o f the estate
o f one o f Chicago’s pioneers, joining The
Northern Trust Company organization in
1896, which fo r many years he has served
as executive vice president, Trust Depart­
ment.

OF CHICAG O

UNION STOCK YARDS

Northwestern Banker October 1933

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

Mere fam ily never made a man great.
Thought and deed, not pedigree, are the
passports to enduring fame.— Skobeleff.

A drummer in the soap line was relating
how at the beach he saw a bathing girl
being carried away by the surf.
“ O f course you plunged in and saved
her,” said a listener.
“ No, I couldn’t swim; but with quick
thought I opened my sample case, and
flung her a cake o f our famous soap.”
“ What was that fo r ? ” several asked.
“ To wash her back,” was the calm reply-

37

Iowa
Bank News
Officers Iowa Bankers
Association
P resid en t................... B . F. Kauffm an
Des Moines
V ice P resid en t........... C. R. Gossett
Sioux City
T rea su rer............................... C. S. Rye
Manly
B . F. K A U FFM A N
President

S ecreta ry...................... Frank
Des Moines

Unrestricted
The Kinross Savings Bank has been re­
leased from Senate File 111. The release
was effective September 9th.
W aivers
were taken the past few Aveeks placing
50 per cent o f the bank’s assets in the
hands o f trustees. O f the balance 15 per
cent in cash has been released. The new
waivers recently taken supersede the old
ones taken last summer and the latter have
been discarded. Forest Herr is president
o f the bank, and W illiam F . Herr is A’ice
president.

Joins Federal Reserve
State Sa\Tings Bank of Fontanelle is a
member o f the Federal Reserve System,
the local institution having received a cer­
tificate issued by the Federal Reserve
Bank o f Chicago by authority o f W . H .
W oodin, Secretary o f the United States
Treasury, effective September 11, 1933,
licensing it to perform full normal bank­
ing operations.
Operations o f the State Savings Bank
o f Fontanelle have never been restricted
in any way except for a very few days at
the beginning o f the national banking
holiday cvlien all banks Avere restricted for
the benefit o f those threatened Avith disas­
ter, and the local bank now holds certifi­
cates of approval from both state and fed­
eral authorities.

New Safe
The IoAva Trust and Savings Bank, o f
Emmetsburg, put their new safe into use
recently.
This Mosler-Corliss bank safe Aveighs
around 16,000, it is fire proof and prac­
tically burglar proof, and is equipped with
a triple time lock. There is only one other
o f the size in the state of IoAva. The cost
o f this safe, Avhen neAV, is $3,800.

A . B. A . Conventionnés
The folloAving were delegates from IoAva
to the American Bankers Association convention in Chicago :
C. J. Adam , cashier, Clayton County
State Bank, Guttenberg; Clarence J.
Adams, cashier, DyersAulle National Bank,


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

W arner

FRAN K W ARN ER
Secretary

Dyersville; W illiam Adams, president,
First National Bank, Denison; L. A .
AndreAV and Avife, president State Bank
Division, Des Moines; A. E. Ander­
son, cashier, Clay County National Bank,
Spencer; T. L. shford and Avife, presi­
dent, Boone State Bank and Trust Com­
pany, Boone; Ray BaAiley, vice presi­
dent, Jasper County Savings Bank, NeAVton ; W . W . Blaiser, president, Farmers
State Bank, J esu p; D. W . Bates, Super­
intendent Department o f Banking, Des
Moines; E. W . Branch, vice president,
First National Bank, Gladbrook; E. R.
Burkett, cashier, First National Bank,
Perry; S. E. Coquillette, \'ice president,
Merchants National Bank, Cedar Rapids;
John A . Dunlap and wife, president, K eo ­
kuk National Bank, K eokuk; E. J. Engeldinger, A’ice president, Union Story Trust
& Savings Bank, A m es; T. L. Evans,
president, Farmers Savings Bank, Bea­
m an; Geo. W . Falk and wife, cashier,
First National Bank, Oehvein; Fred J.
Figge and Avife, president, Ossian State
Bank, Ossian; Reginald B. Figge, vice
president, Ossian State Bank, O ssian;
V . O. Figge, executive vice president,
Davenport Bank & Trust Company, Dav­
enport; C. L. Fredrickson, \Tice president,
Live Stock National Bank, Sioux C ity;
Charles R. Gossett and Avife, vice presi­
dent, The Security National Bank, Sioux
C ity; B. A . Gronstal and wife, vice presi­
dent, Council Bluffs Savings Bank, Coun­
cil Bluffs; James E . Hamilton and Avife,
president,
Merchants
National
Bank,
Cedar R a p id s; John T. Hamilton II, Mer­
chants National Bank, Cedar Rapids;
J. T. Hardin, Jr., cashier, Citizens Sav­
ings Bank, E ldora; C. F. Harris, cashier,
Gladbrook State Bank, Gladbrook; Earl
A . Hoffman, A’ice president, The Toy N a­
tional Bank, Sioux C ity; Herbert L. H or­
ton, executive vice president, Iowa-Des
Moines National Bank & Trust Co., Des
M oines; J. M . Hutchinson and Avife, Trust
officer, Davenport Bank & Trust Co., Dav­
enport; Ed H uxford and Avife, president,
Cherokee State Bank, Cherokee; E. L.
Johnson, president, First National Bank,
W a ve rly; A . W . Jones, president, Sac
City State Bank, Sac C ity ; F . A . Jones
and Avife, president, Tama State Bank.
T a m a ; B. F . Kauffman, president Bank­

