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m r'-'-y ■S® ill A W / ' [ if 1■ § W / Æ k ■ I V ^ 1 f SW m t I M i ft Ik k NUMBER 469 SEPTEMBER, 1926 T he N ebraska G uaranty Law A. B. A. Section T H E P H O T O BE LOW T h o m a s W . L a m ont, n o t e d b a n k e r an d financier of N e w Y o r k C i t y , a m e m b e r of th e firm of J. P. M o rg a n & Co. .—Photo T'ndenvood & t'ndenvood. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 2 TH E N 0 RT U W E S T E R N BANKER September, 1926 GOODBONDS o u n d e d in 1857—68 years ago; and during this period through conservative, s u b s ta n tia l b a n k in g T H E F IR S T NATIONAL has rendered an unexcelled service to correspondent banks in the west. F S ix ty -e ig h t y e a rs afford am ple te s t a n d su p p ly conclusive p ro o f o f th e s ta b ility o f a n y i n s titu tio n — p a rtic u la rly t h a t of a bank. F. H. D A V IS President C. T. KOUNTZE V ice P res, and Chairman For Your Rank's Investm ent Inquiries Solicited from Banks and Bankers on Investment Securities GOVERNM ENT PU B L IC U T IL IT Y IN D U ST R IA L M U N IC IPA L CHARLES (Chick) EVANS, Jr. In v e stm e n t Secu rities 11 N atio n al iBank of O m a h a ¡BONDS S. La S alle Street C H IC A G O S ix te e n y e a r s ’ e x p e r i e n c e in b o n d bu sin ess n p H E Des Moines business of Iowa banks is invited. T hese banks are th o ro u g h ly equipped in every departm ent. Valley National Bank L o n g D ista n ce P h o n e State 6892 SIOUX CITY serves one of America’s richest farming territories, and its commercial import ance in the West makes a good banking connection in this city highly valuable. We invite correspondence regarding our service to banks and bankers. AND Valley Savings Bank D E S M O IN E S , IO W A V alley Bank B uilding E s t a b lis h e d 1872 Combined Capital and Surplus $1,100,000.00 R. A. CRAW FORD, President D. S. CHAM BERLAIN, V ice President C. T. COLE, JR ., V ice P r e si dent W. E. BARRETT, Cashier JO H N H . G INSBERG, A sst. Cashier C. M. CORNWELL, A sst. Cashier The Northwestern Banker is the oldest banking publication west of the Missis sippi river—and was the first in America to join the Audit Bureau of Circulations. It is the official publica tion of the South Dakota Bankers Asso ciation, the Iowa Farm Mortgage Bank ers Association, and the Iowa Bond Dealers Association. It must be used to cover America’s richest agricultural territory. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis CAPITAL ONE MILLION DOLLARS SERVICE COOPERATION READER CONFIDENCE THE NORTHWESTERN BANKER D E S M O IN E S & & G IOW A THE September, 1926 NORTHWESTERN BANKER Mr. Banker:—Are You Getting Direct Action on Your GRAIN DRAFTS? E N D your grain item s direct to M inneapolis — avoid th e costly delays of ro u n d ab o u t routes. S Send them here to The Northwestern where a high ly specialized grain d ra ft d e p artm en t handles this class of item s exclusively. Its messengers are w ith in tw o m inutes’ distance of the grain offices and milling district. R ig h t now m ake certain of pro m p t retu rn s on the first lot of new grain drafts. L et us dem onstrate the value to you of a thoroughly m odern, longexperienced collection service. T h e N o rth w e ste rn N ational B ank Minneapolis, Minnesota https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 3 T II E p S S S a S B S S ä S N 0 KT UWES T ERN S B S B S BANKE R September, 1926 B N O R TH W ESTER N BANKER DES M O I N E S The Oldest Financial Journal W e st of the Mississippi M em ber A u d it B u re au of C ircu latio n s m H I ■|TI"H "l,lI W I lin ,lFI,lIV lñ llñ ,lñ ,lñ llñ ,,ñ llñ llñ llñ lll*lllFllll*l,ll"llll"llM"lllFll^ llM"l»F^^ Thirty-first Y ear CONTENTS FOR SEPTEMBER, 1926 Page N umber 469 “ In T h is I s s u e ” ...................................................................... 13 N e b ra s k a G u a ra n ty L aw F a c ts ........................................ 14 “ F a th e r , Son a n d D o n k e y ” .............B y R oscoe M acy 20 Page N o rth w e st D a iry E x p o s itio n ............................................. 21 A ds o f th e M o n th .................................................................... 23 “ N ew s a n d V ie w s ” ............................................................... 24 S pecial A. B. A. S e c tio n .................................................... 27 The “ H u ll A m e n d m e n ts ” ........ B y H om er A. M ille r 33 F in a n c ia l A d v e rtis e rs S e c tio n ...................................... 41 A cross fro m P u b lis h e r................... B y C lifford D e P u y 10 F ro n tis p a g e ....................................L ym an 12 FI W akefield P e rso n a l P a ra g ra p h s 50 N e b ra s k a N e w s......... B onds a n d In v e s tm e n ts ........................................... 55 M in n e so ta N e w s....... 91 In s u ra n c e S ectio n . 75 N o rth D a k o ta N ew s. 93 Iow a N ew s ................... 95 S o u th D a k o ta N e w s............................................... 84 87 The contents of th is m agazine are fu lly protected by copyright DE PUY PUBLICATIONS AND THEIR TERRITORY M N orthwestern B anker T rans -Mississippi B anker DES M OIN ES K A N S A S CITY M id-Continent B anker I nsurance M agazine S A IN T LOUIS K A N S A S CITY U nderwriters R eview S outhwestern B ankers J ournal DES M O IN ES FORT W O RTH iowA B ank D irectory L ife I nsurance S elling DES M O IN ES ST. L O U IS T H E N O R T H W E S T E R N B A N K E R , P ublished by D eP uy P ublishing Co., I nc ., Capital S tock, $100,000.00 555 Seventh S tre et, Des M oines. Hi C liffo rd D e P u y , P u b lis h e r ; G. A . S n id er , A s s o c ia te P u b lis h e r ; R . W . M o o rh ea d , E d ito r . R ex V . L e n t z , A dvertising Director. H. H. H a y n e s , A ssociate Manager. M in n e a p o l is O f f i c e : F r a n k S. L e w is, 840 Lumber E xchange Bldg., Phone Main 3865. C h ic a g o O f f i c e : Wm. H. Maas, 1221 First N a tio n a l Bank B ld g ., Phone Central 3591. N e w Y ork O f f i c e : Philip J . Sym s, 150 N assau St., Phone 4836 Beekman. S t . L o u is O f f i c e Donald H. Clark. 408 Olive St., Phone Main 1342. K a n s a s C it y O f f i c e : Glen D. M athews, 405 Ridge Bldg., Phone H arrison 5857. F ort W o r t h , T e x a s , O f f i c e : H. Lawson Hetherw ick, 409 F. & M. Bank Bldg. S a n F r a n c isc o O f f i c e : George Wight, 600 Baldwin Bldg. E n te re d as second cla ss m a tte r a t the D e s M o in e s postoffice S u b s c r ip t io n Official P u blication of THE SOUTH DAKOTA B A N K ER S ASSO CIATION THE IOWA FARM MORTGAGE ASSO CIATION THE IOWA BOND D E A L E R S ASSO CIATION https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis R a te s, S 3 . 0 0 per year; 5 0 cen ts per copy it! September. 1926 SIM S® A t the Great Ports of the W orld A t the Railway Stations of Foreign C ities W here assistance is needed most - — T he troubled traveler will always find — The Helpful Hand of a Great Service It is doubtful if th ere is an o th er personality, in all th e w orld, so well k now n to travelers, so welcome to travelers in trouble, as these u n i form ed m en o f the A m erican Express C om pany. T h e ir fame is in te r national. Fam iliar w ith th e details o f foreign custom s, o f dom inating influence everyw here, th eir presence is a guarantee o f intelligent, courteous assistance— endless in its variety, constant and efficient— w herever and w henever assistance is needed. Banks everyw here, appreciating th e value o f this Service, assure it to th eir traveling patrons to th e fullest extent when they sell th em A m erican Express Travelers Cheques. T h e pro tectio n w hich these C heques give the traveler against th e loss or th eft o f his fu n d s— and th a t th ey are spendable and acceptable everyw here—are well estab lished facts. Safe Money plus Tim ely Service are assured th ro u g h A merican E xpress T ravelers C heques https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 6 THE NORTHWESTERN BANKER Confidence R estored Banking, which has been experiencing trying times for the last few years, should again take its place of high standing and usefulness. This cannot be accomplished until bank customers once more place un bounded faith and confidence in the bank which serves them. People are receptive. Their good will and confidence can be won through the proper kind of publicity. Publicity that contains facts, given out in a clear, straight-forward manner, yet in a way that it will be appreciated. Many a couple has had the confidence in their bank restored by the right kind of message from their banker. Highly specialized publicity artists, through Wessling Services, will take pleasure in serving you, and in building the messages of your bank to its cus tomers. 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W h eth er your banking needs are personal, com m ercial, local, n a tio n al or in te rn a tio n a l, you will find here friendly hands and friendly minds to render you every needed banking service. The pleasures, as well as the practical ad vantages, o f sound banking become a very real thing at the Seaboard. er» I The SeaboardNational Bank | t* jc of the City of New York j£ I | 115 Broadway Broad andBeaver Streets24 East 45th St. fh g* B-* 3 dj *« *3 *3 XXXZXXXXXXXXXXXZXZZZXXXZXZXXXXXXXZXZXXXXXXXXXXXXXZXZXZXZXXXXXZXZXZXXXXXXZZXXXXXXXZXZX https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 3 •'*1Q 3j XZXZXIXZXXXXXZXZXXXXXXXXXZXXXX 8 T II E N ( ) R T II W E S T E R X B A N K E R September, 1926 H TH E f i r s t n a t i o n a l A BANK OF CHICAGO, w ith its affiliated institution, th e F ir s t T r u st a n d Sa v in g s B a n k , invites calls and correspondence relative to th e com plete banking, fo r eign and investm ent service, developed th ro u g h the ex perience of sixty-three years’ grow th. FR A N K O. W E T M O R E , C h a ir m a n M E L V IN A. T R A Y L O R , P r e s id e n t C O M B I N E D https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis R E S O U R C E S E X C E E D 4 5 0 , 0 0 0 , 0 0 0 September, 1926 T HE N O R T H W E ST E R N BA X K E R a company that has the facilities and the desire to serve you completely and satisfactorily. The Iowa National Fire company, and offers to its banker agents real oppor tunity. % INSURANCE! Protects PROSPERITY R e li ves AD VE RSI IT https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Iow a N a t io n a l Insurance C F ir e om pa ny DBS MOINES, IOWA S 10 THE NOR T H W E S T E R N BANKER September, 1926 ^Across the Desk from the Publisher T^v URING the last few months, several young business men have come to me and asked my advice concerning their personal business affairs. These young men have all been con nected with good organizations and are drawing good salaries. The main difficulty is that they have gone in debt beyond their means and cannot pay their obligations as soon as they are required to do. Analyzing their specific prob lems, I came to the conclusion that they had been granted too much credit, and it had been granted to them too easily. As I have studied over their cases, I have come to believe that many mercantile firms and many banking institu tions are granting credit too easily to their customers. The mania to buy articles on the in stallment plan is partially responsible for this condition, I believe. There may have been some men and some firms who have been ruined because of lack of credit, but there are also many today being ruined because they are getting too much credit. The N eb ra sk a S to ry TN THIS issue of the N orthwestern B anker we A present the first of a series of articles on the Ne braska Guaranty Bank Deposits Law and its opera tion. The article is entitled “ Both Sides of the Story No Other State Can Tell.” The editor of the N orthwestern B anker made a special trip to Lincoln and interviewed the banking officials concerning this law and its operation and we also sent a questionnaire to every state and na tional bank in Nebraska asking their opinion of the law and its operation as they viewed it. We are leaving it to our readers to make their own decisions as to whether they believe the Nebraska plan has been a success or failure. Briefly, since the law went into effect in Nebraska in 1911, there have been 154 state bank failures, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis which have cost Nebraska banks $14,000,000. The average cost of the Guaranty Fund has been $130,000 per bank for the losses incurred. Up to the time of go ing to press, over 400 state banks and forty-nine national banks had answered our ques tionnaire. Of this number 220 state banks and forty-eight national banks were opposed to the law. One of the questions which we asked in our questionnaire was whether or not they would advise other states to adopt the Nebraska plan. One state bank wrote us as follows and this is typical of many other replies: “ I certainly would not ad vise any other community to indulge in bank guar antee on the Nebraska plan. It is bad banking, both for the banks and for the public. ’’ Another bank wrote us as follows : “ In our opinion the principles of the Nebraska guaranty law are unwise and dangerous. It has operated to the continuous detriment of the better-managed banks but to the advantage of innocent depositors. Eventually the plan will doubtless fail, for the reason that the liabilities continue to pile up while the receipts from assessments diminish and should legislation be enacted, increasing the assessments, no doubt most of the better-managed and larger banks would nationalize. Our advice to the banks in other western states is to fight the enactment of a guaranty law to the best of their ability.” The cashier of another bank in Nebraska writes us as follows: “ We think the Nebraska guaranty plan has already proved itself to be unsound, un economical and without merit in every respect. Its operation can be likened to a toy balloon; it must break and then the children will cry. In other words, it is the plaything of politicians and under its flag they are soliciting business by misrepre sentation which will eventually leave a deep scar upon our fair state. “ South Dakota, North Dakota, Kansas and num- September, 1926 THE NORTHWESTERN erous other states have tried it and have failed. Ne braska’s turn is just around the corner, although those in charge contend that it is stronger than ever before. Why pull the wool over the eyes of the in nocent people of Nebraska when statistics show that it is already a failure ? How much do they spend for advertising ? Why do they employ pages of copy in local newspapers to keep the good work going and solicit from unsuspecting depositors?” These are but a few typical expressions of Ne braska bankers concerning their own guaranty law. Kirk Griggs, Secretary of Trade and Commerce of Nebraska, who is chairman of the Guaranty Fund Commission, believes that if the guaranty law is to be effective in any other state that it should have two years in which to build up a reserve. He also believes that there should be a penalty placed on all banks for the violation of banking laws and that this money should be used to increase this reserve fund. If at the end of two years such fines and assessments fail to build up the reserve adequately, then Mr. Griggs believes that the depositor and not the banker should pay the remaining losses through state taxation. He believes, however, that with the proper supervision it will probably be unnecessary to levy state taxation except in a tremendous emergency. As we view it, the ideal state guaranty bank law has not yet been written. It may be written in the future. The only method that we know of would be state taxation, which would pay the losses of failed banks. By state taxation we now maintain a police force and a fire department. These are used in cases of emergency. Every citizen pays his pro portion of the upkeep of these departments. If the citizens of any commonwealth want to protect their deposits then it seems to us that they should pay for this protection through their taxes. BANKER through forgery and robbery to secure money from banks. According to R. C. Saunders, of the Illinois Bank ers Association, banks of the United States lost $3,620,000,000 through crooks in 1924 and this was not done through counterfeiting. M ore Farm C redit of Commerce Herbert Hoover has SECRETARY conferred with President Coolidge concerning a plan to extend additional credit to the farmers of the country. It is our opinion that the securing of additional cheap credit by the farmers is not the great problem which confronts them today. They already have cheap credit. Any farmer with the right kind of land can secure a loan on his farm at 5 per cent today from any reliable insurance or mortgage company. The main thing that is needed now in the Middle West is not additional credit, but a more active real estate market, so that farm land may be taken out of the frozen-credit column. The B usiness Outlook general business outlook for the remainder T HE of 1926 is very satisfactory. The banking re sources of the country are ample to take care of any legitimate demands which business will make during the coming months. The wheat farmers of the country will have an income of $100,000,000 more than last year, accord ing to the present estimates on their crop. The corn crop is estimated to be a little below the five-year average, but with plenty of corn carried over from last year it is estimated that there is a proper ratio between the total corn supply and corn C ounterfeiting consuming animals. on the Decline Automobile production, building construction, T TNITED STATES secret service agents declare iron and steel outlook are all making very favorable that counterfeiting is on the decline in the reports. There is very little unemployment and the United States. They say that counterfeiting, espe credit conditions are extremely satisfactory. cially of coins, is becoming a lost art. The weekly index number of commodity prices, John A. Adams, United States secret service op which reached 247 in 1920, according D un’s is now erative, says: “ In the old days twenty years ago 147, or 100 below the peak figure of six years ago. a counterfeit was a work of art, but now I should All these factors indicate that the remainder of be ashamed of a five-year-old who would accept 1926 will be a period of good business and conclude some of those we have been getting.” a prosperous year as far as the United States as a The reason for the decline of counterfeiting is whole is concerned. obvious when you consider that it is much easier https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 11 LYMAN E. WAKEFIELD P re sid e n t, F ir s t N a t io n a l Bank, M in n e a p o lis L y m a n E . W ak e fie ld , n e w ly e le c te d p r e s id e n t o f th e F i r s t N a tio n a l B a n k o f M in n e a p o lis, su c c e e d in g F . A . C h a m b e rla in , w h o b e co m es c h a ir m a n o f th e e x e c u tiv e c o m m itte e , s t a r te d , a g e 17, a s e r r a n d b o y f o r th e F i r s t N a tio n a l B a n k o f A u s tin , M in n e so ta . F iv e y e a r s l a t e r he jo in e d th e s ta ff o f th e N o r t h w e s te rn N a tio n a l o f M in n e a p o lis, a n d in 1911, b e c a m e a s s i s t a n t c a s h ie r. M r. W a k e fie ld w e n t w ith th e W e lls-D ic k e y c o m p a n y a fe w y e a r s l a t e r a s t r e a s u r e r , a n d in 1925 w h e n th e W e lls -D ic k e y T r u s t c o m p a n y w a s c o n s o lid a te d w ith th e M in n e a p o lis T r u s t c o m p a n y , h e b e c a m e vice p r e s i d e n t o f th e c o n so li d a te d c o m p a n y . H e h a s sin c e t h e n b e en v ice p r e s id e n t o f th e M in n e a p o lis T r u s t c o m p a n y , a ffilia te d w ith th e F i r s t N a tio n a l, o f w h ic h he h a s s e rv e d a s a d ire c to r. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis IN THIS ISSUE Our S eptem ber F ron tisp iece L YMAN E. W A K E F IE L D , whose pho tog rap h appears as the frontispiece fo r this issue, has had a distinctly in te r esting career in the banking world, w ork ing his way up to the presidency of the F irs t N ational B ank of M inneapolis, from his s ta rt as com bination ja n ito r and errand boy fo r a bank in A ustin. Election of Mr. W akefield elevates a man who at the age of 17 went to work as errand boy for the F irs t National Bank of A ustin, Minn., and who in the 29 years since has held virtually every position in M inneapolis banks. H e was born on a H ennepin county farm , betw een LongLake and W ayzata. Mr. Wakefield has been vice president of the M inneapolis T rust Company, affili ated with the F irs t N ational Bank. Mr. Wakefield went from the farm near W ayzata at the age of 17 to become a com bination ja n ito r and errand boy at the A ustin bank. Five years later he came to M inneapolis, joining the staff of the N orthw estern N ational Bank. By 1911, he had become assistant cashier. Then he went to the W ells-Dickey Company as treasurer. In 1925, Avhen the W ells-Dickey Com pany was consolidated with the M inneapo lis T rust Company, Mr. W akefield became vice president of the consolidated com pany. H e also has been a director of the F irst N ational Bank. In D etroit T A R T IN G Septem ber 20, and continu ing for four days, the Financial A d vertisers Association is planning a recordbreaking m eeting in D etroit. E very phase of bank advertising will be dis cussed. There are men on the program who are the advertisin g heads of some of the larg est banks and tru s t com panies in the country. They will give freely of the knowledge they have gained in th eir m any years of experience, giving p o in t ers, and telling m istakes to avoid. Ad- S https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis vertising in some form or other has come to have real im portance even in the sm aller banks, and it would be a w orth while trip fo r any b anker to atten d this convention. The com plete program and entertain m en t fea tu re s are on page 41. “ H ull A m en d m en ts'’ F vital in te rest to every b an k er at th is time are the H ull A m endm ents and th e ir relatio n to branch banking. On page 33 H om er A. M iller, p resid en t of the Iow a N ational Bank, Des Moines, gives some straight-from -the-shoulder fac ts reg ard in g the M cFadden bill and the H ull A m endm ents. Those who are not en tirely fam iliar w ith this legislation can glean some valuable inform ation from th is article. O Cows and B anks A esop Up-to-Date SIN G one of the old fables as the background fo r his story this month, on page 20, Roscoe Macy brings it up-todate and applies its principles to m odern banking. H e dem onstrates very clearly how impossible and im practical it is to try and please each and every customer, especially when your efforts only resu lt m a loss to your in stitu tio n . H e shows, too, how foolish it is to d ep art from the old, tim e-tried methods. Robbing P eter to pay P au l is sure to have a kick-back hidden in it somewhere. U H IL E it is an undisputed fact that Corn is King, farm ers all over the country are rap id ly finding out that the Cow is Queen. In almost every instance, a d airy com m unity is the la st to feel the effects of so-called h ard tim es. The little old cream check every day or several tim es a week fits in very nicely. The N orthw est D airy Exposition, w hat it is and w hat it is try in g to accomplish, is described on page 21. D airying and banking, pulling together, can do a lot tow ard m aking a prosperous community. W T he A. B. A. C on ven tion T he G uaranty Law H E article on the N ebraska G uaranty law startin g on page 14 of this issue of The N orthwestern B anker needs no comment. The guaranteeing of bank de posits is a subject much under discussion. I t has been tried in several states, and has failed. Such a law is now in opera tion in Nebraska, and it is upon the Ne braska situation th at this article is based. The presentation of the subject here is from a purely im partial viewpoint, the m aterial fo r which was gathered from Nebraska bankers themselves. The state ments made are actual facts. The con clusions are left to our readers. T r"T"' H E A m erican Bankers Association meets this year in Los Angeles, early in October. Bankers along the west coast have pooled th e ir money and brains in one big h at and are p lan n in g to show th e ir visitors a royal good tim e. On page 27 is an outline of w hat you can look fo rw ard to a t the convention. A visit to a movie lot, and w atch p ictu res come hot off the r e e l; beaches bulging w ith buxom bathing b eau ties; an ocean trip to C a talin a; these are ju st a few of the m any offerings. There will of course be sessions of the convention, which you can atten d if you so desire. 14 THE NORTHWESTERN BANKER September, 1926 BOTH SIDES OF THE “STORY NO OTHER STATE C A N TELL!” B y R . W . M oorhead E ditor, N o rth w estern B anker Nebraska STABllfcin PREVENIS b u s in e s s I p ia t t i r T ^ - f í t o " p Guarantee/ Jbànìùng ' ja w " »H O ÇO W B 7 » Editor’s Note T h e casual reader, p ic k in g up a N eb rask a state paper, w ill n o te w ith m ore than p ass in g in terest, a series o f a d vertisem en ts each en titled , “A Story N o O ther State Can T e ll.” In p articu lar, o n e ad vertisem en t of the series sh ow s th e state of N eb rask a, in the form o f a lo v e ly w om an , te llin g h er sisters o f Iow a, M in n esota, M issou ri, I l l i n o is and the D a k o ta s, th e story of the N ebraska G uaranty o f B an k D ep o sits law . B ey o n d the sh ad ow of a d ou b t, there is b ein g en a cted in the state of N eb rask a a dram a u n p a r a lle lle d in fin an cial h istory. It is a story o f id ea lism — and, som e say, f o lly ; h ero ism — and tra g ed y ; fo r there are tw o sid es to “T h e story no o th er state can t e ll” and the o u tco m e o f it a ll seem s as u n cer tain as the v a rio u s o p in io n s that em an ate from the finan cial m in d s of the state. T h is a rticle is the first ot a series of tw o, or p o ssib ly th ree a rticles on the su b ject o f the N eb rask a guaranty p lan , that w ill be p u b lish ed in the N orth w estern B an k er, in th is and fo llo w in g issu es. T h e facts, fig ures and o p in io n s to b e p resen ted th erein , h ave b een g lea n ed b y th e ed ito r of th is m agazin e from actu al in te rv iew s w ith b oth state and n a tio n a l b a n k ers, d ep artm en t o f ficials, and b y m ean s o f a q u estio n n a ire sent to ev ery state, n a tio n a l and p rivate bank in N ebraska. At the ou tset, the N o rth w estern B anker em p h a tica lly states that th ese a rticles are w ritten w ith o u t the slig h test p reju d ic e eith er for or again st th e N eb rask a guaranty p lan . T h is m a gazin e earn estly h o p es, in v iew o f the trem en d o u s efforts and sum s o f m o n ey sp en t on the p lan b y N eb rask a b a n k ers, that it w ill b e a co m p lete success in stea d of a co stly fa ilu re as it has b een in a d o zen other states. Y et at the sam e tim e the N o rth w estern B an k er, in v iew of the https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis !PROMÛT! L bad í economic |coi Ç * #J to w B s | AS' ' A Â 7 /S „ 3 “ î® fact that p o litic ia n s in Iow a, M in n esota and other w estern states, are alread y m akin g p lan s to pass sim ila r le g isla tio n in those states in the n ear fu tu re, fe e ls that there are t w o s id e s to th e sto r y , and that the Iow a ban k er, th e M in n esota ban k er, and the D a kota b an k er, sh ou ld k n o w all the facts and figures of th e N eb rask a situ ation b efore any state leg isla tu re sh all en act any sim ilar le g isla tio n . In every state, ex cep tin g N eb rask a, that has ad op ted a guaranty law , it has p ro v ed a gigan tic fa ilu re . W hy, th en , has the N e braska law o u tliv e d the others? F irst of a ll the N eb rask a law is v ery little d ifferen t, eith er in p r in c ip le or op eration , from th e law that has fa ile d in other states, excep t that the N eb rask a leg isla tu re w en t a little farth er in its p ro v isio n s, g iv in g the b an k in g d ep artm en t b road er p ow ers, settin g up a sp ecia l “ G uarantee F u n d C o m m issio n ” and sim ila r p ro v isio n s. In actual op eration , it has gon e a great deal farther, p rim arily b ecau se N eb rask a state b an k ers h ave put th eir sh ou ld ers to the w h eel and d o n e e v e r y t h in g in t h e i r p o w e r t o m a k e th e la w a su cc ess! T h ey h ave p lan n ed and sacrificed , fo u g h t and b le d to m ake the p lan w ork , re gard less of th eir fe e lin g s tow ard the ju stice or in ju stice of the law , and no on e can talk w ith the average N eb rask a state b an k er w ith o u t gain in g a fe e lin g of ad m iration for h is d eterm in a tio n to m ake su cceed a p lan that has fa ile d in every other state w h ere tried ! A ll in all, it w o u ld seem that th ose w h o say the N eb rask a p la n is a co m p lete su c cess, are ju st as far w ron g as th ose w ho say it is a d ism al fa ilu re . T h e N o rth w est ern B an k er is w illin g to lea v e co n clu sio n s to its readers. L et them read the facts and figures in th ese articles, le t them see what the N eb rask a b an k ers th e m selv es th in k of the p lan . T h e sane ob server m igh t w e ll co n clu d e that the N eb rask a p la n is n eith er a su ccess n or a fa ilu re . W ith several years of fat crop s, the situ a tio n m ay w ork out i p sp len d id ly . W ith a few lea n years, the w h o le law co u ld co lla p se. S om e state b a n k ers say th e G uaranty F u n d is n ow h o p e le s sly in so lv en t. O thers b e lie v e it w ill co m p le te ly straigh ten ou t N eb rask a ’s finan cial situ a tio n in th ree years or less. If th e N eb rask a p la n is a p ractical su c cess, th e N orth w estern B an k er w ants it ad op ted in other states. If it is a co stly ex p erim en t, this m agazin e w ants ev ery le g is lature to v o te it d ow n forever. B y w ay of ex p la n a tio n , the N o rth w estern B an k er is n o t u sin g th e nam e o f every b an k er q u oted in th is series, b eca u se there is so m uch fe e lin g b etw een m any state and n a tio n a l ban k s in N eb rask a, and b e cau se m ost of the b an k ers rep ly in g to the q u estio n n a ire ask ed that th eir nam es be om itted . T h er efo re , in fairn ess to the b ankers w h o an sw ered the q u estio n n a ires, u n less th ey d esign ated that th ey w ish ed their n am es u sed , th ey have b een om itted . Facts A bout the Nebraska Law The N ebraska g u a ra n ty of bank depos its law, in its original form , was passed by the N ebraska legislature in 1909 and was modeled a fte r the O klahom a law. I t was held up in the courts, to determ ine its co n stitu tio n ality u n til 1911, when it w ent into effect. U nder the provisions of the original law, th e g u ara n ty fund was not collected in th e sta te treasu ry , but each sta te bank carried its stip u lated g u ara n ty fu n d on its own books, listed as a liab ility and carried as a deposit. All banks th a t were in trouble were closed, fo r th ere was no commission to tak e them September, 1926 THE over. D epositors were paid in full and d ra fts issued on each sta te bank when it was deemed necessary to close a state bank. Law Changed in 1923 The law was changed in 1923 to its present status, whereby there was a p pointed a g uarantee fu n d commission “fo r the purpose of assisting in conserv ing and adm inistering the depositors’ gu aran tee fu n d of the state of N ebraska and providing a more thorough and com plete supervision of state banks.” There are seven members of the commission, in cluding one “active executive officer of a sta te ban k ” from each of seven banking groups of the state. These are appointed by the govei'nor and hold office fo r three years. W hen originally organized some held office fo r different periods to provide m erely th a t the term of all should not expire a t the same tim e. In addition, there is elected bv the members of the commission, a secretary, who m ay or m ay not be a m em ber of the commission. A t the p resent tim e th a t position is occu pied by V an E. P eterson, who has re n dered excellent service to N ebraska sta te bankers. The Secretary of Trade and Commerce is a member ex-officio of the g uarantee fu n d commission and ch a ir man thereof. K irk Griggs is a t present filling th a t position splendidly. Briefly stated, it is the d uty of the N ebraska D epartm ent of T rade and Commerce, w henever it considers any sta te bank unsound, to take over th a t in stitu tio n and place it in charge of the gu aran tee fu n d commission, which p ro ceeds to c a rry on the ban k ’s affairs, eventually liqu idating it, unless it is only tem porarily em barrassed in which case the bank m ay finally be tu rn ed over to original stockholders. The law provides a maximum assessm ent of six-tenths of 1 p er cent per y ea r on daily average de posits of the sta te banks fo r credit to g u a ra n ty fund account. So much fo r m ethods of operation of the g u ara n ty law. H ere is the present sta tu s of the N ebraska sta te banks, ac cording to figures from the D epartm ent of Trade and Commerce, Mr. Griggs in charge : There have been 154 sta te banks taken over since the law w ent into effect in 1911, the vast m a jo rity of these since 1920 when the ag ricu ltu ral depression began. The commission is now operating th irty-seven of these banks, having liquidated and taken all the prim ary loss in 117 banks. E very depositor has been p aid in fu ll in banks which have gone into receivership. The sta te banks of N ebraska, through assessm ent m ade by the D epartm ent of Trade and Commerce, have reached down in th e ir pockets and paid out over $14,000,000 in direct as sessm ents. A to ta l of about $14,000,000 has also been realized through the liqui dation of the closed banks. The average https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis N O R T H W E S T E R N BA N KER 15 Facts A b o u t the N ebraska Situation N ebraska has a to ta l of 893 sta te banks, w ith $284,000,000 deposits. Since the law w ent into effect in 1911, th ere have been 154 sta te bank failures, the v ast m ajo rity of these since 1920. The G uaran ty F u n d has liquidated and taken all the losses in 117 of these banks and is now operatin g 37 banks. N ebraska bankers have paid out of th e ir own pockets, through the G uaranty F und, a to ta l of $14,000,000 since 1911. A to ta l of about $14,000,000 has also been realized through liquidation of the failed banks. The average loss per bank has cost the G u aran ty F u n d about $130,000 each. loss per bank to th e g u ara n ty fu n d has been about $130,000. The guaran tee fu n d will, of course, have to absorb the losses in the th irty seven state banks now being ru n by the commission. I t will also have to take the losses on some few o th er state banks th a t will come into the hands of the de p artm en t before the situ atio n is entirely cleared up. M ost N ebraska bankers and d ep artm en t officials say th a t ten to fifteen is a fa ir estim ate of the num ber of sta te banks th a t will yet be taken over, gran ted th a t N ebraska has a f a ir crop this year and next. This num ber in cludes those now being operated as going concerns. I f the sta te should suffer one or two crop failu res, ta k in g into consid eration the p resen t depressed farm s it uation, m ost au th o rities agree th a t this estim ate would not be adequate. Up-to-Date Figures But, facing the situ atio n w ith a faildegree of optim ism , w hat will be the o u t come of the plan, so f a r as assessm ents are concerned? M r. Griggs hazards these figures: N ebraska now has 893 state banks, w ith a to ta l of $284,000,000 de posits. There is a t presen t about $1,000,000 in the g u aran tee fund. H e estim ates th a t w ith f a ir conditions, th e g u aran ty fu n d should pay out and clean up the situ atio n in about th ree years. H is fig ures are as fo llo w s: E stim atin g th a t the average bank fa il ure in the fu tu re w ill cause an individual loss of about $110,000 (in stead of $130,000, as in the p ast) if losses in fifty more banks m ust be paid, which num ber in cludes those now operated as going con cerns by the g u aran tee fu n d commission : T o ta l loss o f ......................................$ 5,500,000 D e p o sit in s ta te b a n k s ............... 284,000,000 M axim um a sse ssm e n t o f a v e r age d a ily d e p o sits .................... -06 M axim um y e a rly a sse ssm e n t....$ 1,704,000 A t o ta l of th re e y e a r s ................. $ 5,112,000 To be re c e iv e d b y th e fu n d fro m s ta te b a n k s. A llo w in g $1,500,000 to be c o lle cted fro m sale o f a sse ts of d e fu n c t ba/"Vs . th is gW es th e fu n d a p p ro x im a te ly $6,612,000 to p a y off to ta l losses o f $5,500,000 d u rin g th e n e x t th re e y e a rs. M r. Griggs, conducting the affairs of the D epartm ent o f T rade and Commerce, in a f a ir and im p a rtial m anner, is doing splendid w ork fo r the N ebraska b an k ers, as is also Mr. P eterson, secretary of the g u aran tee fu n d commission. As to the principles and operatio n of the g u a r an ty law, Mr. Griggs has some in terestin g comment. He concedes th a t from an economic stan d p o in t, the law m ight be improved, but th a t in the presen t emergency, it is actually stabilizing N ebraska business conditions, although a severe d rain on the sta te banks, of course. He says the dem and from sta te b&nks fo r receivers’ certificates issued ag ain st the guarantee fu n d as secondary reserve, has always enabled th e fu n d to pay cash to depos itors. The receivers’ certificates m ature in one year or less and bear 6 p er cent. Thus fa r, every receivers’ certificate has been p aid before its m a tu rity date. He says th a t while stabilizing N ebraska conditions, the assessm ents levied have caused N ebraska sta te bankers to econo mize in every possibly way— in order that every Nebraska depositor shall be paid in fu ll! W hat the Public Thinks Does the public ap p reciate this sacri fice th a t N ebraska sta te bankers are m aking fo r the good of the sta te ? “Not alw ays,” says M r. Griggs, “some people take advantage of the situ atio n and it is h ard to convict a banker fo r violations of the law.” This seems to be borne out by facts, fo r a story was told by a banker concerning an instance in a N ebraska tow n where a banker, re tu rn in g from a p en iten tiary sentence, was m et a t the statio n by a brass band and a delegation of citizens welcoming him back home. (N atu rally the celebration had been paid fo r long ago, through the guaran tee fund, by oth er state bankers.) Mr. Griggs believes the N ebraska law is the best th a t has yet been devised, de spite its several weaknesses. W hen asked if he would recommend a sim ilar law 16 T II E to go into effect a t once in Iow a, M inne sota, or any of the other m idw estern states, he s a y s : “I t would seem th a t it would be impossible fo r the banking stru ctu re of m ost sta te s in this section to stand the im m ediate drain on its re sources. The law would have to have at least two years to build up a proper re serve.” Griggs Suggest Changes H ere are some suggested fea tu re s fo r a g u ara n ty law, as suggested by Mr. Griggs fo r other states to consider: The law should have two years to build up a reserve before going into effect. This reserve should be built up by penalizing all state banks fo r violations of the law, and all the other banking sins, each “sin ” to be fined a hundred, five hundred or thousand dollars, these to be fixed by law and enforced by the sta te banking departm ent. The “b ad” banker would th u s pay the bill, answ ering the u n a lte r able argum ent th a t the N ebraska law, and sim ilar laws, penalize the good b anker fo r the sins of the bad banker. I f such fines and penalties failed to build up an adequate reserve, according to Mr. Griggs, he em phatically feels that “the depositor and not the hanks should pay the remaining losses through state taxation.” H e adds, however, that with p ro p er supervision, it would probably never be necessary to levy state taxation except in a trem endous emergency. Mr. Griggs agrees with most of the N ebraska bankers who will express their ideas in this series of articles th at it is well and fine fo r the state banks to pay every de positor of every failed bank in full, but the cost is excessive to every good state hanker! How Nebraska Bankers View the Law T CANNOT be denied th a t the N e braska public including Jo h n H. De positor, is thoroughly in favor of the N ebraska g u ara n ty law. W hy shouldn’t he fav or it? Costing him not a single cent, he is vaguely aw are th a t despite the failu re' of 154 N ebraska state banks, n eith er he nor any other depositor has thus f a r lost a dime through any bank failure. But “A t W h at P rice, the G uaranty Law ” ? A nd w hat do the sta te bankers, who have footed the bill, thin k of th e ir g u aran ty law ? How do they view a piece of legislation which, while ad m it tedly protecting N ebraska depositors, has cost sta te bankers already more than fo u rteen m illion dollars? I The Questionnaire The Northwestern B anker last month sent a letter to everv state and national https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis N 0 R TH W ESTE RN BANKER bank in Nebraska, asking them their con fidential opinions on each of the fo u r following questions : ( 1 ) What is your opinion of the prin ciples and operation of the Nebraska Guaranty Law? (2) What do you think will be the eventual outcome of the plan? (3) Would you advise other western states to adopt a similar law, and if so, what changes, if any, would you suggest? (4) How has the Guaranty Law a f fected your bank and your community? In order to obtain the fullest expres sion of opinion from all N ebraska banks, The Northwestern B anker did not ask the bank to sign the questionnaire, except to state whether the bank answering the letter was a state or national bank. As this issue goes to press, opinions have been received from 400 state banks, and from 49 national banks. In other words, about h alf of all Nebraska banks have answered the questionnaire. In answer to Question No. 1, “W hat is your opinion of the principles and opera tion of the N ebraska G uaranty Law ?” 220 state banks and 48 national banks are em phatically opposed to both its p rin TO L IM IT C H A R T E R S S even ty-five N eb rask a state ban k ers, rep resen tin g co u n ty groups from all parts of the state, in O m aha recen tly ad op ted reso lu tio n s ask in g for law s to m ake b an k in g safer, as fo llo w s: F irst: D rastic restriction s of ch arterin g of n ew banks. S eco n d : C o m p lete rem oval of state hanks and the guarantee fund co m m issio n from p o litic a l in flu en ce and con trol. T h ird : D e v o tio n of en tire sum p aid by state banks fo r exam in ation fees to b an k in g d ep artm en t to aid in secu rin g m ore and b etter q u alified b an k exam in ers. F ou rth : D issem in a tio n of m ore in fo rm a tio n for u se of the bankers, as to the op eration s of the guaranty fund co m m issio n . F ifth : O p p o sitio n o f any p ro p osed ch an ges in the bank guaranty law w h ich w o u ld m ake m ore difficult the c o lle c tio n b y a state b an k cu s tom er of h is d ep osits. T h e reso lu tio n s su ggested w ill be c ir cu lated am ong the state ban k s for a ref eren d u m v o te and w ill b e co n sid ered and m ade m ore d efin ite at a secon d m eetin g. ciples and operation, and 180 state banks and one national bank say they are in favor of the law. It is thus shown that about 55 p er cent of all N ebraska state bankers, Avhile complying with every p ro vision of the g u aran ty law, oppose its principles and methods of operation, while 45 p er cent of the state banks favor it. The fact that 48 out of 49 national banks state their opposition to both the p rin ciples and operation of the law is not September, 1926 surprising, since the law has a tendency to create hostility between the state and national banks. The national banks feel that the advertisements being ru n by the state banks, stressing their guaranteed de posits, is inimical to national bank in ter ests, and in m any cases has resulted in cutthroat com petition th at has harmed bath factions. A National Bank Favors It The one national bank th at favors the law, makes some interesting comment on it, I t is a national bank in a town of 2500, w ith fo u r banks in it. The banker writes as follows: “ P rin c ip le a n d o p eratio n of law good, except a d m in istra tio n should be kep t m ore in th e hands of the b an k ers them selves and not in the h an d s of political appointees. ‘ ‘ O utcom e o f th e p lan will be a su ccess; it has w ithstood th e stra in of th e la s t few y ears an d we do not look fo r n e arly the d ra in on its fu n d s in th e fu tu re th a t it has w ithstood in th e past. ‘ ‘ T h in k o ther sta te s can well affo rd to tak e our law a n d m ake a b e tte r w ork in g p lan out of it th a n we have and assure success. W ith such changes as will keep th e a p p o in tm en t of b a n k exam iners out of politics, a n d in other wrays keep its a d m in istra tio n in th e h an d s o f th e b an k s them selves, it should be a w onderful help fo r an y sta te . N o c alam ity can be of such wide effect upon th e s ta te as th e fa ilu re o f a larg e num ber o f its b an k s an d the loss of its deposits to th e people; w itness th e condi tion of finances, business m orale a n d general fe elin g o f th e public as com pared in Iow a an d N eb rask a. “ How has the G u aran tee F u n d affected our b an k ? O urs is a N a tio n a l B a n k : we have suffered no ill effect fro m th e law, ra th e r we th in k th a t we have received a benefit, a t no cost, in th a t i t h as k e p t con fidence in all banks. ‘ ‘ In an y new law th e in d iscrim in a te g r a n t ing of c h a rte rs to b a n k org an izers should be very stro n g ly g u a rd ed a g a in st. T his w as not so in N e b rask a a n d as a consequence banks w ere sta rte d in places w here th ere were a lre a d y am ple b a n k in g fa c ilitie s, w ith th e re su lt th a t m any b an k s w ent broke from in a b ility to acquire enough business to m ake m oney. B an k s can n o t exist w ith o u t profits an d c h a rte rs should n o t be g ra n te d fo r local itie s th a t a lre a d y have sufficient b an k in g fa cilitie s. ’ ’ One point is p articu la rly im p o rtan t in analyzing the answ ers of the 180 N e braska sta te banks th a t answ ered fa v o r ably to Question No. 1. I t is t h i s : More than h alf of these banks, while statin g they fav o r the principles of the law, are lukew arm in reg ard to its m ethods of operation and suggest a num ber of vital changes. The v ast m ajo rity of them plead th a t the operation of the law be taken com pletely out of politics and be controlled exclusively by the bankers themselves. J u s t how such a m easure can be accom plished few of them are able to say. H ere is some of the com m ent from those who fav o r th e law but w ant it changed in certain resp ects: September, 1926 THE N O R T II W E S T E R N 1> A N K E R 17 O f 4 0 0 State banks and 49 N ation al banks in N ebraska, that answ ered the N O R T H W E S T E R N B A N K E R q u estion n aire, on th eir attitude toward the N ebraska guaranty law, q uestions and answ ers w ere as follow s: (1 ) “ W hat is you r o p in io n o f the p rin cip les and op eration o f the N ebraska guaranty law?" 2 2 0 State banks and 48 N ation al banks are op posed to the p rin cip les and op eration o f th e law. 180 State banks and one N ational bank favor it. Answers. (2 ) “ W hat do you th in k w ill be the outcom e of the p la n ? ’* A lm ost all o f the 2 2 0 State banks who are not in favor o f the law, predict its u ltim ate d o w n fall and repeal. O f the 180 State banks favorin g the law, 75 per cent o f them say the situ ation w ill right itse lf in five years or less. T he rem ainin g 25 per cent advocate certain changes in it b efore ven tu rin g an o p in io n on its outcom e. A nsw ers. (3 ) “ W ou ld you advise other m id d le w estern states to adopt a sim ilar law and if so, w hat changes, if any, w ould you suggest?" Answers. Sixty per cent o f all rep lies from state banks w arned other states not to adopt a guaranty plan sim ilar to the N ebraska plan, 10 per cent o f all the replies w ou ld change the law in certain respects b efore urging its ad op tion , 10 per cent frank ly advise other states to adopt th e N ebraska p lan as it now stands and 20 per cent o f the State bankers fa iled to v en tu re an op in ion . (4 ) “ H ow has the G uaranty Law affected y ou r bank and your com m u nity?" T h e answ ers range all the way from “ Has saved N ebraska," to “ H as torn dow n our state financial structure." Answers. Suggested Changes “I would suggest the ra te of in te rest on tim e and savings deposits be reduced from 4 to 3 p er cent -in consideration of the protection of the g u ara n ty law, and th a t such a ra te be fixed by law. This 1 per cent savings on tim e deposits in N ebraska sta te banks would pay a large p a rt of the m axim um six-tenths of one per cent assessm ent which the G uaranty F und m ay levy on our average daily de posits each year. Secondly, the opera tion of this law is too im p o rtan t to have it used as a political football and th e re fore should have business, and not p o liti cal, supervision. To do this the law should be supervised by a G uarantee F und Commission of not less th a n seven members to be elected by the bankers them selves.” A nother b an k er s a y s : “We should elect a G uarantee F u n d Commission using the present N ebraska plan, keep it out of politics, p u t the S ecretary of T rade and Commerce and the S ecretary of the Com mission under civil service and give them au th o rity to sto p bad banking practices a t th e ir inception.” A th ird sta te b a n k er s a y s : “I think the proper way to m ake the law Avork is to have the gu aran tee cover but 85 per cent of the certificates, those being in the n atu re of an investm ent, and then you will have the m oral support of the com m unity in the event of a bank failure. As it is now, when a bank fails, the com m unity will Avork against the b an k ’s re https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ceiver, thereby causing even greater loss to the other state banks. Also, under such a plan, before depositing their money, the people will make some inquiry as to hoAv the business of the bank is conducted, the character of the officers, etc. I Avould also suggest that the bank ers of this state have some voice in the selection of bank examiners, thereby taking the plan out of politics, for Ave are apt to get poor examiners A\dien the governor is paying' off his political obli gations.” T h e s a m e p o in t is s t r e s s e d in a n o th e r l e t t e r b y a s t a t e b a n k e r Avho f a v o r s th e la w Avith t h is e x c e p ti o n : “ G u a r a n te e o n ly in d iv id u a l d e p o s its a n d s a v in g a c c o u n ts . A tim e d e p o s ito r is a n in v e s to r a n d s h o id d u se h is o w n ju d g m e n t in su c h a n i n v e s tm e n t, j u s t a s he w o u ld in s e le c tin g a n in te r e s t - b e a r in g s e c u rity . T h is Avould do aAvay Avith a n y Avild-cat schem es o f c o n v e r tin g n o te s , e tc ., in to g u a r a n t e e d d e p o s its . A lso , k e e p th e d e p a r t m e n t o f T r a d e a n d C o m m e rc e o u t o f p o litic s , e m p lo y g o o d e x a m in e rs a t g o o d s a la r ie s a n d E X A M IN E b a n k s ! ” (The point of better examiners and more stringent examinations is made so often in these letters, that the casual reader might Avell conclude if such a course Avere adopted, there would be no guaranty laAv in the first place.) Its Staggering Cost A g rea t num ber of the bankers Avho fav o r the g u ara n ty law, adm it th a t it has cost them a staggering sum to ca rry it a lo n g th u s f a r . H e n c e , h e re a n d t h e r e c re e p s in th e o p in io n t h a t Avhile th e g u a r a n t y la w is g o o d f o r b u s in e s s , its e x p e n s e s h o u ld in so m e Avay be p a s s e d o n to th e p u b lic . O ne b a n k e r s a y s : “ T h e laAv h a s m a d e d e p o s its in s t a te b a n k s p e r f e c t ly s a f e , b u t th e n a tio n a l b a n k s s till c o n tin u e to r u n t h e i r b u s in e s s a s u s u a l a n d p e o p le se e m to h a v e f u ll c o n fid e n ce in th e m . I t is m y p e r s o n a l o p in io n t h a t , AA’h ile h e lp in g som e s t a t e b a n k s , th e laAv h a s c a u s e d m a n y b a n k s to go in to r e c e iv e r s ’ h a n d s th r o u g h h e a v y a s s e s s m e n t b y th e G u a r a n te e F u n d . I w o u ld lik e to see th e la w c h a n g e d so t h a t e a c h d e p o s i t o r in a s t a te b a n k w o u ld be c h a rg e d p r o r a t e f o r h is in s u ra n c e , a n d i f a n y o th e r s t a t e c o n te m p la te s a g u a r a n t e e la w , i t sh o u ld c o n s id e r t h is p o in t v e r y s e r io u s ly .” A lm o s t e v e ry b a n k e r o f th e 180 Avho fe e l f a v o r a b l y to w a r d th e laAv, h a ' e one o r tAATo p o in ts o f c r itic is m . O ne b a n k e r A vrites: “ I f su c h a la w sh o u ld be a d o p te d in o th e r s t a te s , th e b u r d e n o f i t s h o u ld be p la c e d o n th e d e p o s ito r w h o re c e iv e s its b e n e fits . T h e b a n k e r o b je c ts to th e c o n fis c a tio n o f h is p ro fits f o r th e p a y m e n t o f o th e r m e n ’s f a il u r e s . G ood b a n k in g p r a c t ic e d e m a n d s t h a t p ro fits b e firs t a p p lie d to b a d , d o u b tf u l a n d sIoav a s s e ts . U n le s s p ro fits a r e la r g e in r e la ti o n to d e p o s its , s u c h p r a c t ic e m a y b e im p o s s ib le u n d e r a s y s te m lik e o u rs , w h ic h f o rc e s u s to p a y f o r th e b u s in e s s lo sse s o f p e r so n s so m e tim e s in c o m p e te n t a n d d is h o n e s t.” P ractically all of the 220 sta te banks, (Continued on page 101) 18 TH E N O R T H W E S T E R N B A N K E R September, 1926 These Bankers Are For the Law “ A Fine Balance Wheel” “ W e b e lie v e th e p rin c ip le of th e G u a r a n te e L a w is sound. T h a t th e o p e ratio n is on th e w hole w ell c a rrie d out, c o n sid e rin g th e h u m an e lem en t. W e do n o t b e lie v e i t is p e rfe c t in p rin c ip le or p e rfe c t in o p e ra tio n , b u t v e ry m uch in th e rig h t d ire c tio n . “ W e h a v e f a it h in th e b a n k s of N e b ra s k a , b u t o f course m u st h a v e f a ir con d itio n s to c a rry th ro u g h to a sa fe p lace. M ost of th e b a n k s a re in good shape, b u t i f th e y h