ers Trust Company, Des Moines; H . G.
Kramer, vice president, City National
Bank, C linton; Harold J. Kriebs, Avife
and tAA’o sons, cashier, Central State Bank
& Trust Co., Eikader; R. P. Lien, vice
president, National Bank o f Waterloo,
W aterloo; Chas. W . Logan, president,
First Trust & Savings Bank, M oville;
H . O. Lovett, cashier, Decatur County
State Bank, L eon ; Leonard R. Manley,
president, W oodbury County Savings
Bank, Sioux C ity; Win. M. McDonald and
Avife, cashier, Rodney Savings Bank, Rod­
ney; B. L. M cKee, cashier, Muscatine
Bank & Trust Co., Muscatine; Grant M cPherrin and wife, president, Central N a­
tional Bank & Trust Company, Des
Moines; J. J. Miller, cashier, Waterloo
Savings Bank, W aterloo; J. R. Miller, Jr.,
president, Commercial State Bank, Deni­
son; Donald A . Mullen and Avife, W ater­
loo; J. H . Neil and wife, vice president
and director, Tama State Bank, Tam a;
F. S. Richards, cashier, First National
Bank, M cGregor; E. T. Rorem, cashier,
Security State Bank, Radcliffe; Mrs.
Hazen I. Sawyer, Keokuk Savings Bank
& Trust Co., Keokuk; H. W . Schaler and
Avife, vice president, Citizens First N a­
tional Bank, Storm Lake; Charles A .
Smith and Avife, Rodney Savings Bank,
Rodney; Herman Staak and wife, cashier,
Davenport Bank and Trust Co., Daven­
port ; George C. SAviler, president, Bur­
lington Savings B ank; Robert W . Turner
and wife, president City National Bank,
Council B luffs; R. W . W aite and Avife,
vice president, Waterloo Savings Bank;
Frank W arner, secretary, Iowa Bankers
Association, Des Moines; Leo J. W egm an,
president, Farmers Savings Bank, Halbur; Frank C. Welch and wife, president,
Peoples Savings Bank, Cedar R apids;
F . D. William s, vice president, First Cap­
ital National Bank, IoAva C ity; J. R. W itzigman, cashier, Miles Savings Bank
M iles; H . R. Young, cashier*, American
National Bank, Arlington.

New Bank
Organization o f the new national bank
in Hampton is nearing completion. The
stockholders o f the neAV proposed bank
held a meeting- and elected directors, as
folio avs : H . E. Boehmler, Dr. Howard H .
Johnston, W . II. Bramwell, W . F. Doug­
lass, and D. D. Bramwell. Officers will be
elected by the directors Avithin a feAV days.
The neAV organization also plans to have
tAvo additional directors, making seven in
all, for the neAV bank, the tAvo not now
named to be selected later.
A t a meeting of the depositors o f the
Citizens

National

Bank

the

sentiment

seemed to be unanimous in favor o f the
reorganization

Avhich Avill result in the

establishment o f a new bank Avith clean
assets right from the start.

Northwestern Banker October 1933

38

Cashier at Onawa
A . E . Muir, o f Pisgah, has been em­
ployed as cashier in the Onawa State
Bank. W hile in the banking business for
the last fifteen years, M r. Muir has been
employed the past three years in the
Pisgah Savings Bank.

Eiect Directors
Stockholders of the Woodbury County
Savings Bank, in Sioux City, elected the
following directors at the reorganization
meeting recently.
Leonard R. Manley, M. C. Eidsmoe,
C. T. McClintock, W e ir Murphy, Otto
Bridge, C. T. H opper and P. H . Schmidt.
F ifty o f the bank’s 100 stockholders

attended the meeting. The directors will
meet to elect officers and choose a site for
the bank.

Sioux Rapids Branch
A fte r being deprived o f banking service
for over a year, Sioux Rapids is to have
a bank again, when the Central Trust
and Savings Bank o f Cherokee will open
a local branch.
Negotiations were begun last year, when
a petition signed by 100 citizens was fo r­
warded to the Cherokee bank, asking that
institution to give a connection with Sioux
Rapids.

R. F. C . Aid
Progress toward obtaining R. P . C. aid
to rehabilitate the 250 Iowa banks operat­
ing under S. F. I l l to enable the banks
to gain protection under the temporary
federal deposit guarantee fund, was re­
ported recently by D. W . Bates, state
banking superin ten dent.
Mr. Bates and Attorney General O’Con­
nor returned from Chicago, 111., where
they conferred with R. P. C. officials on
the senate file banks.
Also present at the conference were
B. P . Kauffman, president o f the Iowa
Bankers Association and member o f the
state banking board, J. M . Parsons, at­
torney fo r the Iowa Bankers Association,
and James L. Dougherty and C. J. Durr,
of the legal staff o f the Washington, D'. C,.
office o f the R, P. C.
Ira A . Moore, manager o f the Chicago
R. F . C. office and H . B. Knight of the
Iowa division attended.
Under the amendment to the R. P. C.
act, the R. P. C. may give aid to banks
whose financial structure has been im­
paired either through the purchase o f non­
assessable preferred stocks of the banks
or by the purchase o f capital notes and
debentures.

New at Garner
Plans for the organization of a new
banking institution in Garner, to be
known as the Citizens National Bank, were
started at a recent meeting in the court
house at which 100 attended.
Lynn Puller, vice president o f the Cen­
tral Banking and Trust Company o f Des
Moines, explained the details o f organiz­
ing a new institution.
Prank Senneff,
B ritt; Dr. Sam W esson and Carl O. Roe
were named fo r working out the details of
the new bank.
A
committee consisting o f Charles
Betlike, W alter Pritchard, I. C. Hastings,
W illiam Boehnke and E . P. Hanson, was
appointed to solicit shares o f stock.

Celebrate

The Omaha
National Bank

Northwestern Banker October 1933
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Mr. and Mrs. Henry M . Carpenter of
Monticello, celebrated their fiftieth wed­
ding anniversary at their home September
11th. More than 300 guests attended the
reception given in their honor during the
afternoon and evening.
A fte r serving as cashier o f the M onti­
cello State Bank for many years, M r. Car­
penter succeeded to the presidency o f that
institution in 1910, following the death of
M ajor S. S. Farwell, who had been made
president o f the bank after the death of
Capt. M . L. Carpenter. Therefore, it is
seen that Mr. Carpenter has been an active
officer o f the Monticello State Bank fo r
more than fifty-eight years.
H ave a good aim in life but don’t fo r­
get to pull the trigger.