a v e crop fa ilu re s a n d h a v e severe local losses, th e g u a ra n te e fu n d o b lig a tio n s w ould be h a rd to m eet. W e th in k t h a t a ll w ill be w ell a n d a sa fe p lac e reac h ed . w ould p lac e p a r t o f th e re sp o n s ib ility on th e people w h ere p a r t of it belongs. “ W e h a v e a v e ry sta b le te r r i t o r y a n d a re of th e o p in io n t h a t th is specific com m un i ty w ould be as w ell off w ith o u t th e g u a r a n te e law , fo r w e a re o f th e o p in io n t h a t th e people of th is c o m m u n ity w ould h a v e c o n tin u e d confidence in th e b a n k s here. W e o f course kn o w t h a t th e law h a s g iv en people a d d ed confidence. I t h a s b e en a d ra in on our lo cal b a n k , in th e n e ig h b o r hood o f $16,000, b e in g p a id in to th e g u a r a n ty fu n d in th e la s t e ig h t y e ars. ‘ ‘ O ur opin io n is t h a t we w ould n o t be w ith o u t th e la w b u t t h a t it should be a m e n d ed to lig h te n th e b u rd e n of th e b a n k a n d p lace som e o f i t on th e people. ’ ’ “ W e b e lie v e t h a t th e N e b ra s k a G u a r a n te e L aw h a s b e en a b a la n c e w heel in th e te r r ito ry , t h a t i t h a s done v e ry m uch good. W e b e lie v e so m e th in g sim ila r w ould be o f b e n efit to a n y te r r i t o r y or s ta te . H o w ev er, we fe e l t h a t th e b u rd e n is n o t p lac ed e n tire ly w h ere i t belongs. T h a t th e b a n k s t h a t su rv iv e should n o t be e n tir e ly re sp o n sib le fo r th e g u a ra n te e in g of fu n d s d e p o site d . W e b e lie v e th e y should sh a re th is re sp o n sib ility , a n d our su g g e s tio n w ould be t h a t th e s ta te or g o v e rn m e n t sh a re e q u a lly w ith th em . T h a t a le v y be m ade to b e a r o n e -h a lf of th e b u rd e n , th is ‘‘Cheap Insurance” ‘ ‘F o r th e p a s t th re e , a n d a h a lf y e a rs, or p e rio d fro m D ecem b er 1, 1922 to J u n e 1, 1926, our to ta l a sse ssm e n ts u n d e r th e g u a ra n ty la w to ta lle d e x a c tly .0121 p e r c e n t o f o ur d ep o sits. W e kn o w o f no c h e a p e r in su ra n c e w e could g e t t h a n th is a n d i f i t w ere n o t fo r th e g u a ra n ty fu n d w ould c a rry som e fo rm o f in su ra n c e fo r th e p ro te c tio n o f our d e p o sito rs, e v en as we h a v e our a c tiv e officers b o n d ed fo r th e p ro te c tio n of th e sto c k h o ld e rs, a n d o f th e “T h e Law a Blessing!” By a State Banker “1. In our opinion the principles of the law are sound. E very b ank failu re em phasizes the fa c t th a t the public cannot possibly know if th e ir deposits are safe or not w ithout some form of protection other th an now afforded through the double liability of stockholders of each individual bank. The very fa c t th a t banks fail and depositors lose th e ir money and th a t th is happens rig h t along all over the country, is an indication th a t people cannot know if th e ir deposits are safe or not. I f they could they would not have th e ir money in such banks a t tim e of failure. The reason fo r the law in our opinion is fundam entally sound. “ The operation of the law in N ebraska is now quite satisfacto ry a fte r the original law had been am ended so as to provide fo r the creation of a G uarantee Fund Commission. W ithout th at amendment, in our opinion, Nebraska might not have survived the crisis through which other states could not pull w ith th e ir g uarantee law. There are no doubt possible im provem ents to be made to the law and no doubt such im provem ents will be enacted from tim e to time. “2. W e th in k the eventual outcome of the plan, in th is state at least, will be th a t the law will be still more am ended and eventually prove successful in the eyes of the skeptical and will be copied in other states. “3. W e believe other sta te s would do well to adopt a sim ilar law, and do not th in k of any special changes to suggest unless it would be to give the banks of the sta te a little more latitu d e in the handling of affairs of weak and closed banks. “4. The G uarantee Law has had a good effect upon the business of this bank and of the community. W e are paying 4 p er cent on time deposits now and our N ational Bank com petitor is paying 5 p er cent and our deposits are increasing much more th an theirs. There have been sta te banks failed in th is com munity and people do not seem to feel a bit uneasy over it. They seem to feel p erfectly satisfied th a t th e ir deposits are safe in state banks.” https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis fu n d . I n our e stim a tio n th e g u a r a n ty law , as e n a c te d a n d in o p e ra tio n in th is s ta te , is a fix tu re t h a t w ill s ta y a n d w ill g ra d u a lly w o rk in to e v e ry s ta te . W e a ll re a liz e t h a t m an y fa ilu re s , b ecau se o f u n fo re s e e n or u n e x p e rie n c e d c o n d itio n s h a v e a ris e n in m a n y c o n se rv a tiv e b a n k in g in s titu tio n s , a n d th e a rg u m e n t t h a t i t p a y s fo r th e losses o f p ro flig a te b a n k e rs c a n n o t a l w ay s be tru e . I t is so g e n e ra lly u n d e rsto o d in o ur co m m u n ity t h a t no one is m uch con c e rn e d w ith w h a t h a p p e n s to th e lo cal or s ta te b a n k in g f r a t e r n it y , a n d i t m ig h t be te rm e d in su ra n c e b o th fo r p ro te c tio n a n d fo r o p tim istic c o n te n tm e tn t. ” ‘‘Has Stood the Test” “ W e b e lie v e th e d e p o sito r sho u ld have som e fo rm o f p ro te c tio n a n d we also b e liev e t h a t N e b ra s k a has th e b e st g u a ra n ty la w y e t e n ac te d . H o w ev e r i t h a s been ex p e n siv e d u rin g th e p a s t six y e a rs to th e c o n se rv a tiv e b a n k e r ( s ta te b a n k e r) as he has, in a m easu re, b e en com pelled to con tr ib u te , in som e in sta n c e s , to th e p a y m e n t o f d e p o sito rs in b a n k s w h ere th e m a n a g e m e n t w as e ith e r w o e fu lly in c o m p e te n t or else u n sc ru p u lo u s a n d d ish o n e st. ‘ ‘ In a sm u c h as th e g u a ra n ty law has sto o d up u n d e r th e w o rst b u sin e ss slum p a n d d e p ressio n t h a t th is n a tio n h a s e x p e rie n c e d in a decade, w e h a v e no d o u b t b u t w h a t i t w ill c o n tin u e to f u n c tio n and t h a t th e c o n se rv a tiv e , so lv e n t b a n k s w ill ‘ ‘ p a y th e b ill. ’ ’ ‘ ‘ In th is im m e d ia te lo c a lity th e g e n e ra l p u b lic has im p lic it confidence in th e g u a r a n ty fu n d , a n d we b e lie v e t h a t th is is q u ite tru e o v er th e s ta te , a n d w hile th e re a re som e th in g s in th e g u a r a n ty law w hich u n d o u b te d ly should be m odified or a d ju s te d , s till we should n o t lik e to see th e law re p ea le d . “ W e a re a s ta te b a n k a n d a re, o f course, o p e ra tin g u n d e r th e g u a ra n ty law . ’ ’ ‘ ‘Benefits Everyone ’ ’ ‘ ‘ 1st. I n our op in io n th e p rin c ip le s of th e g u a ra n te e law in N e b ra s k a a re c o rre c t a n d should be m a in ta in e d . T he law a t p re s e n t is w o rk in g b e tte r th a n a n y tim e since its e n a c tm e n t, h o w e v er th e re are som e th in g c o stin g th e b a n k s m ore th a n th e y should, b u t th ese le a k s a re b e in g c o rre c te d as th e y a p p e a r, a n d in tim e we hope to h a v e a n o rg a n iz a tio n t h a t w ill fu n c tio n w ith th e le a s t possib le expense. ‘ ‘ 2nd. I th in k a ll b a n k s, in a ll sta te s w ill h a v e some g u a ra n te e law , a n d u n til th e y g e t so m e th in g a lo n g th e lin e o f th e N e b ra s k a law , th e y w ill be e x p e rim e n tin g , fo r w e kn o w th e N e b ra s k a law has stood th e m ost rig id t e s t e v e r p lac ed on b a n k s to p e rfo rm . “ 3rd. I c e rta in ly w ould a d v ise all b a n k s in a ll s ta te s to g e t u n d e r a g u a ra n te e law , a n d th e N e b ra s k a la w is good, w hile o th e r law s w ould be a n e x p e rim e n t. ‘ ‘ 4 th . O ur c o m m u n ity w as effected by th e g u a ra n te e law , b y p la c in g a b so lu te co n fidence in d e p o sito rs, a t a tim e w hen (C o n tin u e d o n p a g e 71) T II E September, 1926 N OR TH W E S TE RN BANK E R 19 These Bankers Are Against the Law ‘ ‘U n w ise a n d D a n g e ro u s” ‘ ‘ I t is our o p in io n t h a t th e p rin c ip le s of th e N e b ra s k a g u a ra n ty law a re unw ise a n d d a n g ero u s. I t has o p e ra te d to th e c o n tin u e d d e trim e n t o f th e b e tte r m a n a g ed b a n k s, b u t to th e a d v a n ta g e of in n o c e n t d e p o si to rs. E v e n tu a lly th e p la n w ill d o u b tle ss fa il, fo r th e re a so n t h a t th e lia b ilitie s con tin u e to p ile up, w hile re c e ip ts fro m a sse ss m en ts d im in ish , a n d should le g isla tio n be e n a c te d in c re a s in g th e se asse ssm e n ts, no d o u b t m o st o f th e b e tt e r m a n a g e d a n d la rg e r b a n k s w ould n a tio n a liz e . O ur a d vice to th e b a n k s in o th e r w e ste rn s ta te s , is to fight th e e n a c tm e n t of a g u a ra n te e law to th e b e st of th e ir a b ility . “ Do n o t kn o w t h a t th e g u a ra n te e law has a ffe c te d our c o m m u n ity in a n y w ay e x c e p t t h a t som e in te re s t m oney lias come to us fro m n e ig h b o rin g s ta te of K a n sa s. T his, ho w ev er, w ith o u t so lic ita tio n on our p a rt. “ In th e op in io n of th e w rite r, tw o a m e n d m e n ts sho u ld be e n a c te d ) g ra n tin g t h a t re p e a l o f th e a c t w ould n o t be p o p u la r w ith th e le g is la tu re ), first th e d e p o si to r sh o u ld n o t be fu lly p ro te c te d , p o ssib ly only to 66% o f th e d e p o sit, th u s c a rry in g o n e -th ird of th e risk h im s e lf; th e o re tic a lly , such a n a m e n d m en t w ould cause m ore d is c rim in a tio n b e tw e e n b a n k s on th e p a r t o f th e d e p o sito rs ; secondly, som e m ean s sh o u ld be g ra n te d w h e re b y a s ta te b a n k can w ith d ra w fro m th e sy ste m upon p a y m en t o f its p ro p o rtio n a te sh a re of o u t s ta n d in g lia b ilitie s ; th is a p p lic a tio n fo r w ith d ra w a l be s u b je c t to th e w ill o f th e G u a ra n ty F u n d C om m ission a n d effective th re e m o n th s a f te r p e rm issio n is g iv en . A n u m b er of N e b ra s k a s ta te b a n k s h a v e p a id in to th e f u n d a n a m o u n t e q u al to th e b a n k ’s c a p ita l sto c k , a n d w hile i t is tru e , t h a t a p a r t o f th is a sse ssm e n t h a s been p a id in d ire c tly b y th e b o rro w e r, y e t a la rg e p a r t o f th e a m o u n t should h av e b e en used c h a rg in g off slow a n d w o rth le ss a sse ts w ith in th e b a n k . “ T he a b so lu te fa lla c y o f th e g u a ra n te e fu n d w as re c e n tly b ro u g h t to lig h t in th is s t a te th ro u g h th e fa ilu re of th e P a p illio n b a n k , w h e re in th e b a n k w as w re ck e d to th e lim it a n d th e re st of us p a id th e bill, a t le a st th e s ta tu te s sa y t h a t we s h a ll.” ‘ ‘P rin c ip le s W ro n g ’ ’ “ I th in k t h a t th e p rin c ip le s o f th e g u a r a n ty law in N e b ra s k a a re w rong. E v e ry good s ta te b a n k in N e b ra s k a h a s been o b lig e d to sp en d a g re a t d e al of m oney on a c c o u n t o f th e poor a n d w e ak b a n k s in th e s ta te , w h ich h a v e gone in to th e h a n d s o f a re c e iv e r. T he g u a r a n ty la w h as been a good th in g fo r th e d e p o sito r, who sho u ld n o t be com pelled to ta k e a loss in a n y b a n k , b u t I th in k each b a n k should p ro te c t th e ir d e p o sito rs fro m loss, a n d n o t be com pelled to p a y in to th e g u a ra n ty fu n d fo r th e b en efit o f th e w e ak a n d poorly m a n a g e d b a n k s. B a n k s sho u ld h a v e good s u b s ta n tia l m en b e h in d th e m a s sto c k h o ld ers, in o rd e r to hold th e confidence of t h e i r custom ers. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ‘ ‘ I t is h a rd to te ll w h a t th e outcom e of th e g u a ra n ty law w ill be, a n d I d o u b t v e ry m uch t h a t a n y good b a n k e r can a n sw e r th is q u e stio n fo r a n u m b er o f y e a rs y e t. “ I could n o t a d v ise a n y w e s te rn s ta te s to a d o p t a sim ila r law . ‘ ‘ The g u a r a n ty law h as n o t a ffe c te d our b a n k or o ur c o m m u n ity .” “ A P o litic a l P a n a c e a ” ‘ ‘ I h a v e b e en a m a n a g in g officer o f a s ta te b a n k in N e b ra s k a fo r 35 y e a rs ; in m y p re s e n t lo c a tio n 27 y e a rs. “ T he N e b ra s k a g u a r a n ty law w as sp o n sored se v e ra l y e a rs ago by W illia m J . B ry an as a p o litic a l m easu re, a p a n a c e a fo r th e d e a r people, g u a ra n te e in g th e ir depos its in s ta te b a n k s. T he law h a s been a p o litic a l fo o tb a ll e v e r since it w as e n ac te d . In m y op in io n i t is e n tire ly u n fa ir, u n econom ic, a n d in th e end d e stin e d to fa il as a p ra c tic a l, s a tis f a c to r y a n d ju s t law . I t is not. O ur b a n k has $50,000 p a id up c a p ita l. T hus fa r we h av e p a id a sse ss m en ts in to th e fu n d a m o u n tin g to $32,000. P r a c tic a lly a ll o f th is a m o u n t has been p a id d u rin g th e p a s t six y e a rs. The m oney we h a v e p a id in h as gone to p a y d e p o sito rs o f o th e r fa ile d b a n k s in th e s ta te . W h y should we be o b lig e d to do th is ? Is th e re a n y th in g f a ir a b o u t it? I do n o t th in k so. M ost o f us need t h a t m oney to c are fo r our ow n losses. ‘ ‘ One o f th e g re a te s t w eak n esses o f th e law , in m y opinion, is t h a t w hen i t com es to b e in g a ssessed we a re p ra c tic a lly a m em b e r o f a c o -o p era tiv e in su ra n c e com pany b u t w hen i t comes to th e m a n a g e m e n t of th a t in su ra n c e co m p an y th e s ta te b a n k ers h a v e l it t le to say. A ll we h e a r is p ay , p ay , p a y , b u t we who do th e p a y in g h a v e n o th in g to sa y a b o u t th e policy or m a n a g e m e n t o f s ta te b a n k s. T h a t is le f t to th e p o litic ia n s. I th in k th e law sho u ld be re p e aled a n d we should a g a in go b a c k to old tim e b a n k in g u n d e r th e law o f th e su rv iv a l o f th e fitte st. T h en b a n k s w ould be b e tte r a n d m ore c o n s e rv a tiv e ly m an a g ed . T he w e a k lin g s w ould th e n be w eeded out a n d we w ould n o t th e n h a v e a c o n d itio n w hich we now h a v e in t h a t w e ak a n d im p ro p e rly m a n a g e d b a n k s u n d e r th e g u a ra n ty law are as stro n g as th e good b a n k s. M isdeeds a n d crim es of officers o f fa ile d b a n k s w ould be p u n ish e d as o f old. N ow d e p o si to rs o f fa ile d b a n k s g e t th e ir m oney a n d th e y a re n o t in te re s te d in p ro se cu tio n s. B a n k officers g e t a w a y w ith a n y th in g . The w hole s itu a tio n is one o f re ck lessn e ss a n d u n so u n d b a n k in g . ’ ’ ‘ ‘P rin c ip le s W ro n g ’ ’ “ No. 1.— T he p rin c ip le is w rong, in t h a t th e law re q u ire s th e p ru d e n t a n d h o n e st b a n k e rs to p a y losses of d ish o n e st a n d poor (Continued on page 49.) “T h e Law a C urse!” By a S ta te Banker “1. The N ebraska G uarantee law is founded on wrong financial principles, and has increased a wave of poor banking. It. has p u t a prem ium on the poorest of our class. W e once thought conservative principles tended fo r good banking and fo r an a ttra c tio n to the best financial people. The G uarantee elim inates all such consideration. “2. I think the law m ust be amended, or we m ust see g reater financial dis aster. A lready the state banks have been assessed about fo u rteen m illion to pay losses, and h alf as much more stares us in the face. No other business has faced such a strenuous line of confiscation under the name of taxes, and no oth er policy could have done so much harm in re ta rd in g the efforts of the finan cial in terests to bring the state back to prosperity. Of necessity we all have had some losses, and the m oment we th in k we have saved a dollar to rep a ir our own troubles, we are assessed till the assessm ent lias am ounted to n early a confiscation of capital and surplus w ithout much com pensation. “3. I certain ly would not advise any o th er com m unity to indulge in bank g u aran tee on the N ebraska plan. I t is bad banking, both fo r the banks and fo r the public. “4. The bank guarantee has given a false security to the depositors, so th a t they desposit, in any bank and feel secure. It has prom oted bad banking, as num erous banks have continued to ru n as long as they had the nerve, though well known to be insolvent. W hen a bank loses its nerve, and can no longer face its financial difficulties, then the state'S tep s in and continues to ru n the bank, p artly by assessing the guarantee fund and p artly on nerve. Not long ago the dep artm en t sent us statem en ts of thirty-five banks being operated by the S tate G uarantee Commission. There might be more and might be fewer of them now, as all such are fo r sale. B ut the whole business looks to me as being co n trary to the best financial principles.” 20 THE NORTHWESTERN BANKER September, 1926 THE FATHER— THE SON— and THE DONKEY Another Bedtime Story By B UDDY, <lo you remember the story I used to read to you about a father, and his son, and their donkey ?” “Yeah, pop, I remember. I t sure was a punk story. They sta rte d out to lead the donkey to m arket, but people began to make fun of them fo r w alking when they had such a good chance to ride, so the old m an p u t the boy on the donkey’s back, but this d idn’t sa tisfy anybody, and people began to talk and cuss about a boy who would ride and m ake his poor old dad walk, so they trad e d places, and the old m an rode a while, b u t the people thought th a t was aw ful, too—fo r a grown man to ride and make his poor little boy walk, so then they both got on the donk’s back and rode a ways, but the people thought th a t was still aw fuller, to impose on a poor dumb donk th a t way, so finally they both got off and walked along carrying the donkey slung on a pole be tween ’em. T h a t’s the story you mean, ain ’t it, pop?” “Yes, son, th a t’s it. And now can you tell me about the m oral?” “W hat m orl? You never told me about no morl, pop. All you ever m entioned was the old man, a n ’ the kid, an ’ the donk. W hat did the morl do?” “No, no. You don’t understand, my boy. I mean, w hat lesson does this story teach, th a t we should alw ays rem em ber ?” “Oh, I know th a t, all rig h t. I t teaches the lesson th a t w henever you tak e a donkey to m arket you’ll get there a lot quicker if you do it your Avay, and tell oth er people to go lull hell if they don’t like i t !” “W hy, E lb e rt! Such la n g u ag e! W here on earth did you pick up expressions like th a t is more than I can fathom .” “W ell, I picked up a few th a t tim e I heard you pound your thum b when you tried to fix the car the other day—an' then another tim e when you—” “W ell, as fa th e r was ju st saying, the m oral of this little sto ry applies to bank ing ju st as it does to any other p ro fes sion that savors of public service. And, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis R o sc o e M a c y to illustrate, father is going to tell you the story of a Avise old banker and his foolish son: “It seems that there Avas once a Avise old banker banking in a bank. I t was a one-man bank, and he Avas the man. H e practically carried the business in his vest pocket; he Avas the only living per son AArho kneAV the vault door combina tion, and he Avould never take a vacation for fear the interest would stop. H e had one weakness—a feeble-minded son Avho had graduated from college with high honors and Avas about to finish his post graduate course in the School of Busi ness Administration, after Avhich it was the understanding that he Avas to come back home and take a little piece of the bank off his father’s shoulders. The father Avas getting old, and began to feel at last that he Avould enjoy a week’s va cation, pitching hay on the farm. “A t last the young fellow figured that he had learned all there Avas to knoAV, so he came home with a diploma in his pocket, and knowledge sticking out all o\Ter him. H e spent a week or so resting up and digesting his education, but it took him only a couple of days to size up the situation in the bank. Leaving father to look after the occasional cus tomer Avho came in, he locked himself up in the back room and busied himself add ing up long columns of figures, until the totals really greAV quite imposing. Then one day he called the old man in. “ ‘D ad,’ he opened up, ‘I ’m going to have to give you some p re tty p lain talk, but if you don’t like Avhat I say, please rem em ber th a t I have the figures to back up every statem ent. You like to call this a one-man bank, b ut you haven’t got it quite rig h t. I t ’s a one-horse bank! Look a t our d ep o sits! W hy, the in te rest on our loans AAyon’t even pay me th e salary I ’m entitled to, leaving all oth er expenses out of consideration. I ’ll tell you rig h t now, d a d ; w h a t it tak es to make a real bank is a good line of deposits. W e’ll haA7e to go out a f te r more business.’ “ ‘Yes, son, and it also takes good notes, and a reasonable expense account, and sound judgm ent in the m anagem ent to make a real bank. However, I ’m not saying you’re wrong. Go to it.’ “So the young felloAV began to go out after deposits. He raised the interest rate on time deposits, installed expensive services for the benefit of depositors, and soon had the Avhole community talking about what a good bank the Millslagle bank was, if you had a lot of money. “Some of the citizens, however, didn’t iike it quite so Avell. They Avere the ones A\7ho had notes at the bank, or Avho ex pected to have to borrow later. The in formation came to them that they Avould have to pay a higher rate of interest on the next note, and they began to kick like the proverbial brindle steer. Some of the regular borrowers, instead of reneAVing their notes at maturity, as they had been doing for years and years, paid them off with checks on other banks. So the bills receivable account, instead of keeping pace Avith the mounting deposits, began to dAvindle away, and it was the good borrowers—those who could get money at any bank in the country—Avho Avere paying off their notes. “W ell, a fte r the situ atio n finally got so serious a child could see it, young M ill slagle began to feel th a t som ething was wrong. So he took to h au n tin g the back room again, and in a feA V days he had made the bank all over again on his dope sheet. B ut he still couldn’t bring him self to adm it th a t he could have made a m istake. “ ‘W ell, dad,’ he said, ‘you see I ’ve built up our deposits to a reasonable fig ure. Now it is tim e to look a f te r our earning assets a bit. The quickest and best w ay to brin g them up in line w ith our deposits is to reduce our lending rate. Of course Ave’ll have to cut down the rate on tim e deposits, too, b ut people have form ed the h ab it of banking here now, and th e y ’ll stick by us.’ “ So the lending ra te Avas reduced, until they were offering cheaper money than the old man had ever thought of offering before Its son w ent to coIU o-q, and the (C ontinued on page 52.) September, 1926 T II E N 0 R T II W E S T E R N BANKE R 21 Diversified Farming as Taught at the Northwest Dairy Exposition W H A T does diversified farm ing really m ean? There is a m is guided apprehension here in the N orthw est th a t diversification and d a iry ing are synonymous. N othing could be fa rth e r from the tru th . C ertainly it is no advantage to the farm er, or to the business man who depends upon agricul tu ra l p ro sp erity fo r his own being, to change from a system of one-crop grain farm ing to a system of one-crop dairy production. One is as unbalanced as the other, and the rem edy in th a t case is as severe as the m alady. The laym an’s usual conception of di versified farm in g is a herd of reasonably good cows, a milk stool, a pail and the farm er m ilking profits and prosp erity fo r all he is w orth. P leasan t picture, ’tis true. The old-tim e tandem harvesters also make a pleasant picture, but as tim e w ent on not a very profitable one. D airy cows alone cannot solve the N orthw est ag ricu ltu ral problem any more th an onecrop grain farm in g has solved it in the past. I t will take careful reorganization of the average farm w ith stric t atten tio n paid to efficient crop farm in g w ith a sizable herd of live stock, including dairy cows, as a basis. Balanced Farming The true m eaning of a diversiücation is the tran sfo rm atio n o f farm ing into a business. Efficient business m ethods m ust be adhered to in order to show ade quate profits each year. Live stock of all kinds form s the basis of diversifica tion or better, balanced farm ing. Every farm should have some live stock. Pigs, d airy cows, sheep, beef anim als and chickens are excellent machines fo r changing o rd in ary farm products into commodities of a high m arketable value. Live stock m akes it possible fo r the farm er to tu rn over his dollar not once in a year or once in every two years as before but as m any as three and four tim es annually in the case of the m eat anim als and once a m onth in the case of d airy cows and chickens. I t needs ju st o rd in ary business sense to see th a t the increased turnover will also increase the farm profits. Crop ro tatio n in an orderly m anner, another im portant phase of diversifica tion, retains the fertility of the soil and removes the risk to the farm er of having his entire investm ent tied up in one com modity. H is eggs are not all in one bas ket. I f one crop is poor or fails com pletely, he still has two or three others to rely upon to tide him over to the next https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis T h e N orth w estern D airy E x p o sitio n co m m ittee, an organ ization of b u sin ess m en and agricu ltu ral lead ers in this territory, w ill te ll the story of b alan ced farm in g at the D airy sh ow to be h eld w ith the State F air S ep tem b er 4 to 11 th is year. T h e ed u ca tio n a l ex h ib its are u n iq u e and co n v in cin g and w ill illu s trate efficient m eth od s of m ak in g farm in g a b u sin ess. crop year. The farm crops, too, are espe cially valuable in saving money o th er wise spent fo r p rep ared or purchased live stock feeds. The farm er on the tru ly diversified farm does not only ro tate his crops ac cording to a definite plan, b u t he also uses only the highest-grade seed and is careful to keep his crop clean d u ring the grow ing season to m ain tain his stan d ard of production by elim inating fe r tility draining weeds. M illions of dollars are lost annually in N orthw est g rain m ar kets through dockage. Dockage is n o th ing more than weed seeds which could have been elim inated either by p u rch as ing clean seed or cleaning the farm grown seed before planting. B alanced farm in g is much like the n u r sery rhym e of “The House T hat Jack B uilt,” where the en tire com munity, in cluding the cats and dogs and live stock p articip a ted in the construction of the m ansion of the proverbial John. The d airy cows eat the a lfa lfa and the grain and the corn and the silage and they in tu rn fu rn ish the pigs and the chickens and the calves with skim milk, a valuable m eat-and-egg p ro d u c e r; and they in tu rn fu rn ish eggs, bacon and veal and poultry, which have a high m arket value. And so we have the live stock deriving valu able products from the soil and in re tu rn they help to m ain tain its fe rtility . Business and Agriculture • B ut w hat relatio n has this all to the business of the N o rth w est? There is no need to re ite ra te here the dependency of N orthw est business upon N orthw est ag ri culture. T hat has been em phasized tim e and again. B ut all in all the business men in this te rrito ry are playing a large p a rt in the g rea t diversification move m ent of the N orthw est. Through the N orthw est D airy Exposition, a p a rt of the M innesota S tate F a ir, to be held Septem ber 4th to 11th, a business m en’s com mittee has illu strate d through unique exhibits ju st w hat diversified farm in g is and how it can be accom plished. This y ear is the fo u rth of the N orthw est show. F o r two years before th a t business men were active in bringing the N ational D airy E xposition to the N orthw est in 1921 and 1922 to tell the same story. A p o rtio n o f th e d isp la y w hich show ed th e enorm ous losses to N o rth w e s t fa rm e rs th ro u g h dock ag e in sm all g ra in . T ypes of w eed p e sts w ere e x h ib ite d a n d re m e d ie s fo r cle an crops w ere su g g e ste d in a n in v itin g m an n e r. 22 T HE New Banking Home An im posing new $1,500,000 home, tow ering 14 stories in height and occupy ing the entire southw est corner of T hird and M ain streets, w ith the bank occupy ing the entire ground floor and w ith eleven stories of offices above the bank ing rooms, has been announced by the American Commercial & Savings Bank, D avenport, Iowa. Officials of the bank have already ap proved the prelim inary sketches of the arch itects and w ithin three or four m onths the detailed plans and specifica tions will be completed. I t is expected th a t the contract can be let before the N O R T II W E « T E R N BA N K E R end of this year and th a t the new sky scraper will be ready fo r occupancy by -January 1, 1928. The building will occupy all of the p roperty owned by the bank on the cor ner of T hird and M ain streets, ex tend ing 100 feet on W est T h ird and 150 feet on M ain street. I t will be necessary to te a r down the p resent building in order to provide r e quisite foundations fo r the new sky scraper which will be erected. Bank offi cials stated today th a t they had not yet decided w hether it will be necessary to move into tem porary q u arte rs d uring the period of construction or w hether the September, 1926 new building will be erected in two u n its and in such a way as not to make moving necessary. Farm Mortgage Convention The citizens of Richm ond have a r ranged to tak e the m ortgage bankers on a rem arkable trip to historic points in V irginia on the day follow ing the form al convention program . F rid ay , Septem ber 24th, will be spent in a trip to Jam estow n Island, the site of the first p erm anent colony in A m erica, which was settled 319 years ago, and also the site of the first communion service ever celebrated on this hemisphere. From Jam estow n they will proceed to W illiam sburg, to home of the first legislative body of A m erican colon ists, 1619, tak in g lunch on the cam pus of W illiam and M ary College, the first In d ian school ever established on this continent and the second old est college in th e U nited States, ran k in g next to H arv ard in a n tiq u ity . I t is also in W illiam sburg th a t B ruton church is located, B ru ton P a rish being the first Episcopal p arish to be established on this con tin en t. F rom W illiam sburg they will p ro ceed to Y orktow n, where 145 years ago L ord Cornw allis surrendered to G eneral W ashington and ended the R evolutionary W ar, and it was at this spot the freedom of A m erica was born. A golf tou rn am en t at the Y ork town C ountry Club will begin at 2:30 p. m., on a fine golf course on the site of the b attle and su rren d er a t Y orktown. The fortifications have been restored, and the first tee is a t the breach in the Cornw allis fo rtifi cations. Second, th ird and fo u rth holes cross the “ S u rren d er G round.” A t the rig h t of the seventh tee are the colonial fortifications. The six teen th fairw ay is on the ground over which A lexander H am ilton made his attac k on the redoubt. In leaving the eighteenth green you pass through a break in the Cornwallis fortifications made, no doubt, by the artillery fire. A real prize will be in store fo r the w inner of the to u rn a ment. The th ree tow ns nam ed being w ith in a few miles of each other are very accessible from Richmond. People seem to think themselves in some ways as superior to heaven it self, when they complain of the sor row and w ant round about them. And yet .it is not the devil fo r certain who p u ts the p ity into their hearts.— Thackeray. T he new hom e o f th e A m e ric a n C om m ercial a n d S a v in g s B a n k , soon to be e re c te d in D a v e n p o rt https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis P atien ce is the chiefest f ru it of study.— Seiden. September, 1926 THE 23 N O K l 1 11 W E S T E R N B A N K E R ADS of the M ONTH Helps and Hints on Local Newspaper Advertising By the Service Department, ]\[orthwestern Banker “ The K id That Goes A ’Sw im m in’ in the Crick.—A thin, shallow trickle of w ater running under a railroad bridge may be the setting. But it looks like the Beach at A tlan tic City to him. H e isn’t p articu la r. The cool ground tinder his feet on the bank, the splash in the stream —th a t’s his idea of the way to spend every day of his life. A few years from now when he is singing college songs he will have a different view point. Six years from th a t time his am bitions will undergo another change—and so on through. I t would be h ard to tell the boy th a t swims in the (-reek, but at a more sensible age most people know that it pays to lay aside a reasonable p a rt of their income in the bank. L ater when times have changed or vision brings new opportunities to light, a bank account will make a big differ ence.— P e o p l e s S t a t e B a n k , Lacona, Iow a.” “The H um an Side.—H undreds of peo ple come into our bank every year fo r help with all sorts of financial problems. Some seek plans that will help them save money. Some seek advice on investments, life in surance, home buying, financing the educa tion of their children and m any other things. Some are depositors, others are not, th at makes no difference to us. Our object is to help them, and, if possible pro- E d itor’s N o te :— F or the b en efit of its m any readers, each m on th the N o rth w estern B an k er ad vertisin g staff w ill su b m it at lea st tw o o rig in a l ad ver tisem en ts w ritten b y the S ervice D e p artm en t of this m agazin e, for u se w ith out charge b y its b an k er readers. T h e su b scrib er can sim p ly clip them from this p age and pass them on to his local n ew sp ap er, thu s savin g h im s e lf tim e and tro u b le in w ritin g h is ow n copy. tect their hard-earned money. Ju st re member th a t whether you áre a depositor or not we shall always be glad to help you if we can.— F i r s t N a t i o n a l B a n k , Nora Springs, Iowa.” “Gathering the H arvest.— How g ra ti fying it is to realize in the fall of the year on the harvest which has been carefully tended during the summer. I t is also g ra ti fying, when we become older, to realize on the harvest of finances which will be in ju st proportion to the care we have exercised in conserving w hat we have made.— S t a t e S a v i n g s B a n k , Clarksville, Iow a.” “As the Years Go B y it is a com forting feeling to know th at you have something •put by’ in a Reserve F u n d th at is earn ing a good rate of interest, and ever ready “ R ea l S u c c e s s I s an O a k o f S low G r o w t h " A s u c c e s s f u l b u s i n e s s m a n , o n e w h o is n o t o n l y w e ll fixed f in a n c ia lly , b u t w h o h a s f o u n d t r u e s u c c e s s in h is s e r v ic e to o t h e r s , s a id to u s n o t l o n g a g o in s p e a k i n g of h is e a r l y life: “M y f i r s t j o b w a s w i t h a n e n g r a v i n g c o m p a n y , a n d m y s a l a r y w a s $15 a w e e k . O u t o f t h i s I p u t $5 i n t h e b a n k e v e r y p a y d a y . W h e n I g o t a r a i s e t o $25 a w e e k , I s a v e d $10 o f it. T h e r e w e r e n o i f s n o r a n d s a b o u t it. T h a t c e r t a i n a m o u n t w a s s e t a s i d e e v e r y w e e k . ’’ H is c a p ita l g r e w slow ly, b u t it g re w su re ly , and t o d a y t h a t m a n is t h e o w n e r o f a b u s i n e s s t h a t b r i n g s h im in a n ic e in c o m e . W h y ? B e c a u s e w h e n h is o p p o r tu n i ty c a m e h e h a d s a v e d th e c a p i ta l to be a b l e t o t a k e a d v a n t a g e o f it , a n d h i s b a n k e r , k n o w i n g o f h i s t h r i f t , w a s m o r e t h a n g l a d t o h e l p h i m in e v e ry p o ssib le w ay. O p e n a s a v i n g s a c c o u n t w i t h u s T O D A Y . Y o u ’ll n e v e r r e g r e t it. N AM E TOWN https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis OF B A N K STATE to aid you either in emergency or op p o r tunity. Many of this country’s most suc cessful and wealthiest men keep a sizeable Reserve F und in Certificates of Deposit. Profit by their experience. Y our Certifi cate of Deposit here will earn 4 p er cent.— F a r m e r s S a v i n g s B a n k , Remsen, Iow a.” “W ho Gets the M oney Y ou E a r n f— Spending all means an endless circle of effort without profit. A p a rt of the money you earn belongs to you—to keep. An ac count with this bank is a convenient, sys tematic plan by which you can get ahead with small regular deposits. A deposit of one dollar or more is all you need to start an account with us. A dditional deposit made every week will keep your balance steadily increasing. S ta rt your account here today.— F a r m e r s S a v i n g s B a n k , Manson, Iowa. The roses of pleasure seldom last long enough to adorn the brow of him who plucks them ; fo r they are the only roses which do not retain their sweetness afte r they have lost their beauty.—More. P ay is a sacred thing, a divine o rd in ance, fo r developing in the child a h a r monious and healthy organism, and p re p artin g th a t organism fo r the commence m ent of the w ork of life.—H olland. SAFETY and S E R V I C E Safety fo r your money and valu ables— service in the handling of your various accounts. These are th e two things you ex pect to receive when you choose your banking home. And custom ers of th e _____________ Bank are more then satisfied w ith th e Safety and Service our institution affords. N AM E TOWN OF B A N K STATE 24 THE NORTHWESTERN BANKER September, 1926 am ple fo r other states, and this should be followed. M any banks are suffering to day because they have gone into ratecom petition w ith th eir com petitors. When you go to Los Angeles, October 4-7 to atten d the A. B. A., don’t be m istaken in thinking th a t you are a tte n d ing a bankers’ convention. Of course five or six thousand bankers will be present from all over the U nited S tates, but ac cording to the entertainm ent com mittee they will try to dispell from your mind any of the cares or w orries connected w ith banking. A few of the en tertain m en t features will consist of a b rea k fa st w ith a rodeo fo r entertainm ent. Then a day will be spent a t the motion picture studios w ith a barebque luncheon, and then in the evening there will be a grand ball a t which you can trip the light fan ta stic . Then the m orning a fte r the night be fore, if you are still in condition to p a r ticipate, you will be taken over to C ata lin a Islands, and if the waves are not too rough you can of course digest your m orn ing b reakfast. Then the women will be entertained as they were the last tim e in Los Angeles, w ith a special moving picture show in the afternoon, and while this is fo r “ women only,” if it is the same kind of show they had the la st tim e the A. B. A. was in Los Angeles, we are sure th a t the men would be very much interested in a tte n d ing. Oh yes, and don’t forget your golf sticks. You can play golf to your h e a rt’s content, and when i t ’s all over and you are ready to come home you can rep o rt to your board of directors th a t you had a very w onderful time, th a t all the bank ing problem s in the w orld were discussed, analyzed and solved by special com m it tees appointed for th a t purpose. Besides, you can read w hat the convention speak er's said in the next issue of the D ePuy Banking P ublications, so Avhile you are at the convention ju st enjoy yourself and fo rg et vour troubles. E. D. Chassell, se creta ry -trea su rer of the Farm Mortgage Bankers’ Association of America, points out th a t about one farm er in fifteen in the U nited S tates has borrow ed from the farm loan system. The other fo urteen farm ers out of every fifteen, are paying higher taxes and high er prices fo r the goods which they buy in order to perm it the land banks to en joy th e ir privilege of tax-exem ption. The issuing of tax -free bonds should be prohibited by law, w hether it is fo r fed eral land banks or fo r m unicipalities. A friend of mine in Chefoo, China, w rites me as follo w s: “ The A siatic fleet https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis of the U nited S tates N avy rides a t a n chor in Chefoo Bay. They will have ta r get practice tom orrow m orning. There are 12 destroyers and each one will shoot fo rty shots a t about $1,500 a shot. Thus is our two and a h alf billion dollar navy and arm y budget used. I f I had the money rep resen tin g about 20 shots I could put it to a much b etter purpose.” As we figure it, the m orning ta rg e t p ractice of these destroyers would cost the governm ent about $720,000. How much b e tte r it would be if th is money were used on good roads or on im proving the educational facilities of the country. The Pope m ay be having trouble in Mexico but he also had trouble in Rome recently when his gardeners w ent on a strike, dem anding an increase in pay. Incidently, the V atician is the only spot in Ita ly where th ere is no law against striking. S trikes are outlaw ed under the decrees of P rem ier M ussolini’s gov ernm ent everyw here else in Italy . The gardners in the employ of the Church m aintained th a t th e ir salary of less than (Continued on page 44) Lowden Entertains Farmers and Bankers The cashier of a bank in Nebraska w rites to us on the Neb. guarantee law as follows: “We th in k it has already proven itself to be unsound, uneconomical and w ithout m erit in every respect. Its oper ation can be likened to a toy balloon— it m ust break, and then the children will cry. In other words it is the p laything of politicians, and u n d er its flag they are soliciting business by m isrepresentation which will eventually leave a deep scar upon our fa ir sta te .” This is not a very good testim onial fo r the N ebraska guarantee law, b u t if the experience of o th er states counts fo r any thing, it is a ju s t ap p raisal of the situ a tion. We asked Oscar Wells, president of the American Bankers’ Association, to tell us “W hat it means to be p resid en t of the A m erican B an k ers’ A ssociation,” and in reply to our le tte r he s a id : “I f I u n d er took to convey to the read ers of your publication some idea of the tim e and energy necessary to carry on the respon sibilities of the office of president of the Association, it would surely be construed either as an effort to boast about one’s own achievem ents, or com plaint of the hardships through which one occupying the office m ust pass. I do not think th a t either of these things would reveal the real in terest which one feels in an u n d ertakin g of this ch aracter.” Mr. W ells’ analysis of the duties of the office are undoubtedly correct. I t is a big responsibility, a big opportunity, and the m an who assumes the presidency can not feel otherw ise. Three per cent interest on time deposits is now the prevailing ra te in the sta te of K entucky. The bankers in th a t state got together and decided th a t this was as high a rate of in terest as they could pay w ith safety. K entucky has set a good ex F ra n k O. Lowden, p ractical farm er, form er Illinois governor, and potential p resid en tial candidate, discusses farm ing in the above picture, w ith W illiam H. M aas, vice presid en t of T h e N o r t h w estern B a n k e r , a t the fam ous Sinnissippi F arm , Ogle County, Illinois, owned and operated by M r. Lowden. The occasion was the annual visit of Illinois bankers and farm ers to Mr. Lowden’s fine farm , recently, atten d ed by several hundred bankers and farm ers. Speakers of the day in c lu d ed : L. M. G entry, general m anager of Sinnissippi F a rm ; P ro fesso r W. L. Burlison, head of the d ep artm en t of agronomy, U niversity of Illin o is; P ro fesso r H. T. Rusk, head of the anim al husbandry de partm en t, U niversity of Illin o is; D. E. W arren , farm adviser of Ogle C ounty; J. W. H em ingw ay and W illiam F ritz, ten an ts on Sinnissippi F a r m ; C. S. Rhode, extension specialist in dairy hus ban d ry of the U niversity of Illinois. TH E September, 1926 g N0 RTH WE STE RN BANKE R p j N establishing a relationship of such duration and I intimacy as the selection of a Chicago Correspond ent, one of the prime aims of all farsighted bankers is to become allied with an institution in which every officer and department is genuinely interested in the success of its customers. T h at so many banks have done their Chicago business here for ten, twenty, perhaps thirty years or more, indicates the character of U n io n T ru st service and the S P IR IT in w hich it is rendered. F r e d e r ic k H . R a w s o n H arry A . W heeler Chairman of Board President C r a ig B. H azlew ood Vice-President U N IO N TRUST C O M PA N Y C H IC A G O Offering the Seven Essentials o f a Banking Home SAFETY * SPIRIT https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis * EXPERIENCE - CALIBER - CONVENIENCE - COMPLETENESS PR ESTIG E 26 THE N 0 R T 11 W E 8 T E R N F, A N K E R September, 1926 O ver Seventy Years of C om m unity Service ( lie h isto ry of th is b a n k dates b ack to th e 1 3 th day of Ju ly , 1856, w hen Jo h n H . L eav itt, p io n e er, o p en ed th e d o o r of h is p riv a te b a n k a n d real estate office. M r. L eavitt served a fu ll h a lf c e n tu ry an d was succeeded by Jam es E. Sedgw ick u n til his u n tim e ly d eath in 1918. Ira R o d am ar, its th ird p re si den t. now heads th is in s titu tio n a fte r th irty th re e years of consecutive, in d iv id u a l serv ice. Y o u r b u sin ess is re sp ec tfu lly solicited on th e basis of th is u n u s u a l re c o rd a n d the desire to serve you. Capital , Surplus and P r o f i t s 425,000.00 Deposits ---------------$4,500.000.00 4n Honor Roll Bank ” Ira R odam ar, P r esid en t C. E . P ic k e tt and J,. O. T rum bauer, V ice P r esid en ts Fred H . W ray, C ashier R. E. M iller, I. W . Bloujrh, A . M. D ecker A s s is ta n t C ash iers M. E. H arm on, A ud itor Waterloo Iowa https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis September, 1926 T ILE NORTH W E S T E RN BA N K E R SPECIAL AM ERICAN BANKERS ASSOCIATION SECTION The W est Is Calling You By H. H. SM O C K Mice President and Cashier, Security Trust C? Savings Ban\, Los Angeles , Calif. H E bankers of the country have turned their attention westward, where, beginning on October 3d, will be held the fifty-second annual convention of the American Bankers Association. Los Angeles is the convention city. Always popular with our bankers as a convention city, Los Angeles is again ru n ning true to form , fo r reports from the chairm an of the hotel committee indicate a flood of reservations. This committee conservatively estimates th at the number o f bankers who are coming to Los Angeles for the convention will reach 5,000. Re m arkable as it may seem, nearly every bank will be represented by more than one delegate. A post card test shows that the average is 2.4 persons p er bank. A p p aren tly many bankers are bringing their families with them. Never before has a western convention of bankers offered so many attractions, be cause never before have the principal cities on the west coast joined hands in making a great convention. Seven cities— Spo kane, Seattle, P ortland, Salt Lake City, Oakland, San Francisco and San Diego— through their respective clearing house as sociations, have organized reception and sightseeing committees fo r the purpose of entertaining bankers enroute to or re tu rn ing from the convention at Los Angeles. By this arrangem ent our bankers who a t tend the convention at Los Angeles will have an exceptional o pportunity to see all of the cities of the west coast as the guests of western bankers. The chairmen in the respective cities are as follow s: Mr. W. T. T riplett, vice president, Spo kane & E astern Traction Co., Spokane, Wash. Mr. A. W. Moore, vice president, Oak land, Bank, Oakland, Calif. Mr. C. C. Colt, vice president, F irst N a tional Bank, P ortland, Oregon. T https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mr. R. G. W ilson, assistan t cashier, N a tional Copper Bank, Salt Lake City, Utah. Mr. E. J. Belcher, Jr., president, F irst N ational Bank, San Diego, Calif. Mr. J. F. Sullivan, J r., assistant cashier, Crocker F irs t N ational Bank, San F ra n cisco, Calif. Mr. J. T. McVay, president, M etropoli tan National Bank, Seattle, Wash. All th at those attending the convention will need to do is to notify the chairmen in advance of their arrival and a delegation J. F. SA RTO R! of local bankers will meet them at their train or hotel and escort them on a sight seeing trip over the city and its surround ings. Los Angeles, the convention city, may be relied upon to entertain delegates in royal fashion. Sufficient entertainm ent has been arranged so th at there will not be a dull minute during the week the dele gation rem ain in Los Angeles. Beginning on Sunday, O ctober 3d, the delegation will be taken on an automobile to u r of South ern California. On Monday, October 4th, there will be a reception, tea and fashion show fo r the ladies. On W ednesday, a lawn p a rty at the Los Angeles Country Club fo r the ladies. On Thursday at 2 p. m., all delegates will be taken on a visit to the motion picture studios of H olly wood, where over 80 p er cent of the motion pictures produced in the world are made. This visitation will be followed by a barbe cue in the famous Hollywood Bowl, which will be followed at 9 p. m. by a grand ball in the new $3,000,000 Shrine A uditorium . On F rid ay morning the entire delegation will be taken on chartered steamers fo r a fifty-mile ocean trip to beautiful Santa C atalina Island, where they will spend the day observing the wonders of the subma rine gardens, bathing in the crystal-like waters of Avalon Bay, boating and p lay ing golf. Also on F rid ay the grand golf tournam ent will be played on the links of the Los Angeles Country Club. In addi tion to the famous St. Louis trophy, Los Angeles bankers will offer more than a dozen beautiful trophies, of which the Lbs Angeles tro p h y will be exceptionally fine. On S aturday morning another outing to C atalina Island will take place. A t 1 p. m. delegates will visit the La Brea P its exhibit in the Los Angles Museum, where can be seen the skeletons of mammoth sloths standing more than fifteen feet high. S a ber-toothed tigers more than twice the size of any species of tiger today, and birds with a wing spread of more than twelve feet, are also on exhibit. A t 2 p. m. on S aturday the delegates will move to the Los Angeles Coliseum, said to be one of the finest in the world, seating 78,000 peo ple, where they will witness the annual (Continued on page 38.) 28 T II E N 0 R THWES TE RN BANKER September, 1926 remember that th e State Trust and Savings B an\ is ready to efficiently handle your interests in Burlington and the surrounding territory. Remember, too, that this insti tution for over a half century, since 1874, has demonstrated its ability to render the kind of service that pleases. W e believe our experience eminently qualifies us to efficiently serve you FIRSTKssXBANK https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis September, 1926 T II E N O R T H W E S T E R N B A N K E R 29 W hat It Means to Be President of the A. B. A. O BE president of the A. B. A. means a num ber of things. I t is a signal honor of which any banker may be proud and fo r which he must feel g rateful to his friends who conferred the honor upon him. The detailed work and the supervision of the executive d ep art ments is of the most exhaustive and exac tive character. A great number of speeches m ust be made and as the representative of American banking, this demands most careful thought. A large amount of tra v eling is necessary at considerable expense in money and vitality. The consideration of policies and the activities of the associa tion and the advisory position the p resi dent occupies with respect to division heads and committees demands the most earnest thought and careful procedure. The A. B. A. is, in my judgm ent, the greatest organization of its kind. Its p u r pose is wholly altruistic in th at it continu ally seeks to improve the banking business as a business and of the banker as an indi vidual business man. Its purpose is to enunciate and encourage the practice of T R IC H A R D S. H A W E S sound economic and financial principles, not only in the banking business itself, but also in private and public business. I t is constantly on guard to see that the money of the people is properly used. Its actual strength, economically and financially, is great and its potentialities fo r public service even greater. , The year I had the honor to occupy this position I traveled over 20,000 miles, spoke to twenty-two S tate Bankers Associations and addressed numerous other national or ganizations, and in addition prepared a large number of articles fo r the public and financial press. In thus carrying to https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis B y R . S. Hawes Vice P resident, F irst N ational B ank S t. Louis E d ito r’s N o t e : — F or a year d u rin g 1919-1920, R ich ard S. H aw es, vice p resi d en t of the F irst N a tio n a l B an k in St. L ou is, was p resid en t of the A m erican B ankers A sso cia tio n . H e te lls here what it m ean t to h im , of the co-op eration of h is fe llo w b an k ers, and of the real p leasu re and frien d sh ip s w h ich w ere h is in co n d u ctin g the d u ties of office. the people the thought and activities of the A. B. A. to vast audiences and to millions of readers one cannot help but feel that they are the instrum ent or means of ren dering a decidedly valuable public servcie. A num ber of am using incidents oc curred, delightful entertainm ent was had, and cordial friendships established. An attack on the economic soundness of the Bonus to the Returned Soldiers and the activities of the N on p artisan League brought fo rth numerous anonymous threats of violence, physical and otherwise. My firm belief in the press and its power fo r dissem inating messages of importance to the public was evidenced by establish ment of the Public Relations Committee, now known as the “Public Relations Com mission.” This commission has proved its value many times over and is now one of the powerful avenues of operation of the association. The old constitution under which the association had operated fo r a number of years, and which had amendments from time to time, was considered obsolete and a new constitution was w ritten which co ordinated the work of the whole organiza tion, centralized the executive m anage ment, and has been effective in assisting and minimizing the labor of the presidents of the A. B. A. in recent years. The growth and expansion of the asso ciation, its m astery of the great problems of finance, its sound policies guided by its officers, its aggressive methods of pressing forw ard measures necessary to the finan cial w elfare of the country, are becoming increasingly evident and effective. One of the most delightful and aston ishing things in the A. B. A. is the volun teer service given by hundreds o f prom i nent bankers over the country to the asso ciation work at the sacrifice of their own time, and frequently at considerable finan cial loss. These men have rendered loyalty and unselfish labor, having in mind two th in g s: viz., first, the advancement of their profession, banking; and second, service to the n atio n ; it is a revelation of loyalty to a profession which is seldom equalled and never excelled. The honor of being president of the A. B. A. is one which a man m ust of necessity carry always as near and dear to his heart, but a fte r all the work and labor are over, the worries and cares have been p u t aside, the great possession which comes into the hands of the man who occupies th at posi tion is friendships made. These frien d ships are of value untold and the memory of them lives with one always:—the honor of such friendships will be cherished by his fam ily and children as a gift which cannot be measured. P iety is not enough b etter th a n indifrence to benefit m aterially eith er agent or recipient.—P arkhurst. C orner o f P e rs h in g S q u a re , L os A ngeles THE NORTHWESTERN RANKER September, 1926 P R O M IN E N T B A N K E R S OF N O R T H W E S T T O A T T E N D A . B. A . C O N V E N T IO N •• W A L T E R W . HEAT) E. W. M IL L E R W . G. C. B A G L E Y M. W . E L L IS FR E D H. W RAY RAY N Y EM A STER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis September, 1926 THE 31 N O K T il W E S T E R N B A N K E R OFFICERS ED,. K A U FM A N N ...............President RAY NYEM ASTER. .V ice President H. P. O ETZM ANN................. Cashier F. C. KROEGER............. A sst. Cashier F. A. JO H N SO N ............. A sst. Cashier JNO. D. BROCKMANN. A sst. Cash, A. H. H IEG EL ..................Asst. Cashier That We May Serve T ou Better w in soon b e u n d er w ay on our new b an k in g h om e. In to it w ill go n ot o n ly ston e and m ortar, w o o d and steel, but also the dream s and id ea ls, the am b i tion s, the efforts, the ex p erien ces and a cco m p lish m en ts of th o se lo y a l m en , w h o, sin ce its org a n iza tio n m ore than fifty-seven years ago, have co n trib uted, year after year, to the u p b u ild ing of the A m erican C om m ercial and S avin gs B an k as a great Iow a In s ti tution . C o n s t r u c t io n A n d w e w ant y ou to fe e l that it is you r b an k in g h om e as w e ll as ours— to k n o w that w e are here to serve you — here to m ake you r b an k in g p rob lem s ea sier. O ur w ell-o rg a n ized T rust D ep artm en t w ill h ave in crea sed fa c ilitie s. O ur efficient B on d D ep artm ent w ill h e b etter eq u ip p e d to serve y o u . Our corresp on d en t fa c ilitie s w ill b e u n e x c e lle d . W e w ill b e in a b etter p o sitio n than ever b efo re to give co m p lete service on D aven p ort accou n ts. D r o p in th e n ex t tim e y o u are in D a v e n p o r t. AM ERICAN COMMERCIAL C SAVINGS BANK D A V E N P O R T IO W A https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis T II E NORTHWESTERN BANKE R September, 1923 U nusual Service The promptness with which the Cedar Rapids N a t i o n a l handles the Cedar Rapids busi ness of its correspondents has helped many bankers give to their patrons unusual service. OFFICERS And promptness is only one part of our service. In addition to completely organized facili ties in every detail of banking, there is also that personal inter est in the satisfaction of our cus tomers that makes transactions with the Cedar Rapids National Bank a real pleasure. Our service—and experience —is yours for the asking. R A LPH VAN V ECH TEN Chairman of the Board GLENN M. A V ER IL L President CHAS. C. K U NING V ice P resid en t and Cashier GEO. F. M ILLER V ice President VAN VECH TEN SH A FFE R V ice President PE T E R BA IL E Y A ssista n t Cashier M ARV IN R. SELD EN A ssista n t Cashier GEO. W. SW AB A ssista n t Cashier BER T H A M. WOLF A ssista n t Cashier The Cedar Rapids National Bank Cedar Rapids, Iowa https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis September, 1926 T HE NOR T H W E S T E R N BANKER Let Us Support the “Hull Amendments” B y H om er A . M iller President, Iowa N ational B ank Des Moines, Iowa The last Congress which adjourned on J u ly 3, 1926, had before it a very im p o rta n t bank bill. I t was popularly known as the M cFadden Bill, H. R. No. 2. I t passed the H ouse on F eb ru ary 4, 1926, and contained 26 sections. The larg er p a rt of the provisions of the m eas ure were not subject to any controversy or g rea t differences of opinion, notw ith standing th a t the bill contained cardinal fea tu re s affecting the adm inistration of national banks and even the p erp e tu a tion of the F ederal Reserve System it self. P robably the provisions of the proposed act which a ttra c te d by f a r the m ost atten tio n were the sections relatin g to B ranch B anking and th e ir eorelated am endm ents known as the “H ull A m end m ents.” I t has alw ays been presum ed heretofore, th a t the N ational B ank A ct did not authorize B ranch B anking by n a tional banks. A uthorities say th a t the A ct even prohibited B ranch B anking no m a tte r w hether they were called “B ranches” or “Offices.” Much has been said and w ritten of the recent controversy of the rig h t of n ational banks to establish “B ranches” or “ Offices.’’ An A tto rn ey G eneral of the U nited S tates not so long ago gave an opinion as to the au th o rity of the C om ptroller to authorize “Offices.” To clarify this field of controversy would have been one of the achievem ents sought by the M cFadden Bill. In its original w riting the Bill endeavored to specifically lim it B ranch B anking by n ational banks to the city w herein the p are n t bank was located and th a t no branches could be established in any S tate except where the laws of th a t S tate p erm itted its own S tate banks to have B ranch Banks. The A m erican B ankers A ssociation at its Convention in Chicago two years ago, adopted a resolution in accord w ith the “ H ull A m endm ents” to the M cFadden Bill. Those am endm ents sought to m ain tain a status quo in Branch Banking. In other words, the amendments on passage V iew s o f L os A n g eles a n d S o u th e rn C a lifo rn ia https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis of the Act itself, would have prevented the establishment of any more Branch Banks by national banks and members of the Federal Reserve System regardless of whether or not a State might pass an Act authorizing its own S tate banks to en gage in Branch Banking. The H ull “Amendm ents” consist of a single phrase as follows: “A t the time o f the approval o f this A ct.” The U nited States House of R epresentatives adopted the M cFadden Bill with the “ H ull Amendments.” The Senate Committee declined to accept the amendments. In a Conference Committee fu rth e r amendments were proposed as a substitute fo r the “ H ull Amendm ents” which failed in adoption and Congress ad journed without taking final action on the M cFadden Bill. It is more than likely the next session of Congress, which would regularly convene next December, will again take up this measure. I t is im por tan t therefore, th at we all understand the (C ontinued on page 37.) 34 T HE N O K T 11 W E S ï E R N BA NK E R September, 1926 Mechanics Savings Bank, Minneapolis, M innesota; F ra n k C. Welch, vice presi dent, Peoples Savings Bank, Cedar R ap ids, Iow a; F ra n k W arner, secretary, Iowa Bankers Association, Des Moines, Iow a; T. R. W atts, president, Citizens Bank, G rand Junction, Iow a; F red W ray, cash ier, Pioneer N ational Bank, W aterloo, Iow a; H erbert H orton, cashier, Des Moines National Bank, Des Moines, Iow a; I r a Rodamar, president, Pioneer National Bank, W aterloo, Iowa. A ttending the Convention The following is a p artial list of bankers from the M iddlew est who have m ade ad vance registration to attend the A. B. A. convention: L. A. A ndrew , president of the Citizens Savings Bank, Ottumwa, Iowa, and super intendent of the Iowa banking d ep art m ent; W. G. C. Bagley, vice president, F irs t N ational Bank, Mason City, Iow a; John W. Barton, vice president, M etropol itan National Bank, Minneapolis, M inne sota; J. R. Cain, Jr., vice president, The P eters National Bank, Omaha, N ebraska; J. M. Dinwiddie, president, Cedar R apids Savings Bank & T rust Company, Cedar Rapids, Iow a; M. W. Ellis, president, Se curity T rust & Savings Bank, Charles City, Iow a; Geo. H. G utru, president, N eu man Grove State Bank, Neuman Grove, N ebraska; W alter W . Head, president, Omaha N ational Bank, Omaha, N ebrask a; W. B. Hughes, secretary N ebraska Bank ers Association, Omaha, N ebraska; R. S. Hume, assistant cashier, Northwestern N a tional Bank, Minneapolis, M innesota; 1 John H. H ogan, president, Des Moines N ational Bank, Des Moines, Iow a; W ill iam H. Earned, cashier, State Bank of H aigler, H aigler, N ebraska; P. J. Leeman, vice president, F irs t N ational Bank, M in neapolis, M innesota; J. W. Lesinger, vice president, Iowa State Savings Bank, Cedaf Rapids, Iow a; E dgar L. M attson, vice president, M idland N ational Bank & T rust Company, Minneapolis, Minnesota ; G rant M cPherrin, president, Central State Bank, Des Moines, Iow a; Edm und W. Miller, president, Commercial N ational Bank, W aterloo, Iow a; H om er A. Miller, presi dent, Iow a N ational Bank, Des Moines, Io w a ; A. J. Moe, assistant cashier, Secur ity T rust & Savings Bank, F o rt Dodge, Iow a; W. R. M urray, vice president, M id land N ational Bank & T rust Company, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Minneapolis, M innesota; W. C. M acFadden, secretary, N orth D akota Bankers As sociation, F argo, N orth D akota; Charles H. M artin, president, Peoples Savings Bank, Des Moines, Io w a; H erbert Metcalf, Des Moines, Iow a; Ray Nyemaster, vice president, American Commercial & Sav ings B ank,D avenport, Iow a; J. C. Powers, Des Moines, Io w a ; Miss Lenna M. P ra th er, secretary, Commercial National Bank, W aterloo, Iow a; E. D. Rayburn, presi dent, F irs t N ational Bank, Montezuma, Iow a; A lfred C. Smith, president, City National Bank, Clinton, Iow a; George C. Svviler, president, B urlington State Bank, Burlington, Iow a; Dan V. Stephens, president, F rem ont S tate Bank, Frem ont, N ebraska; F . W. Thomas, vice president, F irst National Bank, Omaha, N ebraska; Thomas F . Wallace, treasurer, F arm ers & P ark to Rem ain Open As a courtesy to members of the A m eri can B ankers A ssociation, R ainier N a tional P an k will rem ain open ten days beyond its usual closing date, by a spe cial dispensation, it was announced by p ark officials. An extended season fo r the n ational p ark fo r a single o rganiza tion is not p aralleled in R ain ier’s history. The usual closing date fo r th e p ark and P arad ise Inn, the fam ous alpine hos telry in P aradise Valley, is Septem ber 15th. Since this would not give delegates to the A. B. A. convention in Los Angeles, early in October, an o p p o rtu n ity to visit the park, the closing date has been delayed until Septem ber 25th. Hotel forces will be m aintained to ac commodate the v isiting bankers and th eir frien d s, and the tra n sp o rta tio n system will be kept up to sta n d ard u n til a fte r th a t date. Guides, to tak e p arties to the glaciers and peaks w ithin easy reach of the Inn, afoot and horseback, will also rem ain a t P arad ise beyond th e ir usual stay, to care fo r the bankers, it has been announced. R ain ier N atio n al P ark , and P arad ise V alley in p articu la r, will be in the height of th e ir autum n glory d uring the b an k ers’ visit. The coloring of the foliage w ill be vividly b rillian t, and tie color-massed hillsides will be in marked co n trast to the glacier-clad bulk of m ighty M ount R ainier, W a rn e r B ro th e rs M o tio n P ic tu re S tu d io September. 1926 T II E N0 RTUWES TE RN BANKE R $ 1,375,937.53 in Surplus to P olicyholders B ack of th e g u a ra n tee given in o u r co n tracts th e re is, in a d d itio n to th e Legal R eserves— sufficient in th em selv es, acco rd in g to av ail able ex p erien ce statistics, to care fo r o u tsta n d in g lia b ilitie s— th is vast a m o u n t of m oney fo r y o u r p ro te c tio n . N early all of th is su m — in v ested by sto ck h o ld ers in m an y w ide ly scattered co m m u n ities, lik ely in c lu d in g one o r m ore in v o u r ow n— is deposited w ith th e In su ra n c e D e p a rtm e n t of Iow a. A stro n g an d ra p id ly grow ing co m p an y sh o u ld ap p eal to th e th in k in g b u y e r of In su ra n c e o r S u rety B onds ju st as it has to th e th in k in g in v esto r. FEDERAL SURETY COMPANY A NATIONAL INSTITUTION OF SERVICE W . L. TA Y L O R H O M E O F F IC E V ice President and General Manager Davenport, Iowa https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis T II E 36 N 0 R T II W E S T E R N R A N K E R September, 1926 Lasting Friendships USINESS relationships mutually ad vantageous and responsible service devoted to the individual interests of all clients is making a growing list of lasting friendships for this bank. Officers E. W. MILLER, President JAMES M. GRAHAM, Vice President R. L. PENNE, Assistant Cashier H. W. WENTE, Cashier CHAS. S. McKINSTRY, Assistant Cashier S. C. KIMM, Assistant Cashier LILLIAN SHOEMAKER, Auditor Directors . W ARREN BROWN President W aterloo Lumber Co. W„ P. HOXIE Vice President W aterloo Fruit & Commission Co. JAM ES M. GRAHAM President James Black Dry Goods Co. WORTH HILLM AN Secretary-Treasurer W aterloo Warehouse & Storage Co. GEORGE W. H U NTLEY President Cutler Hardware Co, E. W. MILLER President L. D. MILLER Secretary and Treasurer Crystal Ice & Fuel Co. IU B. PLUM B Vice President Associated M anufacturers Co. J. S. TUTHILL Reed. Tuthill & Reed, Attorneys H. W. WENTE Cashier I Commercial National Bank W A T E R L O O , IO W A C A P IT A L A N D S U R P L U S — O N E -H A L F M IL L IO N D O L L A R S https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis September, 1926 THE N 0 R T II W E S T E R N B A N K E R LET US SUPPORT THE “HULL AMENDM ENT” (C ontinued from page 33.) simple yet fundam ental issue th at tied up and prevented the M cFadden Bill from passage. I have quoted that amendment above which consists of 9 words. I f those 9 words were incorporated in the M cFad den B ill as those 9 words m ight relate to the Branch B ank sections of the B ill, there will be approxim ately 2-3 of the States o f the Union that will probably never be confronted again with the Brancli B ank problem because they do not at this time perm it Branch Banking, and i f the M cFadden B ill is passed with the “H ull A m e n d m e n t s i t is more than likely that those States will never consider authoriz ing their own S tate Banks to engage in Branch Banking. The inquiry may arise in your minds as to why this is so. I t is quite easily an swered and readily discernible. The Mc Fadden Bill with the “ Hull A mendm ents” as previously said, would perm it Branch Banking to those States th at perm itted Branch Banking at the time of the passage of the M cFadden Bill with the “ H ull Amendments.” Iowa will be one of those States. Iowa today has approxim ately 335 national banks and probably some thing over 100 State incorporated banks th at are members of the F ederal Reserve System. I f Iowa should ever perm it Branch Banking, a thing th at I cannot ever conceive of occurring, the State Banks, members of the Federal Reserve System, would have to withdraw from the Federal Reserve System to engage in Branch B anking in Iowa, because they would be prohibited from rem aining mem bers of the Federal Reserve System and operating Branch Banks under the provi sions of the M cFadden Bill with the “ Hull Amendm ents.” I t would seem th at those Iowa banks would not surrender their membership in the Federal Reserve System in order to engage in the Un-American method of Branch Banking. Therefore, they would be as much opposed to Branch Banking in Iowa as the national banks in Iowa would be. Three A ttorney Generals of Iowa have ruled th at the Iowa State laws cannot be interpreted as perm itting Branch Banking, simply because they are silent as to the prohibiting of Branch Banking. As I have previously said, it is inconceivable th at Iowa will ever pass any Legislation that will destroy the great in A. C. S M IT H H E R B E R T HORTON https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 37 dependent banking system o f this State which is a p a rt of the great American in dependent banking system of the Nation. We have individual banking in this coun try as opposed to the System of central izing banking in E uropean countries and Canada, and I feel sure th at every Iowa banker will be vigorously opposed to losing his privilege of conducting banking in dividually and to perm itting himself to become a p a rt of any great banking “ Oc topus.” So it has been the purpose in this article to present the cardinal issue at stake in the M cFadden Bill and to express the hope th at every Iowa Banker when the time comes fo r the convening of Congress and the reconsideration by it of the M cFadden Bill with the “H ull A m end m e n t s th at they shall continue to be a unit as they have in the years past, as ex pressed through the convention resolutions of our State Association, against Branch Banking and not only against Branch Banking, hut also as a unit fo r the “H ull Amendm ents” which will arrest the fu rth e r spread of Branch Banking in any State. And thus we can feel more secure in the fu tu re fo r the perpetuation of our great American independent banking system. 1 am delighted to recently have had a p a rt in the deliberation of the A dm inis trative Officers of our State Association and to know their vigorous plans fo r op posing the spread of Branch Banking. P hysicians, of all men, are most h a p p y ; w hatever good success soever they have the world proclaim eth, and w hat fau lts they commit the ea rth covereth.— Quarles. E M IL W E B B L E S IR A R O D A M A R T 11 E 38 T H E W E ST IS CALLING YOU (C ontinued from page 27.) struggle between the famous “thundering h erd” football team of the U niversity of Southern California and the “roaring cou g ars” of W ashington State University. In addition to the events outlined there are many luncheons and dinner parties planned, so that there will not be a dull moment during the Convention. Add to what has been outlined the various sessions and divisional meetings and every moment available between October 3rd and 9th is well accounted for. Not only will those who come to this convention benefit by the m any additional attractions that have been provided, but they will a’so benefit by the summ er excursion rates which are in effect west of Chicago until Septem ber 30th, which means th at those coming to the con vention, so long as they leave by midnight of Septem ber 30th will be able to come on low excursion rates. They are also assured that the hotels in Los Angeles will not increase their rates fo r the convention, fo r one of the first steps taken by the Southern California Hotel Men’s Association was to w rite a guarantee that no rates would be raised in Los Angeles during the convention. The generous way in which the Los A n geles Clearing House is entertaining is emphasized in the fact that there will be no registration fee and also that visiting bankers, whether delegates or not, will re OFFICERS September, 1926 NO R T H W E S T E R N B A N K E R ceive the same courtesies as are given to delegates. This convention is your o pportunity an 1 not only yours but the opportunity for you to bring your fam ily with you, fo r never before have there been so many att: actions offered as are now befoie you for your consideration. Convention P lans L egislation affecting banking, m ethods fo r pro tectin g banks ag ain st b an d its and m any other subjects of general public im portance will fill the sessions of the A m erican B ankers A ssociation conven tion to be held in Los Angeles, C alifornia, O ctober 4th to 7th, it is announced by Oscar W ells, presid en t of the organiza tion. Mr. W ells says: “No g rea ter a rra y of subjects of p a ra m ount in terest and im portance to the in dividual b anker has ever been presented at any convention of the A m erican B ankers A ssociation th an will crowd the sessions this O ctober a t Los Angeles. Effective m ethods have been developed fo r quelling bank b an d itry through co operative efforts by banks along lines suited to th e ir circum stances and these will be fully discussed. “ The rap id extension of special b an k ing' functions, such as those having to do w ith savings, fiduciary servcies and in vestm ents by classes of banks form erly C. H. M cN ID ER , P resident not engaged in these activities has cre ated a need fo r more complete in te r change of experience related to these sub jects and this will be fu lly provided through the various technical discus sions a t the convention. “ The p resen t is fra u g h t w ith much in terest among bankers in the subject of legislation and p articu la rly federal legis lation dealing w ith the extension of the ch arters of the twelve federal reserve banks, the control of branch banking, the equalizing* of rig h ts between national banks and state-ch artered in stitutions, and the w idening of the provisions for lending money on real estate under the laws governing the conduct of national banks. B ankers atten d in g the annual conventions of the association are a f forded splendid o p p ortunities fo r know ing how other bankers reg ard these things. A question of prim e im portance to every banker is the grow ing move m ent fo r more equitable state tax atio n fo r banks and the discussions a t the con vention will suggest m eans fo r this end in your state. “In th e b ro ad er view of general busi ness, there is the problem of installm ent selling, the underlying conditions of busi ness which have been subject to so much u n ce rtain ty and questioning during the year and other equally im p o rtan t sub jects which will add to the profits of atten d in g this m eeting.” OFFICERS ROBERT P. SM ITH Cashier HAROLD V . BU LL A ssista n t Cashier H A R R Y C. F ISH E R A ssista n t Cashier W ILL IA M W. BOYD A ssista n t Cashier ROY B. JOHNSON A ssista n t Cashier W IL L IS G. C. BAGLEY V ice P resid en t CARL A. PAR K ER V ice President FR E D E. KEELER V ice P resident H ANFORD M acNIDER V ice P resid en t It is upon th e firm fo u n d ation o f th e con fid en ce o f its cu stom ers and p atrons th a t th e F irst N a tio n a l B ank h as b u ilt and p rogressed . O rgan ized fifty-six y ea rs ago, th e F irst N a tio n a l took an im p ortan t part in th e d ev elo p m en t o f M ason City, and Iow a. A n d n ow , as a l w a y s b efore, it stan d s read y to serve its corresp on d en ts efficien tly and w ell. Capital Stock $500,000 Surplus and Profits $333,000 Resources $9,380,000 The First Fictional Ban\M A S O N C I T Y , IO W A https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis September, 1926 'O' THE NORTHWESTER N BANKER O V E R F IF T Y T E A R S U T ID E R S A M E M A N A G E M E N T T H E C it y DIRECTORS AND OFFICERS A I.F ItF D G. SMITH. Chairman A LFR ED C. SMITH, President O, L. CURTIS, Vice President President, . Curtis Companies, Inc. H. W. SEAMAN. Inland Waterways Advisory Committee G. W. DULANY. JR., President. Eclipse Lumber Co. President, Climax Engineering Co. N a t io n a l Ba nk CLINTON, IOWA •T. PETERSON Treasurer Daehler Motor Co. M .T. GABRIEL President, Gabriel Lumber & Fuel Co. •T. O. SH A FF. Farmer and Live Stock Dealer B. M. JACOBSEN, E. J. CURTIS, Vice President. Curtis Bros. & Co. C. A. ARMSTRONG, President. C. F. Curtis Co., Inc. W. R. SMITH. Genera’ Manager Clinton Corn Syrup Refining Co. A. P. BRYANT, Manager of Operations, Clinton Corn Syrup Refining Co. F. H. VAN ALLEN, Vice Pres, -and Sec’y. J. D. Van A llen & Son, Inc. H. S. TOWLE, Vice Pres, and Treas., Towle & Hypes Co. O. P. PETTY, Cashier All D epartm ents—C om mercial, Savings, Trusts, Investments. Especially equipped for serving its banking cor respondents. J. H. NISSEN , Assistant Cashier H. G. KRAM ER, Assistant Cashier A s s e ts Seven M illion D ollars https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 39 -o- T 11 E 40 N ( ) R T 11 W E S T E R N B A N K E R September, 1926 -»and This One Secured Business G uard Her against these Dangerous Steps/ “Nine out of ten Estates over $5000 are dissipated in S E V E N YEARS.” Read that again! Tragic — alm ost u nbelievable— yet appallingly true. But, in your case, IT C A N BE AV E R TED . It is neither fair nor just to your dependents to neglect this im portant duty o f m aking a w ill and appointing a Trust Company to adm inister your ESTATE. You can arrange— very easily and sim ply for the adm inistration o f your estate— as you w ant it admistered. Y o u r Estate represents a lifetime o f application and industry. Small Estates require most careful handling in order that your dependents receive the fullest benefit. In the matter o f larger Estates, knowledge, experience and absolute responsibility are required to work out the m any intricate details o f a proper administration. These are the requisites that particularly char acterize the F ID E LITY T R U S T C O M P A N Y Liquidation Losses D isposal o f p ro p erty stocks o r b o n d s to Y our Life Insurance P olicy Constitutes an W ith o u t th e slig h test o b lig a tio n o n y o u r p a rt, th e officers o f th is c o m p a n y will gladly ex p la in th e necessity a n d im p o r ta n c e o f th is m a tte r, at th e sam e tim e th e sim p licity a n d ease by w h ic h it can b e acco m p lish ed — a n d th e b en efits th a t w ill accru e. U nwarranted Expenditures ESTA TE! “ T R U S T S E R V IC E * ’ Loans to Relatives and Friends F orty m illio n p eo p le ii b enefit o f o th e rs — Fori w h ic h , in d is p u tab le ret in seven sh o rt vears. You c an av ert th is bv a Life Insurance Tru: W e w ill gladly e x p lain at o u r office o r yo; W* ^ e t w h ich vou can read at v o u r leisure Is a b o o k le t y o u s h o u ld h a v e — A ca,f>y w i ll be Umvise Investments FIDELITY TRUST COMPANY 14*7 W • CO N GRESS Seeking Employment ST • No word picture could possibly depict the story so forcibly told in th e above reproduction. It is a new spaper display ad from th e Publicity D epartm ent of the F idelity T rust Company of D etroit and— it brought results! We are alw ays glad to cooperate in building new tru st business and will be pleased to furnish m ats of the above to any tru st com pany who will use it. A nominal charge to cover cost of cut and mailing will be charged. Write for proofs. A d d r e ss P u b lic ity D ir e c to r FIDELITY TRUST COMPANY W • C O N G R ESS S T • DETROIT, MICH. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis September, 1926 T LI E N 0 R T 11 W E S T E R N B A N K E R LI SPECIAL FINANCIAL ADVERTISERS ASSOCIATION SECTION FINANCIAL ADVERTISERS' ASSOCIATION Eleventh Annual Convention DETROIT, M ICH IG A N Statler Hotel - September 20, 21, 22, 23, 1926 W hen the 20th of Septem ber arrives the lobby of the S ta tle r H otel in D etroit will w itness one of the g rea test collec tions of financial advertising w izards th a t has yet been seen. Such gatherings form the s ta rtin g points fo r new un d er stand in g s; the foci from which flashes of vision orig in ate; the places w here minds are brought together which are all reach ing out, by devious and various paths maybe, to the attain m en t of sim ilar ob jectives. This convention, the eleventh, will prove to be a genuine m ile-stone in the progress of the F. A. A. H ere is an outline of the program in brief, sketchy f o r m : On M onday, Septem ber 20th, the day will be devoted to welcoming incoming delegates and registering as m any as pos sible, so th a t business can be snapped into prom ptly on Tuesday m orning. A golf tou rn am en t fo r the devotees of the mashie will tak e place on this day. Tuesday m orning prom ptly a t nine o’clock the first general session of the convention will be sta rted . A fte r lunch eon, a t which, by the way, E dgar A. Guest will be the speaking- guest, the delegates w ill assemble again fo r busi ness sessions at 2 p. m. The Savings and T rust D e p a rtm e n ta l will occupy the afternoon. Tuesday evening a th e a te r p a rty will be held a t one of the most unique th eaters on this continent. S ta rtin g again a t nine o’clock W ed nesday the Investm ent D epartm ental, and the Commercial D epartm ental, will oc cupy the morning. Lunch tim e and welcome, president, C entral Savings Bank, D etroit. 9:10— Jam es Scherm erhorn, address of welcome. 9 :25—P re sid e n t’s message, Carroll R a gan, U nited S tates M ortgage and T ru st Company, New Y ork City. 10:00—A ddress, Jo h n G. Jones, A dver tising D irector, A lexander H am ilton I n stitu te, New Y ork City, “F in an cial A d v ertisin g as an Economic F acto r.” 1 0 :45—A ddress, Charles R, W iers, P resid en t, D irect M ail A dvertising Asso ciation, Boston. 1 1 :30—A ddress, P au l R. C herington, D irector of Research, J. W a lte r Thomp son Company, New Y ork City. “M edia.” 12:15— Luncheon. Speaker, “E d d ie” Guest. A fte r n o o n S e s s io n : Savings D epartm ental 2 :00—F red W. E llsw orth, chairm an, vice president, H ib ern ia B ank arid T ru st Company, New Orleans. Prelim inary Rem arks. 2 :30—-Guy W. Cooke, assista n t cashier, C L IN T O N F . B E R R Y R alph P a rle tte . Then comes the final general session a t which will be staged the original fea tu re of this convention— the “Clinic.” The business m eeting will end the official business of the conven tion. PROGRAM Monday, Septem ber 20th 1:30— A nnual golf tournam ent. 7 :30—F irs t annual B oard of D irectors dinner. 7 :30—E xtension Com mittee dinner. Tuesday, Septem ber 21st. M o r n in g S e s s io n : J U L IA N https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis M. FA RE 9 :00—L aurence P. Sm ith, address of C H A S. IT. M cM A H O N September, 1926 T II E N O R T II W E S T E R N B A N K E R 42 W ednesday, Septem ber 22nd F irs t N ational Bank, Chicago. “ A R e view of Savings B ank A dvertising.” Morning S ession : 3 :05— George K. Reed, vice president, In v estm en t D epartm ental Edw in B ird W ilson, Incorporated, New (Program on Inside Pages) Y ork City. “Mass P lan of A dvertising Commercial D epartm ental fo r Building U p Savings A ccounts.” 9 :00-12 :15— C. H. H anderson, ch air 3 :40—C. E. A uracher, assista n t cashier, man, P u b licity director, Union T rust Cedar R apids Savings Bank and T rust Company, Cleveland. Company, Cedar Rapids, Iowa. “How Preliminary Remarks. W e A dvertise fo r Savings A ccounts in S p e a k e rs: Cedar R apids.” Dr. W. F . G epharf, vice president, 4:15—H. G. Iiodapp, N ational City Bank, New Y ork City. “ M ethods E m F irs t N ational Bank, St. Louis. “B ack ployed fo r O btaining Savings Accounts ing Up the A dvertising by the P ersonnel.” Charles K etterin g , vice president, Gen in New Y ork C ity.” eral M otors C orporation, D etroit. “ The 5 :00—A djournm ent. Bank and the P ublic.” T rust D epartm ental Robert W. Updegraff, L illibridge Com 2 :00-5:00—E rn e st L. Colegrove, ch a ir pany, New Y ork City. “ The B anker as man, assista n t tru s t officer, G uarantee a R etailer.” T ru st Company, New York City. 12 :15—Luncheon. Prelim inary Rem arks. Speaker, “R alph P a rle tte .” S p eak e rs: A fternoon S ession : Ju liu s C. P eter, vice president, D etroit 2 :00—F in an cial A dvertising “Clinic.” Trust. Company, D etroit. “ The New 3 :30— Speaker. Business D epartm ent in P erspective.” 4:15—Business session. Miss N ora K irch, m anager of W om en’s Thursday, Septem ber 23d D epartm ent, Louisville T rust Company, “In d u stria l D ay” Louisville, K entucky. “ The V alue of Women in the T rust F ield .” In d u stria l Day Doings Theodore Tefft W eldon, vice president, As A m erica’s largest and m ost active W illiam E llio tt Graves, Incorporated, in d u stria l city, D etroit holds much of in Chicago. “ The Coming Trend in T rust terest fo r visitors. And fo r F . A. A. A dvertising and New Business E ffort.” delegates, the E n te rta in m e n t Com mittee A rth u r F . Young, vice president, has n atu ra lly selected the best. T h u rs G uardian T rust Company, Cleveland. “ The T rust Officer and T rust A dvertis day, Septem ber 23d, will be known as In d u strial Day. ing.” E a rly T hursday m orning the guests will be tran sp o rte d in D etroit-m ade autos to the w orld’s new est and largest steel mill and o th er allied industries of H enry F o rd a t his mammoth R iver Rouge plant. Im agine five M ILES of buildings. Im agine seeing ore from F o rd ’s own mines, brought on his own boats, going into the cavernous jaw s of this gigantic plant and coming out a t the oth er end as fin ished p a rts fo r autos and trac to rs! See how glass is made, rolled and cut. See how every scrap and by-product is saved and used. Then there will be an enjoyable lunch and a likelihood of hearing Mr. F o rd ’s n ationally known Old-Time Dance O r chestra, whose music has been broadcast on the radio so often. A fte r lunch, a trip to the F o rd A irp o rt to see his mail and express tra n sp o rt planes come and g o ; inspect his la test types of freig h t and passenger planes (all m etal), see the m ooring m ast fo r dirigibles and perhaps w itness a flying dem onstration. F o r those who prefer, there will be a trip through F o rd ’s H ighland P a rk P lan t, where you can see ’em come off the as sembly lines a t the ra te of fo u r a m inute. There are m any o th er mammoth auto and in d u strial plants, including Cadillac, P ack ard , Lincoln, Dodge, Paige, H udson, Essex, G raham B rothers, C ontinental M otors, M ichigan Stove, B urroughs A dd ing M achine, F ish er Body, U. S. Rubber, etc. Thomas Welcomes F. A. A. Delegates Fidelity Trust President Joins with Advertising Men in Big Convention Plans in Detroit H E N the six hundred and more financial advertising men and women of the U nited States and Canada gather in D etroit this month to p articipate in the eleventh annual conven- W L . D. T H O M A S https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis tion of the Financial A dvertisers Associa tion, they will find a hearty welcome from the city’s prom inent bank executives as well as the entire corps of the local adver tising fra tern ity in the dynamic city. Prom inent among the executives extend ing this welcome will be L uther D. Thomas, president of the F idelity T rust Company, D etroit, who at fo rty years of age typifies the new era and progressive sp irit among some of the country’s leading bankers. There is much romance connected with Mr. Thomas and his associates in their threeyear-old institution, which today is one of the fastest growing institutions among the sixteen splendid tru st companies in De troit. I t is expected th at plans will be an nounced shortly by the Fidelity Trust Company fo r enlarged facilities and a modern new home. I t is significant th at every last one of the F idelity’s officers re ceived his first business train in g in a small town. M any of these officers had already attained success in other corporations. Each one enjoys the memory of small town training. W ith Mr. Thomas hailing orig inally from Em poria, Ivans., other officers claim Missouri, Colorado, Vermont, Michi gan and Ontario as their form er homes. e . h . M cI n t o s h September, 1926 T II E Mr. Thomas’ home town is Em poria, K ans. He passed through the local grade schools and high school, took a tw o-year course in the College of E m poria and com pleted his studies in the U niversity of K an sas, where he specialized in subjects p e r taining to business adm inistration. R eturning from the university, he en tered his fa th e r’s business, the Thomas M ortgage Company of Em poria. H is three older brothers had already spurned this small-town connection and gone forth to larger fields, but L uther D. Thomas con sidered it a fortunate o pportunity for p re p arato ry experience. A pparently he made the most of his ex- N 0 R T II W E S T E R N 43 BANKER perience, for, assuming early control and stressing the farm loan angle, he rapidly expanded the business to cover the whole eastern half of K ansas and making it the largest sim ilar institution in its district. W ithin four years his ability and energy had developed the need of a considerable am ount of executive assistance. Places in the company were made so attractive as to induce the retu rn of his three brothers to the small-town business which they had form erly passed by. Progress of the concern was thenceforth more rapid, until the federal farm loan act became effective in 1916. The terrific (Continued on page 44) Champion Debating Team —in Detroit the Dime Savings Bank will be at your service, in all ways possible. Drop in and get acquainted. T he cham p io n A m e ric a n I n s t i tu t e o f B a n k in g d e b a tin g te a m fro m D e tr o it, t h a t w on first p lace a n d th e silv e r cup a t th is y e a r ’s A. I. B. c o n v e n tio n in D allas, T exas. S ittin g , le f t to rig h t, D. M. Irw in , L o u is K o m ja th y . S ta n d in g , C ecil H u n t a n d P r a n k T hom as. H E D etroit chapter of the A m eri can In s titu te of B anking, holders of the silver cup recently won a t the 1926 convention in D allas, Texas, when its team was victorious in the national debate, is already m aking plans to be host fo r the next convention, which will be held in D etroit in Ju ly , 1927. Com mittees fo r the convention have already been nam ed by Sam uel R ubiner, president of the D etroit chapter, and the com m ittees are now at w ork on plans fo r entertain m en t and business fo r the visiting delegates. The debating team of the D etroit chap ter won its way into the finals by defeat- T https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ing team s rep resen tin g Chicago and Cin cinnati. In the finals the bankers who spoke fo r D etroit defeated the New O r leans team and were aw arded the silvercup. The D etro it team is composed of Louis K om jothy, Peoples S tate B an k ; Cecil H u n t, D etroit Savings B an k ; D. M. I r win, Peoples S tate B ank, and P ra n k Thomas, F irs t N ational Bank. The debate was won by the D etroit chap ter upholding the negative of the q u e stio n : Resolved, T hat the F ederal Reserve System Should Not Be P ro h ib ited from E ngaging in Open M arket T ransactions. SAVINGS BANK Fort and Griswold Streets 21 Branches T HE N 0 R T II W E S T E R N B A N K E R Continental Americans pay their bills by check. A nd one-sixth of the banks, the country over, use this institution as the central bank through which these checks are paid ^ « C O N T I N E N T A L in « / C O M M E R C IA L BANKS C H IC A G O R e s o u r c e s H a l f a B i l l i o n —a n d M o r e September, 1926 com petition of this measure knocked the business of the com pany’s farm mortgage departm ent into a cocked hat, and indi cated to L uther D. Thomas th at the time had come to seek bigger fields. In th at same year he opened a branch office in De tro it to deal principally in construction mortgages and bonds. He tran sferred his oldest brother from E m poria to the m an agement of this branch, which did a volume of business exceeding $ 10 ,000,000 in the ensuing fo u r years. Mr. Thomas secured the D etroit agency fo r P rudential L ife Insurance Company funds in 1920, and at the same time as sumed personal management of his De troit organization. Two years later, due to its splendid showing in D etroit, the Thomas M ortgage Company was ap p o in t ed P rudential loan agent fo r Los Angeles, and two of the brothers were sent to open and operate a branch there. This branch has been a m arked success from the begin ning. H aving built up the Thomas M ortgage Company to eminent positions in two met ropolitan cities w ithin a seven-year period, Mr. Thomas organized the F idelity T rust Company of D etroit in September, 1923, converting into F idelity shares the assets of the Thomas M ortgage Com pany’s De tro it branch. As mentioned in the begin ning, the young Fidelity T rust Company has been rem arkably successful under the Thomas presidency. The foregoing history of Mr. 1 homas business progress is cited p artly to demon strate the m etropolitan opportunities which are open to ambitious young men with small-town business training, and p artly to explain his attitu d e tow ard such men, which attitude he recently expressed to me with the inform ation th at it is gen erally held by those controlling m etropoli tan business institutions. “ Any young man of ability,” he said, “has a better o p p o rtu n ity in the big cities fo r large success than in the small towns, but the invading small-town youth will o utstrip the city-bred youth, providing he is first trained in small-town methods. “F o r one thing, the provincial boy con siders his career more seriously. H e is a b etter moral risk to his employer. In his home town careful behavior has been n atu rally imposed upon him by the fact of his being well known to all of his fellow townspeople. This habit of circumspec tion is fostered in the early period of his city residence by the example and the badgering of his young citv-bred associ ates.” N EW S AND V IE W S (C ontinued from page 24.) 50 cents a day was insufficient to meet the risin g cost of living, and th erefo re they w ent on a strike. P erh ap s the Pope will have a special collection tak en fo r underpaid g ard n ers and thus keep these fa ith fu l employes in his service. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis T Il E S e p te m b e r, 1S)2b N ORTII W E ST E R N BA X K E R Points of Interest in J\[ew T o r\ C ity ' 'î ï § § | L Bili T he Ba n k of A m erica has for generations held the custom of substantial families and business houses because it has held their confidence. U N IT E D S T A T E S C U S T O M H O U SE Facing Bowling Green at the foot of Broad' way, this magnificently carved granite struc ture occupies an entire block. Completed in 1 9 0 7 , at a cost of over $7 ,000 ,0 0 0 , the building, embellished with its stately Doric collonnades, is the finest edifice of its kind in the world. Crowning the attic is a cartouche emblematic of America, while great commercial nations are represented on the cornice. To the left stands the Produce Exchange Building, in which is located the Battery Park Office of The Bank of America. THE BANK ^OF A M ERICA ESTABLISHED 1812 N E W YO RK C IT Y C a p ita l, S u r p lu s a n d U n d iv id e d P ro fits o v e r $ 1 1 ,0 0 0 ,0 0 0 M ore Business A reservoir full of energy found in vacation land sends us back into the arena of business for more co r respondent banks. T hose we are now serving and those we hope to serve are assured of our best attention. In the Center of Things Financial R esources Over Fifty M illion D ollars M e m b e r of F e d e ra l R e se rv e S y stem 120 Broadw ay https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis o f ^[ew T A r§i E quitable B uilding 45 46 THE NORTHWESTERN P a ra ph ra sed P rov erbs A Miss of Five M inutes at the C learings Is as G ood as— A D ay’s In terest Lost m If we could ascribe a sense o f hum or to a transit check, we m ight im agine w ith what feelin g s it is finally m ade the subject o f fran tic clerical haste to avoid “ m issing the clearings” — after it has sp en t idle days and long nights in in n u m erable transit ^'racks'* and post office boxes. Item s sent to us are h an d led prom ptly by our day-and-night operating T ransit D e partm ent and D irect C ollection Service. A ll item s received at par. a THE P H IL A D E L P H IA - G IR A R D N A T IO N A L BA N K P H IL A D E L P H IA , PA. C ap ital, S u rp lu s an d P r o f its - _ $ 2 7 ,9 0 0 ,0 0 0 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BANKET September, 1926 R. C. Saunders, who is now m anager of the protective d epartm ent of the Illinois B an k ers’ A ssociation, in speaking before the In te rn a tio n a l Chief of Police A ssocia tion m eeting in Chicago said, “ The banks in the U nited S tates lost $3,620,000,000 to crooks in 1924, or $42,000,000 more th an the income of the governm ent. The m ajo rity of the robberies these days are not in dynam iting safes or blow ing open v au lts— these strongholds are too secure, b ut most of the bank losses are from fo rg ery and daylight holdups. Com mittees such as have been organized so successfully in Iowa, are helping to overcome the raid s of the bank bandits, and settin g an example fo r the other states, which will g reatly decrease losses in the fu tu re. R. M. Sims, se creta ry -trea su rer of the National Association of Supervisors of State Banks, reports th a t the to tal de posits of all banks in the U nited S tates, as of A pril 12, 1926, the latest date fo r which these figures are available, am ount to over $54,291,000,000. This is an increase in to ta l deposits of all banks of over $3,794,000,000 above the previous high record o f A p ril 6, 1925. The to tal capital, surplus and u n d i vided profits of all banks in the U nited S tates is over $7,398,000,000. A ll of which again proves th a t we have am ple banking resources to ca rry on any legitim ate business activities in this coun try. William H. Crocker, president of the Crocker First National Bank of San Fransisco, to g eth er w ith oth er leading citizens of th a t city, has organized a F o undation which will have fo r its p u r pose the giving aw ay of money. The giving away of money is easy—b ut to give it aw ay intelligently is a real task. However, there are perhaps some who would rise to inquire, “Please tell us how to make money ra th e r th an how to give it aw ay ?” The number of savings depositors in the U nited S tates in 1920 was 22,415,000, and in 1925 this num ber had increased to 43,850,000. The am ount of all savings de posits in the U nited S tates in 1920 was over $15,314,000,000 and this had in creased in 1925 to over $23,134,000,000. In spite of our extravagances, includ ing autom obiles, chewing gum and face powder, we are m anaging to p u t a little som ething aside fo r a rain y day. W e have rem arked a t various tim es in these columns if bank advertising could be w ritte n as cleverly and as in te rest ingly as m oving p ictu re advertisem ents th a t perhaps th ere would be a g reater hum an in te rest appeal to prospective de positors. H ere’s a p arag rap h taken from one of the advertisem ents announcing M ilton S e p te m b e r, 192(5 T li E Sills in ‘‘Men of Steel.” “I t ’s a big tongue of w hite blue la m e leaping to heaven in ro arin g sheets of destruction—a sea of m olten steel sw eeping down like a tidal wave from hell—and then the bronzed, gleaming, half naked body of a man lighting his way through— the h ea rt of a glorious girl—and the rig h t to be one of the men of steel—his rew ard .” The public debt of the United States a t the present tim e am ounts to $19,680,000,000. The annual in terest charge is $806,000,000. Since 1921 the public debt has been decreased about $4,250,000,000 in principal, and $ 212 ,000,000 in annual in terest. it is upon this p latfo rm no doubt th a t Calvin Coolidge will ask fo r reelection as president of the U nited S tates, and will probably get it. The headlines tell us th a t “The French Attack U. S. Tourists,” and we became excited and highly indignant. As a m a t te r of fa c t every E uropean trav eler knows th a t the French have been a t tacking U. S. to u rists fo r m any years but they have confined all of th e ir a t tacking to the to u rist’s pocketbook. Now they ap p aren tly atta c k U. S. c it izens w ith physical force because our country was good enough to loan them m illions of dollars when they needed it, and are now asking them to repay th eir indebtedness to us. H ere is a story which a banker friend of ours tells us and which you can re fe r to your bookkeeping departm ent to see if it is correct. “ G ray: How did you list the money th a t fo rtu n e teller got from you? G re en : I entered it u nder the head of ‘prophet and lost.’ ” Chain banking received a real blow in Georgia when the B ankers T ru st Co. of A tla n ta failed recently and carried down w ith it 115 sm all banks in G eorgia and F lorida. Solicitor John A. Boyken, in com m enting upon the failu re of the B ank ers T ru st Co., said, “Evidence th a t bank funds had been used fo r bucketshop speculation, and th a t fictitious tra n sa c tions had been resorted to in an ef fo rt to hide funds unlaw fully diverted, was the real reason fo r the failu re .” Chain banking is no stronger than its w eakest bank. Since Dan Moody has entered the race fo r governor of Texas some of his poli tical opponents have said th a t a t his present age of 83 he is too young to be governor of th a t g rea t state. One of his adm irers rem arked th a t “ Those who declare Moody too young to be governor forget th a t Jefferson w rote the D eclaration of Independence when he was 33; H am ilton was 32 when he became https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NORTHWESTERN BA NKER ESTABLISHED 18 7 9 W h en You T ransact Chicago Business T he ample resources of this institution; its reputation for sound and progressive m anagem ent; and the constant efforts to provide the best facilities for the transaction of outo f-to w n b u s in e s s are o f d e c id e d a d v a n ta g e to b a n k s w h o w ish to amplify their services for the benefit of their customers. The new State Bank o f Chicago building — the site o f which is now being pre p a red a t L a S a lle a n d M o n ro e Streets — will provide increased facili ties for a constantly growing clientele. H enry A. H augan C hairm an Board o f Directors R alph V an V echten Presiatnt Leroy A. G oddard C hairm an E xecutite Committee O scar H. H augan Vice Chairm an o f the Board State Bank of Chica go LA SALLE AND WASHINGTON STREETS M ember Federal Reserve System C apital $2,500,000 S urplus U ndivided P rofits $7,360,000 17 T il E N 0 K T il W E S T E R N B A N K E R ¡September, 1926 secretary of the tre a su ry ; Clay 30 and W ebster 31 when elected to Congress. P atric k H en ry was only 29 when he de livered his fam ous oration, and B ryan was only 36 when nom inated fo r the p res idency. A ristotle, Longfellow, and Poe became fam ous before they were 25.” F re d Hoopes sent us the follow ing clas sified advertisem ent from one of the daily new spapers in D allas. F re d says he doesn’t m ind tak in g his m orning dip but says he p refers not to perform these ceremonies on the car line. “F o r R en t: 914 N orth P eak St.