39

Good Progress

New in Humboldt

The Iowa Falls State Bank, which
opened as a new bank M ay 24, 1933, is
making splendid progress, according to a
recent statement. Deposits are $200,000,
loans and discounts $8,200, government
bonds $40,000, municipal bonds $22,000,
warrants $4,500 and cash $138,500.

The First National Bank in Humboldt
received a telegram from the United
States Banking Department last month
that it had been granted charter No.
13766 and could open fo r business at
once. The new bank opened immediately
under the phi ns approved by the depart­
ment o f banking, and placed fifty per cent
of the deposits of the old bank that was
closed March 4th, at the disposal of the
depositors.

Unrestricted
Am id a setting of flowers contributed
by friends in Des Moines, Chicago and
Fort Madison, the Iowa State Bank, Fort
Madison, which has been operating under
Senate File 111 since the President’s order
of March 4, resumed regular banking oper­

The new National Bank in Humboldt
was organized to take over the business
o f the National Bank of Humboldt that
was closed March 4th.
New capital o f

$50,000 was subscribed and paid in, with
a surplus o f $10,000 also paid in.
The
officers of the new bank a re: C. W . Gar­
field, president; E. O. Nervig, vice presi­
dent; B. B. W atson, cashier; R. D. Leland, assistant cashier; Mary Vonderhaar
and Robert W atson, bookkeepers.
The board of directors consists of B. B.
W atson, G. P. Ruse, J. D. Berkheimer,
C. W . Garfield and G. J. Bicknell.

Cashier Resigns
Leon B. Madson resigned as cashier of
the Coulter Savings Bank recently to
accept a position as cashier o f the Citi­
zens State Bank at W yom ing. No suc-

ations last month.
Bank officials were highly pleased with
the reception given the bank on its return
to regular banking operations and T. T.
Hitch, president, declared that the bank
“ was doing an excellent business,” and he
concluded “ the bank has many friends
both in Fort Madison and abroad. W e
are entirely pleased with the situation.”

Becomes Cashier
The resignation o f Phillip G. Young
as Benton’s assistant county treasurer to
accept the cashiership o f the reorganized
Benton County State Bank at Blairstown
was announced recently.
Before his appointment as assistant
county treasurer last January, M r. Young
served two years as deputy county auditor
under Milo Harper. Prior to that time he
had been assistant cashier of the Atkins
Savings Bank.

Security Bank Opens
The Security Savings Bank opened re­
cently in Marshalltown as a reorganized
banking institution governed only by the
regular state banking laws, after a year’s
operation under the waiver plan and under
Senate File 111.
D.
W . Bates, state superintendent o f
banks, informed H . M . Vawter, former
president o f the Security bank, that the
bank’s assets had been approved 100 per
cent by the state banking department.
The release came after a sixty day cam­
paign among depositors o f the bank dur­
ing which time enough o f them signed
agreements drawn by the state banking
■department to allow the setting up a new
list o f assets.
W . O. Lane is president of the bank
under the new organization, E . Lester
W illiam s remains as a vice president (in­
active), G. B. Brown is cashier, and Esta
Conn is assistant cashier. Mr. Lane comes
from Waterloo. M r. Vawter is chairman
o f the board of directors.
The new Security bank has capital o f
$50,000 and a surplus o f $10,000 with
undivided profits o f $9,000. Total assets
o f the new bank are listed as $450,000.


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Federal Reserve Bank of St. Louis

Northwestern Banker October 1933

40
cessor to Mr. Maclson lias yet been named,
but Marvin Johansen, who has been assist­
ing Mr. Madson for the last several
months, will be in charge o f the business
o f the bank until definite action is taken
by the directors.

Unrestricted
The Kinross Savings Bank was release^
recently from restriction o f Senate File
No. i l l , under which it has been operat­
ing since the stale law went into effect
soon after the national bank holiday of
March 4tli.
The method by which the Kinross bank

secured its release was similar to the one
which is being effected by the Sigourney
banks, with depositors’ agreements.
This is the third bank in the county to
go off the restriction of the state.
The
other two are the Hayesville Savings Bank
and the White State Bank o f South E n g­
lish.

Organize
The Iowa Mortgage Bankers Associa­
tion has completed its organization with
election o f W . W . Beal o f W aterloo,
Iowa, president; John B. W adsw orth of
Council Bluffs, Iowa, vice president ; Earl

Linn o f Des Moines, secretary, and J. A .
Dougherty o f Carroll, Iowa, treasurer.

New Hours
Sioux City banks now observe a new
schedule o f banking hours including an
earlier opening and closing* time.
A . Gr. Sam, president o f the Live Stock
National Bank, announced at a meeting
o f the Sioux City N R A committee that
the new schedule has been agreed on by
members o f the Clearing House A sso ­
ciation.
Under the new schfedule the banks open
at 9 a. m. instead o f 9 :30 a. m. and close
at 2 :30 p. m. instead o f 3 p. m. Because
most o f the banking business o f the city
is conducted in the early hours o f the
day it was decided to advance the open­
ing and closing hours, Mr. Sam said.

Joins Fed

SALM O N P. CHASE
S e c r e t a r y o f th e T r e a s u r y u n d e r L I N C O L N

A BACKGROUND
o f 'Banking a n d T rust S ervice
T H E CHASE N A T IO N A L BANK

ence known to conservative banking. Its

o f tod ay is a d e v elop m en t b o th o f a

background o f long experience and the

long period o f natural growth and o f a

advantages o f its international facilities

series o f comparatively recent consoli­

have attracted the accou nts o f banks,

d a tion s. T h e m ost n ota ble o f these

bankers, business houses and individuals

were with T h e Mechanics and Metals

from all parts o f the world.

N a tion a l Bank, T h e N a tion a l Park

A s another im p orta n t phase o f its

Bank and T h e Equitable Trust C om ­

operations, the Chase conducts a Trust

pany o f N ew York. Each o f these banks

Service which at all times has justified

was an outstanding financial institution

confidence in its effective discharge o f

and each made a substantial contribu­

fiduciary resp onsibilities. Sym pathetic

tion to the service, man­

and e x p e rt attention is

agem ent, resources and
prestige o f T h e C hase
National Bank.
T od a y the Chase, as a
com m ercia l bank, offers
every facility and conveni-

Çrozvth o f
Ghase Total ‘Resources
1877
1887
1897
1907
1917
1927
1933

( Oremiztd) £
1.042,009.25
.....................
9,489.346.24
....................
36,239.476.68
.....................
105,096.072.52
....................
422,460.081.73
..................... 1.001,292,727.31
(June 3 0 ). . 1,727.182.164.14

made available in this high­
ly specialized and technical
field, through the Chase
Personal T ru st D e p a rt­
ment, to those whose affairs
are placed in its charge.

The

CHASE N A TIO N A L BANK
OF T H E C I T Y OF N E W Y O R K

Northwestern Banker October 1933


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

The Templeton Savings Bank o f Tem­
pleton, is now a member o f the Federal
Reserve System, according to an an­
nouncement made by the officers o f the
banking institution. It is believed that
Templeton is the smallest town in the
country to have a bank which holds mem­
bership in the Federal Reserve System.
It is the only state bank in Carroll county
which holds such a membership.

Not Guilty
Judge H . J. M antz has directed a ver­
dict acquitting W . J. Burke, president of
the Valley Savings Bank, M isso u ri. \ al­
ley, o f forgery.
The state charged that Burke signed
the name of M rs. E. J. Tierney o f M o­
dale, to a bank draft for $361.69 and that
payment was refused.
Judge M antz in the verdict stated that
Burke did not attempt to profit by the
signature and that a cashier’s check was
deposited in the bank.

Unrestricted
The Farmers Saving Bank at Albert
City began unrestricted operations Sep­
tember 21st. The bank has been operat­
ing under senate file No. I l l since the
national bank holiday and Albert City
business has been greatly handicapped
by the restrictions. The state department
o f banking has notified the bank that it
may return to its original basis. N . B .
Scoles, a Des Moines banker, is new
cashier o f the bank.

To Direct Insurance
Carl Trout, former deputy state bank­
ing superintendent, is to be the examiner
in Iow a for the federal bank deposit in­
surance board.
Announcement o f the appointment was
made by the board after a conference

41

with D. W . Bates, Iowa banking superin­
tendent.
M r. Trout will have an office in the
state house at Des Moines and will attend
to details o f obtaining insurance for
banks under the national deposit insur­
ance plan.
The outlook for Iowa banks, M r. Bates
says, indicates that a larger number than
previously expected will be able to take
advantage o f the program, and banks
with assets sufficient to pay their liabil­
ities will be admitted to membership.

Unrestricted
The United State Bank o f Dyersville,
lias been released from the restrictions of
Senate File 111 under which it has been
operating since the National Bankingholiday declared by President Roosevelt
on March 4th.
A s a result the bank
opened September 12th, released from all
restrictions imposed by the new bankinglaw S. F . 111.

LA R G E A TTEN D AN CE AT
A . B. A . C O N V E N T IO N
(Continued from page 7)
tion’s desire for a more rapid expansion
o f credit as an aid to the N R A .
Also
President Roosevelt
sent
a message,
which was read to the convention, in
which, after paying tribute to the bankers
for the part they have played in the de­
velopment o f the recovery program to
date, the President said in part:
“ W e still have much to accomplish in
making credit facilities adequate for the
national recovery we are bringing about.
The banks must play an important part in

making increased loans to industry and
commerce. A fte r a period of drastic liq­
uidation such as we have experienced it
requires unusual courage and judgment
to appraise security and to extend credit.
The vital importance of helping the wheels
o f industry to turn by putting savings to
gainful use must receive increasing and
immediate attention. Loans can and will
be made.
I want you to know that we
rely on your organization for its coopera­
tion in furthering the free flow of credit
so
essentia]
to
business enterprises,
whether they be large or small. Only if
this is done can employers do their full
part in the great recovery program now
under way.
Never before in its history

Solvent for 76 Years
W ith the death o f George Edward Rix
there passes from Keokuk the Rix fam ily
name intimately associated with social
and business life there continuously for
more than 75 years. The Collisson fa m ­
ily, however, are direct descendants of
the Rix fam ily.
It closes the remarkable careers of
two men, father and son, George Rix, Sr.,
and George Edward Rix, “ gentlemen of
the old school,7’ bankers and merchants,
who have been a constructive force in
Keokuk ever since it was a young boom
town in the fifties.
George Rix saw the storm coming in
the fifties. So he brought to Keokuk as
much cash and property as possible for
safe keeping in 1857. Here he founded
a private banking house, Rix, H ale & Co.,
in partnership with Oscar C. H ale, an­
other Verm ont banker who had married
his sister, Susan D. Rix. M r. and Mrs.
H ale lived in Keokuk many years until
their deaths. H e was city treasurer for
several years and treasurer o f the Des
Moines V alley Railroad.
Rix, H ale & Co. became the Keokuk
branch o f the old State Bank o f Iowa,
later the State National Bank o f Keokuk,
merged later to form the State Central
Savings Bank, under Judge W illiam Lo­
gan’s management. George Edward Rix,
a warm friend o f M r. Logan, became
cashier in 1896 and later vice president
and director until he retired from active
business in 1916. These banks therefore
have an unbroken record o f solvency for
more than 76 years.
W hen you see a man with a yard-long
face, he’s probably thinking of what hap­
pened to the money an agent once urged
him to invest in life insurance.— Robert
Quillen.