— Newly fu rn ish ed rooms, connecting bath on car line. U nder new m anagem ent.” The A m erican M edical Society will no doubt wish to look into the situation which has placed the U nited S tates at the head of the production and export of apples to the entire world. L ast year the U nited S tates exported over 10,042,000 bushels of apples. This should have been sufficient to keep a good m any doctors aw ay for quite a. num ber of years. A T THIS bank, the comjfjL p le te mechanism of a world-wide banking service is kept a living, human thing by the personal relationships existing between our officers and our customers. E v e r y B a n k in g S e r v ic e È C entral T rust C O M P A N Y O F IL L IN O IS 125 (yvwmuti on ecí u t LaSalle CHICAGO The next tim e your w ife asks you to buy som ething fo r her ju st tell her the follow ing sto ry and perhaps th a t will square the m a tte r fo r you. “ The Young B ride (looking in window of jew elry sto re )— George I’d love to have th a t bracelet. The H usband— I can’t afford to buy it fo r you, dear. The B ride— B ut if you could, you would, wouldn’t you ? The H usband— I ’m a fra id not. The B ride— W hy? The H usband—I t isn’t good enough, dear. The B ride—Oh you darling! Cel. Thomas H. Birch, presid en t of the T rust Co. of N o rth A m erica of New York, has ju st issued an a ttra c tiv e little book let entitled, “A G iant Among N ations.” In this booklet he pays a very fitting trib u te to the U nited S tates of A m erica on its 150th anniversary. In conclusion 'Col. B irch say s: “ To put into cold type, even this b rief out line of 150 years of progress, appears vainglorious and boastful, b u t I have been prom pted by no such motive. R ather, in our Sesqui-C entennial year, we should combine g ra titu d e w ith ju st pride, th a t as a nation we have been w orthy of such achievem ents. “In solem nity and hum ility may we pledge the U nited S tates of A m erica to the continued and ard en t prom otion of peace and good will am ong n ations.” F re d W. S argent, p resid en t of the Chi cago N o rth w estern Railway, has issued in booklet form a very in te restin g ad dress of his entitled, “ The P a rt th a t Corn P lays.” https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis September, 1926 T li E The booklet takes up the history of corn from the beginning, and shows the w onderful developm ent of this very es sential food product in this country. M r. S argent says in p a r t : “B ut 2 per cent of the corn crop is exported, and 5 p er cent devoted to hum an food in our own country, it is easily possible by in creasing the consum ption as hum an food to increase the dem and and m aintain the price a t a price which w ill nu llify any effect the price of the product exported may have upon the m arket price in the u. s. “ T hat up-to-date m ethods of sales m anship applied to the corn problem will be of much g re a te r benefit to corn pro ducers than any legislative m easures th a t m an’s m ind m ay conceive.” “A G AIN ST T H E L A W ” (C ontinued from page 19.) ju d g m e n t b a n k e rs , a n d p u ts th e le v e lh e a d ed h o n e st b a n k e r on a p a r w ith th e fe llo w who h a s b a d ju d g m e n t a n d is d ish o n e st, b y re aso n o f th e g e n e ra l p u b lie b e lie v in g t h a t th e s ta te to be a c tu a lly re sp o n sib le fo r losses t h a t m ay a n d do occur. “ No. 2— T h in k t h a t e v e n tu a lly th e re w ill n o t be a n y g u a r a n ty law in o p e ra tio n in a n y s ta te . “ N o. 3— No, b u t if th e y do a d o p t a g u a r a n ty law , w ould su g g e st t h a t losses should be m e t b y a g e n e ra l t a x a sse ssed on p ro p e rty , a n d ra is e d sam e as a n y o th e r ta x . T he g e n e ra l p u b lic a re th e ones b e n e fitte d a n d should p a y th e losses. “ No. 4— T he g u a r a n ty la w h a s re q u ire d us to p a y a b o u t 10% a n n u a lly on o u r i n v e s tm e n t to m ee t losses occasioned b y fa ilu re of o th e r b a n k s, a n d o v e r w h ic h we h a v e no ju ris d ic tio n , a n d fo r w hose m a n a g e m e n t we a re in no w a y re sp o n sib le. “ D e p o sito rs in s ta te b a n k s o f N e b ra s k a h a v e n e v e r lo st a d o lla r b y re aso n o f b a n k fa ilu re s , b u t th e so lv e n t a n d c o n se rv a tiv e b a n k s h av e d o n a te d a b o u t 50% o f th e ir su rp lu s a n d c a p ita l to m ee t th e s e losses d u rin g th e p a s t sev en or e ig h t y e a rs. ‘ ‘ S o lv e n t b a n k s a re th e ones t h a t lose in s te a d o f th e d e p o sito r a n d c re a te s jo b s a t good sa la rie s to p o litic a l w ire p u lle rs t h a t c all th e m se lv e s m em b ers o f th e G u a r a n ty F u n d C om m ission. ’ ’ “ Burden U nju st’ ’ “ (1) T he p rin c ip le s a re a lto g e th e r w ro n g — its o p e ra tio n is n o t w ho lly bad. P rin c ip le s a re w ro n g in t h a t th e h o n e st, c o n se rv a tiv e b a n k e r is p e n a liz e d fo r th e fo lly o f th e fe llo w w ho p la y s f a s t a n d loose w ith h is own a n d o th e r p e o p le ’s m oney. In o p e ra tio n i t has h e lp e d b u s i n ess in th e s ta te b y in c re a s in g g e n e ra l confidence a n d th e in c re a s e d b a n k in g b u si ness re su ltin g has partially com pensated th e m fo r th e a d d ed expense. “ (2) D o u b tfu l. T en y e a rs w ith o u t a g e n e ra l crop f a ilu re or fin a n c ia l s trin g e n c y a n d th e law m ay su rv iv e , b u t a t p re s e n t it could n o t liv e th ro u g h e ith e r. T he b u r den fa llin g up o n th e h o n e st a n d c o n se rv a tiv e b a n k s w hile th e m se lv e s suffering- fro m th e d e p ressio n , w ould be m ore th a n th e y could c a rry . Som e w ould close up, o th e rs w ould re o rg a n iz e u n d e r n a tio n a l c h a rte rs , https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis N 0 R T 1LW E S T E R N B A N K E R th u s in c re a s in g th e b u rd e n upon th o se t h a t re m a in e d , u n til re lie f w ould becom e an a b so lu te n e ce ssity . “ (3) Y es w ith m od ificatio n s. I t is a d m itte d t h a t th e law h a s b e n efite d b u sin e ss a n d th e p u b lic in g e n e ra l in th e sta te . T hose who p ro fit b y th e law m u st be m ade to b e a r a t le a s t a p a r t o f th e expense in c u rred . P ro v isio n s m u st be m ade fo r m ore th o ro u g h a n d c o n se rv a tiv e b a n k e x a m in a tio n s. So lo n g as i t is p o ssib le fo r a b a n k to c a rry on fo r y e a rs b y m ean s o f bogus n o tes a n d p a p e rs to th e tu n e of th re e to five h u n d re d th o u s a n d d o lla rs a n d our e x a m in e rs n o t ev en su sp ec t a n y th in g w rong, th e la w is in p e ril a n d an u n w a rra n te d b u rd e n m u st f a ll upon th e h o n e st b a n k e r. “ (4) T he law is a g re a t lia b ility to us. W e h a v e e n jo y e d th e confidence o f our c o m m u n ity w ith o u t th e law a n d h a v e e v e ry re a so n to b e lie v e we w ould h a v e con tin u e d to do so. I n a g e n e ra l w a y i t m ay be sa id to h a v e b e n efite d o u r c o n stitu e n c y as th e g e n e ra l c o n d itio n s of th e s ta te re a c t upon each local c o m m u n ity . ’ ’ 49 “ M a k e s P u b lic C a re le s s’ ’ “ T he p rin c ip le o f th e N e b ra s k a g u a ra n te e law is w rong. I f i t is rig h t a n d ju s t t h a t b a n k e rs should p a y one a n o th e r ’s d e b ts, th e n in su ra n c e com panies should be re q u e ste d to do th e sam e. F a rm e rs should also u n d e rw rite each o t h e r ’s b u sin e ss. T he s ta te goes f a r b ey o n d a n y m o ral rig h t, w hen i t a sk s one c o rp o ra tio n , or a n in d i v id u a l to p a y fo r a d e b t c o n tra c te d b y a n o th e r w hen th e y a re in no w a y re sp o n sib le fo r th e d e b t. “ (2) A n y p la n t h a t is u n ju s t in p r in ciple h a s n e v e r a n d can n o t Tong en d u re. “ (3) I w ould a d v ise t h a t e ac h b a n k m ay jo in a sim ila r sy ste m or go in d e p e n d e n t. In o th e r w ords m ake i t o p tio n a l. I f th e y jo in e d to g u a ra n te e each o t h e r ’s d e p o sits, th e n th e c o n tro l of th e b a n k s a n d th e a sse ts o f liq u id a te d b a n k s should be in c o n tro l o f th e b a n k s g u a ra n te e in g th e d ep o sits. N ow i t o nly c re a te s a b ig p o liti cal “ p lum t r e e ” fo r th e e x ec u tiv e o f th e s ta te . (C o n tin u e d on p ag e 84) The R oyal U nion Life Insurance Company DES MOINES IOWA We have an unex celled line of policy contracts. R oyal U nion L ife B uilding, Cor. 7th and Grand Avenue D es M oines, Iow a Our new Select Risk low-rate policy for business and professional m en is a fast seller. Over fifty per cent of our policies are issued and in the m ails w ithin twenty-four hours after the application papers reach the Home Office. Royal Union Life Insurance Company A. C. TUCKER, President T otal Paid to P olicyh old ers - - - In surance in F orce as o f D ec. 31, 1925 O ver $ 2 1 ,0 0 0 ,0 0 0 .0 0 - $ 1 4 8 ,2 8 1 ,9 0 4 .0 0 50 THE NORTHWESTERN BANKER P erson al P aragraph s A rtiiur Reynolds, p resident of the Con tin e n ta l and Commercial Banks of Chi cago, has been elected chairm an of the board of directors of the C ontinental and Commercial Company, form erly the Con tin e n ta l and Commercial S ecurities Com pany. H enry C. Olcott, vice president of the C ontinental and Commercial T rust and Savings Bank, was elected president. Mr. Reynolds w ill continue as president of the C ontinental and Commercial N a tional B ank and the C ontinental and Commercial T ru st and Savings Bank. This election followed the consolida "THE B A N K E R S ’ tion of the bond dep artm en t of the Con tinen tal and Commercial T ru st and Sav ings Bank with the C ontinental and Com mercial Company. The purpose of th is change is to com bine in one com pany the investm ent f a cilities of both in stitu tio n s in order to afford a complete investm ent service. The cap ital and surplus of the Con tin en tal and Commercial Company is $4,000 , 000 . The directorate of the com pany is com posed of officers and directors of the Con tin e n ta l and Commercial Banks. S E R V I C E S T A T I O N ” September, 1926 The branch office a t 5 N assau S treet, New Y ork City, will be enlarged. O ther branch offices are m aintained in M ilw au kee, M inneapolis and Des Moines. G. P ra th e r K napp, of Rand M cNally & Co. has ju st published a splendid book, “ How Banks Increase Their Business.” In his book Mr. K n ap p places before the read er a first-hand, classified rep o rt on two decades of work in banking and bank business development, rep resen tin g w ork able plans and m ethods secured from bankers in all p arts of the country. His discussions are as p ertin en t to the prob lems of the sm aller bank as they are to those of the larg er and more highly de partm entalized in stitutions. F re d Thomas, vice president of the F irs t N ational Bank of Omaha, retu rn ed last m onth from five weeks in Canada and the east, going by boat from Kingsley, O ntario, to Quebec, through the Thou sand Islan d s to Boston, Island of Cape Cod. H e was accom panied by his wife. H e rep o rts a very pleasan t trip although expressed keen disappointm ent in the Sesquicentennial exposition at P hila delphia. W hat "^Republic”Correspondents Say oAbout "^Republic” Service There is a w ell know n adage that "One eye-witness is worth a thousand hearsays.” W ith this in mind we are printing a few extracts from letters recently sent us by our Correspondent Banks regarding " ‘R epublic” service. Jo h n F. Hagey, vice president of the F irs t N ational Bank, Chicago, spent the m onth of A ugust vacationing a t Oconomowoc, W isconsin. G-. A. Snider, associate publisher of The N orthwestern B anker, in a recent "^Valuable Ideas” "Sxcellent Service” “I can say w ith ou t the sligh test hesitancy that you have g iv en m e som e very valuable ideas. I w ill e m p lo y e v e r y o n e o f your su g g estio n s.” “W e have your special com m ercial report on the com pany w e recently inquired about. T h is is a n ew service to us and an ex cellen t on e. W e ap preciate it very m u ch .’’ "Letter Was a Knockout” "In a Class by Itself ” “ T h e advertising letter that y o u prepared for us was indeed a ‘k n ock ou t.’ It pleased a very great many p eo p le and w e had a n u m b er o f c o m p li m ents o n it.” “That advertising b o o k let you sent us is in a class by itself. There is n oth in g lik e it. It is the finest th in g o f the kind w e have ever seen .” "oAppreciate Collection Service” “ W e surely appreciate the way you handled the recent co llectio n ite m w e sent you. O ur cus tom er is greatly pleased as h e had about g iv en up h o p e s o f ever gettin g his m on ey.” cBeyond the Usual " ‘•R epublic” Service IS beyond the u su a l because it embraces scores or special services originated by this bank for the express purpose o f help ing its correspondents. Why not let us describe them to you in detail? |S | H ie National Bank o f the A ri R E P U B L I C * • O F C H IC A G O • • oAssets # 1 0 0 ,0 0 0 ,0 0 0 .0 0 J o h n A . L y n c h , C h a ir m a n o f the B o a r d D a v i d R . F o r g a n , V ic e -C h a ir m a n G e o r g e W o o d r u f f , V ic e - C h a ir m a n H . E . O t t e , P r e s id e n t © N . B . R . 1926 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ff VA game of golf at the H yperion Club, Des Moines, inducted him self into m em ber ship in th a t select organization, the Hole-in-One Club. Since then the cus tom ary g ifts to Dodo fledglings have been show ering down, from cases of ginger ale to golf balls. “J e rr y ” expressed one regret, however, and th a t was th a t no one thought to send him a bottle opener. E lm er J. Kennedy, form erly connected w ith the M innesota Loan & T ru st Com pany, M inneapolis, has announced the opening of his own office in Los Angeles. H e will deal in governm ent, m unicipal, and corporate bonds. Mr. K ennedy has had m any years of bond experience in M innesota and C alifornia. R ichard Delafield, chairm an of the N a tional P a rk Bank, New York, had an ac cident recently which kep t him away from the bank fo r a tim e. Mr. Delafield, in spite of his age, is still actively in terested in the m anagem ent of the N a tional P ark . Jo h n E. B arber, vice presid en t of the F irs t N ational Bank of Los Angeles, and also the F irs t S ecurities Company, has been highly honored. R ecently he was decorated w ith the O rder of the Crown of Italy , receiving the ran k of Commen datore, the highest of the O rder. September, 1926 THE NORTHWESTERN BANKER TH E FO REM A N BANKS F O U N D E D 1862 W e invite your business on a 64'year record of com tinuous growth. W e are fully equipped to serve you in every banking function. T h e F orem an N atio n al B a n k The Forem an T ru st an d Savin gs Bank La S alle and W a sh in g to n S ts. C hicago C om bin ed C apital, S u rplus an d U ndivided Profits exceed $10,000,000 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 51 T II E 52 N0 RTHWESTERN BANKER September, 1926 J. J. Buckley, form er assista n t m anager of the investm ent advisory d epartm ent of the G uaran ty T ru st Company of New York, has been appointed m anager of th a t departm ent. James Bruce, vice president of the Bal tim ore T ru st Company, B altim ore, has been elected vice p resid en t of the I n te r n atio n al A cceptance B ank, Inc., and of the In te rn a tio n a l A cceptance Securities & T rust Company. As' a Banker As a banker you are interested in the efficiency of or ganizations. Whether an organization can demand your consideration depends entirely upon its ability to effi ciently gather facts about the thing in which you are in terested. Probably you are considering a new bank or fixtures. If you aren’t now, it is inevitable you will some day. Now, in the installation of fixtures, you would select an organization with years of experience in designing, build ing and installing bank interiors. You would be interested naturally in the cost of the project also. In the efficiency of designing, building and installing and yet making it at a reasonable cost, The Fisher Com pany has pleased hundreds of banks and bankers through out the United States. T hough tfu l Bankers C onsult the Fisher Co. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis THE FATHER, THE SON AND THE DONKEY (C ontinued from page 20) ra te on tim e deposits was correspond ingly reduced. “ The old borrow ers began to flock back and new applicants showed up a t the loan counter daily. This would have worked out all rig h t except fo r the fa c t th a t it was tak in g all the b an k ’s loanable funds to m eet the heavy w ithdraw als of time deposits th a t followed the reduction in the in te rest rate. B efore m any weeks, old m an M illslagle had to visit his cor respondent in the city and arran g e a re discounting credit. “ This tim e the son took a day o r two longer w ith his calculations, and emerged ju b ilan t. ‘D ad,’ he announced, ‘it all comes back to my original idea. Volume of business is the fu n d am en tal thing. W e’ve got the borrow ers, and all we have to do is to bring back our depositors. I ’m going to rein state the reg u la r ra te on tim e deposits, b u t leave our lending rate where it is—which is one per cent lower th an any other bank in the country. “Feeling th a t the joke had gone fa r enough, the old man would have p ro tested, b u t his son d idn’t give him a chance. The new regulation w ent into effect im m ediately, and the deposits came back. I t w asn’t long u n til its daily s ta te m ent of condition would give any by sta n d er the im pression th a t the M ill slagle bank was indeed a ‘real b an k ’ at la st— except fo r one item. The undivided profits account began to disappear, and finally the tim e came when th e darned thing w ouldn’t su b trac t a t all, and they had to move it over to th e other side of the ledger. “ Then one day old H erm an Beaderstad t, who owned ten shares of stock in the bank, accosted young M illslagle in the lobby. “ ‘H ey, dere, young man, vot about mine tiv ite n t? In Ju ly you forget, and then again in Y anuary. Mebbv you gift me m ine monies back fo r mine stock, h ey ?’ “ So young M illslagle called a special stockholders’ meeting, and a fte r passing the cigars, he addressed those presen t as fo llo w s: “ ‘My frien d s, I am glad to re p o rt th a t the p a st y ear has been the best th e bank has ever experienced. Our to tals . are September, 1926 THE grow ing very rapidly, and while it is tru e th a t we are a t p resent suffering a small loss on each transaction, the fu tu re looks extrem ely bright. I f we can continue to increase our volume of business a t the present ra te fo r another year, we will have a real bank here. I believe my fa th e r will bear me out in th is.’ “B ut this la st statem ent, a t least, was NORTHWESTERN BANKER erroneous. H is fa th e r couldn’t bear an y one 'out, b ut instead had him self to be borne out. H e had passed quietly away in his ch air.” [C redit fo r the good b its in this article (if any and such as they are) should go to Jose W elch, of Boston, who was “my good frie n d ” u n til I spent my vacation la st m onth v isiting a t his home.— M.] ^iiiiiiiiiiiiiiiiiiiiiitiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiitiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiHiiiiiiiiiiiiiiiiiiiiiHiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiniiiiiiiniiiiiiiiiii^ l , T e n Years A.go Today I B r ie f b its of n ew s fro m T h e N o r th w e ste r n B a n k er, S e p te m b e r , 1916 The Chase National Bank of New York recently gave a stim ulus to the New Y ork m arket fo r the sale of bank and tru s t com pany stock, which had been sta g n an t fo r some weeks. The proposal to increase the cap ital stock of the Chase N ational from $5,000,000 to $ 10 ,000,000 had been rum ored in the m arket some weeks ago and caused an advance then in the stock, which sold as high as 625. W hen the announcem ent of the “m elon” was made, im m ediately the stock became strong again and advanced to 675. Chase stock has fo r some time been a favorite w ith the trad ers, although there is very little of it offered in the m arket. — 1916— J. Fletcher Farrel, fo r a num ber of years vice president of the F o rt D ear born N ational B ank of Chicago, has severed his active connections w ith th a t bank, to become tre a su re r of the Sinclair Oil and R efining C orporation of New York, and will be in charge of the finances. M r. F a rre ll will, however, re tain his in terests in the bank and rem ain on the board of directors. B ank is building quite a business along these lines. — 1916— Wm. H. Hodge, of the H. M. Byllesby & Company, of Chicago, has ju st sent out a b eau tifu l booklet showing views of the public u tility properties, in which the S tan d ard Gas & E lectric Company own investm ents. I f you have not re ceived a copy, the com pany will be glad to send you one upon request, through th e ir Chicago office, 208 South L aSalle Street. — 1916— J. P. Morgan, Sr., le ft an estate ac cording to a recent ap p raisal of only $77,000,000. Mr. M organ was credited w ith being th e fa th e r of th e U nited S tates Steel T rust. The rep o rt shows th a t he owned one share of the U nited S tates Steel p referred , and th a t was a p praised at $107.50. He had 500 shares of common stock appraised a t $30,437, One of the chief item s in M organ’s estate was his $29,000,000 in te rest in th e J . P. M organ & Company, of New York, and D rexel & Company, of P hiladelphia. —1 9 1 6 Ray Nyemaster, cashier of the M usca tine S tate B ank, M uscatine, Iowa, has accepted the active vice presidency of the G erm an Savings Bank, of D aven port, the largest bank in Iow a, w ith de posits of eleven and a h alf m illion dollars. J u s t a few years ago Mr. N ye m aster was a M uscatine county school teacher. W hile teaching a t A talissa he organized and became the f irs t cashier of the A talissa Savings B ank, and thus began his banking career. — 1916— Emil Webbies, who has been connected w ith the K ew anee S tate Savings B ank, K ew anee, 111., has accepted the cashiership and active m anagem ent of the M uscatine S ta te Bank, M uscatine, Iowa. The in stitu tio n to which Mr. W ebbies goes, is recognized as one of the most solid and su b stan tial fin an cial estab lish m ents in the M ississippi V alley. I t is a $2,500,000 b a n k ; w ith deposits con sta n tly growing. — 1916— J. M. Dinwiddie, president of the Cedar R apids Savings Bank, Cedar R apids, Iowa, has issued a very interestin g book let entiled, “ Y our estate, your wish, your w ill.” U nder the laws of Iowa, sta te and savings banks m ay act as adm inis tra to rs, executors, g uardians and trustees. The Cedar R apids Savings — 1916— Percy W. H all was presented w ith a beautifu l sapphire and diam ond stick pin, by the members of the Executive Council of the Iow a B an k ers’ A ssociation as a personal trib u te to him, fo r his ser vices and u n tirin g e ffo rts d uring the p ast six years, as secretary of the S tate A ssociation. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 53 The Bank's Bond A cco u n t A BANK should always endeavor to be in a position to take care of the reasonable demands of its depositors for loans, but as a matter of protection to its depositors and to itself it should maintain a re serve of quick assets sec ond only to cash on hand and in other banks. The intelligent selection of bonds for a bank’s sec ondary reserve involves: First, the determina tion of the bank’s investment require ments. Second, the analyses of bonds with respect to credit position and market posi tion, and Third, diversification, or investment risk insurance. Many banks ask us to analyze the credit position, the market position and the diversification of their bond holdings to g e th e r with their investment re quirements, because of the value of the analyses to them. This service is available to you. FirstIllinois Company BONDS FOR''INVESTMENT ' 208 S. La Salle, Chicago St. Louis Aurora Milwaukee Springfield T II E N 0 R T H W E S T E R N ¿m2 BANKER September, 1926 An Investment Banking House of Service What Is Market Value? A n Im portan t F eature to R em em ber T he m arketab ility o f all bonds is an im portant featu re w h ich every banker m ust n ecessarily consider. T his q u estion has arisen m any tim es regarding the proper analysis o f m arket value. F irst the In vestm en t m ust be fou n d ed on basic need s, o f course, but there is a greater factor to con sider w h ich bankers and investors now recogn ize— that is the alm ost intan gib le yet param ount factor o f w eigh in g the resources, integrity, stability, and ab ility o f the in vest m ent h ou se to in tellig e n tly “ analyze** and “ con fid en tly know** the facts con cern in g the bonds they are selling. T he W h ite-P h illip s C om pany, and its en tire organization has con sisten tly m ain tained this practice in sellin g high grade bonds to Iowa banks and bankers. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis DUBUQUE, IOWA D A V E N P O R T , IO W A OMAHA, NEBRASKA B. & I. Building First N al’l Bank Bldg. Bankers Reserve Life Bldg. DES MOINES, IOWA CHICAGO, ILLINOIS 219 Securities Bldg. 137 S. La Salle St. September, 1926 T IIE N O R T H W E S T E R N B A N K E R o5 mm The Bearing of Foreign Exchange on Foreign Dollar Bonds OND men and bankers, as well as individual investors who are u n fa m iliar w ith the intricacies of fo r eign exchange, are often confused as to the beaiing which the foreign exchange of a country may have upon the external obligations which they hold in th eir in vestm ent. They see, fo r example, the F rench and Belgian fra n cs going to a fu rth e r discount from th e ir prew ar gold value and may feel th a t they should sell th e ir bonds, thin k in g the security is nec essarily weakened by the decline of the currency. As a m a tte r of fact, the oppo site is more a p t to he true, fo r a country’s real w ealth is not lessened or destroyed bv the depreciation of its currency, as in the case of the F rench franc, or its complete devaluation, as in the case of B It is a p leasu re to p resen t to our read ers the accom p an yin g a rticle on the E u rop ean situ a tio n , w h ich so clea rly e x p la in s the b earin g of fo reig n exch an ge on fo reig n d ollar b on d s. T h is m aterial w as p rep ared by Mr. W m . W . W elsh , C h icago D istrict M anager, B aker, K e l lo g g & Co., In c., in co lla b o ra tio n w ith Mr. P au l M. A tk in s, In d u stria l E con om ist and M em b er of H . N . Stronck & Co., C hicago. the G erm an m ark. W h at does happen is th a t the ow nership of th a t w ealth is partially or wholly tra n sfe rre d from those © Key to Maps CONSULTANTS TO BANKS, BANKERS AND THEIR COMMERCIAL CLIENTS 180 N. LA SALLE ST. CHICAGO, IL L . I92S GERMANY HUNGARY AUSTRIA HfJLAND SWEDEN SWITZERLAND BULGARIA HOLLAND CZECHOSLOVAKIA GREAT BRITAIN SPAIN PORTUGAL ITALY JUGOSLAVIA ROUMANIA BELGIUM NORWAY DENMARK FRANCE GREECE POLAND © 4 i . . 60% &SSSSS33 61 • 1924 percentage 10 0.0 100.0 0.0 No d a u 100.0 6 2 .2 9 5 .9 9 2 .6 91.3 94. 7 91. I 85. 7 C O U N TR IE S 58. 3 6 9 .0 7 1 .7 70. 9 8 4 .8 8 2 .8 7 3 .3 70. I A ...........Albani. 53. I 86. 4 86. 2 86. I SO. 4 66. 9 99. 9 65.8 5 0 .5 PERCENTAGE PERCENTAGE 0.0 9. 5 100.0 66.0 8 0 .9 5 3 .3 6 3 .8 6 3 .9 7 4 .8 810 6 7 .5 2 5 .7 DIVISION https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I I& 'iÿ K il 66.5 83.3 91.6 9 7 .2 90. 7 46. 5 9 2 .2 6 9 .6 9 2 .5 81.7 80% 81 . . 100% I 21.2 99. 7 99. 5 9 9 .2 9 8 .9 98. 3 98. I 97 9 97 .7 9S . I 9 2 .5 8 9 .0 COUNTRY GERMANY HUNGARY AUSTRIA FINLAND SWEDEN SWITZERLAND BULGARIA HOLLAND CZECHOSLOVAKIA GREAT BRITAIN SPAIN PORTUGAL ITALY JUGOSLAVIA ROUMANIA BELGIUM NORWAY DENMARK FRANCE GREECE POLAND Stability BY H. N. S TR O N C K AND CO. 1 0 0 - PERFECT STABILITY The foreign exchange of a country does have an im p o rtan t bearing on the eco nomic w elfare of a country, b u t its im portance lies not in the level of the coun tr y ’s exchange, b u t its degree of fluctua tion, or its relative stab ility . F o r ex- STABILITY Or 0Ot-¿-AK EXCHANGE IN COMPARATIVE STABILITY OF EUROPEAN EXCHANGE PREPARED who have previously invested in credits, to those who have invested in the ow ner ship of p ro p erty or enterprises. The de valuation of a currency, when stabilized a t a low er figure, reacts to the benefit of a co u n try ’s obligations by reducing the to tal gold value of its in te rn al debt and leaving it w ith a la rg e r capacity to pay its ex tern al bonds. Po Poland P............Portugal Ru ......Russia R............Roumania Sp.......... Spain Sw..... . Sweden S............Switzerland 90- 5 41.2 6 9 .5 92 -6 4 0 .6 70 9 5 8 .5 51.3 65 6 86. I OF FOREIGN SECURITIES INVESTIGATION DR. PAUL M. ATKIN S, DIRECTOR B............Belgium Bu..........Bulgaria C............Czechoslovakia 0 .....................................Denmark E......... -Esthonia F............Finland Fr...........Prance G ...........Germany G........... Greece H...........Holland Hu.........Hungary 1 ........... Italy J.............Jugoslavia La.......... Latvia L............Lithuania d 56 THE am ple, in the case of F rance, it is much more im p o rtan t to note th a t the exchange is fluctuating widely ra th e r th a n the fa c t th a t her exchange is around th ree cents instead of 19.3 cents, its p rew ar gold p a r ity. The accom panying charts provide a means fo r studying the stab ility of E u ro pean exchanges. C hart I p o rtra y s in graphic form the sta b ility of exchange during the la st fo u r years. C hart I I shows a geographical d istrib u tio n of the changes which have taken place over th a t period of time. W hen the foreign exchange of a coun try is stable, business men can forecast th e ir revenues and expenditures w ith a degree of accuracy which is to tally im possible when exchange is subject to rap id and violent fluctuation. This has NORTHWESTERN BANKER especial significance in connection w ith th e ir borrow ings in the U nited S tates, fo r if exchange falls, th e ir plans fo r p ay m ent of in te rest or capital on such loans m ay be com pletely upset and an in creased burden placed upon those coun trie s u n til the exchange is stabilized. The im m ediate w elfare of a country is im paired in eith er case w hether its exchange is rising or falling. The finan cial capacity of a country to pay its ex te rn a l loans, however, does depend on w hether the tren d of exchange is upw ard or downw ard. This is very well illus tra te d in the case of D enm ark, N orway, F ran ce and Belgium d uring the p ast year. The sta b ility of these countries, as shown on the charts, was about the same. Business in all of these countries has been u n satisfacto ry , slow and u n .......... ir* Are your security holdings organized into an investment structure fitting the require ments of your bank? rANY a bank’s bond holdings are thoroughly sound so far as the security values are con cerned and yet, an analysis made with regard to the bank’s requirements, might show a lack of thorough diversification, of the right proportion of marketability, or of well distributed maturities. Often the taxable status may be improved. A nother factor is the average yield, w hich is an especially im portant consideration in view o f the increasing cost o f bank operation. Very often there is opportunity to im prove the yield o f a bank’s bond investm ents w ithout weakening the security. T he m ore a bond house know s about a bank’s bond h o ld ings, the character o f the business, local'conditions, and the like, the more helpful it can be. W ith ou t such know ledge it cannot give m aximum service. Our aim is to make it definitely advantageous for a bank to becom e a client o f our house, rather than a casual purchaser o f its offerings. That establishes a relationship o f reciprocal, last in g benefit. Y ou are invited to m ake a concrete test o f our service in connection with any bond investm ent problem , w ith out ob ligation. Our representative w ill call if you w ish, or w e wifi serve you capably through correspondence. .!!!!:!, .».!jk y ¡¡ili"«»' fe ite 1 !!!■! i| c ffia wk I?! ............ ||Uitj|5|U;;’i ¡¡ii...... 3 A s k fo r A n a ly s is C hart N B -9 6 *“!_)bli8ation- Write to our nearest office. HALSEY, STUART & CO. N CO RPO RA TED sa I!... il iillill# m t ¡¡ìli!?'! .¡1 $ Send for this Bond Analysis Chart T1A N K S have a very obvious need for -LJ some method o f analysis which will outline the structure of their bond hold ings—show how well they are balanced as to diversification, maturities, etc. W e have prepared a chart based on the method we follow in making a complete analysis of bond holdings—which we do periodically for many banks and institu tions. W e shall be glad to send a copy o f this __________________________chart to any bank upon request, and wi th- 1 *" 1 7 !<|,||. a® O'V'iiiiiu i-;i ily i p "1n|, : ; m i::'hIl>'i; Ij'ite ty NEW Y O R K PHILADELPHIA DETROIT CLEVELAND CHICAGO i n South is th St. 601 Griswold St. 925 Euclid Ave. 201 South La Salle St. i4 W a llS t. BO STON MILW AUKEE MINNEAPOLIS ST. LOUIS 425 EastWater St. 610 Second Ave., S. 3 19 North 4th St. 85 Devonshire St. ¡¡riitei https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis September, 1926 profitable in the S candinavian countries, feverish and destructive of real economic w elfare in F ran ce and Belgium. The disturbances in D enm ark and N or way have been due to a rising* exchange. As soon as it reaches p a r— and it has su b stan tially done so in the case of D en m ark — business conditions will soon be stabilized and the w ay will be paved fo r real economic pro sp erity . The financial stab ility of these countries is being con sta n tly strengthened and this condition is reflected in the price of th e ir securities in foreign m arkets. In F ran ce and Belgium, on the other hand, exchange has been falling, and while superficially business m ay be b et te r th ere fo r the moment th a n in the other two countries, they are actually much fa rth e r from economic and finan cial stab ility , and the price of th eir se curities reflects th is sta te of affairs. Both d epreciating and app reciatin g currencies are h arm fu l to trad e by the confusion they cause in wage and price relations. A depreciating currency re duces real wages by a grad u al and silent process th a t is alm ost unnoticed for a time, so th a t a considerable reduction may occur before a com pensating rea d ju stm en t of wage rate s is made. Prices are affected in like m anner. In stea d of risin g prom ptly to com pensate fo r the de clining value of the currency they re spond sloAAdy, th u s fallin g beloAV prices in gold stan d ard currencies. Belgium and F rance, through th e ir depreciated cur rency, m ay be able to undersell G reat B rita in and the U nited S tates in the fo r eign m arkets because of th eir depre ciated exchange, but this ap p a ren t ad vantage to a co untry from th e fallingvalue of its own currency is tem porary and deceptive. The co untry is selling its p roduct and labor fo r less th a n they are Avort.h, usually AA-ithout knoAving it. The people of G erm any Avent all through th a t experience and w ant no more of it, al though com plaining now of loss of busi ness to Belgium and F rance. The com m ittee of experts appointed to advise the F ren ch trea su ry , in its recent report, says th a t “the F ren ch people are Avorking and producing, b u t m ost of them are be ing im poverished unconsciously.” If F ran ce folloAvs the recom m endations of her com m ittee of experts and succeeds in stabilizing the F ren ch fra n c on a gold basis, she will then be in a position to build h er financial and economic stru c tu re on a sound foundation and should experience the same so rt of recovery th a t G erm any has since th e in au g u ratio n of the Dawes plan. In fact, due to the very large gold reserves th a t F ran ce has on hand a t the present tim e, and the fact th a t she Avill be receiving rep aratio n s in stead of paying them, as is th e case Avith Germany, her problem should be really easier th an th a t of Germany. NorAvav and D enm ark have been suffer- September, 1926 THE ing like G reat B rita in from the ap p re ciation, ra th e r th an depreciation, of th eir currencies. Owing to general confidence th a t th e ir currencies would be eventually restored to par, speculation f o r the rise has caused a m ore ra p id rise th a n either governm ent desired, and this, of course, has been reflected in a fall of in ternal prices. This called fo r a dow nw ard re adju stm en t of wages and the usual diffi culty has been experienced. In the case of D enm ark the currency is now restored p ractically to the old par, and according to an official statem ent, the gold standard w ill be definitely reestablished on this basis. The resto ra tio n has been a d rastic experience, b u t the w orst is now over. In the case of N orw ay the governm ent is endeavoring to reduce fluctuations and hold the currency at about tw enty-one cents to the krone, the old p a r having been tw enty-six. The actual depreciation of exchange has little significance in judging the in vestm ent possibilities of a country pro vided the exchange is stable. This is very well illu strate d in the case of sev eral E uropean countries. A u stria, fo r example, has had- a stable exchange since the spring of 1922 (the in stab ility shown on ch a rt reflects the rap id fall during the first few m onths of th a t year) yet its exchange was at only .01 per cent of paunt.il it was revalorized and a new gold sta n d ard adopted in the la tte r p a rt of 1924 was the official recognition of an already accom plished fact. F in lan d has had much the same kind of experience, a long period of com para tive stab ility on a depreciated basis be fore the official adoption of a new sta n d ard. Czechoslovakia has had a sim ilar p rep a ra to ry period and has recently gone on a new gold standard. The essential point to note in this con nection is th a t business began to a p proach norm al and the fundam ental eco nomic and financial conditions of these countries have im proved steadily w ith the lengthening period of stable exchange even on a depreciated basis. S tab ility of exchange is not the only fac to r to be considered in judging the investm ent possibilities of a country, but because of its own intrin sic im portance and the fa c t th a t it reflects so m any other facto rs as well, it has peculiar significance in th is connection. I t is one of the m ost sa tisfac to ry w ays fo r evalu atin g the economic rehab ilitatio n of a country. I t m ay be said th a t all of those countries whose exchange has been stable fo r a sufficient length of tim e to be called “seasoned” m ay logically be considered as fields fo r A m erican investm ent unless there are o th er outstanding, exceptional facto rs to the contrary. I t is rem arkable to note how m any E uropean countries during the p a st year have attain ed sta b ility of exchange, and, in m any cases, a new gold standard, so https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis N O R T 11 W E S T E R N B A N K E R soon a fte r the W orld W ar. The experi ence of the U nited S tates a fte r the Civil W ar em phasizes the significance of this accom plishm ent fo r it was fo u rteen years a fte r the close of the w ar before specie paym ent was resum ed and as a m a tte r of fact, thirty-five years before fu ll legal au th o rity was accorded the gold sta n d ard. M ortgage B ankers to Meet A rem arkably in terestin g program has been prepared fo r the convention of the M ortgage B ankers of A m erica a t R ich mond, V irginia, Septem ber 21, 22, 23. U nusually strong ta le n t has been se cured fo r the speeches. 1)7 The advestising exhibits will be new and drawing* featu res. The social en tertainm en t, provided by the citizens of Richm ond fo r all guests, ladies and gentlem en, and th e national ch aracter of the association, will com bine to m ake this, the th irte e n th annual convention, the g reatest in th e history of the organization. The m em bership covers the entire U nited S tates. M embers will be presen t from the p rin cip al coast cities of the A tlan tic, the Pacific and the Gulf, as well as from all in terio r states. Subjects of vital im portance will be considered. 58 THE N O R T H W E S T E R N B A N K E R September, 1926 Advertising a Bond Department H E first step in a comprehensive sales prom otion plan is to run an advertisem ent in the best local news p ap er—merely announcing the fact that a bond departm ent has been organized, car rying high grade securities fo r sale. I t might be well to bring out one or two such advertisements a month so as to keep the departm ent before the people. A more effective way, however, of adver tising is by keeping in close touch with prospective investors. The first to receive attention are, n atu r a l^ , the bank’s own depositors, some of whom, no doubt, have already formed the habit of investing their surplus funds in T B y B. H. Stans field E. H. O ttm an & Company, Inc. good securities. A personal letter should be addressed to these customers, inform ing them of the organization of a modern bond departm ent to serve their investment re quirements. They should also be inform ed that the bank would be glad at any time to analyze th eir present holdings and give them sound financial advice, if they care to have it. Needless to add, the tru st thus reposed in a bank should be regarded with the strictest integrity and im partiality. Never should a client be advised to ex change bonds unless it is reasonably cer C u r r e n t offerings current needs fo r T N our monthly Investment Lists you will find a broad selection of diversified issues many of which are particularly suited to bank in vestment. Each has been carefully investigated by us and carries our recommendation as a good invest ment in its class. These lists are consulted regu larly by thousands of banks in country towns and large centers. We will gladly mail you these offer ings each month if you want them. T h e N a tio n a l C ity C o m p a n y National City Bank Building, New York Offices in more than 50 leading cities throughout the world BONDS . https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SHORT TERM-NOTES . ACCEPTANCES tain that by so doing he could obtain a better bond or make a profit. Aside from its immediate depositors, the bank may obtain additional prospects by securing the names of people in its te rri tory who p ay a personal tax of ten or more dollars. To these people should be sent from time to time some good adver tisem ents—not a volume of words, but something that will catch the eye. They should also receive circulars of new issues and be inform ed of changes in interest rates and in relative bond yields. W hen a customer comes to buy a bond, he should be cordially welcomed and made to feel th at the bank is at his service. If he finds it hard to understand some techni cal point about a certain bond issue, be sure to explain it to him in the simplest term s at your command. Avoid am bigu ous statements. Always be ready to p ro mote the interest of your clients, whether they buy or not, fo r one’s development is dependent upon right service. In fact, the little word S E R V IC E is the most attractive advertisem ent. A l ways meet the prospective buyer with a smile and make him feel and know th at to serve him is a real pleasure to you. The more service you give to your customers the more interest you will take in the work, and the more boosters you will get—and every additional booster is certain ly a valuable asset. I t is sometimes said th at banks are giv ing too much free service. W ith this view I cannot agree altogether. Suppose you sell a customer a $100 bond and give him the same am ount of time and attention as if he purchased a larger volume. Off hand, th at transaction might be regarded as a liability. Indeed, it may be so fo r the time being, but who can tell beforehand how m any more bonds this very individual will buy from your bank in the immediate fu tu re ? Who knows how many customers this person may bring you by reason of the fact th at you have “ sold” yourself and your institution to him along with the bond? H andle your little business ju st as if it were all big business, with the same courtesy and attention, and you will win out in the long run. Let the watchword of your departm ent be S E R V IC E ; make the giving of service a real pleasure to yourself and your business will grow by leaps and bounds. I repeat, the best ad vertisement a bank bond departm ent can use is service to its clientele. S tra u s Offering S. W. S traus & Co. has purchased a first mortgage 6^ per cent serial coupon bond issue of $1,350,000 of which $1,050,000 is being offered. These bonds are secured by the Frances-O rpheum Theatre & Office Building, Sioux City, Iowa. The bonds, September, 1926 THE which m ature in 3 to 15 years, are priced to yield from 6.00 to 6.30 p er cent, ac cording to m aturities, and constitute a di rect closed first mortgage on land, build ing and equipment. They are the direct obligation of the Frances Building Com pany. Interest coupons are payable June 10th and December 10th. K ovachy Named M anager George M. Kovachy, assistant treasurer of The Union T rust Company, Cleveland, and now at its Buckeye-East 89th street office, has been selected as m anager of the new Union T rust office to be opened early this fall at Buckeye and E ast 118th street, officials of the bank announced recently. Mr. K ovachy is well known in the Buck eye-W oodland district, as fo r the past twenty-five years he has there been active, not only in banking, but also in a large num ber of neighborhood activities. Mr. K ovachy entered his banking ca reer in May, 1901, at The W oodland Ave nue Savings and T rust Company. Mr. Kovachy was then 17 years old. He be gan as a messenger boy and was succes sively prom oted to clearance clerk, book keeper, general bookkeeper and teller. In June, 1909, when The Buckeye Road office of The W oodland Avenue Savings & Trust Company was opened, Mr. K ovachy was there made assistant secretary and assist ant manager. W hen both there banks merged with the Union T rust Company, Mr. K ovachv was made assistant treasurer of the Union Trust. Mr. K ovachy is a director of the Buck eye Road Business Men’s association and chairman of their finance committee; also member of the advisory board of the Citi zen League and has interested himself in many other activities outside banking lines. H e has thereby made a host of ac quaintances who will welcome him a t the new Union T rust office and congratulate him upon his new responsibilities. F o r four years Mr. K ovachy taught night school at Buckeye Road, where he was p a r ticularly engaged in A m ericanization work. F ew er People on F arm s A continued decrease in farm popula tion in the U nited States is reported by the U nited States D epartm ent of A gricul ture, which estimates th at there were 479,000 few er people on farm s Ja n u ary 1st this year than on Ja n u ary 1st a year ago. The federal departm ent estimates the farm population a t 30,665,000 on Ja n u ary 1, 1926, com pared with 31,134,000 on Ja n u a ry 1, 1925, a decrease of 1.5 per cent. These figures include all men, wom en and children living on farm s. The movement from farm s to cities, towns and villages in 1925 is estimated at 2,035,000, and the movement to farm s at 1,135,000, a net movement away from farm s of 901,000 persons. B irths on farm s during 1925 are estim ated at 710,000, and https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis N0 RTHWESTERN 59 BANKER deaths at 288,000, leaving a n atu ral in crease of 422,000, which reduced the loss due to cityw ard movement to 479,000. The figures fo r 1924 showed a net loss on farm population of 182,000 persons. Opens in D avenport D avenport, Iowa, has been selected as the headquarters fo r Iowa by the F irst Illi nois company of Chicago, the state agency to be in charge of Byron E. Heitzman, m anager fo r Iowa, and Clinton E. H entrich his assistant. This company is one of the well-known reliable bond houses doing a large busi ness in the invesment field. I t p articipates in and originates bonds of the highest class dealing in a diversified list including government, municipal, industrial, public utility and first mortgage real estate bonds. Its clientele consists of banks, investment houses and individual investors. The es tablishm ent of the state agency in D aven p o rt is in line with its program of ex pansion now being carried on so as to be in a better position to care fo r the in creased business coming from the Iowa territory. All salesmen of the state will be under the supervision of the D aven p o rt office. A wicked fellow is the most pious when he takes to it. H e’ll beat you all in piety. — Johnson. Banks Buy and Recommend Wollenberger Bonds H E active customer list of W ollenber^er & Co. includes m any banks and in v estm en t bouses th a t re g u la rly purchase W ollenberger First M ort^a^e Real Estate Gold Bonds for tbeir clients as well as for tbe investm ent of tbeir own funds. T Several of our recent offerings are le^al investm ent for national banks. W ollenberger bonds yield tbe attractive return of 6 K%, and occasionally 7%. T hey are safe beyond question. No in vestor in W ollenberger bonds has ever lost a dollar of interest or principal or been obliged to w ait a single day for tbe paym ent of principal or interest w hen due. On request we shall be glad to send you our Plan o f Cooperation with banks and invest m ent dealers who sell Wollenberger bonds. WOLLENBERGER & CO. ¥ Forty-one In v e stm e n t B a n k e r s iSnf 105 So. L a Salle Street O CHICAGO ^ Years of Investment Banking 60 THE Completes U tility Merger On A ugust 2d, a t the E quitable T rust Company, New Y ork City, the W. B. F oshay ompany, w ith offices in M inneap olis, New York, Chicago, St. P aul and P o rtlan d , Oregon, com pleted the organi zation of People’s L ight and Pow er Cor p o ration which merges th irte en electric, gas, w ater and stre e t railw ay properties in V erm ont, W isconsin, M innesota, Iowa, A rizona, W ashington and Oregon. The subsidiaries grouped in this con solidation under P eople’s L ight and Pow er C orporation are the P eople’s W est Coast H ydro-E lectric C orporation, f o r merly the W est Coast Pow er Company, W illapa Pow er Company and Ilw aco NORTHWESTERN BANKER L ight and Pow er ompany, P eople’s A ri zona Gas and E lectric CC orporation, which was the Globe L ight and Pow er Company, People’s Iow a Ctiy W a te r works Company, P eople’s M innesota Gas and E lectric C orporation, which includes B em idji Gas Company and H enderson L ight and Pow er Company, People’s W is consin H ydro-E lectric C orporation, f o r m erly H u rley M unicipal W a te r Supply Company, M unicipal Pow er C orporation and W isconsin H ydro-E lectric Com pany; People’s H ydro-E lectric V erm ont Corpo ration, which was the V ergennes E lectric Company, and the B urlington T raction Company, including the M ilitary P ost S treet Railw ay. What Are C orporate A Building Bonds? September, 1926 I n connection w ith the financing of this consolidation, G. L. O hrstrom & Com pany, of New Y ork City, sold $3,500,000 fifteen-year 5*4% bonds and $1,650,000 six m onth to five y ear 5% % notes and the W. B. F oshay Company took $700,000. Seven per cent p referre d stock, 16,000 shares no p ar value Class A com mon stock and 36,000 shares no p a r value Class B common stock. A Florida Offering A. C. A llyn & Company is offering an additional issue of $969,000 F lorida Public Service Company first mortgage 6 per cent gold bonds, series “B” at 100 and accrued interest to yield 6 p er cent. The F lo rid a Public Service ompany sup plies electric light and power at retail to fifty-eight communities in central Florida. Resigns from Federal Reserve I t has been announced th a t Mr. Louis T. F alk has resigned from the bank rela tions departm ent of the Federal Reserve Bank of Chicago to enter the investment securities business in the sales organiza tion of the Chicago office of Lee, H iggin- %HIS term is applied to a certain class of bonds which combine the secip rity of the old-fashioned first mortgage with the at tractive features o f th e modern corporation bond. W e have prepared an in teresting illustrated booklet explaining in detail the at tractive features of Cor porate Building Bonds, a copy of which will be sent to you on request without obligation. \ P.W. CHAPMAN & CO.,INC 170 W. Monroe St. CHICAGO https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 42 Cedar Street NEW YORK L O U IS T. F A L K son & Company. D uring eight years of service to Iowa bankers Mr. F alk has ac quired m any firm friends, to whom his banking viewpoints should be useful in answering investment securities problems. H e will continue to visit the Iowa banks, and, as a p riv ate citizen, to m aintain his interest in the banking business. The “Big Boy,” as he is commonly called, keeps in condition during his va cation on the home farm s near Rockwell City, Iowa, where it has been said he has his own private golf links, and he should therefore be able to hold his own among the sharpshooters. September, 1926 THE NORTHWESTERN 61 BANKER Commençai Paper—and the Broker pap er consists of short tim e unsecured promissory notes arising from commercial or m anufacturing transactions. F o r the p u r pose of our discussion here, the term s will be understood to designate p a p e r th at is sold in the open m arket by brokers or dealers to other banks than those with which the borrow er m aintains the direct depository relation. How old the open m arket method of financing is I do not know, but the found ers of my firm began operations as brokers ju st fifty-two years ago. They had been engaged in the leather business in w hat is known in New Y ork as the Swamp and their open m arket transactions consisted in procuring from their late associates and from other sim ilar concerns the customers’ notes they had on hand. R eturning to their small office, they recorded these notes, and I have often wondered how their books of record would have looked to a present day Mr. Marwick E rn st W aterhouse, or a Mr. E lliott F isher Underwood ! They suf ficed fo r their needs at all events, fo r they thrived. W ho knows but what we modern fellows may not be oversystem atized! The next step was to carry these original notes around to the banks and sell them out of hand so to 'sp ea k . One of my esteemed com petitors, possibly speaking from the traditions of his own firm, gives the amus ing account of the early-day dealer who, donning the traditional silk hat and Prince A lbert coat, called on his banking friends and upon procuring their orders, made immediate delivery by removing the actual notes from the band of the tall hat. Changed F orm of P ap er O riginally the p ap e r sold consisted of notes receivable h u t as the borrow ers in creased their own financial responsibility and became more widely known, they came to retain their receivables and borrow on their direct obligation. This greatly re duced the labors of the purchasing banks by obviating the necessity of entering a great num ber of small endorsed notes on their ledgers. In those early days, the concerns that used the open m arket were in the leather business, tobacco, silks, diamonds and dry goods jobbers and commission houses. To day open m arket borrow ing is done by concerns in textiles, foodstuffs, metals, leather, lumber, chemicals, paper, tobacco, building m aterials, rubber, automotive lines and m any others. W here originally tobacco and leather were among the lead ers, it is now estim ated by the National ■ Credit Office th a t only 1 p er cent are in tobacco and 8 p er cent in leather. Through the same source comes the estimate th at of the open m arket borrow ers 48 p e r cent are traders and 52 p er cent m anufacturers. This method of financing supplies tem po ra ry capital fo r m erchants to buy new C o m m e r c ia l https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis B y C leveland V . C hilds H athaw ay & Company, N ew Y o rk stock fo r their season’s business, and fo r m anufacturers to lay in m aterials to be worked into finished products. I t provides funds needed to p lant, cultivate, harvest, tran sp o rt and m arket farm products. O riginating in New York, open m arket financing u ntil 1898 was little known out side of the cities of New Y ork and Boston. Our own office in Chicago was opened in 1899 and Mr. Charles H athaw ay during his lifetim e often told me how he shocked the honorable banking brethren of New Y ork City when he first went up into the great N orthwest and brought back grain and flour p ap e r to offer them ! Today the concerns borrow ing on commercial p ap e r are located in every p a rt of the United States and I understand there are more commercial p a p e r borrowers in Chicago than NeAV York. Bankers in all sections invest their funds in this Avay so th at the brokers have found it necessary to main- oAnnouncement T ru e , W e b b er &c C o . a n nounce the removal of their Cedar Rapids Office, under th e m a n a g e m e n t o f M r. H arry E. Hallenbeck, to Suite 1001 in the new M erchants N a tio n a l B a n k B u ild in g , C edar Rapids, Iowa tlRUE-WcBBBR& Ç5 3 INVESTMENT 231 S. L A S A L L E ST. BOSTON CHICAGO w w BONDS PHONE, CENTRAL 6 55 6 CEDAR RAPIDS 62 T HE tain offices at im portant points from coast to coast, and even to cover country m ar kets by sending- salesmen out in automo biles. C apital R equirem ents The m ajority of open m arket borrowers employ from half a million to two and a half millions of invested capital in their business. U ndoubtedly well over half of the names offered would fall within these limits. An increasing num ber of smaller borrow ers have come into the m arket dur ing the last few years, especially in the bracket from a q u arter to a half million of invested capital. Concerns having less than $ 200,000 are com paratively few in NOR T H W E S T E R N B A N K E R number at least among those seeking na tional distribution. W hile m any bankers feel th at the small concerns should finance at home, there is a distinct advantage to be gained both from the standpoint of the home bank and from th at of the borrow er in the education resulting from a constructive connection with a well equipped broker. The com paratively small departm ent store in the moderate sized city, fo r example, can gain many helpful ideas from contact with a progressive broker who knows what the experience of larger stores has been in such m atters as m ark-up, gross profit, p er centage of advertising expense, leased de partm ent operations, names of lessees and B RO KA W AN D CO M PA N Y to y S o u th L a S a l l e S t r e e t , Chicago Direct Wire to Edward B. Smith & Co. N e w Y o rk • P h ila d e lp h ia General Trading Department Specializing in Packing House, Canadian, Equipment Trust and Pacific Coast Securities. Special B on d Service to Banks IOWA REPRESENTATIVES: E d w a r d J . K e lly a n d M a u r ic e F . L e a h y September, 1926 nature of leasing contracts, ratio of floor area to volume, floor location of d ep a rt ments, and so on. M anufacturers and jo b bers also may gain from such contacts. There is of course a point below which it is inadvisable to go. W hat this point is will vary with specific cases, but gener ally speaking 1 believe $ 200,000 is about as small a capital as an open m arket bor rower should have. Longer M atu rities Commercial p ap e r years ago ran usually from three to fo u r months but with the growth of the system the m aturity length ened until now the average time is five to six months. F o r the banker this has the advantage of fixing his income and at the same time providing him with p ap e r which half way to m aturity can be turned into cash, if need be, by rediscount at the F ed eral Reserve Bank. Commercial paper, broadly speaking, finances som ething to eat, to w ear, or to save labor. Its essentials are integri ty, safety, ability. Dishonest management can deceive the best accountants, the most astute bankers. S afety is most graphically indicated by ratio, but ratio does not necessarily meas ure safety unless, as the chart experts would say, allowance be made fo r v aria tions. A safe ratio in one line, or one locality, or one individual concern, may be quite inadequate in another. Ratio again does not measure safety unless we are satisfied th at the assets have been pro p erly valued. A bility is reflected in earnings. W e are engaged in business fo r the purpose of making money. Conditions in any p artic u lar industry may preclude profitable operations over certain given periods. By and large, however, if a concern can show ratio, earnings and honest management it is a good risk. The amount of outstanding commercial p ap er has decreased from the peak of a few years ago, but the num ber of concerns using the open m arket has increased. From the small beginnings already mentioned, open m arket borrowing has grown to the point where some 2,700 concerns sold thenp ap er in 1925. The decrease of the last three or fouryears in the total am ount of p ap er out standing, can be traced to several causes. H eavy gold im ports have increased the lending power of the country and de creased demand. M any concerns, espe cially large ones, at the peak of their ex pansion financed perm anently through issues of capital stock or funded debt. H and-to-m outh buying became the order of the day, resulting in smaller inventories, smaller debts, and probably also in smaller profits in some m anufacturing lines. Increased N um ber of Borrow ers The increased number of open m arket borrowers indicates th at they realize the advantage of the system. The profit in borrowing in order to take trade discounts https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis September, 1926 T H E is evident when it is remembered that a discount of 2 p er cent 10 days net 30 days equals 36 p er cent p er annum, and if the discount be only one-half p er cent 10 days net 30 days it equals 9 per cent p er annum. Since modern business effort is to diversify operations sufficiently to insure continuous operation the year around there is less of the seasonal feature than form erly, which means in most cases that if the borrow er is to take all trade discounts throughout the year, his bank borrow ings will be p ractic ally continuous though not necessarily in the maximum amount. Such a situation tends to make the bank virtually a p artn e r in his business. H ere then is the broker’s opportunity. O perating not in com peti tion with the bank, but in co-operation, the broker affords the borrow er flexibility by enabling him to clean up with his bank without im pairing his earning power by an unnecessary or undesirable or in convenient curtailm ent of his operations. Open lines thus obtained ju stify his bank in taking the best of care of him. H e obtains a broad distribution at the rates prevailing in the sections where the p ap er is sold. Some time ago I had occa sion to check up our distribution of the p ap e r of one of our largest clients and I found th at we had it then outstanding in H aw aii and in every state in the U nited S tates except U tah and Oklahoma. The open m arket borrow er has access to the experience of his broker whose advice is often valuable in shaping his financial program and developing his rela tions with his banks. Some years ago we handled the p ap e r of a m anufacturer of a nationally advertised product. In course o f time it came to our attention that he had assigned some of his open accounts receivab’e. I sent fo r him and showed him w hat it was costing him and wherein it was u n fair to the banks th at were buying his paper. He thought he could not oper ate his business w ithout doing this. I pointed out to him th at if he had a firstclass treasurer he could relieve himself of the financial burden, concentrate on p ro duction and turn-over, reduce inventories and borrow ing requirem ents and rescue himself from the finance company. He thought me altogether theoretical but on my insistence he cleaned up in the open m arket p ap e r and paid my firm what he owed us in small m onthly installm ents covering a perio r of more than a year. Some four years later he came into our office one day and when I greeted him I told him frankly th at I had supposed he was so displeased with my form er course that we would never see him again. H is reply w a s: “ I was p re tty sore at the time but I realize now th at you are the best friend I ever had, fo r you made me snug up my business, but my house in order and secure a com petent treasurer.” From th at day to this we have been close friends and are doing business h ap pily and profitably together. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis N 0 RT H W E S T E R N 63 B A N K E R A gain the open m arket borrower fre quently profits from the analysis and ques tions resulting from the investigations of buying banks. I have in mind an old established store which had had com para tively small borrowing requirem ents but had always pursued a liberal policy in t m atter of bank balances. Removal to larger and more modern quarters some what increased th eir borrow ing needs and they perm itted us to place a moderate am ount of their p ap er on the open m ar ket. The buyers of it found th at it cheeked well, but th at the banks of deposit made no very specific comments respecting their willingness to loan the company money. W e took it up with the m anage ment and found that they had carried dur ing the year 1925 an average balance of $35,000 in one of th eir banks, $65,000 in the second, and 90,000 in the third, or a total of $190,000. U nder the circumstances it was a simple m atter fo r them to have their lines defined in an aggregate am ount f a r in excess of their peak borrow ings of $450,000. How the Borrow er Profits One of the most valuable features of the open m arket to the borrow er is the adver tising he gets. I have already spoken of the client whose p ap e r we had placed everywhere except in two states. On one occasion a blanket m anufacturer sent for Discrimination Q O U N D S E C U R IT IE S y ield in g k-J m axim um returns, may be found in the offerings listed by this house. That these securities are sound and conservative is shown by the fact that a very large p ro p o rtio n o f our distri bution is to banks and trust companies. These institutions, by the nature o f their business and because o f Federal or State (G overnm ental) supervision, are re stric ted in th e p u rch ase o f securities. Their patronage displays their co n fidence in the value o f our discrimina tion and judgm ent. Ü T h e ir c o n tin u e d , ev er-in creasin g patronage proves it. Ask for List o f Current Offerings BARTLETT & GORDON INC O R PO R A TE D First N ation al B ank Building, Chicago First W iscon sin N ation al B ank B uilding, M ilw aukee 64 THE NORTHWESTERN S ta b ility A ssu red Every dollar of the total investment in Cities Service Company and its 125 subsid iaries, is hard at work pro ducing and marketing neces sities that form the very basis of present-day life. So far as the human mind can determine, the stability of the future income of Cities Service Company holdings is assured. Safety, high yield and mar ketability mark Cities Service Company securities as sound investments for banker or private investor. Write for our booklet “Serving a Nation/’ SECURITIES DEPARTMENT H e ra jm D b h e rty & C bm p^ny IOWA DIVISIONAL OFFICES D es M oines 318 L iberty B uild ing Cedar R apids 1129 M erchants N ational Bank Sioux C ity 507 F rancis B uild ing D avenport 721 F irst N ation al B ank B uilding https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BANKER September, 1926 me and told me he was going to give my firm his account, but with the understand ing th a t we would endeavor to sell his p ap e r in the crossroads, so to speak, where the local merchants are on the bank board and would have their attention called to his blankets by his paper. One of the most valued food accounts came to us fo r the same reason. Still another advantage to the borrower is the fact th a t a well established open m arket rep u tatio n is of m aterial benefit in the event of his desiring to do perm a nent financing. I have spoken of the borrow ers; what of the banks? Does the broker compete w ith the bank? Not a t all. The broker co-operates w ith the bank. H e im presses upon the borrow er the necessity of keeping his account sweet w ith the bank by m ain taining p ro p er balances, whether borrow ing or not. And to the extent to which he assists the borrow er to improve his m eth ods and increase his flexibility and adver tise his product, to ju st th at extent the broker makes him a better risk and a more desirable client fo r the bank. F u r therm ore, as the borrower is more flex ible, so also is the bank, fo r the funds which the borrow er does not take, the bank can invest in outside commercial p ap e r free from any obligation to renew. As a p roperly conducted brokerage con nection is of value to the borrow er’s de pository banks, so also commercial p ap e r is a highly advantageous outlet fo r the funds of the bank. These funds it is the aim of the bank to invest in such a way th at they will be safe, liquid and profit able. These aims commercial p ap e r satisfies. Loss Ratio Is Low Bought with discrimination, losses on commercial p ap e r are practically negli gible. One of the New Y ork banks some years ago rep o rted th a t out of $70,000,000 of p ap er purchased in ten years, only $5,000 was not paid prom ptly a t m a tu rity ; another th at of $10,000,000 bought in ten years only $4,000 was not p a id ; a P h ila delphia bank, th at there had been no loss whatever on $100,000,000, purchased in ten years. In the 1907 panic, of the collat eral to the Clearing H ouse Loan Certifi cates, 73 p er cent was commercial p ap er and only 27 p er cent securities. In panic years, losses on commercial p ap e r have reached $5 p er $1,000, which is the equivalent of one-half of one p er cent depreciation on any security held. In norm al years, losses have not exceeded 20 cents per $1,000. The N ational Credit Office have calculated th at on a three years average the percentage loss of national banks on commercial p ap er has been one-eighteenth (l/1 8 th ) of their loss on investments and one-fifteenth (l/1 5 th ) of their loss on direct loans and discounts. This favorable showing on the p a rt of commercial p a p e r is due to the fact th a t it is selected on its merits, free September, 1926 T H E from considerations of expediency arising from direct contact, is purchased under an option perm itting its retu rn if the in vestigation results unsatisfactorily, is sub ject to the scrutiny of m any investigators, and last but not least, is made by.concerns whose circumstances m ust be above the average or they could not survive the searchlight. F unds thus invested in commercial p a p er provide a liquid asset. In 1907, when direct customers were pressing fo r renew als, collateral loans were frozen and se curities salable only at a sacrifice, the only liquid assets the banks had was commercial paper. D uring the first twelve days of th at trying period a note firm had $10,000,000 of p ap er m aturing, all of which was paid prom ptly without renewal. A careful selection of m aturities will insure a steady retu rn flow from p a p e r falling due. As money tightens requests m ultiply from direct customers fo r renewals, but commercial p ap e r is autom atically p aid as it m atures so th at it is more liquid than direct loans and discounts. Yield Is Fixed The direct profit on commercial p ap e r has at times exceeded the bond yield. A t other times it has fallen slightly below the retu rn of bonds. Over a long period of time I fancy it is p re tty much “ Even Stephen” as between the two, but bonds are not available in time of crisis except at a sacrifice of principal through depre ciation resulting from forced sales in an unfavorable m arket. There is also an indirect profit from commercial p ap er aris ing from the fam iliarity with conditions and the possible contacts it affords the investing bank. As com pared w ith bonds, commercial p ap e r has a fixed value, whereas bonds fluctuate in value, due to business condi tions, money rates or speculative activity. This fluctuation affects both principal and income. One point loss of principal on a 5 p er cent bond fo r one year reduces the yield below 4 per cent, and two points, below 3 p er cent. The average fluctuation over a five years period in the price of fo rty bonds has been 5 9/10ths p er cent. D uring the three-year period covered by 1922, 1923, 1924, the national banks made an average p e r cent of loss eighteen times as great on bonds as on commercial paper. The broker plays an im portant p a rt in our American banking scheme. One of his most im portant functions is to co-ordinate credit thought and research by gathering and disseminating inform a tion. In the early days, the banks based their judgm ent on the general reputation of the borrow er fo r probity and capacity. There were no financial statem ents and practically no credit files either in the banks or in the offices of the brokers. About twenty-five years ago credit files began to be developed and expanded in the banks, but the m aterial fo r them was https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis N O R T H W E S T E R N 65 B A N K E R W e O w n a n d Offer, S u b je c t to Prior Sale, th e s e — IOW A M UNICIPALS This list is offered in evidence of our ability to supply securities which will meet the requirements of every investor. Our offering includes securities originated in the central and southern states; and Michigan, Ohio and California as well. Ask for our complete list. MATURITIES IOWA BONDS Ames W aterw orks 4 % ’s .............. B radgate School 5 ’s ......................................... B urlington Im provem ent 5 ’s ........... ................. ........ Cambria School 4 % ’s ..................................... Cerro Gordo County Funding 5 ’s ....................................... Churdan School D istr ict 4 % ’s -------Clermont School D istrict 4 % ’ s ................. Coon R apids School 5 ’s .................... ................... Creston School 4 Va ’ s ..................... ■.......... D enver School 5 ’s D eW itt School 4 % ’s ............ ........................ D ickinson County Funding 4 Vi ’ s ................... Dunlap Funding 5 ’s ........................ ............... D ysart School 5 ’s .............................. F orest C ity School 4 % ’s ------------------------Greenfield School 4 % ’s .......... : Hamburg School D istrict 4 % ’s ................. Ham pton R efunding 6 ’s ......................................... Jefferson County 5 ’s ___ ____ ___ ________ M oravia School D istrict 4 % ’s -------- ------- ------- ---Pom eroy Funding 5 ’s ............—„ ........ R adcliffe School 4V2’s ........................ Scott County Funding 4 % ’s ................... Shellrock School D istrict 5 ’s ................................... Superior School 5 ’s ................... ................... V alley Jun ction W aterw orks 5 ’s ......................................... W ashington County Funding 4 % ’s ------- ----------------- ....1929 to 1938 ...1936 ....1929-1931 ...1944 ...1933 ...1930 to 1934 ....1944 ....1931-1932 ...1942 ....1944 Op. 1934 ... 1938-1939 ...1936-1937 1939 to 1944 1937-1940 .1930-1931 1933 to 1941 1944 1932 .1934 to 1936 .1935 to 1959 1940 to 1944 1930 to 1935 ...1939 .1936 .1933 to 1936 1939 to 1944 1934-1935 C om plete Details and P rices on Application L. H. Davis , Resident Manager T e le p h o n e M a r k e t 315 526 L ib e r t y B u il d in g , Des M oin es rÆ È h C k o t im : 5?/ KANSAS Chicago K an sas C ity S t. P a u l T o p ek a 66 T H E procured by the banks with very little re f erence to the broker. Gradually, however, the banks began to ask more and more of the broker, and the broker untim ately, p artly fo r his own protection, p artly to meet these requests of the banks, entered the credit field with complete files reflect ing his investigations and the analysis he N O R T H W E S T E R N B A N K E R was in a position to make by reason of his close relations with his clients. Today the banks realize the lengths to which the broker has gone and assign certain mem bers of their credit staff the specific duty of covering the brokers as a p a rt of their investigations. W e m aintain records of the calls we receive each day from the A Criterion of Character A n In vestm en t H ou se m ay b e jud ged by th e ch aracter o f its clien tele . T he fact th at A m erican , S cotch , D u tch and B r itish B a n k in g H ou ses h ave b een co n sisten t custom ers o f th is in stitu tio n for m any years is a h ig h trib u te to th e p r in c ip le s for w h ich th e H ou se o f F o r m an stands. B an k s w h ich act as lo c a l d istrib u tors for F orm an F irst M ortgage B on d s are afford ed a p rofitab le affiliation. C or resp o n d en ce is in v ited from in te r ested bankers. George M.Forman &• Company In v e s tm e n t B o n d s S in ce 1885 EQUITABLE BLDG., DES MOINES, IOWA Chicago N ew York St. L ouis P ittsb u rgh Indian apolis M inneapolis Springfield L exington, Ky. Peoria Lawrence Stern and Company 231 South LaSalle Street • Chicago BOARD OF D IR E C T O R S C H A R L E S A . M cC U L L O C H , P re s i d e n t o f T h e P a r m e le e C o m p a n y JO H N HERTZ. C h a ir m a n o f th e B o a rd o f Y ello w T r u c k & C o ach M a n u f a c t u r in g Co. J O H N R, T H O M P S O N , C h a ir m a n o f th e B o a rd o f J o h n R. T h o m p so n C om pany H E R B E R T L . S T E R N , P r e s id e n t of B a la b a n & K a tz C o r p o r a tio n A L F R E D E T T L I N G E R , V ice P r e s i dent J O S E P H J . R IC E , V ice P r e s id e n t L A W R E N C E S T E R N , P r e s id e n t A L B E R T D. L A S K E R , C h a ir m a n o f th e B o a rd L o rd a n d T h o m a s a n d Logan S T U Y V E S A N T P E A B O D Y , P r e s id e n t o f P e a b o d y C o al C o m p a n y S This company conducts a general securities business, originating and participating in high-grade investment issues and devoting special attention to first mortgage real estate bonds https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis credit men of the banks, and in our New Y ork office they range from 30 to 60 verbal inquiries a day. The broker’s inform ation is scrutinized by bankers whose criticisms uncover the borrow er’s weaknesses. What the Broker Does The broker’s operations tend to equalize rates by obtaining p ap e r in high rate sec tions of the country and selling it where rates are lower. H e conveys money from the place where it is not needed to the place where it is. H e provides the bank with facilities for freedom of choice in diversifying its com mercial investments as to industry, locality and m aturity, at the same time relieving.it from th a t pressure fo r renewals which is im plicit in the bank’s relations with its own customers. H e increases the borrow er’s flexibility by enabling him to clean up his bank in debtedness. H e enlarges the borrow er’s facilities, strengthens his credit, helps shape his financial policy and aids him in improving himself in com parison with other sim ilar enterprises. H e reduces the labors of the banks by acting as a credit clearing house. He increases the protection of the credit community by causing investigation and scrutiny. H is observation of the business of v ari ous concerns in various sections is helpful to borrowers. The publicity he affords constitutes valu able advertising fo r the borrower. In developing the real credit position of the borrower, he has g reater freedom of action than the bank has, because he p re sents a composite picture drawn from m any sources. The broker feels keenly th at he has a moral obligation to protect the banks that invest in the p ap e r he offers, by exercis ing the best judgm ent he possesses, exert ing the utmost effort to investigate and analyze carefully and thoroughly, and fearlessly, m aintaining standards of hon esty, frankness and fa ir dealing among his clients. Exports on the Increase a W IL L IA M W R IG L E Y J R ., C h a irm a n of th e B o a rd of W illia m W rig le y J r . , C om pany. September, 1926 Much has been said concerning the de cline of th is co u n try ’s favorable balance of trad e from over a billion dollars in the fiscal year 1924-25 to $287,000,000 in 1925-26. The S ecretary of Commerce has pointed out th a t th is is largely due to cer ta in tem porary developm ents in the trad e in raw m aterials. Im p o rts of rubber*, fo r example, cost us $320,000,000 more th an if the previous y e a r’s price had been m aintained. E x p o rts of foodstuffs de clined by $270,000,000, m ainly as the re sult of a small w heat cro p ; and exports of cotton dim inished by $150,000,000 be cause of a sm aller q u an tity a t a consid erably reduced price. The developm ent in our commerce in finished goods are of g rea t significance. »September, 1926 THE N O li T l i W E S T E li N BANKER D uring the p ast few years A m erican ex ports of m anufactures have continuously and rap id ly expanded. D uring this last fiscal year these exports increased 15 per cent. F o r the fo u rth q u arte r they surpassed in value those in any other q u arte r since the postw ar inflation p e riod. M anufactured goods com prised 34 per cent of the to ta l exports in 1924-25 and 40 per cent of the to ta l exports in 1925-26. The opinion has been expressed th a t the economic recovery of E urope will not very greatly affect this ex portation of m anufactures. Such effect as may result from a g re a te r E uropean production should be offset by the fa c t th a t Europe will be in a position to buy more of this co u n try ’s raw m aterials. The increased Takes H usband’s Place M rs. L. S. Ivetcham, has been elected by the directors to fill her deceased hus b an d ’s place as president of the Commu n ity B ank of M ontrose, South D akota. A ccording to citizens of M ontrose, Mrs. K etcham is handling the affairs of the bank in an efficient m anner. last half of the year should be marked by conservative and rational operations on the p a rt of industries and mercantile corpora tions. W ith the exception of p a rts of Ne braska and the D akotas, where heat and drought have reduced grain yields, the crops have progressed tow ard m aturity with a promise of fairly good yields. E x cept in spots the cotton crop is doing very well, but in the next th irty days it goes through its crucial period and no one can forecast w hat the yield will be. However, I look fo r a crop perhaps larg er th an is now forecasted as last y ear’s total was later revised upw ard. A good m any in dustries are now buying their supplies of cotton fo r the coming year. Lose H uge Sum R. C. Saunders, m anager of the proteettive departm ent of the Illinois Bankers Association, is authority fo r the statem ent that banks of the U nited Statees lost through crooks in 1924 the sum of $3,620,000,000. H e figures this loss is $42,000,000 more than the total income of the government. In compiling these statistics, Mr. Saund ers says he found that crime had increased 1,200 p er cent in thirty-five years in the U nited States. The statistics were given in an address by Mr. Saunders before the delegates to the International Police Chiefs’ Associa tion at Chicago last month. “ I w ant to say to you gentlemen th at we are getting dangerously near the edge and there is no economic problem so serious and of such im portance before the A m eri can people today as the question of sup pressing crime.” “W hat we need in this country,” Mr. Saunders continued, “is a great arousing of public sentim ent and a realization by American citizens of their responsibility when this comes. Then things will right themselves and we will retu rn to safety.” Container Corporation of America Business P rospects Good F rom the viewpoint of John G. Shedd, chairm an of M arshall F ield & Co., m er chants, m anufacturers and bankers have a clear track ahead fo r another six months of good times. Ju ly is seasonally a dull month, but the change in w eather condi tions and higher tem peratures improved trade nevertheless. In June, S tate street retail stores did the largest business in their history, Mr. Shedd said. “ I anticipate another half year of ex cellent business,” Mr. Shedd said. “ The https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 67 “ Textile industries are still in a de pressed condition, but in most all other lines industrialists take an optim itic view of the situation although they continue to work carefully. In all positions I think business is in a healthy condition. Money is in a com fortable position and credits are in ample supply in this country. At the same time I believe th at money will be no cheaper than it now is. Any unusual increase in business would take up the slack in the money m arket and no business is harassed th a t has to p ay 5 p er cent for the accommodation received from banks. I know of no weak spots in the financial structure because of the conservatism which has been practiced.” G o o d B onds for Banks and T h e ir C ustom ers 1Name of Security Maturity Price To Yield About 6-15-1946 99 6.08% \Rate F i r s t M o r tg a g e S . F . G o ld B o n d s 6 Associated Simmons Hardware Companies, 10 Y e a r S e c u re d 7-1-1933 Market 7 .2 5 % 6^ G o ld N o te s The Bankers Building (Chicago) L a n d T r u s t C ertifica tes 5^ IO O 5.50 % The Chicago Beach Hotel F ir s t Closed M o r tg a g e S . F . G o ld Bonds 6 6 -1-1941 100 6.00% 6 12-1-1945 IO O 6.00% Savoy-Plaza Corporation F ir s t Closed M o r tg a g e S . F . G o ld B o n d s Hotel Sherman Company F i r s t A l tg e . S e r ia l G o ld B o n d s 5^ 5.60 fo 9 4 3 - i 94-6 i Wabash Railway Company R e fu n d in g a n d G e n e r a l M o r t g a g e G o ld B o n d s , S erie s B 5 8 -1-1976 9550 5.25% 5 8-1-1956 96 5 .2 5 % 6 6-1 5-1941 99.50 6.05 <fo 5 6-1 - 1 9 5 6 Central Power and Light Company F ir s t M o r tg a g e G o ld B o n d s , 1956 Series Gatineau Power Company S in k in g F u n d G o ld D e b e n tu re s West Penn Power Company F ir s t M t g e . G o ld B o n d s, Series G 100.50 4-9 7 °lo Subject to prior sale and change in price. We w ill be g lad to send you circulars o f these bonds SflitcliefCM itcfiins &P IL L IN O IS M ERCHANTS BANK B U IL D IN G C hicago [ CORRESPONDENTS • • OF BO STO N K ID D E R , P E A B O D Y & C O . 1 • N EW YORK • • J O F F 1CERS W . E D W IN S T A N L E Y , P R E S ID E N T J A M E S C . H U T C H IN S , V IC E P R E S ID E N T W IL L IA M H . M I T C H E L L , S E C R E T A R Y R O B ER T A . G A R D N ER , TREASURER H A R O L D C . S T R O T Z , A S S IS T A N T T R E A S U R E R T H E 68 N O R T H W E S T E R N B A N K E R September, 1926 Greatest Freight Traffic A First Lien P o w er and L ight C om pany Bond 1. 2. 3. 4. 5. 6. Secured by F irst M ortgage and F irst L ien B onds of subsidiary com panies. E arning m ortgage in terest charges tw o and one-half tim es. M ortgaged at less than 50 per cent. 95 per cent power and light. 43 per cent of generating capacity hydro-electric. P a y in g 6 per cent. CENTRAL ST A T E S PO W ER & LIG H T CO RPORATION F irst C ollateral L ien 6 Per Cent Bonds, D ue 1945 Price 100 and In terest W rite for com plete inform ation. y Q U A I L € v y C U iV D p . w IJVq BONDS FOR INVESTMENT F ir st N a tio n a l B ank B ldg. D A V E N P O R T , IO W A 29 South La Salle St. CHICAGO A BOND’S CHARACTER x is indicated in a general way by its yield. Bonds rating very high in safety and marketability are usually low in yield. Those offering highest returns are likely to be low in safety and marketability Many wise in vestors meet this difficulty by diversi fying their holdings between the highly liquid bonds of low yield and the less active issues yielding a some what higher return. In this way they secure the benefiits of a relatively high return on some bonds, extra safety and marketability in others, and a good average income yield from the list as a whole. W e shall be glad to explain this process to any investor w ithout obligation. D e W olf & C o m p a n y , Business to Improve in c . hwestment Bonds - Established 1889 C H IC A G O https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The railroads of this country during the first six months this year handled the greatest freig h t traffic they were ever called upon to move during any corre sponding period, according to reports ju st filed by the carriers w ith the Bureau of Railw ay Economics. This freight traffic am ounted to 227,116.889.000 net ton-miles, exceeding by 1.632.421.00 net ton-miles or seven-tenths of one p er cent the best previous record, which was made during the corresponding period in 1923. Not only did this freight traffic, meas ured by the num ber of tons of freight car ried one mile, exceed all previous records, but the number of cars loaded with revenue freig h t during the first six months this year also exceeded all previous correspond ing periods. F reig h t traffic moved during the first six months this year, as shown by the to tal number of net ton-miles, was an in crease of 6.9 p er cent over the correspond ing period last year and an increase of 10.9 per cent over the corresponding pe riod in 1924. In the eastern district the volume of freight handled during the sixmonth period in 1926 was an increase of 7.9 per cent com pared with the same pe riod last year while the southern district showed an increase of 10.6 p er cent. The western district reported an increase of 3.8 p er cent. The volume of freight handled in June was also the greatest fo r any Ju n e on record, am ounting to 39,236,630,000 net ton-miles. This exceeded by 758,630,000 net ton-miles or 2 p er cent the best p re vious June, which was in 1917, while it also exceeded by 9.4 p er cent th at fo r June, 1925. In the eastern district, freight traffic in Ju n e showed an increase of 10.9 per cent over the same month last year while the southern district reported an increase of 9.8 per cent and the western district an increase of 7.2 p er cent. M ILW AUKEE The F irs t N ational Bank of Minne apolis, Minnesota, in a recent bulletin is sued regarding the business outlook for the next few months, sees a heavy trade volume along all lines. “ The strength of business during the summer months has convinced even p er sistent skeptics th at 1926 is destined to be another record year,” the review states. “ The pessimists are now moving forw ard the hour fo r the culmination of th eir ex pectations to some time in 1927. The p re dicted slump did not come in the spring, the midsummer decline has been less than usual, and now all signs point to a heavy volume of business in the fall. “ Bank checks cashed and railw ay traffic are exceeding corresponding figures fo r all previous years by a com fortable m argin,” the review states. “Electric power con- September, 1926 THE sumption, which has come to be regarded as one of the most trustw orthy indexes of m anufacturing activity, continues to es tablish new records. Employm ent condi tions have been very satisfactory in most sections.” NORTHWESTERN 69 \ / Eighteen Years of Reliable Investment Service “The Other Fellow” No one man ever made a baseball team, and no one man ever carried on a success ful business by himself. City carpenters and plumbers may think they have little in terest in the farm er. The man handling freight on a city delivery truck or the tim e keeper paying off a bunch of stevedores on a seaport dock, may say: “W hat do we care about the farm er’s problems ?” B ut the m ajority of carpenters secure employment from individuals or corpora tions, who, in turn, are dependent fo r the business they do, upon the sale or m anu facture of products derived from some farm crop. A large p a rt of the business of the city draym an and the w aterfront stevedore, will be handling farm crops, either in their fresh state, canned, or in the shape o f sugar, flour, cured meats, etc. The man who says he is not interested in agriculture, lacks good sense. Lack of tariff protection on crops where it is necessary, sim ply cuts off the jobs of thousands of workmen in other lines of industry besides farm ing. W hat good does it do the laboring man if he can buy b u t ter, eggs or sugar fo r a few cents less each month, if unrestricted foreign competition causes him to lose his job? The sooner we all learn th at we have an interest in each other’s problems, the sooner will industrial and agricultural stability be assured. BANKER Write for circulars listing current offerings for banks H a r r y H .P o l k Sc I n v e s t m e n t S e c u r itie s E q u ita b le Bldg. Co. D e s M o in e s \ / A R em a rk a b le A c h ie v e m e n t S tabilization of currency is one of the m ain problems w ith which a nation m ust contend d u rin g its period of reconstruction, and is one of the m ost im p o rtan t indices fo r ju d g in g the economic w elfare and the investm ent possibilities of a country. Use “Real Money” I t is estim ated that it costs the govern ment $4,500,000 each year to supply one dollar bills ; the total fo r all p ap er money would be much larger. I t would encourage western mining to use more silver money in place of one dol la r bills. One dollar bills wear out in about eight months’ time while silver dollars are p rac tically indestructible. Silver money is also much fre er from dirt, grime and disease germs than p ap e r bills. It was fo u rteen years a fte r th e Civil W ar before the U nited S tates resum ed specie paym ent. And it w as not u n til 1900, thirty-five y ears later, th a t Congress finally provided th a t all p ap er money outstan d in g should be redeemed in gold. In E urope we find th a t eight years a fte r the W orld W ar, G reat B ritain , Holland, Sw itzerland, Sweden, G erm any, A ustria, Czecho-Slovakia, and F inland, have all placed th e ir currencies on a gold basis. This is a tru ly rem arkable achievem ent, and one which places the bond issues of these countries on a sound investm ent basis. Making Road Dollars Count One of the best plans th at has been p re sented, of a scientific and economical type of highway hard surfacing, can be credited to Gr. C. Dillman, chief engineer of the M ichigan highway departm ent. Mr. Dillman points out th at Michigan has thous ands of miles of fine graveled highway?, which, while they cannot stand modern motor traffic, are too good to destroy for an entirely new road bed. The Michigan highway departm ent has worked' out a plan fo r properly leveling and smoothing this old gravel base, and then covering it with a thin coating of road ta r p rep a ra to ry to p u ttin g on a course of https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis We Specialize in Foreign Bonds. B A K E R , K ELLO G G A SPE C IA L IZE D SE R V IC E BANKS NEW YORK LONDON 6 ? C O ., Inc. IN FO RE IG N SE C U R ITIE S FOR and DEALERS 111 W est M onroe S treet Chicago D E T R O IT TELEPH O N E RAN D OLPH 0415 B U E N O S A IR E S THE 70 NORTHWESTERN BA N K E R asphaltic concrete, which averages about inches in thickness. Mr. Dillinan says: “We are try in g to build a com paratively cheap road—th at is, a rath e r high-class road at a low price. W e are try in g to hold the cost of this construc tion down to 50 per cent of the cost of cement concrete.” F o r the m ajority of state and county highways, this type of construction is suit able, fo r m any years to com e; and the saving to taxpayers is enormous, due to the salvaging of the old gravel or macadam road. Specializing in Bonds for Bank Investment W. D. H anna and Company IN C O R P O R A T E D (S U C C E S S O R S T O H A N N A - S H R E V E S C O .) BONDS BURLINGTON J FO R IN V E S T M E N T MUSCATINE WATERLOO LINCOLN — .... ..... .' V Title Insurance eliminates waste — reduces cost and time F o r the Real Estate Investor T here are five im p o rtan t points which commend T itle Insurance to anyone owning or dealing in real estate: F irst— There is a thorough exam i nation of title, once and forever down to a certain point. S econd— T here is an absolute g u a r antee, backed by th e to tal resources of th e Insurance Company, which is under direct supervision of th e S tate. T hird — T here is a savin g of tim e and expense— two im portant item s in business. F ourth — G reat ease and cheapness in the m aking of m ortgages and all subsequent tra n sfe rs, w here quick liquidation is desired. F ifth — T itle In su ran ce is a busi ness asset, as all other kinds of in su r ance are assets, enhancing the value of the th in g it protects. Title Insurance D epartm en t Southern Surety Company 201 Y o u n g e r m a n B u ildin g DES MOINES https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis September, 1926 IOWA Building A ctiv ity N orm al A lthough final figures fo r building con struction in 1926 probably will show a de cline from 1925, this recession will not in dicate any depression, but simply a retu rn to normal building activities, says a recent review. The trem endous boom of 1925 has not been attended by the usual consequence of inflation in the in d u stry ; there has been very little over-construction. F rom now on the industry will keep busy in a more moderate rate, subject to the customary seasonal decline in the last half of the year, it is said. Construction contracts let in Ju n e in the 37 states east of the Rocky M ountains, com prising about 91 per cent of the total fo r the country, reached $547,792,400. This figure represents a decrease of 1 p er cent under May and of 2 per cent under June of last year. Ju n e ’s good showing resulted largely from increased activity in the P ittsb u rg h district, it is said, which had its highest total thus fa r this year in June. M eet a t A tlan tic City The Special L ibraries Association will hold its annual meeting at A tlantic City, October 4-9, 1926. The financial group will have the following program : F in a n c ia l G roup P rogram — Oct. 5, 1926 Tuesday M orning “Inside Publicity or How Can We Se’I Ourselves to O ur O rganizations?” Mr. F o rrest B. Spaulding, Gaylord B roth ers, Syracuse. Miss L aura Gage, L ibrarian, Central T rust Company, Chicago. Miss K. D orothy Ferguson, L ibrarian, Federal Reserve Bank of Richmond, Richmond. Miss Lydia Jacobus, L ibrarian Federal Reserve Bank of Richmond, Richmond. Miss Ethel Baxter, L ibrarian, American Bankers Association, New Y ork City. Miss Emma Boyer, L ibrarian, Union T rust Company, Cleveland. Discussion by members. Business. Round Table Luncheon. Tuesday Evening “ W hy B udgets?” Mr. R. E. W right, A ssistant Vice P resi dent, F irs t W isconsin N ational Bank, Milwaukee. ¡September, 1926 THE Miss Alice Scheck, Librarian, F irs t N a tional Bank of Los Angeles, Los A n geles. Miss M arguerite B urnett, L ibrarian, F ed eral Reserve Bank of New York, New Y ork City. Miss A lta B. Claüin, L ibrarian, Federal Reserve Bank of Cleveland, Cleveland. Discussion by members. Business. The present officers of. the Financial G roup are : Miss M argaret Reynolds, Chairman, F irs t W isconsin N ational Bank, M ilwau kee. Miss Alice M. Scheck, Vice Chairman, F irs t N ational Bank of Los Angeles, Los Angeles. Miss E leanor S. Cavanaugh, Secretary, S tan d a rd S tatistic s Company, New York City. N O R T H W E S T E R N A. B A N K E R J.Boldt & Company P U T N A M BU ILD IN G DAVENPORT BONDS FOR C O N SE R V A TIV E IN V E ST M E N T A M illio n D o lla rs a D a y The steady increase in state, county and m unicipal debt is the g rea test h an d i cap to prosperity, according to W illiam P. Helm, J r., a sta n d ard au th o rity on public finance. In a recently published article he s a y s : “A t the present tim e, local taxpayers are spending not less th a n $1,000,000 a day fo r in te rest on th e ir borrow ings. This sum is greater, by a double h an d fu l of millions, th an the entire revenue obtained by all the sta te s from direct p ro p erty taxation. I t is increasing at the rate , it is estim ated, of about $40,000,000 a year, or more th an $100,000 a day. B efore there is a real reduction in local taxes som ething m ust be done to check the rise in borrow ing which is now going on a t the ra te of about $1,000,000,000 a y ear.” “F O R T H E L A W ” (C o n tin u e d fro m p a g e 1 8) d a n g e r w as lu r k in g e v e ry w h e re , th e re w as no u n e a sin e ss a n d no ru n s. A n d no d e p o sito r h a s lo st a n y o f t h e ir d e p o sits in a s ta te b a n k in N e b ra s k a , since th is law w as p lac ed on th e s ta tu te . S ure, i t cost th e b a n k s h e a v y d u rin g o ur d e fla tio n p e riod, b u t now look b a c k a n d check up th e re c o rd m ade, a n d one w ill find it w o rth th e m oney. W e th in k th e confidence g a in e d w ill offset th e expense, so t h a t b o th b a n k s a n d d e p o sito rs a re b e n e fitte d th e re b y . A g u a ra n te e la w to be s u b s ta n tia l m u st be c om pulsory on a ll b a n k s, as our s ta te b a n k law , o th e rw ise i t w ould be a f a i l u r e . ” ‘ ‘The Only Practical P lan ” ‘ ‘ T he g u a ra n te e la w is th e o nly w o rk a b le law or p la n o f its k in d in e x iste n ce . T he N e b ra s k a g u a ra n te e is in th e h a n d s of b a n k e rs, a n d sh o u ld be. I t is th e s a lv a tio n o f N e b ra s k a , a n d N e b ra s k a b a n k e rs as w ell. T h ere w ill be ch an g e s as tim e com es on to b e tte r it, b u t it w ill n e v e r be done a w a y w ith . T he d ifferen ce b e tw e e n th is law a n d o th e rs, is t h a t i t is a w o rk a b le law , a n d o th e rs w ere lim ite d law s b e sid es b a n k e rs in N e b ra s k a a re c o -o p era tin g . In th e s e tim e s no s ta te can p ick up th is law https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis G eneral Motors Acceptance Corporation Executive Offices: 250 W est 5 7 th S treet, N e w Y ork C ity fH E obligations of this institution are select ed as appropriate and sound m edium s for short term investment by a large banking clientele. They m ay be obtained in convenient denomina tions and suitable maturities. Z D IR E C TO R S Alfred H. Swayne,. .Chairman — Vice President, General Motors Corporation Curtis C. Cooper. . . President Albert L. Deane. . . Vice President Pierre S. duPont. . .Chairman, General Motors Corporation and E. I. duPont de Nemours & Co. Lammot duPont.. .Finance Committee, General Motors Corporation. O. H. P. LaFarge. .General Motors Corporation Seward Prosser. . . . Chairman, Bankers Trust Company New York V John J . Raskob . . . .C h a irm a n , F in a n ce C om m ittee, General Motors Corporation Alfred P. Sloan, Jr. President, General Motors Corporation JohnJ. Schumann, Jr. Vice President Donald M. Spaidal. Vice President 71 72 THE N O R T H W E S T E R N Dae September, 1926 a n d m ak e i t w o rk a b le. I t w ould re q u ire too m uch fu n d s to h a n d le it, a n d th e w e ak e n e d c o n d itio n s o f b a n k s could n o t s ta n d it. “ N e b ra s k a h a s a lre a d y p a id th e p rice o f a su c c essfu l law in m oney a n d th e re fo re th e y can look fo r re tu r n s b a c k as c o n d i tio n s come in w h ich p a p e r t h a t w as con sid e re d slow a n d d o u b tfu l, h a s becom e col le c tib le , th ro u g h good crops. E x a m in e rs should be chosen b y c iv il se rv ice m eth o d s, o r in o th e r w ords, chosen b eca u se o f th e ir e x p erien c e a n d fitn ess, t h a t sh o u ld be a p a r t o f th e law . M en to h a n d le b a n k s th a t a re in slow sh ap e could also be s tr e n g th en ed b y r ig h t k in d of m en. T he g u a ra n te e law in ou r c o m m u n ity h a s a b so lu te ly p u t confidence in th e people a n d i t ta k e s th a t w o rry off fro m th e b a n k e r a n d g iv es him a ch an ce to p u t h is efforts in se rv ice a n d ru n n in g a b e tte r b a n k , w o rk in g o u t th e p roblem s as th e y a re . ’ ’ Sound Investments of Good Yield Rate B A N K E R Yield W est Penn Power Company . 5s 6 /5 6 4 95% Southwest Utility Ice Co. . . . 6s 5/416.25% Atlas Plywood Corp.................. 6 |s 7 /4 0 6.25% *692 Broadway Bldg (N Y .) . . 6js 3 /4 0 6.25% 'In the opinion of counsel this loan is legal for the investment of trust funds in the State of New York “ A Good L a w ” Circulars on Request H o AGLAND, A E s ta b lis h e d 1 9 0 9 — l LUM (o■ I n c o r p o r a te d 14 S. La Salle St. CHICAGO 34 Pine St. NEW YORK C a re fu lly Selected Investm ents Sierra P acific E lectric C om pany G old N otes 5s, 1929 __99.73 5.10 H om e T el. & T el. Co. (F t. W ayn e, In d .) 1st M tge. 5 T A s, 1955 -1021/4 5.35 Iow a S outhern U tilitie s Co. 1st Mtg. 6s, 1933 -103 5.45 C entral Illin o is P u b lic Service Co. 1st and R eg. 5^2S, 1950 _100 5.50 H o tel Sherm an Co. (C h icago) 1st M tge. 5 j/2 s, 1945 98.85 5.60 I Chicago Trust Company B ond D e p a r tm e n t CHICAGO S o u th e a s t C orner M o n ro e a n d Clark https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis “ T he N e b ra s k a g u a ra n te e law is a good law a n d h as su re ly h e lp e d to m inim ize th e c a la m ity we w e n t th ro u g h o f la te y e a rs. W h en a s ta te b a n k fa ile d i t d id n o t p ro duce a ru n on th e b a n k b eca u se th e de p o sito rs k n e w th e y w ould g e t th e ir d e p o sits b a ck . W h en a n a tio n a l b a n k fa ile d , th e d e p o sito rs g o t w h a t w as l e f t a f te r th e re c e iv e r w as th ro u g h s k in n in g th e gam e. “ N ow i t is tru e t h a t th e N e b ra s k a g u a ra n te e la w n e ed s som e c o rre c tio n s y e t. I t w ill be a ll r ig h t i f y o u c u t o u t p o litic s a n d m ak e th e b a n k in g b o a rd a n d e x a m in e rs n o n p o litie a l jo b s. N u m b e r o f b a n k s, e sp e cially in sm all to w n s, should be r e duced. S to c k h o ld e rs should n o t o nly be r e sp o n sib le fo r 100% o f th e ir sto c k , b u t m u st show t h a t th e y a re a b le to p a y in case o f a c ra sh . W h en w o rk e rs sav e t h e i r h ard e a rn e d m oney a n d d e p o sit th e ir little m ite in a b a n k to be p re p a re d fo r d a y s o f sic k ness or old age, a n d th e n lose th e ir all, is_ i t n o t a b o u t tim e t h a t la w m a k e rs come to th e ir senses a n d p ass a g u a ra n te e law w h e reb y th e d e p o sito rs c a n n o t lose th e ir m oney in a fa ile d b a n k ? “ Y ou a sk , h a s th e g u a ra n te e la w a f fe c te d y o u r b a n k a n d com m unity. “ W e h a v e b e en in th e b a n k in g b u sin e ss less th a n n in e y e a rs a n d h a v e p a id in to th e g u a ra n te e f u n d so f a r $32,329.76 a n d w ill h a v e to p a y m ore. T his of course cuts our d iv id e n d s sh o rt, b u t we w ill see b e tte r b a n k e x a m in a tio n s , less b a n k s, b e tte r tim e s, less fa ilu re s a n d b e st o f all, w e a re in good h e a lth . O ur c o m m u n ity h a s n o t suffered, people d id n o t h id e th e ir m oney a n d nob o d y lo st confidence in th e b a n k s of C olum bus a n d w e a re pro sp ero u s. “ L e t e v e ry s ta te h a v e a g u a ra n te e fu n d a n d m ak e our n e ig h b o rs a cro ss th e s ta te lin e s q u it h o w lin g a f te r lo st d e p o s its .” “ H as S tab ilized B u sin e ss” ‘ ‘ N o. 1— T he id e a o f a g u a ra n ty o f d e p o sits fo r th e s ta te o f N e b ra s k a h a s been a w o n d e rfu l h elp in th e s ta b iliz in g o f b u s i ness g e n e ra lly . W e b e lie v e c o n d itio n s are b e tt e r b y f a r th a n could h a v e b e en p ossible w ith o u t th e g u a ra n ty . I t seem s to us th e p rin c ip le o f th e la w should be so con s tru c te d as n o t to im pose a ll of th e b u r den on a few . E v e ry re s id e n t o f th e s ta te o f N e b ra s k a h as e n jo y e d th e p ro te c tio n , w hile th e s ta te b a n k e rs, th o se who h a v e a September, 1926 THE re g a rd fo r th e ir i n te g r ity a n d good nam e, h a v e sto o d p a tie n tly b y a n d p a id . N o t only h a v e th e y p a id th e losses o c c u rrin g by re a so n o f p oor ju d g m e n t, d ish o n e st b a n k in g m eth o d s, a n d p la in th ie v e ry , r e s u ltin g in th e c losing o f th e b a n k a ffected , b u t h av e p a id t h e i r ow n losses fo llo w in g th e g re a t d e p ressio n we h a v e a ll ex p erien c e d . “ N o. 2.— W e w ould n o t v e n tu re an o p in io n as to th e outcom e, b u t we h a v e con fidence in th e m en in g o v e rn m e n t o f our s t a te a n d b e lie v e a n e q u ita b le p la n of g u a r a n ty w ill be w o rk e d o u t; a law w hich w ill p ro te c t th e d e p o sito r a n d g iv e th e b a n k e r a n o p p o rtu n ity to ru n h is b u sin e ss in such a w a y t h a t he m ay kn o w w h e re he w ill s ta n d a t th e e n d o f e ac h tw e lv e m o n th s, a n d w h a t th e f u tu r e y e a rs hold fo r him . A t p re s e n t we c an see o n ly a c o n tin u o u s a sse ssm e n t fo r a ll th e traffic w ill b e a r, e x te n d in g b ey o n d th e horizon. “ N o. 3— O th e r s ta te s m ig h t do w ell to a d o p t a g u a r a n ty la w b u t should stu d y c a re fu lly a p la n w h e re b y th e b u rd e n m ig h t be d is trib u te d . P o s sib ly b y a g e n e ra l ta x o f sm a ll p ro p o rtio n , th u s c re a tin g a g u a r a n ty fu n d to be used w h en o ccasion arises. T h is fu n d in v e s te d in liq u id , sa fe se c u ritie s a ll in te r e s t b e a rin g , a n d a v a ila b le as n e e d ed. In c re a se th e p a y o f e x am in ers, in c rea se th e c h arg e fo r e x a m in a tio n , p u t th e e n tire b a n k in g d e p a rtm e n t on such a b a sis t h a t th e y a re n o t h a m p e re d in p e rfo rm in g th e d u ty im posed upon th em . G ive th em a te rm sufficient, so a f te r th e y becom e a c q u a in te d w ith b a n k in g c o n d itio n s over th e s ta te th e y m ay w o rk o u t th e ir p ro g ra m in s te a d o f m a k in g th e fre q u e n t ch an g e s o f g o v e rn m e n t. E m p lo y e nough e x a m in e rs so th e y m a y ta k e th e tim e n eed e d in m a k in g a th o ro u g h e x a m in a tio n in to th e g e n u in e ness o f a ll a sse ts, e v en to c a llin g upon m a k e rs o f n o te s a n d c h e c k in g th e se c u r ity . ’ ’ NORTHWESTERN 73 BANKER been a good th in g fo r a ll s ta te b a n k s a n d its d e p o sito rs, as fa ile d n a tio n a l b a n k s h a v e n o t been r e fu n d in g v e ry h e a v ily a n d d e p o sito rs h a v e e x p e rie n c e d g r e a t losses, W e fe e l our losses s till s ta y i n ta c t som e p lac e in th e s ta te o f N e b ra s k a . A Complete Investment Service C om m ercial P a p er an d B on ds \V .V V V .