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Federal Reserve Bank of St. Louis

Throughthis door

You’ll Find Good Banking Service
and a Friendly Welcome

C entral National
and

TRUST

bank

c o m p a m y

Northwestern Banker October 1935

has this nation had greater need of cou­
rageous bankers. I am relying on them
fo r prompt realization o f the changes now
taking place in general conditions and o f
their part in the revival o f economic activ­
ities and the increased employment of
workers.
I am confident that yon will
work with me to meet the credit needs o f
industry and trade.”

clared strongly against pressure and prop­
aganda fo r an “ ultra-liberal loaning’ policy
in support o f the recovery program now
under way.”
The report stated further
that “ the objectives o f the recovery pro­
gram ju stify all the support that banks
can rightfully give, but they justify it
just so long as that support involves only
good banking and does not jeopardize the
funds o f depositors.”
President Sisson in his opening address
to the convention made a vigorous defense
o f banking, emphasizing that the banks
were no more to blame fo r the depression
than was agriculture, industry, or any
other branch o f our economic life. Also
lie expressed the thought that improve­

Policy Commission Report
The report o f the Association’s Eco­
nomic Policy Commission headed by
Leonard P. Ayres, vice president Cleveland
Trust Company, after recommending that
the Association urge the national adminis­
tration to postpone deposit insurance, de­

Mention Chicago‘s Union Stock
Yards in Banking Circles — and
you are likely to hear in the next
breath,

se Drovers Service.^

Genuine personal attention to
your live stock items

S W

D

i)

rovers
NATIONAL BANK

TRU5T& SAVINQ5 BANK

Union Stock Yards

Chicago, 111.

1933-Century of Progress Exposition in Chicago

ment to be permanent must proceed on
sound and stable lines, and he strongly
attacked the deposit insurance section of
the Glass-Steagall Act.

Resolutions
The resolutions recommended to the N a­
tional Administration that the initiation
of deposit insurance be postponed, stating
that “ it is our considered judgment that
means should be found to postpone action
in putting into effect the proposed meas­
ures fo r deposit insurance.
W e believe
that if the attempt is made to hurry
through arbitrarily strict examinations
the result will be the suspension and liqui­
dation o f some thousands o f banks which
would deprive many communities o f bank­
ing facilities and would entail new losses
and new credit deflation that would unset­
tle business and impair the prospects o f
recovery. I f on the other hand the neces­
sarily hurried examinations should be lax
and superficial many institutions would be
admitted to deposit insurance that can not
rightfully qualify fo r its privileges,”
W ith respect to the sale of preferred
stock to the R .F .C . the resolutions stated:
“ W e commend to the thorough and
thoughtful consideration of all bankers the
opportunities to expand and strengthen
the capital structures o f their institutions
that are being made available through the
offer o f the Reconstruction Finance Cor­
poration to purchase freely the preferred
stock or capital notes o f banks.”
The resolutions also recommended the
appointment o f a federal commission to
make a thorough-going study o f “ the vastly
important problems of money and banking
and central banking that are pressing for
solution and settlement.”
W hen Comptroller o f the Currency
James F. T. O’Connor spoke before the
convention at the closing session on Thurs­
day it Avas immediately evident that the
national administration did not contem­
plate postponing deposit insurance. Mr.
O’Connor stated that plans had been per­
fected for putting the insurance feature
into effect by January 1, 1934, the date
specified in the Glass-Steagall Act, as he
announced the names of the two ap­
pointive directors o f the Federal Deposit
Insurance Corporation, the comptroller
being director ex-officio. W alter S. Cum­
mings, Chicago industrialist and executive
assistant to Secretary o f the Treasury
Woodin, and E . G. Bennett, banker and
business man o f Ogden, Utah, had been
named by President Roosevelt, Mr. O ’Con­
nor said. Mr. O’ Connor sought to reas­
sure the bankers as to deposit insurance
and assured the meeting o f fair treatment
fo r small institutions.

Officers
The national officers of the Association
were elected as follow s: Francis Marion
La\Ar, president First National Bank o f
Houston, Texas, president; Rudolf S.

Northwestern Banker October Î933


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Federal Reserve Bank of St. Louis

43

Hecht, chairman Hibernia National Bank,
New Orleans, Louisiana, first vice presi­
dent; and Robert V . Fleming, president
Riggs National Bank, Washington, D. C.,
second vice president.
A t the executive
council meeting immediately following the
convention H al Y . Lemon, vice president
National Bank of Detroit, Detroit, Michi­
gan, was elected treasurer, and F . N. Shep­
herd was re-elected executive manager.
Delos J. Needham o f Cleveland was ap­
pointed general counsel, filling the va­
cancy caused by the death last March of
Thomas B. Paton.
The following were elected in the vari­
ous divisions:
National Bank D ivision :
Irving W .
Cook, president First National Bank, New
Bedford, Massachusetts, president; 0 . J.
Lord, president Capital National Bank,
Olympia, Washington, vice president.
Savings D ivision : Henry S. Kingman,
treasurer Farmers and Mechanics Savings
Bank, Minneapolis, Minnesota, president;
Howard Moran, vice president American
Security and Trust Company, W ashing­
ton, D. C., vice president.
State Bank D ivision : Clyde Hendrix,
president Tennessee Valley Bank, Decatur,
Alabama, president; James C. Bolton, vice
president Rapides Bank and Trust Com­
pany, Alexandria, Louisiana, vice pres­
ident.
Trust Division: IT. 0 . Edmonds, vice
president The Northern Trust Company
Bank, Chicago, Illinois, president; Leon
M . Little, vice president New England
Trust Company, Boston, Massachusetts,
vice president.
It was announced that the Association
had received invitations for two years
ahead from cities desirous o f acting as
host to the annual convention. One was
from Washington, D. C., for 1934, and
the other from New Orleans fo r 1935.

LET'S FIG H T FO R STATE
BANKS
(Continued from page 9)
ing that year totaled 1,890, and banks
with resources o f over one million dollars
closing during that year totaled 426.
However, these 426 banks had total de­
posits o f $1,417,798,000.00, and the 1,890
small banks had deposits o f only $396,237,000,000.00. In 1932 the record was
practically the same.
Banks with de­
posits of one million dollars each ac­
counted for 77 per cent o f the total lia­
bility in closed banks. In 1930 the record
is even worse as nearly h alf of the de­
posits in closed banks for that year were
found in two organizations, one a branch
banking system in New Y ork and the
other a group in Kentucky. In the face
o f these official records, we have been
continually told that banks with capital
o f less than $50,000.00 and located in
towns o f 10,000 and less were really the


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Federal Reserve Bank of St. Louis

cause o f the depression and all o f the
bank trouble. This has been repeated so
many times that a great many people
believe it. Official figures show this prop­
aganda to be absolutely untrue.
It is
also said that we must have branch bank­
ing in order to provide safety. The official
records for the past two years show that
seventeen banks with 567 branches have
closed with $1,612,188,000.00 in deposits.
I f that is large branch banking safety,
the record is certainly decidedly worse
than unit banking. The official records
fo r closings of Federal Reserve non-mem­
ber banks are equally interesting. Only
one-third o f our banks are members of
the Federal Reserve System.
In 1932

with closings o f 1,125 non-member banks
and 331 member banks, nearly the same
proportion is shown in number, but the
deposits o f the member banks were only
a little over one-half the deposits o f non­
member banks, the figures being $269,000,000.00 fo r member banks and $446,000,000.00 for non-member banks.

T opheavy
The recent acute period of our bank­
ing trouble, followed by the President’ s
banking holiday, was brought on mainly
by the failure o f several o f our largest
banks not in any state system. In fact
a total lack o f confidence in the large
reserve banks in New York and Chicago

OFFICERS

OFFICERS

W. A. ANDERSON
President

J. H. NISSEN
Cashier & Assistant
Trust Officer
M. E. McCRABB
Assistant Cashier

MILO J. GABRIEL
Vice President

E. JOHANNSEN
Assistant Cashier
H. M. OLNEY
Assistant Cashier

O. P. PETTY
Vice President and
Trust Officer

F. E. CONOVER
Assistant Cashier
F. H. HAMANN
Assistant Cashier
R. A. W. LATIMER
Auditor

H. G. KRAMER
Vice President
A. R. THURN
Vice President

Clinton County’s Largest Bank

THE NEW DEAL
New banking conditions brought about by new
national developments make close contact between
banks and correspondent banks more important
than ever.
W e feel that the intimate and personal relation­
ship built up through years of conscientious
service will prove to be a most important factor
in the New Deal, for banks that correspond
with us.

T he City N ational Bank
CLINTON, IOW A
DIRECTORS

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

Northwestern Banker October 1933

44
and a total collapse o f the entire banking1
system, showed that the people o f the
country had no more confidence in the
so-called “ Bigness” than they had in the
unit country bank.
Let us look for a minute at the com­
parative size o f the foreign system, held
up as ideal for Am erica. In Canada there
are eleven banks with 4,083 branches,
but three o f these banks, with over 2,600
branches, control more than 70 per cent
o f the country’s resources, and two banks
in New York have more bank deposits
than all of the banks in Canada.
It may be that one o f the main reasons
for this propaganda against the unit
country bank is the apparent ease with
which certain interests could control
large groups o f branch banks covering
large sections o f the country. There is
positive menace to the financial stability
o f the United States in the stock market
manipulations which may result if we
have any large concentration o f banking
power through branch banking systems.
This is a phase o f the subject deserving
careful study as it is a real danger.

Sixty Successful Years
The American dual system o f banking
has proved a success for over sixty years.
Banks under state supervision in our
forty-eight states and banks under na­
tional supervision have gone along year
after year, serving not only their own
communities, but the country as a whole,
and responsible, to a great extent, for the
development of the country.
The unit bank, which in a large meas­
ure makes up this dual system of banking,
is now attacked by those in favor o f the
foreign systems o f banking, and an effort
is being made to destroy the unit country
bank as it exists today and has existed

for many years. The unit country bank,
whether national or state, owned and
officered by men who have their homes
in the community where the bank is
located, has been the greatest factor in
building up that communitv. It has pros­
pered with the people and suffered with
them from the depressions which have
affected their community.
These so-called country banks have
gathered together the savings of their
communities and used them in a large
measure to build up their home towns
and the country roundabout. It has been
ideal financial setup, both for the banker
and the customer. Mistakes have been
made, but mistakes have been made in
our large city banking.
Unit country
banking has had its share o f failures,
because people who owed the bank could
not pay their obligations on account of
the world-wide economic conditions over
which they or their bank had no control.
The fight against the unit country bank
and the American dual system o f bank­
ing has been going on now for several
years, but this fight has been intensified
during the past year by the crisis existing
on account o f the depression. Those who
wish to destroy the American dual system
o f banking have taken advantage of this
great depression and, by making use o f
the hysteria resulting from the failure
o f Am erican business and untrue propa­
ganda, have tried to bring the unit coun­
try bank into great disfavor.
This has
gone so far that the ridiculous statement
has been made that the unit country bank
has proved a failure. It has not proved
a failure any more than Federal Reserve
banks, large national banks, branch bank­
ing, group banking and chain banking,
as the official records will show.
For
some reason the unit banker has gone

q u a l i f i e d

.

.

.

.

with every facility for handling the
business of out-of town banks or
bankers. Yonr account is invited.

C

it y

A Nil

N

T IS 1 S T

a t io n a l B a n k
C O M P A N Y

Northwestern Banker October 1933

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Federal Reserve Bank of St. Louis

of

C h ica g o

208 S o u t h L a S a l l e S t r e e t

along attending to his business and has
allowed this untrue propaganda to spread
day after day without proper denial.
However, we are confronted with a fight
for the very existence o f the unit country
bank, both national and state. W e fought
the first battle last year when Section IP
o f the Glass Bill would have put out of
business all small national and state
banks.
W e were told that Section IP
was sure of being enacted into the law.
The unit banker was aroused, however,
Congress heard from the folks back home,
and Section IP was defeated. Then those
who have been fighting the unit country
bank changed their attack and proposed
a unification o f our banking systems.
Ridiculous as it may seem, this “ unifica­
tion o f banking” idea proposed the de­
struction o f half o f our banks, making
membership in the Federal Reserve Sys­
tem the necessary attribute o f every bank
in order to do business. A s this part of
the program progressed and the bank
deposit guaranty scheme was hung on
to the Federal Reserve System, with the
confiscation o f half the earned surplus
o f the Federal Reserve banks, there was
quite a change of opinion. However, the
hysteria to destroy continues and the unit
country bank is in greater danger today
o f being exterminated than at any time
during the period o f its useful existence.