% V A V .V ., ., . ,. ,. V . ,. V . V . V . V Clients of this firm are able to obtain from one source the type of security best suited to their current condition and need. LANE, RO LOSON & CO., Inc. 209 South La Salle Street, Chicago LANE, PIPER & JAFFRAY, Inc. M in n e a p o lis S t. P a u l R och ester M a n k a to ‘ ‘ P lan I s Good ’ ’ “ P rin c ip a ls a n d o p e ra tio n o f g u a ra n ty law a re good. W ith o u t th e p ro te c tio n d u r in g th e p a s t five y e a rs we fe e l m a n y m ore s ta te b a n k s in N e b ra s k a w ould h a v e been closed. ‘ ‘ T h in k th e e v e n tu a l outcom e o f th e p la n w ill be o f such m a te ria l b e n efit to d e p o sito rs t h a t s ta te b a n k s reso u rce s w ill g ro w m ore r a p id ly a n d be p ro fita b le in th e lo n g ru n . S ufficiently so to offset losses on a c c o u n t o f a sse ssm e n ts to th is fu n d . T h in k o th e r s ta te s w ill fo llo w th e p la n . T h in k i t w ill b e n efit th e s ta te o f N e b ra s k a . ‘ 1T h in k o th e r s ta te s could w ell affo rd to a d o p t sam e p lan . F o r in sta n c e , N e b ra s k a has n o t h a d as m uch tro u b le as Io w a or S o u th D a k o ta . “ T h in k N e b ra s k a h a s too m a n y s ta te b a n k s. F e w e r b a n k s a n d l it t le m ore co n se rv a tiv e n e s s on p a r t o f m a n a g e rs a n d op e ra to rs w ill d im in ish n u m b e r of losses an d hence less a sse ssm e n ts a n d a b e tte r o p e ra tio n o f th e fu n d . “ Som e b a n k e rs w ill claim t h a t th e y a re good b a n k e rs, w hile o th e rs a re n o t a n d t h a t th e y should n o t be com pelled to p a y fo r th e o th e r f e llo w ’s losses. T h ere is n o th in g to sto p those fe llo w s fro m beco m in g n a tio n a l b a n k e rs i f th e y do n o t lik e th e s ta te law s, b u t you d o n ’t see th e m c h a n g in g v e ry ra p id ly . T he g u a r a n ty f u n d h a s cost th is b a n k a b o u t $20,000 b u t w e b e lie v e i t has https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Joint Stock Land Bank Stocks Are they a purchase at present levels? Comparative table and summary of new rules which may affect divi dends and market action of these stocks sent on request. K OEPPE LAN G STO N , LOPER & CO. 3 9 South La Salle Street CHICAGO Specialists in Joint Stock Land Bank Securities F argo 74 T II E NO R T I I W E S T E R N G lobe & B A N K E R S e p te m b e r, 1926 R utgers Fire Insurance Company 111 W illiam Street, N ew York City January 1 , 1 9 2 6 ASSETS LIABILITIES Bonds & M ortgages $234,850.00 C ap ital $3,500,000.00 U. S. L iberty Bonds 509,100.00 S urplus 24,161,943.85 R ein su ran ce R eserve 20,265,572.73 G overnm ent, City, R ailro ad an d o th e r Bonds & Stocks 55,891.606.30 C ash in B anks an d Office__ 2,318,432.41 Losses in C ourse of A d ju stm en t 6,839,580.00 P rem ium s in Course of Collection 8,662,122.87 Com m issions Item s 7,150,000.00 In te re st A ccrued 148,180.80 R ein su ran ce R ecoverable on P a id Losses 157,804.20 and o th e r R eserve fo r T axes 1,005,000.00 R eserve fo r D e p re c ia tio n ___ 5,000,000.00 $67,922,096.58 $67,922,096.58 T w en ty -se v e n Y ears’ Progress Dec. 31, 1899 Dec. 31, 1920 Dec. 31, 1925 $ Assets 529,282.59 42,765,374.55 67,922,096.58 Surplus to P olicyholders $ - Reserve 26,832.54 16,593,764.16 20,265,572.73 - $ Surplus 3,038.94 11,361,311.89 24,161,943.85 $27,661,943.85 E. C. Jam eso n , P re sid e n t Lym an C andee, Vice P re sid e n t J. H. M ulvehill, Vice P re sid e n t a n d S e c re ta ry W . L. L indsay, S e c re ta ry A. G. Cassin, A ssistan t S e c re ta ry https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis W . H, Paulison, Vice P re sid e n t J. D. L ester, Vice P re sid e n t A. H. W itth o h n , S e c re ta ry M. J. V olkm ann, Local S e c re ta ry TH E September, 1926 N 0 R T il W E S T E R N 75 BANKER IN SU RA N C E SECTION Helping a Client to Solve His Own Problems H E incident 1 have in mind is the gradual sale of a total of $50,000 life insurance to a good business man of my acquaintance. Now don’t m isunder stand me—this was not a sale of $50,000 in one lump sum, all in one policy, i t was a gradual process, a building up, as it were, and this is how it happened. I dropped in to see him one day at his place of business. H e has a nice estab lishment, a prosperous business— l p re sume he would rate about $150,000. We were sitting down there in our easy chairs with no troubles to bother us. So f a r as the eye could see there was tru ly no reason why this man should w orry about the future. T “A N ic e B u s in e ss” “ You’ve got a nice business here, Mr. Brooks,” I said, “and it seems to be growing all the time. Looks like you were building up a pretty little fortune for yourself. Say, have you ever thought just how much the government and the state would take out of this when you pass on? How much inheritance ta x ? ” “Yes, I ’ve often thought about it, but that was as f a r as I ever got. Joe, I have never found anybody who could tell me.” “ W ould you mind if I figured it out fo r you?” “ I should say n ot; go ahead—I would like to see the results.” So he gave me the necessary inform a tion in outline—how much stock, what bonds, how much insurance, real estate, other holdings, etc. Incidentally I found out how much his obligations were and how they com pared with the value of his assets. Then I excused myself and went back to my office with the figures, and prepared a chart showing the data he had given me, and figured out the approxim ate am ount of tax th at would be payable under the term s of his will. I made this chart in duplicate, keeping one copy as confiden tial inform ation with my office records. Then I w ent back and laid the chart be fore him. A fter he had looked it over carefully and studied it from every angle, he looked up and said: “Joe, that is the finest thing I ever saw. You fire getting into the biggest business in the world to day.” A fte r a review of that chart compe tition ceased. H e was sold. He forgot https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A n In terview w ith Joe E. Musgrave General A g en t, C ontinental L ife Oklahoma all about a friend of his in the insurance business. “W rite me fo r $10,000,” he said. H e didn’t stop to ask the prem ium or any thing else. I w e n t in a fe w d a y s a f t e r I h a d d e liv e re d th is p o lic y , a n d we a g a in to o k u p th e s u b je c t o f his b u sin e ss a n d o f life in su ra n c e . “ Your business has increased trem en dously in the last few years, and I am of the opinion th at your corporation insur ance m ust be very inadequate. W hat am ount do you usually ru n in unpaid bills?” “A round $20,000,” he stated. “W ell, I thought it would ru n some where in th a t neighborhood, so I have brought around a $10,000 corporation insurance policy, payable to your firm to be added to the $10,000 business in surance you already have in ano th er com pany. I am going to leave it w ith you so you can look it over. I ’ll be back tom orrow .” P o lic y S o ld I t s e lf I didn’t even attem p t to sell th a t policy — I knew the policy itself would tu rn the trick. The next day I w ent back and in quired “W hat do you th in k of the policy ?” “W h at do I th in k of it? —W hy it is ju s t the very th in g we need.” So I took out the receipt, made out his check, signed th e receip t and the sale was made. The BB plan was really w hat closed the deal. T h at fe a tu re providing fo r p ay m ent of the face of the policy in case of p erm anent disability was th e w inning point. T h e n I s a id , “ M r. B ro o k s h o w a b o u t y o u r p a r t n e r . D o n ’t y o u w a n t to ta k e a n e x tr a $10,000 f o r h im ? ” ( I k n e w he w a s a lr e a d y in s u r e d f o r I h a d w r i t te n h im in a n o th e r c o m p a n y b e f o re m y p r e s e n t c o n n e c tio n ) . He s a id — “ W e ll I g u e s s w e w ill ta k e a n o th e r $10,000 on h im . I d o n ’t k n o w w h e th e r h e h a s a n y p r e f e r e n c e a b o u t A vriting t h is b u s in e s s . W e m ig h t t a l k it o v e r Avith h im .” “W ell,” I answered, “ There are only three companies operatin g in this tow n th a t can give him th a t policy. I can give you the names of the com panies and th e ir rep resen tativ es if you w ant to figure w ith them .” He ju st shook his head and said, “No, Ave do not need to know them .” And w ith th a t he called his p a rtn e r over and said— “ Tom, do you have anybody you would ra th e r place this business w ith th an Avith Joe ?” “No,” replied the p artn e r, “I Avould ra th e r give it to him th an anyone else.” So I pulled out an application, all made out ready to be signed. T h at seemed to su rp rise them a g rea t deal. Mr. Brooks said— “T hat surely is a clever way of handling the business I ’ll say. F irs t you sell me $10,000 and brin g an ex tra ten along and make it so convenient th a t I sim ply can’t help buying it, then you have an application all made out fo r $10,000 on my p a rtn e r.” Besides delivering the $10,000 on the p a rtn e r I also Avrote him fo r $10,000 a d ditional, personal insurance, fo r he had ju s t been m arried, and I figured he need ed an income policy. H ere is how he bought the ex tra ten fo r his personal in surance : W e had this policy payable $50 per m onth fo r the life of the beneficiary on the annual dividend plan. I took the policy over to my client and asked him to tak e it home and read it to his Avife th a t night and call me the next day and let me know how she liked it. The next day he said he would keep it. E very p a rtn e r has his OAvn responsibilities as a p a rtn e r and as an individual. My aim is to be of service to him in solving his business financial problem s and his fam ily financial problem s! C o n tin u in g th e P la n I delivered an o th er $10,000 th is spring to Mr. Brooks, continuing the p lan of w orking out his financial problem . I t came about in this way. A real estate frien d of mine told me confidentially one day th a t M r. Brooks Avas purchasing a $17,500 home in one of the restricted residence d istric ts of the city. So I im m ediately got in touch w ith M r. Brooks and found out th a t he was going to need an $8,500 first m ortgage on his u c a v 76 THE home. I told him th a t I would be very glad to secure this money fo r him w ith out any charge to him in the way of commission. H e expressed his ap precia tion, and a fte r I had told him of the ne cessity of covering his new obligations w ith our special m ortgage policy, he told me to w rite him $10,000 to cover this loan. I t was duly assigned to the loan com pany, doing aw ay w ith any bother to Mrs. Brooks in the event of his death p rio r to the liquidation of this loan. The end is not yet. This is a growing concern, the p artn e rs being men of th irty -six years and th irty years respec tively-—they are ju s t sta rte d in th eir NORTHWESTERN BANKER business careers. I t is not necessary to be specific a t this tim e, b ut it is reason able to believe th a t both Mr. Brooks and m yself have a clear idea of his insurance program from which I am n ot a t all u n easy he will be deflected. H e is much interested in carry in g through these plans, because they have been definitely adopted as a part, of his financial p ro gram. This is the only way I can sell busi ness. I t is only a fte r a m an has placed before me the in tim ate financial facts concerning him self and his business th a t I am in a position to best serve him. A fte r he has done th a t, I have no fe a r of September, 1926 com petition. T h at m an is my client and my relation to him is professional the same as his atto rn e y ’s relatio n is pro fessional. The Luverne Sigmond Insurance agency, Sioux City, has moved from the W arnock building to 419 Iow a building, and a fire and casualty d ep artm en t w ith Rex Sm ith in charge, has been added to the company. Ray Yenter, com missioner of insurance fo r Iowa, announces th a t the following com panies have recen tly been licensed to w rite business in this sta te : Illinois Indem nity Co. of Chicago; N ational U nion Indem nity Co. of P ittsb u rg h and the P ro v id en t L ife and A ccident In su r ance Co. of Chattanooga, Tennessee. Articles of incorporation have been filed a t Des Moines by the W aterloo I n surance Co. w ith cap ital stock of $25,000. The officers are L aM ar Duke, p re sid e n t; F. A. Duke, vice presid en t and A. R. H am lin, secretary treasu rer. That the Southern Surety Company of Des Moines, is m aking steady progress is indicated in the recent announcem ent th a t the cap ital stock of the company is being increased from $1,250,000 to $1,500,000. A t the same tim e P resid en t C. S. Cobb announces th a t the com pany’s prem ium volume fo r the first h alf of the y ear is Avell over fo u r and a h alf million dollars, in d icatin g an increase of around th ree-q u arters of a m illion fo r the year 1926. This increase is m ost noticeable in the su rety departm ent, w ith both the health and accident and autom obile busi ness likewise show ing m aterial gains. The various o th er dep artm en ts of the com pany are eith er holding th e ir own or m aking slight increases. P resid en t Cobb, who believes th a t no insurance company can afford to stan d still in the m a tte r of volume of business, a ttrib u te s the con sisten t gains of his com pany not to any p a rtic u la r cam paign, or drive, b ut to constant im provem ent in the com pany’s agency force. A t the p resen t time, the com pany has more th an fo u r thousand agents and is licensed in forty-tw o states. The com pany has not entered any new states during the p resen t year. 010102008901005348230200538923020002020201 Fire of unknown origin destroyed the M. O. Hocum g rain elevator n ear Iowa F alls recently. The Iowa Fire Underwriters Field Club held its annual outing recently at Nicollet P ark , n ear Boone, w ith more th an sixty field men and fam ilies p re s ent. The affair was in the form of a picnic w ith baseball, horseshoe pitching and other sports as the en tertain m en t fo r the day. H a rry H oughton, state agent fo r the F irem en ’s of NeAv Jersey https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis September, 1926 THE and Jo h n 0 . Je rtso n , special agent fo r the A m erican of N ew ark, were in charge of the d ay’s outing. The club m em ber ship is made up of B ureau field men, w ith to ta l m em bership of about fifty Iow a field men. Officers a r e : A. G. W esterberg of Omaha, sta te agent in Iow a fo r the M echanic of P ennsylvania; vice president, A rth u r Holm, sta te agent fo r the N ational L ib e rty ; secretary, J. 0 . Je rtso n , and trea su rer, H . A. H ough ton. The club holds m onthly m eetings in various Iow a cities and will hold its next m eeting about the m iddle of Sep tem ber in Dubuque. Impressive gains were recorded in the Ju n e 30th sem iannual statem ents of the A m erican F o re group—the C ontinental, F idelity-P henix, A m erican Eagle and the F irs t A m erican fire insurance com panies. There is shown as a resu lt of the six m onths’ activities a gain of $3,269,293 in combined assets and an a d dition of $3,002,701 to the combined u n earned prem ium reserve. W hile there is no gain recorded fo r the combined net surplus account, this is accounted for by the se ttin g up of a special combined re serve fu n d of $5,800,000 fo r m arket fluctuation in securities. This sum is di vided as follows : C ontinental, $3,000,000; F idelity-P henix, $2,500,000, and A m erican E agle $300,000. The American Bonding Company of B altim ore is to be p u t in business again, w ith $1,000,000 cap ital and $500,000 surplus and a license to do business is expected from the insurance commis sioner of M aryland w ithin a few days. The A m erican Bonding Company, o r ganized in 1894, and fo r some years a prom inent com pany in the su rety busi ness, was purchased by the F id elity & D eposit Company in 1913, and ceased w ritin g new business, its agency p la n t being am algam ated w ith th a t of the p u r chasing com pany. I ts corporate exist ence has been continued and it is now being refinanced and will be conducted as an independent com pany. T hat it will be closely affiliated w ith the F id elity & D eposit is evident from the fa c t th a t all the officers are officers of the F id elity & D eposit and all its directors, aside from the officers, are directors of the F id elity & D eposit. The news letter of the N ational F ire P ro tectio n A ssociation announces th a t the th irty -first annual m eeting will be held a t M emphis on M ay 9, 10, 11 and 12, in 1927. A fur policy that insures fur garments specifically described in the policy while they are w ithin the lim its of the U nited S tates and C anada is now being issued by the H a rtfo rd F ire. Coverage is p ro vided against all risks of loss or dam age https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NORTHWESTERN BANKER 77 One million gallons of oil were con sumed in a fire which destroyed the M on arch M an u factu rin g Co., of Council Bluffs, Iowa, recently w ith approxim ate loss of $700,000. H eroism of firemen prevented destru ctio n of the Council Bluffs gas house, twenty-five feet away. A fire department, incorpoi-ated w ith capital stock of $2,500 under the name of the B eaver V alley F ire D epartm ent, is being oi’ganized a t Johnson S tation, a Des Moines suburb. B. B. Dewey, a county supervisor, is behind the project. The corporation plans to sell shares of stock, which will en title the holder to pi-otection by the d ep artm en t in case of fire. I f a nonstockholder has a fire, he may secure the services of the dep artm ent fo r a flat fee of $50 p er fire. The surety companies co n trib u tin g in the settlem ent of the s ta te ’s rem aining deposit in the d efunct Commei’cial Sav ings B ank la st week, in Des Moines, were the Royal In d em n ity Co., M aryland C asualty Co., F id elity and D eposit Co., A m erican S u rety Co., C ontinental Cas ualty Co., D etro it F id elity and S urety Co. and the F ed eral S u rety Co. The Walker insurance agency, one of the oldest in n o rth eastern Iowa, estab lished in 1863 a t Maxwell, Iowa, has been purchased from F . L. P hillips by R obert R. Brooks. Mr. P hillips will rem ain w ith the agency fo r a m onth then move to C alifornia. H e acquired the agency in 1919 from C. W . W alker, who owned the agency from 1865 un til his death in 1919. other th a n the risks of w ar, contraband or illicit trad e and loss or dam age a ris ing from moth, verm in, w ear and te ar or g rad u al d eterioration. The Royal Union Life Insurance Company DES MOINES IOWA W e h ave an u n ex ce lle d lin e o f p o licy contracts. E oyal U nion L ife B uild ing, Cor. 7th and Grand Avenue D es M oines, Iow a Our new S elect R isk low -rate p o lic y for b usin ess and p ro fessio n a l m en is a fast seller. O ver fifty p er cen t o f our p o lic ie s are issu ed and in th e m a ils w ith in tw en ty-fou r h ours after th e a p p lica tio n p apers reach th e H o m e Office. Royal Union Life Insurance Company A. C. TUCKER, President T otal P a id to P olicyholders - - - In su ra n c e in F orce as of Dec. 31, 1925 O ver $ 21,000,000.00 - $148,281,904.00 78 T II E N 0 R T II W E S T E R N BAN K E R September, 1926 Among the records of the agency are two open policies fo r $50,000 each, Avritten in 1864 and 1870. Should B W r i t e Li f e In s u r a n c e ? A N KERS for years have disagreed on the ques tion, but you w ill agree th at m any have an swered in the affirmative and thus m aterially increased their earnings. B L ife Insurance has become a necessity and is in greater demand today than ever before. The field is young, and particularly bright is the future of the business. Insurance Trusts alone are attract ing m any bankers who had fe lt th at life insurance was entirely apart from the business of banking. The United States Fidelity and Guar antee Co. of B altim ore recently Avrote You are the financial advisor in your com munity. Can you ju stly advise your client on his life insurance affairs, or m ust you call in a life insurance m an? bond on the $420,000 co n tract of the H a r rison E ngineering C onstruction Co. of K ansas City Avho were successful bidbers on the F ed eral A id P ro ject of D u buque county, Iowa. The business Avas w ritten through the H ayes Schlueter and P . W. Coates agencies of Dubuque, I oaati. M utual Trust is now in a position to cooperate w ith bankers. Your inquiries w ill be given careful attention and held strictly confidential. It costs nothing to look into our proposition—■ it may mean thousands of dollars to you later. G e t all th e f a c t s MUTUAL TRUST LIFE IN SU R A N C E C O M PA N Y CARL A. PETERSON, Vice President, A. E. W ILDER. Director of A gencies THE CHICAGO TEMPLE — Mrs. J. W. Lovellette of Cedar Rapids, IoAva, wife of the secretary of the I oaati M utual L iab ility In su ran ce Co., Avas in a p a rty of A m ericans who Avere attacked by a P arisia n mob on Ju ly 21st during the rio tin g over w ar debts. Mrs. Lovel lette states th a t th e thirty-five oth er A m erican to u rists in her p a rty were all subjected to th e indignities of the mob. --------- - CHICAGO Ray Yenter, IoAva insurance commis sioner has announced the licensing of the folloAving companies to A\rrite business in Iow a: Union M utual L ife Co., Des M oines; P ittsb u rg h F ire In su ran ce Co., P ittsb u rg h ; W ashington F id elity N a tional In su ran ce Co., Chicago ; Republic M utual C asualty Co., Des M oines; G uardian F ire A ssurance C orporation of NeAv York and the Kyodo F ire Insurance Co. (U. S. B.) New York. A Plan o f P ro fit— For the B anker For His C o m m u n ity The In ternational L ife Insurance Company has a bank agency plan which includes not only the elem ent of profit for your bank, and service from th is Company, but also profit fo r YOUR COMMUNITY. It calls for— 1. A direct profit to eligible banks from deposits placed in th e bank. 2. A profitable commission contract. W. K . W H IT F IE L D P resid en t D A V ID W. H IL L V ice P resid en t W. F. G RAN TG ES V ice P resid en t and G eneral M anager A g e n ts 3. A complete and up-to-date line of life insurance policies, both stan d ard and sub-standard. 4. C onsistent cooperation from th is business. Company in the closing of 5. An active part in the building of your community through the investment of this Company’s funds. International Life Insurance Co. St. Louis, Missouri https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis September, 1926 THE NOR TH W E S T E R N 79 BANKER Is New Vice President. M r. W illiam A. W a tts, president of the M erchants L ife Insurance Company, Des Moines, Iow a, announces the a p pointm ent of F . A. Ferguson as vice president and agency d irector of the Company. Mr. Ferguson has been w ith the Com pany over two years as home office spe cial. This prom otion comes to him as a tim ely recognition of his loyalty, experi ence and accom plishm ent. M r. F erguson has had over tw enty years p rac tica l experience as a home o f fice executive, field w ork both in agency supervision and personal production. H e is a native of Iowa, has traveled more or less extensively through all the states and has a wide acquaintance am ong the life insurance fra te rn ity . Mr. Ferguson has already assum ed the duties of the new position im m ediately, follow ing an eastern trip on which he visited frien d s in P hiladelphia, W ashing ton, P ittsb u rg h , Cleveland, Columbus and Chicago. New Policies and Rates The M issouri S tate L ife has ju s t a n nounced, effective on A ugust 1st, several new policies, a decided reduction in the rates on old policy form s and other lib eral rules fo r settlem ents, etc. F o u r new policies tak e the place of the old endow m ent a t 85, continuous and lim ited prem ium s. The new form s are o rdinary life p a rtic ip a tin g a fte r tw enty years, tw enty paym ent life p a rtic ip a t ing a fte r tw enty years, fifteen paym ent life p a rtic ip a tin g a fte r tiventy years, and ten paym ent life p articip a tin g a fte r tw enty years. H eretofore, the ten and fifteen-paym ent form s became p a rtic i p atin g a t the end of the prem ium p ay ment period. The nonparticipating rates on practically all form s but term s have been reduced, the greatest reduction a p pearing at the middle and older ages. E xcept in the sta te of M ichigan the com pany will issue economic protection policies in any am ount from $1,000 up, the $2,500 lim itation heretofore existing being removed. In M ichigan the m ini mum am ount will be $2,500. The com pany’s semiannual and q u art erly ra te s and the salary savings m onthly rate s have been reduced fo r all plans, both p articip a tin g and n o nparticipating on policies issued a fte r A ugust 1st. Semiannual premiums will be 51 per cent, q u arte rly prem ium s 8.75 p er cent of the annual prem ium . No change is made in semiannual, quarterly or m onth ly prem ium s in policies issued p rio r to A ugust 1, 1926. On and a fte r A ugust 1st no deduction will be made fo r semiannual, quarterly or m onthly prem ium s to com plete b al ance of prem ium paym ent fo r the pol icy year cu rren t a t the tim e of death. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis W i s h to GO IN T O BUSINESS for Y ourself A ll of us at some tim e or other w ished to enter bu sin ess for ourselves. Perhaps we have had the opportunity but lacked the courage to venture. O p p o r t u n i t y Is R i n g i n g Y o u r D o o r b e l l The N ational L ife A ssociation offers YOU the unlim ited op portu nities of a good paying b u sin ess of your own. In Illin o is a N ation al L ife salesm an has been noted for his con sisten t production, w hich over a spread of 98 m onths has averaged $30,058.00. A number of N ational L ife salesm en have increased their earning ab ility by 50 per cent through the N ational L ife ’s popular low -cost policies. T his same opportunity is possible to you through a N ational L ife contract. Correspondence in vited. Top Contracts Available in Alabama. Arizona Arkansas California Colorado Florida Georgia Idaho Illinois Kansas Kentucky Michigan Missouri Nebraska New Mexico Oklahoma Pennsylvania South Dakota Tennessee Texas Washington Wyoming AGENCY D EPA RTM ENT National Life Association H o m e O f f i ce : D es M o in e s, Iow a :is v W H A T A B O U T W R IT IN G A L IT T L E IN S U R A N C E ? Justa Few Hours a Day Guaranty Life Insurance Company D avenport, Iowa L. J. D O U G H E R T Y , S e c retary an d G eneral M a n a g e r 3 ToiieC isS |P° ^ l<^ A a t i o t t a l a ( M J n m i a a p e SIO U X FALLS, t j o m p a n ^ SOUTH DAKOTA. Mr. Banker: Money sent away from home never builds your community : : : : Make a connection with a HOME LIFE INSURANCE COMPANY—that deposits the Premiums in your bank K or invests in mortgages in your territory. (O ld Line Legal R eserve) OFF I CERS (xuy C.Barton PRESIDENT S.H Witmer VICE-fRESMfrR.AfrtNTS H.O Chapman “A SOUTH DAKOTA COMPANY*’ SECRETARY TREASURER a THE 80 Tribute to the Late Judge Long A t a recent m eeting of the board of directors of the N ational F id elity L ife of K ansas City, the follow ing resolu tion was passed by the board, relative to the passing of the late Judge A. D. Long, a t M anchester, Iowa, who had been a m ember of the board fo r several y ears: “W hereas, Judge A. D. Long came to his death in M anchester, Iowa, on May 3, 1926. F o r m any years he was a mem ber of the board of directors of the N ational F id elity L ife Insurance Com pany, and am ong other duties served on the finance com m ittee of this company. H is fid elity and courage were a source of help and sa tisfactio n a t all times. H is loyalty to his friends, his love for his fam ily and his uniform courtesy to all people were among his outstanding tra its of character. T ruly m ight it be said of him th a t his life was an open NORTHWESTERN book and nothing th erefro m need be de pleted. “Now, T herefore, be it Resolved, th a t the officers and directors of this com pany feel th a t they have lost a frien d and advisor and have sustained an ir reparable loss; th a t his memory will ever be cherished. “Be it F u rth e r Resolved, th a t a copy of this resolution be spread upon the perm anent records of th is company. Adopts Progressive Program The year 1926, is seeing m any p ro g res sive steps taken by the P ra irie L ife I n surance Company of Omaha. N otably am ong them is the elim ination of re strictions in th e ir policy co n tracts as to travel, residence or occupation. A n other progressive fe a tu re will be the a d dition of several new policy contracts. The endowment tw en ty pay and ord in ary life fo r children from one m onth and up. Your Company Is Your Partner Choosing a life insurance com pany should be like selecting a business p a rtn e r. You will derive the g rea test am ount of profit fo r yourself from a w orking p artn e rsh ip w ith a com pany whose known policy of business fits in w ith your business ideas and am bitions. A well-chosen com pany can round out and balance your am bi tion and experience. The first th in g an agent looks fo r is “ agency service and co operation.” The Des Moines Life an A nnuity Company meets th is requisite, m aintaining a definite, solidly-backed policy of agency service—hence th is com pany’s well-known rep u tatio n as “The Company of C ooperation.” As a p a r t of th a t service and related alw ays to an ag e n t’s ideas, ideals and am bitions, we offer a com pany strong, stable— and one whose steady grow th is constantly broadening th e op portunities of Des Moines Life and A nnuity agents. We offer a w orking p artn e rsh ip to am bitious agents. J. J. Sham baugh, Pres. Des Moines Life and Annuity Company Des M oines, Iowa https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BANKER September, 1926 Also the accelerative endowment, and the adding of a tru s t agreem ent to th eir service. The com pany is adopting a sta n d a rd ized form of le tte rin g fo r th e ir name which will ap p ear in all th e ir stationery, policy co n tracts and advertising. In addition they are adopting the P ra irie Schooner show ing the pioneer of the p rairies as the fo re ru n n e r of prosperity, using th erew ith the slogan “P av in g the way to p lenty.” This slogan is unique in the fa c t th a t the P ra irie L ife In s u r ance Company, is paving the way to plenty fo r its policyholders and paving the way to p len ty fo r the agent who w rites th e ir business. The P ra irie L ife In su ran ce Company, has a w onderful name, fo r to it is a t tached the rom ance of the Covered W agon and the expanse of P ra irie o’er which the pioneers traveled. Some changes in the personnel of the m anagem ent of the com pany have been made. Owing to th is progressiveness of the company, th e ex tra duties imposed on Dr. McGrew, obliged him to give up the medical d irectorship which he held in ad dition to th a t of p resid en t and general m anager. Dr. 0 . F . Peebler, was elected medical director to fill this vacancy. Roy D. H a rt was elected secretary of the com pany to fill the vacancy made by the re s ignation of the fo rm er secretary. W. C. M cCarten, was elected m anager of agents which position was m ade v a can t by the elevation of Roy D. H a rt to the position of secretary. These changes w ith the above m en tioned progressive fea tu re s adopted, places the P ra irie L ife in a position as one of th e coming life insurance com panies of the W est. H. and A. Convention A nnouncem ent has ju st been made th a t S tew art M. LaM ont, fo u rth vice p resi dent of the M etropolitan L ife, will give an address on “E d u catin g the A gent” at the annual m eeting of th e H ea lth & Ac cident U n d erw riters’ Conference, to be held a t the H otel Thorw ald, Gloucester, M assachusetts, Septem ber 9-11. Round table discussions are to have a prom inent place on the program . The follow ing are some of the topics which will be d iscu ssed : “W h at is th e lim it to the am ount of m onthly indem nity th a t can be w ritten safely ? Is th ere a lim it, provided it does not exceed 80 p er cent of the policyhold er’s incom e? W hen increasing the am ount of m onthly indem nity should the prem ium s be increased p ro p o rtio n ately or d isproportionately ? W hich is the m ost sa tisfac to ry business on your books — the $100 a m onth policies or those fo r $200 or higher? I f the larger indem n ity policies do not have a favorable loss experience will an elim ination period help? September, 1926 THE NORTHWESTERN “L ife indem nity. “W hat place in the accident and health business does the hospital expense policy have? Surgical benefits? N ursing serv ice? A nd sim ilar expense? “W hat effect does w orkm en’s compen sation have in the settlem ent of claims ?” Will Radio Health Talks Insurance in force July 31, 1926, $ 6 1 6 ,8 1 9 ,3 9 3 .0 0 Actuaries Club Meets More than h alf billion added in past ten years. The Des Moines A ctu aries’ Club held its m onthly m eeting a t the new Y ounker Tea Rooms last week, fo r which a special program has been arranged. R. C. McCankie, associate ac tu ary of the E q u it able L ife of Iowa, is president of the Club. July, 1926, a q u arter million g re ater than sam e month last year. Fire Loss High https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 81 A N ew H igh P ea k!! Dr. Ross H ouston, m edical d irector fo r the B ankers L ife of Iow a, w ith the as sistance of members of the Des Moines M edical A ssociation, is arran g in g a series of health talks and addresses on preven tive medicine, to be delivered over B ank ers L ife radio statio n W HO, the series to s ta rt in Septem ber. Loss by fire costs every man, woman and child in the U nited S tates $5 an n u ally. This means th a t the m an w ith the average fam ily of five pays $25 a year fire tax. The U nited S tates governm ent, in its report, adds to this fire w aste the cost of m aintaining fire departm ents, which is as much more. This m eans $50 a year to the average family. If, on some blue M onday in every year, a represen tativ e of the governm ent were to come around and ask us fo r our check fo r $50 to pay our share of the national carelessness, then we should realize w hat we pay. The big m an u factu rers and the big m erchants know th a t this fire expense is a tax. They equip th e ir prem ises w ith autom atic sprinklers and p u t in p ro tec tive ap p a ratu s. They get the lowest in surance ra te they can because it helps them to com pete; but the m an on the street, the ord in ary business man, does not realize how this fire w aste is paid. Take wool, fo r example, wool in the w arehouse is insured—th a t is a tax. I t is insured in the textile fac to ry where it is w orked up into cloth. I t is insured in the clothing store, insured in the ta ilo r shop, in the departm ent stores and all the way along this fire tax is added to the cost and when you buy a coat, you pay it. The masses do not know th a t they pay it. They do not realize th at when they buy a hat, or a p a ir of shoes, or a suit of clothes, or an y th in g which goes through the reg u la r channels of industry, d istrib u tio n and exchange, they pay a tax. N ot realizing it, they are in d iffe r ent to fire. They thin k the fire losses do not affe c t them. BANKER A GREAT COM PANY DAILY G RO W IN G GREATER B. C. THURMAN Manager Des Moines Branch 618 In s u r a n c e E x c h a n g e D es M o in e s , Io w a M I S S O U R I S T A T E L IF E IN S U R A N C E C O M P A N Y M. E. S IN G L E T O N , P r e s id e n t Life Accident H O M E O FF IC E: H ealth S A I N T L O U IS Group :: What the 63rd Annual Statement Shows A s s e t s o f $ 368,818,073. P o l i c y h o l d e r s ’ r e s e r v e ( M a s s a c h u s e t t s s t a n d a r d ) o f $ 3 1 6 ,383,808. O th e r l i a b i l i t i e s $21 ,9 2 2 ,4 5 9 , 250,000 p a y a b le in 1926. in c lu d in g - p o l i c y h o l d e r s ’ d iv id e n d s of $ 11,- S u r p lu s A s s e t s $ 3 0 ,5 1 1 ,8 0 5 ; 9.6 p e r c e n t o f th e g e n e r a l p o li c y r e s e r v e . T h e J o h n H a n c o c k M u tu a l w r i t e s a l l f o r m s o f L if e , E n d o w m e n t a n d T e r m p o li c ie s f o r B u s i n e s s a n d P e r s o n a l P r o t e c t io n , J o i n t L i f e c o n t r a c t s , T o t a l D i s a b i l i t y a n d D o u b le I n d e m n i t y , a l l th e n e w f o r m s o f G r o u p , W h o le s a le a n d S a la r y D e d u c t io n , a s w e l l a s A n n u it y c o n t r a c t s in v a r i o u s fo r m s . O u r o r g a n iz a t io n is p r e p a r e d to a r r a n g e l i f e in s u r a n c e p r o t e c t io n to m e e t a n y n e e d a n d s p e c i a l i z e s in t h e r e q u ir e m e n t s o f p a r t ic u l a r c o n d it io n s a n d i n h e r it a n c e t a x e s . Li f e In s u r a n c e C o m p a n y ' or Bo s t o n - M a s s a c h u s e t t s HARRY S. HASKINS, State Agent 417-21 Southern Surety Building, Des Moines, Iowa 82 TH E N 0 R T H W E S T E R N B ANK September, 192(5 E R For B ankers and T h e ir W ants T his departm ent o f TH E N O R T H W E ST E R N B A N K E R is to a ssist SU B SC R IB E R S in ob tain in g goods or service hard to find. I t is free to subscribers. U se it. A S K U S, as w e can te ll you where to b u y an yth in g you need in your bank or for your bank. T ELL US, as your “ w a n t” w ill be published under the above headin g free o f charge. In answ ering classified ad vertisem en ts w h ich h a v e k e y num bers please en close a tw o-cen t stamp. This is used to forward your letter. F or S a le : Controlling- in te rest in a good sta te bank in the best dairy sec tion of M innesota. Good reserve and no bills payable. Residence furnished by th e bank. A ddress No. 2908, The N o rth w estern B anker— 7-8-9. F or S a le C h eap : One set bank fix tu res, m arble-faced counters, and about 60 feet oak w ainscoting w ith m arble baseboards. An ornam ent to any bank. A ddress W. S perry, H am burg, Iowa— Indef. Cashier, 12 years banking experience, wishes change. Can handle any work in country bank. Age 32. M arried. P ro te sta n t. Seven years in present po sition. A ddress No. 2920, The N o rth w estern Banker.-—8. C apable E x ecu tiv e ^eosl^e®e cfc° w ith financial institution of high stand ing, preferably investm ent banking. A pplicant is efficient and experienced and in addition to other qualifications is thoroughly fam iliar w ith Iowa special assessm ent paper in all its details. Posi tion is w anted fo r October 1, 1926, but if p referred arran g em en t could be made fo r an earlier date. O pportunity for a personal interview would be appreciated. A ddress No. 2921, The N orthw estern Banker—8. Cashier W anted in very prosperous dairy center of n orthern M innesota, to retire present cashier and tak e over his controlling in te rest of stock. Only bank in town. Good sound organization. Ad dress No. 2914, The N orthw estern Banker—8. Banking Position W anted: Over fif teen years executive experience in state and national banks. Can arran g e to m ake connection a t once. H ave not been connected w ith any failed institution. Experienced in farm loan and insurance business. B est of references upon request. A ddress No. 2919, the N orthw estern Banker—8. 7 J5 S te e l and C op p er E n graved STATIONERY, BUSINESS ANNOUNCEMENTS AND CARDS For q u ality w ork address The H om estead Company, Dea M oines https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Position W anted: As assista n t cashier in bank w ith possibilities fo r advance ment. P re fe r Iowa or South D akota, but will accept any good location. T hirty years of age and single. P ro testan t. Twelve y e a rs’ banking experience; la st eight years w ith p resen t em ployers. P resent em ployer and business associ ates furnished as references. Address No. 2915, The N orthw estern B anker—8. Position W anted by young m arried man w ith 13 y ea rs’ banking experience. Best of references. A ddress No. 2916, The N orthw estern B anker— 8. T ru st or Real E sta te D epartm ent Posi tion W anted: Young man, 27 years old, university g rad u ate. P ro testan t. Y an kee. Qualified as assista n t tr u s t or real estate officer. Five y e a rs’ commercial and investm ent banking experience, both large and sm all cities. P resen t employed in real estate d ep artm en t of Chicago loop bank. Desire to locate in town 10,000 to 100,000. Ready Septem ber 1October 1. A ddress No. 2917, The N o rth w estern Banker— 8. Position W anted by an energetic young man as teller or assista n t cashier. U ni versity g rad u ate w ith banking experi ence. Good references. A ddress No. 2918, The N orthw estern B anker— Indef. Position W anted by young m arried man. Nine y e a rs’ banking experience, six years as cashier. Now employed, but desire a change. F am iliar w ith farm loans, insurance and investm ents. Ad dress Guy B. Eno, 209 W est Church St., M arshalltow n, Iowa— 8-9. W anted: N est of 50 safety deposit boxes, medium size. G randview Savings Bank, Grandview, Iowa— 8. F or S a le : F irs t N ational Bank build ing and fixtures. Mosler trip le tim er M anganese safe, practically new. Mc Clintock b u rg lar alarm . N um erous small accessories. W. R. Payne, Receiver, Pleasantville, Iowa. ÿ m c fe ÿ ô r Research w ork on banking subjects, and speech w riting to specifications. Edw ard W est, 500 F ifth Avenue, New York. Position W anted: As cashier in bank located in town of 2,500 to 500. P refer Iowa. Can fu rn ish best of references. Experience includes reg u la r w ork of cashier in bank and handling insurance d ep artm en t over period of six years, also, 2 V2 years in investm ent banking and real estate office. 32 years old. Address No. 2922, The N orthw estern Banker— 9. N othing is more estimable th an a physi cian who, having studied n atu re from his youth, knows the properties of the hu man body, the diseases Avhich assail it, the remedies which will benefit it, exercises his a rt with caution, and pays equal attention to the rich and the poor.—Voltaire. S peculation in German M arks Speculation in the G erm an paper m arks of the p rew ar vintage has again broken out and has set bankers and brokers searching fo r the reasons. The speculation has centered in one type and color of the m any issued by the old G erm an governm ent, this being the red seal issue of the Reichsbank issue of 1910. The green seal note of the same y ear was not included to the extent of the red, although th ere was a stirrin g up in this colbr. Several explanations were offered as the im m ediate cause fo r the gam bling. One was the prom ise to pay in gold, w hich is stam ped on th e notes, m ight be used as a legal means fo r compelling the R eichsbank to pay, if not in gold, a t least a high revaluation percentage of the p ar value. A nother was hope inspired by the d efeat of the political element which sought to ex propriate the k aiser’s prop- —TES FLOWERS AND SERVICE ALPHA FLORAL COMPANY P hone W alnu t 362 J. a WILSON FLORAL CO. D rake 584 DES MOINES i f \\ L O O S E - l e a f • d e v i c e s - a n d L1 ACCO UNT ING * S Y S T E M S Sold in Iow a by J. H. WELCH PRINTING CO. 1166-68-70 Sixth Ave.. D es Moines. P rinters, Binders, Mntg . Stationers. September, 1926 T 11 E N O R T II W E S T E R N B A NK E R "T h e D a d d y of T h e m All" “C u t s t he C o s t s " of Farming D eveloped fo r over a q u a rte r of a cen tu ry by a fam ily of Iowa ban k ers w ith a “ C om pany S tan d in g " as solid as lo w a s m atchless black d irt; ow ned and d irected by b an k ers w ith extensive Iowa farm ho ld in g s; HART-PARR TRACTORS offer a safe and p ro d u ctiv e in v estm en t for y o u r fa rm e r clients every w here. R ecom m end H a rt-P a rrs as farm “ C ut the Cost“ investm ents. H A R T -P A R R CO M PA N Y Founders of the Tractor In dustry C H A R L E S C. D. EL L IS. P re sid e n t https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis C I T Y , I O W A M. \Y. EL L IS, Vice Pres, an d Gen. Mgr. 83 THE 84 NORTHWESTERN BANKER S ep tem b er, 192G Set New Mark B ank clearings fo r the m onth of Ju ly in Sioux F alls were the highest of any m onth this year, to tallin g fo r Ju n e by approxim ately $610,000, according to a com pilation by the Sioux F alls C learing House. The previous high m ark this year was in M ay when the to ta l was $7,117,603.85, which was a record fo r two and one-half years. The to ta l fo r Ju ly also exceeded by f a r the to ta l fo r the same m onth in 1925 when the to tal was $5,687,738.88. South Dakota B ank N ew s Officers South D ak ota Bankers A ssociation P r e s i d e n t ..................................E i n e r J o h n s o n V o lin V ic e E IN E R JO H N SO N P re s id e n t P r e s i d e n t ......... H a r r y G e tt y s b u r g M. G riffith S e c r e t a r y ............................G eo. A . S t a r r i n g H u ro n T r e a s u r e r ..................G eo. C. F u lle n w e id e r H u ro n G E O . A. S T A R R IN G S e c re ta ry No More Finger Prints Toward Law Repeal In discussing the use of finger prin ts fo r the purpose of signature on checks an d legal docum ents, M. P lin Beebe, chairm an of the protective com mittee of th e South D akota B ankers Association, says : “A few years ago I understan d the bankers thought they has the m a tte r of signatures com pletely solved. T hat in cases w here people were blind or could not w rite their names, their finger p rin ts would be used fo r a signature. This whole theory was short lived fo r it was soon found out th a t rub b er stam ps could be made of exact duplicate of any fin g er p rin t w ith very little trouble. They had to go back to the old, tim e honored signa tu re or m ark w ith the proper w itnesses. J u s t recently, A tto rn ey G eneral Buell F. Jones, of South D akota, outlined the in te n t of the legislature in referrin g to the people a proposal to repeal the state law g u aran teein g bank deposits. H is explanation will be rep rin ted on the ballot th is November directly under the space fo r the v o ters’ m ark. ‘‘This act of the leg islatu re,” the a t torney general said, “would repeal the g u ara n ty fund, sections 9005 to 9031, both inclusive, of the revised Code of 1919, which was enacted to g u aran tee paym ent of bank deposits and created a commission to supervise and control such funds. “ This act would also create a commis sion known as the depositor’s advisory commission, to consist of the superin tendent of banks and th ree o th er mem bers appointed by the governor. Killed in Car Crash P. C. Saunders, president of the F arm ers & M erchants bank of M ilbank, South D akota, was killed recently when his autom obile overturned near G ranite C ity, M innesota. Mr. Saunders, who had been one of the leading citizens of Milbank fo r many years, was retu rn in g home from Lake M innetonka, w here he had le ft his w ife and three children. Bank Reopens The F arm ers S tate B ank of F landreau, South D akota, which has fo r some time been in the process of reorganization, opened recently fo r business. F . R. Sm ith, superintendent of banks, reported th a t the new in stitu tio n did a rushing business on the f ir s t day. Ashton Bank Opens The A shton S tate bank, of A shton, South D akota, reopened recently in th a t city. The capital has been increased to $15,000 w ith a surplus of $5,000. E. N. Graves is in charge of the bank. Elected President L. N. Saunders has been elected to the presidency of the F arm ers & M erchants bank of M ilbank, South D akota. He succeeds his bro th er who was recently killed in an autom obile accident. Mr. Saunders has been associated w ith the bank fo r years and is well qualified to fill his new position. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis “ T h is c o m m issio n is a u th o r iz e d u n d e r th e a c t to p a s s u p o n a p p lic a tio n s f o r c h a r t e r s f o r neAV s t a te b a n k s . A ll g u a r a n ty f u n d w o u ld b e p la c e d u n d e r c o n tro l o f th e n e w ly c r e a te d c o m m issio n . “No fu rth e r assessm ent would be made upon sta te banks u n d er the g u aran ty fund laAV. “W hatever fu n d s come into control of the newly created commission would be distrib u ted among the depositors of failed banks to p roportion the am ount of th e ir original claims provided th a t no p a rt of such funds would be d istrib u ted to depositors of banks failed a fte r J a n u ary 1, 1926. “A vote of ‘yes’ is in fav o r of su stain ing the g u ara n ty fu n d law, and a vote ‘no’ is in favor of leaving the law as it is and rejects the act of the legislature.” Buys New Location The S ecurity B ank and T ru st Com pany, W ebster, South D akota, has p u r chased the local opera house, and will tran sfo rm it into a perm anent home fo r the bank. I t is the largest and finest business stru c tu re in W ebster. The building was erected fifteen yeai’s ago and is in a very desirable location in the business d istrict. Assistant Cashier Resigns Iv an W elch has resigned his position as assistant cashier of the F irst N ational B ank of M idland, South D akota and has taken up other business in terests in F t. P ierre. Peoples Savings Moved The Peoples Savings B ank, of W atertown, South D akota, has moved from its old q u arte rs in the g ran ite block to the corner banking room in the same b u ild ing form erly occupied by the Security N ational Bank, m aking the move be tw een the tim e the bank closed on S a tu r day night and 9 o’clock M onday m orn ing. The move was made exactly 11 years to the day from the tim e th e Peoples Savings B ank was opened by II. D. Rice, presid en t of the in stitu tio n who has been connected w ith the banking business of the city fo r 35 years, having sta rted his banking career th ere in 1890, when he was connected w ith the C itizens N ati onal Bank. T h e n e w b a n k in g ro o m is o n e o f th e fin e s t in th e c ity , b e in g e n ti r e l y m o d e rn m o d e rn in e v e ry w a y a n d p a r t i c u l a r l y c o n v e n ie n t. I t is f a c e d t h r o u g h o u t in a n a t t r a c t i v e p a t t e r n o f m a r b le a n d officers p o in t o u t, w ill m a k e f o r effi c ien cy in c a r r y in g on th e Avork o f th e o r g a n iz a tio n . With the neAV room the organization has secured many added facilities, in cluding an enlarged and better safety deposit vault. For the present, at least, it A\ras explained, the tellers’ AA’indoA\7s directly in front of the entrance door Avill be used, those on the sides being occupied as the business Avarrants their use. “AGAINST THE LAW” (Continued from page 49) ‘ ‘ (4) I t h a s ta x e d our b a n k to th e lim it, t a k in g care o f its own losses a n d th e n c o n trib u tin g to th e losses o f o th ers. “ I t h a s m ade th e c o m m u n ity careless a n d in d iffe re n t to w a rd th e b a n k s th e y do b u sin e ss w ith . T h ey use no d isc re tio n in choosing th e b a n k w h ere th e y d e p o sit, as long as th e y re ce iv e m ore i n t e r e s t .” ‘ ‘ In creases C om petition ’ ’ ‘ ‘ T he p rin c ip le s o f th e g u a ra n te e la w as o rig in a lly p a sse d are a b so lu te ly w rong. ‘ ‘ A ny one u n d e r such a law can s t a r t a b a n k o r a p e a n u t s ta n d a t w ill. September, 1926 T HE ‘ 4C o m p etitio n is m ade und u e, in e x p e ri enced b a n k in g is en co u ra g ed , a n d th e m en o f in te g r ity a n d a b ility a re a ssessed fo r th e ben efit o f th e u n fit a n d u n scru p u lo u s. “ U n d e r our p re s e n t law , how ever, b a n k s a re n o t g ra n te d a c h a rte r unless th e ir need is show n a n d th e m en who re c e iv e a c h a r t e r m u st show s ta b ility a n d fin an c ia l w o rth . 44H o w ev e r th is does n o t p re v e n t th e w ro n g m en fro m b u y in g a b a n k a lre a d y e s ta b lish e d . “ I n m y o p in io n th e law w ill n e v e r be re p ea le d , b u t w ill be so m odified t h a t only d e p o sits t h a t do n o t d ra w in te r e s t w ill be p ro te c te d else th o se t h a t d ra w a v e ry m o d e ra te r a te of in te re s t. 44I n th e l a t t e r case th e b a n k w ill be p e r m itte d to p a y a n y re a so n a b le r a te o f i n te r e s t on tim e d e p o sits, b u t i f th e d e p o si to r re ce iv e s m ore th a n 2 y2 to 3% he w ill n o t re ce iv e th e p ro te c tio n o f th e g u a ra n te e fu n d . “ A d e p o sito r w ill be p e rm itte d to c h an g e a t a n y tim e so t h a t in tim e of stre ss, th e b a n k w ill n o t lose th e d e p o sit due to la c k o f confidence. T he d e p o sit w ill be c h a n g e d fro m a h ig h in te re s t r a te to a low one. “ Y es, as to y o u r q u e stio n as to th e a d v is a b ility o f o th e r s ta te s a d o p tin g some fo rm o f g u a ra n te e law . T he b a n k s m u st be s a fe g u a rd e d fro m u n d u e c o m p e titio n th ro u g h too m a n y e sta b lish m e n ts. Offi cers sho u ld be licen sed . T he d e p o sito r should be com pelled to p a y p a r t of th e cost b y a c c e p tin g a low er r a te o f in te re s t. 44T he a d m in is tra tio n o f th e s ta te b a n k in g d e p a rtm e n t sh o u ld be ta k e n out o f p o l itic s. “ W h ile th e su p e rv isio n m u st n e c e ssa rily be le f t w ith th e s ta te , th e b a n k e rs th e m selves m u st fo o t th e cost o f th e g u a r a n tee fu n d should h a v e sufficient sa y in th e su p e rv isio n to in su re t h a t th e e x a m in a tio n s a n d m a n a g e m e n t o f th e b a n k in g d e p a r t m e n t sh all be c o n d u c te d upon p ro p e r lines. “ T h ere is no q u e stio n b u t t h a t th e w o rk in g o f th is la w has sa v e d N e b ra s k a fro m f e a r f u l com m ercial losses. “ W ith o u t it, u n d o u b te d ly a couple of h u n d re d m ore b a n k s, n a tio n a l as w ell as s ta te w ould h a v e closed th e ir doors w ith th e c o n se q u en t loss to a ll classes. “ N a tio n a l b a n k s h a v e b e en th e b enefi c ia rie s th ro u g h th e confidence g e n e ra lly e sta b lish e d . 