W e Have a Fight
Those o f us who believe in the Am eri­
can dual system o f banking and those
of us who wish to preserve the unit coun­
try bank may as well realize now before
it is too late that Ave have a fight on our
hands. The propaganda to destroy the
Am erican system and to put in its place
the foreign system, represented primarilv
by Canada and England, is being pushed
by powerful interests \yith plentv of
money for promotion purposes.
StateAvide branch banking is the first step in
the program, next comes so-called trade
area branch banking, and then follows,
as a matter of course, nation-Avide branch
banking Avith seven or eight large sys­
tems having three or four thousand
branches each.
The fight against the unit country bank
is not political, but is a. fight that large
interests are making to concentrate the
banking power o f this country in a few
hands.
The campaigning is carefully
manipulated,
untrue
propaganda
is
spread broadcast and the unit banker
fighting for his very life is confused by
the rapid changes in the form o f attack.
The primary idea, o f course, is to control
all o f the banking interests o f this coun­
try by one bureau in Washington. W ise
national bankers have known for years
that the best check they had upon un­
wise national bank regulations Avas the
state bank systems, in that the state bank
systems were not more lenient, but that
they were a, constant check against na-

45

tional legislation which might seriously
interfere with national banks.
It is
nearly inconceivable that any man with
a knowledge o f W ashington bureaucracy
would want the entire financial resources
o f this country tied up in one politically
governed bureau in W ashington.

A n Unwise M ove
The movement to put all banks under
the Federal Reserve System, another
angle in the attack against the unit coun­
try bank, is equally indefensible.
The
Federal Reserve System should have the
support o f all large commercial banks,
and every bank doing a commercial busi­
ness with resources o f over a million dol­
lars should belong to the system, but any
effort to compel all the unit country
banks to belong would not be wfise or even
desirable from the Federal Reserve viewrpoint.
It would add infinitely to the
detail and responsibility o f the system
without material benefit.
In fact, the
best posted men with a thorough knowl­
edge o f the Federal Reserve System have
repeatedly said that one-third of the
banks in this country have no place in the
system. Their wants can be taken care
o f better by the use o f correspondent
banks in reserve centers.
The Am erican dual system o f banking
with thousands o f unit country banks,
both national and state, are going to
fight for the continuation o f their exist­
ence. A ll they want is the opportunity
to continue to be o f service to their
communities, to continue to have a large
part in the building o f their country.
They are Americans that are in favor of
American banking.
They have worked
for two generations in many places to
build up safe and helpful banks. They
protest against the use of depression
hysteria to destroy their business. They
have the right to demand, at the very
least, a careful study o f the entire situa­
tion before Congress takes action. The
official records show that the unit bank
has not been a failure. Paid propagand­
ists with selfish interests to promote have
continually misrepresented the situation.
The millions o f the folks back home who
have prospered with the unit bank and
who have suffered when they were unable
to pay their obligations, causing the unit
bank troubles, are ready to fight for a
continuation o f the Am erican system.
They need to be aroused because their
communities are in danger o f losing the
greatest factor in their success.
The
unit country banker needs today more
than ever before the fighting spirit of
the pioneers, and with this fighting spirit
he must have continued faith, not only
in his country, but in his bank and in
himself.
(E ditor’s N o te: The foregoing article
contained excerpts from the address
made by M r. Andrew at the recent
A . B. A . Convention in Chicago.)


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Federal Reserve Bank of St. Louis

To Discontinue
Paris O ffi ce

have asked them to render to our clients
the service it has been our privilege to
render in the past.

Plans to discontinue the operation of
the Paris office of Bankers Trust Com­
pany, established in 1920 as a result o f
the large increase in foreign travel and the
growth of foreign business after the world
war, have been announced by S. Sloan
Colt, president of the bank.
Mi*. Colt
issued the following statement:
“ The board o f directors o f Bankers
Trust Company has decided to discon­
tinue the operation o f our Paris office at
the close of business September 30, 1933.
Inasmuch as Messrs. Morgan & Cie. act
as one of our correspondents in Paris, we

I want to take this occasion to express
to the many thousands of Americans who
have used our Paris office during the past
thirteen years our appreciation of the op­
portunity o f serving them.”
Several o f the officers o f the Paris
office will be transferred to the London
office. Others, including 0 . P. McComas,
vice president, will return to New York.
Still others, including Julian Allen, assist­
ant manager, will become associated with
Morgan et Cie., where they will continue
to serve the former customers of the Paris
office of Bankers Trust Company. A ll o f

A Special Message
to

Rural Bankers
Last year there was a dire shortage
of calendars ♦. ♦
^
There need be no shortage this year#
T o relieve the shortage of calendars which has
existed for several years we have prepared a
fine big special Daily Memorandum Calendar—
Size 11x16 inches
Pad size 11x8 inches
Good big readable figures
Space for daily memos
Sundays and holidays in red
Complete weather forecast for year
Fine art picture, size 10x5— Full Color
Your advertising space size 10x2 Display
Calendar equipped with metal binder and hanger.
Price of calendar in thousand lot, Eleven Cents
Three hundred 12^4 cents, Five hundred 11.6 cents
W rite today for free sample, stating if you prefer
Landscape, Home or Baby picture. Ask for P-237

The Gerlach'Barklow Co.
Creators of Good - Will - Advertising Mediums
J o lie t , I llin o is

Northwestern Banker October 1933

46
the principal executives o f the Paris office
will continue to serve in one o f these three
capacities.

Forba McDaniel Resigns
Resignation of Miss Forba McDaniel,
secretary of the Indiana Bankers Asso­
ciation since 1924, and the selection of
Don E. W arrick, head o f the Indianapolis
Clearing House Association department
of bank examinations to succeed her, has
been announced by Felix M . M cW hirter,
president o f the organization.
Miss M ‘Daniel becomes assistant to the
vice president and general sales manager
o f P faff & Hughel, Inc., investment bank­
ing house which has offices in Indianapolis,
Chicago, Fort W ayne and Evansville, and
will make her headquarters in Chicago.
M r. W arrick, who has been connected
with the banking business since 1925,
assumed his new duties September 1st.

Bankers'

Wants

This department of The Northwest­
ern Banker is free to subscribers.
To non-subscribers, a charge of five
cents per word. In answering key
numbers, please enclose postage for
forwarding purposes. And remem­
ber, this service is free to subscribers.

Miss McDaniel remains with the associa­
tion until October 1st, however, in an
advisory capacity.
M iss McDaniel received her offer from
P faff & Hughel, Inc., some time ago and
informed Mr. M cW hirter of it.
It was
held in abeyance, however, to give the
organization an opportunity to select her
successor.
“ M iss McDaniel has literally grown up
with the association,” Mr. M cW hirter said,
“ and we regret to lose her. She has been
with us during some troublesome times
and has rendered excellent service.
“ Much o f the ability o f the association
to serve its members and much o f its cohe­
sion are due to her ability as an organizer.
No president, who is elected to serve one
year, could have perpetuated such policies
in an adequate manner without her assist­
ance.”

M other: “ Jane, why are you putting
water into the ink?”
“ W ell, mother, in this part o f the letter
I want to whisper something to daddy.”

I have no repressions,
N or am I vain;
M y thought are not filthy
I must be insane.
Joanne after seeing a drunken man for
the first time in her short life was de­
manding explanations.
“ W h y, mother,” said she, “ did he fall
down ivhen he stood up ?”
H er mother explained that too much
drink made it impossible for one to stand
up straight.
“ Yes, but mother,” said Joanne again,
“ this man
couldn’t
even
stand
up
crooked.”
“ Little girl, why are you so interested in
these birds?”
“ W ell, I just learned that there ain’t
no Santa, Claus and I ’m out here to in­
vestigate this stork proposition.”
Every man is the architect of his own
fortune.— Pseudo-Sallust.

Andex Go ¿Advertisers

Position Wanted — Cashier in small
bank or teller in larger bank. Married.
A ge 42. Eighteen years of experience.
Address the Northwestern Banker, No.
3211.
8-9-10.

A m erican Telephone & T e le g r a p h ..

Position Wanted — Young woman de­
sires place as bank teller or assistant
cashier. Experience and references. A d ­
dress the Northwestern Banker, No.
3213.
9-10-11

B a n k e r s T r u s t C o m p a n y ......................... 39
C a r le t o n D. B e h C o ..................................... 18

Wanted— Used Banktrol or Deferred
Time Lock Chest.
Woodbury County
Savings Bank, Sioux City, Iowa, or ad­
dress 3214 Northwestern Banker.
10

Psychology

A

j
24

J a c k l e y - W i e d m a n & C o ..........................

20

It

I,

L i v e S t o c k N a t i o n a l B a n k , C h i c a g o . . 36
L i v e S t o c k N a t i o n a l B a n k , O m a h a . . . 32
L i v e S t o c k N a t i o n a l B an k, S io u x C ity 28

C
C e n t r a l H a n o v e r B a n k & T r u s t Co.. .
C e n t r a l N a t ’ l B a n k & T r u s t C o .........
C h a s e N a t i o n a l B a n k ...............................
C it y N a t i o n a l B a n k ..................................
C it y N a t i o n a l B a n k & T r u s t C o ...........
C u r t is H o t e l .................................................

47
41
40
43
44
46

M

M erchants N ational Bank

JV
N o r t h e r n T r u s t C o .............................
N o r t h w e s t e r n N a t ’ l l i f e Ins. Co.

1)

Now — ■

D r o v e r s N a t i o n a l B a n k ...........................

42

>

A room w ith p rivate hath
o

$2.50
in the city’s finest hotel.

Northwestern Banker October Í933

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

F

F irst National Bank, Sioux C i t y . . . .

O m a h a N a t i o n a l B a n k .............................

38

30

P
G
General M otors A c ce p t a n c e C o r p .. . .
G e r l a c h - B a r k l o w C o .................................

22
45

34
21

W

]
I o w a - D e s M o in e s N a t i o n a l B a n k . . . .

P h i l a d e l p h i a N a t i o n a l B a n k ..................
P o l k - P e t e r s o n C o r p ...................................

48

W e s t e r n M u t u a l F i r e Ins. C o ...............

26


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Federal Reserve Bank of St. Louis

P rinciples
W h ic h E ndure
Policies must change to meet changing conditions, hut sound
principles endure.
For more than a century certain fundamentals have governed
Central Hanover.
IN B A N K IN G — cooperation with customers in good
times and had; a primary regard for the safety o f deposits.
IN T R U ST S — lull appreciation of conservation as the
first resp on sib ility o f a trustee; independence in the
selection ol investm ents for trust funds; thoughtful
attention to beneficiaries as well as to property.
IN ALL R E L A T IO N S — emphasis on quality of service
designed to make this bank a constructive influence in
the aflairs of its customers and the business of the nation.
These principles endure.
T h ey will control our course in the future as they have in
the past.

C

e n t r a l

H

a n o v e r

BANK AND TRUST COMPANY
NEW Y O R K

58 Years in Des Moines
O
N OCTOBER 2 6 , 1 9 3 3 , this Bank will begin its 59tli year in
Des Moines.

With this background of nearly three score

years of service to Des Moines and Iowa, our eyes are turned toward

the future and its ever widening field of opportunity for construc­
tive commercial hanking.
Today this Bank is prepared to meet the increasing demands of
business recovery.

With direct hanking connections in all sections

of Iowa and in the principal cities of the country Iowa’ s Largest
Bank invites banks and hankers to make use of the complete hank­
ing service which it offers.

IOWA-DES MOINES NATIONAL BANK
fir T r u s t C o m p a n y


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Federal Reserve Bank of St. Louis

a ffilia te d w ith

NORTHWEST

BANCORPORATION