44T he cost to th e s ta te b a n k s h a s how e v er b e en tre m e n d o u s, in m a n y cases e x cee d in g th e ir e a rn in g s. “ I n our ow n case, th is b a n k h a s p a id in o v er $45,000.00 in to th e g u a ra n te e fu n d a n d w ill u n d o u b te d ly h a v e to p a y in n e a r ly t h a t m uch m ore. A t id y sum . H a d th e d e p o sito r w ho re c e iv e s th e b e n efit o f th e p ro te c tio n b e en com pelled to sh a re in th is th ro u g h h a v in g his d e p o sit fre e fro m i n te re s t, else d ra w in g a v e ry m o d e ra te ra te , th e e a rn in g s w ould be so in c re a s e d as to lessen th e b u r d e n .” “ T a k e s A ll O ur E a r n in g s ” ‘ 4O ur opin io n a b o u t th e ab o v e law is as follow s a n d in th e o rd e r o f y o u r q u e stio n s v iz .: “ 1st. I n s te a d o f in c re a s e d b u sin e ss as w as p ro m ised a n d p re d ic te d a t its in c e p tio n 15 y e a rs ago we g o t in c re a s e d eompe- https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NOR TH W E S T E R N BANKER titio n — a n d v e ry q u e stio n a b le c o m p e titio n •—in c o m p e te n t b a n k e rs a n d a ll t h a t so rt o f th in g . S ince th e ‘ p ow ers t h a t be ’ h a v e a r ig h t to re fu s e c h a rte rs w h ere new or e x tr a b a n k s a re n o t re q u ire d i t w o rk s b e t te r. “ 2nd. T he p rin c ip le o f th e g u a ra n te e law fo r d e p o sits we co n sid er r ig h t b u t no one b u t p ro fe s sio n a l b a n k e rs sho u ld be allo w ed to e n te r th e p ro fessio n . B a n k in g is n o t only a p ro fe s sio n — th e m o st im p o r ta n t o f a ll p ro fe ssio n s fo r th e re aso n t h a t i t has c h arg e o f th e fu n d a m e n ta l su b s t r a ta o f th e w hole econom ic s tru c tu re — i t is a science. B an k ers— re a l b an k ers— 85 should be m en w ho ta k e a sane v iew of th in g s — th e sam e to d a y , y e s te rd a y a n d fo re v e r. “ 3rd. T he p la n w ill u ltim a te ly be a g re a t boon a n d a success. “ 4 th . Y es, o th e r s ta te s should a d o p t i t b u t th e re sp e c tiv e s ta te s should p a y th e b ill a n d n o t th e in n o c e n t a n d b lam eless so lv e n t s ta te b a n k e rs. 445th. T he g u a r a n ty law h a s a ffe c te d ou r b a n k in a v e ry d isc o u ra g in g w ay. I t h a s p ra c tic a lly ta k e n a ll o ur e a rn in g s in th e p a s t five y e a rs to p a y our g u a ra n te e asse ssm e n ts. ’ ’ Will Your Customers Feed Their Corn? If so — hav e you sufficient o u tle t fo r YOUR FEEDER PAPER? The Live Stock National Bank Located at the Stock Yards Sioux City, Iowa Is esp ecially w ell eq u ip p e d to h a n d le Live S tock Loans YOUR ACCOUNT IS INVITED | | In d u stria l A ccep ta n ce C orp oration | New York C a p ita l & S u rp lu s O ver $ 7 ,0 0 0 ,0 0 0 if ? | COLLATERAL T R V S T GOLD NOTES in (T h e N a tio n a l C ity B an k o f N. Y., T rustee) W (ft (ft w tft The Notes o f this Corporation are regarded by a nation-wide banking clientele as appropriate and attractive investment fo r short term funds. They m ay be obtained under customary option in varying maturities between 2 and 12 months. Complete information available on request to any o f our offices. >ft (V (ft CHICAGO Commercial Paper Offices NEW YORK 105 So. L a S a lle S treet 100 E a st 42nd S treet SAN FRANCISCO 225 Bush S treet >ft F in a n cin g e x clu siv ely d ealers o f 1 | THE STU D EBAKER C O R P O R A T IO N OF A M E RICA jft»*i— —--------------------- ! i ! ( j ( ( ( ( ) 86 TH E N O R T II W E S T E R N B A N K E R A t the C en ter of th e N atio n IDWAY between the oceans, at the cross-roads of commerce, T h e O m a h a 1R a tio n a l B a n \ offers its service as yo u r correspondent. Sixty years of successful banking achievement constitute its recom mendation. Over $50,000,000 in resources of the bank and its affiliated trust com pany are available to meet the require ments of its customers. T H E OM AHA N A T IO N A L BANK , W A L T E R W. H E A D https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis President September, 1926 T HE September, 1926 NORTHWESTERN BANKER Phil L. H all, presid en t Bank of Greenwood, Avas the D em ocrats as th e ir N ebraska state trea su rer, prim aries. Nebraska Bank News Officers N ebrask a Bankers A ssociation I. R. ALTER President P re sid e n t.......................................I. R. A lter Grand Islan d Chairman of the E xecutive C ouncil.............................P . L. H all, Jr. Greenwood S ecreta ry..............................W . B. H ughes Omaha T reasurer............... ................P. W . Thomas Omaha General C ounsel......... ........J. P . Palm er Omaha B ankers O pposed to B ra n c h B an k in g V igorous opposition to proposed exten sion of branch banking into states which now, by law, do not perm it it, was as sured when W a lte r W. H ead, president of the Omaha N ational B ank and form er president of the A m erican B an k ers’ A s sociation, accepted, a t Chicago A ugust 14th, the chairm anship of the Com mittee of 100, whose purpose, as declared in the resolution fo r it, is “to safeguard the fu tu re existence of independent banking from the menace of branch banking.” Mr. H ead ’s own conception of his duties and the opinion of the bankers fo r whom he speaks, are revealed in the fo l lowing sta te m e n t: “D uring the term of my presidency of the A m erican B ankers A ssociation in 1924, the bankers of the country thought this vexatious question had been settled. They were entitled to so consider it, fo r the n ational association unanim ously passed resolutions endorsing the now fam ous H ull am endm ents, designed to lim it branch banking to those states in which it Avas then legal under state larv. “B ut the resolutions A\Thich we adopted unanim ously have not been carried out. The bankers of the U nited S tates are made to appear as half-h earted and un certain in th e ir a ttitu d e tow ard this im p o rta n t legislation, Avhereas, in fact, by unanim ous vote, they spoke em phatically and unequivocally against any extension of branch banking beyond the lim its of a single city and then only in states where it is now authorized by sta te law. These resolutions were and are in full accord A v ith my personal views. I believe th a t national banks should have the same right to operate in tra -c ity branches th a t are enjoyed by sta te banks, but only in those states AArhere such branches are noAV p erm itted by sta te larv. I do not believe in branch banking, but this much is nec essary in fairn ess to national banks u n der existing conditions. “B anking in the U nited S tates has come to a cross-roads; either it must m aintain its tim e-tried independent banking system or it m ust embrace https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis WM. B. H U G H E S Secretary branch banking Avith all its atten d a n t evils, evils Avhich m ight be equally se ri ous to banking, to commerce, and to in dustry. “It is fo rtu n a te th a t congress, a t its recent session, Avas not stam peded by the drive made to jam through the M cFadden bill Avithout th e H ull am endm ents. Trem endous pressu re Avas brought to bear upon m any senators and rep rese n ta tives to secure the necessary votes fo r passage, but these efforts did not succeed. “A nother session of congress is com ing. The M cFadden bill will be up again, and it behooves the bankers of the U nited S tates— the g rea t m ajo rity of Avhom stan d solidly fo r our independ ent banking system — to let th eir re p re sentatives in congress know th a t the passage of th is bill is essential to the p reserv atio n of our n atio n al banking system — and th a t the H ull am endm ents m ust be included in order to insure the continuance of independent banking units. Passage of the M cFadden bill Avith the H ull amendments Avill forever insure the continuance of our present thoroughly A m erican system .” N eb rask a News N otes The F irs t N ational B ank of Omaha— longest in continuous business in the city— early in A ugust celebrated its seventieth anniversary. Charles T. K ountze, vice president, is a son of one of the founders of the bank, the same K ountze brothers, bankers, aaJ io estab lished sim ilar g rea t banking houses in NeAv Y ork and Denver. Omaha bankers elected to the execu tive com m ittee of the Cham ber of Com merce fo r the coming fiscal year, in clude W. Dale Clark and Guy C. Kiddoo, vice presidents and V icto r B. Smith, assista n t to the president, of th e Omaha N ational b an k ; F re d W . Thomas, vice president, F irs t N ational b an k ; F ord Hovey, p resident, Stock Y ards N ational bank. C. A. McCloud of York, and M rs. Mccloud, aaT io are in Fmrope, recently en joyed a boat trip up the R hine river. 87 of the S tate nom inated by candidate for a t the A ugust E xcavation w ork began A ugust 10 on the nerv home fo r the Union S tate B ank of Omaha, a t N ineteenth and F arn am streets. The bank Avill erect an eightsto ry building, Avith a fro n tag e of 68 feet on F arn am and 132 feet on E ig h teen th street. E xcept fo r some re ta il stores on F arn am , Avhich is O m aha’s p rincipal business street, the firs t floor will be occupied by the bank. The u pper floors will be devoted to commercial office purposes. The neAV building, w ith site, will rep resent an investm ent of $800,000. To erect the new bank stru ctu re , a building com pany Avas form ed Avith F . C. H oracek and Em il K avalec, who are presid en t and cashier, respectively of the bank, as the p rincipal officers of the building com pany. The neAV bank building Avill be faced Avith stone. John Latenser & Sons of Om aha are the archietects, and P eter KieAvits’ Sons have the general contract. C onstruction is expected to be com pleted w ithin ten months. F red H. Davis, p resid en t of the F irs t N ational bank of Omaha, has retu rn ed from two m onths abroad, d uring Avhich he spent m ost of the tim e on the R iviera w ith Mrs. D avis and th e ir daughter. In a statem en t on his re tu rn Mr. Davis said th at he believed the French nation is on the Avay tow ard fin an cial reh ab ilitatio n , and th a t as soon as economic recovery had been arriv ed at, the F ren ch people would again feel frien d ly toAvard America. Mr. D avis was in P aris d uring the f irs t dem onstrations of mob anger against A m erican to u rists, although he A\ms not in any p a rty th a t Avas attacked. H e said it is useless to m inimize the genuine b ittern ess of the F ren ch toAvard the U nited S tates, b ut th a t it Avould d isap p ear in time. In the reorganization of the Omaha, Com munity Chest, W alter W. H ead, p resid en t of the Omaha N ational bank, has become tre a su re r of the chest, and E. F . Folda, form erly of the Corn E x change N ational bank and head of the “Folda strin g ” of banks in N ebraska, Avas made a director. Both Mr. H ead and Mr. F olda will serve on the executive com m ittee of the chest, which is planning a fall ch arities cam paign fo r 430 th o u sand dollars fo r the 1927 needs. H erb ert Koyen, fo r the p ast three years assistan t cashier of the S tate Bank of N ickerson, has been prom oted to cashier. H e succeeds V. M. H u ffm an , resigned. Mr. K oyen’s form er post has THE 88 been tem porarily le ft vacant. Mr. H o ff m an will devote his tim e to cattle and hog buying. Mr. K oyen was form erly con nected w ith the P ackers N ational bank of Omaha. Nebraska state bankers will ask the coming legislature to authorize the em ploym ent of additional sta te bank ex am iners by the N ebraska G uaranty F u n d commission, and the placing of app o in t m ents in the hands of the commission, in stead of in the secretary of trad e and commerce, according to A. L. Schantz, president of the S tate B ank of Omaha. E xam iners’ salaries would also be raised NORTHWESTERN ü ANKER under Air. S chantz’ plan, in order th a t more com petent men could be a ttra c te d to the post, and held longer in the work. The N ebraska bankers feel th a t w ith the organization of th e ir sta te g u aran ty fu n d commission, whose members are selected by the bankers according to te r rito rial divisions, the ad m in istratio n of the sta te banking laws have been 80 per cent freed from politics, and the changes now being recommended would take the sta te banks en tirely out of sta te politics. Edward Horn has resigned as cashier o f the N ebraska S tate bank of Bristow , and removed to N orfolk. Succeeding T H E N A T IO N A L P A R K B A N K of NEW YORK Established, 1856 214 B roadway U p to w n Offices P ark A v e n u e a n d 4 6 th S treet S e v e n t h A v e nu e a n d 32nd S treet DIRECTORS Charles Scribner Richard Delafield Francis R. Appleton Cornelius Vanderbilt Gilbert G. Thorne Thomas F. Vietor John G. Milburn William Vincent Astor Joseph D. Oliver Lewis Cass Ledyard, Jr. David M. Goodrich Eugenius H. Outerbridge Kenneth P. Budd John H. Fulton Frank L. Polk Benjamin Joy Banking in all its branches Commercial and Travelers’ Credit issued; Correspondents in all principal Cities in the World. Foreign Exchange bought and sold. Corporate and Personal Trusts; Safekeeping of Securities; Collection of Income. Investment Service for Custom ers. Safes in our Safe-Deposit Vaults at moderate rental. Capital, Surplus and Undivided Profits, $34,000,000 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis September, 1926 him a t the B ristow bank is Law rence W. W ibson, N ew port, who has been assist an t cashier of the F arm ers S tate bank at N ew port fo r the p ast five years. Ed K rohn, Neligh, has been elected vice president of the B ristow S tate bank. J. R. Kinder, who has been the active m anager of the M adison N ational bank, will move to Lincoln, to devote his time to the investm ent house headed by Charles S tuart. Air. K in d er is president of the N ebraska departm ent of the A m eri can Legion. H is d eparture from Aladison follows the sale of the M adison N ational bank to local interests, who will soon announce its reorg an izatio n plans. The Aladison bank was founded in 1878 by Jam es S tu art, who la te r removed to Lincoln, although th e stock of the bank rem ained in the possession of the S tu art fam ily u n til its recent sale. The Seneca S tate B ank of Seneca, N ebraska has closed and is dissolving its business, leaving the Stockm en’s bank alone in the Seneca field. D issolution of the bank follow ed the forced economy and liquidations of the p a st few years, and leaves the banking condition at Seneca in a m uch more h ealth y state. W A L T E R W . H E A D R E S IG N S W alter W . H ead an n ou n ced h is resig n ation as ch airm an of the C o m m ittee of O ne H u n d red , recen tly o rg a n ized to carry on a n ation -w id e cam p aign fo r the en actm en t of the M cF ad d en B ill w ith the so-called H u ll A m en d m en ts d esig n ed to restrict the ex ten sio n of b ran ch b a n k in g. “ I am em p h a tica lly in favor o f th is le g isla tio n ,” said Mr. H ead . “I co n sid er its p assage b y con gress a b so lu tely es sen tia l for the p reserv a tio n o f our na tio n a l system of in d ep en d e n t h a n k in g .” “E ven ts sin ce th e o rgan iza tio n o f the C om m ittee of O ne H u n d red h ave led m e to b e lie v e that it is m y p articu lar duty to w ork w ith in the ranks o f the A m er ican B an k ers A sso cia tio n to m ake e f fe c tiv e th e p o lic y agreed u p o n at the C h icago co n v en tio n in 1924. B y u n a n i m ou s v o te the a sso cia tio n assu m ed a p o sitio n sp ec ifica lly and em p h a tica lly for the M cF ad d en B ill w ith th e H u ll am en d m ents. “A s a form er p resid e n t o f the a sso cia tio n and as the p resid in g officer of the 1924 co n v en tio n , I am co n v in ced that I can ren d er a m ore satisfactory service w ith in th e ranks of the a sso cia tio n than by th e d irectio n of an o u tsid e a ctivity. T h e C om m ittee of O ne H u n d red w ill co n tin u e its efforts for the p assage of the M cF ad d en B ill w ith the H u ll a m en d m en ts.” The o ffe r of Dan V. Stephens, p resi den t of the F rem o n t S tate bank, to pay $100 fo r the a rre st and conviction of persons guilty of w recking the S tate bank of Papillion, has brought an o ffe r from L. AY. AVilson, p resid en t of the S ecurity S tate bank of B roken Bow, to draw on his bank fo r any p a rt of the rew ard th a t Air. Stephens thought proper. September, 1926 T II E N O R T II W E S T E R N B A N K E R E. F. Folda, who has extensive b an k ing interests in Nebraska, is enjoying his custom ary sum m er vacation at E phriam , W is., w here he is commodore of the yacht club, and one of the most popular figures on Green bay and G reat Lakes yachting and m otoring circles. To Visit Omaha Omaha, N ebraska, w ill be host fo r about six hours on Septem ber 29th to three hundred bankers who will arrive on the “F a ll Tonic Special” from Chicago on th e ir w ay to the annual A. B. A. convention in Los Angeles. J. F. Coad, president of the P ackers N ational Bank has been appointed chairm an of a com m ittee to w ork in conjunction w ith the Cham ber of Commerce in e n te rta in ing the guests. Moves to Auburn FEEDER L O A N S F IN A N C E D W rite Us Live Stock National Bank Union Stock Yards — Omaha (Quick service on collection of live stock proceeds at stock yards) Clarence C astner who has been w ith the F irs t N ational Bank, Coleridge, N ebraska has severed his connections w ith th a t bank and accepted a position w ith the Carson N ational B ank at A uburn, N ebraska. The position le ft vacant by M r. C astner has not yet been filled. Nebraska Convention Plans W illiam B. H ughes, secretary of the N ebraska B ankers A ssociation, and editor of the Record, in speaking of the plans fo r the A ssociation convention this fall, o ffe rs the follow ing: A n in v itatio n has been sent to S ecretary H erb ert H oover of the D epartm ent of Commerce a t W ashington, whose ap p e ar ance on our program , if he accepts, will prove a great draw ing card. Secretary Hoover is making a num ber of very in teresting speeches around the country and we hope fo r his presence a t our conven tion. A nother in v itatio n has been sent to Jo h n M cHugh, P resid en t of the big Chase N ational B ank of New York, which ju st recently swallowed up the M echanics and M etals N ational Bank. Mr. M cHugh is a form er N ebraskan who is long overdue in these p a rts fo r a visit and an address. H e is very prom inent in New Y ork b an k ing circles and would be a w onderful addition to our program . W e have invited Ju liu s H. Barnes, who is one of the very fin est speakers in the land, both as to the substance of his rem arks and his ex tra o rd in ary speaking ability. I t would be especially delightful if he accepts. F ra n k 0 . Lowden, ex-Governor of Illinois, and ju s t back from a visit of two m onths in Europe, has been invited and we are very hopeful of his accept ance. The fa c t th a t he is m entioned every now and then fo r nom ination fo r the presidency would add to the in te rest if we can secure him. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The real difference in banks lies not in the buildings they occupy bu t in the men and women who conduct them . Our bank building m ay be superior or inferior to other bank buildings nearby or f a r away, b u t inside our b a n k a re h u m an beings v it ally in te re ste d in re n d e rin g a service to our custom er bankers which will m ake th e ir job easier and th e ir grow th more rapid. We solicit your business because of our belief in our ability to sa tisfy you. THE STOCK YARDS NATIONAL BANK THE STOCK YARDS TRUST&SAVINGS B A N K o f C H IC A G O 89 90 THE N O R T II W E 8 T E R N BANKER Nebraska Committee Meets E B R A S K A state bankers will ask fu rth e r legislation to complete the divorcement of the state banks and the state guaranty fund commission from the power of politics, representatives of all p arts of the state decided at a meeting in Omaha, August 19th. Resolutions were adopted calling for severe restrictions upon the chartering of new banks, fo r the ap p ro p riatio n of all fees collected for examing banks to the guaranty fund body fo r use in employing better and more ex perienced examiners at higher pay, for lengthening the term of office of examin ers, and fo r expediting the paym ent of depositors of failed banks, from the g u ar anty fund. The bankers pointed out that the assets of failed banks, now being adm inistered by the g uaranty fund commission, are between ten and tw enty million dollars. Phil L. H all of Greenwood, chairman of the state bank committee of the Ne braska Bankers Association, presided after I. R. A lter of G rand Island, president of the association, opened the meeting. The state banks will cast a referendum vote on the proposals, and the same committee will meet in about a month to map a cam paign to secure legislative approval of the suggestions. The bankers say that the state has made a profit of $40,000 a bien N nium on examination fees, diverted to other state needs than bank examination. Members of the state bankers’ commit tee, elected by county groups, are: R. M. lie rre , vice president, Citizens State Bank, A insw orth; J . F . O’Donnell, cashier, Ne braska State Bank, O’Neill; F ra n k L. H all, vice p resident, Commercial S tate Bank, C raw ford; H. C. Peterson, presi dent, Chappell S tate B ank; S. M. H all, president, State Bank of Maywood ; Merle C. H iggins, cashier, F arm ers & M erchants Bank, Benkelm an; A. B. Woods, cashier, S tate bank of B a rtley ; E lm er W illiam s, president, Commercial S tate Bank, G rand Island; J. A. Boyd, cashier, F arm ers State Bank, K earney; C. J. Mortensen, cashier, F arm ers State Bank, O rd; P. C. Erickson, cashier, Brewster State B ank; H. C. Van Horn, president, F arm ers State Bank, Pawnee C ity; C. C. Shoemaker, cashier, Home State Bank, D eW itt; P. E. Kelly, president, F arm ers State Bank, H um p h rey ; Charles C. E ndree, vice president, F arm ers State Bank, Central C ity; J a ro slav Folda, cashier, Banking* House of F. Folda, Schuyler; P. A. Sullivan, president, F arm ers State Bank, W ynot; L. W. W il son, president, Security S tate Bank, B rok en Bow; H. B. D opf, vice president, F a rm ers S tate Bank, B rule; Glen G. H am pton, cashier, Gothenburg State B ank; C. S. (Ehas^Natumalllank o f ttie (£itg o f £3>ut fo r k 57 BROADW AY C apital . . . $ 40.000,000.00 S u rp lu s and Profits . 36,764,122.23 D eposits (J u n e 30. 1926) 813,425.869.65 September, 1926 Brown, vice president, F idelity Stale Bank, A u ro ra; L. O. Stoker, cashier, F arm ers S tate Bank, Rising C ity; J. V. Johnson, president, F arm ers S tate Bank, Tecumseh; J. G. Hohl, cashier, F arm ers & M erchants Bank, P ra g u e; A. G. Rahn, cashier, F arm ers S tate Bank, Newcastle; O. A. Riley, cashier, S tate Bank of H ast ings; C. L. Cooper, cashier, F arm ers State bank, W allace; S. D. Thornton, Jr., presi dent, Security State bank, N eligh; Dan J. Riley, president, Dawson State B ank; H. M. Link, cashier, E xeter State B ank; H. K. F ran tz, president, Bank of E agle; W. S. Newmyer, president, F arm ers State Bank, Lyons; S. S. Hadley, cashier, H ad ley & Co., Cedar R ap id s; F re d Volpp, president, Scribner S tate B a n k ; H. A. Cheney, president, Security Bank, Creigh to n ; W. F. Wenke, cashier, Pender State B a n k ; L. P. Tonner, cashier, Breslau State B ank; J. B. Gibson, president, Nebraska State Bank, N o rfo lk ; F red Soker, presi dent, S tate Bank of H ildreth. Prom oted to Cashier A t a recent m eeting of the board of directors of the A m erican S tate bank of Loup City, N ebraska, George A rm strong was prom oted to the position of assistant cashier. M r. A rm strong has demon strated his ab ility as a good and efficien t banker. P iety may be called the act of right growing.—-Beecher. T H E H ANNA TO V E R IO N A L BA N K OF THE CITY OF NEW YORK E stablished 185! O F F IC E R S ALBERT H. W IGGIN Chairman of the Board GATES W. McGARRAH v Chairman of the Executive Committee ROBERT L. CLARKSON Vice Chairman of the Board Vice Presidents SAM UEL H. MILLER CARL J. SOHM IDLAPP R EEV E SCHLEY SH ER R ILL SMITH H ENRY OLLESHEIM ER A LFR ED C. A N D R EW S ROBERT I. BA RR JOHN McHTJGH President GEORGE E. W ARREN GEORGE D. GRAVES FR A N K O. ROE HARRY H. POND SAM UEL S. CAM PBELL WILLIAM E. LA K E M. G. B. W H ELPLEY Vice President and Cashier WILLIAM P. HOLLY Second Vice Presidents A LEX A N D ER S. W EBB A LFR E D W. HUDSON FR E D E R IC K W. GEHLE JAM ES L. MILLER GEORGE W. SIMMONS JO SEPH C. ROVENSKY ED W IN A. L EE BEN JAM IN E. SMYTHE WILLIAM E. PU R D Y JO SEPH PULVERM ACHER GEORGE H. SAYLOR LEON H. JOHNSTON M. H A D D E N HOWELL FR A N K LIN H. GATES A R TH UR M. A IK EN Comptroller THOMAS RITCHIE Foreign and Trust Department Facilities https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Capital . . . $5,000,000 Surplus and Profits . $25,000,000 ►September, 1926 T HE N 0 R T II W 1 S T E R N S tate B ank of W arren, the same state. The A ngus bank will be closed and all of its deposits AA’ill be paid by the W arren bank, and all notes Avill fall due a t th a t in stitu tio n . W hile this consolidation leaves A ngus w ithout a bank, its close proxim ity to W arren w ill Avork no h a rd ship on the depositors. M in n esota Bank N ew s Officers M in nesota B ankers A ssociation P re sid e n t................ R. E. M acgregor M inneapolis V ice P resid en t........... A. G. W edge P ark Rapids T reasurer............... ....A . M. Schaefer Jordan R. E. MACGREGOR P resid en t S ecretary.......................P. P . F ellow s St. Paul blamed Casnier M emfred Nelson, assistant cashier of the F arm ers and M erchants State Bank of Moorhead, M innesota, since May 1st, has been elected cashier of the institution to succeed Con E uren, resigned, at a recent meeting of the board of directors. Mr. Nelson came to Moorhead from Sabin where he was cashier of the F irst State B ank of Sabin. H e Avas raised on a farm south of Moorhead. Becomes Cashier George D aily, fo r the last 10 years sta te bank exam iner in n orthw estern M innesota, has accepted the cashiership of the F irst S tate Bank of E ast Grand F orks, M innesota. Mr. D aily has p u r chased stock in the bank and has been nam ed one of the board of directors. IV, L. Nelson, form er cashier, has resigned to en ter the insurance and real estate business. H eads G uardian Bank A lbert L. Roth, well-known St. P aul, M innesota, banker, was recently elected president of the Cosm opolitan S tate bank of th a t city, succeeding Ju liu s Schmal, who resigned. A t the same election it was voted th at the nam e of the bank be changed from the Cosm opolitan to the G uardian S tate bank. Mr. R oth sta rte d his banking career as a m essenger fo r the Second N ational in 1884, and was w ith th a t in stitu tio n fo r 25 years, service in various capacities. H e later was cashier, and vice president, of the N ational Exchange bank of St. Paul. Cashier Dies A lfred M. Johnson, cashier of the F arm ers & M erchants S tate bank, of Dawson, M innesota, died recently at the age of 54 years. H e had been cashier of the above in stitu tio n since 1913. St. Cloud M erger A nnouncem ent has been made of the consolidation of the S ecurity S tate bank Avith the A m erican N ational bank, both, of St. Cloud, M innesota. This is the https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 91 BANKE R F. P. FELLOW S Secretary second im p o rtan t m erger in St. Cloud within the past three months. D uluth Bank Clearings The bank clearings of D uluth fo r Ju ly totaled $31,444,618.34 as com pared Avith $26,021,395.20 in Ju ly , 1925. The in d ic a te d increase is $5,423,223.14. I t is expected th a t A ugust clearings will shoAV an other good increase as com pared Avith the same m onth in 1925, Avhen the to tal Avas about $37,000,000. Shows D eposit Grow th The A m erican N ational Bank of St. P aul, M innesota is noAV in its 24tli year of service. The b ank sta rte d in 1903 w ith deposits of $230,000. Today the in stitu tio n has deposits of $11,500,000. The original cap ital Avas $200,000, and in 1923 this Avas increased to $400,000. O fficers at present are as folloAA-s : O tto B rem er, chairm an ; L. H. Ickler, president ; Charles H. F. Smith, AGee p resid en t; H. B. H um ason, vice p resi dent and cash ier; G. J. Johnson, vice p resid e n t; P. A. F . Sm ith, assista n t cashier; S. B. F red erick , assistan t cash ier; J. P. Lonev, assistan t cashier; C. A. M anley, assista n t cash ier; Larvrence D oran, assista n t cashier, and A. M. D uBord, assista n t cashier. New Cashier Grover P. M itchell, form er cashier of the F irs t National Bank of Taconite, has recently taken over his duties as cashier of the F irs t N ational B ank of Marble, Minnesota. Mr. Mitchell is Avell known in M arble, and succeeds Louis Sicard, Avho has been w ith the bank fo r the p ast fo u r years. M idland Makes Purchase The M idland N ational Bank and Trust Company of M inneapolis, M innesota, re cently purchased the business of the Sixth A venue S tate Bank, also in M in neapolis. The custom ers of the S tate bank will be served in the q u arte rs of the M idland, and the employes of the S ixth Avenue S tate Avili become mem bers of the M idland organization. The Sixth Avenue S tate had a capital of $25,000, and deposits of approxim ately $150,000. Checks, d ra fts and other in strum ents bearing the sig n atu re of the S tate bank Avili be honored u n til such tim e as nerv blanks can be furnished. E lect New P resid en t The directors of the S tate B ank of RedAvood F alls, M innesota, have recently elected A. C. B urm eister as president of th a t in stitu tio n , succeeding Jo h n P. Cooper, deceased. No oth er changes Avere made except the election to the board of Judge A. R. C an be installed in vaults already built w ith o u t interfer ence w i t h business routine. S en d fo r b o o k l e t d es c r ib in g th is m a rv e lo u s s y s te m o f V a u lt P r o te c tio n . Resigns as Cashier T. C. Overson has resigned his posi tion as cashier of the F arm ers & M er chants B ank of C larkfield, M innesota, and becomes assistan t au d ito r w ith the NorAvegian L u th eran church of America. M erger A nnounced A m erger has recently been com pleted Avherebv the F arm ers S tate Bank of Angus, M innesota, Avas tak en over by the O B M C C LIN T O C K C O M P A N Y Mi n n e a p o l i s , - - auaiai. 92 THE NORTHWESTERN BANKER September, 1926 A. Laudon, to fill the vacancy le ft by the death of A. D. S tew art. R E A L SE R V IC E To serve our clients to their entire satisfaction is our con" stant aim and ambition. I Stanley-Henderson Com pany Farm Mortgage Bankers 207-214 Higley Bldg. Cedar Rapids, Iowa Bank Reopens The F irs t S tate Bank of W atson, M in nesota, has reopened recently. Its capital now stands at $30,000, w ith a surplus of $6,000. S. F. Fosnes is the president, and J . E. Oddan, cashier. Consolidation The F arm ers S tate B ank of E aston, M innesota, has recently taken over the liabilities and assets of the E aston S tate Bank. The consolidation gives the F arm ers S tate assets of approxim ately $500,000, an o u tstan d in g fig u re fo r a com m unity th a t size. C. J . B achite, form erly w ith the E as ton S tate, has entered the F arm ers S tate as assista n t cashier. Hold Sales Conference IN M I A M I The South Florida Mortgage Company of Miami, is at your service to assist you or your customers in every possible way. This Company renders the follow ing services: 1. Makes mortgage loans on resi dential property. 2. Makes appraisements fo r loaning or investment on property in southeast Florida. 3. Buys and sells real estate on a brokerage basis and handles rentals, property management and insurance. We are at your service in this rapidly growing city which has a building program placing it in seventh place among the cities of the United States. W rite us today South Florida Mortgage Company Capital $100,000.00 J. V. Carpenter, President O. M. Fowler, Vice President S. Grover Morrow, Vice President Harry A. Brattin, Secretary 150 S. East First St. M iam i, Florida https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The sales organization of the O. B. M cClintock Company, known to all b an k ers as m an u factu rers of complete burglar alarm systems, outdoor chime clocks, and the new v au lt v en tilato rs, held its annual conference the week of A ugust 1st. The conference, as usual, was afforded the de lig h tfu l se ttin g of the n o rth ern M inne sota lake home of P resid en t O. B. Mc Clintock in Crow W ing county n o rth east of B rainerd, where nearly one hundred people, including fam ilies of th e execu tives and salesm en, were en tertain ed d u rin g the assembly. This delightful spot is equipped w ith a num ber of sp a cious and com fortable cabins, each w ith a fireplace; and also, an assem bly room and a cen tral dining room. The annual sales conference is, th erefo re, an occasion tow ards which the members of the o r ganization look fo rw ard w ith special an ticipation. P iety, stretched beyond a certain point, is the p are n t of im piety.— Smith. All really great pictures exhibit the general habits of nature, manifested in some peculiar, rare, and beautiful way. — Ruskin. Midland National Bank and Trust Company t Resources $22,000,000.00 I M IN NEA PO LIS September, 1926 THE NORTHWESTERN North Dakota Bank News Officers North Dakota Bankers Association P resid en t.................................. H. T. Graves Vice P resid en t and Chairman E xecu tiv e C ouncil.......... ......George H. L eick Hebron T reasurer.......................... -........ J. E. D avis Goodrich H . T. GRAVES President Secretary.................................0 . M acfadden Fargo W. C. M ACFADDEN Secretary North Dakota Banks in Good Condition O RTH D A K O TA banks and finan cial in stitu tio n s are generally in splendid shape, G ilbert Semingson, sta te bank exam iner, said recently in com m enting on the la test consolidated re p a rt of financial in stitu tio n s as in d i cated in th e ir statem ents of condition as of Ju n e 29th. A lthough all but two of the items listed in the resource account show de creases, the same thing holds true with items in the liabilities account and sav ings deposits are greater than they were at that time last year although slightly be low the figure reported fo r A pril. Reseiwes held by banks to ta l $11,391,984.20 or $2,384,563.49 more than the required figure, $9,007,420.71. The to ta l reseiwes on Api’il 1st was $13,164,325.26 and on Ju n e 30, 1925, it was $13,087,109.83. A significant thing in considering the lower totals of practically all items is the reduction in the num ber of banks re porting. A y ear ago 494 sta te banks and fo u r tru s t com panies m ade reports. On A pril 1st the num ber was 454 banks and fo u r tr u s t com panies, and the latest rep o rt includes figures from only 438 banks and fo u r tru s t companies. The reduction has been caused lai’gelv by the consolidation of two or m ore banks in one com munity. Total resources of the banks reporting are placed a t $88,686,398.13 as com pared w ith $92,290,037.77 on A pril 1st and $98,448,675.98 on Ju n e 30, 1925. Loans and discounts are placed a t $59,157,385.85, a decrease since Jiune, 1925 of $6,167,472.32 and since A pril 1st of $368,715.06. W a rra n ts, stocks and bonds held by banks to ta l $5,273,188.33 a decrease since la st year of $508,564.31 and since A pril 1st of $575,964.17. Governm ent issues to ta l $3,283,790.62, a decrease since la st year of $581,832.56 and since A pril 1st of $736,427.35. R eduction in the num ber of banks is N https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 93 BANKER reflected in the cap ital stock account which shows $218,800 less th a n it xvas in A pril and $844,800 less th an it xvas on Ju n e 30, 1925. Money due to other banks was reduced to $126,981.37, $71,732.13 less th an on A p ril 1st and $73,548.02 less th an in Ju n e, 1925. A L an d F in a n c e C orp oration The N orth D akota Bankers association will be i*epresented by a committee consist ing of E d Pierce, Sheldon, chairm an; J. R. Carley, G rand Forks, and Jos. M. Kelly, Devils Lake, at a conference to be held shortly fo r the purpose of form ing a Northwest Land Finance corporation, ac cording to an announcement authorized by W. C. M cFadden, secretary of the as sociation. A ppointm ent of the committee resulted from action authorizing such appoixxtment taken at the annual convention in Grand F orks in Ju n e of the association, when it was deemed advisable by members of the bankers’ association to take some suitable action fo r the stabilizing of land values. The m atter xvas bi’ought up at the con vention during the course of an address by LToward E verett of St. Paul. The proposed plan has awakened the in terest of a large num ber of financiers, gov ernment officials and others, including M. L. Mosher of the Federal Reserve Bank of M inneapolis and Secretary H erbert Hoover. R e p o r ts on I llin o is M e e tin g “Illinois is looking to N orth D akota fo r sw eet clover and a lfa lfa seed as the fo rm er sta te is ju st beginning to realize the im portance of sweet clover, especial ly as a soil builder,” declared T. Melvin Lee, p resident, M iddlew est T ru st Com pany, of V alley City, chairm an of the ag ricu ltu ral com m ittee of the N orth D a ko ta B an k ers’ A ssociation. “N orth D akota is rate d as being next to W isconsin in the general p ro sp erity of ag ricu ltu re and in financial condi tions,” he said. “W e learned th a t results made by the U niversity of Illinois showed th a t one acre of sw eet clover, when ploughed un der, was equal in value to seven tons of m anure. T h at is of g rea t im portance where the soil is p re tty xvell exhausted by continuous cropping over long periods. “ They have found th a t the value of sweet clover is due to the fa c t th a t it makes available the present m ineral m at te r and also th a t the roots p en etrate to a sufficient depth to tak e up m ineral m atter and m ake it available, also th a t plants tak e the free nitrogen from the air and store it in the soil as food fo r suc ceeding ci’ops. “In connection w ith the discussion of sxveet clover as a fertilizin g crop, the statem en t was made th a t land in Illinois has reached its lim it in value and fa rm ing m ust become more efficient to make profitable retu rn s. “Illinois does not produce a lfa lfa or sw eet clover seed and looks to N orth D a kota fo r a large p a rt of th e ir supply. F o r th a t reason the fai-mers of ’N orth D akota have an exceptional o p p o rtu n ity to pi’oduce sweet clover and a lfa lfa seed to be m arketed in th a t sta te and Illinois and adjoining states. “L and buyers can be expected to come to N orth D akota as soon as farm ers in these cen tral states ax-e in financial con dition to m ake a change. “I found th a t th e G i'eater N orth D a kota A ssociation is doing a ve:ry con stru ctiv e and efficient job of advertising the state and g ettin g the tru th about it to the people in the central states. I t is certainly doing more than any othe^ agency to this end and I firmly believe it deserves the su p p o rt of all N o rth D a kota citizens. N o r th D a k o ta N e w s The F arm ers S tate B ank of Bakei’, has been given perm ission to change its corporate name and h ead q u arters to the “F arm ers S tate B ank of Leeds.” H erm an C. Perlow ski has been ap pointed assista n t cashier of the F irs t S tate bank of H ague. Oscar C. B erg has been elected to the office of assista n t cashier of the Bank of Pekin, succeeding C arl R. Bystrom . C. S. D ugstad has been elected cashier of the Citizens S tate b ank of L ansford, succeeding P . A. Paulson. C. Sennes has been appointed assistan t cashier of th e N orthxvestern S tate bank of Coal H arbor. F. G. M ehlhaff succeeds W. A. McCulley as p resid en t and director 94 THE M erchants B ank of N apoleon, M r. McCulley having resigned. 1 J. M. Thomson has been elected as one of the directors of the F arm ers S tate bank of K ath ry n , succeeding H enrik H elland, deceased. M ath J. K ra k e r has been elected cashier and director of the W ahpeton S tate bank, succeeding* A ugust Bergm an, deceased. Jo h n J. Gordon has been elected assista n t cashier of the F irs t S tate bank of Brisbane, succeeding S. D. McCul lough resigned. f NORTHWESTERN BANKER G. H. M urphy has been appointed as assista n t cashier of the St. Jo h n S tate sistan t cashier of the h ir s t S tate bank bank, succeeding H . P. Johnson. of Center. H en ry M. H olte has been elected Russel P. Postlew aite has been assista n t cashier of the S ecurity S tate appointed bookkeeper and teller of the bank of Upham. P ioneer bank of B ottineau. M onte Lockwood has been elected Chester L. Severson has been appointed teller and bookkeeper of the E ldridge assistan t cashier of the M ontpelier S tate S tate bank, succeeding E dna F. Clemens. bank. J. H. Void has been elected as a B ertin a Rotnem has been appointed d irecto r of the N orthw estern T ru st Com teller of the F arm ers & M erchants S tate pany of G rand F orks, succeeding J . G. hank of F ordville. Jacobson deceased. W. C. Row erdink has been elected P iety b efo re theology.— Beecher. — "When Harvest Comes” com es every m o n th in th e y e ar to th e H o b so n B ro w n F a rm —h arv est from th e s ta n d p o in t o f incom e. Every w eek brings its checks fro m an y o n e o f various sou rces—cream , eggs, special fatted fow ls, beef, hogs a n d g ra in s—each fo rm s its p a rt o f a su b stan tial yearly in com e. In sh o rt, H o b so n B ro w n is a firm b elieverinD iversificatio n . H a r v e st T his has b een called a n age of specialization. B u t w ith in spe cialized fields, it is th e m a n o r th e c o n ce rn able to diversify w h o w ins y o u r p atro n ag e. In serving c o rre sp o n d e n t banks, D R O V E R S SER V IC E covers ev ery possible b a n k in g n eed . It is diversified; it is intellig en tly a p plied; it is co m p lete. It m akes th e D R O V E R S a p ractical a n d logical place to carry y o u r C h i cago acco u n t. rovers D U n io n https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis September, 1926 N A T IO N A L B A N K TRU 5 T # SAVINGS BANK S to c k Y a rd s, C h ic a g o THE September, 1926 1 0 NORTHWESTERN B AN KE R The charge will apply to all such accounts, whether the customer carries an additional savings account in the same bank or not. WA SECTION Officers Iow a B ankers A ssociation P re sid e n t.............................A. C. Sm ith Clinton V ice P r esid en t........... ......... John Sieh Spencer T reasurer......................F. A. Schuetz Law ler A. C. SM ITH P resid en t S ecretary...................... Frank W arner D es Moines W . O. R eed Jo in s Iow a B an k in g D e p a rtm e n t W. (). Reed, form erly deputy super'ntendent of banking in the adm inistration of S uperintendent W. J. M urray, has returned from W ashington, D. C., where he has spent more th an three years as E xam iner of C redits fo r the W a r F inance Corporation. He is again associated w ith the Iowa S tate B anking D epartm ent, hav ing been appointed Chief E xam iner by S u perintendent L. A. A ndrew. The W ar Finance C orporation has not m ade any new advances fo r the past eighteen m onths, as its pow er to do so has expired by lim itation of law. The credit men, of which there were a num ber, have all been released and the cor p oration now keeps only a skeleton or ganization in W ashington, and is direct ing the liquidation of the balances due from banks, farm credit organizations, and live stock associations, through the agencies still in operation in several states. Mr. Reed states th a t the W a r F inance C orporation m ade advances to banks in Iow a in the approxim ate am ount of $25,000,000, a larger am ount than was ad vanced to banks in any other state. H ow ever, Iowa has liquidated fa ste r than has any other state, and the to ta l indebted ness of Iow a banks to the corporation is now estim ated to be less than $100,000. F arm er Given R ew ard F ra n k Breed, farm er near Onawa, Iowa, who was responsible for the capture of the Onawa bank bandits several weeks ago, lias been given a $500 rew ard by the Mo nona County Bankers association. The association lias a $1,000 rew ard posted fo r the capture of bank robbers, but inasm uch as B reed did not actually capture the b an d it hiding in his cornfield, but gave the alarm, it was deemed best by the bankers to split the balance of the re ward, dividing $500 among the members of the vigilance committees. In New Home The Pocahontas State Bank of Pocahon tas, Iowa, is now established perm anently in its new building. I t is located on one https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 95 FR A N K W ARNER Secretary of the best corners in Pocahontas and is one of the most modern banking equip ments in the county. The Pocahontas State Bank is enjoying a substantial steady growth. Its officials announce that they will now be glad to welcome the people of that vicinity to their newly acquired p er m anent home. B ankers Picnic More than 300 employes of the Des Moines banks thronged Riverview p ark re cently at the American In stitu te of Bank ing annual picnic. The crowd took in all of the concessions, the “swimmin’ hole” and the dancing pavilion, and had a chick en dinner at 6 o’clock. Officers declared it was the largest picnic ever held by the organization. Meet in Jones County The Jones County Bankers association held a meeting in Monticello, Iowa, recent ly following a banquet in the basement of the Presbyterian church. There were dele gates present from ten different banks, the total being about fifty. The object of the meeting was to strengthen the lines of the association in its protective policy against bank rob bers. F o r several years Jones county has been organized for protective purposes with 42 vigilants scattered over the county, bonded and sworn in as deputy sheriffs, whose duty it is to apprehend bank robbers whenever an alarm is sent out following a bank raid. These men are al1 armed and have been picked fo r their bravery and willingness to run down these criminals. Make Service Charge The three Atlantic, Iowa, banks, the A tlantic National, F arm ers Savings, and W hitney Loan & Trust Company, an nounce the fact th at henceforth it will be their policy to require a small service charge fo r the handling of checking ac counts which fall below the minimum average of $50. The policy is being adopted, they ex plain, because such small accounts, when active, are handled by the banks at a loss, and the service charge, which will be 50c a month, will p artially reim burse them. W ins V igilantes Contest M ajor Ray A. Jones of Storm Lake, Iowa, won first in both rifle and pistol shooting at the annual rifle contest of Buena V ista county vigilantes at the rifle range south of Storm Lake recently. The rifle contest resulted with M ajor Jones, first; IV. D. Van De M ark, second; Vic Shirk, th ird ; Ed Sundholm, fourth, and Charles Liercke, fifth. The pistol contest was won by M ajor Jones with Charles Liercke, second. Those entitled to attend the state shoot at F o rt Des Moines Septem ber 14th and 15th are M ajor Jones, E d Sundholm and Charles Liercke. A lternates a r e : W. D. V an DeM ark and Vic Shirk. It was the fastest match ever held, with first one ahead, then another. W hen the smoke had cleared away and the final foot ings totaled, M ajor Jones had a score of 225 in the rifle contest, with V an DeM ark and Shirk tied at 223, only two points be hind. The aggregate score in both rifle and pistol was: Jones, 603; Sundholm, 578; Liercke, 576. Mr. Jones is the cashier of the Citi zens F irst N ational Bank of Storm Lake. A dopt Service Cnarges Following the recommendations of the still better banking committee of the Iowa Bankers association as presented at the annual convention of the association in Sioux City last June, the Floyd County Bankers association at Charles City, Iowa, have adopted a schedule of service charges to p aitially reimburse the banks fo r serv ices heretofore rendered fo r little or no revenue. Two meetings of the association have been he’d to consider the adoption of the charges which have proven so success ful in other communities, with the result tl at at the last meeting a complete sched ule of charges was agreed upon, without the dissenting vote of a single member p. esent. Iow a B anker Dead J. H. N utt, president of the F arm ers Savings Bank of W ever, Iowa, died at his home on August 18th, at the age of sixtvsix years. Mr. N utt was one of the organizers of the F arm ers Savings Bank, and had served continuously on its board of directors. In 1915 he was elected president of the insti tution, and served in th at capacity until his death. H e is survived by his widow and one son, Charles H. N utt. To H old Picnic The B ankers of Boone county, Iowa, and th e ir fam ilies are an ticip atin g thenannual outing which occurs this year on F rid ay , Septem ber 3d, from 1:00 o’clock on. The g ath erin g is to be held in McHose P a rk and all bankers, directors and THE 96 th eir fam ilies are expected to be there w ith baskets fu ll of good things to eat. The afternoon hours will be spent in sports and g ettin g acquainted a fte r which the picnic supper w ill be served. J. T. McGuire, who has been connected w ith the V ictor Savings B ank of V ictor, Iowa, fo r m any years in the capacities of cashier and president, presented his res ignation as president, and director. The board of directors was loath to ac cept the resignation and laid it over fo r a m onth, but a t Mr. M cG uire’s insistence th a t he be relieved of the responsibilities of his office, the resignation was reluc ta n tly accepted. No action was taken NOR TH W E S T ERN BA N K E R as to a successor in the office of p resi dent, and vice president. Mr. M cGuire’s place on the board of directors Avas filled by the election of Jo h n M. D usterhoft, aaT io is noAv assista n t cashier. Dubuque Banker Dead A cablegram was recently received by the P ioneer T ru st & Savings B ank, D u buque, Iowa, announcing th e d eath in B erlin of the p resid en t of the in stitu tio n , Charles A. Sass. Mr. Sass was to u rin g E urope Avith his Avife Avhen a h ea rt a tta c k ended his life. H e came to D ubuque from G uttenberg fifty years ago. W hile serving as city September, 1926 tre a su re r in 1890 he Avas elected cashier of the P ioneer B ank and he Avas elevated to the presidency a little more th an a year ago. H e Avas elected p resid en t of the N orth w estern Saengerbund a t P eoria last Ju n e. S urviving are the widoAV, a son and daughter. Buys Controlling Interest M. E. Crabb of the S ecurity Savings B ank of W ellm an, has purchased the controlling in te rest in the K inross Sav ings B ank K inross, IoAva, from E. E. G raham . M r. M cCrabb has taken charge of the bank. The re tirin g cashier, Mr. G raham , has not announced his fu tu re plans. Two More Iowa Bankers CHATHAM OVER 100 YEARS OF COM M ERCIAL B A N K IN G pH EN j^ B etter B anking for ^ Sells Bank Interest B etter B usiness ionalb^ IRüstcompaNÏ There was a time when business and banking were far apart—and were willing to remain so. Since then, of course, pro gressive bankers have been placing increasing insistence on the need for a thorough grasp of business and its financial requirements. A sound commercial view point is particularly neces sary in a New York cor respondent. At Chatham Phénix, busi ness interest and under standing have been devel oped to an unusual degree, resulting in a saving of time and more satisfactory banking business relation ships. M A IN O FFICE 149 Broadw ay, C o rn er Liberty Street N ew Y ork City RESOURCES https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis OVER A Q U A R T E R BILLION Mr. and M rs. I. J. Green, of D aven port, IoAva, are the proud p aren ts of tAvin boys born recently a t St. L uke’s H ospital. Mr. Green is cashier of the' F irs t N ational B ank of D avenport. These la st arriv als bring the Green chil dren to five in num ber. IT. L. Moore has sold his entire in terest in the Yale Savings Bank, of Yale, IoAva, to Plenry M orine, and has severed his connection Avith th e in stitu tio n . The presen t officers a r e : S. L. P ark er, p resi d en t; H enry M orine, vice p resid e n t; R. E. CasloAv, cash ier; H. C. BartholoAv and V. L. T ruax, assista n t cashiers. From Bank to Farm E. D. C ottington has severed his con nection Avith the F irs t N ational B ank of A yrshire, Iorva, and will tak e up fa rm ing. N ext M arch he expects to move onto his fa th e rs 240 acre fa rm near A yrshire. Cashier Resigns II. H. Spiegel has resigned the posi tion of cashier of the F arm ers Savings Bank of Odebolt, Iowa, which he has filled fo r the p ast seven years. He has been out of the bank fo r the p ast couple of m onths engaging in life insurance Avork as a change and v aca tion. H e has decided to continue th a t w ork exclusively and give his fu ll tim e to it. Change in Organization A change in the organization of the D iagonal S tate B ank D iagonal, Iorva, has been made. Rollev Bailey, long tim e the cashier, is iioav vdce p resid e n t; Rav 0 . B ailey becomes the cashier. B oth have been A\7orkers in the bank, the form er from the tim e of its organization. Leaves First National DOLLARS A fte r eight years of efficient seiwice at the F arm ers N ational B ank in V inton, IoAAra, R ichard Lynch has given up his position as bookkeeper and will begin (September, 1926 THE w ork fo r Jo h n M orrell & Co. of Ottum w a, prom inent Iow a m eat packers. H e will be employed in the accounting d e p a rt ment. H is successor a t the bank has not been announced. Subm its to O peration George B. Lernen, cashier of the Rock well City, Iowa, N ational B ank, was sub ject to a sudden attac k of appendicitis recently. H e was taken im m ediately to F o rt Dodge, w here he subm itted to an operation fo r the rem oval of his appen dix. R eports from the M ercy hospital are to the effect th a t he is recuperating rapidly. County B ankers Picnic T hirty-eight cases of so ft drinks, fif teen gallons of ice cream, and innum er able cups of coffee were consumed by a crowd of 400, including bankers and th e ir fam ilies from Calhoun and P ocahontas counties, a t th e ir annual jo in t picnic a t sta te p ark , Twin Lakes, Iowa, recently. This is the rep o rt of the refreshm ent com m ittee. A ttendance a t the frolic was f a r g re a te r th an was anticipated. B asket lunches were served a t the noon and eve ning meals. M ost of the day was given over to sports of all kinds, both fo r women and men. M any attended the dance a t the A lham bra dance pavilion follow ing the serving of the picnic supper. Resigns Lee Ough, who has been associated w ith the Miles Savings B ank, Miles, Iowa, fo r the p ast several years, le ft re cently fo r his home in Clinton. H e will go w ith his people on an auto to u r to D enver and other w estern points and then en ter college a t Ames. R eorganizing a t H um boldt The reorganization com mittee, having in charge the reorganization of the P eo ples S tate B ank of H um boldt, Iowa, has been actively a t w ork during the p ast month securing signatures of depositors to the agreem ents fo r reorganization of this bank. The people of H um boldt and vicinity are very much interested in the question of its reorganization, and a l ready over 500 depositors have signed the form s covering the depositors’ agree ment. C hildren Save Money In te re sts paid on deposits of school children in Council Bluffs, Iowa, banks and recently credited am ount to $2,177.79. Council Bluffs school children have $113,154 in the banks of the city as a resu lt of the public school savings plan system. The am ount represents 42 per cent of all savings d uring the five and one-half years the system has been in vogue. L ast y ear 7,424 children or 87 per cent of the to ta l enrollm ent rvere https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NO K T U W E S T E RN B A N K E R depositors. Since the system was launch ed $264,971.34 has been deposited. A nnual Convention The “ C ooperators” of the Des Moines L ife and A nnuity Company met a t Lake Okoboji, Iowa, on T hursday and F rid ay , A ugust 26th and 27th. The m eetings were held a t the M an h attan Beach H otel and atten d ed by all agents of the com pany. W. E. Bilheim er, of St. Louis, con ducted th e sales m eetings of the conven tion. A gents engaged in a production contest. All agents who m ade th e ir quotas during this contest had all th eir 97 expenses paid d u rin g these two days of in stru ctio n and fun. P rio r to th is con vention a conference was held, atten d ed by the d istric t and general agents. The Des M oines L ife and A nnuity Company, whose home offices are a t Des Moines, Iowa, is one of the younger com panies whose aggressive and construc tive program of grow th has m arked it as one of the very progressive old-line com panies. Its officers are J. J. Shambaugh, p resid e n t; E. L. Shinnick, se creta ry ; H. B. Bossert, agency supervisor. The sh o rtest pleasures are the sw eetest. —F arq u h ar. "Y\ J E solicit your ^ * business on the strength of what we have done and are doing to help other im p o rtan t correspond ent banks get prompt, i n t e l l i g e n t action on e v e r y item of Des Moines business. BANKERS TRUST CO. BAN K Cor. 6th and L ocu st Sts., D es M oines Capital $1,000,000.00 Surplus $200,000.00 98 T 11 E D allas B ankers Meet The annual picnic and “get-together” m eeting of the D allas County B ankers A ssociation was held a t R iverside P ai’k in A del on A ugust 1 1 th. E very bank in the county was re p re sented by one or more people, and the wives of the bankers came along to see th a t everything was properly carried out. There was a program of sports and am usem ents in the afternoon, including a k itten b a ll game betw een the bankers of the north and south halves of the county. In the evening th ere was a picnic sup per and a program . Buys Building The F arm ers S tate Bank of B ayard, Iowa, has purchased the building form er ly occupied by the B ayard Savings Bank, and moved to th eir new quarters. The N O R T 11 W E S T E R N B A N K E R building was built in 1909 and was oc cupied a t th a t tim e by the City Savings Bank. Increases C apital The board of directors of the Security N ational B ank of M ilford, Iowa, at a re cent m eeting voted to increase the capi tal stock of the bank to $50,000, and the surplus fund to $25,000, m aking a w ork ing capital of $75,000. This action was taken in the belief th a t M ilford w ith its extensive and varied business in terests and unusually large trad e te rrito ry in the m idst of an ag ric u ltu ral region unsurpassed any where in fe rtility and occupied by en terprising , progressive farm ers, the town and com m unity are en titled to a bank large enough and strong enough to take care of any business th a t may come to it. G-ladbrcok B anker M arried K enneth W illoth, of the F irs t N ational Bank of G ladbrook, Iowa, and Miss \ ivian W alters, domestic science teacher in the school there last year, were m ar ried recently a t the home of the brid e’s p aren ts, n ear Beam an. A fter a short honeymoon trip in n o rth ern M innesota, the young couple are a t home in the H orstm an cottage on E ast H ill. Building Almost Completed. The new bank building fo r the F irs t T rust & Savings Bank of Onawa, Iowa, is n earing com pletion. The in terio r fix tures are now being installed, and it will lie but a sh o rt tim e u ntil the building will be ready fo r occupancy. Resigns P osition L. D. Olsen has been forced to resign his position w ith the F irs t N ational Bank of Storm Lake, Iowa, on account of his health and he and M rs. Olsen will go to the lakes to rem ain u n til school opens in the fall when they will re tu rn to Des Moines, where Mrs. Olsen teaches and where Mr. Olsen atten d s college at D rake U niversity. Picnic a t H olstein The Id a County B an k ers’ picnic was held recen tly at H olstein, Iowa. About three hundred people atten d ed and C. J. W ohlenberg had charge of the program . Talks were given by Jo h n Sieh, vice president of the Iow a B an k ers’ A ssocia tio n ; Jo h n M itchell of Sioux C ity ; H. Y. Q uinlan of Des Moines, and E. L. Moser, county agent of Id a County. Trombone and slide selections were rendered by Mr. and M rs. V. C. Bone steel of Sioux City, and the H olstein high school band fu rn ish ed music during the dinner hours. There were also v a r ious sports and races during the a f te r noon. Our building (in the heart of Chicago’s financial dis trict) is given exclusively to hanking in all its phases; with a quality of business that enables us to give the utmost personal attention to our customers, whether individuals, corporations, or other hanks. C elebrates 83rd B irth d ay H en ry W agner, chairm an of the board o f directors of the C apital City S tate Bank, lies Moines, celebrated his eightyth ird b irth d a y W ednesday a t his home a t A nkeny, Iowa. Mr. W agner has been actively engaged in the livestock, fa rm ing and banking business since he became a resid en t of A nkeny, fifty-five years ago. A b irth d ay p a rty and dinner was given fo r him a t his home. H is th ree g rea t grandchildren, Sue and R ichard Shreiber of Des M oines and Law rence Johnson of Cedar Rapids, atten d ed the p arty . TH E N O R TH ER N TRUST COMPANY Capital, Surplus and Undivided Profits $7,500,000 C H IC A G O j J https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis September, 192o New Bank Building W ork has sta rte d on the excavation for the basem ent of the new Iowa S tate Bank a t Jefferson, Iowa, and the con struction, under the supervision of John P. Johnson, will be pushed along as ra p idly as possible. The new stru ctu re will he located on the w est side of the square September, 1926 T II E N 0 R T 11 AV E S l 1 E R N B A N K E R on the lot form erly occupied by the Lyon & Quinn ice cream parlor. The building w ill be 100 feet deep and two stories high, w ith a fu ll cement basem ent. The brickw ork of the fro n t will be m ade of red brick trim m ed w ith a lighter shade. Casem ent windows w ith prism glass a t the top will be installed in the bank room, which will occupy the entire first floor. The second floor will be suitably arranged fo r a num ber of office suites. The entrance to the banking in stitu tio n will be from the southeast cor ner of the building, while the sta irs to the second floor will be a t the north east corner. New equipm ent will be purchased fo r the in te rio r of the bank, among which will be one of the best vaults possible to buy. The lower floor will be of terrazzo, and the fixtures up-to-date in every re spect, and tlie building m odern through out. On V acation Mr. and M rs. Jo h n M cM anus and fam ily have le ft by autom obile on a vacation trip to the lakes of N orthern Iow a and M innesota. Mr. M cM anus is assista n t cashier a t the F irs t N ational B ank in A dair, Iowa. G-oldfield Bank Opens Goldfield’s new bank opened its doors fo r business recently. The directors have made an arrangem ent w ith the banking d epartm ent fo r the purchase of the Citizens S tate B ank building. The nam e of the new bank is the Gold field S tate B ank and T ru st Company of Goldfield, Iowa. I t is capitalized fo r $25,000.00, and sta rts w ith a surplus of $12,500. The bank will be un d er the m anagem ent of the follow ing officers : J. E. R ichardson, president. E. H . F urrow , vice president. J. A. Bundy, cashier. Buys In te re s t in M anning II. A. Boysen in com pany w ith F . J. M iller of B attle Creek has purchased a controlling in te rest in the M anning T rust and Savings B ank, of M anning, Iowa. Mr. Boysen will be presid en t of the institu tio n and M r. M iller has already as sumed the position of cashier. I t was two years ago th a t the M an ning T ru st and Savings B ank was or ganized and already has deposits am ounting to over $250,000. This is the second bank in th a t tow n which has a population of about 1700. Physicians are the cobblers, ra th e r the botchers, of m en’s b o d ies; as the one patches our ta tte re d clothes, so the other solders our diseased flesh.—Ford. How poor are they th a t have not p a tience.— Shakespeare. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A D es M oines C onnection T hat Y ou Can R ely on in E very N eed 99 T II E N 0 R T 11 W E S T E R N B A N K E R 00 MERCHANTS N A T IO N A L * B A N K C E D A R R A P I D S , I O W A “Management Has Reflected Success” T he p resid en t o f a correspondent hank w ith a capital and surplus of $ 6 5 ,0 0 0 , says: “ W e are p leased to ex press our ap preciation o f the sp lend id service w h ich th e M erchants N ation al Bank o f Cedar R apids has at all tim es for upw ards o f tw enty years exten ded to our b ank and its officers. W e feel the need o f this strong hanking in stitu tion for this locality. “ It is our o p in io n that th eir m anage m ent has reflected success in such a m anner as to en title them to the con fidence o f every Iowa hanking house. W e are very p leased to claim th em as frien d and corresp on dent bank."* Resources $15,000,000 Jam es E. H a m ilto n , P re sid e n t P. C. Frick Vice President Mark J. Myers Vice Pres. & Cash E. E. Pinney Vice President S. E. Coquillette Vice President Edwin H. Furrow Vice President E. B. Zbanek Vice President H. N. Boyson Vice President L. W. Broulik Assistant Cashier Roy C. Folsom Vice President Fred W. Smith Assistant Cashier https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis September, 1926 Buy Efficient P ro tectio n Schemes fo r beating bank robbers are extremely p o p u lar these clays. New ones are constantly appearing, and some are given a great deal of publicity before first ascertaining their actual value. Bankers should thoroughly investigate these various devices before spending their good money fo r something th at may he costly and still give inadequate protection. H. F . Luers, vice president of the 0. B. MeClintock Company of Minneapolis, in speaking of this publicity, sa y s: “ The harm in this lies not only in its inducing bankers to waste money on a large variety of worthless devices, but also in its diverting th eir attention from well-tried protective equipment and de ferrin g their investment in something worth while.” “I t sometimes seems as though almost anyone can obtain a h earing on the sub ject of p rotection excepting those of long experience who have made a life long business of i t ; p articu la rly if said anyone has som ething new and novel to offer. . “ Of course because a scheme or device is new is no good reason fo r disregarding it; hut it is certain ly susceptible to analy sis by those who, by reason of experience, should u n d erstan d the case it is supposed to he applied to, and such analysis would seem desirable before one recommends, or purchases. “As th ere are certain well know n op tical illusions, so there are certain m en ta l illusions common in the logic of the protection problem, and it is these illu sions, absolute misapprehensions, which m asquerade as self-evident tru th s, th a t make the peddling of some of these de vices possible. “ There are well established guideposts for the pah t of the protection seeker, if only he can have them identified fo r him. “One of these is, th a t the really d an gerous a tta c k of any kind, upon a hank, is a m a tte r carefu lly planned out in the light of complete in fo rm atio n as to the defense to he encountered. Therefore any defense depending in any degree upon taking the crim inal by surprise, if futile so fa r as the professional is concerned. The defense which is effective in spite of the B u rg lar’s full knowledge and under standing of it, is the Sterling defense. “A nother established, b u t too o ften ig nored, principle, is th a t an y th in g which is designed to in cap acitate the crim inal even b ut tem porarily, is an extrem ely dangerous th in g to have about, as there are always possibilities of sei’ious conse quence, even death, to hank employes and custom ers. A nd do n ot fo rg et th a t the b u rg lar will find out about it beforehand and will he forearm ed, so th a t it is the least dangerous to him, of all concerned. “As a m a tte r of fact, devices of this kind differ from the set gun, prohibited by law, only in degree of probable harm. September, 1926 T HE NOR T U W E S T E R N 101 B A N K E R “ One of the m ost o utstanding axioms in protection is th a t the H um an E lem ent — dependence upon the adroitness, cour age and loyalty of hum an beings—is a vital w eakness in any device or scheme; and therefore its elim ination to the la rg est possible degree is desirable and es sential. “ On the p a rt of the crim inal against whom defenses are raised, it should be rem em bered th a t the w eakest spot in his arm or is his dread of detection, publi city.” TH E GUARANTY LAW (Continued from page 17) or 55 p er cent of the answ ering state banks, who oppose the N ebraska plan, oppose it em phatically, to the point of bitterness. They have seen th e ir profits m elt like snow, and th e ir h ard earned wages go to pay the other m an’s losses. They have seen one com m unity prosper a t the expense of another. “ The m ost pernicious law ever enacted—u n ju s t, iniquitious— c l a s s legislation—tax atio n w ithout rep rese n tatio n —w rong in p rin ciple—unsound economically and ro tte n in o peration” are a few of the m ilder opinions registered by the sta te banks. Say Law Is a F arce T hat the law encourages incom petent and even dishonest banking, is pointed out by alm ost all of the 220 sta te bankers who say the law is a farce. I t is a political panacea, and never in a thou sand years can be divorced from politics, say others. In stea d of aiding N ebraska business, it has w eakened the financial stru c tu re of the sta te to a degree where the G uaranty F u n d is absolutely insol vent a t the p resent tim e, say others. A num ber of sta te bankers w rite in to say th a t while it has given N ebraska a “story no other sta te can tell,” it has in reality When in CHICAGO E n jo y y o u r s ta y — a t th e n e w MORRISON HOTEL T a lle s t in th e W o rld 46 S to r ie s H ig h Closest in the city to offices, theatres, stores and railroad stations 1944 O u ts id e R o o m s Each with bath, running ice water and servidor L o w e st R a te s W rite or w ire f o r rese rv a tio n s https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis PROGRESSIVE Im stitution founded up' on thirty one years of sound, c o n s e rv a tiv e b an k in g practice GRANT M cPH ERRIN President T H E OLD R E L IA B L E C entral State Bank OF DES MOINES Banking, T ru sts and Investm ents Safe D eposit V a u lts M e m b e r Federal Reserve S y s t e m T O T A L R E S O U R C E S O V E R N IN E M IL L IO N 102 TH E N O K T II W E S T E R N B A N K E R Preventing Farm Slumps (Little Talks on Tiling, No. 20) ANALYSIS of official records over a period of 36 years shows that the general farm in come drops in those years hav ing either abnormally heavy or light rainfall. This is because either an excess or a shortage of rain reduces crop yields. But the experience of thousands of farmers shows that they get consistently large yields from tile-drained lands, whether the season is wet or dry. Thus the owners of tile-drained lands do not suffer these periodic slumps in their income which work such hardship on the owners of untiled land. Tile Drainage Insures Large Yields And So Prevents Farm Income Slumps Mason City Brick and Tile Company 312 Denison Bldg. Mason City, Iowa A C o m p le te B a n k in g S e rv ic e The Midland Bank offers exceptional facilities for the transaction o f banking business o f every description. Together with its affiliations it operates 2,2$o branches in Great Britain and Northern Ireland, and has agents and correspondents in all parts o f the world. The Bank has offices in the Atlantic Liners Aquitania, Berengaria and Mauretania, and a foreign branch office at 196 Piccadilly, London, specially equipped for the use and convenience o f visitors in London. M ID L A N D BANK LIMITED HEAD OFFICE: 5 THREADNEEDLE STREET, LONDON, E.C.2 Affiliated B an k s: Belfast Banking Co. L td., N orthern Irelan d ; T he Clydesdale Bank L td., and N orth o f Scotland Bank L td ., Scotland THE STATE CENTRAL SAVINGS BANK KEOKUK, IOWA C ap ital .......................................................................................................................... $ 200,000.00 S u rp lu s and U n d ivid ed P ro fits ........................................................................ 329,574.16 D e p o sits ........................................................................................................................2,803,196.77 W I L L I A M I . O G A X , P r e s id e n t L. J. M O N T G O M E R Y , V i c e P r e s i d e n t A S A P H B U C K , V i c e P r e s id e n t C. J. B O D E , C a s h i e r A L V I N K R A F T , A s sis ta n t Cashier L. J, W O L F , A s s i s t a n t C a s h i e r :: ACCOUNTS https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis OF BANKS AND BANKERS IN V IT E D :: September, 1926 given her a sto ry no other sta te would desire to te l l ! H ere is one reply from a sta te banker, typical of all the replies of the 55 per cent who oppose the principles and o per ation of the law. (The banker in ques tion is If. A. G uthm ann, cashier of the B ank of M urdock, N ebraska, who s a y s : “Ours is a sta te bank, operatin g u nder the G uaran ty law, and I have no objec tion to your using my nam e.” ) H e adds: ‘ ‘ The Guaranty Law, in my opinion, based on operating a hank before, and ever since this law was passed, is a very iniquitious piece of legislation, forced upon the bankers of this state by a thoughtless and incompe tent legislature. The law was placed upon our statute books, without giving the hank ers an opportunity to be heard on same, except in a meager way. The thing was over and done before we realized what was actually happening. The idea of the Guar anty Fund was, of course, obtained from the publicity of the Oklahoma Guaranty law, which was heralded as something wonderful. " I t will either be repealed, or greatly modified, or go the way the Oklahoma law went. The principles of these so-called Guarante of Deposit laws, are fundamentally unsound, and cannot stand the acid test for long. ‘ ‘ I would advise any and all states to shun the guaranty of deposit laws, unless they want to pay depositors out of a fund accumulated by general taxation of all prop erty. Such laws drive competent, worthy, substantial men out of the banking business, as has often been the case in Nebraska. I f they must have a guaranty law, have it cover only checking accounts, which bear no in terest. But first and last, do not let such a law be enacted in your state. ‘ ‘ I t has caused the chartering of six banks in our county, which already had too many banks; has caused acute competition, bidding for business on strength of the guaranty law, and not on soundness of the soliciting bank. I t makes for reckless banking, gives the weak banker the opportunity to truthfully state that his depositors are as safe as in any bank. Which they are, until the guar anty fund blows up, which will come in time. ’ ’ P red icts B an k ru p t F u n d H ere is an in te restin g opinion from a state b anker who says th a t while he be lieves the principle of the g u ara n ty law is all right, and although it has p aid every loss in fu ll, he th in k s the fu n d will in time he know n as a b a n k ru p t fund, ineapable of paying all losses and will doubtless be repealed. H e s a y s : " I n my opinion the fund appears to have been in a bankrupt condition for several years. A law placing the assessments upon the people by taxation, might do the busi ness, and certainly be more fair than to make the capable, and honest bankers pay for the poor and crooked work of the incapable and dishonest bankers. " N o other state should pass such a law. Taxation to pay the losses, or else bank bonds in reliable companies. But never one like ours. " I would drop out from under tomorrow September, 1926 THE N 0 R T H W ES TE RN RANKER m o rning if I could. W ould g lad ly risk any possible losses in deposits. T h in k deposits come to th is b a n k because its officers are know n as honest. Can nam e you m any b a n k ers who w ould drop out a t once, risk in g any possible d rop in deposits. Can see no effect on th e com m unity. I f I desired to ste al fro m th e ban k , d e fra u d a n d g e t aw ay w ith its m oney, th e w orking of th e law sure would help m e do it. P eople w ould sta y w ith me anyw ay, know ing th e g u a ra n te e law would p a y them , so why re p o rt me or q u it the b a n k ?’’ Advises Other State Bankers A nother sta te banker sends in his opinion as follows, sta tin g th a t while he does not w ant his nam e used w ith it, “this is fo r the inform ation of your state bankers “ I t is fu n d a m e n ta lly w rong to m ake a m an or set o f m en p a y debts, for^w hich th ey a re no w ay responsible. I t has been said th e g u a ra n te e law sta b ilize d business in N e b ra sk a. J u s t as tru e , to a la rg e degree, th a t i t b ro u g h t in a lo t o f poor b a n k ers w hich la rg e ly offset th e sta b iliza tio n . “ T he N e b rask a G u aran tee L aw is a d m in iste re d b y th e sta te , w ith th e re su lt th a t p o liticia n s m ake i t a p o litica l fo o tb all, in th e w ay o f p a tro n a g e . The conservative sa fe b a n k ers o f th e s ta te have to p ay the bills. T h a t bein g tru e , th e g u a ra n te e law should n o t be ru n by th e p o litica l bunch in pow er, b u t by th e b an k ers them selves. “ T here is a very stro n g fe elin g am ong the conservative b an k s wdtli s ta te c h a rte r, th a t th ey w ill a b an d o n th e ir s ta te c h a rte r an d ta k e a n a tio n a l c h a rte r, unless th e sta te b an k ers can have m ore to say a b o u t th e con d u ct of th e g u a ra n te e fu n d . “ T here are a good m any banks who have p a id out A L L of th e c a p ita l stock to the g u a ra n te e fu n d . T his b a n k has p a id out a b o u t 75 per cent o f c a p ita l stock. T here w ill be a determ ined effort fo r re lie f th is nex t leg isla tu re , to g e t the g u a ra n te e fu n d out of politics, or th e b e st b an k s w ill tak e n a tio n a l c h arters, a n d th e g u a ra n te e fu n d will fa ll by its own w eight. T here were m any fine th eo ries ad vanced a t inception o f the g u a ra n te e law , w hich did n o t w ork out in p ractice. ’ ’ What Outcome? Question No. 2: “W hat do you think will be the eventual outcome of the p la n ” brings some in te restin g comment, both from the 180 sta te banks th a t favor the law, and the 220 sta te banks who are opposed to it. This question, of course, involves m erely a m a tte r of opinion, and since it is quite generally agreed among N ebraska bankers th a t the g u ara n ty plan is still in an experim ental stage, no m a t ter how strongly some adherents fight this idea, one m an’s opinion is as good as another. Of the 180 sta te banks th a t favor the law, about 75 per cent of them say they are confident the law will w ork out suc cessfully and th a t the fu n d will pay out in five years or less. Some of them even p redict th a t its operation will become better, year by year, p articu la rly as a g ri cultural conditions become b etter and https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis “The important part o f any banking business is the individual service rendered ” Iowa National Bank Davenport, Iowa 103 THE 104 NORTHWESTERN BANKER 1926 1876 Ask Your Banker Friends what they think about the Consolidated National Bank of Dubuque. Iowa bankers recognize this institution in the Dubuque territory. For 49 years the Consolidated has been serving Iowa banks and bankers. Your account here will receive the most care ful attention at all times. J. K. Dem ing, P resid en t Geo. W . M yers, V ice P resid en t Jas. M. Burch, V ice P resid en t Herm an E schen, Secretary Jos. W . M eyer, Cashier Consolidated National Bank UNITED STATES DEPOSITORY DUBUQUE, IOWA SOUND BONDS FOR BANK INVESTMENT The First National Company of Iowa Hanford MacNider, President MASON CITY Security Building Cedar Rapids https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Valley National Bank Building Des Moines September, 1926 business more stable. A m oderate p er centage, however, feel th a t there are a num ber of changes yet necessary before they will h azard a guess as to the suc cessful outcome of the plan. There are even some who fav o r the law very much, yet are dubious as to its final outcome. H ere are a few of the “guesses” made by the favorable 45 per c e n t: “H aving stood the te st of five years, the N ebraska law will continue to operate.” “W e be lieve the plan will become stro n g er and stro n g er in N ebraska, and would recom mend th a t o th er sta te s adopt the p lan .” “ We believe the plan is here to stay, but a bad fe a tu re of it is the inducem ent offered to members of the G uaran ty Com m ission to close banks in order to tra n s fe r th e ir salvage into th eir own in stitu tions. To tak e the supervision of b ank ing out of the hands of sta te officers and place it in group of bankers (to get it out of politics) is like jum ping into the lake to get out of the ra in .” The 220 sta te bankers who oppose the law, are not so prone to qualify th eir predictions as to its outcome. Almost to a m an they p red ict its complete col lapse, in the very n ear fu tu re . They say th a t it is b uilt on a “fa k e ” foundation, and th a t it w ill require only tim e to see its com plete dow nfall. Few of them even believe th a t heroic m easures applied to its m ethods of operation, can pull it through, and they are convinced th a t the “sto ry ” N ebraska will eventually tell will be a rep etitio n of the disastrous ex periences of other states th a t have a t tem pted to p u t over a g u aran ty plan. H ere are some of th e ir comments on this q u e stio n : “ The G u aran ty F u n d commission has been ru n n in g the bank here fo r so long and refu sin g to pay the depositors in full, th a t people will eventually lose con fidence in it and the m easure will be re pealed.” “W e shudder when we contem plate the final outcome. No sane man will say the p resen t conditions will con tinue much longer. S tate banks simply cannot meet the assessm ents and make a profit a t the same tim e and we all know th a t a business will not survive long w ith out profit. B ut how to ‘unscram ble’ the situ atio n is a problem th a t none of us knows. C ertainly we would not recom mend a sim ilar law fo r any oth er sta te .” “I th in k the law m ust be greatly amended or we shall live to see even g rea ter finan cial d isaster in N ebraska.” “ The law m ust be abandoned at once.” “The fund is already hopelessly insolvent and we are p ouring our money down a well.” “ The principle of the whole th in g is so ro tten th a t the law cannot long endure.” A nother b an k er w rites: “ The outcome of the plan is very doubtful. Ten years w ithout a general crop failu re or finan cial stringency and the law n rg h t su r vive, b ut a t presen t it sim ply could not w ithstand eith er.” September, 1926 T II E NO R ï II W E S T E R N B A N K E R 105 Service and Security A continue to hold the ac^ counts of Iowa banks and bankers, as they have done for over fifty years. See us when you come to Des Moines. C om bined R esou rces O ver $ 2 8 .0 0 0 . 0 0 0 . 0 0 OFFICERS Homer A. M iller Clyde E. Brenton H. T. B lackburn Geo. E. P earsall A lbert J. R obertson J. R. Capps R. L. Chase, Jr. Jam es F. H art J. Burson Sherman W . Fow ler President V ice Pres. V ice P res. V ice Pre». V ice P res. Cashier A sst. Cash. A sst. Cash. A sst. Cash. A sst. Cash. DIRECTORS Geo. N. A yres H. T. B lackburn Clyde E. Brenton H ow ard J. Clark Gardner Cowles J. H . Cownie E. C. F inkbine J. B. Green Wm. C. Harbach F. H . Luthe M. M andelbaum H om er A. M iller Geo. E. P earsall Kalph H. Plum b M. Sh loss E. R. S totts O. H. Thom pson G. M. Van Ever* Io w a National bank D e s Moines Savings Bank and Trust Company Iowa's Largest Bank ~ Des Moines - Sixtk and Walnuc https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 106 TH E A n other banker d e c la re s: “I f all the banks of N ebraska whose capital stock has been lost by excess loans were to be closed, I th in k a very serious situation would im m ediately arise. I cannot see an y thing in the fu tu re fo r the fu n d ex cept th a t it will be repealed. Unless some m aterial change is made, I look fo r the law to be stricken from the books w ithin the next five years.” Advice to O ther S tates The N o r t h w e s t e r n B a n k e r feels that of g rea test im portance of all the answ ers to the whole situation, are the answ ers to Question No. 3: “W ould you advise other w estern states to adopt a sim ilar N O K T JL W E S T E R N B A N K E R law ?” The N ebraska plan was la st year given serious consideration by th e Iowa legislature, it is being talk ed of in M in nesota, and as the resu lt of the u n fo r tu n a te volume of bank failu re s the p ast few years, will be the subject of political debate in the middle w est fo r years to come. In th a t event, certain ly no legis la tu re should overlook g ettin g from N e b raska state bankers, th e ir advice on the adoption of a sim ilar law. Several m idw estern politicians have publicly stated th a t the N ebraska state bankers, alm ost to a man, urge other states to adopt a g u ara n ty plan like theirs. The N orthw estern B anker questionnaire proves beyond the shadow of a doubt th a t th is statem ent is u ntrue. S ixty p er cent of the replies w arned other states th a t they should not attem p t such legislation, 10 p er cent of the re plies states th a t no oth er sta te should 5% F a r m September, 1926 adopt a sim ilar p la n unless im p o rtan t changes were m ade in its principles and operation, only 10 per cent openly a d vise oth er states to adopt the N ebraska plan, while 20 p er cent of the state bankers failed to answ er the question, or h azard an o p in io n ! Of the 60 p er cent of all the state bankers who urged th a t no other state adopt a sim ilar law, here are some ch aracteristic re p lie s : “I would not advise any other sta te to adopt such a law, unless the good banks w ant to play ‘S an ta Claus’ fo r m ism an agem ent and insolvencies.” “I would not advise any o th er w estern sta te to adopt a sim ilar law .” “Do not adopt our plan or any like it.” “I certainly would not recommend such a law to any sane legis la tu re.” “No o th er sta te in its rig h t senses, w ill indulge in the g u aran ty ‘spree’, fo r it is bad banking both fo r the Lo a n s 5% R E F IN A N C E Y O U R L O A N S N O W W H IL E R A TE S A R E C H E A P P W E A LS O M A K E C IT Y L O A N S IN DES M O IN E S D A V E N P O R T , C E D A R R A P ID S , IO W A C IT Y C L IN T O N , B U R L IN G T O N e a r so n H o t e l O n th e near N orth Side C H IC A G O M idland D ES M O IN E S O F FIC E 555 SEV EN T H S T R E E T DE S MO IN ES , IOWA M ortgage ompany C E N T R A L IOW A O F F IC E C E D A R R A P ID S , IO W A F . C . W A P L E S P r e s id e n t C L I F F O R D D E P U Y . V ic e P r e s id e n t R . S S I N C L A I R , , V ic e P r e s id e n t I N G R A M B I X L E R . V ic e P r e s id e n t H E pleasure of your Chicago visit will be heightened if The Pearson is selected as your stopping place. It is located ju s t outside of the business, th e atrical and shopping d istrict, yet w ithin p leasant w alking distance; its m oderate rate s, unexcelled equipm ent and service, notably good and reasonably priced food, all m ake it a perfect base for opera, concert, th e atre and shop ping expeditions. A 300-car fire proof garag e is close by. C 220 T H I R D A V E . “T ' R. J . S O E N E R S e c r e t a r y T r e a s u r e r R U S S E L L D . C O L E A S S IS T A N T S E C Y . R . H . M E M El E R , A S S IS T A N T SE C Y . P. T . W A P L E S . M g k W e s t e r n O f f ic e T S E N D T O D A Y FOR ILLUSTRATED FOLDER The Pearson is a block east of the intersection of Pearson Street and N orth Michigan Boulevard. Rates for one person are from $3.50 to $5.00 a d a y : for tw o $5.00 to $7.00; tworoom suites $10.00 to $14.00. Every room and suite with private bath. A t y o u r service in E astern Io w a and W e ste r n Illin ois CLINTON, IOWA. PEOPLES T RUST & SAVINGS BANK Remember i t this v / a y -“PEOPLES TRUST https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis September, 1926 TH E b a n k s a n d f o r th e p u b lic .” “ Y o u p e o p le in IoAva a n d M in n e s o ta a r e in f a r b e tt e r f in a n c ia l s h a p e t h a n w e in N e b r a s k a , a n d y o u d o n ’t re a liz e i t . ” “ N o o th e r s t a te w h o se b a n k s a r e b n th e m id d le o f th e s t r e a m ’, a s m o s t b a n k s a r e n o w , c a n a f f o r d to a d o p t s u c h a p l a n .” “ I w o u ld n o t Avish s u c h a c a la m ity o n a n y o t h e r s ta te , u n le s s th e Avhole b u r d e n is c a r r i e d by s t a t e t a x a t i o n . ” “ N o o t h e r s t a te is j u s t i fied in p a s s in g s u c h a laAV. I t is u n s o u n d in p r in c ip le s a n d in th e e n d th e p u b lic m u s t p a y th e f r e i g h t . ” The 10 per cent Avho openly advise other states to adopt a similar laAV, merely answer the question in the affirmative, with no comment that public confidence must be purchased, no matter hoAv dearly. The ten per cent Avho advise other states to adopt such a laAV with certain im portant changes, make such suggestions as these: “Take the plan out of politics and put this plan in complete charge of the state bankers Avho must pay the cost.” “Clean un the bad banks before trying our plan.” X O R T II W E S T E R N B A N K E R 107 Genuine Courtesy H ere at the “ S ecu rity S tate” w e d elig h t in d oin g little th in g s fo r others, th in gs p erhaps trivial in th e m selv es b ut w h ich do m ore to m ake p e o p le hap p y than you can thin k of. If w e do so m eth in g to m ake life a little easier, a little b righ ter and m ore en jo y a b le for som e on e, w e fe e l that w e h ave tru ly a cco m p lish ed the w o rth w h ile in our d aily w ork. You, too, will like banking the “Security State” way SECU RITY STATE BANK KEOKUK “W here B anking Is a Pleasure” IOWA Im possible in IoAva The Avriter, mt erviowing many Ne braska state bankers in person, asked them this question in particular: “Would you advise IoAva, for example, to adopt your plan?” The responses were usually quick and to this effect : “No, and IoAva could not adopt it if it Avere necessary, for your state has already done most of its house cleaning of the Aveaker banks, and to adopt our plan now would Avreck a number of your banks that will eventually pull through unless Aveakened further by the assessments a guaranty laAV Avould place upon them.” Q u e s tio n N o. 4, “ H oav h a s th e G u a r a n t y LaAV a ffe c te d y o u r b a n k a n d y o u r c o m m u n ity ? ” b ro u g h t a n u m b e r o f i n t e r e s t i n g re p lie s , b o th f r o m s t a t e a n d n a tio n a l b a n k e r s . I n th e n a t u r e o f c o m m e n t, a n u m b e r o f th e s e l e t t e r s a r e p u b lis h e d in t h is a n d folloA ving is s u e s , on b o th sid e s o f th is q u e stio n . T o su m u p th e re p lie s to th is q u e s tio n n a ire , a n d to a n a ly z e th e in te r v ie w s th e w r i t e r h a d AA7i t h a n u m b e r o f N e b r a s k a b a n k e r s , h e r e a r e so m e c o n c lu s io n s t h a t w ill i n t e r e s t e v e ry N o r t h w e s t e r n B a n k e r re ad e r: (1) The N ebraska guaranty laAV is the best g u ara n ty plan yet devised by any state, differing from the others in its broaders provisions and powers. (2) The N ebraska g u ara n ty law can not yet be classified as a failure, because N ebraska sta te bankers hav7e applied such heroic trea tm e n t to m ake it a success and have fought off so m any obstacles in its p ath th a t it is still rendering service to the state. ■ (3) N ebraska bankers, in general, feel th a t the plan is an excessive burden on sta te banks, and th a t since the public deiw es its real benefit, the public, and https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis T h e sp irit of frien d lin ess w h ich p revails th r o u g h out th e F irst N a tio n a l o r gan ization is th e sam e now as it was sixty-tliree years ago, w hen th e hank w as esta b lish ed . T od ay w e are b elter eq u ip p ed than ever b efore to give Iow a banks our frie n d ly — an e f ficien t— co o p eration . O F F IC E R S A .F. D A W S O N , JOE R . L A N E , IRVIN J.C R E E N , C .F S C H M ID T , P.A.TORNQUIST, P r w id p n t V.Prpyidcnt C a /'h ip r Asst Cashier A m Cashier FIRST NATIONAL RANK DAVENPORT. IOW A T II E 108 not the banks, should in some way stand its terrific cost of operation. (4) The N ebraska g u ara n ty law has imposed upon sta te banks the most sta g gering financial burden in th e ir history, m any predicting th a t w ithin five years, a t th e maximum, the law will have cost them as much as the total capital and su r plus of all N ebraska state banks. (5) More than half the N ebraska state banks, and alm ost every national banker, is opposed to the N ebraska plan both in “principle and operation.” ( 6 ) More th a n h alf the state bankers p red ict th a t the law will eventually go into the discard, either voluntarily or involuntarily. (7) Sixty p er cent of all the state banks in N ebraska w arn other states not September, 1926 N O li T II W E S T E K N B A N K E R to attem p t enactm ent of a g u ara n ty law sim ilar to the N ebraska plan, only 10 per cent advise o th er states to adopt it, the rem aining 30 per cent eith er advise adoption of the plan w ith im portant changes, or are noncom m ittal on the sub ject. E d itor’s N o te :— T h is is the first -of a series of a rticles on the N eb rask a G uar anty Law, that w ill appear in the N o rth w estern B anker. A n oth er article w ill appear in the O ctob er issu e. H e r e ’s a good h ot w e a th e r sto r y th a t is a tru e story of two men and a girl and the g allan try th a t made S ir W alter R a leigh fam ous. I t was one of those zero mornings in Ja n u ary . The city streets were a sheet of ice. A young and comely woman attem p ted to board a street car. She slipped and spraw led, not gracefully. A n am bitious young banker rushed to her rescue. The ice proved equally treacherous fo r him. H is head struck the pavem ent and he was knocked un conscious. A second man made an a t tem pt to perform a double rescue. He likewise slipped and broke the bones of his w rist. M eanwhile, the young lady boarded th e stree t car and disappeared while doctors were settin g bones and re viving the unconscious. F o r verification of our sto ry we would re fe r you to H ow ard F uller, vice president of the Iow a Loan and T ru st Co., Des Moines. The head best leaves to the h eart w hat the heart alone divines.— Alcott. “ROLL OF HONOR” BANKS It is an honor to be listed among the Honor Roll Banks. It indicates that the bank has Surplus and Undivided Profits equal to or greater than its capital. Such distinction is accorded to the banks listed on this page. By careful management and sound banking they have achieved this enviable position. These banks will be especially glad to handle any collections, special credit reports or other business in their communities which you may entrust to them. Correspondence is invited. IOWA Bank Town Davenport Ft. Madison Lake Mills Little Rock Capital Union Sav. Bk. & Tr. Co. Lee County Sav. Farmers State First National Surplus and Profits Bank Town Monticello $1,250,000 $1,250,000 Soldier 56.000 Wallingford 50.000 38.000 Waterloo 25.000 26.000 25.000 Monticello State Soldier Val. Sav. Farmers Sav. Pioneer National F IR S T N A T I O N A L B A N K , D IR E C T O R S B. F SWISHEK Pickett, Swisher Sc. Farweli R. J HOXIE Secretary Waterloo Fruit & Commission Co. A. M. PLACE Vice President E. E. PEEK Vice President Waterloo Bldg. & Loan Association. H W GROUT Real Estate 0. A MARSH President C ÿ ia r tp r 'p c î / â S S https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis THE First National Bank of Wat, rloo ii 1 equipped to give you the highest degree of SERVICE, and do it promptly and efficiently at all times. Fifty-eight years of steady con servative growth enables this bank to extend such service. O F F IC E R S C. A. MARSH, President A. M. PLACE, Vice President WILL A. LANE, Cashier P W. EIGHMEY, Assistant Cashier O. L. MORRIS, Assistant Cashier T o ta l R esou rce« Ovpr Capital $ 2 .9 0 0 .0 0 0 0 0 $ Surplus and Profits $ 225,000 28,991 35,000 15,000 2 0 0 ,0 0 0 2 0 ,0 0 0 2 0 0 ,0 0 0 W a t e r l o o , ! ,owa D IR E C T O R S W. W. MARSH President Iowa Dairy Separa tor Co., President Associated Mfg. Co. J. T. SULLIVAN Lawyer. J. O. TRUMBAUER Vice President Farmers Loan and Trust Co. H A. MAINE President H. A. Main« Sc Co. WILL A. LANE Cashier 2 1 0 ,0 0 0 THE •September, 1926 NORTH WESTERN 109 BANKER INDEX TO ADVERTISERS A Page A m e r i c a n B o n d & M o r t g a g e C o ............ 48 A m erican C o m m ercial & S av in g s B a n k ............ ...................................................... 31 A m e r i c a n E x p r e s s C o m p a n y .................. 5 B B a k e r - K e l l o g & Co., I n c ............................. B a n k o f A m e r i c a ............................................. B a n k e r s T r u s t Co., D e s M o i n e s .......... B a r t l e t t & G o r d o n , I n c ................................ B o l d t , A. J . & C o ................................................. B r o k a w & C o ........................................................ B r o w n , C r u m m e r C o ....................................... 69 45 97 63 71 62 65 Page 2 F i r s t N a t i o n a l B a n k , O m a h a ............... F i r s t N a tio n a l B a n k , S io u x C i t y . . . . 2 F i r s t N a t i o n a l B a n k , W a t e r l o o ........... 108 F i r s t N a t i o n a l C o ...............................................101 F i s h e r Co. ............................................................ 52 F o r m a n , G e o . M. C o ........................................ 66 F o r e m a n N a t i o n a l B a n k ........................... 51 F o s h a y , W . B. C o ................................................ 103 G G e n e r a l M o t o r s A c c e p t a n c e C o r p .......... 71 G l o b e & R u t g e r s , N e w Y o r k .................. 74 G u a r a n t y L i f e I n s u r a n c e C o ................... 79 C n D e s M o i n e s D u p l i c a t i n g C o ....................... 106 D e s M o i n e s L i f e & A n n u i t y C o ............... 80 D e s M o i n e s N a t i o n a l B a n k ....................... I l l D e W o l f & Co., I n c ............................................. 68 D i m e S a v i n g s B a n k , D e t r o i t .................. 43 D o h e r t y , H e n r y L. C o ..................................... 64 D r o v e r s N a t i o n a l B a n k ............................ 94 E E v a n s . “C h ick " ............................................... H a ’s e y S t u a r t & C o ........................................ H a n n a , W . D ......................................................... H a n o v e r N a t i o n a l B a n k . . ....................... H a r t P a r r C o m p a n y ..................................... H o a g l a n d , A l l u m & C o ................................ 56 70 90 83 72 1 I l l i n o i s - M e r c h a n t s B a n k .......................... 112 I n d u s t r i a l A c c e p t a n c e C o r p ..................... 85 I n t e r n a t i o n a l L i f e I n s u r a n c e C o .......... 78 I o w a L o a n & T r u s t C o .................................. 99 I o w a N a t i o n a l B a n k , D a v e n p o r t ........... 103 I o w a N a t i o n a l B a n k , D e s M o i n e s . . . .1 05 I o w a N a t i o n a l F i r e I n s u r a n c e C o .. . . 9 J o h n H ancock M u tu al L ife In s u ra n c e C o ................... SI K o e p p e , L a n g s t o n , L o p e r & C o .............. 73 L L a n e , R o l o s o n & C o ........................................ 7 3 L i v e s t o c k N a t . B a n k , O m a h a .................. 89 L i v e s t o c k N a t . B a n k . S i o u x C i t y .......... 85 2 F e d e r a l S u r e t y C o ............................................ 35 F i d e l i t y T r u s t Co., D e t r o i t ....................... 40 F i d e l i t y T r u s t Co., N e w Y o r k C i t y . . 46 F i r s t I l l i n o i s C o ................................................ 53 F ir s t Io w a S tate T ru s t & Sav in g s B a n k ................................................................... 28 F i r s t N a t i o n a l B a n k , C h i c a g o ..................... 8 F i r s t N a t i o n a l B a n k , D a v e n p o r t . . . . 107 F i r s t N a t i o n a l B a n k , M a s o n C i t y . . . . 38 M c C l i n t o c k , O. B. C o ..................................... 91 M a s o n C i t y B r i c k & T i l e C o ....................... 102 M e r c h a n t s N a t . B a n k .................................... 100 M i d l a n d B a n k , L t d .......................................... 102 M i d l a n d M o r t g a g e C o ..................................... 106 M i d l a n d N a t . B a n k ........................................ 92 M i s s o u r i S t a t e L i f e I n s u r a n c e C o . . . . 81 M i t c h e l l , H u t c h i n s & C o .............................. 67 M o r r i s o n H o t e l ................................................... 101 M u t u a l T r u s t L i f e I n s u r a n c e C o .......... 78 “ A C A S H IE R 'S C H E C K ” for $ 3 .0 0 is all th a t is required to secure th e m onthly visits of the N orthw estern Banker for an entire year. E ach issue contains from 1 0 8 to 2 0 0 pages of m ighty interesting m a tte r pertaining to h a n k s and banking interests in th e territo ry covere dby th e magazine. “ O U R C O R R E S P O N D E N T S .” Every b ank in th e northw est is in vited to a place on this list. Send us item s of local interest, tell us about your bank and its grow th, prospects, etc., also any other financial news of in terest to bankers in your section. W e are always glad to head from our friends. “ S IG H T D R A F T S .” W e always carry a large “ Reserve” of good will an d additional service, and will prom ptly honor d rafts m ade upon same by any bank. This departm ent is for your special benefit. I t may be m ade of very great benefit to your bank. Do n o t fail to avail yourself of its privileges. “ A C L E A R IN G H O U S E .” O ur columns are a clearing house for all our readers. Express your v is ? on any topic of in terest to https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 86 P e a r s o n H o t e l ...................................................106 P e o p l e s T r u s t & S a v i n g s B a n k .............106 P h i l a d e l p h i a - G i r a r d N a t i o n a l B a n k . . 46 P i o n e e r N a t i o n a l B a n k .............................. 26 P o licy h o ld e rs N a tio n a l L ife I n s u r a n c e C o ................................................................ 79 P o l k , H a r r y & C o ............................................ 69 P r i e s t e r , Q u a i l & C u n d y ............................ 68 It R o l l o f H o n o r B a n k s ...................................... 108 R o y a l U n i o n L i f e I n s u r a n c e C o .......49, 77 S S e a b o a r d N a t i o n a l B a n k ............................ 7 S e c u r i t y S t a t e B a n k .................................... 107 S o u t h e r n S u r e t y C o ......................................... 70 S o u t h F l o r i d a M o r t g a g e C o ................... 92 S t a n l e y , H e n d e r s o n C o ................................ 92 S t a t e B a n k o f C h i c a g o ................................ 47 S t a t e C e n t r a l S a v i n g s B a n k ..................... 102 S t e r n , L a w r e n c e & C o ................................... 66 S t o c k Y a r d s N a t . B a n k . C h i c a g o .......... 89 T T h o m p s o n , R o s s & C o ................................... 57 T r u e , W e b b e r C o ............................................... 61 IT M E O O m a h a N a t i o n a l B a n k ........................... P »4 C e d a r R a p i d s N a t i o n a l B a n k .................. 32 C e n t r a l S t a t e B a n k ......................................... 101 C e n t r a l T r u s t Co. o f 111............................... 48 C h a p m a n , P. W . & C o ..................................... 60 C h a s e N a t i o n a l B a n k ................................... 90 C h a t h a m P h e n i x N a t i o n a l B a n k .......... 96 C h i c a g o T r u s t C o .............................................. 72 C i t y N a t i o n a l B a n k , C l i n t o n .................... 39 C l a s s i f i e d A d s .................................................... 82 C o m m ercial N atio n al B ank, W a t e r l o o ...................... 36 C o n s o l i d a t e d N a t i o n a l B a n k ...................104 C o n tin e n tal & C o m m ercial N atio n al B a n k s ......................................................................44 \ Page N a t i o n a l B a n k o f t h e R e p u b l i c .......... 50 N a t i o n a l C i t y C o ............................................... 58 N a t i o n a l L i f e A s s o c i a t i o n ....................... 79 N a t i o n a l P a r k B a n k ...................................... 88 N o r t h A m e r i c a n N a t . L i f e I n s . C o .. . . 76 N o r t h e r n B a n k N o t e C o ................................ 101 N o r t h e r n T r u s t C o .......................................... 9S N o r t h w e s t e r n N a t i o n a l B a n k ................. 3 U n i o n T r u s t C o ................................................. 25 V V alley N a tio n a l B an k . . . .......................... 2 W W e s s l i n g S e r v i c e s ........................................ 6 W h i t e - P h i l l i p s C o ............................................ 54 W h e r e t o B u y ..................................................... 82 W o l l e n b e r g e r & Co. . . . . . . . ' .................... 59 th e banking fratern ity an d sum bit same for publication. You do n o t have to agree w ith us, or w ith anyone else. W e learn things by a n interchange of ideas and people w ith whom we disagree often prove valuable teachers. W e shall be glad to hear from you. NO P R O T E S T ” h as ever been offered to th e statem e n t th a t th e field coverd by th e N orthw estern B anker is th e money-producing tfi* section of th e A m erican co n tinent, rich in hogs, cattle, corn, etc., an d do tted w ith thousands of prosperous banks, all doing a good business, an d th e m ajority of them are readers of “ The N orth w estern.” “ S U R P L U S A N D U N D I V I D E D P R O F I T S ” increase very rap idly w ith those banks whose advertisem ents appear regularly in th e columns of th is magazine. F u ll in form ation as to rates and our special service will be prom ptly furnished on appli cation. Your business solicited and appreciated. T he “ Bankhas been tw enty-nine years in its present field. 110 T H E N 0 R T I I AV E ¡8 T E R N B A N K E R September, 1926 9 And R ath er G reasy H im : “Ho you believe th a t a bird in the hand is w orth two in the bush ?” O ther H im : “I don’t know, but it sure is bum table m anners.—D etroit News. A t L ast “W h at did fa th e r say when you asked him fo r m e?” “H e d id n ’t say anything. H e fell on my neck and w ept.” Some D ay F a th e r: “I'm sorry, my boy, but I only punish you because I love you.” Son: “I ’m sorry, dad, that I ’m not big enough to retu rn your love.—-Answers. H oney F lavor D ruggist: “ Yes, miss, you’ll find th a t most ladies like this lipstick.” Young G irl: “You couldn’t—ah— tell me the kind the men like, could yo u ?” You H eard Me Voice of the telephone o p era to r: “I have your p arty . D eposit ten cents, please.” Souse at p ay statio n : “W hazzat?” O p erato r: “Please deposit your money.” S o u se: “Listen, girlie, w at I w an’s co-versa-shun from a fre n ’, not f ’nancial advice from a stran g er.— New York Journal o f Commerce. No, D ear W illie (observing leopard a t zoo) : “Mama, is th a t the dotted lion the in su r ance m an was telling you about when he loaned you his fo u n tain p en ?” T ry and F in d ’Em H u b : “You are ex trav ag an t. You spend money fo r unnecessary clothes.” W ife : “A bsurd! U nnecessary clothes are jio t in fashion.”-—New Y ork Times. She DecLned . Sim pson gallantly escorted his Boston hostess to the table. “M ay I ,” he asked, “sit on your rig h t hand ?” “No,” she replied, “I have to eat w ith th at. You’d b etter take a chair.” M ixed w ith W ater and There You A re “W aiter, this coffee’s like m ud,” ex claim ed the custom er. “I ’m not surprised, s ir; it was ground this m orning,” was the un p ertu rb ed reply. W om an S till P ays and P ays O’B ry a n : “By golly, I ’m tired to n ight.’ M rs. O’B r y a n : “ There you go a g a in ! You’re tire d ! H ere I be standing over a hot stove all day and you w orking in a nice, cool sewer.—-Exchange. H e S tu ttered , Too Three stran g ers were in the P ullm an smoker, when one of them tu rn ed to a n other and a s k e d : “How f-r-r-ra r is it t-t-to P -P -P -P ittsb u rg h ?” The m an addressed made no reply, but got up and le ft the car. The stu tte re r then tu rn ed to the th ird man, who gave the inform ation. A few m inutes afte rw a rd the th ird m an m et the one who had le ft the car, and s a id : “ See here! W hy did you go out w ith out answ ering when th a t man asked you a civil question?” “D-D-Do you think I w-w-wanted to g-g-g-get m-my head knocked off?” was the answer. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Oh I See “ T rip lets,” anm meed the nurse to the proud fath er. “Really,” he said. “ I can h ardly be lieve my own census.”—;K reolite News. Made a H it B ut D idn’t Score H e: “D earest, will you m arry m e?” “ S h e : “I can’t m ary you, b u t I ’ll always respect your good taste.”—John sonian. LOOK W HA T THC C AU AFMACt T H IY O W 6 H T A FROGS SEt A U R O U rtP AT WlAhAI H e C ertainly W asn ’t They were talk in g about inventions. “ The m an who invented the flyin’ m a chine was a g re a t genius,” said P at. “H i th in k w ireless is the g reatest in vention,” said ’A rry. “Veil,” said Ignatz, “the fellow who invented in terest was no slouch.” I t ’s So Much E asier “A re you a clock-w atcher?” asked the em ployer of the candidate fo r a job. “No, I don’t like inside w ork,” replied the applicant, w ithout heat, “I ’m a whis tle-listen er.” N ot W ell T rained F irs t A ctress: “W hen I came on the stage th e audience sim ply sa t th ere openm outhed.” Second A c tre ss: “Oh, nonsense ! They never all yawn at once.— Toronto Globe. J u s t W h at H e M eant “P a, W illie’s jab b in g me in the eye w ith the fu n n y p ap er.” “D on’t poke fu n a t your brother, W il lie,” advised the stern fath e r. She H ad n ’t W ent T ea ch e r: “I have went. T h at’s wrong, isn ’t it? ” P u p il: “Yes, m a’am .” T eacher: “W hy is it w rong?” P u p il: “Because you ain ’t w ent y et.” Newlywed— My wife is going to P aris fo r her gowns. Cynic—I thought she had le ft them som ew here! Recipe fo r cooking c a rp : Place the carp on a smooth plank, cover w ith b u t ter, season w ith salt, pepper and a little p ap rik a. Bake in a hot oven fo r one-half hour. Throw the carp aw ay and eat the plank, garnished w ith parsley and lemon. No Need, There In su ran ce A g e n t: “Don’t you w ant your office fu rn ish in g s insured against th e ft ?” Boss: “Yes, all except the clock. E verybody w atches th a t.” ON TH E O THER HAND— — T h o m a s In th e D e tro it N e w s. F o r such k ind of borrow ing as this, if it be not b ettered by the borrow er among good au th o rs is accounted plagiary.— M ilton. September, 1926 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis T II E NO R T H W E S T E R N B A N K E R 111 Selecting Your Chicago Bank The large number of banks now using the Illinois Merchants Trust Company for their Chicago business indicates the confidence that men of broad banking experience place in this institution. W ith its standing as one of the lead ing banks in the country, its intimate business and governmental contacts both at home and abroad, its board of directors composed of leaders in every branch of commerce and industry, and its large financial resources, the Illinois M er chants Trust Company is a logical choice for banks establishing a Chicago connec tion. O ur officers will be glad to give per sonal attention to inquiries concerning our specialized services to banks. Capital a n d Surplus • Forty-Fire M illion Dollars I llinois M erchants Trust Company qA consolidation o f Illinois Trust & Savings Bank, The ¿Merchants Loan & Trust Company and The Corn Exchange National Bank CHI CAGO https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis
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